SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. __)
Filed by the registrant [ ]
Filed by a Party other than the Registrant [X]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ ] Definitive Proxy Statement [ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
THE YACKTMAN FUNDS, INC.
(Name of Registrant as Specified in its Charter)
YACKTMAN ASSET MANAGEMENT CO.
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] 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:
2) Aggregate number of securities to which transaction applies:
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):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] 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 date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
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PRELIMINARY PROXY MATERIALS DATED SEPTEMBER 18, 1998
SUBJECT TO COMPLETION
The information included in this preliminary proxy statement
is as we expect it to be when we mail the definitive proxy statement to
stockholders of The Yacktman Funds, Inc. We will revise this proxy statement to
reflect actual facts at the time we file the definitive proxy statement.
NOVEMBER 24, 1998
SPECIAL MEETING OF STOCKHOLDERS
OF
THE YACKTMAN FUNDS, INC.
PROXY STATEMENT OF
YACKTMAN ASSET MANAGEMENT CO.
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IMPORTANT INFORMATION ABOUT THE SPECIAL MEETING
Why You Were Sent This Proxy Statement
We, Yacktman Asset Management Co. (the investment adviser to
The Yacktman Fund and The Yacktman Focused Fund (the "Funds"), sent you this
Proxy Statement and the enclosed BLUE proxy card because we are soliciting your
proxy to vote at a special meeting of the stockholders of The Yacktman Funds,
Inc. The special meeting, which has been called by your Funds' President, Donald
Yacktman, will be held at the Goodman Room of the Allegro Hotel, 171 West
Randolph Street, Chicago, Illinois, on Tuesday, November 24, 1998, at 10:00
a.m., Central Standard Time. This Proxy Statement summarizes the information you
need to know to vote at the special meeting. We will begin sending this Proxy
Statement and the enclosed BLUE proxy card on September __, 1998 to all
stockholders entitled to vote.
What You Are Voting On
At the special meeting we will ask you to vote to:
o Remove all of the current directors of your Funds other than Ronald
Ball and Donald Yacktman;
o Amend your Funds' bylaws to reduce the number of directors for your
Funds from six to five; and
o Elect three nominees as new directors of your Funds.
Who Can Vote at the Special Meeting
Stockholders who owned shares of the Funds at the close of
business on October 25, 1998 are entitled to vote at the special meeting. On
September 14, 1998, there were 550,473,300
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issued and outstanding shares of The Yacktman Fund and 55,536,495 issued and
outstanding shares of The Yacktman Focused Fund.
How Many Votes You Have
Each share of the Funds that you own entitles you to one vote.
The enclosed BLUE proxy card indicates the number of shares of the Funds that
you own as of September 14, 1998. Since the record date is October 25, 1998, the
number of shares you own and can vote at the special meeting is subject to
change.
How to Vote by Proxy
Whether you plan to attend the special meeting or not, we urge
you to complete, sign and date the enclosed BLUE proxy card and to return it
promptly in the envelope provided. Returning the proxy card will not affect your
right to attend the special meeting and vote.
If you properly fill in your proxy card and send it to us in
time to vote, your "proxy" (one of the individuals named on your proxy card,
either Ronald Ball or Donald Yacktman) will vote your shares as you have
directed. If you sign the proxy card but do not make any specific choices, your
proxy will vote your shares as follows:
o "FOR" the removal of all the current directors of your Funds other
than Ronald Ball and Donald Yacktman;
o "FOR" the amendment of your Funds' bylaws to reduce the number of
directors of your Funds from six to five; and
o "FOR" the election of all three of our nominees as new directors of
your Funds.
If any other matter is presented at the special meeting, your
proxy will vote in accordance with his best judgment. At the time this Proxy
Statement was mailed, we knew of no matters which needed to be acted on at the
special meeting, other than those discussed in this Proxy Statement.
Who You Can Call If You Have Questions
If you have any questions concerning this Proxy Statement or
need assistance in voting your shares, please call:
D. F. KING & CO., INC.
777 Water Street
New York, New York 10005
Banks and Brokers Call: (212) 269-5550 (collect)
All Others Call Toll-Free: (800) 769-5414
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How You Can Obtain an Annual Report
If you would like a copy of your Funds' Annual Report for
1997, you may obtain this report by calling your Funds' transfer agent, Firstar
Trust Company, at 1-800-457-6033.
How You Can Revoke a Proxy
If you have signed a proxy card and attend the special
meeting, attendance in itself will not revoke a proxy. If you have signed a
proxy card, then you may revoke your proxy at any time before it is exercised by
sending notice of your revocation to us or to your Funds in writing or at the
special meeting. If you have already submitted a proxy card, you may change your
vote by signing, dating and returning another proxy card. PLEASE NOTE THAT ONLY
YOUR LATEST DATED PROXY WILL COUNT.
SPECIAL MEETING PROPOSALS; REQUIRED VOTE
At the special meeting, we will ask you to vote on the
proposals set forth below. As discussed in more detail below, we believe that
certain of the current members of the Board of Directors, namely Jon Carlson,
Thomas Hanson, Stanislaw Maliszewski and Stephen Upton (the "Carlson/Maliszewski
Directors") have not been acting in your best interests as stockholders of the
Funds. The following proposals, if approved, will remove the Carlson/Maliszewski
Directors from your Funds' Board of Directors and replace them with new
directors.
1. PROPOSAL TO REMOVE DIRECTORS
We are asking you to vote to remove the Carlson/Maliszewski
Directors from the Board of Directors because we believe it's in the best
interests of your Funds to do so. Our differences with the Carlson/Maliszewski
Directors on how your Funds' portfolios should be managed are so great that, in
our opinion, they cannot be resolved. We believe we can do a better job of
managing your Funds than they can. Unfortunately, the Carlson/Maliszewski
Directors constitute a majority of your Funds' Board of Directors. We have asked
the Carlson/Maliszewski Directors to resign, but they have refused. Only by
removing them as directors can you assure yourselves that your Funds will be
able to continue to receive the investment advice you expected to receive when
you invested in the Funds.
How We Disagree On Portfolio Management
Our investment style is simple but disciplined. We buy growth
companies at what we believe to be low prices. We buy companies of any size
market capitalization although, if all else is equal, we prefer larger companies
to smaller companies. We are disciplined investors. If we cannot find companies
that meet our investment requirements, we increase our cash position. Those of
you who would like to read a more detailed discussion of our investment style
should read an article by Susan Dziubinski in the May 1998 edition of
Morningstar Fund Investor entitled "Is Something Wrong with Don Yacktman?" In
that article Ms. Dziubinski states
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"Yacktman hasn't changed an iota since leaving Selected American in
1992 to start his own firm. The same investment philosophy that gave
him a lock on the fund manager hall of fame also leads to occasional
performance lulls - and it makes his fund jump around the style box,
too. Yet Yacktman's clear-cut strategy and stick to-itiveness are rare
finds in the fund industry, and good times outnumber bad. There's good
reason to stand by him."
The Carlson/Maliszewski Directors have continuously pressured
us to abandon our investment style and become large capitalization value
managers. They want us to change our investment style so that your Funds are
always in the "large cap value" category of the Morningstar, Inc. style box,
irrespective of the investment potential of that style. We have refused, and
will continue to refuse, to do so. We believe our investment approach has the
potential to yield returns superior to those of traditional large cap value
managers. We also believe that as investors in the Funds you want us to stick to
our investment style. We will continue to do what we do best.
Why We Are Better Portfolio Managers Than The Carlson/Maliszewski Directors
Our portfolio manager, Donald Yacktman, has managed your Funds
since their inception. His track record as a mutual fund manager speaks for
itself. In 1991, Morningstar named Mr. Yacktman its "Portfolio Manager of the
Year." Mr. Yacktman received a similar award from the Mutual Fund Letter in
1994. Your Funds' returns are set forth below:
The Yacktman Standard & Poor's
The Yacktman Focused Fund Composite Index
Fund Average Average Annual of 500 Stocks
Time Period Annual Returns Returns Annual Returns
One Year (7/1/97 - 6/30/98) 8.6% 14.3% 30.2%
Three Years (7/1/95 - 6/30/98) 20.4% N/A 30.2%
Five Years (7/1/93 - 6/30/98) 18.0% N/A 23.1%
Since Inception (7/6/92) 13.6% N/A 21.2%
Since Inception (5/1/97) N/A 20.9% 36.9%
Prior to becoming the portfolio manager of your Funds, Mr.
Yacktman was the portfolio manager for the Selected American Shares mutual fund
from January 1, 1983 through March 6, 1992. Beginning on July 1, 1983, Mr.
Yacktman used substantially the same investment policies and strategies in
managing this fund as he has in managing The Yacktman Fund. (From January 1,
1983 through June 30, 1983 the Selected American Shares mutual fund was a
balanced fund.) (The average annual return of the Selected American Mutual Fund
from January 1, 1983 through December 31, 1991 and that of Standard & Poor's
Corporation Index of 500 Stocks ("S&P 500") for the same periods were:
Selected American Shares S&P 500
17.8% 15.5%
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We recognize that there has been a period of underperformance
since the third quarter of 1997. However there have also been periods of very
good performance. For example, from September 30, 1993 to September 30, 1994 the
average annual returns of The Yacktman Fund and the S&P 500 were:
The Yacktman Fund S&P 500
17% 3.7%
Also for the three years ended April 30, 1997, Micropal, Inc. determined that on
a risk-adjusted basis The Yacktman Fund was the best-performing U.S. equity
growth fund having more than $50 million in assets. Source: Investment News June
16, 1997. Please remember past performance is not necessarily an indication of
future performance. Your Funds may perform better or worse in the future.
We believe our record demonstrates that we are good, but not
perfect, portfolio managers. In contrast the Carlson/Maliszewski Directors have
no experience in managing mutual fund portfolios. Jon Carlson, who is currently
unemployed, was, for the last 9 years that he worked, a marketer of mutual
funds. Stanislaw Maliszewski, who also has no regular full time employment,
provides marketing services. The other Carlson/Maliszewski Directors are Stephen
Upton and Thomas Hanson. Mr. Upton is a retired business executive. Mr. Hanson,
the only one of the Carlson/Maliszewski Directors that is employed on a
full-time basis, is a business executive.
Of course, directors of mutual funds are not expected to be
good portfolio managers. They are expected to oversee the mutual fund's
investment performance, but not play an active role in managing investments. We
believe the Carlson/Maliszewski Directors have crossed the line that divides
oversight from micro-management because they have continuously pressured us to
change our investment style. The cumulative effect of their interference is to
make it more difficult for us to manage your Funds. You should consider their
lack of competence in managing investments in deciding whether to remove the
Carlson/Maliszewski Directors from the Board of Directors.
Other Factors Influencing The Carlson/Maliszewski Directors
Jon Carlson had been employed by us until we fired him earlier this
year. Last year we refused to hire Stanislaw Maliszewski as an investment
adviser solicitor. We believe both Mr. Carlson and Mr. Maliszewski resented the
actions we took. As you can imagine, our estrangement with Mr. Carlson and Mr.
Maliszewski has placed an added strain on communications with the
Carlson/Maliszewski Directors.
Mr. Carlson and Mr. Maliszewski are friends with Mr. Hanson. Mr. Upton
is the uncle of Mr. Carlson's wife. Since we fired Jon Carlson, the
Carlson/Maliszewski Directors have consistently voted as a bloc in opposition to
your Funds' management directors, Mr.
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Ronald Ball and Mr. Donald Yacktman, and, in our judgment, in opposition to the
best interests of your Funds.
How The Carlson/Maliszewski Directors Are Harming Your Funds
To date we have resisted the efforts of the
Carlson/Maliszewski Directors to change our investment style. We will not be
able to continue to stop them from taking actions that we believe harm the Funds
because they control the Board of Directors. Please consider the following
actions taken by the Carlson/Maliszewski Directors:
o At the August 14, 1998 meeting of your Funds' Board of
Directors, the Carlson/Maliszewski Directors, over the
objection of your Funds' management directors, adopted an
amendment to your Funds' bylaws. This amendment gives the
Carlson/Maliszewski Directors the authority to use your
Funds' assets to hire outside consultants without consulting
with the management directors and without any limitations
being placed on the amounts they can spend. Your Funds'
management directors attempted to reach a compromise with
the Carlson/Maliszewski Directors on this issue, but the
Carlson/Maliszewski Directors would not accept any
limitations on their access to your Funds' assets to pay
outside consultants. Now, money that could be used to
increase your Funds' investments can be used by the
Carlson/Maliszewski Directors.
o Collectively the Carlson/Maliszewski Directors have recently
significantly reduced their investments in your Funds. Mr.
Carlson and Mr. Maliszewski now own only a nominal amount of
shares of your Funds. In our opinion, these reductions are
evidence that the interests of the Carlson/Maliszewski
Directors and your interests as stockholders of the Funds
have diverged. As you can see on Schedule II to the proxy
statement, your Funds' management directors, Mr. Yacktman
and Mr. Ball, have both made substantial investments in your
Funds and Mr. Yacktman has recently increased his investment
in your Funds.
o The Carlson/Maliszewski Directors have been critical of our
younger employees. Their criticism and interference in
portfolio management is creating an environment where it
will be unnecessarily difficult for us to attract and retain
the qualified personnel necessary for the success of your
Funds in the future.
What Happens If Our Proposal Is Not Passed
If you do not vote to remove the Carlson/Maliszewski Directors
from the Board of Directors, we believe your Funds' investment advisory
agreements with us will be terminated, either by them or by us as our
disagreements with them have become intolerable. As you can imagine, our
relationship with the Carlson/Maliszewski Directors is likely to deteriorate
further following our proxy solicitation. Therefore, we believe that if the
Carlson/Maliszewski
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Directors are not removed as directors, you should assume that we will not be
your Funds' investment adviser for very long after the special meeting.
Required Votes And Other Matters
Please join us in voting to remove the Carlson/Maliszewski
Directors as directors of your Funds by voting for the adoption of the following
resolution:
RESOLVED, that, other than Ronald W. Ball and Donald A. Yacktman, all
of the directors of the Company, including, without limitation, Jon D.
Carlson, Thomas R. Hanson, Stanislaw Maliszewski and Stephen E. Upton,
and any other person who is a director at the time this resolution
takes effect, be, and all of them hereby are, removed from such office
immediately.
We anticipate that some of you may have the following specific
questions concerning this resolution:
Q. How long do the Funds' directors serve as directors?
A. Under your Funds' bylaws each director serves indefinitely
since your Funds, like most mutual funds, do not have annual
meeting of shareholders.
Q. Why does the resolution refer to "any other person who is a
director at the time this resolution takes effect?"
A. It is possible, but unlikely, that a member of the
Carlson/Maliszewski Directors may resign prior to the special
meeting and be replaced by another person chosen by the
Carlson/Maliszewski Directors. It is also possible that the
Carlson/Maliszewski Directors might vote to expand the Board
of Directors by adding another person of their choosing. We
included the quoted text in the resolution because we did not
want the Carlson/Maliszewski Directors to be able to frustrate
your efforts to remove them by taking any of these actions.
Q. How many votes are required to pass the resolution?
A. In order to pass the resolution a majority of the outstanding
shares of the Funds on the record date must vote "FOR" the
proposal to remove the Carlson/Maliszewski Directors as
directors of the Funds. If you do not vote for any reason, or
if you "ABSTAIN" from voting, it will have the same effect as
if you voted "AGAINST" the proposal.
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2. PROPOSAL TO AMEND BYLAWS
We are asking you to vote to amend your Funds' bylaws to
reduce the number of directors from six to five. If you amend your Funds' bylaws
as we propose, there will be three vacancies in the Board of Directors following
the removal of the Carlson/Maliszewski Directors. We have proposed three
nominees to fill these vacancies. We discuss their qualifications later in this
proxy statement. If the stockholders do not vote to remove the
Carlson/Maliszewski Directors, we will not ask you to vote to amend your Funds'
bylaws or to fill vacancies.
Each member of the Carlson/Maliszewski Directors is a director
who is not an "interested person" of your Funds. Mr. Ball and Mr. Yacktman are
"interested persons" of your Funds. Mr. Carlson was an "interested person" of
your Funds until August 13, 1998 when he resigned as an officer. Our three
nominees are persons who are not "interested persons" of your Funds. The
Securities and Exchange Commission has recommended that a majority of a mutual
fund's directors not be "interested persons" of the mutual fund. Our proposals
to amend the bylaws and elect our three nominees is consistent with the
Securities and Exchange Commission's recommendation.
Please join us in voting to amend your Funds' bylaws by voting
for the adoption of the following resolution:
RESOLVED, that Article II, Section 1 of the bylaws be amended to read
as follows:
Number. The number of directors of the corporation shall be
five (5). By vote of a majority of the entire board of
directors, the number of directors fixed by the charter or
these bylaws may be increased or decreased from time to time
to not more than fifteen nor less than three, but the tenure
of office of a director shall not be affected by any decrease
in the number of directors so made by the board.
We anticipate that some of you may have the following specific
questions concerning this resolution:
Q. How does the proposed amendment change Article II, Section 1?
A. The last word of the first sentence formerly was six (6). No
other change was made.
Q. How many votes are required to pass the resolution?
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A. In order to pass the resolution, a majority of the outstanding
shares on the record date must vote "FOR" the proposal to
amend your Funds' bylaws. If you do not vote for any reason,
or if you "ABSTAIN" from voting, it will have the same effect
as if you voted "AGAINST" the proposal.
3. PROPOSAL TO ELECT NOMINEES
We are asking you to vote to elect the three persons we have
nominated to serve as new directors of your Funds. If you elect them, they will
hold office until their successors have been elected.
We know of no reason why any nominee may be unable to serve as
a director. If any nominee is unable to serve, your proxy may vote for another
nominee proposed by us. In addition, we reserve the right to nominate additional
nominees to fill any vacant director positions if the proposal to amend the
bylaws to reduce the number of directors from six to five is not approved. Such
nominees may or may not be an "interested person" of your Funds.
The table set forth below identifies the three nominees for
election as new directors of your Funds and provides information concerning each
of these nominees and the directors of your Funds who will continue in office.
Business Experience
Name Age During Past Five Years
Ronald W. Ball* 57 Vice President of The Yacktman Funds, Inc. since
(Continuing Director) February 1997 and Secretary of The Yacktman
Funds, Inc. since August 1998; Director of The
Yacktman Funds, Inc. since February 1998;
Senior Vice President of Yacktman Asset
Management Co.
Bruce B. Bingham 49 Partner in Hamilton Partners (real estate
(Nominee) development firm).
Albert J. Malwitz 61 Owner and Chief Executive Officer of Arlington
(Nominee) Fastener Co. (manufacturer and distributor of
industrial fasteners).
George J. Stevenson III 59 President of Stevenson & Company (registered
(Nominee) business broker); President of Healthmate
Products Co. (fruit juice concentrate
manufacturing company).
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Donald A. Yacktman* 56 President, Treasurer and Director of the
(Continuing Director) Yacktman Funds, Inc. since April 1992; President
of Yacktman Asset Management Co.
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*Interested person as defined in the Investment Company Act of 1940.
Other than Donald Yacktman, who is a director of 1-800
Contacts, Inc., none of the nominees or the continuing directors serve as
directors of public companies.
Committees, Meetings and Attendance
The Board of Directors of your Funds had no audit, nominating,
compensation or other similar committees during 1997. The Board of Directors
held four meetings during 1997. Donald Yacktman, the only nominee or continuing
director who was a director of your Funds in 1997, attended all of the meetings
of the Board of Directors. The Board of Directors has held five meetings in
1998. Each of Donald Yacktman and Ronald Ball attended all five meetings.
How Directors Are Compensated
Your Funds only compensate directors who are not "interested
persons" of your Funds. Your Funds' standard method of compensating directors is
to pay each disinterested director an annual fee of $8,000 for services
rendered, including attending meetings of the Board of Directors. Your Funds
also may reimburse their directors for travel expenses incurred in order to
attend meetings for the Board of Directors. The table below sets forth the
compensation paid by your Funds to each of the nominees and the continuing
directors during 1997:
<TABLE>
<CAPTION>
Total
Aggregate Pension or Retirement Estimated Annual Compensation
Compensation Benefits Accrued as Benefits Upon from Company
Name of Person from Company Part of Fund Expenses Retirement Paid to Director
<S> <C> <C> <C> <C>
Ronald W. Ball $0 $0 $0 $0
Bruce B. Bingham $0 $0 $0 $0
Albert J. Malwitz $0 $0 $0 $0
George J. Stevenson III $0 $0 $0 $0
Donald A. Yacktman $0 $0 $0 $0
</TABLE>
We anticipate that, if you elect the nominees as new directors of your Funds,
then your Funds will compensate the nominees in accordance with the Funds'
standard method of compensating directors during 1999 and at the rate of $2,000
per meeting during 1998. In accordance with this method of
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compensating directors, the continuing directors will not be compensated for
their services during 1998 because they are "interested persons."
Effect of Special Meeting Proposals
The Yacktman Fund has in place a Rule 12b-1 plan. The Rule
12b-1 plan permits The Yacktman Fund to pay expenses associated with
distributing shares of The Yacktman Fund. Rule 12b-1 under the Investment
Company Act of 1940 provides that payments made pursuant to a Rule 12b-1 plan
may be made only if the selection and nomination of those directors who are not
"interested persons" of the investment company are determined by the directors
who are not "interested persons" of your Funds. Accordingly, The Yacktman Fund
will terminate its Rule 12b-1 plan if you vote to remove the Carlson/Maliszewski
Directors as directors.
Required Votes And Other Matters
Please join us in voting to elect the three nominees as new
directors of your Funds by voting for the adoption of the following resolution:
RESOLVED, that the Stockholders of The Yacktman Funds, Inc. hereby
elect Bruce B. Bingham, Albert J. Malwitz and George J. Stevenson as
directors, effective immediately, to hold office until their
respective successors are elected and qualified.
We anticipate that some of you may have the following specific
questions concerning this resolution:
Q. How many votes are required to elect the three nominees as new
directors?
A. The three nominees for director who receive the most votes
will be elected as directors of your Funds. If you do not vote
for any reason, or if you vote to "WITHHOLD AUTHORITY TO VOTE"
for a particular nominee, your vote will not count "FOR" or
"AGAINST" the nominee.
OTHER INFORMATION
How Proxies Will Be Solicited
We may solicit proxies for the special meeting by mail,
advertisement, telephone, telecopier or in person. Certain of our officers and
employees may make solicitations. None of these persons will receive additional
compensation for participating in the solicitation. We have requested banks,
brokerage houses and other custodians, nominees and fiduciaries to forward all
of our solicitation materials to the beneficial owners of the shares of the
Funds they hold. We will reimburse these record holders for customary clerical
and mailing expenses incurred by them in forwarding these materials to their
customers.
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Important Instructions For "Street Name" Stockholders
If any of your shares are held in the name of a brokerage
firm, bank, bank nominee or other institution on the record date, only that
entity can vote your shares and only upon its receipt of your specific
instructions. Accordingly, please contact the person responsible for your
account at such entity and instruct that person to execute and return the BLUE
proxy card on your behalf. You should also sign, date and mail your proxy when
you receive it from your broker or banker. Please do this for each account you
maintain to ensure that all of your shares are voted.
Information about the Proxy Solicitor
We have retained D. F. King & Co., Inc. to solicit proxies to be used
at the special meeting. We, not your Funds, will pay D. F. King & Co., Inc. a
fee of $________ and we, not your Funds, will reimburse it for its reasonable
expenses. We, not your Funds, have also agreed to indemnify D. F. King & Co.,
Inc. against certain liabilities and expenses, including liabilities and
expenses under the federal securities laws. We anticipate that D. F. King will
employ approximately 70 employees to solicit proxies in connection with the
special meeting.
Costs of Soliciting Proxies
Our costs for soliciting proxies include expenditures for
printing, postage, legal and related expenses and are expected to be
approximately $_________. Our total costs incurred to date for this solicitation
are $________. We will pay the costs of soliciting proxies and we do not intend
to seek reimbursement from your Funds for such costs.
Information About Stockholder Proposals
Under the proxy rules of the Securities and Exchange
Commission, you may submit a proposal to be included in your Funds' proxy
materials for a particular meeting of stockholders if the proposal meets tests
contained in those rules. One of the conditions you must comply with relates to
the timely receipt by your Funds of any such proposal. Since your Funds do not
have regular annual meetings of stockholders, under these rules, proposals you
submit for inclusion in the proxy materials for a particular meeting must be
received by your Funds a reasonable time before the solicitation of proxies for
the meeting is made. The fact that you submit a stockholder proposal in a timely
manner does not insure its inclusion in your Funds' proxy materials since there
are other requirements in the proxy rules relating to such inclusion.
Information About The Yacktman Funds, Inc. And Its Stockholders
The principal executive offices of The Yacktman Funds, Inc.
are located at 303 West Madison Street, Chicago, Illinois 60606. We are not
aware of any person who beneficially owns 5% or more of the outstanding shares
of either Fund.
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Information About Yacktman Asset Management Co.
Yacktman Asset Management Co., whose principal executive
offices are located at 303 West Madison Street, Chicago, Illinois 60606, is the
investment adviser to your Funds. Donald Yacktman, our president and sole
stockholder, organized Yacktman Asset Management Co. in April 1992.
Pursuant to investment advisory agreements entered into
between your Funds and us, we furnish continuous investment advisory services to
each of the Funds. For services provided by us under the applicable advisory
agreement during 1997, The Yacktman Fund paid us $6,360,037. For services
provided by us under the applicable advisory agreement during 1997, The Yacktman
Focused Fund paid the Adviser $218,380. We reimbursed The Yacktman Focused Fund
$101,060 for operating expenses in excess of 1.25% of such Fund's daily net
assets during 1997.
We and Donald Yacktman, as our sole stockholder, have a
financial interest in the outcome of the proposals to be voted on at the special
meeting. Because each advisory agreement may be terminated at any time without
the payment of any penalty by the Board, there can be no assurance the Board of
Directors will not terminate the advisory agreements if the proposals to be
voted on are not approved. Other than the directorships contemplated by our
proposals for the three nominees, none of the participants in this solicitation
of proxies has any arrangement or understanding with an person with respect to
any future employment by your Funds or with respect to any future transactions
to which your Funds will or may be a party.
Certain information about the officers and employees of the
Adviser who may participate in the solicitation of proxies is set forth in
Schedule I to this Proxy Statement. Schedule II to this Proxy Statement sets
forth certain information relating to shares of the Funds owned by such persons.
Information About Your Funds' Administrator and Underwriter
Your Funds' administrator is Sunstone Financial Group, Inc.,
207 East Buffalo Street, Suite 400, Milwaukee, Wisconsin 53202-5712. Your Funds
have no principal underwriter.
It is important that you return your proxy promptly. Please
sign and date your BLUE proxy card promptly and return it in the enclosed
envelope to avoid unnecessary expense and delay. No postage is necessary.
September __, 1998 YACKTMAN ASSET MANAGEMENT CO.
Donald A. Yacktman
President
-13-
<PAGE>
SCHEDULE I
Participants in the Solicitation
The following table identifies and provides certain
information about each of the participants in the solicitation of proxies
pursuant to this Proxy Statement.
Name and Business Address Principal Occupation or Employment
Ronald W. Ball Vice President of The Yacktman Funds, Inc.
303 West Madison Street, Suite 1925 since February 1997 and Secretary of The
Chicago, IL 60606 Yacktman Funds, Inc. since August 1998;
Senior Vice President of Yacktman Asset
Management Co.
Bruce B. Bingham Partner in Hamilton Partners (real estate
230 Park Blvd. development firm).
Itasca, IL 60143
Albert J. Malwitz Owner and Chief Executive Officer of
1032 West Northwest Way Arlington Fastener Co. (manufacturer and
Barrington, IL 60010 distributor of industrial fasteners).
George J. Stevenson, III President of Stevenson & Company
1007 Church Street, Suite 310 (registered business broker); President of
Evanston, IL 60201 Healthmate Products Co. (fruit juice
concentrate manufacturing company).
Donald A. Yacktman President and Treasurer of the Yacktman
303 West Madison Street, Suite 1925 Funds, Inc. since April 1992; President of
Chicago, IL 60606 Yacktman Asset Management Co.
Schedule I - 1
<PAGE>
SCHEDULE II
Beneficial Ownership of Shares by Participants in the Solicitation
The following table shows, as of August 1, 1998, the shares of
The Yacktman Fund and The Yacktman Focused Fund beneficially owned by the
participants in the solicitation of proxies pursuant to this Proxy Statement.
Unless otherwise indicated, each participant has sole voting and investment
power over the shares beneficially owned.
Amount and Nature of Beneficial Ownership
Name of Beneficial Owner The Yacktman Fund The Yacktman Focused Fund
Ronald W. Ball 7,061.00 10,835.00
Bruce B. Bingham 6,141.47(1) 0.00
Albert J. Malwitz 69,025.69(2) 505.19
George J. Stevenson III 1,136.00(3) 1,401.00(3)
Donald A. Yacktman 121,990.31(4) 199,348.42(4)
Yacktman Asset Management Co. 15,539.53 0.00
- ------------------
(1) Includes 6,141.47 shares of The Yacktman Fund owned by Bruce Bingham's
spouse.
(2) Includes 1,336.65 shares of The Yacktman Fund held by Albert Malwitz as
custodian for his child.
(3) Includes 1,136.00 shares of The Yacktman Fund and 1,401.00 shares of The
Yacktman Focused Fund held by the Stevenson & Company Profit Sharing Trust,
of which George Stevenson is a trustee and participant.
(4) Includes 2,588.79 shares of The Yacktman Fund and 103,181.46 shares of The
Yacktman Focused Fund owned by Donald Yacktman's spouse and 10,489.08
shares of The Yacktman Fund held by Donald Yacktman's spouse as custodian
for their children. Includes 94,161.96 shares of The Yacktman Focused Fund
purchased on August 27, 1998.
Transactions in Shares by Participants in the Solicitation
The following table sets forth all shares of The Yacktman Fund and The
Yacktman Focused Fund purchased or sold within the past two years by
participants in the solicitation of proxies pursuant to this Proxy Statement.
SCHEDULE II - 1
<PAGE>
<TABLE>
<CAPTION>
Number of
Participant Fund Date Shares Purchased
<S> <C> <C> <C>
Ronald W. Ball The Yacktman Fund 4/1/97 1,307.19
7/1/97 150.40
The Yacktman Focused Fund 7/1/97 205.67
3/31/98 1,726.62
6/30/98 198.35
Albert J. Malwitz The Yacktman Fund 1/20/97 14.74
1/28/97 14.76
2/3/97 14.43
3/3/97 28.39
3/13/97 14.10
3/21/97 14.33
4/9/97 14.51
4/28/97 93.8
4/29/97 14.52
5/2/97 14.26
5/28/97 13.70
6/5/97 13.62
6/23/97 13.34
7/7/97 13.28
7/16/97 13.13
7/30/97 12.90
8/29/97 13.03
9/2/97 12.84
9/4/97 12.86
9/8/97 12.82
9/26/97 12.58
10/6/97 12.36
11/25/97 25.89
Schedule II - 2
<PAGE>
12/5/97 12.878
12/26/97 13.30
1/8/98 14.46
1/26/98 15.67
2/4/98 14.34
2/17/98 13.91
2/27/98 13.37
3/16/98 13.00
3/30/98 13.17
4/6/98 13.35
5/14/98 13.39
5/26/98 13.60
6/8/98 13.57
6/24/98 13.82
7/13/98 27.42
7/20/98 13.68
8/3/98 14.39
The Yacktman Focused Fund 10/9/97 210.62
1/24/97 17.07
12/10/97 17.45
1/8/98 18.20
1/26/98 18.67
2/5/98 17.72
2/20/98 17.21
3/2/98 16.41
3/16/98 15.94
3/30/98 15.96
4/13/98 16.09
Schedule II - 3
<PAGE>
5/13/98 15.86
5/26/98 16.25
6/29/98 33.17
7/13/98 16.56
7/20/98 16.47
8/3/98 17.09
8/19/98 17.73
Donald A. Yacktman The Yacktman Fund 4/1/97 1,633.99
The Yacktman Focused Fund 4/30/97 100,000.00
3/31/98 1,798.56
6/30/98 123.97
8/27/98 94,161.96
</TABLE>
Schedule II - 4
<PAGE>
[Face of Proxy Card]
PROXY
The Yacktman Funds, Inc.
Special Meeting of Stockholders
To be held on November 24, 1998
The undersigned appoints Ronald W. Ball and Donald A. Yacktman, and
each of them, each with full power to act without the other, and each with full
power of substitution, proxies for the undersigned, to represent and vote, as
designated below, all shares of The Yacktman Fund and The Yacktman Focused Fund
(the "Funds") which the undersigned is entitled to vote at the Special Meeting
of Stockholders of The Yacktman Funds, Inc. to be held at Goodman Room of the
Allegro Hotel, 171 West Randolph Street, Chicago, Illinois, on Tuesday, November
24, 1998, at 10:00 a.m., Central Standard Time, and at any adjournments thereof.
This proxy, when properly executed, will be voted in the manner
directed by the undersigned shareholder. If no direction is made, this proxy
will be voted FOR proposals 1, 2 and 3.
This proxy is solicited on behalf of Yacktman Asset Management Co.
- --------------------------------------------------------------------------------
PLEASE SIGN, DATE AND RETURN THIS PROXY PROMPTLY IN THE ENCLOSED ENVELOPE.
- --------------------------------------------------------------------------------
[Reverse of Proxy Card]
Yacktman Asset Management Co. recommends that you vote FOR
items 1, 2 and 3 below.
1. To remove all of the current directors of your Funds other than Ronald
Ball and Donald Yacktman.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
2. To amend your Funds' bylaws to reduce the number of directors of your
Funds from six to five.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. To elect three nominees as new directors of your Funds.
[ ] FOR all nominees listed below [ ] WITHHOLD authority to vote
(except as marked to the for all nominees listed
contrary below) below
Bruce B. Bingham, Albert J. Malwitz and George J. Stevenson, III
(INSTRUCTION: To withhold authority to vote for any individual
nominee, write that nominee's name in the space below.)
--------------------------------------------
4. To transact such other business as may properly come before the
special meeting or any adjournment thereof.
Please sign your name exactly as it
appears on this card. If you are a joint
owner, each owner should sign. When
signing as executor, administrator,
attorney, trustee, or guardian, or as
custodian for a minor, please give your
full title as such. If you are signing
for a corporation, please sign the full
corporate name and indicate the signer's
office. If you are a partner, sign in
the partnership name.
Shareholder sign here Date
Co-owner sign here Date
If you need assistance in voting your shares, please call D. F. King & Co.,
Inc., which is assisting Yacktman Asset Management Co. in its solicitation of
your proxy for the special meeting, at (800) 769-5414.
