Item 9A. Controls and Procedures
ITEM 9A – CONTROLS AND PROCEDURES
The Company maintains a system of disclosure controls and procedures that are designed to provide reasonable assurance that material information, which is required to be timely disclosed, is accumulated and communicated to management in a timely manner. An evaluation of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) of the Securities Exchange Act of 1934 (the “Exchange Act”)) was performed as of the end of the period covered by this report. This evaluation was performed under the supervision and with the participation of the Company’s Chief Executive Officer and Chief Financial Officer. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures as of the end of the period covered by this report were effective to provide reasonable assurance that information required to be disclosed by the Company in the Company’s reports that it files or submits under the Exchange Act is accumulated and communicated to management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure and are effective to provide reasonable assurance that such information is recorded, processed, summarized, and reported within the time periods specified by the SEC’s rules and forms.
Change in Internal Control Over Financial Reporting - There were no changes in the Company's internal control over financial reporting that occurred during the Company's last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.
Management’s Report on Internal Control Over Financial Reporting - Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. The Company’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United State of America (“GAAP”).
All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Management has assessed the effectiveness of the Company’s internal control over financial reporting as of January 29, 2022, based on the criteria set forth by the Committee of Sponsoring Organizations (“COSO”) of the Treadway Commission in their Internal Control — Integrated Framework (2013) . In making its assessment of internal control over financial reporting, management has concluded that the Company’s internal control over financial reporting was effective as of January 29, 2022.
The Company’s independent registered public accounting firm, Deloitte & Touche LLP, has audited the effectiveness of the Company’s internal control over financial reporting. Their report appears herein.
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the stockholders and the Board of Directors of The Buckle, Inc.
Opinion on Internal Control over Financial Reporting
We have audited the internal control over financial reporting of The Buckle, Inc. and subsidiary (the “Company”) as of January 29, 2022, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of January 29, 2022, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the fiscal year ended January 29, 2022, of the Company and our report dated March 30, 2022, expressed an unqualified opinion on those financial statements.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting . Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ Deloitte & Touche LLP
Omaha, Nebraska
March 30, 2022
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ITEM 9B - OTHER INFORMATION
Indemnification Agreements
On January 24, 2022, the Company’s Board of Directors entered into indemnification agreements between the Company and each outside member of the Company’s Board of Directors. The purpose of the indemnification agreements is to provide specific contractual assurance with respect to the existing indemnification and expense advancement rights extended to such directors under the Company’s Amended and Restated Bylaws.
A copy of the form of indemnification agreement is attached hereto as Exhibit 10.12, and is incorporated herein by reference.
Amended and Restated Code of Business Conduct and Ethics
On December 3, 2021, the Company’s Board of Directors approved certain stylistic, technical, and administrative amendments as part of an Amended and Restated Company Code of Business Conduct and Ethics (the “Code”). Specifically, the Code was updated and enhanced to utilize plain English language choices while modernizing the layout and format of the Code for enhanced readability. The Code is applicable to directors, officers, and employees of the Company.
The foregoing description of Code is qualified in its entirety by reference to the Code, which is available for review or download in the Corporate Governance section of the Company’s website.
ITEM 9C - DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
PART III
ITEM 10 - DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE
The information required by this item appears under the captions "Executive Officers of the Company" in this report and "Election of Directors" in the Company's Proxy Statement for its 2022 Annual Stockholders Meeting and is incorporated by reference.
ITEM 11 - EXECUTIVE COMPENSATION
The information required by this item appears under the following captions in the Company's Proxy Statement for its 2022 Annual Stockholders Meeting and is incorporated by reference: “Executive Compensation,” “Director Compensation” (included under the “Election of Directors” section), and “Report of the Audit Committee.”
ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The information required by this item appears under the captions "Beneficial Ownership of Common Stock" and “Election of Directors” in the Company's Proxy Statement for its 2022 Annual Stockholders Meeting and in the Notes to Consolidated Financial Statements under Footnote K in this report and is incorporated by reference.
ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
The information required by this item appears under the captions “Independence” and “Related Party Transactions” (included under the “Election of Directors” section) in the Company's Proxy Statement for its 2022 Annual Stockholders Meeting and is incorporated by reference.
ITEM 14 - PRINCIPAL ACCOUNTANT FEES AND SERVICES
Information regarding the fees billed by Deloitte & Touche LLP (PCAOB ID No. 34 ), our independent registered public accounting firm, and the nature of services comprising the fees for each of the two most recent fiscal years is set forth under the caption “Ratification of Independent Registered Public Accounting Firm” in the Company’s Proxy Statement for its 2022 Annual Stockholders Meeting and is incorporated by reference.
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PART IV
ITEM 15 - EXHIBITS AND FINANCIAL STATEMENT SCHEDULE
(a) Financial Statement Schedule
Valuation and Qualifying Account. See Schedule II included in this report.
All other schedules are omitted because they are not applicable or the required information is presented in the consolidated financial statements or notes thereto.
(b) Exhibits
See Index To Exhibits.
ITEM 16 - FORM 10-K SUMMARY
Not applicable.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
THE BUCKLE, INC.
Date: March 30, 2022 By: /s/ DENNIS H. NELSON
DENNIS H. NELSON,
President and CEO
(principal executive officer)
Date: March 30, 2022 By: /s/ THOMAS B. HEACOCK
THOMAS B. HEACOCK,
Senior Vice President of Finance, Treasurer,
and CFO (principal accounting officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the registrant and in the capacities indicated on the 30th day of March, 2022.
/s/ DANIEL J. HIRSCHFELD /s/ BRUCE L. HOBERMAN
Daniel J. Hirschfeld Bruce L. Hoberman
Chairman of the Board and Director Director
/s/ DENNIS H. NELSON /s/ MICHAEL E. HUSS
Dennis H. Nelson Michael E. Huss
President and Chief Executive Officer Director
and Director
/s/ THOMAS B. HEACOCK /s/ ANGIE J. KLEIN
Thomas B. Heacock Angie J. Klein
Sr. Vice President of Finance, Treasurer, Director
Chief Financial Officer, and Director
/s/ KARI G. SMITH /s/ JOHN P. PEETZ, III
Kari G. Smith John P. Peetz, III
Executive Vice President of Stores Director
and Director
/s/ HANK M. BOUNDS /s/ KAREN B. RHOADS
Hank M. Bounds Karen B. Rhoads
Director Director
/s/ BILL L. FAIRFIELD /s/ JAMES E. SHADA
Bill L. Fairfield James E. Shada
Director Director
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SCHEDULE II - Valuation and Qualifying Accounts
(Amounts in Thousands)
Allowance for Doubtful Accounts Reserve for Sales Returns
Balance, February 2, 2019 $ 4 $ 2,182
Amounts charged to costs and expenses
472 —
Amounts charged to other accounts
— 62,878
Deductions ( 472 ) ( 62,803 )
Balance, February 1, 2020 $ 4 $ 2,257
Amounts charged to costs and expenses
489 —
Amounts charged to other accounts
— 62,257
Deductions ( 489 ) ( 61,955 )
Balance, January 30, 2021 $ 4 $ 2,559
Amounts charged to costs and expenses
448 —
Amounts charged to other accounts
— 85,192
Deductions ( 448 ) ( 84,738 )
Balance, January 29, 2022 $ 4 $ 3,013
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INDEX TO EXHIBITS
Exhibits Page Number or Incorporation by Reference to
(3) Articles of Incorporation and By-Laws.
(3.1)
Articles of Incorporation of The Buckle, Inc. as amended Exhibit 3.1 to Form 10-Q filed for the fiscal quarter ended July 29, 2017
(3. 2 )
Amended and Restated By-Laws of The Buckle, Inc. Exhibit 3.2 to Form 8-K filed for the report period December 3, 2021
(4) Instruments defining the rights of security holders, including indentures
(4.1) See Exhibits 3.1 and 3.2 for provisions of the Articles of Incorporation and Amended and Restated By-laws of the Registrant defining rights of holders of Common Stock of the registrant
(4.2) Form of stock certificate for Common Stock Exhibit 4.1 to Form S-1 No. 33-46294
(10) Material Contracts
(10.1)
Amended and Restated Non-Qualified Deferred Compensation Plan (*) Exhibit 10.6 and 10.6.1 to Form 10-K filed for the fiscal year ended January 28, 2012
(10.2)
Revolving Line of Credit Note and First Amendment to Credit Agreement, dated June 8, 2012 between The Buckle, Inc. and Buckle Brands, Inc. and Wells Fargo Bank, N.A. for a $25.0 million line of credit Exhibit 10.1 to Form 10-Q filed for the fiscal quarter ended July 28, 2012
(10.2.1)
Revolving Line of Credit Note and Second Amendment to Credit Agreement, dated February 16, 2015 between The Buckle, Inc. and Buckle Brands, Inc. and Wells Fargo Bank, N.A. for a $25.0 million line of credit Exhibit 10.2.1 to Form 10-K filed for the fiscal year ended January 31, 2015
(10.2.2)
Revolving Line of Credit Note and Third Amendment to Credit Agreement, dated June 30, 2017 between The Buckle, Inc. and Buckle Brands, Inc. and Wells Fargo Bank, N.A. for a $25.0 million line of credit Exhibit 10.1 to Form 10-Q filed for the fiscal quarter ended July 29, 2017
(10.2.3)
Revolving Line of Credit Note and Fourth Amendment to Credit Agreement, dated July 26, 2019 between The Buckle, Inc. and Buckle Brands, Inc. and Wells Fargo Bank, N.A. for a $25.0 million line of credit Exhibit 10.1 to Form 10-Q filed for the fiscal quarter ended August 3, 2019
(10.2. 4 )
Revolving Line of Credit Note and Fifth Amendment to Credit Agreement, dated July 16, 2021 between The Buckle, Inc. and Buckle Brands, Inc. and Wells Fargo Bank, N.A. for a $25.0 million line of credit Exhibit 10.1 to Form 10-Q filed for the fiscal quarter ended July 31, 2021
(10.3)
1993 Director Stock Option Plan Amended and Restated (*) Exhibit B to Proxy Statement for Annual Meeting held June 2, 2006
(10.4)
1997 Executive Stock Option Plan (*) Exhibit B to Proxy Statement for Annual Meeting held May 28, 1998
(10.5)
1998 Restricted Stock Plan (*) Exhibit C to Proxy Statement for Annual Meeting held May 28, 1998
(10.6)
2005 Restricted Stock Plan Amended and Restated (*) Exhibit B to Proxy Statement for Annual Meeting held May 31, 2013
(10.7)
2008 Director Restricted Stock Plan (*) Exhibit B to Proxy Statement For Annual Meeting held May 28, 2008
(10. 8 )
2020 Management Incentive Plan (*) Exhibit A to Proxy Statement for Annual Meeting held June 1, 2020
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Exhibits Page Number or Incorporation by Reference to
(10. 9 )
2021 Management Incentive Plan (*) Exhibit A to Proxy Statement for Annual Meeting held June 7, 2021
(10.10) Summary of Named Executive Officer Compensation (*) Incorporated by reference from the section titled "Executive Compensation and Other Information" in Proxy Statement for the 2022 Annual Meeting of Stockholders
(10.11) Summary of Non-Employee Director Compensation (*) Incorporated by reference from the section titled "Director Compensation" in Proxy Statement for the 2022 Annual Meeting of Stockholders
(10.12)
Form of Director Indemnification Agreement
(21)
List of Subsidiaries
(23)
Consent of Deloitte & Touche LLP
(31a)
Certification Pursuant to Rule 13a-14(a) or 15d-14(a) Under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
(31b)
Certification Pursuant to Rule 13a-14(a) or 15d-14(a) Under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
(32)
Certifications Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
(101) Includes the following materials from The Buckle, Inc.’s Annual Report on Form 10-K for the fiscal year ended January 29, 2022, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets; (ii) Consolidated Statements of Income; (iii) Consolidated Statements of Stockholders’ Equity; (iv) Consolidated Statements of Cash Flows; and (v) Notes to Consolidated Financial Statements, tagged as blocks of text and in detail.
(104) Cover page formatted as Inline XBRL and contained in Exhibit 101
(*) Denotes management contract or compensatory plan or arrangement.
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