Item 2.05. Costs Associated with Exit or Disposal Activities.
On April 19, 2022, WW International, Inc. (the "Company") committed to a
restructuring plan consisting of (i) an organizational realignment to simplify
the Company's corporate structure and reduce associated costs (the
"Organizational Realignment") and (ii) a continued rationalization of its real
estate portfolio resulting in the termination of certain of the Company's
operating leases (together with the Organizational Realignment, the "2022
Restructuring Plan"). In connection with the 2022 Restructuring Plan, the
Company anticipates recording restructuring charges which it currently estimates
will range between $18.0 million to $22.0 million in the aggregate. The
Organizational Realignment will result in the elimination of certain positions
and termination of employment for certain employees worldwide. In connection
with its Organizational Realignment, the Company anticipates recording charges
of approximately $12.0 million to $16.0 million in the aggregate with respect to
employee termination benefit costs (which are expected to consist of general and
administrative expenses), the majority of which will be recorded in the second
quarter of fiscal 2022. In connection with the termination of certain of its
operating leases, the Company anticipates recording charges of approximately
$6.0 million in the aggregate consisting of lease termination and other related
costs, the majority of which will be recorded in the second quarter of fiscal
2022. Substantially all of these costs arising from the 2022 Restructuring Plan
are expected to result in cash expenditures related to separation payments,
other employee termination expenses, and lease termination payments. The Company
expects the 2022 Restructuring Plan to be fully executed by the end of fiscal
2023.
Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On April 19, 2022, in connection with the Company's Organizational Realignment,
the Compensation and Benefits Committee of the Board of Directors of the Company
(the "Committee") approved the elimination of the position of Chief Operating
Officer and the departure from the Company of Nicholas P. Hotchkin, Chief
Operating Officer, on April 22, 2022. In connection with Mr. Hotchkin's
departure from the Company, he will receive the following: (i) a lump-sum cash
payment of $905,626 (equal to 15 months of his current base salary) and
(ii) continued employer contributions for health coverage under
Company-sponsored health plans during the 15-month period following his
departure, subject to the execution and non-revocation of a general release of
claims in favor of the Company and its affiliates and standard non-competition
and non-solicitation provisions. All of Mr. Hotchkin's unvested equity awards as
of April 22, 2022 will be forfeited. He will have the right to exercise any of
his vested stock options within 90 days of his departure date.
On April 19, 2022, in connection with the Company's Organizational Realignment,
the Committee also approved the following modifications to the compensation
arrangements for the specified named executive officer in connection with her or
his redefined role within the Company, and, in the case of Mr. Lysaght, a change
in title as specified below:
• Amy O'Keefe, Chief Financial Officer of the Company: (i) a base salary
increase, bringing her new base salary to $575,000 per annum effective
April 22, 2022, (ii) an increase in her annual, performance-based cash
bonus target percentage to 85% of her base salary (based solely on the
Company's overall performance) effective with respect to the Company's
fiscal 2022 annual cash bonus and (iii) an increase in her target
aggregate annual equity award grant amount value to 175% of her base
salary under the Company's annual, long-term equity incentive
compensation program commencing with her fiscal 2022 annual award, as
determined in the sole discretion of the Committee.
• Michael Lysaght, Chief Digital Officer of the Company, who assumed the
role of Chief Technology Officer of the Company on April 22, 2022:
(i) a base salary increase, bringing his new base salary to $550,000
per annum effective April 22, 2022, (ii) an increase in his annual,
performance-based cash bonus target percentage to 65% of his base
salary effective with respect to the Company's fiscal 2022 annual cash
bonus and (iii) an increase in his target aggregate annual equity
award grant amount value to 175% of his base salary under the
Company's annual, long-term equity incentive compensation program
commencing with his fiscal 2022 annual award, as determined in the
sole discretion of the Committee.
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