Icahn, who holds about 5% of Yahoo! shares, filed the proxy with the US Securities and Exchange Commission, urging Yahoo! shareholders to vote in favour of his proposed slate.
Icahn wrote: "We believe that NOW IS THE TIME TO ENTER INTO A SIGNIFICANT TRANSACTION WITH MICROSOFT [Icahn's use of all caps]. To that end, we have nominated nine directors to replace Yahoo's current board.
"We urge you to read the enclosed proxy statement and vote the GOLD proxy card in favour of our nominees."
Icahn reiterated to shareholders that Steve Ballmer, chief executive of Microsoft, is not willing to negotiate a new deal with Yahoo! unless the internet firm's current board and Yang are replaced.
He stressed that he "strongly" believed that if his slate was elected, Microsoft would either offer to buy the whole company or provide a "very attractive" deal for its search business, which Microsoft is now most interested in.
Icahn said that Yahoo! stood on the edge and risked its future unless Yang could be replaced although he said he does not want to kick him out of the firm that he founded, but rather keep him on in his previous nebulous role of "chief Yahoo!".
"Our company is now moving toward a precipice. It is currently losing market share in its 'Search' function, our current board has failed to bring in a talented and experience CEO to replace Jerry Yang and return Jerry to his role as chief of Yahoo!, and currently it is witnessing a meaningful exodus of talent.
"It is no secret that Google (which hired a great operator as CEO) continues to dramatically outperform Yahoo!. IT IS TIME FOR A CHANGE!"
Icahn's proxy letter follows Yahoo!'s rejection of a joint offer from Microsoft and himself on Saturday, which called for Yahoo! to be broken up. Microsoft would have bought the search business, leaving the rest of the firm to be run by Icahn and his slate of directors.
Yahoo! instead suggested two different offers to Microsoft -- one being that the software giant buy the entire company for a minimum of $33 a share (the value of Yahoo!'s last offer) or start negotiating a better offer for Yahoo!'s search business.
Microsoft, however, was not interested and quickly rejected both offers.
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