NOTICE OF ANNUAL MEETING
TO BE HELD AUGUST 21, 2001
To the shareholders of the Valley Forge Fund
NOTICE IS HEREBY GIVEN that the Annual Meeting of the Valley Forge Fund, Inc.
will be held at 1375 Anthony Wayne Drive, Wayne, PA. 19087 on August 21, 2001 at
7:30 PM for the following purposes.
1) To elect six (6) 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 Sanville & Company, Certified Public
Accountants, as independent public accountants to audit and certify financial
statements of the Fund for the fiscal year ending December 31, 2001.
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 24, 2001 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.
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 proxy material was first mailed to shareholders on July 1, 2001.
The proxy may be revoked at any time before it is exercised either by mail
notice to the Fund or through resubmittal at a later date. Please place your
instructions on the enclosed one, then sign, date and return it. All costs of
soliciting this proxy will be borne by your Fund.
You may also vote in person at the meeting that would override all your previ-
ously filed proxies.
The Fund has one class of capital stock all having equal voting rights. On June
24, 2001, the date of record, there were 874,384 shares outstanding, held by
shareholders entitled to notice of and to vote at the meeting. In all matters,
each share has one vote.
ELECTION OF DIRECTORS
Six (6) nominees listed below have consented to serve as directors, if elected,
until the next Annual Meeting of Shareholders or until their successors are
elected and qualified.
Nominees for Election of Directors of the Valley Forge Fund
Name, Age & Directors Principal Occupation # Share % of
Fund Office Since Past Five Years 06/24/01 Class
Bernard B. Klawans 1971 President 76,521 8.75
80 Valley Forge Fund, Inc.
* President Valley Forge, PA.
(1)
William A. Texter 1992 Retired Nuclear Eng Mgr 3,618 0.41
54 Peco Energy Co.
Philadelphia, PA.
(2)
Victor J. Belanger 1978 VP & Chief Oper Officer 17,259 1.97
59 Linearizer Tech, Inc.
Robbinsville, NJ.
(3)
Dr. Gerd H. Dahl 1976 Retired Chemist 4,209 0.48
70 Elf Atochen N. A.
Philadelphia, PA.
* Directors of the Fund who are "interested persons" as defined in the Invest-
ment Company Act of 1940. Mr. Klawans is an "interested person" by virtue of his
position in the Fund's Investment Adviser. All Fund officers are also considered
"interested persons".
1) These shares are held in a joint account with his wife, Sandra K. Texter.
2) Includes 347 shares held in custodianship for Father, Francis V. Belanger,
655 shares for Daughter,Suzanne Belanger and 15,964 shares in IRAs.
3) Includes 215 shares held in custodianship for daughter Karen, 215 shares for
daughter Laura and 1869 shares in an IRA.
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Name & Age Directors Principal Occupation # Share % of
Since Past Five Years 06/24/01 Class
(1)
Dr. James P. King 1971 President 2,432 0.28
69 Desilube Technology Inc .
Lansdale, PA.
(2)
Donald A. Peterson 1986 Project Manager 21,338 2.44
60 Lockeed Martin
Norristown, PA.
1) These shares are held in a Living Trust Dated August 2, 1994.
2) Includes 16,488 shares held in a joint account with his wife, Donna Peterson
and 4,850 shares in an IRA.
Shareholders have one vote for each share they own for each of six 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 & Committees
There were five Board of Directors meetings in 2000. Mr. Texter attended two
and Mr. Peterson attended three. The remaining four directors attended all five.
Principal Executive Officers
Name Age Executive Office & Tenure
Bernard B. Klawans 80 President since 1971 (inception)
William A. Texter 54 Secretary since 2000
Sandra K. Texter 50 Treasurer since 1999
The Board of Directors elects officers for a term of one year.
Remuneration of Directors and Officers
The Fund pays $49.50 a month to Mr. Texter to cover his miscellaneous expenses
associated with services rendered as officer of the Fund. In addition, all
directors except Mr. Texter and Mr. Klawans are paid $99 for expenses associated
with each Directors' meeting they attend. The officers and directors of the
Fund, as a group, own 185,593 shares beneficially, directly and indirectly or
21.22% of the shares outstanding. There are no other classes of shares issued.
BROKERAGE
The Fund requires all brokers to effect transactions in portfolio securities in
such a manner as to get prompt execution of the 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 market makers in placing over
the counter portfolio orders. The Fund places all orders for purchase and sale
of its portfolio securities through its President who is answerable to the Board
of Directors. The President may selct brokers who, in addition to meeting the
primary requirements of execution & price, have furnished statistical or other
factual information and services, which, in the opinion of management, are
helpful or necessary to the Fund's normal operations. Those services may inclu-
de economic or industry studies, security analysis & reports, sales literature
and statistical services furnished either directly to the Fund or to the
Adviser. No effort is made in any given circumstance to determine the value of
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these services or the amount they might have reduced Adviser expenses.
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 ma-
terials and services. In it's most recently completed year, 2000, the Fund paid
$16,600 in brokerage commissions. Brokerage commissions were $26,726 in 1999
and $38,375 in 1998. The Board of Directors evaluates and reviews semi-annually
the reasonableness of brokerage commissions paid.
RATIFICATION OR REJECTION OF SELECTION OF AUDITORS
Your Board of Directors has selected, subject to shareholder approval, Sanville
and Company, Certified Public Accountants ("S&C") to audit and certify financial
statements of the Fund for the year 2001. Our relationship with Larson Allen
Weishair & Co. LLP ("LAW&C") who performed our audit last year remains amicable.
The change to "S&C" is recommended because of a significabt increase in proposed
fees by "LAW&C" to perform the year 2001 audit. "S&C" is suggested based on our
review of their ability to perfornm credible audits of other mutual funds at
competitive prices. "S&C" will review the Fund's Annual Report to Shareholders
and the Fund's filings with the Securities and Exchange Commission.
The Board of Directors has adopted procedures to pre-approve the types of
professional services for which the Fund may retain such auditors. As part of
the approval process, the Board of Directors considers whether the performance
of each professional service is likely to affect the independence of "S&C".
Neither "S&C" nor any of its partners have any direct or material indirect
financial interest in the Fund and will pprovide no non-auditing services to the
Fund if selected.
A representative of Sanville & Co. will not be present at the meeting unless re-
quested by a shareholder (either in writing or by telephone) in advance of the
meeting. Such requests should be directed to the secretary of the Fund.
SHAREHOLDER PROPOSALS
The Fund tentatively expects to hold its next annual meeting in August 2002.
Shareholder proposals may be presented at that meeting provided they are recei-
ved by the Fund not later then January 4, 2002 in accordance with Rule 14a-8
under the Securities & Exchange Act of 1934 which sets forth certain require-
ments.
OTHER MATTERS
The Board of Directors knows 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.
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PROXY - SOLICITED BY THE BOARD OF DIRECTORS
VALLEY FORGE FUND ANNUAL MEETING OF SHAREHOLDERS AUG. 21, 2001
The annual meeting of the VALLEY FORGE FUND will be held Aug. 21, 2001 at 1375
Anthony Wayne Dr., Wayne, Pa. at 7:30 P.M. The under-signed hereby appoints
Bernard B. Klawans and/or William A. Texter as proxies to represent and to vote
all shares of the undersigned at the annual meeting of shareholders and all
adjournments thereof, with all powers the undersigned would possess if personal-
ly present, upon the matters specified below.
SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED: IF NO DIRECTION
IS INDICATED AS TO A PROPOSAL, THE PROXIES SHALL VOTE FOR SUCH PROPOSAL. THE
PROXIES MAY VOTE AT THEIR DISCRETION ON ANY OTHER MATTER WHICH MAY PROPERLY
COME BEFORE THE MEETING.
The Board of Directors recommends that you vote FOR on all items.
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 William A. Texter Victor J. Belanger
Dr. Gerd H. Dahl Dr James P. King Donald A. Peterson
2. Proposal to ratify the selection of Sanville & Co. 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, 2000.
___ ___ ___
l___l FOR l___l AGAINST l___l ABSTAIN
Please mark, date, sign and return the proxy promptly in the enclosed envelope.
For joint registrations, both parties should sign.
Dated ___________________, 2001 _______________________
Shareholder's Signature
_______________________
Shareholder's Signature
Please review your address and note corrections below.
PRIVACY NOTICE - VALLEY FORGE FUND
PO Box 262
Valley Forge PA. 19481
1-800-548-1942
June 30, 2001
Dear Shareholders:
The Federal Securities and Exchange Commission has adapted a ruling regarding
the "Privacy of Consumer Financial Information known as Regulation S-P. This
ruling states that financial instutions such as your Fund must provide you with
this notice of our privacy policies and practices on an annual basis. We are
pleased to report that:
A. Information We Collect - Our application forms contain names, addresses,
phone numbers, W-9 status and social security or tax ID numberes for regular
accounts. Our IRA application forms also contain birth date and benificiary
information. Of course, we also keep record of all of your security tran-
sactions such as your account balances and transaction histories.
B. Our Disclosure Statement - We only disclose personal information about you
either while you are a shareholder, or if you have left the Fund as required
by law. And, since we handle regular transactions internally, the number of
employees that even see your information is limited. However, funds cannot
be IRA trustees. We use Delaware Charter Gurantee & Trust Co. to provide
this service which requires that we disclose our IRA shareholder name and
address list to it on an annual basis. In this regard, we have forwarded a
letter requiring them to get permission from our IRA shareholders if they
wish to use the information we supply other than required by law.
You may call 1-800-548-1942 if there are any questions about our regulatiom S-P
status.
Respectfully submitted
Bernard B. Klawans