Evergreen STATE MUNICIPAL BOND FUNDS Prospectus August 1, 2009 Evergreen California Municipal Bond Fund Evergreen Pennsylvania Municipal 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 PROSPECTUSES AND STATEMENTS OF ADDITIONAL INFORMATION ( SAI ) OF EVERGREEN NATIONAL MUNICIPAL BOND FUNDS EVERGREEN STATE MUNICIPAL BOND FUNDS AND I. Evergreen California Municipal Bond Fund, Evergreen High Income Municipal Bond Fund, Evergreen Intermediate Municipal Bond Fund, Evergreen Municipal Bond Fund, Evergreen Pennsylvania Municipal Bond Fund and Evergreen Short-Intermediate Municipal Bond Fund (each, a Fund; and together, the Funds ) Effective immediately, Matthew M. Kiselak is no longer a portfolio manager of the Funds. The section of each Fund s prospectus entitled Fund Portfolio Manager(s) and the section entitled Portfolio Manager(s) in each Fund s SAI are revised accordingly. May 21, 2010 587241 (5/10)
Fund Reorganizations SUPPLEMENT TO THE PROSPECTUSES OF EVERGREEN BALANCED FUNDS EVERGREEN BLEND EQUITY FUNDS EVERGREEN DOMESTIC GROWTH EQUITY FUNDS EVERGREEN DOMESTIC VALUE EQUITY 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 The Evergreen Funds Boards of Trustees have unanimously approved the reorganizations of the Evergreen Funds listed in the table below into the corresponding Wells Fargo Advantage Funds also listed in the table. The reorganizations were proposed by Evergreen Investment Company, LLC, and Wells Fargo Funds, LLC, investment advisers to the Evergreen Funds and Wells Fargo Advantage Funds, respectively. In addition, the Wells Fargo Funds Trust Board of Trustees has also unanimously approved these fund reorganizations. Evergreen Funds Wells Fargo Advantage Funds (Surviving Fund) Portfolio Team of Surviving Fund Evergreen Balanced Funds Evergreen Asset Allocation Fund Wells Fargo Advantage Asset Allocation Fund 1 Ben Inker, Grantham, Mayo, Van Otterloo & Co. LLC Evergreen Diversified Capital Builder Fund Wells Fargo Advantage Diversified Capital Builder Fund 1 Margie Patel, Wells Capital Incorporated ( Wells Capital ) Evergreen Blend Equity Funds Evergreen Enhanced S&P 500 Fund Wells Fargo Advantage Disciplined U.S. Core Fund 1 Bill Zieff, Wells Capital Evergreen Equity Index Fund Wells Fargo Advantage Index Fund Bill Zieff, Wells Capital Evergreen Fundamental Large Cap Fund Wells Fargo Advantage Core Equity Fund 1 Walter McCormick, Emory Sanders, Wells Capital Evergreen Golden Core Opportunities Fund Evergreen Golden Large Cap Core Fund Wells Fargo Advantage Small/Mid Cap Core Fund 1 Wells Fargo Advantage Large Cap Core Fund 1 Evergreen Domestic Growth Equity Funds Evergreen Growth Fund Wells Fargo Advantage Traditional Small Cap Growth Fund 1 Evergreen Large Company Growth Fund Wells Fargo Advantage Premier Large Company Growth Fund 1 John Campbell, Golden Capital, LLC ( Golden Capital ) Jeff Moser, Golden Capital Jeff Drummond, Linda Freeman, Paul Carder, Jeffrey Harrison, Edward Rick, Wells Capital Aziz Hamzaogullari, Wells Capital Evergreen Mid Cap Growth Fund Wells Fargo Advantage Mid Cap Growth Fund Cam Philpott, Stuart Roberts, Wells Capital
Evergreen Funds Wells Fargo Advantage Funds (Surviving Fund) Evergreen Omega Fund Wells Fargo Advantage Omega Growth Fund 1 Evergreen Small-Mid Growth Fund Wells Fargo Advantage Growth Opportunities Fund 1 Evergreen Strategic Growth Fund Wells Fargo Advantage Strategic Large Cap Growth Fund 1 Evergreen Domestic Value Equity Funds Evergreen Disciplined Value Fund Wells Fargo Advantage Disciplined Value Fund 1 Evergreen Equity Income Fund Wells Fargo Advantage Classic Value Fund 1 Evergreen Fundamental Mid Cap Value Fund Evergreen Intrinsic Value Fund Wells Fargo Advantage Mid Cap Disciplined Fund 2 Wells Fargo Advantage Intrinsic Value Fund 1 Evergreen Small Cap Value Fund Wells Fargo Advantage Special Small Cap Value Fund 1 Evergreen Special Values Fund Wells Fargo Advantage Special Small Cap Value Fund 1 Evergreen Money Market Funds Evergreen California Municipal Money Wells Fargo Advantage California Market Fund Municipal Money Market Fund Evergreen Money Market Fund Wells Fargo Advantage Money Market Fund Evergreen Municipal Money Market Wells Fargo Advantage Municipal Money Fund Market Fund Evergreen New Jersey Municipal Wells Fargo Advantage New Jersey Money Market Fund Municipal Money Market Fund 1 Evergreen New York Municipal Money Wells Fargo Advantage New York Market Fund Municipal Money Market Fund 1 Evergreen Pennsylvania Municipal Wells Fargo Advantage Pennsylvania Money Market Fund Municipal Money Market Fund 1 Evergreen Treasury Money Market Wells Fargo Advantage Treasury Plus Fund Money Market Fund Evergreen U.S Government Money Wells Fargo Advantage Government Market Fund Money Market Fund Evergreen Institutional Money Market Funds Evergreen Institutional 100% Treasury Wells Fargo Advantage 100% Treasury Money Market Fund Money Market Fund Evergreen Institutional Money Market Wells Fargo Advantage Heritage Money Fund Market Fund Evergreen Institutional Municipal Wells Fargo Advantage Municipal Cash Money Market Fund Money Market Fund 1 Evergreen Institutional Treasury Wells Fargo Advantage Treasury Plus Money Market Fund Money Market Fund Evergreen Institutional U.S. Wells Fargo Advantage Government Government Money Market Fund Money Market Fund Evergreen Prime Cash Wells Fargo Advantage Heritage Money Money Market Fund Market Fund Portfolio Team of Surviving Fund Aziz Hamzaogullari, Wells Capital Cam Philpott, Stuart Roberts, Wells Capital Shannon Reid, David Chow, Jay Zelko, Wells Capital Bill Zieff, Wells Capital Walter McCormick, Gary Mishuris, Wells Capital Jim Tringas, Bryant VanCronkhite, Wells Capital Howard Gleicher, Gary Lisenbee, David Graham, Jeffrey Peck, Metropolitan West Capital, LLC ( MetWest Capital ) Jim Tringas, Wells Capital Jim Tringas, Wells Capital Mathew Kiselak, Wells Capital David Sylvester, Wells Capital Mathew Kiselak, Wells Capital Mathew Kiselak, Wells Capital Mathew Kiselak, Wells Capital Mathew Kiselak, Wells Capital David Sylvester, Wells Capital David Sylvester, Wells Capital David Sylvester, Wells Capital David Sylvester, Wells Capital Mathew Kiselak, Wells Capital David Sylvester, Wells Capital David Sylvester, Wells Capital David Sylvester, Wells Capital
Evergreen Funds Wells Fargo Advantage Funds (Surviving Fund) Evergreen Global and International Funds Evergreen Emerging Markets Growth Wells Fargo Advantage Emerging Markets Fund Equity Fund 1 Portfolio Team of Surviving Fund Jerry Zhang, Wells Capital Evergreen Global Large Cap Equity Fund Evergreen Global Opportunities Fund Evergreen International Bond Fund Evergreen International Equity Fund Evergreen Intrinsic World Equity Fund Wells Fargo Advantage Disciplined Global Equity Fund 1 Wells Fargo Advantage Global Opportunities Fund 1 Wells Fargo Advantage International Bond Fund 1 Wells Fargo Advantage International Core Fund 3 Wells Fargo Advantage Intrinsic World Equity Fund 1 Bill Zieff, Wells Capital Francis Claro, Jim Tringas, Wells Capital Anthony Norris, Peter Wilson, Michael Lee, Alex Perrin, First International Advisors, LLC Francis Claro, Wells Capital Howard Gleicher, Gary Lisenbee, David Graham, Jeffrey Peck, MetWest Capital Evergreen Intermediate and Long Term Bond Funds Evergreen Core Bond Fund Wells Fargo Advantage Total Return Bond Fund Troy Ludgood, Thomas O'Connor, Wells Capital Evergreen Core Plus Bond Fund Wells Fargo Advantage Income Plus Fund Tom Price, Michael Bray, Janet Rilling, D. James Newton II, Wells Capital Evergreen Diversified Income Builder Fund Wells Fargo Advantage Diversified Income Builder Fund 1 Margie Patel, Wells Capital Evergreen High Income Fund Wells Fargo Advantage High Yield Bond Fund 1 Niklas Nordenfelt, Philip Susser, Evergreen U.S. Government Fund Wells Fargo Advantage Government Securities Fund Evergreen National Municipal Bond Funds Evergreen High Income Municipal Wells Fargo Advantage Municipal Bond Bond Fund Fund Evergreen Intermediate Municipal Bond Fund Evergreen Municipal Bond Fund Evergreen Short-Intermediate Municipal Bond Fund Evergreen Strategic Municipal Bond Fund Wells Fargo Advantage Intermediate Tax/AMT-Free Fund Wells Fargo Advantage Municipal Bond Fund Wells Fargo Advantage Short-Term Municipal Bond Fund Wells Fargo Advantage Strategic Municipal Bond Fund 1 Wells Capital Michael Bray, Jay Mueller, Wells Capital Lyle Fitterer, Robert Miller, Mathew Kiselak, Wells Capital Lyle Fitterer, Robert Miller, Mathew Kiselak, Wells Capital Lyle Fitterer, Robert Miller, Mathew Kiselak, Wells Capital Lyle Fitterer, Wendy Casetta, Wells Capital Lyle Fitterer, Mathew Kiselak, Julio Bonilla, Wells Capital Evergreen Sector Funds Evergreen Health Care Fund Wells Fargo Advantage Health Care Fund 1 Robert Junkin, Wells Capital Evergreen Precious Metals Fund Wells Fargo Advantage Precious Metals Michael Bradshaw, Wells Capital Evergreen Utility and Telecommunications Fund Fund 1 Wells Fargo Advantage Utility and Telecommunications Fund 1 Tim O'Brien, Crow Point Partners, LLC Evergreen Short and Intermediate Term Bond Funds Evergreen Adjustable Rate Fund Wells Fargo Advantage Adjustable Rate Richard Applebach, Christopher Y. Government Fund 1 Kauffman, Wells Capital
Evergreen Funds Evergreen Short Intermediate Bond Fund Wells Fargo Advantage Funds (Surviving Fund) Wells Fargo Advantage Total Return Bond Fund Evergreen Southern State Municipal Bond Funds Evergreen North Carolina Municipal Wells Fargo Advantage North Carolina Bond Fund Tax-Free Fund 1 Evergreen State Municipal Bond Funds Evergreen California Municipal Bond Wells Fargo Advantage California Tax-Free Fund Evergreen Pennsylvania Municipal Bond Fund Bond Fund Wells Fargo Advantage Pennsylvania Tax- Free Fund 1 Portfolio Team of Surviving Fund Troy Ludgood, Thomas O'Connor, Wells Capital Mathew Kiselak, Robert Miller, Wells Capital Stephen Galiani, Adrian Van Poppel, Wells Capital Mathew Kiselak, Robert Miller, Wells Capital 1. This fund will be newly created in order to receive the assets of the Evergreen Fund upon completion of the reorganization. 2. The Wells Fargo Advantage Mid Cap Disciplined Fund will be renamed the Wells Fargo Advantage Special Mid Cap Value Fund following the merger and is expected to make certain changes to its principal investments at that time. 3. The Wells Fargo International Core Fund will be renamed the Wells Fargo Advantage International Equity Fund following the merger and is expected to make certain changes to its principal investments at that time. Each reorganization is subject to the satisfaction of a number of conditions, including approval by the shareholders of the Evergreen Funds at special meetings of the shareholders expected to be held in June, 2010. In each reorganization, if various conditions to the closing of the reorganization are satisfied, the Wells Fargo Advantage Fund will receive all of the assets and assume all of the liabilities of the Evergreen Fund, and Evergreen Fund shareholders will receive shares of the Wells Fargo Advantage Fund in exchange for their shares of the Evergreen Fund. Each reorganization is intended to be a tax-free transaction and it is anticipated that no gain or loss will be recognized by shareholders as a result of the reorganization for U.S. federal income tax purposes. Additionally, fund shareholders will not incur any sales loads or similar transaction charges as a result of the reorganizations. Each reorganization, if it is approved by shareholders and all conditions to the closing are satisfied, is expected to occur in July, 2010. Prior to each reorganization, Evergreen Fund shareholders may continue to purchase, redeem and exchange their shares subject to the limitations described in the Fund s prospectus. No shareholder action is necessary at this time. Additional information, including a description of the applicable reorganization and information about fees, expenses, and risk factors, will be provided to shareholders of each Evergreen Fund in a Prospectus/Proxy Statement that is expected to be mailed in April, 2010. The Prospectus/Proxy Statement will provide information regarding the date, time and location of the shareholder meeting where the reorganization will be considered. The foregoing is not an offer to sell, nor is it a solicitation of an offer to buy, shares of any Wells Fargo Advantage Fund, nor is it a solicitation of any proxy. For more information, or to receive a free copy of the Prospectus/Proxy Statement once a registration statement relating to a proposed reorganization has been filed with the Securities and Exchange Commission and becomes effective, please call 1.800.343.2898 or visit Evergreeninvestments.com. The Prospectus/Proxy Statement will also be available for free on the Securities and Exchange Commission s website (www.sec.gov). Please read the Prospectus/Proxy Statement carefully before making any investment decisions. January 13, 2010 585748 (1/10)
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 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 (Each, a Fund, together, the Funds ) I. Effective January 4, 2010, each Fund s prospectus is revised as follows: The second paragraph under the section entitled Affiliated Service Providers is replaced with the following: Wells Fargo Funds Distributor, LLC ("WFFD"), a wholly-owned subsidiary of Wells Fargo and an affiliate of EIMC, serves as the Fund's distributor. Certain of the Evergreen funds pay WFFD fees for these services pursuant to their 12b-1 plans as well as through the sales charges paid in respect of fund shares. For information regarding this compensation with respect to a Fund, please see the SAI. WFFD is located at 525 Market Street, San Francisco, California, 94105. WFFD is also the distributor of the Wells Fargo Advantage Funds. II. The following changes to the Funds Statement of Additional Information will also be effective January 4, 2010: The first paragraph under the Principal Officers table in the section entitled Officer Information is replaced with the following: Officers and certain Trustees of the Fund may be affiliated persons of the Fund and an affiliated person of EIMC or Wells Fargo Funds Distributor, LLC ("WFFD") by virtue of their positions as an officer or employee of EIMC or WFFD. The Fund's principal executive officers do not receive any compensation or expense reimbursement from the Fund. The section entitled Principal Underwriter is replaced with the following: WFFD, located at 525 Market Street, San Francisco, California, 94105, is the distributor/principal underwriter of the Funds. WFFD markets the Funds through broker-dealers and other financial representatives and receives payments pursuant to the Funds' 12b-1 plans as well as through the sales charges paid in respect of sales of Fund shares. WFFD, a subsidiary of Wells Fargo, is an affiliate of each Fund and EIMC. The Trust has entered into a Distribution Agreement ("Distribution Agreement") with WFFD with respect to each class of the Fund. WFFD has agreed to act as agent for the distribution of the shares. WFFD may retain and employ representatives to promote distribution of the shares and may obtain orders from broker-dealers, and others, acting as principals, for sales of shares to them. The Distribution Agreement provides that WFFD will bear the expense of preparing, printing, and distributing advertising and sales literature and prospectuses used by it.
All subscriptions and sales of shares by WFFD are at the public offering price of the shares, which is determined in accordance with the provisions of the Trust's Declaration of Trust, By-Laws, current prospectuses and SAI. All orders are subject to acceptance by the Fund and the Fund reserves the right, in its sole discretion, to reject any order received. Under the Distribution Agreement, the Fund is not liable to anyone for failure to accept any order. WFFD has agreed that it will, in all respects, duly conform with all state and federal laws applicable to the sale of the shares. WFFD has also agreed that it will indemnify and hold harmless the Trust and each person who has been, is, or may be a Trustee or officer of the Trust against expenses reasonably incurred by any of them in connection with any claim, action, suit, or proceeding to which any of them may be a party that arises out of or is alleged to arise out of any misrepresentation or omission to state a material fact on the part of WFFD or any other person for whose acts WFFD is responsible or is alleged to be responsible, unless such misrepresentation or omission was made in reliance upon written information furnished by the Trust. After an initial term of two years, the Distribution Agreement provides that it will remain in effect as long as its terms and continuance are approved annually (i) by a vote of a majority of the Trust's Trustees who are not interested persons of the Fund, or interested persons of any party to the agreement and (ii) by vote of a majority of the Trust's Trustees, in each case. The first paragraph under the section entitled Underwriting Commissions is replaced with the following: As of the Fund s most recent fiscal year end, WFFD, the principal underwriter of the Fund and affiliate of Wells Fargo, had not received any underwriting commissions from sales charges on the sale of Fund shares. Below are the underwriting commissions received by Evergreen Investment Services, Inc. ( EIS ), the former principal underwriter of the Fund and an affiliate of Wells Fargo, from sales charges on the sale of Fund shares and the amounts retained by EIS after the payment of any dealer allowance for the last three fiscal years. EIS is an affiliate of the Fund and EIMC. III. Effective January 4, 2010, all other references to EIS in the Funds prospectuses and SAI are replaced with WFFD, except the references to Evergreen Investment Services, Inc. in the section of the Funds prospectuses under the heading Legal Proceedings. January 4, 2010 585837 (01/10)
SUPPLEMENT TO THE PROSPECTUSES OF EVERGREEN NATIONAL MUNICIPAL BOND FUNDS EVERGREEN STATE MUNICIPAL BOND FUNDS AND EVERGREEN SOUTHERN STATE MUNICIPAL BOND FUNDS I. Evergreen Intermediate Municipal Bond Fund, Evergreen Municipal Bond Fund and Evergreen Short-Intermediate Municipal Bond Fund (each, a Fund; and together, the Funds ) Effective November 1, 2009, Evergreen Intermediate Municipal Bond Fund is managed by Mathew M. Kiselak and Robert J. Miller; Evergreen Municipal Bond Fund is managed by Mathew M. Kiselak and Lyle J. Fitterer, CFA, CPA; and Evergreen Short-Intermediate Municipal Bond Fund is managed by Mathew M. Kiselak, James Randazzo and Lyle J. Fitterer, CFA, CPA. Accordingly, the section of the prospectuses for the Funds entitled "Fund Portfolio Manager(s)" is revised to reflect the following: Intermediate Municipal Bond Fund Name/Year Joined Fund Role Employer Positions over Past Five Years Mathew M. Kiselak/2007 Portfolio Manager EIMC or predecessor Director and Senior 2000-Present Robert J. Miller/2009 Portfolio Manager EIMC and an affiliate 2008-Present American Century Investments 1998-2008 Portfolio Manager Portfolio Manager Senior Portfolio Manager Municipal Bond Fund Name/Year Joined Fund Role Employer Positions over Past Five Years Mathew M. Kiselak/2000 Portfolio Manager EIMC or predecessor Director and Senior Lyle J. Fitterer, CFA, CPA /2009 Portfolio Manager 2000-Present EIMC and an affiliate 2005-Present Strong Capital 2000-2005 Portfolio Manager Managing Director and Senior Portfolio Manager Portfolio Manager Short-Intermediate Municipal Bond Fund Name/Year Joined Fund Role Employer Positions over Past Five Years Mathew M. Kiselak/2007 Portfolio Manager EIMC or predecessor 2000-Present Director and Senior Portfolio Manager James Randazzo/2008 Portfolio Manager EIMC or predecessor Associate Director and Lyle J. Fitterer, CFA, CPA /2009 Portfolio Manager 2000-Present EIMC and an affiliate 2005-Present Strong Capital 2000-2005 Analyst Managing Director and Senior Portfolio Manager Portfolio Manager II. Evergreen California Municipal Bond Fund and Evergreen Pennsylvania Municipal Bond Fund (each, a Fund; and together, the Funds ) Effective November 1, 2009, Evergreen California Municpal Bond Fund is managed by Mathew M. Kiselak and Stephen Galiani, and Evergreen Pennsylvania Municipal Bond Fund is managed by
Mathew M. Kiselak and Robert J. Miller. Accordingly, the section of the prospectus for the Funds entitled "Fund Portfolio Manager(s)" is revised to reflect the following: Callifornia Municipal Bond Fund Name/Year Joined Fund Role Employer Positions over Past Five Years Mathew M. Kiselak/2007 Portfolio Manager EIMC or predecessor Director and Senior 2000-Present Stephen Galiani/2009 Portfolio Manager EIMC and an affiliate 1997-Present Portfolio Manager Portfolio Manager Pennsylvania Municipal Bond Fund Name/Year Joined Fund Role Employer Positions over Past Five Years Mathew M. Kiselak/2008 Portfolio Manager EIMC or predecessor Director and Senior 2000-Present Robert J. Miller/2009 Portfolio Manager EIMC and an affiliate 2008-Present American Century Investments 1998-2008 Portfolio Manager Portfolio Manager Senior Portfolio Manager III. Evergreen North Carolina Municipal Bond Fund (the Fund ) Effective November 1, 2009, the Fund is managed by Mathew M. Kiselak and Robert J. Miller. Accordingly, the section of the prospectus for the Fund entitled "Fund Portfolio Manager(s)" is revised to reflect the following: North Carolina Municipal Bond Fund Name/Year Joined Fund Role Employer Positions over Past Five Years Mathew M. Kiselak/2008 Portfolio Manager EIMC or predecessor Director and Senior 2000-Present Robert J. Miller/2009 Portfolio Manager EIMC and an affiliate 2008-Present American Century Investments 1998-2008 Portfolio Manager Portfolio Manager Senior Portfolio Manager October 29, 2009 585528 (10/09)
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 STATE MUNICIPAL BOND FUNDS Fund Summary Evergreen California Municipal Bond Fund Evergreen Pennsylvania Municipal Bond Fund Fund Risks Principal Risks Additional Investment Strategies and Related Risks Fund Investment Advisor and Administrator 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 12 13 13 13 14 17 20 20 20 22 23 23 24 25 25 Evergreen State Municipal Bond Funds 1
FUND SUMMARY Evergreen California Municipal Bond Fund INVESTMENT GOAL The Fund seeks current income exempt from federal income taxes, other than the alternative minimum tax, and California state income tax as part of a long-term strategy of achieving tax-advantaged total return. INVESTMENT STRATEGY The Fund is a non-diversified fund that normally invests at least 80% of its assets in municipal securities that are exempt from federal income tax, other than the alternative minimum tax, and from California state and local personal income taxes. The Fund may invest up to 20% of its assets in other obligations, which may include taxable securities. The Fund normally invests at least 80% of its assets in investment grade securities. In addition, under normal circumstances, the Fund seeks to invest at least 50% of its assets in securities in the top two investment grade categories. The Fund may invest up to 20% of its assets in securities rated below investment grade (commonly referred to as "high yield" or "junk" bonds), but the Fund will not invest in bonds rated below B. The Fund may invest in bonds of any maturity or duration; however, the Fund's dollar-weighted average maturity is generally not expected to exceed 20 years. In purchasing municipal securities, the portfolio managers consider how well the securities fit into the portfolio from a strategy, credit quality and pricing standpoint. Security ratings are determined at the time of investment and 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 higher rating is used. The Fund may retain any security whose rating has been downgraded after purchase if the Fund's portfolio managers consider the retention advisable. At no time, however, will more than 35% of the Fund's assets consist of securities rated below investment grade. 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, 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. 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." Below Investment Grade Bond Risk. Below investment grade bonds are considered speculative by the major rating agencies and are usually backed by issuers of less proven or questionable financial strength. Concentration Risk. A Fund that concentrates its investments will be more vulnerable to adverse conditions affecting the area or industry in which it concentrates and the value of the Fund's shares may be more volatile than a Fund that does not concentrate its investments. 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. 2 Evergreen State Municipal Bond Funds
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 also decline. Municipal Securities Risk. The value of municipal securities may be more sensitive to certain adverse conditions than other fixed income securities. Certain municipal securities may be highly illiquid. Municipal securities may lose their tax-exempt status if certain legal requirements are not met, or if federal or state tax laws change. Non-Diversification Risk. A Fund that is non-diversified may be especially vulnerable to adverse conditions affecting an issuer in which it invests and the value of the Fund's shares may be more volatile than those of a Fund that is diversified. Tax Risk. Distributions of capital gains and other taxable income will be subject to applicable federal, state and local income taxes. Distributions of income and gains arising from the fund's use of derivatives will be subject to applicable federal, state, and local income taxes. The State of California is experiencing extreme financial stress, increasing the possibility that the State or its agencies or municipalities, or other issuers of securities in which the Fund may invest, will be unable to meet their obligations, that the values of securities in which the Fund invests will decline significantly, and that the liquidity of such securities will be impaired. Any of these events would likely cause the Fund's net asset value to decline, perhaps significantly and rapidly. It is not possible to predict how long this period of financial stress will persist. Investors should consult their financial advisors regarding the advisability of investing in a portfolio of California municipal securities. 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 Returns for Class I Shares (%) 1 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 12% 8% 4% 0% -4% -0.77 10.14 5.87 9.70 4.56 3.88 2.57 4.58 1.83-8% -12% -9.35-16% Highest Quarter: 3rd Quarter 2002 +6.28% 1 Lowest Quarter: 3rd Quarter 2008-5.06% Year-to-date total return as of 6/30/2009 is +8.72% Evergreen State Municipal 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 4/2/1997 Class A 11/8/2002-13.87% -0.68% 2.47% 3.23% Class B 2 11/8/2002-14.60% -0.78% 2.52% 3.26% Class C 11/8/2002-11.13% -0.44% 2.52% 3.26% Class I 4/2/1997-9.35% 0.57% 3.16% 3.81% Class I (after taxes on distributions) 3 4/2/1997-9.36% 0.46% 2.48% 2.97% Class I (after taxes on distributions and the sale of Fund Shares) 3 4/2/1997-4.62% 1.04% 2.69% 3.09% Barclays Capital 5-Year Municipal Bond Index 5.78% 3.57% 4.57% 4.93% Barclays Capital California Municipal Bond Index -4.16% 2.62% 4.08% 4.90% 1. Historical performance shown for Classes A, B and C prior to their inception is based on the performance of Class I. Historical performance for Class I prior to 11/11/2002 is based on the performance of Select shares of the Fund's predecessor fund, OFFIT California Municipal Fund. The historical returns for Classes A, B and C have not been adjusted to reflect the effect of each class' 12b-1 fees. These fees are 0.25% for Class A and 1.00% for Classes B and C. Class I and Select shares do 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) 4.75% 1 None None None Maximum deferred sales charge (load) (as a % of either the redemption amount or initial investment, whichever is lower) None 1 5.00% 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 Fees 0.35% 0.35% 0.35% 0.35% 12b-1 Fees 0.25% 1.00% 1.00% 0.00% Other Expenses 1 0.26% 0.26% 0.26% 0.26% Total Annual Fund Operating 0.86% 1.61% 1.61% 0.61% 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 State Municipal 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 $559 $164 $164 $62 3 Years $736 $508 $508 $195 5 Years $929 $876 $876 $340 10 Years $1,485 $1,710 $1,911 $762 If you sold your shares, you would pay: After: Class A Class B Class C Class I 1 Year $559 $664 $264 $62 3 Years $736 $808 $508 $195 5 Years $929 $1,076 $876 $340 10 Years $1,485 $1,710 $1,911 $762 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 State Municipal Bond Funds 5
FUND SUMMARY Evergreen Pennsylvania Municipal Bond Fund INVESTMENT GOAL The Fund seeks current income exempt from federal income taxes, other than the alternative minimum tax, and Pennsylvania state income tax as part of a long-term strategy of achieving tax-advantaged total return. INVESTMENT STRATEGY The Fund is a non-diversified fund that normally invests at least 80% of its assets in municipal securities issued by the Commonwealth of Pennsylvania, jurisdictions within the Commonwealth of Pennsylvania and possessions of the U.S. and their political subdivisions, that are exempt from federal income tax, other than the alternative minimum tax, and from income taxes of the Commonwealth of Pennsylvania. The Fund may also invest up to 20% of its assets in high quality short-term obligations, which may include taxable securities. The Fund normally invests at least 80% of its assets in investment grade bonds. The Fund may invest up to 20% of its assets in below investment grade bonds (commonly referred to as "high yield" or "junk" bonds), but the Fund will not invest in bonds rated below B. The Fund may invest in bonds of any maturity or duration but generally will maintain an overall portfolio with a dollar-weighted average maturity of 5 to 20 years. In purchasing municipal securities, the portfolio managers conduct an analysis of how well the securities fit into the Fund's overal portfolio strategy, credit criteria and established price levels. 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 managers. 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 managers consider 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, 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. 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." Below Investment Grade Bond Risk. Below investment grade bonds are considered speculative by the major rating agencies and are usually backed by issuers of less proven or questionable financial strength. Concentration Risk. A Fund that concentrates its investments will be more vulnerable to adverse conditions affecting the area or industry in which it concentrates and the value of the Fund's shares may be more volatile than a Fund that does not concentrate its investments. 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. 6 Evergreen State Municipal Bond Funds
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 also decline. Municipal Securities Risk. The value of municipal securities may be more sensitive to certain adverse conditions than other fixed income securities. Certain municipal securities may be highly illiquid. Municipal securities may lose their tax-exempt status if certain legal requirements are not met, or if federal or state tax laws change. Non-Diversification Risk. A Fund that is non-diversified may be especially vulnerable to adverse conditions affecting an issuer in which it invests and the value of the Fund's shares may be more volatile than those of a Fund that is diversified. Tax Risk. Distributions of capital gains and other taxable income will be subject to applicable federal, state and local income taxes. Distributions of income and gains arising from the fund's use of derivatives will be subject to applicable federal, state, and local income taxes. 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 A Shares (%) 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 12% 8% 4% 0% 9.51 4.91 8.29 4.30 3.58 2.65 4.12 1.25-4% -8% -12% -3.20-8.88-16% Highest Quarter: 3rd Quarter 2002 +4.42% Lowest Quarter: 4th Quarter 2008-4.89% Year-to-date total return as of 6/30/2009 is +9.64% 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 12/27/1990 Class A 12/27/1990-13.21% -0.55% 2.03% 4.67% Class A (after taxes on distributions) 2 12/27/1990-13.21% -0.55% 1.98% N/A Class A (after taxes on distributions and the sale of Fund Shares) 2 12/27/1990-7.10% 0.20% 2.36% N/A Class B 3 2/1/1993-13.96% -0.63% 1.85% 4.31% Class C 2/1/1993-10.46% -0.29% 1.85% 4.31% Evergreen State Municipal 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 12/27/1990 Class I 11/24/1997-8.65% 0.70% 2.80% 5.13% Barclays Capital Municipal Bond Index -2.47% 2.71% 4.26% 5.91% Barclays Capital Pennsylvania Municipal Bond Index -0.73% 3.07% 4.45% N/A 1. Historical performance shown for Classes B, C and I prior to their inception is based on the performance of Class A, the original class offered. The historical returns for Classes B, C and I 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 B and C would have been lower while returns for Class I would have been higher. 2. 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. 3. The returns shown for Class B shares do not reflect the conversion of Class B shares to Class A shares. 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) 4.75% 1 None None None Maximum deferred sales charge (load) (as a % of either the redemption amount or initial investment, whichever is lower) None 1 5.00% 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 Fees 0.30% 0.30% 0.30% 0.30% 12b-1 Fees 0.25% 1.00% 1.00% 0.00% Other Expenses 0.17% 0.17% 0.17% 0.17% Total Annual Fund Operating Expenses 0.72% 1.47% 1.47% 0.47% 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: 8 Evergreen State Municipal Bond Funds
If you held your shares, you would pay: After: Class A Class B Class C Class I 1 Year $545 $150 $150 $48 3 Years $694 $465 $465 $151 5 Years $857 $803 $803 $263 10 Years $1,327 $1,554 $1,757 $591 If you sold your shares, you would pay: After: Class A Class B Class C Class I 1 Year $545 $650 $250 $48 3 Years $694 $765 $465 $151 5 Years $857 $1,003 $803 $263 10 Years $1,327 $1,554 $1,757 $591 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 State Municipal Bond Funds 9