Tender Offer Reform Act of 1987

Tender Offer Reform Act of 1987 - Amends the Securities Exchange Act of 1934 (the Act) to make it unlawful for a broker or dealer in securities to use the mail or any means of interstate commerce to effect a transaction, or attempt to induce the purchase or sale of any security, during any period that the primary market for such security has suspended trading in such security for the purpose of facilitating the dissemination of material information concerning the issuer, the security, or the market for such security. Provides that any primary market determination to suspend trading shall be effective for not more than one business day and is subject to review and renewal approval by the Securities and Exchange Commission (the Commission). Requires the Commission to approve any such primary market suspension unless it makes certain specified findings, at which time the Commission shall set aside such suspension or modify it as appropriate. Requires the Commission to define the term "primary market" for purposes of this Act, and allows the Commission to exempt certain dealers and brokers from the above prohibition, as it deems appropriate.

Makes it unlawful for a broker or dealer to effect any transaction after the effective date of this Act in any nationally-listed security or security authorized for quotation within a national securities association if: (1) any of such issuer's voting securities has fewer or greater than one vote per share on any issue before the shareholders; or (2) any of such issuer's common stock is without voting rights. Excludes certain limited types of voting securities from the above prohibition, and allows the Commission to exempt certain securities from the operation of this prohibition when the Commission deems it appropriate in order to prevent undue hardship or disruption of the securities markets.

Requires any person whose acquisition results in ownership of more than five percent of an issuer's equity securities to: (1) make a written statement to be sent to the issuer regarding detailed information concerning all material aspects of such acquisition; and (2) cease acquiring additional securities of such class until the expiration of two business days following the acquisition. Outlines detailed information to be included in the written statement, along with the information to be included in the public announcement. Requires any person required to file a statement to file with the issuer and the Commission an amended statement if a material change occurs in the information given in the required statement. Authorizes the Commission to allow a person to file a briefer statement as the Commission may specify if the securities were acquired by the person in the ordinary course of their business and have no effect on changing the influence or control of the issuer. Exempts the following acquisitions from the above reporting requirements: (1) any acquisition made or proposed to be made by a registration statement under the Securities Act of 1933; (2) any acquisition which, together with any other acquisition of such security during the preceding 12 months, does not exceed two percent of that class; (3) any acquisition of an equity security by the issuer of such security; and (4) any acquisition or proposed acquisition of a security which the Commission exempts from the provisions of this Act. Authorizes the Commission to adopt such rules and regulations as necessary to enforce the provisions of the above requirements, and to bring an action against those violating the above provisions. Outlines administrative provisions concerning the bringing of such actions and the determination of the penalty to be paid. Places a five-year statute of limitations on the bringing of such actions. Provides that when two or more persons act as a partnership or other group to acquire, vote, hold, or dispose of securities of an issuer, such group shall be deemed a "person" for purposes of the requirements of this Act. Outlines provisions for the determination of the percentage of a class of any security beneficially held by a person, for purposes of this Act.

Makes it unlawful for an issuer to purchase, directly or indirectly, any of its voting equity securities at a price above the average market price of such securities from any person who is the beneficial owner of more than three percent of that class of securities and has been the beneficial owner of such securities for less than two years, unless such purchase has been approved through a shareholder vote, or is part of an identical offer made to all holders of such securities. Authorizes the Commission to adopt rules and regulations to carry out this provision, and allows the Commission to exempt from this provision any persons or transactions not intended to come under this provision.

Amends provisions of the Act relating to proxy statements to require equal, descriptive statements concerning candidates for directors within any proxy statement to shareholders that is submitted by a person nominating such candidates if such person is the beneficial owner of three percent or more of the voting power of the issuer's securities or of $500,000 in market value. Requires such statements to be similar in objectivity as are statements distributed by the board of directors to shareholders for election purposes. Directs the Commission to prescribe necessary rules and regulations to carry out such provision.

Requires any material soliciting or requesting tender offers that are published or sent to security holders to include a summary disclosure in accordance with rules and regulations as prescribed by the Commission. Outlines information to be included in such summary disclosure, including the amount of securities beneficially owned by the solicitor as well as the purpose of the acquisition.

Revises the authority of the Commission under the Act to adopt rules, regulations, and orders relating to tender offers.

Authorizes the Commission to extend, when appropriate, the periods in which solicitation tender offers shall remain open. Requires a person making a tender offer to keep such offer open for a period of 60 days after the date on which a certain information statement concerning such offer is filed with the Commission.

Directs the Commission to prescribe rules and regulations which would require an issuer to respond to rumor questions concerning possible changes in corporate ownership, control, or management. Requires the Commission, within 120 days after the enactment of this Act, to publish for public comment the above-required rules and regulations.

Makes it unlawful for any person who has made a tender offer and has then withdrawn such offer before its normal expiration to acquire, except by tender offer or request or invitation for tenders, beneficial ownership of any securities of such class until the later of: (1) 30 days after the date such offer is terminated; or (2) the date such offer would have expired if it had not been terminated.

Provides that, during a tender offer by a person other than the issuer, it shall be unlawful for the issuer to enter into or amend agreements containing provisions that increase the current or future compensation of any officer or director, except for routine increases in compensation undertaken in the ordinary course of the issuer's business. Makes it unlawful for such issuer to make such a payment to an officer or director that is not deductible under provisions of the Internal Revenue Code (by reason of sections of such Code relating to golden parachute payments), except for payments under agreements entered into prior to a specified date.

Makes unlawful the acquisition of the beneficial ownership of any covered equity security of a class, if after such acquisition such person will be the beneficial owner of more than ten percent of such class, except if done by tender offer, requests or invitations for tenders, or by purchase from the issuer. Outlines exceptions to such prohibition, including acquisitions by gift and acquisitions pursuant to a statutory merger or consolidation.

Makes it unlawful for any issuer to establish or implement, during any proxy contest, tender offers, or request or invitation for tenders, any defensive tactic in violation of such rules and regulations as prescribed by the Commission unless such tactic has been approved by the shareholders of such issuer. Outlines actions which shall be considered by the Commission in their rules and regulations to be defensive tactics, including the issuance of warrants which give the shareholders the right, upon the occurrence of an event related to a contest for corporate ownership, control, or management, to buy or sell securities at prices not reflective of the current market price of such securities.

Provides that nothing contained in this Act shall limit or condition the authority of the Commission to supplement the proration, withdrawal, and minimum offering periods applicable to tender offers or requests or invitations for tenders.