Vistaprint 2007 Annual Report Download - page 85

VISTAPRINT LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Years Ended June 30, 2007, 2006 and 2005
(in thousands, except share and per share data)
On August 30, 2004, the Company issued 5,535,279 shares of Series B Shares for $4.11 each,
for total consideration of $22,750.
Of these shares, the Company issued 60,827 shares for a total consideration of $250 to George
Overholser, a director, and an aggregate of 9,732,360 shares for a total consideration of $40,000 to
Highland Capital Partners VI Limited Partnership and related entities. At the time of the issuance of
these shares, Fergal Mullen, a managing director of Highland Management Partners VI, Inc., the
general partner of each of the general partners of these entities, was a director of the Company.
In connection with the completion of the Company’s IPO described in Note 9, on September 29,
2005 all outstanding Series B Shares were converted into 12,874,694 common shares.
The principal rights of the Series B Shares were as follows:
Dividend Rights
Prior to conversion into common shares, holders of Series B Shares were entitled to receive
dividends at an annual rate of 8% of the original purchase price of $4.11 per share payable only
when, as and if declared by the Board of Directors. The dividends were accruing and cumulative,
and if not declared and paid prior to redemption, were payable upon redemption.
Liquidation Rights
Prior to conversion into common shares , in the event of any liquidation or winding up of the
Company, assets available for distribution to shareholders were to be distributed as follows:
(1) holders of Series B Shares were entitled to receive, in preference to holders of Series A
Shares and common shares, an amount equal to the original purchase price; (2) holders of
Series A Shares were entitled to receive, in preference to holders of common shares, $1.43 per
share; (3) the remaining assets were to be distributed to holders of the Series B Shares on an
as-converted basis and common shares.
Voting Rights
Prior to conversion into common shares, holders of Series B Shares were entitled to vote,
together with the holders of Series A Shares and common shares, as a single class on the
following basis: (i) common shareholders had one vote per share; and (ii) holders of Series A and
Series B Shares had the number of votes equal to the number of common shares into which their
shares of Preferred stock were convertible. In addition, as long as at least 20% of the Series B
Shares were outstanding, a majority of the Series B shares was required to approve any plans to:
(1) amend the Memorandum of Association or Bye-Laws; (2) authorize or issue any new class of
securities; (3) create or authorize any additional shares of Series A or Series B; (4) make an
acquisition for more than $1,000 or borrow amounts exceeding $2,500; (5) change the size of the
Board of Directors; (6) increase the number of shares reserved for issuance to employees,
directors or contractors unless approved by the Board of Directors; or (7) change the principal
business of the Company.
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Form 10-K