[Battle for the Board] the Board of Directors of InfoHub

question 88

Multiple Choice

[Battle for the Board] The Board of Directors of InfoHub, an internet service provider, contains 9 directors. Two of the directors, Jude and Rostan, decide they want to replace several of the directors with individuals who support their position and then take over the Board and control the company. Jude thinks it's a long shot, but Rostan tells him they could do it because Rostan has gradually been accumulating shares and they can get a majority of proxies on their side. Jude says the proxies are not important, because it's the shareholders that vote for the members of the board but it is difficult for them to find the names of shareholders. Rostan tells him not to worry, because he will get the shareholder list and focus only a few key shareholders, then get their proxies on his side before the next shareholder meeting.
-Is Jude correct that the proxies do not really matter?

• A) Yes, the proxies do not have a right to vote at shareholder meetings.
• B) Yes, only shareholders have a right to vote at shareholder meetings.
• C) No, the holder of a proxy has the right to vote at shareholder meetings.
• D) No, although only shareholders have a right to vote at shareholder meetings, the proxies can influence the shareholders.
• E) Yes, proxies have no rights under the law.

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Definitions:

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