Vistaprint 2009 Annual Report Download - page 46

We believe that we were not a PFIC for the tax year ended June 30, 2009 and we expect that we
will not become a PFIC in the foreseeable future. However, whether we are treated as a PFIC depends
on questions of fact as to our assets and revenues that can only be determined at the end of each tax
year. Accordingly, we cannot be certain that we will not be treated as a PFIC for our current tax year or
for any subsequent year.
If a United States shareholder acquires 10% or more of our ordinary shares, it may be subject to
increased United States taxation under the “controlled foreign corporation” rules.
Each “10% U.S. Shareholder” of a non-U.S. corporation that is a “controlled foreign corporation,”
or CFC, for an uninterrupted period of 30 days or more during a taxable year, and that owns shares in
the CFC directly or indirectly through non-U.S. entities on the last day of the CFC’s taxable year, must
include in its gross income for United States federal income tax purposes its pro rata share of the
CFC’s “subpart F income,” even if the subpart F income is not distributed. A non-U.S. corporation is
considered a CFC if one or more 10% U.S. Shareholders together own more than 50% of the total
combined voting power of all classes of voting shares of the non-U.S. corporation or more than 50% of
the total value of all shares of the corporation on any day during the taxable year of the corporation. A
10% U.S. Shareholder is a U.S. person, as defined in the Internal Revenue Code, who owns at least
10% of the total combined voting power of all classes of shares entitled to vote of the non-U.S.
corporation. For purposes of determining whether a corporation is a CFC, and therefore whether the
more-than-50% and 10% ownership tests have been satisfied, shares owned include shares owned
directly or indirectly through non-U.S. entities and shares considered owned under constructive
ownership rules. The attribution rules are complicated and depend on the particular facts relating to
each investor. For taxable years in which we are a CFC for an uninterrupted period of 30 days or more,
each of our 10% U.S. Shareholders will be required to include in its gross income for United States
federal income tax purposes its pro rata share of our subpart F income, even if the subpart F income is
not distributed to enable such taxpayer to satisfy this tax liability. Based upon our existing share
ownership, we do not believe we are a CFC.
Provisions of our Articles of Association, the Articles of Association of a foundation that we
have established, Dutch law and an option we have granted to the foundation may make it
difficult to replace or remove management and may inhibit or delay a change of control,
including a takeover attempt that might result in a premium over the market price for our
ordinary shares, and dilute your voting power.
Our Articles of Association, or Articles, provide that our shareholders may only suspend or
dismiss the members of our management board and supervisory board against their wishes with a vote
of two-thirds of the votes cast if such votes represent more than 50% of the outstanding ordinary
shares unless the proposal was made by a meeting of the supervisory board, in which case a simple
majority is sufficient. The Articles also provide that if the members of our supervisory board and our
management board have been nominated by a meeting of the supervisory board, shareholders may
only overrule this nomination with a vote of two-thirds of the votes cast if such votes represent more
than 50% of the outstanding ordinary shares. As a result, there may be circumstances in which
shareholders may not be able to remove members of our management board or supervisory board
even if holders of a majority of our ordinary shares favoring doing so.
Our Articles provide for the possible issuance of preferred shares. We are establishing a
foundation, the Stichting Continuïteit Vistaprint, which we refer to as the Foundation, whose board will
consist of three members, at least two of whom are independent of Vistaprint N.V. We will grant the
Foundation a call option pursuant to which the Foundation may acquire a number of preferred shares
equal to the same number of ordinary shares then outstanding. The objective of the Foundation is to
serve the interests of Vistaprint N.V. In carrying out this objective, the Foundation may acquire, own
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