Declaration of Compliance

Declaration by the Management Board and the Supervisory Board of LHS Aktiengesellschaft regarding the recommendations of the „Government Commission German Corporate Governance Code” pursuant to Section 161 German Stock Corporation Act (AktG)

Since day one LHS has complied with the recommendations put forward by the German Corporate Governance Code in the respective issued version, with only a few exceptions.

The Management Board and the Supervisory Board of LHS AG declare that since the last Declaration of Compliance the company was and is in compliance with the recommendations of the „Government Commission German Corporate Governance Code” as amended on June 18, 2009, with the exception of the following items:

3.8. Paragraph 2 – “If the company takes out a D&O insurance policy for the Management Board and Supervisory Board, a deductible of at least 10% of the loss up to at least the amount of one and a half times the fixed annual compensation of the Management Board member must be agreed upon. A similar deductible must be agreed upon in any D&O policy for the Supervisory Board.”  The Company has taken out a D&O insurance policy, but without a deductible.

3.10 Sentence 1 and 2 – “The Management Board and Supervisory Board report each year on the enterprise’s Corporate Governance in the Annual Report, Corporate Governance Report. It is an integral part of the annual corporate governance statement of the company. This includes the explanation of possible deviations from the recommendations of this Code.”
The company provided the annual corporate governance statement according to § 289a HGB, which is available to the shareholders on the homepage of the company under www.lhsgroup.com/de/investor-relations/corporate-governance/.

5.3.3. “The Supervisory Board is to form a nomination committee consisting exclusively of shareholder representatives to propose suitable candidates to the Supervisory Board and the Annual General Meeting.” A nomination committee has not been formed.

5.4.6. Paragraph 2, Sentence 1 (formerly 5.4.7. Paragraph 2, Sentence 1) – “Members of the Supervisory Board are to receive fixed as well as performance-related compensation.”  Members of the Supervisory Board do not receive performance-related compensation. Members of the Supervisory Board waived compensation for fiscal year 2009 and for the current fiscal year 2010 completely.

Frankfurt am Main, February 2010

The Management Board          The Supervisory Board