SEC rules provide exceptions to
facilitate odd-lot tender offers

• Odd-lots are individual holdings of fewer than 100 shares
• Shares are typically traded in round lots of 100
  or multiples thereof
• Odd-lots are thus relatively illiquid

Offer must be directed solely to odd-lot security holders

• Provide "all holders" and "best price" protections to tendering security holders

Rule 13e-4(h)(5)

• Rule
• Exception to Rule 13e-4 requirements
  generally applicable to an issuer tender offer

Rule 14e-5(b)(3)

• Rule
• Exception to Rule 14e-5's general prohibition on
  purchases outside a tender offer
• Rule 14e-5 replaced Rule 10b-13 in 2000
• Codifies a prior class exemption from Rule 10b-13
• Final release commentary

Regulation M

• Rule 101(b)(3)
  Exception to Rule 101 prohibitions
• Rule 102(b)(1)
  Exception to Rule 102 prohibitions
• Final release commentary

Final release 34-19988 1983

• Adopted exceptions for odd-lot tender offers

Final release 33-7376 1996

• Amended Rule 13e-4 to remove requirement that holders specify a record date of ownership for eligibility
• Enabled issuers to conduct continuous, periodic, or extended odd-lot offers for their equity securities
• Proposal release 33-7283 1996
• Comment letters

Final release 33-7760  1999

• M&A Release
• Included Rule 14e-5(b)(3) as part of a comprehensive revision of the tender offer rules
• Final release commentary
• Proposal release 33-7607 1998

American Financial Group 2005

Hickok Incorporated 2004

Tender Offers