Vistaprint 2011 Annual Report Download - page 35

Our Articles of Association, Dutch law and the independent foundation, Stichting Continuïteit
Vistaprint, may make it difficult to replace or remove management, may inhibit or delay a
change of control or may dilute your voting power.
Our Articles of Association, or Articles, as governed by Dutch law limit our shareholders’ ability
to suspend or dismiss the members of our management board and supervisory board or to overrule
our supervisory board’s nominees to our management board and supervisory board by requiring a
vote of two thirds of the votes cast representing more than 50% of the outstanding ordinary shares to
do so under most circumstances. 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 favor doing so.
In addition, we have established an independent foundation, Stichting Continuïteit Vistaprint,or
the “Foundation,” to safeguard the interests of Vistaprint N.V. and its stakeholders, which include but
are not limited to our shareholders, and to assist in maintaining Vistaprint’s continuity and
independence. To this end, we have granted 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, which is designed to provide a protective measure against unsolicited take-over bids
for Vistaprint and other hostile threats. If the Foundation were to exercise the call option, it may
prevent a change of control or delay or prevent a takeover attempt, including a takeover attempt that
might result in a premium over the market price for our ordinary shares. Exercise of the preferred
share option would also effectively dilute the voting power of our outstanding ordinary shares by one
half.
We have limited flexibility with respect to certain aspects of capital management.
Dutch law requires shareholder approval for the issuance of shares and grants preemptive
rights to existing shareholders to subscribe for new issuances of shares. In August 2009, our
shareholders granted our supervisory board and management board the authority to issue ordinary
shares and preferred shares as the boards determine appropriate, without obtaining specific
shareholder approval for each issuance, and to limit or exclude shareholders’ preemptive rights.
However, this authorization expires in August 2014. Although we intend to seek re-approval from our
shareholders before the 2014 expiration date, we may not succeed in obtaining this re-approval. In
addition, subject to specified exceptions, Dutch law requires shareholder approval for many corporate
actions, such as the approval of dividends and authorization to repurchase outstanding shares.
Situations may arise where the flexibility to issue shares, pay dividends, repurchase shares or take
other corporate actions without a shareholder vote would be beneficial to us, but is not available under
Dutch law.
Because of our corporate structure, our shareholders may find it difficult to pursue legal
remedies against the members of our supervisory board or management board.
Our Articles and our internal corporate affairs are governed by Dutch law, and the rights of our
shareholders and the responsibilities of our supervisory board and management board are different
from those established under United States laws. For example, class action lawsuits and derivative
lawsuits are generally not available under Dutch law, and our supervisory board and management
board are responsible for acting in the best interests of the company, its business and all of its
stakeholders generally (including employees, customers and creditors), not just shareholders.
Furthermore, we are obligated to indemnify the members of our supervisory board and management
board against liabilities for their good faith actions in connection with their service on either board,
subject to various exceptions. As a result, our shareholders may find it more difficult to protect their
interests against actions by members of our supervisory board or management board than they would
if we were a U.S. corporation.
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