As a “foreign private issuer,” as defined by the U.S. Securities and Exchange Commission, Codere Online Luxembourg, S.A. (“Codere Online”) is permitted to follow, and does follow, home country corporate governance practices, instead of certain corporate governance practices required by Nasdaq for U.S. domestic issuers. Codere Online’s corporate governance practices differ in certain respects from those that U.S. domestic issuers must adopt in order to maintain a Nasdaq listing. A brief, general summary of those significant differences is provided as follows:
- Unlike Nasdaq Listing Rules, Luxembourg law and the articles of association of Codere Online do not require that the compensation of Codere Online’s senior management team be determined, or recommended to the Board of Directors of Codere Online (the “Board”) for determination, by a compensation committee comprised of independent directors. Codere Online follows Luxembourg law and its articles of association with regard to compensation of its senior management and has opted not to establish a compensation committee. Codere Online currently believes that matters in connection with compensation of Codere Online’s senior management should be discussed and determined by its entire Board.
- Unlike Nasdaq Listing Rules, Luxembourg law and the articles of association of Codere Online do not require director nominations to be made by a nominations committee comprised of independent directors or by independent directors constituting a majority of the Board’s independent directors. Codere Online follows Luxembourg law, its articles of association and the nomination agreement entered into by Codere Newco, S.A.U. (“Codere Newco”), Codere Online and DD3 Sponsor Group, LLC (“Sponsor”) on November 30, 2021, with regard to the process of nominating directors.
- Nasdaq Listing Rules require that a listed company that is not a limited partnership shall solicit proxies and provide proxy statements for all meetings of shareholders, and also provide copies of such proxy solicitation materials to Nasdaq. Codere Online is a “foreign private issuer” as defined by the SEC, and the equity securities of Codere Online are accordingly exempt from the proxy rules set forth in the U.S. Securities Exchange Act of 1934, as amended. Additionally, Codere Online is not required to solicit proxies in accordance with applicable rules and regulations in Luxembourg.
- Codere Online follows Luxembourg practice with respect to quorum requirements for shareholder meetings in lieu of the requirement under Nasdaq Listing Rules that the quorum be not less than 33 1/3% of the outstanding voting shares. Under the articles of association of Codere Online and the Luxembourg Law of August 10, 1915 on commercial companies, as amended from time to time (loi du 10 août 1915 sur les sociétés commerciales, telle que modifiée) (the “1915 Law”), lower thresholds are mandatorily required for certain meetings of Codere Online’s shareholders. In addition, under the articles of association of Codere Online, there is no quorum requirement for resolutions to be considered at certain extraordinary general meetings of Codere Online’s shareholders.
- Unlike Nasdaq Listing Rules, Luxembourg law and the articles of association of Codere Online do not require that shareholder approval be obtained in connection with certain dilutive events. Under the articles of association of Codere Online and the 1915 Law, the Board is authorized to issue new ordinary shares for an amount not to exceed the amount of authorized, but unissued and unsubscribed share capital of Codere Online and to allot existing or newly issued ordinary shares to certain persons, including employees of Codere Online, without shareholder approval, as set forth under the articles of association of Codere Online.