WeightWatchers 2005 Annual Report Download - page 72

We agreed with Artal that both we and Artal have the right to:
• engage in the same or similar business activities as the other party;
• do business with any customer or client of the other party; and
• employ or engage any officer or employee of the other party.
Neither Artal nor we, nor our respective related parties, will be liable to each other as a result of
engaging in any of these activities.
Under the corporate agreement, if one of our officers or directors who also serves as an officer,
director or advisor of Artal becomes aware of a potential transaction related primarily to the group
education-based weight-loss business or an internet diet business, as defined, that may represent a
corporate opportunity for both Artal and us, the officer, director or advisor has no duty to present that
opportunity to Artal, and we will have the sole right to pursue the transaction if our Board of Directors
so determines. If one of our officers or directors who also serves as an officer, director or advisor of
Artal becomes aware of any other potential transaction that may represent a corporate opportunity for
both Artal and us, the officer or director will have a duty to present that opportunity to Artal, and
Artal will have the sole right to pursue the transaction if Artal so determines. If one of our officers or
directors who does not serve as an officer, director or advisor of Artal becomes aware of a potential
transaction that may represent a corporate opportunity for both Artal and us, neither the officer nor
the director nor we have a duty to present that opportunity to Artal, and we may pursue the
transaction if our Board of Directors so determines. If any officer, director or advisor of Artal who
does not serve as an officer or director of us becomes aware of a potential transaction that may
represent a corporate opportunity for both Artal and us, neither the officer, director, advisor, nor Artal
has a duty to present that opportunity to us and Artal may pursue the transaction if it so determines.
If Artal transfers, sells or otherwise disposes of our then outstanding voting stock, the transferee
will generally succeed to the same rights that Artal has under this agreement by virtue of its ownership
of our voting stock, subject to Artal’s option not to transfer those rights.
WeightWatchers.com Intellectual Property License
In September 2001, Weight Watchers International entered into an amended and restated
intellectual property license agreement with WeightWatchers.com that governs WeightWatchers.com’s
right to use our trademarks and materials related to the Weight Watchers program.
The amended and restated license agreement grants WeightWatchers.com the exclusive right to
(1) use any of our trademarks, service marks, logos, brand names and other business identifiers as part
of a domain name for a website on the Internet; (2) use any of the domain names we own; (3) use any
of our trademarks on the Internet and any other similar or related forms of interactive digital
transmission that now exists or may be developed later (provided that we and our affiliates, franchisees,
and licensees other than WeightWatchers.com can continue using the trademarks in connection with
online advertising and promotion of activities conducted offline); and (4) use any materials related to
the Weight Watchers program, including any text, artwork and photographs, and advertising, marketing
and promotional materials on the Internet. The license agreement also grants WeightWatchers.com a
non-exclusive right to (1) use any of our trademarks to advertise any approved activities that relate to
its online weight-loss business; and (2) create derivative works. All rights granted to
WeightWatchers.com must be used solely in connection with the conduct of its online weight-loss
business.
Beginning in January 2002, WeightWatchers.com began paying Weight Watchers International a
royalty of 10% of the net revenues it earns through its online activities. For fiscal 2005, prior to the
62