Annual report and accounts 2008

7Called-up share capital

Called-up share capital
	2008 £000	2007 £000
Authorised
2,200,000,000 ordinary shares of 0.05 pence each (2007: 2,200,000,000)	1,100	1,100
Allotted, called-up and fully paid
1,344,055,696 ordinary shares of 0.05 pence each (2007: 1,344,055,696)	672	672

Share options and awards The Company had the following options and awards outstanding over ordinary shares of 0.05 pence at 31 December 2008:

Share options and awards
	Year of grant	Number of options	Range of exercise prices £	Weighted average exercise price £	Latest date of exercise
Executive Scheme	1999	1,194,997	1.224–4.26	1.3903	15 November 2009
	2000	325,061	6.136–7.738	6.5782	21 May 2010
	2001	483,992	2.84–3.75	3.3917	5 November 2011
	2002	728,861	2.465	2.465	18 April 2012
	2003	495,812	0.4375	0.4375	29 January 2013
	2004	493,490	1.25	1.25	29 January 2014
	2005	517,593	1.055	1.055	3 February 2015
		4,239,806		2.0326
Unapproved Scheme	2002	2,940,314	0.425–3.145	2.4146	15 October 2009
	2003	2,864,145	0.4375–1.1475	0.4595	4 November 2010
	2004	6,087,508	0.9475–1.25	1.2356	21 October 2011
	2005	7,728,457	1.005–1.185	1.0611	30 October 2012
	2006	2,321,848	1.16–1.36	1.3221	19 November 2013
		21,942,272		1.2400
Unapproved Performance	2002	630,411	2.1475–2.465	2.3524	27 May 2009
Scheme	2003	731,428	0.4375	0.4375	30 January 2010
	2004	1,616,000	1.25	1.25	30 January 2011
	2005	2,620,853	1.055	1.055	4 February 2012
	2006	2,445,284	1.325	1.325	1 February 2013
		8,043,976		1.2218
US ISO Scheme	2004	1,439,239	0.9475–1.25	1.2244	21 October 2009
	2005	3,693,816	1.005–1.185	1.0601	30 October 2010
	2006	744,307	1.1875–1.36	1.3269	31 August 2011
		5,877,362		1.1341

Share options and awards
	Year of grant	Number of options	Range of exercise prices £	Weighted average exercise price £	Latest date of exercise
French Scheme	2002	134,250	1.505–3.145	2.4799	14 August 2009
	2003	31,250	0.4375–1.1475	0.5113	4 November 2010
	2004	344,504	0.9475–1.25	1.2407	21 October 2011
	2005	424,386	1.0425–1.185	1.0603	30 October 2012
	2006	98,250	1.325–1.36	1.3297	3 May 2013
		1,032,640		1.3141
Belgian Scheme	2003	85,600	1.1475	1.1475	4 November 2010
	2004	353,700	1.25	1.25	29 January 2011
	2005	328,700	1.055	1.055	3 February 2012
	2006	22,500	1.1875–1.325	1.2944	31 August 2013
		790,500		1.1591
1993 Plan	1999	285,425	0.16–0.28	0.2031	15 November 2009
	2000	642,994	0.25–0.58	0.3697	14 September 2010
	2001	1,690,428	0.24–0.46	0.2533	30 December 2011
	2002	1,879,653	0.27–0.60	0.4165	30 December 2012
	2003	893,433	0.48–0.50	0.4980	27 February 2013
		5,391,933		0.3620
2000 Plan	2001	2,728,453	0.22–0.28	0.2242	27 September 2011
	2002	246,435	0.24–0.27	0.2542	29 August 2012
		2,974,888		0.2267
2003 Plan	2003	2,535,501	0.47–0.66	0.5020	22 October 2013
	2004	4,319,330	0.55–1.01	0.7005	29 November 2014
		6,854,831		0.6271
Director Plan	2000	89,912	0.57	0.57	16 February 2010
	2001	7,498	0.22	0.22	15 April 2011
	2002	26,236	0.44	0.44	6 February 2012
		123,646		0.5212
ND00 Plan	2000	98,313	0.19	0.19	7 August 2010
	2001	37,528	0.37	0.37	13 August 2011
	2002	43,282	0.37	0.37	2 July 2012
	2003	276,192	0.51	0.51	18 February 2013
		455,315		0.4161
SAYE	2003	64,078	0.5865	0.5865	31 January 2009
	2004	81,096	0.9435	0.9435	31 January 2010
	2005	208,273	0.9095	0.9095	31 January 2011
	2006	811,760	1.0264	1.0264	31 January 2012
	2007	397,780	1.104	1.104	31 January 2013
	2008	2,763,496	0.81	0.81	31 January 2014
		4,326,483		0.8816
Total options		62,053,652	0.16−7.738	1.0569

Share options and awards
	Year of grant	Number of share awards	Latest date of exercise
RSU	2006	3,025,615	20 November 2010
	2007	5,455,961	12 November 2011
	2008	8,767,264	1 December 2012
		17,248,840
French RSU	2006	175,379	20 November 2010
	2007	259,065	12 November 2011
	2008	386,934	1 December 2012
		821,378
LTIP	2006	2,170,753	February 2009
	2007	2,639,408	February 2010
	2008	4,305,675	February 2011
		9,115,836
DAB	2007	847,341	February 2010
	2008	838,236	February 2011
		1,685,577
Total awards		28,871,631
Total options and awards		90,925,283

Under the UK Inland Revenue Executive Approved Share Option Plan (the “Executive Scheme”), the Company may grant options to directors and employees meeting certain eligibility requirements. Options under the Executive Scheme are exercisable between three and ten years after their issue, after which time the options expire.

Under the Company’s Unapproved Scheme (the “Unapproved Scheme”), for which it has not sought approval from the UK tax authorities, options are exercisable one to seven years after their issue, after which time the options expire. The Company also operates the US ISO Scheme, which is substantially the same as the Unapproved Scheme, the main difference being that the options are exercisable one to five years after their issue. Under both of these schemes options are exercisable as follows: 25% maximum on first anniversary, 50% maximum on second anniversary, 75% maximum on third anniversary, 100% maximum on fourth anniversary. Various options to directors under the Unapproved Scheme have certain performance criteria attached, which if met are exerciseable after three years, otherwise they will become exerciseable after seven years.

There are further schemes for our French and Belgian employees (the “French Scheme” and the “Belgian Scheme”). In the French Scheme, options are exercisable between four and seven years after their issue, whilst in the Belgian Scheme, options are exercisable from 1 January following the third anniversary after their issue, up to seven years from issue.

Upon the acquisition of Artisan in 2004, the Company assumed the share schemes of Artisan existing at acquisition. The schemes remained substantially the same as prior to the acquisition, other than the options became options to purchase shares in ARM Holdings plc instead of Artisan Components Inc. The number and value of options were amended in line with the conversion ratio as detailed in the merger agreement. The schemes assumed were the “1993 Plan”, the “2000 Plan”, the “2003 Plan”, the “Director Plan” and the “ND00 Plan”.

Under each plan, there are multiple vesting templates and vesting periods. The majority of the options were already vested upon acquisition, and the most common template was 25% vesting after one year, and then 6.25% vesting each quarter thereafter, until 100% vest after four years. Some options vest on a monthly basis, and some vest over five years. All options lapse ten years from the date of grant.

The Company also operates savings-related share option schemes (SAYE) for all employees and executive directors of the Group, except for ARM Inc. The number of options granted is related to the value of savings made by the employee. The period of savings is either three or five years. The option price for grants made in 2007 and 2008 was set at 80% of the market share price prior to the grant, but in previous years was set at 85%, and the right to exercise normally only arises for a six-month period once the savings have been completed. In 2007, the Company commenced a new savings-related option scheme for employees of ARM Inc., namely the Employee Share Purchase Plan (ESPP). The number of options granted is related to the value of savings made by the employee. The period of savings is six months, with the option price being at 85% of the lower of the market share price at the beginning and end of the scheme.

The Company also issues restricted stock units (RSUs) to employees which are actual share awards on vesting rather than options to buy shares at a fixed exercise price. The main RSU awards (to employees in all jurisdictions other than France) vest similarly to the unapproved scheme above, namely 25% on the each anniversary over four years. RSU awards to our French employees vest 50% after two years, and then a further 25% after three and four years. Whilst the Company reserves the right to award options to employees going forward, the majority of awards to employees will be in RSUs.

Additionally, the Company operates a Deferred Annual Bonus plan (DAB). Under the DAB, which is for directors and selected senior management within the Group, participants are required to defer 50% of any related annual bonus into shares on a compulsory basis. These shares will be deferred for three years, and then a further matching award will be made depending on the achievement of an EPS performance condition over that time. The Company also operates the Long Term Incentive Plan (LTIP), also for directors and selected senior management, whereby share awards are made and vest depending on the Company’s TSR performance compared to two comparator groups over the three-year performance period.

For disclosures relating to the grants in the year and fair value assumptions, reconciliations of opening to closing option balances and related items, please refer to note 23 in the IFRS accounts within these financial statements.

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