WeightWatchers 2015 Annual Report Download - page 10

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Artal Ownership
In September 1999, Artal Luxembourg S.A., or Artal Luxembourg, acquired us from Heinz. Artal
Luxembourg is an indirect subsidiary of Artal Group S.A., or Artal Group, which together with its parents and its
subsidiaries is referred to in this Annual Report on Form 10-K as Artal. Currently, Artal Luxembourg is the
record holder of all our shares owned by Artal.
WeightWatchers.com Acquisition
In July 2005, we acquired control of our licensee and affiliate, WeightWatchers.com, Inc., by increasing our
ownership interest from approximately 20% to approximately 53%. Subsequently, in December 2005,
WeightWatchers.com, Inc. redeemed all shares owned by Artal in it, resulting in our current ownership of 100%
of WeightWatchers.com, Inc.
Winfrey Transaction
On October 18, 2015, we entered into a Strategic Collaboration Agreement with Ms. Winfrey, or the
Strategic Collaboration Agreement, pursuant to which Ms. Winfrey granted us the right to use, subject to her
approval, her name, image, likeness and endorsement for and in connection with the Company and its programs,
products and services (including in advertising, promotion, materials and content), and we granted Ms. Winfrey
the right to use our WEIGHT WATCHERS marks to collaborate with and promote the Company and its
programs, products and services. The Strategic Collaboration Agreement has an initial term of five years, with
additional successive one year renewal terms. During this period, Ms. Winfrey will consult with us and
participate in developing, planning, executing and enhancing the Weight Watchers program and related
initiatives, and provide us with services in her discretion to promote the Company and its programs, products and
services, including in advertisements and promotions, and making personal appearances on our behalf.
Ms. Winfrey will not grant anyone but the Company the right to use her name, image, likeness or endorsement
for or in connection with any other weight loss or weight management programs during the term of the Strategic
Collaboration Agreement, and she will not engage in any other weight loss or weight management business,
program, products, or services during the term of the Strategic Collaboration Agreement and for one year
thereafter.
On that same date, we entered into a Share Purchase Agreement with Ms. Winfrey, or the Winfrey Purchase
Agreement, pursuant to which we issued and sold to Ms. Winfrey an aggregate of 6,362,103 shares of our
common stock for an aggregate cash purchase price of $43,198,679. The purchased shares are subject to certain
transfer restrictions and a right of first offer and right of first refusal held by the Company. Under the Winfrey
Purchase Agreement, Ms. Winfrey has certain demand registration rights and piggyback rights with respect to
these purchased shares. The Winfrey Purchase Agreement also provides Ms. Winfrey with the right to be
nominated as director of the Company for so long as she and certain permitted transferees own at least 3% of our
issued and outstanding common stock.
In consideration of Ms. Winfrey entering into the Strategic Collaboration Agreement and the performance
of her obligations thereunder, on October 18, 2015, we granted Ms. Winfrey a fully vested option to purchase
3,513,468 shares of our common stock, or the Winfrey Option. The term sheet for the Winfrey Option, which
includes the terms and conditions appended thereto, relating to the grant of the Winfrey Option is referred to
herein as the Winfrey Option Agreement. The Winfrey Option is exercisable at a price of $6.97 per share, in
whole or in part, at any time prior to October 18, 2025, subject to earlier termination under certain circumstances,
including if (i) the Strategic Collaboration Agreement expires as a result of Ms. Winfrey’s decision not to renew
the term of such agreement and (ii) a change in control (as defined the Winfrey Option Agreement) of the
Company occurs. The shares issuable upon exercise of the Winfrey Option are subject to certain transfer
restrictions and a right of first offer and right of first refusal held by the Company.
7