THIS IS FILED UNDER EDGAR CODE DEF-14A
NOTICE OF ANNUAL MEETING
TO BE HELD AUGUST 15, 2006
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 15, 2005 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 Sanville & Company, Certified Public
Accountants to audit and certify financial statements of the Fund for the fiscal
year ending December 31, 2006.
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 20, 2006 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 Commision has adopted a rulling 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. 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 Delaware Charter Guarantee & Trust Co.
to provide this service which requires disclosure of your IRA shareholder
name and address to it on an annual basis. In this regard, the Fund has
forwarded a letter requiring Delaware Charter to get permission from you if
they wish to use such 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 24, 2006.
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 one, then sign, date and return.
The Fund has one class of capital stock of the Fund, all having equal voting
rights. On June 20, 2006, the date of record, there were 1,035,977 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 willserve 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 Director & Officers
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
85 May 15, 1973
* Sandra K. Texter Treasurer Elected for One System Analyst None
551 Red Coat Lane Year. Served Lockeed Martin
Phoenixville PA Since King of Prussia
56 Jan. 30, 2003 PA
Independent Directors
Victor J. Belanger Director Elected for One Retired Chief One
PO Box 96 Year. Serve Finance Officer
Princeton Junction NJ Since Linearizer
64 Aug. 18, 1980 Tech. Inc.
Robinsville NJ
* "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
Investment Adviser. Mrs. Texter is an interested person because all officers
of the Fund are considered to be so.
- 1 -
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
Dr. James P. King Director Elected for One President One
904 Breezewood Lane Year. Served Desilube Tech
Lansdale PA Since Inception Inc.
73 May 15, 1973 Labsdale PA.
C. William Majer Director Elected for One President One
732 Summit Ave Year. Served MajerPlus LTD
Philadelphia PA Since Philadelphia PA.
70 June 21, 2005
Donald A. Peterson C.O.B Elected for One Program Mgr One
3741 Worthington Rd Director Year. Served DRS Technologies
Collegeville PA Since King of Prussia PA
66 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 2005. Three directors attended all
meetings. Dr. King missed two meetings because o a serious illness and Mr. Majer
was approved by the Board in tiome to attend four.
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 the 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 $ Range of Equity Aggregate $ Range of Equity Securities
Securities in All Registered Investment Companies
in the Fund Overseen by Directors & 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 $ 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
C. Willian Majer $10,001 to $50,000 $10,001 to $50,000
Donald A. Peterson over $ 100,000 over $ 100,000
- 2 -
There has been no change in the $ range of equity security holdings in the Fund
by those Directors and Officers serving since the last annual meeting. None
serve as directors in 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 2005 Compensation in 2005
Interested Director and Officers
*Bernard B. Klawans none none
*Sandra K. Texter none none
Independent Directors
Victor j. Belanger $ 798 $ 798
Dr. James P. King $ 510 $ 510
C. William Majer $ 510 $ 510
Donald A. Peterson $ 708 $ 708
* 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 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 or industry studies, security analysis and sales literature. 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 business to brokers furnishing these
materials and services. In its most recently completed year, 2005, the Fund
paid $4,813 in brokerage commissions. Commissions were $11,696 in 2004 and
$6,401 in 2003. 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, Sanville &
Company ("S&C") Certified Public Accountants to audit and certify financial
statements of the Fund for the year 2006 since they performed the 2005 audit in
an exemplary fashion at a competitive price. The Board has adopted procedures
to pre-approve the types of professional services required of their auditors.
- 3 -
Neither S&C 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 S&C will be present at the meeting unless requested by a shareholder in
advance. Requests, if desired, should be directed to the Secretary of the Fund.
Audit Fees: Sanville & Company charged $8.056.35for the 2005 audit. The fee for
the year 2006 is expected to be increased to $9,000 because of the complexities
added to meet the new requirements brought on by detected malfeasance in other
mutual fund complexes. This charge includes reporting its findings to the
Securities and 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 what so ever.
SHAREHOLDER PROPOSALS
The Fund tentatively expects to hold its next annual meeting in August 2007.
Shareholder proposals may be presented at that meeting provided they are
received by the Fund no later than Jnuary 4, 2007 in accordance with Rule 14a-8
under the Securities & Exchange Act of 1934 which sets forth certain
requirements.
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 15, 2006
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
DISCRETION 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.
Donald A. Peterson Victor J. Belanger Bernard B. Klawans
Dr. James P. King C. William Majer
2. Ratification or rejection of 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 2006.
___ ___ ___
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 ___________________, 2006 _______________________
Shareholder's Signature
_______________________
Shareholder's Signature
You should review your address and note corrections below.