NOTICE OF ANNUAL MEETING
TO BE HELD AUGUST 17. 2004
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 17, 2004 at 7:30 PM
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 Sanville & Company, Certified Public
Accountants to audit and certify financial statements of the Fund for the
fiscal year ending December 31, 2004.
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 18, 2004 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
June 21. 2004
The Federal Securities & Exchange Commission has adopted a ruling regarding the
"Privacy of Consumer Finacial Information" known as Regulation S-P. This ruling
states that financial institutions 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, W9 status and social security or tax ID numbers for regular
accounts. Our IRA application forms also contain birth date and beneficiary
information. We also keep record of all of your security transactions 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 Guarantee and Trust Co. to provide
this service which requires that we disclose our IRA shareholder name and ad-
dress 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 that required by law.
You may call 1-800-548-1942 if there are any questions about the Fund's Regu-
lation 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 21, 2004. Ex-
ercised 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 one, then sign, date and return.
The Fund has one class of capital stock of the Fund, all having equal voting
rights. On June 18, 2004, the date of record, there were 1,088,811.8936 shares
outstanding, held by shareholders entitled to notice of and to vote at the meet-
ing. 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. Absten-
tions 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 quali-
fied. All current Fund Officers are also presented in the following table.
Noneof thes directors or current officers hold directorships in other mutual
funds
Name, Address Position in Term of Office Principal # of Other
and Age the Fund and Length of Occupation Funds Direct-
Time Served Past Five in Fund orships
Years Complex Held
Overseen
by Director
Interested Director & Officer
*Bernard B Klawans President Elected for One President of One None
1375 Anthony Wayne and Year. Served Valley Forge
Wayne PA Director Since Inception Fund
83 Dec. 15, 1972
Interested Officer
*Sandra K. Texter Treasurer Elected for One System Analyst One None
551 Red Coat Lane Year. Served Lockeed Martin
Phoenixville PA Since King of Prussia
53 Jan. 30, 2003 PA
* "Interested persons" as defined in the Investment Company Act of 1940. Mr.
Klawans is an "interested person" because of his ownership of the Fund's Invest-
ment Adviser. Sandra Texter is an interested person because all officers of the
Fund are considered to be so.
- 1 -
Continued Table
Name, Address Position in Term of Office Principal # of Other
and Age the Fund and Length of Occupation Funds Direct-
Time Served Past Five in Fund orships
Years Complex Held
Overseen
by Director
Independent Directors
Victor J. Belanger Director Elected for One Chief Finan. One None
PO Box 96 Year. Served Officer
Princeton Junction NJ Since Linearizer
62 Aug. 18, 1980 Tech. Inc.
Robinsville NJ
Dr. James P. King Director Elected for One President One None
904 Breezewood Lane Year. Served Desilube Tech
Lansdale PA Since Inception Inc.
72 Dec. 15, 1972 Lansdale PA
Donald A. Peterson Director Elected for One Retired One None
3741 Worthington Rd Year. Served Program Mgr.
Collegeville PA Since Lockeed Martin
63 Aug. 15, 1984 King of Prussia
PA
William A. Texter Director Elected for One Retired Mgr. One None
551 Red Coat Lane Year. Served Nuclear Div.
Phoenixville PA Since PECO Energy
57 Jan. 30, 2001 Philadelphia PA
Shareholders have one vote for each share they own for each of five Directors of
their choice. All proxies returned to the Fund, except those specifically mark-
ed to withhold authority, will be cast for the nominees listed above. A major-
ity 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 2003. Mr. Peterson attended Five.
The remaining fpur directors attended all six meetings.
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 Inde-
pendent 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.
- 2 -
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 Registered
Investment Companies Overseen
by Director in Family of
Investment Companies
Interested Director and Officers
Bernard B. Klawans over $100,000 over $100,000
Sandra K. Texter over $100,000 over $100,000
Independent directors
Victor J. Belanger over $100,000 over $100,000
Dr. James P. King $10,001 to $50,000 $10,001 to $50,000
Donald A. Peterson over $100,000 over $100,000
William A. Texter $10,001 to $50,000 $10,001 to $50,000
The above holdings represent Directors and Officers dollar range of equity se-
curity holdings in all registered investment companies since they only serve the
Valley Forge Fund.
REMUNERATION OF DIRECTORS AND OFFICERS
The Fund does not pay salaries to their Officers or Directors. Comppensations
listed below are all travel & other expenses associated with attending meetings.
Valley Forge Fund Family of Funds
Name Compensation Valley Forge
in 2003 Compensation in 2003
Interested Director and Officers
*Bernard B. Klawans none none
*Sandra K. Texter none none
Independent directors
Victor J. Belanger $ 544 $ 544
Dr. Gerd H. Dahl (deceased) $ 544 $ 544
Dr. James P. King $ 544 $ 544
Donald A. Peterson $ 544 $ 544
William A. Texter $ 408 $ 408
* 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 effect transactions in portfolio securities in
such a manner as to get prompt execution of orders at the most favorable price.
Where consistant with best price and execution and, in light of its limited re-
sources, 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 re-
quirements of execution and price, may have furnished statistical or other
- 3 -
factual information and services that are helpful or necessary to the Fund's
normal operation. Services may include economic or industry studies, security
analysis and reports, sales literature and statistical services that are fur-
nished either to the Fund or the Adviser. No effort is made to determine the
value of these services or the amount they may have reduced Adviser expenses.
Other than as set forth above, the Fund has no fixed policy, formula, method or
criteria used in allocating brokerage busines to brokers furnishing these mater-
ials and services. In its most recently completed year, 2003, the Fund paid
$6,401 in brokerage commissions. Commissions were $10,910 in 2002 and $15,808
in 2001. The Board of Directors evaluates and reviews annually the reasonable-
ness of brokerage commissions paid.
PROPOSAL #2: RATIFICATION OR REJECTION OF SELECTION OF AUDITOR
Your Board of Directors recommend, subject to shateholder approval, Sanville &
Company Certified Public Accountants to audit and certify financial statements
of the Fund for the year 2004 since they performed our 2003 audit in an exem-
plary fashion at a competitive price. The Board has adopted procedures to pre-
approve the types of professional services required of their auditors. Neither
Sanville & Co. nor any of its partners may have any direct or material indirect
interest in the Fund and will provide no non-auditing services. No representa-
tive of Sanville & Co. will be present at the meeting unless requested by a
shareholder in advance of the meeting. Requests, if desired, should be directed
to the Secretary of the Fund.
Audit Fees: The fee charged for the 2003 audit by Sanville & Company was $7,500.
The fee for the year 2004 is expected to be te same. This charge will include
reporting its findings to the Securities and Exchange Commission along with 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: None
SHAREHOLDER PROPOSALS
The Fund tentatively expects to hold its next annual meeting in August 2005.
Shareholder proposals may be presented at that meeting provided they are recei-
ved by the Fund not later than January 4, 2005 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.
- 4 -
PROXY - SOLICITED BY THE BOARD OF DIRECTORS
VALLEY FORGE FUND ANNUAL MEETING OF SHAREHOLDERS AUGUST 17, 2004
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 under-
signed at the annual meeting of shareholders and all adjournments therof, 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 DISCRE-
TION 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/her/their name(s) in the following list.
Bernard B. Klawans Victor J. Belanger Dr, James P. King
Donald A. Peterson William A. Texter
2. Ratification or rejection of selection of Sanville & Co. by the Board of Di-
rectors as independent public accontants to audit and certify financial
statements of the Fund for the fiscal year ending December 31, 2004.
___ ___ ___
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 ___________________, 2004
___________________________
Shareholder's Signature
____________________________
Shareholder's Signature
You should review your address and note corrections below.