SQS Software Quality Systems AG 19 December 2005 SQS Software Quality Systems AG (the "Company") Share Incentive Arrangements In order to retain and incentivise key employees, the two major shareholders, Heinz Bons and Rudolf van Megen, have increased the number of options granted to certain key employees to purchase Ordinary Shares from them to in aggregate up to approximately 990,000 Ordinary Shares (representing approximately six per cent. of the current issued share capital of the Company). The figure includes the lower figure of 575,000 options referred to in the AIM admission document dated 14 September 2005. In the event that an employee exercises these options, Mr Bons and Mr van Megen will sell the relevant number of Ordinary Shares to such employee under the terms of the option agreement. The exercise period will be from 1 October 2007 until 30 September 2009. The exercise price will be between €0.42 and €2.00 per Ordinary Share; the higher the market price of the Ordinary Shares, the lower will be the exercise price. For the avoidance of doubt, these share incentive arrangements relate to existing Ordinary Shares only and do not involve the issue of any additional new Ordinary Shares. 19 December 2005 This information is provided by RNS The company news service from the London Stock Exchange