EVERGREEN ASSET MANAGEMENT
2500 WESTCHESTER AVENUE
PURCHASE, N.Y. 10577
August 23, 1996.
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington, D.C.
Attention: File Room
Re: EVERGREEN INVESTMENT TRUST
File No. 811-4154
Commissionioners:
Please be advised that the definitive form Proxy and Proxy card for
Evergreen Investment Trust was was submitted to your office on August 23, 1996,
via electronic transmission (Edgar). This Proxy includes one of the Trust's
managed series of shares namely, Evergreen International Equity Fund. The
Preliminary Proxy was previously filed on August 7, 1996 and the fee was paid.
Any questions or comments about this proxy should be directed to the
undersigned at (914) 641-2206.
Very Truly Yours,
James P. Wallin
Vice President and
Assistant General Counsel
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(X ) Filed by the Registrant
( ) Filed by a Party other than the Registrant
Check the appropriate box:
( ) Preliminary Proxy Statement
( ) Confidential, for Use of the Commission Only (as permitted by
Rule 14a-b(e)(2))
(X ) Definitive Proxy Statement
( ) Definitive Additional Materials
( ) Soliciting Material Pursuant to (section mark)240.14a-11(c) or
(section mark)240.14a-12
Evergreen International Equity Fund
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement If Other Than Registrant)
PAYMENT OF FILING FEE (Check the appropriate box):
( ) $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2).
( ) $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
( ) Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11: *
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
(Set forth the amount on which the filing fee is calculated and state how
it was determined)
( ) Fee previously paid with preliminary materials.
( ) Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid: $
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
EVERGREEN INVESTMENT TRUST
2500 WESTCHESTER AVENUE
PURCHASE, NEW YORK 10577
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON OCTOBER 1, 1996
TO THE SHAREHOLDERS OF
EVERGREEN INTERNATIONAL EQUITY FUND:
You are cordially invited to a Special Meeting of Shareholders of the
Evergreen International Equity Fund (the "Fund"), a series of Evergreen
Investment Trust (the "Trust"), on Tuesday, October 1, 1996, at 10:00 a.m.
Eastern time at the offices of First Union National Bank of North Carolina, 301
South College Street, Charlotte, North Carolina 28288, to consider and act on
the following matter:
A Proposal to approve the selection of Warburg, Pincus Counsellors, Inc.
("Warburg") as the Sub-Adviser for the Fund, and to approve a new Sub-Advisory
Agreement relating to the Fund between Warburg and First Union National Bank of
North Carolina, the Fund's investment adviser.
In accordance with their own discretion, the proxy holders are authorized
to vote on such other business that may properly be voted on at the Special
Meeting.
Shareholders of record at the close of business on August 1, 1996, are
entitled to notice of and to vote at the Special Meeting or any adjournment
thereof. Each shareholder is cordially invited to attend the special meeting in
person. However, if you are unable to be present at the Special Meeting, you are
requested to mark, sign and date the enclosed proxy and return it promptly in
the enclosed envelope so that the Special Meeting may be held and a maximum
number of shares may be voted.
By Order of the Board of Trustees
JOHN PILEGGI
PRESIDENT
August 22, 1996
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE SPECIAL MEETING, PLEASE
COMPLETE AND PROMPTLY RETURN THE ENCLOSED PROXY CARD. A POSTAGE PAID ENVELOPE IS
ENCLOSED FOR YOUR CONVENIENCE SO THAT YOU MAY RETURN YOUR PROXY CARD AS SOON AS
POSSIBLE. IT IS MOST IMPORTANT AND IN YOUR INTEREST FOR YOU TO COMPLETE AND SIGN
YOUR PROXY CARD AND RETURN IT SO THAT A QUORUM WILL BE PRESENT AT THE SPECIAL
MEETING AND A MAXIMUM NUMBER OF SHARES MAY BE VOTED. THE PROXY IS REVOCABLE AT
ANY TIME PRIOR TO ITS USE AT THE SPECIAL MEETING.
EVERGREEN INTERNATIONAL EQUITY FUND
A SERIES OF EVERGREEN INVESTMENT TRUST
2500 WESTCHESTER AVENUE
PURCHASE, NEW YORK 10577
TELEPHONE: (800) 807-2940
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Trustees of Evergreen Investment Trust (the "Trust") on
behalf of the Evergreen International Equity Fund (the "Fund") for use at the
Special Meeting of Shareholders to be held on October 1, 1996 at 10:00 a.m.
Eastern time at the offices of First Union National Bank of North Carolina, 301
South College Street, Charlotte, North Carolina 28288 and at any adjourned
session thereof (such meeting and any adjournment thereof are hereinafter
referred to as the "Meeting"). Shareholders of the Fund of record at the close
of business on August 1, 1996 (the "Shareholders") are entitled to vote at the
Meeting. As of August 1, 1996, the number of issued and outstanding Class A,
Class B, Class C and Class Y shares of beneficial interest ("shares") of the
Fund were 722,558, 1,301,014, 19,688 and 10,825,710, respectively. Each share,
regardless of Class, is entitled to one vote and each fractional share is
entitled to a proportionate fractional vote on each matter to be voted upon at
the Meeting.
The cost of solicitation will be borne by the Fund. The enclosed proxy card
and this Proxy Statement are being mailed to Shareholders on or about August 22,
1996.
Shares represented by duly executed proxies will be voted in accordance
with the instructions given. Proxies may be revoked at any time before they are
exercised by a written revocation received by the President of the Trust at 2500
Westchester Avenue, Purchase, New York 10577, by properly executing a written
revocation, submitting a later-dated proxy, or by attending the Meeting and
voting in person.
INTRODUCTION
At a meeting held on August 1, 1996, the Board of Trustees of the Trust
(the "Board of Trustees") voted to replace Boston International Advisers, Inc.
("BIA") as the Sub-Adviser to the Fund, effective upon approval by the
shareholders of the Fund, which is expected to be given October 1, 1996. The
Board of Trustees is recommending replacing BIA with Warburg, Pincus
Counsellors, Inc. ("Warburg") because the Board believes that Warburg's
investment process and style is more suitable for the Fund's shareholders. At
the same meeting the Board called this shareholder meeting for the purpose of
soliciting shareholder approval of the appointment of Warburg as Sub-Adviser and
approval of the terms of the proposed Sub-Advisory Agreement (the "Warburg
Sub-Advisory Agreement") that is attached hereto as Exhibit A. As described
below, Warburg's compensation under the Warburg Sub-Advisory Agreement, .55 of
1% of average daily net assets on an annual basis, will be computed differently
from the manner in which BIA's fee is computed under its Sub-Advisory Agreement
(the "BIA Agreement") and will result in a fee higher than the fee BIA currently
receives at any asset level of the Fund. However, since the Sub-Adviser's fee is
paid by First Union National Bank of North Carolina, the Fund's investment
adviser (the "Adviser"), the proposed increase in the Sub-Adviser's compensation
will not increase the maximum advisory fees payable by the Fund. Such
differences could, however, affect decisions by the Adviser about whether or to
what extent it is willing to waive its own fees, which it has done, and may in
the future continue to do. The waiver of fees by the Adviser is currently
limited to that portion of the advisory fee it retains and it is currently
expected that the Adviser will continue to limit waivers in this manner. In view
of this, the increase in the sub-advisory fee contemplated under the proposed
Sub-Advisory Agreement with Warburg may limit the extent to which the Adviser
may in the future waive a portion of the advisory fee. For further information
about the sub-advisory fees and the differences and similarities between the
sub-advisory agreements see the discussion below under "COMPARISON OF THE
WARBURG SUB-ADVISORY AGREEMENT AND THE BIA AGREEMENT."
The Fund currently offers four classes of shares, Class A shares, Class B
shares, Class C shares and Class Y shares. Class A shares have a front-end sales
charge and pay an ongoing distribution fee at the annual rate of .25% of the
Fund's average daily net assets. Class B shares are not subject to a front-end
sales charge, but are subject to a contingent deferred sales charge ("CDSC") if
redeemed within seven years of purchase, and pay ongoing distribution and
shareholder service fees at an annual rate of .75% and .25%, respectively, of
the Fund's average daily net assets for a period of eight years, after which
they convert automatically to Class A shares. Class C shares are not subject to
a front-end sales charge, but are subject to a CDSC if redeemed within the first
year of purchase, pay ongoing distribution and shareholder service fees at the
annual rate of .75% and .25%, respectively, of the Fund's average daily net
assets, and do not have a conversion feature. Class Y
shares are not subject to any front-end sales charges or CDSCs, and do not bear
any ongoing distribution or shareholder service fees. However, Class Y shares
are only available to (i) all shareholders of record as of December 30, 1994 in
one or more of the mutual funds for which Evergreen Asset Management Corp.
("Evergreen Asset"), a wholly-owned subsidiary of the Adviser, serves as
investment adviser, (ii) certain institutional investors and (iii) investment
advisory clients of the Adviser, Evergreen Asset or their affiliates.
PROPOSAL 1: APPROVAL OF THE SELECTION OF WARBURG AS SUB-ADVISER FOR THE FUND
AND APPROVAL OF THE WARBURG SUB-ADVISORY AGREEMENT
The Board of Trustees has determined that it would be in the best interest
of the Fund and its shareholders to retain Warburg as the Sub-Adviser of the
Fund and, therefore, is recommending that Shareholders of the Fund approve
Warburg as the Sub-Adviser of the Fund and approve the Warburg Sub-Advisory
Agreement between the Adviser and Warburg. The Trustees of the Trust (the
"Trustees"), including all of the Trustees who are not "interested persons" of
the Trust, approved the selection of Warburg by the Adviser as Sub-Adviser for
the Fund as well as the Warburg Sub-Advisory Agreement on August 1, 1996.
INFORMATION ABOUT THE ADVISER. The Adviser's principal business address is
301 South College Street, Charlotte, NC 28288. Under an Investment Advisory
Agreement between the Trust and the Adviser (the "Advisory Agreement") dated
February 28, 1985, as amended with respect to the Fund on July 28, 1994, the
Adviser has, subject to the supervision and direction of the Board of Trustees,
general oversight responsibility for the investment advisory services provided
to the Fund. In connection therewith, the Adviser, among other things,
participates in the formulation of the Fund's investment policies, analyzes
economic trends, monitors expenses, monitors the brokerage and research
services, selects Sub-Advisers and monitors and evaluates the services provided
by the Fund's Sub-Adviser. In this instance, the Adviser recommends the
selection of Warburg as the new Sub-Adviser to the Fund and recommends that the
Shareholders vote to approve such selection and the Warburg Sub-Advisory
Agreement.
Neither the Advisory Agreement nor the fees to which the Adviser is
entitled under the Advisory Agreement will change or increase as a consequence
of the Warburg Sub-Advisory Agreement. Pursuant to the Advisory Agreement, the
Adviser pays any sub-advisory fees out of its advisory fees. For the services
provided and expenses assumed pursuant to the Advisory Agreement, the Adviser is
paid a monthly fee at the annual rate of .82 of 1% of the first $20 million of
average daily net assets; .79 of 1% of the next $30 million of average daily net
assets; .76 of 1% of the next $50 million of average daily net assets; and .73
of 1% of average daily net assets in excess of $100 million. The Adviser retains
only the net amount of the foregoing advisory fees that remains after the
Adviser pays the Fund's Sub-Adviser the sub-advisory fees to which it is
entitled as described herein. During the fiscal year ended October 31, 1995,
$86,917 in advisory fees were paid by the Fund to the Adviser, and $116,844 in
advisory fees were paid by the Adviser to BIA. The Adviser is currently
entitled, based on the current level of the Fund's average daily net assets, to
an effective advisory fee of .77 of 1%.
DESCRIPTION OF THE SUB-ADVISER. Warburg is located at 466 Lexington Avenue,
New York, New York 10017-3147. Warburg is a professional investment counselling
firm that provides investment services to investment companies, employee benefit
plans, endowment funds, foundations and other institutions and individuals. As
of June 30, 1996, Warburg managed approximately $16.0 billion of assets,
including approximately $9.6 billion of investment company assets. The directors
of Warburg are Mr. Lionel I. Pincus, Chief Executive Officer, Mr. John L. Furth,
Chairman of the Board of Directors, and Mr. John L. Vogelstein. Incorporated in
1970, Warburg is a wholly-owned subsidiary of Warburg, Pincus Counsellors G.P.
("Counsellors G.P."), a New York general partnership. E.M. Warburg Pincus & Co.,
Inc. ("EMW") controls Warburg through its ownership of a class of voting
preferred stock of Warburg. Counsellors G.P. has no business other than being a
holding company of Warburg and its subsidiaries. Each director's address is the
same as Warburg's address, and the principal occupation of each director is his
position with Warburg and its affiliates. Lionel I. Pincus may be deemed a
controlling person of EMW.
Warburg currently provides investment advisory or sub-advisory services to
the following investment company portfolios that have investment objectives
similar to those of the Fund. Warburg provides these services pursuant to the
fee arrangements described below as of August 1, 1996. From time to time Warburg
may waive part or all of the fees payable by certain of the portfolios listed
below. These waivers are not reflected in the table.
2
AMOUNT OF ASSETS UNDER ANNUAL RATE OF
NAME OF INVESTMENT COMPANY MANAGEMENT (000'S) COMPENSATION
Warburg Pincus International Equity Fund........................................... $2,830,916 1.00%
Warburg Pincus Institutional Fund, Inc.
-- International Equity Portfolio............................................... $ 828,676 0.80%
Warburg Pincus Trust
-- International Equity Portfolio............................................... $ 240,178 1.00%
Sierra Trust Funds
-- International Growth Fund.................................................... $ 164,018 0.50%
The Sierra Variable Trust
-- International Growth Fund.................................................... $ 56,865 0.50%
Separate Account D of Golden American Life Insurance Company
-- The Managed Global Account................................................... $ 81,979 0.60% of
the first
$500 million;
0.50% of assets
over $500
million
In the event Shareholders of the Fund do not approve the adoption of the
Warburg Sub-Advisory Agreement at the Special Meeting, the Trustees will
consider an appropriate course of action to take.
COMPARISON OF THE WARBURG SUB-ADVISORY AGREEMENT AND THE BIA AGREEMENT. A
copy of the form of the Warburg Sub-Advisory Agreement is attached as Exhibit A
to this Proxy Statement. The following discussion of the Warburg Sub-Advisory
Agreement is qualified in its entirety by reference to Exhibit A. The BIA
Agreement between the Adviser and BIA is dated as of July 28, 1994. The sole
shareholder of the Fund initially approved BIA as the Fund's Sub-Adviser on
August 23, 1994.
The proposed Warburg Sub-Advisory Agreement, which the Adviser and Warburg
negotiated, contains several significant changes when compared to the BIA
Agreement. Under the Warburg Sub-Advisory Agreement, Warburg will be entitled to
a fee of .55% of the average daily net assets of the Fund on an annual basis. In
contrast, BIA is entitled to a fee of .32 of 1% of the first $20 million of
average daily net assets; .29 of 1% of the next $30 million of average daily net
assets; .26 of 1% of the next $50 million of average daily net assets; and .23
of 1% of average daily net assets in excess of $100 million. On August 1, 1996,
the net assets of the Fund were $136.1 million. BIA is currently entitled to an
effective sub-advisory fee of .28 of 1%. At all asset levels the fee Warburg
would receive would exceed the fee BIA receives from the Adviser. In any case,
however, the proposed fee to be paid to Warburg will not effect the maximum
advisory fees payable by the Fund because there will be no change in the overall
advisory fee paid to the Adviser, out of which Warburg, as Sub-Adviser, would be
paid its fee, just as BIA is currently paid. However, as discussed above, the
Adviser has waived and may in the future continue to waive a portion of the
overall advisory fee due from the Fund. For the period ended October 31, 1995
advisory fee waivers and Fund expenses assumed by the Adviser totaled .65 of 1%
of annualized average daily net assets of the Fund, and for the period ended
April 30, 1996 advisory fee waivers and Fund expenses assumed by the Adviser
totalled .50 of 1% of annualized average daily net assets. Since May 3, 1996,
the Adviser voluntarily set the advisory fee waiver at .36 of 1% of average
daily net assets. It is the current intention of the Adviser, should the
proposed Warburg Sub-Advisory Agreement be approved, to reduce current fee
waivers and assumption of Fund expenses to at least a level that would permit
recovery of the entire sub-advisory fee due Warburg. Accordingly, implementation
of the proposed Warburg Sub-Advisory Agreement would result in an increase in
Fund expenses of no less than .14 of 1% of annualized average daily net assets
at current asset and expense levels should fee waivers and assumption of
expenses be reduced in the manner described in the preceding sentence. For
further information and an illustration of the effect of the proposed
transaction on Fund expenses, see "FUND EXPENSES" below.
The Warburg Sub-Advisory Agreement also contains a number of provisions
that are similar to those in the BIA Agreement or that are governed by
applicable law. For example, both agreements provide that the Sub-Adviser may
consider brokerage and research services when it evaluates the best price and
execution available from brokers or dealers for particular securities
transactions. In addition, Warburg is permitted, when it deems it in the best
interest of the Fund and as permitted by law, to aggregate purchase or sale
orders to obtain lower brokerage commissions, if any, and/or the most favorable
execution.
The Warburg Sub-Advisory Agreement also contains more extensive
indemnification provisions than the BIA Agreement, which are reciprocal between
the Adviser and Warburg. However, these provisions do not require the Fund to
provide indemnification; nor do they provide specific indemnification to the
Fund. These indemnification provisions provide, among other things, that the
Adviser shall indemnify Warburg against any loss arising from the Warburg
Sub-Advisory Agreement
3
that may be based on any untrue statement (or omission) of a material fact
contained in the Trust's registration statement, unless such statement or
omission was made in reliance on written information furnished by Warburg and
except to the extent such losses result from willful misfeasance, bad faith,
gross negligence or reckless disregard on the part of Warburg. The Warburg
Sub-Advisory Agreement provides similar assurances to the Adviser for losses
arising out of Warburg's failure to perform its responsibilities to the Fund,
the Trust or the Adviser.
SUB-ADVISER'S DUTIES UNDER THE WARBURG SUB-ADVISORY AGREEMENT. Under the
Warburg Sub-Advisory Agreement, Warburg is responsible for the investment
decisions for the Fund, and continual review, supervision and management of the
Fund's investment program in accordance with the Fund's investment objective and
policies. Warburg will discharge its responsibilities subject to the supervision
of the Adviser. The Adviser will discharge its responsibilities of evaluating
the investment services provided by Warburg and monitoring the Fund's investment
performance subject to the supervision of the Board of Trustees.
FUND EXPENSES. The table below sets forth information summarizing the
expenses payable by the Fund, which includes the proposed level of fees payable
to Warburg should its selection as Sub-Adviser be approved by the shareholders.
Under the Warburg Sub-Advisory Agreement, the Adviser will pay Warburg a fee
calculated daily and paid monthly, at an annual rate of .55 of 1% of the average
daily net assets of the Fund. As noted above, the Fund's expenses would increase
upon approval of the Warburg Sub-Advisory Agreement.
EVERGREEN INTERNATIONAL EQUITY FUND
PRO FORMA SHAREHOLDER UNDER CURRENT UNDER PROPOSED
TRANSACTION EXPENSES AGREEMENT AGREEMENT
SHAREHOLDER TRANSACTION FEES
Class A shares (maximum sales charge imposed on purchase
as a percentage of offering price).............................................. 4.75%* 4.75%*
Class B shares (deferred sales charge as a percentage of original purchase price or
redemption proceeds or purchase price, whichever is lower)...................... 5.00% 5.00%
Class C shares (deferred sales charge as a percentage of original purchase price or
redemption proceeds or purchase price, whichever is lower)...................... 1.00% 1.00%
Class Y shares..................................................................... None None
PRO FORMA ANNUAL FUND OPERATING EXPENSES** UNDER CURRENT UNDER PROPOSED
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS) AGREEMENT AGREEMENT
ADVISORY FEES (AFTER VOLUNTARY WAIVERS OR REIMBURSEMENTS)+
Class A shares..................................................................... 0.41% 0.55%
Class B shares..................................................................... 0.41% 0.55%
Class C shares..................................................................... 0.41% 0.55%
Class Y shares..................................................................... 0.41% 0.55%
12B-1 AND SHAREHOLDER SERVICE FEES
Class A shares..................................................................... 0.25% 0.25%
Class B shares..................................................................... 1.00% 1.00%
Class C shares..................................................................... 1.00% 1.00%
Class Y shares..................................................................... None None
OTHER EXPENSES
Class A shares..................................................................... 0.70% 0.70%
Class B shares..................................................................... 0.70% 0.70%
Class C shares..................................................................... 0.70% 0.70%
Class Y shares..................................................................... 0.70% 0.70%
TOTAL FUND OPERATING EXPENSES
Class A shares..................................................................... 1.36% 1.50%
Class B shares..................................................................... 2.11% 2.25%
Class C shares..................................................................... 2.11% 2.25%
Class Y shares..................................................................... 1.11% 1.25%
* The initial sales charge is reduced for purchases of $50,000 and over,
decreasing to zero for purchases of $1,000,000 and over. See "How to Buy
Shares -- Class A Shares -- Front End Sales Charge Alternative" in the Fund's
prospectus.
** Based on the experience of the Fund for the semi-annual period ended April
30, 1996.
+ The difference in the advisory fees shown in the table is due entirely to the
higher fee that is proposed to be paid to Warburg. If fee waivers were
eliminated, the total advisory fees under both the current and proposed
sub-advisory agreements would, at current asset levels, be .77 of 1% on an
annual basis.
4
EXAMPLE
Based on the foregoing table, and assuming a hypothetical investment of
$1,000, a 5% annual return and redemption at the end of each time period, an
investor in each class of shares would pay estimated transaction and operating
expenses for the periods specified as follows:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
CLASS A SHARES (1)
Current Agreement....................................................................... $ 62 $ 92 $ 124 $215
Proposed Agreement (Pro Forma).......................................................... $ 63 $ 96 $ 131 $230
CLASS B SHARES
Current Agreement assuming a complete redemption at
end of period (2)..................................................................... $ 72 $ 96 $ 134 $221
Current Agreement assuming no redemption (3)............................................ $ 22 $ 66 $ 114 $221
Proposed Agreement (Pro Forma) assuming a complete redemption
at end of period (2).................................................................. $ 73 $ 101 $ 141 $236
Proposed Agreement (Pro Forma) assuming no redemption (3)............................... $ 23 $ 71 $ 121 $236
CLASS C SHARES
Current Agreement assuming a complete redemption at end of period (2)................... $ 33 $ 66 $ 114 $245
Current Agreement assuming no redemption (3)............................................ $ 22 $ 66 $ 114 $245
Proposed Agreement (Pro Forma) assuming a complete redemption
at end of period (2).................................................................. $ 33 $ 66 $ 114 $260
Proposed Agreement (Pro Forma) assuming no redemption (3)............................... $ 23 $ 66 $ 114 $260
CLASS Y SHARES
Current Agreement assuming a complete redemption at end of period (2)................... $ 11 $ 35 $ 61 $135
Proposed Agreement (Pro Forma) assuming a complete redemption
at end of period (2).................................................................. $ 13 $ 40 $ 69 $151
(1) Assumes deduction at the time of purchase of maximum initial sales charge.
(2) Assumes deduction of maximum applicable CDSC.
(3) Assumes no deduction of CDSC.
THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
For the fiscal year ended October 31, 1995, the aggregate fee paid by the
Adviser to BIA, the current Sub-Adviser, for services on behalf of the Fund was
$116,844.
DURATION AND TERMINATION. Once approved by vote of a majority of the
outstanding voting securities of the Fund in accordance with the requirements of
the Investment Company Act of 1940, as amended (the "Act"), and unless sooner
terminated, the Warburg Sub-Advisory Agreement will continue in effect for an
initial period of two years from the date of its execution. Thereafter, if not
terminated, the Warburg Sub-Advisory Agreement will continue in effect for
successive periods of 12 months, provided that such continuation is specifically
approved at least annually (a) by the vote of a majority of those members of the
Board of Trustees who are not interested persons of the Trust, the Adviser, or
Warburg, cast in person at a meeting called for the purpose of voting on such
approval, and (b) by the vote of a majority of the Board of Trustees or by the
vote of a majority of the outstanding shares of the Fund. The Warburg
Sub-Advisory Agreement may be terminated as to the Fund at any time, without the
payment of any penalty, on 60 days' written notice by the Adviser, the Board of
Trustees, or by vote of a majority of the outstanding shares of the Fund or upon
90 days' written notice by Warburg. The Warburg Sub-Advisory Agreement will
immediately terminate in the event of its assignment or in the event the
Advisory Agreement between the Trust and the Adviser is terminated.
TRUSTEES' CONSIDERATIONS. In recommending that the Shareholders approve the
Warburg Sub-Advisory Agreement, the Trustees reviewed and evaluated the
experience of Warburg and its key personnel and the nature and quality of
services expected to be delivered to the Fund by Warburg. The Trustees noted
Warburg's performance history and its practice of broadly diversifying its
international portfolios on a country by country basis. Additional factors
considered by the Trustees included, but were not limited to, the following:
Warburg's depth of experience in advising international equity funds and
5
complying with regulations applicable thereto, Warburg's credit analysis team,
the amount and nature of assets under management by Warburg and marketing
considerations. The Trustees also reviewed the fees to be paid to Warburg in
comparison to those charged in the relevant segment of the mutual fund business.
The Trustees also considered that the Warburg Sub-Advisory Agreement requires
Warburg, when executing transactions for the Fund and selecting brokers or
dealers, to assess the best overall terms available and attempt to obtain the
best net price and most favorable execution of its orders.
THE TRUSTEES RECOMMEND THAT THE SHAREHOLDERS VOTE FOR THE PROPOSAL
GENERAL INFORMATION ABOUT THE TRUST AND OTHER MATTERS
DISTRIBUTION. Evergreen Funds Distributor, Inc. ("EFD"), an indirect
wholly-owned subsidiary of Furman Selz LLC ("Furman"), is located at 230 Park
Avenue, New York, New York 10169 and serves as distributor of the Trust's
shares.
ADMINISTRATION. Evergreen Asset Management Corp., a wholly-owned subsidiary
of First Union National Bank of North Carolina, provides shareholder services
and other administrative services to the Trust and is located at 2500
Westchester Avenue, Purchase, New York 10577. Furman serves as sub-administrator
to the Fund and in that capacity provides personnel to act as officers of the
Fund.
FUND BROKERAGE TRANSACTIONS. For the fiscal year ended October 31, 1995,
the Trust paid no brokerage commissions to affiliated broker-dealers.
5% SHAREHOLDERS. The table below sets forth information with respect to
each person who was known to the Fund to own beneficially 5% or more of the
Fund's shares as of August 1, 1996. As of August 1, 1996, the Trustees and
executive officers of the Trust owned in the aggregate less than 1% of the
shares of the Fund.
NAME AND ADDRESS NUMBER OF SHARES PERCENTAGE OF CLASS
OF BENEFICIAL OWNER BENEFICIALLY OWNED BENEFICIALLY OWNED
First Union National Bank of North Carolina*
Trust Accounts
301 S. Tryon Street
Charlotte, NC 28288-0001..................................... 10,657,137 82.81%
*Acting in various capacities for numerous trust accounts. As a result of its
ownership of 82.81% of the Fund on August 1, 1996, First Union National Bank of
North Carolina may be deemed to "control" the Fund as that term is defined in
the Investment Company Act of 1940, as amended.
SOLICITATION OF VOTES. Proxy solicitations will be made primarily by mail,
but proxy solicitations may also be made by telephone, telegraph or personal
solicitations conducted by officers and employees of the Adviser, its affiliates
or other representatives of the Trust (who will not be paid for their
solicitation activities). The Trust may also retain Shareholder Communications
Corporation ("SCC") to assist in the proxy solicitation process, and SCC may
contact certain Shareholders over the telephone. Shareholders that are contacted
by SCC may be asked to cast their vote by telephonic proxy. Such proxies will be
recorded in accordance with the procedures set forth below. The Adviser believes
these procedures are reasonably designed to ensure that the identity of the
shareholder casting the vote is accurately determined and that the voting
instructions of the shareholder are accurately reflected. SCC has received an
opinion of Dechert Price & Rhoads LLP that addresses the validity, under the
applicable law of the Commonwealth of Massachusetts, of a proxy given orally.
The opinion given by Dechert Price & Rhoads LLP concludes that a Massachusetts
court would find that there is no Massachusetts law or Massachusetts public
policy against the acceptance of proxies signed by an orally-authorized agent.
In all cases where a telephonic proxy is solicited, the SCC representative
will ask you for your full name, address, social security or employer
identification number, title (if you are authorized to act on behalf of an
entity, such as a corporation), and number of shares owned. If the information
solicited agrees with the information provided to SCC by the Adviser, then the
SCC representative will explain the process, read the proposals listed on the
proxy card and ask for your instructions on each proposal. The SCC
representative, although he or she will answer questions about the process, will
not recommend to you how you should vote, other than to read any recommendations
set forth in this Proxy Statement. Within 72 hours, SCC will send you a letter
or mailgram to confirm your vote and asking you to call SCC immediately if your
instructions are not correctly reflected in the confirmation.
If you wish to participate in the Meeting, but do not wish to give your
proxy by telephone, you may still submit the proxy card included with this Proxy
Statement or attend the Meeting in person. Any proxy given by you, whether in
writing or by telephone, is revocable as hereinabove provided.
6
ADJOURNMENT. In the event that sufficient votes in favor of the proposal
set forth in the Notice of the Special Meeting are not received by October 1,
1996, the persons named as proxies may propose one or more adjournments of the
Meeting with respect to the proposal for a period or periods of not more than 60
days in the aggregate to permit further solicitation of proxies with respect to
such proposal. In determining whether to adjourn the Meeting, the following
factors may be considered: the percentage of votes actually cast, the percentage
of negative votes actually cast, the nature of any further solicitation and the
information to be provided to Shareholders with respect to the reasons for the
further solicitation. Any such adjournment will require the affirmative vote of
a majority of the votes cast on the question in person or by proxy at the
session of the Meeting to be adjourned. The persons named as proxies will vote
in favor of such adjournment those proxies which they are entitled to vote in
favor of the proposal. They will vote against any such adjournment those proxies
required to be voted against the proposal. The costs of any such additional
solicitation and of any adjourned session will be borne by the Fund.
REQUIRED VOTE. Approval of the proposal requires the affirmative vote of a
majority of the outstanding shares of the Fund. As defined in the Act, "majority
of the outstanding shares" means the vote of (i) 67% or more of the Fund's
outstanding shares present at a meeting, if the holders of more than 50% of the
outstanding shares of the Fund are present or represented by proxy, or (ii) more
than 50% of the Fund's outstanding shares, whichever is less. Abstentions and
"broker non-votes" will not be counted for or against any proposal to which they
relate, but will be counted for purposes of determining whether a quorum is
present. Abstentions and broker non-votes will be counted as votes present for
purposes of determining a "majority of the outstanding voting securities"
present at the Meeting, and will therefore have the effect of counting against
the proposal.
SHAREHOLDER PROPOSALS. The Trust does not hold annual shareholder meetings.
Shareholders wishing to submit proposals for inclusion in a proxy statement for
a subsequent meeting should send their written proposals to Evergreen Investment
Trust, 2500 Westchester Avenue, Purchase, New York 10577 c/o Secretary of the
Trust.
REPORTS TO SHAREHOLDERS. The Trust will furnish, without charge, a copy of
the most recent Annual Report to Shareholders of the Fund and the most recent
Semi-Annual Report on request. Requests should be directed to the Trust at 2500
Westchester Avenue, Purchase, New York 10577, or by calling (800) .
OTHER MATTERS. The Trustees know of no other business to be brought before
the Meeting. However, if any other matters are voted on at the Meeting, it is
their intention that proxies which do not contain specific restrictions to the
contrary will be voted on such matters in accordance with the judgment of the
persons named in the enclosed form of proxy.
Dated: August 22, 1996
SHAREHOLDERS ARE URGED TO COMPLETE, SIGN AND DATE THE ENCLOSED PROXY AND RETURN
IT PROMPTLY.
7
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EXHIBIT A
SUBADVISORY AGREEMENT
This AGREEMENT is made and entered into on this day of October, 1996,
between FIRST UNION NATIONAL BANK OF NORTH CAROLINA (the "Adviser"), a National
Banking Association, and WARBURG, PINCUS COUNSELLORS, INC. (the "Subadviser"), a
Delaware corporation registered under the Investment Advisers Act of 1940, as
amended (the "Advisers Act").
W I T N E S S E T H
WHEREAS, Evergreen Investment Trust (the "Trust") is registered with the
Securities and Exchange Commission (the "SEC") as an open-end management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act");
WHEREAS, the Adviser has, pursuant to an Investment Advisory Agreement with
the Trust dated as of July 28, 1994 (the "Advisory Agreement"), been retained to
act as investment adviser for the Evergreen International Equity Fund (the
"Fund"), one of the Trust's portfolios;
WHEREAS, the Advisory Agreement permits the Adviser to delegate certain of
its duties under the Advisory Agreement to other investment advisers, subject to
the requirements of the 1940 Act; and
WHEREAS, the Adviser desires to retain the Subadviser to assist it in the
provision of a continuous investment program for the assets of the Fund (the
"Subadviser Assets"), and the Subadviser is willing to render such services
subject to the terms and conditions set forth in this Agreement.
NOW, THEREFORE, the parties do mutually agree and promise as follows:
1. INVESTMENT DESCRIPTION: APPOINTMENT AS SUBADVISER. The Fund desires to
employ its capital by investing and reinvesting in securities of the kind and in
accordance with the limitations specified in the Trust's Declaration of Trust
and By-Laws, as may be amended from time to time (the "Charter Documents"), and
in its Prospectus and Statement of Additional Information, as may be in effect
from time to time (collectively, the "Prospectus") and which are filed with the
Securities and Exchange Commission as part of the Trust's Registration Statement
on Form N-1A, as amended from time to time, and in such manner and to such
extent as may be approved by the Board of Trustees of the Trust. Copies of the
Prospectus and Charter Documents, each as currently in effect, have been or will
be submitted to the Subadviser. The Adviser hereby retains the Subadviser to act
as investment adviser for and to manage the Subadviser Assets subject to the
supervision of the Adviser and the Board of Trustees of the Trust and subject to
the terms of this Agreement; and the Subadviser hereby accepts such employment.
In such capacity, the Subadviser shall be responsible for the investment
management of the Subadviser Assets. It is recognized that the Subadviser now
acts, and that from time to time hereafter may act, as investment adviser to one
or more other investment companies and to fiduciary or other managed accounts
and that the Adviser and the Trust have no objection to such activities so long
as the services rendered hereunder are not impaired.
2. DUTIES OF SUBADVISER.
(a) INVESTMENTS. The Subadviser is hereby authorized and directed and
hereby agrees, subject to the stated investment policies and restrictions
of the Fund as set forth in the Prospectus and subject to the directions of
the Adviser and the Trust's Board of Trustees, to purchase, hold and sell
Subadviser Assets ("Fund Investments") and to monitor on a continuous basis
the performance of such Fund Investments. Subject to the supervision of the
Board of Trustees and the Adviser, the Subadviser will: (1) manage the
Subadviser Assets in accordance with the Fund's investment objective,
policies and limitations as stated in the Prospectus and the Charter
Documents and as the objective, policies and limitations apply to the
Subadviser Assets and in compliance with the 1940 Act and the Advisers Act;
(2) make investment decisions for the Fund; (3) place purchase and sale
orders for portfolio transactions for the Fund; and (4) manage otherwise
uninvested cash assets included in the Subadviser Assets. In providing
these services, the Subadviser will conduct a continual program of
investment, evaluation and, if appropriate, sale and re-investment of the
Subadviser Assets. The Adviser agrees to provide to the Subadviser such
assistance as may be reasonably requested by the Subadviser in connection
with its activities under this Agreement, including, without limitation,
information concerning the Fund, its funds available, or to become
available, for investment and generally as to the conditions of the Fund's
affairs.
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(b) COMPLIANCE WITH APPLICABLE LAWS AND GOVERNING DOCUMENTS. In the
performance of its duties and obligations under this Agreement, the
Subadviser shall act in conformity with the Trust's Charter Documents and
the Prospectus and with the instructions and directions received in writing
from the Adviser or the Board of Trustees of the Trust and will act in
conformity with the requirements of the 1940 Act, the Internal Revenue Code
of 1986, as amended (the "Code") (including the requirements for
qualification as a regulated investment company) and all other applicable
federal and state laws and regulations. Notwithstanding the foregoing, the
Adviser shall remain responsible for ensuring the Fund's overall compliance
with the 1940 Act, the Code and all other applicable federal and state laws
and regulations and the Subadviser is only obligated to comply with
subsection (b) with respect to the Subadviser Assets.
The Adviser will provide the Subadviser with reasonable advance notice
of any change in the Fund's investment objective, policies and restrictions
as stated in the Prospectus, and the Subadviser shall act in conformity
with such changes, provided that the Subadviser has received reasonable
advance written notice of such changes from the Trust or the Adviser. The
Adviser acknowledges and agrees that the Prospectus will at all times be in
compliance with all disclosure requirements under all applicable federal
and state laws and regulations relating to the Trust or the Fund,
including, without limitation, the 1940 Act, and the rules and regulations
thereunder, and that the Subadviser shall have no liability in connection
therewith, except as to the accuracy of material information furnished in
writing by the Subadviser to the Fund or to the Adviser specifically for
inclusion in the Prospectus. The Subadviser hereby agrees to provide upon
request to the Adviser in a timely manner such information relating to the
Subadviser and its relationship to, and actions for, the Fund as may be
required to be contained in the Prospectus.
In fulfilling these requirements and its other requirements and
obligations hereunder, the Subadviser shall be entitled to rely on and act
in accordance with, and the Adviser agrees to hold the Subadviser harmless
for relying on and acting in accordance with, (1) information, which is not
clearly inaccurate on its face, provided to it by the Trust's
administrator, fund accountant or custodian and (2) instructions, which may
be standing instructions, from the Adviser. The Adviser agrees to provide
or cause to be provided to the Subadviser on an ongoing basis upon request
by the Subadviser, such information as is reasonably requested by the
Subadviser for the performance of its obligations under this Agreement, and
the Subadviser shall not be in breach of any term of this Agreement or be
deemed to have acted negligently if the Adviser fails to provide or cause
to be provided such information and the Subadviser relies on the
information most recently furnished to it.
(c) VOTING OF PROXIES. Unless the Adviser notifies the Subadviser
otherwise, the Subadviser shall have the power to vote, either in person or
by proxy, all securities in which the Subadviser Assets may be invested
from time to time, and shall not be required to seek or take instructions
from, the Adviser or the Fund or take action with respect thereto. If both
the Subadviser and another entity managing assets of the Fund have invested
in the same security, the Subadviser and such other entity will each have
the power to vote its pro rata share of the security.
(d) BROKERAGE. The Subadviser is authorized, subject to the
supervision of the Adviser and the Trust's Board of Trustees, to establish
and maintain accounts on behalf of the Fund with, and place orders for the
purchase and sale of the Fund investments with or through, such persons,
brokers or dealers ("brokers") as Subadviser may elect and negotiate
commissions to be paid on such transactions. The Subadviser, however, is
not required to obtain the consent of the Adviser or the Trust's Board of
Trustees prior to establishing any such brokerage account. The Subadviser
shall place all orders for the purchase and sale of portfolio investments
for the Fund's account with brokers selected by the Subadviser. In the
selection of such brokers and the placing of such orders, the Subadviser
shall use its reasonable efforts to seek to obtain for the Fund the most
favorable price and execution available, except to the extent it may be
permitted to pay higher brokerage commissions for brokerage and research
services, as provided below. In using its reasonable efforts to obtain for
the Fund the most favorable price and execution available, the Subadviser,
bearing in mind the Fund's best interests at all times, shall consider all
factors it deems relevant, including price, the size of the transaction,
the breadth and nature of the market for the security, the difficulty of
the execution, the amount of the commission, if any, the timing of the
transaction, market prices and trends, the reputation, experience and
financial stability of the broker involved, and the quality of service
rendered by the broker or dealer in other transactions. Subject to such
policies as the Trustees may determine, or as may be mutually agreed to by
the Adviser and the Subadviser, the Subadviser shall not be deemed to have
acted unlawfully or to have breached any duty created by this Agreement or
otherwise solely by reason of its having caused the Fund to pay a broker
that provided brokerage and research services to the Subadviser an amount
of commission for effecting a Fund Investment transaction that is in excess
of the amount of commission that another broker would have charged for
effecting that transaction.
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It is recognized that the services provided by such brokers may be
useful to the Subadviser in connection with the Subadviser's services to
other clients. On occasions when the Subadviser deems the purchase or sale
of a security to be in the best interests of the Fund as well as other
clients of the Subadviser, the Subadviser, to the extent permitted by
applicable laws and regulations, may, but shall be under no obligation to,
aggregate the securities to be sold or purchased in order to obtain the
most favorable price or lower brokerage commissions and efficient
execution. In such event, allocation of securities so sold or purchased, as
well as the expenses incurred in the transaction, will be made by the
Subadviser in the manner the Subadviser considers to be the most equitable
and consistent with its fiduciary obligations to the Fund and to such other
clients over time. It is recognized that in some cases, this procedure may
adversely affect the price paid or received by the Fund or the size of the
position obtainable for, or disposed of by, the Fund.
(e) SECURITIES TRANSACTIONS. The Subadviser and any affiliated person
of the Subadviser will not purchase securities or other instruments from or
sell securities or other instruments to the Fund; provided, however, the
Subadviser may purchase securities or other instruments from or sell
securities or other instruments to the Fund if such transaction is
permissible under applicable laws and regulations, including, without
limitation, the 1940 Act and the Advisers Act and the rules and regulations
promulgated hereunder.
The Subadviser, including its Access Persons (as defined in subsection
(e) of Rule 17j-l under the 1940 Act), agrees to observe and comply with
Rule 17j-l and its Code of Ethics shall comply in all material respects
with Rule 17j-l, as the same may be amended from time to time. On a
quarterly basis, the Subadviser will either (i) certify to the Adviser that
the Subadviser and its Access Persons have complied with the Subadviser's
Code of Ethics in all material respects with respect to the Subadviser
Assets or (ii) identify any material violations which have occurred with
respect to the Subadviser Assets. In addition, the Subadviser will report
at least annually to the Adviser concerning any other violations of the
Subadviser's Code of Ethics which required significant remedial action and
which were not previously reported.
(f) BOOKS AND RECORDS. Pursuant to the 1940 Act and the rules and
regulations promulgated thereunder, the Subadviser shall maintain separate
books and records of all matters pertaining to the Subadviser Assets (the
"Fund's Books and Records"). The Fund's Books and Records (relating to the
Subadviser Assets) shall be the property of the Trust and shall be
available to the Adviser at any time upon reasonable request during normal
business hours and shall be available for telecopying without unreasonable
delay to the Adviser during any day that the Fund is open for business.
Notwithstanding the foregoing, if the Adviser takes possession of any of
the Fund's Books and Records, the Subadviser shall be entitled to retain a
copy of any such books and records.
(g) INFORMATION CONCERNING FUND INVESTMENTS AND SUBADVISER. From time
to time as the Adviser or the Fund may reasonably request, the Subadviser
will furnish the requesting party reports on portfolio transactions and
reports on Fund Investments held in the portfolio, all in such detail as
the Adviser or the Fund may reasonably request. The Subadviser will also
inform the Adviser in a timely manner of material changes in portfolio
managers responsible for Subadviser Assets or of material changes in the
control of the Subadviser. The Subadviser will make available its officers
and employees to meet with the Trust's Board of Trustees on reasonable
notice to review the Fund investments. Under normal circumstance, employees
of the Subadviser shall not be obligated to attend in person more than one
Board meeting per year.
(h) CUSTODY ARRANGEMENTS. The Subadviser shall on each business day
provide the Adviser and the Trust's custodian such information as the
Adviser and the Trust's custodian may reasonably request relating to all
transactions concerning the Fund Investments.
3. INDEPENDENT CONTRACTOR. In the performance of its duties hereunder, the
Subadviser is and shall be an independent contractor and unless otherwise
expressly provided herein or otherwise authorized in writing, shall have no
authority to act for or represent the Fund or the Adviser in any way or
otherwise be deemed an agent of the Fund or the Adviser.
4. EXPENSES. During the term of this Agreement, Subadviser will pay all
expenses incurred by it in connection with its activities under this Agreement
other than the cost of securities, commodities and other investments (including
brokerage fees and commissions and other transaction charges, if any) purchased
for the Fund. The Adviser, the Trust and the Fund, to the extent agreed between
them, shall be responsible for all expenses of the operations of the Fund
including, without limitation, brokerage fees and commissions and other
transaction charges, if any. The Subadviser shall not be responsible for the
expenses of the Trust, the Fund or the Adviser. The Adviser shall reimburse the
Subadviser, or cause the Subadviser to be reimbursed, for any expenses of the
Trust, the Fund or the Adviser as may reasonably be incurred by the Subadviser
on behalf of the Fund or the Adviser, including without limitation all expenses
incurred by the Subadviser in connection with the
A-3
attendance in person by any officer or employee of the Subadviser at the request
of the Adviser or the Trust, at any meeting of the Board of Trustees (which
expense shall be solely that of the Adviser). The Subadviser shall keep and
supply to the Trust and the Adviser reasonable records of all such expenses.
5. COMPENSATION. For the services provided and the expenses assumed with
respect to the Fund pursuant to this Agreement, the Subadviser will be entitled
to a fee, computed daily and payable no later than the seventh (7th) business
day following the end of each month, from the Adviser, calculated at the annual
rate of .55 of 1% of the average daily net value of the Subadviser Assets.
The method of determining net assets of the Fund for purposes hereof shall
be the same as the method of determining net assets for purposes of establishing
the offering and redemption price of the shares as described in the Fund's
Prospectus. If this Agreement shall be effective for only a portion of a month,
the aforesaid fee shall be prorated for that portion of such month during which
this Agreement is in effect. Notwithstanding any other provision of this
Agreement, the Subadviser may from time to time agree not to impose all or a
portion of its fee otherwise payable hereunder (in advance of the time such fee
or portion thereof would otherwise accrue). Any such fee reduction may be
discontinued or modified by the Subadviser at any time. The Subadviser further
agrees that to the extent the overall advisory fee has been reduced by any
amount necessary to prevent the expenses of the Fund (exclusive of taxes,
interest, brokerage commissions and extraordinary expenses, but inclusive of the
advisory fees) from exceeding the most restrictive of the expense limitations
imposed by state securities commissions of the states in which the Fund's shares
are then registered or qualified for sale, the fee payable to the Subadviser as
provided for in the immediately preceding Paragraph will be reduced in an amount
equal to the amount of said reduction times the percentage that the fee payable
to the Subadviser bears to the total advisory fees payable with respect to the
Fund. Reimbursement, when necessary, will be made monthly in the same manner in
which the advisory fee is paid. The amount of any reimbursement shall not exceed
the aggregate amount of fees payable to the Subadviser.
6. REPRESENTATIONS AND WARRANTIES OF SUBADVISER. The Subadviser represents
and warrants to the Adviser and the Fund as follows:
(a) The Subadviser is registered as an investment adviser under the
Advisers Act;
(b) The Subadviser is a corporation duly organized and validly
existing under the laws of the State of Delaware with the power to own and
possess its assets and carry on its business as it is now being conducted;
(c) The execution, delivery and performance by the Subadviser of this
Agreement are within the Subadviser's powers and have been duly authorized
by all necessary action on the part of its directors, trustees and/or
shareholders, and no action by or in respect of, or filing with, any
governmental body, agency or official is required on the part of the
Subadviser for the execution, delivery and performance by the Subadviser of
this Agreement, and the execution, delivery and performance by the
Subadviser of this Agreement do not contravene or constitute a default
under (i) any provision of applicable law, rule or regulation, (ii) the
Subadviser's governing instruments, or (iii) any material agreement,
judgment, injunction, order, decree or other instrument binding upon the
Subadviser;
(d) The Form ADV of the Subadviser previously provided to the Adviser
is a true and complete copy of the form filed with the SEC and the
information contained therein is accurate and complete in all material
respects.
7. REPRESENTATIONS AND WARRANTIES OF ADVISER. The Adviser represents and
warrants to the Subadviser as follows:
(a) The Adviser is registered as an investment adviser under the
Advisers Act or is not required to be so registered;
(b) The Adviser is a National Banking Association duly organized and
validly existing under the laws of the United States of America with the
power to own and possess its assets and carry on its business as it is now
being conducted;
(c) The execution, delivery and performance by the Adviser of this
Agreement are within the Adviser's powers and have been duly authorized by
all necessary action on the part of its directors, trustees and/or
shareholders, and no action by or in respect of, or filing with, any
governmental body, agency or official is required on the part of the
Adviser for the execution, delivery and performance by the Adviser of this
Agreement, and the execution, delivery and performance by the Adviser of
this Agreement do not contravene or constitute a default under (i) any
provision of applicable law, rule or regulation, (ii) the Adviser's
governing instruments, or (iii) any material agreement, judgment,
injunction, order, decree or other instrument binding upon the Adviser;
(d) The Form ADV of the Adviser previously provided to the Subadviser
is a true and complete copy of the form filed with the SEC and the
information contained therein is accurate and complete in all material
respects;
A-4
(e) The Adviser acknowledges that it received a copy of the
Subadviser's Form ADV more than 48 hours prior to the execution of this
Agreement;
(f) The Trust is registered as an investment company under the 1940
Act and the Fund's shares are registered under the Securities Act of 1933,
as amended ("Securities Act");
(g) The Trust, on behalf of the Fund, has filed a notice of exemption
pursuant to Rule 4.5 under the Commodity Exchange Act with the Commodity
Futures Trading Commission and the National Futures Association or is not
required to file such exemption; and
(h) The Trust is a Massachusetts business trust duly organized and
validly existing under the laws of the Commonwealth of Massachusetts with
the power to own and possess its assets and carry on its business as it is
now being conducted.
8. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; DUTY TO UPDATE INFORMATION.
All representations and warranties made by the Subadviser and the Adviser
pursuant to Sections 6 and 7, respectively, shall survive for the duration of
this Agreement and the parties hereto shall promptly notify each other in
writing upon becoming aware that any of the foregoing representations and
warranties are no longer true.
9. LIABILITY AND INDEMNIFICATION.
(a) LIABILITY. In the absence of willful misfeasance, bad faith or
gross negligence on the part of the Subadviser or a reckless disregard of
its duties hereunder, the Subadviser, any affiliated person of the
Subadviser and each person, if any, who within the meaning of the
Securities Act controls the Subadviser ("Controlling Persons") shall not be
subject to any expenses or liability to the Adviser, the Trust or the Fund
or any of the Fund's shareholders, and, in the absence of willful
misfeasance, bad faith or gross negligence on the part of the Adviser or a
reckless disregard of its duties hereunder, the Adviser, any affiliated
person (other than as provided in Section 5) of the Adviser and each of its
Controlling Persons shall not be subject to any expenses or liability to
the Subadviser, for any act or omission in the case of, or connected with,
rendering services hereunder or for any losses that may be sustained in the
purchase, holding or sale of Fund Investments.
(b) INDEMNIFICATION. The Subadviser shall indemnify the Adviser, and
its respective officers and directors and trustees, for any liability and
expenses, including attorneys' fees, which may be sustained as a result of
the Subadviser's willful misfeasance, bad faith, gross negligence or
reckless disregard of its duties hereunder. The Adviser shall indemnify the
Subadviser, its affiliates, its Controlling Persons and its officers and
directors, for any liability and expenses, including attorneys' fees, (i)
which may be sustained as a result of the Adviser's willful misfeasance,
bad faith, gross negligence or reckless disregard of its duties hereunder,
or (ii) arising out of the Adviser's responsibilities based upon any act or
omission by the Adviser, any of its employees or representatives or any
affiliate of or any person acting on behalf of the Adviser, or (iii) which
may be based upon any untrue statement or alleged untrue statement of
material fact contained in the Prospectus or any sales literature relating
to the Fund, or alleged omission to state therein a material fact known or
which should have been known and was required to be stated therein or
necessary to make the statements therein not misleading, unless such
statement or omission was made in reliance upon written information
provided to the Adviser by the Subadviser specifically for inclusion in
such Prospectus and sales literature, or (iv) based upon any act or
omission by the Trust, any of its officers or representatives or any
affiliate of or any person acting on behalf of the Trust.
10. DURATION AND TERMINATION.
(a) DURATION. Unless sooner terminated, this Agreement shall continue
in effect until September 30, 1998 and thereafter shall continue
automatically for successive annual periods, provided such continuance is
specifically approved at least annually by the Trust's Board of Trustees or
vote of the lesser of (a) 67% of the shares of the Fund represented at a
meeting if holders of more than 50% of the outstanding shares of the Fund
are present in person or by proxy or (b) more than 50% of the outstanding
shares of the Fund; provided that in either event its continuance also is
approved by a majority of the Trust's Trustees who are not "interested
persons" (as defined in the 1940 Act) of any party to this Agreement, by
vote cast in person at a meeting called for the purpose of voting on such
approval.
(b) TERMINATION. Notwithstanding whatever may be provided herein to
the contrary, this Agreement may be terminated at any time, without payment
of any penalty:
A-5
(i) By vote of a majority of the Trust's Board of Trustees, or by
vote of a majority of the outstanding voting securities of the Fund, or
by the Adviser, in each case, upon one hundred twenty (120) days'
written notice to the Subadviser;
(ii) By any party hereto immediately upon written notice to the
other parties in the event of a material breach of any provision of this
Agreement by either of the other parties; or
(iii) By the Subadviser upon sixty (60) days' written notice to the
Adviser and the Trust.
This Agreement shall not be assigned (as such term is defined in the 1940
Act) and shall terminate automatically in the event of its assignment or upon
the termination of the Advisory Agreement. In the event this Agreement is
terminated or is not approved in the foregoing manner, the provisions contained
in Sections 8 and 9 and the requirement to pay amounts done under the first
paragraph of Section 5 shall remain in effect; however, the parties will have no
obligation to notify the others of changes to the representations.
11. USE OF NAMES.
(a) It is understood that the name "Warburg, Pincus Counsellors, Inc."
or any derivative thereof or logo associated with that name is the valuable
property of the Subadviser and its affiliates and that the Trust or the
Adviser have the right to use such name (or derivative or logo) in offering
materials of the Trust or the Adviser only with the prior written approval
of the Subadviser and for so long as the Subadviser is a subadviser to the
Trust or the Adviser; provided that the Trust or the Adviser may use such
name (or derivative or logo) without such prior written approval in
offering materials of the Trust to the extent that (i) such materials
simply list the Subadviser as the Subadviser to the Fund as part of a
listing of the investment subadvisers to the series or portfolios of the
Trust with a brief description of the Subadviser's experience and duties
hereunder; (ii) such materials include such name (or derivative or logo)
and any related information that has been previously approved by the
Subadviser or that is required to be disclosed by applicable law or
regulation, such as information disclosed in the Trust's registration
statement; or (iii) such materials are intended for use by the Trust's
Trustees, or for internal use by the Adviser, the Trust or the principal
underwriter of the Trust. Such prior written approval of the Subadviser
shall not be unreasonably withheld and shall be deemed to be given if no
written objection is received by the Trust or the Adviser within three
business days after the material is received by the Subadviser with a
request by the Trust or the Adviser for such use. Upon termination of this
Agreement, the Adviser shall cause the Trust and the Fund to forthwith
cease to use such name (or derivative or logo) as soon as reasonably
practicable.
(b) It is understood that the name "Evergreen" or any derivatives
thereof or logos associated with such names is the valuable property of the
Adviser and the Trust and their affiliates and that the Subadviser or its
affiliates have the right to use such names (or derivatives or logos) in
marketing materials of the Subadviser or its affiliates only with the prior
written approval of Adviser and, if such approval is granted, only for so
long as the Subadviser is a subadviser to the Adviser and the Trust;
provided that the Subadviser or its affiliates may use such names (or
derivatives or logos) without such prior written approval in marketing
materials of the Subadviser or its affiliates to the extent that (i) such
materials simply list the Adviser and the Trust as part of a listing of the
investment companies advised by the Subadviser or its affiliates with a
brief description of the Adviser and the Trust; (ii) such materials include
such names (or derivatives or logos) and any related information that has
been previously approved by the Adviser or that is required to be disclosed
by applicable law or regulation, such as information disclosed in the Form
ADV or Form BD of the Subadviser or its affiliates; or (iii) such materials
are intended for broker-dealer use only or for internal use by the
Subadviser. Such prior written approval of the Adviser shall not be
unreasonably withheld and shall be deemed to be given if no written
objection is received by the Subadviser within three business days after
the material is received by the Adviser with a request by the Subadviser
for such use. Upon termination of this Agreement, the Subadviser and its
affiliates shall forthwith cease to use such names (or derivatives or
logos) as soon as reasonably practicable.
12. AMENDMENT. This Agreement may be amended by written amendment signed by
the parties, provided that the terms of any material amendment shall be approved
by: (a) the Trust's Board of Trustees or by a vote of a majority of the
outstanding voting securities of the Fund (as required by the 1940 Act) and (b)
the vote of a majority of those Trustees of the Trust who are not "interested
persons" of any party to this Agreement cast in person at a meeting called for
the purpose of voting on such approval, if such approval is required by
applicable law.
13. CONFIDENTIALITY. Subject to the duties of the Subadviser to comply with
applicable law, including any demand of any regulatory or taxing authority
having jurisdiction, the Subadviser shall treat as confidential all records and
other information pertaining to the Fund or the Adviser which the Subadviser
maintains or receives as a result of its responsibilities under this
A-6
Agreement. In addition, subject to the duties to comply with any applicable law,
the Adviser and the Fund agree to treat as confidential any information
concerning the Subadviser, including its investment policies or objectives,
which the Adviser and the Fund receive as the result of their actions under this
Agreement.
14. NOTICE. Any notice that is required to be given by the parties to each
other under the terms of this Agreement shall be in writing, delivered, or
mailed postpaid to the other parties at the following addresses, which may from
time to time be changed by the parties by notice to the other parties:
(a) If to the Subadviser:
Warburg, Pincus Counsellors, Inc.
466 Lexington Avenue
New York, New York 10017
Attention: Eugene P. Grace
(b) If to the Adviser:
Capital Management Group
First Union National Bank of North Carolina
301 South College Street
Charlotte, N.C. 28288-1173
15. JURISDICTION. This Agreement shall be governed by and construed to be
consistent with the Advisory Agreement and in accordance with substantive laws
of the State of New York without reference to choice of law principles thereof
and in accordance with the 1940 Act. In the case of any conflict, the 1940 Act
shall control.
16. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, all of which shall
together constitute one and the same instrument.
17. DEFINITIONS. For the purposes of this Agreement, "interested person",
"affiliated person" and "assignment" shall have their respective meanings as set
forth in the 1940 Act, subject, however, to such exemptions as may be granted by
the SEC.
18. CAPTIONS. The captions herein are included for convenience of reference
only and shall be ignored in the construction or interpretation hereof.
19. SEVERABILITY. If any provision of this Agreement shall be held or made
invalid by a court decision or applicable law, the remainder of the Agreement
shall not be affected adversely and shall remain in full force and effect.
20. MASSACHUSETTS BUSINESS TRUST. The terms "Trust" and "Trustees" refer
respectively to the Trust created and the Trustees as trustees but not
individually or personally, acting from time to time under a Declaration of
Trust, which has been or may be amended from time to time, and to which
reference is hereby made and a copy of which is on file at the office of the
Secretary of State of The Commonwealth of Massachusetts and elsewhere as
required by law, and to any and all amendments thereto so filed or hereafter
filed. The obligations of the Trust entered into in the name or on behalf
thereof by any of the Trust, the Trustees or their representatives or agents are
not made individually, but only in their capacities with respect to the Trust.
Such obligations are not binding upon any of the Trustees, shareholders or
representatives of the Trust personally, but bind only the assets of the Trust.
All persons dealing with any series of shares of the Trust must look solely to
the assets of the Trust belonging to such series for the enforcement of any
claims against the Trust.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
day and year first written above.
FIRST UNION NATIONAL BANK OF NORTH
CAROLINA
By:
Name:
Title:
WARBURG, PINCUS COUNSELLORS, INC.
By:
Name:
Title:
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PROXY CARD
EVERGREEN INVESTMENT TRUST
EVERGREEN INTERNATIONAL EQUITY FUND
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS, OCTOBER 1, 1996
The undersigned Shareholder(s) of the Evergreen International Equity Fund
(the "Fund"), a series of EVERGREEN INVESTMENT TRUST (the "Trust") hereby
appoint(s) James P. Wallin, Patrick Bannigan and W. Douglas Munn and each of
them (with full power of substitution), the proxy or proxies of the undersigned
to attend the Special Meeting of Shareholders of the Fund to be held on October
1, 1996, and any adjournments thereof, to vote all of the shares of the Fund
that the undersigned would be entitled to vote if personally present at the
Special Meeting of Shareholders on the following proposal and on any other
matters that are voted on at the Meeting, all as set forth in the Notice of
Special Meeting of Shareholders. Said proxies are directed to vote or refrain
from voting pursuant to the Proxy Statement as indicated below upon the
following matter:
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE TRUST AND
WILL BE VOTED "FOR" THE PROPOSAL UNLESS OTHERWISE INDICATED.
Please vote by filling in the appropriate box below, as shown, using blue or
black ink or dark pencil. Do not use red ink.
PROPOSAL: A proposal to approve the selection of Warburg, Pincus
Counsellors, Inc. ("Warburg") as the Subadviser for the Fund, and to approve a
new sub-advisory agreement relating to the Fund between Warburg and First Union
National Bank of North Carolina, the Fund's investment adviser.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
In accordance with their discretion, said proxies are authorized to vote on
such other business as may be voted on at the Meeting.
(continued on other side)
(continued from other side)
ALL PROPERLY EXECUTED PROXIES WILL BE VOTED AS DIRECTED HEREIN BY THE
SIGNING SHAREHOLDER(S). IF NO DIRECTION IS GIVEN WHEN THE DULY EXECUTED PROXY IS
RETURNED, SUCH SHARES WILL BE VOTED IN ACCORDANCE WITH THE RECOMMENDATIONS OF
THE BOARD OF TRUSTEES FOR THE PROPOSAL.
THE UNDERSIGNED ACKNOWLEDGES RECEIPT WITH THIS PROXY OF A COPY OF THE NOTICE
OF SPECIAL MEETING OF SHAREHOLDERS AND THE PROXY STATEMENT.
PLEASE DATE, SIGN AND RETURN PROMPTLY.
Dated: , 1996
YOUR SIGNATURE(S) ON THIS PROXY
SHOULD BE EXACTLY AS YOUR NAME
OR NAMES APPEAR ON THIS PROXY.
IF THE SHARES ARE HELD JOINTLY,
EACH HOLDER SHOULD SIGN. IF
SIGNING IS BY ATTORNEY,
EXECUTOR, ADMINISTRATOR, TRUSTEE
OR GUARDIAN, PLEASE PRINT YOUR
FULL TITLE BELOW YOUR SIGNATURE.
SIGNATURE(S)