Tektronix, Inc.June 19, 1987INQUIRY LETTERSTOEL RIVES BOLEY JONES & GREY SUITE 2300, STANDARD INSURANCE CENTER, 900 SW FIFTH AVENUE PORTLAND, OREGON 97204-1268 TELEPHONE (503) 224-3380 June 18, 1987
Securities Exchange Act of 1934 and Item 1 of Schedule 13E-4 and Rule 13e-4(f)(1)(ii) thereunder.
Division of Market Regulation Securities and Exchange Commission Judiciary Plaza 450 Fifth Street, NW Washington, D.C. 20549
Under the modified Dutch Auction procedure, the Company has invited its shareholders to tender Common Shares at prices, not in excess of $40 nor less than $35 per share, specified by such shareholders, upon the terms and subject to the conditions set forth in the offer to purchase dated June 10, 1987 and the related letter of transmittal, copies of which are enclosed. The Company will determine a single per share price (not in excess of $40 nor less than $35 per share) that it will pay for shares validly tendered pursuant to the Offer, taking into account the number of shares so tendered and the prices specified by tendering shareholders. The Company will select a purchase price that will enable it to purchase in the Offer at least 6,000,000 shares or such lesser number of shares as is validly tendered at prices not in excess of $40 nor less than $35 per share. The Company may, but will not be obligated to, select a purchase price that will enable it to purchase up to 10,000,000 shares, although the Company does not intend to pay more than $380 million to purchase shares in the Offer. Item 1 of Schedule 13E-4 requires that an offer state the exact amount of securities being sought. The Offer states that the Company will buy between 6,000,000 shares (or such lesser number as is validly tendered) and 10,000,000 shares and describes the method by which the Company will determine the number actually purchased. We believe that this disclosure satisfies the requirements of Item 1 of Schedule 13E-4. Rule 13e-4(f)(1)(ii) provides that, in the event of an increase in the percentage of securities being sought by more than two percent, the offer must be extended at least 10 business days from the date that notice of the increase is given. We believe that this rule does not require that the Offer be extended after the Company has determined the number of shares to be purchased pursuant to the Offer if the amount to be purchased is within the range specified. These interpretations of Item 1 of Schedule 13E-4 and Rule 13e-4(f)(1)(ii) are consistent with and based upon the interpretations of the Commission published in connection with the adoption of the "all holders and best price" rules as set forth in SEC Release No. 33-6653 issued on July 11, 1986 (the "July Release"). The Commission expressly addressed modified Dutch Auction issuer tender offers and concluded that they are consistent with the tender offer rules, as amended. In footnote 64 to the July Release, the Commission indicated that under current staff interpretations, issuers have been permitted to make modified Dutch Auction issuer tender offers, subject to the following conditions: (i) disclosure in the tender offer material of the minimum or maximum consideration to be paid; (ii) pro rata acceptance throughout the offer with all securities purchased participating equally in prorationing; (iii) withdrawal rights throughout the offer; (iv) prompt announcement of the purchase price, if determined prior to the expiration of the offer; and (v) purchase of all accepted securities at the highest price paid to any security holder under the offer. In the same release that included this endorsement of the modified Dutch Auction procedure, the Commission amended Rule 13e-4(f)(1)(ii) to require a ten-day extension if the percentage of securities being sought increased by more than two percent. Nowhere in the July Release, or in SEC Release No. 34-24296 relating to modifications requiring extensions, was it suggested that the common practice of stating the number of securities being sought in a modified Dutch Auction tender offer as a range would require an extension if more than the minimum amount (plus two percent) was purchased. The practices of the Commissions staff since the amendment of Rule 13e-4(f)(1)(ii), to the extent such practices could be discerned from transactions the staff permitted to proceed without extension, reinforced the implication that modified Dutch Auctions issuer tender offers with the number of shares to be purchased stated as a range were consistent with Rule 13e-4(f)(1)(ii). Modified Dutch Auction issuer tender offers with ranges of shares to be purchased were undertaken before the July Release and have continued since issuance of the July Release. These have included issuer tender offers by Jostens, Inc. (commenced on August 7, 1986), J.P. Stevens & Co., Inc. (commenced on September 24, 1986), and, most recently, SmithKline Beckman Corp. (commenced on November 26, 1986). The documents for these tender offers did not provide for an extension when the number of shares to be purchased was determined and no extensions were in fact made. The Company requests a no-action letter confirming that the Commissions staff will not recommend any enforcement action if the Company proceeds with the Offer and does not extend the Offer when the number of shares to be purchased is determined by the Company upon normal expiration of the Offer. If you should have any questions regarding this matter, please do not hesitate to call me collect. Thank you for your assistance in this matter. Very truly yours,
June 19, 1987
Stoel Rives Boley Jones & Grey Suite 2300 Standard Insurance Center 900 SW Fifth Avenue Portland, Oregon 97204-1268
File No. TP 87-448
You make the following representations:
Item 1 of Schedule 13E-4 requires that an offer state that exact amount of securities being sought. The Tender Offer states that Tektronix will buy between 6 million Common Shares (or such lesser number as is validly tendered) and 10 million Common Shares and describes the method by which Tektronix will determine the number actually purchased. You believe that this disclosure satisfies the requirements of Item 1 of Schedule 13E-4. In addition, Rule 13e-4(f)(1)(ii) provides that, in the event of an increase in the percentage of securities being sought by more than two percent, the offer must be extended at least 10 business days from the date that notice of the increase is given. You also believe that this provision does not require that the Tender Offer be extended after Tektronix has determined the number of shares to be purchased to the Tender Offer if the amount to be purchased is within the range specified. Response:
Nevertheless, because of possible confusion regarding the requirements of Rule 13e-4 in the context of modified dutch auction tender offers, on the basis of your representations and the facts presented, and for purposes of this transaction only, the Division will not recommend that the Commission take enforcement action under Rule 13e-4 if Tektronix conducts the Tender Offer as described above. The foregoing no-action position is based solely on your representations and the facts presented and is strictly limited to the Tender Offer being conducted by Tektronix. The Divisions determination to grant relief in this matter is a staff position regarding enforcement action only. Because the no-action position is based solely on the representations that you have made, any different facts might require a different conclusion. Finally, your attention is directed to the antifraud and anti-manipulation provisions of the Exchange Act, particularly Sections 9(a), 10(b) and 14(e) and Rule 10b-5 thereunder. Responsibility for compliance with these and any other applicable provisions of the federal securities laws must rest with Tektronix. The Division expresses no view with respect to other questions the proposed transaction may raise, including but not limited to, the adequacy of disclosure concerning, and the applicability of other federal or state laws to, the proposed transaction. Because application of Rule 13e-4 to modified dutch auction tender offers by issuers often involve difficult issues, counsel to issuers are urged to contact the staff of the Division prior to commencing such offers with respect to current interpretive positions. You have agreed to waive the provision of the Commissions rule concerning publication of interpretive and no-action letters and other written communications, 17 C.F.R. 200.81, which provides for public availability of written communications requesting interpretive legal advise together with any response. Accordingly, your letter dated June 18, 1987 and this letter shall be placed in the Commissions public file on June 19, 1987. Sincerely,
Associate Director |
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