WeightWatchers 2011 Annual Report Download - page 75

bore interest at a rate equal to LIBOR plus 2.25% per annum; and the Revolver II bore interest at a rate equal to
LIBOR plus 2.25% per annum. In addition to paying interest on outstanding principal under the WWI Credit
Facility, at the end of fiscal 2011, we were required to pay a commitment fee to the lenders under the Revolver II
with respect to the unused commitments at a rate equal to 0.4375% per annum.
The WWI Credit Facility contains customary covenants including covenants that, in certain circumstances,
restrict our ability to incur additional indebtedness, pay dividends on and redeem capital stock, make other
payments, including investments, sell our assets and enter into consolidations, mergers and transfers of all or
substantially all of our assets. The WWI Credit Facility also requires us to maintain specified financial ratios and
satisfy certain financial condition tests. At the end of fiscal 2010, we were in compliance with all of the required
financial ratios and also met all of the financial condition tests and expect to continue to do so for the foreseeable
future. 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
subsidiaries. Substantially all of our assets collateralize the WWI Credit Facility.
We amended the WWI Credit Facility on June 26, 2009 to allow us to make loan modification offers to all
lenders of any tranche of term loans or revolving loans to extend the maturity date of such loans and/or reduce or
eliminate the scheduled amortization. Any such loan modifications would be effective only with respect to such
tranche of term loans or revolving loans and only with respect to those lenders that accept our offer. Loan
modification offers may be accompanied by increased pricing and/or fees payable to accepting lenders. This
amendment also provides for up to an additional $200.0 million of incremental term loan financing through the
creation of a new tranche of term loans, provided that the aggregate principal amount of such new term loans
cannot exceed the amount then outstanding under our existing revolving credit facility. In addition, the proceeds
from such new tranche of term loans must be used solely to repay certain outstanding revolving loans and
permanently reduce the commitments of certain revolving lenders. In connection with this amendment, we
incurred fees of approximately $4.1 million during fiscal 2009.
On April 8, 2010, we amended the WWI Credit Facility pursuant to a loan modification offer to all lenders
of all tranches of term loans and revolving loans to, among other things, extend the maturity date of such loans.
In connection with this amendment, certain lenders converted a total of $454.5 million of their outstanding term
loans under the Term A Loan ($151.8 million) and Additional Term A Loan ($302.7 million) into term loans
under the new Term C Loan due 2015 (or 2013, upon the occurrence of certain events described in the WWI
Credit Facility agreement), and a total of $241.9 million of their outstanding term loans under the Term B Loan
into term loans under the new Term D Loan due 2016. In addition, certain lenders converted a total of $332.6
million of their outstanding Revolver I commitments into commitments under the new Revolver II which
terminates in 2014 (or 2013, upon the occurrence of certain events described in the WWI Credit Facility
agreement), including a proportionate amount of their outstanding Revolver I loans into Revolver II loans.
Following these conversions of a total of $1,029.0 million of loans and commitments, at April 8, 2010, we had
the same amount of debt outstanding under the WWI Credit Facility and amount of availability under the
Revolver as we had immediately prior to such conversions. In connection, with this loan modification offer, we
incurred fees of approximately $11.5 million during the second quarter of fiscal 2010.
We expect to fund the purchase of shares under the Pending Tender Offer and the Pending Share
Repurchase through new borrowings under an amendment and extension to the WWI Credit Facility which is
anticipated to include new term loans in an aggregate amount of $1.5 billion. We also expect to seek extensions
to the maturities in the existing WWI Credit Facility.
Dividends
We have issued a quarterly cash dividend of $0.175 per share of our common stock every quarter for the
past several fiscal years. Any decision to declare and pay dividends in the future will be made at the discretion of
our Board of Directors, after taking into account our financial results, capital requirements and other factors it
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