WeightWatchers 2002 Annual Report Download - page 77

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WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
12. Related Party Transactions (Continued)
Total costs charged to the Company by Heinz for other miscellaneous services were $93 for the
fiscal year ended April 29, 2000 and were recorded in selling, general and administrative expenses in
the accompanying statement of operations.
The Company maintained a cash management arrangement with Heinz. On a daily basis, all
available domestic cash was deposited and disbursements were withdrawn. Heinz charged the Company
interest on the average daily balance maintained in an intercompany account. Net interest expense
related to this arrangement included in the statements of operations was $1,700 for the fiscal year
ended April 29, 2000. The interest rate charged to or received by the Company was 5.5% in the fiscal
year ended April 29, 2000.
13. Employee Benefit Plans
Weight Watchers Sponsored Plans:
Effective September 29, 1999, the net assets of the Heinz sponsored employee savings plan were
transferred to the Weight Watchers sponsored plan upon execution of the Transaction. The Company
sponsors the Weight Watchers Savings Plan (the ‘‘Savings Plan’’) for salaried and hourly employees.
The Savings Plan is a defined contribution plan which provides for employer matching contributions up
to 100% of the first 3% of an employee’s eligible compensation. The Savings Plan also permits
employees to contribute between 1% and 13% of eligible compensation on a pre-tax basis. Company
contributions for the fiscal years ended December 28, 2002 and December 29, 2001, the eight months
ended December 30, 2000, and the fiscal year ended April 29, 2000 were $1,033, $823, $433 and $316,
respectively.
The Company sponsors the Weight Watchers Profit Sharing Plan (the ‘‘Profit Sharing Plan’’) for all
full-time salaried employees who are eligible to participate in the Savings Plan (except for certain
senior management personnel). The Profit Sharing Plan provides for a guaranteed monthly employer
contribution on behalf of each participant based on the participant’s age and a percentage of the
participant’s eligible compensation. The Profit Sharing Plan has a supplemental employer contribution
component, based on the Company’s achievement of certain annual performance targets, which are
determined annually by the Company’s board of directors. The Company also reserves the right to
make additional discretionary contributions to the Profit Sharing Plan.
For certain senior management personnel, the Company sponsors the Weight Watchers Executive
Profit Sharing Plan. Under the Internal Revenue Service (‘‘IRS’’) definition, this plan is considered a
Nonqualified Deferred Compensation Plan. There is a promise of payment by the Company made on
the employees’ behalf instead of an individual account with a cash balance. The account is valued at
the end of each fiscal month, based on an annualized interest rate of prime plus 2%, with an
annualized cap of 15%.
During fiscal 2002, the Company received a favorable determination letter from the IRS that
qualifies the Company’s Savings Plan under Section 401(a) of the IRS Code.
F-28