📄 What This Document Is 📰

This document is an Additional Materials section attached to eXp World Holdings, Inc.'s (EXPI) Definitive Proxy Statement. Think of it as a detailed memo explaining major changes and proposals that the company wants stockholders to vote on at the Annual Meeting. 🗳️

👉 The core message is that the company is asking stockholders for their vote to legally change its corporate home from Delaware to Texas. This vote is critical and needs to happen before the Annual Meeting on Friday, April 24, 2026.

🌎 What eXp World Holdings Does 🧭

In simple terms, eXp World Holdings operates a business model that relies heavily on independent real estate agents. Unlike traditional real estate companies, whose employees might be the primary drivers, eXp’s growth and revenue come from its vast network of independent agents. 🧑‍💻

👉 The company emphasizes that these independent agents are the "engine of our revenue, growth, and competitive position." This reliance on an independent network means that the legal structure (like the state of incorporation) is deeply tied to how the company manages its agent relationships.

🚀 Redomestication to Texas: The Proposal 🤠

The centerpiece of this filing is Proposal 4: the movement of the company’s legal corporate home from Delaware to Texas. The board argues this change will provide significant benefits and was based on a deliberation process spanning over a year. ⏳

• Why Texas? The company asserts that Texas offers "tremendous benefits" to eXp, its agents, and its stockholders. While the move only changes the state of legal incorporation, the board believes it provides greater predictability for a "high-growth, agent-driven business."
• The Benefit: Management states that "Redomestication has real financial benefits for the company (which benefits all of us as stockholders)," implying that the legal structure in Texas will improve financial outcomes.
• No Operational Change: Importantly, the company assures investors that this is merely a legal change. It explicitly states that the company’s current operations, agent relationships, and existing litigation will continue exactly as they do today.

🧑‍⚖️ Governance and Legal Review Process 🛡️

The proposal is not a quick decision. It was developed by a Special Committee of independent directors and was reviewed by three outside law firms: Gibson, Dunn & Crutcher (Texas counsel), Hirschler Fleischer (Delaware counsel), and K&L Gates (general corporate counsel). 📚

• Material Equivalence: The Special Committee concluded that while the laws of Delaware and Texas are "materially equivalent with respect to substantive governance and litigation rights," Texas offers a beneficial framework.
• Independent Review: The Special Committee was deliberately set up to exclude any directors involved in the pending derivative litigation, ensuring the move was assessed independently.
• No Hidden Benefits: The committee explicitly considered if the move would grant directors or officers "non-ratable benefits" and reported that it did not identify any such benefits.
• ⚠️ Legal Caveat: The filing acknowledges that while Texas law might offer different liability protections going forward, any such benefits would only apply to conduct occurring after the company is effectively in Texas. Delaware law will continue to govern all activity that happened before the redomestication.

🗳️ Dual-Vote Requirement for Approval 🤝

To pass the redomestication, the proposal requires a high standard of shareholder approval, which is tracked through two separate votes. This structure is designed to give non-affiliated shareholders a strong, clear voice. 🗣️

• Statutory Stockholder Approval: This requires a majority of all outstanding shares entitled to vote.
• Unaffiliated Stockholder Approval: This is the more critical check. It requires a majority of votes cast only by disinterested stockholders (meaning no Board members, officers, or affiliates).
• Voting Dynamics: The Proxy Statement details that while abstentions and broker non-votes count as votes against the Statutory Stockholder Approval, they have no effect on the Unaffiliated Stockholder Approval. This means the second vote is a pure gauge of independent shareholder sentiment.

💬 Company Culture and Fiduciary Duty ⭐️

The company provided specific details on its corporate culture, noting that its structure allows it to meaningfully align its legal framework with the real-world needs of its business. 💖

• Agent Focus (The Legal Edge): eXp emphasizes that Texas law is unique because it "expressly permits directors and officers to consider the interests of constituencies critical to the enterprise, including agents, when exercising their fiduciary duties." This is presented as a major advantage for their business model.
• Misconduct Policy: The company maintains a "zero tolerance for abuse, harassment, or misconduct of any kind," including actions by independent real estate agents who use its services.
• Litigation Status: The company addressed pending derivative litigation, stating that an independent external review "did not substantiate the allegation that Company leadership had knowledge of and failed to act on the underlying conduct."

📆 Annual Meeting and Voting Logistics 📮

The filing provided clear instructions, dates, and contact information for stockholders who wish to participate in the vote. 💡

• The Event: The Annual Meeting of Stockholders is scheduled for Friday, April 24, 2026, at 12:00 p.m. Eastern Time (virtual).
• Action Deadline: Stockholders must vote before the polls close this Friday (prior to April 24, 2026).
• How to Vote: Stockholders can vote online at proxyvote.com using a 16-digit control number.
• Help Desk: If the email with the control number is missing, stockholders can call E*TRADE at 800-387-2331 or reply directly to the confirmation email.
• Resources: The Proxy Statement and other relevant documents can be obtained free of charge from the SEC’s website (www.sec.gov) or by mailing a request to eXp World Holdings, Inc., Investor Relations, 2219 Rimland Dr., Suite 301, Bellingham, WA 98226.

🧠 The Analogy

Redomestication is like moving the headquarters of a successful restaurant from a neighborhood with very strict, old-school zoning laws (Delaware) to a new neighborhood (Texas) that has more modern, flexible, and business-friendly regulations. The restaurant doesn't change its recipes or its local suppliers (the agents), but by changing its legal address, it gains structural flexibility that management believes will help it scale and grow its profits.

🧩 Final Takeaway

The primary takeaway is that eXp needs stockholder approval to change its legal state from Delaware to Texas, claiming this move is necessary to unlock "real financial benefits" and better align its legal governance with its unique, agent-driven business model. Stockholders must vote before the April 24, 2026 Annual Meeting to support this change.