WeightWatchers 2015 Annual Report Download - page 106

WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
injury of the Company. The allegations in the letters relate to those contained in the ongoing federal securities
litigation described above. In response to the letters, pursuant to Virginia law, the Board of Directors has created
a special committee to review and evaluate the facts and circumstances surrounding the claims made in the
demand letters. The special committee has decided to undertake its review after receiving a decision on
defendants’ motion to dismiss in the federal securities litigation given the overlapping issues.
On August 11, 2015, a purported shareholder derivative lawsuit was filed in New York State Court in
Westchester County. The complaint alleges that certain Company directors and executive officers breached their
various fiduciary duties by knowingly causing the Company to repurchase shares from Artal and from certain
executive officers at artificially inflated prices in connection with a tender offer made to all shareholders. The
complaint seeks an order for the defendants to disgorge all profits made from selling Company stock between
March 16, 2012 and April 9, 2012, as well as an award for damages sustained by the alleged breaches of
fiduciary duty. The parties sought to stay this suit pending a decision on defendants’ motion to dismiss in the
federal securities litigation asserting similar allegations. The Court denied the stay, but at the preliminary court
conference on December 17, 2015, the Court granted an adjournment and scheduled the next court conference for
April 29, 2016. The Company believes that the suit is without merit and intends to defend it vigorously.
Raymond Roberts v. Weight Watchers International, Inc.
On January 7, 2016, an OnlinePlus member filed a putative class action complaint against the Company in the
Supreme Court of New York, New York County, asserting class claims for breach of contract and violations of the
New York General Business Law. On February 5, 2016, the Company removed the case to the United States
District Court, Sothern District of New York. Specifically, the plaintiff is asserting that, as a result of the temporary
glitches in the Company’s website and app in November and December 2015, the Company has: (1) breached its
Subscription Agreement with its OnlinePlus members; and (2) engaged in misleading advertising and deceptive acts
and practices in violation of Sections 349 and 350 of the New York General Business Law. The plaintiff is seeking
unspecified actual, punitive and statutory damages, as well as his attorneys’ fees and costs incurred in connection
with this action. The Company believes that the suit is without merit and intends to defend it vigorously.
Other Litigation Matters
Due to the nature of the Company’s activities, it is also, at times, subject to pending and threatened legal
actions that arise out of the ordinary course of business. In the opinion of management, the disposition of any
such matters is not expected to have a material effect on the Company’s results of operations, financial condition
or cash flows.
Commitments
Minimum commitments under non-cancelable obligations, primarily for office and rental facilities operating
leases at January 2, 2016, consist of the following:
2016 ............................................................ $ 46,086
2017 ............................................................ 30,650
2018 ............................................................ 20,214
2019 ............................................................ 15,098
2020 ............................................................ 12,093
2021 and thereafter ................................................. 95,437
Total ........................................................ $219,578
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