WeightWatchers 2009 Annual Report Download - page 94

WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
The Company recognizes interest and penalties related to unrecognized tax benefits in income tax expense.
The Company had $2,059 and $1,655 of accrued interest and penalties at January 2, 2010 and January 3, 2009,
respectively. The Company recognized $403, $431 and $516 in interest and penalties during the fiscal years
ended January 2, 2010, January 3, 2009 and December 29, 2007, respectively.
The Company or one of its subsidiaries files income tax returns in the U.S. federal jurisdiction, and various
state and foreign jurisdictions. At January 2, 2010, with few exceptions, the Company was no longer subject to
U.S. federal, state or local income tax examinations by tax authorities for years prior to 2004, or non-U.S. income
tax examinations by tax authorities for years prior to 2002.
12. Employee Benefit Plans
The Company sponsors the Amended and Restated Weight Watchers Savings Plan (the “Savings Plan”) for
salaried and hourly U.S. employees of the Company. The Savings Plan is a defined contribution plan that
provides for employer matching contributions up to 100% of the first 3% of an employee’s eligible
compensation. Expense related to these contributions for the fiscal years ended January 2, 2010, January 3, 2009
and December 29, 2007 was $2,486, $1,763 and $2,451, respectively.
During fiscal 2002, the Company received a favorable determination letter from the IRS that qualifies the
Savings Plan under Section 401(a) of the Internal Revenue Code.
Pursuant to the Savings Plan, the Company also sponsors a profit sharing plan (the “Profit Sharing Plan”)
for all full-time salaried U.S. 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 discretionary supplemental employer contribution component that is
determined annually by the Compensation and Benefits Committee of the Company’s Board of Directors.
Expense related to these contributions for the fiscal years ended January 2, 2010, January 3, 2009
and December 29, 2007 was $3,361, $3,867 and $2,941, respectively.
For certain U.S. senior management personnel, the Company sponsors the Amended and Restated Weight
Watchers Executive Profit Sharing Plan (“EPSP”). Under the IRS definition, the EPSP 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 EPSP provides for a guaranteed
employer contribution on behalf of each participant based on the participant’s age and a percentage of the
participant’s eligible compensation. The EPSP has a discretionary supplemental employer contribution
component that is determined by the Compensation and Benefits Committee of the Company’s Board of
Directors. 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%. Expense related to this commitment for the fiscal years ended
January 2, 2010, January 3, 2009 and December 29, 2007 was $1,620, $1,026 and $1,868, respectively.
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