WeightWatchers 2010 Annual Report Download - page 37

Download and view the complete annual report

Please find page 37 of the 2010 WeightWatchers annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 128

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128

California, or the Federal Court. In July 2010, the plaintiff filed an amended complaint adding two additiona
l
named plaintiffs for this matter. In October 2010, the parties engaged in mediation and reached an agreement in
p
rinciple to settle this matter in its entirety and, accordingly, we have recorded a reserve with respect to this
matter of
$
6.5 million. The settlement is de
p
endent u
p
on final a
pp
roval of the Federal Court. The
p
artie
s
submitted the proposed settlement to the Federal Court in December 2010. In January 2011, the parties received
the Federal Court’s preliminary approval of the settlement. A hearing seeking final approval of the Federal Court
o
f the settlement is scheduled for spring 2011
.
Hanson-Kelly & Jackson v. Weight Watchers North America, Inc. and Weight Watchers International, Inc.
I
n January 2010, a lawsuit was filed in the U.S. District Court for the Middle District of North Carolina b
y
two leaders alleging violations of certain federal and North Carolina wage and hour laws on behalf of
themselves, and, if approved by the court, other leaders and receptionists in North Carolina since January 2
5,
2007. In this matter, the plaintiffs are seeking unpaid wages and certain other damages. In April 2010, we filed a
Motion to Dismiss the claim for unpaid wages under the North Carolina wage and hour laws. The court has no
t
r
uled yet on this Motion. Although we disagree with the allegations that we have violated federal and Nort
h
Carolina wage and hour laws and we believe we have valid defenses with respect to this matter, litigation i
s
inherently unpredictable. At this time, it is not possible to determine the outcome of, or estimate the liabilit
y
r
elated to, this action and we have not made any provision for losses in connection with it.
Other Litigation Matter
s
Due to the nature of our activities, we are also, at times, subject to pending and threatened legal actions that
arise out of the ordinary course of business. In the opinion of management, based in part upon advice of lega
l
counsel, the disposition of any such matters is not expected to have a material effect on our results of operations,
f
inancial condition or cash flows. However, the results of legal actions cannot be predicted with certainty.
T
herefore, it is possible that our results of operations, financial condition or cash flows could be materiall
y
adversely affected in any particular period by the unfavorable resolutions of one or more legal actions
.
I
tem
4
. Removed and Reserved
21