Corporate Governance 2014

Corporate Governance – Declaration of Conformity 2014

Declaration of Conformity with the German Corporate Governance Code (Code) by the Management Board and Supervisory Board of USU Software AG pursuant to Article 161 of the German Stock Corporation Act (AktG)

The Management Board and Supervisory Board of USU Software AG declare that since the latest declaration of conformity on November 28, 2013 the recommendations of the "Government Commission for the German Corporate Governance Code" in the version dated May 13, 2013 and since they took effect in the version dated June 24, 2014 have been and will in future continue to be complied with, although the following recommendations have not been and will not be applied:

 

Clause 4.2.1 of the Code stipulates that the Board of Management shall comprise several persons.

Until 30 September 2014, the Management Board of USU Software AG comprised one person who was simultaneously the Chairman of the Management Board. Owing to the strong Group-wide growth of the USU Group, the Supervisory Board resolved in the 2014 financial year to increase the Management Board of the company to three members effective 1 October 2014, at the same time appointing the previous Spokesman of Management Board as the CEO. The new composition and operational responsibility of the Management Board reflects the growth drivers of the USU Group – innovation, internationalization and acquisitions – and is thus a key success factor in the implementation of the medium-term strategy of USU Software AG. At the same time, USU Software AG therefore now complies with the requirements of the Code.

Under item 4.2.3, the Code recommends that variable remuneration components for the members of the Management Board are based on a multi-year assessment. Both positive and negative developments should be taken into account when determining variable remuneration components. In concluding Management Board contracts, it should be ensured that payments made to a Management Board member on premature termination of his contract, including fringe benefits, do not exceed the value of two years’ remuneration (severance pay cap) and compensate no more than the remaining term of the employment contract. If the employment contract is terminated for cause for which the Management Board member is responsible, no payments will be made to the Management Board, as per the regulations of the Code.

The Supervisory Board has not stipulated any such arrangements in contracts for appointments to or the expansion of the Management Board, and does not plan to do so in the future either. The Supervisory Board is confident that the current Management Board remuneration comprehensively takes into account the interests of the stakeholders of the company, highly motivates the Management Board and thus makes a lasting and positive contribution to the company’s development.

In accordance with item 5.1.2 of the Code, diversity should be observed in the composition of the Management Board and an age limit specified for its members.

Regarding composition of the Management Board, the Supervisory Board of USU Software AG bases its decisions on the technical and personal aptitude of the persons in question, irrespective of gender or age as the company does not generally wish to rule out the potential of older, experienced and renowned personalities when choosing the members of the Management Board. Neither a general age limit for members of the Management Board nor specific quotas based on sex have been or are intended.

In accordance with clauses 5.3.1, 5.3.2 and 5.3.3 of the Code, the Supervisory Board shall form committees such as an Audit Committee and a Nomination Committee.

As the Supervisory Board of USU Software AG comprises three members, there has been and remains no intention to set up committees. Independently of this, the Supervisory Board of the company jointly assumes the tasks of these committees.

In accordance with item 5.4.1 of the Code, the Supervisory Board has to be composed in such a way that its members as a group possess the knowledge, abilities and expert experience required to properly complete its tasks. Meanwhile, the Supervisory Board should name specific goals for its composition, which should include provisions such as an established age limit for Supervisory Board members and diversity.

Regarding its own composition, the Supervisory Board of USU Software AG bases its decisions on the technical and personal aptitude of the persons in question, taking into account their knowledge, abilities and expert experience required to properly complete their tasks. Neither a general age limit for members of the Supervisory Board of USU Software AG nor specific quotas based on sex have been or are intended as the company does not generally wish to rule out the potential of older, experienced and renowned personalities when choosing the members of the Supervisory Board. In addition, in the opinion of the company, such an age limit would inappropriately restrict shareholders’ voting rights in the Annual General Meeting.

In accordance with clause 5.4.6 of the Code, members of the Supervisory Board shall receive separate compensation for assumption of the office of Chairman or Deputy Chairman of the Supervisory Board or for membership of a Supervisory Board committee.

Compensation was and is not envisaged for assumption of the office of Deputy Chairman of the Supervisory Board or for membership or chairmanship of a committee of the Supervisory Board. The company considers there to be no increased incentive based on assumption of the position of Deputy Chairman of the Supervisory Board because the Supervisory Boards of USU Software AG are also to a large degree not dependent on such incentives and work with great commitment for the good of the company. Based on the composition of the Supervisory Board with three experienced members who jointly assume the envisaged functions, the formation of Supervisory Board committees and accordingly the associated compensation has been and will also in the future continue to be forgone.

According to clause 7.1.2 of the Code, the interim reports shall be made publicly accessible within 45 days after the end of the reporting period.

In the past, USU Software AG has published interim reports in accordance with the relevant stock exchange rules and regulations immediately after they have been completed and at the very latest within two months following the end of the reporting period. This policy will continue to apply. In observing statutorily stipulated deadlines, the interests of company shareholders in being informed are, in the opinion of USU Software AG, accommodated to an adequate extent, especially since the statutory disclosure requirements are fully observed and complied with.

Signed

Management Board and Supervisory Board of USU Software AG

Möglingen, December 11, 2014