SCHEDULE 14A INFORMATION
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
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-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
EVERGREEN INCOME ADVANTAGE FUND
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(Name of Registrant as Specified in Its Charter)
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(Name of Person Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) 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 (set forth the
amount on which the filing fee is calculated and state how it
was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary material
[ ] 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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EVERGREEN INCOME ADVANTAGE FUND
200 Berkeley Street, Boston, Massachusetts 02116
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
AUGUST 13, 2004
TO THE SHAREHOLDERS
OF EVERGREEN INCOME ADVANTAGE FUND
Notice is hereby given that the Annual Meeting of Shareholders (the
"Meeting") of Evergreen Income Advantage Fund (the "Fund") will be held on
August 13, 2004 at 10:00 a.m. Eastern time, at the offices of Evergreen
Investments, 26th Floor, 200 Berkeley Street, Boston, Massachusetts 02116, for
the following purposes:
1. To elect four Trustees to serve for the term indicated herein and until
their successors shall have been elected and qualified; and
2. To transact such other business as may properly be brought before the
Meeting.
Shareholders of record at the close of business on June 18, 2004 will be
entitled to vote at the Meeting. A complete list of the shareholders entitled to
vote at the Meeting shall be available for examination by any shareholder at the
principal office of the Fund during normal business hours from July 30, 2004
until the commencement of the Meeting, at which time the list will be available
at the place of the Meeting.
It is hoped that you will attend the Meeting, but if you cannot do so,
please complete and sign the enclosed proxy card, and return it in the
accompanying envelope as promptly as possible. Any shareholder attending the
Meeting can vote in person even though a proxy card may have already been
returned.
By Order of the Board of Trustees
MICHAEL H. KOONCE
Secretary
June 30, 2004
EVERGREEN INCOME ADVANTAGE FUND
PROXY STATEMENT
This proxy statement is furnished in connection with the solicitation of
proxies by and on behalf of the Board of Trustees of Evergreen Income Advantage
Fund (the "Fund") for use at the Annual Meeting of Shareholders (the "Meeting")
to be held at Evergreen Investments, 26th Floor, 200 Berkeley Street, Boston,
Massachusetts 02116, on August 13, 2004 at 10:00 a.m. Eastern time. The address
of the principal office of the Fund is Evergreen Investments, 200 Berkeley
Street, Boston, Massachusetts 02116.
This proxy statement and form of proxy were first sent to shareholders on or
about June 30, 2004.
Proxy Solicitation
All proxies in the enclosed form which are properly executed and returned
to the Fund will be voted as provided therein at the Meeting or at any
adjournments thereof. A holder of either common or preferred shares (the
"Shareholder") executing and returning a proxy has the power to revoke it at any
time before it is exercised by giving written notice of such revocation to an
officer of the Fund. Signing and mailing the proxy will not affect your right to
give a later proxy or to attend the Meeting and vote your common shares or
preferred shares (the "Shares") in person.
The Board of Trustees intends to bring before the Meeting the matter set
forth in Proposal 1 in the foregoing notice. The persons named in the enclosed
proxy card and acting thereunder will vote with respect to Proposal 1 in
accordance with the directions of the Shareholders as specified on the proxy
card; if no choice is specified, the Shares will be voted FOR the election of
the four trustees named in Proposal 1. If any other matters are properly
presented at the Meeting for action, it is intended that the persons named in
the enclosed proxy card and acting thereunder will vote in accordance with the
views of management thereon. Abstentions and broker non-votes (i.e., Shares held
by brokers or nominees as to which (i) instructions have not been received from
the beneficial owners or the persons entitled to vote and (ii) the broker or
nominee does not have discretionary voting power on a particular matter) are
counted for quorum purposes. The Fund's Second Amended and Restated Agreement
and Declaration of Trust (the "Declaration") provides that the holders of
thirty-three and a third percent (33 1/3%) of the Shares issued and outstanding
and entitled to vote, present in person or by proxy, shall constitute a quorum
for the transaction of business at the Meeting. With regard to the election of
trustees, votes may be cast in favor or withheld; votes that are withheld will
be excluded entirely from the vote and will have no effect.
The affirmative vote of a plurality of the Shares present in person or
represented by proxy at the Meeting is required for the election of trustees
(Proposal 1). The four nominees that receive the most affirmative votes cast at
the Meeting will be elected as trustees.
In the event a quorum is not present at the Meeting or in the event that a
quorum is present but sufficient votes to approve the proposed item is not
received, the persons named as proxies may propose one or more adjournments of
the Meeting to permit further solicitation of proxies. Any such adjournment will
require the affirmative vote of a majority of those Shares represented at such
meeting in person or by proxy. The persons named as proxies will vote those
proxies that they are entitled to vote FOR any such proposal, IN FAVOR of such
an adjournment, and will vote those proxies required to be voted AGAINST any
such proposal, AGAINST any such adjournment. Abstentions and broker non-votes
will not be voted as a motion to adjourn.
The Fund will bear the costs of preparing, printing and mailing this proxy
statement, the proxies and any additional materials which may be furnished to
Shareholders. Solicitation may be undertaken by mail, telephone, facsimile and
personal contact. The Fund has engaged Georgeson Shareholder Communications,
Inc. to solicit proxies from brokers, banks, other institutional holders and
individual Shareholders for a fee of approximately $3,500.00. This fee will be
borne by the Fund. The Annual Report of the Fund will be mailed, along with this
proxy statement, to all Shareholders on or about June 30, 2004.
Voting Securities and Principal Holders Thereof
Holders of record of the Fund's Shares at the close of business on June 18,
2004 will be entitled to vote at the Meeting or any adjournment thereof. As of
June 18, 2004, the Fund had outstanding 66,314,975 common shares and 490,000,000
preferred shares. Each Shareholder is entitled to one vote per Share on all
business of the Meeting.
To the knowledge of the Fund, there is no beneficial owner of more than 5%
of the outstanding Shares of the Fund.
As of June 18, 2004, the officers and Trustees of the Fund as a group
beneficially owned in aggregate less than 1.00% of the outstanding Shares of the
Fund and less than 1% of the outstanding securities of Wachovia Corporation
("Wachovia"), parent of Evergreen Investment Management Company, LLC ("EIMC"),
the Fund's investment advisor.
I. ELECTION OF TRUSTEES (Proposal 1)
In accordance with the Fund's Declaration, the Trustees have been divided
into three classes (each a "Class"): Class I, Class II and Class III. The terms
of the present Trustees in each Class expire at the annual meeting in the year
indicated or thereafter in each case when their respective successors are
elected and qualified: Class I, 2006, Class II, 2004 and Class III, 2005. At
each subsequent annual meeting, successors to the Class of Trustees whose terms
are expiring will be identified as being of that same Class and will be
nominated for a three-year term. The effect of these staggered terms is to limit
the ability of other entities or persons to acquire control of the Fund by
delaying the replacement of a majority of the Board of Trustees. If any nominee
for any reason becomes unable to serve, the persons named as proxies will vote
for the election of such other person or persons as they believe will carry on
the present policies of the Fund and as they deem to be qualified. The Board of
Trustees has no reason to believe that any of the four nominees will be unable
to serve.
The Board of Trustees of the Fund proposes the following Trustees for
election at the 2004 Meeting:
Trustee Class Expiration of Term if Elected
--------------------------------------- --------------- --------------------------------
Charles A. Austin III Class II 2007 Annual Meeting1
Shirley L. Fulton Class II 2007 Annual Meeting
Gerald M. McDonnell Class II 2007 Annual Meeting
Richard J. Shima Class II 2007 Annual Meeting
(1) Pursuant to the Fund's Governance Policies, Mr. Austin will become
a Trustee Emeritus in January 2007.
As described above, there are four nominees for election to the Board of
Trustees at this time. Proxies cannot be voted for a greater number of persons
than the four nominees currently proposed to serve on the Board of Trustees.
Nominees for Election as Trustees
The following table contains specific information about each Trustee and
nominee, including: age, principal occupation and other affiliations for the
last five years, term of office, length of time each has served any other
directorships held outside the Fund and number of portfolios overseen by
trustees. Unless otherwise indicated, the address for each Trustee is 200
Berkeley Street, Boston, Massachusetts 02116.
Independent Trustees
Class II -- Nominees to serve until 2007 Annual Meeting of Shareholders:
Number of
Portfolios
in Fund Other
Position Length of Complex Directorships
Held with Time Overseen Held by
Name and Age the Fund Served1 Principal Occupation(s) During Past 5 by Trustee Trustee
------------ -------- ------- -------------------------------------- ---------- -------
Years
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Charles A. Austin III2 Trustee Trustee 94 Trustee,
Age: 69 since 2003. Investment Counselor, Anchor Capital Evergreen
Advisors, Inc. (investment advice); family of
Director, The Andover Companies funds6
(insurance); Trustee, Arthritis
Foundation of New England; Director, The
Francis Ouimet Society; Former Director,
Health Development Corp.
(fitness-wellness centers); Former
Director, Mentor Income Fund, Inc.;
Former Trustee, Mentor Funds and Cash
Resource Trust; Former Investment
Counselor, Appleton Partners, Inc.
(investment advice); Former Director,
Executive Vice President and Treasurer,
State Street Research & Management
Company (investment advice)
Shirley L. Fulton2 Trustee Trustee 94 Trustee,
Age: 52 since Partner, Helms, Henderson & Fulton, P.A. Evergreen
2004. (law firm); Retired Senior
Resident family of Superior
Court Judge, 26th Judicial
funds6
District, Charlotte, NC
Gerald M. McDonnell2 Trustee Trustee 94 Trustee,
Age: 64 since 2003. Manager of Commercial Operations, SMI Evergreen
STEEL Co. - South Carolina (steel family of
producer); Former Sales and Marketing funds6
Management, Nucor Steel Company; Former
Director, Mentor Income Fund, Inc.;
Former Trustee, Mentor Funds and Cash
Resource Trust
Richard J. Shima4 Trustee Trustee Independent Consultant; Director, Trust 94 Trustee,
Age: 64 since 2003. Company of CT; Trustee, Saint Joseph Evergreen
College (CT); Director, Hartford family of
Hospital; Trustee, Greater Hartford YMCA; funds6
Former Director, Enhance Financial
Services, Inc.; Former Director, Old
State House Association; Former Director
of CTG Resources, Inc. (natural gas);
Former Director, Mentor Income Fund,
Inc.; Former Trustee, Mentor Funds and
Cash Resource Trust
Class III -- Nominees to serve until 2005 Annual Meeting of Shareholders:
Number of
Portfolios
in Fund Other
Position Length of Complex Directorships
Held with Time Overseen Held by
Name and Age the Fund Served1 Principal Occupation(s) During Past 5 by Trustee Trustee
------------ -------- ------- -------------------------------------- ---------- -------
Years
-----
William Walt Pettit2, 5 Trustee Trustee 94 Trustee,
Age: 48 since 2003. Partner and Vice President, Kellam & Evergreen
Pettit, P.A. (law firm); Former Director, family of
Mentor Income Fund, Inc.; Former Trustee, funds6
Mentor Funds and Cash Resource Trust
David M. Richardson4 Trustee Trustee 94 Trustee,
Age: 62 since 2003. President, Richardson, Runden & Company Evergreen
(executive recruitment business family of
development/consulting company); funds6
Consultant, Kennedy Information, Inc.
(executive recruitment information and
research company); Consultant, AESC (The
Association of Retained Executive Search
Consultants); Trustee, NDI Technologies,
LLP (communications); Director, J&M
Cumming Paper Co. (paper merchandising);
Former Vice Chairman, DHR International,
Inc. (executive recruitment); Former
Director, Mentor Income Fund, Inc.;
Former Trustee, Mentor Funds and Cash
Resource Trust
Dr. Russell A. Salton, Trustee Trustee President/CEO, AccessOne MedCard; Former 94 Trustee,
III, 3,4 since 2003. Medical Director, Healthcare Resource Evergreen
Age: 57 Associates, Inc.; Former Medical family of
Director, U.S. Health Care/Aetna funds6
Health Services; Former Director,
Mentor Income Fund, Inc.; Former
Trustee, Mentor Funds and Cash Resource
Trust
Interested Trustee:
Number of
Portfolios
In Fund Other
Position Length of Complex Directorships
Held with Time Overseen Held by
Name and Age the Fund Served1 Principal Occupation(s)During Past 5 Years By Trustee Trustee
------------ --------- ------- ------------------------------------------ ---------- -------
Richard K. Wagoner, CFA4 Trustee Trustee Member and Former President, North 94 Trustee,
Age: 66 since 2003. Carolina Securities Traders Association; Evergreen
Member, Financial Analysts Society; family of
Former Consultant to the Boards of funds6
Trustees of the Evergreen funds; Former
Trustee, Mentor Funds and Cash Resource
Trust
Class I -- Nominees to serve until 2006 Annual Meeting of Shareholders:
Number of
Portfolios
in Fund Other
Position Length Complex Directorships
Held with of Time Overseen Held by
Name and Age the Fund Served1 Principal Occupation(s) During Past 5 by Trustee Trustee
------------ -------- ------- -------------------------------------- ---------- -------
Years
-----
K. Dun Gifford2,3 Trustee Trustee 94 Trustee,
Age: 65 since 2003. Chairman and President, Oldways Evergreen
Preservation and Exchange Trust family of
(education); Trustee, Treasurer and funds6
Chairman of the Finance Committee,
Cambridge College; Former Chairman of the
Board, Director, and Executive Vice
President, The London Harness Company
(leather goods purveyor); Former
Director, Mentor Income Fund, Inc.;
Former Trustee, Mentor Funds and Cash
Resource Trust
Dr. Leroy Keith, Jr.4 Trustee Trustee 94 Trustee,
Age: 65 since 2003. Partner, Stonington Partners, Inc. Evergreen
(private investment firm); Trustee of family of
Phoenix Series Fund, Phoenix funds6,
Multi-Portfolio Fund, and The Phoenix Big Trustee,
Edge Series Fund; Former Chairman of the Phoenix
Board and Chief Executive Officer, Carson Series Fund,
Products Company (manufacturing); Phoenix
Director, Obagi Medical Products Co.; Multi-Portfolio
Director, Lincoln Educational Services; Fund, and
Director, Diversapack Co.; Former The Phoenix
President, Morehouse College; Former Big Edge
Director, Mentor Income Fund, Inc.; Series Funds
Former Trustee, Mentor Funds and Cash
Resource Trust.
Michael S. Scofield3 Trustee Trustee 94 Trustee,
Age: 61 since 2003. Attorney, Law Offices of Michael S. Evergreen
Scofield; Former Director, Mentor Income family of
Fund, Inc.; Former Trustee, Mentor Funds funds6
and Cash Resource Trust.
(1) All Trustees are elected to initially serve a one, two or three year term
and thereafter to serve a three-year term.
(2) Member of Audit Committee.
(3) Member of Executive Committee.
(4) Member of Performance Committee.
(5) Preferred Shares Trustee.
(6) The Evergreen family of funds consists of 9 open-end management investment
companies with 91 separate funds or series organized as Delaware statutory
trusts and 3 closed-end management investment companies organized as
Delaware statutory trusts.
The following table contains specific information about the dollar range of
equity securities beneficially owned by each Trustee in the Fund and the
aggregate dollar range of equity securities in other funds in the Evergreen
family of Funds overseen by the Trustees.
Aggregate Dollar Range of Equity
Securities in All Funds Overseen by
Dollar Range of Equity Securities Trustee in Family of Investment
Name of Trustee in the Fund as of December 31, 2003 Companies as of December 31, 2003
--------------- -------------------------------- ---------------------------------
Charles A. Austin III1 $0 Over $100,000
Shirley L. Fulton2 $0 $0
K. Dun Gifford $0 $10,001-$50,000
Dr. Leroy Keith, Jr. $0 $1-$10,000
Gerald M. McDonnell1 $0 $10,001-$50,000
William W. Pettit1 $0 $10,001-$50,000
David M. Richardson $0 $50,001-$100,000
Dr. Russell A. Salton, III1 $0 $0
Michael S. Scofield1 $0 Over $100,000
Richard J. Shima1 $10,001 - $50,000 Over $100,000
Richard K. Wagoner $0 Over $100,000
(1) In addition to the above investment amounts, the Trustee has over $100,000
indirectly invested in certain of the Evergreen funds through Deferred
Compensation Plans, with the exception of Mr. Shima who has over $50,000
indirectly invested.
(2) Ms. Fulton was elected to serve as Trustee of the Boards of Trustees for
the term beginning April 1, 2004.
Under the Investment Company Act of 1940, as amended (the "1940 Act"), Mr.
Wagoner is an "interested person" of the Fund because of his ownership of shares
in Wachovia.
Board Meetings and Committees
During the fiscal year ended April 30, 2004, the Board of Trustees held 4
regular meetings and one special meeting. The Board of Trustees has appointed an
Executive Committee consisting of Michael S. Scofield, K. Dun Gifford and Dr.
Russell A. Salton, III. The Executive Committee recommends Trustees to fill
vacancies, prepares the agenda for Board meetings and acts on routine matters
between scheduled Board meetings. The Executive Committee met 23 times during
fiscal year 2004. The Board of Trustees has also appointed an Audit Committee,
as defined by Section 3(a)(58)(A) of the Securities Exchange Act of 1934. The
purpose of the Audit Committee is to evaluate financial management, meet with
the auditors and deal with other matters of a financial nature that it deems
appropriate. The Audit Committee met 4 times during fiscal year 2004. The Audit
Committee consists of Charles A. Austin III, Shirley L. Fulton, K. Dun Gifford,
Gerald M. McDonnell and William W. Pettit. Each member of the Audit Committee is
"independent" as defined in the American Stock Exchange's listing standards. The
Board of Trustees also has appointed a Performance Committee. The purpose of the
Performance Committee is to review all activities involving investment-related
issues and activities of EIMC and to assess the performance of the Fund. The
Performance Committee met 4 times during fiscal year 2004. The Performance
Committee consists of Dr. Leroy Keith, David M. Richardson, Dr. Russell A.
Salton, III, Richard J. Shima and Richard Wagoner. Each Trustee attended at
least 75% of the aggregate of the total number of meetings of the Board and
Committee meetings on which he or she served.
Nominating Committee Process
The Executive Committee functions as the Nominating Committee. The members
of the Executive Committee are "independent" as defined in the American Stock
Exchange listing standards. The Executive Committee Charter addresses the
Nominating Committee functions. A copy of the Evergreen funds Executive
Committee Charter is attached as Exhibit A.
On March 18, 2004, the Board of Trustees approved a policy for the
consideration of Trustee nominees. The policy states the minimum nominee
qualifications, the process for identifying and evaluating trustee nominees and
the process for considering nominees recommended by shareholders. The Evergreen
funds Policy for the Consideration of Trustee Nominees is attached as Exhibit B.
The Fund paid an independent, third-party consultant to identify and
evaluate potential nominees to fill a new position on the Board of Trustees. The
Executive Committee provided specific criteria to the consultant to identify
suitable candidates. Among other requirements, potential nominees had to have
obtained certain educational and professional achievements, qualify as
non-interested persons of the Fund and be financially literate. The consultant
evaluated possible candidates against this criteria and provided the names of
suitable candidates to the Executive Committee for further consideration.
Communications with Board Members
On March 18, 2004, the Board of Trustees approved a policy for
communications with Board members. Any shareholder who wishes to send a
communication to the Board of Trustees of an Evergreen fund should send the
communications to the Evergreen Board of Trustees, P.O. Box 20083, Charlotte,
North Carolina 28202. If a shareholder wishes to send a communication directly
to an individual Trustee or to a Committee of the Fund's Board of Trustees, then
the communication should be specifically addressed to such individual Trustee or
Committee and sent to the above address.
Trustee Attendance Policy At Annual Shareholder Meetings
On March 18, 2004, the Board of Trustees approved a policy for Trustee
attendance at annual shareholder meetings. The Evergreen funds listed on the
American Stock Exchange are required to hold an Annual Meeting of Shareholders.
Accordingly, it is the policy of the Board of Trustees of the Fund to encourage
Trustees attendance at each Annual Meeting of Shareholders in person or by video
conference.
None of the Trustees attended the 2003 Annual Meeting of Shareholders.
Current Officers
The following table contains specific information about each principal
officer of the Fund, including: name, address and age, position held with the
Fund, term of office and length of time each has served, and principal
occupation during the past five years including offices held with EIMC, Wachovia
and their affiliated companies.
Term of Office and Principal Occupations(s) During
Name, Address and Age Position Held with the Length of Time Served1 Past Five Years
Fund
Dennis H. Ferro President Since 2003 President, Chief Executive Officer and
401 S. Tyron Chief Investment Officer, Evergreen
Charlotte, NC 28288 Investment Company, Inc. and Executive
Age: 59 Vice President, Wachovia Bank, N.A.
Carol Kosel Treasurer Since 2003 Senior Vice President, Evergreen
200 Berkeley Street Investment Services, Inc.
Boston, MA 02116
Age: 40
Michael H. Koonce Secretary Since 2003 Senior Vice President and General
200 Berkeley Street Counsel, Evergreen Investment Services,
Boston, MA 02116 Inc.; Senior Vice President and
Age: 44 Assistant General Counsel, Wachovia
Corporation.
(1) The term of office for each principal officer is until a successor is duly
elected or qualified or until their death, resignation, retirement or
removal from office.
Dennis H. Ferro oversees the operations of the Fund. Michael H. Koonce is
responsible for the Fund's compliance with governing law. Carol A. Kosel is
responsible for maintaining the books and records of the Fund and for working
with the portfolio managers on a continuous basis to assure that accounting
records are properly maintained.
Other Remuneration and Affiliations of Officers and Trustees
The Fund reimburses all Trustees for expenses incurred in connection with
attending meetings of the Board of Trustees. Fees, salaries or other
remuneration of officers of the Fund who also serve as officers or employees of
EIMC or any of its affiliated companies are borne by EIMC or the Wachovia
affiliate for whom the individual serves. All present officers are covered by
this provision, and did not receive any compensation or expense reimbursement
from the Fund. For the fiscal year ended April 30, 2004, the Trustees earned the
following compensation from the Fund and the Evergreen fund complex:
Pension or Retirement Total Compensation From
Name of Person and Benefits Accrued as the Fund and Fund Complex
Position with the Fund Aggregate Compensation From the Fund Part of Fund Expenses1 Paid to Trustees
---------------------- ------------------------------------ ------------------ ----------------
Charles A. Austin III, $6,500 N/A $158,333
Trustee2
K. Dun Gifford, Trustee $6,500 N/A $177,500
Shirley L. Fulton, Trustee $333 N/A $18,167
Dr. Leroy Keith, Jr., $6,500 N/A $153,333
Trustee
Gerald M. McDonnell, $6,500 N/A $153,333
Trustee
William W. Pettit, Trustee2 $6,500 N/A $153,333
David M. Richardson, $6,500 N/A $153,333
Trustee
Dr. Russell A. Salton, III, $6,500 N/A $167,500
Trustee
Michael S. Scofield, Trustee $6,500 N/A $195,833
Richard J. Shima, Trustee2 $6,500 N/A $169,333
Richard K. Wagoner, Trustee $6,500 N/A $153,333
(1) The Fund does not currently provide pension or retirement plan benefits to
the Trustees.
(2) Includes compensation deferred pursuant to a Trustee Compensation Deferral
Plan. The total amounts of deferring compensation payable to Messrs.
Austin, McDonnell, Pettit, Shima and Ms. Fulton for the fiscal year ended
April 30, 2004 were $101,000, $16,850, $134,658, $65,946 and $2,667,
respectively.
Section 16(a) Beneficial Ownership Reporting Compliance. Section 16(a) of
the Securities Exchange Act of 1934 requires the Fund's Trustees and officers
and certain other persons to file reports regarding ownership of, and
transactions in, the Fund's securities with the Securities and Exchange
Commission (the "SEC"). Copies of the required filings must also be furnished to
the Fund. The Fund believes that all reports required to be filed by the Fund's
officers and Trustees were filed on a timely basis.
Forms 3, 4, and 5 for the officers and Trustees are available on our
website at www.EvergreenInvestments.com.
Service Providers
Investment Advisor. EIMC, an indirect wholly owned subsidiary of Wachovia,
a North Carolina-based, multi-bank financial holding company subject to the Bank
Holding Company Act of 1956, as amended, and the rules and regulations
promulgated thereunder, currently serves as the Fund's investment advisor. EIMC
has been managing mutual funds and private accounts since 1932. For the fiscal
year ended April 30, 2004, the Fund paid $9,064,399 (0.89% of average daily net
assets, or 60% of average daily total assets, which are the net assets of the
Fund plus borrowings or other leverage for investment purposes to the extent
excluded in calculating net assets) to EIMC in advisory fees. The principal
business address of EIMC is 200 Berkeley Street, Boston, Massachusetts 02116.
Administrator. Administrative services are provided by Evergreen Investment
Services, Inc. ("EIS"), an affiliated company of EIMC. EIS is located at 200
Berkeley Street, Boston, MA 02116.
Independent Registered Public Accounting Firm. KPMG LLP ("KPMG"), 99 High
Street, Boston, MA 02110, has been selected by the Trustees of the Fund as the
independent registered public accounting firm of the Fund for the current fiscal
year ending April 30, 2005.
The Audit Committee of the Board of the Fund unanimously recommended the
selection of KPMG, and the Trustees unanimously approved such selection, at a
meeting held on June 17, 2004.
The Fund's Audit Committee has established and adopted policies and
procedures for pre-approving audit services, audit-related services, tax
services and all other services provided by the Fund's independent registered
public accounting firm as well as the fee levels or budgeted amounts for those
services. The Fund's policies and procedures include reporting and request or
application requirements that are intended to keep the Audit Committee informed
of all the services provided by the Fund's independent registered public
accounting firm. In addition, the Chief Compliance Officer is required to
monitor the performance of all services provided by the Fund's independent
registered public accounting firm in order to determine whether those services
are in compliance with the Fund's pre-approval policies and procedures and to
report the results of this monitoring to the Audit Committee on a periodic
basis. The Fund's pre-approval policies and procedures do not delegate any of
the Audit Committee's responsibilities under the Securities Exchange Act of 1934
for pre-approving services performed by the Fund's independent registered public
accounting firm to the Fund's management.
A representative of KPMG, if requested by any Shareholder, will be present
via telephone at the Meeting to respond to appropriate questions from
Shareholders and will have an opportunity to make a statement if he or she
chooses to do so.
The following table presents fees billed for professional audit services
rendered by KPMG for the audit of the Fund's annual financial statements for the
fiscal years ended April 30, 2003 and 2004, respectively, and for fees billed
for other services rendered by KPMG to the Fund. There were no fees paid to KPMG
during the fiscal years where the de minimis exception was used.
Evergreen Income Advantage Fund
2003 2004
-------------------------------------------------------------------------------------------------
Audit fees $24,000 $25,000
Audit-related fees1 $13,000 $13,000
Tax fees $1,850 $0
All other Fees $0 $0
-------------------------------------------------------------------------------------------------
(1) Audit-related fees consist principally of fees for performing agreed upon
procedure engagements relating to the leveraged preferred shares of the
Fund.
In approving the selection of KPMG for the Fund, the Audit Committee
considered, in addition to other practices and requirements relating to the
selection of the Fund's auditors, whether the non-audit services covered in the
table above under "Audit-related fees, Tax fees and All other fees" performed by
KPMG for the Fund and the investment advisor and for certain related parties are
compatible with maintaining the independence of KPMG as the Fund's principal
accountants.
On June 17, 2004, the Audit Committee reviewed and discussed with
management the Fund's audited financial statements for the fiscal year ended
April 30, 2004. The Audit Committee has reviewed and discussed with the
independent registered public accounting firms the matters required to be
discussed by Statements on Auditing Standards, No. 61, Communication with Audit
Committees. The Audit Committee has received the written disclosures and the
letter from the independent registered public accounting firm required by
Independence Standards Board Standard No. 1, and has discussed with the
independent registered public accounting firm the independent registered public
accounting firm's independence. Based on these reviews and discussions, the
Audit Committee recommended to the Board of Trustees that the audited financial
statements be included in the annual report to shareholders for the last fiscal
year for filing with the SEC.
The Board of Trustees has adopted a written charter for the Audit Committee
which is attached to this proxy statement as Exhibit C. Each member of the Audit
Committee is independent as independence is defined in the listing standards of
the American Stock Exchange.
Other Business. As of the date of this Proxy Statement, the Fund's officers
and the investment advisor are not aware of any other business to come before
the Meeting other than as set forth in the Notice. If any other business is
properly brought before the Meeting, or any adjournment thereof, the persons
named as proxies will vote in their sole discretion.
Required Vote. Election of each nominated Trustee to the Board of Trustees
of the Fund will be decided by a plurality of the common shares and preferred
shares of the Fund (voting together as a single class) voted in the election of
Trustees at the Meeting, in person or by proxy.
THE BOARD OF TRUSTEES OF THE FUND UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR
THIS PROPOSAL FOR THE FUND.
SHAREHOLDER PROPOSALS
Any Shareholder desiring to present a proposal for consideration at the
2005 annual meeting of Shareholders of the Fund should submit such proposal in
writing to the Secretary, c/o Evergreen Investment Services, Inc., Evergreen
Income Advantage Fund, 200 Berkeley Street, Boston, MA 02116-5034 so that it is
received by the Fund no later than March 10, 2005. Proxies submitted by
Shareholders confer discretionary authority on the individually named proxies to
vote on all matters presented at the meeting. Mere submission of a Shareholder
proposal does not guarantee inclusion of the proposal in the proxy statement or
presentation of the proposal at the 2005 annual meeting since such inclusion and
presentation are subject to compliance with certain federal regulations.
Michael H. Koonce, Secretary
June 30, 2004
EXHIBIT A
EVERGREEN INCOME ADVANTAGE FUND
EVERGREEN MANAGED INCOME FUND
EVERGREEN UTILITIES AND HIGH INCOME FUND
EXECUTIVE COMMITTEE CHARTER
1) The Executive Committee shall be composed entirely of independent Trustees.
2) The purposes of the Executive Committee are:
a) To formulate policies and procedures governing the Board's structure and
operation;
b) To act as liaison between Evergreen and the full Board of Trustees;
c) To act on behalf of the Board between regular Board meetings.
3) To carry out its purposes, the Executive Committee shall have the
following duties and powers:
a) To prepare and recommend to the full Board written policies
and procedures governing the structure and operation of the
Board, including but not limited to policies relating to Board
size, qualifications for Board membership, filling of
vacancies, committees, compensation and retirement; and from
time to time to review such policies and procedures and
recommend any changes;
b) To select and nominate persons to fill vacancies on the Board;
c) To recommend to the full Board the amount of compensation to
be paid to Trustees for service on the Board and on committees
of the Board;
d) To take on behalf of the Board, between regular meetings of
the full Board, any actions required to be taken by the Board
that are not required by the Declaration of Trust or
applicable law to be transacted by the full Board or by
another group of Trustees;
e) To report its activities to the full Board on a regular basis
and to make such recommendations with respect to the above and
other matters as the Committee may deem necessary or
appropriate.
4) The Committee shall meet on a regular basis and is empowered to hold
special meetings as circumstances require.
5) The Committee shall have the resources and authority appropriate to
discharge its responsibilities.
6) The Committee shall review this Charter from time to time and recommend
any changes to the full Board.
Last Approved: September 19, 2002
Last Revised:March 18, 2004
EXHIBIT B
EVERGREEN TRUSTS
Policy for the Consideration of Trustee Nominees
The following Policy for the Consideration of Trustee Nominees (the
"Policy") shall be followed by the Executive Committee (the "Committee") of each
Evergreen Trust in filling vacancies on the Boards of Trustees or when Trustees
are to be nominated for election by shareholders.
Minimum Nominee Qualifications
1. With respect to nominations for Trustees who are not interested persons
of a Fund as defined by Section 2(a)(19) of the Investment Company Act
of 1940 (the "1940 Act") ("Disinterested Trustees"), nominees shall be
independent of the Fund's investment adviser and other principal
service providers. The Committee shall also consider the effect of any
relationship beyond those delineated in the 1940 Act that might impair
independence, such as business, financial or family relationships with
the investment adviser or its affiliates.
2. Disinterested Trustee nominees must qualify for service on the Fund's
Audit Committee under the rules of the American Stock Exchange
(including financial literacy requirements) or other applicable
securities exchange.
3. With respect to all Trustees, nominees must qualify under all
applicable laws and regulations.
4. The proposed nominee may not be within five years of the Fund's
retirement age for Trustees unless he or she is nominated for
re-election.
5. The Committee may also consider such other factors as it may determine
to be relevant.
Other Qualifications
1. With respect to all proposed nominees, the Committee shall consider
whether the proposed nominee serves on boards of or is otherwise
affiliated with competing financial service organizations or their
related fund complexes or companies in which the Evergreen Funds may
invest.
2. The Committee shall consider whether the proposed nominee is able to
and intends to commit the time necessary for the performance of Trustee
duties.
3. The Committee shall consider the integrity and character of the
proposed nominee, and the proposed nominee's compatibility with the
current Trustees.
4. The Committee may require an interview with the proposed nominee.
Nominees Recommended by Shareholders
1. The Committee shall consider nominations for openings on the Board of
Trustees from shareholders who have separately or as a group held for
at least one full year 5% of the shares of a Fund.
2. The Committee shall give candidates recommended by shareholders the
same consideration as any other candidate.
3. Shareholder recommendations should be sent to the attention of the
Committee in care of the Fund's Secretary and should include
biographical information, including business experience for the past
ten years and a description of the qualifications of the proposed
nominee, along with a statement from the proposed nominee that he or
she is willing to serve and meets the requirements to be a
Disinterested Trustee, if applicable.
Process for Identifying and Evaluating Trustee Nominees
1. When identifying and evaluating prospective nominees for openings on
the Board of Trustees, the Committee shall review all recommendations
in the same manner, including those received from shareholders.
2. The Committee shall first determine if the prospective nominee meets
the minimum qualifications set forth above. Those proposed nominees
meeting the minimum qualifications will then be considered by the
Committee with respect to the other qualifications listed above, and
any other qualifications deemed to be important by the Committee.
3. Those nominees selected by the Committee shall be recommended to the
Boards of Trustees.
Last Approved: June 17, 2004
Last Revised: June 17, 2004
EXHIBIT C
EVERGREEN INCOME ADVANTAGE FUND
EVERGREEN MANAGED INCOME FUND
EVERGREEN UTILITIES AND HIGH INCOME FUND
AUDIT COMMITTEE CHARTER
1) The Audit Committee (the "Committee") of Evergreen Income
Advantage Fund, Evergreen Managed Income Fund and Evergreen
Utilities and High Income Fund (the "Funds") shall be composed
entirely of independent Trustees who, in the view of the Board of
Trustees of the Funds (the "Board"), are free of any relationship
that would interfere with the exercise of independent judgment.
The independent Trustees (i) are barred from accepting, directly
or indirectly, any consulting, advisory or other compensatory fee
from the Funds or an affiliate of the Funds, other than in the
capacity as a member of the Board and any Board committee, and
(ii) cannot be an "interested person" of the Funds as defined in
Section 2(a)(19) of the Investment Company Act of 1940.
2) The Board will determine whether there is at least one member of
the Committee who is an independent audit committee financial
expert as defined in Item 3 of Form N-CSR.
3) The purposes of the Committee are:
a) To review the Funds' accounting and financial reporting policies
and practices, their internal controls and, as appropriate, the
internal controls of certain service providers;
b) To review the quality and objectivity of the Funds' financial
statements and the independent audits thereof; and
c) To act as liaison between the Funds' independent auditors and the
Board.
The function of the Committee is to review; it is management's
responsibility to maintain appropriate systems for accounting and
internal control, and the auditors' responsibility to plan and carry
out a proper audit.
4) To carry out its purposes, the Committee shall have the following
duties and powers:
a) To be directly responsible for the appointment, retention,
compensation, and oversight of the work of any registered public
accounting firm engaged for the purpose of preparing or issuing an
audit report or related work or performing other audit, review or
attest services for the Funds, and each such registered public
accounting firm must report directly to the Committee;
b) To recommend to the independent Trustees the selection, retention
or termination of auditors and, in connection therewith, to
evaluate the independence of the auditors, including whether the
auditors provide any non-audit services to the Funds' investment
advisers or affiliated persons of the investment advisers, and to
receive the auditors' formal written statement delineating
specific representations as to the auditors' independence and all
relationships between the auditors and the Funds' investment
advisers and any affiliated persons of the investment advisers,
consistent with Independence Standards Board Standard 1. The
Committee shall have responsibility for actively engaging in a
dialogue with the auditors with respect to any disclosed
relationships or services that may impact the objectivity and
independence of the auditors and for taking or recommending that
the Board take appropriate action to oversee the
independence of the auditors;
c) To instruct the auditors of the auditors' ultimate responsibility to
the Board and the Committee, as representatives of shareholders, and
the Board's and Committee's ultimate authority to select, evaluate,
and, where appropriate, replace the auditors and to nominate the
auditors for shareholder approval in any proxy statement;
d) To pre-approve all audit and non-audit services, except those within
the de minimis statutory exception, provided to the Funds by their
auditors or to establish pre-approval policies and procedures (which
may include the establishment of a pre-approval sub-committee
consisting of one or more independent audit committee members who serve
on the Board), to pre-approve non-audit services provided directly to
the Funds' investment advisers and any entity in the Funds' complex
where the nature of the services provided have a direct impact on the
operations or financial reporting of the Funds, to review in advance
the related estimate of fees, and to recommend pre-approved audit and
non-audit services and fee estimates for Board approval;
e) To meet with the Funds' independent auditors, including private
meetings, as necessary (i) to review the arrangements for
and scope of the annual audits and any special audits; (ii) to discuss
any matters of concern relating to the Funds'financial statements,
including any adjustments to such statements recommended by the
auditors, or other results of said audit(s); (iii) to consider the
auditors' comments with respect to the Funds' financial policies,
procedures and internal accounting controls and management's responses
thereto; (iv) to review the form of opinion the auditors
propose to render to the Board and shareholders; (v) to receive
reports from time to time about the nature of conversations, if any,
between the auditors of Wachovia and its affiliates and the auditors
of the Funds, and (vi) to discuss the results of the auditors' peer
review, if any;
f) To receive at least annually a report from the auditors within 90 days
prior to the filing of the auditors' report (or receive an updated
report within such 90 day period, if the auditors' annual report is
presented to the Committee more than 90 days prior to the filing of
the auditors' report) which includes the following: (i) all critical
accounting policies and practices used by the Funds (or, in connection
with any update, any changes in such accounting policies and
practices), (ii) all material alternative accounting treatments within
GAAP that have been discussed with management since the last annual
report or update, including the ramifications of the use of the
alternative treatments and the treatment preferred by the accounting
firm, (iii) other material written communications between the auditors
and the management of the Funds since the last annual report or
update, and (iv) a description of all non-audit services
provided, including fees associated with the services, to the
Funds' complex since the last annual report or update that
were not subject to the pre-approval requirements as discussed above;
g) To consider the effect upon the Funds of any changes in accounting
principles or practices proposed by management or the auditors;
h) To consider and review operating policies and procedures relating to
derivatives and risk management;
i) To review and discuss with management, including any officers
certifying the Funds' Form N-CSR, the Funds' audited financial
statements and to review any officer's certifications and reports to be
filed with the Securities and Exchange Commission on behalf of the
Funds; to offer guidance with respect to such audited financial
statements, certifications and reports; and to determine whether to
recommend that the financial statements be included in the annual
report;
j) To discuss all disclosures made by the Funds' officers certifying the
Funds' Form N-CSR to the Committee, based on such officers' most recent
evaluation as to (i) all significant deficiencies in the design or
operation of internal controls which could adversely affect the Funds'
ability to record, process, summarize and report financial data, and
(ii) any fraud, whether or not material, that involves management or
other employees who have significant roles in the Funds' internal
controls;
k) To investigate improprieties or suspected improprieties in the Funds'
operations;
l) To establish procedures for the receipt, retention and treatment of
complaints regarding accounting, internal accounting controls or
auditing matters, including procedures for the confidential, anonymous
submission by officers of the Funds or by employees of the Funds'
investment advisers or other service providers, of concerns regarding
questionable accounting or auditing matters; and
m) To report its activities to the Board on a regular basis and to make
such recommendations with respect to the above and other matters as the
Committee may deem necessary or appropriate.
5) The Committee shall meet at least quarterly and is empowered to hold
special meetings, as circumstances require.
6) The Committee shall meet with internal auditors to review their audit
plan and the result of completed audits.
7) The Committee shall have the authority to engage independent counsel
and other advisors as it determines necessary to carry out its duties.
8) The Committee shall have the resources and authority appropriate to
discharge its responsibilities.
9) The Committee shall review this Charter at least annually and
recommend any changes to the Board.
Last Approved: September 17, 2003
Last Revised: March 18, 2004
VERGREEN INCOME ADVANTAGE FUND
COMMON SHARES
This Proxy is solicited on Behalf of the Board of Trustees of Evergreen
Income Advantage Fund for the Annual Meeting of Shareholders, August 13, 2004
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes
and appoints Catherine F. Kennedy, Michael H. Koonce, Lloyd Lipsett and Maureen
E. Towle, or any of them, with full power of substitution, as attorneys and
proxies to appear and vote all of the common shares standing in the name of the
undersigned at the annual meeting of shareholders of Evergreen Income Advantage
Fund to be held at the offices of Evergreen Investments, 26th Floor, 200
Berkeley Street, Boston, Massachusetts 02116 on August 13, 2004 at 10:00 o'clock
a.m., Eastern time, and at any and all adjournments thereof, and the undersigned
hereby instructs said attorneys to vote:
(Continued, and to be signed on other side)
X Please mark your
votes as in this
example.
The shares represented by this proxy will be voted as specified in the following
Item 1, but if no choice is specified, they will be voted FOR the election of
the 4 persons named in the proxy statement as proposed Trustees under "Election
of Trustees."
1. ELECTION OF TRUSTEES
FOR all nominees (except as marked to [ ] WITHHOLD AUTHORITY to [ ] Nominees: Charles A. Austin III
the contrary below*) vote for all nominees Shirley L. Fulton
Gerald M. McDonnell
Richard J. Shima
2. In their discretion, the proxies are authorized to vote upon any other
business which may properly come before the meeting or any adjournment
thereof.
(*INSTRUCTION: To withhold authority to vote for any individual nominee, write
the name of the nominee(s) below.)
SIGNATURE(S)____________________________________________________________________
DATE_____________, 2004. (Signature of all joint owners is required. Fiduciaries
please indicate your full title. Sign exactly as name appears hereon.)
If any other matters properly come before the meeting about which the proxy
holders were not aware prior to the time of the solicitation, authorization is
given to the proxy holders to vote in accordance with the views of the
management of the Fund thereto. Management is not aware of any such matters.
-----------------------------------
PLEASE SIGN AND RETURN
THIS PROXY CARD IN THE
ENCLOSED ENVELOPE.
-----------------------------------
PROXY
EVERGREEN INCOME ADVANTAGE FUND
PREFERRED SHARES
This Proxy is solicited on Behalf of the Board of Trustees of Evergreen Income
Advantage Fund for the Annual Meeting of Shareholders, August 13, 2004
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes
and appoints Catherine F. Kennedy, Michael H. Koonce, Lloyd Lipsett and Maureen
E. Towle, or any of them, with full power of substitution, as attorneys and
proxies to appear and vote all of the preferred shares standing in the name of
the undersigned at the annual meeting of shareholders of Evergreen Income
Advantage Fund to be held at the offices of Evergreen Investments, 26th Floor,
200 Berkeley Street, Boston, Massachusetts 02116 on August 13, 2004 at 10:00
o'clock a.m., Eastern time, and at any and all adjournments thereof, and the
undersigned hereby instructs said attorneys to vote:
(Continued, and to be signed on other side)
X Please mark your
votes as in this
example.
The shares represented by this proxy will be voted as specified in the following
Item 1, but if no choice is specified, they will be voted FOR the election of
the 4 persons named in the proxy statement as proposed Trustees under "Election
of Trustees."
1. ELECTION OF TRUSTEES
FOR all nominees (except as marked to [ ] WITHHOLD AUTHORITY to [ ] Nominees: Charles A. Austin III
the contrary below*) vote for all nominees Shirley L. Fulton
Gerald M. McDonnell
Richard J. Shima
2. In their discretion, the proxies are authorized to vote upon any other
business which may properly come before the meeting or any adjournment
thereof.
(*INSTRUCTION: To withhold authority to vote for any individual nominee, write
the name of the nominee(s) below.)
SIGNATURE(S)___________________________________________________________________
DATE_____________, 2004. (Signature of all joint owners is required. Fiduciaries
please indicate your full title. Sign exactly as name appears hereon.)
If any other matters properly come before the meeting about which the proxy
holders were not aware prior to the time of the solicitation, authorization is
given to the proxy holders to vote in accordance with the views of the
management of the Fund thereto. Management is not aware of any such matters.
-----------------------------------
PLEASE SIGN AND RETURN
THIS PROXY CARD IN THE
ENCLOSED ENVELOPE.
-----------------------------------
June 25, 2004
EDGAR Operations Branch
Divisions of Investment Management
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Evergreen Income Advantage Fund
DEF 14A
CIK No.: 0001210123
Ladies and Gentlemen:
Pursuant to the Securities Act of 1934, as amended and the General
Rules and Regulations thereunder, enclosed for filing electronically is the
definitive proxy statement on Form DEF 14A of Evergreen Income Advantage Fund
(the "Fund"). This filing relates to the annual meeting of shareholders of the
Fund.
Very truly yours,
/s/ Maureen E. Towle
Maureen E. Towle
Enclosures
cc: David Mahaffey, Esq.