Your good client Paddington Bakerloo, General Counsel of Piccadilly Lines, Inc., is on the phone. He tells you that Piccadilly plans to file a shelf registration statement and to do a takedown. He also tells you that Piccadilly has not yet filed its proxy statement.

Here’s what you need to know in order to mind the gap – no, not the gap between the train and the station, but the gap between filing the registration statement and incorporating certain information required by Part III of Form 10-K (“Part III”) from a company’s proxy statement.
What creates the gap? How can I forward incorporate Part III into the proxy statement?

General Instruction G(3) to Form 10-K provides:

The information required by Part III (Items 10, 11, 12, 13 and 14) may be incorporated by reference from the registrant’s definitive proxy statement (filed or required to be filed pursuant to Regulation 14A) or definitive information statement (filed or to be filed pursuant to Regulation 14C) which involves the election of directors, if such definitive proxy statement or information statement is filed with the Commission not later than 120 days after the end of the fiscal year covered by the Form 10-K.

Part III consists of the following items:

• Item 10. Directors, Executive Officers and Corporate Governance;
• Item 11. Executive Compensation (including the Compensation Discussion and Analysis);
• Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters;
• Item 13. Certain Relationships and Related Transactions, and Director Independence; and
• Item 14. Principal Accounting Fees and Services.

As a result of General Instruction G(3), many issuers forward incorporate Part III from their proxy statement, which for a calendar year issuer must be filed by April 30. This creates a gap period when all of the information required to be included in Form 10-K is not yet on file until the proxy statement has been filed.

In turn, when the issuer incorporates its Form 10-K by reference into its shelf registration statement, it will be missing information during the gap between the filing of the Form 10-K and the filing of the proxy statement. This missing information may affect both filing the shelf and doing shelf takedowns.
Can a non-WKSI file a registration statement in the gap period?

Consider the following fact pattern:

• a company files a non-automatic shelf registration statement on Form S-3 on April 10;
• the company wants to incorporate its most recent Form 10-K (filed March 31); and
• the Form 10-K omits information to be incorporated by reference from the proxy statement

Can the company go effective prior to filing the proxy statement?

In C&DI 123.01 the SEC Staff took the position that in order to have a complete prospectus, the issuer must either file its definitive proxy statement before the Form S-3 is declared effective, or include the missing information in its 10-K. In other words, a Form S-3 registration statement may be filed in the gap period, but the SEC Staff will not declare the registration statement effective until Part III information is on file. You will generally avoid a comment requesting the missing Part III information if you state up front in your transmittal letter to the SEC that you intend to file it before requesting acceleration of effectiveness.
What about a WKSI? Can it file an automatic shelf registration statement during the gap period? Can a WKSI and a non-WKSI conduct a shelf takedown during the gap period?

Yes, a WKSI can file an automatic registration statement or do a shelf takedown after filing its 10-K but before filing the Part III information, but the SEC Staff has left it up to WKSIs to make their own decision as to whether the disclosure satisfies applicable requirements. See C&DI 114.05. In other words, the Staff will not object to the filing of a WKSI automatic shelf registration statement or a takedown during the gap period, but you need to figure out if the missing Part III information is material.

The upshot of this is the effectiveness of Form S-3 registration statements and WKSI automatic shelf registration statements during the gap period are treated differently. Both may be filed during the gap period, but the Form S-3 registration statement will not be declared effective until Part III is on file pursuant to C&DI 123.01. By contrast, the WKSI automatic shelf automatically becomes effective (thanks to Rule 462).

On the other hand, takedowns from a WKSI automatic shelf registration statement and a non-WKSI shelf registration statement are both allowed during the gap period, assuming the missing information is not material.
Can you give me a map to how this all works?

While we can’t match the London Tube map for sheer design elegance, a picture is always worth a thousand words: