Annual Report and Accounts 2010

7Called-up share capital

 

2010
£000

2009
£000

Authorised

2,200,000,000 ordinary shares of 0.05 pence each (2009: 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 (2009: 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 2010:

Year of grant

Number of
options

Range of
exercise prices
£

Weighted
average
exercise
price
£

Latest date
of exercise

Executive Scheme

2001

197,986

2.84–3.75

3.4441

5 November 2011

2002

212,619

2.465

2.465

18 April 2012

2003

63,355

0.4375

0.4375

29 January 2013

2004

71,509

1.25

1.25

29 January 2014

2005

70,082

1.055

1.055

3 February 2015

 

615,551

 

2.2696

 

Unapproved Scheme

2004

129,458

0.9475–1.25

1.2395

21 October 2011

2005

1,431,976

1.005–1.185

1.0715

30 October 2012

2006

335,375

1.16–1.36

1.329

19 November 2013

 

1,896,809

 

1.1285

 

Unapproved Performance

2005

276,762

1.055

1.055

4 February 2012

Scheme

2006

800,513

1.325

1.325

1 February 2013

 

1,077,275

 

1.2556

 

US ISO Scheme

2006

93,750

1.1875–1.36

1.3429

31 August 2011

French Scheme

2005

105,750

1.0425–1.055

1.0544

30 October 2012

2006

3,250

1.36

1.36

3 May 2013

 

109,000

 

1.0635

 

1993 Plan

2001

729,746

0.24–0.25

0.2497

4 November 2011

2002

555,721

0.27–0.60

0.3941

28 November 2012

2003

443,314

0.50

0.50

30 January 2013

 

1,728,781

 

0.3603

 

2000 Plan

2001

193,724

0.22–0.25

0.2439

30 August 2011

2002

62,938

0.27

0.27

29 August 2012

 

256,662

 

0.2503

 

 

Year of grant

Number of
options

Range of
exercise prices
£

Weighted
average
exercise
price
£

Latest date
of exercise

2003 Plan

2003

1,210,452

0.47–0.65

0.488

22 October 2013

2004

1,984,690

0.55–1.01

0.6953

29 November 2014

 

3,195,142

 

0.6167

 

ND00 Plan

2001

26,862

0.37

0.37

13 August 2011

2002

43,282

0.37

0.37

2 July 2012

2003

174,452

0.51

0.51

18 February 2013

 

244,596

 

0.4699

 

SAYE

2006

25,096

1.0264

1.0264

31 January 2012

2007

51,457

1.104

1.104

31 January 2013

2008

2,406,075

0.81

0.81

31 January 2014

2009

1,146,075

0.854

0.854

31 January 2015

2010

606,591

1.948

1.948

31 January 2016

 

4,235,294

 

0.9897

 

Total options

13,452,860

0.22−3.75

0.8992

 

Year of grant

Number of
share awards

Latest vest date

RSU

2007

1,461,336

12 November 2011

2008

3,543,335

1 December 2012

2009

9,538,261

1 December 2013

2010

11,539,588

12 November 2014

 

26,082,520

 

French RSU

2007

62,494

12 November 2011

2008

185,218

1 December 2012

2009

770,314

12 November 2013

2010

589,571

12 November 2014

 

1,607,597

 

LTIP

2008

4,069,330

8 February 2011

2009

4,990,153

8 February 2012

2010

2,415,499

8 February 2013

 

11,474,982

 

DAB

2008

792,916

8 February 2011

2009

1,530,677

8 February 2012

2010

980,834

8 February 2013

 

3,304,427

 

Total awards

42,469,526

Total options and awards

55,922,386

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 exercisable after three years; otherwise they will become exercisable after seven years.

There is a further scheme for our French employees (the “French Scheme”). In the French Scheme, options are exercisable between four and seven years after their 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” 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 between 2007 and 2010 was set at 80% of the market share price prior to the announcement of the scheme, 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 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 22 in the IFRS accounts within these financial statements.