CORPORATE GOVERNANCE REPORTING A KGaA is a hybrid corporate form combining its consent on behalf of the general partner. elements of a German stock corporation and a Rather, such rights and duties are vested in limited partnership (Kommanditgesellschaft). It is a the governing bodies of Borussia Dortmund separate legal entity whose share capital is divided Geschäftsführungs-GmbH, namely its into shares which are held by at least one Advisory Board and the Executive Committee shareholder (the general partner) that has unlimited created by the Advisory Board. liability against creditors of the Company and limited partners (Kommanditaktionäre) that are not • Additional features specific to the KGaA's personally liable for the debts of the company (§278 Annual General Meeting are set forth (1) AktG). primarily in §§ 285 and 286 (1) AktG and in the Company's Articles of Association. The key differences between a KGaA and a German stock corporation can be characterised as follows: As a consequence, a Declaration of Conformity in accordance with § 161 AktG must be submitted by • Borussia Dortmund GmbH & Co. KGaA does the management of the general partner and the not have an executive board. Instead, the Supervisory Board of Borussia Dortmund GmbH & general partner, Borussia Dortmund Co. KGaA, taking into account the specific Geschäftsführungs-GmbH, is solely responsible characteristics of the KGaA's legal form and the for its management and representation. provisions of the Articles of Association. This German limited liability company (Gesellschaft mit beschränkter Haftung, "GmbH") In our assessment, the following recommendations is in turn represented by one or more of the Code are not applicable (including mutatis managing directors; its sole shareholder is mutandis) to the specific characteristics of the KGaA Ballspielverein Borussia 09 e.V. Dortmund. legal form and the provisions of the Company's Articles of Association: • The rights and duties of the KGaA's Supervisory Board, which is appointed by the • The Code makes various recommendations Annual General Meeting, are limited. to the Supervisory Board in respect of Specifically, it has no authority to appoint and executive board remuneration, namely G.4, dismiss Managing Directors of Borussia G.8 and G.13 of the Code. The Code makes a Dortmund Geschäftsführungs-GmbH or to large number of other recommendations to stipulate the terms of their service the Supervisory Board in respect of the agreements. Nor is the Supervisory Board remuneration system for executive board authorised to adopt internal rules of members and/or the structure of their procedure or a list of transactions requiring individual remuneration. As follows from the 41009653-1376911 Anlage 1.4 / 23 23