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Item 9A. Controls and Procedures

2023-02-23 compared with 2022-02-24 · 36 added, 52 removed, 172 unchanged (34% of the section changed)

1 unchanged sentence

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this Annual Report on Form 10-K.

Our management, with the participation of our Principal Executive Officer and our Principal Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this Annual Report on Form 10-K.

The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms.

1 unchanged sentence

Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of December 31, 2021, our disclosure controls and procedures were effective at the reasonable assurance level.

Based on such evaluation, our Principal Executive Officer and Principal Financial Officer have concluded that, as of December 31, 2022, our disclosure controls and procedures were effective at the reasonable assurance level.

Changes in Internal Control over Financial Reporting

5 unchanged sentences

The effectiveness of our internal control over financial reporting as of December 31, 2022 has been audited by Ernst & Young, LLP, an independent registered public accounting firm, as stated in their report which appears herein.

We acquired TIDAL on April 30, 2021, and our management excluded from our assessment of the effectiveness of our internal control over financial reporting as of December 31, 2021, as TIDAL’s internal control over financial reporting is associated with less th an 2% of total assets, 1% of t otal net revenue and 1% of total gross profit within the consolidated financial statements as of and for the year ended December 31, 2021.

OTHER INFORMATION

Disclosure Pursuant to Item 1.01 of Form 8-K:

Entry into a Material Definitive Agreement.

On February 23, 2022, we entered into the Sixth Amendment to Revolving Credit Agreement, among Block, the lenders that are party thereto, and Goldman Sachs Bank USA, as administrative agent (the “Revolver Amendment”).

The Revolver Amendment amends the Revolving Credit Agreement, dated as of May 1, 2020 (as amended, modified, or supplemented, the “Amended Credit Agreement”), among Block, the lenders that are party thereto, and Goldman Sachs Bank USA, as Administrative Agent, to, among other things, provide for a new tranche of unsecured revolving loan commitments in an aggregate principal amount of up to $100 million (the “Tranche B Loans”).

With the addition of the Tranche B Loans, the total revolving commitments under the Amended Credit Agreement has been increased to an aggregate principal amount of up to $600 million.

Under the Amended Credit Agreement, the Tranche B Loans bear interest, at our option, at an annual rate based on the forward-looking term rate based on the secured overnight financing rate (“Term SOFR”) or a base rate.

Tranche B Loans based on Term SOFR shall bear interest at a rate equal to Term SOFR plus a margin of between 1.25% and 1.75%, depending on our total net leverage ratio.

Tranche B Loans based on the base rate shall bear interest at a rate based on the highest of the prime rate, the federal funds rate plus 0.50%, and Term SOFR with a tenor of one-month plus 1.00%, in each case, plus a margin ranging from 0.25% to 0.75%, depending on our total net leverage ratio.

We are required to pay a commitment fee equal to 0.15% per annum on the undrawn portion available under the revolving credit facility.

Currently, the total revolving commitments of up to $600 million remain undrawn.

The foregoing description of the Revolver Amendment does not purport to be complete and is qualified in its entirety by reference to the full text of the Revolver Amendment, a copy of which is filed as Exhibit 10.21 hereto and incorporated herein by reference.

Disclosure Pursuant to Item 2.03 of Form 8-K:

Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information set forth pursuant to Item 1.01 of Form 8-K above is incorporated herein by reference.

On February 22, 2023, Amrita Ahuja, the Chief Financial Officer was appointed as Chief Operating Officer of the Company.

Ahuja will continue to serve as the Company’s Chief Financial Officer.

Ahuja’s biographical information is included in the Company’s proxy statement filed April 28, 2022.

In connection with her appointment, Ms.

Ahuja is expected to receive an incremental stock grant (in addition to her compensation as the Company’s Chief Financial Officer) of approximately $5 million in a mix of RSUs and stock options vesting over four years consistent with Ms.

Ahuja’s existing stock grants, subject to the approval of the compensation committee of the board of directors of the Company.

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The information required by this item will be included under the captions "Board of Directors and Corporate Governance" and "Executive Officers" in our Proxy Statement for the 2022 Annual Meeting of Stockholders to be filed with the SEC within 120 days of the fiscal year ended December 31, 2021 (Proxy Statement) and is incorporated herein by reference.

The information required by this item regarding delinquent filers pursuant to Item 405 of Regulation S-K will be included under the caption "—Delinquent Section 16(a) Reports" in the Proxy Statement and is incorporated herein by reference.

The information required by this item will be included in our Proxy Statement for the 2023 Annual Meeting of Stockholders to be filed with the SEC within 120 days of the fiscal year ended December 31, 2022 ("Proxy Statement") and is incorporated herein by reference.

EXECUTIVE COMPENSATION

The information required by this item will be included under the captions "Board of Directors and Corporate Governance—Director Compensation," "Executive Compensation," and "Board of Directors and Corporate Governance—Compensation Committee Interlocks and Insider Participation" in the Proxy Statement and is incorporated herein by reference.

The information required by this item will be included in the Proxy Statement and is incorporated herein by reference.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The information required by this item will be included under the captions "Security Ownership of Certain Beneficial Owners and Management" and "Equity Compensation Plan Information" in the Proxy Statement and is incorporated herein by reference.

The information required by this item will be included in the Proxy Statement and is incorporated herein by reference.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The information required by this item will be included under the captions "Certain Relationships, Related Party and Other Transactions" and "Board of Directors and Corporate Governance—Director Independence" in the Proxy Statement and is incorporated herein by reference.

The information required by this item will be included in the Proxy Statement and is incorporated herein by reference.

PRINCIPAL ACCOUNTING FEES AND SERVICES

The information required by this item will be included under the caption "Ratification Of Appointment Of Independent Registered Public Accounting Firm" in the Proxy Statement and is incorporated herein by reference.

The information required by this item will be included in the Proxy Statement and is incorporated herein by reference.

EXHIBITS, FINANCIAL STATEMENT SCHEDULES

9 unchanged sentences

Exhibit Filing Date

Agreement and Plan of Reorganization, dated as of April 26, 2018, by and among the Registrant, Weebly, Inc., Forest Merger Sub, Inc., Forest Merger LLC and Shareholder Representative Services.

8-K 001-37622 2.1 April 26, 2018

Scheme Implementation Deed, dated as of August 2, 2021, by and among Square, Inc., Lanai (AU) 2 Pty Ltd, and Afterpay Limited.

3 unchanged sentences

Amended and Restated Certificate of Incorporation of the Registrant, as amended .

Second Amended and Restated Bylaws of the Registrant.

8-K 001-37622 3.2 December 10, 2021

10-K 001-37622 3.1 February 24, 2022

Amended and Restated Bylaws of the Registrant.

8-K 001-37622 3.1 October 21, 2022

Form of Class A common stock certificate of the Registrant.

S-1/A 333-207411 4.1 November 6, 2015

Fifth Amended and Restated Investors’ Rights Agreement among the Registrant and certain holders of its capital stock, dated as of September 9, 2014.

S-1 333-207411 4.2 October 14, 2015

Indenture, dated March 6, 2017, between the Registrant and The Bank of New York Mellon Trust Company, N.A.

8-K 001-37622 4.1 March 6, 2017

Form of 0.375% Convertible Senior Notes due 2022 (included in Exhibit 4.3).

8-K 001-37622 4.2 March 6, 2017

Indenture, dated May 25, 2018, by and between the Registrant and The Bank of New York Mellon Trust Company, N.A.

14 unchanged sentences

8-K 001-37622 4.3 November 13, 2020

Incorporated by Reference

Exhibit Number Description Form File No.

Exhibit Filing Date

Form of 0.25% Convertible Senior Note due 2027 (included in Exhibit 4.

5 unchanged sentences

8-K 001-37622 4.2 May 20, 2021

Incorporated by Reference

Exhibit Number Description Form File No.

Exhibit Filing Date

Indenture, dated as of May 20, 2021 by and between Square, Inc.

10 unchanged sentences

2015 Equity Incentive Plan, as amended and restated

10-K 001-37622 10.2.1 February 24, 2022

Form of Restricted Stock Unit Award and Restricted Stock Unit Agreement.

Form of Restricted Stock Award and Restricted Stock Agreement.

10-K 001-37622 10.2.3 February 24, 2022

Form of Stock Option Grant and Stock Option Agreement.

2015 Employee Stock Purchase Plan, as amended and restated.

10-Q 001-37622 10.1 November 3, 2022

2009 Stock Plan and related form agreements.

3 unchanged sentences

Outside Director Compensation Policy, as amended and restated.

10-K 001-37622 10.6 February 24, 2022

Form of Change of Control and Severance Agreement between the Registrant and certain of its executive officers.

1 unchanged sentence

Form of Change of Control and Severance Agreement between the Registrant and certain of its executive officers entered into on and after January 27, 2020.

10-K 001-37622 10.8 February 24, 2022

Offer Letter between the Registrant and Jack Dorsey, dated as of March 7, 2016.

16 unchanged sentences

8-K 001-37622 10.1 January 31, 2022

Incorporated by Reference

Exhibit Number Description Form File No.

Exhibit Filing Date

Sixth Amendment to Credit Agreement, dated as of February 23, 2022, by and among Block, Inc., the lenders party thereto, and Goldman Sachs Bank USA, as administrative agent.

10-K 001-37622 10.21 February 24, 2022

Master Development and Supply Agreement by and between the Registrant and TDK Corporation, dated as of October 1, 2013.

S-1 333-207411 10.15 October 14, 2015

Incorporated by Reference

Exhibit Number Description Form File No.

Exhibit Filing Date

Master Manufacturing Agreement by and between the Registrant and Cheng Uei Precision Industry Co., Ltd., dated as of June 27, 2012.

9 unchanged sentences

Form of Convertible Note Hedge Confirmation.

8-K 001-37622 10.2 March 6, 2017

Form of Warrant Confirmation.

8-K 001-37622 10.3 March 6, 2017

Form of Convertible Note Hedge Confirmation.

8-K 001-37622 10.2 May 25, 2018

15 unchanged sentences

Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm.

Certification of Chief Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Certification of Chief Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Certifications of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C.

Certification of Principal Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Certification of Principal Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Certifications of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C.

Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

15 unchanged sentences

/s/ Jack Dorsey

President, Chief Executive Officer, and Chairman

Block Head and Chairperson

(Principal Executive Officer)

POWER OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints Jack Dorsey, Amrita Ahuja and Sivan Whiteley, and each of them, as his or her true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully for all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their, his or her substitutes, may lawfully do or cause to be done by virtue hereof.

Each person whose signature appears below hereby constitutes and appoints Jack Dorsey, Amrita Ahuja, and Chrysty Esperanza, and each of them, as his or her true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully for all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their, his or her substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual Report on Form 10-K has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated:

Signature Title Date

/s/ Jack Dorsey President, Chief Executive Officer, and Chairman (Principal Executive Officer) February 24, 2022

/s/ Jack Dorsey Block Head and Chairperson

(Principal Executive Officer) February 23, 2023

/s/ Amrita Ahuja Chief Financial Officer (Principal Financial Officer)

11 unchanged sentences

/s/ Mary Meeker Director February 23, 2023

/s/ Anna Patterson Director February 24, 2022

Anna Patterson

/s/ Sharon Rothstein Director February 23, 2023

2 unchanged sentences

Lawrence Summers

/s/ David Viniar Director February 24, 2022

/s/ Darren Walker Director February 23, 2023

1 unchanged sentence

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures