WeightWatchers 2012 Annual Report Download - page 106

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WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
The Company recognizes interest and penalties related to unrecognized tax benefits in income tax expense.
The Company had $3,405 and $2,582 of accrued interest and penalties at December 29, 2012 and December 31,
2011, respectively. The Company recognized $823, $(256) and $780 in interest and penalties during the fiscal
years ended December 29, 2012, December 31, 2011and January 1, 2011, respectively.
The Company or one of its subsidiaries files income tax returns in the US federal jurisdiction, and various
state and foreign jurisdictions. At December 29, 2012, with few exceptions, the Company was no longer subject
to US federal, state or local income tax examinations by tax authorities for years prior to 2009, or non-US
income tax examinations by tax authorities for years prior to 2004.
11. Employee Benefit Plans
The Company sponsors the Second Amended and Restated Weight Watchers Savings Plan (the “Savings
Plan”) for salaried and certain hourly US employees of the Company. The Savings Plan is a defined contribution
plan that provides for employer matching contributions of 100% of the employee’s tax deferred contributions up
to 3% of an employee’s eligible compensation. Expense related to these contributions for the fiscal years ended
December 29, 2012, December 31, 2011 and January 1, 2011 was $2,730, $2,466 and $1,681, respectively.
During fiscal 2011, 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 makes profit sharing contributions for all full-time salaried
US employees who are eligible to participate in the Savings Plan (except for certain management personnel). The
profit sharing contribution is 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 Savings Plan also has a
discretionary supplemental profit sharing 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 December 29, 2012, December 31, 2011 and January 1, 2011 was $2,779,
$3,704 and $3,157, respectively.
For certain US management personnel, the Company sponsors the Second 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 annually 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
December 29, 2012, December 31, 2011 and January 1, 2011 was $2,954, $2,369 and $1,719, respectively.
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