<PAGE> 1
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
THE BUCKLE, INC.
- -------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
N/A
- -------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing
fee is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
- --------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
- --------------------------------------------------------------------------------
(3) Filing party:
- --------------------------------------------------------------------------------
(4) Date filed:
- --------------------------------------------------------------------------------
<PAGE> 2
THE BUCKLE, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 2, 1997
To Our Stockholders:
The Annual Meeting of Stockholders of The Buckle, Inc. will be held at the
Ockinga Center on the University of Nebraska-Kearney campus, Kearney, Nebraska,
on Monday June 2, 1997 at 10:00 A.M., for the following purposes:
1. To elect a Board of Directors. The Board of Directors intends to
nominate the following persons, each of whom currently serves as a Board
member: Daniel J. Hirschfeld, Dennis H. Nelson, Karen B. Rhoads, Robert E.
Campbell, William D. Orr, Ralph M. Tysdal and Bill L. Fairfield.
2. To ratify the appointment of Deloitte & Touche LLP as the Company's
independent accountants for fiscal year ending January 31, 1998.
3. To approve the Company's 1997 Management Incentive Plan.
4. To transact such other business as may properly come before the meeting
and any adjournments or postponements thereof.
Only stockholders of record at the close of business on April 14, 1997, are
entitled to notice of and to vote at the Annual Meeting and at any and all
adjournments or postponements thereof.
A copy of the Company's annual report is being mailed with this proxy statement
to stockholders entitled to notice of this meeting.
By Order of the Board of Directors,
Wayne Daugherty, Secretary
April 30, 1997
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE DATE, SIGN AND RETURN THE
ENCLOSED PROXY AS PROMPTLY AS POSSIBLE IN THE ENCLOSED ENVELOPE.
<PAGE> 3
THE BUCKLE, INC.
2407 West 24th Street
Kearney, NE 68847
PROXY STATEMENT FOR THE ANNUAL MEETING OF
SHAREHOLDERS TO BE HELD JUNE 2, 1997
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of The Buckle, Inc. ("the Company") for use
at the Annual Meeting of Shareholders of the Company to be held June 2, 1997,
or at any adjournments of said meeting (the "Meeting"). The enclosed form of
proxy, if executed, may nevertheless be revoked at any time insofar as it has
not been exercised. When such proxy is properly executed and returned, the
shares it represents will be voted at the meeting in accordance with any
directions noted thereon; or if no direction is indicated, it will be voted in
favor of the proposals set forth in the notice attached hereto.
The Company will bear the cost of solicitation of proxies, including the
charges and expenses of brokerage firms and others for forwarding solicitation
materials to beneficial owners of stock. In addition to the use of mail,
proxies may be solicited by personal interview, by telegram or by telephone.
Copies of the Proxy Statement and proxy form will be first provided to
shareholders on April 30, 1997.
VOTING INFORMATION
As of April 14, 1997, the Company has outstanding 6,983,581 shares of
Common Stock. Each share of Common Stock is entitled to one vote. Only
holders of Common Stock of record on April 14, 1997 will be entitled to vote at
the Annual Meeting of Shareholders. A holder of Common Stock is entitled to
cumulate his or her votes in the election of directors and may give one or more
candidates as many votes as the number of directors to be elected multiplied by
the total number of shares owned by such shareholder. Under Nebraska law there
are no conditions precedent to the exercise of cumulative voting rights. On
all other matters which may come before the Meeting, each holder of Common
Stock will be entitled to one vote for each share owned.
Votes cast by proxy or in person at the Annual Meeting will be tabulated
by the election inspectors appointed for the meeting and will determine whether
or not a quorum is present. The election inspectors will treat abstentions as
shares that are present and entitled to vote for purposes of determining the
presence of a quorum but as unvoted for purposes of determining the approval of
any matter submitted to the shareholders for a vote. If a broker indicates on
the proxy that it does not have discretionary authority as to certain shares to
vote on a particular matter, those shares will not be considered as present and
entitled to vote with respect to that matter.
BENEFICIAL OWNERSHIP OF COMMON STOCK
Principal Shareholders
As of April 14, 1997, the Common Stock was held of record by 302
shareholders. The following table sets forth certain information concerning
the beneficial ownership of Common Stock by each stockholder who is known by
the Company to own beneficially in excess of 5% of the outstanding Common
Stock, by each director, and by all executive officers and directors as a
group, as of April 14, 1997. Except as otherwise indicated, all persons listed
below have (i) sole voting power and investment power with respect to their
shares of Common Stock assuming the exercise of all outstanding Options, except
to the extent that authority is shared by spouses under applicable law, and
(ii) record and beneficial ownership with respect to their shares of Common
Stock.
2
<PAGE> 4
<TABLE>
<CAPTION>
Name of Beneficial Owner Shares of Common Stock
- ----------------------------------------------------------------------------------------------------------
Sole Voting and Shared Voting and Right to
Investment Power Investment Power (1) Acquire (2) Percent
---------------- -------------------- ----------- -------
<S> <C> <C> <C> <C>
Daniel J.Hirschfeld 4,810,200 0 0 68.88%
Dennis H. Nelson 11,000 11,100 544,200 7.52%
Karen B. Rhoads 1,000 0 45,625 *
Bill L. Fairfield 0 0 50 *
Robert E. Campbell 700 0 450 *
William D. Orr 1,000 0 450 *
Ralph M. Tysdal 1,000 0 450 *
All executive officers and
directors as a group (12) 4,829,300 16,201 836,213 72.65%
* Less than 1%
</TABLE>
(1) These amounts include shares owned within participants' 401(k) accounts for
which the voting power is held by Grand Island Trust Co. Share amounts
include Dennis H. Nelson with 500 and all executive officers as a group
with 3,001.
(2) These amounts represent shares as to which the named individual has the
right to acquire through exercise of options which are exercisable within
the next 60 days.
Proposal 1
ELECTION OF DIRECTORS
Directors will be elected at the June 2, 1997 Annual Meeting to serve
until the next Annual Meeting and until their successors are elected and
qualified. The By-laws of the Company provide that seven directors are to be
elected.
The Board of Directors recommends the election of the seven nominees listed
below. In the absence of instructions to the contrary, shares represented by
the Proxy will be voted for the election of all such nominees to the Board of
Directors. The Board of Directors has no reason to believe that any of these
nominees will be unable to serve. However, if any nominee should for any reason
be unavailable to serve, the proxies will be voted for the election of such
other person to the office of Director as the Board of Directors may recommend
in place of such nominee. Set forth below is certain information concerning the
nominees which is based on data furnished by them.
Daniel J. Hirschfeld, age 55. Mr. Hirschfeld is Chairman of the Board of
the Company. He has served as Chairman of the Board since April 19, 1991.
Prior to that time, Mr. Hirschfeld served as President and Chief Executive
Officer. Mr. Hirschfeld has been involved in all aspects of the Company's
business, including the development of the Company's management information
systems.
Dennis H. Nelson, age 47. Mr. Nelson is the President and Chief Executive
Officer and a Director of the Company. He has served as President and Director
since April 19, 1991. Mr. Nelson was elected as Chief Executive Officer by the
Board of Directors on March 17, 1997. Mr. Nelson began his career with the
Company in 1970 as a part-time salesman while he was attending Kearney State
College (now the University of Nebraska - Kearney). While attending college, he
became involved in merchandising and sales supervision for the Company. Upon
graduation from college in 1973 Mr. Nelson became a full-time employee of the
Company and he has worked in all phases of the Company's operations since that
date. Prior to his election as President and Chief Operating Officer on April
19, 1991, Mr. Nelson performed all of the functions normally associated with
those positions.
Karen B. Rhoads, age 38. Ms. Rhoads is the Vice-President - Finance and a
Director of the Company, and is the Chief Financial Officer. Ms. Rhoads was
elected a Director on April 19, 1991. She worked in the corporate offices
during college, and later worked part-time on the sales floor. Ms. Rhoads
practiced as a CPA for
3
<PAGE> 5
6 1/2 years, during which time she began working on tax and accounting matters
for the company as a client. She has been employed with the Company since
November, 1987.
ROBERT E. CAMPBELL, AGE 54. Mr. Campbell has been a Director of the
Company since July 1, 1991. Since 1985, Mr. Campbell has served as Chairman
and Chief Executive Officer, and currently also President, of Miller & Paine, a
company which owns and manages office and retail properties in Lincoln,
Nebraska. Before 1988, Miller & Paine owned and operated department stores in
Lincoln and Grand Island, Nebraska, which were sold to Dillards Department
Stores, Inc.
WILLIAM D. ORR, AGE 62. Mr. Orr has been a Director of the Company since
July 1, 1991. He presently serves as Senior Vice President, Agency and
Marketing Operations, of Woodmen Accident & Life Company, an insurance company
in Lincoln, Nebraska, a position he has held since 1987. Mr. Orr also is a
member of the Board of Directors of Woodmen, and has worked for Woodmen since
1960.
RALPH M. TYSDAL, AGE 59. Mr. Tysdal has served as a Director of the
Company since July 1, 1991. Mr. Tysdal owns and operates McDonald's
restaurants in Broken Bow, Lexington, North Platte and Ogallala, Nebraska. He
began his McDonald's ownership in 1978.
BILL L. FAIRFIELD, AGE 50. Mr. Fairfield has served as a Director of The
Buckle, Inc. since May 30, 1996. Since 1991, Mr. Fairfield has held the
position of President and Chief Executive Officer of Inacom Corp., a technology
management services company. Prior to 1991 Mr. Fairfield was CEO of Valcom, the
predecessor company to Inacom Corp.
Meetings and Committees of the Board
During fiscal 1996, four meetings of the Board of Directors, seven
meetings of the Executive Committee, eight meetings of the Compensation
Committee and one meeting of the Audit Committee were held. No Director was
absent from more than twenty-five percent of the aggregate of (1) the total
number of meetings of the Board of Directors and (2) the total number of
meetings held by all committees on which he or she served. The Company has no
nominating committee, but it does have the following standing committees:
Executive Committee. The Executive Committee has the power and
authority of the Board of Directors to manage the affairs of the Company
between meetings of the Board of Directors. The Executive Committee
establishes compensation for all non-officer employees of The Company. The
Committee also regularly reviews significant corporate matters and
recommends action as appropriate to the Board. Members of the Executive
Committee presently are Daniel J. Hirschfeld, Dennis H. Nelson, and Karen
B. Rhoads.
Audit Committee. The Audit Committee meets with the Company's chief
financial officer and independent accountants to review the scope of
auditing procedures and the policies relating to internal auditing
procedures and controls and to review the Company's public financial
statements. The current members of such committee are William D. Orr,
Robert E. Campbell, Bill L. Fairfield and Ralph M. Tysdal.
Compensation Committee. The Compensation Committee reviews and makes
recommendations to the Board of Directors regarding officer compensation.
The Compensation Committee also administers the Company's 1991 Stock
Incentive Plan, the Company's Non-Qualified Stock Option Plan and Agreement
with Dennis Nelson, the Company's 1991 Non-Qualified Stock Option Plan, the
Company's 1993 Executive Stock Option Plan, the Company's 1995 Executive
Stock Option Plan, the 1995 Management Incentive Plan, and the 1997
Management Incentive Plan. The current members of the Compensation
Committee are Bill L. Fairfield, Robert E. Campbell, William D. Orr, and
Ralph M. Tysdal.
4
<PAGE> 6
Director Compensation
For their services as Directors in fiscal 1996, the members of the Board
of Directors who are not employees of the Company were paid $6,000 annually and
$1,000 for each quarterly board meeting they attended. For fiscal 1997, the
annual fee has been increased to $9,000 and the quarterly meeting fee has been
increased to $1,500. In addition, each non-employee Director (defined as a
Director of the Company who is not an officer or employee of the Company or any
Subsidiary) is annually granted options to purchase shares of Common Stock of
the Company. Options to purchase 100 shares are granted to each non-employee
Director on the first day of each fiscal year of the Company. In addition,
each non-employee Director is granted an option to purchase 100 shares on the
date such Director is first elected to the Board of Directors of the Company.
All options have a term of ten years from the date of grant and are exercisable
25 percent immediately, with an additional 25 percent being exercisable on each
of the first three successive anniversaries of the date of the grant. The
exercise price for each option is the fair market value of a share on the date
of grant. Fair market value means the average of the highest and lowest quoted
selling price of a share of Common stock as reported on the NASDAQ Automated
Quotation System. There are no family relationships among any of the Directors
or Officers of the Company.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange Act")
requires the Company's officers, directors and greater than 10% shareholders
("Reporting Persons") to file certain reports ("Section 16 Reports") with
respect to beneficial ownership of the Company's equity securities. Based
solely on its review of the Section 16 Reports furnished to the Company by its
Reporting Persons and, where applicable, any written representations by any of
them that no Form 5 was required, all Section 16(a) filing requirements
applicable to the Company's Reporting Persons during and with respect to fiscal
1996 have been complied with on a timely basis, except that Bill Fairfield's
initial report on Form 3 was filed late, the annual reports on Form 5 for
Dennis Nelson, Karen Rhoads, Scott Porter, James Shada, Gary Lalone, Wayne
Daugherty, Bill Fairfield, Robert Campbell, Bill Orr and Ralph Tysdal were
filed late, and one report on Form 4 for James Shada was filed late.
Proposal 2
RATIFICATION OF INDEPENDENT ACCOUNTANTS
Subject to stockholder ratification, the Board of Directors has
reappointed the firm of Deloitte & Touche LLP, Certified Public Accountants, as
independent auditors to make an examination of the accounts of the Company for
the fiscal year 1997. Deloitte & Touche LLP has served as the independent
auditors of the Company since December, 1990.
Management recommends that stockholders vote "FOR" such ratification.
Unless contrary instructions are given, the proxies solicited by management
will be voted "FOR" such ratification. Ratification will require affirmative
vote of holders of a majority of the Common Stock present or in proxy, at the
meeting.
One or more representatives of Deloitte & Touche LLP are expected to be
present at the annual meeting and will have an opportunity to make a statement
if they desire to do so and will be available to respond to appropriate
questions.
Proposal 3
APPROVAL OF THE COMPANY'S 1997 MANAGEMENT INCENTIVE PLAN
The Board of Directors believes that the continued success of the Company
depends on its ability to attract, retain and motivate key employees.
Accordingly, and in view of the provisions of the current Internal Revenue
Code, (the "Code"), which impose certain limits on the Company's ability to
deduct employee compensation, the Compensation Committee of the Board Of
Directors has designed and recommends that the Company's shareholders approve
the 1997 Management Incentive Plan (the "Plan"). In order for payment of
certain incentive awards to be deductible by the Company under the Code such
awards must be paid under a plan
5
<PAGE> 7
like the Plan, and shareholder approval of the Plan is necessary. The full text
of the Plan is set forth in Exhibit "A" to this Proxy Statement, and the
following discussion is qualified in its entirety by reference to the text of
the Plan.
The Plan is designed to motivate the Company's key employees to improve
shareholder value by linking a portion of their cash compensation to the
Company's financial performance.
Description of the Plan.
The Plan is administered by the Compensation Committee of the Board of
Directors, which committee is comprised solely of Directors who are "outside
directors" as defined in Section 162(m) of the Code. The Committee's powers
include authority, within the limitations set forth in the Plan, to select the
persons to be granted awards, to determine the time when awards will be
granted, to determine whether objectives and conditions for earning awards have
been met, and to determine whether payment of an award will be made at the end
of an award period or deferred.
Key Employees (defined to include any employee of the Company whose
performance the Committee determines can have a significant effect on the
success of the Company) have been granted incentive awards for fiscal 1997 under
the Plan. Incentive awards are cash bonuses. Each Participant in the Plan (a
key Employee to whom an Award has been granted under the Plan) will receive an
Award which will be a fixed percentage of the Management Bonus Pool. The amount
to be contributed to the Management Bonus Pool is to be based on the Company's
net income from operations after the deduction of all expenses, excluding
administrative and store manager percentage bonuses and excluding income taxes,
but including draws against such bonuses ("Pre-Bonus Net Income"). Net income
from operations does not include earnings on cash investments. The Management
Bonus Pool will be calculated as follows:
(a) On the Company's first $10 million of Pre-bonus Net Income
there will be nothing contributed to the Management Bonus
Pool.
(b) On Pre-bonus Net Income in excess of $10 million ("Excess
Pre-Bonus Net Income") the amount to be contributed to the
Management Bonus Pool will be based upon the increase in
fiscal 1997 Pre-Bonus Net Income over fiscal 1996 Pre-Bonus
Net Income, as follows:
<TABLE>
<CAPTION>
Percentage of Excess
Increase in Pre-Bonus Net Income to be
Pre-Bonus Net Income Contributed to Bonus Pool
-------------------- --------------------------
<S> <C>
No increase 15.5%
> 0 - 10% 17.0%
> 10 - 20% 18.0%
> 20 - 30% 19.0%
> 30% 20.0%
</TABLE>
No payment of an Award for the year will be made until the Company's
Pre-Bonus Net Income for the year is certified by the Committee.
The following table shows the percentage of the Management Bonus Pool to be
paid to each of the executive officers who is listed in the compensation table
and who is also a Participant in the Plan for fiscal 1997:
<TABLE>
<CAPTION>
Percentage of
Name of Participant Management Bonus Pool
------------------- ---------------------
<S> <C>
Dennis H. Nelson 24.50%
Scott M. Porter 12.50%
James E. Shada 11.25%
Gary L. Lalone 11.25%
Wayne Daugherty 10.00%
</TABLE>
6
<PAGE> 8
The Committee may amend the Plan from time to time, provided that no
amendment to the Plan shall be effective unless approved by the Company's
shareholders, to the extent that such shareholder approval is required under
Section 162(m) of the Code with respect to awards which are intended to qualify
under that Section.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE PROPOSAL TO APROVE THE
1997 MANAGEMENT INCENTIVE PLAN.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
Summary of Cash and Certain Other Compensation
The following table provides certain summary information concerning
compensation paid or accrued by the Company and its subsidiaries, to or on
behalf of the Company's chief executive officer and each of the five other most
highly compensated executive officers of the Company whose compensation
exceeded $100,000 (determined as of the end of the last fiscal year) for the
fiscal years ended January 28, 1995, February 3, 1996, and February 1, 1997:
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long Term
Compensation
- -------------------------------------------------------------------------
Annual Compensation Awards
- -------------------------------------------------------------------------
Name All Other
and Compen-
Principal Options/ sation
Position Year Salary ($) Bonus ($) SARs (#) ($) (1)
- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Daniel J. 1996 $ 72,000 $0 0 $ 4,320
Hirschfeld 1995 $ 72,000 $0 0 $ 4,320
Chairman and CEO 1994 $ 72,000 $0 0 $ 4,320
Dennis H. 1996 $ 400,000 $853,738 (2) 41,200 $ 7,654
Nelson 1995 $ 400,000 $564,793 (2) 41,200 $ 11,136
President 1994 $ 159,996 $655,317 1,200 $ 8,404
and COO
Scott M. 1996 $ 200,000 $376,869 (3) 30,750 $ 8,577
Porter 1995 $ 200,000 $232,396 (3) 30,750 $ 9,654
Vice President 1994 $ 51,000 $247,952 750 $ 7,833
Men's Mdsg
James E. 1996 $ 175,000 $376,869 (4) 20,750 $ 9,096
Shada 1995 $ 175,000 $232,396 (4) 20,750 $ 9,274
Vice President 1994 $ 51,000 $247,952 750 $ 8,544
Sales
Gary L. 1996 $ 175,000 $376,869 (4) 20,750 $ 9,096
Lalone 1995 $ 175,000 $232,396 (4) 20,750 $ 9,620
Vice President 1994 $ 51,000 $247,952 750 $ 6,658
Sales
Wayne 1996 $ 150,000 $361,869 (5) 15,750 $ 8,808
Daugherty 1995 $ 150,000 $217,396 (5) 15,750 $ 8,963
Vice President 1994 $ 51,000 $247,952 750 $ 8,097
Operations
</TABLE>
7
<PAGE> 9
(1) These amounts include the Company's matching contribution into the 401(k)
profit sharing plan for the plan years ended January 31, 1997, 1996 and
1995. The Company matched 100% of the employees' deferrals for each of
these fiscal years, not exceeding 6% of gross earnings and subject to
dollar limits per Internal Revenue Code regulations.
(2) Mr. Nelson's bonus for fiscal years 1996 and 1995 was calculated based upon
the Company's 1995 Management Incentive Plan, as approved at the 1995
Annual Meeting of Stockholders (See "Report of the Compensation
Committee"). Mr. Nelson's bonus for fiscal year 1994 was calculated based
upon 5% of profits, including investment income, up to $10 million, plus 3%
of profits over $10 million.
(3) Mr. Porter's bonus for fiscal years 1996 and 1995 was calculated based the
Company's 1995 Management Incentive Plan, as approved at the 1995 Annual
Meeting of Stockholders (See "Report of the Compensation Committee"). Mr.
Porter's bonus for fiscal year 1994 was calculated based upon 2% of
profits, excluding investment income, up to $10 million plus 1% of profits
from $10 million to $15 million, and .6% of profits in excess of $15
million.
(4) Mr. Shada and Mr. Lalone's bonuses for fiscal yeas 1996 and 1995 were
calculated based upon the Company's 1995 Management Incentive Plan, as
approved at the 1995 Annual Meeting of Stockholders (See "Report of the
Compensation Committee"). Mr. Shada and Mr. Lalone's bonuses for fiscal
year 1994 were calculated based upon 2% of profits, excluding investment
income, up to $10 million plus 1% of profits from $10 million to $15
million, and .6% of profits in excess of $15 million.
(5) Mr. Daugherty's bonus for fiscal years 1996 and 1995 was calculated based
the Company's 1995 Management Incentive Plan, as approved at the 1995
Annual Meeting of Stockholders (See "Report of the Compensation
Committee"). Mr. Daugherty's bonus for fiscal year 1994 was calculated
based upon 2% of profits, excluding investment income, up to $10 million
plus 1% of profits from $10 million to $15 million, and 0.6% of profits in
excess of $15 million.
Board Compensation Committee Report on Executive Compensation
The following report of the Compensation Committee shall not be deemed
incorporated by reference by any general statement incorporating by reference
this Proxy Statement into any filing under the Securities Act of 1933 or under
the Securities Exchange Act of 1934, except to the extent that the Company
specifically incorporates this information by reference, and shall not
otherwise be deemed filed under such Acts.
REPORT OF THE COMPENSATION COMMITTEE
The Company is engaged in a highly competitive industry, with fashion,
selection, quality, price, location, store environment and service being the
principal competitive factors. In order to succeed, the Company believes that
it must be able to attract and retain highly qualified executives. The Company
emphasizes the promotion of store managers and other management personnel from
within. The Company's compensation philosophy is that each member in a
position to make the Company grow should be rewarded more highly than other
team members. Historically, this compensation philosophy has been reflected in
the Company's policy of basing compensation of its key sales and merchandising
employees primarily on performance bonuses.
Compensation of the executive officers, other than Mr. Hirschfeld, who
serves as Chairman and Chief Executive Officer, is based in large part on the
Company's profits (as defined) and therefore is closely tied to the performance
of the Company. Mr. Hirschfeld receives a salary but no other form of
compensation, and particularly no other form of incentive compensation. Mr.
Hirschfeld's salary was established based on Mr. Hirschfeld's recommendation.
Mr. Hirschfeld believes that his significant stock ownership in the Company
(68.88% as of April 14, 1997) provides sufficient incentive without the need
for cash bonuses and/or stock options.
For fiscal 1996, the compensation program for executive officers, other
than the Chairman and Chief Executive Officer, consisted of salary, annual cash
bonus, 401(k) plan and stock options. Salaries, cash bonuses
8
<PAGE> 10
and stock options were paid and granted in accordance with the 1995 Management
Incentive Plan and the 1995 Executive Stock Option Plan, both of which were
approved by the Shareholders at the Meeting held on June 2, 1995.
Salary. Salaries for fiscal 1996 were identical to the salaries paid for
fiscal 1995.
Cash Bonus. Cash bonuses for the executive officers for fiscal 1996 were
established pursuant to the 1995 Management Incentive Plan. Pursuant to the
Plan, a targeted cash award and a variance percentage was established for each
of the Company's executive officers. The targeted cash award was the cash award
actually earned by each officer in fiscal 1995, and the variance percentage for
each officer was the same as the variance percentage for fiscal 1995. The
Committee also established the same performance goal for the Company for the
year, which was a four percent increase in the Company's pre-tax and pre-bonus
net income. The cash award for fiscal 1996 equaled the Participant's targeted
award for the year, plus an amount equal to the Participant's variance
percentage of the amount by which the Company's pre-tax and pre-bonus net income
exceeded the Company's performance goal for the year. The targeted award and
the variance percentage established for each executive officer who is listed in
the Compensation Table and who is also a Participant in the Plan for fiscal
1996, are as follows:
<TABLE>
<CAPTION>
Name Targeted Award Variance Percentage
---- -------------- -------------------
<S> <C> <C>
Daniel J. Hirschfeld ------- ------
Dennis H. Nelson $564,793 4.0%
Scott M. Porter $232,396 2.0%
James E. Shada $232,396 2.0%
Gary L. Lalone $232,396 2.0%
Wayne Daugherty $217,396 2.0%
</TABLE>
For fiscal 1996, the targeted awards under the Plan for key employees not
shown in the above table, ranged from $5,000 to $111,198, and the variance
percentages for those persons ranged from 0.1 percent to 1.0 percent.
Stock Options. Pursuant to the 1995 Executive Stock Option Plan, on
February 2, 1996, the Compensation Committee granted options to twelve employees
of the Company to purchase an aggregate of 169,000 shares of Common Stock at an
exercise price of $19.00 per share, representing the fair market value of the
shares subject to the options at the date of grant. The following information
is submitted with regard to the number of options granted to the executive
officers listed in the Compensation Table of the Company:
<TABLE>
<CAPTION>
Name Number of Shares
---- ----------------
<S> <C>
Daniel J. Hirschfeld -------
Dennis H. Nelson 40,000
Scott M. Porter 30,000
James E. Shada 20,000
Gary L. Lalone 20,000
Wayne Daugherty 15,000
</TABLE>
The options vested and became exercisable only if the Company met certain
performance goals. One-half of the options granted to each individual vested in
full only if the increase in the Company's pre-tax and pre-bonus net income was
four percent or better; if there was no increase in the Company's pre-tax and
pre-bonus net income, then the options lapsed; if the increase was less than two
percent, then the options vested 25 percent; and if the increase was more than
two percent but less than four percent, then the options were to be 50 percent
vested. The remaining one-half of the options granted to each individual vested
only if the increase in the Company's pre-tax and pre-bonus net income was 30
percent or more. The Company achieved both performance goals, and thus all
options granted to executive officers and others on February 2, 1996, are fully
vested and exercisable.
For fiscal 1997, the Committee established a new incentive award system
whereby each executive officer, and others, will be paid a fixed percentage of a
Management Bonus Pool. The 1997 Management Incentive Plan is attached to this
Proxy Statement as Exhibit "A". The Committee also recommended to the Board of
Directors,
9
<PAGE> 11
and, at its meeting held on March 17, 1997, the Board of Directors authorized
the Company to retain a consultant to review and advise the Committee and the
Board with regard to all elements of the Company's compensation program.
Although initial interviews have been held, a final decision on the consultant
to be retained has not been made.
The Compensation Committee has considered the application of the provision
of the Internal Revenue Code which disallows a public company's deduction for
top executive's compensation in the excess of $1,000,000. The Committee intends
that all of the compensation payable to its executive officers be deductible for
income tax purposes. The Committee believes that compensation payable pursuant
to the 1995 Management Incentive Plan, the 1997 Management Incentive Plan, and
the 1995 Executive Stock Option Plan achieves this objective under current tax
law.
This report was submitted by the Compensation Committee, which is comprised
of:
Bill L. Fairfield
Robert E. Campbell
Ralph M. Tysdal
William D. Orr
10
<PAGE> 12
Option Grants in Last Fiscal Year
The following table provides information on option grants in fiscal 1996 to the
named executive officers.
<TABLE>
<CAPTION>
Grant
Date
Individual Grants Value
- --------------------------------------------------------------------------------------------------
% of
Total Options/
SARS
Options/ Granted to Exercise Grant
SARS Employees or Base Date
Granted in Fiscal Price Expiration Present
Name (#) (1) Year (2) ($Sh) Date Value (3)
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Daniel J.
Hirschfeld None N/A N/A N/A
Dennis H. 1,200 0.55% $19.000 2/03/06 $ 11,088
Nelson 40,000 18.40% $19.000 1/31/06 $369,600
Scott M. 750 0.34% $19.000 2/03/06 $ 6,930
Porter 30,000 13.80% $19.000 1/31/06 $277,200
James E. 750 0.34% $19.000 2/03/06 $ 6,930
Shada 20,000 9.20% $19.000 1/31/06 $184,800
Gary L. 750 0.34% $19.000 2/03/06 $ 6,930
Lalone 20,000 9.20% $19.000 1/31/06 $184,800
Wayne 750 0.34% $19.000 2/03/06 $ 6,930
Daugherty 15,000 6.90% $19.000 1/31/06 $138,600
</TABLE>
(1) The shares granted on February 3, 1996 at $19.00 become fully vested
February 3, 2000. The shares granted January 31, 1996 at $19.00 became
fully vested as of March 17, 1997.
(2) The Company granted options totaling 217,400 during fiscal 1996.
(3) As suggested by the Commission's rules on executive compensation
disclosure, the Company used the Black-Scholes model of option valuation to
determine grant date present value. The Company does not advocate or
necessarily agree that the Black-Scholes model can properly determine the
value of an option. The present value calculations are based on a ten-year
option term with an expected life of six years. Assumptions include:
interest rate of 6%; annual dividend yield of 0%; and volatility of 40%.
11
<PAGE> 13
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year End Option
Values
The following table provides information on option exercises in fiscal
1996 by the named executive officers and the value of such officers'
unexercised options at February 1, 1997.
<TABLE>
<CAPTION>
Number of Value of
Unexercised Unexercised
Options In-the Money
at FY-end Options at FY-end
----------------------------- -----------------------------
Shares Value
Acquired on Realized Unexercisable
Name Exercise (#) ($) Exercisable Unexercisable Exercisable (1)
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Daniel J.
Hirschfeld N/A N/A None None None None
Dennis H.
Nelson N/A N/A 503,000 41,800 $7,019,488 $378,813
Scott M.
Porter N/A N/A 84,874 31,126 $ 780,606 $281,145
James E.
Shada 20,000 $296,250 35,874 21,126 $ 419,481 $192,395
Gary L.
Lalone 39,000 $557,500 16,874 21,126 $ 108,606 $192,395
Wayne
Daugherty 22,000 $446,250 12,874 16,126 $ 87,356 $148,020
</TABLE>
Employment Agreements
The Company has no employment agreements under which any employee,
including the executive officers, is entitled to employment for any specific
period of time. Each fiscal year each executive officer, except Daniel J.
Hirschfeld, signs an acknowledgment which contains the anticipated compensation
arrangement for the employee for the current fiscal year, and acknowledges that
the employee is an employee at will, and that the terms of the employment
arrangement can be changed by the Company or terminated by either the Company
or the officer at any time. Each executive officer listed in the summary
compensation table above, except Daniel J. Hirschfeld, receives a salary plus a
bonus based on pre-tax and pre-bonus income as proposed in the 1997 Executive
Compensation Plan. For fiscal 1997, 1996 and 1995, the acknowledgments provide
base salary for each of these executive officers as follows: Dennis H. Nelson
$400,000, Scott M. Porter $200,000, James E. Shada and Gary L. Lalone $175,000,
and Wayne Daugherty $150,000. For fiscal 1997, the bonus amounts will be
payable according to the proposed 1997 Management Incentive Plan, to be
approved at the June 2, 1997 Annual Meeting of Stockholders. For fiscal 1996
and 1995, the bonus amounts were payable according to the Company's Management
Incentive Plan, approved at the June 2, 1995 Annual Meeting of Stockholders.
(See "Report of the Compensation Committee.")
12
<PAGE> 14
The following table shows the bonus pool percentage established for each of the
executive officers who is listed in the compensation table and who is also a
participant in the Plan for fiscal 1997:
<TABLE>
<CAPTION>
Name Percentage of Bonus Pool
---- ------------------------
<S> <C>
Daniel J. Hirschfeld ------
Dennis H. Nelson 24.50%
Scott M. Porter 12.50%
James E. Shada 11.25%
Gary L. Lalone 11.25%
Wayne Daugherty 10.00%
</TABLE>
Bonuses are payable before April 15 of the year following the year to which
they related and are contingent upon the employee being employed by the Company
on the last day of the fiscal year. For purposes of computing bonuses for all
executive officers identified in the summary compensation table except Daniel
J. Hirschfeld, "profits" mean pre-tax and pre-bonus income, excluding income on
cash investments, and after deducting any bonus advances.
Compensation Committee Interlocks and Insider Participation
On July 14, 1996, the Company loaned to Jeffrey L. Orr, Trustee of the
Hirschfeld Irrevocable Insurance Trust, the principal sum of $200,000. The
total amount owed to the Company by the Trust is $600,000. The loans are
repayable with interest at the rate of 5 percent per annum and are represented
by Promissory Notes dated July 27, 1994, July 14, 1995 and July 16, 1996, and
are secured pursuant to and in accordance with the terms of a collateral
assignment dated July 27, 1994, pursuant to which Jeffrey L. Orr, as Trustee,
has assigned and conveyed to the Company, as security for the loan, all of the
Trust's right, title and interest in a certain life insurance policy owned by
the Trust and insuring the life of Daniel J. Hirschfeld. The 1996 loan
completes the planned periodic premium payments due on that insurance policy,
thus requiring no additional loans.
Stock Price Performance Graph
The Stock Price Performance Graph on the following page shall not be
deemed incorporated by reference by any general statement incorporating by
reference this Proxy Statement into any filing under the Securities Act of 1933
or under the Securities Exchange Act of 1934, except to the extent the Company
specifically incorporates this information by reference, and shall not
otherwise be deemed filed under such Acts.
13
<PAGE> 15
The graph below compares cumulative total return of the Company, CRSP
Total Returns Index for Nasdaq Stock Market (US Companies), and CRSP Total
Return Index for Nasdaq Retail Trade Stocks, using SIC codes 5200-5599,
5700-5799, and 5900-5999 (US and foreign).
[LINE GRAPH]
<TABLE>
<CAPTION>
The Buckle, Inc. Nasdaq Stock Market (US Companies) Nasdaq Retail Trade Stocks
<S> <C> <C> <C>
5/08/92
5/28/92
6/26/92 [TO COME]
7/28/92
8/28/92
9/28/92
10/28/92
11/27/92
12/28/92
1/28/93
2/26/93
3/26/93
4/28/93
5/28/93
6/28/93
7/28/93
8/27/93
9/28/93
10/28/93
11/26/93
12/28/93
1/28/94
2/28/94
3/28/94
4/28/94
5/27/94
6/28/94
7/28/94
8/26/94
9/28/94
10/28/94
11/28/94
12/28/94
1/27/95
2/28/95
3/28/95
4/28/95
5/26/95
6/28/95
7/28/95
8/28/95
9/28/95
10/27/95
11/28/95
12/28/95
1/26/96
2/28/96
3/28/96
4/26/96
5/28/96
6/28/96
7/26/96
8/28/96
9/27/96
10/28/96
11/27/96
12/27/96
1/28/97
</TABLE>
Percentage of close May 31, 1992, Dividends reinvested for companies where
applicable
OTHER MATTERS
The Board of Directors knows of no other matters to be brought before this
Annual Meeting. However, if other matters should come before the meeting, it
is the intention of each person named in the proxy to vote such proxy in
accordance with his judgment on such matters, discretionary authority to so do
being included in each proxy.
PROPOSALS FOR 1998 ANNUAL MEETING
Although the date for the Annual Stockholders' meeting to be held in 1998
has not been set, the rules adopted by the Securities and Exchange Commission
require that this statement disclose the date by which shareholders proposals
must be received by the Company in order to be included in next year's Proxy
Statement. According to those rules, a shareholder's proposal should be
received by the Company at its office in Kearney, Nebraska on or before
December 28, 1997.
By Order of the Board of Directors
Wayne Daugherty
Vice President of Operations and Secretary
Kearney, Nebraska
April 30, 1997
14
<PAGE> 16
EXHIBIT A
THE BUCKLE, INC.
1997 MANAGEMENT INCENTIVE PLAN
1. PURPOSES
The purposes of The Buckle, Inc. 1997 Management Incentive Plan are to
motivate the Company's key employees to improve stockholder value by linking a
portion of their cash compensation to the Company's financial performance,
reward key employees for improving the Company's financial performance, and help
attract and retain key employees.
2. DEFINITIONS
A. "Award" means any cash incentive payment made under the Plan.
B. "Code" means the Internal Revenue Code of 1986, as amended.
C. "Committee" means the Compensation Committee of The Buckle, Inc.'s
Board of Directors, or such other committee designated by that Board
of Directors. The Committee shall be comprised solely of directors who
are outside directors under Section 162(m) of the Code.
D. "Company" means The Buckle, Inc.
E. "Key Employee" means any employee of the Company whose performance the
Committee determines can have a significant effect on the success of
the Company.
F. "Participant" means any individual to whom an Award is granted under
the Plan.
G. "Plan" means this Plan, which shall be known as The Buckle, Inc. 1997
Management Incentive Plan.
H. "Pre-Bonus Net Income" means the Company's net income from operations
after the deduction of all expenses, excluding administrative and
store manager percentage bonuses and excluding income taxes, but
including draws against such bonuses. Net income from operations does
not include earnings on cash investments.
3. ADMINISTRATION
A. The Plan shall be administered by the Committee. The Committee shall
have the authority to:
(i) interpret and determine all questions of policy and expediency
pertaining to the Plan;
(ii) adopt such rules, regulations, agreements, and instruments as it
deems necessary for its proper administration;
(iii) select Key Employees to receive Awards;
(iv) determine the terms of Awards;
(v) determine amounts subject to Awards (within the limits
prescribed in the Plan);
15
<PAGE> 17
(vi) determine whether Awards will be granted in replacement of or as
alternatives to any other incentive or compensation plan of the
Company or an acquired business unit;
(vii) grant waivers of Plan or Award conditions (other than Awards
intended to qualify under Section 162(m) of the Code);
(viii) accelerate the payment of Awards (but with respect to Awards
intended to qualify under Section 162(m) of the Code, only as
permitted under that Section);
(ix) correct any defect, supply any omission, or reconcile any
inconsistency in the Plan, any Award or any Award notice;
(x) take any and all other actions it deems necessary or advisable
for the proper administration of the Plan;
(xi) adopt such Plan procedures, regulations, subplans and the like
as it deems are necessary to enable Key Employees to receive
Awards; and
(xiii) amend the Plan at any time and from time to time, provided
however than no amendment to the Plan shall be effective unless
approved by the Company's stockholders, to the extent such
stockholder approval is required under Section 162(m) of the
Code with respect to Awards which are intended to qualify under
that Section.
B. The Committee may delegate its authority to grant and administer Awards to
a separate committee; however, only the Committee may grant and administer
Awards which are intended to qualify as performance-based compensation
under Section 162(m) of the Code.
4. ELIGIBILITY
Any Key Employee is eligible to become a Participant in the Plan.
5. AWARDS
A. Each Participant in the Plan shall receive an Award which shall be a
fixed percentage of the Management Bonus Pool.
B. The amount to be contributed to the Management Bonus Pool shall be
based on the Company's Pre-Bonus Net Income for fiscal 1997, and shall
be calculated as follows:
(i) On the first $10 million of Pre-Bonus Net Income there
shall be nothing contributed to the Management Bonus Pool.
(ii) On Pre-Bonus Net Income in excess of $10 million ("Excess
Pre-Bonus Net Income"), the amount to be contributed to the
Management Bonus Pool will be based upon the increase in
fiscal 1997 Pre-Bonus Net Income over fiscal 1996 Pre-Bonus
Net Income, as follows:
<TABLE>
<CAPTION>
Percentage of Excess Pre-Bonus
Increase in Net Income to be Contributed to
Pre-Bonus Net Income Bonus Pool
-------------------- -------------------------------
<S> <C>
No increase 15.5%
> 0 - 10% 17.0%
> 10 - 20% 18.0%
> 20 - 30% 19.0%
> 30% 20.0%
</TABLE>
16
<PAGE> 18
C. No payment of an Award for the year may be made to an Executive
Officer until the Company's Pre-Bonus Net Income for the year is
certified by the Committee. A Participant shall not be entitled to
receive payment of an Award unless such Participant is still in the
employ of (and shall not have delivered notice of resignation to) the
Company at the time the Award is actually paid
D. The Company shall withhold all applicable federal, state, local and
foreign taxes required by law to be paid or withheld relating to the
receipt or payment of any Award.
6. GENERAL
A. The Plan shall become effective as of February 2, 1997, subject to
stockholder approval of the Plan at the 1997 annual meeting of the
Company's stockholders. No Awards shall be made under the Plan after
January 31, 1998.
B. Any rights of a Participant under the Plan shall not be assignable by
such Participant, by operation of law or otherwise, except by will or
the laws of descent and distribution. No Participant may create a
lien on any funds or rights to which he or she may have an interest
under the Plan, or which is held by the Company for the account of the
Participant under the Plan.
C. Participation in the Plan shall not give any Key Employee any right to
remain in the employ of the Company. Further, the adoption of the
Plan shall not be deemed to give any Key Employee or other individual
the right to be selected as a Participant or to be granted an Award.
D. To the extent any person acquires a right to receive payments from the
Company under this Plan, such rights shall be no greater that the
rights of an unsecured creditor of the Company.
E. The Plan shall be governed by and construed in accordance with the
laws of the State of Nebraska.
17
<PAGE> 19
PROXY THE BUCKLE, INC.
2407 West 24th Street, Kearney, Nebraska 68847
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Daniel J. Hirschfeld and Dennis H. Nelson,
or either of them, as Proxies, each with the power to appoint his substitute,
and hereby authorizes them, or either of them, to represent and to vote, as
designated below, all the shares of common stock of The Buckle, Inc. held of
record by the undersigned on April 14, 1997 at the annual meeting of the
shareholders to be held on June 2, 1997, or any adjournment thereof.
In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
<TABLE>
<S> <C> <C>
1. ELECTION OF DIRECTORS [ ] FOR ALL NOMINEES LISTED [ ] WITHHOLD AUTHORITY
(except as marked to the contrary) to vote for all nominees listed.
D. Hirschfeld, D. Nelson, K. Rhoads, R. Campbell, W. Orr, R. Tysdal, B. Fairfield
(INSTRUCTION: TO WITHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE THAT NOMINEE'S NAME ON THE SPACE PROVIDED BELOW.)
--------------------------------------------------------------------------------------------------------------------------------
2. Proposal to ratify the selection of Deloitte & Touche LLP as independent auditor for the Company for the fiscal year ending
January 31, 1998.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. Proposal to approve the Company's 1997 Management Incentive Plan.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
</TABLE>
(Continued on reverse side)
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR THE ELECTION OF THE DIRECTORS NAMED IN THE PROXY STATEMENT AND FOR
PROPOSALS 2 AND 3.
DATED: , 1997
--------------------------------
--------------------------------------------
Signature
--------------------------------------------
Signature if held jointly
Please sign exactly as your name appears.
When shares are held by joint tenants, both
should sign. When signing as attorney, as
executor, administrator, trustee or
guardian, please give full title as such.
If a corporation, please sign in full
corporate name by President or other
authorized officer. If a partnership,
please sign in partnership name by
authorized person.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY
CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
