Information Policy for Morphic Technologies AB (publ)

Confirmed by the Board of Morphic Technologies AB (publ) Oct 20, 2008

1 Introduction

Morphic Technologies AB (publ), (“Morphic”), is a public company listed on the OMX Nordic Exchange. Morphic intends to comply with the Listing Agreement concluded between the Company and OMX Nordic Exchange Stockholm AB, and with other applicable laws and regulations that apply to public limited liability companies in Sweden.

This information policy is intended to guarantee the good quality of internal and external information, and to ensure compliance with laws, regulations and agreements.

The policy was approved by Morphic’s Board of Directors on October 19, 2007 and revised on October 20, 2008.

Basic principles

Morphic shall provide correct, relevant and reliable information simultaneously to all of its shareholders, the capital market, society and the media.

Information that is deemed to have an impact on the valuation of the Company’s shares (price-sensitive information) shall be disclosed so that it reaches the public rapidly and in a non-discriminatory manner.

Disclosure shall be made through press releases that are sent simultaneously to the Stockholm Stock Exchange, established news agencies and daily newspapers. The same information shall be published simultaneously on the Company’s website. For handling of insider information, see the Company’s log book instructions.

2 Communication Activities

The Company’s communication activities are intended to:

Provide information about important events and keep the Board of Directors and the Company’s shareholders up-to-date on the Company’s financial position.
Create interest in and build confidence in the business.
Create conditions for a stronger dialogue with external parties.
Involve and engage the Company’s employees.

The Company’s information/communication activities are divided into the following areas of operation:

External information
Mass media relations
Internal information

2.1 Tools for Communication

The Company’s tools for external communication and mass media relations include:

press releases
interim reports
financial statements
annual reports
the Company’s website
printed information material
electronic presentation material
replies to enquiries by telephone, e-mail and fax
analyst contacts and personal contacts

3 Target Groups

The Company’s communications shall be the same for everyone, but aimed at target groups.

The target groups must be proactively provided with valuable, easily accessible and easy-to-understand information. The goal is to add value as the market’s confidence in the Company grows.

Quantitative targets for the information may include building confidence in the Company and raising awareness about the Company’s activities. Internal targets may include ensuring that all employees of the Company feel involved.

The following target groups for Morphic’s information distribution have been identified:

The financial market
Regulatory authorities
Existing and potential customers
Existing and potential shareholders
Existing and potential suppliers and partners
Media and other opinion-formers
The Board of Directors and the Company’s employees

4 Silent Period

Prior to the publication of interim reports, year-end financial statements or annual reports a 30-day period of silence shall be observed. During this period no personal meetings with investors or analysts may be planned, and no comments may be made on Morphic’s financial performance. If the Company makes decisions or if events occur, which to a not insignificant degree are likely to influence the perception of the Company’s situation created by previously disclosed information or in other ways influence the valuation of the Company’s traded securities, the Company must immediately disclose such decisions or events.

5 Organization

The CEO is ultimately responsible for Morphic’s communication with the market, society and the media, and has delegated the coordination and performance of these duties to the Information Department. The Company has a Vice President Investor Relations (“VPIR”). Since information activities are a key part of the Company’s activities, the VPIR reports directly to the CEO and, working closely with the CEO, assumes overall responsibility for the Company’s common external and internal information and for the Company’s overall mass media relations. The VPIR and CEO are jointly responsible for the content of the Company’s website.

Only the CEO, Chairman of the Board and Vice President Investor Relations may issue information/make pronouncements on all general issues concerning the Company, both externally and internally.

5.1 The Information department

Is responsible for overall coordination of the Group’s media relations and graphic identity.
Provides Morphic’s target groups with financial and other relevant information.
Writes and distributes press releases and is responsible for preparing annual reports and interim reports.
Plans and arranges general meetings.
Maintains and develops the Group’s websites.

5.2 Subsidiaries

The Group’s subsidiaries are responsible for communications with their customers, markets and suppliers, provided that the information provided is not regarded as price-sensitive information.

6 Duty to Provide Information

A key requirement for independent analysis of the Company’s business and value is that all stakeholders have the ability to access the same information from the Company at the same time. In its Listing Agreement with the Stockholm Stock Exchange, Morphic agrees to communicate information in a non-discriminatory manner,.

The determination of what constitutes price-sensitive information is made on a case-by-case basis. In case of doubt, the CEO or Vice President Investor Relations will contact the companies monitoring department of the Stockholm Stock Exchange for advice. During trading hours this normally means that the disclosure must not take more time than is required to compile and distribute the information. This requires good planning, i.e. a draft press release must be prepared prior to the decision being made (there is not, however, a requirement that the information be disclosed during an ongoing Board meeting). If an appointment or decision is made during the evening or night and no trading in the Company’s shares is conducted on any other marketplace at such time, disclosure shall be made the morning after in good time before the opening of the stock exchange. This requires that those who have access to the information are instructed to observe strict confidentiality in the intervening time.

If an event occurs that is outside the control of the Company, the Company shall issue information about the event as soon as possible.

To ensure that information is distributed in as impartial a manner as possible when significant price-sensitive information is about to be disclosed to the market during trading hours, the CEO is required to contact the stock exchange prior to such disclosure.

The Stockholm Stock Exchange Listing Agreement, Annex 1, specifies the situations and the manner in which information must be disclosed. For example, there is a duty to disclose information in the following situations:

the acquisition or sale of companies or businesses
major orders or investment decisions
unexpected changes in earnings
decisions on securities offerings
partnership agreements or other significant agreements
significant changes in market prices or exchange rates
major credit or customer losses
regulatory or court decisions
a change of business focus
transactions with related parties (special regulations)
acquisitions and transfers of securities
information prior to the election of the Board of Directors
share buybacks
competing research findings
changes to product development schedules
patent issues concerning the Company’s technology platform
adjustments to forecasts
changes in the business

6.1 Prior information to the stock exchange

The Listing Agreement specifies situations when the Company has a duty to provide information to the stock exchange prior to a disclosure. For example, this applies in the case of

a caution from the Company’s auditors relating to circumstances that may have an impact on the valuation of the Company’s shares
preparations for the submission of a public offer for the acquisition of another listed company
notification that a third party is planning to submit a public offer for the acquisition of shares to the Company’s shareholders
an adjustment to forecasts or another unexpected substantial change in earnings
delays in disclosing information

6.2 Handling of price-sensitive information

Employees of the Morphic Group are required to observe the Company’s internal confidentiality requirements, which have been introduced to prevent the distribution of undisclosed price-sensitive information.

The Company is required to conclude confidentiality agreements with external consultants and partners that have access to undisclosed price-sensitive information.

6.3 Persons with insider status

Trading on the OMX Nordic Exchange is subject to the notification requirements of the Swedish Financial Supervisory Authority (Finansinspektionen). Morphic is required to submit a list of individuals with access to insider information (“insiders”) to Finansinspektionen. Registered insiders are required to comply with laws and regulations relating to notification requirements. Persons with insider status must disclose their total securities holdings in Morphic to Finansinspektionen at the time of acquiring such status. They are then required to continuously report all purchases and sales of financial instruments to Finansinspektionen. People with insider status may not buy or sell financial instruments in Morphic during periods when they have insider information about Morphic. The term “insider information” refers to information that is not in the public domain and that is of such a nature as could influence the price of Morphic’s shares if it were to be disclosed. The same rules apply to a changing circle of people for whom the criterion for inclusion in the Company’s log book is their access to insider information. In no case may purchases or sales take place during a period of thirty (30) calendar days prior to, and on the day of, the publication of a report.

6.4 Handling of information leaks

In the event of a leak of information, the Company shall always report the actual circumstances.

In the event of rumors, the Company shall consistently and invariably apply the following:
“The Company has a policy of never commenting on rumors.”

Under no circumstances must the term “no comments” be used, which could be interpreted as a confirmation. If the rumor is detrimental to the Company, the Company should issue a clarification in a press release.

Prior to important decisions, material from which to compile a press release shall be prepared.

6.5 Crisis management

In the event of a crisis and negative publicity, it is always the CEO that determines the media strategy. The Stockholm Stock Exchange should be contacted for advice and the CEO will convene a crisis response team. The Vice President Investor Relations and Chief Financial Officer should always be included in the crisis response team. A decision must also be made whether to appoint an on-call press officer to answer enquiries about the issue. Internal information should be issued immediately under the responsibility of the Vice President Investor Relations. Issues that are dealt with in this way should always be evaluated internally upon completion as a means of continually improving the Company’s preparedness for similar events.

6.6 Unexpected significant changes in earnings

If the Company becomes aware that its earnings performance in a quarter differs significantly, either positively or negatively, from the perception of the Company’s situation created by previously disclosed information, this shall be made public.

In cases where it is reasonable to assume that the “unexpected significant change in earnings” will have a significant impact on the Company’s share price, the stock exchange must receive prior notification of such disclosure.

7 Procedures

7.1 Distribution

The VPIR is responsible for ensuring that price-sensitive information in the form of press releases, interim reports and annual reports are disclosed to the public without delay and in a non-discriminatory manner.

Such distribution shall be made using an established electronic news distributor, ensuring that the Stockholm Stock Exchange, media and public are given access to the information simultaneously and without delay.

7.2 Press releases

Significant orders received by the parent company or a subsidiary, business deals or other price-sensitive information shall be disclosed by the parent company through a press release. Unless otherwise agreed with the customer, such disclosure shall include as much information as possible concerning the identity of the customer, and the value and scope of the order. The subsidiary shall always publish the news after publication of the press release, but in a different form and targeted to its specific market.
The Information Department is responsible for compiling and distributing press releases, interim reports, financial statements and annual reports.
Interim reports and financial statements shall also be made public as press releases.
Comments on press releases may be made only by the CEO, Chairman or Vice President Investor Relations.

Press releases shall be published in Swedish. To facilitate understanding for non-Swedish speakers, it is Company policy for all press releases to be translated into English and published as soon as possible on the Company’s website. Translated information must always be accompanied by a statement declaring that the information is a translation from Swedish and is not aimed at people in locations where Swedish law does not apply.

7.3 Contact persons

Only the CEO of the parent company, the Chairman of the Board and the Vice President Investor Relations may communicate with the financial market and media on behalf of the Group. Any other employee and executive in the Group that is contacted by investors, shareholders, analysts or the media must always refer the enquirer directly to the Information Department, without further comment.

Subsidiaries of the Morphic Group may not communicate with the media without the express approval of the Information Department.

7.4 General Meetings

The Information Department is responsible for planning and arranging general meetings. The time and planned location for meetings must be announced as far in advance as possible and, for the Annual General Meeting, no later than in the year-end financial statement. Notice of a general meeting shall be made in accordance with the procedures defined in the Company’s articles of association and through a press release. The notice and other preparatory documents for the general meeting shall be made available on Morphic’s website.

7.5 The Group’s websites

The Information Department is responsible for all of the Group’s public websites.

The Group has a website for publishing information in compliance with this policy and the recommendations of the Stock Exchange on web-based financial information. The VPIR is responsible for ensuring that the website is kept up-to-date and provides a correct, up-to-date description of the Group’s business activities. In addition to press releases and reports, the website includes information about general meetings, the Company’s articles of association, insider trading, Board members and contact information.

The Group’s subsidiaries have separate websites for communicating with their respective markets. The design, content and functionality of subsidiary websites should be consistent with the Group’s website, and decided in consultation with the VPIR.

8 Policy on Selective Information

Analysts play a central role in stock markets, and it is important that the Company maintains contact with them. At the same time, such contacts must be handled in the correct manner. Failure to do so could result in a breach of the ban on selective information contained in the Listing Agreement.

The Listing Agreement contains a general prohibition on selective information:

”Information that is not likely to significantly influence the valuation of the Company’s traded securities must not, except in special circumstances, be disclosed otherwise than by public disclosure.”

In exceptional circumstances, undisclosed price-sensitive information may be disclosed to an outside party (selective information) without simultaneous disclosure to the general public:

Information provided to major shareholders or potential shareholders when initial contacts are made prior to a share placing,
information provided to advisors engaged by the Company, e.g. for work on a prospectus prior to a securities offering or significant transaction,
potential bidders or target companies in connection with negotiations on takeover bids,
information requested by credit rating agencies prior to a credit valuation, or
information on investment plans and anticipated profitability trends prior to important credit decisions.

The option of making exceptions must be used very restrictively and subject to continual review of whether the requested information is required for the purpose. Information that is disclosed selectively shall normally be published at a later time to terminate the “insider status” of those to whom the information has been disclosed.

The Company must make it clear to the recipient that he is required to treat the information confidentially and that by receiving the information he becomes an “insider” and is therefore legally prohibited from exploiting it for his own or another party’s advantage. The Company shall also keep a careful record of who has been granted access to selective information, including the time of disclosure and the content of the information.

In particularly sensitive cases, a confidentiality agreement must always be concluded with the recipient of the information.

8.1 Policy on public offers of acquisition

If the Company is preparing to submit a public offer to a wider group for the acquisition of shares or equivalent financial instruments in another listed company, it must immediately notify the Stockholm Stock Exchange when there is reason to believe that the preparations will lead to a public offer. A log book must be kept in such situations.

If the Company has been informed that another party is planning to submit to the Company’s owners a public offer for the acquisition of shares or equivalent financial instruments in the Company, and if this information has not been made public, the Company must immediately notify the Stockholm Stock Exchange that there is reason to assume that the plan will be realized.

In case of major acquisitions, the issuing of information is subject to a comprehensive regulatory framework.

8.2 Policy on contacts with analysts

The Company may under no circumstances selectively disclose price-sensitive information. Such disclosure constitutes a violation of the Listing Agreement and also risks placing the analyst in a difficult situation by exposing him or her to a risk of violating insider trading laws. On the other hand, it is permissible to provide analysts with undisclosed information that is not price-sensitive. Such information can thus be disclosed selectively. For example, is permissible to:

“flesh out” previously disclosed information
remind analysts of previously disclosed information
correct misunderstandings, miscalculations and obvious errors of logic, and
provide industry statistics.

It is also permissible to provide price-sensitive information at an analysts meeting – either an ordinary meeting or a conference call – if the Company simultaneously publishes a press release. If price-sensitive information is mistakenly released at such a meeting, for instance in reply to a question, a press release must be published immediately.

The following applies in respect of the Company’s contacts with analysts and the media:

If an analyst has been given certain information the Company cannot deny the same information to another journalist or analyst. This consideration must be taken into account in deciding whether to disclose the information.
The Company must be prepared to release the same information to the mass media.
It is absolutely prohibited to provide analysts or journalists with information about a coming announcement even if they promise not to publish it before the announcement is made. The Company must always invite the media to analysts meetings to reduce the risk of arousing suspicions about such meetings.
Analysts must be treated impartially and receive access to the same information regardless of whether they represent a large or small shareholder or firm of analysts.

Companies occasionally distribute analyst reports. To avoid the risk of the Company sanctioning what is stated in the report, and therefore providing selective information, it must instead refer any enquirers to the analyst firm concerned. The names of analysts should (subject to approval from the analysts concerned) be provided in the Company’s annual report and on the Company’s website.

In meetings with individuals from society or the media or with individual analysts (“one-to-one meetings”) documentation such as invitations, printed material and attendance lists from such meetings shall be archived. In certain cases a memorandum stating the names of persons to whom information has been disclosed shall be prepared and archived.

9 Policy on Information Leaks and Crisis Management

Information leaks are generally the result of carelessness and a lack of discipline.

At least once a year, senior executives must emphasize to all employees who have access to undisclosed price-sensitive information the importance of not spreading such information.
Not to inform more people than is necessary. Those receiving the information must sign non-disclosure agreements.
In case of major deals, however, it may not be possible to avoid involving a large number of individuals. Always contact the Stockholm Stock Exchange for advice so that trading can be stopped before it is influenced by any leak of information.

9.1 Handling of information leaks

The Company must always report the actual circumstances.

In the event of rumors, the Company shall consistently and invariably apply the following:

“The Company has a policy of never commenting on rumors.”

When preparations are made for an important decision, material from which to compile a press release must always be prepared.

9.2 Crisis management

If the Company “ends up in the press” in a negative sense it is always the CEO that decides the media strategy. Always contact the Stockholm Stock Exchange for advice. It is then appropriate for the CEO to convene a “crisis response team”. The Vice President Investor Relations and Chief Financial Officer should always be included in the crisis response team. A decision must also be made whether to appoint an on-call press officer to answer enquiries about the issue. Internal information should be issued immediately under the responsibility of the Vice President Investor Relations. Issues that are dealt with in this way should always be evaluated internally upon completion as a means of continually improving the Company’s preparedness for similar events.

This also applies to issues that are exposed to extreme media attention.

10 Policy on Internal Information

The Company is a professional organization operating in the field of energy technology. The Company shall manage and spread knowledge in its area of expertise and also develop new knowledge. In a knowledge-based organization such as the Company the employees are the most important resource. A key factor in achieving the Company’s goals is to strengthen the commitment of the employees.

Efficient internal information/communication is therefore one of the key means of assuring a high level of knowledge and commitment among the employees, who represent the Company to the outside world. Internal information is the basis for the Company’s externally oriented activities. The employees are the most important envoys of the Company’s profile, through whom confidence in the Company’s business is built.

All internal information must take account of the Listing Agreement and stock exchange rules, which may impose limitations on the scope of internal information. Due to stock exchange rules and for competitive reasons, not all information can be disclosed to all employees.

10.1 Types of internal communication

Internal communication can be categorized as follows:

work communication: which facilitates the performance of employees’ work duties,
news communication: employees need to be made aware of recent developments to be able to perform their duties,
governance communication: information relating to the governance of the business (budget, goals, long-term planning),
change communication: information that falls outside the normal news flow, in the event of major changes,
cultural communication: an invisible part of the Company’s internal communications.

All of these types of communication must be developed.

10.2 Goals for the company’s internal information/communication

By developing its internal information/communication, the Company is aiming to increase employees’ knowledge and afford them an opportunity to present their views on the business.

Good internal communication improves the Company’s prospects of achieving its goals. It is particularly important to increase communication across the organization and among units. Developing internal communication is a process in which senior executives play an important role by setting an example and acting as role models. However, it is always the duty of each employee to actively ensure that he keeps himself informed about matters affecting his duties. Efficient internal information:

creates agreement on goals,
gives employees a general overview,
provides a better basis for making decisions,
gives employees a say in decision-making,
creates motivation,
facilitates delegation of tasks,
contributes to personal development,
improves efficiency.