WeightWatchers 2006 Annual Report Download - page 56

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International is required to pay a commitment fee to the lenders under the WWI Revolver with respect to the
unused commitments at a rate equal to 0.175% per year.
The WWI Credit Facility contains customary covenants including covenants that, in certain circumstances,
restrict Weight Watchers International’s ability to incur additional indebtedness, pay dividends on and redeem
capital stock, make other restricted payments, including investments, sell its assets and enter into consolidations,
mergers and transfers of all or substantially all of its assets. The WWI Credit Facility also requires Weight
Watchers International to maintain specified financial ratios and satisfy financial condition tests. At
December 30, 2006, WWI complied with all of the required financial ratios and also met all of the financial
condition tests and is expected to continue to do so. The WWI Credit Facility contains customary events of
default. Upon the occurrence of an event of default under the WWI Credit Facility, the lenders thereunder may
cease making loans and declare amounts outstanding to be immediately due and payable. The WWI Credit
Facility is guaranteed by certain of our existing and future domestic subsidiaries. Substantially all the assets of
Weight Watchers International collateralize the WWI Credit Facility.
The WW.com First Lien Term Loan bore interest at a rate equal to LIBOR plus 2.25% per annum, or, at
WeightWatchers.com’s option, the alternate base rate, as defined, plus 1.25% per annum. The WW.com Second
Lien Term Loan bore interest at a rate equal to LIBOR plus 4.75% per annum or, at WeightWatchers.com’s
option, the alternate base rate, as defined, plus 3.75% per annum.
Loans outstanding under the WW.com Credit Facilities (i) were required to be prepaid with certain
percentages of excess cash flow and net cash proceeds of asset sales, issuances, offerings or placements of debt
obligations of WeightWatchers.com and issuances of equity securities of WeightWatchers.com; and (ii) were
permitted to be voluntarily prepaid at any time in whole or in part without premium or penalty, with certain
exceptions depending on the date of payment. The rights and priorities of the lenders under the WW.com Credit
Facilities were governed by an intercreditor agreement.
The WW.com Credit Facilities contained customary covenants, including affirmative and negative
covenants that, in certain circumstances, restricted WeightWatchers.com’s ability to incur additional
indebtedness, pay dividends on and redeem capital stock, make other restricted payments, including investments,
sell WeightWatchers.com assets and enter into consolidations, mergers and transfer of all or substantially all of
WeightWatchers.com’s assets. The WW.com Credit Facilities also required WeightWatchers.com to maintain
specified financial ratios and satisfy financial condition tests, which became more restrictive over time. At
December 30, 2006, WeightWatchers.com had complied with all of the required financial ratios and also had met
all of the financial condition tests. The WW.com Credit Facilities contained customary events of default. Upon
the occurrence of an event of default under the WW.com Credit Facilities, the lenders thereunder could have
ceased making loans and declared amounts outstanding to be immediately due and payable. Each of WW.com’s
existing and future domestic subsidiaries had guaranteed the WW.com Credit Facilities, which facilities were
secured by substantially all the assets of WeightWatchers.com and these subsidiaries. Weight Watchers
International did not guarantee the WW.com Credit Facilities.
As discussed above, the WW.com Credit Facilities were fully repaid in January 2007.
On June 16, 2006, Standard & Poor’s confirmed its “BB” rating for WeightWatchers International’s
corporate credit and assigned a “BB+” rating to the WWI Credit Facility. On September 22, 2006, Moody’s
assigned a “Ba1” rating to WeightWatchers International’s corporate credit and the WWI Credit Facility.
Dividends
On February 16, 2006, our Board of Directors authorized the initiation of a quarterly cash dividend of
$0.175 per share of our common stock, which corresponds to an annual dividend rate of $0.70 per share. The
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