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Note 11. Equity

Our Management Board has the power to issue ordinary shares and (financing) preference shares insofar as the Management Board has been authorized to do so by the General Meeting of Shareholders. The Management Board requires approval of the Supervisory Board for such an issue. The authorization by the General Meeting of Shareholders can only be granted for a certain period. In case the General Meeting of Shareholders has not authorized the Management Board to issue shares, the General Meeting of Shareholders shall have the power to issue shares.

Common shares, preferred and financing preferred shares

The authorized capital of the Company amounts to 110,000,000 common shares of €0.04 par value, 118,000 preferred shares of €40 par value and 8,000 financing preferred shares of €40 par value.

As at December 31, 2015, 63,797,394 ordinary shares with a nominal value of €0.04 each were issued and fully paid up, of which 2,091,007 ordinary shares are held by us in treasury. All shares have one vote per €0.04 par value. Treasury shares held by the Company cannot be voted on. Of our 61,706,387 outstanding common shares at December 31, 2015, 2,142,039 are registered with us in the Netherlands, 59,025,925 are registered with our transfer agent in the Netherlands, ABN AMRO Bank NV and 487,391 are registered with our transfer agent in the United States, Citibank, NA, New York.

Financing preferred shares are designed to allow ASMI to finance equity with an instrument paying a preferred dividend, linked to EURIBOR loans and government loans, without the dilutive effects of issuing additional common shares.

Preferred and financing preferred shares are issued in registered form only and are subject to transfer restrictions. Essentially, a preferred or financing preferred shareholder must obtain the approval of the Company's Supervisory Board to transfer shares. If the approval is denied, the Supervisory Board will provide a list of acceptable prospective buyers who are willing to purchase the shares at a cash price to be fixed by consent of the Supervisory Board and seller within two months after the approval is denied. If the transfer is approved, the shareholder must complete the transfer within three months, at which time the approval expires.

Preferred shares are entitled to a cumulative preferred dividend based on the amount paid-up on such shares. Financing preferred shares are entitled to a cumulative dividend based on the par value and share premium paid on such shares.

As per December 31, 2015 no preference shares are issued.

Retained earnings

Distributions to common shareholders are limited to the extent the total amount of shareholders’ equity exceeds the amounts of nominal paid-in share capital (exclusive any share premium) and any reserves to be formed pursuant to law or the Company’s articles of association. The amounts are derived from the Statutory Financial Statements of ASM International NV.

ASMI aims to pay a sustainable annual dividend. Annually the Supervisory Board, upon proposal of the Management Board, will assess the amount of dividend that will be proposed to the Annual General Meeting of Shareholders. The decision that a dividend be proposed to the Annual General Meeting of Shareholders will be subject to the availability of distributable profits as well as retained earnings and may be affected by our potential future funding requirements. Accordingly, dividend payments may fluctuate and could decline or be omitted in any year.

In 2015 we paid a dividend of €0.60 per common share. We proposed to the forthcoming 2016 Annual General Meeting of Shareholders to declare a dividend of €0.70 per share.

Results on dilution of investments in associates are accounted for directly in equity. For 2015 and 2014 these dilution results were €5,535 and €3,561 respectively.

Treasury shares

On October 29, 2014, ASMI announced a share buyback program, to purchase up to an amount of €100 million of its own shares within the 2014-2015 time frame. The repurchase program is part of ASMI's commitment to use excess cash for the benefit of its shareholders.

ASMI intends to use part of the shares for commitments under employee share-based compensation schemes.

The buyback program was executed by intermediaries through on-exchange purchases or through off-exchange trades. ASMI updated the markets on the progress of the buyback program on a weekly basis. The program started on November 24, 2014, and was completed on May 20, 2015. Under the 2014-2015 share buyback program we repurchased 2,593,970 shares at an average price of €38.55.

On October 29, 2015, ASMI announced a share buyback program, to purchase up to an amount of €100 million of its own shares within the 2015-2016 time frame. The program started on November 26, 2015. On December 31, 2015 of the program 9% was repurchased.

Other reserves

The changes in the amount of other reserves are as follows.

Proportionate share in other comprehensive income investments in associates 1Translation reserveTotal other reserves
Balance January 1, 2014480(86,399)(85,919)
Proportionate share in other comprehensive income investments in associates(2,179)(2,179)
Foreign currency translation effect on translation of foreign operations146,025146,025
Reclassification of deferred accumulative translation result to income following the sale of the 12% share of ASMPT(3,157)(3,157)
Balance December 31, 2014(1,699)56,46954,770
Proportionate share other comprehensive income investments in associates567567
Foreign currency translation effect on translation of foreign operations136,744136,744
Balance December 31, 2015(1,132)193,213192,081
  1. Proportionate share in other comprehensive income investments in associates and translation reserve, items may be subsequently reclassified to profit or loss.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

On May 21, 2015, the General Meeting of Shareholders authorized the Company, for an 18-month period, to be calculated from the date of the General Meeting, to repurchase its own shares up to the statutory maximum, at a price at least equal to the shares’ nominal value and at most a price equal to 110% of the share’s average closing price according to the listing on the Euronext Amsterdam stock exchange during the five trading days preceding the purchase date.

The maximum of shares that may yet be purchased under the program takes into account the treasury shares held by the Company (at December 31, 2015 there were 2,091,007 treasury shares held) and the maximum number of common shares which the Company can hold according to its Articles of Association. This maximum is 10% of the number of common shares issued.

On October 29, 2014, ASMI announced a share buyback program, to purchase up to an amount of €100 million of its own shares within the 2014-2015 time frame.

The following tables provide a summary of shares repurchased by ASMI under this program:

PeriodTotal number of shares purchasedAverage price paid per share (EUR)Cumulative number of shares purchasedMaximum value of shares that may yet be purchased under the program (EUR)
Share buyback program 2014-2015:
November, 2014555,671€33.18555,67181,563
December, 2014397,881€33.86953,55268,092
January, 2015259,302€35.121,212,85458,986
February, 2015200,710€36.971,413,56451,586
March, 2015277,253€42.761,690,81739,731
April, 2015629,381€44.362,320,19811,815
May, 2015273,772€43.172,593,970
Total2,593,970€38.55

On October 29, 2015, ASMI announced a share buyback program, to purchase up to an amount of €100 million of its own shares within the 2015-2016 time frame.

The following tables provide a summary of shares repurchased by ASMI under this program:

PeriodTotal number of shares purchasedAverage price paid per share (EUR)Cumulative number of shares purchasedMaximum value of shares that may yet be purchased under the program (EUR)
Share buy back program 2015-2016:
November, 201523,788€37.5923,78899,105
December, 2015228,191€36.16251,97990,853
Total251,979€36.30