<PAGE>
File No.: 2-10698;
811-505.
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 74 [X]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 22
(Check appropriate box or boxes.)
PHILADELPHIA FUND, INC.
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(Exact Name of Registrant as Specified in Charter)
1200 North Federal Highway, Suite 424, Boca Raton, Florida 33432
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(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code 561-395-2155
Ronald F. Rohe, Vice President ------------
Philadelphia Fund, Inc.
1200 North Federal Highway, Suite 424, Boca Raton, Florida 33432
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(Name and Address of Agent for Service)
Approximate Date of Proposed Public Offering April 1, 1997
It is proposed that this filing will become effective (check appropriate box)
[ ] immediately upon filing pursuant to paragraph (b)
[X] on April 1, 1997 pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(1)
[ ] on (date) pursuant to paragraph (a)(1)
[ ] 75 days after filing pursuant to paragraph (a)(2)
[ ] on (date) pursuant to paragraph (a)(2) of rule 485.
If appropriate, check the following box:
[ ] this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
The Registrant has registered an indefinite number of shares of common stock
under the Securities Act of 1933 pursuant to Rule 24f-2 under the Investment
Company Act of 1940. On January 15, 1997 Registrant filed a Rule 24f-2 Notice
for Registrant's most recent fiscal year.
EXHIBIT INDEX LOCATED ON PAGE 40
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FORM N-1A
CROSS REFERENCE SHEET
(as required by Rule 404)
FORM N-lA PART A ITEM NO. PROSPECTUS LOCATION
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Item 1. Cover Page....................... Cover Page
Item 2. Synopsis......................... Expenses of the Fund;
Item 3. Condensed Financial Information.. Financial Highlights;
Performance
Item 4. General Description of........... Cover Page; Invest-
Registrant ment Goal and
Policy; Options
Transactions; Futures
Contracts; Investment
Limitations
Item 5. Management of the Fund........... Management of the
Fund, Back Cover
Item 6. Capital Stock and Other
Securities....................... Dividends, Capital
Gains Distributions,
and Taxes; Rights of
Ownership
Item 7. Purchase of Securities Being
Offered.......................... Purchase of Shares;
Calculation of Net
Asset Value
Item 8. Redemption or Repurchase......... Redemption of Shares
Item 9. Pending Legal Proceedings........ Not Applicable
LOCATION IN STATE-
MENT OF ADDITIONAL
FORM N-1A PART B ITEM NO. INFORMATION
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Item 10. Cover Page....................... Cover Page
Item 11. Table of Contents................ Table of Contents
Item 12. General Information and
History.......................... Not Applicable
Item 13. Investment Objectives and
Policies......................... Investment Goal and
Policy; Options
Transactions; Futures
Contracts
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Item 14. Management of the Fund........... Officers and
Directors; Additional
Information about the
Investment Advisor
Item 15. Control Persons and Principal
Holders of Securities............ Not Applicable
Item 16. Investment Advisory and
Other Services................... Officers and
Directors; Addi-
tional Information
about the Investment
Advisor
Item 17. Brokerage Allocation............. Brokerage
Item 18. Capital Stock and Other
Securities....................... Prospectus-Rights
of Ownership
Item 19. Purchase, Redemption and Pricing
of Securities Being Offered ..... Further Information
Regarding Sale of
Shares; Redemption of
Shares; Distribution
Item 20. Tax Status....................... Prospectus-Dividends,
Capital Gains
Distributions, and
Taxes
Item 21. Underwriters..................... Principal Underwriter
Item 22. Calculations of Performance Data. Calculation of
Performance Data;
Comparisons and
Advertisements
Item 23. Financial Statements............. Financial Statements
FORM N-1A PART C ITEM NO. LOCATION IN PART C
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Item 24. Financial Statements and
Exhibits......................... Financial Statements
and Exhibits
Item 25. Persons Controlled By or Under
Common Control with Registrant... Persons Controlled by
or under Common
Control with
Registrant
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Item 26. Number of Holders of Securities.. Number of Holders
of Securities
Item 27. Indemnification.................. Indemnification
Item 28. Business and Other Connections
of Investment Advisor............ Business and Other
Connections of
Investment Advisor
Item 29. Principal Underwriters........... Principal Under-
writers
Item 30. Location of Accounts and Records. Location of
Accounts and
Records
Item 31. Management Services.............. Management Services
Item 32. Undertakings..................... Undertakings
<PAGE>
PART A
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PHILADELPHIA FUND, INC.
1200 NORTH FEDERAL HIGHWAY
SUITE 424
BOCA RATON, FLORIDA
561-395-2155
PROSPECTUS - APRIL 1, 1997
A Management-Type
Diversified Open-End
Investment Company
Philadelphia Fund is an open-end, diversified investment company offering
shares of its stock to those of the investing public whose desire and
objective is long-term growth of capital and income. The minimum initial
investment in the Fund is $1,000, and there is no minimum amount for
subsequent investments in the Fund.
This prospectus is designed to provide you with information that you
should know before investing and should be retained for future reference.
A Statement of Additional Information (dated April 1, 1997) regarding the
Fund, which is incorporated in this prospectus by reference, has been filed
with the Securities and Exchange Commission and is available from the Fund,
without charge, by writing to the above address or by calling:
1-800-749-9933
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
TABLE OF CONTENTS
PAGE
----
Expenses of the Fund . . . . . . . . . . . . . . . . . . 6
Financial Highlights . . . . . . . . . . . . . . . . . . 6
Investment Goal and Policy . . . . . . . . . . . . . . . 7
Options Transactions . . . . . . . . . . . . . . . . . . 8
Futures Contracts . . . . . . . . . . . . . . . . . . . 10
Investment Limitations . . . . . . . . . . . . . . . . . 11
Management of the Fund . . . . . . . . . . . . . . . . . 11
Purchase of Shares . . . . . . . . . . . . . . . . . . . 13
Calculation of Net Asset Value . . . . . . . . . . . . . 14
Tax Sheltered Plans . . . . . . . . . . . . . . . . . . 14
Redemption of Shares . . . . . . . . . . . . . . . . . . 15
Rights of Ownership . . . . . . . . . . . . . . . . . . 15
Dividends, Capital Gains Distributions, and Taxes . . . 16
Performance. . . . . . . . . . . . . . . . . . . . . . . 17
<PAGE>
EXPENSES OF THE FUND
--------------------
The following table has been prepared to assist the investor in
understanding the various expenses that an investor in the Fund will bear
directly or indirectly.
SHAREHOLDER TRANSACTION EXPENSES
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Maximum Sales Load Imposed on Purchases.............. none
Maximum Sales Load Imposed on Reinvested Dividends... none
Deferred Sales Load.................................. none
Redemption Fees...................................... none
ANNUAL FUND OPERATING EXPENSES
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Management Fee ...................................... .75%
Administrative Fee .................................. .25%
12b-1 Fees........................................... .26%
Other Expenses....................................... .30%
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Total Fund Operating Expenses................... 1.56%
=====
The following example illustrates the expenses that you would pay on a
$1,000 investment over various time periods assuming (1) a 5% annual rate of
return and (2) redemption at the end of each time period based on the expenses
shown above. The Fund charges no redemption fee.
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
Shareholder Expenses $16 $49 $85 $186
This example should not be considered a representation of past or future
expenses or performance. Actual expenses may be greater or lesser than those
shown. As a consequence of the Fund's Distribution Plan, long-term
shareholders may pay more than the economic equivalent of the maximum
front-end sales charge permitted by the rules of the National Association of
Securities Dealers.
FINANCIAL HIGHLIGHTS
--------------------
The data set forth under the caption "Financial Highlights" in the Annual
Report to Stockholders for the fiscal year ended November 30, 1996 is
incorporated herein by reference. Such data is covered by the Independent
Auditor's Report which is contained in the Annual Report to Stockholders.
Further information regarding the Fund's investment performance is contained
in the Annual Report to Stockholders which may be obtained from the Fund upon
request without charge.
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INVESTMENT GOAL AND POLICY
--------------------------
The Fund's investment objective is to achieve long term growth of capital
and income. This goal may be changed only by the vote of a majority of the
shares of the Fund.
The shares of Philadelphia Fund, Inc. provide a convenient way for
investors to own, at a reasonable cost, an interest in a carefully selected
and supervised portfolio of investments. The risks and opportunities are
spread over many companies in different industries. The shares, in effect,
represent ownership of a program designed and managed for long-term growth of
capital and income. The Fund operates as a diversified, open-end investment
company. This means that it will not invest more than 5% of its assets in the
securities of any one company nor will it buy more than 10% of the voting
stock of any company, and stands ready to redeem its own stock for cash at net
asset value upon the request of shareholders.
The Fund's charter permits wide flexibility in the choice of securities,
however, the Fund will not purchase securities of companies in any single
industry if such purchase would cause more than 25% of the Fund's assets to be
invested in securities of companies in such industry. Most investments will
be in common stocks traded on the principal U.S. security exchanges, but
unlisted securities may be acquired as well. Normally, the Fund does not
invest in fixed income securities, except to employ temporarily uncommitted
cash balances and during periods when, in management's judgment, a more
defensive position is warranted in light of market, economic, or financial
conditions. In such circumstances the Fund may hold cash, cash equivalents,
bonds, and/or preferred stocks to the extent deemed prudent to achieve its
investment objectives. In those situations, the Fund will only invest in
fixed income securities rated Aaa, Aa, or A by Moody's Investors Service, Inc.
("Moody's") or AAA, AA, or A by Standard & Poor's Corporation ("Standard &
Poor's").
When the Fund does invest in fixed income securities which offer
opportunities for capital appreciation and income, the Fund may purchase such
securities which are rated B-2 or lower by Moody's or B- or lower by Standard
& Poor's. These fixed income debt securities are deemed to involve a higher
risk level than investment grade debt securities. The Fund may also invest in
unrated securities when Baxter Financial Corporation, the Fund's investment
advisor ("Advisor"), believes that the terms of the security and the financial
condition of the issuer are such that the protection afforded limits risks to
a level similar to that of rated securities in which the Fund may invest.
Fixed income debt securities offer a potential for capital appreciation
because the value of the fixed income security generally fluctuates inversely
with interest rates.
The Fund has authority to invest up to 20% of its assets in the
securities of foreign companies. Investments in foreign securities involve
risks which are in addition to the usual risks inherent in domestic
investments. There may be less publicly available information about foreign
companies comparable to the reports and ratings published about companies in
the United States. Foreign companies are not generally subject to uniform
accounting, auditing, and financial reporting standards, and auditing
practices and requirements may not be comparable to those applicable to United
States companies. Foreign investments may also be affected by fluctuations in
<PAGE>
the relative rates of exchange between the currencies of different nations, by
exchange control regulations, and by indigenous economic and political
developments. There is also the possibility of expropriation,
nationalization, or confiscatory taxation, foreign exchange controls,
political or social instability, or diplomatic developments which could affect
investments in securities of issuers in those nations.
The Fund has authority to buy securities of companies organized as real
estate investment trusts.
The Fund is authorized to invest in "restricted securities" (i.e.
securities which may not be sold without registration or an exemption from
registration under the Securities Act of 1933, as amended). Ordinarily, the
Fund does not expect to have more than 5% of the Fund's total net asset value
invested in restricted securities. The Fund will not purchase such securities
if immediately after such purchase more than 15% of the Fund's net assets will
be invested in restricted or other illiquid securities.
Securities, other than options, are bought with long-term goals in view,
however, the Advisor is free to make any portfolio changes which, in its
judgment, are in the best interests of shareholders.
Because the Fund's assets are subject to price fluctuations of the
investments owned, there can be no assurance that the Fund's investment
objectives will be achieved. Management lays no claim to infallibility, but
they endeavor to apply the flexible investment policy effectively.
OPTIONS TRANSACTIONS
--------------------
The Fund may sell covered call options (options on securities owned by
the Fund) and uncovered call options (options on securities not owned by the
Fund) which are issued by the Options Clearing Corporation and listed on
national securities exchanges, from time to time. This practice may enable
the Fund to increase its income because the buyer of the option pays the Fund
a sum of cash (a premium) for the option whether or not the buyer ultimately
exercises the option. The amount of the premium is determined on the exchange
upon which the option is traded, and will depend on various factors, such as
the market price and volatility of the underlying securities and the
expiration date and exercise price of the option.
Ordinarily, call options would be sold on stocks whose market value is
not expected to appreciate above the option exercise price by the expiration
date of the option, or when the premium received plus the exercise price of
the option exceeds the price at which the Advisor expects the underlying
securities to be trading by the expiration date of the option. When the Fund
sells an option it is obligated to deliver the underlying securities until the
expiration date of the option (which may be one, two, three, six or nine
months from the date the option is issued) if the option is exercised. If the
option is exercised, the Fund would deliver the underlying securities to the
buyer if the option was a covered option or buy the underlying securities to
deliver to the purchaser of the option if the option was uncovered.
<PAGE>
The sale of covered call options should enable the Fund to increase its
income through the receipt of premium income on the call options it sells.
However, the Fund risks limiting potential gains the Fund would otherwise
realize if the market value of the underlying securities of a covered call
option appreciates above the exercise price of the option because the
purchaser will then exercise the option. In the case of uncovered call
options, the Fund risks a loss upon closing its option position if the market
price of the optioned securities at the time the option is exercised exceeds
the exercise price plus the premium received by the Fund.
The Fund may purchase call options when the Advisor believes that the
market price of the underlying securities will exceed the strike price of the
option, plus the premium the Fund must pay for the option, by the option
expiration date. If the market price of the underlying securities appreciates
after the option is purchased, the price of the option also will appreciate,
thereby affording the Fund the opportunity to resell the option at a profit
or, as an alternative, to purchase the underlying securities at the option
exercise price anytime until or on the expiration date and retain or resell
the underlying securities at their appreciated value. Purchasing call
options, however, entails the risk that the market price of the underlying
securities may decrease and the market value of the call option will also
decrease, and in these circumstances, while the Fund may sell the option, the
transaction is likely to result in a loss.
The Fund may also buy and sell put options. For the sale of a put option
the Fund receives a premium, which is determined on the exchange on which the
put is traded. The amount of the premium is influenced by the same factors as
influence the market price of call options.
The sale of a put option obligates the seller to purchase the underlying
securities at the option exercise price anytime until or on the expiration
date if the option is exercised. Alternatively, the seller may satisfy its
obligation by purchasing an identical put option for delivery to the purchaser
of the put option.
The option will be exercised if the market price of the underlying
securities is less than the strike price of the option on the expiration date
of the option. The Fund may sell put options to obtain premium income on
underlying securities whose market price the Advisor expects to increase or
remain relatively constant for the duration of the option. They may also be
sold when the Advisor believes the underlying securities are an attractive
long-term investment, despite a possible short term decline in their market
value. In these circumstances, the Fund would purchase the underlying
securities pursuant to the option rather than buy an identical put option to
close the transaction, if the option is exercised by the buyer.
The Fund also may buy put options to protect against a decline in the
market value of underlying securities that are held in the Fund's investment
portfolio. In return for paying a premium to the seller of the put option,
the Fund acquires the right to sell the underlying securities to the seller of
the option at the exercise price, thereby protecting itself against a decline
in the market price of the underlying securities. If, however, at the
expiration date of the option, the market value of the underlying securities
has not declined below the option exercise price, the Fund will not exercise
its put option.
<PAGE>
Puts and calls also may be used in combination, to hedge investments in
underlying securities. For example, if the Fund has bought a call that
entitles it to purchase underlying securities at a specified strike price, it
may also buy a put, which enables it to sell the same securities at a
specified strike price. Put options, as well as call options, are frequently
available on identical underlying securities with identical expiration dates,
but at different strike prices. In this type of hedging transaction, the Fund
might seek to buy a put option whose strike price is higher than the strike
price of an otherwise identical call option on the same underlying securities,
thereby obtaining the right to buy the underlying securities at a lower price
than the price at which it would have the right to sell the securities.
The success of options transactions depends largely on the ability of the
Advisor to predict future stock and option movements. Further, an option
position may be closed out only on an exchange which provides a secondary
market for an option of the same series. Although the Fund will generally
purchase or sell only those options for which the Advisor believes there is an
active secondary market, there is no assurance that a liquid secondary market
on an exchange will exist for any particular option. The inability to
close-out an option position could result in a loss to the Fund.
FUTURES CONTRACTS
-----------------
The Fund may buy and sell financial futures contracts and options on such
contracts. Financial futures contracts provide for the future sale by one
party and purchase by another party of a specified amount of specific
securities or currencies at a specified future time and at a specified price.
Futures contracts which are standardized as to maturity date and the
underlying financial instruments are traded on national futures exchanges.
The Fund may use financial futures and options thereon to implement a
number of hedging strategies. For example, because the purchase of a
financial futures contract requires only a relatively small initial margin
deposit, the Fund could remain exposed to the market activity of a broad-based
number of stocks contained in the futures index, while maintaining liquidity
to meet redemptions. Also, the Fund might temporarily invest available cash
in stock index futures contracts or options pending investments in securities.
These investments entail the risk that an imperfect correlation may exist
between changes in the market price of an index futures contract and the value
of the securities that comprise the index.
There are also limited risk strategies that involve combinations of
options and futures positions. For example, the Fund might purchase a futures
contract in anticipation of higher prices while simultaneously buying an
option on a futures contract to protect against the risk of lower prices.
Further, inasmuch as the Fund may purchase foreign securities which are
denominated in foreign currencies, the Fund may purchase foreign currency
futures contracts in order to hedge against fluctuations in foreign currency
exchange rates.
The Fund will be required to make a good faith margin deposit in cash or
government securities with a broker or custodian to initiate and maintain open
positions in futures contracts. A margin deposit is intended to assure
completion of the contract if it is not terminated prior to the specified
<PAGE>
settlement date. Minimum initial margin requirements are established by the
futures exchange and may be changed. Brokers may establish deposit
requirements which are higher than the exchange minimums.
After a futures contract position is opened, the value of the contract is
marked to market daily. If the futures contract price changes to the extent
that the margin on deposit does not satisfy margin requirements, payment of
"variation" (additional) margin will be required. Conversely, change in the
contract value may reduce the required margin, resulting in a repayment of
excess margin to the Fund. Variation margin payments are made to and from the
futures broker for as long as the contract remains open. The Fund expects to
earn income on its margin deposits. The Fund will not enter into futures
contract transactions to the extent that, immediately thereafter, the sum of
its initial and variation margin deposits on open contracts exceeds 5% of the
market value of the Fund's total assets.
INVESTMENT LIMITATIONS
-----------------------
The Fund has adopted the following limitations which are designed to
reduce certain risks inherent in securities investment and which may be
changed only by a vote of the holders of the majority of the voting securities
of the Fund.
The Fund will not:
(1) invest more than 5% of its gross assets in securities of any
one issuer (except U.S. Government obligations);
(2) invest more than 25% in the securities of companies in the
same industry;
(3) buy more than 10% of the voting securities of any company;
(4) borrow or lend money; or
(5) purchase securities on margin.
MANAGEMENT OF THE FUND
----------------------
The strength of Philadelphia Fund, and any success it may achieve for
shareholders, depend chiefly upon the character, experience, and judgment of
the persons managing its activities. The Board of Directors, guided by the
recommendations of the Advisor, establish the broad investment policy and,
under Maryland law, are responsible to oversee the management of the Fund.
Baxter Financial Corporation ("BFC" or the "Advisor") provides the Fund
with investment advice and recommendations regarding the investment and
reinvestment of the Fund's assets. Donald H. Baxter, President, Treasurer,
Director, and sole shareholder of the Advisor, is responsible for selecting
brokers to execute Fund portfolio transactions and is authorized to place Fund
securities transactions with dealers who sell shares of the Fund. Mr. Baxter
is primarily responsible for the day to day management of the Fund's
portfolio. He has been the Fund's portfolio manager since May, 1987. Mr.
<PAGE>
Baxter is also President and Director of the Fund and Eagle Growth Shares,
Inc., a registered investment company. BFC also serves as investment advisor
to institutional and individual investors, including Eagle Growth Shares, Inc.
The Advisor receives an investment advisory fee from the Fund which, on
an annual basis, equals .75 percent of the net assets of the Fund not
exceeding $200,000,000. The rate of this annual fee is reduced to .625
percent on net assets in excess of $200,000,000 but less than $400,000,000,
and to .50 percent on net assets in excess of $400,000,000. The fee is
payable monthly, based on the month-end net asset value of the Fund, at 1/12th
of the annual fee rate. As of November 30, 1996, the net assets of the Fund
were $97,300,315. For the fiscal year ended November 30, 1996, the Fund paid
BFC total advisory fees equal on an annual basis to .75% of the average net
assets.
The Advisor is also responsible for providing the Fund with
administrative services, such as clerical and secretarial personnel and
facilities, necessary to the administrative affairs of the Fund, pursuant to
an Administration Agreement between the Fund and the Advisor. For these
services, the Fund pays the Advisor a fee which is equal on an annual basis to
.25 percent of the net assets of the Fund. All services provided by the
Advisor are subject to the approval and the overall supervision of the Fund's
Board of Directors.
Total Fund expenses for the fiscal year ended November 30, 1996 were 1.56%
of average net assets.
Under a Distribution Plan approved by the Board of Directors as amended
on January 1, 1994, the Fund may make monthly payments of not more than 1/24
of 1% (.5% annually) of the net assets of the Fund to defray: (a) expenses
associated with the sale of Fund shares (a reimbursement plan) and (b)
services to existing shareholders. Sales expenses may include commissions and
commissions to dealers who have sold shares of the Fund, advertising and
promotional expenses, the costs of a Fund sales office and sales personnel,
printing prospectuses, communications equipment used in the sale of Fund
shares, and such other sales expenses as may be approved by the Fund's Board
of Directors. The service fee, which may not exceed on an annual basis .25%
of the average net asset value of the Fund, is intended to defray the cost of
providing personal services to the Fund's existing shareholders. Such
services may include advice and information regarding their share accounts,
the application and use of the prototype retirement plans of the Fund, a
periodic newsletter, assistance with questions or problems regarding the
Fund's transfer agent, and other information and services designed to retain
the loyalty of shareholders to the Fund and enhance the likelihood that the
shareholders will refrain from redeeming their shares. The Fund may pay these
expenses directly, or it may make payments to BFC if BFC incurs such expenses
in its capacity as an underwriter of the Fund. For the fiscal year ended
November 30, 1996, the Fund paid distribution expenses under the Plan equal to
.26% of average net assets. The NASD has adopted a rule that became effective
July 7, 1993 that has reduced and may continue to reduce the amount the Fund
may pay for sales related expenses under the Distribution Plan.
Baxter Financial Corporation is authorized to allocate brokerage
transactions to dealers that have sold Fund shares. Such transactions are
subject to the requirement to seek to obtain the best price and execution.
<PAGE>
Star Bank, N.A. acts as the Fund's custodian. American Data Services,
Inc. acts as transfer agent, dividend paying agent, and provides the Fund with
certain accounting services.
PURCHASE OF SHARES
------------------
The shares of the Fund are readily available through the underwriter of
the Fund's shares by completing the Fund Account Application which should be
remitted together with payment for the shares to Star Bank, N.A., P.O. Box
640110, Cincinnati, OH 45264-0110. Investors who are interested in purchasing
shares may also contact the Fund at 1-800-749-9933. The minimum initial
investment in the Fund is $1,000, and there is no minimum amount for
subsequent investments in the Fund. The Fund retains the right to waive the
minimum initial investment at its discretion. Purchases of shares will be
made in full and fractional shares calculated to three decimal places.
Certificates for shares of stock will not be issued, except upon written
request of the shareholder submitted to American Data Services, Inc. ("ADS")
and, if requested, ADS will issue share certificates at no charge.
Certificates for fractional shares, however, will not be issued. Shares may
also be purchased and sold through securities firms which may charge a service
fee or commission for such transactions. No fee or commission is charged on
shares which are purchased from or redeemed by the Fund directly.
The Fund reserves the right, after sending a shareholder at least ninety
(90) days prior written notice, to redeem the shares held by any shareholder
if the total value of the holder's shares does not exceed $500 as of the
proposed redemption date, unless after receipt of such notice of the proposed
redemption, the shareholder provides the Fund's transfer agent with timely
written notice that he or she objects to the proposed redemption, in which
case the shares will not be redeemed. Any redemptions by the Fund pursuant to
this procedure will be at the net asset value of the shares calculated as of
the close of the New York Stock Exchange on the stated redemption date and a
check for the redemption proceeds will be sent to the investor not more than
seven (7) days later.
The Fund also makes available an Automatic Investment Plan which enables
shareholders to make regular monthly investments in shares through automatic
charges to their bank checking accounts. The Fund's $1,000 minimum initial
investment shall be waived for Automatic Investment Plan participants making
regular monthly payments of not less than $50.00 per month.
Once an account is established, subsequent investments should be sent to
Star Bank, N.A., P.0. Box 640110, Cincinnati, OH 45264-0110. A confirmation
will be mailed to the investor showing the shares purchased, the exact price
paid for the shares, and the total number of shares that are owned.
Fund investors who purchase or redeem shares under any of the following
fund plans: the Automatic Investment Plan or the Check Withdrawal Plan will
receive confirmations of purchases and redemptions of Fund shares on a
calendar quarter basis, not later than five business days after the end of
each calendar quarter in which a transaction takes place. The confirmation
will show the date of each transaction during the period, number and price
paid or received for shares purchased or redeemed, including dividends and
<PAGE>
distributions, and total number of shares owned by the investor as of the end
of the period.
CALCULATION OF NET ASSET VALUE
------------------------------
Shares are sold at net asset value per share. The net asset value per
share is equal to the current market value of the Fund's securities
investments, plus cash and other assets, less liabilities, divided by the
number of outstanding shares (adjusted to the nearest cent). Portfolio
securities traded on a securities exchange or the NASDAQ National Market
System are valued at the closing sales price on the market on which they are
principally traded. Securities traded over-the-counter, except those that are
quoted on the NASDAQ National Market System, are valued at the prevailing
quoted bid price. Other assets and securities for which no quotations are
readily available, including restricted securities, are valued at fair value,
as determined in good faith by the Board of Directors, or a delegated person
acting pursuant to the directions of the Board. The method of valuing assets
and securities for which no quotations are available, including restricted
securities, will be reviewed at appropriate intervals by the Board.
The net asset value is computed as of the close of the New York Stock
Exchange, generally 4:00 p.m., New York City time, on each day the New York
Stock Exchange is open. Orders for Fund shares received by the Fund or its
underwriter prior to that time are priced at the net asset value next
calculated, provided the order is received in proper form together with
payment for the shares by either the Fund, or the Fund's custodian, prior to
such close of the New York Stock Exchange. Orders received subsequent to the
close of the New York Stock Exchange will be priced at the net asset value
calculated at the close of the New York Stock Exchange on the next business
day. Orders received by Star Bank, N.A. directly from investors will be
priced as of the next calculation of net asset value after the properly
completed order together with payment for the shares is received by Star Bank,
N.A.
Baxter Financial Corporation, the underwriter of the Fund, makes a
continuous offering of Fund shares.
TAX SHELTERED PLANS
-------------------
For self-employed individuals, partnerships, and corporations there is
available through the Fund a prototype Profit Sharing/Money Purchase Pension
Plan which has been approved by the Internal Revenue Service. The Profit
Sharing Plan permits an employer to make tax-deductible investments in the
Fund on behalf of each participant up to the lesser of 15% of each
participant's earned income (or compensation), or $30,000. The Money Purchase
Pension Plan permits an employer to make tax-deductible contributions on
behalf of each participant up to the lesser of 25% of earned income (or
compensation), or $30,000. If an employer adopts both the Profit Sharing Plan
and the Money Purchase Pension Plan, deductible contributions to both plans,
in the aggregate, may be made on behalf of each participant up to the lesser
of 25% of earned income (or compensation), or $30,000. Also, the Fund makes
available an Individual Retirement Account (IRA) which permits tax-deductible
investments in the Fund by certain taxpayers up to $2,000 (($4,000 for
contributions made in respect to 1997 calendar year income for a Spousal IRA)
<PAGE>
per year. All taxpayers may make nondeductible IRA contributions up to $2,000
(($4,000 for contributions made in respect to 1997 calendar year income for a
Spousal IRA) to a separate account whether or not they are eligible for a
deductible contribution. The minimum amount which must be contributed to
establish an IRA account is $1,000, and there is a $250 minimum investment
amount required to establish a Spousal IRA account. Dividends and capital
gains distributions paid on Fund shares held in a retirement plan or an IRA
will be reinvested at net asset value and accumulate free from tax until
withdrawn.
Forms to establish an IRA or Profit Sharing/Money Purchase Pension Plan
are available from the Fund or Baxter Financial Corporation.
REDEMPTION OF SHARES
--------------------
Investors may redeem their shares by requesting redemption in writing to
American Data Services, Inc., 24 West Carver Street, Location #00150,
Huntington, NY 11743. Upon redemption, the investor will receive the net
asset value of his shares calculated as of the next close of the New York
Stock Exchange (generally 4:00 p.m. New York City time) following the receipt
of properly tendered shares. A proper tender of shares means that if the
investor holds share certificates, they must be signed as registered and the
signatures must be guaranteed. To redeem shares for which certificates have
not been issued - those held for the account of the investor by American Data
Services, Inc. - all registered holders must sign and deliver to the Fund or
to American Data Services, Inc. a written request for redemption specifying
the shares to be redeemed with signatures guaranteed. A guarantee of
signature is acceptable if made by a member firm of the New York Stock
Exchange or a regional stock exchange, by a trust company, by a commercial
bank, by an overseas bank which has a New York City correspondent, by certain
credit unions, or by certain savings associations. Any questions regarding
which institutions may guarantee signatures should be directed to American
Data Services, Inc. at 1-800-525-6201. Neither the Fund nor its underwriter
charge any fee on these transactions. The Fund's policy is to pay promptly
when shares are presented for redemption; it is obligated to pay within seven
days after the date of tender, except when the securities exchanges are closed
or an emergency exists.
The Fund has reserved the right to redeem Fund shares in kind rather than
in cash should this be necessary in accordance with the applicable rules of
the Securities and Exchange Commission.
The Fund also makes available a Check Withdrawal Plan about which further
information may be obtained by writing or calling the Fund, or by obtaining a
copy of the Statement of Additional Information.
RIGHTS OF OWNERSHIP
-------------------
Each share of the Fund's common stock has an equal interest in the Fund's
assets, net investment income, and in any net capital gains realized by the
Fund and is entitled to one vote. The shares are non-assessable, fully
transferable, and redeemable at the option of the shareholder. They may be
sold only for cash, except to acquire the major portion of the assets of
<PAGE>
another investment company. They have no conversion, preemptive, or other
subscription rights. Shareholders having questions about the Fund or their
accounts may call or write to the Fund at its telephone number or address
shown on the cover of this prospectus.
The Fund is a Maryland corporation which was organized on November 30,
1984 for the purpose of continuing the operations of Philadelphia Fund, Inc.,
a Delaware corporation, which was originally established in 1923. The Fund is
the surviving corporation of a merger between the Delaware corporation and the
Fund whose sole purpose was to change the Fund's state of incorporation from
Delaware to Maryland.
Ordinarily, the Fund does not intend to hold an annual meeting of
shareholders in any year except when required under the Investment Company Act
of 1940.
DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS, AND TAXES
-------------------------------------------------
The Fund intends to continue to qualify for tax treatment under
Subchapter M of the Internal Revenue Code and to distribute to shareholders
all of its net investment income and realized net capital gains (in excess of
any available capital loss carryovers) to relieve the Fund from all Federal
income tax. The Fund will pay dividends of its net investment income on a
quarterly basis. Any capital gain distributions will be paid annually on
approximately December 31st.
Dividends and distributions paid to shareholders who are taxpayers are
subject to Federal income tax. Dividends, together with distributions of any
short-term capital gains, are taxable as ordinary income. Shareholders who
are taxpayers pay Federal income taxes at capital gains rates on realized
long-term capital gains which are distributed to them, whether or not
reinvested in the Fund and regardless of the period of time the Fund's shares
have been owned by the shareholders. Annually, the Fund will provide each
shareholder with a statement regarding the tax status of dividends and
distributions paid for the year. Dividends and capital gains distributions
paid in January ordinarily will be included in the shareholder's income for
the previous year. Shareholders may elect to receive income dividends and
capital gains distributions in additional shares of the Fund at net asset
value (calculated as of the ex-dividend date), or to receive cash.
Among other requirements, in order to maintain its favorable tax
treatment as a "regulated investment company" under the Internal Revenue Code
of 1986, gains from the sale of securities held for less than three months
must constitute less than 30% of the Fund's gross income for its fiscal year.
Premium income from the sale of options that are not exercised and net premium
income on option closing transactions are treated as capital gains.
Therefore, in order to continue to qualify for federal tax treatment as a
"regulated investment company," the Fund's gross income from the sale of
options and financial futures contracts held for less than three months and
the sale of other securities held for less than three months, in the
aggregate, must constitute less than 30% of the Fund's gross income on a
fiscal year basis.
<PAGE>
PERFORMANCE
-----------
Total return data may from time to time be included in advertisements
pertaining to the Fund. Standardized "total return" of the Fund refers to the
average annual compounded rates of return over certain periods of time that
would equate the initial amount invested in the Fund to the ending redeemable
value of the investment, and includes reinvestment of dividends and
distributions over the period for which performance is shown. The Fund may
advertise total return figures which shall represent Fund performance over one
or more time periods, including (1) one-year to date, and (2) May 1, 1987 to
date, the latter being the date on which Mr. Donald H. Baxter assumed
exclusive portfolio management responsibilities for the Fund.
Non-standardized total return quotations may also be presented. Such
quotations may exclude certain types of deductions, such as certain Fund
expenses, which would otherwise reduce total return quotations.
Prior to April 1, 1989, the Fund imposed the maximum sales load of 8.5%
on purchases. On April 1, 1989, the sales load was eliminated and a Plan of
Distribution was implemented. Standardized total return figures for periods
prior to, and for, fiscal year ended November 30, 1989 are calculated by
deducting the sales load, and total return figures for periods after November
30, 1989 will not reflect a sales load on purchases.
The Fund may also advertise its investment performance by comparison to
market indices such as the S&P Index and to mutual fund indices such as those
reported by Lipper Analytical Services, Inc. Such indices may group funds by
investment objective (in the Fund's case, typically in the "Growth and Income
Funds" category), or may involve a more general ranking reflecting the Fund's
overall performance as compared to any number or variety of funds, regardless
of investment objective.
<PAGE>
PROSPECTUS
PHILADELPHIA FUND, INC. PHILADELPHIA FUND, INC.
Established in 1923 Established 1923
1200 North Federal Highway APRIL 1, 1997
Suite 424
Boca Raton, Florida 33432
(561) 395-2155
SHAREHOLDER SERVICES
(800) 525-6201
INVESTMENT ADVISOR, ADMINISTRATOR, AND DISTRIBUTOR
Baxter Financial Corporation
1200 North Federal Highway, Suite 424
Boca Raton, Florida 33432
CUSTODIAN
Star Bank, N.A.
P.O. Box 640110
Cincinnati, OH 45264-0110
TRANSFER AGENT AND
DIVIDEND DISBURSING AGENT
American Data Services, Inc.
24 West Carver Street
Location #00150
Huntington, NY 11743
LEGAL COUNSEL
Stradley, Ronon, Stevens & Young
Great Valley Corporate Center
30 Valley Stream Parkway
Malvern, PA 19355
AUDITORS
Tait, Weller & Baker
Two Penn Center Plaza
Suite 700
Philadelphia, PA 19102-1707
Your Investment Dealer Is:
<PAGE>
PART B
------
PHILADELPHIA FUND, INC.
Statement of Additional Information
April 1, 1997
This Statement is not a prospectus, but should be read in conjunction
with the Fund's current prospectus (dated April 1, 1997). To obtain the
Prospectus please write to Philadelphia Fund, Inc., 1200 North Federal
Highway, Suite 424, Boca Raton, Florida 33432.
Or call:
Nationwide 1-800-749-9933
Florida 1-561-395-2155
Table of Contents Page
----
Investment Goal and Policy . . . . . . . . . . . . . . . . 20
Options Transactions . . . . . . . . . . . . . . . . . . . 20
Futures Contracts . . . . . . . . . . . . . . . . . . . . 21
Federal Tax Treatment of Futures Contracts . . . . . . . . 22
Investment Limitations . . . . . . . . . . . . . . . . . . 23
Further Information Regarding Sale of Shares . . . . . . . 24
Automatic Investment Plan . . . . . . . . . . . . . . . . 24
Redemption of Shares . . . . . . . . . . . . . . . . . . . 25
Check Withdrawal Plan . . . . . . . . . . . . . . . . . . 25
Officers and Directors . . . . . . . . . . . . . . . . . . 25
Brokerage. . . . . . . . . . . . . . . . . . . . . . . . . 27
Additional Information About the Investment Advisor. . . . 28
Principal Underwriter. . . . . . . . . . . . . . . . . . . 29
Distribution . . . . . . . . . . . . . . . . . . . . . . . 29
Independent Certified Public Accountant. . . . . . . . . . 31
Calculation of Performance Data. . . . . . . . . . . . . . 31
Comparisons and Advertisements . . . . . . . . . . . . . . 32
Financial Statements . . . . . . . . . . . . . . . . . . . 33
<PAGE>
The following information supplements the information set forth under
"Investment Goal and Policy", "Options Transactions", "Investment Limitations"
and "Futures Contracts" in the Prospectus.
INVESTMENT GOAL AND POLICY
--------------------------
Securities will be bought with the long-term goals of the Fund in view,
and it is the practice of the Fund not to engage in selling portfolio
securities on a short-term basis. However, the Fund may dispose of any
portfolio securities acquired at any time if, in management's judgment, such
action is in the best interests of shareholders. Management will endeavor to
apply the flexible investment policy effectively -- making shifts from bonds
to stocks, and vice versa, to meet changing conditions. If, for example, all
of the portfolio securities were replaced in one year, the portfolio turnover
rate would be 100%. It is not anticipated that the Fund's portfolio turnover
rate would exceed 100%. The portfolio turnover rate (the annual rate at which
portfolio securities are replaced) for the past ten years is set forth in the
Annual Report to stockholders for the fiscal year ended November 30, 1996
under "Financial Highlights".
OPTIONS TRANSACTIONS
--------------------
The Fund may write (sell) listed call options on its portfolio securities
(covered options). In selling an option, the Fund, effectively, agrees to
deliver, for example, 100 shares of common stock held in its portfolio at a
specified price (the "strike price") prior to the expiration date of the
option if the option is exercised by the purchaser.
If, at or near the expiration date of an option, the market price of the
optioned stock exceeds the strike price of the option, the option will be
exercised. In that event, the purchaser of the option must pay to the Fund
the strike price, and the Fund must thereupon deliver the optioned stock to
the purchaser. In this event, the Fund would lose the opportunity to take
full advantage of the increase in market price of the optioned stock. If, by
the expiration date of the option, the market price of the optioned stock
fails to exceed the strike price of the option, the option will expire
unexercised. Alternatively, the Fund might purchase an identical option for
delivery to the buyer. In this event, the cost of such option might exceed
the premium for the option sold by the Fund. The Fund retains the premium
paid for the option regardless of whether the option is exercised. Premiums
received by the Fund are treated as short-term capital gains under the
Internal Revenue Code except when the optioned stock is delivered in
connection with the transaction, in which case the total amount received by
the Fund, the premium, and the strike price are added together, and any gain
or loss will be considered long-term or short-term depending on how long the
Fund held the optioned stock.
The Fund may also sell listed options on securities which it does not own
(uncovered options). Its obligation to the buyer of an uncovered option is
the same as when it sells a covered option. If the option is exercised the
Fund must either purchase the underlying securities in the market for delivery
to the seller or it must purchase an identical option for delivery to the
purchaser.
<PAGE>
The Fund may also buy and sell listed put options. When the Fund sells a
put option, it receives a premium from the buyer and is obligated to purchase
the optioned securities at the strike price of the option on the expiration
date of the option if the option is exercised. The premium for a put option
is determined in the same manner as the premium on a call option. Similarly,
the purchase of a put option entitles the Fund to sell the optioned securities
to the option seller at the strike price of the option anytime until or on the
option expiration date.
When the Fund sells an uncovered call option or a put option, it will be
required to maintain in a segregated account, which will be "marked to market,
" with its custodian bank cash or highly liquid, short-term U.S. government
securities in an amount equal to its obligation under the call or put option.
With respect to a put option this will be an amount equal to the price of the
underlying securities it will be obligated to buy if the option is exercised.
With respect to a call option, it would be the market value of the underlying
securities it is obligated to deliver if the option is exercised.
FUTURES CONTRACTS
-----------------
The Fund may buy and sell financial futures contracts and options on
futures contracts. Futures contracts provide for the future sale by one party
and purchase by another party of a specified amount of specific securities at
a specified future time and at a specified price. Financial futures contracts
which are standardized as to maturity date and the underlying financial
instruments are traded on national futures exchanges, and include futures
contracts on equity securities, debt securities and foreign currencies.
Although index futures contracts by their terms call for settlement in
cash, in most cases the contracts are closed out before the settlement date.
Closing out an open futures position is done by taking an opposite position
("buying") a contract which has previously been "sold" or "selling" a contract
previously purchased in an identical contract to terminate the position.
Brokerage commissions are incurred when a futures contract is bought or sold.
Positions in futures contracts may be closed out only on an exchange
which provides a secondary market for such futures. However, there can be no
assurance that a liquid secondary market will exist for any particular futures
contract at any specific time. Therefore, it might not be possible to close a
futures position. In the event of adverse price movements, the Fund would
continue to be required to make daily cash payments to maintain its required
margin. In such situations, if the Fund has insufficient cash, it may have to
sell portfolio securities to meet daily margin requirements at a time when it
may be disadvantageous to do so. In addition, the Fund may be required to
make delivery of the securities underlying futures contracts it holds.
The Fund will minimize the risk that it will be unable to close out a
futures contract by only entering into futures which are traded on national
futures exchanges and for which there appears to be a liquid secondary market.
The risk of loss in trading futures contracts can be substantial, due to
the low margin deposits required. As a result, a relatively small price
movement in a futures contract may result in immediate and substantial loss
(as well as gain) to the investor. There is also the risk of loss by the Fund
<PAGE>
of margin deposits, in the event of bankruptcy of a broker with whom the Fund
has an open position in the futures contract or related option.
When the Fund has a long position in a futures contract or sells a put
option, it must establish a segregated account with its custodian bank
containing cash or highly liquid, short-term U.S. government securities in an
amount equal to the purchase price of the contract or the strike price of the
put option (less any margin on deposit). When the Fund sells a call option on
a futures contract, it must establish a segregated account with its custodian
bank containing cash or highly liquid, short-term U.S. government securities
in an amount that, when added to the amount of the margin deposit, equals the
market value of the instruments underlying the call option (but are not less
than the strike price of the call option).
FEDERAL TAX TREATMENT OF FUTURES CONTRACTS
------------------------------------------
Except for transactions the Fund has identified as hedging transactions,
the Fund is required for federal income tax purposes to recognize as income
for each taxable year its net unrealized gains and losses on certain futures
contracts as of the end of the year as well as those actually realized during
the year. In most cases, any gain or loss recognized with respect to a
futures contract is considered to be 60% long-term capital gain or loss and
40% short-term capital gain or loss, without regard to the holding period of
the contract. Furthermore, sales of futures contracts which are intended to
hedge against a change in the value of securities held by the Fund may affect
the holding period of such securities and, consequently, the nature of the
gain or loss on such securities upon disposition.
In order for the Fund to continue to qualify for Federal income tax
treatment as a regulated investment company, at least 90% of its gross income
for its taxable year must be derived from qualifying income; i.e., dividends,
interest, income derived from loans of securities, gains from the sale of
securities and other income derived with respect to the Fund's business of
investing in securities. In addition, gains realized on the sale or other
disposition of securities held for less than three months must be limited to
less than 30% of the Fund's annual gross income. It is anticipated that any
net gain realized from the closing out of futures contracts will be considered
gain from the sale of securities and, therefore, constitute qualifying income
for purposes of the 90% requirement. In order to avoid realizing excessive
gains on securities held less than three months, the Fund may be required to
defer closing futures contracts beyond the time when it would otherwise be
advantageous to do so. It is anticipated that unrealized gains on futures
contracts which have been open for less than three months as of the end of the
Fund's fiscal year and which are recognized for tax purposes, will not be
considered gains on sales of securities held less than three months for the
purpose of the 30% test.
The Fund will distribute to shareholders annually any net capital gains
which have been recognized for federal income tax purposes, including
unrealized gains at the end of the Fund's fiscal year on futures transactions.
Such distributions will be combined with distributions of capital gains
realized on the Fund's other investments.
<PAGE>
INVESTMENT LIMITATIONS
----------------------
The Investment Limitations of the Fund, including those set forth in the
Prospectus, may be changed only with the approval of the lesser of: (i) at
least 67% of the voting securities of the Fund present at a meeting if the
holders of more than 50% of the outstanding voting securities of the Fund are
present or represented by proxy, or (ii) more than 50% of the outstanding
voting securities of the Fund.
In addition to the Investment Limitations stated in the Fund's
Prospectus, the Fund may not:
buy securities to exercise control or management, issue senior
securities except that the Fund may buy and sell options); make
short sales (the Fund does not consider the sale of an uncovered call
option or financial futures contracts to be short sales); mortgage;
pledge or otherwise encumber; transfer or assign its assets to secure
debts; buy or sell real estate or real estate mortgage loans,
commodities, or commodity contracts (except the Fund may buy and sell
financial futures contracts and options thereon); acquire the
securities of any other domestic or foreign investment company or
investment fund, except in connection with a plan of merger or
consolidation with or acquisition of substantially all the assets of
such other investment company; this policy shall not prevent the Fund
from investing in the securities issued by a real estate investment
trust, provided that such Trust is not permitted to invest in real
estate or interests in real estate other than mortgages or other
security interests.
Although changes in the following restrictions are not subject to
stockholder approval, the Fund does not intend to: purchase more than 10% of
any non-voting class of securities of any issuer; own any participation in
oil, gas or mineral leases or mineral development projects, or invest more
than 15% of its assets in so-called "restricted securities" (i.e. securities
which may not be sold without registration or an exemption from registration
under the Securities Act of 1933, as amended, securities with a legal or
contractual obligation on resale, foreign securities not listed on a
recognized domestic or foreign securities exchange, securities which do not
have a bona fide market or securities not readily marketable). In purchasing
restricted securities, the Fund may be deemed to be a statutory underwriter
unless it acquires and disposes of such securities pursuant to an exemption
available under the Securities Act of 1933. If an exemption is not available,
the Fund may be required to bear the cost of registering such securities.
Ordinarily, restricted securities may be acquired at a discount from the
market price of similar securities of the issuer and, therefore, in certain
instances, may offer greater opportunity for capital appreciation. The method
of valuing restricted securities is described in the prospectus under
"Calculation of Net Asset Value".
The Fund is authorized to lend its portfolio securities and enter into
repurchase agreements. Investments in repurchase agreements involve certain
risks. For example, if the seller of the underlying securities defaults on
its obligation to repurchase the securities at a time when their value has
declined, the Fund may incur a loss upon disposition. If the seller becomes
insolvent and subject to liquidation or reorganization under the Bankruptcy
<PAGE>
Code or other laws, a bankruptcy court may determine that the underlying
securities are collateral not within the control of the Fund and, therefore,
subject to sale by the trustee in bankruptcy. Finally, it is possible that
the Fund may not be able to substantiate its interest in the underlying
securities. While management acknowledges these risks, it believes that they
can be controlled through stringent security selection criteria and careful
monitoring procedures.
The following information supplements the information in the Prospectus
under "Purchase of Shares":
FURTHER INFORMATION REGARDING
SALE OF SHARES
-----------------------------
The Fund calculates the net asset value per share at the close of the New
York Stock Exchange on days when the New York Stock Exchange is open. On
other days, the Fund will generally be closed and pricing calculations will
not be made. The New York Stock Exchange is scheduled to be open Monday
through Friday throughout the year except for New Year's Day, President's Day,
Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day. Orders for redemption and purchase will not be processed if
received when the Fund is not open for business.
The Fund will not knowingly sell its shares where, after the sale, such
shares would be owned directly, indirectly, or through a unit investment trust
by another investment company, whether a foreign or domestic in the amount of
3% or more, or by an individual or any kind of entity, owning directly,
indirectly, or through a unit investment trust in the amount of 5% or more of
the then outstanding shares of the Fund. However, this shall not prevent the
holding by the Custodian for Philadelphia Fund Investing Programs (a unit
investment trust for accumulation of shares of the Fund) or by Philadelphia
Fund International Limited required to service their respective security
holders.
The following information supplements the information in the Prospectus
under "Redemption of Shares."
AUTOMATIC INVESTMENT PLAN
-------------------------
The Automatic Investment Plan enables shareholders to make regular
monthly investments in shares through automatic charges to their bank checking
accounts. With shareholder authorization and bank approval, Star Bank, N.A.
will automatically charge the bank account for the amount specified, which
will be automatically invested in shares at the net asset value on the date
specified by the shareholder. Bank accounts will be charged on the day or a
few days before investments are credited, depending on the bank's
capabilities, and shareholders will receive a quarterly confirmation statement
showing the transactions during the calendar quarter. Participation in the
plan will begin within 30 days after receipt of a completed section 7 of the
Account Application and a voided check from your checking account. If your
bank account cannot be charged due to insufficient funds, a stop payment
order, or the closing of your bank account, the plan may be terminated and the
related investment reversed. The shareholder may change the amount of the
<PAGE>
investment or discontinue the plan at any time by writing to American Data
Services, Inc.
REDEMPTION OF SHARES
--------------------
Payments for shares redeemed, or the right of redemption, may be
suspended for any period during which the New York Stock Exchange is closed,
other than customary week-end and holiday closings or during which, by order
of the Securities and Exchange Commission, trading on the New York Stock
Exchange is restricted, or for any period during which an emergency, as
determined by order of the Commission, 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 values of its net
assets, or for such other periods as the Commission may, by order, permit for
the protection of security holders of the Fund.
CHECK WITHDRAWAL PLAN
---------------------
An investor with a minimum account balance of $5,000 who is not currently
participating in the Automatic Investment Plan may have sufficient Fund shares
automatically redeemed at regular monthly or quarterly intervals to provide
payments of $25 or more. This minimum amount is not necessarily a recommended
amount. The privilege may be exercised by a written request to American Data
Services, Inc. specifying the amount of the check to be received each month
(or each quarter as desired). Share certificates cannot be issued while the
Plan is in effect. With the Custodian's approval, payment amounts may be
revised at any time by the investor. All shares owned or purchased will be
credited to the Check Withdrawal Plan and a sufficient number of shares will
be sold from the investor's account to meet the requested withdrawal payments.
All income dividends and capital gains distributions on shares held will be
reinvested in additional shares at net asset value on the ex-dividend date.
Since the withdrawal payments represent the proceeds from the sales of shares,
there will be a reduction of invested capital to the extent that the
withdrawal payments exceed the income dividends and capital gains
distributions paid and reinvested in shares held in the account. While no
charge is contemplated on each withdrawal payment at present, the right is
reserved at any future time to deduct $1.00 from each withdrawal payment. At
present, the expenses are paid by the Fund. This Plan, upon written notice to
the Custodian, can be terminated at any time without penalty. Any subsequent
investments in this type of Plan must be $1,000 or more.
The following information supplements the information in the
Prospectus under "Management of the Fund."
OFFICERS AND DIRECTORS
----------------------
The officers and directors of the Fund and their principal business
occupations are listed below. All officers and directors hold identical
positions with Eagle Growth Shares Inc., a registered investment company, and
with the Fund. Each Director who is an "interested person" of the Fund, as
defined in Section 2(a)(19) of the Investment Company Act of 1940, is
indicated by an asterisk. All of the officers and directors aggregately own
<PAGE>
less than 1% of the securities of the Fund. Each director, except Donald H.
Baxter, receives from the Philadelphia Fund a $2,000 annual fee and $1,150 for
each quarterly Board of Director's meeting they attend. Donald H. Baxter does
not receive any annual or meeting fees as a director. Thomas J. Flaherty a
director and former officer of the Fund receives a monthly pension from the
Fund which amounted to $12,500 for the year ended November 30, 1996. Donald
P. Parson, a director of the Fund, is a partner of the firm Parson and Brown
which handles certain legal matters for the Fund. In addition, each director,
except Donald H. Baxter, receives $50 from Eagle Growth Shares for each
quarterly Board of Director's meeting they attend.
Kenneth W. McArthur, Director (61)
93 Riverwood Parkway, Toronto, Ontario, Canada, M8Y 4E4
Chairman, Shurway Capital Corp. (private investment company); formerly, Vice
President and Director, Nesbitt Investment Management; formerly President,
Chief Executive Officer, and Director, Fahnestock & Co., Inc. (securities
brokerage); formerly Senior Vice President and Chief Financial Officer,
Nesbitt Thomson Inc. (holding company).
Donald H. Baxter, Director and President* (53)
1200 North Federal Highway, Suite 424, Boca Raton, Florida 33432
Director, President, and Treasurer, Baxter Financial Corporation; Director,
Sunol Molecular Corp. (biotechnology); Director, Great Eastern Bank; formerly
Managing Member, Crown Capital Asia Limited Liability Company (private
investment company); formerly Managing Member, Baxter Biotech Ventures Limited
Company (private investment company); formerly, Portfolio Manager, Nesbitt
Thomson Asset Management, Inc.
Donald P. Parson, Director* (55)
c/o Parson & Brown, 666 Third Avenue, New York, NY 10017
Partner, Parson & Brown, Attorney at Law; Director, ITSN, Inc. (interactive
satellite kiosks); formerly, Partner, Whitman & Ransom, Attorney at Law.
Robert A. Utting, Director (73)
c/o The Royal Bank of Canada, 1 Place Ville Marie, Montreal, Quebec, Canada
H3C 3A9
President, R. A. Utting & Associates Inc. (insurance); Chairman and Director,
The Mortgage Insurance Company of Canada; formerly Vice Chairman, Royal Bank
of Canada.
Robert L. Meyer, Director (56)
c/o Ehrlich Meyer Associates, Inc., 25 Griffin Avenue,
P.O. Box 496, Bedford Hills, NY 10507
President, Ehrlich Meyer Associates, Inc.; formerly Principal Officer,
Convergent Capital Corporation (holding company); formerly Director, Vice
President, and Senior Vice President, Fahnestock & Co., Inc.
<PAGE>
James Keogh, Director (80)
202 West Lyon Farm Drive, Greenwich, CT 06831
Writer/Editor; formerly Executive Editor, TIME (newsmagazine); formerly,
Director, United States Information Agency; formerly, Executive Director, The
Business Round Table.
Thomas J. Flaherty, Director (72)
400 Ocean Road, House No. 175, Vero Beach, FL 32963
Retired. Formerly Executive Vice President, Philadelphia Fund, Inc. and Eagle
Growth Shares, Inc.; formerly, President and Director, Universal Programs,
Inc. (investment advisor); formerly, partner Fahnestock & Co.
Ronald F. Rohe, Vice President, Secretary, and Treasurer (54)
1200 North Federal Highway, Suite 424, Boca Raton, Florida 33432
Chief Operating Officer and Marketing Director, Baxter Financial Corporation;
formerly registered representative, Paine Webber Incorporated
BROKERAGE
---------
Donald H. Baxter, President of Baxter Financial Corporation, the Fund's
investment advisor and underwriter, is responsible for the selection of
brokers to execute Fund portfolio transactions. Mr. Baxter seeks to obtain
the best price and execution of Fund portfolio transactions and selects
brokers with this goal in mind. In selecting brokers, Mr. Baxter also
considers the commission rate being paid by the Fund. Commissions on listed
securities are based on competitive rates, and Mr. Baxter seeks assurance
that the commissions paid by the Fund are reasonable in relation to the rates
paid by other similar institutions which are comparable in size and portfolio
characteristics to the Fund, and commensurate with the services being provided
by the broker. To accomplish this, Mr. Baxter negotiates commission levels
with brokers with whom the Fund does business; compares the quoted commission
level, and applies his own knowledge regarding the general levels of
commissions prevailing from time to time. He also considers the value of
research services provided to the Fund by these brokers. Mr. Baxter is
permitted to pay a higher commission than another broker might charge when, in
his good faith judgment, such commission is reasonable in relation to the
value of research or brokerage services provided by such broker. During
fiscal year ended November 30, 1996, the Fund paid total brokerage commissions
of $78,518 to brokers that provided research services.
Receipt of research information, including statistical and market
analyses, economic and financial studies from other securities firms,
electronic quotation services, and on-line electronic analysis software,
enables the advisor to supplement its own research and analysis activities by
taking available views of other securities firms and is a factor considered in
selecting brokers for the Fund. Allocations of brokerage for the receipt of
research and statistical information are made in the best judgment of Mr.
Baxter and not in accordance with any formula.
<PAGE>
Baxter Financial Corporation serves as investment advisor to two
registered investment companies, the Fund and Eagle Growth Shares, Inc., and
to various institutional and individual investors. Receipt of research
information by Baxter Financial Corporation may also be of benefit to Eagle
Growth Shares, Inc. and these other private accounts.
During the fiscal years ended November 30, 1996, 1995, and 1994, the
Fund paid total brokerage commissions of $78,518, $316,500, and $166,561,
respectively. The decreased level of commissions incurred by the Fund in 1996
was due to the portfolio manager's strategy of maintaining positions in a
rising market to avoid taxes for Fund shareholders. When a portfolio position
is sold for a profit the shareholder becomes responsible to pay tax on the
capital gain created. In order for existing positions to be replaced, there
must be an obviously superior investment advantage in holding the new
security. The increase in brokerage commissions in 1995 was due to the
portfolio manager implementing a more aggressive equity posture and increasing
the equity portion of the portfolio during the middle of the year.
On over-the-counter transactions the Fund generally deals with the
principal market makers and no commissions are paid to a broker except in
situations where execution through the broker is likely to result in a savings
to the Fund.
ADDITIONAL INFORMATION
ABOUT THE INVESTMENT ADVISOR
----------------------------
The following information supplements the information in the prospectus
under "Management of the Fund."
The Investment Advisory Agreement between Baxter Financial Corporation
and the Fund was approved by the Fund's shareholders on March 19, 1991 and
became effective on April 1, 1991. The agreement requires Baxter Financial
Corporation to provide the Fund with a continuous review of and
recommendations regarding investment of the Fund's assets. The agreement
continues in force until March 31, 1998, and may be continued thereafter from
year to year if renewed annually by a majority vote of the Board of Directors
of the Fund, or by a vote of the holders of a majority of the outstanding
voting securities of the Fund, but in either case, in order to effect any such
continuance the terms of the agreement must also be approved by a majority
vote, cast in person, of those Fund Directors who are not parties to the
agreement nor interested persons of any such party, as defined by the
Investment Company Act of 1940, at a meeting called for the purpose of
considering the approval of the agreement. The agreement terminates
automatically if it is transferred or assigned by either party, which would
include a change of control of the Advisor, and may be terminated by either
party without penalty on 60 days written notice.
The Fund pays all of its own operating expenses, including: custodian and
transfer agent fees, insurance premiums, registration fees, cost of Directors'
and stockholders' meetings, distribution expenses, legal and accounting fees,
printing, and postage.
<PAGE>
During the fiscal years ended November 30, 1996, 1995, and 1994 the Fund
paid investment advisory fees to Baxter Financial Corporation totaling
$685,222, $644,614, and $640,780, respectively.
The current Administration Agreement between the Fund and Baxter
Financial Corporation requires Baxter Financial Corporation to supervise and
provide for the administrative operations of the Fund, including the provision
of office space, utilities, equipment, and clerical, secretarial, and
administrative personnel. The Administration Agreement is subject to approval
by a majority vote of disinterested directors of the Fund. It may be
terminated in the same manner, without penalty, upon 60 days written notice to
Baxter Financial Corporation, and by Baxter Financial Corporation upon 60 days
notice to the Fund.
During the fiscal years ended November 30, 1996, 1995, and 1994 the Fund
paid administration fees totaling $228,408, $214,871, and $213,593,
respectively, to Baxter Financial Corporation. American Data Services, Inc.
provides the Fund with certain accounting services.
PRINCIPAL UNDERWRITER
---------------------
The Fund's shares are offered, without sales charge, on a continuous
basis by Baxter Financial Corporation, the Fund's principal underwriter on a
"best efforts" basis.
DISTRIBUTION
------------
The Board of Directors and stockholders of the Fund approved a Plan of
Distribution in accordance with Rule l2b-1 of the Investment Company Act of
1940 (the "Distribution Plan") which provides for payment by the Fund of
expenses related to the distribution of Fund shares. Under the Distribution
Plan the Fund may make payments in any month in an amount not greater than
1/24th of 1% of the net asset value of the Fund (.5% on an annual basis) based
on the net asset value calculated on the last business day of each month.
Distribution payments may be made by the Fund directly or to Baxter
Financial Corporation for any advertising and promotional expenses incurred
which further the sale and distribution of Fund shares, including the
incremental costs of printing prospectuses, statements of additional
information, annual reports and other periodic reports for distribution to
persons who are not shareholders of the Fund; the costs of preparing and
distributing any supplemental sales literature; costs of radio, television,
newspaper and other advertising; telecommunications expenses, including the
costs of telephones, telephone lines and other communications equipment used
in the sale of Fund shares, the salary of a Marketing Director and related
support personnel, the costs of sales seminars, the costs of maintaining an
office for the sale of the Fund's shares, and to defray the costs of such
other products or services to be used to sell, or further the sale of, Fund
shares, as may be approved by the Board of Directors of the Fund. Payments
under the Distribution Plan to Baxter Financial Corporation are for actual
costs and expenses incurred or to be incurred by Baxter Financial Corporation
in connection with the distribution of Fund shares. Payments to dealers may
include commissions and "trail commissions" or service fees for services in
<PAGE>
connection with the sale or retention of Fund shares. Payments may not be
used to defray the overhead expense of Baxter Financial Corporation, interest,
or for the carry forward of expenses which are incurred which would be in
excess of the expense ceiling (.5% annually) in expectation of payment under
the Plan in future years.
During fiscal year ended November 30, 1996, the Fund paid out a total of
$238,663 under the Distribution Plan. Of that amount $228,408 was a service
fee to provide shareholders of the Fund (including persons who are indirect
shareholders through ownership of Philadelphia Fund Investing Programs) with
personal services, including advice and information regarding their share
accounts, such as information regarding account activity and other related
information; the application and use of the prototype retirement plans of the
Fund; a semiannual newsletter; assistance with questions or problems regarding
the Fund's transfer agent; and other information and services, including the
personnel, communications equipment, office space, and supplies to provide
such specified services. The remaining $10,285 paid out by the Fund, was
attributable to marketing salaries.
The Distribution Plan may be continued for one year terms if approved at
least annually by a majority vote, cast in person, of both the Board of
Directors and Disinterested Directors of the Fund, at a meeting called for the
purpose of voting on the Distribution Plan. The Distribution Plan may be
terminated at any time, without penalty, by a vote of a majority of the Fund's
disinterested directors, or by vote of a majority of the outstanding voting
securities of the Fund. The Distribution Plan terminates automatically in the
event of an "assignment" of the Plan as defined in section 2(a)(4) of the
Investment Company Act of 1940. Also, while the Distribution Plan remains in
effect the nomination of the Disinterested Directors of the Fund is committed
to the discretion of such Directors.
The Board of Directors believe there is a reasonable likelihood that the
Distribution Plan will benefit the Fund and its shareholders in light of the
perceived need to increase the sale of Fund shares. The benefits that would
accrue to the Fund by an increase in the level of sales of Fund shares are
that the Fund would have the ability to expand the investment opportunities
available to it with increased cash, certain costs of operation would be
decreased in proportion to the size of the Fund, and the Fund could benefit
from a scaled-down advisory fee rate if the Fund's net assets grow to exceed
$200,000,000 (a decrease from an annual fee of .75 percent to .625 percent of
those assets in excess of $200,000,000). Mr. Baxter, President and sole
stockholder of Baxter Financial Corporation, investment advisor of the Fund
and underwriter, would benefit from increased sales of Fund Shares.
On December 9, 1993 the Board of Directors of the Fund amended the
Distribution Plan to provide, effective January 1, 1994, out of the total
maximum distribution fee payable under the Distribution Plan, which is .5% of
the net assets value of the Fund on an annual basis, that a monthly fee, equal
on an annual basis to .25% of the net asset value of the Fund, will be paid to
BFC for providing shareholders of the Fund, with personal services, including
advice and information regarding their share accounts, the application and use
of the prototype retirement plans of the Fund, a periodic newsletter,
assistance with questions or problems regarding the Fund's transfer agent, and
other information and services designed to retain the loyalty of shareholders
<PAGE>
to the Fund and enhance the likelihood that the shareholders will refrain from
redeeming their shares. In connection with the foregoing, BFC is required to
provide personnel, communications equipment and other facilities, including
office space, supplies and the like, and, in its discretion, may make payments
to broker-dealers that are registered under the Securities Act of 1934 and
members of the National Association of Securities Dealers, Inc., for providing
shareholders of the Fund with services that are similar to those described
above.
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
----------------------------------------
Tait, Weller & Baker, Philadelphia PA, serve as the independent certified
public accountant of the Fund. As such, that firm conducts audits of the
Fund's annual and semi-annual reports to stockholders and prepares the Fund's
tax returns.
The following information supplements the information in the prospectus
under "Performance."
CALCULATION OF PERFORMANCE DATA
-------------------------------
Following are quotations of the annualized total returns for the one,
five, and ten year periods ended November 30, 1996 using the standardized
method of calculation pursuant to SEC Guidelines:
Average Annual Total Returns
----------------------------
One-Year..................... 16.04%
Five-Year.................... 14.51%
Ten-Year..................... 9.41%
As the following formula indicates, the average annual total return is
determined by multiplying a hypothetical initial purchase order of $1,000 by
the average annual compounded rate of return (including capital
appreciation/depreciation and dividends and distributions paid and reinvested)
for the stated period, less any recurring fees charged to a shareholder
account. The results are annualized and presented accordingly. The
calculation assumes that the maximum sales load is deducted from the initial
$1,000 purchase order and that all dividends and distributions are reinvested
at the net asset value on the reinvestment dates during the period. The
quotation assumes the account was completely
redeemed at the end of each one, five, and ten year period and the deduction
of all applicable charges and fees.
The SEC Guidelines provide that "average annual total return" be computed
according to the following formula:
n
P (1 + T) = ERV
<PAGE>
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 1, 5, or 10 year
periods at the end of the 1, 5, or 10 year periods
(or fractional portion thereof).
Non-standardized performance figures may also be presented in connection
with Fund advertisements. Performance figures calculated in this manner may
exclude charges which might otherwise reduce return figures, including, for
example, the sales performance over periods of time other than the one, five,
and ten year periods. Non-standardized total return figures, when furnished,
shall be accompanied by standardized total return figures which shall reflect
Fund performance over the following time periods: (1) one-year to date and May
1, 1987 to date, the latter being the date on which Mr. Donald H. Baxter
assumed exclusive portfolio management responsibilities pertaining to the
Fund, or (2) one, five, and ten year periods as of the most recent fiscal year
end of the Fund. However, notwithstanding the foregoing, standardized total
return figures for one, five, and ten year periods shall always be presented
in the Fund's Statement of Additional Information.
COMPARISONS AND ADVERTISEMENTS
------------------------------
To help investors better evaluate how an investment in the Fund might
satisfy their investment objective, Fund advertisements may discuss total
return as reported by various financial publications, or they may also compare
total return to total return as reported by other investments, indices, and
averages. Without limitation, the following publications, indices, and
averages may be used:
(a) Dow Jones Composite Average or its component averages --an
unmanaged index presently composed of 30 industrial corporation stocks (Dow
Jones Industrial Average), 15 utility company stocks and 20 transportation
company stocks. Comparisons of performance assume reinvestment of dividends.
(b) Standard & Poor's 500 Stock Index -- an unmanaged index
presently composed of 400 industrial stocks, 40 financial stocks, 40 utilities
stocks, and 20 transportation stocks. Comparisons of performance assume
reinvestment of dividends.
(c) The New York Stock Exchange composite or component indices --
unmanaged indices of all industrial, utilities, transportation, and finance
stocks listed on the New York Stock Exchange.
(d) Lipper -- Mutual Fund Performance Analysis and Lipper Mutual
Fund Indices -- measures total return and average current yield for the mutual
fund industry. Ranks individual mutual fund performance over specified time
periods assuming reinvestment of all distributions, exclusive of sales
charges.
<PAGE>
(e) Financial publications, including Business Week, Changing
Times, Financial World, Forbes, Fortune, Money Magazine, Wall Street Journal,
Barron's, which rate fund performance over various time periods.
FINANCIAL STATEMENTS
--------------------
The financial statements of the Fund for the fiscal year ended November
30, 1996, including the Portfolio of Investments, Statement of Assets and
Liabilities, Statement of Operations, Statement of Changes in Net Assets,
Notes to Financial Statements, Financial Highlights, and Independent Auditor's
Report, as set forth in the Fund' Annual Report to Stockholders for fiscal
year ended November 30, 1996, is incorporated herein by reference.
<PAGE>
PART C
------
Other Information
- -----------------
Item 24. Financial Statements and Exhibits
- -------- ---------------------------------
(a) Financial statements:
Portfolio of Investments,
November 30, 1996
Statements of Assets and Liabilities, November 30, 1996
Statement of Operations for the year ended
November 30, 1996
Statement of Changes in Net Assets for the years
ended November 30, 1996 and 1995
Notes to Financial Statements
Independent Auditor's Report
Selected Per Share Data and Ratios Ten Years Ended
11/30/96
The financial statements described above are
contained in Registrant's Annual Report to Stockholders
for the fiscal year ended November 30, 1996, which was
filed with the Commission on January 27, 1997, and are
incorporated herein by reference.
(b) Exhibits:
(1) Certificate of Incorporation.
(2) By-Laws, as amended.
Incorporated herein by reference to Exhibit 24 (b) (2) to
Post-Effective Amendment No. 74 to the Registration Statement
under the Securities Act of 1933
(3) Not applicable.
(4) Specimen of Certificate of Common Stock.
(5) Investment Advisory Agreement.
Incorporated herein by reference to Exhibit 24 (b) (5) to
Post-Effective Amendment No. 74 to the Registration Statement
under the Securities Act of 1933
<PAGE>
(6) Distribution Agreement with Baxter Financial
Corporation.
Incorporated herein by reference to Exhibit 24 (b) (6) to
Post-Effective Amendment No. 74 to the Registration Statement
under the Securities Act of 1933
(7) The former Executive Vice President who is also a
Director, receives a pension of $12,500 annually. The
pension arrangements are not set forth in formal
documents.
(8) Custody Agreement with Star Bank, N.A.
Incorporated herein by reference to Exhibit 24 (b) (8) to
Post-Effective Amendment No. 74 to the Registration Statement
under the Securities Act of 1933
(9) Administration Agreement and Amendment to
Administration Agreement.
Incorporated herein by reference to Exhibit 24 (b) (9) to
Post-Effective Amendment No. 74 to the Registration Statement
under the Securities Act of 1933
(9a) Transfer Agency and Service Agreement with
American Data Services, Inc.
Incorporated herein by reference to Exhibit 24 (b) (9a) to
Post-Effective Amendment No. 74 to the Registration Statement
under the Securities Act of 1933
(9b) Fund Accounting Services Agreement with
American Data Services, Inc.
Incorporated herein by reference to Exhibit 24 (b) (9b) to
Post-Effective Amendment No. 74 to the Registration Statement
under the Securities Act of 1933
(10) Opinion of Counsel
Filed with Rule 24f-2 Notice on January 15, 1997.
(11) Consent of Tait, Weller & Baker
Independent Certified Public Accountants.
(12) None.
(13) None.
(14) Model retirement plans.
(a) Prototype Profit Sharing/Money Purchase Pension Retirement
Plan *
<PAGE>
(b) Amendment to the Profit Sharing/Money Purchase Pension
Retirement Plan *
(c) Custodian Agreement with Application/Adoption Agreements *
(d) Individual Retirement Custodial Account under Sections 408(a)
of the Internal Revenue Code. *
* Incorporated herein by reference to Exhibit 24 (b) (14) to
Post-Effective Amendment No. 74 to the Registration
Statement under the Securities Act of 1933
(15) Distribution Plan, as amended
Incorporated herein by reference to Exhibit 24 (b) (15) to
Post-Effective Amendment No. 74 to the Registration Statement
under the Securities Act of 1933
(16) Schedule for Computation of Performance Quotations.
Item 25. Persons Controlled by or Under Common Control with Registrant
- -------- -------------------------------------------------------------
Not applicable; no person either directly or
indirectly is controlled by or under common control
with the registrant.
Item 26. Number of Holders of Securities.
- -------- --------------------------------
As of December 31, 1996:
(1) (2)
Number of Record
Title of Class Holders
-------------- ----------------
Common Stock; $1.00 4610
par value
Item 27. Indemnification.
- -------- ----------------
Section 54 of the Registrant's By-Laws provides for
indemnification, as set forth below.
With respect to the indemnification of the Officers
and Directors of the Corporation:
<PAGE>
(a) The Corporation shall indemnify each Officer and
Director made party to a proceeding, by reason of
service in such capacity, to the fullest extent,
and in the manner provided, under section 2-418 of
the Maryland General Corporation law: (i) unless
it is proved that the person seeking
indemnification did not meet the standard of
conduct set forth in subsection (b)(1) of such
section; and (ii) provided, that the Corporation
shall not indemnify any Officer or Director for
any liability to the Corporation or its security
holders arising from the willful misfeasance, bad
faith, gross negligence or reckless disregard of
the duties involved in the conduct of such
person's office.
(b) The provisions of clause (i) of paragraph (a)
herein notwithstanding, the Corporation shall
indemnify each Officer and Director against
reasonable expenses incurred in connection with
the successful defense of any proceeding to which
such Officer or Director is a party by reason of
service in such capacity.
(c) The Corporation, in the manner and to the extent
provided by applicable law, shall advance to each
Officer and Director who is made party to a
proceeding by reason of service in such capacity
the reasonable expenses incurred by such person in
connection therewith.
Item 28. Business and Other Connection of Investment Advisor.
- -------- ----------------------------------------------------
Baxter Financial Corporation is investment advisor to
the Registrant, to Eagle Growth Shares, Inc., and to
institutional and individual investment accounts; and
acts as underwriter of Shares of the Fund and of
Eagle Growth Shares, Inc.
DONALD H. BAXTER - President and Treasurer, Baxter Financial Corporation;
President and Director, Eagle Growth Shares, Inc. and Philadelphia Fund, Inc.;
Director, Great Eastern Bank; Director, Sunol Molecular Corp. (biotechnology);
formerly Managing Member, Crown Capital Asia Limited Liability Company;
formerly Managing Member, Baxter Biotech Ventures Limited Company.
RONALD F. ROHE - Chief Operating Office, Baxter Financial Corporation; Vice
President, Eagle Growth Shares, Inc. and Philadelphia Fund, Inc.; formerly
Registered Representative, Paine Webber Inc.
The address of Baxter Financial Corporation, Eagle Growth Shares, Inc.
and Philadelphia Fund, Inc. is 1200 North Federal Highway, Suite 424, Boca
Raton, FL 33432.
<PAGE>
Item 29. Principal Underwriters.
- -------- -----------------------
(a) Baxter Financial Corporation, 1200 North Federal Highway, Suite
424, Boca Raton, FL 33432 serves as principal underwriter of
the Fund. Baxter Financial Corporation also serves as
underwriter of shares of Eagle Growth Shares, Inc. Baxter
Financial Corporation also serves as investment adviser to the
Fund, Eagle Growth Shares, Inc., and to private investment
accounts.
(b) See Item 28.
(c) Not applicable
Item 30. Location for Accounts and Records.
- -------- ----------------------------------
All books and records of the Registrant are maintained and in the
possession of The Fund, at 1200 North Federal Highway, Suite 424,
Boca Raton, Florida 33432, except those which are kept by Star
Bank, N.A., the Fund's custodian, and American Data Services, Inc.,
the Fund's transfer agent, and dividend disbursing agent.
Item 31. Management Services.
- -------- --------------------
NONE.
Item 32. Undertakings.
- -------- -------------
Registrant hereby undertakes to furnish to each person to whom a
prospectus is delivered a copy of the registrant's latest Annual
Report to Stockholders upon request and without charge.
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant, Philadelphia Fund, Inc.,
certifies that it meets all of the requirements for effectiveness of this
Registration Statement pursuant to Rule 485(b) under the Securities Act of
1933, and has duly caused this Post-Effective Amendment to its Registration
Statement (Commission File Nos. 2-10698 and 811-505) to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Boca
Raton, and the State of Florida on the 10th day of March, 1997.
Philadelphia Fund, Inc.
(Registrant)
By:/s/Donald H. Baxter
----------------------------
Donald H. Baxter, President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to the Registration Statement (File No. 2-10698) has been signed below by the
following persons in the capacity and on the date indicated.
Signature Title Date
- --------- ----- ----
President, Principal
/s/Donald H.Baxter Executive Officer and March 10, 1997
- ---------------------- Director
Donald H. Baxter
/s/Ronald F. Rohe Treasurer, Principal March 10, 1997
- ---------------------- Financial Officer
Ronald F. Rohe
/s/Kenneth W. McArthur Director March 10, 1997
- ----------------------
Kenneth W. McArthur
/s/Donald P. Parson Director March 10, 1997
- ----------------------
Donald P. Parson
/s/Robert A. Utting Director March 10, 1997
- ----------------------
Robert A. Utting
/s/Robert L. Meyer Director March 10, 1997
- ----------------------
Robert L. Meyer
/s/James Keogh Director March 10, 1997
- ----------------------
James Keogh
/s/Thomas J. Flaherty Director March 10, 1997
- ----------------------
Thomas J. Flaherty
<PAGE>
EXHIBIT INDEX
-------------
PAGE
----
24(b)(1) Certificate of Incorporation 41
24(b)(4) Specimen of Certificate of Common Stock 49
24(b)(11) Consent of Tait, Weller & Baker 51
24(b)(16) Schedule for Computation of
Performance Quotations 52
<PAGE>
ARTICLES OF INCORPORATION
OF
PHILADELPHIA FUND, INC.
FIRST: WE, THE UNDERSIGNED, Stephen W. Kline, Esquire, whose
post-office address is 1100 One Franklin Plaza, Philadelphia,
Pennsylvania 19102, and Audrey C. Talley, Esquire, whose post
office address is 1100 One Franklin Plaza, Philadelphia,
Pennsylvania 19102, being at least twenty-one years of age, do,
under and by virtue of the General Laws of the State of Maryland
authorizing the formations of corporations, associate ourselves
as incorporators with the intention of forming a corporation.
SECOND: The name of the corporation is PHILADELPHIA FUND,
INC.
THIRD: The purposes for which the corporation is formed are:
To engage generally in the business of an incorporated
investment company of the management type, investing and
reinvesting as more specifically set forth herein, subject to
limitations as set forth in the By-Laws of the Corporation, its
assets in all forms of securities and other personal property, of
every kind and description; to consolidate or merge with, to
acquire and take over the assets of, and to assume the
liabilities of, any other corporation or trust with similar
powers; to make contracts; and, generally to do any or all acts
and things
<PAGE>
necessary or desirable in furtherance of any of the corporate
purposes or designed to protect, preserve, or enhance the value
of the corporate assets, or to the extent permitted to business
corporations authorized under the State of Maryland as now or may
in the future be enforced; and to do any or all of the things in
furtherance of the above purposes as natural persons might do.
To invest and reinvest its capital and any surplus and any
reserves it may have, and to acquire by exchange, purchase,
subscription, contract or otherwise, and to receive, own, hold,
guarantee, sell, assign, exchange, transfer, mortgage, pledge,
hypothecate, or otherwise dispose of and generally deal in and
with all forms of securities and investments of every kind and
description, including, but not by way of limitation, shares of
stock (preferred, common, and debentures) notes, bonds,
debentures, script, warrants, options to purchase and options to
sell securities, participation certificates, mortgages,
commercial papers, choses in action, evidences of indebtedness
and other obligations of every kind and disposition; (a) of any
private, public, quasi-public, municipal, corporation, syndicate,
association, common law trust, firm or individual existing or
carrying on business in the United States or elsewhere
throughout the world; (b) of any government, United States or
foreign, or subdivision thereof, whether state, county,
municipality or other political or government division or
subdivision;
And also, all trust, partnership or other certificates of
rights, evidencing interest in any such securities or
-2-
<PAGE>
instruments, both within and without the State of Maryland; and
while the owners of any such securities or investments to
exercise all the rights, powers, privileges of ownership or
interest in respect to the same, including the right to vote, to
subscribe for additional stock, and to purchase or exercise
"rights" in connection therewith; to do any or all acts and
things for the preservation, protection, improvement, management,
and enhancement in value thereof, or designated to accomplish any
such purpose, all to such extent as permitted under the laws of
the State of Maryland and not otherwise;
To conduct researches, investigations, and analyses of
enterprises of every kind and description in the United States
and elsewhere throughout the world.
To acquire or become interested in any such securities or
evidences of interest therein as aforesaid by original
subscription, or otherwise, and to make payment thereon as called
for, and to subscribe for the same conditionally or otherwise.
Subject to the limitations as set forth in the By-Laws of
the Corporation and other governing laws and regulations, to
acquire, and pay for in cash, stock, or evidence of indebtedness
of this Corporation or otherwise, the assets and property, and to
undertake or assume the whole or any part of the obligations or
liabilities of any person, firm, association or corporation which
is in the nature of a private investment portfolio or company or
personal holding company.
-3-
<PAGE>
To acquire, hold, use, sell, assign, lease, grant licenses
in respect of, mortgage or otherwise dispose of letters patent of
the United States or any foreign country, patent rights, licenses
and privileges, inventions, improvements and processes,
copyrights, trademarks and trade names, relating to or useful in
connection with the business of this Corporation as an investment
company.
To enter into, make and perform contracts of every kind and
description with any person, firm, association, corporation,
municipality, county, state, body politic or government or colony
or dependency thereof relating to or useful in connection with
the business of this Corporation as an investment company.
Subject to limitations as set forth in the By-Laws of
the Corporation and other governing law and regulations, to
borrow or raise moneys for any of the purposes of the Corporation
and, from time to time without limit as to amount, to draw, make,
accept, endorse, execute and issue promissory notes, drafts,
bills of exchange, warrants, bonds, debentures and other
negotiable or non-negotiable instruments and evidence of
indebtedness, and to secure the payment of any thereof and of the
interest thereon by pledge, conveyance or assignment in trust of
the whole or any part of property of the Corporation whether at
the time owned or thereafter acquired, and to sell, pledge, or
otherwise dispose of such bonds or other obligations of the
Corporation for its purposes.
-4-
<PAGE>
To have one or more offices in any or all states,
territories, and districts of the United States and foreign
countries, to carry on all or any of its operations and business
and without restriction or limit as to amount but subject to the
restrictions as set forth in the By-Laws of the Corporation, to
purchase or otherwise acquire, hold, own, mortgage, sell, convey
or otherwise dispose of, personal property of every class and
description but subject to the limitations as set forth in the
By-Laws of the Corporation, in any of the states, districts,
territories or colonies of the United States, and in any and all
foreign countries subject to the laws of such state, district,
territory, colony or country.
The Corporation shall be authorized to exercise and enjoy
all of the powers, rights and privileges granted to, or conferred
upon, corporations of a similar character by the General Laws of
the State of Maryland now or hereafter in force, and the
enumeration of the foregoing powers shall not be deemed to
exclude any powers, rights or privileges so granted or conferred.
Subject to the restrictions contained in the By-Laws of the
Corporation, the objects and purposes specified in the foregoing
clauses shall, except where otherwise expressed, be in nowise
limited or restricted by reference to, or inference from, the
terms of any other clauses in these Articles of Incorporation,
but the objects and purposes specified in each of the foregoing
clauses of this Article shall be regarded as independent objects
and purposes.
-5-
<PAGE>
FOURTH: The post-office address of the principal office of
the Corporation in this State is c/o The Corporation Trust
Incorporated, 32 South Street, Baltimore, Maryland 21202. The
name of the resident agent of the Corporation in this State is
The Corporation Trust Incorporated, a corporation of this State,
and the post-office address of the resident agent is 32 South
Street, Baltimore, Maryland 21202.
FIFTH: The total number of shares of stock which the
Corporation shall have authority to issue is Thirty Million
(30,000,000) shares, all of one class, of the par value of One
Dollar ($1.00) each and of the aggregate par value of Thirty
Million Dollars ($30,000,000).
SIXTH: The number of directors of the Corporation shall be
seven, which number may be increased or decreased pursuant to the
By-Laws of the Corporation and shall never be less than three
(3). The names of the directors who shall act until the first
annual meeting or until their successors are duly chosen and
qualify are:
Sherburn Becker Daniel Ladd
William H. Bauer Shelby H. Pahe
M. Donald Grant Charles C. Goodfellow
Jarvis S. Hicks, Jr.
SEVENTH: The Corporation shall redeem or purchase from its
stockholders shares of its own stock as provided in the By-Laws
of the Corporation; provided that the Corporation shall not pay
for such shares of stock an amount greater than the
-6-
<PAGE>
proportionate interest in the Corporation represented by such
shares of stock.
EIGHTH: Notwithstanding any provision of law requiring a
greater proportion than a majority of the votes of all classes or
of any class of stock entitled to be cast, to take or authorize
any action, the Corporation may take or authorize such action
upon the concurrence of a majority of the aggregate number of the
votes entitled to be cast thereon.
NINTH: No holder of shares of stock of any class shall be
entitled as a matter of right to subscribe for or purchase or
receive any part of any new or additional issue of shares of
stock of any class or of securities convertible into shares of
stock of any class, whether now or hereafter authorized or
whether issued for money, or for a consideration other than
money.
TENTH: The duration of the Corporation shall be perpetual.
IN WITNESS WHEREOF, the undersigned incorporators of
Philadelphia Fund, Inc. who executed the foregoing Articles of
Incorporation hereby acknowledge the same to be their act and
-7-
<PAGE>
further acknowledge that, to the best of their knowledge the
matters and facts set forth therein are true in all material
respects under the penalties of perjury.
Dated the 29th day of November, 1984
/s/Stephen W. Kline
-------------------------
Stephen W. Kline
/s/Audrey C. Talley
-------------------------
Audrey C. Talley
-8-
<PAGE>
****************************SPECIMEN*****************************
NUMBER SHARES
/----------/ /----------/
/ / [logo] / /
/----------/ /----------/
PHILADELPHIA FUND, INC.
INCORPORATED UNDER THE LAWS OF THE STATE OF MARYLAND
THIS CERTIFIES that is the owner of
*SEE REVERSE SIDE FOR CERTAIN DEFINITITIONS
------------------------------------------
/ CUSIP 717588 10 7 /
------------------------------------------
FULLY-PAID AND NON-ASSESSABLE SHARES OF CAPITAL STOCK OF THE PAR VALUE OF
ONE DOLLAR PER SHARE OF Philadelphia Fund, Inc. transferable only on the books
of the Corporation by the holder hereof in person or duly authorized Attorney
upon surrender of this Certificate properly endorsed.
This certificate and the shares represented hereby are issued and shall be
held subject to all of the restrictions, conditions and provisions of the
Articles of Incorporation and By-laws of the Corporation and all amendments
and supplements thereto copies of which are on file at the office of the
Transfer Agent and the holder hereof, by acceptance of this certificate,
consents to and agrees to be bound by all of the said provisions, a copy of
which provisions will be furnished to any holder hereof upon request and
without charge.
This certificate is not valid unless countersigned by the Transfer Agent.
In Witness Whereof, the Corporation has caused this certificate to be
signed by its duly authorized officers and its Corporation seal to be hereto
affixed.
Dated:
PHILADELPHIA FUND, INC.
CORPORATE
/s/Ronald F. Rohe SEAL /s/Donald H. Baxter
TREASURER 1984 PRESIDENT
*MARYLAND*
COUNTERSIGNED:AMERICAN DATA SERVICES, INC.
TRANSFER AGENT (HUNTINGTON, NY)
BY
-------------------------------------------
AUTHORIZED SIGNATURE
<PAGE>
[BACK OF CERTIFICATE]
The following abbreviations when used in the inscription on the face of this
certificate, shall be construed as though they were written out in full
according to applicable laws and regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT -_____Custodian_____
TEN ENT - as tenants by the entireties (Cust) (Minor)
JT TEN - as joint tenants with right under Uniform Gifts
of survivorship and not as to Minors Act_______
tenants in common (State)
Additional abbreviations may also be used though not in the above list.
For value received,_____________________hereby sell, assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
- --------------------------------------
/ /
- --------------------------------------
___________________________________________________________
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS OF ASSIGNEE)
___________________________________________________________
___________________________________________________________
____________________________________________________ shares
of the capital stock represented by the within Certificate,
and do hereby irrevocably constitute and appoint
____________________________________________________ Attorney
to transfer the said stock on the books of the within named
Corporation with full power of substitution in the premises.
Dated___________________
X________________________________________
THE SIGNATURES TO THIS ASSIGNMENT MUST
CORRESPOND WITH THE NAMES AS WRITTEN
NOTICE: UPON THE FACE OF THE CERTIFICATE IN EVERY
PARTICULAR, WITHOUT ALTERATION OR
ENLARGEMENT OR ANY CHANGE WHATEVER.
<PAGE>
TAIT, WELLER & BAKER
Certified Public Accountants
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We hereby consent to the incorporation by reference in the Statement of
Additional Information (Part B) of this amended Registration Statement on Form
N-1A of our report dated December 16, 1996 (except for Note 6 as to which the
date is December 24, 1996 relating to financial statements of Philadelphia
Fund, Inc. for the year ended November 30, 1996. We also consent to the
reference to our report under the heading "Financial Highlights" in such
amended Registration Statement.
/s/Tait, Weller & Baker
Tait, Weller & Baker
Philadelphia, Pennsylvania
March 5, 1997
<PAGE>
PHILADELPHIA FUND, INC.
10 YEAR PERFORMANCE FIGURES
LOAD BASIS 8.50%
FOR THE PERIOD ENDING 11/30/96
<TABLE>
<CAPTION>
TOTAL COST VALUE SHARE
DIV+CAP DOLLARS DOLLARS SHARES NAV PERFORMANCE
<S> <C> <C> <C> <C> <C> <C>
BALANCE 11/30/86 1000.00 915.00 99.133 9.23
DIVIDEND 12/11/86 $2.41 238.91 238.91 34.525 6.92
DIVIDEND 3/11/87 $0.04 5.35 5.35 0.668 8.00
DIVIDEND 6/6/87 $0.03 4.03 4.03 0.505 7.98
DIVIDEND 9/9/87 $0.03 4.04 4.04 0.489 8.27 -136.66
BALANCE 11/30/87 1252.33 863.34 135.320 6.38 - 14.94%
DIVIDEND 12/12/87 $1.81 244.93 244.93 48.791 5.02
DIVIDEND 3/9/88 $0.02 3.68 3.68 0.666 5.53
DIVIDEND 6/15/88 $0.02 3.70 3.70 0.666 5.55
DIVIDEND 9/15/88 $0.02 3.71 3.71 0.683 5.43 162.21
BALANCE 11/30/88 1508.35 1025.55 186.126 5.51 18.79%
DIVIDEND 12/28/88 $0.185 34.43 34.43 6.204 5.55
DIVIDEND 3/22/89 $0.02 3.85 3.85 0.640 6.01
DIVIDEND 6/15/89 $0.02 3.86 3.86 0.535 7.22
DIVIDEND 9/14/89 $0.04 7.74 7.74 1.066 7.26 381.19
BALANCE 11/30/89 1558.23 1406.75 194.571 7.23 37.17%
<PAGE>
DIVIDEND 12/13/89 $0.95 184.84 184.84 29.575 6.25
DIVIDEND 3/28/90 $0.04 8.97 8.97 1.522 5.89
DIVIDEND 6/13/90 $0.04 9.03 9.03 1.468 6.15
DIVIDEND 9/14/90 $0.04 9.09 9.09 1.670 5.44 -184.92
BALANCE 11/30/90 1770.15 1221.82 228.806 5.34 - 13.15%
DIVIDEND 12/26/90 $0.06 13.73 13.73 2.524 5.44
DIVIDEND 3/20/91 $0.03 6.94 6.94 1.218 5.70
DIVIDEND 6/12/91 $0.02 4.65 4.65 0.803 5.79
DIVIDEND 9/12/91 $0.02 4.67 4.67 0.835 5.59 45.12
BALANCE 11/30/91 1800.13 1266.94 234.185 5.41 3.69%
DIVIDEND 12/23/91 $0.02 4.68 4.68 0.853 5.49
DIVIDEND 3/25/92 $0.01 2.35 2.35 0.398 5.91
DIVIDEND 6/16/92 $0.02 4.71 4.71 0.772 6.10
DIVIDEND 9/15/92 $0.02 4.72 4.72 0.750 6.30 278.02
BALANCE 11/30/92 1816.60 1544.96 236.958 6.52 21.94%
DIVIDEND 12/24/92 $0.11 26.07 26.07 3.949 6.60
DIVIDEND 3/25/93 $0.02 4.82 4.82 0.691 6.97
DIVIDEND 6/8/93 $0.02 4.83 4.83 0.697 6.93
DIVIDEND 9/14/93 $0.03 7.27 7.27 0.974 7.46 284.43
BALANCE 11/30/93 1859.59 1829.39 243.270 7.52 18.41%
<PAGE>
DIVIDEND 12/28/93 $0.683 166.15 166.15 23.804 6.98
DIVIDEND 3/15/94 $0.00 5.34 5.34 0.808 6.61
DIVIDEND 6/14/94 $0.02 5.36 5.36 0.831 6.45
DIVIDEND 9/13/94 $0.03 8.06 8.06 1.262 6.39 -131.25
BALANCE 11/30/94 2044.50 1698.14 269.974 6.29 - 7.17%
DIVIDEND 12/28/94 $0.05 13.50 13.50 2.146 6.29
DIVIDEND 3/22/95 $0.03 8.16 8.16 1.239 6.59
DIVIDEND 6/13/95 $0.02 5.47 5.47 0.780 7.01
DIVIDEND 9/26/95 $0.03 8.22 8.22 1.082 7.60 451.34
BALANCE 11/30/95 2079.85 2149.48 275.221 7.81 26.58%
DIVIDEND 12/27/95 $0.845 232.56 232.56 32.755 7.10
DIVIDEND 3/26/96 $0.03 9.24 9.24 1.274 7.25
DIVIDEND 6/24/96 $0.03 9.28 9.28 1.274 7.28
DIVIDEND 9/24/96 $0.03 9.32 9.32 1.269 7.34 344.88
BALANCE 11/30/96 2340.25 2494.35 311.794 8.00 16.04%
</TABLE>
- ------------------------------------------------------------------------------
10 YEAR TOTAL RETURN 145.77%
AVERAGE ANNUAL TOTAL RETURN 9.41%
==============================================================================
<PAGE>
PHILADELPHIA FUND, INC.
5 YEAR PERFORMANCE FIGURES
LOAD BASIS 0.00%
FOR THE PERIOD ENDING 11/30/96
<TABLE>
<CAPTION>
TOTAL COST VALUE SHARE
DIV+CAP DOLLARS DOLLARS SHARES NAV PERFORMANCE
<S> <C> <C> <C> <C> <C> <C>
BALANCE 11/30/91 1000.00 1000.00 184.843 5.41
DIVIDEND 12/23/91 $0.02 3.70 3.70 0.673 5.49
DIVIDEND 3/25/92 $0.01 1.86 1.86 0.314 5.91
DIVIDEND 6/16/92 $0.02 3.72 3.72 0.609 6.10
DIVIDEND 9/15/92 $0.02 3.73 3.73 0.592 6.30 219.44
BALANCE 11/30/92 1013.00 1219.44 187.031 6.52 21.94%
DIVIDEND 12/24/92 $0.11 20.57 20.57 3.117 6.60
DIVIDEND 3/25/93 $0.02 3.80 3.80 0.546 6.97
DIVIDEND 6/8/93 $0.02 3.81 3.81 0.550 6.93
DIVIDEND 9/14/92 $0.03 5.74 5.74 0.769 7.46 224.50
BALANCE 11/30/93 1046.93 1443.94 192.014 7.52 18.41%
DIVIDEND 12/28/93 $0.683 131.15 131.15 18.789 6.98
DIVIDEND 3/15/94 $0.02 4.22 4.22 0.638 6.61
DIVIDEND 6/14/94 $0.02 4.23 4.23 0.656 6.45
DIVIDEND 9/13/94 $0.03 6.36 6.36 0.996 6.39 -103.60
BALANCE 11/30/94 1192.88 1340.35 213.091 6.29 - 7.17%
<PAGE>
DIVIDEND 12/28/94 $0.05 10.65 10.65 1.694 6.29
DIVIDEND 3/22/95 $0.03 6.44 6.44 0.978 6.59
DIVIDEND 6/13/95 $0.02 4.32 4.32 0.616 7.01
DIVIDEND 9/26/95 $0.03 6.49 6.49 0.854 7.60 356.24
BALANCE 11/30/95 1220.78 1696.59 217.233 7.81 26.58%
DIVIDEND 12/27/95 $0.845 183.56 183.56 25.854 7.10
DIVIDEND 3/26/96 $0.03 7.29 7.29 1.006 7.25
DIVIDEND 6/24/96 $0.03 7.32 7.32 1.006 7.28
DIVIDEND 9/24/96 $0.03 7.35 7.35 1.002 7.34 272.21
BALANCE 11/30/96 1426.31 1968.80 246.100 8.00 16.04%
</TABLE>
- ------------------------------------------------------------------------------
5 YEAR TOTAL RETURN 96.88%
AVERAGE ANNUAL TOTAL RETURN 14.51%
==============================================================================
<PAGE>
PHILADELPHIA FUND, INC.
1 YEAR PERFORMANCE FIGURES
LOAD BASIS 0.00%
FOR THE PERIOD ENDING 11/30/96
<TABLE>
<CAPTION>
TOTAL COST VALUE SHARE
DIV+CAP DOLLARS DOLLARS SHARES NAV PERFORMANCE
<S> <C> <C> <C> <C> <C> <C>
BALANCE 11/30/95 1000.00 1000.00 128.041 7.81
DIVIDEND 12/27/95 $0.845 108.19 108.19 15.239 7.10
DIVIDEND 3/26/96 $0.03 4.30 4.30 0.593 7.25
DIVIDEND 6/24/96 $0.03 4.32 4.32 0.593 7.28
DIVIDEND 9/24/96 $0.03 4.33 4.33 0.590 7.34 160.45
BALANCE 11/30/96 1121.14 1160.45 145.056 8.00 16.04%
</TABLE>
- ------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN 16.04%
==============================================================================
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000078105
<NAME> PHILADELPHIA FUND, INC.
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> NOV-30-1996
<PERIOD-END> NOV-30-1996
<INVESTMENTS-AT-COST> 63,472,880
<INVESTMENTS-AT-VALUE> 96,754,399
<RECEIVABLES> 283,683
<ASSETS-OTHER> 374,021
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 97,412,103
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 111,788
<TOTAL-LIABILITIES> 111,788
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 63,249,209
<SHARES-COMMON-STOCK> 12,161,782
<SHARES-COMMON-PRIOR> 11,786,414
<ACCUMULATED-NII-CURRENT> 415,693
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 353,894
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 33,281,519
<NET-ASSETS> 97,300,315
<DIVIDEND-INCOME> 1,565,004
<INTEREST-INCOME> 1,399,527
<OTHER-INCOME> 0
<EXPENSES-NET> 1,422,163
<NET-INVESTMENT-INCOME> 1,542,368
<REALIZED-GAINS-CURRENT> 357,495
<APPREC-INCREASE-CURRENT> 11,824,732
<NET-CHANGE-FROM-OPS> 13,724,595
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1,732,280
<DISTRIBUTIONS-OF-GAINS> 9,295,047
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 62,070
<NUMBER-OF-SHARES-REDEEMED> 1,009,161
<SHARES-REINVESTED> 1,322,459
<NET-CHANGE-IN-ASSETS> 5,195,957
<ACCUMULATED-NII-PRIOR> 605,605
<ACCUMULATED-GAINS-PRIOR> 9,291,446
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 685,222
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,425,266
<AVERAGE-NET-ASSETS> 91,420,027
<PER-SHARE-NAV-BEGIN> 7.81
<PER-SHARE-NII> .13
<PER-SHARE-GAIN-APPREC> .99
<PER-SHARE-DIVIDEND> .142
<PER-SHARE-DISTRIBUTIONS> .793
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 8.00
<EXPENSE-RATIO> 1.56
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
