WeightWatchers 2012 Annual Report Download - page 35

We are a “controlled company” within the meaning of the New York Stock Exchange rules and, as a
result, qualify for exemptions from certain corporate governance requirements.
Artal controls a majority of the voting power of our outstanding common stock. Under the New York Stock
Exchange, or the NYSE, rules, a listed company of which more than 50% of the voting power for the election of
directors is held by another person or group of persons acting together is a “controlled company” and such a
company may elect not to comply with certain NYSE corporate governance requirements, including (1) the
requirement that a majority of the Board of Directors consist of independent directors, (2) the requirement that
the nominating and corporate governance committee be composed entirely of independent directors with a
written charter addressing the committee’s purpose and responsibilities, (3) the requirement that the
compensation committee be composed entirely of independent directors with a written charter addressing the
committee’s purpose and responsibilities, (4) that the compensation committee be required to consider certain
independence factors when engaging compensation consultants, legal counsel and other committee advisors and
(5) the requirement for an annual performance evaluation of the nominating and corporate governance and
compensation committees. We have elected to be treated as a “controlled company.” Accordingly, our
shareholders may not have the same protections afforded to shareholders of companies that are subject to all of
the NYSE corporate governance requirements.
Our articles of incorporation and bylaws and Virginia corporate law contain provisions that may
discourage a takeover attempt.
Provisions contained in our articles of incorporation and bylaws and the laws of Virginia, the state in which
we are incorporated, could make it more difficult for a third party to acquire us, even if doing so might be
beneficial to our shareholders. Provisions of our articles of incorporation and bylaws impose various procedural
and other requirements, which could make it more difficult for shareholders to effect certain corporate actions.
For example, our articles of incorporation authorize our Board of Directors to determine the rights, preferences,
privileges and restrictions of unissued series of preferred stock, without any vote or action by our shareholders.
Thus, our Board of Directors can authorize and issue shares of preferred stock with voting or conversion rights
that could adversely affect the voting or other rights of holders of our common stock. These rights may have the
effect of delaying or deterring a change of control of our company. In addition, a change of control of our
company may be delayed or deterred as a result of our having three classes of directors. These provisions could
limit the price that certain investors might be willing to pay in the future for shares of our common stock.
Item 1B. Unresolved Staff Comments
None.
Item 2. Properties
We are currently headquartered in New York, New York in leased office space with our US back-office and
customer support operations located in leased office spaces elsewhere in the United States. Each of our foreign
country operations generally also has leased office space to support its operations. Our WWI reporting segment
typically holds its meetings in third-party locations (usually meeting rooms in well-located civic or other
community centers) or space leased in retail centers.
Our website, including our subscription products, is hosted on hardware and software co-located at a third-
party facility in New York. We also maintain a disaster recovery site with hardware and software co-located at a
third-party facility in Arizona.
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