UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 INFORMATION REQUIRED IN PROXY STATEMENT 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)) ( ) Definitive Proxy Statement (X) Definitive Additional Materials ( ) Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12 THE YACKTMAN FUNDS, INC. ---------------------------------------------------------------------------- (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) No fee required. ( ) Fee computed on table below per Exchange Act Rules 14a-6(i)(1) 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: ---------------------------------------------------------------------------- THE YACKTMAN FUNDS, INC. November 16, 1998 Financial advisors and institutional investors have indicated to us their concern about the SHIFTING INVESTMENT "STYLE" of The Yacktman Funds, Inc. (the "Funds"). As noted previously, there clearly has been a movement away from the Funds' long standing and publicly stated focus on large capitalization companies. The traditional focus of The Yacktman Fund was summarized in an "Insider Interview" in the August, 1995 Kiplinger's Personal Finance Magazine as: "Buy[ing] big, growing, boring, companies when they're beaten down in price and sell[ing] them when prices approach peak valuations...the quintessential large-company growth fund." Many professional investors purchased shares of the Yacktman Funds for clients assuming they were making a fund investment similar to the type described in Kiplinger's. Unfortunately, the attached chart shows that neither of the Funds appears any longer to be a "large-company growth fund." These professional investors have indicated that they CANNOT IGNORE an investment "style" shift because it directly impacts a number of other issues. As fiduciaries and "watchdogs" for shareholder interests, the Independent Directors and their consultant share the concerns of these professionals over what this "shift" could mean with respect to: * PROSPECTIVE RISK for the investors. The smaller capitalization stocks have potentially greater economic and market risk plus greater volatility. * PROFESSIONAL STAFFING OF THE INVESTMENT ADVISER. The inexperienced and almost skeletal professional staff at Yacktman Asset Management Co. must now follow for investment purposes an "all-market cap" universe of conceivably as many as 2,000 companies. * REASONS for the "style" shift (i.e., is someone other than Donald Yacktman involved in the day-to-day management of the Funds?). * DETERIORATING AND NONCOMPETITIVE PERFORMANCE. Please see attached chart for comparisons to overall market and other Growth & Income mutual funds. Instead of responding to the legitimate questions of the Independent Directors on these issues, Donald Yacktman initiated this costly proxy fight. IT APPEARS TO US THAT HE HOPES TO REPLACE THE CURRENT BOARD WITH DIRECTORS, WHO WILL LOOK THE OTHER WAY WHEN TOUGH QUESTIONS NEED TO BE ASKED. Therefore, if the concerns raised by the Independent Directors are to be addressed in an effective and meaningful manner, you should support the Independent Directors, by VOTING the WHITE PROXY CARD. For additional information, please call either Jon Carlson at 1-630-734-3792 or Stanislaw (Stas') Maliszewski at 1-312-780-1933. The Board of Directors* The Yacktman Funds, Inc. *Messrs. Ball and Yacktman dissenting COMPARATIVE PERFORMANCE ----------------------- THE S&P'S YACKTMAN COMPOSITE PERCENT OF FUND AVERAGE INDEX OF 500 THE YACKTMAN FUNDS ANNUAL STOCKS ANNUAL FUND LIPPER OUTPERFORMING THE TIME PERIOD RETURNS RETURNS RANKINGS* YACKTMAN FUND* - ----------- ------- ------- --------- -------------- Three Months Ended 9/30/98 .......................................... -16.4% -9.9% 707 OUT OF 827 85% Year-to-date (1/1/98-9/30/98) ....................................... -13.3% 6.0% 717 OUT OF 763 94% One Year (10/1/97-9/30/98) ...................................... -15.7% 9.0% 676 OUT OF 714 95% Three Years (10/1/95-9/30/98) ...................................... 10.8% 22.6% 417 OUT OF 449 93% Five Years (10/1/93-9/30/98) ...................................... 14.7% 19.9% 186 OUT OF 289 64% Since Inception (7/6/92) ............................................... 9.8% 18.3% N/A N/A * Lipper rankings are out of the total number of funds in the Lipper Growth and Income fund category for the time period specified. Source: Lipper Analytical Services N/A means not applicable. MARKET CAPITALIZATIONS* - AS OF 9/30/98 PERCENTAGE OF PERCENTAGE OF THE YACKTMAN SIZE RANGE THE YACKTMAN FUND FOCUSED FUND ---------- ----------------- ------------ Above $15 B................ 13.5% 14.47% Between $10 an 15 B........ 0.98% 0.00% Between $5 and 10 B........ 15.44% 9.39% Between $4 and 5 B......... 0.00% 0.00% Between $3 and 4 B......... 3.23% 0.00% Between $2 and 3 B......... 0.00% 0.00% Between $1.5 and 2 B....... 6.70% 4.85% Between $1.0 and 1.5 B..... 14.45% 9.19% Between $0.5 and $1.0 B.... 26.13% 17.73% Less than $0.5 B........... 17.66% 26.18% Cash equivalents........... 1.95% 18.19% *The market capitalizations of the companies will fluctuate over time and may at a specific date be lower or higher than the historic average.