PHILADELPHIA FUND, INC.

                      STATEMENT OF ADDITIONAL INFORMATION

                                APRIL 1, 2007

This Statement of Additional Information is not a prospectus, but should be
read in conjunction with the Fund's current prospectus (dated April 1, 2007).
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

The Fund's annual report and other information are available on the Fund's
Internet website at http://www.philadelphiafund.com.

The information required by Item 10 "Fund History" of this Statement of
Additional Information is incorporated by reference and is located in the
Fund's prospectus under the heading "Fund History."  The information required
by Item 22 "Financial Statements" of this Statement of Additional Information
is incorporated by reference and is located in the Fund's Annual Report dated
November 30, 2006.


      TABLE OF CONTENTS                                              PAGE
      -----------------                                              ----

      Investment Goals, Policies and Risks . . . . . . . . . . .       2
      Options Transactions . . . . . . . . . . . . . . . . . . .       2
      Futures Contracts  . . . . . . . . . . . . . . . . . . . .       4
      Taxation of the Fund . . . . . . . . . . . . . . . . . . .       5
      Investment Limitations . . . . . . . . . . . . . . . . . .       8
      Temporary Defensive Positions  . . . . . . . . . . . . . .       9
      Disclosure of Portfolio Holdings . . . . . . . . . . . . .       9
      Calculation of Net Asset Value . . . . . . . . . . . . . .       9
      Purchase of Shares . . . . . . . . . . . . . . . . . . . .       9
      Automatic Investment Plan  . . . . . . . . . . . . . . . .      10
      Tax Sheltered Plans  . . . . . . . . . . . . . . . . . . .      10
      Redemption of Shares . . . . . . . . . . . . . . . . . . .      11
      Check Withdrawal Plan  . . . . . . . . . . . . . . . . . .      11
      Rights of Ownership. . . . . . . . . . . . . . . . . . . .      11
      Officers and Directors . . . . . . . . . . . . . . . . . .      11
      Brokerage. . . . . . . . . . . . . . . . . . . . . . . . .      14
      Information About the Investment Advisor and
        Other Service Providers. . . . . . . . . . . . . . . . .      15
      Principal Underwriter. . . . . . . . . . . . . . . . . . .      17
      Distribution . . . . . . . . . . . . . . . . . . . . . . .      17
      Independent Registered Public Accounting Firm. . . . . . .      18
      Financial Statements . . . . . . . . . . . . . . . . . . .      18
      Proxy Voting Policies. . . . . . . . . . . . . . . . . . .      18


<PAGE>
                     INVESTMENT GOALS, POLICIES AND RISKS
                     ------------------------------------

The Fund is a diversified open end management investment company.  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 five years is set forth in the Annual
Report to stockholders for the fiscal year ended November 30, 2006 under
"Financial Highlights".

While the following are not considered to be principal policies of the Fund,
they may be employed as described herein.

The Fund may invest in fixed income securities which offer opportunities for
capital appreciation and income. These securities may be rated investment grade
or lower.  Securities rated B-2 or lower by Moody's Investors Service, Inc. or
B- or lower by Standard & Poor's Corporation 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 fixed income securities generally fluctuates inversely
with interest rates.

The Fund has authority to invest up to 20% of its assets in the securities of
foreign companies.  However, historically the Fund has not invested more than
5% of its assets in foreign securities, and has no current intention to do
so.  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 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 nationalization or other government policies or instability 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 ("REITS"). REITS are subject to price fluctuations
similar to other investments traded on exchanges.  In addition, property
values or income produced from properties owned can have an impact on the
value of a REIT.

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 (the "1933 Act")).  Ordinarily,
the Fund does not expect to have more than 5% of the Fund's total net assets
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.  It is possible
that the Advisor may not be able to sell an investment in restricted
securities when it is determined the investment no longer meets the Fund's
objectives.  This would cause a negative impact on the value of Fund shares
should the restricted security's price decline before the investment can be
sold.


                             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.  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

                                    2
<PAGE>

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.

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.

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.

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,"
cash or liquid assets, 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 the Fund 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 the Fund is obligated to deliver
if the option is exercised.

                                    3
<PAGE>

                               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 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.

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.

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.

When the Fund has a long position in a futures contract or sells a put option,
it must establish a segregated account containing cash or liquid assets 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 containing cash or
liquid assets 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). 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.

                                    4
<PAGE>

                             TAXATION OF THE FUND
                             --------------------

The Fund receives income generally in the form of dividends and interest on
its investments. This income, less expenses incurred in the operation of the
Fund, constitutes the Fund's net investment income from which dividends may
be paid to you. If you are a taxable investor, any income dividends (other
than qualified dividends) the Fund pays are taxable to you as ordinary income.

For individual shareholders, a portion of the dividends paid by the Fund may be
qualified dividends eligible for taxation at long-term capital gain rates. This
reduced rate generally is available for dividends paid by the Fund out of
dividends earned on the Fund's investment in stocks of domestic corporations
and qualified foreign corporations.

Both the Fund and a shareholder must meet certain holding period requirements
to qualify Fund dividends for this treatment. Specifically, the Fund must hold
the stock for at least 61 days during the 121-day period beginning 60 days
before the stock becomes ex-dividend.  Similarly, a shareholder must hold its
Fund shares for at least 61 days during the 121-day period beginning 60 days
before the Fund distribution goes ex-dividend. The ex-dividend date is the
first date following the declaration of a dividend on which the purchaser of
stock is not entitled to receive the dividend payment. When counting the number
of days you held your Fund shares, include the day you sold your shares but not
the day you acquired the shares.

While the income received in the form of a qualified dividend is taxed at the
same rates as long-term capital gains, such income will not be considered as a
long-term capital gain for other federal income tax purposes.  For example, you
will not be allowed to offset your long-term capital losses against qualified
dividend income on your federal income tax return. Any qualified dividend
income that you elect to be taxed at these reduced rates also cannot be used as
investment income in determining your allowable investment interest expense.
For other limitations on the amount of or use of qualified dividend income on
your income tax return, please contact your personal tax advisor.

After the close of its fiscal year, the Fund will designate the portion of its
ordinary dividend income that meets the definition of qualified dividend income
taxable at reduced rates.  If 95% or more of the Fund's income is from
qualified sources, it will be allowed to designate 100% of its ordinary income
distributions as qualified dividend income.

The Fund may realize capital gains and losses on the sale of its portfolio
securities. Distributions from net short-term capital gains are taxable to you
as ordinary income. Distributions from net long-term capital gains are taxable
to you as long-term capital gains, regardless of how long you have owned your
shares in the Fund. Any net capital gains realized by the Fund generally are
distributed once each year, and may be distributed more frequently, if
necessary, to reduce or eliminate excise or income taxes on the Fund.

The Fund has elected to be treated as a regulated investment company under
Subchapter M of the Internal Revenue Code (Code). It has qualified as a
regulated investment company for its most recent fiscal year, and intends to
continue to qualify during the current fiscal year. As a regulated investment
company, the Fund generally pays no federal income tax on the income and gains
it distributes to you. The board reserves the right not to maintain the
qualification of the Fund as a regulated investment company if it determines
this course of action to be beneficial to shareholders. In that case, the Fund
would be subject to federal, and possibly state, corporate taxes on its taxable
income and gains, and distributions to you would be taxed as ordinary income
dividends to the extent of the Fund's earnings and profits.

To avoid federal excise taxes, the Code requires the Fund to distribute to you
by December 31 of each year, at a minimum, the following amounts:

   [BULLET] 98% of its taxable ordinary income earned during the calendar
            year;

   [BULLET] 98% of its capital gain net income earned during the twelve
            month period ending November 30; and

   [BULLET] 100% of any undistributed amounts of these categories of income
            or gain from the prior year.


The Fund intends to declare and pay these distributions in December (or to pay
them in January, in which case you must treat them as received in December),
but can give no assurances that its distributions will be sufficient to
eliminate all taxes.

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

                                    5
<PAGE>

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.

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.

The Fund may be subject to foreign withholding taxes on income from certain
foreign securities.  This, in turn, could reduce the Fund's income dividends
paid to shareholders. Foreign dividends designated by the Fund as dividends
from qualifying foreign corporations and subject to taxation at long-term
capital gain rates, may reduce the otherwise available foreign tax credits on
your federal income tax return.  Shareholders in these circumstances should
talk with their personal tax advisors about their foreign tax credits and the
procedures that they should follow to claim these credits on their personal
income tax returns.

The Fund may invest in securities of foreign entities that could be deemed for
tax purposes to be PFICs. When investing in PFIC securities, the Fund intends
to mark-to-market these securities and recognize any gains at the end of its
fiscal and excise tax years. Deductions for losses are allowable only to the
extent of any current or previously recognized gains.  These gains (reduced by
allowable losses) are treated as ordinary income that the Fund is required to
distribute, even though it has not sold the securities. You should also be
aware that the designation of a foreign security as a PFIC security will cause
its income dividends to fall outside of the definition of qualified foreign
corporation dividends. These dividends generally will not qualify for the
reduced rate of taxation on qualified dividends when distributed to you by a
Fund.  In addition, if the Fund is unable to identify an investment as a PFIC
and thus does not make a mark-to-market election, the Fund may be subject to
U.S. federal income tax on a portion of any "excess distribution" or gain from
the disposition of such shares, even if such income is distributed as a taxable
dividend by the Fund to its shareholders.  Additional charges in the nature of
interest may be imposed on the Fund in respect of deferred taxes arising from
such distributions or gains.

Most foreign exchange gains realized on the sale of debt securities are treated
as ordinary income by the Fund. Similarly, foreign exchange losses realized on
the sale of debt securities generally are treated as ordinary losses. These
gains when distributed are taxable to you as ordinary income, and any losses
reduce the Fund's ordinary income otherwise available for distribution to you.


This treatment could increase or decrease the Fund's ordinary income
distributions to you, and may cause some or all of the Fund's previously
distributed income to be classified as a return of capital. A return of
capital generally is not taxable to you, but reduces the tax basis of your
shares in the Fund. Any return of capital in excess of your basis, however,
is taxable as a capital gain.

Redemptions of Fund shares are taxable transactions for federal and state
income tax purposes.  Any loss incurred on the redemption or exchange of
shares held for six months or less is treated as a long-term capital loss to
the extent of any long-term capital gains distributed to you by the Fund on
those shares.

All or a portion of any loss that you realize on the redemption of your Fund
shares is disallowed to the extent that you buy other shares in the Fund
(through reinvestment of dividends or otherwise) within 30 days before or
after your share redemption.  Any loss disallowed under these rules is added
to your tax basis in the new shares.

For corporate shareholders, because some of the income of the Fund generally is
derived from investments in domestic securities, it is anticipated that a
portion of the dividends paid by the Fund will qualify for the dividends-
received deduction. You may be allowed to deduct these qualified dividends,
thereby reducing the tax that you would otherwise be required to pay. The
dividends-received deduction will be available only with respect to dividends
designated by the Fund as eligible for such treatment.  All dividends
(including the deducted portion) are included in your calculation of
alternative minimum taxable income.

The availability of the dividends-received deduction is subject to certain
holding period and debt financing restrictions imposed under the Code on the
corporation claiming the deduction.  The amount that the Fund may designate as
eligible for the dividends-received deduction will be reduced or eliminated if
the shares on which the dividends earned by the Fund were debt-financed or held
by the Fund for less than a minimum period of time, generally 46 days during a
91-day period beginning 45 days before the stock becomes ex-dividend.
Similarly, if your Fund shares are debt-financed or held by you for less than a
46-day period, then the dividends-received deduction for Fund dividends on your
shares may also be reduced or eliminated.

The income earned on certain U.S. government securities is exempt from state
and local personal income taxes if earned directly by you. States also grant
tax-free status to mutual fund dividends paid to you from interest earned on
these securities, subject in some states to minimum investment or reporting
requirements that must be met by a fund. The income on Fund investments in

                                    6
<PAGE>

certain securities, such as repurchase agreements, commercial paper and
federal agency-backed obligations (e.g., Ginnie Mae or Fannie Mae
securities), generally does not qualify for tax-free treatment. The rules
on exclusion of this income are different for corporations.

As stated above, the Fund may invest in complex securities such as puts, calls,
futures contracts, etc. that may be subject to numerous special and complex
tax rules.  These rules could affect whether gain or loss recognized by the
Fund is treated as ordinary or capital, or as interest or dividend income.
These rules could also accelerate the recognition of income to the Fund
(possibly causing the Fund to sell securities to raise cash for the necessary
distributions) and/or defer the Fund's ability to recognize a loss, and, in
limited cases, subject the Fund to U.S. federal income tax on income from
certain foreign securities.  These rules could therefore affect the amount,
timing or character of the income distributed to shareholders by the Fund.

Income received by the Fund from equity interests of certain mortgage pooling
vehicles, either directly, or through an investment in a REIT holding such
interests or that qualifies as a taxable mortgage pool, is treated as "excess
inclusion income." In general, this income is required to be allocated to Fund
shareholders in proportion to dividends paid with the same consequences as if
the shareholders directly received the excess inclusion income. The Fund may be
subject to tax on its excess inclusion income that is allocable to
"disqualified organizations," which are generally certain cooperatives,
governmental entities and tax-exempt organizations that are exempt from tax on
unrelated business taxable income. Excess inclusion income may not be offset
with net operating losses, represents unrelated business taxable income in the
hands of a tax-exempt shareholder that is not a disqualified organization, and
is subject to withholding tax, without regard to otherwise applicable
exemptions or rate reductions, to the extent such income is allocable to a
shareholder who is not a U.S. person.

Taxation of an investor who, as to the United States, is a nonresident alien
individual, non-U.S. trust or estate, non-U.S. corporation, or non-U.S.
partnership ("non-U.S. investor"), depends on whether the income from the Fund
is "effectively connected" with a U.S. trade or business carried on by such
shareholder.  If the income from the Fund is NOT effectively connected with a
U.S. trade or business carried on by a non-U.S. investor, dividends paid to
such non-U.S. investor from investment company taxable income generally will be
subject to a U.S. withholding tax at the rate of 30% (or lower treaty rate)
upon the gross amount of the dividend.  Such a non-U.S. investor generally
would be exempt from U.S withholding tax on gains realized on the sale or
redemption of Fund shares and dividends paid by the Fund from long-term
capital gains, unless the investor is a nonresident alien individual present
in the United States for a period or periods aggregating 183 days or more
during the taxable year.  Special U.S. withholding tax rules apply to
disposition of "United States real property interests."

Also, U.S withholding taxes are no longer imposed on dividends paid by
regulated investment companies to the extent the dividends are designated as
"interest-related dividends" or "short-term capital gain dividends."  Under
these exemptions, interest-related dividends and short-term capital gain
dividends generally represent distributions of interest from U.S. sources and
short-term capital gains that would not have been subject to U.S. withholding
tax at the source if they had been received directly by a foreign person, and
that satisfy certain other requirements.  These exemptions apply to dividends
with respect to taxable years of regulated investment companies beginning after
December 31, 2004 and before January 1, 2008.  Ordinary dividends paid by the
Fund to non-U.S. investors on the income earned on portfolio investments in (i)
the stock of domestic and foreign corporations, and (ii) the debt of foreign
issuers, continue to be subject to U.S. withholding tax.

If the income from the Fund is effectively connected with a U.S. trade or
business carried on by a non-U.S. investor, then the Fund's dividends and
distributions and any gains realized upon the sale or redemption of Fund
shares will be subject to the U.S. federal income tax on a net income basis
at the rates applicable to U.S. citizens or domestic corporations.

The Fund may invest in securities of corporations or REITs that invest in real
property.  The Foreign Investment in Real Property Tax Act of 1980 (FIRPTA)
makes non-U.S. persons subject to U.S. tax on disposition of a U.S. real
property interest as if he or she were a U.S. person.  Such gain is sometimes
referred to as FIRPTA gain.  To the extent that the Fund realizes a gain on its
investment in a U.S. real property interest, or receives a distribution from
the gain on the sale of a U.S. real property interest realized on one of its
investments, and passes that gain through to its shareholders, such a
distribution when made to a non-U.S. shareholder may be subject to U.S.
withholding tax at a rate of 35% and may require the filing of a nonresident
U.S. income tax return.

Special U.S. tax certification requirements apply to non-U.S. investors to
avoid U.S. back-up withholding imposed at a rate of 28%, obtain the benefits of
any treaty between the United States and the shareholder's country of
residence, and obtain the benefits of exemption from withholding on interest-
related and short-term capital gain dividends.  In general, a non-U.S. investor
must provide a Form W-8 BEN (or other applicable Form W-8) to establish that
you are not a U.S. person, to claim that you are the beneficial owner of the
income and, if applicable, to claim a reduced rate of, or exemption from,
withholding as a resident of a country with which the United States has an
income tax treaty.  A Form W-8 BEN provided without a U.S. taxpayer
identification number will

                                    7
<PAGE>

remain in effect for a period beginning on the date signed and ending on the
last day of the third succeeding calendar year, unless an earlier change of
circumstances makes the information on the form incorrect.

A partial exemption from U.S estate tax may apply to stock in the Fund held by
the estate of a nonresident decedent.  The amount treated as exempt is based
upon the proportion of the assets held by the Fund at the end of the quarter
immediately preceding the decedent's death that are debt obligations, deposits,
or other property that would generally be treated as situated outside the
United States if held directly by the estate.  This provision applies to
decedents dying after December 31, 2004 and before January 1, 2008.

YOU SHOULD CONSULT YOUR TAX ADVISOR ABOUT THE FEDERAL, STATE, LOCAL OR FOREIGN
TAX CONSEQUENCES OF AN INVESTMENT IN THE FUND.


                            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
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.

The Fund may not:

         invest more than 5% of its gross assets in securities of any one
         issuer (except U.S. Government obligations); invest more than 25% in
         the securities of companies in the same industry; buy more than 10%
         of the voting securities of any company; borrow or lend money (this
         policy shall not prohibit the purchasing of debt securities commonly
         purchased by institutional investors); purchase securities on margin;
         buy securities to exercise control or management; issue senior
         securities (except 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); encumber its assets
         to secure debts; buy or sell real estate or real estate mortgage
         loans, commodities, or commodity contracts (except financial futures
         contracts and options thereon); underwrite the securities of any other
         issuer (except when deemed to be a statutory underwriter in connection
         with the acquisition of "restricted securities"); acquire the
         securities of any other domestic or foreign investment company (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 REIT, provided that such Trust is not permitted
         to invest in real estate or interests in real estate other than
         mortgages or other security interests.

The Fund will not concentrate its investments in a single industry.  For these
purposes, the Fund considers utilities to be a sector, and not an industry.

Although changes in the following restrictions are not subject to stockholder
approval, the Fund does not intend to: 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 1933 Act,
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 1933 Act.  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 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 U.S.
Bankruptcy 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.

                                    8
<PAGE>


                         TEMPORARY DEFENSIVE POSITIONS
                         -----------------------------

When unusual market conditions warrant, the Fund may make substantial temporary
defensive investments in cash equivalents, up to a maximum of 100% of its net
assets.  Cash equivalent holdings may be in any currency (although such
holdings may not constitute "cash or cash equivalents" for tax diversification
purposes under the Code).  When the Fund invests for temporary defensive
purposes, such investments may affect the Fund's ability to achieve its
investment objective.


                       DISCLOSURE OF PORTFOLIO HOLDINGS
                       --------------------------------

The Fund intends to publicly disclose all of its portfolio holdings in
quarterly reports approximately 60 days after each quarter-end as required by
Securities and Exchange Commission (the "Commission") rules.  The Fund also
intends to publicly disclose all of its portfolio holdings, with a shorter
delay of at least 45 days, after each quarter-end to facilitate timely release
of information to rating agencies and others.  The Fund does not make selective
non-public disclosures of portfolio holdings to third parties.  Finally, the
Fund intends to publicly disclose its top ten holdings (excluding short-term
holdings) on a monthly basis, after a 30-day delay, along with information
regarding the percentage of the Fund that each holding comprises, on the Fund's
Internet website at http://www.philadelphiafund.com.

The Fund also may disclose its complete portfolio holdings, on a daily basis
and without a time lag (i.e., on a real time basis) to Unified Fund Services
Inc. and U.S. Bank, in their capacities as the Fund's service providers (the
"service providers"), who require such information to perform their contractual
duties and responsibilities to the Fund.  In addition, complete portfolio
holdings information may be provided to Briggs, Bunting & Dougherty, LLP, the
Fund's independent registered public accounting firm (the "Auditor"), for
purposes of preparing the semi-annual and annual audits of the Fund and related
shareholder reports.  The service providers and the Auditor are subject to
duties of confidentiality, including a duty not to trade on non-public
information, whether by contract, applicable law, or relevant accounting
standards. The Fund's chief compliance officer periodically requests that the
service providers confirm their compliance with these restrictions. Neither the
Fund nor the Advisor receives any compensation or other consideration for the
disclosure of the Fund's portfolio holdings to the service providers and the
Auditor. Only executive officers of the Fund, subject to the Board's oversight,
may authorize disclosure of the Fund's portfolio securities.  The Fund has
adopted policies and procedures that are designed to ensure that disclosure of
the information regarding portfolio holdings is in the best interests of the
Fund's shareholders, including addressing any conflicts of interest between the
interests of the Fund's shareholders and the interests of the Advisor, the
principal underwriter and any affiliated persons thereof. The Fund's chief
compliance officer, at least annually, reports to the Board regarding these
policies and procedures and their application.


                        CALCULATION OF NET ASSET VALUE
                        ------------------------------

Shares are sold at the Fund's net asset value per share.  The net asset value
per share is equal to the current market value of the Fund's portfolio
investments, plus cash and other assets, less liabilities, divided by the
number of the Fund's outstanding shares (adjusted to the nearest cent).
Portfolio securities traded on a securities exchange are valued at the closing
sales price on the market on which they are principally traded except those
traded on the Nasdaq NMS and Small Cap exchanges ("Nasdaq"). Securities traded
on Nasdaq will be valued at the Nasdaq Official Closing Price.  Securities
traded over-the-counter, except those that are quoted on Nasdaq, 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 direction of the Board.

The method of valuing assets and securities for which quotations are not
readily available or unreliable, or for which there are no published
quotations, including restricted securities, is reviewed annually by
the Board.


                              PURCHASE OF SHARES
                              ------------------

The Fund calculates the net asset value per share at the close of the New
York Stock Exchange, generally 4:00 P.M. Eastern time, 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, Martin Luther King Jr. Day, Presidents' 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.

                                    9
<PAGE>

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 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 of shares 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.


                          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, U.S. 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 6 of the General 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 investment or discontinue the plan at
any time by writing to Unified Fund Services, Inc. P.O. Box 6110,
Indianapolis, IN 46204-6110.


                              TAX SHELTERED PLANS
                              -------------------

For self-employed individuals, partnerships, and corporations, investments in
shares of the Fund can be made through 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 25% of each
participant's earned income (or compensation), or $40,000, as adjusted by the
Internal Revenue Service for cost-of-living increases.  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 $40,000 (as adjusted).  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
$40,000(as adjusted).  For plan contributions made for the year 2006, the
dollar limit is $44,000; and for the year 2007 the dollar limit is $45,000.
Also, the Fund makes available an Individual Retirement Account (IRA) which
permits tax-deductible investments in the Fund by certain taxpayers up to
$4,000 for 2006 and 2007.  All taxpayers may make nondeductible IRA
contributions up to the same amount  to a separate account whether or not they
are eligible for a deductible contribution.  In either case, the limit is
$5,000 for 2006 and 2007 for individuals who are 50 or older by the end of the
year for which the contribution is made.  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.

The Fund also makes available a "Roth IRA" - which permits nondeductible
investments in the Fund by certain taxpayers up to $4,000 for 2006 and 2007 (or
$5,000 for 2006 and 2007 for individuals age 50 or older) per tax year.  If the
Roth IRA is maintained for at least a five-year period beginning with the first
tax year for which a contribution to the Roth IRA was made, distributions from
the Roth IRA after age 59-1/2 or under certain other circumstances will be
completely tax free.

An annual limit of $4,000 for 2006 and 2007 (or  $5,000 for 2006 and 2007, as
described above) applies to contributions to regular and Roth IRAs. For
example, if a taxpayer younger than age 50 contributes $4,000 to a regular IRA
for 2006, he or she may not make any contribution to a Roth IRA for that year.

Specialized IRA accounts (SIMPLE IRAs and SEP-IRAs), Coverdell Education
Savings Accounts and 403(b)(7) Custodial Accounts also are available for Fund
investments.

Forms to establish an IRA, a Coverdell Education Savings Account, a 403(b)(7)
Custodial Account, or Profit Sharing/Money Purchase Pension Plan are available
from the Fund or Baxter Financial Corporation.

                                    10
<PAGE>


                             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
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.

The Fund has reserved the right to redeem Fund shares in kind, rather than in
cash, should this be necessary.  However, by filing an appropriate election
under Rule 18f-1 pursuant to the 1940 Act, the Fund has obligated itself upon a
request for redemption to redeem shares solely for cash up to the lesser of
$250,000 or 1% of the net asset value of the Fund in compliance with a request
for redemption by any one shareholder during any 90 day period.


                            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 Unified Fund
Services, Inc., specifying the amount of the check to be received each month
(or each quarter, as desired). 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.


                             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.  Each share is entitled to one vote.  The shares are non-assessable,
fully transferable, and redeemable at the option of the shareholder.  The
shares typically may be sold only for cash, except in conjunction with a
reorganization or other transaction with another investment company.  The
shares 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
Statement of Additional Information.

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 (the
"1940 Act").


                            OFFICERS AND DIRECTORS
                            ----------------------

The Board of Directors (the "Board"), guided by the recommendations of the
Advisor, establishes the broad investment policies of the Fund and, under
Maryland law, is responsible for overseeing the management of the Fund.
Each Director who is not an "interested person" (as defined in the 1940 Act
(the "Independent Directors")) is a member of the Fund's Audit Committee and
Nominating and Governance Committee.

The Audit Committee's functions include: (a) selecting, overseeing and setting
the compensation of the Fund's independent registered public accounting
firm;(b) overseeing the Fund's accounting and financial reporting policies and
practices, its internal controls and, as appropriate, the internal controls of
certain service providers of the Fund; (c) overseeing the quality and
objectivity of the Fund's financial statements and the independent audits
thereof; and (d) acting as a liaison between the Fund's independent registered
public accounting firm and the full Board. During the fiscal year ended
November 30, 2006, the Audit Committee met three times.

                                    11
<PAGE>

The Nominating and Governance Committee has responsibility, among other
things, to: (i) make recommendations and to consider shareholder
recommendations for nominations for Board members; (ii) review Board governance
procedures and recommend any appropriate changes to the full Board; (iii)
periodically review the Independent Directors' compensation and recommend any
changes to that compensation; and (iv) make recommendations to the full Board
for nominations for membership on all Board committees, review all Board
committee assignments annually and periodically review the responsibilities and
need for all committees of the Board.  The Nominating and Governance Committee
met three times during the fiscal year ended November 30, 2006.

The Nominating and Governance Committee will consider nominees recommended by
Qualifying Shareholders (as defined below) if an Independent Director vacancy
on the Board occurs. A "Qualifying Shareholder" is a shareholder that (i) owns
of record, or beneficially through a financial intermediary, 5% or more of the
Fund's outstanding shares; (ii) has been a shareholder of 5% or more of the
Fund's total outstanding shares for 12 months or more prior to submitting the
recommendation to the Nominating and Governance Committee; and (iii) provides a
written notice to the Nominating and Governance Committee containing certain
information.  In order to recommend a nominee, a Qualifying Shareholder should
submit the written notice to the Nominating and Governance Committee's
attention at the Fund's offices at 1200 North Federal Highway, Suite 424, Boca
Raton, Florida  33432.  A Qualifying Shareholder's letter should include: (i)
the name and address of the Qualifying Shareholder making the recommendation;
(ii) the number of shares of the Fund that are owned of record and beneficially
by the Qualifying Shareholder, and the length of time that the shares have been
so owned by the Qualifying Shareholder; (iii) a description of all arrangements
and understandings between the Qualifying Shareholder and any other person(s)
(naming such person(s)) pursuant to which the recommendation is being made;
(iv) the name, age, date of birth, business address and residence address of
the person(s) being recommended; (v) such other information regarding each
person recommended by the Qualifying Shareholder as would be required to be
included in a proxy statement filed under the Commission's proxy rules had the
nominee been nominated by the Board; (vi) whether the Qualifying Shareholder
believes the person being recommended would or would not be an "interested
person" of the Fund (as defined in the 1940 Act); and (vii) the written consent
of the recommended person to stand for election if nominated for the Board and
to serve if elected by shareholders.

The names, addresses, ages, lengths of service, principal business occupations
for at least the past five years and other directorships of the officers and
Directors of the Fund are listed below. In most cases, more than five years of
prior business experience is included in order to present shareholders with a
better awareness of the Directors' experience.  All officers and Directors
hold identical positions with Eagle Growth Shares Inc., another registered
investment company, and with the Fund. Each Director will hold office until
the termination of the Fund or his resignation, retirement, incapacity,
removal or earlier death.  Each Director who is an "interested person" of the
Fund, as defined in Section 2(a)(19) of the 1940 Act, is  identified under the
"Interested Persons" or "Interested Directors" headings below. The officers
and Directors of the Fund, in the aggregate, own less than 1% of the
outstanding securities of the Fund as of December 31, 2006.  The address of
each Director and officer is 1200 North Federal Highway, Suite 424, Boca Raton,
FL 33432.


Independent Directors
----------------------

Thomas J. Flaherty, Director (Since 1989)                          Age:(82)
                    Audit Committee Member (Since 2001)
                    Nominating and Governance Committee Member (Since 2004)

Retired. Formerly, Executive Vice President, Philadelphia Fund, Inc.;
formerly, President, Eagle Growth Shares, Inc.; formerly, President and
Director, Universal Programs, Inc. and Eagle Advisory Corporation (investment
advisors); formerly, Partner, Fahnestock & Co., Inc.



Kenneth W. McArthur, Director (Since 1987),                        Age:(71)
                     Audit Committee Chairman (Since 2001)
                     Nominating and Governance Committee Member (Since 2004)

Chairman, Shurway Capital Corp. (private investment company); Trustee, BMO
Mutual Funds (Canadian registered investment company); Trustee & Investment
Committee Member, Canada Post Pension Fund; Lead Director, Oppenheimer
Holdings, Inc. (financial services holding 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).

                                    12
<PAGE>

Robert L. Meyer, Director (Since 1989)                             Age:(66)
                 Audit Committee Member (Since 2001)
                 Nominating and Governance Committee Member (Since 2004)

Managing Director, The Roosevelt Investment Group (investment management);
Chartered Financial Analyst; formerly, President, Ehrlich Meyer Associates,
Inc. (investment management); formerly, Principal Officer, Convergent Capital
Corporation (holding company); formerly, Director, Vice President, and Senior
Vice President, Fahnestock & Co., Inc.



Donald P. Parson, Director (Since 1987),                           Age:(65)
                  Audit Committee Member (Since 2001)
                  Nominating and Governance Committee Member (Since 2004)

Counsel, Satterlee Stephens Burke & Burke LLP; Vice Chairman and Director,
Home Diagnostics, Inc. (publicly registered medical device company); formerly,
Chairman of the Board, Syracuse University College of Law.


Interested Persons
------------------

Donald H. Baxter, Chairman of the Board,
                  Director and President (Since 1989)              Age:(63)

Director, President, and Treasurer, Baxter Financial Corporation; Director and
President, Universal Programs International Limited (distributor); formerly,
Director, Sunol Molecular Corp. (biotechnology); formerly, Director, Great
Eastern Bank; formerly, Director, Frost Hanna Capital Group (publicly
registered acquisition company); 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.



Ronald F. Rohe, Vice President, Secretary,                          Age:(64)
                and Treasurer (Since 1990)

Chief Operating Officer and Marketing Director, Baxter Financial Corporation;
Secretary, Universal Programs International Limited (distributor); formerly,
registered representative, Paine Webber Incorporated.



Keith A. Edelman, Vice President and                               Age:(41)
                  Chief Compliance Officer (Since 2004)

Director of Operations and Director of Computer Operations, Baxter Financial
Corporation; Director of Operations, Philadelphia Fund, Inc.; Director of
Operations, Eagle Growth Shares, Inc.



Diane M. Sarro, Vice President (Since 2005)                        Age (42)

Director of Shareholder Services, Baxter Financial Corporation, Philadelphia
Fund, Inc. and Eagle Growth Shares, Inc.


Each Independent Director  receives from the Philadelphia Fund a $2,000 annual
fee and $1,150 for each quarterly Board of Directors meeting attended.  As an
Interested Director, 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, on an annual
basis, to $12,500 for the fiscal year ended November 30, 2006.  In addition,
each Independent Director receives $50 from Eagle Growth Shares, Inc. for each
quarterly Board of Directors' meeting he attends.  In addition, each
Independent Director

                                    13
<PAGE>

receives $550 from the Fund and $50 from Eagle Growth Shares for each semi-
annual Audit Committee meeting attended.  Mr. McArthur receives an additional
$150 from the Fund and $50 from Eagle Growth Shares for each semi-annual Audit
Committee meeting as compensation for acting as Audit Committee Chairman.


 _____________________________________________________________________________
|Independent Directors' Fund Holdings Table                     as of 12/31/06|
|-----------------------------------------------------------------------------|
|                                 |                     |    Total Dollar     |
|                                 |       Dollar        |   Range of Equity   |
|                                 |   Range of Equity   |  Securities in the  |
|                                 |     Securities      |Fund and Eagle Growth|
|Director's Name                  |    in the Fund      |    Shares, Inc.     |
|---------------------------------|---------------------|---------------------|
|Thomas J. Flaherty               |  $10,001 - $50,000  |   over $100,000     |
|---------------------------------|---------------------|---------------------|
|Kenneth W. McArthur              |        None         |        None         |
|---------------------------------|---------------------|---------------------|
|Robert L. Meyer                  |  $10,001 - $50,000  |  $10,001 - $50,000  |
|---------------------------------|---------------------|---------------------|
|Donald P. Parson                 |  $10,001 - $50,000  |   over $100,000     |
|_________________________________|_____________________|_____________________|


_______________________________________________________________________________
|Interested Director's Fund Holdings Table                     as of 12/31/06 |
|-----------------------------------------------------------------------------|
|                                 |                     |    Total Dollar     |
|                                 |       Dollar        |   Range of Equity   |
|                                 |   Range of Equity   |  Securities in the  |
|                                 |     Securities      |Fund and Eagle Growth|
|Director's Name                  |    in the Fund      |    Shares, Inc.     |
|---------------------------------|---------------------|---------------------|
|Donald H. Baxter                 |        None         |        None         |
|_________________________________|_____________________|_____________________|



_______________________________________________________________________________
|COMPENSATION TABLE                                                           |
|for the fiscal year ended 11/30/06                                           |
|----------------------------------       Pension or                          |
|                                         Retirement                          |
|                                         Benefits   Estimated   Total        |
|                                         Accrued    Annual      Compensation |
|                           Aggregate     as part    Benefits    from Fund and|
|                           Compensation  of Fund    Upon        Eagle Growth |
|Name, Position             From Fund     Expenses   Retirement  Shares, Inc. |
|_____________________________________________________________________________|
|Thomas J. Flaherty, Director   $6,550    $12,500                  $6,800     |
|-----------------------------------------------------------------------------|
|Kenneth W. McArthur, Director  $8,000                             $8,400     |
|-----------------------------------------------------------------------------|
|Robert L. Meyer, Director      $7,700                             $8,000     |
|-----------------------------------------------------------------------------|
|Donald P. Parson, Director     $7,700                             $8,000     |
|_____________________________________________________________________________|

The Fund and Baxter Financial Corporation, the Fund's investment advisor and
principal underwriter, have adopted a code of ethics under Rule 17j-1 of the
1940 Act, and Rule 204A-1 under the Investment Advisers Act of 1940 (in the
case of the Advisor).  The code of ethics permits personnel subject to the code
to invest in securities, including securities that may be purchased, sold or
held by the Fund provided that the Fund is not at the same time purchasing or
selling or considering purchasing or selling the same securities or the
President of the Fund or his assignee approves the transactions because there
is deemed to exist only a remote possibility of a conflict of interest.
However, personnel subject to the code are not allowed to purchase or sell
securities within a seven calendar day period before or after the purchase or
sale of the same identical security by the Fund.


                                  BROKERAGE
                                  ---------

Donald H. Baxter, President of Baxter Financial Corporation, the Fund's
investment advisor and principal 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

                                    14
<PAGE>

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.  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. The Advisor,
however, pursuant to policies and procedures approved by the Board of
Directors of the Fund, is prohibited from selecting brokers and dealers to
effect the Fund's portfolio securities transactions based (in whole or in
part) on a broker's or dealer's promotion or sale of shares issued by the
Fund or any other registered investment company.  Mr. Baxter 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 the fiscal year ended November 30, 2006, the Fund paid total
brokerage commissions of $33,500 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 by the
Advisor 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.

Baxter Financial Corporation serves as investment advisor to two registered
investment companies, the Fund and Eagle Growth Shares, Inc., and manages the
assets of various other institutional and individual investors.  Receipt of
research information by Baxter Financial Corporation also may be of benefit to
Eagle Growth Shares, Inc. and these private accounts.

During the fiscal years ended November 30, 2006, 2005, and 2004, the Fund paid
total brokerage commissions of $62,500, $74,505, and $42,993, respectively. The
decreased level of brokerage commissions paid by the Fund in the 2006 fiscal
year was due to less market volatility resulting in fewer shares of securities
being bought and sold in the portfolio. The increased level of brokerage
commissions paid by the Fund in the 2005 fiscal year was attributable to the
Advisor taking a defensive position due to market conditions.  The defensive
posture involved increased selling of equities resulting in a larger commercial
paper position.

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.


      INFORMATION ABOUT THE INVESTMENT ADVISOR AND OTHER SERVICE PROVIDERS
      ---------------------------------------------------------------------

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 of the Fund in excess of $200,000,000 but less than $400,000,000, and
to .50 percent on net assets of the Fund 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, 2006, the net assets of the Fund
were $85,882,786.  For the fiscal year ended November 30, 2006, the Fund paid
the Advisor total advisory fees equal, on an annual basis, to .75% of the
average net assets.

Donald H. Baxter controls the Advisor.  He serves as President, Treasurer,
Director and is the sole shareholder of the Advisor.  Mr. Baxter is solely
responsible for the day-to-day management of the Fund's investment portfolio.

He is the President and Chairman of the Board of Directors of the Philadelphia
Fund, Inc. and has served as the portfolio manager of the Fund since May 1,
1987. In addition to the Fund, Mr. Baxter, as of November 30, 2006, managed (i)
one other U.S. registered investment company, Eagle Growth Shares, Inc., which
has $3.6 million in assets, and (ii) 10 other accounts, including his personal
account, which have assets of $32.1 million.  In the event there were any
conflicts of interest between the Fund and Eagle Growth Shares, Inc., the
Advisor believes, as in the case of the other accounts, that it has implemented
policies and procedures that will address and prevent (or manage) any adverse
consequences.

The portfolio manager's management of other accounts may give rise to potential
conflicts of interest in connection with the management of the Fund's
investments. The other accounts may have similar investment objectives to the
Fund's or hold, purchase, or sell securities that are eligible to be held,
purchased, or sold by the Fund (or vice versa). The Advisor does not anticipate
that any conflicts between the investment strategies of the Fund and the
investment strategies of the other accounts, if any, will be material.  If any
conflicts do arise, the Advisor believes it has adopted policies and
procedures, in accordance with applicable laws, and its Code of Ethics contains
legally required policies which are designed to prevent or manage any conflicts

                                    15
<PAGE>

of interest.

In the case of Eagle Growth Shares Fund, Inc., which has an investment
objective seeking growth of capital, the portfolio manager believes that the
possibility for any conflicts of interest with the Funds regarding investment
opportunities, or similar portfolio holdings, is extremely unlikely, and if it
does arise, not material.  The Fund, which invests in large cap stocks, does
not typically purchase the type of small to mid cap stocks acquired by Eagle
Growth Shares, Inc.

A potential conflict of interest may arise as a result of the portfolio
manager's day-to-day management of the Fund.  It is possible theoretically that
the portfolio manager, knowing the trading activities of the Fund, could use
this information to benefit the other accounts and to the detriment of the
Fund.  As stated above, under normal market conditions, the Fund invests in
issues with large capitalizations and large amounts of outstanding shares.  The
Advisor does not believe that, given the size of the investments of the Fund in
the large cap stock category, there would be any material benefit to the other
accounts by the Fund's purchase and sale of securities.  Furthermore, given the
size of the Fund's positions, the Advisor does not believe that there is a
possibility for a material conflict of interest with respect to the allocation
of investment opportunities.  However, while the potential for conflict of
interest is extremely remote, the Fund has policies and procedures in place to
prohibit knowledge of the Fund's trading activity from being used to benefit
others. Furthermore, the Advisor is subject to a fiduciary duty, under both the
1940 Act and the Investment Advisers Act of 1940, to the Fund's shareholders
and to act in their best interest at all times.

Mr. Baxter is compensated by the Advisor with an annual salary and bonus, both
of which vary from year to year, based on a variety of economic factors.  The
portfolio manager's compensation is not determined by factors such as the
Fund's performance, in the conventional sense (i.e., the portfolio manager's
compensation is not based on the Fund's pre- or after-tax performance over a
period of time, or measured against a particular index).  Because Mr. Baxter
is the sole owner of the Advisor, his compensation likely will increase if the
assets of the Fund increase (which may result from strong investment
performance), since this will entitle the Advisor to a higher amount of fees by
the application of the Fund's advisory fee under pursuant to the Investment
Advisory Agreement (subject to the sliding breakpoint investment advisory fee
schedule described in this Statement of Additional information).

The portfolio manager does not own shares in the Fund.

The Investment Advisory Agreement (the "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 Advisory Agreement
requires the Advisor to provide the Fund with a continuous review of and
recommendations regarding investment of the Fund's assets.

During the fiscal years ended November 30, 2006, 2005, and 2004,  the Fund
paid investment advisory fees to the Advisor totaling $644,413, $650,552, and
$599,243, respectively.

The Advisor is also responsible for providing the Fund with administrative
services, such as clerical and secretarial personnel and facilities, necessary
to administer the 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 administration services provided by the Advisor
are subject to the approval and the overall supervision of the Fund's Board of
Directors.

During the fiscal years ended November 30, 2006, 2005, and 2004, the Fund paid
administration fees totaling $214,808, $216,847, and $199,748,  respectively,
to Baxter Financial Corporation.

The current Administration Agreement between the Fund and the Advisor requires
the Advisor 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 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.

U.S. Bank, N.A. acts as the Fund's custodian.  Unified Fund Services, Inc.
acts as transfer agent, dividend paying agent, and provides the Fund with
certain accounting services.

                                    16
<PAGE>


                            PRINCIPAL UNDERWRITER
                            ---------------------

The Fund's shares are offered, without a sales charge, on a continuous and
"best efforts" basis by Baxter Financial Corporation, the Fund's principal
underwriter. Baxter Financial Corporation is located at 1200 North Federal
Highway, Suite 424, Boca Raton, FL 33432.



                                 DISTRIBUTION
                                 ------------

The Board of Directors and stockholders of the Fund approved a Plan of
Distribution in accordance with Rule 12b-1 of the 1940 Act (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
of the Fund calculated on the last business day of each month.

Payment may be made on either a compensatory or reimbursement basis as
determined by the Board of Directors. BFC has agreed to reduce the fees
payable under the Distribution Plan to .15% per annum until further notice.

Distribution payments may be made by the Fund directly or to BFC 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 BFC are for
actual costs and expenses incurred or to be incurred by BFC in connection with
the distribution of Fund shares.  Payments to dealers may include commissions
and "trail commissions" or service fees for services in connection with the
sale or retention of Fund shares.  Payments may not be used to defray the
overhead expense of BFC, interest, or for the carrying 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 the fiscal year ended November 30, 2006, the Fund paid out a total of
$128,885 under the Distribution Plan.  The entire amount 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; assistance with questions 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 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 Independent Directors, 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 Independent 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 1940 Act.  Also, while the
Distribution Plan remains in effect, the nomination of the Independent
Directors of the Fund is committed to the discretion of such Directors.

The Board of Directors believes 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% to .625% of those assets
in excess of $200,000,000).  Mr. Baxter, the President and sole stockholder of
BFC, the Fund's investment advisor, underwriter, and administrator, would
also benefit from increased sales of Fund shares.

The Distribution Plan provides that out of the total maximum distribution fee
payable , which is .5% of the net assets value of the Fund on an annual basis,
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 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.  In connection with
the foregoing, BFC is required to

                                    17
<PAGE>

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. ("NASD"), for
providing shareholders of the Fund with services that are similar to those
described above.

An NASD rule has reduced and may continue to reduce the amount that the Fund
may pay for sales-related expenses under the Distribution Plan.


                INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
                ---------------------------------------------

Briggs, Bunting & Dougherty, LLP, Philadelphia PA, serve as the independent
registered 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.


                             FINANCIAL STATEMENTS
                             --------------------

The financial statements of the Fund for the fiscal year ended November 30,
2006, 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 Report of Independent
Registered Public Accounting Firm, as set forth in the Fund's Annual Report to
Stockholders for fiscal year ended November 30, 2006, are incorporated herein
by reference.



                            PROXY VOTING POLICIES
                            ---------------------

General Guidelines
------------------

In voting proxies of portfolio securities, the Fund is guided by general
fiduciary principles.  The Fund's goal is to act prudently and solely in the
best interest of the Fund's shareholders.  The Fund attempts to consider all
factors of its vote that could affect the value of its investments and will
vote proxies in the manner that it believes will be consistent with efforts
to maximize shareholder value.

The Fund's portfolio manager is responsible for monitoring, researching and
deciding proxy votes for portfolio securities of the Fund.


How The Fund Votes
------------------

Generally, the Fund divides proxies into routine matters and non-recurring
extraordinary matters.



   A. Routine Matters

      Voting decisions for routine matters are made by the Fund's portfolio
      manager.  It is the Fund's general policy, absent a particular reason
      to the contrary, to vote with management's recommendations on routine
      matters.

   B. Non-Recurring Extraordinary Matters

      For non-recurring extraordinary matters, the Fund votes on a
      case-by-case basis, generally following the suggestions for such
      matters detailed below.  If there is a non-recurring extraordinary
      matter for which there is no suggestion detailed below, the Fund votes
      on a case-by-case basis in accordance with the General Guidelines set
      forth above.

      1. Accept

         [BULLET] Proposals supporting best practices for corporate
                  governance.

         [BULLET] Restoration or protection of shareholders' authority.

      2. Reject

         [BULLET] Protection of management from results of mergers and
                  acquisitions.

                                    18
<PAGE>

         [BULLET] Proposals having the effect of diluting the value of the
                  existing shares.

      3. Vote with Management

         [BULLET] Proposals that address social or moral issues.

Avoidance Of Potential Conflicts Of Interest
--------------------------------------------

   A. General Principles

      Voting of shares of portfolio securities shall be conducted in a
      manner consistent with the best interests of Fund shareholders as
      follows:

         [BULLET] Proxies of portfolio securities shall be voted in accordance
                  with these Proxy Voting Policies; and

         [BULLET] Proxies of portfolio securities shall be voted without
                  regard to any other relationship, business or otherwise,
                  between (i) the issuers of the portfolio securities, and
                  (ii) the Fund, its investment advisor, principal
                  underwriter or any affiliated person thereof.

   B. Identifying and Addressing Conflicts of Interest

      1. Identification of Conflicts of Interest

         The portfolio manager is responsible for identifying conflicts of
         interest with respect to voting proxies of portfolio securities.
         Such conflicts of interest may arise from:

         [BULLET] the conduct of the Fund's business;

         [BULLET] relationships, business, or other connections between
                  (i) the issuers of the portfolio securities, and (ii) the
                  Fund, its investment advisor, principal underwriter or
                  any affiliated person thereof; or

         [BULLET] other special circumstances.

      2. Determination of Materiality

         A conflict of interest will be considered material to the extent
         that:

         [BULLET] the conflict has the potential to influence the portfolio
                  manager's decision-making in voting the proxy; or

         [BULLET] other particular facts and circumstances require a
                  determination of materiality.

      3. Non-Material Conflicts

         If it is determined that a conflict of interest is not material,
         the portfolio manager may vote the proxy, notwithstanding the
         existence of the conflict.

      4. Material Conflicts of Interest

         If it is determined that a conflict of interest is material, the
         portfolio manager will resolve such conflict of interest before
         voting the proxy(ies) affected by the conflict of interest.  Such
         resolution may include:

         [BULLET] disclosing the conflict to the Board of Directors of
                  the Fund and obtaining the consent of the Board
                  before voting;

         [BULLET] engaging another party to vote the proxy on the behalf of
                  the Fund;

                                    19
<PAGE>

         [BULLET] engaging a third party to recommend a vote with respect
                  to the proxy based on application of the policies set
                  forth herein; or

         [BULLET] such other method as the portfolio manager deems
                  appropriate under the circumstances, given the nature of
                  the conflict, which method will be subsequently reported
                  to the Board of Directors at the next regularly-
                  scheduled meeting.


In accordance with regulations of the Securities and Exchange Commission, the
Funds' proxy voting records for the twelve-month period ended June 30, 2007
will be filed with the Securities and Exchange Commission no later than
August 31, 2007.  Information regarding how the Fund voted proxies relating to
portfolio securities during the 12-month period ended June 30, 2006 are
available without charge, upon request, by calling 1-800-749-9933 and on the
Commission's website at http://www.sec.gov.


                                    20