Vistaprint 2012 Annual Report Download - page 33

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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 November 2011, our shareholders granted our
supervisory board and management board the authority to issue ordinary 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 November 2016. Although we plan to seek re-approval
from our shareholders from time to time in the future, we may not succeed in obtaining future re-approvals. 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, under Dutch law class action lawsuits and derivative lawsuits are generally not
available, 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.
Because of our corporate structure, our shareholders may find it difficult to enforce claims based on United
States federal or state laws, including securities liabilities, against us or our management team.
We are incorporated under the laws of the Netherlands, and the vast majority of our assets are located
outside of the United States. In addition, some of our officers and management board members reside outside of
the United States. In most cases, a final judgment for the payment of money rendered by a U.S. federal or state
court would not be directly enforceable in the Netherlands. The party in whose favor such final judgment is rendered
would need to bring a new suit in the Netherlands and petition the Dutch court to enforce the final judgment
rendered in the United States, and there can be no assurance that a Dutch court would impose civil liability on us or
our management team in such a suit or in any other lawsuit predicated solely upon U.S. securities laws. In addition,
because most of our assets are located outside of the United States, it could be difficult for investors to place a lien
on our assets in connection with a claim of liability under U.S. laws. As a result, it may be difficult for investors to
effect service of process within the United States upon us or our management team, enforce U.S. court judgments
obtained against us or our management team outside of the U.S., or enforce rights predicated upon the U.S.
securities laws.
Form 10-K