Vroom, Inc. 10-K

Item 9A. Controls and Procedures Limitations on effectiveness of controls and procedures In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs. Evaluation of Disclosure Controls and Procedures Our management, with the participation of our Principal Executive Officer and Principal Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of December 31, 2022. Based on that 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. Management's Annual Report on Internal Control Over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). Management has assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2022, using the criteria described in Internal Control—Integrated Framework (2013 framework) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on this evaluation, our management concluded that the Company’s internal control over financial reporting was effective as of December 31, 2022. Management excluded Unitas Holdings Corp., including its wholly owned subsidiaries United PanAm Financial Corp. and United Auto Credit Corporation, from its assessment of internal control over financial reporting as of December 31, 2022 because it was acquired in a business combination on February 1, 2022. Total assets and total revenue that were excluded from management's assessment represented approximately 34% and 9%, respectively, of consolidated total assets and total revenue, as of and for the year ended December 31, 2022. The effectiveness of the Company’s internal control over financial reporting as of December 31, 2022 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which appears in Item 8 of this Annual Report on Form 10-K. Changes in Internal Control over Financial Reporting There was no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarterly period ended December 31, 2022, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. Item 9B . Other Information Not applicable. Item 9C . Disclosure Regarding Foreign Jurisdictions that Prevent Inspections. Not applicable. 141 Table of Contents PART III Item 10. Directors, Executive Off icers, and Corporate Governance We have adopted a written code of ethics, entitled “Code of Business Conduct and Ethics,” that applies to all of our directors, executive officers and employees, including our principal executive officer, principal financial officer, principal accounting officer and controller, or persons performing similar functions. We make available our code of ethics free of charge through our investor relations website which is located at ir.vroom.com . We intend to post on our website all disclosures that are required by law or Nasdaq listing standards concerning any amendments to, or waivers from, any provision of our code of ethics. The information concerning our executive offers and directors required by this Item 10 is contained under the caption “Information about our Executive Officers and Directors” at the end of Part I of this Annual Report on Form 10-K. The remaining information required by this item is incorporated by reference to Vroom’s Proxy Statement for its 2023 Annual Meeting of Stockholders to be filed with the SEC within 120 days after the end of the fiscal year ended December 31, 2022, under the headings "Our Board of Directors," "Our Executive Officers," "Corporate Governance," and, if applicable, "Delinquent Section 16(a) Reports". Item 11. Executi ve Compensation The information required by this item is incorporated by reference to Vroom’s Proxy Statement for its 2023 Annual Meeting of Stockholders to be filed with the SEC within 120 days after the end of the fiscal year ended December 31, 2022, under the headings "Executive Compensation" and "Compensation Committee Interlocks and Insider Participation". Item 12. Security Ownership of Certain Beneficial Own ers and Management and Related Stockholder Matters The information required by this item is incorporated by reference to Vroom’s Proxy Statement for its 2023 Annual Meeting of Stockholders to be filed with the SEC within 120 days after the end of the fiscal year ended December 31, 2022, under the headings "Security Ownership of Certain Beneficial Owners and Management" and "Securities Authorized for Issuance under Equity Compensation Plans". Item 13. Certain Relationships and Related Transactions, and Director Independence The information required by this item is incorporated by reference to Vroom’s Proxy Statement for its 2023 Annual Meeting of Stockholders to be filed with the SEC within 120 days after the end of the fiscal year ended December 31, 2022, under the headings "Certain Relationships and Related Person Transactions" and "Corporate Governance". Item 14. Principal Accou nting Fees and Services The information required by this item is incorporated by reference to Vroom’s Proxy Statement for its 2023 Annual Meeting of Stockholders to be filed with the SEC within 120 days after the end of the fiscal year ended December 31, 2022, under the subheading "Principal Accountant Fees and Services". 142 Table of Contents PART IV Item 15. Exhibits and Financial Statement Schedules 1. Financial Statements: The Consolidated Financial Statements of Vroom are set forth in Part II, Item 8 of this Annual Report on Form 10-K. 2. Financial Statement Schedules: All financial statement schedules have been omitted because they are not applicable, not material or the required information is shown in Part II, Item 8 of this Annual Report on Form 10-K. 3. Exhibits: The exhibits listed in the accompanying Exhibit Index are filed, furnished or incorporated by reference as part of this Annual Report on Form 10-K. INDEX TO EXHIBITS Exhibit Number Exhibit Description Form File No. Exhibit Filing Date Filed Herewith Furnished Herewith 2.1 Agreement and Plan of Merger, dated as of October 11, 2021, by and among Vroom, Inc., Vroom Finance Corporation, Unitas Holdings Corp. and Fortis Advisors LLC, solely in its capacity as the equityholders' representative 8-K 001-39315 2.1 October 12, 2021 3.1 Amended and Restated Certificate of Incorporation of Vroom, Inc. 10-Q 001-39315 3.1 August 13, 2020 3.2 Amended and Restated Bylaws of Vroom, Inc. 10-Q 001-39315 3.2 August 13, 2020 4.1 Specimen Stock Certificate evidencing the shares of common stock S-1/A 333-238482 4.1 June 1, 2020 4.2 Indenture, dated as of June 18, 2021, between Vroom, Inc. and U.S. Bank National Association, as trustee 8-K 001-39315 4.1 June 21, 2021 4.3 Form of Global Note representing the 0.750% Convertible Senior Notes due 2026 (included in Exhibit 4.2) 8-K 001-39315 4.2 June 21, 2021 4.4 Eighth Amended and Restated Investors’ Rights Agreement, dated as of November 21, 2019, by and among Vroom, Inc. and certain holders of its capital stock S-1/A 333-238482 4.2 May 18, 2020 4.5 Description of Registrant’s Securities 10-K 001-39315 4.3 March 3, 2021 143 Table of Contents 10.1† Second Amended & Restated 2014 Equity Incentive Plan, as amended S-1/A 333-238482 10.1 May 18, 2020 10.2† First Amendment to the Second Amended and Restated Vroom, Inc. 2014 Equity Incentive Award Plan 10-Q 001-39315 10.3 August 13, 2020 10.3† Second Amendment to the Second Amended and Restated Vroom, Inc. 2014 Equity Incentive Award Plan 10-Q 001-39315 10.4 August 13, 2020 10.4† Form of Stock Option Agreement pursuant to the Second Amended and Restated 2014 Equity Incentive Award Plan 10-K 001-39315 10.4 March 3, 2021 10.5† Form of Restricted Stock Unit Agreement pursuant to the Second Amended and Restated 2014 Equity Incentive Award Plan 10-K 001-39315 10.5 March 3, 2021 10.6† 2019 Short Term Incentive Plan S-1/A 333-238482 10.2 May 18, 2020 10.7† 2020 Incentive Award Plan S-1/A 333-238482 10.3 June 1, 2020 10.8† Form of Restricted Stock Unit Agreement pursuant to the 2020 Incentive Award Plan 10-Q 001-39315 10.2 August 13, 2020 10.9† Form of Stock Option Grant Notice and Stock Option Agreement pursuant to the 2020 Incentive Award Plan 10-Q 001-39315 10.4 August 8, 2022 10.10† 2022 Inducement Award Plan S-8 333-265233 99.1 May 26, 2022 10.11† Form of Restricted Stock Unit Agreement pursuant to the 2022 Inducement Award Plan S-8 333-265233 99.2 May 26, 2022 10.12† Form of Stock Option Agreement pursuant to the 2022 Inducement Award Plan S-8 333-265233 99.3 May 26, 2022 10.13† Amended and Restated Non-Employee Director Compensation Policy 10-Q 001-39315 10.9 August 8, 2022 10.14† Form of Indemnification Agreement S-1/A 333-238482 10.5 June 1, 2020 10.15† Amended and Restated Executive Severance Plan 8-K 001-39315 10.1 May 26, 2022 10.16 Commercial Lease Agreement, dated August 10, 2009, as S-1/A 333-238482 10.6 June 1, 2020 144 Table of Contents amended, by and between Texas Direct Auto and Robert P. Archer, ETAL 10.17 Development Agreement, dated June 28, 2011, as amended, by and between The City of Meadows Place, Texas and Left Gate Property Holding, Inc. d/b/a Texas Direct Auto and Vroom S-1/A 333-248655 10.9 June 1, 2020 10.18# Inventory Financing and Security Agreement, dated March 6, 2020, by and among Ally Bank, Ally Financial Inc., Left Gate Property Holding, LLC and Vroom, Inc. S-1/A 333-248655 10.10 May 18, 2020 10.19# First Amendment to Inventory Financing and Security Agreement, dated June 19, 2020, by and among Ally Bank, Ally Financial Inc., Left Gate Property Holding, LLC and Vroom, Inc. 10-Q 001-39315 10.9 August 13, 2020 10.20# Second Amendment to Inventory Financing and Security Agreement, dated October 1, 2020 by and among Ally Bank, Ally Financial, Inc., Left Gate Property Holding, LLC and Vroom, Inc. 10-Q 001-39315 10.1 November 12, 2020 10.21# Third Amendment to Inventory Financing and Security Agreement, dated December 16, 2021 by and among Ally Bank, Ally Financial, Inc., Vroom Automotive, LLC and Vroom, Inc. 8-K 001-39315 10.1 December 20, 2021 10.22# Fourth Amendment to Inventory Financing and Security Agreement, dated February 24, 2022 by and among Ally Bank, Ally Financial, Inc., Vroom Automotive, LLC and Vroom, Inc. 10-K 001-39315 10.25 March 1, 2022 10.23# Amended and Restated Inventory Financing and Security Agreement, dated November 4, 2022 by and among Ally Bank, Ally Financial Inc., Vroom Automotive, LLC and Vroom, Inc. 10-Q 001-39315 10.1 November 7, 2022 10.24# Retail Reconditioning Services Agreement, dated May 20, 2020, by and between Manheim Remarketing, Inc d/b/a Manheim Retail Solutions and Left Gate Property Holding, LLC d/b/a Vroom S-1/A 333-248655 10.12 June 1, 2020 145 Table of Contents 10.25 † Employment Agreement, dated June 8, 2016, by and between Vroom, Inc. and Paul J. Hennessy S-1/A 333-248655 10.13 June 1, 2020 10.26 † Employment Offer Letter, dated January 6, 2019, by and between Vroom, Inc. and Mark Roszkowski S-1/A 333-248655 10.15 June 1, 2020 10.27 † Separation Agreement, dated as of June 30, 2022, by and between Mark E. Roszkowski and Vroom, Inc. 8-K 001-39315 10.1 July 1, 2022 10.28 † Employment Offer Letter, dated December 29, 2018, by and between Vroom, Inc. and Patricia Moran S-1/A 333-248655 10.18 September 8, 2020 10.29 † Employment Offer Letter, dated November 3, 2016, by and between Vroom, Inc. and Carol Denise Stott S-1/A 333-248655 10.19 September 8, 2020 10.30 † Letter Agreement, dated as of September 13, 2021, by and between Robert Krakowiak and Vroom, Inc. 8-K 001-39315 10.1 September 13, 2021 10.31 † Amended Offer Letter, dated as of May 20, 2022, by and between Robert R. Krakowiak and Vroom, Inc. 8-K 001-39315 10.2 May 26, 2022 10.32† Letter Agreement, dated as of December 15, 2021, by and between Thomas Shortt and Vroom, Inc. 8-K 001-39315 10.1 December 17, 2021 10.33 † Employment Letter, dated as of May 9, 2022, by and between Thomas Shortt and Vroom, Inc. 8-K 001-39315 10.1 May 9, 2022 10.37 † Nominee and Indemnity Agreement, dated September 1, 2020, by and among Catterton Management Company, L.L.C. as investment manager of CGP2 Lone Star, L.P., Scott Dahnke and Vroom, Inc. S-1/A 333-248655 10.20 September 8, 2020 10.34 † Nominee and Indemnity Agreement, dated September 1, 2020, by and among Catterton Management Company, L.L.C. as investment manager of CGP2 Lone Star, L.P., Michael Farello and Vroom, Inc. S-1/A 333-248655 10.21 September 8, 2020 146 Table of Contents 10.35 † Assignment of Contracts, dated July 29, 2021, by and between CGP2 Lone Star, LP as assignor and Catterton Growth Partners II, L.P., Catterton Growth Partners II Offshore, L.P., L Catterton Growth Partners III, L.P. and L Catterton Growth Partners Offshore III, L.P. as assignees, of the Nominee and Indemnity Agreements, dated September 1, 2020, of Scott Dahnke and Michael Farello 10-Q 001-39315 10.1 August 11, 2021 21.1 Subsidiaries of the Registrant X 23.1 Consent of PricewaterhouseCoopers LLP X 31.1 Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 X 31.2 Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 X 32.1 Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 X 32.2 Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 X 101.INS Inline XBRL Instance Document X 101.SCH Inline XBRL Taxonomy Extension Schema Document X 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document X 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document X 101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document X 147 Table of Contents 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document X 104 Cover Page Interactive Data File (embedded within the Inline XBRL document) X † Indicates a management contract or compensatory plan or arrangement. # Certain portions of this exhibit (indicated by "[***]") have been omitted pursuant to Regulation S-K, Item (601)(b)(10). Item 16. Form 10-K Summary None. 148 Table of Contents SIGNATURES Pursuant to the requirements 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. Vroom, Inc. Date: March 2, 2023 By: /s/ Thomas H. Shortt Thomas H. Shortt Chief Executive Officer (principal executive officer) Date: March 2, 2023 By: /s/ Robert R. Krakowiak Robert R. Krakowiak Chief Financial Officer (principal financial officer) Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Signature Title Date /s/ Thomas H. Shortt Thomas H. Shortt Chief Executive Officer (Principal Executive Officer) and Director March 2, 2023 /s/ Robert R. Krakowiak Robert R. Krakowiak Chief Financial Officer (Principal Financial Officer) March 2, 2023 /s/ Agnieszka Zakowicz Agnieszka Zakowicz Senior Vice President and Principal Accounting Officer March 2, 2023 /s/ Robert J. Mylod, Jr. Robert J. Mylod, Jr. Director March 2, 2023 /s/ Timothy M. Crow Timothy M. Crow Director March 2, 2023 /s/ Michael J. Farello Michael J. Farello Director March 2, 2023 /s/ Laura W. Lang Laura W. Lang Director March 2, 2023 /s/ Laura G. O’Shaughnessy Laura G. O’Shaughnessy Director March 2, 2023 /s/ Paula B. Pretlow Paula B. Pretlow Director March 2, 2023 149