SUPPLEMENT TO THE PROSPECTUSES
                                       OF
                        EVERGREEN DOMESTIC EQUITY FUNDS I
                       EVERGREEN DOMESTIC EQUITY FUNDS II
                             EVERGREEN SECTOR FUNDS
                    EVERGREEN GLOBAL AND INTERNATIONAL FUNDS
                          EVERGREEN TAX STRATEGIC FUNDS
                            EVERGREEN BALANCED FUNDS
                          EVERGREEN EQUITY INDEX FUNDS
                 EVERGREEN INTERMEDIATE AND LONG TERM BOND FUNDS
                EVERGREEN SHORT AND INTERMEDIATE TERM BOND FUNDS
                     EVERGREEN NATIONAL MUNICIPAL BOND FUNDS
                  EVERGREEN SOUTHERN STATE MUNICIPAL BOND FUNDS
                      EVERGREEN STATE MUNICIPAL BOND FUNDS
                          EVERGREEN MONEY MARKET FUNDS
                   EVERGREEN INSTITUTIONAL MONEY MARKET FUNDS
                        EVERGREEN VARIABLE ANNUITY FUNDS
                           (collectively, the "Funds")

I. The following section has been added to the prospectus(es) of each of the
Funds:

LEGAL PROCEEDINGS

EIMC has informed the Funds of the following:

Since  September,  2003,  governmental  and  self-regulatory   authorities  have
instituted  numerous ongoing  investigations  of various practices in the mutual
fund   industry,   including   investigations   relating  to  revenue   sharing,
market-timing,  late  trading  and record  retention,  among other  things.  The
investigations  cover investment  advisors,  distributors and transfer agents to
mutual  funds,  as well  as  other  firms.  EIMC,  EIS  and  ESC  (collectively,
"Evergreen")  have  received  subpoenas  and other  requests for  documents  and
testimony relating to these investigations, are endeavoring to comply with those
requests,  and are cooperating with the investigations.  Evergreen is continuing
its own internal review of policies, practices, procedures and personnel, and is
taking remedial action where appropriate.

In connection with one of these  investigations,  on July 28, 2004, the staff of
the Securities and Exchange Commission informed Evergreen that the staff intends
to  recommend  to the SEC  that  it  institute  an  enforcement  action  against
Evergreen.  The SEC staff's  proposed  allegations  relate to (i) an arrangement
pursuant to which a broker at one of EIMC's affiliated  broker-dealers  had been
authorized,  apparently  by an EIMC officer (no longer with EIMC),  to engage in
short-term  trading,  on behalf of a client,  in  Evergreen  Mid Cap Growth Fund
(formerly  Evergreen  Small Company  Growth Fund and Evergreen  Emerging  Growth
Fund) during the period December,  2000,  through April,  2003, in excess of the
limitations set forth in the Fund's  prospectus,  (ii)  short-term  trading from
September,  2001, through January, 2003, by a former Evergreen portfolio manager
of Evergreen  Precious  Metals  Fund,  a Fund he managed at the time,  (iii) the
sufficiency  of  systems  for  monitoring   exchanges  and  enforcing   exchange
limitations  as stated in the  Funds'  prospectuses,  and (iv) the  adequacy  of
e-mail retention practices. In connection with the activity in Evergreen Mid Cap
Growth Fund,  EIMC  reimbursed  the Fund $378,905,  plus an additional  $25,242,
representing  what EIMC  calculated at that time to be the client's net gain and
the fees earned by EIMC and the  expenses  incurred by the Fund on the  client's
account. In connection with the activity in Evergreen Precious Metals Fund, EIMC
reimbursed the Fund $70,878,  plus an additional $3,075,  representing what EIMC
calculated  at that  time to be the  portfolio  manager's  net gain and the fees
earned by EIMC and  expenses  incurred  by the Fund on the  portfolio  manager's
account.  Evergreen  currently  intends  to  make  a  written  Wells  submission
explaining why it believes that no such enforcement action should be instituted,
and Evergreen  also intends to engage in  discussions  with the staff of the SEC
concerning its recommendation.

Any resolution of these matters with regulatory authorities may include, but not
be  limited  to,  sanctions,   penalties  or  injunctions  regarding  Evergreen,
restitution to mutual fund  shareholders  and/or other  financial  penalties and
structural  changes in the governance or management of  Evergreen's  mutual fund
business.  Any penalties or restitution will be paid by Evergreen and not by the
Evergreen Funds.

Evergreen does not believe the foregoing  investigations  and action will have a
material  adverse  impact on the  Evergreen  Funds.  There can be no  assurance,
however, that these matters and any publicity surrounding or resulting from them
will not result in reduced sales or increased  redemptions of Fund shares, which
could  increase  Fund  transaction  costs or operating  expenses,  or have other
adverse consequences on the Funds.

August 9, 2004                                                570648 Rev01(8/04)