Remuneration report

Remuneration committee

The remuneration committee has responsibility for determining and agreeing with the board, within agreed terms of reference, the Group’s policy for the remuneration of the executive directors and the individual remuneration packages for each executive director. This includes basic salary, annual bonus, the level and terms of conditional awards under the Long Term Incentive Plan and the terms of performance conditions that apply to such benefits, pension rights and any compensation payments. Where the remuneration committee considers it appropriate, the committee will make recommendations in relation to the remuneration of senior management. The committee also liaises with the board in relation to the preparation of the board’s annual report to shareholders on the Group’s policy on the remuneration of executive directors and in particular the directors’ remuneration report, as required by the Companies Act 1985, the Combined Code and the Listing Rules of the Financial Services Authority. The committee’s terms of reference are published on the company’s website at www.arm.com.

The committee is chaired by Jeremy Scudamore and the other members are Kathleen O’Donovan, Young Sohn and John Scarisbrick, who joined the committee in September 2008. The committee met three times during 2008. Given their diverse experience, these four independent non-executive directors are able to offer a balanced view and international expertise in relation to remuneration issues for the Group. The committee has access to professional advice from external advisers (generally appointed by the Executive Vice President, Human Resources) in the furtherance of its duties and makes use of such advice. During 2008, KPMG provided general advice on remuneration and benefits, including tax advice for employees who are seconded overseas and they also worked on royalty audits and the acquisition of Logipard AB. Linklaters provided legal services in relation to equity plans and corporate matters. Monks provided salary survey data. Deloitte provided salary survey data, royalty audit services and tax training. Kepler Associates provided independent verification of TSR calculations for the Long Term Incentive Plan. The Executive Vice President, Human Resources also provided advice to the committee and to the Group. Monks, which provided salary survey data, is an associate of the Group’s external auditor and these services were approved by the audit committee in accordance with the procedure described in the corporate governance report. The Chief Executive Officer and the Executive Vice President, Human Resources, normally attend for part of remuneration committee meetings. No director is involved in deciding his or her own remuneration.

The Deferred Annual Bonus Plan for executive directors and senior managers and the Employee Equity Plan for all other employees were approved by shareholders at the 2006 AGM. These plans brought the Group’s remuneration structure more closely in line with UK market norms, increased alignment between remuneration and financial performance and strengthened the retention aspect of the deferred bonus. Cessation of option grants to executive directors (other than in exceptional circumstances) and the reduction from three plans to two for executive directors and senior managers, together with the move away from options to shares for all employees, reduces potential dilution and has simplified remuneration arrangements.

Remuneration policy

The remuneration committee, in its deliberations on remuneration policy for the Group’s executive directors, seeks to give full consideration to the principles set out in the Combined Code. The committee is able to consider corporate performance on environmental, social and corporate governance issues when setting the remuneration of executive directors. The committee also monitors developments in accounting for equity-based remuneration on an ongoing basis.

The Group operates a remuneration policy and framework for executive directors designed to ensure that it attracts and retains the high quality management skills necessary to achieve a high level of corporate performance, in line with the best interests of shareholders. This policy seeks to provide rewards and incentives for the remuneration of executive directors that reflect their performance and align with the objectives of the Group. These comprise a mix of performance related and non-performance-related remuneration. The committee believes that a director’s total remuneration should seek to recognise his worth in the external market and, to this end, operates a policy of paying base salaries which are in line with the market median, as part of a total remuneration package which is upper quartile. The committee believes that this is justified, recognising that more than 50% of total potential remuneration is performance-related. The committee obtains information about the external market from various independently published remuneration surveys and is committed to benchmarking the total remuneration package.

However for 2009, recognising current market conditions and the uncertainty over when the global economy will start to improve, the board took the decision to postpone the annual pay review across the Group and to review the situation at the mid year in the light of actual business performance and prospects for the remainder of the year and 2010. This applies to all employees and to the board, including executive and non-executive directors.

The nature of the Group’s development has meant that there has been a good deal of focus on the attainment of short-term objectives with a high level of variable remuneration. Since 2007, variable remuneration has consisted of two performance-related elements: annual bonus and a conditional award under the Long Term Incentive Plan. A shareholding guideline is in place for executive directors and certain senior managers, who are required to build up a holding of shares in the Company over a period of five years. The shareholdings may be built up of shares received through earlier grants under the Company’s share option schemes and/or the Long Term Incentive Plan and/or the Deferred Annual Bonus Plan and, in the case of executive directors, the required holding is 100% of basic salary.

Incentive arrangements

The remuneration committee aims to ensure that individuals are fairly rewarded for their contribution to the success of the Group. The various incentive schemes that comprise the remuneration packages of executive directors and senior managers are described below.

The remuneration committee aims to ensure that individuals are fairly rewarded for their contribution to the success of the Group. The various incentive schemes that comprise the remuneration packages of executive directors and senior managers are described below.

Deferred Annual Bonus Plan

There is a strong variable element to executive directors’ remuneration and a bonus of up to 125% of base salary (after application of a personal performance multiplier which flexes the payment by 0.75 to 1.25) can be earned through the Deferred Annual Bonus Plan (DAB) if all targets are met. The personal performance multiplier depends on the achievement of pre-determined objectives which are reviewed and approved by the committee each year. These include key strategic objectives related to each director’s role and responsibilities including compliance with the Management Charter which is designed to foster employee development, understanding of the overall vision and strategy of the Group and good governance.

There is compulsory deferral into shares of 50% of the bonus earned and an opportunity to earn an equity match of up to 2:1, subject to achievement of an EPS performance condition. Deferred shares and any matching shares earned will normally be transferred three years from the date of award. Payment of the bonus for 2008 was subject to the achievement of US dollar revenue and normalised operating profit targets set by the remuneration committee, which were directly related to the Group’s financial results. The bonuses payable to executive directors in respect of performance during 2008 are shown in the table on page 41 and are in the range 69.0% to 70.7% of base salary, 50% of which was compulsorily deferred into shares. For 2008, 50% of bonus was dependent on achieving a US dollar revenue target and 50% on achieving a normalised operating profit target. At EPS growth equal to the increase in the Consumer Prices Index (CPI) plus 4% per annum, the deferred shares will be matched on a 0.3:1 basis, rising to 2:1 when EPS growth is in excess of CPI plus 12% per annum. The deferred shares can be forfeited in the event of gross misconduct and the matching shares are subject to forfeiture for “bad leavers”.

For 2009, 30% of bonus is dependent on achieving a US dollar revenue target and 70% on achieving a normalised operating profit target, which the committee believes have been set at challenging but motivational levels. These targets are directly related to the Group’s financial results and encourage achievement of the Group’s short-term financial goals, while the deferral and matching elements encourage a longer term view of the success of the Group. Maximum bonus is 125% of base salary depending on the personal performance multiplier described above.

Existing option schemes

The grant of options under the existing share option schemes ceased in 2006 when the DAB and the Employee Equity Plan were approved by shareholders. The Employee Equity Plan has the facility for option grants to be made, but this will be done only in exceptional circumstances. The existing option grants to executive directors remain available for exercise and vesting in accordance with the rules of the relevant schemes. In line with practice among the Group’s peers in the technology sector, there are generally no performance conditions attached to the issue or exercise of discretionary options under the existing schemes, except for those issued to executive directors where performance conditions based on real EPS growth apply. Share options issued to executive directors prior to their appointment to the board of the Group do not have performance conditions attached to them. However, discretionary options issued to executive directors after their appointment to the board of the Group do have performance conditions attached to them. These discretionary options will vest after seven years, but may vest after three years from grant to the extent that the performance conditions are satisfied.

The performance conditions applicable to the Long Term Incentive Plan are described in more detail below and are based on TSR rather than EPS, providing the link to performance against an appropriate peer group.

These performance conditions were selected having regard to the position of the Group within its sector and the nature of the companies against which it competes to attract and retain high calibre employees. The committee believes that the performance conditions represent the correct balance between being motivational and challenging.

Pensions

The Group does not operate its own pension scheme but makes payments into a Group personal pension plan, which is a money purchase scheme. For executive directors, the normal rate of Group contribution is 10% of the executive’s basic salary plus additional amounts in accordance with the Group’s salary sacrifice scheme. Full details of Group contributions are set out in the directors’ emoluments table on page 41.

Service agreements

Executive directors have “rolling” service contracts that may be terminated by either party on one year’s notice. These agreements provide for each of the directors to provide services to the Group on a full-time basis and contain restrictive covenants for periods of three to six months following termination of employment relating to non-competition, non-solicitation of the Group’s customers, non-dealing with customers and non-solicitation of the Group’s suppliers and employees. In addition, each service contract contains an express obligation of confidentiality in respect of the Group’s trade secrets and confidential information and provides for the Group to own any intellectual property rights created by the directors in the course of their employment.

The dates of the service contracts of each person who served as an executive director during the financial year are as follows:

The dates of the service contracts

Director	Date
Warren East	29 January 2001
Tim Score	1 March 2002
Tudor Brown	3 April 1996
Mike Inglis	17 July 2002
Mike Muller	31 January 1996
Simon Segars	4 January 2005

Where notice is served to terminate the appointment, whether by the Group or the executive director, the Group in its absolute discretion is entitled to terminate the appointment by paying to the executive director his salary in lieu of any required period of notice.

Non-executive directors

During 2008, the Chairmen of the audit and remuneration committees and the senior independent director each received a total fee of £45,000 per annum and the other non-executive directors each received a total fee of £40,000 per annum. These fees were arrived at by reference to fees paid by other companies of similar size and complexity, and reflected the amount of time non-executive directors were expected to devote to the Group’s activities during the year, which is between 10 and 15 working days a year. The remuneration of the non-executive directors is set by the executive directors and the term of appointment is three years. Fees paid to non-executive directors are reviewed annually with effect from 1 January and, as mentioned above, the board agreed that, in the light of current market conditions, no increase should be paid at the start of 2009 and the situation will be reviewed at the mid year.

Non-executive directors do not have service contracts, are not eligible to participate in bonus or share incentive arrangements and their service does not qualify for pension purposes or other benefits. No element of their fees is performance-related. Share options held by Lucio Lanza were granted prior to the Group’s acquisition of Artisan.

Performance graphs

A performance graph showing the Company’s total shareholder return (TSR) together with the TSR for the FTSE All-World Technology Index from 31 December 2003 is shown below. The TSR has been calculated in accordance with the Directors’ Remuneration Report Regulations 2002.

The TSR for the Company’s shares was -33.4% over this period compared with -1.3% for the FTSE All-World Technology Index for the same period.

ARM total shareholder return performance from 31 December 2003 to 31 December 2008

The directors consider the FTSE All-World Technology Index to be an appropriate choice as the Index contains companies from the US, Asia and Europe and therefore reflects the global environment in which the Group operates. In addition, the Index includes many companies that are currently the Group’s customers, as well as companies which use ARM technology in their end products.

Directors’ shareholdings in the Company

The directors’ beneficial interests in the Company’s ordinary shares of 0.05 pence, which excludes interests under its share option schemes, Long Term Incentive Plan and Deferred Annual Bonus Plan, are set out below.

Directors’ shareholdings in the Company

Director	At date of report Number	31 December 2008 Number	31 December 2007 Number
Warren East	813,806	747,561	627,480
Tim Score	427,949	372,164	247,250
Tudor Brown	1,814,422	1,769,097	1,655,636
Mike Inglis	266,518	227,295	149,771
Mike Muller	2,012,203	1,972,980	1,911,860
Simon Segars	261,732	225,124	172,735
Doug Dunn	48,000	48,000	48,000
Lucio Lanza	1,277,291	1,277,291	1,277,291
Kathleen O’Donovan	–	–	–
Philip Rowley	50,000	50,000	50,000
John Scarisbrick	10,800	10,800	10,800
Jeremy Scudamore	125,000	125,000	125,000
Young Sohn	159,000	159,000	–

In addition to the interests disclosed above, all the executive directors (together with all the employees of the Group) were potential beneficiaries of the ARM Holdings plc Employee Share Ownership Plan. They were, therefore, treated as interested in all the shares held by this trust being nil ordinary shares at 31 December 2008 (and 1,201,434 ordinary shares at 31 December 2007). The executive directors also have interests in dividend shares that could be awarded under the Long Term Incentive Plan, the amount of which will depend on the extent to which the performance criteria are satisfied and the dividends declared during the performance period. Changes in directors’ interests in the Company’s shares that have taken place in the period from 31 December 2008 to the date of approval of the remuneration report are shown above.

Auditable information

The following information has been audited by the Company’s auditors, PricewaterhouseCoopers LLP, as required by Schedule 7A to the Companies Act 1985.

Interests in share options

Details of discretionary options beneficially held by directors are set out below:

Interests in share options

Director	As at 1 January 2008 Number	Granted Number	Exercised Number	Lapsed Number	As at 31 December 2008 Number	Exercise price £	Earliest date of exercise	Expiry date
Warren East	8,480	–	–	–	8,480	1.224	11/03/02	10/03/09*
	3,187	–	–	–	3,187	6.155	22/05/03	21/05/10*
	62,909	–	–	(62,909)	−	3.815	22/05/04	22/05/08**
	100,000	–	–	–	100,000	2.465	19/04/05	19/04/09**
	400,000	–	–	–	400,000	1.25	30/01/07	30/01/11**
	592,417	–	–	–	592,417	1.055	04/02/08	04/02/12**
	573,585	–	–	–	573,585	1.325	01/02/09	01/02/13**
	1,740,578	–	−	(62,909)	1,677,669
Tim Score	206,896	–	–	–	206,896	2.465	19/04/05	19/04/09**
	320,000	–	–	–	320,000	1.25	30/01/07	30/01/11**
	473,934	–	–	–	473,934	1.055	04/02/08	04/02/12**
	483,019	–	–	–	483,019	1.325	01/02/09	01/02/13**
	1,483,849	–	−	–	1,483,849
Tudor Brown	3,736	–	–	–	3,736	6.155	22/05/03	21/05/10*
	2,091	–	–	–	2,091	3.35	14/05/04	13/05/11*
	22,909	–	–	(22,909)	−	3.35	14/05/02	13/05/08†
	50,000	–	–	–	50,000	2.465	19/04/05	19/04/09**
	731,428	–	–	–	731,428	0.4375	30/01/06	30/01/10**
	320,000	–	–	–	320,000	1.25	30/01/07	30/01/11**
	436,019	–	–	–	436,019	1.055	04/02/08	04/02/12**
	392,453	–	–	–	392,453	1.325	01/02/09	01/02/13**
	1,958,636	–	–	(22,909)	1,935,727
Mike Inglis	223,515	–	–	–	223,515	2.1475	27/05/03	26/05/09†
	288,000	–	–	–	288,000	1.25	30/01/07	30/01/11**
	379,147	–	–	–	379,147	1.055	04/02/08	04/02/12**
	339,623	–	–	–	339,623	1.325	01/02/09	01/02/13**
	1,230,285	–	−	–	1,230,285
Mike Muller	3,736	–	–	–	3,736	6.155	22/05/03	21/05/10*
	2,091	–	–	–	2,091	3.35	14/05/04	13/05/11*
	22,909	–	–	(22,909)	−	3.35	14/05/02	13/05/08†
	50,000	–	–	–	50,000	2.465	19/04/05	19/04/09**
	288,000	–	–	–	288,000	1.25	30/01/07	30/01/11**
	398,104	–	–	–	398,104	1.055	04/02/08	04/02/12**
	339,623	–	–	–	339,623	1.325	01/02/09	01/02/13**
	1,104,463	–	–	(22,909)	1,081,554
Simon Segars	6,792	–	–	–	6,792	3.35	14/05/04	13/05/11*
	33,208	–	–	(33,208)	−	3.35	14/05/02	13/05/08†
	40,000	–	–	–	40,000	2.465	19/04/03	18/04/09†
	105,142	–	−	–	105,142	0.4375	30/01/04	29/01/10†
	224,000	–	–	–	224,000	1.25	30/01/05	29/01/11†
	341,232	–	–	–	341,232	1.055	04/02/08	04/02/12**
	316,981	–	–	–	316,981	1.325	01/02/09	01/02/13**
	1,067,355	–	−	(33,208)	1,034,147
Lucio Lanza	89,912	–	–	–	89,912	0.57	17/03/00	16/02/10
	7,498	–	–	–	7,498	0.22	16/05/01	15/04/11
	26,236	–	–	–	26,236	0.44	07/03/02	06/02/12
	177,615	–	–	–	177,615	0.66	11/04/04	10/03/14
	301,261	–	–	–	301,261

* Denotes share options issued under the Group’s Approved Share Option Scheme.
** Denotes share options issued under the Group’s Unapproved Share Option Scheme with performance conditions attached.
† Denotes share options issued under the Group’s Unapproved Share Option Scheme which are exercisable as follows: 25% maximum from first anniversary,
50% maximum from second anniversary, 75% maximum from third anniversary, 100% maximum on fourth anniversary.

For options granted before January 2003, the performance condition is that the Group must achieve average real EPS growth of at least 33.1% (i.e. 33.1% greater than the percentage over a performance period of three years from the start of the financial year in which the options were granted (the “performance period”).

For options granted in 2003 and 2004 the performance conditions requiring average real EPS growth of at least 33.1% were satisfied and 100% of the options vested on 1 February 2006 and 8 February 2007 respectively. For options granted in 2005 the performance conditions were satisfied to the extent that 89.44% of the options vested on 8 February 2008 and the balance will vest seven years from the date of grant.

For the final grant of options in 2006 the performance conditions were satisfied to the extent that 76.2% of the options vested on 8 February 2009 and the balance will vest seven years from the date of grant. The performance condition was that 50% of the shares under option would vest after three years if the Group achieved average real EPS growth of 12.5% over the performance period. If average real EPS growth of at least 33.1% had been achieved over the performance period, 100% of the shares under option would have vested after three years. For average real EPS growth of between 12.5% and 33.1% over the performance period, the number of shares vested after three years increased on a straight-line basis.

Details of options held by directors under the Group’s Save As You Earn option schemes are set out below:

Details of options held by directors under the Group’s

Director	As at 1 January 2008 Number	Granted Number	Exercised Number	As at 31 December 2008 Number	Exercise price £	Earliest date of exercise	Expiry date
Warren East	8,559	−	–	8,559	1.104	01/09/10	28/02/11
Tim Score	27,152	–	(27,152)	−	0.5865	01/08/08	31/01/09
Tudor Brown	8,559	−	–	8,559	1.104	01/09/10	28/02/11
Mike Inglis	9,109	–	–	9,109	1.0264	01/08/09	31/01/10

Options issued under this scheme are issued at a 15% discount to market value for grants made in 2006 and before, and at a 20% discount for those granted in 2007.

Details of options exercised by directors during the year are as follows:

Details of options exercised by directors during the year

Director	Number of shares	Exercise price £	Market price on date of exercise £	Gains on exercise £
Tim Score	27,152	0.5865	1.0325	12,110

Long Term Incentive Plan

A Long Term Incentive Plan was approved by shareholders at the 2003 AGM. Conditional share awards held by directors are as follows:

Long Term Incentive Plan

Director	Performance period ending 31 December	Award date	Market price at date of award £	As at 1 January 2008 Number	Conditional award Number	Vested* Number	Lapsed Number	As at 31 December 2008 Number	Vesting date
Warren East	2007	20 July 2005	1.165	268,240	–	(147,532)	(120,708)	−	February 2008
	2008	8 May 2006	1.365	278,388	–	−	–	278,388**	February 2009
	2009	8 February 2007	1.28	308,594	−	−	–	308,594	February 2010
	2010	8 February 2008	0.93	−	446,237	−	−	446,237	February 2011
				855,222	446,237	(147,532)	(120,708)	1,033,219
Tim Score	2007	20 July 2005	1.165	214,592	–	(118,026)	(96,566)	−	February 2008
	2008	8 May 2006	1.365	234,432	–	−	–	234,432**	February 2009
	2009	8 February 2007	1.28	261,719	−	−	–	261,719	February 2010
	2010	8 February 2008	0.93	−	387,097	−	−	387,097	February 2011
				710,743	387,097	(118,026)	(96,566)	883,248
Tudor Brown	2007	20 July 2005	1.165	197,425	–	(108,584)	(88,841)	−	February 2008
	2008	8 May 2006	1.365	190,476	–	−	–	190,476**	February 2009
	2009	8 February 2007	1.28	214,844	−	−	–	214,844	February 2010
	2010	8 February 2008	0.93	−	306,452	−	−	306,452	February 2011
				602,745	306,452	(108,584)	(88,841)	711,772
Mike Inglis	2007	20 July 2005	1.165	171,674	–	(94,420)	(77,254)	−	February 2008
	2008	8 May 2006	1.365	164,835	–	−	–	164,835**	February 2009
	2009	8 February 2007	1.28	187,500	−	−	–	187,500	February 2010
	2010	8 February 2008	0.93	−	268,817	−	−	268,817	February 2011
				524,009	268,817	(94,420)	(77,254)	621,152
Mike Muller	2007	20 July 2005	1.165	180,258	–	(99,141)	(81,117)	−	February 2008
	2008	8 May 2006	1.365	164,835	–	−	–	164,835**	February 2009
	2009	8 February 2007	1.28	183,594	−	−	–	183,594	February 2010
	2010	8 February 2008	0.93	−	263,441	−	−	263,441	February 2011
				528,687	263,441	(99,141)	(81,117)	611,870
Simon Segars	2007	20 July 2005	1.165	154,506	–	(84,979)	(69,527)	−	February 2008
	2008	8 May 2006	1.365	153,846	–	−	–	153,846**	February 2009
	2009	8 February 2007	1.28	179,688	−	−	–	179,688	February 2010
	2010	8 February 2008	0.93	−	268,817	−	−	268,817	February 2011
				488,040	268,817	(84,979)	(69,527)	602,351

* The performance conditions applicable to the 2005 conditional awards were satisfied to the extent of 55% plus dividend shares.
** The performance conditions applicable to the 2006 conditional awards were satisfied to the extent of 38.9% plus dividend shares.

Annual grants to executive directors are normally made at a level equivalent to base salary. Conditional awards vest to the extent that the performance criteria are satisfied over a three-year performance period from 1 January of the year of award and no re-testing thereafter is possible. The performance conditions are based on the Company’s TSR when measured against that of two comparator groups (each testing half of the shares comprised in the award). The first index comprises UK companies across all sectors (FTSE 350) and the second comprises predominantly US companies within the Hi Tech sector (FTSE Global Technology Index). For each comparator group, the number of shares that may vest may be up to a maximum of 200% of relevant half of the shares comprised in the conditional award if the Company’s TSR ranks in the upper decile, 50% will vest in the event of median performance and between median and upper decile performance vesting will increase on a straight-line basis. Additional shares may vest to cover dividends paid by the Company during the performance period. No shares will be received for below-median performance. In addition, no shares will vest unless the committee is satisfied that there has been a sustained improvement in the underlying financial performance of the Company.

As detailed in the 2007 Annual Report the performance conditions applicable to the conditional awards granted on 20 July 2005 were satisfied to the extent of 55% plus dividend shares which vested on 6 February 2008, as follows:

detailed in the 2007 Annual Report

Director	Conditional award Number	Vested award Number	Dividend shares Number	Total award Number	Market value at vesting £
Warren East	268,240	147,532	3,525	151,057	143,591
Tim Score	214,592	118,026	2,820	120,846	114,874
Tudor Brown	197,425	108,584	2,594	111,178	105,683
Mike Inglis	171,674	94,420	2,256	96,676	91,898
Mike Muller	180,258	99,141	2,369	101,510	96,493
Simon Segars	154,506	84,979	2,030	87,009	82,659
Total	1,186,695	652,682	15,594	668,276	635,198

The performance conditions applicable to the conditional awards granted on 8 May 2006 were satisfied to the extent of 38.9% plus dividend shares which vested on 8 February 2009, as follows:

The performance conditions applicable to the conditional awards

Director	Conditional award Number	Vested award Number	Dividend shares Number	Total award Number	Market value at vesting £
Warren East	278,388	108,292	3,988	112,280	111,999
Tim Score	234,432	91,194	3,358	94,552	94,316
Tudor Brown	190,476	74,095	2,728	76,823	76,631
Mike Inglis	164,835	64,120	2,361	66,481	66,315
Mike Muller	164,835	64,120	2,361	66,481	66,315
Simon Segars	153,846	59,846	2,203	62,049	61,894
Total	1,186,812	461,667	16,999	478,666	477,470

The following conditional awards over ordinary shares were made under the LTIP on 8 February 2009: Warren East 416,040; Tim Score 360,902; Tudor Brown 214,286; Mike Inglis 250,627; Mike Muller 245,614 and Simon Segars 250,627. The mid-market closing price of an ordinary share on 6 February 2009, being the business day prior to the date of these conditional awards, was 99.75 pence.

Deferred annual bonus plan

As described above, there is a compulsory deferral of 50% of the annual bonus earned by executive directors in the year. The emoluments detailed below include the full bonus earned, though only half has been settled in cash and the deferred elements will be settled in shares after three years. The following awards were made on 8 February 2009 in respect of the deferred proportion of the 2008 bonus: Warren East 143,388; Tim Score 127,443; Tudor Brown 86,161; Mike Inglis 88,502; Mike Muller 84,650 and Simon Segars 88,502.

The total number of awards under the deferred annual bonus plan held by the directors following the 2009 grant is: Warren East 334,259; Tim Score 288,669; Tudor Brown 215,361; Mike Inglis 201,750; Mike Muller 195,320 and Simon Segars 194,010.

Except as described above, there have been no changes in directors’ interests under the Group’s equity schemes since the end of the 2008 financial year up to the date of approval of the remuneration report.

The Company’s register of directors’ interests contains full details of directors’ shareholdings and options to subscribe and conditional awards under the LTIP.

Share prices

The market value of the shares of the Company as at 31 December 2008 was 86.5 pence. The closing mid-price ranged from 79.0 pence to 124.5 pence during the year.

Directors’ emoluments

The emoluments of the executive directors of the Group in respect of services to the Group were paid through its wholly-owned subsidiary, ARM Limited, as were the non-executive directors with the exception of Lucio Lanza and Young Sohn who were paid through ARM Inc., and were as follows:

Directors’ emoluments

Director	Fees £	Basic salary£	Benefits** £	Bonus payments*** £	Subtotal £	Pension contributions £	Total 2008 £	Subtotal 2007 £	Pension contributions 2007 £	Total 2007 £
Executive
Warren East	–	415,000	14,418	286,501	715,919	45,235	761,154	562,020	39,500	601,520
Tim Score	–	360,000	19,641	254,643	634,284	37,350	671,634	484,063	33,500	517,563
Tudor Brown	–	249,375	12,668	172,160	434,203	26,719	460,922	391,233	27,500	418,733
Mike Inglis	–	250,000	14,418	176,563	440,981	26,875	467,856	345,206	24,000	369,206
Mike Muller	–	245,000	14,418	171,139	430,557	30,877	461,434	340,206	23,500	363,706
Simon Segars	–	250,000	108,998	176,835	535,833	26,875	562,708	360,464	23,000	383,464
Total	–	1,769,375	184,561	1,237,841	3,191,777	193,931	3,385,708	2,483,192	171,000	2,654,192
Non-executive
Doug Dunn	160,000	–	–	–	160,000	–	160,000	150,000	–	150,000
Peter Cawdron*	−	–	–	–	−	–	−	15,552	–	15,552
Lucio Lanza	40,000	–	–	–	40,000	–	40,000	36,000	–	36,000
Kathleen O’Donovan	40,000	–	–	–	40,000	–	40,000	38,354	–	38,354
Philip Rowley	45,000	–	–	–	45,000	–	45,000	41,000	–	41,000
John Scarisbrick	40,000	–	–	–	40,000	–	40,000	36,000	–	36,000
Jeremy Scudamore	45,000	–	–	–	45,000	–	45,000	41,000	–	41,000
Young Sohn*	40,000	–	–	–	40,000	–	40,000	27,000	–	27,000
Total	410,000	–	–	–	410,000	–	410,000	384,906	–	384,906
Total	410,000	1,769,375	184,561	1,237,841	3,601,777	193,931	3,795,708	2,868,098	171,000	3,039,098

* Peter Cawdron’s fees are for the period up to his date of resignation on 15 May 2007. Young Sohn’s fees are for the period from his appointment on 2 April 2007.

** All the executive directors receive family healthcare and annual travel insurance as part of their benefits in kind. In addition, Tim Score has the use of a company car and Warren East, Tudor Brown, Mike Inglis and Mike Muller receive a car and petrol allowance. Simon Segars receives living and transportation allowances as part of his placement in the US.

*** The bonus payments above represent the full bonus earned during 2008. According to the terms of the deferred annual bonus, 50% of this bonus is not paid in cash, but is deferred and becomes payable in shares after three years. Details of the awards made in February 2009 in respect of these deferrals are detailed above.

Warren East is the highest paid employee in the Company. It is the Company’s policy to allow executive directors to hold non-executive positions at other companies and to receive remuneration for their services. The board believes that experience of the operations of other companies and their boards and committees is valuable to the development of the executive directors. Details of executive directors’ roles within other companies and their remuneration are as follows:

Warren East is a non-executive director of Reciva Limited and of De La Rue plc. The Group holds 0.4% of the issued share capital of Reciva Limited and more details about this investment are included in note 14 on page 73. In relation to Reciva Limited he was awarded options over 2,838 shares which vested monthly as to 1,350 shares at an option price of £20.00 between January and July 2008, as to 400 shares at an option price of £22.50 between July and August 2008 and as to 1,088 shares at an option price of £16.50 between September and December 2008 and received no other remuneration. In relation to De La Rue plc he received remuneration totalling £39,375 up to 31 December 2008 (2007: £36,247).

Tudor Brown is a non-executive director of ANT plc. In this capacity he received remuneration totalling £22,500 up to 31 December 2008 (2007: £26,250). Mike Inglis was a non-executive director of Superscape plc until 3 March 2008 and received remuneration totalling £9,587 up to that date. He became a non-executive director of Pace plc on 25 July 2008 and in this capacity he received remuneration totalling £14,383 up to 31 December 2008. Tim Score is a non-executive director and was interim chairman of National Express Group plc. In this capacity he received remuneration totalling £58,101 up to 31 December 2008 (2007: £48,000). Simon Segars is a non-executive director of Plastic Logic Limited and in this capacity he received remuneration totalling £15,000 up to 31 December 2008 (2007: £15,000).

All the executive directors are accruing benefits under a money purchase pension scheme as a result of their services to the Group, contributions for which were all paid during the year.

Jeremy Scudamore, Chairman of the Remuneration Committee