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Bertha Mader, CFA, received proxy material related to a hostile takeover attempt of Danube Industries by Balnet Company. She holds shares of Danube in most of her client accounts. Mader has a high opinion of Danube’s management because they have run the company successfully and have always responded directly and honestly to her inquiries. She is not acquainted with Balnet’s management team but knows they have a reputation for improving the bottom line at the companies they acquire, partly because they tend to replace upper management at their targets and assume their functions. Balnet's offer is 60% higher than the price of Danube shares before the announcement. Danube’s management has contacted Mader and requested that she vote the shares she controls against the takeover because the management is concerned for their jobs and for the welfare of the company. To comply with the Code and Standards, Mader should: A. vote for the takeover if she can get assurance that Danube's management team will remain in place. B. vote for the takeover if it is in the best interest of Danube's shareholders, regardless of the consequences to current management. C. delegate her proxy vote to another member of her firm due to the conflict of interest created when she was contacted by management. |