Bob Has Decided to Solicit Proxies from Shareholders of Sunset

question 77

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 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 being on the board will have on the earnings of the company.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 effect on the earnings of the company of electing his friend to the board
• B) cannot solicit proxies because he has not owned at least $1,000 of stock for 2 years
• C) can solicit the proxies 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 applicable proxy requirements

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Definitions:

Hardy-Weinberg Law

The Hardy-Weinberg Law is a principle that predicts the genetic variation and allele frequencies will remain constant in a population from generation to generation, assuming no evolutionary influences affect them.

Gametic Isolation

A type of reproductive barrier where gametes (sperm and egg) of different species fail to meet or fuse, preventing gene flow between the species.

Open Water

Large bodies of water such as oceans, seas, and large lakes, where there is no nearby land within sight.

Gametes

Mature haploid sex cells, such as sperm and eggs, that unite to form a diploid zygote during sexual reproduction.