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:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6 (e) (2))
[ ] Definitive Proxy Statement
[X] 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):
[ ] 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:
[ ] 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:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
CONTACTS:
Peter C. Harkins
Mary Ellen Goodall
D. F. King & Co., Inc.
(212) 269-5550
FOR IMMEDIATE RELEASE
- ---------------------
MARYLAND COURT ISSUES TEMPORARY RESTRAINING ORDER
-------------------------------------------------
AGAINST CARLSON/MALISZEWSKI DIRECTORS
-------------------------------------
November 24 Special Meeting Date Affirmed
------------------------------------------
CHICAGO, ILLINOIS, October 19, 1998 . . . Yacktman Asset Management Co.
("Yacktman"), the investment adviser to The Yacktman Funds, Inc. (the "Funds"),
announced that on Friday, October 16, 1998, the Circuit Court for Baltimore City
issued a temporary restraining order (a "TRO") enjoining four of the Funds'
directors - - Jon D. Carlson, Stanislaw Maliszewski, Thomas R. Hanson and
Stephen E. Upton (collectively, the "Carlson/Maliszewski Directors) -- from
blocking a special meeting of the Funds' stockholders, which was called by
Donald A. Yacktman for November 24.
The court found that a TRO was necessary to prevent "immediate, substantial
and irreparable harm" to stockholders of the Funds. The court held that actions
by the Carlson/Maliszewski Directors have violated the rights of the Funds'
stockholders to attend the duly called special meeting of stockholders and to
vote on matters properly before them, including the removal of the
Carlson/Maliszewski Directors. Therefore, the court entered the TRO, ordering
the Carlson/Maliszewski Directors "to take no action to impede the conduct of
the special stockholders meeting called by plaintiff Donald Yacktman for
11/24/98" and ordering the Carlson/Maliszewski Directors "to provide Yacktman
immediately with a record date list of all stockholders entitled to notice of
said meeting."
(M O R E)
<PAGE>
Yacktman Asset Management
October 19, 1998
Page 2
Background
As disclosed, Mr. Yacktman called the special meeting in his capacity as
President of the Funds to consider and act on several proposals sponsored by
Yacktman which, if adopted, would remove the Carlson/Maliszewski Directors from
the board of directors of the Funds, reduce the size of the Funds' board of
directors by one seat to five seats from six seats, and elect three new
directors to serve on the Funds' board of directors with Donald A. Yacktman and
Ronald W. Ball who currently hold seats on the Funds' board of directors.
Shortly after Mr. Yacktman called the special meeting, the Carlson/ Maliszewski
Directors voted to: 1) remove Mr. Yacktman as President of the Funds and Ronald
Ball as Secretary; 2) to elevate Mr. Carlson to both positions; and 3) to
rescind the call for the special meeting.
Court papers submitted by Yacktman argued that: "Maryland's corporate law
statutes clearly articulate that the president of a corporation may call a
special meeting of stockholders.... Nowhere does the Maryland Code in any way
authorize the Board of Directors to circumvent that Rule by firing the president
who called the meeting and having the board of directors, one of which is the
newly-elected president, rescind the call. Courts specifically have rejected
such a rule as illogical."
The complaint went on to say: "The effect of this illegal action is to deny
the stockholders of The Yacktman Funds, including but not limited to [Yacktman],
their rights under the by-laws and Maryland law to vote upon matters to be
presented at a Special Meeting of Stockholders duly called by the President."
Yacktman Still Serves as Investment Advisor to the Funds
Yacktman continues to manage the Funds. Mr. Yacktman maintains that removal
of the Carlson/Maliszewski Directors is required by disagreements among the
directors of the Funds regarding the management and investment style of the
Funds. As part of such disagreements, the
(M O R E)
<PAGE>
Yacktman Asset Management
October 19, 1998
Page 3
Carlson/Maliszewski Directors consistently have voted as a bloc in opposition to
Donald Yacktman and Ronald Ball, contrary to what Yacktman perceives as the best
interests of the Funds. Mr. Yacktman has said in an October 6 letter to
stockholders that if his proposals are not adopted by the Funds' stockholders at
the special meeting, stockholders "should assume that, going forward, Yacktman
will not be the Funds' investment advisor."
The entire cost of Yacktman's solicitation in connection with the Special
Meeting, including litigation costs, is being paid by Yacktman (and not by the
Funds). Mr. Yacktman has stressed that choosing who should manage the Funds'
assets - Yacktman or the Carlson/Maliszewski Directors - is the imperative of
the Funds' stockholders.
Since Mr. Yacktman advised the Carlson/Maliszewski Directors of his
intention to petition the stockholders for their removal, the
Carlson/Maliszewski Directors have raised allegations against Yacktman
regarding, among other things, 1) how the Funds are managed and who is actually
managing them; 2) Yacktman's use of derivatives; and 3) Yacktman's adherence to
the Funds' Code of Ethics. Mr. Yacktman maintains that he himself manages the
funds, and that Yacktman's investment objective, strategy and style have not
changed. Further, he has said that the Yacktman Fund is prohibited from trading
in derivatives, and the Yacktman Focused Fund's derivative trading, which is
limited to exchange-listed put options, was approved unanimously by the Funds'
board of directors, including the Carlson/Maliszewski Directors. With regard to
ethical violations, Mr. Yacktman denies any improprieties, and questions why, if
ethical violations had occurred at the Funds, had the Carlson/Maliszewski
Directors not exposed them sooner.
# # #
