Declaration about Corporate Management in Accordance with Sec. 289a HGB for the 2010 Business Year

In this declaration, the Executive and Supervisory Boards of MorphoSys AG provide their report on corporate governance in the Company pursuant to section 289a of the German Commercial Code (HGB).

The MorphoSys Group regards corporate governance as the framework for the management and supervision of a company. The internal guidelines at MorphoSys are aligned with the German Corporate Governance Code, which contains internationally recognized standards for good and responsible governance. The aim of transparent and coherent management principles to strengthen the confidence of the financial markets, business partners, employees and the public in the Company is also reflected in the Code of Conduct of MorphoSys.

The Executive Board and the Supervisory Board discussed corporate governance issues several times in the financial year 2010 and jointly submitted an updated Declaration of Compliance for 2010 on December 22, 2010, pursuant to section 161 of the German Stock Corporation Act.

Declaration of Compliance with regard to the German Corporate Governance Code in the Business Year 2010‎

At the respective meetings on December 22, 2010 the Board of Management and the Supervisory Board approved the following Declaration of Compliance pursuant to sec. 161 of the German Act on Stock Corporations (AktG):

MorphoSys AG complies and will comply with the recommendations of the German Corporate Governance Code (“Code”) – in the version of May 26, 2010 – with the following exceptions:

• The stock option program for the Board of Management does not provide a cap for unforeseen developments within the meaning of Code section 4.2.3, since the reasonableness of the amount of stock options for the Board of Management has already been considered at the time of the grant. However, the stock incentive program for the years 2011 and beyond will incorporate the concept of a cap.
• The postal vote system as of Code section 2.3.1 and 2.3.3 will be on the agenda of the AGM 2011 to change the articles of association accordingly.
• Since there were no elections to the supervisory board at the time of the introduction of this recommendation, the supervisory board will address the issue of Code section 5.4.1 concerning the adequate consideration of women in the Supervisory Board in 2011.
• The remuneration for the Supervisory Board as resolved in the General Shareholders’ Meeting 2010 only provides for fixed remuneration components and no longer for performance-related remuneration within the meaning of the code sec. 5.4.6. The Company’s practice is consistent with the view of an increasing number of experts on Supervisory Board compensation, who regard performance-related payments to board members as potentially giving rise to a conflict of interests in a body whose duties include setting and assessment of objectives for the Company’s long-term development

With these exceptions, MorphoSys AG has complied with the German Corporate Governance Code (in its version from June 18, 2009) also in the time period since its Declaration of Compliance of December 2009.

Martinsried/Planegg, December 22, 2010

MorphoSys AG

Amended Declaration of Compliance with regard to the German Corporate Governance Code in the Business Years 2010 and 2011

At its respective meetings on March 10, 2011 the Board of Management and the Supervisory Board approved the following interim update of the Declaration of Compliance pursuant to sec. 161 of the German Act on Stock Corporations (AktG) as of December 22, 2010:

MorphoSys AG complies and will comply with the recommendations of the German Corporate Governance Code (“Code”) – in the version of May 26, 2010 – with the following exceptions:

• The stock option program for the Board of Management does not provide a cap for unforeseen developments within the meaning of Code section 4.2.3, since the reasonableness of the amount of stock options for the Board of Management has already been considered at the time of the grant. However, the stock incentive program for the years 2011 and beyond will incorporate the concept of a cap.
• With regard to Code section 5.4.1, in its meeting of March 10, 2011 the Supervisory Board has decided to aim for an adequate representation of women being members of the supervisory board that respective female candidates shall be proposed for election and that at the beginning of the approval of potential candidates qualified women shall be appropriately considered in the appointment procedure. A concrete quota for female members of the supervisory board has not been defined since the individual qualification and not the gender of candidates for elections to the supervisory board shall be the decisive criteria for the composition of the supervisory board. With regard to the upcoming election to the supervisory board taking place in the AGM 2011, the Supervisory Board decided to propose the re-election of the male members Prof. Drews and Dr. Blättler, since their biotechnology know-how will be still needed by the Company; for this reason their re-election is in the prevailing interest of the Company.                                                                               Furthermore, Prof. Drews exceeds the age limit of 75 years defined by the Supervisory Board in its rules of procedure. Insofar, the Company uses the possibility as foreseen in the rules of procedure to exceptionally propose an elder candidate for election; the proposal to re-elect Prof. Drews to the Supervisory Board for a further year is in the interest of the board to procure the continuity of its performance.
• The remuneration for the Supervisory Board as resolved in the General Shareholders’ Meeting 2010 only provides for fixed remuneration components and no longer for performance-related remuneration within the meaning of the code sec. 5.4.6. The Company’s practice is consistent with the view of an increasing number of experts on Supervisory Board compensation, who regard performance-related payments to board members as potentially giving rise to a conflict of interests in a body whose duties include setting and assessment of objectives for the Company’s long-term development

With these exceptions, MorphoSys AG has complied with the German Corporate Governance Code (in its version from June 18, 2009) also in the time period since its Declaration of Compliance of December 2009.

Martinsried/Planegg, March 10, 2011

MorphoSys AG

Board of Management

The Management Board of MorphoSys AG consists of four members and has one chairman. Rules of procedure define the different areas of responsibility and the cooperation within the Management Board.

• Dr. Simon E. Moroney, Chief Executive Officer, is responsible for the business segment AbD Serotec, corporate communications and investor relations, human resources, strategy and planning, business development and the coordination of the Management Board reporting to the Supervisory Board.
• Dave Lemus, Chief Financial Officer, is responsible for finance, accounting and controlling, corporate development, treasury and technical operations including IT, and also resumes responsibility for the corporate legal function.*
• Dr. Arndt Schottelius, Chief Development Officer, is responsible for the preclinical and clinical development of MorphoSys's proprietary development programs.
• Dr. Marlies Sproll, Chief Scientific Officer, is responsible for antibody discovery and predevelopment, technology development, protein sciences, alliance management and intellectual property.

The Management Board members have no additional mandates concerning the supervisory boards of other publicly listed companies. However, Dr. Moroney acts as member of the Supervisory Board of ProtAffin AG, Graz, Austria. Mr. Lemus is presently a member of the Supervisory Board of the Munich International School and of Proteros Biostructures GmbH, and is a Non-Executive Director of Axela Inc., Inc., Toronto, Canada. Dr. Sproll or Dr. Schottelius currently do not hold any board positions.

All positions were approved by the Supervisory Board.

*The information in the section "Corporate Governance" relates to fiscal year 2010. With Jens Holstein, MorphoSys AG has a new Chief Financial Officer since May 01, 2011.

Supervisory Board

The Supervisory Board of MorphoSys AG consists of six members who oversee and advise the Board of Management. The current Supervisory Board consists of professionally qualified members, representing MorphoSys AG’s shareholders. The Chairman of the Supervisory Board, Dr. Gerald Möller, coordinates the work of the Supervisory Board, chairs its meetings and represents the Board’s concerns externally. All members of the Supervisory Board are independent and have many years of experience in the biotechnology and pharmaceutical industry. They are duly elected by the shareholders at the Annual General Meeting. The Chairman of the Supervisory Board is not a former member of the Management Board of MorphoSys AG.

Pursuant to its rules of procedure and to fulfill its duties, the Supervisory Board mandated three committees in 2010: the Audit Committee, the Remuneration & Nomination Committee and the Science & Technology Committee. These three committees of the Supervisory Board consist of professionally qualified members.

Audit Committee

The central task of the Audit Committee is to assist the Supervisory Board in fulfilling its oversight responsibilities as they relate to the integrity of the consolidated financial statements, the Group’s compliance with legal and regulatory requirements, the external auditor’s qualifications and performance, and the internal audit function. The Audit Committee is also responsible for the appointment of the auditor. The members of the Audit Committee are Dr. Geoffrey N. Vernon (Chairman) and Dr. Daniel Camus, who are both independent financial experts.

Remuneration & Nomination Committee

The Remuneration & Nomination Committee prepares and reviews the compensation system of the Management Board for their final approval, which is subject to an annual review. Additionally, the committee oversees the search for appropriate candidates for appointment as Management Board members and makes corresponding proposals to the Supervisory Board. The Committee approves contracts with Management Board members, particularly with regard to their remuneration. Members of the Remuneration & Nomination Committee are Dr. Gerald Möller (Chairman), Dr. Metin Colpan and Prof. Jürgen Drews.

Science & Technology Committee

The Science & Technology Committee advises the Supervisory Board in the area of proprietary drug and technology development and prepares the respective resolutions of the Supervisory Board. The members of the Science & Technology Committee are Dr. Walter A. Blättler (Chairman) and Prof. Jürgen Drews.