Option Grant and Modification

Phorm, Inc.

Option grant and modification

6 January 2011

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO THE

UNITED STATES, CANADA, JAPAN OR AUSTRALIA

Phorm, Inc.

('Phorm' or the 'Company')

Option Grant and Modification

Phorm (AIM: PHRM and PHRX), the internet personalisation technology company,

announces that on 31 December 2010 (the "Grant Date"), its CEO and Interim Chair was awarded new options over common shares in the capital of the Company (the "New Options") and its Executive and Non-Executive Directors had the terms of the options that were granted to them on 30 April 2010 (the "Modified Options") amended, as part of a revised Company-wide employee incentive plan.

Details of the New Options are as follows:

CEO & Interim Chair No. Options Granted Total No. Options Held

(at 31/12/10)

Kent Ertugrul 180,000 2,584,457

The exercise price of the options is £1.025, being the closing price on the Grant Date. These options have a 10-year term and vest in equal tranches over four years.

The Modified Options relate to the option grant made on 30 April 2010, and full details of these grants are as follows:

CEO & Interim Chair No. Options Granted Total No. Options Held

(at 30/4/10)

Kent Ertugrul 1,517,811 2,404,457

Non-Executive Directors No. Options granted Total No. Options Held

(at 30/4/10)

Lord Norman Lamont 30,000 80,000

Kip Meek 30,000 130,000

Stephen Partridge-Hicks 30,000 130,000

The Modified Options originally had a 10-year term and the vesting commencement date was stated to be the first day of the month following the date upon which the quoted share price of Phorm (PHRM line) achieved a three month rolling average share price of £30 per share or more (the "Vesting Commencement Date"). Kip Meek stepped down as a Non-Executive Director on 16 August 2010 and the 130,000 options that he held have now lapsed.

This vesting criterion for the Modified Options has been amended such that the rolling average share price of Phorm (PHRM line) would need to be £5 for a period of six consecutive weeks.

Upon the Vesting Commencement Date, the Modified Option for the relevant director shall be deemed to have vested at a rate of 1/36th of the original number of common shares subject to option ("Shares") on the first day of each calendar month after the grant date (in each case rounded down to the nearest whole share), and shall continue to vest and become exercisable in a similar manner with respect to the balance of the Shares subject to option until fully vested and exercisable, provided the director remains in service. If the Vesting Commencement Date does not occur within three years of the grant date, the Modified Option will expire.

The exercise price of the Modified Options is £1.025, being the closing price on 31 December 2010 when the Board approved the scheme.

Enquiries:

Phorm, Inc.

Andy Croxson (analysts & investors) +44 20 7297 2326

Alex Laity (media) +44 20 7297 2710

Canaccord Genuity Limited +44 20 7050 6500

(Nominated Advisor)

Mark Williams

Andrew Chubb

About Phorm:

Phorm is a global personalisation technology company that makes content and advertising more relevant to the consumer. Phorm's innovative platform preserves user privacy and delivers a more interesting online experience. Phorm's partners include leading ISPs, Publishers, Ad Networks and Advertisers.

Phorm is a Delaware, US incorporated company, with offices in Seoul, Moscow, Sao Paulo and London. The Company was admitted to the AIM market of the London Stock Exchange in 2004 and has over 150 employees and direct contractors. For more information, please visit: www.phorm.com.