PAX WORLD GROWTH FUND INC, N-1A EL/A, 1997-05-27

PAX WORLD GROWTH FUND INC
N-1A EL/A, 1997-05-27

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<PAGE> 1

As filed with the Securities and Exchange Commission
on May 27, 1997

Registration No. 333-23549

================================================================================

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
PRE-EFFECTIVE AMENDMENT NO. 1 [X]
POST-EFFECTIVE AMENDMENT NO. [ ]

AND/OR

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
AMENDMENT NO. 1 [X]
(Check appropriate box or boxes)

PAX WORLD GROWTH FUND, INC.
(Exact name of registrant as specified in charter)

222 STATE STREET
PORTSMOUTH, NH 03801
(Address of Principal Executive Offices) (Zip Code)

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE:
800-767-1729

PAX WORLD MANAGEMENT CORP.
222 STATE STREET
PORTSMOUTH, NH 03801
ATTENTION: LAURENCE A. SHADEK
THOMAS W. GRANT
(Name and Address of Agent for Service)

APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING:
AS SOON AS PRACTICABLE
AFTER THE EFFECTIVE DATE OF THE REGISTRATION STATEMENT.

Registrant hereby elects, pursuant to Rule 24f-2 under the Investment
Company Act of 1940, to register an indefinite number of shares by this
Registration Statement. In accordance with Rule 24f-2, a registration fee, in
the amount of $500.00, is being paid herewith.

Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933, as amended, or until this Registration Statement
shall become effective on such date as the Commission, acting pursuant to said
Section 8(a), may determine.
<PAGE> 2
CROSS REFERENCE SHEET
(AS REQUIRED BY RULE 495)

<TABLE>
<CAPTION>
N-1A ITEM NO. LOCATION
------------- --------

PART A

<S> <C>
Item 1. Cover Page.................... Cover Page

Item 2. Synopsis...................... Fund Highlights; Fund Expenses

Item 3. Condensed Financial
Information................... Fund Expenses; How the Fund
Calculates Performance

Item 4. General Description of
Registrant.................... Cover Page; Fund Highlights;
Management of the Fund; General
Information

Item 5. Management of the Fund........ Fund Highlights; Management of the
Fund

Item 5A. Management's Discussion
of Fund Performance........... Not Applicable

Item 6. Capital Stock and Other
Securities.................... Fund Highlights; Taxes, Dividends
and Distributions; General
Information; Additional Information

Item 7. Purchase of Securities
Being Offered................. Fund Highlights; How the Fund Values
its Shares; Shareholder Guide;
Shareholder Services

Item 8. Redemption or Repurchase...... Fund Highlights; How the Fund Values
its Shares; Shareholder Guide

Item 9. Pending Legal Proceedings..... Not Applicable

PART B

Item 10. Cover Page.................... Cover Page

Item 11. Table of Contents............. Table of Contents

Item 12. General Information and
History....................... General

Item 13. Investment Objectives
and Policies.................. Investment Objectives and Policies;
Investment Restrictions

Item 14. Management of the Fund........ Management of the Fund; Distribution
</TABLE>

-ii-
<PAGE> 3
<TABLE>
<S> <C>
Item 15. Control Persons and
Principal Holders of
Securities.................... Not Applicable

Item 16. Investment Advisory and
Other Services................ Management of the Fund;
Distribution; Custodian, Transfer
and Dividend Disbursing Agent and
Independent Accountants

Item 17. Brokerage Allocation and
Other Practices............... Portfolio Transactions

Item 18. Capital Stock and Other
Securities.................... Not Applicable

Item 19. Purchase, Redemption and
Pricing of Securities
Being Offered................. Purchase, Redemption and Exchange of
Fund Shares; Net Asset Value

Item 20. Tax Status.................... Taxes

Item 21. Underwriters.................. Distribution

Item 22. Calculation of Performance
Data.......................... Performance Information

Item 23. Financial Statements.......... Financial Statements
</TABLE>

PART C

Information required to be included in Part C is set forth under the
appropriate Item, so numbered, in Part C to this Registration Statement.

INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.

SUBJECT TO COMPLETION, DATED _______________, 1997

PAX WORLD GROWTH FUND, INC.

-iii-
<PAGE> 4
- ------------------------------------------------------------------------------

PROSPECTUS DATED _______________, 1997

- ------------------------------------------------------------------------------

PAX WORLD GROWTH FUND, INC.
A Low-Load Growth Fund

222 State Street, Portsmouth, NH 03801
For shareholder account information: 800-372-7827
Portsmouth, NH office: 800-767-1729
603-431-8022

Pax World Growth Fund, Inc. (the "Fund") is an open-end, diversified
management investment company which seeks investments in companies producing
life-supportive goods and services and that are not, to any degree, engaged in
manufacturing defense or weapons-related products. The policy of the Fund is to
exclude from its portfolio securities of (i) companies engaged in military
activities, (ii) companies appearing on the United States Department of Defense
list of 100 largest contractors (a copy of which may be obtained from the Office
of the Secretary, Department of Defense, Washington, D.C. 20310) if five percent
(5%) or more of the gross sales of such companies are derived from contracts
with the United States Department of Defense, (iii) other companies contracting
with the United States Department of Defense if five percent (5%) or more of the
gross sales of such companies are derived from contracts with the United States
Department of Defense, and (iv) companies which derive revenue from the
production, sale and/or distribution of liquor, tobacco and/or gambling services
or equipment. See "Fund Highlights--What is the Fund's Investment Philosophy?"
at page 1; and "How the Fund Invests--Investment Objective and Policies" at page
5.

The Fund's investment objective is long-term growth of capital. The
Fund seeks to achieve this objective by investing primarily in equity securities
(common stock, preferred stock and securities convertible into common stock) of
established companies with above-average growth prospects. Current income, if
any, is incidental. Under normal market conditions, the Fund intends to invest
at least seventy-five percent (75%) of its total assets in equity securities of
companies that exceed $200,000,000.00 in market capitalization. The Fund may
also invest in (i) equity securities of other companies including foreign
issuers, (ii) investment grade fixed-income securities and (iii) obligations
issued or guaranteed by U.S. Government agencies and instrumentalities, the
proceeds of which are earmarked for a specific purpose which complies with the
investment objectives and policies of the Fund. In addition, the Fund may
purchase and sell put and call options on equity securities and stock indices
and foreign currency exchange contracts to hedge its portfolio and to attempt to
enhance return. The Fund will not invest in obligations issued or guaranteed by
foreign governments or the U.S. Treasury, however, because the proceeds thereof
may be used to manufacture defense or weapons-related products or for a purpose
which does not otherwise comply with the Fund's socially conscious objectives
and policies. There can be no assurance that the Fund's investment objective
will be achieved. See "Fund Highlights--What is the Fund's Investment
Philosophy?" at page 1; and "How the Fund Invests--Investment Objective and
Policies" at page 5. The Fund's address is 222 State Street, Portsmouth, NH
03801 and its telephone number is 800-767-1729.

This Prospectus sets forth concisely the information about the Fund
that a prospective investor ought to know before investing. Additional
information about the Fund has been filed with the Securities and Exchange
Commission in a Statement of Additional Information, dated _______________,
1997, which information is incorporated herein by reference (is legally
considered a part
<PAGE> 5
of this Prospectus) and is available without charge upon request to the Fund at
the address or telephone number noted above.

- ------------------------------------------------------------------------------
Investors are advised to read the Prospectus
and retain it for future reference.
- ------------------------------------------------------------------------------

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

Some prospective purchasers of Fund shares may be effecting
transactions through a securities broker-dealer which may result in a
transaction and other fees and charges, including postage and handling charges,
by such broker-dealer in addition to the sales charge imposed by the Fund. Such
transaction and other fees and charges (other than the sales charge imposed by
the Fund) would not be incurred if such purchase transaction is made directly
with the Fund.

-2-
<PAGE> 6
TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
----
<S> <C>
FUND HIGHLIGHTS .......................................................... 1
What is Pax World Growth Fund, Inc? ............................. 1
What is the Fund's Investment Philosophy? ....................... 1
What is the Fund's Investment Objective? ........................ 1
Investments and Special Considerations; Risk Factors ............ 1
Who Manages the Fund? ........................................... 2
Who Advises the Fund? ........................................... 2
Who Distributes the Fund's Shares? .............................. 3
What is the Minimum Investment? ................................. 3
How Do I Purchase Shares? ....................................... 3
How Do I Sell My Shares? ........................................ 4
How Are Dividends and Distributions Paid? ....................... 4
FUND EXPENSES ............................................................ 4
HOW THE FUND INVESTS ..................................................... 5
Investment Objective and Policies ............................... 5
Investments and Special Considerations; Risk Factors ............ 7
Corporate and Other Debt-Securities .................... 7
Convertible Securities ................................. 7
Equity-Related Securities .............................. 7
Foreign Securities ..................................... 8
Illiquid and Restricted Securities ..................... 8
Portfolio Turnover ..................................... 8
Repurchase Agreements .................................. 9
Short Sales Against-The-Box ............................ 9
U.S. Government Agency and/or
Instrumentality Securities ........................... 9
When-Issued and Delayed Delivery Securities ............ 10
Borrowing for Leverage ................................. 10
Hedging and Return Enhancement Strategies ....................... 11
Option Transactions .................................... 11
Investment Restrictions ......................................... 12
MANAGEMENT OF THE FUND ................................................... 12
Officers and Directors .......................................... 12
Adviser; Sub-Adviser ............................................ 12
Distribution .................................................... 14
Custodian and Transfer and Dividend Disbursing Agent ............ 14
HOW THE FUND VALUES ITS SHARES ........................................... 14
HOW THE FUND CALCULATES PERFORMANCE ...................................... 15
TAXES, DIVIDENDS AND DISTRIBUTIONS ....................................... 16
Taxation of the Fund ............................................ 16
Taxation of Shareholders ........................................ 16
Withholding Taxes ............................................... 16
Dividends and Distributions ..................................... 16
GENERAL INFORMATION ...................................................... 17
Incorporation ................................................... 17
Description of Common Stock ..................................... 17
Shareholder Meetings ............................................ 17
SHAREHOLDER GUIDE ........................................................ 18
How to Purchase Shares .......................................... 18
In General ............................................. 18
Investing by Mail ...................................... 18
Investing by Telephone ................................. 18
Investing by Wire Transfer ............................. 18
Waiver of Sales Charges ................................ 19
How to Sell Your Shares ......................................... 19
In General ............................................. 19
Redemptions by Written Request ......................... 20
Involuntary Redemptions ................................ 20
How to Exchange Your Shares ..................................... 21
In General ............................................. 21
</TABLE>

<PAGE> 7
<TABLE>
<S> <C>
Exchanges By Mail ...................................... 21
Exchanges by Telephone ................................. 21
Shareholder Services ............................................ 21
Automatic Reinvestment of Dividends and/or
Distributions without a Sales Charge ................. 22
Automatic Monthly Investment Plan ...................... 22
Tax-Deferred Retirement Plans .......................... 22
Systematic Withdrawal Plans ............................ 22
Reports to Shareholders ................................ 22
Shareholder Inquiries .................................. 22
THE PAX WORLD MUTUAL FUND FAMILY ......................................... 22
ADDITIONAL INFORMATION ................................................... 23
</TABLE>

-ii-
<PAGE> 8
FUND HIGHLIGHTS

The following summary is intended to highlight certain information
contained in this Prospectus and is qualified in its entirety by the more
detailed information appearing elsewhere herein.

WHAT IS PAX WORLD GROWTH FUND, INC.?

Pax World Growth Fund, Inc. is a mutual fund. A mutual fund pools the
resources of investors by selling its shares to the public and investing the
proceeds of such sale in a portfolio of securities designed to achieve its
investment objective. Technically, the Fund is an open-end, diversified,
low-load management investment company.

WHAT IS THE FUND'S INVESTMENT PHILOSOPHY?

The Fund endeavors through its investment philosophy to make a
contribution to world peace through investment in companies producing
life-supportive goods and services. Thus the Fund has adopted the name Pax World
to denote this endeavor. The Fund's portfolio will consist primarily of
companies located in the United States.

The policy of the Fund is to invest in securities of companies whose
business is essentially directed toward non-military and life-supportive
activities. For example, the Fund seeks to invest in such industries as building
supplies, computer software, education, food, health care, household appliances,
housing, leisure time, pollution control, publishing, retailing, technology and
telecommunications, among others.

The Fund seeks investments in companies producing life-supportive
goods and services and that are not, to any degree, engaged in manufacturing
defense or weapons-related products. The policy of the Fund is to exclude from
its portfolio securities of (i) companies engaged in military activities, (ii)
companies appearing on the United States Department of Defense list of 100
largest contractors if five percent (5%) or more of the gross sales of such
companies are derived from contracts with the United States Department of
Defense, (iii) other companies contracting with the United States Department of
Defense if five percent (5%) or more of the gross sales of such companies are
derived from contracts with the United States Department of Defense, and (iv)
companies which derive revenue from the production, sale and/or distribution of
liquor, tobacco and/or gambling services or equipment. See "How the Fund Invests
- -- Investment Objective and Policies" at page 5.

WHAT IS THE FUND'S INVESTMENT OBJECTIVE?

The Fund's investment objective is long-term growth of capital. It
seeks to achieve this objective by investing primarily in equity securities
(common stock, securities convertible into common stock and preferred stock) of
established companies with above-average growth prospects. Current income, if
any, is incidental. See "How the Fund Invests -- Investment Objective and
Policies" at page 5.

INVESTMENTS AND SPECIAL CONSIDERATIONS;
RISK FACTORS

Under normal market conditions, the Fund anticipates that at least
seventy-five percent (75%) of its total assets will consist of equity securities
of companies that exceed $200,000,000.00 in market capitalization. The Fund may
also invest in (i) other equity securities including securities of foreign
issuers, (ii) investment grade fixed-income securities and (iii)
<PAGE> 9

obligations issued or guaranteed by U.S. Government agencies and
instrumentalities, the proceeds of which are earmarked for a specific purpose
which complies with the investment objectives and policies of the Fund. In
addition, the Fund may purchase and sell put and call options on equity
securities and stock indices and foreign currency exchange contracts to hedge
its portfolio and to attempt to enhance return. The Fund will not invest in
obligations issued or guaranteed by foreign governments or the U.S. Treasury,
however, because the proceeds thereof may be used to manufacture defense or
weapons-related products or for a purpose which does not otherwise comply with
the Fund's socially conscious objectives and policies. See "How the Fund Invests
- -- Investment Objective and Policies" at page 5. Investing in securities of
foreign companies involves certain risks and considerations not typically
associated with investments in domestic companies. See "How the Fund Invests --
Investments and Special Considerations; Risk Factors" at page 7.

WHO MANAGES THE FUND?

The officers of the Fund are responsible for the day-to-day operations
of the Fund and the Board of Directors of the Fund is responsible for the
general policy of the Fund. The Board of Directors meets four times per year,
reviews portfolio selections and bonding requirements, declares dividends, if
any, and reviews the activities of the executive officers of the Fund. Such
activities are consistent with their fiduciary obligations as directors under
the General Corporation Law of the State of Delaware. Members of the Board of
Directors of the Fund are reimbursed for their travel expenses for attending
meetings of the Board of Directors plus a fee of Three Hundred Dollars ($300.00)
to affiliated directors and One Thousand Dollars ($1,000.00) to unaffiliated
directors.

WHO ADVISES THE FUND?

Pursuant to an Advisory Agreement entered into between the Fund and Pax
World Management Corp., 222 State Street, Portsmouth, NH 03801 (the "Adviser"),
the Adviser, subject to the supervision of the Board of Directors of the Fund,
is responsible for managing the assets of the Fund in accordance with its
investment objective, investment program and policies. In the event that the
average net assets of the Fund are less than $5,000,000.00, the Adviser will be
compensated by the Fund for its services at an annual rate of $25,000.00; in the
event that average net assets of the Fund are equal to or in excess of
$5,000,000.00, the Adviser will be compensated by the Fund for its services at
an annual rate of one percent (1%) of average net assets up to and including
$25,000,000.00 and three-quarters of one percent (.75%) of average net assets in
excess of $25,000,000.00.

Pursuant to a Sub-Advisory Agreement entered into between the Adviser
and H.G. Wellington Capital Management, a division of H.G. Wellington & Co.,
Inc., 14 Wall Street, New York, NY 10005 (the "Sub-Adviser"), the Sub-Adviser
furnishes investment advisory services in connection with the management of the
Fund and assists in determining what securities and other instruments are
purchased and sold for the Fund and in obtaining and evaluating financial data
relevant to the Fund. In the event that the average net assets of the Fund are
less than $5,000,000.00, the Sub-Adviser will be compensated by the Adviser for
its services at an annual rate of $25,000.00; in the event that average net
assets of the Fund are equal to or in excess of $5,000,000.00, the Sub-Adviser
will be compensated by the Adviser for its services at an annual rate of
one-third of one percent (.33%) of average net assets up to and including
$25,000,000.00 and one-quarter of one percent (.25%) of average net assets in
excess of $25,000,000.00, but in no event to exceed the annual sum of Two
Hundred and Fifty Thousand Dollars ($250,000.00) net of expenses.

-2-
<PAGE> 10
Mr. Robert P. Colin, an employee of the Sub-Adviser, is the Portfolio
Manager of the Fund. He is the person responsible for the day-to-day
management of the Fund's portfolio. Mr. Colin received his bachelor of arts
degree from Rutgers University and his masters in business administration
- -finance from New York University. Mr. Colin joined H.G. Wellington Capital
Management, a division of the Sub-Adviser, in 1991 as a Senior Vice President
and Senior Portfolio Manager. Mr. Colin was one of the original founders of
Faulkner, Dawkins & Sullivan in 1959, serving as Director of Research and
Investment Strategy. After Faulkner, Dawkins & Sullivan merged with Shearson
Lehman, and later, American Express, Mr. Colin worked briefly for Merrill
Lynch Asset Management before joining Bessemer Trust Company in 1978 as a
Senior Portfolio Manager and Director of Research. In 1983, Mr. Colin joined
General Electric Investment Corporation as a Senior Vice President of Equity
Portfolios with responsibilities for various funds under General Electric's
control, including its own pension fund.

Mr. Colin, who is a Chartered Financial Analyst, has contributed
numerous articles on investment research to professional journals and has
served as a consultant to a number of publicly-owned corporations.

WHO DISTRIBUTES THE FUND'S SHARES?

The Fund maintains a distribution expense plan pursuant to Rule 12b-1
under the Investment Company Act of 1940, as amended, pursuant to which the
Fund incurs the expenses of distributing the Fund's shares. These expenses
include (but are not limited to) advertising expenses, the cost of printing and
mailing prospectuses to potential investors, commissions and
account servicing fees paid to, or on account of, broker-dealers or certain
financial institutions which have entered into agreements with the Fund,
compensation to and expenses incurred by officers, directors and/or employees of
the Fund for their distributional services and indirect and overhead costs
associated with the sale of Fund shares. The plan provides that (i) up to
twenty-five one hundredths of one percent (.25%) of the average daily net assets
of the shares of the Fund per annum may be used to pay for personal service
and/or the maintenance of shareholder accounts (service fee) and (ii) total
distribution fees (including the service fee of .25%) may not exceed thirty-five
one hundredths of one percent (.35%) of the average daily net assets of the
shares of the Fund per annum.

WHAT IS THE MINIMUM INVESTMENT?

The minimum initial investment is $500.00; the minimum subsequent
investment is $100.00. There is no minimum investment requirement for certain
retirement and employee savings plans or custodial accounts for the benefit of
minors. See "Shareholder Guide -- How to Purchase Shares" at page 16 and
"Shareholder Guide -- Shareholder Services" at page 20.

HOW DO I PURCHASE SHARES?

You may purchase shares of the Fund directly from the Fund, through its
transfer agent, PFPC, Inc. (the "Transfer Agent"), at the net asset value per
share (NAV) next determined after receipt of your purchase order by the Transfer
Agent, plus a front-end sales charge of up to two and one-half percent (2.5%).
No sales charges are imposed on shares of the Fund purchased upon (i) the
exchange of shares of the Pax World Fund or (ii) the reinvestment of dividends
and distributions. In addition, shares of the Fund may be purchased at NAV,
without payment of a sales charge, by certain investors, including certain
pension, profit-sharing or other employee benefit plans.

-3-
<PAGE> 11
See "Shareholder Guide -- How to Purchase Shares" at page 16; and "How The Fund
Values its Shares" at page 13.

HOW DO I SELL MY SHARES?

You may redeem your shares at any time at the NAV next determined after
the Transfer Agent receives your sell order. See "Shareholder Guide -- How to
Sell Your Shares" at page 18.

HOW ARE DIVIDENDS AND DISTRIBUTIONS PAID?

The Fund expects to pay dividends of net investment income
semi-annually and distributions of net capital gains at least annually.
Dividends and distributions will be automatically reinvested in additional
shares of the Fund at NAV without a sales charge unless you request that they be
paid to you in cash. See "Taxes, Dividends and Distributions" at page 14.

FUND EXPENSES

<TABLE>
<S> <C>
Shareholder Transaction Expenses(1):

Maximum Sales Load Imposed on Purchases
(as a percentage of offering price) ...................................... 2.5%

Maximum Sales Load Imposed on Reinvested Dividends
and Other Distributions
(as a percentage of offering price) ...................................... 0%

Maximum Deferred Sales Load
(as a percentage of original purchase price or
redemption proceeds, as applicable) ...................................... 0%

Redemption Fees
(as a percentage of amount redeemed, if applicable) ...................... 0%

Exchange Fees
(as a percentage of average net assets) .................................. 0%

Annual Fund Operating Expenses (as a percentage of average net assets):

Management Fee ........................................................... _____%

12b-1 Fees ............................................................... _____%

Other Expenses (estimated) ............................................... _____%

Total Fund Operating Expenses ............................................ _____%
</TABLE>

- ----------
(1) Pursuant to the rules of the National Association of Securities
Dealers, Inc., the aggregate initial sales charges, deferred sales
charges and asset-based sales charges on shares of the Fund may not
exceed 6.25% of total gross sales, subject to certain exclusions. This
6.25% limitation is imposed on the Fund rather than on a per
shareholder basis.

-4-
<PAGE> 12
Example:

You would pay the following expenses on a $1,000 investment, assuming (1) 5%
annual return and (2) redemption at the end of each time period:

1 Year 3 Years

$_____ $_____

You would pay the following expenses on the same investment, assuming no
redemption:

1 Year 3 Years

$_____ $_____

THE FOREGOING EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST
OR FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.

The purpose of this table is to assist an investor in understanding the
various costs and expenses that an investor in the Fund will bear, whether
directly or indirectly. For more complete descriptions of the various costs and
expenses, see "Management of the Fund" at page 11. "Other Expenses" include
estimated operating expenses of the Fund, such as directors' and professional
fees, registration fees, reports to shareholders, transfer agency and custodian
fees and is based on estimated amounts for the current fiscal year.

HOW THE FUND INVESTS

INVESTMENT OBJECTIVE AND POLICIES

Under normal market conditions, the Fund intends to invest at least
seventy-five percent (75%) of its total assets in equity securities of companies
that exceed $200,000,000.00 in market capitalization. Stocks will be selected on
a company-by-company basis primarily through the use of fundamental analysis.
The Fund's Adviser looks for companies that have demonstrated growth in earnings
and sales, high returns on equity and assets, or other strong financial
characteristics, and, in the judgment of the Adviser, are attractively valued.
These companies tend to have a unique market niche, a strong new product profile
or superior management.

-5-
<PAGE> 13

currency exchange contracts to hedge its portfolio and to attempt to enhance
return. The Fund will not invest in obligations issued or guaranteed by foreign
governments or the U.S. Treasury, however, because the proceeds thereof may be
used to manufacture defense or weapons-related products or for a purpose which
does not otherwise comply with the Fund's socially conscious objectives and
policies.

The Fund reserves the right to hold temporarily other types of
securities without limit, including commercial paper, bankers' acceptances,
non-convertible debt securities (corporate) or government securities and high
quality money market securities or cash (foreign currencies or United States
dollars), in such proportions as, in the opinion of the Adviser, prevailing
market, economic or political conditions warrant. The Fund may also temporarily
hold cash and invest in high quality foreign or domestic money market
instruments pending investment of proceeds from new sales of Fund shares or to
meet ordinary daily cash needs.

Consistent with its social criteria, the Fund will seek investments in
companies that produce life-supportive goods and services and are not to any
degree engaged in manufacturing defense or weapons-related products. By way of
illustration, the Fund will invest in such industries as building supplies,
computer software, education, food, health care, household appliances, housing,
leisure time, pollution control, publishing, retailing, technology and
telecommunications, among others. The Fund will endeavor (but is not required)
to invest in companies which have adopted and administer fair employment and
pollution control policies to the extent information reflecting such policies
and administrative practices is available to the Fund.

The policy of the Fund is to exclude from its portfolio securities of
(i) companies engaged in military activities, (ii) companies appearing on the
United States Department of Defense list of 100 largest contractors if five
percent (5%) or more of the gross sales of such companies are derived from
contracts with the United States Department of Defense, (iii) other companies
contracting with the United States Department of Defense if five percent (5%) or
more of the gross sales of such companies are derived from contracts with the
United States Department of Defense, and (iv) companies which derive revenue
from the production, sale and/or distribution of liquor, tobacco and/or gambling
services or equipment.

In order to properly supervise a securities portfolio containing the
limitations described above, care must be exercised to continuously monitor
developments of the companies whose securities are included in the portfolio.
Developments and trends in the economy and financial markets are also
considered, and the screening of many securities is required to implement the
investment philosophy of the Fund.

If after the initial purchase by the Fund it is determined that the
company's activities fall within the exclusion described above (either by
acquisition, merger or otherwise), the securities of such companies will be
eliminated from the portfolio as soon thereafter as possible taking into
consideration (i) any gain or loss which may be realized from such elimination,
(ii) the tax implications of such elimination, (iii) market timing, and the
like. In no event, however, will such security be retained longer than six
months from the time the Fund learns of the investment disqualification. This
requirement may cause the Fund to dispose of the security at a time when it may
be disadvantageous to do so.

The Fund's investment objective is a fundamental policy and may not be
changed without the approval of the holders of a majority of the Fund's
outstanding voting securities, as defined in the Investment Company Act.
Investment policies that are not fundamental may be modified by the Board of
Directors.

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<PAGE> 14

SHAREHOLDERS SHOULD UNDERSTAND THAT ALL INVESTMENTS INVOLVE RISK AND
THERE CAN BE NO GUARANTEE AGAINST LOSS RESULTING FROM AN INVESTMENT IN THE FUND,
NOR CAN THERE BE ANY ASSURANCE THAT THE FUND'S INVESTMENT OBJECTIVE WILL BE
ATTAINED. See "Investment Objective and Policies" in the Statement of Additional
Information, a copy of which is available without charge upon request by writing
to the Fund at 222 State Street, Portsmouth, NH 03801 or by telephoning
800-767-1729.

INVESTMENTS AND SPECIAL CONSIDERATIONS;
RISK FACTORS

Corporate and Other Debt Securities

The Fund may invest in investment grade corporate and other debt
obligations of domestic and foreign issuers. Bonds and other debt securities are
used by issuers to borrow money from investors. The issuer pays the investor a
fixed or variable rate of interest and must repay the amount borrowed at
maturity. Investment grade debt securities are rated within the four highest
quality grades as determined by Moody's Investors Service (Moody's) (currently
Aaa, Aa, A and Baa for bonds), or Standard & Poor's Ratings Group (S&P)
(currently AAA, AA, A and BBB for bonds), or by another nationally recognized
statistical rating organization ("NRSRO") or, in unrated securities which are of
equivalent quality in the opinion of the Adviser.

Convertible Securities

A convertible security can be converted at a stated price within a
specified period of time into a certain quantity of the common Stock of the same
or a different issuer. Convertible securities are senior to common stocks in a
corporation's capital structure, but are usually subordinated to similar
nonconvertible securities. While providing a fixed income stream (generally
higher in yield than the income derivable from a common stock but lower than
that afforded by a similar nonconvertible security), a convertible security also
affords an investor the opportunity, through its conversion feature, to
participate in the capital appreciation dependent upon a market price advance in
the convertible security's underlying common stock.

In general, the market value of a convertible security is at least the
higher of its "investment value" (i.e., its value as a fixed-income security) or
its "conversion value" (i.e., its value upon conversion into its underlying
common stock). The price of a convertible security is influenced, in part, by
the market value of the security's underlying stock. The price of a convertible
security tends to increase as the market value of the underlying stock rises,
and it tends to decrease as the market value of the underlying stock declines.
While no securities investment is without some risk, investments in convertible
securities generally entail less risk than investments in the common stock of
the same issuer.

Equity-Related Securities

The Fund may invest in equity-related securities. Equity-related
securities are common stock, preferred stock, rights, warrants and debt
securities or preferred stock which are convertible or exchangeable for common
stock or preferred stock. See "Convertible Securities" above.

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<PAGE> 15
Foreign Securities

While the Fund intends to invest primarily in domestic securities, it
may invest in foreign securities. Investors in the Fund should be aware that
foreign securities involve certain risks, including political or economic
instability in the country of the issuer, the difficulty of predicting
international trade patterns, the possibility of imposition of exchange controls
and the risk of currency fluctuations. Such securities may be subject to greater
fluctuations in price than securities issued by U.S. corporations or issued or
guaranteed by U.S. Government instrumentalities or agencies. In addition, there
may be less publicly available information about a foreign company than about a
domestic company. Foreign companies generally are not subject to uniform
accounting, auditing and financial reporting standards comparable to those
applicable to domestic companies.

Additional costs could be incurred in connection with any international
investment activities engaged in by the Fund. Foreign brokerage commissions are
generally higher than United States brokerage commissions. Increased custodian
costs as well as administrative difficulties may also be involved.

If a security is denominated in a foreign currency, it will be affected
by changes in currency exchange rates and in exchange control regulations, and
costs may be incurred in connection with conversions between currencies. Such
changes also will affect the Fund's income and distributions to shareholders. In
addition, although the Fund may receive income in such currencies, the Fund will
be required to compute and distribute its income in U.S. dollars. Therefore, if
the exchange rate for any such currency declines after the Fund's income has
been accrued and translated into U.S. dollars, the Fund could be required to
liquidate portfolio securities to make such distributions, particularly in
instances in which the amount of income the Fund is required to distribute is
not immediately reduced by the decline in such currency.

Illiquid and Restricted Securities

The Fund may invest up to 10% of its net assets in illiquid securities,
including repurchase agreements which have a maturity of longer than seven (7)
days, securities with legal or contractual restrictions on resale (restricted
securities) and securities that are not readily marketable in securities markets
either within or outside of the United States. Restricted securities eligible
for resale pursuant to Rule 144A under the Securities Act of 1933, as amended
(the "Securities Act") and privately placed commercial paper that have a readily
available market are not considered illiquid for purposes of this limitation.
The Adviser will monitor the liquidity of such restricted securities under the
supervision of the Board of Directors. Repurchase agreements subject to demand
are deemed to have a maturity equal to the applicable notice period. See
"Investments and Special Considerations; Risk Factors -- Illiquid and Restricted
Securities" in the Statement of Additional Information, a copy of which is
available without charge upon request by writing to the Fund at 222 State
Street, Portsmouth, NH 03801 or by telephoning 800-767-1729.

Portfolio Turnover

While as a matter of policy, the Fund will try to limit the turnover of
its portfolio, it is possible that, as a result of the Fund's investment
policies and social criteria, its portfolio turnover rate may exceed
seventy-five percent (75%), although the rate is not expected to exceed one
hundred percent (100%). High portfolio turnover (over one hundred percent
(100%)) may involve correspondingly greater brokerage commissions and other

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<PAGE> 16

transaction costs, which will be borne directly by the Fund. See "Portfolio
Transactions and Brokerage" in the Statement of Additional Information, a copy
of which is available without charge upon request by writing to the Fund at 222
State Street, Portsmouth, NH 03801 or by telephoning 800-767-1729. In addition,
high portfolio turnover may result in increased short-term capital gains, which,
when distributed to shareholders, are treated as ordinary income. See "Taxes,
Dividends and Distributions" at page 14.

Repurchase Agreements

The Fund may enter into repurchase agreements whereby the seller of the
security agrees to repurchase that security from the Fund at a mutually
agreed-upon time and price. The repurchase date is usually within a day or two
of the original purchase, although it may extend over a number of months. The
Fund's repurchase agreements will at all times be fully collateralized by
obligations issued or guaranteed by U.S. Government agencies and
instrumentalities (other than the U.S. Treasury) in an amount at least equal to
the purchase price of the underlying securities (including accrued interest
earned thereon). In the event of a default or bankruptcy by a seller, the Fund
will promptly seek to liquidate the collateral. To the extent that the proceeds
from any sale of such collateral upon a default in the obligation to repurchase
are less than the repurchase price, the Fund will suffer a loss. See
"Investments and Special Considerations; Risk Factors -- Repurchase Agreements"
in the Statement of Additional Information, a copy of which is available without
charge upon request by writing to the Fund at 222 State Street, Portsmouth, NH
03801 or by telephoning 800-767-1729.

Short Sales Against-the-Box

The Fund may make short sales against-the-box for the purpose of
deferring realization of gain or loss for federal income tax purposes. A short
sale "against-the-box" is a short sale in which the Fund owns an equal amount of
the securities sold short or securities convertible into or exchangeable for,
without payment of any further consideration, securities of the same issue as,
and equal in amount to, the securities sold short.

U.S. Government Agency and/or
Instrumentality Securities

The Fund may invest in securities issued or guaranteed by U.S. agencies
or instrumentalities, the proceeds of which are earmarked for a specific purpose
which complies with the investment objectives and policies of the Fund. The Fund
will not invest in obligations issued or guaranteed by foreign governments or
the U.S. Treasury, however, because the proceeds thereof may be used to
manufacture defense or weapons-related products or for a purpose which does not
otherwise comply with the Fund's socially conscious objectives and policies. Not
all U.S. Government securities are backed by the full faith and credit of the
United States. Some are supported only by the credit of the issuing agency. See
"Investments and Special Considerations; Risk Factors -- U.S. Government Agency
and/or Instrumentality Securities" in the Statement of Additional Information, a
copy of which is available without charge upon request by writing to the Fund at
222 State Street, Portsmouth, NH 03801 or by telephoning 800-767-1729.

In connection with its commitment to assist in the development of
housing, the Fund may invest in mortgage-backed securities and other derivative
mortgage products, including those representing an undivided ownership interest
in a pool of mortgages, e.g., Government National Mortgage Association ("GNMA"),
Federal National Mortgage Association ("FNMA") and

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<PAGE> 17
Federal Home Loan Mortgage Corporation ("FHLMC") certificates. These
certificates are in most cases "pass-through" instruments, through which the
holder receives a share of all interest and principal payments from the
mortgages underlying the certificate, net of certain fees.

Mortgage-backed securities are subject to the risk that the principal
on the underlying mortgage loans may be prepaid at any time. Although the extent
of prepayments on a pool of mortgage loans depends on various economic and other
factors, as a general rule prepayments on fixed rate mortgage loans will
increase during a period of falling interest rates and decrease during a period
of rising interest rates. Accordingly, amounts available for reinvestment by the
Fund are likely to be greater during a period of declining interest rates and,
as a result, likely to be reinvested at lower interest rates than during a
period of rising interest rates. Mortgage-backed securities may decrease in
value as a result of increases in interest rates and may benefit less than other
fixed income securities from declining interest rates because of the risk of
prepayment. See "Investments and Special Considerations; Risk Factors -- U.S.
Government Agency and/or Instrumentality Securities" in the Statement of
Additional Information, a copy of which is available without charge upon request
by writing to the Fund at 222 State Street, Portsmouth, NH 03801 or by
telephoning 800-767-1729.

When-Issued and Delayed Delivery Securities

The Fund may purchase or sell securities on a when-issued or delayed
delivery basis. When-issued or delayed delivery transactions arise when
securities are purchased or sold by the Fund with payment and delivery taking
place a month or more in the future in order to secure what is considered to be
an advantageous price and yield to the Fund at the time of entering into the
transaction. While the Fund will only purchase securities on a when-issued or
delayed delivery basis with the intention of acquiring the securities, the Fund
may sell the securities before the settlement date, if it is deemed advisable.
At the time the Fund makes the commitment to purchase securities on a
when-issued or delayed delivery basis, the Fund will record the transaction and
thereafter reflect the value, each day, of such security in determining the net
asset value of the Fund. At the time of delivery of the securities, the value
may be more or less than the purchase price. The Fund's Custodian will maintain,
in a segregated account of the Fund, cash, or other liquid high-grade debt
obligations having a value equal to or greater than the Fund's purchase
commitments; the Custodian will likewise segregate securities sold on a delayed
delivery basis. See "Investment Objective and Policies; Risk Factors --
When-Issued and Delayed Delivery Securities" in the Statement of Additional
Information, a copy of which is available without charge upon request by writing
to the Fund at 222 State Street, Portsmouth, NH 03801 or by telephoning
800-767-1729.

Borrowing For Leverage

From time to time, the Fund may borrow up to twenty percent (20%) of
the value of its total assets (calculated when the loan is made) for temporary,
extraordinary or emergency purposes or for the clearance of transactions. The
Fund may pledge up to twenty percent (20%) of the value of its total assets to
secure such borrowings. Such borrowings may subject the Fund to greater risks
and costs than funds that do not borrow. For example, the Fund may have to sell
a portion of its investments at a time when it would otherwise not want to sell
such investments in order to comply with the capital coverage requirements of
the Investment Company Act, which require the value of the Fund's assets, less
its liabilities other than borrowings, to be equal to at least three hundred
percent (300%) of all borrowings including the proposed borrowing. In addition,
because interest on money the Fund borrows is an

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<PAGE> 18

expense of the Fund, the Fund's expenses may increase more than the expenses of
funds that do not borrow and the NAV per share of the Fund may fluctuate more
than the NAV per share of funds that do not borrow. See "Investment Objective
and Policies; Risk Factors -- Borrowing for Leverage" in the Statement of
Additional Information, a copy of which is available without charge upon request
by writing to the Fund at 222 State Street, Portsmouth, NH 03801 or by
telephoning 800-767-1729.

HEDGING AND RETURN ENHANCEMENT STRATEGIES

The Fund may also engage in various portfolio strategies to reduce
certain risks of its investments and to attempt to enhance return. These
strategies currently include the use of options, futures contracts and options
thereon. The Fund's ability to use these strategies may be limited by market
conditions, regulatory limits and tax considerations and there can be no
assurance that any of these strategies will succeed. See "Investment Objective
and Policies," "Investments and Special Considerations; Risk Factors" and
"Taxes" in the Statement of Additional Information, a copy of which is available
without charge upon request by writing to the Fund at 222 State Street,
Portsmouth, NH 03801 or by telephoning 800-767-1729. New financial products and
risk management techniques continue to be developed and the Fund may use these
new investments and techniques to the extent consistent with its investment
objective and policies.

Options Transactions

The Fund may purchase and write (i.e., sell) put and call options on
securities, stock indices and currencies that are traded on U.S. or foreign
securities exchanges or in the over-the-counter market to enhance return or to
hedge the Fund's portfolio. These options may be on equity securities, stock
indices (e.g., S&P 500) and foreign currencies. The Fund may write covered put
and call options to generate additional income through the receipt of premiums,
purchase put options in an effort to protect the value of securities (or
currencies) that it owns against a decline in market value and purchase call
options in an effort to protect against an increase in the price of securities
(or currencies) it intends to purchase. The Fund may also purchase put and call
options to offset previously written put and call options of the same series.
See "Investments and Special Considerations; Risk Factors -- Options on
Securities" and "Investments and Special Considerations; Risk Factors -- Options
on Securities Indices" in the Statement of Additional Information, a copy of
which is available without charge upon request by writing to the Fund at 222
State Street, Portsmouth, NH 03801 or by telephoning 800-767-1729.

A call option gives the purchaser, in exchange for a premium paid, the
right for a specified period of time to purchase the securities or currency
subject to the option at a specified price (the exercise price or strike price).
The writer of a call option, in return for the premium, has the obligation, upon
exercise of the option, to deliver, depending upon the terms of the option
contract, the underlying securities or a specified amount of cash to the
purchaser upon receipt of the exercise price. When the Fund writes a call
option, the Fund gives up the potential for gain on the underlying securities or
currency in excess of the exercise price of the option during the period that
the option is open.

A put option gives the purchaser, in return for a premium, the right,
for a specified period of time, to sell the securities or currency subject to
the option to the writer of the put at the specified exercise price. The writer
of the put option, in return for the premium, has the obligation, upon exercise
of the option, to acquire the securities or currency underlying the

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<PAGE> 19
option at the exercise price. The Fund might, therefore, be obligated to
purchase the underlying securities or currency for more than their current
market price.

The Fund will write only "covered" options. An option is covered if, so
long as the Fund is obligated under the option, it owns an offsetting position
in the underlying security or currency or maintains cash, U.S. Government
securities or other liquid high-grade debt obligations with a value sufficient
at all times to cover its obligations in a segregated account. See Investments
and Special Considerations; Risk Factors -- Options on Securities" and
"Investments and Special Considerations; Risk Factors -- Options on Securities
Indices" in the Statement of Additional Information, a copy of which is
available without charge upon request by writing to the Fund at 222 State
Street, Portsmouth, NH 03801 or by telephoning 800-767-1729.

INVESTMENT RESTRICTIONS

The Fund is subject to certain investment restrictions which, like its
investment objective, constitute fundamental policies. Fundamental policies
cannot be changed without the approval of a majority of the Fund's outstanding
voting securities (which is defined as the vote at a special or annual meeting
of the shareholders of the Fund, duly called, (i) of sixty-seven percent (67%)
of the voting securities present at such meetings if the holders of more than
fifty percent (50%) of the outstanding voting securities are present or
represented by proxy, or (ii) of more than fifty percent (50%) of the
outstanding voting securities, whichever is less). See "Investment Restrictions"
in the Statement of Additional Information, a copy of which is available without
charge upon request by writing to the Fund at 222 State Street, Portsmouth, NH
03801 or by telephoning 800-767-1729.

MANAGEMENT OF THE FUND

OFFICERS AND DIRECTORS

The Fund's officers conduct and supervise the daily business operations
of the Fund. The Fund's Board of Directors, in addition to overseeing the
Adviser and Sub-Adviser, decides upon matters of general policy. The Fund's
Adviser and Sub-Adviser furnish daily investment advisory services. Members of
the Board of Directors of the Fund are reimbursed for their travel expenses for
attending meetings of the Board of Directors plus Three Hundred Dollars
($300.00) to affiliated directors and One Thousand Dollars ($1,000.00) to
unaffiliated directors. See "Management of the Fund" in the Statement of
Additional Information, a copy of which is available without charge upon request
by writing to the Fund at 222 State Street, Portsmouth, NH 03801 or by
telephoning 800-767-1729.

ADVISER; SUB-ADVISER

Pax World Management Corp., 222 State Street, Portsmouth, NH 03801 (the
"Adviser"), is the adviser to the Fund. It was incorporated in 1970 under the
laws of the State of Delaware. Pursuant to the terms of an Advisory Agreement
entered into between the Fund and the Adviser (the "Advisory Agreement"), the
Adviser, subject to the supervision of the Board of Directors of the Fund, is
responsible for managing the assets of the Fund in accordance with the Fund's
investment objective, investment program and policies. As of December 31, 1996,
the Adviser had over $513,000,000.00 in assets under management by virtue of
serving as the adviser to the Pax World Fund, Inc. (the "Pax World Fund"). The
Adviser has no clients other than the Fund and the Pax World Fund.

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<PAGE> 20
Pursuant to the terms of the Advisory Agreement, the Adviser will be
compensated as follows: in the event that the average net assets of the Fund are
less than $5,000,000.00, the Adviser will be compensated by the Fund for its
services at an annual rate of $25,000.00; in the event that the average net
assets of the Fund are equal to or in excess of $5,000,000.00, the Adviser will
be compensated by the Fund for its services at an annual rate of one percent
(1%) of average net assets up to and including $25,000,000.00 and three-quarters
of one percent (.75%) of average net assets in excess of $25,000,000.00.

The Adviser has, however, agreed to supply and pay for such services as
are deemed by the Board of Directors of the Fund to be necessary or desirable
and proper for the continuous operations of the Fund (excluding all taxes and
charges of governmental agencies and brokerage commissions incurred in
connection with portfolio transactions) which are in excess of one and one-half
percent (1-1/2%) of the average net asset value of the Fund per annum. Such
expenses include (i) management, distribution and sub-advisory fees; (ii) the
fees of affiliated and unaffiliated Directors; (iii) the fees of the Fund's
Custodian and Transfer Agent; (iv) the fees of the Fund's legal counsel and
independent accountants; (v) the reimbursement of organization expenses; and
(vi) expenses related to shareholder communications including all expenses of
shareholders' and Board of Directors' meetings and of preparing, printing and
mailing reports, proxy statements and prospectuses to shareholders.

H. G. Wellington & Co., Inc., 14 Wall Street, New York, NY 10005 (the
"Sub-Adviser"), is the sub-adviser to the Fund. It was incorporated in 1984
under the laws of the State of Delaware and is also a registered
broker-dealer.

Pursuant to the terms of a Sub-Advisory Agreement between the Adviser
and the Sub-Adviser, the Sub-Adviser furnishes investment advisory services in
connection with the management of the Fund, determines what securities and other
instruments are purchased and sold for the Fund and is responsible for obtaining
and evaluating financial data relevant to the Fund. In the event that the
average net assets of the Fund are less than $5,000,000.00, the Sub-Adviser will
be compensated by the Adviser for its services at an annual rate of $25,000.00;
in the event that average net assets of the Fund are equal to or in excess of
$5,000,000.00, the Sub-Adviser will be compensated by the Adviser for its
services at an annual rate of one-third of one percent (.33%) of average net
assets up to and including $25,000,000.00 and one-quarter of one percent (.25%)
of average net assets in excess of $25,000,000.00, but in no event to exceed the
annual sum of Two Hundred and Fifty Thousand Dollars ($250,000.00) net of
expenses.

Thomas W. Grant, the President of the Adviser, is also the President of
the Sub-Adviser and has been associated with that firm since 1991. Mr. Grant
served previously with the firm of Fahnestock & Co. for twenty-six years as a
partner, managing director and senior officer. His duties encompassed branch
office management, corporate finance, syndications and municipal and corporate
bonds. Mr. Laurence A. Shadek, the Chairman of the Board of Directors of the
Adviser, is also an Executive Vice-President of the Sub-Adviser and, together
with members of his family, own a 26.67% interest in the Sub-Adviser. Mr.
Shadek has been associated with that firm since March 1986. He was previously
associated with Stillman, Maynard & Co., where he was a general partner. Mr.
Shadek's investment experience includes 12 years as a limited partner and
Account Executive with the firm Moore & Schley. Each of Mr. Grant and Mr.
Shadek serve as a member of the Board of Directors of the Fund and the Pax
World Fund.

Mr. Robert P. Colin, an employee of the Sub-Adviser, is the Portfolio
Manager of the Fund. He is the person responsible for the day-to-day

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<PAGE> 21
management of the Fund's portfolio. Mr. Colin received his bachelor of arts
degree from Rutgers University and his masters in business administration
- -finance from New York University. Mr. Colin joined H.G. Wellington Capital
Management, a division of the Sub-Adviser, in 1991 as a Senior Vice President
and Senior Portfolio Manager. Mr. Colin was one of the original founders of
Faulkner, Dawkins & Sullivan in 1959, serving as Director of Research and
Investment Strategy. After Faulkner, Dawkins & Sullivan merged with Shearson
Lehman, and later, American Express, Mr. Colin worked briefly for Merrill
Lynch Asset Management before joining Bessemer Trust Company in 1978 as a
Senior Portfolio Manager and Director of Research. In 1983, Mr. Colin joined
General Electric Investment Corporation as a Senior Vice President of Equity
Portfolios with responsibilities for various funds under General Electric's
control, including its own pension fund.

DISTRIBUTION

The Fund maintains a distribution expense plan pursuant to Rule 12b-1
under the Investment Company Act of 1940, as amended, pursuant to which the Fund
incurs the expenses of distributing the Fund's shares. These expenses include
(but are not limited to) advertising expenses, the cost of printing and mailing
prospectuses to potential investors, commissions and account servicing fees paid
to, or on account of, broker-dealers or certain financial institutions which
have entered into agreements with the Fund, compensation to and expenses
incurred by officers, directors and/or employees of the Fund for their
distributional services and indirect and overhead costs associated with the sale
of Fund shares. The plan provides that (i) up to twenty-five one hundredths of
one percent (.25%) of the average daily net assets of the shares of the Fund per
annum may be used to pay for personal service and/or the maintenance of
shareholder accounts (service fee) and (ii) total distribution fees (including
the service fee of .25%) may not exceed thirty-five one hundredths of one
percent (.35%) of the average daily net assets of the shares of the Fund per
annum. See "Distribution" in the Statement of Additional Information, a copy of
which is available without charge upon request by writing to the Fund at 222
State Street, Portsmouth, NH 03801 or by telephoning 800-767-1729.

CUSTODIAN AND TRANSFER AND DIVIDEND DISBURSING AGENT

State Street Bank and Trust Company, 225 Franklin Street, Boston, MA
02110 (the "Custodian"), will serve as the custodian for the Fund's portfolio
securities and cash and, in that capacity, maintains certain financial and
accounting books and records pursuant to an agreement with the Fund.

PFPC, Inc., 400 Bellevue Parkway, Wilmington, DE 19809 (the "Transfer
Agent"), will serve as the transfer agent and dividend disbursing agent for the
Fund and in those capacities maintains certain books and records for the Fund.
Shareholder inquiries relating to a shareholder account should be directed to
the Transfer Agent at Pax World Mutual Funds, P.O. Box 8930, Wilmington, DE
19899-8930.

HOW THE FUND VALUES ITS SHARES

The Fund's net asset value per share or NAV is determined by
subtracting its liabilities from the value of its assets and dividing the
remainder by the number of outstanding shares. For valuation purposes,
quotations of foreign

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<PAGE> 22
securities in a foreign currency are converted to U.S. dollar equivalents.
The Board of Directors of the Fund has fixed the specific time of day for the
computation of the Fund's NAV to be as of 4:15 P.M., New York time.

Portfolio securities are valued based on market quotations or, if not
readily available, at fair value as determined in good faith under procedures
established by the Fund's Board of Directors. See "Net Asset Value" in the
Statement of Additional Information, a copy of which is available without charge
upon request by writing to the Fund at 222 State Street, Portsmouth, NH
03801 or by telephoning 800-767-1729.

The Fund will compute its NAV once daily on days that the New York
Stock Exchange is open for trading except on days on which no orders to
purchase, sell or redeem shares have been received by the Fund or days on which
changes in the value of the Fund's portfolio securities do not materially affect
the NAV. The New York Stock Exchange is closed on the following holidays: New
Year's Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor
Day, Thanksgiving Day and Christmas Day. See "Net Asset Value" in the Statement
of Additional Information, a copy of which is available without charge upon
request by writing to the Fund at 222 State Street, Portsmouth, NH 03801 or by
telephoning 800-767-1729.

HOW THE FUND CALCULATES PERFORMANCE

From time to time, the Fund may advertise its total return (including
"average annual" total return and "aggregate" total return) and yield in
advertisements or sales literature. These figures are based on historical
earnings and are not intended to indicate future performance. The "total return"
shows how much an investment in the Fund would have increased (decreased) over a
specified period of time (i.e., one, five, or ten years or since inception of
the Fund) assuming that all distributions and dividends by the Fund were
reinvested on the reinvestment dates during the period and less all recurring
fees. The "aggregate" total return reflects actual performance over a stated
period of time. "Average annual" total return is a hypothetical rate of return
that, if achieved annually, would have produced the same aggregate total return
if performance had been constant over the entire period. "Average annual" total
return smooths out variations in performance and takes into account any
applicable sales charges. Neither "average annual" total return nor "aggregate"
total return takes into account any federal or state income taxes which may be
payable upon redemption. The "yield" refers to the income generated by an
investment in the Fund over a one-month or 30-day period. This income is then
"annualized;" that is, the amount of income generated by the investment during
that 30-day period is assumed to be generated each 30-day period for twelve
periods and is shown as a percentage of the investment. The income earned on the
investment is also assumed to be reinvested at the end of the sixth 30-day
period. The Fund also may include comparative performance information in
advertising or marketing the Fund's shares. Such performance information may
include data from Lipper Analytical Services, Inc., Morningstar Publications,
Inc., and other industry publications, business periodicals and market indices.
See "Performance Information" in the Statement of Additional Information, a copy
of which is available without charge upon request by writing to the Fund at 222
State Street, Portsmouth, NH 03801 or by telephoning 800-767-1729. Further
performance information will be contained in the Fund's annual and semi-annual
reports to shareholders, which will be available without charge. See
"Shareholder Guide -- Shareholder Services" at page 20.

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<PAGE> 23
TAXES, DIVIDENDS AND DISTRIBUTIONS

TAXATION OF THE FUND

The Fund intends to elect to qualify and intends to remain qualified as
a regulated investment company under Subchapter M of the Internal Revenue Code
of 1986, as amended (the "Internal Revenue Code"). Accordingly, the Fund will
not be subject to federal income taxes on its net investment income and capital
gains, if any, that it distributes to its shareholders.

TAXATION OF SHAREHOLDERS

All dividends out of net investment income, together with distributions
of net short-term capital gains, will be taxable as ordinary income to the
shareholder whether or not reinvested. Any net long-term capital gains
distributed to shareholders will be taxable as such to the shareholder, whether
or not reinvested and regardless of the length of time a shareholder has owned
his or her shares. The maximum long-term capital gains rate for individual
shareholders is currently twenty-eight percent (28%) and the maximum tax rate
for ordinary income is thirty-nine and six-tenths percent (39.6%).

Any gain or loss realized upon a sale or redemption of shares by a
shareholder who is not a dealer in securities will be treated as long-term
capital gain or loss if the shares have been held more than one year and
otherwise as short-term capital gain or loss. Any such loss, however, on shares
that are held for six months or less, will be treated as a long-term capital
loss to the extent of any capital gain distributions received by the
shareholder.

WITHHOLDING TAXES

Under U.S. Treasury Regulations, the Fund is required by federal law to
withhold and remit to the U.S. Treasury thirty-one percent (31%) of dividend,
capital gain income and redemption proceeds, payable on the accounts of those
shareholders who fail to furnish their tax identification numbers on IRS Form
W-9 (or IRS Form W-8 in the case of certain foreign shareholders) with the
required certifications regarding the shareholder's status under the federal
income tax law. In connection with this withholding requirement, therefore, a
purchaser of the Fund's shares will be asked to certify on our application that
the Social Security or tax identification number provided is correct and that
such purchaser is not subject to thirty-one percent (31%) back-up withholding
for previously underreporting to the IRS.

Shareholders are urged to consult their own tax advisers regarding
specific questions as to federal, state or local taxes. See "Taxes" in the
Statement of Additional Information, a copy of which is available without charge
upon request by writing to the Fund at 222 State Street, Portsmouth, NH
03801 or by telephoning 800-767-1729.

DIVIDENDS AND DISTRIBUTIONS

The Fund expects to pay dividends on net investment income, if any,
semi-annually and to make distributions of any capital gains in excess of net
long-term capital losses at least annually.

Dividends and distributions will be paid in additional Fund shares,
based on the NAV at the close of business on the ex-dividend date or such other
date as the Board of Directors may determine, unless the shareholder

-16-
<PAGE> 24

elects in writing not less than ten (10) days prior to the ex-dividend date to
receive (i) such dividends in cash and distributions in additional shares or
(ii) such dividends and distributions in cash. Such election should be submitted
to the Transfer Agent at Pax World Mutual Funds, P.O. Box 8930, Wilmington, DE
19899-8930. The Fund will notify each shareholder after the close of the Fund's
taxable year both of the dollar amount and the taxable status of that year's
dividends and distributions on a per share basis.

When the Fund goes "ex-dividend", its NAV is reduced by the amount of
the dividend or distribution. If you buy shares just prior to the ex-dividend
date, the price you pay will include the dividend or distribution and a portion
of your investment will be returned to you as a taxable distribution. You
should, therefore, consider the timing of dividends when making your purchases.

GENERAL INFORMATION

Incorporation

The Fund was incorporated under the laws of the State of Delaware on
March 12, 1997. The Fund is registered under the Act as an open-end management
investment company commonly known as a mutual fund.

Description of Common Stock

The Fund is currently authorized to issue 25,000,000 shares of Common
Stock, $1.00 par value per share; however, the Board of Directors of the Fund
may increase or decrease the number of authorized shares. In accordance with the
Fund's Articles of Incorporation, the Board of Directors may also authorize the
creation of additional series of common stock and classes within such series,
with such preferences, privileges, limitations and voting and dividend rights as
the Board may determine.

Shares of the Fund, when issued, are fully paid, nonassessable, fully
transferable and redeemable at the option of the holder. Shares are also
redeemable at the option of the Fund under certain circumstances as described
under "Shareholder Guide -- How to Sell Your Shares."

Each share of common stock is equal as to earnings, assets and voting
privileges. There are no conversion, preemptive or other subscription rights. In
the event of liquidation, each share of common stock of the Fund is entitled to
its portion of all of the Fund's assets after all debts and expenses of the Fund
have been paid. The Fund's shares do not have cumulative voting rights for the
election of Directors.

As of March 12, 1997, Pax World Management Corp., 222 State Street,
Portsmouth, NH 03801, was the sole initial shareholder of the Fund's shares.

Shareholder Meetings

The Fund does not intend to hold annual meetings of shareholders unless
otherwise required by law. The Fund will not be required to hold meetings of
shareholders unless, for example, the election of directors is required to be
acted on by shareholders under the Investment Company Act. Shareholders have
certain rights, including the right to call a meeting upon a vote of 10% or more
of the Fund's outstanding shares for the purpose of voting on the removal of one
or more directors or to transact any other business.

-17-
<PAGE> 25
SHAREHOLDER GUIDE

HOW TO PURCHASE SHARES

In General

Shares of the Fund are offered for sale by the Fund on a continuous
basis at the NAV next determined following receipt of an order by the Transfer
Agent, plus an initial sales charge. In some cases, however, purchases are not
subject to an initial sales charge, and the offering price is the NAV.
See "Waiver of Sales Charges" below.

The minimum initial investment is $500.00; the minimum subsequent
investment is $100.00. All minimum investment requirements are waived for
certain retirement and employee savings plans or custodial accounts for the
benefit of minors. For purchases through the Automatic Monthly Investment Plan,
the minimum initial and subsequent investment is $50.00. See "Shareholder
Services" below.

If a stock certificate is desired, it must be requested in writing for
each transaction. Certificates are issued only for full shares.

The Fund reserves the right to reject any purchase order (including an
exchange) or to suspend or modify the continuous offering of its shares. See
"How to Sell Your Shares" below.

Investing by Mail

Prospective shareholders may purchase shares of the Fund by completing
and signing the "Investment Application" enclosed with this Prospectus and
sending the application, together with a check to the Transfer Agent at Pax
World Mutual Funds, P.O. Box 8930, Wilmington, DE 19899-8930. Purchases without
full payment will not be processed until payment is received. A confirmation of
the purchase will be issued showing the account number and number of shares
owned and the ownership of shares shall be recorded on the books of the Transfer
Agent in an account under the shareholder's name.

Investing by Telephone

The Fund may accept telephone orders from broker-dealers which have
been previously approved by the Fund by telephoning 800-635-1404. It is the
responsibility of such broker-dealers to promptly forward purchase orders and
payments for such orders to the Fund. The Fund reserves the right to cancel any
purchase order for which payment has not been received by the third business day
following the investment.

Transactions in Fund shares through your broker-dealer may be subject
to transaction or other fees, including postage and handling charges, imposed by
your broker/dealer (in addition to the sales charge imposed by the Fund) which
would otherwise not be charged if the shares were purchased directly from the
Fund.

Investing by Wire Transfer

Shareholders may purchase shares of the Fund (other than initial
purchases) by wire transfer. To do so, you must (i) telephone the Transfer Agent
at 800-372-7827 (individual shareholders) or 800-635-1404 (broker/dealers) to
advise them that you would like to purchase shares of the

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<PAGE> 26

Fund by wire transfer and then (ii) give instructions to your bank to transfer
funds by wire to the following account:

Bank Name: PNC Bank, Philadelphia, PA
ABA Number: 031-0000-53
Account Name: Pax World Growth Fund, Inc.
Account No.: 510-077-1

specifying on the wire your name and individual Fund account number.

If you arrange for receipt by the Custodian of federal funds prior to
4:15 P.M., New York time, on a business day, you may purchase shares of the
Fund as of that day.

Waiver of Sales Charges

No initial sales charges are imposed on shares of the Fund purchased
for a period of six months from the date of this prospectus or upon the exchange
of shares of the Pax World Fund or the reinvestment of dividends and
distributions. In addition, shares of the Fund may be purchased at NAV, without
payment of an initial sales charge, (a) for a period of one year from the date
of this Prospectus by any investor who owns as of the date of this Prospectus or
has owned at any time during the four year period immediately preceding the date
of this Prospectus shares of the Pax World Fund, and (b) by (i) any investor
provided that the amount invested by such investor in the Fund or other Pax
World Mutual Funds totals at least $1,000,000.00; (ii) any pension,
profit-sharing or other employee benefit plans qualified under Section 401 of
the Internal Revenue Code and deferred compensation and annuity plans under
Sections 457 or 403(b)(7) of the Internal Revenue Code ("Benefit Plans"); (iii)
trustees, officers, directors, employees (including retirees) and sales
representatives of the Fund, the Adviser, the Sub-Adviser or certain affiliated
companies, for themselves, their spouses and their dependent children; and (iv)
registered representatives and employees of broker-dealers having selling group
agreements with the Fund, for themselves, their spouses and their dependent
children. Finally, if you redeem your shares and have not previously exercised
the repurchase privilege, you may reinvest, within 90 days after the date of
redemption, any portion or all of the proceeds of such redemption in shares of
the Fund at the NAV next determined after the order is received without payment
of an initial sales charge.

You must notify the Transfer Agent that you are entitled to the
reduction or waiver of the sales charge. The reduction or waiver will be granted
subject to confirmation of your entitlement. See "Purchase, Redemption and
Exchange of Fund Shares -- Purchase of Shares -- Waiver of Sales Charges" in the
Statement of Additional Information, a copy of which is available without charge
upon request by writing to the Fund at 222 State Street, Portsmouth, NH 03801 or
by telephoning 800-767-1729.

HOW TO SELL YOUR SHARES

In General

You can redeem shares of the Fund at any time for cash at the NAV per
share next determined after the redemption request is received in proper form by
the Transfer Agent. See "How the Fund Values its Shares" at page 13.

-19-
<PAGE> 27
Redemptions by Written Request

If you hold shares in non-certificate form, a written request for
redemption signed by you exactly as the account is registered is required. If
you hold certificates, the certificates signed in the names(s) shown on the face
of the certificates, must be received by the Transfer Agent in order for the
redemption request to be processed. If redemption is requested by a corporation,
partnership, trust or fiduciary, written evidence of authority acceptable to the
Transfer Agent must be submitted before such request will be accepted. All
correspondence and documents concerning redemptions should be directed to the
Transfer Agent at Pax World Mutual Funds, P.O. Box 8930, Wilmington, DE
19899-8930.

If the proceeds of the redemption (i) exceed $5,000.00 (unless the
record owner has provided to the Transfer Agent a Shareholder Redemption Option
form authorizing the Transfer Agent to redeem shares of the Fund upon written
instructions without a signature guarantee), (ii) are to be paid to a person
other than the record owner, (iii) are to be sent to an address other than the
address on the Transfer Agent's records or within thirty (30) days after the
Transfer Agent has been notified of an address change, or (iv) are to be paid to
a corporation, partnership, trust or fiduciary, the signature(s) on the
redemption request and on the certificates, if any, or stock power must be
guaranteed by an "eligible guarantor institution." An "eligible guarantor
institution" includes any bank, broker/dealer or credit union. The Transfer
Agent reserves the right to request additional information from, and make
reasonable inquiries of, any eligible guarantor institution.

Payment for shares presented for redemption will be made by check
within seven (7) days after receipt by the Transfer Agent of the certificate
and/or written request except as indicated below. Such payment may be postponed
or the right of redemption suspended at times (i) when the New York Stock
Exchange is closed for other than customary weekends and holidays, (ii) when
trading on such Exchange is restricted, (iii) when an emergency exists as a
result of which disposal by the Fund of securities owned by it is not reasonably
practicable or it is not reasonably practicable for the Fund fairly to determine
the value of its net assets, or (iv) during any other period when the Securities
and Exchange Commission ("SEC"), by order, so permits; provided that applicable
rules and regulations of the SEC shall govern as to whether the conditions
prescribed in (ii), (iii) or (iv) exist.

Payment for redemption of recently purchased shares will be delayed
until the Fund or the Transfer Agent has been advised that the purchase check
has been honored, up to fifteen (15) days from the time of receipt of the
purchase check by the Transfer Agent. Such delay may be avoided by purchasing
shares by wire or by certified or official bank check.

Involuntary Redemption

In order to reduce expenses of the Fund, the Board of Directors may
redeem all of the shares of any shareholder, other than a shareholder which is
an IRA or other tax-deferred retirement plan, whose account has a net asset
value of less than $500.00 due to a redemption. The Fund will give any such
shareholder sixty (60) days' prior written notice in which to purchase
sufficient additional shares to avoid such redemption.

-20-
<PAGE> 28
HOW TO EXCHANGE YOUR SHARES

In General

As a shareholder of the Fund, you have an exchange privilege with the
Pax World Fund, Inc., subject to the minimum investment requirement of such
fund. No sales charge will be imposed at the time of exchange. An exchange will
be treated as a redemption and purchase for tax purposes. See "Purchase,
Redemption and Exchange of Fund Shares -- Exchange of Shares" in the Statement
of Additional Information, a copy of which is available without charge upon
request by writing to the Fund at 222 State Street, Portsmouth, NH 03801 or by
telephoning 800-767-1729.

Exchanges by Mail

You may exchange shares by mail by writing to the Transfer Agent at Pax
World Mutual Funds, P.O. Box 8930, Wilmington, DE 19899-8930.

If you hold certificates, the certificates, signed in the name(s) shown
on the face of the certificates, must be returned to the Transfer Agent in order
for the shares to be exchanged. See "How to Sell Your Shares" above.

Exchanges By Telephone

In order to exchange shares by telephone, you must authorize telephone
exchanges on your initial application form or by written notice to the Transfer
Agent and hold shares in non-certificate form. Thereafter, you may call the Fund
at 800-372-7827 to execute a telephone exchange of shares, on weekdays, except
holidays, between the hours of 8:00 A.M. and 6:00 P.M., New York time. For your
protection and to prevent fraudulent exchanges, your telephone call may be
recorded and you will be asked to provide your personal identification number. A
written confirmation of the exchange transaction will be sent to you. NEITHER
THE FUND NOR ITS AGENTS WILL BE LIABLE FOR ANY LOSS, LIABILITY OR COST WHICH
RESULTS FROM ACTING UPON INSTRUCTIONS REASONABLY BELIEVED TO BE GENUINE UNDER
THE FOREGOING PROCEDURES. All exchanges will be made on the basis of the
relative NAV of the two funds next determined after the request is received in
good order. The exchange privilege is available only in states where the
exchange may legally be made.

In periods of severe market or economic conditions the telephone
exchange of shares may be difficult to implement and you should make exchanges
by mail by writing to the Transfer Agent at the address noted below.

SHAREHOLDER SERVICES

The Fund offers investors the following special programs:

AUTOMATIC REINVESTMENT OF DIVIDENDS AND/OR DISTRIBUTION WITHOUT A SALES
CHARGE. For your convenience, all dividends and distributions, if any,
will be automatically reinvested in additional full and fractional
shares of the Fund at the NAV prevailing at the close of business on
the ex-dividend date unless and until you notify the Transfer Agent in
writing at least ten (10) days prior to such ex-dividend date that you
elect to receive (i) receive such dividends in cash and distributions
in additional shares or (ii) such dividends and distributions in cash.
Stock certificates will not be physically issued on reinvestment of
such dividends and distributions, but a record of the shares purchased
will be added

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<PAGE> 29
to your account and a confirmation of such reinvestment will be
sent to you by the Transfer Agent.

AUTOMATIC MONTHLY INVESTMENT PLAN. Under the Fund's Automatic Monthly
Investment Plan, you may make regular purchases of the Fund's shares in
amounts as little as $50.00 via an automatic debit to a bank account.
For additional information about this service, you may contact the
Transfer Agent directly.

TAX-DEFERRED RETIREMENT PLANS. Various tax-deferred retirement plans,
including self-directed individual retirement accounts, simplified
employee pension - IRA plans and "tax-sheltered accounts" under Section
403(b)(7) of the Internal Revenue Code are available through the
Fund. Information regarding the establishment of these plans, the
administration, custodial fees and other details is available from the
Fund or the Transfer Agent. If you are considering adopting such a
plan, you should consult with your own legal or tax adviser with
respect to the establishment and maintenance of such a plan.

SYSTEMATIC WITHDRAWAL PLAN. A systematic withdrawal plan is available
to shareholders, which provides for monthly, bi-monthly, quarterly or
semi-annual checks. See "Shareholder Services --Systematic Withdrawal
Plan" in the Statement of Additional Information, a copy of which is
available without charge upon request by writing to the Fund at 222
State Street, Portsmouth, NH 03801 or by telephoning 800-767-1729.

REPORTS TO SHAREHOLDERS. The Fund will send you annual and semi-annual
reports. The financial statements appearing in annual reports are
audited by independent accountants. In order to reduce duplicate
mailing and printing expenses, the Fund will provide one annual and
semi-annual shareholder report and annual prospectus per household. You
may request additional copies of such reports by calling 800-767-1729
(toll-free) or by writing to the Fund at 222 State Street, Portsmouth,
NH 03801-3853. In addition, monthly unaudited financial data are
available upon request from the Fund.

SHAREHOLDER INQUIRIES. Inquiries should be directed to the
Transfer Agent at Pax World Mutual Funds, P.O. Box 8930, Wilmington, DE
19899-8930, or by telephone at 800-372-7827 (toll-free) or, from
outside the U.S.A., at 302-791-2844 (collect).

For additional information regarding the services and privileges
described above, see "Purchase, Redemption and Exchange of Fund Shares" in the
Statement of Additional Information, a copy of which is available without charge
upon request by writing to the Fund at 222 State Street, Portsmouth, NH
03801 or by telephoning 800-767-1729.

THE PAX WORLD MUTUAL FUND FAMILY

Pax World Management Corp. currently offers two mutual funds designed
to meet your individual needs - Pax World Fund and Pax World Growth Fund. We
welcome you to review the investment options available through our family of
funds. For more information on the Pax World Mutual Funds, including charges and
expenses, contact your financial adviser or telephone the Fund at 800-767-1729
for a free prospectus. Read the prospectus carefully before you invest or send
money.

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<PAGE> 30
ADDITIONAL INFORMATION

This Prospectus, including the Statement of Additional Information
which has been incorporated by reference herein, does not contain all the
information set forth in the Registration Statement filed by the Fund with the
SEC under the Securities Act. Copies of the Registration Statement may be
obtained at a reasonable charge from the SEC or may be examined, without charge,
at the office of the SEC in Washington, D.C.

-23-
<PAGE> 31
P R O S P E C T U S

- --------------------------------------------------------------------------------
No dealer, sales representative or any other person has been authorized to give
any information or to make any representations, other than those contained in
this Prospectus, in connection with the offer contained herein, and, if given or
made, such other information or representations must not be relied upon as
having been authorized by the Fund. This Prospectus does not constitute an offer
by the Fund to sell or a solicitation of any offer to buy any of the securities
offered hereby in any jurisdiction to any person to whom it is unlawful to make
such offer in such jurisdiction.
-------------------------------------------------------------------------------

TABLE OF CONTENTS

<PAGE> 32

<TABLE>
<S> <C>
SHAREHOLDER GUIDE ........................................................ 18
How to Purchase Shares .......................................... 18
In General ............................................. 18
Investing by Mail ...................................... 18
Investing by Telephone ................................. 18
Investing by Wire Transfer ............................. 18
Waiver of Sales Charges ................................ 19
How to Sell Your Shares ......................................... 19
In General ............................................. 19
Redemptions by Written Request ......................... 20
Involuntary Redemptions ................................ 20
How to Exchange Your Shares ..................................... 21
In General ............................................. 21
Exchanges By Mail ...................................... 21
Exchanges by Telephone ................................. 21
Shareholder Services ............................................ 21
Automatic Reinvestment of Dividends and/or
Distributions without a Sales Charge ................. 21
Automatic Monthly Investment Plan ...................... 22
Tax-Deferred Retirement Plans .......................... 22
Systematic Withdrawal Plans ............................ 22
Reports to Shareholders ................................ 22
Shareholder Inquiries .................................. 22
THE PAX WORLD MUTUAL FUND FAMILY ......................................... 22
ADDITIONAL INFORMATION ................................................... 23
</TABLE>

- --------------------------------------------------------------------------------

PAX WORLD GROWTH FUND, INC.

Subject to Completion, dated _______________, 1997

-ii-
<PAGE> 33
- -------------------- COMPARISON OF NOTES --------------------

Pursuant to the rules of the National Association of Securities Dealers, Inc.,
the aggregate initial sales charges, deferred sales charges and asset-based
sales charges on shares of the Fund may not exceed 6.25% of total gross sales,
subject to certain exclusions. This 6.25% limitation is imposed on the Fund
rather than on a per shareholder basis.

-iii-
<PAGE> 34
PAX WORLD GROWTH FUND, INC.

Statement of Additional Information
dated _______________, 1997

Pax World Growth Fund, Inc. (the "Fund") is an open-end, diversified
management investment company whose investment objective is long-term growth of
capital. The Fund seeks to achieve this objective by investing primarily in
equity securities (common stock, preferred stock and securities convertible into
common stock) of established companies with above-average growth prospects.
Current income, if any, is incidental.

Under normal market conditions, the Fund intends to invest at least
seventy-five percent (75%) of its total assets in equity securities of companies
that exceed $200,000,000.00 in market capitalization. The Fund may also invest
in (i) equity securities of other companies including foreign issuers, (ii)
investment grade fixed-income securities and (iii) obligations
issued or guaranteed by U.S. Government agencies and instrumentalities, the
proceeds of which are earmarked for a specific purpose which complies with the
investment objectives and policies of the Fund. In addition, the Fund may
purchase and sell put and call options on equity securities and stock indices
and foreign currency exchange contracts to hedge its portfolio and to attempt to
enhance return. The Fund will not invest in obligations issued or guaranteed by
foreign governments or the U.S. Treasury, however, because the proceeds thereof
may be used to manufacture defense or weapons-related products or for a purpose
which does not otherwise comply with the Fund's socially conscious objectives
and policies. There can be no assurance that the Fund's investment objective
will be achieved. See "How the Fund Invests -- Investment Objective and
Policies" in the Prospectus. The Fund's address is 222 State Street, Portsmouth,
NH 03801, and its telephone number is 800-767-1729.

This Statement of Additional Information is not a prospectus and should
be read in conjunction with the Fund's Prospectus dated _______________, 1997, a
copy of which may be obtained from the Fund upon request.
<PAGE> 35
TABLE OF CONTENTS

Page
----

<TABLE>
<S> <C>
INVESTMENT OBJECTIVE AND POLICIES ........................................ 1
Investment Objective ............................................ 1
Investment Philosophy ........................................... 1
INVESTMENTS AND SPECIAL CONSIDERATIONS; RISK FACTORS ..................... 2
Foreign Securities .............................................. 2
Forward Foreign Currency Exchange Contracts ..................... 2
Illiquid and Restricted Securities .............................. 3
Options on Securities ........................................... 4
Options on Securities Indices ................................... 5
Portfolio Turnover .............................................. 6
Position Limits ................................................. 7
Repurchase Agreements ........................................... 7
Short-term Investments .......................................... 7
U.S. Government Agency and/or
Instrumentality Securities ................................... 7
When-issued and Delayed Delivery Securities ..................... 8
Borrowing for Leverage .......................................... 8
INVESTMENT RESTRICTIONS .................................................. 9
MANAGEMENT OF THE FUND ................................................... 11
ADVISER; SUB-ADVISER ..................................................... 13
DISTRIBUTION ............................................................. 15
CUSTODIAN, TRANSFER AND DIVIDEND DISBURSING AGENT
AND INDEPENDENT ACCOUNTANTS ........................................... 16
PORTFOLIO TRANSACTIONS AND BROKERAGE ..................................... 16
PURCHASE, REDEMPTION AND EXCHANGE OF FUND SHARES ......................... 17
Purchase of Shares .............................................. 17
In General ............................................. 17
Waiver of Sales Charges ................................ 18
Sales of Shares ................................................. 18
In General ............................................. 18
Involuntary Redemption ................................. 19
Exchange of Shares .............................................. 19
NET ASSET VALUE .......................................................... 19
PERFORMANCE INFORMATION .................................................. 20
Average Annual Total Return ..................................... 20
Yield ........................................................... 20
TAXES .................................................................... 21
SHAREHOLDER SERVICES ..................................................... 22
Automatic Reinvestment of Dividends and/or
Distributions without a Sales Charge .......................... 22
Automatic Monthly Investment Plan ............................... 22
Tax-Deferred Retirement Plans ................................... 23
Tax-Deferred Retirement Accounts ................................ 23
Systematic Withdrawal Plans ..................................... 23
Reports to Shareholders ......................................... 24
Shareholder Inquiries ........................................... 24
</TABLE>

<PAGE> 36
INVESTMENT OBJECTIVE AND POLICIES

Investment Objective

Under normal market conditions, the Fund anticipates that at least
seventy-five percent (75%) of its total assets will consist of equity securities
of companies that exceed $200,000,000.00 in market capitalization. Stocks will
be selected on a company-by-company basis primarily through the use of
fundamental analysis. The Fund's adviser, Pax World Management Corp. (the
"Adviser"), looks for companies that have demonstrated growth in earnings and
sales, high returns on equity and assets, or other strong financial
characteristics, and, in the judgment of the Adviser, are attractively valued.
These companies tend to have a unique market niche, a strong new product profile
or superior management.

The Fund may also invest in (i) equity securities of other companies
that are undergoing changes in management or product and marketing dynamics that
have not yet been reflected in reported earnings but that are expected to impact
earnings in the intermediate-term -- these securities often lack investor
recognition and are often favorably valued, (ii) other equity-related
securities, (iii) equity securities of foreign issuers, (iv) investment grade
fixed-income securities, and (v) obligations issued or guaranteed by U.S.
Government agencies and instrumentalities, the proceeds of which are earmarked
for a specific purpose which complies with the investment objectives and
policies of the Fund. In addition, the Fund may purchase and sell put and call
options on equity securities and stock indices and foreign currency exchange
contracts to hedge its portfolio and to attempt to enhance return. The Fund will
not invest in obligations issued or guaranteed by foreign governments or the
U.S. Treasury, however, because the proceeds thereof may be used to manufacture
defense or weapons-related products or for a purpose which does not otherwise
comply with the Fund's socially conscious objectives and policies. Investing in
securities of foreign companies involves certain risks and considerations not
typically associated with investments in domestic companies. See "How the Fund
Invests -- Investments and Special Considerations; Risk Factors" in the
Prospectus.

Investment Philosophy

<PAGE> 37

are derived from contracts with the United States Defense Department, and (iv)
companies which derive revenue from the production, sale and/or distribution of
liquor, tobacco and/or gambling services or equipment. By way of illustration,
the Fund will invest in such industries as building supplies, computer software,
education, food, health care, household appliances, housing, leisure time,
pollution control, technology and telecommunications, among others. The Fund's
portfolio will consist primarily of companies located in the United States. See
"Fund Highlights -- What is the Fund's Investment Philosophy" in the Prospectus.

There can be no assurance that the Fund's investment objective will be
achieved.

INVESTMENTS AND SPECIAL CONSIDERATIONS;
RISK FACTORS

FOREIGN SECURITIES

The Fund is permitted to invest in foreign corporate and government
securities. "Foreign Government securities" include debt securities issued or
guaranteed, as to payment of principal and interest, by governments,
quasi-governmental entities, governmental agencies, supranational entities and
other governmental entities (collectively, "Government Entities") of foreign
countries denominated in the currencies of such countries or in U.S. dollars
(including debt securities of a Government Entity in any such country
denominated in the currency of another such country).

A "supranational entity" is an entity constituted by the national
governments of several countries to promote economic development. Examples of
such supranational entities include, among others, the Asian Development Bank,
the European Investment Bank and the World Bank (International Bank for
Reconstruction and Development). Debt securities of "quasi-governmental
entities" are issued by entities owned by a national, state, or equivalent
government or are obligations of a political unit that are not backed by the
national government's "full faith and credit" and general taxing powers.

FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS

The Fund may enter into forward foreign currency exchange contracts in
limited circumstances. When the Fund enters into a contract for the purchase or
sale of a security denominated in a foreign currency, or when the Fund
anticipates the receipt in a foreign currency of dividends or interest

-2-
<PAGE> 38
payments on a security which it holds, the Fund may desire to "lock-in" the U.S.
dollar price of the security or the U.S. dollar equivalent of such dividend or
interest payment, as the case may be. By entering into a forward contract for a
fixed amount of dollars, for the purchase or sale of the amount of foreign
currency involved in the underlying transactions, the Fund may be able to
protect itself against a possible loss resulting from an adverse change in the
relationship between the U.S. dollar and the foreign currency during the period
between the date on which the security is purchased or sold, or on which the
dividend or interest payment is declared, and the date on which such payments
are made or received.

Additionally, when the investment adviser believes that the currency of
a particular foreign country may suffer a substantial decline against the U.S.
dollar, the Fund may enter into a forward contract for a fixed amount of
dollars, to sell the amount of foreign currency approximating the value of some
or all of the Fund's portfolio securities denominated in such foreign currency.
The projection of short-term currency market movement is extremely difficult,
and the successful execution of a short-term hedging strategy is highly
uncertain. The Fund's Custodian will place cash or liquid securities into a
segregated account of the Fund in an amount equal to the value of the Fund's
total assets committed to the consummation of forward foreign currency exchange
contracts. If the value of the securities placed in the segregated account
declines, additional cash or securities will be placed in the account on a daily
basis so that the value of the account will equal the amount of the Fund's
commitments with respect to such contracts.

The Fund generally will not enter into a forward contract with a term
of greater than one year. At the maturity of a forward contract, the Fund may
either sell the portfolio security and make delivery of the foreign currency, or
it may retain the security and terminate its contractual obligation to deliver
the foreign currency by purchasing an "offsetting" contract with the same
currency trader obligating it to purchase, on the same maturity date, the same
amount of the foreign currency.

If the Fund retains the portfolio security and engages in an offsetting
transaction, the Fund will incur a gain or a loss to the extent that there has
been movement in forward contract prices. Should forward contract prices decline
during the period between the Fund's entering into a forward contract for the
sale of a foreign currency and the date it enters into an offsetting contract
for the purchase of the foreign currency, the Fund will realize a gain to the
extent that the price of the currency it has agreed to sell exceeds the price of
the currency it has agreed to purchase. Should forward contract prices increase,
the Fund will suffer a loss to the extent that the price of the currency it has
agreed to purchase exceeds the price of the currency it has agreed to sell.

ILLIQUID AND RESTRICTED SECURITIES

The Fund may not invest more than ten percent (10%) of its net assets
in repurchase agreements which have a maturity of longer than seven (7) days or
in other illiquid securities, including securities that are illiquid by virtue
of the absence of a readily available market (either within or outside of the
United States) or legal or contractual restrictions on resale. Historically,
illiquid securities have included securities subject to contractual or legal
restrictions on resale because they have not been registered under the
Securities Act of 1933, as amended (the "Securities Act"), securities which are
otherwise not readily marketable and repurchase agreements having a maturity of
longer than seven (7) days. Securities which have not been registered under the
Securities Act are referred to as private placements or restricted securities
and are purchased directly from the issuer or in the secondary market. Mutual
funds do not typically hold a significant amount of

-3-
<PAGE> 39
these restricted or other illiquid securities because of the potential for
delays on resale and uncertainty in valuation. Limitations on resale may have an
adverse effect on the marketability of portfolio securities and a mutual fund
might be unable to dispose of restricted or other illiquid securities promptly
or at reasonable prices and might thereby experience difficulty satisfying
redemptions within seven days. A mutual fund might also have to register such
restricted securities in order to dispose of them resulting in additional
expense and delay. Adverse market conditions could impede such a public offering
of securities.

Restricted securities eligible for resale pursuant to Rule 144A under
the Securities Act and commercial paper for which there is a readily available
market will not be deemed to be illiquid. The investment adviser will monitor
the liquidity of such restricted securities subject to the supervision of the
Board of Directors. In reaching liquidity decisions, the investment adviser will
consider, inter alia, the following factors: (i) the frequency of trades and
quotes for the security; (ii) the number of dealers wishing to purchase or sell
the security and the number of other potential purchasers; (iii) dealer
undertakings to make a market in the security and (iv) the nature of the
security and the nature of the marketplace trades (e.g., the time needed to
dispose of the security, the method of soliciting offers and the mechanics of
the transfer). In addition, in order for commercial paper that is issued in
reliance on Section 4(2) of the Securities Act to be considered liquid, (i) it
must be rated in one of the at least two nationally recognized statistical
rating organizations ("NRSRO"), or if only one NRSRO rates the securities, by
that NRSRO, or, if unrated, be of comparable quality in the view of the
investment adviser; and (ii) it must not be "traded flat" (i.e., without accrued
interest) or in default as to principal or interest. Repurchase agreements
subject to demand are deemed to have a maturity equal to the notice period.

OPTIONS ON SECURITIES

The Fund may purchase and write (i.e., sell) put and call options on
securities that are traded on U.S. or foreign securities exchanges or that are
traded in the over-the-counter markets.

A call option is a short-term contract pursuant to which the purchaser,
in return for a premium paid, has the right to buy the security underlying the
option at a specified exercise price at any time during the term of the option.
The writer of the call option, who receives the premium, has the obligation,
upon exercise of the option, to deliver the underlying security against payment
of the exercise price.

A put option is a similar contract which gives the purchaser, in return
for a premium, the right to sell the underlying security at a specified price
during the term of the option. The writer of the put option, who receives the
premium, has the obligation to buy the underlying security upon exercise at the
exercise price.

A call option written by the Fund is "covered" if (i) the Fund owns the
security underlying the option or has an absolute and immediate right to acquire
that security without additional cash consideration (or for additional cash
consideration held in a segregated account by its Custodian) or (ii) the Fund
holds on a share-for-share basis a call on the same security as the call written
where the exercise price of the call held is equal to or less than the exercise
price of the call written or greater than the exercise price of the call written
if the difference is maintained by the Fund in cash, U.S. Government securities
or other liquid high-grade debt obligations in a segregated account with its
Custodian.

-4-
<PAGE> 40
A put option written by the Fund is "covered" if the Fund maintains
cash, U.S. Government securities or other liquid high-grade debt obligations
with a value equal to the exercise price in a segregated account with its
Custodian, or else holds on a share-for-share basis a put on the same security
as the put written where the exercise price of the put held is equal to or
greater than the exercise price of the put written.

The Fund may also purchase a "protective put," i.e., a put option
acquired for the purpose of protecting a portfolio security from a decline in
market value. In exchange for the premium paid for the put option, the Fund
acquires the right to sell the underlying security at the exercise price of the
put regardless of the extent to which the underlying security declines in value.
The loss to the Fund is limited to the premium paid for, and transaction costs
in connection with, the put plus the initial excess, if any, of the market price
of the underlying security over the exercise price. However, if the market price
of the security underlying the put rises, the profit the Fund realizes on the
sale of the security will be reduced by the premium paid for the put option less
any amount (net of transaction costs) for which the put may be sold. Similar
principles apply to the purchase of puts on stock indices, as described below.

The Fund may write put and call options on stocks only if they are
covered, and such options must remain covered so long as the Fund is obligated
as a writer. The Fund does not intend to purchase options on equity securities
if the aggregate premiums paid for such outstanding options would exceed ten
percent (10%) of the Fund's total assets.

OPTIONS ON SECURITIES INDICES

In addition to options on securities, the Fund may also purchase and
sell put and call options on securities indices traded on U.S. or foreign
securities exchanges or traded in the over-the-counter markets. Options on
securities indices are similar to options on securities except that, rather than
the right to take or make delivery of a security at a specified price, an option
on a securities index gives the holder the right to receive, upon exercise of
the option, an amount of cash if the closing level of the securities index upon
which the option is based is greater than, in the case of a call, or less than,
in the case of a put, the exercise price of the option. This amount of cash is
equal to such difference between the closing price of the index and the exercise
price of the option expressed in dollars times a specified multiple (the
multiplier). The writer of the option is obligated, in return for the premium
received, to make delivery of this amount. All settlements on options on indices
are in cash, and gain or loss depends on price movements in the securities
market generally (or in a particular industry or segment of the market) rather
than price movements in individual securities.

The multiplier for an index option performs a function similar to the
unit of trading for a stock option. It determines the total dollar value per
contract of each point in the difference between the exercise price of an option
and the current level of the underlying index. A multiplier of 100 means that a
one-point difference will yield $100. Options on different indices may have
different multipliers. Because exercises of index options are settled in cash, a
call writer cannot determine the amount of its settlement obligations in advance
and, unlike call writing on specific stocks, cannot provide in advance for, or
cover, its potential settlement obligations by acquiring and holding the
underlying securities. In addition, unless the Fund has other liquid assets
which are sufficient to satisfy the exercise of a call, the Fund would be
required to liquidate portfolio securities or borrow in order to satisfy the
exercise.

-5-
<PAGE> 41
Because the value of an index option depends upon movements in the
level of the index rather than the price of a particular security, whether the
Fund will realize a gain or loss on the purchase or sale of an option on an
index depends upon movements in the level of security prices in the market
generally or in an industry or market segment rather than movements in the price
of a particular security. Accordingly, successful use by the Fund of options on
indices would be subject to the investment adviser's ability to predict
correctly movements in the direction of the securities market generally or of a
particular industry. This requires different skills and techniques than
predicting changes in the price of individual stocks.

The distinctive characteristics of options on indices create certain
risks that are not present with stock options.

Index prices may be distorted if trading of certain stocks included in
the index is interrupted. Trading in the index options also may be interrupted
in certain circumstances, such as if trading were halted in a substantial number
of stocks included in the index. If this occurred, the Fund would not be able to
close out options which it had purchased or written and, if restrictions on
exercise were imposed, may be unable to exercise an option it holds, which could
result in losses to the Fund. It is the Fund's policy to purchase or write
options only on indices which include a number of stocks sufficient to minimize
the likelihood of a trading halt in the index.

The ability to establish and close out positions on such options will
be subject to the development and maintenance of a liquid secondary market. It
is not certain that this market will develop in all index option contracts. The
Fund will not purchase or sell any index option contract unless and until, in
the investment adviser's opinion, the market for such options has developed
sufficiently that the risk in connection with such transactions is not
substantially greater than the risk in connection with options on securities in
the index.

The Fund will write put options on stock indices and foreign
currencies only if they are covered by segregating with the Fund's Custodian an
amount of cash, U.S. Government securities, or liquid assets equal to the
aggregate exercise price of the puts. The Fund does not intend to purchase
options on securities indices if the aggregate premiums paid for such
outstanding options would exceed ten percent (10%) of the Fund's total assets.

PORTFOLIO TURNOVER

As a result of the investment policies described above, the Fund may
engage in a substantial number of portfolio transactions and its portfolio
turnover rate may exceed seventy-five percent (75%), although the Fund's
portfolio turnover rate is not expected to exceed one hundred percent (100%).
The portfolio turnover rate is generally the percentage computed by dividing the
lesser of portfolio purchases or sales (excluding all securities, including
options, whose maturities or expiration date at acquisition were one year or
less) by the monthly average value of the portfolio. High portfolio turnover
(over one hundred percent (100%)) involves correspondingly greater brokerage
commissions and other transaction costs, which are borne directly by the Fund.
In addition, high portfolio turnover may also mean that a proportionately
greater amount of distributions to shareholders will be taxed as ordinary income
rather than long-term capital gains compared to investment companies with lower
portfolio turnover. See "Portfolio Transactions and Brokerage" and "Taxes" on
pages 16 and 20, respectively.

-6-
<PAGE> 42

POSITION LIMITS

Transactions by the Fund in futures contracts and options will be
subject to limitations, if any, established by each of the exchanges, boards of
trade or other trading facilities (including NASDAQ) governing the maximum
number of options in each class which may be written or purchased by a single
investor or group of investors acting in concert, regardless of whether the
options are written on the same or different exchanges, boards of trade or other
trading facilities or are held or written in one or more accounts or through one
or more brokers. An exchange, board of trade or other trading facility may order
the liquidation of positions in excess of these limits, and it may impose
certain other sanctions.

REPURCHASE AGREEMENTS

The Fund will enter into repurchase transactions only with parties
meeting creditworthiness standards approved by the Fund's Board of Directors.
The Fund's investment adviser will monitor the creditworthiness of such parties,
under the general supervision of the Board of Directors. In the event of a
default or bankruptcy by a seller, the Fund will promptly seek to liquidate the
collateral. To the extent that the proceeds from any sale of such collateral
upon a default in the obligation to repurchase are less than the repurchase
price, the Fund will suffer a loss.

SHORT-TERM INVESTMENTS

When conditions dictate a defensive strategy, the Fund may temporarily
invest in money market instruments, including commercial paper of corporations,
certificates of deposit, bankers' acceptances and other obligations of domestic
and foreign banks, obligations issued or guaranteed by the U.S. Government, its
agencies or its instrumentalities and repurchase agreements (described more
fully below). Such investments may be subject to certain risks, including future
political and economic developments, the possible imposition of withholding
taxes on interest income, the seizure or nationalization of foreign deposits and
foreign exchange controls or other restrictions.

U.S. GOVERNMENT AGENCY AND/OR
INSTRUMENTALITY SECURITIES

The Fund may invest in securities issued by U.S. Government agencies or
instrumentalities other than the U. S. Treasury. These obligations may or may
not be backed by the full faith and credit of the United States. In the case of
securities not backed by the full faith and credit of the United States, the
Fund must look principally to the agency issuing or guaranteeing the obligation
for ultimate repayment and may not be able to assert a claim against the United
States if the agency or instrumentality issuing or guaranteeing the obligation
does not meet its commitments. Obligations of the Government National Mortgage
Association ("GNMA"), the Farmers Home Administration and the Small Business
Administration are backed by the full faith and credit of the United States.
Securities in which the Fund may invest which are not backed by the full faith
and credit of the United States include obligations such as those issued by the
Federal Home Loan Bank, the Federal Home Loan Mortgage Corporation ("FHLMC"),
the Federal National Mortgage Association, the Student Loan Marketing
Association and Resolution Funding Corporation , each of which has the right to
borrow from the U.S. Treasury to meet its obligations, and obligations of the
Farm Credit System, the obligations of which may be satisfied only by the

-7-
<PAGE> 43
individual credit of the issuing agency. FHLMC investments may include
collateralized mortgage obligations.

In connection with its commitment to assist in the development of
housing, the Fund may invest in mortgage-backed securities, including those
which represent undivided ownership interests in pools of mortgages. The U.S.
Government or the issuing agency or instrumentality guarantees the payment of
interest on and principal of these securities. However, the guarantees do not
extend to the yield or value of the securities nor do the guarantees extend to
the yield or value of the Fund's shares. These securities are in most cases
"pass-through" instruments, through which the holders receive a share of all
interest and principal payments from the mortgages underlying the securities,
net of certain fees. Because the prepayment characteristics of the underlying
mortgages vary, it is not possible to predict accurately the average life of a
particular issue of pass-through certificates. Mortgage-backed securities are
often subject to more rapid repayment than their maturity date would indicate as
a result of the pass-through of prepayments of principal on the underlying
mortgage obligations. During periods of declining interest rates, prepayment of
mortgages underlying mortgage-backed securities can be expected to accelerate.
The Fund's ability to invest in high-yielding mortgage-backed securities will be
adversely affected to the extent that prepayments of mortgages must be
reinvested in securities which have lower yields than the prepaid mortgages.
Moreover, prepayments of mortgages which underlie securities purchased at a
premium could result in capital losses.

The Fund may invest in both Adjustable Rate Mortgage Securities
("ARMs"), which are pass-through mortgage securities collateralized by
adjustable rate mortgages, and Fixed-Rate Mortgage Securities ("FRMs"), which
are collateralized by fixed-rate mortgages.

WHEN-ISSUED AND DELAYED DELIVERY SECURITIES

From time to time, in the ordinary course of business, the Fund may
purchase or sell securities on a when-issued or delayed delivery basis, that is,
delivery and payment can take place a month or more after the date of the
transaction. The Fund will limit such purchases to those in which the date for
delivery and payment falls within 120 days of the date of the commitment. The
Fund will make commitments for such when-issued transactions only with the
intention of actually acquiring the securities. The Fund's Custodian will
maintain, in a separate account of the Fund, cash, U.S. Government securities or
other liquid high-grade debt obligations having a value equal to or greater than
such commitments. If the Fund chooses to dispose of the right to acquire a
when-issued security prior to its acquisition, it could, as with the disposition
of any other portfolio security, incur a gain or loss due to market
fluctuations.

BORROWING FOR LEVERAGE

From time to time, the Fund may increase its ownership of securities by
borrowing and investing the borrowed funds, subject to the restrictions stated
in the Prospectus. Pursuant to the requirements of the Investment Company Act,
any such borrowing will be made only to the extent that the value of the Fund's
assets, less its liabilities other than borrowings, is equal to at least 300% of
all borrowings including the proposed borrowing. If the value of the Fund's
assets, when computed in that manner, falls below such 300% asset coverage
requirement, the Fund is required, within three (3) days, to reduce its bank
debt to the extent necessary to meet that coverage requirement. To do so, the
Fund may have to sell a portion of its investments at a time when it would
otherwise not want to sell such investments. In addition, because interest on
money the Fund borrows is an expense of the

-8-
<PAGE> 44

Fund, the Fund's expenses may increase more than the expenses of funds that do
not borrow and the NAV per share of the Fund may fluctuate more than the NAV per
share of funds that do not borrow.

INVESTMENT RESTRICTIONS

The following restrictions are fundamental policies. Fundamental policies
are those which cannot be changed without the approval of the holders of a
majority of the Fund's outstanding voting securities. A "majority of the Fund's
outstanding voting securities," when used in this Statement of Additional
Information, means the lesser of (i) sixty-seven percent (67%) of the shares
represented at a meeting at which more than fifty percent (50%) of the
outstanding voting shares are present in person or represented by proxy or (ii)
more than fifty percent (50%) of the outstanding voting shares.

The Fund may not:

1. Purchase securities on margin (but the Fund may obtain such
short-term credits as may be necessary for the clearance of
transactions); provided that the deposit or payment by the Fund of
initial or maintenance margin in connection with futures or options is
not considered the purchase of a security on margin.

2. Make short sales of securities or maintain a short position
if, when added together, more than twenty-five percent (25%) of the
value of the Fund's net assets would be (i) deposited as collateral for
the obligation to replace securities borrowed to effect short sales and
(ii) allocated to segregated accounts in connection with short sales.
Short sales "against-the-box" are not subject to this limitation.

3. Issue senior securities, borrow money or pledge its assets,
except that the Fund may borrow from banks up to twenty percent (20%)
of the value of its total assets (calculated when the loan is made) for
temporary, extraordinary or emergency purposes or for the clearance of
transactions. The Fund may pledge up to twenty percent (20%) of the
value of its total assets to secure such borrowings. For purposes of
this restriction, the purchase or sale of securities on a when-issued
or delayed delivery basis, forward foreign currency exchange contracts
and collateral arrangements relating thereto, and collateral
arrangements with respect to futures contracts and options thereon and
with respect to the writing of options and obligations of the Fund to
Directors pursuant to deferred compensation arrangements are not deemed
to be a pledge of assets or the issuance of a senior security.

4. Purchase any security if as a result: (i) with respect to
seventy-five percent (75%) of the Fund's total assets, more than five
percent (5%) of the Fund's total assets (determined at the time of
investment) would then be invested in securities of a single issuer,
(ii) twenty-five percent (25%) or more of the Fund's total assets
(determined at the time of the investment) would be invested in a
single industry, or (iii) the Fund would own more than ten percent
(10%) of the outstanding voting securities of a single issuer.

5. Purchase any security if as a result the Fund would then
have more than five percent (5%) of its total assets (determined at the
time of investment) invested in securities of companies (including
predecessors) less than three years old, except that

-9-
<PAGE> 45

the Fund may invest in the securities of any U.S. Government
agency or instrumentality (other than the U.S. Treasury), and in
any security guaranteed by such an agency or instrumentality, the
proceeds of which are earmarked for a specific purpose which complies
with the investment objectives and policies of the Fund.

6. Buy or sell real estate or interests in real estate, except
that the Fund may purchase and sell securities which are secured by
real estate, securities of companies which invest or deal in real
estate and publicly traded securities of real estate investment trusts.
The Fund may not purchase interests in real estate limited partnerships
which are not readily marketable.

7. Buy or sell commodities or commodity contracts. (For
purposes of this restriction, futures contracts on currencies and on
securities indices and forward foreign currency exchange contracts are
not deemed to be commodities or commodity contracts.)

8. Act as underwriter except to the extent that, (i) in
connection with the disposition of portfolio securities, it may be
deemed to be an underwriter under certain federal securities laws, and
(ii) the Fund may invest up to five percent of the value of its assets
(at time of investment) in portfolio securities which the Fund might
not be free to sell to the public without registration of such
securities under the Securities Act of 1933. The Fund's position in
such restricted securities may adversely affect the liquidity and
marketability of such restricted securities and the Fund may not be
able to dispose of its holdings in these securities at reasonable price
levels. The Fund has not adopted a fundamental investment policy with
respect to investments in restricted securities. See "Illiquid and
Restricted Securities" above.

9. Make investments for the purpose of exercising control or
management.

10. Invest in interests in oil, gas or other mineral
exploration or development programs, except that the Fund may invest in
the securities of companies which invest in or sponsor such programs.

11. Make loans, except that the Fund may enter into repurchase
transactions with parties meeting creditworthiness standards approved
by the Fund's Board of Directors. See "Investments and Special
Considerations; Risk Factors -- Repurchase Agreements" at page 7.

12. Invest more than ten percent (10%) of the value of its
assets in securities of foreign issuers.

In order to comply with certain "blue sky" restrictions, the Fund will
not as a matter of operating policy:

1. Invest in oil, gas and mineral leases.

2. Invest in securities of any issuer if, to the knowledge of
the Fund, any Officer or Director of the Fund or the Fund's Manager or
Adviser or Sub-Adviser (as defined below) owns more than one-half of
one percent (.5%) of the outstanding securities of such issuer, and
such Officers and Directors who own more than

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<PAGE> 46
one-half of one percent (.5%) own in the aggregate more than five
percent (5%) of the outstanding securities of such issuer.

3. Purchase warrants if as a result the Fund would then have
more than five percent (5%) of its assets (determined at the time of
investment) invested in warrants. Warrants will be valued at the lower
of cost or market and investment in warrants which are not listed on
the New York Stock Exchange or American Stock Exchange or a major
foreign exchange will be limited to two percent (2%) of the Fund's net
assets (determined at the time of investment). For purposes of this
limitation, warrants acquired in units or attached to securities are
deemed to be without value.

Whenever any fundamental investment policy or investment restriction
states a maximum percentage of the Fund's assets, it is intended that if the
percentage limitation is met at the time the investment is made, a later change
in percentage resulting from changing total or net asset value will not be
considered a violation of such policy.

MANAGEMENT OF THE FUND

The officers of the Fund are responsible for the day-to-day operations
of the Fund and the Board of Directors of the Fund, in addition to overseeing
the Adviser and Sub-Adviser, is responsible for the general policy of the Fund.
The Board of Directors meets four times per year, reviews portfolio selections
and bonding requirements, declares dividends, if any, and reviews the activities
of the executive officers of the Fund. Such activities are consistent with their
fiduciary obligations as directors under the General Corporation Law of the
State of Delaware. Members of the Board of Directors of the Fund are reimbursed
for their travel expenses for attending meetings of the Board of Directors plus
Three Hundred Dollars ($300.00) for affiliated directors and One Thousand
Dollars ($1,000.00) for unaffiliated directors. The Fund's Adviser and
Sub-Adviser furnish daily investment advisory services.

The following table reflects the name and address, position held with
the Fund and principal occupation during the past five (5) years for those
persons who are the officers and directors of the Fund.

<TABLE>
<CAPTION>
Name, Address and Age Position(s) Held with the Fund Principal Occupation(s) During Past Five Years
- --------------------- ------------------------------ ----------------------------------------------
<S> <C> <C>
Carl H. Doerge, Jr., 867 Director Private investor (1995 - present); Executive
Remsen Lane, Oyster Bay, NY Vice President and Managing Director, Smith
11771 ; (__) Barney (1971 - 1995)

Thomas W. Grant, 14 Wall President; Director Vice Chairman of the Board, Pax World Fund,
Street, New York, NY 10005*; Incorporated (1996 - present); President, Pax
(55) World Management Corp. (1996 - present);
President, H. G. Wellington & Co., Inc. (1991 -
present)

Anita D. Green, c/o Pax World Assistant Treasurer Manager - Shareholder Services for Pax World
Management Corp., 222 State Fund, Incorporated, Pax World Management Corp.
Street, Portsmouth, NH 03801; (1990 - present)
(32)
</TABLE>

-11-
<PAGE> 47

<TABLE>
<S> <C> <C>
John L. Kidde, c/o KDM Director President, KDM Development Corporation (1988 -
Development Corporation, 209 present)
Cooper Avenue, Suite 5-D,
Upper Montclair, NJ 07043;
(__)

Joy L. Liechty, 1403 Director Client and Sales Advocate, Menonite Mutual Aid
Ashton Court, Goshen, IN Association, Goshen, IN 46526 (1989 - present)
46526; (42)

James M. Shadek, 14 Wall Treasurer Account Executive, H. G. Wellington & Co., Inc.
Street, New York, NY 10005*; (_____ - present); Senior Vice President for
(44) Social Research, Pax World Management Corp.
(1996 - present)

Laurence A. Shadek, 14 Wall Chairman of the Board; Chairman of the Board, Pax World Fund,
Street, New York, NY 10005*; Director Incorporated (1996 - present); Chairman of the
(46) Board, Pax World Management Corp. (1996 -
present); Executive Vice President, H. G.
Wellington & Co., Inc. (1986 - present)

Janet Lawton Spates, c/o Pax Assistant Treasurer Operations Manager for Pax World Fund,
World Management Corp., 222 Incorporated, Pax World Management Corp. (1992
State Street, Portsmouth, NH - present)
03801; (27)

Nancy S. Taylor, 5298 N. Director Senior minister, First Congregational Church,
Riffle Way, Boise, ID 83703; Boise, ID (1992 - present); Associate minister,
(__) Immanuel Congregational Church, Hartford, CT
(1987 - 1992)

Lee D. Unterman, c/o Broudy & Secretary Partner, Broudy & Jacobson, New York, NY (1988
Jacobson, 230 Park Avenue, New - present)
York, NY 10169*; (46)
</TABLE>

* Designates an "Interested" officer or director, as defined in the
Investment Company Act, by reason of his or her affiliation with the
Adviser.

** Designates a member of the Executive Committee, Investment Committee
and/or Audit Committee. Members of the Executive Committee assist in
making investment decisions and in executing various decisions of the
Board of Directors.

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<PAGE> 48
No person on such date owned of record or beneficially five percent
(5%) or more of the outstanding Common Stock of the Fund and all officers and
directors as a group own less than one percent (1%) of the outstanding Common
Stock of the Fund.

Certain directors and officers of the Fund are also directors and
officers of Pax World Fund, Inc., the other investment company managed by the
Adviser. None of the officers or directors are related to one another by blood,
marriage or adoption, except that Laurence A. Shadek and James M.
Shadek are brothers.

Members of the Board of Directors of the Fund are reimbursed for their
travel expenses for attending meetings of the Board of Directors plus Three
Hundred Dollars ($300.00) for affiliated directors and One Thousand Dollars
($1,000.00) for unaffiliated directors.

COMPENSATION TABLE

The following table sets forth estimated aggregate compensation to be
paid by the Fund to all members of the Board of Directors of the Fund, all
members of the advisory board of the Fund, and for each of the three highest
paid executive officers or any affiliated person of the Fund with aggregate
compensation from the Fund for the calendar year ending December 31, 1997.

Name of Person, Aggregate Estimated Total
Position Compensation Annual Benefits Compensation
from Fund Upon Retirement from Fund and
Fund Complex
Paid to
Directors

- -------------- -------------- -------------- --------------

ADVISER; SUB-ADVISER

Pax World Management Corp., 222 State Street, Portsmouth, NH 03801 (the
"Adviser") is the adviser to the Fund. It was incorporated in 1970 under the
laws of the State of Delaware. Pursuant to the terms of an Advisory Agreement
entered into between the Fund and the Adviser (the "Advisory Agreement"), the
Adviser, subject to the supervision of the Board of Directors of the Fund, is
responsible for managing the assets of the Fund in accordance with the Fund's
investment objective, investment program and policies. The Adviser determines
what securities and other instruments are purchased and sold for the Fund and is
responsible for obtaining and evaluating financial data relevant to the Fund. As
of December 31, 1996, the Adviser had over $513,000,000.00 in assets under
management by virtue of serving as the adviser to the Pax World Fund, Inc. (the
"Pax World Fund"). The Adviser has no clients other than the Fund and the Pax
World Fund.

Pursuant to the terms of the Advisory Agreement, the Adviser will be
compensated as follows: in the event that the average net assets of the Fund are
less than $5,000,000.00, the Adviser will be compensated by the Fund for its
services at an annual rate of $25,000.00; in the event that the average net
assets of the Fund are equal to or in excess of $5,000,000.00, the Adviser will
be compensated by the Fund for its services at an annual rate of one percent
(1%) of average net assets up to and including $25,000,000.00 and

-13-
<PAGE> 49
three-quarters of one percent (.75%) of average net assets in excess of
$25,000,000.00.

The Adviser has, however, agreed to supply and pay for such services as
are deemed by the Board of Directors of the Fund to be necessary or desirable
and proper for the continuous operations of the Fund (excluding all taxes and
charges of governmental agencies and brokerage commissions incurred in
connection with portfolio transactions) which are in excess of one and one-half
percent (1.5%) of the average net asset value of the Fund per annum. Such
expenses include (i) management, distribution and sub-advisory fees; (ii) the
fees of affiliated and unaffiliated Directors; (iii) the fees of the Fund's
Custodian and Transfer Agent; (iv) the fees of the Fund's legal counsel and
independent accountants; (v) the reimbursement of organization expenses; and
(vi) expenses related to shareholder communications including all expenses of
shareholders' and Board of Directors' meetings and of preparing, printing and
mailing reports, proxy statements and prospectuses to shareholders.

The Advisory Agreement provides that (i) it may be terminated by the
Fund or the Adviser at any time upon not more than sixty (60) days', nor less
than thirty (30) days', written notice, and (ii) will terminate automatically in
the event of its assignment (as defined in the Investment Company Act). In
addition, the Advisory Agreement provides that it may continue in effect for a
period of more than two (2) years from its execution only so long as such
continuance is specifically approved at least annually in accordance with the
requirements of the Investment Company Act.

The Advisory Agreement was approved by the Board of Directors,
including a majority of the Directors who are not parties to the contract or
interested persons of any such party, as defined in the Investment Company Act,
on _______________, 1997, and by the initial shareholder of the Fund on
_______________, 1997.

H. G. Wellington Capital Management, a division of H. G. Wellington &
Co., Inc., 14 Wall Street, New York, NY 10005 (the "Sub-Adviser") is the
sub-adviser to the Fund. H. G. Wellington & Co., Inc. was incorporated in
1984 under the laws of the State of Delaware and is also a registered
broker-dealer.

-14-
<PAGE> 50
sixty-seven one hundredths percent (26.67%) interest in the Sub-Adviser. Mr.
Shadek has been associated with that firm since March 1986. He was previously
associated with Stillman, Maynard & Co., where he was a general partner. Mr.
Shadek's investment experience includes 12 years as a limited partner and
Account Executive with the firm Moore & Schley. Each of Mr. Grant and Mr.
Shadek serve as a member of the Board of Directors of the Fund and the Pax
World Fund.

Mr. Robert P. Colin, an employee of the Sub-Adviser, is the Portfolio
Manager of the Fund. He is the person responsible for the day-to-day
management of the Fund's portfolio. Mr. Colin received his bachelor of arts
degree from Rutgers University and his masters in business administration
- -finance from New York University. Mr. Colin joined H. G. Wellington Capital
Management, a division of the Sub-Adviser, in 1991 as a Senior Vice President
and Senior Portfolio Manager. Mr. Colin was one of the original founders of
Faulkner, Dawkins & Sullivan in 1959, serving as Director of Research and
Investment Strategy. After Faulkner, Dawkins & Sullivan merged with Shearson
Lehman, and later, American Express, Mr. Colin worked briefly for Merrill
Lynch Asset Management before joining Bessemer Trust Company in 1978 as a
Senior Portfolio Manager. In 1983, Mr. Colin joined General Electric
Investment Corporation as a Senior Vice President of Equity Portfolios with
responsibilities for various funds under General Electric's control, including
its own pension fund.

DISTRIBUTION

The Fund maintains a distribution expense plan pursuant to Rule 12b-1
under the Investment Company Act of 1940, as amended, pursuant to which the Fund
incurs the expenses of distributing the Fund's shares. These expenses include
(but are not limited to) advertising expenses, the cost of printing and mailing
prospectuses to potential investors, commissions and account servicing fees paid
to, or on account of, broker-dealers or certain financial institutions which
have entered into agreements with the Fund, compensation to and expenses
incurred by officers, directors and/or employees of the Fund for their
distributional services and indirect and overhead costs associated with the sale
of Fund shares. The plan provides that (i) up to twenty-five one hundredths of
one percent (.25%) of the average daily net assets of the shares of the Fund per
annum may be used to pay for personal service and/or the maintenance of
shareholder accounts (service fee) and (ii) total distribution fees (including
the service fee of .25%) may not exceed thirty-five one hundredths of one
percent (.35%) of the average daily net assets of the shares of the Fund per
annum.

The Plan will continue in effect from year to year, provided that each
such continuance is approved at least annually by a vote of the Board of
Directors, including a majority vote of the Rule 12b-1 Directors, cast in person
at a meeting called for the purpose of voting on such continuance. The Plan may
be terminated at any time, without penalty, by the vote of a majority of the
Rule 12b-1 Directors or by the vote of the holders of a majority of the
outstanding shares of the Fund on not more than 60 days', nor less than 30
days', written notice to any other party to the Plan. The Plan may not be
amended to increase materially the amounts to be spent for the services
described therein without approval by the shareholders of the Fund, and all
material amendments are required to be approved by the Board of Directors in the
manner described above. The Plan will automatically terminate in the event of
its assignment. The Fund will not be obligated to pay expenses incurred under
the Plan if it is terminated or not continued.

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<PAGE> 51
Pursuant to the Plan, the Board of Directors will review at least
quarterly a written report of the distribution expenses incurred on behalf of
the Fund. The report will include an itemization of the distribution expenses
and the purposes of such expenditures.

The Plan was adopted on _______________, 1997 by the Board of Directors
of the Fund, including a majority of the Directors who are not interested
persons of the Fund and who have no direct or indirect financial interest in the
operation of the Plan or in any agreement related to the Plan, at a meeting
called for the purpose of voting on such Plan.

CUSTODIAN, TRANSFER AND DIVIDEND DISBURSING AGENT
AND INDEPENDENT ACCOUNTANTS

State Street Bank and Trust Company, 225 Franklin Street, Boston MA
02110 (the "Custodian"), will serve as custodian for the Fund's portfolio
securities and cash and, in that capacity, maintains certain financial and
accounting books and records pursuant to an agreement with the Fund. See "How
the Fund is Managed -- Custodian and Transfer and Dividend Disbursing Agent" in
the Prospectus.

PFPC, Inc., 400 Bellevue Parkway, Wilmington, DE 19809 (the "Transfer
Agent"), will serve as the transfer and dividend disbursing agent for the Fund.
The Transfer Agent provides customary transfer agency services to the Fund,
including the handling of shareholder communications, the processing of
shareholder transactions, the maintenance of shareholder account records,
payment of dividends and distributions and related functions. For these
services, the Transfer Agent receives an annual fee per shareholder account of
Ten Dollars ($10.00), a new account set-up fee for each manually established
account of Five Dollars ($5.00) and a monthly inactive zero balance account fee
per shareholder account of Thirty Cents ($0.30). The Transfer Agent is also
reimbursed for its out-of-pocket expenses, including but not limited to postage,
stationery, printing, allocable communication expenses and other costs.
Shareholder inquiries relating to a shareholder account should be directed to
the Transfer Agent at Pax World Mutual Funds, P.O. Box 8930, Wilmington,
DE 19899-8930.

Pannell Kerr Forster, P.C., 125 Summer Street, Boston, MA 02110 serves
as the Fund's independent accountants, and in that capacity audits the Fund's
annual reports.

PORTFOLIO TRANSACTIONS AND BROKERAGE

The Adviser and Sub-Adviser are responsible for decisions to buy and
sell securities and options on securities for the Fund, the selection of brokers
and dealers to effect the transactions and the negotiation of brokerage
commissions, if any. Broker-dealers may receive negotiated brokerage commissions
on Fund portfolio transactions, including options and the purchase and sale of
underlying securities upon the exercise of options. Orders may be directed to
any broker including, to the extent and in the manner permitted by applicable
law, the Sub-Adviser and its affiliates.

Equity securities traded in the over-the-counter market and bonds,
including convertible bonds, are generally traded on a "net" basis with dealers
acting as principal for their own accounts without a stated commission, although
the price of the security usually includes a profit to the dealer. In
underwritten offerings, securities are purchased at a fixed price which includes
an amount of compensation payable to the underwriter, generally referred to as
the underwriter's concession or discount. On

-16-
<PAGE> 52
occasion, certain money market instruments and U.S. Government agency securities
may be purchased directly from the issuer, in which case no commissions or
discounts are paid.

In placing orders for portfolio securities of the Fund, the Fund is
required to give primary consideration to obtaining the most favorable price and
efficient execution. Within the framework of this policy, the Fund will consider
the research and investment services provided by brokers and dealers who effect
or are parties to portfolio transactions of the Fund. Such research and
investment services are those which brokerage houses customarily provide to
institutional investors and include statistical and economic data and research
reports on particular companies and industries. Such services are used by the
Fund in its investment activities. Commission rates are established pursuant to
negotiations with the broker or dealer based on the quality and quantity of
execution services provided by the broker in the light of generally prevailing
rates. The Fund's policy is to pay higher commissions to brokers, other than the
Sub-Adviser, for particular transactions than might be charged if a different
broker had been selected, on occasions when, in the Fund's opinion, this policy
furthers the objective of obtaining best price and execution. In addition, the
Fund is authorized to pay higher commissions on brokerage transactions for the
Fund to brokers other than the Sub-Adviser (or any affiliate) in order to secure
research and investment services described above, subject to review by the
Fund's Board of Directors from time to time as to the extent and continuation of
this practice. The allocation or orders among brokers and the commission rates
paid are reviewed periodically by the Fund's Board of Directors.

Subject to the above considerations, the Sub-Adviser (or any affiliate)
may act as a securities broker for the Fund. In order for the Sub-Adviser (or
any affiliate) to effect any portfolio transactions for the Fund, the
commissions, fees or other remuneration received by the Sub-Adviser (or any
affiliate) must be reasonable and fair compared to the commissions, fees or
other remuneration paid to other brokers in connection with comparable
transactions involving similar securities being purchased or sold on an exchange
during a comparable period of time. This standard would allow the Sub-Adviser
(or any affiliate) to receive no more than the remuneration which would be
expected to be received by an unaffiliated broker in a commensurate arm's-length
transaction. Furthermore, the Board of Directors of the Fund, including a
majority of the Directors who are not "interested" persons, has adopted
procedures which are reasonably designed to provide that any commissions, fees
or other remuneration paid to the Sub-Adviser (or any affiliate) are consistent
with the foregoing standard. In accordance with Section 11(a) of the Securities
Exchange Act of 1934, the Sub-Adviser may not retain compensation for effecting
transactions on a national securities exchange for the Fund unless the Fund has
expressly authorized the retention of such compensation. The Sub-Adviser must
furnish to the Fund at least annually a statement setting forth the total amount
of all compensation retained by the Sub-Adviser from transactions effected for
the Fund during the applicable period. Brokerage with the Sub-Adviser is also
subject to such fiduciary standards as may be imposed by applicable law.

PURCHASE, REDEMPTION AND EXCHANGE
OF FUND SHARES

PURCHASE OF SHARES

In General

-17-
<PAGE> 53
not subject to an initial sales charge, and the offering price is the NAV.
See "Waiver of Sales Charges" below.

If a stock certificate is desired, it must be requested in writing for
each transaction. Certificates are issued only for full shares. There is no
charge to the investor for issuance of a certificate.

The Fund reserves the right to reject any purchase order (including an
exchange) or to suspend or modify the continuous offering of its shares.

Waiver of Sales Charges

Prospective investors must notify the Transfer Agent that they are
entitled to the reduction or waiver of the sales charge. The reduction or waiver
will be granted subject to confirmation of your entitlement.

SALE OF SHARES

In General

Shares of the Fund can be redeemed at any time for cash at the NAV per
share next determined after the redemption request is received in proper form by
the Transfer Agent. See "How the Fund Values its Shares" in the Prospectus; and
"Net Asset Value" at page 19.

-18-
<PAGE> 54
Involuntary Redemption

In order to reduce expenses of the Fund, the Board of Directors may
redeem all of the shares of any shareholder, other than a shareholder which is
an IRA or other tax-deferred retirement plan, whose account has a net asset
value of less than $500.00 due to a redemption. The Fund will give any such
shareholder 60 days' prior written notice in which to purchase sufficient
additional shares to avoid such redemption.

EXCHANGE OF SHARES

The Fund makes available to its shareholders the privilege of
exchanging their shares of the Fund for shares of the Pax World Fund, Inc.,
subject in each case to the minimum investment requirements of such funds.
Shares of such other Pax World Mutual Funds may also be exchanged for shares of
the Fund. All exchanges are made on the basis of relative net asset value next
determined after receipt of an order in proper form. An exchange will be treated
as a redemption and purchase for tax purposes. Shares may be exchanged for
shares of another fund only if shares of such fund may legally be sold under
applicable state laws. It is contemplated that this Exchange Privilege will be
applicable to any new Pax World Mutual Funds.

Additional details about the Exchange Privilege and prospectuses for
each of the Pax World Mutual Funds are available from the Fund or the Fund's
Transfer Agent. The Exchange Privilege may be modified, terminated or suspended
on sixty (60) days' notice.

NET ASSET VALUE

Under the Investment Company Act, the Board of Directors is responsible
for determining in good faith the fair value of securities of the Fund. In
accordance with procedures adopted by the Board of Directors, the value of
investments listed on a securities exchange and NASDAQ National Market System
securities (other than options on stock and stock indices) are valued at the
last sales price on the day of valuation, or, if there was no sale on such day,
the mean between the last bid and asked prices on such day, as provided by a
pricing service. Corporate bonds (other than convertible debt securities) and
U.S. Government securities that are actively traded in the over-the-counter
market, including listed securities for which the primary market is believed to
be over-the-counter, are valued on the basis of valuations provided by a pricing
service which uses information with respect to transactions in bonds, quotations
from bond dealers, agency ratings, market transactions in comparable securities
and various relationships between securities in determining value. Convertible
debt securities that are actively traded in the over-the-counter market,
including listed securities for which the primary market is believed to be
over-the-counter, are valued at the mean between the last reported bid and asked
prices provided by principal market makers or independent pricing agents.
Options traded on an exchange are valued at the mean between the most recently
quoted bid and asked prices on the respective exchange. Should an extraordinary
event, which is likely to affect the value of the security, occur after the
close of an exchange on which a portfolio security is traded, such security will
be valued at fair value considering factors determined in good faith by the
investment adviser under procedures established by and under the general
supervision of the Fund's Board of Directors.

Securities or other assets for which market quotations are not readily
available are valued at their fair value as determined in good faith by the
Board of Directors. Short-term debt securities are valued at cost, with interest
accrued or discount amortized to the date of maturity, if their

-19-
<PAGE> 55
original maturity was sixty (60) days or less, unless this is determined by the
Board of Directors not to represent fair value. Short-term securities with
remaining maturities of sixty (60) days or more, for which market quotations are
readily available, are valued at their current market quotations as supplied by
an independent pricing agent or principal market maker. The Fund will compute
its net asset value at 4:15 P.M., New York time, on each day the New York Stock
Exchange is open for trading except on days on which no orders to purchase, sell
or redeem Fund shares have been received or days on which changes in the value
of the Fund's portfolio securities do not affect net asset value. In the event
the New York Stock Exchange closes early on any business day, the net asset
value of the Fund's shares shall be determined at a time between such closing
and 4:15 P.M., New York time.

PERFORMANCE INFORMATION

Average Annual Total Return.

The Fund may from time to time advertise its average annual total
return. See "How the Fund Calculates Performance" in the Prospectus.

Average annual total return is computed according to the following
formula:
(n)
P (1+T) = ERV

Where: P = a hypothetical initial payment of $1,000.
T = average annual total return.
n = number of years.

ERV = ending redeemable value of a hypothetical $1,000
payment made at the beginning of the 1, 5 or 10 year
periods (or fractional portion thereof).

Average annual total return takes into account any applicable initial
or deferred sales charges but does not take into account any federal or state
income taxes that may be payable upon redemption.

Yield.

The Fund may also advertise its yield. See "How the Fund Calculates
Performance" in the Prospectus.

Yield is computed according to the following formula:

a - b (6)
2[(--------------- + 1) - 1]
cd

Where: a = Dividends and interest earned during the period
b = Expenses accrued for the period (net of
reimbursements)
c = The average daily number of shares outstanding during
the period that were entitled to receive dividends
d = The maximum offering price per share on the last day
of the period.

Yield does not take into account any federal or state income taxes that
may be payable upon redemption or any applicable initial or contingent deferred
sales charges.

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<PAGE> 56
TAXES

The Fund intends to elect to qualify and remain qualified as a
regulated investment company under the Internal Revenue Code. This relieves the
Fund (but not its shareholders) from paying federal income tax on income which
is distributed to shareholders and permits net long-term capital gains of the
Fund (i.e., the excess of net long-term capital gains over net short-term
capital losses) to be treated as long-term capital gains of the shareholders,
regardless of how long shareholders have held their shares in the Fund.

Qualification as a regulated investment company requires, among other
things, that (a) at least ninety percent (90%) of the Fund's annual gross income
(without reduction for losses from the sale or other disposition of securities)
be derived from interest, dividends, and gains from the sale or other
disposition of securities or options thereon or foreign currencies, or other
income (including but not limited to gains from options, futures or forward
contracts) derived with respect to its business of investing in such securities
or currencies; (b) the Fund derive less than thirty percent (30%) of its gross
income from gains (without reduction for losses) from the sale or other
disposition of securities, options thereon, forward contracts and foreign
currencies held for less than three (3) months (except for foreign currencies
directly related to the Fund's business of investing in foreign securities) (the
short-short rule); (c) the Fund diversify its holdings so that, at the end of
each quarter of the taxable year (i) at least fifty percent (50%) of the market
value of the Fund's assets is represented by cash, U.S. Government securities
and other securities limited in respect of any one issuer to an amount not
greater than five percent (5%) of the market value of the Fund's assets and ten
percent (10%) of the outstanding voting securities of such issuer, and (ii) not
more than twenty-five percent (25%) of the value of its assets is invested in
the securities of any one industry (other than U.S. Government securities); and
(d) the Fund distribute to its shareholders at least ninety percent (90%) of its
net investment income (including short-term capital gains) other than long-term
capital gains in each year.

Gains or losses on sales of securities by the Fund will be treated as
long-term capital gains or losses if the securities have been held by it for
more than one year except in certain cases where the Fund acquires a put or
writes a call thereon or makes a short sale against-the-box. Other gains or
losses on the sale of securities will be short-term capital gains or losses.
Gains and losses on the sale, lapse or other termination of options on
securities will generally be treated as gains and losses from the sale of
securities (assuming they do not qualify as Section 1256 contracts). If an
option written by the Fund on securities lapses or is terminated through a
closing transaction, such as a repurchase by the Fund of the option from its
holder, the Fund will generally realize short-term capital gain or loss. If
securities are sold by the Fund pursuant to the exercise of a call option
written by it, the Fund will include the premium received in the sale proceeds
of the securities delivered in determining the amount of gain or loss on the
sale. Certain of the Fund's transactions may be subject to wash sale, short
sale, conversion transaction and straddle provisions of the Internal Revenue
Code. In addition, debt securities acquired by the Fund may be subject to
original issue discount and market discount rules.

Gain or loss on the sale, lapse or other termination of options on
stock will be capital gain or loss and will be long-term or short-term depending
upon the holding period of the option. In addition, positions which are part of
a straddle will be subject to certain wash sale and short sale provisions of the
Internal Revenue Code. In the case of a straddle, the Fund may be required to
defer the recognition of losses on positions it holds to the extent of any
unrecognized gain on offsetting positions held by the Fund. The

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<PAGE> 57
conversion transaction rules may apply to certain transactions to treat all or a
portion of the gain thereon as ordinary income rather than as capital gain.

The Fund is required to distribute ninety-eight percent (98%) of its
ordinary income in the same calendar year in which it is earned. The Fund is
also required to distribute during the calendar year ninety-eight percent (98%)
of the capital gain net income it earned during the twelve (12) months ending on
October 31 of such calendar year, as well as all undistributed ordinary income
and undistributed capital gain net income from the prior year or the
twelve-month period ending on October 31 of such prior year, respectively. To
the extent it does not meet these distribution requirements, the Fund will be
subject to a nondeductible four percent (4%) excise tax on the undistributed
amount. For purposes of this excise tax, income on which the Fund pays income
tax is treated as distributed.

Any dividends paid shortly after a purchase by an investor may have the
effect of reducing the per share net asset value of the investor's shares by the
per share amount of the dividends. Furthermore, such dividends, although in
effect a return of capital, are subject to federal income taxes. Therefore,
prior to purchasing shares of the Fund, the investor should carefully consider
the impact of dividends, including capital gains distributions, which are
expected to be or have been announced.

The tax consequences to a foreign shareholder entitled to claim the
benefits of an applicable tax treaty may be different from those described
herein. Foreign shareholders are advised to consult their own tax advisers with
respect to the particular tax consequences to them of an investment in the Fund.

SHAREHOLDER SERVICES

The Fund makes available to its shareholders the following privileges
and plans:

Automatic Reinvestment of Dividends and/or
Distributions Without a Sales Charge

For the convenience of investors, all dividends and distributions, if
any, will be automatically reinvested in additional full and fractional shares
of the Fund. An investor may direct the Transfer Agent in writing not less than
ten (10) days prior to the ex-dividend date to receive (i) such dividends in
cash and distributions in additional shares or (ii) such dividends and
distributions in cash. Any shareholder who receives a cash payment representing
a dividend or distribution may reinvest such dividend or distribution at net
asset value by returning the check or the proceeds to the Transfer Agent within
thirty (30) days after the payment date. Such investment will be made at the net
asset value per share next determined after receipt of the check or proceeds by
the Transfer Agent.

Automatic Monthly Investment Plan

Under the Fund's Automatic Monthly Investment Plan, an investor may
arrange to have a fixed amount automatically invested in shares of the Fund
monthly by authorizing his or her bank account to be debited to invest specified
dollar amounts in shares of the Fund. The investor's bank must be a member of
the Automatic Clearing House System. Stock certificates are not issued to
Automatic Monthly Investment Plan participants.

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<PAGE> 58
Further information about this plan and an application form can be
obtained from the Fund or the Transfer Agent.

Tax-Deferred Retirement Plans

Various qualified retirement plans, including self-directed individual
retirement accounts, simplified employee pension -- IRA plans and "tax-sheltered
accounts" under Section 403(b)(7) of the Internal Revenue Code of 1986, as
amended (the "Internal Revenue Code") are available through the Fund.
Information regarding the establishment of these plans, and the administration,
custodial fees and other details are available from the Fund or the Transfer
Agent.

Investors who are considering the adoption of such a plan should
consult with their own legal counsel or tax adviser the establishment and
maintenance of any such plan.

Tax-Deferred Retirement Accounts

An individual retirement account (IRA) permits the deferral of federal
income tax on income earned in the account until the earnings are withdrawn. The
following chart represents a comparison of the earnings in a personal savings
account with those in an IRA, assuming a $2,000 annual contribution, an eight
percent (8%) rate of return and a thirty-nine and six-tenths of one percent
(39.6%) federal income tax bracket and shows how much more retirement income can
accumulate within an IRA as opposed to a taxable individual savings account.

TAX-DEFERRED COMPOUNDING(1)

<TABLE>
<CAPTION>
Contributions Personal
Made Over: Savings IRA
- --------------------------------------------------------------------------------
<S> <C> <C>
10 years $ 26,165 $ 31,291
15 years 44,676 58,649
20 years 68,109 98,846
25 years 97,780 157,909
30 years 135,346 244,692
</TABLE>

Systematic Withdrawal Plan

A systematic withdrawal plan is available to shareholders through the
Transfer Agent. Such withdrawal plan provides for monthly, bi-monthly,
quarterly or semi-annual checks in any amount, except as provided below, up to
the value of the shares in the shareholder's account.

In the case of shares held through the Transfer Agent (i) a $10,000.00
minimum account value applies, (ii) withdrawals may not be for less than $100.00
and (iii) the shareholder must elect to have all dividends and/or

- ----------
(1) This chart is for illustrative purposes only and does not represent the
performance of the Fund or any specific investment. It shows taxable
versus tax-deferred compounding for the periods and on the terms
indicated. Earnings in the IRA account will be subject to tax when
withdrawn from the account.

-23-
<PAGE> 59
distributions automatically reinvested in additional full and fractional shares
at net asset value on shares held under this plan.

The Transfer Agent acts as agent for the shareholder in redeeming
sufficient full and fractional shares to provide the amount of the periodic
withdrawal payment. The systematic withdrawal plan may be terminated at any
time, and the Fund reserves the right to initiate a fee of up to Five Dollars
($5.00) per withdrawal, upon thirty (30) days' written notice to the
shareholder. Withdrawal payments should not be considered as dividends, yield or
income. If periodic withdrawals continuously exceed reinvested dividends and
distributions, the shareholder's original investment will be correspondingly
reduced and ultimately exhausted.

Furthermore, each withdrawal constitutes a redemption of shares, and
any gain or loss realized must be recognized for federal income tax purposes.
Each shareholder should consult his or her own tax adviser with regard to the
tax consequences of the plan, particularly if used in connection with a
retirement plan.

Reports to Shareholders

The Fund will send annual and semi-annual reports. The financial
statements appearing in annual reports are audited by independent accountants.
In order to reduce duplicate mailing and printing expenses, the Fund will
provide one annual and semi-annual shareholder report and annual prospectus per
household. You may request additional copies of such reports by calling
800-767-1729 (toll-free) or by writing to the Fund at 222 State Street,
Portsmouth, NH 03801-3853. In addition, monthly unaudited financial data are
available upon request from the Fund.

Shareholder Inquiries

Inquiries should be directed to the Transfer Agent at Pax World Mutual
Funds, P.O. Box 8930, Wilmington, DE 19899-8930, or by telephone at 800-372-7827
(toll-free) or, from outside the U.S.A., at 302-791-2844 (collect).

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<PAGE> 60
INDEPENDENT AUDITORS' REPORT

The Shareholder and Board of Directors of
Pax World Growth Fund, Inc.

We have audited the accompanying statement of assets and liabilities of
Pax World Growth Fund, Inc. as of _______________, 1997. This financial
statement is the responsibility of the Fund's management. Our responsibility is
to express an opinion on this financial statement based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statement. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statement referred to above presents
fairly, in all material respects, the financial position of Pax World Growth
Fund, Inc. as of _______________, 1997, in conformity with generally accepted
accounting principles.

PANNELL KERR FORSTER, P.C.

Boston, MA
_______________, 1997

-25-
<PAGE> 61
PAX WORLD GROWTH FUND, INC.

Statement of Assets and Liabilities

_______________, 1997

<TABLE>
<CAPTION>
ASSETS
<S> <C>
Cash ........................................................ $
----------

Deferred organization costs (Note 1) ........................
----------

Total assets ................................................
----------

LIABILITIES

Deferred organization costs payable (Note 1) ................ $
----------

Net Assets (Note 1)
Applicable to _____ shares of common stock .................. $
==========

Calculation of Offering Price

Net asset value price per share ............................. $
----------

Maximum sales charge
(_____% of offering price) .................................. ----------

Offering price to public .................................... $
==========
</TABLE>

See Notes to Financial Statement.

-26-
<PAGE> 62
PAX WORLD GROWTH FUND, INC.
NOTES TO FINANCIAL STATEMENT

NOTE 1. Pax World Growth Fund, Inc. (the "Fund"), which was incorporated in
Delaware on March 12, 1997, is an open-end, diversified management
investment company. The Fund has had no significant operations other
than the issuance of shares of common stock for $_______________ on
_______________, 1997, to Pax World Management Corp. There are
25,000,000 shares of $1.00 par value common stock authorized.

Costs incurred and expected to be incurred in connection with the
organization and initial registration of the Fund will be paid
initially by Pax World Management Corp. and will be repaid to Pax World
Management Corp. upon commencement of investment operations. These
costs will be deferred and amortized over the period of benefit not to
exceed 60 months from the date the Fund commences investment
operations. If any of the initial shares of the Fund are redeemed by
any holder thereof during the period of amortization of organization
expenses, the redemption proceeds will be reduced by the pro-rata
amount of unamortized organization expenses based on the number of
initial shares being redeemed to the number of the initial shares
outstanding.

NOTE 2. Pursuant to an Advisory Agreement between the Fund and Pax World
Management Corp. (the "Adviser"), the Adviser furnishes investment
advisory services in connection with the management of the Fund. Under
the Advisory Agreement, the "Adviser", subject to the supervision of
the Board of Directors of the Fund is responsible for managing the
assets of the Fund in accordance with its investment objectives,
investment program and policies. The Adviser determines what securities
and other instruments are purchased and sold for the Fund and is
responsible for obtaining and evaluating financial data relevant to the
Fund. In the event that the average net assets of the Fund are less
than $5,000,000.00, the Adviser will be compensated by the Fund for its
services at an annual rate of $25,000.00; in the event that average net
assets of the Fund are equal to or in excess of $5,000,000.00, the
Adviser will be compensated by the Fund for its services at an annual
rate of one percent (1%) of average net assets up to and including
$25,000,000.00 and three-quarters of one percent (.75%) of average net
assets in excess of $25,000,000.00.

The Adviser has, however, agreed to supply and pay for such services as
are deemed by the Board of Directors of the Fund to be necessary or
desirable and proper for the continuous operations of the Fund
(excluding all taxes and charges of governmental agencies and brokerage
commissions incurred in connection with portfolio transactions) which
are in excess of one and one-half percent (1.5%) of the average net
asset value of the Fund per annum. Such expenses include (i)
management, distribution and sub-advisory fees; (ii) the fees of
affiliated and unaffiliated Directors; (iii) the fees of the Fund's
Custodian and Transfer Agent; (iv) the fees of the Fund's legal counsel
and independent accountants; (v) the reimbursement of organization
expenses; and (vi) expenses related to shareholder communications
including all expenses of shareholders' and Board of Directors'
meetings and of preparing, printing and mailing reports, proxy
statements and prospectuses to shareholders.

-27-
<PAGE> 63
Pursuant to the terms of a Sub-Advisory Agreement between the Adviser
and H. G. Wellington Capital Management, a division of H. G. Wellington
& Co., Inc., 14 Wall Street, New York, NY 10005 (the "Sub-Adviser"),
the Sub-Adviser furnishes investment advisory services in connection
with the management of the Fund, determines what securities and other
instruments are purchased and sold for the Fund and is responsible for
obtaining and evaluating financial data relevant to the Fund. In the
event that the average net assets of the Fund are less than
$5,000,000.00, the Sub-Adviser will be compensated by the Adviser for
its services at an annual rate of $25,000.00; in the event that average
net assets of the Fund are equal to or in excess of $5,000,000.00, the
Sub-Adviser will be compensated by the Adviser for its services at an
annual rate of one-third of one percent (.33%) of average net assets up
to and including $25,000,000.00 and one-quarter of one percent (.25%)
of average net assets in excess of $25,000,000.00, but in no event to
exceed the annual sum of Two Hundred and Fifty Thousand Dollars
($250,000.00) net of expenses.

Pursuant to a plan of distribution (the "Plan") adopted by the Fund
under Rule 12b-1 of the Investment Company Act of 1940, the Fund incurs
the expenses of distributing the Fund's shares. These expenses include
(but are not limited to) advertising expenses, the cost of printing and
mailing prospectuses to potential investors, commissions and account
servicing fees paid to, or on account of, broker-dealers or certain
financial institutions which have entered into agreements with the
Fund, compensation to and expenses incurred by officers, directors
and/or employees of the Fund for their distributional services and
indirect and overhead costs associated with the sale of Fund shares.

-28-
<PAGE> 64
PART C
OTHER INFORMATION

Item 24. Financial Statements and Exhibits.

(a) Financial Statements:

(i) Financial Statements included in the Prospectus constituting
Parts A and B of this Registration Statement:

None.

(b) Exhibits:

1. Articles of Incorporation.*

2. By-Laws.*

3. Not Applicable.
4. Instruments defining rights of shareholders.*

5(a). Form of Advisory Agreement between the Registrant and
Pax World Management Corp.*

5(b). Form of Sub-Advisory Agreement between Pax World
Management Corp. and H. G. Wellington & Co., Inc.*

6. Not Applicable.

7. Not Applicable.

8(a). Form of Custodian Contract between the Registrant and
State Street Bank and Trust Company.**

8(b). Form of Data Access Services Addendum to Custodian
Agreement between the Registrant and State Street Bank
and Trust Company.**

9. Form of Transfer Agency Services Agreement between the
Registrant and PFPC, Inc.**

10. Opinion of Broudy & Jacobson.***

11. Consent of Independent Accountants.***

12. Not Applicable.

13. Form of Purchase Agreement.**

14. Not Applicable.

15. Form of Distribution and Service Plan.**

16. Not Applicable.

17. Not Applicable.

- ----------

* Previously filed and not filed herewith.

** Filed herewith.

*** To be filed by Amendment.

<PAGE> 65
Item 25. Persons Controlled by or under Common Control with Registrant.

None.

Item 26. Number of Holders of Securities.

Not Applicable.

Item 27. Indemnification.

As permitted by Section 17(h) and (i) of the Investment Company Act of
1940 (the "1940 Act") and pursuant to Section 8.04 of the Fund's By-Laws
(Exhibit 2 to the Registration Statement), officers, directors, employees and
agents of the Registrant will not be liable to the Registrant, any shareholder,
officer, director, employee, agent or other person for any action or failure to
act, except for bad faith, willful misfeasance, gross negligence or reckless
disregard of duties, and those individuals may be indemnified against
liabilities in connection with the Registrant, subject to the same exceptions.
Section 145 of the General Corporation Law of the State of Delaware permits
indemnification of directors who acted in good faith and reasonably believed
that the conduct was in the best interests of the Registrant.

The Registrant has purchased an insurance policy insuring its officers
and directors against liabilities, and certain costs of defending claims against
such officers and directors, to the extent such officers and directors are not
found to have committed conduct constituting willful misfeasance, bad faith,
gross negligence or reckless disregard in the performance of their duties. The
insurance policy also insures the Registrant against the cost of indemnification
payments to officers and directors under certain circumstances.

Section 8 of the Advisory Agreement (Exhibit 5 to the Registration
Statement) and Section 7 of the Sub-Advisory Agreement (Exhibit 5 to the
Registration Statement) limit the liability of the Adviser and the Sub-Adviser,
respectively, to liabilities arising from willful misfeasance, bad faith or
gross negligence in the performance of their respective duties or from reckless
disregard by them of their obligations and duties under the Advisory and
Sub-Advisory Agreement.

The Registrant hereby undertakes that it will apply the indemnification
provisions of its By-Laws in a manner consistent with Release No. 11330 of the
Securities and Exchange Commission under the 1940 Act so long as the
interpretation of Section 17(h) and 17(i) of such Act remain in effect and are
consistently applied.

Under Section 17(h) of the 1940 Act, it is the position of the staff of
the Securities and Exchange Commission that if there is neither a court
determination on the merits that the defendant is not liable nor a court
determination that the defendant was not guilty of willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in the
conduct of one's office, no indemnification will be permitted unless an
independent legal counsel (not including a counsel who does work for either the
Registrant, its investment adviser, its principal underwriter or persons
affiliated with these persons) determines, based upon a review of the facts,
that the person in question was not guilty of willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the conduct of
his office.

-2-
<PAGE> 66
Under its Articles of Incorporation, the Registrant may advance funds
to provide for indemnification. Pursuant to the Securities and Exchange
Commission staff's position on Section 17(h) advances will be limited in the
following respect:

(i) Any advances must be limited to amounts used, or to be used,
for the preparation and/or presentation of a defense to the
action (including cost connected with preparation of a
settlement);

(ii) Any advances must be accompanied by a written promise by, or
on behalf of, the recipient to repay that amount of the
advance which exceeds the amount to which it is ultimately
determined that he is entitled to receive from the Registrant
by reason of indemnification;

(iii) Such promise must be secured by a surety bond or other
suitable insurance; and

(iv) Such surety bond or other insurance must be paid for by the
recipient of such advance.

Item 28. Business and Other Connections of the Investment Adviser.

See "Fund Highlights -- Who Advises the Fund?" and "Adviser;
Sub-Adviser" in the Prospectus constituting Part A of this Registration
Statement and "Adviser; Sub-Adviser" in the Statement of Additional Information
constituting Part B of this Registration Statement.

The business and other connections of the Adviser's directors and
executive officers are as set forth below. Except as otherwise indicated, the
address of each person is 222 State Street, Portsmouth, NH 03801.

<TABLE>
<CAPTION>
Name Position(s) Held with the Principal Occupation(s)
Adviser
<S> <C> <C>
Katherine Shadek Boyle Senior Vice President; Senior Vice President, Pax World Management
Director Corp.

Anthony S. Brown Executive Vice President and Executive Vice President and Treasurer, Pax
Treasurer World Management Corp.; Executive Vice
President, Treasurer and Portfolio Manager, Pax
World Fund Incorporated

Thomas W. Grant President; Director President, Pax World Management Corp.; Vice
Chairman of the Board, Pax World Fund,
Incorporated; President, Pax World Growth Fund,
Inc.; President, H. G. Wellington & Co., Inc.
</TABLE>

-3-
<PAGE> 67

<TABLE>
<S> <C> <C>
James M. Shadek Senior Vice President for Senior Vice President for Social Research, Pax
Social Research; Director World Management Corp.; Treasurer, Pax World
Growth Fund, Inc.; Account Executive, H. G.
Wellington & Co., Inc.

Laurence A. Shadek Chairman of the Board; Chairman of the Board, Pax World Management
Director Corp.; Chairman of the Board, Pax World Fund,
Incorporated; Chairman of the Board, Pax World
Growth Fund, Inc.; Executive Vice President,
H. G. Wellington & Co., Inc.

Thomas F. Shadek Senior Vice President Senior Vice President -Marketing, Pax World
-Marketing; Director Management Corp.

Luther E. Tyson Executive Vice President Executive Vice President, Pax World Management
Corp.; President, Pax World Fund, Incorporated
</TABLE>

Item 29. Principal Underwriters

Not Applicable.

Item 30. Location of Accounts and Records

The accounts, books and other documents relating to shareholder
accounts and activity required to be maintained by Section 31(a) of the 1940 Act
and the Rules thereunder are maintained by PFPC, Inc. and are located at 400
Bellevue Parkway, Wilmington, DE 19809. All other accounts, books and other
documents required to be maintained by Section 31(a) of the 1940 Act and the
Rules thereunder are maintained by the Fund at 222 State Street, Portsmouth, NH
03801 and by the State Street Bank and Trust Company at 225 Franklin Street,
Boston MA 02110.

Item 31. Management Services

Other than as set forth under the captions "Fund Highlights--Who
Manages the Fund?" and "Management of the Fund" in the Prospectus and the
captions "Management of the Fund" in the Statement of Additional Information,
constituting Parts A and B, respectively, of this Registration Statement, the
Registrant is not a party to any management-related service contract.

Item 32. Undertakings

Registrant makes the following undertaking:

To file a post-effective amendment, using financial statements which
may not be certified, within four (4) to six (6) months from the effective date
of this Registration Statement.

-4-
<PAGE> 68

To call a meeting of shareholders for the purpose of voting upon the
question of removal of any member of the Board of Directors of the Fund when
requested in writing so to do by the record holders of not less than ten
percent (10%) of the outstanding shares of the Fund.

To assist in communications with shareholders of the Fund in accordance
with the provisions of Section 16(c) of the Investment Company Act.

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of New York, and State of New York, on the 23rd day of
May, 1997.

PAX WORLD GROWTH FUND, INC.

By: /s/ Thomas W. Grant
----------------------------
Thomas W. Grant
President

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.

<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Laurence A. Shadek Chairman of the Board, 5/23/97
- ---------------------------- Director
Laurence A. Shadek

/s/ Thomas W. Grant President, Director 5/23/97
- ----------------------------
Thomas W. Grant

/s/ James M. Shadek Treasurer 5/23/97
- ----------------------------
James M. Shadek

/s/ Carl H. Doerge, Jr. Director 5/23/97
- ----------------------------
Carl H. Doerge, Jr.

/s/ John L. Kidde Director 5/23/97
- ----------------------------
John L. Kidde

/s/ Joy L. Liechty Director 5/23/97
- ----------------------------
Joy L. Liechty

/s/ Nancy S. Taylor Director 5/23/97
- ----------------------------
Nancy S. Taylor
</TABLE>

-5-
<PAGE> 69
- -------------------- COMPARISON OF NOTES --------------------

This chart is for illustrative purposes only and does not represent the
performance of the Fund or any specific investment. It shows taxable versus
tax-deferred compounding for the periods and on the terms indicated. Earnings in
the IRA account will be subject to tax when withdrawn from the account.

-6-
<PAGE> 70
PAX WORLD GROWTH FUND, INC.

Exhibit Index

Description

1. Articles of Incorporation.*

2. By-Laws.*

4. Instruments defining rights of shareholders.*

5(a). Form of Advisory Agreement between the Registrant
and Pax World Management Corp.*

5(b). Form of Sub-Advisory Agreement between Pax World
Management Corp. and H. G. Wellington & Co., Inc.*

8(a). Form of Custodian Contract between the Registrant
and State Street Bank and Trust Company.**

8(b). Form of Data Access Services Addendum to Custodian
Agreement between the Registrant and State Street
Bank and Trust Company.**

9. Form of Transfer Agency Services Agreement between the
Registrant and PFPC, Inc.**

10. Opinion of Broudy & Jacobson.***

11. Consent of Independent Accountants.***

13. Form of Purchase Agreement.**

15. Form of Distribution and Service Plan.**

16. Not Applicable.

- ----------

* Previously filed and not filed herewith.
** Filed herewith.
*** To be filed by Amendment.

<PAGE> 1
Exhibit 8(a)

CUSTODIAN CONTRACT

Between

PAX WORLD GROWTH FUND, INC.

and

STATE STREET BANK AND TRUST COMPANY
<PAGE> 2
TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
1. Employment of Custodian and Property to be
Held By It................................................... 1

2. Duties of the Custodian with Respect to Property of
the Fund Held by the Custodian in the United States.......... 1

2.1 Holding Securities................................. 1
2.2 Delivery of Securities............................. 2
2.3 Registration of Securities......................... 4
2.4 Bank Accounts...................................... 5
2.5 Availability of Federal Funds...................... 5
2.6 Collection of Income............................... 5
2.7 Payment of Fund Monies............................. 6
2.8 Liability for Payment in Advance of
Receipt of Securities Purchased.................... 7
2.9 Appointment of Agents.............................. 8
2.10 Deposit of Securities in U.S. Securities System.... 8
2.11 Fund Assets Held in the Custodian's Direct
Paper System....................................... 10
2.12 Segregated Account................................. 10
2.13 Ownership Certificates for Tax Purposes............ 11
2.14 Proxies............................................ 11
2.15 Communications Relating to Fund
Portfolio Securities............................... 12
2.16 Reports to Fund by Independent Public
Accountants........................................ 12

3. Duties of the Custodian with Respect to Property of
the Fund Held Outside of the United States................... 12

3.1 Appointment of Foreign Sub-Custodians.............. 12
3.2 Assets to be Held.................................. 13
3.3 Foreign Securities Systems......................... 13
3.4 Holding Securities................................. 13
3.5 Agreements with Foreign Banking Institutions....... 13
3.6 Access of Independent Accountants of the Fund...... 14
3.7 Reports by Custodian............................... 14
3.8 Transactions in Foreign Custody Account............ 14
3.9 Liability of Foreign Sub-Custodians................ 15
3.10 Liability of Custodian............................. 15
3.11 Reimbursement for Advances......................... 16
3.12 Monitoring Responsibilities........................ 16
3.13 Branches of U.S. Banks............................. 16
3.14 Tax Law............................................ 17

4. Payments for Repurchases or Redemptions and Sales
of Shares of the Fund........................................ 17

5. Proper Instructions.......................................... 18
</TABLE>
<PAGE> 3
<TABLE>
<S> <C> <C>
6. Actions Permitted Without Express Authority.................. 18

7. Evidence of Authority........................................ 19

8. Duties of Custodian with Respect to the Books of
Account and Calculations of Net Asset Value and
Net Income................................................... 19

9. Records...................................................... 19

10. Opinion of Fund's Independent Accountant..................... 20

11. Compensation of Custodian.................................... 20

12. Responsibility of Custodian.................................. 20

13. Effective Period, Termination and Amendment.................. 22

14. Successor Custodian.......................................... 22

15. Interpretive and Additional Provisions....................... 23

16. Massachusetts Law to Apply................................... 23

17. Prior Contracts.............................................. 24

18. Reproduction of Documents.................................... 24

19. Shareholder Communications Election.......................... 24
</TABLE>

-ii-
<PAGE> 4
Custodian Contract

This Contract between PAX WORLD GROWTH FUND, INC., a
corporation organized and existing under the laws of the State of Delaware,
having its principal place of business at 222 State Street, Portsmouth, New
Hampshire 03801, hereinafter called the "Fund", and STATE STREET BANK AND TRUST
COMPANY, a Massachusetts trust company, having its principal place of business
at 225 Franklin Street, Boston, Massachusetts, 02110, hereinafter called the
"Custodian",

WITNESSETH: That in consideration of the mutual covenants and
agreements hereinafter contained, the parties hereto agree as follows:

1. Employment of Custodian and Property to be Held by It

The Fund hereby employs the Custodian as the custodian of its
assets, including securities it desires to be held in places within the United
States ("domestic securities") and securities it desires to be held outside the
United States ("foreign securities") pursuant to the provisions of the Articles
of Incorporation. The Fund agrees to deliver to the Custodian all securities and
cash owned by it, and all payments of income, payments of principal or capital
distributions received by it with respect to all securities owned by the Fund
from time to time, and the cash consideration received by it for such new or
treasury shares of capital stock, $ 1.00 par value, ("Shares") of the Fund as
may be issued or sold from time to time. The Custodian shall not be responsible
for any property of the Fund held or received by the Fund and not delivered to
the Custodian.

Upon receipt of "Proper Instructions" (within the meaning of
Article 5), the Custodian shall from time to time employ one or more
sub-custodians located in the United States, but only in accordance with an
applicable vote by the Board of Directors of the Fund, and provided that the
Custodian shall have no more or less responsibility or liability to the Fund on
account of any actions or omissions of any sub-custodian so employed than any
such sub-custodian has to the Custodian. The Custodian may employ as
sub-custodians for the Fund's securities and other assets the foreign banking
institutions and foreign securities depositories designated in Schedule "A"
hereto but only in accordance with the provisions of Article 3.

2. Duties of the Custodian with Respect to Property of the Fund
Held By the Custodian in the United States

2.1 Holding Securities. The Custodian shall hold and physically
segregate for the account of the Fund all non-cash property,
to be held by it in the United States, including all domestic
investments owned by the Fund, other than (a) securities which
are maintained pursuant to Section 2.10 in a clearing agency
which
<PAGE> 5
acts as a securities depository or in a book-entry system
authorized by the U.S. Department of the Treasury and certain
federal agencies (each, a "U.S. Securities System") and (b)
commercial paper of an issuer for which the Custodian acts as
issuing and paying agent ("Direct Paper") which is deposited
and/or maintained in the Direct Paper System of the Custodian
(the "Direct Paper System") pursuant to Section 2.11.

2.2 Delivery of Securities. The Custodian shall release and
deliver domestic securities owned by the Fund held by the
Custodian or in a U.S. Securities System account of the
Custodian or in the Custodian's Direct Paper book-entry system
account ("Direct Paper System Account") only upon receipt of
Proper Instructions, which may be continuing instructions when
deemed appropriate by the parties, and only in the following
cases:

1) Upon sale of such securities for the account of
the Fund and receipt of payment therefor;

2) Upon the receipt of payment in connection with
any repurchase agreement related to such
securities entered into by the Fund;

3) In the case of a sale effected through a U.S.
Securities System, in accordance with the
provisions of Section 2.10 hereof;

4) To the depository agent in connection with tender
or other similar offers for portfolio securities
of the Fund;

5) To the issuer thereof or its agent when such
securities are called, redeemed, retired or
otherwise become payable; provided that, in any
such case, the cash or other consideration is to
be delivered to the Custodian;

6) To the issuer thereof, or its agent, for transfer
into the name of the Fund or into the name of any
nominee or nominees of the Custodian or into the
name or nominee name of any agent appointed
pursuant to Section 2.9 or into the name or nominee
name of any sub-custodian appointed pursuant to
Article 1; or for exchange for a different number
of bonds, certificates or other evidence
representing the same aggregate face amount or
number of units; provided that, in any such case,
the new securities are to be delivered to the
Custodian;

-2-
<PAGE> 6
7) Upon the sale of such securities for the account of
the Fund, to the broker or its clearing agent,
against a receipt, for examination in accordance
with "street delivery" custom; provided that in any
such case, the Custodian shall have no
responsibility or liability for any loss arising
from the delivery of such securities prior to
receiving payment for such securities except as may
arise from the Custodian's own negligence or
willful misconduct;

8) For exchange or conversion pursuant to any plan of
merger, consolidation, recapitalization,
reorganization or readjustment of the securities of
the issuer of such securities, or pursuant to
provisions for conversion contained in such
securities, or pursuant to any deposit agreement;
provided that, in any such case, the new securities
and cash, if any, are to be delivered to the
Custodian;

9) In the case of warrants, rights or similar
securities, the surrender thereof in the exercise
of such warrants, rights or similar securities or
the surrender of interim receipts or temporary
securities for definitive securities; provided
that, in any such case, the new securities and
cash, if any, are to be delivered to the Custodian;

10) For delivery in connection with any loans of
securities made by the Fund, but only against
receipt of adequate collateral as agreed upon from
time to time by the Custodian and the Fund, which
may be in the form of cash or obligations issued by
the United States government, its agencies or
instrumentalities, except that in connection with
any loans for which collateral is to be credited to
the Custodian's account in the book-entry system
authorized by the U.S. Department of the Treasury,
the Custodian will not be held liable or
responsible for the delivery of securities owned by
the Fund prior to the receipt of such collateral;

11) For delivery as security in connection with any
borrowings by the Fund requiring a pledge of assets
by the Fund, but only against receipt of amounts
borrowed;

12) For delivery in accordance with the provisions of
any agreement among the Fund, the Custodian and a

-3-
<PAGE> 7
broker-dealer registered under the Securities
Exchange Act of 1934 (the "Exchange Act") and a
member of The National Association of Securities
Dealers, Inc. ("NASD"), relating to compliance with
the rules of The Options Clearing Corporation and
of any registered national securities exchange, or
of any similar organization or organizations,
regarding escrow or other arrangements in
connection with transactions by the Fund;

13) For delivery in accordance with the provisions of
any agreement among the Fund, the Custodian, and a
Futures Commission Merchant registered under the
Commodity Exchange Act, relating to compliance with
the rules of the Commodity Futures Trading
Commission and/or any Contract Market, or any
similar organization or organizations, regarding
account deposits in connection with transactions by
the Fund;

14) Upon receipt of instructions from the transfer
agent ("Transfer Agent") for the Fund, for delivery
to such Transfer Agent or to the holders of shares
in connection with distributions in kind, as may be
described from time to time in the Fund's currently
effective prospectus and statement of additional
information ("prospectus"), in satisfaction of
requests by holders of Shares for repurchase or
redemption; and

15) For any other proper corporate purpose, but only
upon receipt of, in addition to Proper
Instructions, a certified copy of a resolution of
the Board of Directors or of the Executive
Committee signed by an officer of the Fund and
certified by the Secretary or an Assistant
Secretary, specifying the securities to be
delivered, setting forth the purpose for which such
delivery is to be made, declaring such purpose to
be a proper corporate purpose, and naming the
person or persons to whom delivery of such
securities shall be made.

2.3 Registration of Securities. Domestic securities held by the
Custodian (other than bearer securities) shall be registered
in the name of the Fund or in the name of any nominee of the
Fund or of any nominee of the Custodian which nominee shall be
assigned exclusively to the Fund, unless the Fund has
authorized in writing the appointment of a nominee to be used
in common with

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<PAGE> 8
other registered investment companies having the same
investment adviser as the Fund, or in the name or nominee name
of any agent appointed pursuant to Section 2.9 or in the name
or nominee name of any sub-custodian appointed pursuant to
Article 1. All securities accepted by the Custodian on behalf
of the Fund under the terms of this Contract shall be in
"street name" or other good delivery form. If, however, the
Fund directs the Custodian to maintain securities in "street
name", the Custodian shall utilize its best efforts only to
timely collect income due the Fund on such securities and to
notify the Fund on a best efforts basis only of relevant
corporate actions including, without limitation, pendency of
calls, maturities, tender or exchange offers.

2.4 Bank Accounts. The Custodian shall open and maintain a
separate bank account or accounts in the United States in the
name of the Fund, subject only to draft or order by the
Custodian acting pursuant to the terms of this Contract, and
shall hold in such account or accounts, subject to the
provisions hereof, all cash received by it from or for the
account of the Fund, other than cash maintained by the Fund in
a bank account established and used in accordance with Rule
17f-3 under the Investment Company Act of 1940. Funds held by
the Custodian for the Fund may be deposited by it to its
credit as Custodian in the Banking Department of the Custodian
or in such other banks or trust companies as it may in its
discretion deem necessary or desirable; provided, however,
that every such bank or trust company shall be qualified to
act as a custodian under the Investment Company Act of 1940
and that each such bank or trust company and the funds to be
deposited with each such bank or trust company shall be
approved by vote of a majority of the Board of Directors of
the Fund. Such funds shall be deposited by the Custodian in
its capacity as Custodian and shall be withdrawable by the
Custodian only in that capacity.

2.5 Availability of Federal Funds. Upon mutual agreement between
the Fund and the Custodian, the Custodian shall, upon the
receipt of Proper Instructions, make federal funds available
to the Fund as of specified times agreed upon from time to
time by the Fund and the Custodian in the amount of checks
received in payment for Shares of the Fund which are deposited
into the Fund's account.

2.6 Collection of Income. Subject to the provisions of Section
2.3, the Custodian shall collect on a timely basis all income
and other payments with respect to

-5-
<PAGE> 9
United States registered securities held hereunder to which
the Fund shall be entitled either by law or pursuant to custom
in the securities business, and shall collect on a timely
basis all income and other payments with respect to United
States bearer securities if, on the date of payment by the
issuer, such securities are held by the Custodian or its agent
thereof and shall credit such income, as collected, to the
Fund's custodian account. Without limiting the generality of
the foregoing, the Custodian shall detach and present for
payment all coupons and other income items requiring
presentation as and when they become due and shall collect
interest when due on securities held hereunder. Income due the
Fund on United States securities loaned pursuant to the
provisions of Section 2.2 (10) shall be the responsibility of
the Fund. The Custodian will have no duty or responsibility in
connection therewith, other than to provide the Fund with such
information or data as may be necessary to assist the Fund in
arranging for the timely delivery to the Custodian of the
income to which the Fund is properly entitled.

2.7 Payment of Fund Monies. Upon receipt of Proper Instructions,
which may be continuing instructions when deemed appropriate
by the parties, the Custodian shall pay out monies of the Fund
in the following cases only:

1) Upon the purchase of domestic securities, options,
futures contracts or options on futures contracts
for the account of the Fund but only (a) against
the delivery of such securities, or evidence of
title to such options, futures contracts or options
on futures contracts, to the Custodian (or any
bank, banking firm or trust company doing business
in the United States or abroad which is qualified
under the Investment Company Act of 1940, as
amended, to act as a custodian and has been
designated by the Custodian as its agent for this
purpose) registered in the name of the Fund or in
the name of a nominee of the Custodian referred to
in Section 2.3 hereof or in proper form for
transfer; (b) in the case of a purchase effected
through a U.S. Securities System, in accordance
with the conditions set forth in Section 2.10
hereof; (c) in the case of a purchase involving the
Direct Paper System, in accordance with the
conditions set forth in Section 2.11; (d) in the
case of repurchase agreements entered into between
the Fund and the Custodian, or another bank, or a
broker-dealer which is a member of

-6-
<PAGE> 10
NASD, (i) against delivery of the securities either
in certificate form or through an entry crediting
the Custodian's account at the Federal Reserve Bank
with such securities or (ii) against delivery of
the receipt evidencing purchase by the Fund of
securities owned by the Custodian along with
written evidence of the agreement by the Custodian
to repurchase such securities from the Fund or (e)
for transfer to a time deposit account of the Fund
in any bank, whether domestic or foreign; such
transfer may be effected prior to receipt of a
confirmation from a broker and/or the applicable
bank pursuant to Proper Instructions from the Fund
as defined in Article 5;

2) In connection with conversion, exchange or
surrender of securities owned by the Fund as set
forth in Section 2.2 hereof;

3) For the redemption or repurchase of Shares issued
by the Fund as set forth in Article 4 hereof;

4) For the payment of any expense or liability
incurred by the Fund, including but not limited to
the following payments for the account of the Fund:
interest, taxes, management, accounting, transfer
agent and legal fees, and operating expenses of the
Fund whether or not such expenses are to be in
whole or part capitalized or treated as deferred
expenses;

5) For the payment of any dividends declared
pursuant to the governing documents of the Fund;

6) For payment of the amount of dividends received
in respect of securities sold short;

7) For any other proper purpose, but only upon receipt
of, in addition to Proper Instructions, a certified
copy of a resolution of the Board of Directors or
of the Executive Committee of the Fund signed by an
officer of the Fund and certified by its Secretary
or an Assistant Secretary, specifying the amount of
such payment, setting forth the purpose for which
such payment is to be made, declaring such purpose
to be a proper purpose, and naming the person or
persons to whom such payment is to be made.

2.8 Liability for Payment in Advance of Receipt of Securities
Purchased. Except as specifically stated

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<PAGE> 11
otherwise in this Contract, in any and every case where
payment for purchase of domestic securities for the account of
the Fund is made by the Custodian in advance of receipt of the
securities purchased in the absence of specific written
instructions from the Fund to so pay in advance, the Custodian
shall be absolutely liable to the Fund for such securities to
the same extent as if the securities had been received by the
Custodian.

2.9 Appointment of Agents. The Custodian may at any time or times
in its discretion appoint (and may at any time remove) any
other bank or trust company which is itself qualified under
the Investment Company Act of 1940, as amended, to act as a
custodian, as its agent to carry out such of the provisions of
this Article 2 as the Custodian may from time to time direct;
provided, however, that the appointment of any agent shall not
relieve the Custodian of its responsibilities or liabilities
hereunder.

2.10 Deposit of Securities in U.S. Securities Systems. The
Custodian may deposit and/or maintain domestic securities
owned by the Fund in a clearing agency registered with the
Securities and Exchange Commission under Section 17A of the
Securities Exchange Act of 1934, which acts as a securities
depository, or in the book-entry system authorized by the U.S.
Department of the Treasury and certain federal agencies,
collectively referred to herein as "U.S. Securities System" in
accordance with applicable Federal Reserve Board and
Securities and Exchange Commission rules and regulations, if
any, and subject to the following provisions:

1) The Custodian may keep domestic securities of the
Fund in a U.S. Securities System provided that such
securities are represented in an account
("Account") of the Custodian in the U.S. Securities
System which shall not include any assets of the
Custodian other than assets held as a fiduciary,
custodian or otherwise for customers;

2) The records of the Custodian with respect to
domestic securities of the Fund which are
maintained in a U.S. Securities System shall
identify by book-entry those securities belonging
to the Fund;

3) The Custodian shall pay for domestic securities
purchased for the account of the Fund upon (i)

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<PAGE> 12
receipt of advice from the U.S. Securities System
that such securities have been transferred to the
Account, and (ii) the making of an entry on the
records of the Custodian to reflect such payment
and transfer for the account of the Fund. The
Custodian shall transfer domestic securities sold
for the account of the Fund upon (i) receipt of
advice from the U.S. Securities System that payment
for such securities has been transferred to the
Account, and (ii) the making of an entry on the
records of the Custodian to reflect such transfer
and payment for the account of the Fund. Copies of
all advices from the U.S. Securities System of
transfers of domestic securities for the account of
the Fund shall identify the Fund, be maintained for
the Fund by the Custodian and be provided to the
Fund at its request. Upon request, the Custodian
shall furnish the Fund confirmation of each
transfer to or from the account of the Fund in the
form of a written advice or notice and shall
furnish to the Fund copies of daily transaction
sheets reflecting each day's transactions in the
U.S. Securities System for the account of the Fund.

4) The Custodian shall provide the Fund with any
report obtained by the Custodian on the U.S.
Securities System's accounting system, internal
accounting control and procedures for
safeguarding domestic securities deposited in the
U.S. Securities System;

5) The Custodian shall have received the initial or
annual certificate, as the case may be, required
by Article 13 hereof;

6) Anything to the contrary in this Contract
notwithstanding, the Custodian shall be liable to
the Fund for any loss or damage to the Fund
resulting from use of the U.S. Securities System by
reason of any negligence, misfeasance or misconduct
of the Custodian or any of its agents or of any of
its or their employees or from failure of the
Custodian or any such agent to enforce effectively
such rights as it may have against the U.S.
Securities System; at the election of the Fund, it
shall be entitled to be subrogated to the rights of
the Custodian with respect to any claim against the
U.S. Securities System or any other person which
the Custodian may have as a consequence of any such
loss or

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<PAGE> 13
damage if and to the extent that the Fund has not
been made whole for any such loss or damage.

2.11 Fund Assets Held in the Custodian's Direct Paper System. The
Custodian may deposit and/or maintain securities owned by the
Fund in the Direct Paper System of the Custodian subject to
the following provisions:

1) No transaction relating to securities in the
Direct Paper System will be effected in the
absence of Proper Instructions;

2) The Custodian may keep securities of the Fund in
the Direct Paper System only if such securities are
represented in an account ("Account") of the
Custodian in the Direct Paper System which shall
not include any assets of the Custodian other than
assets held as a fiduciary, custodian or otherwise
for customers;

3) The records of the Custodian with respect to
securities of the Fund which are maintained in
the Direct Paper System shall identify by
book-entry those securities belonging to the
Fund;

4) The Custodian shall pay for securities purchased
for the account of the Fund upon the making of an
entry on the records of the Custodian to reflect
such payment and transfer of securities to the
account of the Fund. The Custodian shall transfer
securities sold for the account of the Fund upon
the making of an entry on the records of the
Custodian to reflect such transfer and receipt of
payment for the account of the Fund;

5) The Custodian shall furnish the Fund confirmation
of each transfer to or from the account of the
Fund, in the form of a written advice or notice, of
Direct Paper on the next business day following
such transfer and shall furnish to the Fund copies
of daily transaction sheets reflecting each day's
transaction in the U.S. Securities System for the
account of the Fund;

6) The Custodian shall provide the Fund with any
report on its system of internal accounting
control as the Fund may reasonably request from
time to time;

2.12 Segregated Account. The Custodian shall upon receipt of Proper
Instructions establish and maintain a

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<PAGE> 14
segregated account or accounts for and on behalf of the Fund,
into which account or accounts may be transferred cash and/or
securities, including securities maintained in an account by
the Custodian pursuant to Section 2.10 hereof, (i) in
accordance with the provisions of any agreement among the
Fund, the Custodian and a broker-dealer registered under the
Exchange Act and a member of the NASD (or any futures
commission merchant registered under the Commodity Exchange
Act), relating to compliance with the rules of The Options
Clearing Corporation and of any registered national securities
exchange (or the Commodity Futures Trading Commission or any
registered contract market), or of any similar organization or
organizations, regarding escrow or other arrangements in
connection with transactions by the Fund, (ii) for purposes of
segregating cash or government securities in connection with
options purchased, sold or written by the Fund or commodity
futures contracts or options thereon purchased or sold by the
Fund, (iii) for the purposes of compliance by the Fund with
the procedures required by Investment Company Act Release No.
10666, or any subsequent release or releases of the Securities
and Exchange Commission relating to the maintenance of
segregated accounts by registered investment companies and
(iv) for other proper corporate purposes, but only, in the
case of clause (iv), upon receipt of, in addition to Proper
Instructions, a certified copy of a resolution of the Board of
Directors or of the Executive Committee signed by an officer
of the Fund and certified by the Secretary or an Assistant
Secretary, setting forth the purpose or purposes of such
segregated account and declaring such purposes to be proper
corporate purposes.

2.13 Ownership Certificates for Tax Purposes. The Custodian shall
execute ownership and other certificates and affidavits for
all federal and state tax purposes in connection with receipt
of income or other payments with respect to domestic
securities of the Fund held by it and in connection with
transfers of such securities.

2.14 Proxies. The Custodian shall, with respect to the domestic
securities held hereunder, cause to be promptly executed by
the registered holder of such securities, if the securities
are registered otherwise than in the name of the Fund or a
nominee of the Fund, all proxies, without indication of the
manner in which such proxies are to be voted, and shall
promptly deliver to the Fund such proxies, all proxy
soliciting materials and all notices relating to such
securities.

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<PAGE> 15
2.15 Communications Relating to Fund Portfolio Securities. Subject
to the provisions of Section 2.3, the Custodian shall transmit
promptly to the Fund all written information (including,
without limitation, pendency of calls and maturities of
domestic securities and expirations of rights in connection
therewith and notices of exercise of call and put options
written by the Fund and the maturity of futures contracts
purchased or sold by the Fund) received by the Custodian from
issuers of the domestic securities being held for the Fund.
With respect to tender or exchange offers, the Custodian shall
transmit promptly to the Fund all written information received
by the Custodian from issuers of the domestic securities whose
tender or exchange is sought and from the party (or his
agents) making the tender or exchange offer. If the Fund
desires to take action with respect to any tender offer,
exchange offer or any other similar transaction, the Fund
shall notify the Custodian at least three business days prior
to the date on which the Custodian is to take such action.

2.16 Reports to Fund by Independent Public Accountants The
Custodian shall provide the Fund, at such times as the Fund
may reasonably require, with reports by independent public
accountants on the accounting system, internal accounting
control and procedures for safeguarding securities, futures
contracts and options on futures contracts, including domestic
securities deposited and/or maintained in a U.S. Securities
System, relating to the services provided by the Custodian
under this Contract; such reports shall be of sufficient scope
and in sufficient detail, as may reasonably be required by the
Fund to provide reasonable assurance that any material
inadequacies would be disclosed by such examination, and, if
there are no such inadequacies, the reports shall so state.

3. Duties of the Custodian with Respect to Property of the Fund
Held Outside of the United States

3.1 Appointment of Foreign Sub-Custodians. The Fund hereby
authorizes and instructs the Custodian to employ as
sub-custodians for the Fund's securities and other assets
maintained outside the United States the foreign banking
institutions and foreign securities depositories designated on
Schedule A hereto ("foreign sub-custodians"). Upon receipt of
"Proper Instructions", as defined in Section 5 of this
Contract, together with a certified resolution of the Fund's
Board of Directors, the Custodian and the Fund may agree to
amend Schedule A hereto from time to time

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<PAGE> 16
to designate additional foreign banking institutions and
foreign securities depositories to act as sub-custodian. Upon
receipt of Proper Instructions, the Fund may instruct the
Custodian to cease the employment of any one or more such
sub-custodians for maintaining custody of the Fund's assets.

3.2 Assets to be Held. The Custodian shall limit the securities
and other assets maintained in the custody of the foreign
sub-custodians to: (a) "foreign securities", as defined in
paragraph (c)(1) of Rule 17f-5 under the Investment Company
Act of 1940, and (b) cash and cash equivalents in such amounts
as the Custodian or the Fund may determine to be reasonably
necessary to effect the Fund's foreign securities
transactions. The Custodian shall identify on its books as
belonging to the Fund, the foreign securities of the Fund held
by each foreign sub-custodian.

3.3 Foreign Securities Systems. Except as may otherwise be agreed
upon in writing by the Custodian and the Fund, assets of the
Fund shall be maintained in a clearing agency which acts as a
securities depository or in a book-entry system for the
central handling of securities located outside the United
States (each, a "Foreign Securities System") only through
arrangements implemented by the foreign banking institutions
serving as sub-custodians pursuant to the terms hereof
(Foreign Securities Systems and U.S. Securities Systems are
collectively referred to herein as the "Securities System").
Where possible, such arrangements shall include entry into
agreements containing the provisions set forth in Section 3.5
hereof.

3.4 Holding Securities. The Custodian may hold securities and
other non-cash property for all of its customers, including
the Fund, with a foreign sub-custodian in a single account
that is identified as belonging to the Custodian for the
benefit of its customers, provided however, that (i) the
records of the Custodian with respect to securities and other
non-cash property of the Fund which are maintained in such
account shall identify by book-entry those securities and
other non-cash property belonging to the Fund and (ii) the
Custodian shall require that securities and other non- cash
property so held by the foreign sub-custodian be held
separately from any assets of the foreign sub-custodian or of
others.

3.5 Agreements with Foreign Banking Institutions. Each agreement
with a foreign banking institution shall provide that: (a) the
Fund's assets will not be

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<PAGE> 17
subject to any right, charge, security interest, lien or claim
of any kind in favor of the foreign banking institution or its
creditors or agent, except a claim of payment for their safe
custody or administration; (b) beneficial ownership of the
Fund's assets will be freely transferable without the payment
of money or value other than for custody or administration;
(c) adequate records will be maintained identifying the assets
as belonging to the Fund; (d) officers of or auditors employed
by, or other representatives of the Custodian, including to
the extent permitted under applicable law the independent
public accountants for the Fund, will be given access to the
books and records of the foreign banking institution relating
to its actions under its agreement with the Custodian; and (e)
assets of the Fund held by the foreign sub-custodian will be
subject only to the instructions of the Custodian or its
agents.

3.6 Access of Independent Accountants of the Fund. Upon request of
the Fund, the Custodian will use its best efforts to arrange
for the independent accountants of the Fund to be afforded
access to the books and records of any foreign banking
institution employed as a foreign sub-custodian insofar as
such books and records relate to the performance of such
foreign banking institution under its agreement with the
Custodian.

3.7 Reports by Custodian. The Custodian will supply to the Fund
from time to time, as mutually agreed upon, statements in
respect of the securities and other assets of the Fund held by
foreign sub-custodians, including but not limited to an
identification of entities having possession of the Fund's
securities and other assets and advices or notifications of
any transfers of securities to or from each custodial account
maintained by a foreign banking institution for the Custodian
on behalf of the Fund indicating, as to securities acquired
for the Fund, the identity of the entity having physical
possession of such securities.

3.8 Transactions in Foreign Custody Account. (a) Except as
otherwise provided in paragraph (b) of this Section 3.8, the
provision of Sections 2.2 and 2.7 of this Contract shall
apply, mutatis mutandis to the foreign securities of the Fund
held outside the United States by foreign sub-custodians. (b)
Notwithstanding any provision of this Contract to the
contrary, settlement and payment for securities received for
the account of the Fund and delivery of securities maintained
for the account of the Fund may be effected in accordance with
the customary established securities trading or

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<PAGE> 18
securities processing practices and procedures in the
jurisdiction or market in which the transaction occurs,
including, without limitation, delivering securities to the
purchaser thereof or to a dealer therefor (or an agent for
such purchaser or dealer) against a receipt with the
expectation of receiving later payment for such securities
from such purchaser or dealer. (c) Securities maintained in
the custody of a foreign sub-custodian may be maintained in
the name of such entity's nominee to the same extent as set
forth in Section 2.3 of this Contract, and the Fund agrees to
hold any such nominee harmless from any liability as a holder
of record of such securities.

3.9 Liability of Foreign Sub-Custodians. Each agreement pursuant
to which the Custodian employs a foreign banking institution
as a foreign sub-custodian shall require the institution to
exercise reasonable care in the performance of its duties and
to indemnify, and hold harmless, the Custodian and each Fund
from and against any loss, damage, cost, expense, liability or
claim arising out of or in connection with the institution's
performance of such obligations. At the election of the Fund,
it shall be entitled to be subrogated to the rights of the
Custodian with respect to any claims against a foreign banking
institution as a consequence of any such loss, damage, cost,
expense, liability or claim if and to the extent that the Fund
has not been made whole for any such loss, damage, cost,
expense, liability or claim.

3.10 Liability of Custodian. The Custodian shall be liable for the
acts or omissions of a foreign banking institution to the same
extent as set forth with respect to sub-custodians generally
in this Contract and, regardless of whether assets are
maintained in the custody of a foreign banking institution, a
foreign securities depository or a branch of a U.S. bank as
contemplated by paragraph 3.13 hereof, the Custodian shall not
be liable for any loss, damage, cost, expense, liability or
claim resulting from nationalization, expropriation, currency
restrictions, or acts of war or terrorism or any loss where
the sub-custodian has otherwise exercised reasonable care.
Notwithstanding the foregoing provisions of this paragraph
3.10, in delegating custody duties to State Street London
Ltd., the Custodian shall not be relieved of any
responsibility to the Fund for any loss due to such
delegation, except such loss as may result from (a) political
risk (including, but not limited to, exchange control
restrictions, confiscation, expropriation, nationalization,
insurrection, civil

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<PAGE> 19
strife or armed hostilities) or (b) other losses (excluding a
bankruptcy or insolvency of State Street London Ltd. not
caused by political risk) due to Acts of God, nuclear incident
or other losses under circumstances where the Custodian and
State Street London Ltd. have exercised reasonable care.

3.11 Reimbursement for Advances. If the Fund requires the Custodian
to advance cash or securities for any purpose including the
purchase or sale of foreign exchange or of contracts for
foreign exchange, or in the event that the Custodian or its
nominee shall incur or be assessed any taxes, charges,
expenses, assessments, claims or liabilities in connection
with the performance of this Contract, except such as may
arise from its or its nominee's own negligent action,
negligent failure to act or willful misconduct, any property
at any time held for the account of the Fund shall be security
therefor and should the Fund fail to repay the Custodian
promptly, the Custodian shall be entitled to utilize available
cash and to dispose of the Fund assets to the extent necessary
to obtain reimbursement.

3.12 Monitoring Responsibilities. The Custodian shall furnish
annually to the Fund, during the month of June, information
concerning the foreign sub-custodians employed by the
Custodian. Such information shall be similar in kind and scope
to that furnished to the Fund in connection with the initial
approval of this Contract. In addition, the Custodian will
promptly inform the Fund in the event that the Custodian
learns of a material adverse change in the financial condition
of a foreign sub-custodian or any material loss of the assets
of the Fund or in the case of any foreign sub-custodian not
the subject of an exemptive order from the Securities and
Exchange Commission is notified by such foreign sub-custodian
that there appears to be a substantial likelihood that its
shareholders' equity will decline below $200 million (U.S.
dollars or the equivalent thereof) or that its shareholders'
equity has declined below $200 million (in each case computed
in accordance with generally accepted U.S. accounting
principles).

3.13 Branches of U.S. Banks. (a) Except as otherwise set forth in
this Contract, the provisions hereof shall not apply where the
custody of the Fund assets are maintained in a foreign branch
of a banking institution which is a "bank" as defined by
Section 2(a)(5) of the Investment Company Act of 1940 meeting
the qualification set forth in Section 26(a) of said Act. The
appointment of any such branch as a sub-custodian

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<PAGE> 20
shall be governed by paragraph 1 of this Contract. (b) Cash
held for the Fund in the United Kingdom shall be maintained in
an interest bearing account established for the Fund with the
Custodian's London branch, which account shall be subject to
the direction of the Custodian, State Street London Ltd. or
both.

3.14 Tax Law. The Custodian shall have no responsibility or
liability for any obligations now or hereafter imposed on the
Fund or the Custodian as custodian of the Fund by the tax law
of the United States of America or any state or political
subdivision thereof. It shall be the responsibility of the
Fund to notify the Custodian of the obligations imposed on the
Fund or the Custodian as custodian of the Fund by the tax law
of jurisdictions other than those mentioned in the above
sentence, including responsibility for withholding and other
taxes, assessments or other governmental charges,
certifications and governmental reporting. The sole
responsibility of the Custodian with regard to such tax law
shall be to use reasonable efforts to assist the Fund with
respect to any claim for exemption or refund under the tax law
of jurisdictions for which the Fund has provided such
information.

4. Payments for Repurchases or Redemptions and Sales of Shares
of the Fund

From such funds as may be available for the purpose but
subject to the limitations of the Articles of Incorporation and any applicable
votes of the Board of Directors of the Fund pursuant thereto, the Custodian
shall, upon receipt of instructions from the Transfer Agent, make funds
available for payment to holders of Shares who have delivered to the Transfer
Agent a request for redemption or repurchase of their Shares. In connection with
the redemption or repurchase of Shares of the Fund, the Custodian is authorized
upon receipt of instructions from the Transfer Agent to wire funds to or through
a commercial bank designated by the redeeming shareholders. In connection with
the redemption or repurchase of Shares of the Fund, the Custodian shall honor
checks drawn on the Custodian by a holder of Shares, which checks have been
furnished by the Fund to the holder of Shares, when presented to the Custodian
in accordance with such procedures and controls as are mutually agreed upon from
time to time between the Fund and the Custodian.

The Custodian shall receive from the distributor for the
Fund's Shares or from the Transfer Agent of the Fund and deposit into the Fund's
account such payments as are received for Shares of the Fund issued or sold from
time to time by the Fund. The Custodian will provide timely notification to the
Fund and

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<PAGE> 21
the Transfer Agent of any receipt by it of payments for Shares of the Fund.

5. Proper Instructions

Proper Instructions as used herein means a writing signed or
initialled by one or more person or persons as the Board of Directors shall have
from time to time authorized. Each such writing shall set forth the specific
transaction or type of transaction involved, including a specific statement of
the purpose for which such action is requested. Oral instructions will be
considered Proper Instructions if the Custodian reasonably believes them to have
been given by a person authorized to give such instructions with respect to the
transaction involved. The Fund shall cause all oral instructions to be confirmed
in writing. Upon receipt of a certificate of the Secretary or an Assistant
Secretary as to the authorization by the Board of Directors of the Fund
accompanied by a detailed description of procedures approved by the Board of
Directors, Proper Instructions may include communications effected directly
between electro-mechanical or electronic devices provided that the Board of
Directors and the Custodian are satisfied that such procedures afford adequate
safeguards for the Fund's assets. For purposes of this Section, Proper
Instructions shall include instructions received by the Custodian pursuant to
any three-party agreement which requires a segregated asset account in
accordance with Section 2.12.

6. Actions Permitted without Express Authority

The Custodian may in its discretion, without express authority
from the Fund:

1) make payments to itself or others for minor expenses of
handling securities or other similar items relating to its
duties under this Contract, provided that all such payments
shall be accounted for to the Fund;

2) surrender securities in temporary form for securities
in definitive form;

3) endorse for collection, in the name of the Fund, checks,
drafts and other negotiable instruments; and

4) in general, attend to all non-discretionary details in
connection with the sale, exchange, substitution, purchase,
transfer and other dealings with the securities and property
of the Fund except as otherwise directed by the Board of
Directors of the Fund.

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<PAGE> 22
7. Evidence of Authority

The Custodian shall be protected in acting upon any
instructions, notice, request, consent, certificate or other instrument or paper
believed by it to be genuine and to have been properly executed by or on behalf
of the Fund. The Custodian may receive and accept a certified copy of a vote of
the Board of Directors of the Fund as conclusive evidence (a) of the authority
of any person to act in accordance with such vote or (b) of any determination or
of any action by the Board of Directors pursuant to the Articles of
Incorporation as described in such vote, and such vote may be considered as in
full force and effect until receipt by the Custodian of written notice to the
contrary.

8. Duties of Custodian with Respect to the Books of Account and
Calculation of Net Asset Value and Net Income

The Custodian shall cooperate with and supply necessary
information to the entity or entities appointed by the Board of Directors of the
Fund to keep the books of account of the Fund and/or compute the net asset value
per share of the outstanding shares of the Fund or, if directed in writing to do
so by the Fund, shall itself keep such books of account and/or compute such net
asset value per share. If so directed, the Custodian shall also calculate daily
the net income of the Fund as described in the Fund's currently effective
prospectus and shall advise the Fund and the Transfer Agent daily of the total
amounts of such net income and, if instructed in writing by an officer of the
Fund to do so, shall advise the Transfer Agent periodically of the division of
such net income among its various components. The calculations of the net asset
value per share and the daily income of the Fund shall be made at the time or
times described from time to time in the Fund's currently effective prospectus.

9. Records

The Custodian shall create and maintain all records relating
to its activities and obligations under this Contract in such manner as will
meet the obligations of the Fund under the Investment Company Act of 1940, with
particular attention to Section 31 thereof and Rules 31a-1 and 31a-2 thereunder.
All such records shall be the property of the Fund and shall at all times during
the regular business hours of the Custodian be open for inspection by duly
authorized officers, employees or agents of the Fund and employees and agents of
the Securities and Exchange Commission. The Custodian shall, at the Fund's
request, supply the Fund with a tabulation of securities owned by the Fund and
held by the Custodian and shall, when requested to do so by the Fund and for
such compensation as shall be agreed upon between the Fund and the Custodian,
include certificate numbers in such tabulations.

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<PAGE> 23
10. Opinion of Fund's Independent Accountant

The Custodian shall take all reasonable action, as the Fund
may from time to time request, to obtain from year to year favorable opinions
from the Fund's independent accountants with respect to its activities hereunder
in connection with the preparation of the Fund's Form N-1A, and Form N-SAR or
other annual reports to the Securities and Exchange Commission and with respect
to any other requirements of such Commission.

11. Compensation of Custodian

The Custodian shall be entitled to reasonable compensation for
its services and expenses as Custodian, as agreed upon from time to time between
the Fund and the Custodian.

12. Responsibility of Custodian

So long as and to the extent that it is in the exercise of
reasonable care, the Custodian shall not be responsible for the title, validity
or genuineness of any property or evidence of title thereto received by it or
delivered by it pursuant to this Contract and shall be held harmless in acting
upon any notice, request, consent, certificate or other instrument reasonably
believed by it to be genuine and to be signed by the proper party or parties,
including any futures commission merchant acting pursuant to the terms of a
three-party futures or options agreement. The Custodian shall be held to the
exercise of reasonable care in carrying out the provisions of this Contract, but
shall be kept indemnified by and shall be without liability to the Fund for any
action taken or omitted by it in good faith without negligence. It shall be
entitled to rely on and may act upon advice of counsel (who may be counsel for
the Fund) on all matters, and shall be without liability for any action
reasonably taken or omitted pursuant to such advice.

Except as may arise from the Custodian's own negligence or
willful misconduct or the negligence or willful misconduct of a sub-custodian or
agent, the Custodian shall be without liability to the Fund for any loss,
liability, claim or expense resulting from or caused by; (i) events or
circumstances beyond the reasonable control of the Custodian or any
sub-custodian or Securities System or any agent or nominee of any of the
foregoing, including, without limitation, nationalization or expropriation,
imposition of currency controls or restrictions, the interruption, suspension or
restriction of trading on or the closure of any securities market, power or
other mechanical or technological failures or interruptions, computer viruses or
communications disruptions, acts of war or terrorism, riots, revolutions, work
stoppages, natural disasters or other similar events or acts; (ii) errors by the
Fund or the Investment Advisor in their instructions to the Custodian provided
such instructions

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<PAGE> 24
have been in accordance with this Contract; (iii) the insolvency of or acts or
omissions by a Securities System; (iv) any delay or failure of any broker, agent
or intermediary, central bank or other commercially prevalent payment or
clearing system to deliver to the Custodian's sub-custodian or agent securities
purchased or in the remittance or payment made in connection with securities
sold; (v) any delay or failure of any company, corporation, or other body in
charge of registering or transferring securities in the name of the Custodian,
the Fund, the Custodian's sub-custodians, nominees or agents or any
consequential losses arising out of such delay or failure to transfer such
securities including non-receipt of bonus, dividends and rights and other
accretions or benefits; (vi) delays or inability to perform its duties due to
any disorder in market infrastructure with respect to any particular security or
Securities System; and (vii) any provision of any present or future law or
regulation or order of the United States of America, or any state thereof, or
any other country, or political subdivision thereof or of any court of competent
jurisdiction.

The Custodian shall be liable for the acts or omissions of a
foreign banking institution to the same extent as set forth with respect to
sub-custodians generally in this Contract.

If the Fund requires the Custodian to take any action with
respect to securities, which action involves the payment of money or which
action may, in the opinion of the Custodian, result in the Custodian or its
nominee assigned to the Fund being liable for the payment of money or incurring
liability of some other form, the Fund, as a prerequisite to requiring the
Custodian to take such action, shall provide indemnity to the Custodian in an
amount and form satisfactory to it.

If the Fund requires the Custodian, its affiliates,
subsidiaries or agents, to advance cash or securities for any purpose (including
but not limited to securities settlements, foreign exchange contracts and
assumed settlement) or in the event that the Custodian or its nominee shall
incur or be assessed any taxes, charges, expenses, assessments, claims or
liabilities in connection with the performance of this Contract, except such as
may arise from its or its nominee's own negligent action, negligent failure to
act or willful misconduct, any property at any time held for the account of the
Fund shall be security therefor and should the Fund fail to repay the Custodian
promptly, the Custodian shall be entitled to utilize available cash and to
dispose of the Fund assets to the extent necessary to obtain reimbursement.

In no event shall the Custodian be liable for indirect,
special or consequential damages.

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<PAGE> 25
13. Effective Period, Termination and Amendment

This Contract shall become effective as of its execution,
shall continue in full force and effect until terminated as hereinafter
provided, may be amended at any time by mutual agreement of the parties hereto
and may be terminated by either party by an instrument in writing delivered or
mailed, postage prepaid to the other party, such termination to take effect not
sooner than thirty (30) days after the date of such delivery or mailing;
provided, however that the Custodian shall not act under Section 2.10 hereof in
the absence of receipt of an initial certificate of the Secretary or an
Assistant Secretary that the Board of Directors of the Fund has approved the
initial use of a particular U.S. Securities System, as required by Rule 17f-4
under the Investment Company Act of 1940, as amended and that the Custodian
shall not act under Section 2.11 hereof in the absence of receipt of an initial
certificate of the Secretary or an Assistant Secretary that the Board of
Directors has approved the initial use of the Direct Paper System; provided
further, however, that the Fund shall not amend or terminate this Contract in
contravention of any applicable federal or state regulations, or any provision
of the Articles of Incorporation, and further provided, that the Fund may at any
time by action of its Board of Directors (i) substitute another bank or trust
company for the Custodian by giving notice as described above to the Custodian,
or (ii) immediately terminate this Contract in the event of the appointment of a
conservator or receiver for the Custodian by the Comptroller of the Currency or
upon the happening of a like event at the direction of an appropriate regulatory
agency or court of competent jurisdiction.

Upon termination of the Contract, the Fund shall pay to the
Custodian such compensation as may be due as of the date of such termination and
shall likewise reimburse the Custodian for its costs, expenses and
disbursements.

14. Successor Custodian

If a successor custodian shall be appointed by the Board of
Directors of the Fund, the Custodian shall, upon termination, deliver to such
successor custodian at the office of the Custodian, duly endorsed and in the
form for transfer, all securities then held by it hereunder and shall transfer
to an account of the successor custodian all of the Fund's securities held in a
Securities System.

If no such successor custodian shall be appointed, the
Custodian shall, in like manner, upon receipt of a certified copy of a vote of
the Board of Directors of the Fund, deliver at the office of the Custodian and
transfer such securities, funds and other properties in accordance with such
vote.

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<PAGE> 26
In the event that no written order designating a successor
custodian or certified copy of a vote of the Board of Directors shall have been
delivered to the Custodian on or before the date when such termination shall
become effective, then the Custodian shall have the right to deliver to a bank
or trust company, which is a "bank" as defined in the Investment Company Act of
1940, doing business in Boston, Massachusetts, of its own selection, having an
aggregate capital, surplus, and undivided profits, as shown by its last
published report, of not less than $25,000,000, all securities, funds and other
properties held by the Custodian and all instruments held by the Custodian
relative thereto and all other property held by it under this Contract and to
transfer to an account of such successor custodian all of the Fund's securities
held in any Securities System. Thereafter, such bank or trust company shall be
the successor of the Custodian under this Contract.

In the event that securities, funds and other properties
remain in the possession of the Custodian after the date of termination hereof
owing to failure of the Fund to procure the certified copy of the vote referred
to or of the Board of Directors to appoint a successor custodian, the Custodian
shall be entitled to fair compensation for its services during such period as
the Custodian retains possession of such securities, funds and other properties
and the provisions of this Contract relating to the duties and obligations of
the Custodian shall remain in full force and effect.

15. Interpretive and Additional Provisions

In connection with the operation of this Contract, the
Custodian and the Fund may from time to time agree on such provisions
interpretive of or in addition to the provisions of this Contract as may in
their joint opinion be consistent with the general tenor of this Contract. Any
such interpretive or additional provisions shall be in a writing signed by both
parties and shall be annexed hereto, provided that no such interpretive or
additional provisions shall contravene any applicable federal or state
regulations or any provision of the Articles of Incorporation of the Fund. No
interpretive or additional provisions made as provided in the preceding sentence
shall be deemed to be an amendment of this Contract.

16. Massachusetts Law to Apply

This Contract shall be construed and the provisions thereof
interpreted under and in accordance with laws of the Commonwealth of
Massachusetts.

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<PAGE> 27
17. Prior Contracts

This Contract supersedes and terminates, as of the date
hereof, all prior contracts between the Fund and the Custodian relating to the
custody of the Fund's assets.

18. Reproduction of Documents

This Contract and all schedules, exhibits, attachments and
amendments hereto may be reproduced by any photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar process. The parties hereto
all/each agree that any such reproduction shall be admissible in evidence as the
original itself in any judicial or administrative proceeding, whether or not the
original is in existence and whether or not such reproduction was made by a
party in the regular course of business, and that any enlargement, facsimile or
further reproduction of such reproduction shall likewise be admissible in
evidence.

19. Shareholder Communications Election

Securities and Exchange Commission Rule 14b-2 requires banks
which hold securities for the account of customers to respond to requests by
issuers of securities for the names, addresses and holdings of beneficial owners
of securities of that issuer held by the bank unless the beneficial owner has
expressly objected to disclosure of this information. In order to comply with
the rule, the Custodian needs the Fund to indicate whether it authorizes the
Custodian to provide the Fund's name, address, and share position to requesting
companies whose securities the Fund owns. If the Fund tells the Custodian "no",
the Custodian will not provide this information to requesting companies. If the
Fund tells the Custodian "yes" or does not check either "yes" or "no" below, the
Custodian is required by the rule to treat the Fund as consenting to disclosure
of this information for all securities owned by the Fund or any funds or
accounts established by the Fund. For the Fund's protection, the Rule prohibits
the requesting company from using the Fund's name and address for any purpose
other than corporate communications. Please indicate below whether the Fund
consents or objects by checking one of the alternatives below.

YES [ ] The Custodian is authorized to release the
Fund's name, address, and share positions.

NO [ ] The Custodian is not authorized to release the
Fund's name, address, and share positions.

IN WITNESS WHEREOF, each of the parties has caused this
instrument to be executed in its name and behalf by its duly

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<PAGE> 28
authorized representative and its seal to be hereunder affixed as of the _____
day of _______________, 1997.

Attest: PAX WORLD GROWTH FUND, INC.

______________________________ By:___________________________
[Name] [Name]
Secretary [Title]

Attest: STATE STREET BANK AND TRUST
COMPANY

______________________________ By:__________________________
[Name] [Name]
Secretary Executive Vice President

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<PAGE> 29
Schedule A

The following foreign banking institutions and foreign
securities depositories have been approved by the Board of Directors of Pax
World Growth Fund, Inc. for use as sub-custodians for the Fund's securities and
other assets:

(Insert banks and securities depositories)

Certified:

By:______________________________
[Name]
[Title]

Dated:_______________, 1997

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<PAGE> 1
Exhibit 8(b)

Data Access Services Addendum
to Custodian Agreement

AGREEMENT between PAX WORLD GROWTH FUND, INC. (the "Customer") and
STATE STREET BANK AND TRUST COMPANY ("State Street").

PREAMBLE

WHEREAS, State Street has been appointed as custodian of certain
assets of the Customer pursuant to a certain Custodian Agreement (the "Custodian
Agreement") dated as of _______________, 1997;

WHEREAS, State Street has developed and utilizes proprietary
accounting and other systems, including State Street's proprietary Multicurrency
HORIZON(R) Accounting System, in its role as custodian of the Customer, and
maintains certain Customer-related data ("Customer Data") in databases under the
control and ownership of State Street (the "Data Access Services"); and

WHEREAS, State Street makes available to the Customer certain Data
Access Services solely for the benefit of the Customer, and intends to provide
additional services, consistent with the terms and conditions of this Agreement.

NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained, and for other good and valuable consideration, the
parties agree as follows:

1. SYSTEM AND DATA ACCESS SERVICES

a. System. Subject to the terms and conditions of this Agreement,
State Street hereby agrees to provide the Customer with access to State Street's
Multicurrency HORIZON(R) Accounting System and the other information systems
(collectively, the "System") as described in Attachment A, on a remote basis for
the purpose of obtaining reports, solely on computer hardware, system software
and telecommunication links, as listed in Attachment B (the "Designated
Configuration") of the Customer, or certain third parties approved by State
Street that serve as investment advisors or investment managers (the "Investment
Advisor") or independent auditors (the "Independent Auditors") of the Customer
and solely with respect to the Customer or on any designated substitute or
back-up equipment configuration with State Street's written consent, such
consent not to be unreasonably withheld.

b. Data Access Services. State Street agrees to make available to
the Customer the Data Access Services subject to the
<PAGE> 2
terms and conditions of this Agreement and data access operating standards and
procedures as may be issued by State Street from time to time. The ability of
the Customer to originate electronic instructions to State Street on behalf of
the Customer in order to (i) effect the transfer or movement of cash or
securities held under custody by State Street or (ii) transmit accounting or
other information (such transactions are referred to herein as "Client
Originated Electronic Financial Instructions"), and (iii) access data for the
purpose of reporting and analysis, shall be deemed to be Data Access Services
for purposes of this Agreement.

c. Additional Services. State Street may from time to time agree to
make available to the Customer additional Systems that are not described in the
attachments to this Agreement. In the absence of any other written agreement
concerning such additional systems, the term "System" shall include, and this
Agreement shall govern, the Customer's access to and use of any additional
System made available by State Street and/or accessed by the Customer.

2. NO USE OF THIRD PARTY SYSTEMS-LEVEL SOFTWARE

State Street and the Customer acknowledge that in connection with
the Data Access Services provided under this Agreement, the Customer will have
access, through the Data Access Services, to Customer Data and to functions of
State Street's proprietary systems; provided, however that in no event will the
Customer have direct access to any third party systems-level software that
retrieves data for, stores data from, or otherwise supports the System.

3. LIMITATION ON SCOPE OF USE

a. Designated Equipment; Designated Location. The System and the
Data Access Services shall be used and accessed solely on and through the
Designated Configuration at the offices of the Customer or the Investment
Advisor or Independent Auditor located in _______________ ("Designated
Location").

b. Designated Configuration; Trained Personnel. State Street shall
be responsible for supplying, installing and maintaining the Designated
Configuration at the Designated Location. State Street and the Customer agree
that each will engage or retain the services of trained personnel to enable both
parties to perform their respective obligations under this Agreement. State
Street agrees to use commercially reasonable efforts to maintain the System so
that it remains serviceable, provided, however, that State Street does not
guarantee or assure uninterrupted remote access use of the System.

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<PAGE> 3
c. Scope of Use. The Customer will use the System and the Data
Access Services only for the processing of securities transactions, the keeping
of books of account for the Customer and accessing data for purposes of
reporting and analysis. The Customer shall not, and shall cause its employees
and agents not to (i) permit any third party to use the System or the Data
Access Services, (ii) sell, rent, license or otherwise use the System or the
Data Access Services in the operation of a service bureau or for any purpose
other than as expressly authorized under this Agreement, (iii) use the System or
the Data Access Services for any fund, trust or other investment vehicle without
the prior written consent of State Street, (iv) allow access to the System or
the Data Access Services through terminals or any other computer or
telecommunications facilities located outside the Designated Locations, (v)
allow or cause any information (other than portfolio holdings, valuations of
portfolio holdings, and other information reasonably necessary for the
management or distribution of the assets of the Customer) transmitted from State
Street's databases, including data from third party sources, available through
use of the System or the Data Access Services to be redistributed or
retransmitted to another computer, terminal or other device for other than use
for or on behalf of the Customer or (vi) modify the System in any way, including
without limitation, developing any software for or attaching any devices or
computer programs to any equipment, system, software or database which forms a
part of or is resident on the Designated Configuration.

d. Other Locations. Except in the event of an emergency or of a
planned System shutdown, the Customer's access to services performed by the
System or to Data Access Services at the Designated Location may be transferred
to a different location only upon the prior written consent of State Street. In
the event of an emergency or System shutdown, the Customer may use any back-up
site included in the Designated Configuration or any other back-up site agreed
to by State Street, which agreement will not be unreasonably withheld. The
Customer may secure from State Street the right to access the System or the Data
Access Services through computer and telecommunications facilities or devices
complying with the Designated Configuration at additional locations only upon
the prior written consent of State Street and on terms to be mutually agreed
upon by the parties.

e. Title. Title and all ownership and proprietary rights to the
System, including any enhancements or modifications thereto, whether or not made
by State Street, are and shall remain with State Street.

f. No Modification. Without the prior written consent of State
Street, the Customer shall not modify, enhance or otherwise create derivative
works based upon the System, nor shall the Customer reverse engineer, decompile
or otherwise

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<PAGE> 4
attempt to secure the source code for all or any part of the System.

g. Security Procedures. The Customer shall comply with data access
operating standards and procedures and with user identification or other
password control requirements and other security procedures as may be issued
from time to time by State Street for use of the System on a remote basis and to
access the Data Access Services. The Customer shall have access only to the
Customer Data and authorized transactions agreed upon from time to time by State
Street and, upon notice from State Street, the Customer shall discontinue remote
use of the System and access to Data Access Services for any security reasons
cited by State Street; provided, that, in such event, State Street shall, for a
period not less than 180 days (or such other shorter period specified by the
Customer) after such discontinuance, assume responsibility to provide accounting
services under the terms of the Custodian Agreement.

h. Inspections. State Street shall have the right to inspect the use
of the System and the Data Access Services by the Customer and the Investment
Advisor to ensure compliance with this Agreement. The on-site inspections shall
be upon prior written notice to Customer and the Investment Advisor and at
reasonably convenient times and frequencies so as not to result in an
unreasonable disruption of the Customer's or the Investment Advisor's business.

4. PROPRIETARY INFORMATION

a. Proprietary Information. The Customer acknowledges and State
Street represents that the System and the databases, computer programs, screen
formats, report formats, interactive design techniques, documentation and other
information made available to the Customer by State Street as part of the Data
Access Services and through the use of the System constitute copyrighted, trade
secret, or other proprietary information of substantial value to State Street.
Any and all such information provided by State Street to the Customer shall be
deemed proprietary and confidential information of State Street (hereinafter
"Proprietary Information"). The Customer agrees that it will hold such
Proprietary Information in the strictest confidence and secure and protect it in
a manner consistent with its own procedures for the protection of its own
confidential information and to take appropriate action by instruction or
agreement with its employees who are permitted access to the Proprietary
Information to satisfy its obligations hereunder. The Customer further
acknowledges that State Street shall not be required to provide the Investment
Advisor or the Investment Auditor with access to the System unless it has first
received from the Investment Advisor and the Investment Auditor an undertaking
with respect to State Street's Proprietary

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<PAGE> 5
Information in the form of Attachment C and/or Attachment C-1 to this Agreement.
The Customer shall use all commercially reasonable efforts to assist State
Street in identifying and preventing any unauthorized use, copying or disclosure
of the Proprietary Information or any portions thereof or any of the logic,
formats or designs contained therein.

b. Cooperation. Without limitation of the foregoing, the Customer
shall advise State Street immediately in the event the Customer learns or has
reason to believe that any person to whom the Customer has given access to the
Proprietary Information, or any portion thereof, has violated or intends to
violate the terms of this Agreement, and the Customer will, at its expense,
co-operate with State Street in seeking injunctive or other equitable relief in
the name of the Customer or State Street against any such person.

c. Injunctive Relief. The Customer acknowledges that the disclosure
of any Proprietary Information, or of any information which at law or equity
ought to remain confidential, will immediately give rise to continuing
irreparable injury to State Street inadequately compensable in damages at law.
In addition, State Street shall be entitled to obtain immediate injunctive
relief against the breach or threatened breach of any of the foregoing
undertakings, in addition to any other legal remedies which may be available.

d. Survival. The provisions of this Section 4 shall survive the
termination of this Agreement.

5. LIMITATION ON LIABILITY

a. Limitation on Amount and Time for Bringing Action. The Customer
agrees any liability of State Street to the Customer or any third party arising
out of State Street's provision of Data Access Services or the System under this
Agreement shall be limited to the amount paid by the Customer for the preceding
24 months for such services. In no event shall State Street be liable to the
Customer or any other party for any special, indirect, punitive or consequential
damages even if advised of the possibility of such damages. No action,
regardless of form, arising out of this Agreement may be brought by the Customer
more than two years after the Customer has knowledge that the cause of action
has arisen.

b. Limited Warranties. NO OTHER WARRANTIES, WHETHER EXPRESS OR
IMPLIED, INCLUDING, WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, ARE MADE BY STATE STREET.
IN NO EVENT WILL STATE STREET BE LIABLE TO THE CUSTOMER OR ANY OTHER PARTY FOR
ANY CONSEQUENTIAL OR INCIDENTAL DAMAGES WHICH MAY ARISE FROM THE

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<PAGE> 6
CUSTOMER'S ACCESS TO THE SYSTEM OR USE OF INFORMATION OBTAINED THEREBY.

c. Third-Party Data. Organizations from which State Street may
obtain certain data included in the System or the Data Access Services are
solely responsible for the contents of such data, and State Street shall have no
liability for claims arising out of the contents of such third-party data,
including, but not limited to, the accuracy thereof.

d. Regulatory Requirements. As between State Street and the
Customer, the Customer shall be solely responsible for the accuracy of any
accounting statements or reports produced using the Data Access Services and the
System and the conformity thereof with any requirements of law.

e. Force Majeure. Neither party shall be liable for any costs or
damages due to delay or nonperformance under this Agreement arising out of any
cause or event beyond such party's control, including without limitation,
cessation of services hereunder or any damages resulting therefrom to the other
party, or the Customer as a result of work stoppage, power or other mechanical
failure, computer virus, natural disaster, governmental action, or communication
disruption.

6. INDEMNIFICATION

The Customer agrees to indemnify and hold State Street harmless from
any loss, damage or expense including reasonable attorney's fees, (a "loss")
suffered by State Street arising from (i) the negligence or willful misconduct
in the use by the Customer of the Data Access Services or the System, including
any loss incurred by State Street resulting from a security breach at the
Designated Location or committed by the Customer's employees or agents or the
Investment Advisor or the Independent Auditor and (ii) any loss resulting from
incorrect Client Originated Electronic Financial Instructions. State Street
shall be entitled to rely on the validity and authenticity of Client Originated
Electronic Financial Instructions without undertaking any further inquiry as
long as such instruction is undertaken in conformity with security procedures
established by State Street from time to time.

7. FEES

Fees and charges for the use of the System and the Data Access
Services and related payment terms shall be as set forth in the Custody Fee
Schedule in effect from time to time between the parties (the "Fee Schedule").
Any tariffs, duties or taxes imposed or levied by any government or governmental
agency by reason of the transactions contemplated by this Agreement, including,
without limitation, federal, state and local taxes,

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<PAGE> 7
use, value added and personal property taxes (other than income, franchise or
similar taxes which may be imposed or assessed against State Street) shall be
borne by the Customer. Any claimed exemption from such tariffs, duties or taxes
shall be supported by proper documentary evidence delivered to State Street.

8. TRAINING, IMPLEMENTATION AND CONVERSION

a. Training. State Street agrees to provide training, at a
designated State Street training facility or at the Designated Location, to the
Customer's personnel in connection with the use of the System on the Designated
Configuration. The Customer agrees that it will set aside, during regular
business hours or at other times agreed upon by both parties, sufficient time to
enable all operators of the System and the Data Access Services, designated by
the Customer, to receive the training offered by State Street pursuant to this
Agreement.

b. Installation and Conversion. State Street shall be responsible
for the technical installation and conversion ("Installation and Conversion") of
the Designated Configuration. The Customer shall have the following
responsibilities in connection with Installation and Conversion of the System:

(i) The Customer shall be solely responsible for the timely
acquisition and maintenance of the hardware and software that
attach to the Designated Configuration in order to use the
Data Access Services at the Designated
Location.

(ii) State Street and the Customer each agree that they will assign
qualified personnel to actively participate during the
Installation and Conversion phase of the System implementation
to enable both parties to perform their respective obligations
under this Agreement.

9. SUPPORT

During the term of this Agreement, State Street agrees to provide
the support services set out in Attachment D to this Agreement.

10. TERM OF AGREEMENT

a. Term of Agreement. This Agreement shall become effective on the
date of its execution by State Street and shall remain in full force and effect
until terminated as herein provided.

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<PAGE> 8
b. Termination of Agreement. Either party may terminate this
Agreement (i) for any reason by giving the other party at least one-hundred and
eighty days' prior written notice in the case of notice of termination by State
Street to the Customer or thirty days' notice in the case of notice from the
Customer to State Street of termination; or (ii) immediately for failure of the
other party to comply with any material term and condition of the Agreement by
giving the other party written notice of termination. In the event the Customer
shall cease doing business, shall become subject to proceedings under the
bankruptcy laws (other than a petition for reorganization or similar proceeding)
or shall be adjudicated bankrupt, this Agreement and the rights granted
hereunder shall, at the option of State Street, immediately terminate with
notice to the Customer. This Agreement shall in any event terminate as to any
Customer within 90 days after the termination of the Custodian Agreement
applicable to such Customer.

c. Termination of the Right to Use. Upon termination of this
Agreement for any reason, any right to use the System and access to the Data
Access Services shall terminate and the Customer shall immediately cease use of
the System and the Data Access Services. Immediately upon termination of this
Agreement for any reason, the Customer shall return to State Street all copies
of documentation and other Proprietary Information in its possession; provided,
however, that in the event that either party terminates this Agreement or the
Custodian Agreement for any reason other than the Customer's breach, State
Street shall provide the Data Access Services for a period of time and at a
price to be agreed upon by the parties.

11. MISCELLANEOUS

a. Assignment; Successors. This Agreement and the rights and
obligations of the Customer and State Street hereunder shall not be assigned by
either party without the prior written consent of the other party, except that
State Street may assign this Agreement to a successor of all or a substantial
portion of its business, or to a party controlling, controlled by, or under
common control with State Street.

b. Survival. All provisions regarding indemnification, warranty,
liability and limits thereon, and confidentiality and/or protection of
proprietary rights and trade secrets shall survive the termination of this
Agreement.

c. Entire Agreement. This Agreement and the attachments hereto
constitute the entire understanding of the parties hereto with respect to the
Data Access Services and the use of the System and supersedes any and all prior
or contemporaneous representations or agreements, whether oral or written,
between the parties as such may relate to the Data

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<PAGE> 9
Access Services or the System, and cannot be modified or altered except in a
writing duly executed by the parties. This Agreement is not intended to
supersede or modify the duties and liabilities of the parties hereto under the
Custodian Agreement or any other agreement between the parties hereto except to
the extent that any such agreement specifically refers to the Data Access
Services or the System. No single waiver or any right hereunder shall be deemed
to be a continuing waiver.

d. Severability. If any provision or provisions of this Agreement
shall be held to be invalid, unlawful, or unenforceable, the validity, legality,
and enforceability of the remaining provisions shall not in any way be affected
or impaired.

e. Governing Law. This Agreement shall be interpreted and construed
in accordance with the internal laws of The Commonwealth of Massachusetts
without regard to the conflict of laws provisions thereof.

IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement effective as of the date hereof.

STATE STREET BANK AND TRUST
COMPANY

By:______________________________
[Name]
[Title]

Date:____________________________

PAX WORLD GROWTH FUND, INC.

By:______________________________
[Name]
[Title]

Date:____________________________

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<PAGE> 10
ATTACHMENT A

Multicurrency HORIZON(R) Accounting System
System Product Description

I. The Multicurrency HORIZON(R) Accounting System is designed to
provide lot level portfolio and general ledger accounting for SEC and ERISA type
requirements and includes the following services: 1) recording of general ledger
entries; 2) calculation of daily income and expense; 3) reconciliation of daily
activity with the trial balance, and 4) appropriate automated feeding mechanisms
to (i) domestic and international settlement systems, (ii) daily, weekly and
monthly evaluation services, (iii) portfolio performance and analytic services,
(iv) customer's internal computing systems and (v) various State Street provided
information services products.

II. GlobalQuest(R) GlobalQuest(R) is designed to provide customer
access to the following information maintained on The Multicurrency HORIZON(R)
Accounting System: 1) cash transactions and balances; 2) purchases and sales; 3)
income receivables; 4) tax refund receivables; 5) daily priced positions; 6)
open trades; 7) settlement status; 8) foreign exchange transactions; 9) trade
history; and 10) daily, weekly and monthly evaluation services.

III. HORIZON(R) Gateway. HORIZON(R) Gateway provides customers with
the ability to (i) generate reports using information maintained on the
Multicurrency HORIZON(R) Accounting System which may be viewed or printed at the
customer's location; (ii) extract and download data from the Multicurrency
HORIZON(R) Accounting System; and (iii) access previous day and historical data.
The following information which may be accessed for these purposes: 1) holdings;
2) holdings pricing; 3) transactions, 4) open trades; 5) income; 6) general
ledger and 7) cash.

IV. SaFiRe(SM). SaFiRe(SM) is designed to provide the customer with
the ability to prepare its own financial reports by permitting the customer to
access customer information maintained on the Multicurrency HORIZON(R)
Accounting System, to organize such information in a flexible reporting format
and to have such reports printed on the customer's desktop or by its printing
provider.
<PAGE> 11
ATTACHMENT B

Designated Configuration
<PAGE> 12
ATTACHMENT C

Undertaking

The undersigned understands that in the course of its employment as
Investment Advisor to Pax World Growth Fund, Inc. (the "Customer") it will have
access to State Street Bank and Trust Company's ("State Street") Multicurrency
HORIZON Accounting System and other information systems (collectively, the
"System").

The undersigned acknowledges that the System and the databases,
computer programs, screen formats, report formats, interactive design
techniques, documentation, and other information made available to the
Undersigned by State Street as part of the Data Access Services provided to the
Customer and through the use of the System constitute copyrighted, trade secret,
or other proprietary information of substantial value to State Street. Any and
all such information provided by State Street to the Undersigned shall be deemed
proprietary and confidential information of State Street (hereinafter
"Proprietary Information"). The Undersigned agrees that it will hold such
Proprietary Information in confidence and secure and protect it in a manner
consistent with its own procedures for the protection of its own confidential
information and to take appropriate action by instruction or agreement with its
employees who are permitted access to the Proprietary Information to satisfy its
obligations hereunder.

The Undersigned will not attempt to intercept data, gain access to
data in transmission, or attempt entry into any system or files for which it is
not authorized. It will not intentionally adversely affect the integrity of the
System through the introduction of unauthorized code or data, or through
unauthorized deletion.

Upon notice by State Street for any reason, any right to use the
System and access to the Data Access Services shall terminate and the
Undersigned shall immediately cease use of the System and the Data Access
Services. Immediately upon notice by State Street for any reason, the
Undersigned shall return to State Street all copies of documentation and other
Proprietary Information in its possession.

PAX WORLD MANAGEMENT CORP.

By:______________________________
[Name]
[Title]

Dated:_______________, 1997
<PAGE> 13
ATTACHMENT C-1

Undertaking

The undersigned understands that in the course of its employment as
Independent Auditor to Pax World Growth Fund, Inc. (the "Customer") it will have
access to State Street Bank and Trust Company's ("State Street") Multicurrency
HORIZON Accounting System and other information systems (collectively, the
"System").

PANNELL KERR FORSTER

By:______________________________
[Name]
[Title]

Dated:_______________, 1997
<PAGE> 14
ATTACHMENT D

Support

During the term of this Agreement, State Street agrees to provide
the following on-going support services:

a. Telephone Support. The Customer Designated Persons may contact
State Street's HORIZON(R) Help Desk and Customer Assistance Center between the
hours of 8 a.m. and 6 p.m. (Eastern time) on all business days for the purpose
of obtaining answers to questions about the use of the System, or to report
apparent problems with the System. From time to time, the Customer shall provide
to State Street a list of persons, not to exceed five in number, who shall be
permitted to contact State Street for assistance (such persons being referred to
as "the Customer Designated Persons").

b. Technical Support. State Street will provide technical support to
assist the Customer in using the System and the Data Access Services. The total
amount of technical support provided by State Street shall not exceed 10
resource days per year. State Street shall provide such additional technical
support as is expressly set forth in the fee schedule in effect from time to
time between the parties (the "Fee Schedule"). Technical support, including
during installation and testing, is subject to the fees and other terms set
forth in the Fee Schedule.

c. Maintenance Support. State Street shall use commercially
reasonable efforts to correct system functions that do not work according to the
System Product Description as set forth on Attachment A in priority order in the
next scheduled delivery release or otherwise as soon as is practicable.

d. System Enhancements. State Street will provide to the Customer
any enhancements to the System developed by State Street and made a part of the
System; provided that, sixty (60) days prior to installing any such enhancement,
State Street shall notify the Customer and shall offer the Customer reasonable
training on the enhancement. Charges for system enhancements shall be as
provided in the Fee Schedule. State Street retains the right to charge for
related systems or products that may be developed and separately made available
for use other than through the System.

e. Custom Modifications. In the event the Customer desires custom
modifications in connection with its use of the System, the Customer shall make
a written request to State Street providing specifications for the desired
modification. Any custom modifications may be undertaken by State Street in its
sole discretion in accordance with the Fee Schedule.
<PAGE> 15
f. Limitation on Support. State Street shall have no obligation to
support the Customer's use of the System: (1) for use on any computer equipment
or telecommunication facilities which does not conform to the Designated
Configuration or (ii) in the event the Customer has modified the System in
breach of this Agreement.

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<PAGE> 1
Exhibit 9

Transfer Agency Services Agreement

This Transfer Agency Services Agreement (this "Agreement") is
made as of _______________, 1997 by and between PFPC INC., a Delaware
corporation ("PFPC"), and PAX WORLD GROWTH FUND, INC., a Delaware corporation
(the "Fund").

W I T N E S S E T H:

WHEREAS, the Fund is registered as an open-end management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"); and

WHEREAS, the Fund wishes to retain PFPC to serve as transfer
agent, registrar, dividend disbursing agent and shareholder servicing agent and
PFPC wishes to furnish such services.

NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained, and intending to be legally bound hereby, the
parties hereto agree as follows:

1. Definitions. As used in this Agreement:

(a) "1933 Act" means the Securities Act of 1933, as
amended.

(b) "1934 Act" means the Securities Exchange Act of 1934,
as amended.

(c) "Authorized Person" means any officer of the Fund and
any other person duly authorized by the Fund's Board
of Directors to give Oral and Written Instructions on
behalf of the Fund and listed on the Authorized
Persons Appendix attached hereto and made a part
hereof of any amendment thereto as may be received by
PFPC. An authorized Person's scope of authority may
be limited by the Fund by setting forth such
limitation in the Authorized Persons Appendix.

(d) "CEA" means the Commodities Exchange Act, as amended.

(e) "Oral Instructions" means oral instructions received
by PFPC from an Authorized Person or from a person
reasonably believed by PFPC to be an Authorized
Person.

<PAGE> 2

(f) "SEC" means the Securities and Exchange Commission.

(g) "Securities Laws" means the 1933 Act, the 1934 Act,
the 1940 Act and the CEA.

(h) "Shares" means the shares of stock of any series or
class of the Fund.

(i) "Written Instructions" means written instructions
signed by an Authorized Person and received by PFPC.
The instructions may be delivered by hand, mail,
tested telegram, cable, telex or facsimile sending
device.

2. Appointment. The Fund hereby appoints PFPC to serve as
transfer agent, registrar, dividend disbursing agent and shareholder servicing
agent to the Fund in accordance with the terms set forth in this Agreement. PFPC
accepts such appointment and agrees to furnish such services, subject to the
direction and control of the Board of Directors of the Fund.

3. Delivery of Documents. The Fund has provided or, where
applicable, will provide PFPC with the following:

(a) Certified or authenticated copies of the resolutions
of the Fund's Board of Directors, approving the
appointment of PFPC or its affiliates to provide
services to the Fund and approving this Agreement;

(b) A copy of the Fund's most recent effective
registration statement;

(d) A copy of the distribution agreement, if any, with
respect to each class of Shares of the Fund;

(e) A copy of the Fund's administration agreements if
PFPC is not providing the Fund with such services;

(f) Copies of any shareholder servicing agreements made
in respect of the Fund; and

(g) Copies (certified or authenticated where applicable)
of any and all amendments or supplements to the
foregoing.

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<PAGE> 3

4. Compliance with Rules and Regulations. In performing its
duties hereunder, PFPC will comply with all applicable requirements of the
Securities Laws and any laws, rules and regulations of governmental authorities
having jurisdiction with respect to the duties to be performed by PFPC hereunder
and will act in conformity with the instructions and directions of the Board of
Directors of the Fund which are timely delivered to PFPC. Except as specifically
set forth herein, PFPC assumes no responsibility for such compliance by the Fund
or any of its investment portfolios.

5. Instructions.

(a) Unless otherwise provided in this Agreement, PFPC shall act
only upon Oral and Written Instructions.

(b) PFPC shall be entitled to rely upon any Oral and Written
Instructions it receives from an Authorized Person (or from a person reasonably
believed by PFPC to be an Authorized Person) pursuant to this Agreement. PFPC
may assume that any Oral or Written Instructions received hereunder is not in
any way inconsistent with the provisions of organizational documents or this
Agreement or of any vote, resolution or proceeding of the Fund's board of
Directors or of the Fund's shareholders, unless and until PFPC receives Written
Instructions to the contrary.

(c) The Fund agrees to forward to PFPC Written Instructions
confirming Oral Instructions so that PFPC receives the Written Instructions by
the close of business on the same day that such Oral Instructions are received.
The fact that such confirming Written Instructions are not received by PFPC
shall in no way invalidate the transactions or enforceability of the
transactions authorized by the Oral Instructions. Where Oral or Written
Instructions reasonably appear to have been received from an Authorized Person,
PFPC shall incur no liability to the Fund in acting upon such Oral or Written
Instructions provided that PFPC's actions comply with the other provisions of
this Agreement.

6. Right to Receive Advise.

(a) Advice of the Fund. If PFPC is in doubt as to any action
it should or should not take, PFPC may request directions or advice, including
Oral or Written Instructions, from the Fund.

(b) Advice of Counsel. If PFPC shall be in doubt as to any
question of law pertaining to any action it should or should not take, PFPC may
request advice at its own cost from such counsel of its own choosing (who may be
counsel for the Fund, the Fund's investment adviser PFPC, at the option of
PFPC).

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<PAGE> 4

(c) Conflicting Advice. In the event of a conflict between
directions, advice or Oral or Written Instructions PFPC receives from the Fund,
and the advice it receives from counsel, PFPC may rely upon and follow the
advice of counsel. In the event PFPC so relies on the advice of counsel, PFPC
remains liable for any action or omission on the part of PFPC which constitutes
willful misfeasance, bad faith, gross negligence or reckless disregard by PFPC
of any duties, obligations or responsibilities set forth in this Agreement.

(d) Protection of PFPC. PFPC shall be protected in any action
its takes or does not take in reliance upon directions, advice or Oral or
Written Instructions its receives from the Fund or from counsel and which PFPC
believes, in good faith, to be consistent with those directions, advice or Oral
or Written Instructions. Nothing in this section shall be construed so as to
impose an obligation upon PFPC (i) to seek such directions, advice or Oral or
Written Instructions, or (ii) to act in accordance with such directions, advice
or Oral or Written Instructions unless, under the terms of other provisions of
this Agreement, the same is a condition of PFPC's properly taking or not taking
such action. Nothing in this subsection shall excuse PFPC when an action or
omission on the part of PFPC constitutes willful misfeasance, bad faith, gross
negligence or reckless disregard by PFPC of any duties, obligations or
responsibilities set forth in this Agreement.

7. Records. PFPC shall prepare and keep records relating to
its services to be provided hereunder as and to the extent required by section
31 of the 1940 Act and the rules and regulations thereunder. The books and
records pertaining to the Fund, which are in the possession or under the control
of PFPC, shall be the property of the Fund. The Fund and Authorized Persons
shall have access to such books and records at all times during PFPC's normal
business hours. Upon the reasonable request of the Fund, copies of any such
books and records shall be provided by PFPC to the Fund or to an Authorized
Person, at the Fund's expense.

8. Confidentiality. PFPC agrees on its own behalf and that of
its employees to keep confidential all records of the Fund and information
relating to the Fund and its shareholders (past, present and future), unless the
release of such records or information is otherwise consented to in writing by
the Fund. The Fund agrees that such consent shall not be unreasonably withheld
and may not be withheld where PFPC may be exposed to civil or criminal contempt
proceedings or when required to divulge such information or records to duly
constituted authorities.

9. Cooperation with Accountants. PFPC shall cooperate with the
Fund's independent public accountants and shall take all

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<PAGE> 5

reasonable actions in the performance of its obligations under this Agreement to
ensure that the necessary information is made available to such accountants for
the expression of their unqualified opinion, as required by the Fund.

10. Disaster Recovery. PFPC shall enter into and shall
maintain in effect with appropriate parties one or more agreements making
reasonable provisions for emergency use of electronic data processing equipment
to the extent appropriate equipment is available. In the event of equipment
failures, PFPC shall, at no additional expense to the Fund, take reasonable
steps to minimize service interruptions. PFPC shall have no liability with
respect to the loss of data or service interruptions caused by equipment
failure, provided such loss or interruption is not caused by PFPC's own willful
misfeasance, bad faith, gross negligence or reckless disregard of its duties or
obligations under, or other material noncompliance with, this Agreement.

11. Compensation. As compensation for services rendered by
PFPC during the term of this Agreement, the Fund will pay to PFPC a fee or fees
as may be agreed to from time to time in writing by the Fund and PFPC.

12. Indemnification. The Fund agrees to indemnify and hold
harmless PFPC and its affiliates from all taxes, charges, expenses, assessments,
claims and liabilities (including, without limitation, liabilities arising under
the Securities Laws and any state and foreign securities and blue sky laws, and
amendments thereto), and expenses, including (without limitation) reasonable
attorneys' fees and disbursements (collectively, "Losses"), arising directly or
indirectly from any action or omission to act which PFPC takes (i) at the
request or on the direction of or in reliance on the advice of the Fund or (ii)
upon Oral or Written Instructions. Neither PFPC, nor any of its affiliates,
shall be indemnified against any liability (or any expenses incident to such
liability) arising out of PFPC's or its affiliates' own willful misfeasance, bad
faith, gross negligence or reckless disregard of its duties and obligations
under this Agreement.

13. Responsibility of PFPC.

(a) PFPC shall be under no duty to take any action on behalf
of the Fund except as specifically set forth herein or as may be specifically
agreed to by PFPC in writing. PFPC shall be obligated to exercise care and
diligence in the performance of its duties hereunder, to act in good faith and
to use it best efforts, within reasonable limits, in performing services
provided for under this Agreement. PFPC shall be liable for any damages arising
out of PFPC's failure to perform its duties under this Agreement to the extent
such damages arise out of PFPC's

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<PAGE> 6

willful misfeasance, bad faith, gross negligence or reckless disregard of such
duties.

(b) Without limiting the generality of the foregoing or of any
other provision of this Agreement, (i) PFPC, shall not be liable for losses
beyond its control, provided that PFPC has acted in accordance with the standard
of care set forth above; and (ii) PFPC shall not be under any duty or obligation
to inquire into and shall not be liable for (A) the validity or invalidity or
authority or lack thereof of any Oral or Written Instruction, notice or other
instrument which conforms to the applicable requirements of this Agreement, and
which PFPC reasonably believes to be genuine; or (B) subject to Section 10,
delays or errors or loss of data occurring by reason of circumstances beyond
PFPC's control, including acts of civil or military authority, national
emergencies, labor difficulties, fire, flood, catastrophe, acts of God,
insurrection, war, riots or failure of the mails, transportation, communication
or power supply.

(c) Notwithstanding anything in this Agreement to the
contrary, neither PFPC nor its affiliates shall be liable to the Fund for any
consequential, special or indirect losses or damages which the Fund may incur or
suffer by or as a consequence of PFPC's or its affiliates' performance of the
services provided hereunder, whether or not the likelihood of such losses or
damages was known by PFPC or its affiliates.

14. Description of Services. Unless PFPC receives Written
Instructions to the contrary, PFPC is authorized to take, and shall take, the
following actions without Oral or Written Instructions:

(a) Services Provided on an Ongoing Basis, If Applicable.

(i) Calculate 12b-1 payments;

(ii) Maintain proper stockholder registrations;

(iii) Review new applications and correspond with
stockholders to complete or correct
information;

(iv) Direct payment processing of checks or wires;

(v) Prepare and certify stockholder lists in
conjunction with proxy solicitations;

(vi) Countersign share certificates;

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<PAGE> 7

(vii) Prepare and mail to stockholders confirmation
of activity and periodic statements;

(viii) Provide toll-free lines for direct
shareholder use, plus customer liaison staff
for on-line inquiry response;

(ix) Mail duplicate confirmations to broker-
dealers of their Funds' activity, whether
executed through the broker-dealer or
directly with PFPC;

(x) Provide periodic stockholder lists and
statistics to the Fund;

(xi) Provide detailed data for underwriter/broker
confirmations;

(xii) Prepare periodic mailing of year-end tax and
statement information;

(xiii) Notify on a timely basis the investment
adviser, accounting agent, and custodian of
Fund activity; and

(xiv) Perform other participating broker-dealer
stockholder services as may be agreed upon
from time to time.

(b) Services Provided by PFPC Under Oral or Written
Instructions (which may be standing Instructions or operating procedures).

(i) Accept and post daily Fund purchases and
redemptions;

(ii) Accept, post and perform stockholder
transfers and exchanges;

(iii) Pay dividends and other distributions;

(iv) Solicit and tabulate proxies;

(v) Issue (when requested in writing by the
stockholder) and cancel certificates; and

(vi) Perform such other duties as the Fund may
reasonably request from time to time.

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<PAGE> 8

in the manner described in the Fund's prospectus, once it receives:

(i) A purchase order;

(ii) Proper information to establish a stockholder
account; and

(iii) Confirmation of receipt or crediting of funds
for such order to the Fund's custodian.

(d) Redemption of Shares. PFPC shall redeem Shares only if
that function is properly authorized by the certificate of incorporation or
resolution of the Fund's Board of Directors. Shares shall be redeemed and
payment therefor shall be made in accordance with the Fund's prospectus when the
record holder tenders Shares in proper form and directs the method of
redemption. If Shares are received in proper form, Shares shall be redeemed
before the funds are provided to PFPC from the Fund's custodian (the
"Custodian"). If the record holder has not directed that redemption proceeds be
wired, when the Custodian provides PFPC with funds, the redemption check shall
be sent to and made payable to the record holder, unless:

(i) The surrendered certificate is drawn to the
order of an assignee or holder and the
transfer authorization is signed by the
record holder; or

(ii) Transfer authorizations are signed by the
record holder when Shares are held in book-
entry form.

When a broker-dealer notifies PFPC of a redemption desired by a customer, and
the Custodian provides PFPC with funds, PFPC shall prepare and send the
redemption check to the broker-dealer and made payable to the broker-dealer on
behalf of its customer.

(e) Dividends and Distributions. Upon receipt of a resolution
of the Fund's Board of Directors authorizing the declaration and payment of
dividends and distributions, PFPC shall issue dividends and distributions
declared by the Fund in Shares, or, upon shareholder elections, pay such
dividends and distributions in cash, if provided for in the Fund's prospectus.
Such issuance or payment of dividends or distributions, as well as payments upon
redemption as described above, shall be made after deduction and payment of the
required amount of funds to be withheld to designated authorities in accordance
with any applicable tax laws or other laws, rules or regulations. PFPC shall
prepare and mail to the Fund's shareholders such tax forms and other
information, or permissible substitute notice, relating to dividends and
distributions paid by the Fund as are required

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<PAGE> 9
to be filed and mailed by applicable law, rule or regulation. PFPC shall
prepare, maintain and file with the IRS and other appropriate taxing authorities
reports relating to all dividends above a stipulated amount paid by the Fund to
its shareholders as required by tax or other law, rule or regulation.

(f) Shareholder Account Service.

(i) PFPC shall offer to arrange, in accordance
with the prospectus, for issuance of Shares
obtained through:

- Any pre-authorized check plan; and

- Direct purchases through broker wire orders,
checks and applications.

(ii) PFPC shall offer to arrange, in accordance
with the prospectus, for a shareholder's:

- Exchange of Shares for shares of another
fund with which the Fund has exchange
privileges;

- Automatic redemption from an account where
that shareholder participates in an
automatic redemption plan; and/or

- Redemption of Shares from an account with a
checkwriting privilege.

(g) Communications to Shareholders. Upon timely Written
Instructions, PFPC shall address and mail all communications by the Fund to its
shareholders, including:

(i) Reports to shareholders;

(ii) Confirmations of purchases and sales of Fund
shares;

(iii) Monthly or quarterly statements;

(iv) Dividend and distribution notices;

(v) Prospectus and Proxy material; and

(vi) Tax form information.

In addition, PFPC will receive and tabulate the proxy cards
for the meetings of the Fund's shareholders.

(h) Records. PFPC shall maintain records of the accounts for
each shareholder showing the following information:

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<PAGE> 10
(i) Name, address and United States Tax
Identification or Social Security number;

(ii) Number and class of Shares held and number and class
of Shares for which certificates, if any, have been
issued, including certificate numbers and
denominations;

(iii) Historical information regarding the account
of each shareholder, including dividends and
distributions paid and the date and price for
all transactions on a shareholder's account;

(iv) Any stop or restraining order placed against
a shareholder's account;

(v) Any correspondence relating to the current
maintenance of a shareholder's account;

(vi) Information with respect to withholdings; and

(vii) Any information required in order for the transfer
agent to perform any calculations contemplated or
required by this Agreement.

(i) Lost or Stolen Certificates. PFPC shall place a stop
notice against any certificate reported to be lost or stolen and comply with all
applicable federal regulatory requirements for reporting such loss or alleged
misappropriation. A new certificate shall be registered and issued only upon:

(i) The shareholder's pledge of a lost instrument
bond or such other appropriate indemnity bond
issued by a surety company approved by PFPC;
and

(ii) Completion of a release and indemnification
agreement signed by the shareholder to
protect PFPC and its affiliates.

(j) Shareholder Inspection of Stock Records. Upon a request
from any Fund shareholder to inspect stock records, PFPC will notify the Fund
and the Fund will issue instructions granting or denying each such request.
Unless PFPC has acted contrary to the Fund's instructions, the Fund agrees and
does hereby, release PFPC from any liability for refusal of permission for a
particular shareholder to inspect the Fund's stock records.

(k) Withdrawal of Shares and Cancellation of Certificates.
PFPC is hereby instructed to cancel outstanding certificates surrendered by the
Fund to reduce the total amount

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<PAGE> 11

of outstanding shares by the number of shares surrendered by the Fund.

(l) Reports and Information. PFPC shall furnish the Fund with
the Following reports:

(i) Reports as to the number of Shares sold in
each state or other jurisdiction, and

(ii) Such periodic and special reports and such other
information, including statistical information
concerning stockholder accounts as the Fund may
reasonably request.

PFPC shall furnish to the Fund's Investment Adviser,
Administrator and Custodian and other persons providing services to the Fund
with such information as they may reasonably request in connection with the
performance of their respective duties and obligations with respect to the Fund.

15. Duration and Termination. This Agreement shall continue
until terminated by the Fund or by PFPC on sixty (60) days' prior written notice
to the other party.

16. Notices. All notices and other communications, including
Written Instructions, shall be in writing or by confirming telegram, cable,
telex or facsimile sending device. If notice is sent by confirming telegram,
cable, telex or facsimile sending device, it shall be deemed to have been given
immediately. If notice is sent by first-class mail, it shall be deemed to have
been given three days after it has been mailed. If notice is sent by messenger,
it shall be deemed to have been given on the day it is delivered. Notices shall
be addressed (a) if to PFPC, at 400 Bellevue Parkway, Wilmington, Delaware
19809, Attention: Jay Nusblatt; (b) if to the Fund, c/o Pax World Management
Corp., 222 State Street, Portsmouth, NY 03801, with a copy to Broudy & Jacobson,
230 Park Avenue, New York, NY 10169, Attention: Lee D. Unterman, Esq. and Kevin
J. Lake, Esq.; or (c) at such other address as shall have been provided by like
notice to the sender of any such notice or other communication by the other
party. Any notice given by PFPC pursuant to Section 15 hereof also shall be
given to each member of the Board of Directors of the Fund at the address set
forth in the Registration Statement of the Fund as then in effect and to the
legal counsel to the Fund.

17. Amendments. This Agreement, or any term hereof, may be
changed or waived only by a written amendment, signed by the party against whom
enforcement of such change or waiver is sought.

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<PAGE> 12
18. Delegation; Assignment. PFPC may assign its rights and
delegate its duties hereunder to any wholly-owned direct or indirect subsidiary
or PNC Bank, National Association or PNC Bank Corp., provided that (i) PFPC
gives the Fund thirty (30) days' prior written notice; (ii) the delegate (or
assignee) agrees with PFPC and the Fund to comply with all relevant provisions
of the 1940 Act and the rules and regulations of the SEC thereunder and with
this Agreement; and (iii) PFPC and such delegate (or assignee) promptly provide
such information as the Fund may request, and respond to such questions as the
Fund may ask, relative to the delegation (or assignment), including (without
limitation) the capabilities of the delegate (or assignee). Except as provided
above, this Agreement and the rights and duties of PFPC hereunder may not be
assigned without the prior written consent of the Fund.

19. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

20. Further Actions. Each party agrees to perform such further
acts and execute such further documents as are necessary to effectuate the
purposes hereof.

21. Miscellaneous.

(a) Entire Agreement. This Agreement embodies the entire
agreement and understanding between the parties and supersedes all prior
agreements and understandings relating to the subject matter hereof, provided
that the parties may embody in one or more separate documents their agreement,
if any, with respect to delegated duties and Oral Instructions.

(b) Captions. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect.

(c) Governing Law. This Agreement shall be deemed to be a
contract made in Delaware and governed by Delaware law, without regard to
principles of conflicts of law.

(d) Partial Invalidity. If any provision of this Agreement
shall be held or made invalid by a court decision, statute, rule or otherwise,
the remainder of this Agreement shall not be affected thereby.

(e) Successors and Assigns. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and permitted assigns.

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<PAGE> 13

(f) Facsimile Signatures. The facsimile signature of any party
this Agreement shall constitute the valid and binding execution hereof by such
party.

IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the day and year first above written.

PFPC INC.

By: ______________________________
[Name]
[Title]

PAX WORLD GROWTH FUND, INC.

By:______________________________
[Name]
[Title]

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<PAGE> 14

Authorized Persons Appendix
---------------------------

Name (Type) Signature

- ------------------------------ ------------------------------

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<PAGE> 1
Exhibit 13

Purchase Agreement

The undersigned, PAX WORLD GROWTH FUND, INC. (the "Fund"), an
open-end, diversified management investment company and a Delaware corporation,
and PAX WORLD MANAGEMENT CORP., a Delaware corporation (the "Adviser"),
intending to be legally bound, hereby agree as follows:

1. In order to provide the Fund with its initial capital, the
Fund hereby sells to the Adviser, and the Adviser hereby purchases from the
Fund, 1,000 shares of the common stock, par value $1.00 per share, of the Fund
(collectively, the "Shares"). The Fund hereby acknowledges receipt from the
Adviser of funds in the amount of $1,000.00 in full payment for the Shares.

2. The Adviser represents and warrants to the Fund that the
Adviser is acquiring such Shares for its own account for investment and with no
present intention of distributing or reselling such Shares or any part thereof
in any transaction which would constitute a "distribution" within the meaning of
the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.

3. The Adviser hereby agrees that it will not redeem any of
the Shares except in direct proportion to the amortization of organizational
expenses by the Fund. In the event that the Fund liquidates before deferred
organizational expenses are fully amortized, then the Shares shall bear their
proportionate share of such unamortized organizational expenses.

IN WITNESS THEREOF, the parties have executed this agreement
as of the _____ day of _______________, 1997.

PAX WORLD GROWTH FUND, INC.

By:________________________________
[Name]
[Title]

PAX WORLD MANAGEMENT CORP.

By:_____________________________
[Name]
[Title]

<PAGE> 1
Exhibit 15

PAX WORLD GROWTH FUND, INC.
Distribution and Service Plan

Introduction

Pax World Growth Fund, Inc. (the "Fund") is engaged in
business as an open-end management investment company and is registered as such
under the Investment Company Act of 1940, as amended (the "Investment Company
Act").

The Distribution and Service Plan (the "Plan") set forth
below, which is designed to conform to the requirements of Rule 12b-1 under the
Act and Rule 2830 of the Rules of Conduct of the National Association of
Securities Dealers, Inc. (the "NASD"), has been adopted by the Fund.

The purpose of the Plan is to create incentives to qualified
broker-dealers and their account executives to provide distribution assistance
to their customers who are investors in the Fund, to defray the costs and
expenses associated with the preparation, printing and distribution of
prospectuses and sales literature and other promotional and distribution
activities and to provide for the servicing and maintenance of shareholder
accounts. Expenditures under this Plan by the Fund for Distribution Activities
(defined below) are primarily intended to result in the sale of shares of the
Fund within the meaning of paragraph (a)(2) of Rule 12b-1 promulgated under the
Investment Company Act.

A majority of the Board of Directors of the Fund, including a
majority of those Directors who are not "interested persons" of the Fund (as
defined in the Investment Company Act) and who have no direct or indirect
financial interest in the operation of this Plan or any agreements related to it
(the "Rule 12b-1 Directors"), have determined by votes cast in person at a
meeting called for the purpose of voting on this Plan that there is a reasonable
likelihood that adoption of this Plan will benefit the Fund and its
shareholders.

The Plan

The material aspects of the Plan are as follows:

1. Service and Distribution Activities. The Fund shall engage
qualified broker-dealers and financial institutions to distribute shares of the
Fund and to provide personal service and/or maintain shareholder accounts using
their distribution networks, including sales personnel and branch office and
central support systems. Services provided and activities undertaken to
distribute shares of the Fund are referred to herein as "Distribution
Activities"; services provided and activities

<PAGE> 2

undertaken to provide personal service and/or maintain shareholder accounts are
referred to herein as "Service Activities".

2. Payment of Service Fee. The Fund may pay up to .25 of 1%
per annum of the average daily net assets of the shares of the Fund as
compensation for providing Service Activities. The Fund shall calculate and
accrue daily amounts payable hereunder and shall pay such amounts monthly or at
such other intervals as the Board of Directors may determine.

3. Payment for Distribution Activities. As compensation for
the performance of Distribution Activities, the Fund may pay a distribution fee,
together with the service fee (described in Section 2 hereof), of up to .35 of
1% per annum of the average daily net assets of the shares of the Fund. The Fund
shall calculate and accrue daily amounts payable hereunder and shall pay such
amounts monthly or at such other intervals as the Board of Directors may
determine. Amounts payable under the Plan shall be subject to the limitations of
Rule 2830 of the Rules of Conduct of the NASD.

4. Quarterly Reports; Additional Information. An appropriate
officer of the Fund will provide to the Board of Directors of the Fund for
review, at least quarterly, a written report specifying in reasonable detail the
amounts expended for Distribution Activities (including payment of the service
fee) and the purposes for which such expenditures were made in compliance with
the requirements of Rule 12b-1. In addition, such officer will provide to the
Board of Directors of the Fund such additional information as the Board shall
from time to time reasonably request.

5. Effectiveness; Continuation. The Plan shall not take effect
until it has been approved by a vote of a majority of the outstanding voting
securities (as defined in the Investment Company Act) of the shares of the Fund.

If approved by a vote of a majority of the outstanding voting
securities (as defined in the Investment Company Act) of the shares of the Fund,
the Plan shall, unless earlier terminated in accordance with its terms, continue
in full force and effect thereafter for so long as such continuance is
specifically approved at least annually by a majority of the Board of Directors
of the Fund and a majority of the Rule 12b-1 Directors by votes cast in person
at a meeting called for the purpose of voting on the continuation of the Plan.

6. Termination. This Plan may be terminated at any time by
vote of a majority of the Rule 12b-1 Directors, or by vote of a majority of the
outstanding voting securities (as defined in the Investment Company Act) of the
shares of the Fund.

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<PAGE> 3

7. Amendments. The Plan may not be amended to change the
combined service and distribution fees to be paid as provided for in Sections 2
and 3 hereof so as to increase materially the amounts payable under this Plan
unless such amendment shall be approved by the vote of a majority of the
outstanding voting securities (as defined in the Investment Company Act) of the
shares of the Fund. All material amendments of the Plan shall be approved by a
majority of the Board of Directors of the Fund and a majority of the Rule 12b-1
Directors by votes cast in person at a meeting called for the purpose of voting
on the Plan.

8. Rule 12b-1 Directors. While the Plan is in effect, the
selection and nomination of the Directors shall be committed to the discretion
of the Rule 12b-1 Directors.

9. Records. The Fund shall preserve copies of the Plan and any
related agreements and all reports made pursuant to Section 4 hereof, for a
period of not less than six years from the date of effectiveness of the Plan,
such agreements or reports, and for at least the first two years in an easily
accessible place.

Dated: ______________, 1997

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