NOTICE OF ANNUAL MEETING
TO BE HELD AUGUST 19, 2008
To the Shareholders of the Valley Forge Fund
NOTICE IS HEREBY GIVEN that the Annual Meeting of The Valley Forge Fund will be held at 1375 Anthony Wayne Drive, Wayne PA. 19087 on August 19, 2008 at 7:30PM for the following purposes.
1) To elect or reject five (5) directors to serve until the next Annual Meeting of Shareholders or until their successors are elected and qualified.
2) To ratify or reject the selection of Conner & Associates PC, Certified Public Accountants to audit and certify financial statements of the Fund for the fiscal year ending December 31, 2008.
3) To transact such other business as may properly come before the meeting or any general adjournments thereof.
The Board of Directors has fixed the close of business on June 30, 2008 as the record date for determination of the shareholders entitled to notice of, and to vote at the meeting.
PLEASE FILL IN, SIGN AND RETURN THE ENCLOSED PROXY IF
YOU DO NOT EXPECT TO ATTEND THE MEETING IN PERSON.
PROMPT RETURN OF YOUR PROXY WILL BE APPRECIATED.
PRIVACY POLICY
THE VALLEY FORGE FUND
The Federal Securities and Exchange Commission has adopted a ruling regarding the “Privacy of Consumer Financial Information” known as Regulation S-P. This ruling states that financial institutions such as the Valley Forge Fund must provide you with this notice of our privacy policies and practices on an annual basis. The Fund is pleased to report that:
A.
Information We Collect–The Fund’s application forms contain names, addresses, phone numbers, W9 status, birth dates and social security or tax ID numbers for regular accounts. IRA application forms also contain beneficiary information. In addition, the Fund retains records of all of your security transactions such as your account balances and transaction histories.
B.
Our Disclosure Statement – The Fund only discloses personal information about you while you are a shareholder or if you have left the Fund as required by law. That is, to you personally, to the Securities & Exchange Commission and to government tax agencies. And, since all transactions are handled internally, the number of employees that even see your information is limited. However, funds cannot be IRA trustees. Your Fund now uses Principal Trust Company to provide this service which requires disclosure of your IRA shareholder name and address to it on an annual basis. In this regard, Principal Trust has a similar Privacy Policy to protect this information other than that required by law.
You should call 1-800-548-1942 if there are any questions about the Fund’s Regulation S-P status.
PROXY STATEMENT
THE VALLEY FORGE FUND
1375 Anthony Wayne Dr. Wayne, PA. 19087 Tel. 1-800-548-1942
Enclosed herewith is notice of an Annual Meeting of Shareholders of The Valley Forge Fund (the "Fund") and a proxy form solicited by the Board of Directors of the Fund. This material was first mailed to shareholders on June 30, 2008. Exercised proxies may be revoked by you at any time either by mail notice to the Fund, resubmittal at a later date or voting at the meeting. Please place your instructions on the enclosed form, then sign, date and return.
The Fund has one class of capital stock of the Fund, all having equal voting rights. On June 30, 2008, the date of record, there were 951,359 shares outstanding, held by shareholders entitled to notice of and to vote at the meeting. In all matters, each share has one vote.
A quorum must exist to hold an annual meeting. It requires that more than fifty percent of the outstanding shares be present or represented by proxy. Abstentions and broker accounts that do not vote are considered as being present with negative votes. Sixty-seven percent of the votes cast or fifty percent of the outstanding shares, whichever is less, will pass any proposal presented.
PROPOSAL #1: ELECTION OF DIRECTORS
All directors listed below have consented to serve if elected until the next Annual Meeting of Shareholders or until their successors are elected and qualified. All current Fund Officers are also presented in the following table. None of these directors or current officers holds directorships in other mutual funds.
Interested Officers & Director
Name, Address Position in Term of Office Principal # of
and Age the Fund and Length of Occupation Funds
Time Served Past Five Overseen
Years by Director
*Bernard B Klawans President Elected for One President One
1375 Anthony Wayne and Year. Served Valley Forge
Wayne PA Director Since Inception Fund
87 June 30, 1971
*Sandra K. Texter Treasurer Elected for One System Analyst None
551 Red Coat Lane Year. Served Lockheed Martin
Phoenixville PA since King of Prussia
58 Jan. 30, 2003 PA
* "Interested persons" as defined in the Investment Company Act of 1940. Mr. Klawans is an "interested person" because he owns the Fund's Investment Adviser. Mrs. Texter (the daughter of Mr. Klawans) is an interested person because all officers of the Fund are considered to be so.
Continued Table
Independent Directors
Name, Address Position in Term of Office Principal # of
and Age the Fund and Length of Occupation Funds
Time Served Past Five Overseen
Years by Director
Victor J. Belanger Director Elected for One Retired Chief One
PO Box 96 Year. Served Finance Officer
Princeton Junction NJ Since Linearizer
66 Aug. 18, 1980 Tech. Inc.
Robbinsville NJ
Dr. James P. King Director Elected for One President One
904 Breezewood Lane Year. Served Desilube Tech
Lansdale PA Since Inception Inc.
75 June 30, 1971 Lansdale PA
C. William Majer Director Elected for One President One
732 Summit Ave Year. Served MajerPlus LTD
Philadelphia PA Since Philadelphia PA
72 June 21, 2005
Donald A. Peterson Director Elected for One Program Mgr One
3741 Worthington Rd Year. Served DRS Technologies
Collegeville PA Since King of Prussia PA
67 Aug. 15, 1974
Shareholders have one vote for each share they own for each of the Directors of their choice. All proxies returned to the Fund, except those specifically marked to withhold authority, will be cast for the nominees listed above. A majority of the votes cast when a quorum is present will elect each director. All nominees stood for election last year and were overwhelmingly reelected
BOARD MEETINGS AND DIRECTORS DUTIES
Meetings: There were six board meetings in 2007. Four directors attended all meetings. Mr. Belanger did not attend two of the scheduled meeting.
Director Duties: The Board of Directors select officers to run the Fund, propose all changes in operating procedures where approval of a majority of the Independent Directors is required, pass on the Fund's auditor on a yearly basis and monitor Fund activities to insure to the best of their collective abilities that Fund Officers are meeting Fund commitments to their shareholders, the Securities and Exchange Commission, the Internal Revenue Service and Blue Sky arrangements with the various states where the Fund offers its shares.
FUND HOLDINGS OF THE PRESENT OFFICERS AND DIRECTORS
Name Dollar Range of Equity Aggregate Dollar Range of Equity
Securities in the Fund Securities in All Register Investment
Companies Overseen by Directors and
Officers in Family of Investment Companies
Interested Director and Officers
Bernard B. Klawans over $1,000,000 over $1,000,000
Sandra K. Texter over $ 500,000 over $ 500,000
Independent Directors
Victor J. Belanger over $ 10,000 over $ 10,000
Dr. James P. King over $ 25,000 over $ 25,000
C. William Majer over $ 25,000 over $ 25,000
Donald A. Peterson over $ 100,000 over $ 100,000
Mr. Belanger sold $185,000, Mr. Peterson sold $100,000 and Mr. Majer sold $11,000 of their holdings in the Fund in the Fund in the fall of 2007. The rest of the Officers, Directors and Associated Persons serving since the last Annual Meeting, Mr. Klawans, Mrs. Texter and Mrs. Ellen Klawans (daughter-in-law of Mr. Klawans) had essentially no change in their dollar range of equity security holdings in the Fund. None serve as directors for other registered investment companies.
REMUNERATION OF DIRECTORS AND OFFICERS
The Fund does not pay salaries to their Officers or Directors. Compensations listed below are all travel and other expenses associated with attending meetings.
.
Valley Forge Fund Family of Funds
Name Compensation Valley Forge
in 2007 Compensation in 2007 Interested Director and Officers
*Bernard B. Klawans none none
*Sandra K. Texter none none
Independent Directors
Victor J. Belanger $ 559 $ 559
Dr. James P. King $ 674 $ 674
C. William Majer $ 674 $ 674
Donald A. Peterson $ 675 $ 675
* Mr. Klawans and Mrs. Texter serve the Fund in many capacities but only receive compensation from the Management Company that Mr. Klawans owns.
BROKERAGE
The Fund requires all brokers to affect transactions in portfolio securities to get prompt execution of orders at the most favorable price. Where consistent with best price and execution and, in light of its limited resources, the Fund will deal with primary markets in placing over-the-counter portfolio orders. The Fund places all orders for purchase and sale of its securities through its president who is answerable to the Board of Directors. The President may select brokers who, in addition to meeting the primary requirements of execution and price, have furnished statistical or other factual information and services that are helpful or necessary to the Fund's normal operation. Services may include economic, statistical or industry studies, security analysis and sales literature. No effort is made to determine the value of these services or the amou nt they may have reduced Adviser expenses. Mr. Scott Klawans, the son of Mr. Bernard Klawans who is a broker with Best-Vest & Co., has provided brokerage services to the Fund that appear to be satisfactory to the Fund’s Board of Directors.
Other than as set forth above, the Fund has no fixed policy, formula, method or criteria used in allocating brokerage business to brokers furnishing these materials and services. In its most recently completed year, 2007, the Fund paid $8,165 in brokerage commissions. Commissions were $10,701 in 2006 and $4,813 in 2005. The Directors evaluate and review annually the reasonableness of brokerage commissions paid.
PROPOSAL #2: RATIFICATION OR REJECTION OF SELECTION OF AUDITOR
Your Board of Directors recommend, subject to shareholder approval, Conner & Associates PC (“C&A”) Certified Public Accountants to audit and certify financial statements of the Fund for the year 2008 since they performed audit services in an exemplary fashion to aid Fund Management to reply to the Securities & Exchange Commission (“SEC”) on-site bi-annual examination of the Fund’s operations. The Board has adopted new procedures to pre-approve the types of professional services required of their auditors.
Neither C&A nor any of its partners have any direct or material indirect interest in the Fund and will provide no non-auditing services. If you desire to have representatives of C&A present at the meeting you may contact the Treasurer of the Fund in advance of the meeting and request their presence.
Audit Fees: Conner & Associates charged $12,500 for the 2007 audit. The fee for the year 2008 is expected to be decreased to about $10,000 because C&A personnel are now familiar with the Fund’s operating procedures that they helped modify to meet the new requirements brought on by detected malfeasance in other mutual fund complexes. This charge includes reporting its findings to the Securities & Exchange Commission and the Fund's Board of Directors concerning the certified audit. The status of the Fund's securities held in corporate name is also reported three times a year as required since the Fund acts as self-custodian.
All Other Fees: There are no other Audit Fees expected.
SHAREHOLDER PROPOSALS
The Fund expects to hold its next annual meeting in August 2009. Shareholder proposals may be presented at that meeting provided they are received by the Fund no later than January 4, 2009 in accordance with Rule 14a-8 under the Securities & Exchange Act of 1934 which sets forth certain requirements.
OTHER MATTERS
The Directors know of no other matters to be presented at the meeting other than those mentioned above. Should other business come before the meeting, the proxies will be voted in accordance with the view of the Board of Directors.
PROXY - SOLICITED BY THE BOARD OF DIRECTORS
VALLEY FORGE FUND ANNUAL MEETING OF SHAREHOLDERS AUGUST 19, 2008
The annual meeting of the VALLEY FORGE FUND will be held at 1375 Anthony Wayne Dr., Wayne PA at 7:30 P.M. The undersigned hereby appoints Bernard B. Klawans or Sandra K. Texter as proxy to represent and to vote all shares of the undersigned at the annual shareholder meeting and all adjournments thereof, with all powers the undersigned would possess if personally present, upon the matters specified below.
SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED: PROXIES WILL
BE VOTED POSITIVELY IF NO DIRECTION IS GIVEN. PROXIES MAY VOTE AT THEIR DIS-
CRETION ON ANY OTHER MATTER THAT MAY PROPERLY COME BEFORE THE MEETING
The Board of Directors recommends that you vote FOR on all Proposals.
1. Election of Directors.
___
l___l FOR all nominees except as marked to the contrary below.
____
l___l WITHHOLD AUTHORITY to vote for all nominees.
Instructions: To withhold authority to vote for nominees, strike a line through his/their name(s) in the following list.
Bernard B. Klawans Victor J. Belanger Dr, James P. King
C. William Majer Donald A. Peterson
2. Ratification or rejection of selection of Conner & Associates PC. by the Board of Directors as independent public accountants to audit and certify financial statements of the Fund for the fiscal year ending December 31 2008.
___ ___ ___
l___l FOR l___l AGAINST l___l ABSTAIN
3. To consider and act upon any other matters that may properly come before the meeting or any adjournments thereof
Please mark, date, sign and return the proxy promptly in the enclosed envelope. For joint registrations, both parties should sign.
Dated ___________________, 2008 _______________________
Shareholder's Signature
_______________________
Shareholder's Signature
You should review your address and note corrections below.
