Evergreen SHORT AND INTERMEDIATE TERM BOND FUNDS Prospectus November 1, 2009 Evergreen Adjustable Rate Fund Evergreen Short Intermediate Bond Fund Share Classes A, B*, C, I * Class B shares of Evergreen funds are available for purchase only under certain circumstances. Please see the section entitled "Share Class Information" for more information. As with all mutual funds, the Securities and Exchange Commission has not approved or disapproved these securities or passed upon the accuracy or adequacy of this prospectus. Anyone who tells you otherwise is committing a crime.
SUPPLEMENT TO THE PROSPECTUS AND STATEMENT OF ADDITIONAL INFORMATION OF EVERGREEN INTERMEDIATE AND LONG TERM BOND FUNDS EVERGREEN SHORT AND INTERMEDIATE TERM BOND FUNDS I. Evergreen Adjustable Rate Fund (the Fund ) Effective immediately, the portfolio management team for the Fund consists of Christopher Y. Kauffman, CFA and Richard Applebach, CFA. The section of the Fund s prospectuses entitled "Portfolio Manager(s)" and the section of the Fund s Statement of Additional Information entitled Portfolio Managers are revised accordingly. II. Evergreen U.S. Government Fund (the Fund ) Effective immediately, the portfolio management team for the Fund consists of Christopher Y. Kauffman, CFA and Richard Applebach, CFA. The section of the Fund s prospectuses entitled "Portfolio Manager(s)" and the section of the Fund s Statement of Additional Information entitled Portfolio Managers are revised accordingly. November 30, 2009 585658 (11/09)
SUPPLEMENT TO THE PROSPECTUSES OF EVERGREEN INTERMEDIATE AND LONG TERM BOND FUNDS EVERGREEN SHORT AND INTERMEDIATE TERM BOND FUNDS I. Evergreen Core Bond Fund, Evergreen Core Plus Bond Fund and Evergreen Short Intermediate Bond Fund (each, a Fund and together, the Funds ) Effective December 1, 2009, Wells Capital Management Inc. ( Wells Capital ) will replace Tattersall Advisory Group, Inc. ( TAG ), and, in the case of Evergreen Core Plus Bond Fund, will also replace First International Advisors, LLC, as sub-advisor to the Funds pursuant to new interim subadvisory agreements between Evergreen Investment Management Company, LLC and Wells Capital with respect to each Fund. Each interim agreement will be in effect until no later than April 29, 2010. The shareholders of each Fund will meet on or around April 15, 2010 to consider a definitive sub-advisory agreement with Wells Capital, which, if approved by a Fund s shareholders, would replace the Fund s interim agreement. Accordingly, the section of the prospectuses for Evergreen Core Bond Fund and Evergreen Core Plus Bond Fund entitled Fund Management Sub-Advisor(s) is replaced with the following: Tattersall Advisory Group, Inc. (TAG) is a sub-advisor to High Income Fund and U.S. Government Fund. TAG has been managing fixed income accounts since 1976. TAG is located at 6802 Paragon Place, Suite 200, Richmond, Virginia 23230. EIMC pays a portion of its advisory fee to TAG for its services. There is no additional charge to the Funds for the services provided by TAG. Wells Capital Management Inc. (Wells Capital) is a sub-advisor to Core Bond Fund and Core Plus Bond Fund. Wells Capital provides investment advisory services for registered mutual funds, company retirement plans, foundations, endowments, trust companies and high net-worth individuals. Wells Capital is located at 525 Market Street, San Francisco, California 94105. EIMC pays a portion of its advisory fee to Wells Capital for its services. There is no additional charge to the Funds for the services provided by Wells Capital. The section of the prospectuses for Evergreen Short Intermediate Bond Fund entitled Fund Management Sub-Advisor(s) is replaced with the following: Tattersall Advisory Group, Inc. (TAG) is a sub-advisor to Adjustable Rate Fund. TAG has been managing fixed income accounts since 1976. TAG is located at 6802 Paragon Place, Suite 200, Richmond, Virginia 23230. EIMC pays a portion of its advisory fee to TAG for its services. There is no additional charge to the Fund for the services provided by TAG. Wells Capital Management Inc (Wells Capital) is a sub-advisor to Short Intermediate Bond Fund. Wells Capital provides investment advisory services for registered mutual funds, company retirement plans, foundations, endowments, trust companies and high net-worth individuals. Wells Capital is located at 525 Market Street, San Francisco, California 94105. EIMC pays a portion of its advisory fee to Wells Capital for its services. There is no additional charge to the Fund for the services provided by Wells Capital. II. Evergreen Core Bond Fund and Evergreen Short Intermediate Bond Fund (each, a Fund and together, the Funds ) Effective December 1, 2009, each Fund is managed by Troy Ludgood, Thomas O Connor, CFA, Lynne A. Royer and William Stevens. Accordingly, the section of the prospectuses for the Funds entitled "Fund Management Portfolio Manager(s)" is revised to reflect the following:
Core Bond Fund Name/Year Joined Fund Role Employer Positions over Past Five Years Troy Ludgood/2009 Senior Portfolio Manager Wells Capital or predecessor firm 2004-Present Senior Portfolio Manager Thomas O Connor, CFA/2009 Senior Portfolio Manager Wells Capital or predecessor firm 2000-Present Senior Portfolio Manager Lynne A. Royer/2009 Senior Portfolio Wells Capital or predecessor firm Senior Portfolio William Stevens/2009 Manager Senior Portfolio Manager 1996-Present Wells Capital or predecessor firm 1992-Present Manager Senior Portfolio Manager Short Intermediate Bond Fund Name/Year Joined Fund Role Employer Positions over Past Five Years Troy Ludgood/2009 Senior Portfolio Manager Wells Capital or predecessor firm 2004-Present Senior Portfolio Manager Thomas O Connor, CFA/2009 Senior Portfolio Manager Wells Capital or predecessor firm 2000-Present Senior Portfolio Manager Lynne A. Royer/2009 Senior Portfolio Wells Capital or predecessor firm Senior Portfolio William Stevens/2009 Manager Senior Portfolio Manager 1996-Present Wells Capital or predecessor firm 1992-Present Manager Senior Portfolio Manager III. Evergreen Core Plus Bond Fund (the Fund ) Effective December 1, 2009, the Fund is managed by Michael Bray, CFA, D. James Newton II, CFA, CPA, Thomas M. Price, CFA and Janet S. Rilling, CFA, CPA. Accordingly, the section of the prospectuses for the Fund entitled "Fund Management Portfolio Manager(s)" is revised to reflect the following: Core Plus Bond Fund Name/Year Joined Fund Role Employer Positions over Past Five Years Michael Bray, CFA/2009 Senior Portfolio Manager Wells Capital or predecessor firm 2005-Present Senior Portfolio Manager Windward Capital, LLC 2004-2005 Principal D. James Newton II, CFA, CPA/2009 Thomas M. Price, CFA/2009 Janet S. Rilling, CFA, CPA/2009 Portfolio Manager Senior Portfolio Manager Senior Portfolio Manager State Street Research and Management 1996-2004 Wells Capital or predecessor firm 2002-Present Wells Capital or predecessor firm 1996-Present Wells Capital or predecessor firm 1995-Present Managing Director Portfolio Manager Senior Portfolio Manager Senior Portfolio Manager November 18, 2009 585619 (11/09)
SUPPLEMENT TO THE PROSPECTUSES AND STATEMENTS OF ADDITIONAL INFORMATION OF EVERGREEN BALANCED FUNDS EVERGREEN BLEND EQUITY FUNDS EVERGREEN DOMESTIC GROWTH EQUITY FUNDS EVERGREEN DOMESTIC VALUE EQUITY FUNDS EVERGREEN EQUITY INDEX FUNDS EVERGREEN GLOBAL AND INTERNATIONAL FUNDS EVERGREEN INSTITUTIONAL MONEY MARKET FUNDS EVERGREEN INTERMEDIATE AND LONG TERM BOND FUNDS EVERGREEN MONEY MARKET FUNDS EVERGREEN NATIONAL MUNICIPAL BOND FUNDS EVERGREEN SECTOR FUNDS EVERGREEN SHORT AND INTERMEDIATE TERM BOND FUNDS EVERGREEN SOUTHERN STATE MUNICIPAL BOND FUNDS EVERGREEN STATE MUNICIPAL BOND FUNDS EVERGREEN VARIABLE ANNUITY FUNDS (together, the Evergreen Funds ) At a meeting held on September 23-24, 2009, the Boards of Trustees of the Evergreen Funds approved a change in the principal underwriter for the Evergreen Funds from Evergreen Investment Services, Inc. to Wells Fargo Funds Distributor, LLC ( WFFD ). This change is expected to become effective on January 4, 2010. WFFD, a wholly-owned subsidiary of Wells Fargo & Company, is located at 525 Market Street, San Francisco, California, 94105. WFFD is also the distributor and principal underwriter of the Wells Fargo Advantage Funds. September 25, 2009 585150 (09/09)
SUPPLEMENT TO THE PROSPECTUSES OF EVERGREEN INTERMEDIATE AND LONG TERM BOND FUNDS EVERGREEN SHORT AND INTERMEDIATE TERM BOND FUNDS EVERGREEN VARIABLE ANNUITY FUNDS Evergreen Investment Management Company, LLC, the Evergreen funds' investment advisor, expects to propose that Wells Capital Management Incorporated replace Tattersall Advisory Group, Inc. as sub-adviser to Evergreen Core Plus Bond Fund, Evergreen Core Bond Fund, Evergreen VA Core Bond Fund and Evergreen Short Intermediate Bond Fund. This would occur either through the execution of a new sub-advisory agreement and/or through the reorganization of each Evergreen fund into a similarly managed Wells Fargo Advantage fund. Any such changes are required to be approved by Trustees and shareholders and would take effect later in 2009. We will provide additional information concerning these changes as it becomes available. April 6, 2009 584201 (4/09)
Special Note to Shareholders Regarding a Fund's Investment Goal: The Fund's Board of Trustees can change the investment goal without a shareholder vote. Risk Factors for All Mutual Funds Please remember that an investment in a mutual fund is: not guaranteed to achieve its investment goal; not a deposit with a bank; not insured, endorsed or guaranteed by the FDIC or any government agency; and subject to investment risks, including possible loss of your original investment. Like most investments, your investment in a Fund could fluctuate significantly in value over time and could result in a loss of money. Portfolio Holdings A description of the Evergreen funds' policies and procedures with respect to the disclosure of their portfolio holdings is available in each Fund's Statement of Additional Information in the section entitled "Policy for Dissemination of Portfolio Holdings."
TABLE OF CONTENTS EVERGREEN SHORT AND INTERMEDIATE TERM BOND FUNDS Fund Summary Evergreen Adjustable Rate Fund Evergreen Short Intermediate Bond Fund Fund Risks Principal Risks Additional Investment Strategies and Related Risks Fund Management Investment Advisor and Administrator Sub-Advisor(s) Portfolio Manager(s) Affiliated Service Providers Legal Proceedings Pricing Calculating a Fund's Share Price Valuing a Fund's Investments Share Class Information Sales Charge By Class Sales Charge Reduction Buying and Selling Fund Shares Account Minimums Retirement Plans Opening an Account, Adding to an Account, and Selling Fund Shares Additional Shareholder Services Short-Term Trading Policy Dividends and Distributions Taxes Portfolio Trading Costs and Turnover Financial Highlights 2 6 10 11 12 12 13 13 13 14 14 14 18 20 21 21 22 23 24 24 25 27 Evergreen Short and Intermediate Term Bond Funds 1
FUND SUMMARY Evergreen Adjustable Rate Fund INVESTMENT GOAL The Fund seeks a high level of current income consistent with low volatility of principal. INVESTMENT STRATEGY The Fund seeks to maintain a relatively stable net asset value per share by investing primarily in adjustable rate securities, whose interest rates are periodically reset when market rates change. The dollar-weighted average reset period of adjustable rate securities held by the Fund will not exceed one year. Normally, the Fund invests at least 80% of its assets in securities that have interest rates that reset at periodic intervals. The Fund may also invest up to 20% of its assets in obligations that pay fixed interest rates. For temporary defensive purposes, the Fund may invest up to 100% of its assets in such obligations. Under normal market conditions, the Fund expects that it will invest substantially all of its assets in mortgage-backed securities (including collateralized mortgage obligations (CMOs)) and asset-backed securities. Some mortgage-backed securities, such as securities issued or guaranteed by the Government National Mortgage Association, are backed by the full faith and credit of the U.S. government. Other securities, such as those issued by the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation or those issued by private issuers, are not backed by the full faith and credit of the U.S. government and are supported only by the credit of the issuer itself. As part of its investment strategy, the Fund may engage in covered dollar roll transactions, which allow the Fund to sell a mortgage-backed security to a dealer and simultaneously contract to repurchase a security that is substantially similar in type, coupon and maturity, on a specified future date. The portfolio managers intend to maintain a minimum dollar-weighted average credit quality for the portfolio of Aaa, as defined by Moody's Investor Services, Inc. or an equivalent rating by another nationally recognized statistical ratings organization. For the purposes of determining dollar-weighted average credit quality, a security's current credit ratings are considered. Security ratings are based on ratings received by nationally recognized statistical ratings organizations or, if a security is not rated, it will be deemed to have the same rating as a security determined to be of comparable quality by the Fund's portfolio manager. If a security is rated by more than one nationally recognized statistical ratings organization, the highest rating is used. The Fund may, but will not necessarily, use a variety of derivative instruments, such as futures contracts, options and swaps, including, for example, index futures, Treasury futures, Eurodollar futures, interest rate swap agreements, credit default swaps and total return swaps. The Fund typically uses derivatives as a substitute for taking a position in the underlying asset or basket of assets and/or as part of a strategy designed to reduce exposure to other risks, such as interest rate risk. Derivatives are financial contracts whose values depend on, or are derived from, the value of one or more underlying assets, reference rates or indexes. The various derivative instruments that the Fund may use may change from time to time as new derivative products become available to the Fund. More detail on these types of transactions is included under "Additional Information on Securities, Investment Practices and Risks" in the Statement of Additional Information (SAI). For purposes of determining compliance by the Fund with its investment policies and limitations (including any required investment by the Fund in a particular type of security), the Fund may consider an investment in a derivative instrument to constitute an investment in a security if, in the judgment of the portfolio manager(s), the derivative instrument provides investment exposure comparable to that of the security. For example, the Fund may consider a futures contract or swap transaction to constitute a particular fixed-income security for these purposes. 2 Evergreen Short and Intermediate Term Bond Funds
PRINCIPAL RISK SUMMARIES Your investment in the Fund is subject to the following risks. For additional information on the risks listed below, see the section entitled "Fund Risks." Credit Risk. The issuer of a debt security may be unable to pay interest and principal when due, and the value of a debt security may decline if an issuer defaults or if its credit quality deteriorates. Derivatives Risk. A Fund's use of derivatives may involve risks different from, or greater than, the risks associated with investing in more traditional investments, such as stocks and bonds. Derivatives transactions can create investment leverage, may be highly volatile, and a Fund could lose more than the amount it invests. Interest Rate Risk. When interest rates go up, the values of debt securities tend to fall. When interest rates go down, interest earned on debt securities may decline. Mortgage- and Asset-Backed Securities Risk. Mortgage- and asset-backed securities may be negatively affected by prepayments, defaults, and changes in interest rates. In addition, these securities are often not guaranteed or backed by the credit of the U.S. government or by an agency or instrumentality of the U.S. government. U.S. Government Securities Risk. Securities issued by agencies of the U.S. government and by certain U.S. government sponsored entities are neither insured nor guaranteed by the U.S. Treasury. PERFORMANCE The Year-by-Year Total Return chart and Average Annual Total Return table that follow provide you with some indication of the risks of investing in the Fund. The calculations of total return assume the reinvestment of all dividends and capital gain distributions on the reinvestment date. The Year-by-Year Total Return chart shows performance of the indicated class for the periods shown and includes the effects of Fund expenses, but not applicable sales charges, if any. Returns would be lower if sales charges were included. The Average Annual Total Return table shows the Fund's average annual total returns by class for the periods shown, including the effect of applicable sales charges, and compares its performance with that of one or more broad-based securities market indexes. Performance information for an index does not include deductions for fees, expenses or taxes, and it is not possible to invest directly in an index. Past performance is not necessarily an indication of future results. Year by Year Total Return for Class I Shares (%) 8% 6% 4% 2% 0% -2% 1999 4.99 2000 7.40 2001 7.86 2002 4.46 2003 2.09 2004 2.07 2005 2.34 2006 4.74 2007 4.75 2008-0.95 Highest Quarter: 1st Quarter 2001 +2.25% Lowest Quarter: 4th Quarter 2008-2.74% Year-to-date total return as of 9/30/2009 is 5.90% -4% Evergreen Short and Intermediate Term Bond Funds 3
Average Annual Total Returns for the period ended 12/31/2008 1 Inception Date of Share Class 1 Year 5 Year 10 Year Performance Since 10/1/1991 Class A 6/30/2000-3.41% 1.82% 3.47% 4.32% Class B 2 6/30/2000-3.83% 1.55% 3.07% 4.09% Class C 6/30/2000-2.88% 1.55% 3.07% 4.09% Class I 10/1/1991-0.95% 2.57% 3.95% 4.60% Class I (after taxes on distributions) 3 10/1/1991-2.61% 1.03% 2.10% N/A Class I (after taxes on distributions and the sale of Fund Shares) 3 10/1/1991-0.60% 1.30% 2.25% N/A Barclays 6-Month Treasury Bill Index 3.70% 3.68% 3.84% 4.31% 1. Historical performance shown for Classes A, B and C prior to their inception is based on the performance of Class I, the original class offered. The historical returns for Classes A, B and C have not been adjusted to reflect the effect of each class' 12b-1 fee. These fees are 0.25% for Class A and 1.00% for Classes B and C. Class I does not pay a 12b-1 fee. If these fees had been reflected, returns for Classes A, B and C would have been lower. 2. The returns shown for Class B shares do not reflect the conversion of Class B shares to Class A shares. 3. After-tax returns are shown for only one class and after-tax returns for other classes will vary. The after-tax returns shown are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. After-tax returns on distributions and the sale of Fund shares assume a complete sale of Fund shares at the end of the measurement period, resulting in capital gains taxes or tax benefits when capital losses occur. Actual after-tax returns will depend on your individual tax situation and may differ from those shown. The after-tax returns shown are not relevant to you if you hold your Fund shares through tax-deferred arrangements, such as 401(k) plans or IRAs. FEES AND EXPENSES This section describes the fees and expenses you would pay if you bought and held shares of the Fund. More detailed information regarding the Shareholder Fees contained in the table that follows can be found in the section entitled "Share Class Information." Except as otherwise noted, the information in the Annual Fund Operating Expenses table is based on amounts incurred during the Fund's most recent fiscal year, expressed as a percentage of average net assets during the fiscal year. It is important for investors to understand that a decline in the Fund's average net assets would likely cause the Annual Fund Operating Expense ratios for the Fund's current fiscal year to be higher than the expense information presented. Shareholder Fees (fees paid directly from your investment) Class A Class B Class C Class I Maximum front-end sales charge (load) imposed on purchases (as a % of offering price) 2.25% 1 None None None Maximum deferred sales charge (load) (as a % of either the redemption amount or initial investment, whichever is lower) None 1 2.00% 1.00% None 1. Investments of $1 million or more are not subject to a front-end sales charge, but will be subject to a deferred sales charge of 1.00% if you sell the shares within 18 months. Annual Fund Operating Expenses (expenses that are deducted from Fund assets) Class A Class B Class C Class I Management Fees 0.21% 0.21% 0.21% 0.21% 12b-1 Fees 0.25% 1.00% 1.00% 0.00% Other Expenses 1 0.28% 0.28% 0.28% 0.28% Total Annual Fund Operating 0.74% 1.49% 1.49% 0.49% Expenses 1 1. The Other Expenses in the table above include fees and expenses of 0.01% or less that were incurred indirectly by the Fund as a result of its investment in other investment companies (each, an "Acquired Fund"). The Total Annual Fund Operating Expenses shown may be higher than the Fund's ratio of expenses to average net assets shown in the "Financial Highlights" section, which does not include Acquired Fund fees and expenses. 4 Evergreen Short and Intermediate Term Bond Funds
Example of Fund Expenses. Here is an example that can help you to compare the cost of investing in this Fund versus other mutual funds. For purposes of our example, let's assume that the Fund has an average annual return of 5%, that you reinvest all dividends and distributions, and that the Fund's fees and expenses remain exactly the same as in the tables above. Based on these assumptions, if you invested $10,000 in the Fund, here's how much you would pay in total fees and expenses for the time periods indicated: If you held your shares, you would pay: After: Class A Class B Class C Class I 1 Year $299 $152 $152 $50 3 Years $456 $471 $471 $157 5 Years $627 $813 $813 $274 10 Years $1,123 $1,390 $1,779 $616 If you sold your shares, you would pay: After: Class A Class B Class C Class I 1 Year $299 $352 $252 $50 3 Years $456 $571 $471 $157 5 Years $627 $813 $813 $274 10 Years $1,123 $1,390 $1,779 $616 Because the Fund's fees and expenses may vary from year to year, the total fees and expenses you will actually pay may be higher or lower than those shown above. Evergreen Short and Intermediate Term Bond Funds 5
FUND SUMMARY Evergreen Short Intermediate Bond Fund INVESTMENT GOAL The Fund seeks to maximize total return through a combination of current income and capital growth. INVESTMENT STRATEGY The Fund normally invests at least 80% of its assets in U.S. dollar-denominated investment grade debt securities, including mortgage-backed securities (including collateralized mortgage obligations (CMOs)) and asset-backed debt securities. Some mortgage-backed securities, such as securities issued by the Government National Mortgage Association, are backed by the full faith and credit of the U.S. government. Other securities, such as those issued by the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation or those issued by private issuers, are not backed by the full faith and credit of the U.S. government and are supported only by the credit of the issuer itself. Under normal conditions, the Fund maintains a bias toward mortgage-backed and corporate securities in order to capture higher levels of income. The portfolio managers consider a security to be investment grade if it is rated in the top four ratings categories (e.g., BBB/Baa or above) by a nationally recognized statistical ratings organization. The Fund intends to limit the dollar-weighted average duration of its portfolio to two and a quarter to four and one half years. The Fund's dollar-weighted average maturity is expected to be longer than the dollar-weighted average duration. Duration is the expected life of a fixed income security and is used to determine the sensitivity of the security's price to changes in interest rates. Maturity merely measures the time until final payment is due. Unlike maturity, duration accounts for the time until all payments of interest and principal on a security are expected to be made, including how these payments are affected by prepayments and by changes in interest rates. The Fund may invest up to 20% of its assets in other investments, including cash, cash equivalents or shares of registered investment companies. As part of its investment strategy, the Fund may engage in covered dollar roll transactions, which allow the Fund to sell a mortgage-backed security to a dealer and simultaneously contract to repurchase a security that is substantially similar in type, coupon and maturity, on a specified future date. Security ratings are determined at the time of investment based on ratings received by nationally recognized statistical ratings organizations or, if a security is not rated, it will be deemed to have the same rating as a security determined to be of comparable quality by the Fund's portfolio manager. If a security is rated by more than one nationally recognized statistical ratings organization, the highest rating is used. The Fund may retain any security whose rating has been downgraded after purchase if the Fund's portfolio manager considers the retention advisable. The Fund may, but will not necessarily, use a variety of derivative instruments, such as futures contracts, options and swaps, including, for example, index futures, Treasury futures, Eurodollar futures, interest rate swap agreements, credit default swaps and total return swaps. The Fund typically uses derivatives as a substitute for taking a position in the underlying asset or basket of assets and/or as part of a strategy designed to reduce exposure to other risks, such as interest rate risk. Derivatives are financial contracts whose values depend on, or are derived from, the value of one or more underlying assets, reference rates or indexes. The various derivative instruments that the Fund may use may change from time to time as new derivative products become available to the Fund. More detail on these types of transactions is included under "Additional Information on Securities, Investment Practices and Risks" in the Statement of Additional Information (SAI). For purposes of determining compliance by the Fund with its investment policies and limitations (including any required investment by the Fund in a particular type of security), the Fund may consider an investment in a derivative instrument to constitute an investment in a security if, in the judgment of the portfolio manager(s), the derivative instrument provides investment exposure comparable to that of the security. For example, the Fund may consider a futures contract or swap transaction to constitute a particular fixed-income security for these purposes. 6 Evergreen Short and Intermediate Term Bond Funds
PRINCIPAL RISK SUMMARIES Your investment in the Fund is subject to the following risks. For additional information on the risks listed below, see the section entitled "Fund Risks." Credit Risk. The issuer of a debt security may be unable to pay interest and principal when due, and the value of a debt security may decline if an issuer defaults or if its credit quality deteriorates. Derivatives Risk. A Fund's use of derivatives may involve risks different from, or greater than, the risks associated with investing in more traditional investments, such as stocks and bonds. Derivatives transactions can create investment leverage, may be highly volatile, and a Fund could lose more than the amount it invests. Interest Rate Risk. When interest rates go up, the values of debt securities tend to fall. When interest rates go down, interest earned on debt securities may decline. Mortgage- and Asset-Backed Securities Risk. Mortgage- and asset-backed securities may be negatively affected by prepayments, defaults, and changes in interest rates. In addition, these securities are often not guaranteed or backed by the credit of the U.S. government or by an agency or instrumentality of the U.S. government. Subordinated Securities Risk. If the Fund purchases mortgage-backed or asset-backed securities that are 'subordinated' to other interests in the same mortgage pool, the Fund as a holder of those securities may only receive payments after the pool's obligations to other investors with more senior investments in the mortgage pool have been satisfied. U.S. Government Securities Risk. Securities issued by agencies of the U.S. government and by certain U.S. government sponsored entities are neither insured nor guaranteed by the U.S. Treasury. PERFORMANCE The Year-by-Year Total Return chart and Average Annual Total Return table that follow provide you with some indication of the risks of investing in the Fund. The calculations of total return assume the reinvestment of all dividends and capital gain distributions on the reinvestment date. The Year-by-Year Total Return chart shows performance of the indicated class for the periods shown and includes the effects of Fund expenses, but not applicable sales charges, if any. Returns would be lower if sales charges were included. The Average Annual Total Return table shows the Fund's average annual total returns by class for the periods shown, including the effect of applicable sales charges, and compares its performance with that of one or more broad-based securities market indexes. Performance information for an index does not include deductions for fees, expenses or taxes, and it is not possible to invest directly in an index. Past performance is not necessarily an indication of future results. Year-by-Year Total Return for Class I Shares (%) 24% 18% 12% 6% 0% -6% -12% -18% -24% -30% 1999 0.30 2000 10.29 2001 8.25 2002 9.62 2003 3.77 2004 2.98 2005 1.32 2006 4.05 2007 4.99 2008-21.09 Highest Quarter: 3rd Quarter 2001 +4.58% Lowest Quarter: 3rd Quarter 2008-10.95% Year-to-date total return as of 9/30/2009 is 14.18% Average Annual Total Returns for the period ended 12/31/2008 1 Inception Date of Share Class 1 Year 5 Year 10 Year Performance Since 3/31/1977 Class A 6/5/2002-22.85% -2.46% 1.96% 6.33% Class B 2 6/5/2002-23.19% -2.83% 1.64% 6.22% Class C 6/5/2002-22.44% -2.83% 1.64% 6.22% Evergreen Short and Intermediate Term Bond Funds 7
Average Annual Total Returns for the period ended 12/31/2008 1 Inception Date of Share Class 1 Year 5 Year 10 Year Performance Since 3/31/1977 Class I 11/24/1997-20.89% -1.85% 2.31% 6.44% Class I (after taxes on distributions) 3 11/24/1997-21.64% -3.20% 0.44% N/A Class I (after taxes on distributions and the sale of Fund Shares) 3 11/24/1997-13.55% -2.23% 0.91% N/A Barclays Capital Intermediate Government/Credit Index 5.08% 4.21% 5.43% 8.05% 1. Historical performance shown for Classes A, B and C prior to their inception is based on the performance of Class I, the original class offered. The historical returns for Classes A, B and C have not been adjusted to reflect the effect of each class' 12b-1 fee. These fees are 0.25% for Class A and 1.00% for Classes B and C. Class I does not pay a 12b-1 fee. If these fees had been reflected, returns for Classes A, B and C would have been lower. Historical performance shown for Class I prior to its inception is based on the Fund's predecessor common trust fund's (CTF) performance, adjusted for Class I expenses. The CTF was not registered under the Investment Company Act of 1940 and was not subject to certain investment restrictions imposed by such Act. If the CTF had been registered, its performance might have been adversely affected. 2. The returns shown for Class B shares do not reflect the conversion of Class B shares to Class A shares. 3. After-tax returns are shown for only one class and after-tax returns for other classes will vary. The after-tax returns shown are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. After-tax returns on distributions and the sale of Fund shares assume a complete sale of Fund shares at the end of the measurement period, resulting in capital gains taxes or tax benefits when capital losses occur. Actual after-tax returns will depend on your individual tax situation and may differ from those shown. The after-tax returns shown are not relevant to you if you hold your Fund shares through tax-deferred arrangements, such as 401(k) plans or IRAs. FEES AND EXPENSES This section describes the fees and expenses you would pay if you bought and held shares of the Fund. More detailed information regarding the Shareholder Fees contained in the table that follows can be found in the section entitled "Share Class Information." Except as otherwise noted, the information in the Annual Fund Operating Expenses table is based on amounts incurred during the Fund's most recent fiscal year, expressed as a percentage of average net assets during the fiscal year. It is important for investors to understand that a decline in the Fund's average net assets would likely cause the Annual Fund Operating Expense ratios for the Fund's current fiscal year to be higher than the expense information presented. Shareholder Fees (fees paid directly from your investment) Class A Class B Class C Class I Maximum front-end sales charge (load) imposed on purchases (as a % of offering price) 2.25% 1 None None None Maximum deferred sales charge (load) (as a % of either the redemption amount or initial investment, whichever is lower) None 1 2.00% 1.00% None 1. Investments of $1 million or more are not subject to a front-end sales charge, but will be subject to a deferred sales charge of 1.00% if you sell the shares within 18 months. Annual Fund Operating Expenses (expenses that are deducted from Fund assets) 1 Class A Class B Class C Class I Management Fees 0.42% 0.42% 0.42% 0.42% 12b-1 Fees 0.25% 1.00% 1.00% 0.00% Other Expenses 0.54% 0.54% 0.54% 0.54% Acquired Fund Fees and 0.04% 0.04% 0.04% 0.04% Expenses 2 Total Annual Fund Operating 1.25% 3 2.00% 2.00% 1.00% Expenses 2 1. Restated to reflect current fees as of September 8, 2009. 2. The Total Annual Fund Operating Expenses in the table above include fees and expenses incurred indirectly by the Fund as a result of its investment in other investment companies (each an "Acquired Fund"). The Total Annual Fund Operating Expenses shown may be higher than the Fund's ratio of expenses to average net assets shown in the "Financial Highlights" section, which does not include Acquired Fund Fees and Expenses. 8 Evergreen Short and Intermediate Term Bond Funds
3. The Total Annual Fund Operating Expenses listed above do not reflect voluntary fee waivers and/or expense reimbursements made by the Fund's investment advisor in order to reduce expense ratios. Including current voluntary fee waivers and/or expense reimbursements, Total Annual Fund Operating Expenses were 1.20% for Class A. The Fund's investment advisor may cease these voluntary waivers and/or reimbursements at any time. Example of Fund Expenses. Here is an example that can help you to compare the cost of investing in this Fund versus other mutual funds. For purposes of our example, let's assume that the Fund has an average annual return of 5%, that you reinvest all dividends and distributions, and that the Fund's fees and expenses remain exactly the same as in the tables above. Based on these assumptions, if you invested $10,000 in the Fund, here's how much you would pay in total fees and expenses for the time periods indicated: If you held your shares, you would pay: After: Class A Class B Class C Class I 1 Year $349 $203 $203 $102 3 Years $613 $627 $627 $318 5 Years $896 $1,078 $1,078 $552 10 Years $1,702 $1,956 $2,327 $1,225 If you sold your shares, you would pay: After: Class A Class B Class C Class I 1 Year $349 $403 $303 $102 3 Years $613 $727 $627 $318 5 Years $896 $1,078 $1,078 $552 10 Years $1,702 $1,956 $2,327 $1,225 Because the Fund's fees and expenses may vary from year to year, the total fees and expenses you will actually pay may be higher or lower than those shown above. Evergreen Short and Intermediate Term Bond Funds 9
FUND RISKS PRINCIPAL RISKS The following provides additional information regarding the various risks referenced in the section entitled "Fund Summary." For a list of the principal risks that apply to a particular Fund, please refer to that Fund's summary page. Credit Risk. Credit risk refers to the possibility that the issuer of a security held by a Fund or the counterparty to a contract with a Fund may not be able to pay interest and principal when due or otherwise honor its obligations. If an issuer or counterparty defaults, or if the credit quality of an investment deteriorates or is perceived to deteriorate, the value of the investment could decline. Credit risk is generally greater for zero coupon bonds and other investments that are required to pay interest only at maturity rather than at intervals during the life of the investment. Credit risk will be heightened if a Fund invests in debt securities with medium- and lower-rated credit quality ratings. Derivatives Risk. A derivative is a financial contract whose value depends on changes in the value of one or more underlying assets, reference rates, or indexes. A Fund's use of derivatives may involve risks different from, or greater than, the risks associated with investing in more traditional investments, such as stocks and bonds. Derivatives can be highly complex and may perform in ways unanticipated by a Fund's investment advisor. A Fund's use of derivatives involves the risk that the other party to the derivative contract will fail to make required payments or otherwise to comply with the terms of the contract. Derivatives transactions can create investment leverage, may be highly volatile and a Fund could lose more than the amount it invests. Derivatives may be difficult to value and highly illiquid, and a Fund may not be able to close out or sell a derivative position at a particular time or at an anticipated price. Use of derivatives may increase the amount and affect the timing and character of taxes payable by shareholders. Interest Rate Risk. When interest rates go up, the value of debt securities tends to fall. If a Fund invests a significant portion of its portfolio in debt securities, and if interest rates rise, then the value of the Fund's investments in debt securities and its yield may decline. If interest rates go down, interest earned by the Fund on its debt investments may also decline, which could cause the Fund to reduce the dividends it pays. The longer the term of a debt security held by the Fund, the more the Fund is subject to interest rate risk. Some debt securities give the issuer the option to call or redeem the security before its maturity date. If an issuer calls or redeems the security during a time of declining interest rates, the Fund might have to reinvest the proceeds in a security offering a lower yield, and therefore might not benefit from any increase in value as a result of declining interest rates. Mortgage- and Asset-Backed Securities Risk. Unlike traditional debt investments, payments on mortgage-backed and many asset-backed investments typically include both interest and partial payment of principal. Principal may also be prepaid voluntarily, or as a result of refinancing, sale or foreclosure. A Fund may have to invest the proceeds from prepaid investments in other investments with less attractive terms and yields. As a result, these securities may have less potential for capital appreciation during periods of declining interest rates than other securities of comparable maturities, although they may have a similar risk of decline in market value during periods of rising interest rates. Because the prepayment rate generally declines as interest rates rise, an increase in interest rates will likely increase the duration, and thus the volatility, of mortgage-backed and asset-backed securities. Some mortgage-backed and asset-backed investments receive only the interest portion ("IOs") or the principal portion ("POs") of payments on the underlying assets. The yields and values of these investments are extremely sensitive to changes in interest rates and in the rate of principal payments on the underlying assets. IOs tend to decrease in value if interest rates decline and rates of repayment (including prepayment) on the underlying mortgages or assets increase; it is possible that a Fund may lose the entire amount of its investment in an IO due to a decrease in interest rates. Conversely, POs tend to decrease in value if interest rates rise and rates of repayment decrease. Moreover, the market for IOs and POs may be volatile and limited, which may make them difficult for a Fund to buy or sell. A Fund may gain investment exposure to mortgage-backed and asset-backed investments by entering into agreements with financial institutions to buy the investments at a fixed price at a future date. A Fund may or may not take delivery of the investments at the termination date of such an agreement, but will nonetheless be exposed to changes in value of the underlying investments during the term of the agreement. Asset-backed and mortgage-backed securities in which a Fund invests include those issued by private issuers, which are not guaranteed or backed by the credit of the U.S. government or by an agency or instrumentality of the U.S. government. 10 Evergreen Short and Intermediate Term Bond Funds
Subordinated Securities Risk. If a Fund purchases mortgage-backed or asset-backed securities that are 'subordinated' to other interests in the same mortgage pool, the Fund as a holder of those securities may only receive payments after the pool's obligations to other investors with more senior investments in the mortgage pool have been satisfied. An unexpectedly high rate of defaults on the mortgages held by a mortgage pool may limit substantially the pool's ability to make payments of principal or interest to a Fund as a holder of such subordinated securities, reducing the values of those securities or in some cases rendering them worthless; the risk of such defaults is generally higher in the case of mortgage pools that include so-called 'subprime' mortgages. An unexpectedly high or low rate of prepayments on a pool's underlying mortgages may have a similar effect on subordinated securities. A mortgage pool may issue securities subject to various levels of subordination; the risk of non-payment affects securities at each level, although the risk is greater in the case of more highly subordinated securities. U.S. Government Securities Risk. The debt instruments issued and/or guaranteed by the U.S. government, its agencies, or instrumentalities, in which a Fund invests, typically include mortgage-backed securities, asset-backed securities, and collateralized mortgage obligations ("CMOs") issued by the Government National Mortgage Association ("GNMA"), the Federal National Mortgage Association ("Fannie Mae"), the Federal Home Loan Mortgage Corporation ("Freddie Mac") and the Federal Home Loan Banks ("FHLB"). Securities issued by GNMA, but not those issued by Fannie Mae, Freddie Mac or FHLB, are backed by the full faith and credit of the U.S. government. Fannie Mae, Freddie Mac and FHLB, although chartered or sponsored by Congress, are not funded by congressional appropriations and the securities issued by them are neither guaranteed nor insured by the U.S. government and are supported only by the credit of the issuer itself. In general, securities issued by U.S. government sponsored entities are neither insured nor guaranteed by the U.S. Treasury. ADDITIONAL INVESTMENT STRATEGIES AND RELATED RISKS In addition to the strategies described under "Investment Strategy," a Fund may also pursue the following non-principal investment strategies, which are subject to the risks described below: Below Investment Grade Bonds. Although not a principal investment strategy, Short Intermediate Bond Fund might invest up to 10% of its assets in below investment grade bonds. Below investment grade bonds are commonly referred to as "high yield" or "junk" bonds. These bonds are considered speculative by the major rating agencies (and bonds in the lower rating category are highly speculative and may be in default) and are usually backed by issuers of less proven or questionable financial strength. Such issuers are more vulnerable to financial setbacks and less certain to pay interest and principal than issuers of bonds offering lower yields. Markets may react severely to unfavorable news about issuers of below investment grade bonds, causing sudden and steep declines in value. Lower-rated debt usually has a more limited market than higher-rated debt, which may at times make it difficult to buy or sell certain debt instruments or establish their fair value. Foreign Securities. Short Intermediate Bond Fund may invest up to 20% of its assets in foreign securities. Investments in foreign securities entail risks not present in domestic investments. Because foreign securities are normally denominated and traded in foreign currencies, the value of a Fund's assets may be affected favorably or unfavorably by currency exchange rates, exchange control regulations, and restrictions or prohibitions on the repatriation of foreign currencies. Income the Fund receives from its investments in foreign securities may be subject to withholding and other taxes, in which case the Fund's yield would be reduced. There may be less information publicly available about a foreign company than about a U.S. company, and many foreign companies are not subject to accounting, auditing, and financial reporting standards and practices comparable to those in the United States. The securities of some foreign companies are less liquid and at times more volatile than securities of comparable U.S. companies. Foreign brokerage commissions and other fees are also generally higher than in the United States. In addition, there may be a possibility of nationalization or expropriation of assets, imposition of currency exchange controls, confiscatory taxation, political or financial instability, and diplomatic developments that could adversely affect the value of a Fund's investments in certain foreign countries. Foreign settlement procedures and trade regulations may involve increased risk (such as delay in payment or delivery of securities) or risks not present in the settlement of domestic investments. Legal remedies available to investors may be more limited in foreign markets. A Fund may buy or sell foreign currencies for future delivery and options and futures contracts on foreign currencies for hedging purposes in connection with its foreign investments. Leverage. Although not currently a principal investment strategy, the Funds may borrow money temporarily to meet redemption requests and/or to settle investment transactions. The Funds may also enter into reverse repurchase agremeents, TBA mortgage securities, uncovered mortgage dollar rolls, and invest in other derivatives to enhance its investment return. These transactions may result in leverage. Leverage can create special risks. Leveraging can exaggerate changes in the Fund's net asset value and performance as well as magnify the risks associated with the underlying securities in which the Funds invest. Leverage may disproportionately increase a Fund's portfolio losses and reduce opportunities for gain when interest rates, stock prices or currency rates are changing. Evergreen Short and Intermediate Term Bond Funds 11
Sell Strategy. A Fund will consider selling a portfolio investment when a portfolio manager believes the issuer's investment fundamentals are beginning to deteriorate, when the investment no longer appears consistent with the portfolio manager's investment methodology, when the Fund must meet redemptions, in order to take advantage of more attractive investment opportunities, or for other investment reasons which a portfolio manager deems appropriate. Temporary Defensive Strategy. A Fund may, but will not necessarily, temporarily invest up to 100% of its assets in cash and/or high-quality money market instruments in response to adverse economic, political or market conditions. This strategy is inconsistent with the Fund's investment goal and principal investment strategies and, if employed, could result in a lower return and loss of market opportunity. For more information on these and other investment strategies a Fund may pursue, and the risks associated with such strategies, please see the Fund's Statement of Additional Information (SAI). FUND MANAGEMENT INVESTMENT ADVISOR AND ADMINISTRATOR As investment advisor to the Evergreen funds, Evergreen Investment Management Company, LLC (EIMC) manages and oversees each Evergreen fund's investments and supervises its daily business affairs. EIMC has been managing mutual funds and private accounts since 1932 and managed over $82.5 billion in assets for the Evergreen funds as of 12/31/2008. EIMC is located at 200 Berkeley Street, Boston, Massachusetts 02116-5034. EIMC is a subsidiary of Wells Fargo & Company (Wells Fargo), a bank holding company in the United States, with over $1.3 trillion in assets as of 12/31/2008. For a Fund's most recent fiscal year, the advisory fee paid to EIMC was as follows: Evergreen Fund Adjustable Rate Fund 0.21% Short Intermediate Bond Fund 0.42% As a % of average daily net assets EIMC also serves as administrator to the Evergreen funds. As administrator, EIMC prepares various filings, reports and contracts on behalf of the Evergreen funds, performs certain back office services, and provides the Evergreen funds with facilities, equipment and personnel. The Evergreen funds pay EIMC a fee for these services and those fees are included in the "Other Expenses" item in the Annual Fund Operating Expenses table in the section entitled "Fees and Expenses." For a discussion regarding the basis for the approval of a Fund's investment advisory, and, if applicable, sub-advisory agreement(s) by its Board of Trustees, please see the Fund's most recent shareholder report for the period ended June 30th. SUB-ADVISOR(S) Tattersall Advisory Group, Inc. (TAG) is a sub-advisor to the Funds. TAG has been managing fixed income accounts since 1976. TAG is located at 6802 Paragon Place, Suite 200, Richmond, Virginia 23230. EIMC pays a portion of its advisory fee to TAG for its services. There is no additional charge to the Funds for the services provided by TAG. 12 Evergreen Short and Intermediate Term Bond Funds