Bob Has Decided to Solicit Proxies from Shareholders of Sunset

question 57

Multiple Choice

Bob has decided to solicit proxies from shareholders of Sunset Corporation.Bob owns two shares of Sunset,which have a share price of $48.Bob is soliciting the proxies in order to elect a friend of his to the board of directors.Bob's friend is reasonably intelligent,but he has no business experience.In his proxy solicitation,Bob accurately describes his friend and his background and,indicates that the proxy is being sought in order to elect this friend to the board of directors.Bob does not disclose why he thinks his friend should be on the board of directors,nor does Bob disclose what effect he thinks his friend's membership on the board will have on company earnings.Two weeks before starting to solicit proxies,Bob filed copies of his proxy materials with the Securities and Exchange Commission.Bob:

• A) has not properly prepared the proxy statement, because he did not disclose the potential effect on company earnings of his friend's membership on the board.
• B) cannot solicit proxies because, he does not own a sufficient amount of stock in the corporation.
• C) can solicit the proxies, but only if he has obtained approval from the board of directors.
• D) will be able to recover the costs of this proxy contest, even if his friend is not elected.
• E) has complied with all applicable proxy requirements.

---

Definitions:

Authentic Leadership

A leadership style emphasizing transparency, ethics, and openness, with leaders being true to themselves and their values.

Open And Honest Communications

A principle advocating for transparency and truthfulness in all forms of discourse, which fosters trust and understanding.

Transactional Leaders

Leaders who focus on the exchange process between themselves and their followers, motivating through rewards and penalties.

Taking Responsibility

The act of acknowledging one's role in a situation, accepting accountability for one's actions or decisions, and taking the necessary steps to correct or improve the situation.