<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement / / Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e) (2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
VALLEY FORGE CORPORATION
- -----------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- -----------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c) (1) (ii), or 14a-6(i) (1), or 14a-6(i)
(2) or Item 22(a) (2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i) (3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i) (4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a) (2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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<PAGE> 2
VALLEY FORGE CORPORATION
100 SMITH RANCH ROAD, SUITE 326
SAN RAFAEL, CALIFORNIA 94903
NOTICE OF ANNUAL STOCKHOLDERS' MEETING
TO OUR STOCKHOLDERS:
The annual meeting of the stockholders of Valley Forge Corporation, a Georgia
corporation, will be held on June 14, 1995, at 10:00 a.m., Pacific time, at the
offices of the Corporation, located at 100 Smith Ranch Road, Suite 326, San
Rafael, California 94903. The items of business to be transacted at this meeting
are as follows:
1. Election of the Board of Directors of five people for the ensuing year.
2. Ratification of the appointment of Coopers & Lybrand as independent
accountants of the Corporation for the 1995 fiscal year.
3. Transaction of such other business as may properly come before the
meeting or any adjournment thereof.
The Board of Directors has specified May 9, 1995 at the close of business as the
record date for the purpose of determining the stockholders who are entitled to
receive notice of and to vote at the annual meeting. A list of the stockholders
entitled to vote at the annual meeting will be available for the examination of
any stockholder at the meeting.
The Proxy Statement for the annual meeting is set forth on the following pages.
So that as many shares as possible may be represented at this meeting, we urge
you to promptly sign, date and return your proxy in the enclosed, self-addressed
envelope. If you attend the meeting, you may revoke the proxy and vote your
shares in person if you desire to do so.
Sincerely,
Monica J. Burke
Secretary - Treasurer
Dated: May 15, 1995
<PAGE> 3
PROXY STATEMENT OF THE BOARD OF DIRECTORS
FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 14, 1995
GENERAL INFORMATION
This Proxy Statement and the accompanying Proxy and other enclosures are being
mailed beginning May 15, 1995 to holders of common stock of Valley Forge
Corporation, a Georgia Corporation (the "Company"), in connection with the
stockholders' meeting to be held on June 14, 1995, at 10:00 a.m., Pacific time,
at the Company's offices at 100 Smith Ranch Road, Suite 326, San Rafael,
California 94903, or at any adjournment thereof (the "Meeting"). Proxies are
solicited to provide all stockholders of the Company with the opportunity to
vote. Shares may only be voted at the Meeting if the stockholder is present in
person or is represented by a proxy.
COSTS OF SOLICITATION OF PROXIES
The Company will bear the cost of preparing, mailing and soliciting Proxies. In
addition to solicitations by mail, the directors, officers, and regular
employees of the Company may solicit proxies personally and by telephone,
telegraph, or other means, for which they will receive no compensation in
addition to their normal compensation. Arrangements will also be made with
brokerage houses and other custodians, nominees and fiduciaries for forwarding
solicitation material to the beneficial owners of common stock, and the Company
may reimburse them for their reasonable out-of-pocket and clerical expenses in
forwarding the soliciting materials.
VOTING RIGHTS AND REVOCABILITY OF PROXIES
Only holders of the Company's common stock, par value $.50 per share ("Common
Stock"), of record at the close of business on May 9, 1995 are entitled to
notice of and to vote at the Meeting. Holders of the Common Stock will be
entitled to one vote on all matters properly coming before the Meeting for each
share registered in their names on the record date specified above. On May 9,
1995 the Company had outstanding 1,906,724 shares of Common Stock, of which
1,773,267 will be entitled to vote at the Meeting (133,457 shares of Common
Stock are treasury shares and are not entitled to vote). The Company has no
other classes of securities issued and outstanding.
The By-Laws of the Company require that a quorum be present at all meetings of
stockholders before the stockholders may conduct business. A quorum consists of
the holders of record of a majority of the shares of Common Stock, issued and
outstanding, entitled to vote at the meeting, and present in person or by proxy.
When a proxy is returned properly signed and dated, the person designated as
proxy shall vote the shares represented by the proxy in accordance with the
stockholder's directions. If a proxy is signed, dated and returned without
specifying choices on one or more matters presented to the stockholders, the
shares will be voted on such matter or matters as recommended by the Company's
Board of Directors.
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<PAGE> 4
Abstentions will be treated as shares present and entitled to vote for purposes
of determining the presence of a quorum. Each stockholder is entitled to one
vote, in person or by proxy, for each share of stock standing in his or her name
on the books of the Company as of the record date on any matter submitted to the
stockholders. The Company's By-Laws do not authorize cumulative voting. In the
election of directors, the five persons receiving the highest number of votes
will be elected. Each of the other proposals submitted hereby requires the
affirmative vote of a majority of the Stock represented and eligible to vote at
the Meeting. Accordingly, abstentions from voting on any matter other than in
the election of directors will have the effect of a vote "AGAINST" the proposal.
A stockholder giving a proxy may revoke it by (i) delivering a written notice of
revocation to the Secretary of the Company at the office of the Company
identified above at any time before the commencement of the Meeting or any
adjournments thereof; (ii) attending the Meeting in person and voting; or (iii)
executing a proxy bearing a date and time later than that of the proxy to be
revoked. Revocation of the proxy will not affect any vote previously taken.
If you hold your Common Stock in "street name" and you fail to instruct your
broker or nominee as to how to vote your Common Stock, your broker or nominee
may, in its discretion, vote your Common Stock "FOR" the election of the Board
of Directors' nominees and "FOR" the proposal to ratify the appointment of
Coopers & Lybrand as the Company's independent accountants for the fiscal year
ending December 31, 1995.
Unless revoked, the shares of Common Stock represented by proxies will be voted
in accordance with the instructions given thereon. In the absence of any
instruction in the Proxy, your shares of Common Stock will be voted in favor (i)
"FOR" the election of the nominees for director set forth herein; and (ii) "FOR"
ratification of the appointment of Coopers & Lybrand as the Company's
independent accountants for the fiscal year ending December 31, 1995.
The Meeting has been called for the purposes set forth in the Notice of Annual
Stockholders' Meeting (the "Notice") to which this Proxy Statement is appended.
The Board of Directors does not anticipate that matters other than those
described in the Notice will be brought before the Meeting for stockholder
action, but if any other matters properly come before the Meeting, votes thereon
will be cast by the proxy holder in accordance with her best judgment.
If a stockholder wishes to give a proxy to someone other than the person
indicated on the accompanying proxy, he must cross out the names appearing on
the proxy and insert the name or names of another person or persons to act as
proxies. The signed proxy must be presented at the Meeting by the person or
persons representing the stockholder.
A copy of the Company's 1994 Annual Report to its stockholders is enclosed
herewith. Stockholders may obtain additional copies of the Annual Report without
charge upon written request to the Company's Secretary at the Company's offices.
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<PAGE> 5
ITEM 1. ELECTION OF DIRECTORS
The Company's By-Laws authorize a Board of Directors of nine persons, but at no
time since 1974 have all directors' positions been filled. At the Company's 1994
annual meeting of stockholders, Messrs. Bloom, Desloge, Brining, Dressel, and
Warner were elected.
The Board of Directors has nominated all of its present members for election as
directors for a term of one year or until their successors are elected and
qualified.
All nominees have indicated their willingness to serve and, unless otherwise
specified on the proxy, it is the intention of the proxy holder to vote for the
Nominees listed below. No proxy may be voted for more than five persons. If
events not now known or anticipated make any of the Nominees unable to serve,
the Proxies will be voted at the discretion of the proxy holder. The vote of a
majority of the Common Stock, present in person or by proxy and voting, is
required to elect each of the Nominees.
The following sets forth biographical information of the five nominees for
director and of the executive officers of the Company:
<TABLE>
<CAPTION>
Year First
Name and Age Principal Occupation Elected Director
------------ -------------------- ----------------
NOMINEES FOR DIRECTORS:
<S> <C> <C>
Martin J. Bloom (64) Co-Chairman of the Board since July, 1983
100 Smith Ranch Road, Suite 326 1984
San Rafael, CA 94903-1994
Theodore P. Desloge, Jr. (55) Co-Chairman of the Board since July, 1983
100 Smith Ranch Road, Suite 326 1984
San Rafael, CA 94903-1994
David R. Brining (52) President, Chief Executive Officer, 1981
100 Smith Ranch Road, Suite 326 and Director of the Company since
San Rafael, CA 94903-1994 July, 1981
Phillip F. Dressel (58) Chairman of the Board and President of 1985
100 Smith Ranch Road, Suite 326 Consolidated Flavor Corporation
San Rafael, CA 94903-1994
Dale J. Warner (72) Retired, formerly a Director of Gits 1983
100 Smith Ranch Road, Suite 326 Bros. Mfg. Co., a subsidiary of
San Rafael, CA 94903-1994 the Company
EXECUTIVE OFFICER:
Monica J. Burke (43) Vice President Finance and Secretary
of the Company since November, 1988
</TABLE>
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<PAGE> 6
Mr. Bloom has been a Director of the Company since July 1983, Co-Chairman of the
Board since July, 1984, and is a Director for most of the Company's
subsidiaries. He is a past Director and Chairman of the Board of Park `N Fly,
Inc., an operator of off-airport parking services.
Mr. Desloge has been a Director of the Company since July 1983 and Co-Chairman
of the Board since July, 1984. He is a past Director and President of Park `N
Fly, Inc.
Mr. Brining has been President, CEO, and a Director of the Company since 1981.
He has served as a Director or Chairman of each of the Company's subsidiaries
since their acquisition. Mr. Brining was delinquent in filing a Form 4 for one
transaction during 1994 required under Item 405 of Regulation S-K.
Mr. Dressel has been a Director of the Company since 1985. He has also been
Chairman of the Board and President of Consolidated Flavor Corporation, a
privately held flavoring business located in St. Louis, Missouri, since 1985.
Mr. Warner has been a Director of the Company since 1983. He was a Director of
Gits Bros. Mfg. Co. for more than six years.
Ms. Burke has served as Vice President Finance since 1988.
None of the directors, nominees for director, or executive officers were
selected pursuant to any arrangement or understanding, other than with the
directors and executive officers of the Company acting within their capacity as
such. There are no family relationships among directors or executive officers of
the Company, and as of the date hereof, no directorships are held by any
director with a company which has a class of securities registered pursuant to
Section 12 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act") or subject to the requirements of Section 15(d) of the Exchange Act or any
company registered as an investment company under the Investment Company Act of
1940, except for Mr. Desloge, who is a director of Mississippi Valley
Bancshares, listed on the NASDAQ.
THE BOARD OF DIRECTORS AND COMMITTEES
The Corporation's Board of Directors met twice during 1994. The Board of
Directors has two committees, the Compensation Committee and the Audit Committee
and does not have a nominating committee. All of the persons who were directors
of the Company during 1994 attended at least 75% of (1) the total number of
Board meetings and (2) the total number of meetings held by all committees on
which they served.
The members of the Audit Committee are Messrs. Brining, Dressel, and Warner. The
Audit Committee met once during 1994. The Audit Committee reviews and reports to
the Board on various auditing and accounting matters, including the annual audit
report from the Company's independent accountants.
The members of the Compensation Committee are Messrs. Bloom, Desloge, and
Dressel. For a description of the functions of the Compensation Committee, see
"Report of the Compensation Committee on Executive Compensation." The Committee
met once during 1994.
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<PAGE> 7
COMPLIANCE WITH REPORTING REQUIREMENTS OF SECTION 16
Under Section 16(a) of the Exchange Act, the Company's directors, executive
officers, and any persons holding ten percent or more of Common Stock are
required to report their ownership of Common Stock and any changes in that
ownership to the Securities and Exchange Commission (the "SEC") and to furnish
the Company with copies of such reports. Specific due dates for these reports
have been established and the Company is required to report in this Proxy
Statement any failure to file on a timely basis by such persons. All persons
subject to the reporting requirements of Section 16(a) have filed all required
reports on a timely basis, except for Mr. Brining who was delinquent in filing a
Form 4 for one transaction during 1994.
SECURITY OWNERSHIP
The following table sets forth certain information with respect to the
beneficial ownership of the Common Stock as of May 9, 1995 by (i) each
stockholder known by the Company to own beneficially more than five percent (5%)
of the outstanding Common Stock, (ii) each director of the Company, (iii) the
Company's Chief Executive Officer, (iv) all executive officers and directors of
the Company as a group. Except as otherwise indicated below, each of the
entities named in the table has sole voting and investment power with respect to
all shares of Common Stock beneficially owned by such entity as set forth
opposite such entity's name, subject to community property laws where
applicable. No effect has been given to shares reserved for issuance under
outstanding stock options except where otherwise indicated.
<TABLE>
<CAPTION>
Number of Shares
Beneficial Owner Beneficially Owned Percent
---------------- ------------------ -------
<S> <C> <C>
FMR Corp.(1) 157,300 8.87%
82 Devonshire Steet
Boston, MA 02109
Martin J. Bloom 331,635(2) 18.70%
84,568(3) 4.77%
Theodore P. Desloge, Jr. 358,885 20.24%
84,568(3) 4.77%
David R. Brining 187,650(4) 10.51%
Phillip F. Dressel 52,700(5) 2.97%
All directors and executive
officers as a group 1,107,006(6) 61.83%
</TABLE>
------------------
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<PAGE> 8
(1) Based solely upon a Schedule 13G dated February 13, 1995. Of the
157,300 shares shown as beneficially owned by FMR Corp., 157,300
shares are beneficially owned by Fidelity Management Research
Company ("Fidelity Research"), a wholly-owned subsidiary of FMR
Corp. and investment advisor of several investment companies.
FMR Corp. and its chairman, Edward C. Johnson 3rd, each has sole
power to dispose of the shares owned by Fidelity Research, but
neither FMR Corp. nor Mr. Johnson has the sole power to vote or
to direct the voting of such shares.
(2) Does not include 10,000 shares (.56%) owned by Mr. Bloom's wife,
with respect to which Mr. Bloom disclaims beneficial ownership.
(3) Represents shares owned by Bloom & Desloge Enterprises, Inc.,
a corporation in which Messrs. Bloom and Desloge are each 50%
stockholders. Bloom & Desloge Enterprises, Inc. owns a total of
169,136 shares of common stock.
(4) Includes options to purchase 12,500 shares at $16.625 per share.
Does not include 450 shares (.03%) owned by Mr. Brining's wife
with respect to which Mr. Brining disclaims beneficial
ownership.
(5) Represents shares owned by Consolidated Flavor Corporation,
a privately held company owned by Mr. Dressel.
(6) Includes options to purchase 4,500 shares at $7.25 per
purchasable by an officer. In addition to the disclaimed shares
described in (2) and (4) above, does not include 3,600 shares
(.20%) held in trust by Mr. Warner's wife with respect to which
Mr. Warner disclaims beneficial ownership.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
EXECUTIVE OFFICERS' COMPENSATION
The following table shows certain summary information concerning compensation
paid or accrued by the Company to or on behalf of the Company's Chief Executive
Officer and the other executive officer of the company whose compensation
exceeds $100,000.
<TABLE>
<CAPTION>
Summary Compensation Table
--------------------------
Long-Term
Annual Compensation Compensation
------------------- ------------
Name and Fiscal Other Annual All Other
Principal Position Year Salary Bonus Compensation(1) Options Compensation(2)
------------------ ---- ------ ----- ------------ ------- ------------
<S> <C> <C> <C> <C> <C> <C>
David R. Brining, 1994 $254,817 $190,500 $5,351 50,000 $16,489
CEO(3) 1993 240,750 63,500 4,563 0 21,005
1992 218,750 40,000 4,767 0 24,183
Monica J. Burke, 1994 105,667 40,800 0 0 11,339
Vice President 1993 101,417 20,700 0 0 10,899
Finance(3) 1992 94,583 15,500 0 0 8,667
</TABLE>
(1) In August, 1987 and incident to the relocation of the corporate headquarters
from St. Louis, Missouri to San Rafael, California, the Company accepted a
$75,000 demand, non-interest bearing note from Mr. Brining. The
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<PAGE> 9
amounts included under Other Annual Compensation represent interest
calculated at the prime rate on the demand note.
(2) Represents amounts contributed pursuant to the Company's 401k and
Profit Sharing Plans. See "Report of Compensation Committee - 401k Plan and
Profit Sharing Plan."
(3) Mr. Brining and Ms. Burke also serve as officers of each of the Company's
subsidiaries.
OPTION GRANTS IN 1994
<TABLE>
<CAPTION>
Potential Realizable Potential Realizable
Value at Assumed Value at Assumed
Annual Rates of Stock Annual Rates of Stock
Price Appreciation for Price Appreciation for
Percent Option Term for Option Term for
of Total Exercise Named Executive All Shareholders
Named Options Options Price Expiration --------------- ------------------
Executive Granted Granted per Share Date 5% 10% 5% 10%
- --------- ------- ------- --------- ---- -- --- -- ---
<S> <C> <C> <C> <C> <C> <C> <C> <C>
David R.
Brining 50,000 83% $16.625 July 1, 2001 $338,000 $789,000 $11,976,000 $27,910,000
</TABLE>
OPTION EXERCISES AND HOLDINGS
The following table provides information with respect to the Executive Officers
concerning the exercise of options during the fiscal year ended December 31,
1994 and unexercised options held by the Executive Officers as of December 31,
1994:
<TABLE>
<CAPTION>
Aggregated Option(1) Exercises in Fiscal Year 1994
and Fiscal Year-End Option Values
---------------------------------
Value of Unexercised,
Number of Unexercised In the Money
Shares Options Held at Year End Options Held at Year End(2)
Named Acquired On Value ------------------------ ------------------------
Executives Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
---------- -------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
David R. Brining 70,000 $482,500 0 50,000 $ 0 $75,000
Monica J. Burke 0 0 6,000 1,500 52,110 16,313
</TABLE>
(1) The Company has no plans pursuant to which stock appreciation rights
(SAR's) may be granted.
(2) Value of unexercised "in the money" options is the difference between
the market price of the Common Stock on December 31, 1994 ($18.125 per
share) and the exercise price of the option, multiplied by the number of
shares subject to the option.
EMPLOYMENT AGREEMENTS
There are no employment contracts or termination agreements with the Executive
Officers.
STOCK OPTIONS
The Board of Directors adopted the Company's 1987 Stock Option Plan on May 29,
1987, which was subsequently amended on November 23, 1987 to increase the number
of shares available for
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<PAGE> 10
option from 200,000 to 300,000 and further amended, restated, and approved by
the Company's shareholders at the 1992 Annual Meeting of Shareholders ("Stock
Option Plan"). The Stock Option Plan is intended to strengthen the Company by
providing added incentive to participating directors, employees, non-employee
directors, and consultants of the Company and its subsidiaries for high levels
of performance and for unusual efforts to increase the earnings of the Company
through the opportunity for stock ownership. Options issued under the Stock
Option Plan are in the discretion of the Compensation Committee of the Board of
Directors, or any committee to which responsibility for administration of the
Stock Option Plan has been delegated, and may be either incentive stock options
as that term is used in Section 422A of the Internal Revenue Code of 1986, as
amended, or any successor thereto, or options which do not qualify as incentive
stock options. The Stock Option Plan is currently administered by the
Compensation Committee of the Company. The Compensation Committee has full power
and authority in its discretion to take any and all action required or permitted
to be taken under the Stock Option Plan, including the selection of participants
to whom stock options may be granted, the determination of the number of shares
which may be covered by stock options, the purchase price, and other terms and
conditions thereof. There are 300,000 shares of common stock reserved for
issuance upon exercise of options granted under the Stock Option Plan.
If any option granted under the Stock Option Plan shall for any reason expire,
be canceled, or otherwise terminate without having been exercised in full, the
shares not purchased under such option shall again become available for the
Stock Option Plan. Generally, the exercise price of each option is determined by
the Board of Directors or the Compensation Committee and is not less than 100%
of the fair market value of the Common Stock subject to the option on the date
the option is granted. The purchase price of Common Stock acquired pursuant to
an option must be paid in cash or check payable to the order of the Company at
the time the option is exercised. In general, no option under the Stock Option
Plan may extend more than ten years from the date of grant.
The Stock Option Plan will terminate upon the occurrence of a terminating event,
including, but not limited to, liquidation, reorganization, merger or
consolidation of the Company with another corporation in which the Company is
not the surviving corporation or resulting corporation, or a sale of
substantially all the assets of the Company to another person, or a reverse
merger in which the Company is the surviving corporation but the shares of the
Company's Common Stock outstanding immediately preceding the merger are
converted by virtue of the merger into other property. The Board of Directors or
the Compensation Committee shall notify each optionee not less than thirty days
prior thereto of the pendency of such an event. The Board of Directors may also
suspend or terminate the Stock Option Plan at any time. Unless sooner
terminated, the Stock Option Plan terminates ten years from its effective date,
which was May 15, 1992.
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The Compensation Committee of the Company establishes, implements, and monitors
general policies regarding compensation for the Company's employees, adopts and
amends employee compensation plans, and approves specific compensation levels
for executive officers, including the Executive Officers. Currently, the members
of the Compensation Committee are Martin J.
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<PAGE> 11
Bloom, Theodore P. Desloge, Jr., and Phillip F. Dressel. Each member of the
Compensation Committee is a non-employee director of the Company.
Set forth below is a report of the Compensation Committee addressing the
Company's compensation policies for 1994 applicable to the Company's executives,
including the Executive Officers.
The Report of the Compensation Committee on Executive Compensation shall not be
deemed incorporated by reference by any general statement incorporating by
reference this Proxy Statement into any filing under the Securities Act of 1933
(the "Securities Act") or under the Exchange Act, except to the extent that the
Company specifically incorporates this information by reference, and shall not
otherwise be deemed filed under such Acts.
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The Company's compensation programs reflect the philosophy that executive
compensation levels should be linked to Company performance, yet be competitive
and consistent with that provided to others holding positions of similar
responsibility in the recreational products and manufactured industrial products
industries. The Company's compensation plans are designed to assist the Company
in attracting and retaining qualified employees critical to the Company's
long-term success, while enhancing employees' incentives to perform to their
fullest abilities to increase profitability and thus maximize shareholder value.
Salary Compensation
The Company pays cash salaries which it believes are competitive with salaries
paid to executives of other companies in the recreational products and
manufactured industrial products industries based upon the individual's
experience and past and potential contribution to the Company.
Mr. Brining's annual base salary was $254,817 for 1994. This amount represents
an increase of $14,067, or 5.8%, over Mr. Brining's base salary for 1993. The
increase was set by the Compensation Committee in June 1994 to maintain
competitive positioning versus comparable companies based on an analysis of
comparable company compensation practices as prepared by outside consultants.
Subsidiary Incentive Compensation
In 1990, as a result of Mr. Brining's recommendation and efforts, the Company
developed and implemented the Subsidiary Incentive Compensation Plan (the "Bonus
Plan") whereby individual compensation is directly linked to the performance of
the Company's subsidiary (the "Subsidiaries" or "Subsidiary"). The Bonus Plan
and the Company's salary deferral 401(k) Plan (the "401k Plan"), and the
Company's Profit Sharing Plan (the "Profit Sharing Plan") are the three programs
under which employees of the Company or the Subsidiaries may receive cash
contributions and/or bonuses. The Executive Officers are not eligible to receive
bonuses under this Bonus Plan. However, the Executive Officers are eligible for
bonuses under the Valley Forge Corporate Incentive Compensation Plan (the
"Corporate Bonus Plan").
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<PAGE> 12
Valley Forge Corporate Incentive Compensation Plan
The Compensation Committee authorized the payment of bonus compensation in 1994
to Mr. Brining and Ms. Burke based upon the Company's achievement of certain
sales and return on equity objectives set by the Compensation Committee. The
specific bonuses for Mr. Brining and Ms. Burke were 75% and 39%, respectively,
of his and her base salary.
401k Plan
The Company adopted the salary deferral 401k Plan in August 1992 which benefits
all employees at the corporate headquarters and certain Subsidiaries. The 401k
Plan is a pretax salary deduction retirement program with a mandatory matching
funds feature. It encourages participants to adopt a regular savings program to
defer part of their pretax compensation to provide security for their
retirement. Employees who meet certain service and length of employment
requirements are eligible to participate. The Company provides matching
contributions of 100% of the employee's own contributions into the 401k Plan, up
to 3% of each employee's covered compensation. For 1994, the Company made a
matching contribution of approximately $8,300 for the benefit of the Executive
Officers' 401k Plan accounts.
Profit Sharing Plan
The Company sponsors a profit sharing plan for the benefit of the corporate
headquarters and two Subsidiaries. The Chief Executive Officer of the Company
makes a discretionary allocation of the compensation amount calculated pursuant
to the Corporate Bonus Plan to be contributed to the Profit Sharing Plan (the
"Profit Sharing Amount") for the benefit of the eligible employees of the
corporate headquarters at the close of the fiscal year. The Profit Sharing
Amount is distributed to eligible employees in proportion primarily to the
employee's base salary of such year. The Company made a profit sharing
contribution of 5.4% of the Executive Officers' aggregate base salary to the
Executive Officers for 1994 from the Profit Sharing Amount.
Stock-Based Compensation
The Company also believes that stock ownership by directors, officers,
employees, and consultants provides valuable long-term incentives for such
persons who will benefit as the Common Stock price increases and that
stock-based performance compensation arrangements are beneficial in aligning
employees' and stockholders' interests. Further, the Company believes that the
Company's policy of encouraging stock ownership serves an important function in
attracting, retaining, and motivating such persons, and accordingly, in the
growth and success of the Company. To facilitate these objectives, the Company
adopted the Stock Option Plan in 1987, which was amended in 1991 to include
authority for the grant of incentive stock options, authority for the grant of
options to non-employee directors and consultants, elimination of certain
limitations on the vesting and exercise price of options, and permitting the
Board of Directors to delegate administration of the Stock Option Plan to a
committee.
Through the Stock Option Plan, stock options have been granted to employees of
the Company, including the Executive Officers, in previous years. Non-employee
directors and consultants are eligible to participate in the Stock Option Plan,
but at the present time there are no outstanding stock options held by such
persons and none have ever been exercised. The Stock Option Plan is
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<PAGE> 13
administered by the Compensation Committee. Mr. Brining was granted 50,000 stock
options exercisable at $16.625 per share during 1994.
Other Compensation
The Executive Officers also participate in the Company's broad-based employee
benefit plans, such as the Company's medical, supplemental disability, and term
life insurance plans.
Currently, the Company's compensation programs described above, including stock
option plans, will not qualify for the exception to the $1,000,000 limit under
Section 162(m) of the Internal Revenue Code on total compensation for named
executives as structured. The Compensation Committee has no plans to revise the
Company's compensation programs to qualify for the exception since the level of
total compensation for each named executive is not currently subject to this
limit nor is it expected to exceed this limit in the foreseeable future.
COMPENSATION COMMITTEE
Martin J. Bloom, Chairman
Theodore P. Desloge, Jr.
Phillip F. Dressel
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Brining is a director of Consolidated Flavor Corporation, which is owned by
Mr. Dressel. Mr. Dressel serves on the Compensation Committee. Mr. Desloge and
Mr. Bloom are the other members of the Compensation Committee and their
compensation arrangements are discussed under Directors' Compensation.
PERFORMANCE GRAPH
The Performance Graph shall not be deemed incorporated by reference by any
general statement incorporating by reference this proxy statement into any
filing under the Securities Act of 1933 or under the Securities Exchange Act of
1934, except to the extent Valley Forge Corporation specifically incorporates
this information by reference, and shall not otherwise be deemed filed under
such Acts.
The graph on the following page compares the company's cumulative total
shareholder return on Common Stock with (i) the cumulative total return of the
American Stock Exchange ("AMEX") market index; and (ii) the cumulative total
return of peer companies ("Peer Group") selected by the Company in good faith(1)
over the period from January 1, 1990 through December 31, 1994. Each member of
the Peer Group is a publicly traded, diversified manufacturing company whose
three principal lines of business match three of the Company's top four
principal lines of business, and whose revenues are less than $1.1 billion. The
graph assumes an initial investment of $100 and reinvestment of dividends. This
graph is not necessarily indicative of future price performance.
- ------------------------------
(1) The Peer Group includes Augat Inc., Bel Fuse Inc., Cherry Corp. (Class B),
Joslyn Corp., La Barge Inc., Molex Inc., Powell Industries Inc. and Thomas &
Betts Corp. Assumes $100 invested on 1/1/90 in Valley Forge common stock, Peer
Group companies (weighted by market capitalization) and the American Stock
Exchange index (AMEX). Assumes reinvested dividends. Fiscal year ends December
31.
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<PAGE> 14
PERFORMANCE GRAPH
COMPARES THE CUMULATIVE TOTAL SHAREHOLDER RETURN AMONG
VALLEY FORGE CORPORATION, PEER GROUP INDEX, AND AMEX MARKET INDEX.
[GRAPHIC OMITTED]
<TABLE>
<CAPTION>
1/1/90 1990 1991 1992 1993 1994
------ ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Valley Forge $100.00 $79.22 $112.08 $151.84 $170.01 $232.64
Peer Group 100.00 105.33 147.30 156.62 179.44 211.07
AMEX 100.00 84.80 104.45 105.88 125.79 111.12
</TABLE>
DIRECTORS' COMPENSATION
The Company entered into consulting agreements with Messrs. Bloom and Desloge in
1983. Pursuant to the terms of the agreements, Messrs. Bloom and Desloge are to
provide the Company with advice on any corporate acquisitions, retention of
corporate assets, evaluation of key personnel, evaluation of the operations of
Subsidiaries, supervision of new product development, and general strategic
planning. The agreements are renewable annually on December 31 with the
consulting fee for the succeeding year set at that time. The Company agreed to a
fee of $81,250 for Mr. Bloom for 1995 due to his increased contributions to the
Company. The Company agreed to a fee of $50,000 for Mr. Desloge for 1995. The
Company has an agreement with Mr. Warner to retain him as a consultant for a fee
of $8,400 which is renewable each year. In addition, the Company generally pays
directors $500 for each board meeting attended.
ITEM 2. RATIFICATION OF SELECTION OF INDEPENDENT ACCOUNTANTS
The Audit Committee of the Board of Directors has selected Coopers & Lybrand,
independent accountants, to audit the accounts of the Company and its
Subsidiaries for its current fiscal year ending December 31, 1995. Although the
appointment of independent accountants is not required to be approved by the
stockholders, the Board believes that stockholders should participate in the
appointment through ratification. If a majority of the stockholders voting do
not ratify the appointment, the Audit Committee of the Board of Directors will
reconsider its action.
A representative of Coopers & Lybrand is expected to be present at the meeting
and will have an opportunity to make a statement if he desires to do so and to
be available to respond to appropriate questions.
The Board of Directors recommends that you VOTE FOR ratification of its
appointment of Coopers & Lybrand as the Company's independent accountants.
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<PAGE> 15
STOCKHOLDER PROPOSALS
Stockholders are entitled to submit proposals on matters appropriate for
stockholders' action, consistent with regulations of the Securities and Exchange
Commission. Should a stockholder intend to present a proposal at next year's
annual meeting, it must be received by the Secretary of the Company at the
Company's principal office on or before January 8, 1996, in order to be included
in the Company's Proxy Statement and form of proxy relating to that meeting.
GENERAL
The Board of Directors knows of no matters to be presented for action at the
Meeting other than as set forth in this Proxy Statement. If other matters
properly do come before the Meeting, the persons named in the accompanying proxy
will vote said proxy in accordance with their judgment. It is important that
proxies be returned promptly. Therefore, stockholders are urged to promptly
sign, date, and return the proxy in the attached stamped and addressed envelope.
Proxies, ballots, and voting tabulations identifying stockholders are secret and
will not be available to anyone, except as actually necessary to meet legal
requirements.
OTHER BUSINESS
Management knows of no business which will be presented for consideration at the
Meeting other than as stated in the Notice. If, however, other matters are
properly brought before the Meeting, it is the intention of the Proxy holder to
vote the shares represented thereby on such matters in accordance with the
recommendation of the Board of Directors and authority to do so is included in
the Proxy.
STOCKHOLDERS MAY OBTAIN WITHOUT CHARGE COPIES OF THE COMPANY'S ANNUAL REPORT ON
FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1994, AND ALL FINANCIAL STATEMENTS AND
SCHEDULES THERETO AS FILED WITH THE SEC BY WRITING THE COMPANY'S SECRETARY, MS.
MONICA J. BURKE, 100 SMITH RANCH ROAD, SUITE 326, SAN RAFAEL, CALIFORNIA 94903.
BY ORDER OF THE BOARD OF DIRECTORS
MONICA J. BURKE
SECRETARY - TREASURER
Date: May 15, 1995
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<PAGE> 16
VALLEY FORGE CORPORATION PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF VALLEY FORGE
CORPORATION. The undersigned, revoking all previous proxies, hereby appoints
Monica J. Burke as Proxy with the power to appoint her substitute, and hereby
authorizes her to represent and vote, as designated below, all of the shares of
common stock of Valley Forge Corporation (the "Corporation") held of record by
the undersigned on May 9, 1995, at the annual meeting of stockholders to be held
on June 14, 1995, or at any adjournment thereof.
ITEM 1. ELECTION OF DIRECTORS
_____FOR all nominees listed below (except as marked to the contrary
below).
_____WITHHOLD AUTHORITY to vote for all nominees listed below.
INSTRUCTIONS: To withhold authority to vote for any nominee,
strike a line through the nominee's name in the list below:
Martin J. Bloom Theodore P. Desloge, Jr.
David R. Brining Phillip F. Dressel Dale J. Warner
ITEM 2. RATIFICATION OF APPOINTMENT OF COOPERS & LYBRAND AS THE
CORPORATION'S INDEPENDENT ACCOUNTANTS FOR 1995.
______ FOR ______ AGAINST ______ ABSTAIN
In her discretion, the Proxy is authorized to vote upon such other business
as may properly come before the annual meeting or any adjournment thereof.
THIS PROXY, WHEN PROPERLY EXECUTED, DATED, AND RETURNED, WILL BE VOTED IN
THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS
MADE, THIS PROXY WILL BE VOTED FOR ALL THE NOMINEES FOR DIRECTOR DESIGNATED IN
ITEM 1 AND FOR ITEM 2.
PLEASE SIGN EXACTLY AS YOUR NAME APPEARS BELOW. When shares are held by
joint tenants, both should sign. When signing as attorney, executor,
administrator, trustee, or guardian, please give full title as such. If a
corporation, please sign in full corporate name by the President or other
authorized officer. If a partnership, please sign in the partnership name by an
authorized partner.
DATED: _____________________, 1995
-----------------------------------
Signature
-----------------------------------
Signature if held jointly
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY USING THE ENCLOSED
ENVELOPE.
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