As filed with the Securities and Exchange Commission on September 15, 2021
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER THE
SECURITIES ACT OF 1933
NAUTILUS, INC.
(Exact name of Registrant as specified in its charter)
Washington94-3002667
(State or other jurisdiction of(I.R.S. Employer
incorporation or organization)Identification Number)

17750 SE 6th Way
Vancouver, Washington 98683
(360) 859-2900
(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)

Nautilus, Inc. Inducement Stock Plan for Vay AG Employees
(Full title of the plans)

Alan Chan
Secretary
Nautilus, Inc.
17750 SE 6th Way
Vancouver, Washington 98683
(360) 859-2900
(Name, address, including zip code, and telephone number, including area code, of agent for service)

Please send copies of all communications to:
Jeffrey C. Wolfstone, Esq.

Lane Powell PC
601 S.W. Second Avenue Suite 2100
Portland, Oregon
(503) 778-2100

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definition of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated fileroAccelerated filerx
Non-accelerated fileroSmaller reporting companyo
Emerging growth companyo

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. o

CALCULATION OF REGISTRATION FEE
Title of Each Class of Securities
to be Registered
Amount to be
Registered(1)
Proposed Maximum
Offering Price
Per Share
Proposed Maximum
Aggregate Offering
Price
Amount of
Registration
Fee
Common Stock, no par value per share (Inducement Restricted Stock Unit Awards)
1,150,000(2)
$10.42(3)
$11,983,000.00(4)
$1,306.15
Total
1,150,000$11,983,000.00$1,306.15
(1)Pursuant to Rule 416(a) under the Securities Act of 1933, as amended (the “Securities Act”), this Registration Statement shall also cover any additional shares of the Registrant’s common stock that becomes issuable in respect of the securities identified in the above table by reason of any stock dividend, stock split, recapitalization or other similar transaction effected without the receipt of consideration that increases the number of the Registrant’s outstanding shares of common stock.
(2)Consists of shares issuable under new hire inducement restricted stock unit awards and inducement performance stock unit awards to be granted pursuant to the Nautilus, Inc. Inducement Stock Plan for Vay AG Employees in connection with the Registrant’s acquisition of Vay AG, and in reliance on the employment inducement exception to shareholder approval under Section 303A.08 of the NYSE Listed Company Manual.
(3)Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(c) and Rule 457(h) of the Securities Act. The price per share and aggregate offering price are calculated on the basis of the average of the high and low sales price per share of Common Stock on September 15, 2021, as reported on the New York Stock Exchange.




PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS

The information called for by Part I of Form S-8 is omitted from this Registration Statement in accordance with Rule 428 of the Securities Act of 1933, as amended (the “Securities Act”) and the instructions to Form S-8. In accordance with the rules and regulations of the Securities and Exchange Commission (the “Commission”) and the instructions to Form S-8, such documents are not being filed with the Commission either as part of this Registration Statement or as prospectuses or prospectus supplements pursuant to Rule 424. The documents containing the information specified in Part I of Form S-8 will be delivered to the participants in the equity benefit plans covered by this Registration Statement as specified by Rule 428(b)(1) under the Securities Act.



PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

Item 3. Incorporation of Documents by Reference.

The following documents filed by the Registrant with the Commission pursuant to the Securities Act and the Securities Exchange Act of 1934, as amended (the “Exchange Act”) are incorporated herein by reference:

(a)the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020, which includes audited financial statements for the Registrant’s latest fiscal year, filed with the Commission on February 26, 2021, and the information specifically incorporated by reference therein from the Registrant’s Definitive Proxy Statement on Schedule 14A filed with the Commission on April 29, 2021;

(b)the Registrant’s Current Report on Form 8-K filed with the Commission on March 3, 2021, the Registrant’s Current Report on Form 8-K filed with the Commission on March 18, 2021, the Registrant’s Transition Report on Form 10-QT for the transition period from January 1, 2021 to March 31, 2021, filed with the Commission on May 10, 2021, the Registrant’s Current Report on Form 8-K filed with the Commission on May 20, 2021, the Registrant’s Annual Report for the Nautilus, Inc. 401(k) Savings Plan on Form 11-K filed with the Commission on June 10, 2021, the Registrant’s Current Reports on Form 8-K each filed with the Commission on June 21, 2021, the Registrant’s Current Report on Form 8-K filed with the Commission on August 9, 2021 (solely with respect to Item 5.02), and the Registrant’s Quarterly Report on Form 10-Q filed with the Commission on August 9, 2021; and

(c)the description of the Registrant’s Common Stock which is contained in the Registrant’s registration statement on Form 8-A filed on May 8, 2002 (File No. 001-31321) under the Exchange Act, including any amendment or report filed for the purpose of updating such description.

All documents filed by the Registrant pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the filing of this Registration Statement and prior to the filing of a post-effective amendment which indicates that all securities offered hereby have been sold or which deregisters all securities then remaining unsold, shall be deemed to be incorporated by reference into this Registration Statement and to be a part hereof from the date of filing such documents, except as to specific sections of such documents as set forth therein. Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Registration Statement to the extent that a statement contained in any subsequently filed document which also is deemed to be incorporated by reference herein modifies or supersedes such statement.

Item 4. Description of Securities.

Not applicable.

Item 5. Interests of Named Experts and Counsel.

Not applicable.







Item 6. Indemnification of Directors and Officers.

The Registrant’s amended and restated articles of incorporation contain a provision eliminating the personal liability of its directors for monetary damages to the fullest extent permitted by Washington law. Under Washington law, this provision eliminates the liability of a director for breach of fiduciary duty, but does not eliminate the personal liability of any director for (1) acts or omissions of the director finally adjudged to be intentional misconduct or a knowing violation of law, (2) conduct of the director finally adjudged to be in violation of Section 23B.08.310 (relating to unlawful distributions) of the Washington Business Corporation Act (the WBCA”), or (3) any transaction with respect to which it was finally adjudged that such director personally received a benefit in money, property, or services to which the director is not legally entitled.

Section 23B.08.510 of the WBCA authorizes Washington corporations to indemnify their officers and directors under certain circumstances against expenses and liabilities incurred in legal proceedings involving them as a result of their service as an officer or director. Section 23B.08.560 of the WBCA authorizes a corporation by provision in its articles of incorporation to agree to indemnify a director or officer and obligate itself to advance or reimburse expenses without regard to the provisions of Sections 23B.08.510 through .550; provided, however, that no such indemnity shall be made for or on account of any (1) acts or omissions of the director finally adjudged to be intentional misconduct or a knowing violation of law, (2) conduct of the director finally adjudged to be in violation of Section 23B.08.310 (relating to unlawful distributions) of the WBCA, or (3) any transaction with respect to which it was finally adjudged that such director personally received a benefit in money, property, or services to which the director is not legally entitled. The Registrant’s amended and restated articles of incorporation require indemnification of the Registrant’s officers and directors and advancement of expenses to the fullest extent not prohibited by applicable law.

The Registrant has entered into indemnification agreements with each of its current directors and executive officers to provide these directors and executive officers additional contractual assurances regarding the scope of the indemnification set forth in the Registrant’s amended and restated articles of incorporation and amended and restated bylaws and to provide additional procedural protections. At present, there is no pending litigation or proceeding involving a director, executive officer, or employee of the Registrant regarding which indemnification is sought. The indemnification provisions in the Registrant’s amended and restated articles of incorporation, amended and restated bylaws and the indemnification agreements entered into between the Registrant and each of its directors and executive officers may be sufficiently broad to permit indemnification of the Registrant’s directors and executive officers for liabilities arising under the Securities Act.

The Registrant has directors’ and officers’ liability insurance for its directors and officers.

See also the undertakings set out in response to Item 9 hereof.

Item 7. Exemption From Registration Claimed.

Not applicable.




Item 8. Exhibits.

The following exhibits are filed herewith:

Exhibit
Incorporated by ReferenceFiled
NumberExhibit DescriptionFormFile No.ExhibitFiling DateHerewith
4.1Amended and Restated Articles of Incorporation of the RegistrantDEF 14A001-31321AApril 22, 2008
4.2Amended and Restated Bylaws of the Registrant8-K001-313213.1April 5, 2005
4.3Amendment to Amended and Restated Bylaws of the Registrant8-K001-313213.1January 31, 2007
4.4Form of Registrant’s Common Stock certificateS-8333-2366604.1February 26, 2020
Opinion of Lane Powell PCX
Consent of Lane Powell PC (contained in Exhibit 5.1)X
Consent of KPMG LLP, Independent Registered Public Accounting FirmX
Power of Attorney (included on the signature page to this Registration Statement)X
Form of Inducement Restricted Stock Unit Agreement for Vay AG Employees
X
Form of Inducement Performance Unit Agreement for Vay AG Employees
X
Nautilus, Inc. Inducement Stock Plan for Vay AG EmployeesX




Item 9. Undertakings.

A.The undersigned Registrant hereby undertakes:

(1)To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement:

(i)To include any prospectus required by Section 10(a)(3) of the Securities Act;

(ii)To reflect in the prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement.

Notwithstanding the foregoing, any increase or decrease in the volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective Registration Statement;

(iii)To include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement;

provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) above do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Commission by the Registrant pursuant to Section 13 or Section 15(d) of the Exchange Act that are incorporated by reference in the Registration Statement.

(2)That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(3)To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

B.The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the Registrant’s annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference in the Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

C.Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered hereby, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.




SIGNATURES

Pursuant to the requirements of the Securities Act, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Vancouver, Washington, on this 15th day of September, 2021.
NAUTILUS, INC.
By:/s/ Aina E. Konold
Aina E. Konold
Chief Financial Officer

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and appoints James Barr IV and Aina Konold, and each of them, as his or her true and lawful attorney-in-fact and agent with full power of substitution, for him or her in any and all capacities, to sign any and all amendments (including post-effective amendments) to this Registration Statement on Form S-8, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully for all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his or her substitute, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act, this Registration Statement has been signed by the following persons in the capacities and on the date indicated.
NameTitleDate
/s/ James Barr IVPresident, Chief Executive Officer and Director
(Principal Executive Officer)
September 15, 2021
James Barr IV
/s/ Aina E. KonoldChief Financial Officer
(Principal Financial Officer)
September 15, 2021
Aina E. Konold
/s/ Sarah A. JonesPrincipal Accounting OfficerSeptember 15, 2021
Sarah A. Jones
/s/ M. Carl Johnson IIIDirectorSeptember 15, 2021
M. Carl Johnson III
/s/ Richard A. HornDirectorSeptember 15, 2021
Richard A. Horn
/s/ Patricia M. RossDirectorSeptember 15, 2021
Patricia M. Ross
/s/ Anne G. SaundersDirectorSeptember 15, 2021
Anne G. Saunders
/s/ Marvin G. SiegertDirectorSeptember 15, 2021
Marvin G. Siegert


a51-lpsx8opinion
September 15, 2021 Nautilus, Inc. 17750 S.E. 6th Way Vancouver, Washington 98683 Ladies and Gentlemen: We have acted as counsel to Nautilus, Inc., a Washington corporation (the “Company”) in connection with its Registration Statement on Form S-8 (the “Registration Statement”) to be filed with the Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933, as amended (the “Securities Act”) relating to the proposed offering of up to 1,150,000 shares (“Shares”) of common stock, no par value per share (“Common Stock”) of the Company, all of which are issuable pursuant to the Nautilus, Inc. Inducement Stock Plan for Vay AG Employees (the “Plan”). For purposes of this opinion letter, we have examined (i) the Amended and Restated Articles of Incorporation of the Company dated as of June 3, 2008; (ii) the Amended and Restated Bylaws of the Company dated as of March 30, 2005, as amended on January 29, 2007; (iii) the Registration Statement and the exhibits thereto; (iv) the Plan; and (v) such other corporate records, written consents, certificates and other instruments as in our opinion are necessary or appropriate in connection with expressing the opinions set forth below. In our examination of the aforesaid documents and in rendering the opinion expressed herein, we have, without independent inquiry or investigation, assumed that: (i) all documents submitted to us as originals are authentic and complete; (ii) all documents submitted to us as copies (including .pdfs) conform to authentic, complete originals; (iii) all documents filed as exhibits to the Registration Statement that have not been executed will conform to the forms thereof; (iv) all signatures on all documents that we reviewed are genuine; (v) all natural persons executing documents had and have the legal capacity to do so; (vi) all statements in certificates of public officials and the officers of the Company that we reviewed were and are accurate; and (vii) all representations made by the Company as to matters of fact in the documents that we reviewed were and are accurate. We have also assumed that any certificates or instruments representing the Shares, including the applicable award agreements, when issued, will be executed by the Company and by officers of the Company duly authorized to do so, and that the terms of the restricted stock unit awards and performance unit awards will be consistent with the forms of inducement restricted stock unit award agreement and inducement performance unit award agreement approved by the Board. In rendering our opinion, we have also relied upon a Certificate of Existence dated Exhibit 5.1


 
2 September 9, 2021 issued by the Washington Secretary of State with respect to the Company and representations and certifications made to us by the Company, including without limitation representations in a Secretary’s Certificate addressed to us of even date herewith that the Company has available a sufficient number of authorized shares of Common Stock that are not currently outstanding or reserved for issuance under other outstanding securities or plans of the Company, to enable the Company to issue and delivery all of the Shares as of the date of this letter. This opinion letter is given, and all statements herein are made, in the context of the foregoing. Based upon, subject to and limited by the foregoing, we are of the opinion that following (i) effectiveness of the Registration Statement, (ii) grant of the awards pursuant to the terms of the Plan, (iii) receipt by the Company of the consideration for the Shares specified in the Plan and the applicable resolutions of the Board of Directors of the Company (or a duly authorized committee of the Board of Directors of the Company) authorizing the issuance thereof, and (iv) the settlement of the inducement awards pursuant to the terms of the applicable inducement restricted stock unit award agreement and inducement performance unit award agreement and duly registered on the books of the transfer agent and registrar for the Shares in the name or on behalf of the holders thereof, such Shares will be validly issued, fully paid, and nonassessable. This opinion letter is rendered as of the date hereof, and we disclaim any obligation to advise you of facts, circumstances, events or developments that hereafter may be brought to our attention and that may alter, affect or modify the opinion expressed herein. Our opinion is expressly limited to the matters set forth above and we render no opinion, whether by implication or otherwise, as to any matters beyond the matters expressly set forth herein. This opinion letter is based as to matters of law solely on the Washington Business Corporation Act, as amended. We do not express any opinion herein concerning any law other than the corporate laws of the State of Washington. We assume no obligation to supplement this opinion letter if any applicable law changes after the date hereof or if we become aware of any fact that might change the opinions expressed herein after the date hereof. We express no opinion herein as to any other statutes, rules or regulations. We hereby consent to the filing of this opinion letter with the Commission as Exhibit 5.1 to the Registration Statement. In giving this consent, we do not thereby admit that we are within the category of persons whose consent is required under Section 7 of the Act or the rules and regulations of the Commission promulgated thereunder. Very truly yours, LANE POWELL PC Lane Powell PC


 

a231-lpsx8consent
September 15, 2021 Nautilus, Inc. 17750 S.E. 6th Way Vancouver, Washington 98683 Ladies and Gentlemen: We have acted as counsel to Nautilus, Inc., a Washington corporation (the “Company”) in connection with its Registration Statement on Form S-8 (the “Registration Statement”) to be filed with the Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933, as amended (the “Securities Act”) relating to the proposed offering of up to 1,150,000 shares (“Shares”) of common stock, no par value per share (“Common Stock”) of the Company, all of which are issuable pursuant to the Nautilus, Inc. Inducement Stock Plan for Vay AG Employees (the “Plan”). For purposes of this opinion letter, we have examined (i) the Amended and Restated Articles of Incorporation of the Company dated as of June 3, 2008; (ii) the Amended and Restated Bylaws of the Company dated as of March 30, 2005, as amended on January 29, 2007; (iii) the Registration Statement and the exhibits thereto; (iv) the Plan; and (v) such other corporate records, written consents, certificates and other instruments as in our opinion are necessary or appropriate in connection with expressing the opinions set forth below. In our examination of the aforesaid documents and in rendering the opinion expressed herein, we have, without independent inquiry or investigation, assumed that: (i) all documents submitted to us as originals are authentic and complete; (ii) all documents submitted to us as copies (including .pdfs) conform to authentic, complete originals; (iii) all documents filed as exhibits to the Registration Statement that have not been executed will conform to the forms thereof; (iv) all signatures on all documents that we reviewed are genuine; (v) all natural persons executing documents had and have the legal capacity to do so; (vi) all statements in certificates of public officials and the officers of the Company that we reviewed were and are accurate; and (vii) all representations made by the Company as to matters of fact in the documents that we reviewed were and are accurate. We have also assumed that any certificates or instruments representing the Shares, including the applicable award agreements, when issued, will be executed by the Company and by officers of the Company duly authorized to do so, and that the terms of the restricted stock unit awards and performance unit awards will be consistent with the forms of inducement restricted stock unit award agreement and inducement performance unit award agreement approved by the Board. In rendering our opinion, we have also relied upon a Certificate of Existence dated Exhibit 23.1


 
2 September 9, 2021 issued by the Washington Secretary of State with respect to the Company and representations and certifications made to us by the Company, including without limitation representations in a Secretary’s Certificate addressed to us of even date herewith that the Company has available a sufficient number of authorized shares of Common Stock that are not currently outstanding or reserved for issuance under other outstanding securities or plans of the Company, to enable the Company to issue and delivery all of the Shares as of the date of this letter. This opinion letter is given, and all statements herein are made, in the context of the foregoing. Based upon, subject to and limited by the foregoing, we are of the opinion that following (i) effectiveness of the Registration Statement, (ii) grant of the awards pursuant to the terms of the Plan, (iii) receipt by the Company of the consideration for the Shares specified in the Plan and the applicable resolutions of the Board of Directors of the Company (or a duly authorized committee of the Board of Directors of the Company) authorizing the issuance thereof, and (iv) the settlement of the inducement awards pursuant to the terms of the applicable inducement restricted stock unit award agreement and inducement performance unit award agreement and duly registered on the books of the transfer agent and registrar for the Shares in the name or on behalf of the holders thereof, such Shares will be validly issued, fully paid, and nonassessable. This opinion letter is rendered as of the date hereof, and we disclaim any obligation to advise you of facts, circumstances, events or developments that hereafter may be brought to our attention and that may alter, affect or modify the opinion expressed herein. Our opinion is expressly limited to the matters set forth above and we render no opinion, whether by implication or otherwise, as to any matters beyond the matters expressly set forth herein. This opinion letter is based as to matters of law solely on the Washington Business Corporation Act, as amended. We do not express any opinion herein concerning any law other than the corporate laws of the State of Washington. We assume no obligation to supplement this opinion letter if any applicable law changes after the date hereof or if we become aware of any fact that might change the opinions expressed herein after the date hereof. We express no opinion herein as to any other statutes, rules or regulations. We hereby consent to the filing of this opinion letter with the Commission as Exhibit 5.1 to the Registration Statement. In giving this consent, we do not thereby admit that we are within the category of persons whose consent is required under Section 7 of the Act or the rules and regulations of the Commission promulgated thereunder. Very truly yours, LANE POWELL PC Lane Powell PC


 

a232-nautilusinckpmgcons
Consent of Independent Registered Public Accounting Firm The Board of Directors Nautilus, Inc.: We consent to the use of our reports dated February 26, 2021, with respect to the consolidated balance sheets of Nautilus, Inc. and subsidiaries as of December 31, 2020 and 2019, the related consolidated statements of operations, comprehensive income (loss), shareholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2020, and the related notes, and the effectiveness of internal control over financial reporting as of December 31, 2020, incorporated herein by reference. Portland, Oregon September 15, 2021 KPMG LLP Suite 3800 1300 South West Fifth Avenue Portland, OR 97201 KPMG LLP, a Delaware limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. Exhibits 23.2


 

a991-nlsxvayrsuagmtfinal
707472.0021/8587917.3 NAUTILUS, INC. INDUCEMENT RESTRICTED STOCK UNIT AGREEMENT FOR VAY AG EMPLOYEES THIS RESTRICTED STOCK UNIT AWARD AGREEMENT (the “Agreement”) is made by and between Nautilus, Inc., a Washington corporation (the “Company”), through its Board of Directors or a Committee thereof (the “Plan Administrator”), and the Grantee named above (the “Grantee”). WHEREAS, the Company has adopted the Nautilus, Inc. Inducement Stock Plan for Vay AG Employees (the “Plan”), pursuant to which the Company may grant Restricted Stock Units (“RSUs”); and WHEREAS, the purpose of the Plan and this Agreement is to provide RSU awards to persons employed by Vay AG in connection with its proposed acquisition by the Company (the “Acquisition”) as an inducement material to the individual’s entering into employment with the Company or its current or future subsidiaries upon consummation of the proposed Acquisition and to promote the success of the business of the Company and its subsidiaries. The Plan and this Agreement is intended to comply with Rule 303A.08 of the NYSE Listed Company Manual which provides an exception to the NYSE shareholder approval requirement for the issuance of securities with regard to inducement grants to prospective employees of the Company, including without limitation inducement grants to prospective employees in connection with a merger or other acquisition; and WHEREAS, the Company wishes to grant to Grantee the number of Restricted Stock Units provided for herein; NOW, THEREFORE, in consideration of the recitals and the mutual agreements herein contained, the parties hereto agree as follows: 1. Grant of Restricted Stock Unit Award. 1.1 In accordance with the Plan and contingent upon and effective as of the date of the consummation of the Acquisition and the commencement of the Grantee’s employment with the Company or its Subsidiary (the “Grant Date”), the Company hereby grants to Grantee the number of Restricted Stock Units specified above (the “Restricted Units”). Each Restricted Unit represents the right to receive one share of the Company’s common stock (“Common Stock”) upon the satisfaction of certain vesting requirements set forth in Section 2. 1.2 The provisions of the Plan are incorporated herein by reference. Except as otherwise expressly set forth herein, this Agreement shall be construed in accordance with the provisions of the Plan and any capitalized terms not otherwise defined in this Agreement shall have the definitions set forth in the Plan. 1.3 The Plan Administrator shall have final authority to interpret and construe the Plan and this Agreement and to make any and all determinations thereunder, and its decision shall be binding and conclusive upon Grantee and his/her legal representative in respect of any questions arising under the Plan or this Agreement. 1.4 By accepting these Restricted Units, the Grantee acknowledges and agrees that this grant of Restricted Units is a voluntary gratification in the sense of art. 322d Swiss Code of Obligations ("CO") and under no circumstances shall constitute a salary component. 2. Vesting. 2.1 Subject to Sections 2.2 through 2.4 below, thirty-three percent (33.34%) of the total number of Restricted Units shall vest at the end of the twelve (12) month period of Grantee’s continuous employment with the Company following the Date of Grant. Thereafter, an additional thirty-three (33.33%) of the total number of Restricted Units shall vest at the end of each subsequent twelve (12) month period of Grantee’s continuous employment with the Exhibit 99.1


 
2 707472.0021/8587917.3 Company. The period of time between the Date of Grant and the date a Restricted Unit becomes fully vested is referred to herein as the “Restriction Period.” 2.2 Except as expressly provided in Section 2.3, in the event of the termination of Grantee's employment or service with the Company for any reason prior to the Vesting Date, Grantee shall forfeit all rights, title, and interest in and to the Restricted Units which have not vested as of the date of termination of Grantee’s employment. For the avoidance of doubt, date of termination means the date notice of termination or notice of resignation is served. Neither Grantee nor any of Grantee's successors, heirs, assigns or personal representatives shall have any rights or interests in any Restricted Units that are so forfeited. 2.3 If Grantee's employment or service with the Company is terminated as a result of Grantee's death or total disability prior to the Vesting Date, then a prorated portion of the Restricted Units shall immediately vest. The number of Restricted Units vesting under this Section 2.3 shall be based on the number of completed months of service from the Date of Grant through the date of such death or disability, divided by thirty-six (36). 2.4. Restricted Units shall vest upon the occurrence of any of the following events: (i) the sale, liquidation or other disposition of all or substantially all of the Company’s assets; (ii) a merger or consolidation of the Company with one or more corporations as a result of which, immediately following such merger or consolidation, the shareholders of the Company as a group hold less than a majority of the outstanding capital stock of the surviving corporation; or (iii) any person or entity, including any “person” as such term is used in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), becomes the “beneficial owner”, as defined in the Exchange Act, of shares of the Company’s Common Stock representing fifty percent (50%) or more of the combined voting power of the voting securities of the Company (each a “Change in Control”). Notwithstanding the foregoing, in no event will any portion of an Award become vested immediately prior to or upon a Change in Control, except that each Award will become vested if the Grantee is terminated by the Company for a reason other than Cause (“Cause”, as defined in the Plan and which shall also include any other important reason set forth in Art. 337 CO of the Swiss Civil Code, allowing the company employing the Grantee to terminate the employment relationship with immediate effect) upon or within twelve (12) months following the Change in Control. 3. Terms and Conditions of Award. The Restricted Units shall be subject to the following terms, conditions and restrictions: 3.1 The Restricted Units are bookkeeping entries only. During the Restriction Period the Grantee shall have no rights as a stockholder of the Company, no dividend rights and no voting rights with respect to unvested Restricted Units. 3.2 Restricted Units may not be transferred in any manner except as expressly permitted by the Plan. The terms of the Plan and this Agreement shall be binding upon the executors, administrators, heirs, successors and assigns of the Grantee. 4. Delivery of Shares. 4.1 As soon as administratively practicable after the date upon which a Restricted Unit vests, and provided Grantee shall have paid the Withholding Liability to the Company pursuant to Section 5 hereof, the Company shall issue to Grantee or, at Grantee’s request, Grantee’s designated broker, one share of Stock free and clear of any restrictions in settlement of each vested Restricted Unit. 5. Income Taxes.


 
3 707472.0021/8587917.3 5.1 The Grantee shall be liable for all applicable income and withholding taxes, including without limitation, any federal, state, local or other income taxes, or any applicable employment tax or social security or pension contributions (“Payroll Taxes”) with respect to any compensation income arising out of the vesting and issuance of the Restricted Units hereunder and the issuance and the delivery of Common Stock in settlement thereof. 5.2 If the Company shall be required to withhold any Payroll Taxes in connection with the issuance and vesting of the Restricted Units or the issuance of shares of Common Stock upon settlement thereof, it shall be a condition to such vesting or issuance that the Grantee pay the tax or make provisions that are satisfactory to the Company for the payment thereof. The Grantee shall satisfy the minimum statutory tax withholding obligations by surrendering to the Company a portion of the Common Stock to be issued to the Grantee, and the shares of Common Stock so surrendered by the Grantee shall be credited against any such withholding obligation at the Fair Market Value per share of such Common Stock on the date that the amount of tax to be withheld is to be determined. The Grantee will receive a cash refund for any fraction of a surrendered share not necessary for required Payroll Taxes. 5.3 If the Company cannot (under applicable legal, regulatory, listing or other requirements, or otherwise) satisfy any obligation to withhold Payroll Taxes in the manner described in Section 5.2, the Company may satisfy such withholding obligation by deducting such amount out of any other compensation otherwise payable to the Grantee. Grantee hereby consents to the Company withholding the full amount of the withholding obligation from any compensation or other amounts otherwise payable to Grantee, and Grantee agrees that the withholding and payment of any such amount by the Company to the relevant taxing authorities shall constitute full satisfaction of the Company’s obligation to pay such compensation of other amounts to Grantee. 5.4 Regardless of any action the Company takes with respect to any or all obligations to withhold Payroll Taxes, the Grantee acknowledges and agrees that the ultimate liability for Payroll Taxes legally due from Grantee is and remains the Grantee’s responsibility. 6. Miscellaneous Provisions. 6.1 Notices; Electronic Delivery. Any notices, designations, consents, offers, acceptances and any other communications required or permitted hereunder shall be given in writing and shall be delivered either personally or by registered or certified mail, postage prepaid, which shall be addressed, in the case of the Company to the principal office of the Company and, in the case of the Grantee, to the Grantee's physical or electronic mail address appearing on the books of the Company or to the Grantee's residence or to such other address as may be designated in writing by the Grantee. Grantee hereby consents to the electronic delivery of the Notice of Grant, this Agreement, the Plan, account statements, Plan prospectuses required by the Securities and Exchange Commission, financial reports of the Company, and all other documents that the Company is required to deliver to its security holders (including, without limitation, annual reports and proxy statements) or other communications or information related to the Award or the Common Stock. Electronic delivery may include the delivery of a link to a Company intranet or the internet site of a third party involved in administering the Plan, the delivery of the document via e-mail or such other delivery determined at the Company’s discretion. The Company will provide a paper copy of any documents delivered electronically at no cost upon request of the Grantee. Grantee acknowledges that his/her consent may be revoked or changed, including any change in the electronic mail address to which documents are delivered, at any time by notifying the Company of such revised or revoked consent. Grantee acknowledges and understands that he/she is not required to consent to electronic delivery. 6.2 Invalid Provision. The invalidity or unenforceability of any particular provision thereof shall not affect the other provisions hereof, and this Agreement shall be construed in all respects as if such invalid or unenforceable provision had been omitted.


 
4 707472.0021/8587917.3 6.3 No Employment Contract. Nothing contained in this Agreement shall confer upon the Grantee any right with respect to continuance of employment by the Company, or limit or affect in any manner the right of the Company to terminate the employment or adjust the compensation of the Grantee. 6.4 Compliance with Law. The Company shall make reasonable efforts to comply with all applicable federal and state securities laws; provided, however, notwithstanding any other provision of this Agreement, the Company shall not be obligated to issue any Restricted Units or shares of unrestricted Common Stock or other securities pursuant to this Agreement if the issuance thereof would result in a violation of any such law. 6.5 Modifications. No change, modification or waiver of any provision of this Agreement shall be valid unless the same is in writing and signed by the parties hereto. 6.6 Capital Adjustments. In the event of a material alteration in the capital structure of the Company on account of a recapitalization, stock split, reverse stock split, stock dividend or otherwise, this award shall be subject to adjustment by the Plan Administrator in accordance with the Plan. 6.7 Entire Agreement. This Agreement sets forth the entire agreement and understanding of the parties with respect to the subject matter contained herein and supersedes all prior communications, representations and negotiations in respect thereto. 6.8 Governing Law. This agreement shall be interpreted and construed in accordance with the laws of the State of Washington. 6.9 Section 409A. Anything herein to the contrary notwithstanding, any earned amount payable to Grantee hereunder shall be paid on or deferred until the earliest date as may be required to comply with the provisions of Section 409A of the Internal Revenue Code of 1986, as amended. 6.10 Data Privacy. The following provisions are applicable to Grantees residing and/or working in the European Union or Switzerland: The Company is located at 17750 S.E. 6th Way, Vancouver, Washington 98683, USA, and grants these inducement RSUs under the Plan to employees of the Company and its Subsidiaries in its sole discretion. In conjunction with the Company's grant of the inducement RSUs under the Plan and its ongoing administration of such award, the Company is providing the following information about its data collection, processing and transfer practices, which Grantee should carefully review. (a) Data Collection, Processing and Usage. The Company will collect, process and use certain personal information about Grantee, specifically, Grantee’s name, home address, email address and telephone number, date of birth, social security or insurance number, passport number or other identification number, salary, nationality, job title, any shares or directorships held in the Company, details of all RSUs, shares, awards or any other entitlement to shares awarded, canceled, exercised, vested, unvested or outstanding in Grantee's favor (“Data”), for the exclusive purpose of implementing, administering and managing the Plan. Grantee's Data also may be disclosed to certain securities or other regulatory authorities where the Company’s securities are listed or traded or regulatory filings are made. The Company's legal basis for such disclosure of Grantee’s Data is to satisfy its contractual obligations under the terms of the Agreement, and to comply with applicable laws, rules and regulations. (b) Stock Plan Administrator. The Company may transfer Grantee’s Data to E*TRADE Financial Services or any of its successor or other third party service provider based in the United States of America and engaged by the Company to assist with the implementation, administration and management of awards granted under the Plan (the “Stock Plan Administrator”). In the future, the Company may select a different Stock Plan Administrator and share Grantee’s Data with another company that serves in a similar manner. The Stock Plan Administrator will open an account for Grantee to receive and trade shares acquired under the Plan. Grantee will be asked to agree to separate


 
5 707472.0021/8587917.3 terms and data processing practices with the Stock Plan Administrator, which is a condition of Grantee’s ability to participate in the Plan. (c) International Data Transfers. The Company and the Stock Plan Administrator are based in the United States of America. Grantee should note that Grantee’s country of residence may have enacted data privacy laws that are different from the United States of America. The Company's legal basis for the transfer of Grantee’s Data to the United States of America is to satisfy its contractual obligations under the terms and conditions of this Agreement. (d) Data Retention. Grantee understands that Grantee’s Data will be held only as long as is necessary to implement, administer and manage Grantee’s participation in the Plan. When the Company no longer needs Grantee’s Data, the Company will remove it from its systems. If the Company retains Grantee’s Data longer, it would be to satisfy the Company's legal or regulatory obligations and the Company's legal basis would be for compliance with applicable laws, rules and regulations. (e) Data Subject Rights. Grantee understands that Grantee may have the right under applicable law to (i) access or copy Grantee’s Data that the Company possesses, (ii) rectify incorrect Data concerning Grantee, (iii) delete Grantee’s Data, (iv) restrict processing of Grantee’s Data, or (v) lodge complaints with the competent supervisory authorities in Grantee’s country of residence. To receive clarification regarding these rights or to exercise these rights, Grantee understand that Grantee can contact the Company's human resources representative. IN WITNESS WHEREOF, the Company has indicated its agreement to the terms hereof by electronically posting this Agreement on the Grantee’s Company E*Trade account. By electronically accepting and acknowledging the Restricted Units in the manner provided in the Grantee’s Company E*Trade account, Grantee acknowledges receipt of a copy of the Plan and represents that he or she is familiar with the terms and provisions thereof and hereby accepts these Restricted Units subject to all the terms and provisions hereof.


 

a992-nlsxvaypsuagmtfinal
707472.0021/8587285.4 NAUTILUS, INC. INDUCEMENT PERFORMANCE UNIT AGREEMENT FOR VAY AG EMPLOYEES Nautilus, Inc. (the “Company”), through its Board of Directors or a Committee thereof (the “Plan Administrator”), has granted to the employee named on the notice of grant (“Grantee”) in the Grantee’s Company E*Trade account (the “Notice of Grant”), a Performance Unit Award pursuant to the Nautilus, Inc. Inducement Stock Plan for Vay AG Employees (the “Plan”), which is incorporated herein by reference. Capitalized terms not otherwise defined in this Agreement shall be defined as set forth in the Plan. The date of grant of this Performance Unit award is as specified in the Notice of Grant (the “Grant Date”). WHEREAS, the purpose of the Plan and this Agreement is to provide Performance Units to persons employed by VAY AG in connection with its proposed acquisition by the Company (the “Acquisition”) as an inducement material to the individual’s entering into employment with the Company or its current or future subsidiaries upon consummation of the proposed Acquisition and to promote the success of the business of the Company and its subsidiaries. The Plan and this Agreement is intended to comply with Rule 303A.08 of the NYSE Listed Company Manual which provides an exception to the NYSE shareholder approval requirement for the issuance of securities with regard to inducement grants to prospective employees of the Company, including without limitation inducement grants to prospective employees in connection with a merger or other acquisition; and WHEREAS, the Company wishes to grant to Grantee the number of Performance Units provided for herein; NOW, THEREFORE, in consideration of the recitals and the mutual agreements herein contained, the parties hereto agree as follows 1. Grant of Performance Unit Award. 1.1 Subject to and upon the terms, conditions, and restrictions set forth in this Agreement, the Notice of Grant and the Plan, and, contingent upon and effective as of the date of the consummation of the Acquisition and the commencement of the Grantee’s employment with the Company or its Subsidiary (the “Grant Date”), the Company hereby grants to Grantee a Performance Unit award set forth in the Notice of Grant (the “Award”). The Award consists of Performance Units representing the Grantee’s right to receive shares of the Company’s common stock (“Common Stock”) calculated based on the level of achievement of the performance goals described on the performance summary sheet provided in your E*Trade account with your Notice of Grant (the “Performance Goals”) at 3/31/2024 (the “Performance Period”). 1.2 The provisions of the Plan are incorporated herein by reference. Except as otherwise expressly set forth herein, this Agreement shall be construed in accordance with the provisions of the Plan and any capitalized terms not otherwise defined in this Agreement shall have the definitions set forth in the Plan. 1.3 The Plan Administrator shall have final authority to interpret and construe the Plan and this Agreement and to make any and all determinations thereunder, and its decision shall be binding and conclusive upon Grantee and his/her legal representative in respect of any questions arising under the Plan or this Agreement. 1.4 By accepting the Award, the Grantee acknowledges and agrees that this grant of the Award is a voluntary gratification in the sense of art. 322d Swiss Code of Obligations ("CO") and under no circumstances shall constitute a salary component. 2. Achievement and Vesting. 2.1 As promptly as administratively practicable following completion of the Company’s audited financial statements for the last year of the Performance Period, the Compensation Committee of the Board of Directors shall Exhibit 99.2


 
707472.0021/8587285.4 2 determine and certify the level at which the Company has achieved the specified Performance Goals. On the date of such certification (the “Vesting Date”), if the Performance Goals have been achieved, a number of Performance Units calculated based on the Achievement Matrix set forth in the performance summary sheet shall vest and an equivalent number of shares of Common Stock will become issuable. The number of Performance Units identified in the Notice of Grant as being granted hereunder is equal to 100% of the shares of Common Stock issuable based on the achievement of all Performance Goals at the “Target” achievement level (the “Target Shares”). The percentage of the Target Shares that vest and become issuable under this Award will be determined based on the achievement of the Performance Goals at Threshold, Target and Maximum levels, as outlined in the Achievement Matrix of the performance summary sheet provided with the Notice of Grant. The minimum threshold is set at 30% of the Target Shares and the maximum is set at 200% of the Target Shares. The number of Performance Units vested and the number of shares of Common Stock issued in settlement of the Award will equal the applicable percentage identified in the Achievement Matrix of the Notice of Grant, multiplied by the Target Shares. If a Performance Goal is not achieved during the Performance Period, the Performance Award shall be forfeited. 2.2 Except as expressly provided in Section 2.3, in the event of the termination of Grantee's employment or service with the Company for any reason prior to the Vesting Date, Grantee shall forfeit all rights, title, and interest in and to the Performance Units. For the avoidance of doubt, date of termination means the date notice of termination or notice of resignation is served. Neither Grantee nor any of Grantee's successors, heirs, assigns or personal representatives shall have any rights or interests in any Performance Units that are so forfeited. 2.3 If Grantee's employment or service with the Company is terminated as a result of Grantee's death or total disability prior to the last day of the Performance Period, then a prorated portion of the Performance Units shall immediately vest and the equivalent number of shares of Common Stock shall be issued. The number of Performance Units vesting under this Section 2.3 shall be equal to the product of (X) 100% of the Target Shares multiplied by (Y) a fraction, the numerator of which is the number of Grantee’s completed months of service from the Grant Date through the date of such death or disability, and the denominator of which is thirty-six (36). 2.4 A number of Performance Units equal to 100% of the Target Shares shall vest and the equivalent number of shares of Common Stock shall be issued upon the occurrence of any of the following events: (i) the sale, liquidation or other disposition of all or substantially all of the Company’s assets; (ii) a merger or consolidation of the Company with one or more corporations as a result of which, immediately following such merger or consolidation, the shareholders of the Company as a group hold less than a majority of the outstanding capital stock of the surviving corporation; or (iii) any person or entity, including any “person” as such term is used in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), becomes the “beneficial owner”, as defined in the Exchange Act, of shares of the Company’s Common Stock representing fifty percent (50%) or more of the combined voting power of the voting securities of the Company. Notwithstanding the foregoing, in no event will any portion of an Award become vested immediately prior to or upon a Change in Control, except that each Award will become fully vested at 100% of the Target Shares if the Grantee is terminated by the Company for a reason other than Cause (“Cause”, as defined in the Plan and which shall also include any other important reason set forth in Art. 337 CO of the Swiss Civil Code, allowing the company employing the Grantee to terminate the employment relationship with immediate effect) upon or within twelve (12) months following the Change in Control. 3. Terms and Conditions of Award. The Performance Units shall be subject to the following terms, conditions and restrictions: 3.1 The Performance Units are bookkeeping entries only. Until the Company has issued Common Stock to Grantee in accordance with the terms of the Plan and this Agreement, the Performance Units granted pursuant to this Award shall not entitle the Grantee to any rights of a shareholder, including without limitation the right to receive dividends or to vote the shares underlying such Performance Units.


 
707472.0021/8587285.4 3 3.2 The Performance Units granted hereunder may not be transferred in any manner except as permitted by the Plan. The terms of the Plan and this Agreement shall be binding upon the executors, administrators, heirs, successors and assigns of the Grantee. 4. Delivery of Shares. As soon as administratively practicable after the Performance Units become vested hereunder the Company shall issue to Grantee or, at Grantee’s request, Grantee’s designated broker, one share of Common Stock in settlement of each vested Performance Unit. 5. Income Taxes. 5.1 The Grantee shall be liable for all applicable income and withholding taxes, including without limitation, any federal, state, local or other income taxes, or any applicable employment tax or social security or pension contributions (“Payroll Taxes”) with respect to any compensation income arising out of the vesting and issuance of the Performance Units hereunder and the issuance and the delivery of Common Stock in settlement thereof. 5.2 If the Company shall be required to withhold any Payroll Taxes in connection with the issuance and vesting of the Performance Units or the issuance of shares of Common Stock upon settlement thereof, it shall be a condition to such vesting or issuance that the Grantee pay the tax or make provisions that are satisfactory to the Company for the payment thereof. The Grantee shall satisfy the minimum statutory tax withholding obligations by surrendering to the Company a portion of the Common Stock to be issued to the Grantee, and the shares of Common Stock so surrendered by the Grantee shall be credited against any such withholding obligation at the Fair Market Value per share of such Common Stock on the date that the amount of tax to be withheld is to be determined. The Grantee will receive a cash refund for any fraction of a surrendered share not necessary for required Payroll Taxes. 5.3 If the Company cannot (under applicable legal, regulatory, listing or other requirements, or otherwise) satisfy any obligation to withhold Payroll Taxes in the manner described in Section 5.2, the Company may satisfy such withholding obligation by deducting such amount out of any other compensation otherwise payable to the Grantee. Grantee hereby consents to the Company withholding the full amount of the withholding obligation from any compensation or other amounts otherwise payable to Grantee, and Grantee agrees that the withholding and payment of any such amount by the Company to the relevant taxing authorities shall constitute full satisfaction of the Company’s obligation to pay such compensation of other amounts to Grantee. 5.4 Regardless of any action the Company takes with respect to any or all obligations to withhold Payroll Taxes, the Grantee acknowledges and agrees that the ultimate liability for Payroll Taxes legally due from Grantee is and remains the Grantee’s responsibility. 6. Miscellaneous Provisions. 6.1 Notices; Electronic Delivery. Any notices, designations, consents, offers, acceptances and any other communications required or permitted hereunder shall be given in writing and shall be delivered either personally or by registered or certified mail, postage prepaid, which shall be addressed, in the case of the Company to the principal office of the Company and, in the case of the Grantee, to the Grantee's physical or electronic mail address appearing on the books of the Company or to the Grantee's residence or to such other address as may be designated in writing by the Grantee. Grantee hereby consents to the electronic delivery of the Notice of Grant, this Agreement, the Plan, the performance summary sheet, account statements, Plan prospectuses required by the Securities and Exchange Commission, financial reports of the Company, and all other documents that the Company is required to deliver to its security holders (including, without limitation, annual reports and proxy statements) or other communications or information related to the Award or the Common Stock. Electronic delivery may include the delivery of a link to a Company intranet or the internet site of a third party involved in administering the Plan, the delivery of the document via e-mail or such other delivery determined at the Company’s discretion. The Company will provide a paper copy of any documents delivered electronically at no cost upon request of the Grantee. Grantee acknowledges that his/her


 
707472.0021/8587285.4 4 consent may be revoked or changed, including any change in the electronic mail address to which documents are delivered, at any time by notifying the Company of such revised or revoked consent. Grantee acknowledges and understands that he/she is not required to consent to electronic delivery. 6.2 Invalid Provision. The invalidity or unenforceability of any particular provision thereof shall not affect the other provisions hereof, and this Agreement shall be construed in all respects as if such invalid or unenforceable provision had been omitted. 6.3 No Employment Contract. Nothing contained in this Agreement shall confer upon the Grantee any right with respect to continuance of employment by the Company, or limit or affect in any manner the right of the Company to terminate the employment or adjust the compensation of the Grantee. 6.4 Compliance with Law. The Company shall make reasonable efforts to comply with all applicable federal and state securities laws; provided, however, notwithstanding any other provision of this Agreement, the Company shall not be obligated to issue any Performance Units or shares of Common Stock or other securities pursuant to this Agreement if the issuance thereof would result in a violation of any such law. 6.5 Modifications. No change, modification or waiver of any provision of this Agreement shall be valid unless the same is in writing and signed by the parties hereto. 6.6 Capital Adjustments. In the event of a material alteration in the capital structure of the Company on account of a recapitalization, stock split, reverse stock split, stock dividend or otherwise, this award shall be subject to adjustment by the Plan Administrator in accordance with the Plan. 6.7 Entire Agreement. This Agreement sets forth the entire agreement and understanding of the parties with respect to the subject matter contained herein and supersedes all prior communications, representations and negotiations in respect thereto. 6.9 Governing Law. This agreement shall be interpreted and construed in accordance with the laws of the State of Washington. 6.10 Section 409A. Anything herein to the contrary notwithstanding, any earned amount payable to Grantee hereunder shall be paid on or deferred until the earliest date as may be required to comply with the provisions of Section 409A of the Internal Revenue Code of 1986, as amended. 6.11 Data Privacy. The following provisions are applicable to Grantees residing and/or working in the European Union or Switzerland: The Company is located at 17750 S.E. 6th Way, Vancouver, Washington 98683, USA, and grants these inducement Performance Units under the Plan to employees of the Company and its Subsidiaries in its sole discretion. In conjunction with the Company's grant of the inducement Performance Units under the Plan and its ongoing administration of such award, the Company is providing the following information about its data collection, processing and transfer practices, which Grantee should carefully review. (a) Data Collection, Processing and Usage. The Company will collect, process and use certain personal information about Grantee, specifically, Grantee’s name, home address, email address and telephone number, date of birth, social security or insurance number, passport number or other identification number, salary, nationality, job title, any shares or directorships held in the Company, details of all Performance Units, shares, awards or any other entitlement to shares awarded, canceled, exercised, vested, unvested or outstanding in Grantee's favor (“Data”), for the exclusive purpose of implementing, administering and managing the Plan. Grantee's Data also may be disclosed to certain securities or other regulatory authorities where the Company’s securities are listed or traded or regulatory


 
707472.0021/8587285.4 5 filings are made. The Company's legal basis for such disclosure of Grantee’s Data is to satisfy its contractual obligations under the terms of the Agreement, and to comply with applicable laws, rules and regulations. (b) Stock Plan Administrator. The Company may transfer Grantee’s Data to E*TRADE Financial Services or any of its successor or other third party service provider based in the United States of America and engaged by the Company to assist with the implementation, administration and management of awards granted under the Plan (the “Stock Plan Administrator”). In the future, the Company may select a different Stock Plan Administrator and share Grantee’s Data with another company that serves in a similar manner. The Stock Plan Administrator will open an account for Grantee to receive and trade shares acquired under the Plan. Grantee will be asked to agree to separate terms and data processing practices with the Stock Plan Administrator, which is a condition of Grantee’s ability to participate in the Plan. (c) International Data Transfers. The Company and the Stock Plan Administrator are based in the United States of America. Grantee should note that Grantee’s country of residence may have enacted data privacy laws that are different from the United States of America. The Company's legal basis for the transfer of Grantee’s Data to the United States of America is to satisfy its contractual obligations under the terms and conditions of this Agreement. (d) Data Retention. Grantee understands that Grantee’s Data will be held only as long as is necessary to implement, administer and manage Grantee’s participation in the Plan. When the Company no longer needs Grantee’s Data, the Company will remove it from its systems. If the Company retains Grantee’s Data longer, it would be to satisfy the Company's legal or regulatory obligations and the Company's legal basis would be for compliance with applicable laws, rules and regulations. (e) Data Subject Rights. Grantee understands that Grantee may have the right under applicable law to (i) access or copy Grantee’s Data that the Company possesses, (ii) rectify incorrect Data concerning Grantee, (iii) delete Grantee’s Data, (iv) restrict processing of Grantee’s Data, or (v) lodge complaints with the competent supervisory authorities in Grantee’s country of residence. To receive clarification regarding these rights or to exercise these rights, Grantee understand that Grantee can contact the Company's human resources representative. IN WITNESS WHEREOF, the Company has indicated its agreement to the terms hereof by electronically posting this Agreement on the Grantee’s Company E*Trade account. By electronically accepting and acknowledging the Performance Units in the manner provided in the Grantee’s Company E*Trade account, Grantee acknowledges receipt of a copy of the Plan and represents that he or she is familiar with the terms and provisions thereof and hereby accepts these Performance Units subject to all the terms and provisions hereof.


 

a993-nlsxvayinducementst
NAUTILUS, INC. INDUCEMENT STOCK PLAN FOR VAY AG EMPLOYEES 1. PURPOSE The purpose of the Inducement Stock Plan for Vay AG Employees (the “Plan”) of Nautilus, Inc. (the “Corporation”) is to provide stock unit awards to persons employed by Vay AG in connection with its proposed acquisition by the Corporation (the “Acquisition”) as an inducement material to the individual’s entering into employment with the Company or its current or future subsidiaries upon consummation of the proposed Acquisition and to promote the success of the business of the Company and its subsidiaries. The Plan is intended to comply with Rule 303A.08 of the NYSE Listed Company Manual which provides an exception to the NYSE shareholder approval requirement for the issuance of securities with regard to inducement grants to prospective employees of the Company, including without limitation inducement grants to prospective employees in connection with a merger or other acquisitions. This Plan permits the grant of performance units and restricted stock units, each of which shall be subject to such conditions based upon continued employment, passage of time or satisfaction of performance criteria as shall be specified pursuant to the Plan. 2. DEFINITIONS (a) “Administrator” means the officer or officers of the Corporation appointed by the Committee to perform certain Plan ministerial functions pursuant to subsection 3(b). (b) “Award” means Performance Unit or Restricted Stock Unit granted to a Participant pursuant to the Plan. (c) “Award Agreement” means (as applicable) a Restricted Stock Unit Agreement and/or a Performance Unit Agreement. (d) “Board of Directors” means the Board of Directors of Nautilus. (e) “Change in Control” means either: (a) the sale, liquidation or other disposition of all or substantially all of the Company’s assets; (ii) a merger or consolidation of the Company with one or more corporations as a result of which, immediately following such merger or consolidation, the shareholders of the Company as a group hold less than a majority of the outstanding capital stock of the surviving corporation; or (iii) any person or entity, including any “person” as such term is used in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), becomes the “beneficial owner” as defined in the Exchange Act, of shares of the Common Stock representing fifty percent (50%) or more of the combined voting power of the voting securities of the Company. (f) “Cause” means (i) Participant’s indictment or conviction in a court of law for any felony that in the Company’s reasonable judgment makes Participant unfit for continued employment, prevents Participant from performing Participant’s duties or other obligations or adversely affects the reputation of the Company if Participant remained in Participant’s position; (ii) dishonesty by Participant related to Participant’s employment that has an adverse effect on the Company; (iii) violation of a key Company policy, the employment agreement, offer letter or the Business Protection Agreement between Participant and the Company (including, but not limited to, acts of harassment or discrimination, use of or being under the influence of unlawful drugs on the Company’s premises or while performing duties on behalf of the Company) that has an adverse effect on the Company; Exhibit 99.3


 
707472.0021/8576991.1 2 (iv) insubordination (i.e. conduct such as refusal to follow direct orders of the Participant’s manager), provided, however, conduct based on adherence to legal requirements (i.e. tax and securities laws) shall not constitute insubordination; (v) Participant’s failure to perform minimum duties after warning and failure to correct to the Company’s reasonable satisfaction; (vi) Participant’s competition with the Company, diversion of any corporate opportunity or other similarly serious conflict of interest or self-dealing incurring to Participant’s direct or indirect benefit and the Company’s detriment; (vii) intentional or grossly negligent conduct by Participant that is injurious to the Company or its affiliates after warning and failure to correct to the Company’s reasonable satisfaction; or (viii) any other important reason set forth in Art. 337 CO of the Swiss Civil Code, allowing the company employing the Participant to terminate the employment relationship with immediate effect. (g) “Code” means the Internal Revenue Code of 1986, as amended from time to time and any successor thereto, the Treasury Regulations promulgated thereunder and other relevant interpretive guidance issued by the Internal Revenue Service or Treasury Department. Any reference to a section of the Code shall be deemed to include such regulations and guidance and any successor provision of the Code. (h) “Committee” means the Compensation Committee of Nautilus. (i) “Common Stock” means the common stock, without par value, of Nautilus authorized for issuance by Nautilus. (j) “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time. Any reference to a section of the Exchange Act shall include any successor provision of the Exchange Act. (k) “Executive Officer” means any “officer” of Nautilus as such term is defined in Rule 16a- 1(f) under the Exchange Act. (l) “Fair Market Value” means, with respect to any given date, the value of a Share determined as follows: (1) If the Common Stock is publicly traded and is then listed on a national securities exchange, its closing price on the date of determination on the principal national securities exchange on which the Common Stock is listed or admitted to trading, as reported in The Wall Street Journal or such other source as the Committee deems reliable (or, if there are no reported sales on such date, on the last date prior to such date on which there was a reported sale); (2) If the Common Stock is publicly traded but is neither listed nor admitted to trading on a national securities exchange, the average of the closing bid and asked prices of a Share as reported in The Wall Street Journal, or as quoted by an established quotation service for over-the-counter securities, or as reported by such other source as the Committee deems reliable, and if there is no such reported price for the Common Stock for the date in question, then such price on the last preceding date for which such price exists shall be determinative of Fair Market Value; or (3) If none of the foregoing is applicable, by the Committee in good faith and in a manner that satisfies Code Sections 409A and 422(c)(1), as applicable.


 
707472.0021/8576991.1 3 (m) “Outside Director” means a member of the Board of Directors who is not otherwise an employee of the Corporation. (n) “Participants” means those individuals who hold unexercised Awards and any authorized transferee of such individuals. (o) “Performance Period” means the period described in subsection 9(d) during which a Performance Unit Award is earned. (p) “Performance-Based Award” means an Award that vests only upon the satisfaction of one or more of the Qualifying Performance Criteria specified in subsection 10(b). (q) “Performance Unit” means and Award granting the right to receive Shares or cash upon achievement of certain goals related to performance as stated in a Performance Unit Agreement. (r) “Performance Unit Agreement” means the document(s) evidencing a Performance Unit Award. (s) “Plan” means the Nautilus, Inc. Inducement Stock Plan for Vay AG Employees as stated in this document and any amendments to it. (t) “Restricted Stock Unit Award” means an Award of a right to receive, in cash or stock (as determined by the Committee), the market value of one Share, the grant, issuance, retention, vesting, termination and/or forfeiture of which is subject to the terms and conditions stated in a Restricted Stock Unit Agreement. (u) “Restricted Stock Unit Agreement” means the document(s) evidencing a Restricted Stock Unit Award. (v) “Qualifying Performance Criteria” has the meaning set forth in subsection 10(b). (w) “Restricted Stock Unit Agreement” means the document(s) evidencing an Award of Restricted Stock Units. (x) “Share” means a share of Common Stock or the number and kind of shares of stock or other securities which shall be substituted or adjusted for such shares as provided in Section 11. (y) “Subsidiary” means any corporation, partnership, joint venture, limited liability company or other entity in which at least 50% or more of the voting power or economic interests is owned, directly or indirectly, by Nautilus. 3. ADMINISTRATION (a) Administration by the Committee or Board. (1) Subject to paragraph (2) below, this Plan shall be administered by the Committee in accordance with its Charter. (2) The Board of Directors, in its sole discretion, may exercise any authority of the Committee under this Plan in lieu of the Committee’s exercise thereof and, in such


 
707472.0021/8576991.1 4 instances, references in the Plan to the Committee shall refer to the Board of Directors. (b) Delegation. (1) The Board of Directors or the Committee may delegate to one or more separate committees (a “Subcommittee”) composed of one or more members of the Board of Directors who are Outside Directors (and who may but need not be members of the Committee) the ability to grant Awards and take the other actions described in subsection 3(c) with respect to any Participant who is not an Executive Officer, and such actions shall be treated for all purposes as if taken by the Committee. (2) The Committee may delegate to an Executive Officer the authority to grant Awards within parameters established by the Committee to any Participant who is not an Executive Officer. (3) Any action by any such Subcommittee or Executive Officer within the scope of such delegation shall be deemed for all purposes to have been taken by the Committee, and references in this Plan to the Committee shall include any such Subcommittee or Executive Officer. (4) The Committee may delegate certain ministerial functions with respect to the administration of the Plan to an officer or officers of the Corporation (an “Administrator”) as follows: (A) Subject to paragraphs (B) and (D) below, the Administrator(s) shall have the authority to: (i) Execute and distribute documents, instruments and other agreements evidencing or relating to Awards granted under this Plan; (ii) To maintain records relating to the grant, vesting, exercise, forfeiture or expiration of Awards; (iii) To process or oversee the issuance of Shares upon the exercise, vesting and/or settlement of an Award; and (iv) To take such other actions as the Committee may specify. (B) In no case shall any Administrator be authorized to grant Awards under the Plan or to take any discretionary actions with respect to the Plan or any Award, including, by way of example and not of limitation, interpreting the provisions of the Plan or any Award. (C) Any action by any Administrator within the scope of its delegation shall be deemed for all purposes to have been taken by the Committee, and references in this Plan to the Committee shall include any such Administrator, provided that the actions and interpretations of any such Administrator shall be subject to final review and approval, disapproval or modification by the Committee.


 
707472.0021/8576991.1 5 (D) Notwithstanding anything to the contrary in this subsection 3(b), no power or authority may be delegated that is required by law, regulation or applicable stock exchange listing standards to be exercised by the Committee. (c) Powers of the Committee. Subject to the express provisions and limitations set forth in this Plan, the Committee shall be authorized and empowered to do all things necessary or desirable, in its sole discretion, in connection with the administration of the Plan, including, without limitation, the following: (1) To prescribe, amend and rescind rules, policies and practices relating to the administration of the Plan and to define terms not otherwise defined in the Plan; (2) To determine which persons are Participants, to which of such Participants, if any, Awards shall be granted under the Plan, and the timing of any such Awards; (3) To grant Awards to Participants and, subject to the terms of the Plan, determine the terms and conditions of each Award, including the number of Shares covered by each Award, the exercise or purchase price, and any terms or conditions relating to vesting, exercise, forfeiture or expiration, which terms may, but need not be, conditioned upon the passage of time, continued employment, the satisfaction of performance criteria, the occurrence of certain events or other factors, provided that in no event will any portion of an Award become vested prior to the first anniversary of the date of grant of such Award (except in the case of death or disability and except that up to 5% of the Shares authorized for grant pursuant to Section 6(a) may be granted with a minimum vesting schedule of less than one year) and provided that in no event will any portion of an Award become vested immediately prior to or upon a Change in Control, except that each Award may become fully vested if the Participant holding the Award is terminated by the Company for a reason other than Cause upon or within twelve (12) months following the Change in Control; (4) To establish or verify the extent of satisfaction of any performance goals or other conditions applicable to the grant, issuance, exercisability, vesting and/or ability to retain any Award; (5) To prescribe and amend the terms of the Award Agreements and related documents and instruments pursuant to which Awards may be settled or exercised or beneficiaries may be designated; (6) To determine whether, and the extent to which, adjustments are required pursuant to Section 11; (7) To determine whether and to what extent an Award may be settled in cash, Shares, or a combination thereof; (8) To interpret and construe the Plan, any rules, polices or procedures relating to the Plan and the terms and conditions of any Award Agreement and related documents and instruments pursuant to which Awards may be settled or exercised or beneficiaries may be designated, and to make exceptions to any such provisions in good faith and for the benefit of the Corporation; and


 
707472.0021/8576991.1 6 (9) To make all other determinations deemed necessary or advisable for the administration of this Plan. (d) Effect of Change in Status. The Committee shall have the discretion to determine the effect upon an Award of a change in a Participant’s employment status (including whether a Participant shall be deemed to have experienced a termination of employment or other change in status), including the vesting, expiration or forfeiture of an Award in the case of: (1) Any individual who is employed by an entity that ceases to be a Subsidiary; (2) Any leave of absence approved by the Corporation; (3) Any transfer between locations of employment between Nautilus and any Subsidiary or between any Subsidiaries; (4) Any change in the Participant’s status from an employee to a consultant, or vice versa; and (5) Any employee who at the request of the Corporation becomes employed by any partnership, joint venture, limited liability company, corporation or other entity that is not a Subsidiary. (e) Determinations of the Committee. All decisions, determinations and interpretations by the Committee regarding this Plan shall be final, conclusive and binding on all persons, including, the Participants and any other individual claiming benefits or rights under the Plan. Any dispute regarding the interpretation of the Plan or any Award shall be submitted by the Participant to the Committee for review. The resolution of such a dispute by the Committee shall be final, conclusive and binding on the Participant. The Committee shall consider such factors as it deems relevant to making such decisions, determinations and interpretations including, without limitation, the recommendations or advice of any attorneys, consultants and accountants as it may select. 4. PARTICIPANTS Awards may be granted only to persons who are employees of Vay AG or one of its subsidiaries immediately prior to the Acquisition and shall be granted as an inducement material to such individual’s entering into employment with the Corporation or its subsidiaries upon consummation of the Acquisition. Awards shall not become effective until consummation of the Acquisition and the Participant’s commencement of employment with the Corporation or its subsidiary. No Award shall be granted hereunder after consummation of the Acquisition, and no Award shall be granted hereunder to any person who is an Employee of, or who is rendering services to, the Corporation or any of its subsidiaries immediately prior to the Acquisition. 5. EFFECTIVE DATE AND EXPIRATION OF PLAN (a) Effective Date. This Plan was approved by the Board of Directors on August 29, 2021 and became effective on August 29, 2021. (b) Date of Grant. The date of grant of an Award shall be the date, upon consummation of the Acquisition, when the Participant commences employment with the Company or its subsidiary. Notice of the determination shall be provided to each Participant within a


 
707472.0021/8576991.1 7 reasonable time after the date of grant. In connection with the grant of any Award hereunder, the Company shall disclose in a press release in compliance with Rule 303A.08 of the NYSE Listed Company Manual the material terms of the Awards, the number of employees and the number of Shares involved. (c) Expiration Date. (1) The Plan shall remain available for the grant of Awards until the earlier of: (A) August 29, 2031; or (B) The date on which all Shares available for issuance under the Plan have been issued as fully vested Shares. (2) The expiration of the Committee’s authority to grant Awards under the Plan will not affect the operation of the terms of the Plan or the Corporation’s and Participants’ rights and obligations with respect to Awards granted on or prior to the expiration date of the Plan. 6. SHARES SUBJECT TO THE PLAN (a) Aggregate Limits. Subject to adjustment as provided in Section 11, the aggregate number of Shares that may be granted pursuant to Awards under the Plan is 1,150,000. The Shares that may be granted pursuant to Awards under the Plan may include Shares reacquired by Nautilus (including Shares purchased in the open market) or authorized but unissued Shares. To the extent any Award is forfeited, terminates, expires or lapses instead of being exercised, is not earned in full or is settled in cash, the Shares subject to such Awards not delivered as a result shall again be available to be granted as Awards under this Plan. Notwithstanding anything to the contrary contained herein, Shares tendered by the Participant or withheld by the Company to satisfy any tax withholding obligation with respect to an Award shall not be added to the Shares authorized for grant under this Section 6(a)(1) and shall not be available for future grants of Awards. 7. PLAN AWARDS (a) Award Types. The Committee is authorized to grant the following Awards under the Plan provided that their terms and conditions are not inconsistent with the provisions of the Plan: (1) Restricted Stock Units, pursuant to the terms and conditions of a Restricted Stock Unit Agreement. (2) Performance Units pursuant to the terms and conditions of a Performance Unit Agreement. (b) Grants of Awards; Designation as Performance- Based Awards. (1) Awards may be granted separately or in tandem or in the alternative.


 
707472.0021/8576991.1 8 (2) The Committee, in its discretion, may designate any Award as a Performance- Based Award and designate in the Award Agreement the Qualifying Performance Criteria upon which the grant or vesting of the Award is conditioned. 8. RESTRICTED STOCK UNITS (a) The Committee may grant Restricted Stock Units only to those eligible individuals described in Section 4 who are selected by the Committee. (b) Awards of Restricted Stock Units shall be evidenced by Restricted Stock Unit Agreements approved by the Committee and executed by the Corporation and the Participant. Awards of Restricted Stock Units granted pursuant to the Plan need not be identical, but each must contain or be subject to the following terms and conditions: (1) Mandatory Terms and Conditions. Each Restricted Stock Unit Agreement shall contain provisions regarding: (A) The number of Shares granted under the Award or a formula for determining such; (B) The purchase price of the Shares, if any, and the means of payment for the Shares; (C) If the Award is a Performance-Based Award, the Qualifying Performance Criteria, if any, and level of achievement versus these criteria that shall determine the number of Shares granted, issued, retainable and/or vested; (D) Such other terms and conditions relating to the grant, issuance, vesting and/or forfeiture of the Shares as determined by the Committee, to the extent not inconsistent with this Plan, provided that in no event will any portion of Restricted Stock Units become vested prior to the first anniversary of the date of grant of such Restricted Stock or Stock Units (except in the case of death or disability and except that up to 5% of the Shares authorized for grant pursuant to Section 6(a) may be granted with a minimum vesting schedule of less than one year) and provided that in no event will any portion of Restricted Stock Units become vested immediately prior to or upon a Change in Control, except that Restricted Stock Units may become fully vested if the Participant holding the Restricted Stock Units is terminated by the Company for a reason other than Cause upon or within twelve (12) months following the Change in Control; (E) Restrictions on the transferability of the Shares, if any; and (F) Such further terms and conditions as may be determined from time to time by the Committee, in each case not inconsistent with this Plan. (2) Sale or Award Price. Subject to the requirements of applicable law, the Restricted Stock Unit Agreement shall set forth the price, if any, as determined by the Committee at which Shares of Restricted Stock Units shall be sold or awarded to a Participant.


 
707472.0021/8576991.1 9 (3) Share Vesting. The grant, issuance, retention and/or vesting of Shares under Restricted Stock Unit Awards shall be at such time and in such installments as determined by the Committee or under criteria established by the Committee, provided that in no event will any portion of Restricted Stock Units become vested prior to the first anniversary of the date of grant of such Restricted Stock Units (except in the case of death or disability and except that up to 5% of the Shares authorized for grant pursuant to Section 6(a) may be granted with a minimum vesting schedule of less than one year) and provided that in no event will any portion of Restricted Stock Units become vested immediately prior to or upon a Change in Control, except that Restricted Stock Units will become fully vested if the Participant holding the Restricted Stock or Stock Units is terminated by the Company for a reason other than Cause upon or within twelve (12) months following the Change in Control. The Committee shall have the right to make the timing of the grant and/or the issuance, ability to retain and/or vesting of Shares under Restricted Stock Unit Awards subject to continued employment, passage of time and/or such performance criteria and level of achievement versus these criteria as deemed appropriate by the Committee, which criteria may be based on financial performance and/or personal performance evaluations. Notwithstanding anything to the contrary in the Plan, the performance criteria for any Restricted Stock Unit Award that is intended to satisfy the requirements for “performance- based compensation” within the meaning of Code Section 162(m) shall be measured based on one or more Qualifying Performance Criteria selected by the Committee and specified at the time the Restricted Stock Unit Award is granted. (4) Termination of Employment. The Restricted Stock Unit Agreement may provide for the forfeiture or cancellation of the Restricted Stock Unit Award, in whole or in part, in the event of the termination of employment or service of the Participant to whom it was granted. In all cases, the Restricted Stock Unit Agreement shall provide that vesting shall cease in the event of termination of employment or service of the Participant to whom it was granted. (5) Shareholder Rights. No Participant shall have any rights as a shareholder with respect to any Shares subject to an Award of Restricted Stock Units under the Plan until said Shares have been issued. (6) Settlement of Stock Units. Upon expiration of the vesting period, settlement of Stock Units shall be made in Shares, cash or a combination thereof, as determined by the Committee, at the time(s) and in the manner set forth in the applicable Restricted Stock Unit Agreement. Until a Restricted Stock Unit is so settled, the number of Shares represented by a Restricted Stock Unit shall be subject to adjustment pursuant to Section 11. 9. PERFORMANCE UNITS (a) General. The Committee may grant Performance Units only to those eligible individuals described in Section 4 who are selected by the Committee as Participants. (b) Awards. A Performance Unit may be awarded either alone or in addition to other Awards granted under the Plan. The Committee shall determine the number of Performance Units granted to each Participant. Each Performance Unit Award shall be evidenced by a


 
707472.0021/8576991.1 10 Performance Unit Agreement approved by the Committee and executed by the Committee and the Participant. (c) Settlement. The Performance Unit Agreement shall provide that Performance Units may be settled in Shares, cash or a combination thereof, as determined by the Committee, at the time(s) and in the manner set forth in the applicable Performance Unit Agreement. Until a Performance Unit is so settled, the number of Shares represented by a Performance Unit shall be subject to adjustment pursuant to Section 11. (d) Performance Period and Criteria. The time period during which a Performance Unit Award shall be earned shall be the “Performance Period,” and, except in the year in which the Plan is adopted, shall be at least the length of one (I) fiscal year (whether of Nautilus or of any Subsidiary, determined in the discretion of the Committee). Performance Units shall be subject to performance goals established by the Committee. Notwithstanding anything to the contrary in the Plan, the performance criteria for any Performance Unit that is intended to satisfy the requirements for “performance-based compensation” within the meaning of Code Section 162(m) shall be a measure based on one or more Qualifying Performance Criteria selected by the Committee and specified in the Performance Unit Agreement. (e) Earning Performance Unit Awards. After the applicable Performance Period has ended, the Committee shall determine the extent to which the established performance goals have been achieved. (f) Termination of Employment. The Performance Unit Agreement may provide for the forfeiture or cancellation of the Performance Unit Award, in whole or in part, in the event of the termination of employment or service of the Participant to whom it was granted. In all cases, the Performance Unit Agreement shall provide that vesting shall cease in the event of termination of employment or service of the Participant to whom it was granted. 10. OTHER PROVISIONS APPLICABLE TO AWARDS (a) Transferability. Unless the Award Agreement expressly states that the Award is transferable as provided under the Plan, no Award granted under this Plan, nor any interest in such Award, may be sold, assigned, conveyed, gifted, pledged, hypothecated or otherwise transferred in any manner prior to the vesting or lapse of any and all applicable restrictions, other than by will or the laws of descent and distribution. The Committee may grant an Award or amend an outstanding Award Agreement to provide that the Award is transferable or assignable: (1) In the case of a transfer without the payment of any consideration, to any “family member” as such term is defined in Section A.1(a)(5) of the General Instructions to Form S-8 under the Securities Act of 1933, as amended from time to time; and (2) In any transfer described in clause (ii) of Section A.1(a)(5) of the General Instructions to Form S-8 under the 1933 Act as amended from time to time, provided that, following the transfer or assignment, the Award will remain subject to substantially the same terms applicable to the Award while held by the Participant, as modified as the Committee shall determine appropriate, and as a condition to such transfer, the transferee shall execute an agreement agreeing to be bound by the terms.


 
707472.0021/8576991.1 11 Any purported assignment, transfer or encumbrance that does not qualify under this subsection shall be void and unenforceable against the Corporation. (b) Qualifying Performance Criteria. (1) For purposes of this Plan, the term “Qualifying Performance Criteria” shall mean any one or more of the following performance criteria, either individually, alternatively or in any combination, applied to either the Corporation as a whole or to a business unit or Subsidiary, either individually, alternatively or in any combination, and measured either annually or cumulatively over a period of years, on an absolute basis or relative to a pre-established target, to previous years’ results or to a designated comparison group, in each case as specified by the Committee in the Award Agreement: (A) Cash flow; (B) Earnings per share; (C) Earnings before interest, taxes and amortization; (D) Return on equity; (E) Total shareholder return; (F) Share price performance; (G) Return on capital; (H) Return on assets or net assets; (I) Revenue or revenue growth; (J) Income or net income; (K) Operating income or net operating income; (L) Operating profit or net operating profit; (M) Operating margin or profit margin; (N) Return on operating revenue; (O) Return on invested capital; (P) Market segment share; (Q) Product release schedules; (R) New product innovation; (S) Product cost reduction through advanced technology;


 
707472.0021/8576991.1 12 (T) Brand recognition/acceptance; (U) Product ship targets; or (V) Customer satisfaction. (2) The Committee may adjust the performance goals and any evaluation of performance under any Qualifying Performance Criteria to account for changes in law or accounting practices and to make such adjustments the Committee deems necessary or appropriate to reflect the impact of extraordinary or unusual items, events or circumstances to avoid windfalls or hardships during a performance period, including without limitation: (A) Asset write-downs; (B) Litigation or claim judgments or settlements; (C) The effect of changes in tax law, accounting principles or other such laws or provisions affecting reported results; (D) Accruals for reorganization and restructuring programs; (E) Any extraordinary non-recurring items as described in Accounting Standards Codification 225-20 and/or in management’s discussion and analysis of financial condition and results of operations appearing in the Corporation’s annual report to shareholders for the applicable year; and (F) Events either not directly related to Company operations or not under the reasonable control of Company management. (3) Notwithstanding satisfaction or completion of any Qualifying Performance Criteria, to the extent specified at the time of grant, the number of Shares, Stock Units or other benefits granted, issued, retainable and/or vested under an Award on account of satisfaction of such Qualifying Performance Criteria may be reduced by the Committee on the basis of such further considerations as the Committee in its sole discretion shall determine. However, such a reduction with respect to one Participant may not result in an increase in the amount payable to another Participant. (c) Dividends. No adjustment shall be made in Shares issuable under the Award Agreement on account of cash dividends that may be paid or other rights that may be issued to the holders of Common Stock prior to the issuance or vesting of Shares under any Award. The Committee shall specify in the Award Agreement whether dividends or dividend equivalent amounts shall be paid to any Participant with respect to the Shares subject to the Award Agreement that are subject to any restrictions or conditions on the record date for dividends, provided that in no event will unissued or unvested Shares under any Award receive dividends or dividend equivalent amounts. (d) Award Agreements. The Committee shall, subject to applicable law, determine the date an Award is deemed to be granted. The Committee may establish the terms of Award Agreements and related documents and may, but need not, require as a condition to any


 
707472.0021/8576991.1 13 such agreement’s or document’s effectiveness that such agreement or document be executed by the Participant, including by electronic signature or other electronic indication of acceptance, and that Participant agrees to such further terms and conditions as specified in such agreement or document. The grant of an Award under this Plan shall not confer any rights upon the Participant holding such Award other than such terms, and subject to such conditions, as are specified in this Plan as being applicable to such type of Award (or to all Awards) or as are expressly set forth in the Award Agreement. (e) All Awards Subject to Company Clawback or Recoupment Policy. All Awards, subject to applicable law, shall be subject to clawback or recoupment pursuant to any compensation clawback or recoupment policy adopted by the Board of Directors or required by law during the term of Participant’s employment or other service with the Company that is applicable to employees, Board of Director members or other service providers of the Company, and in addition to any other remedies available under such policy and applicable law, may require the cancellation of outstanding Awards and the recoupment of any gains realized with respect to Awards. (f) Additional Restrictions on Awards. Either at the time an Award is granted or by subsequent action, the Committee may, but need not, impose such restrictions, conditions or limitations as it determines appropriate as to the timing and manner of any resales by a Participant or other subsequent transfers by a Participant of any Shares issued under an Award, including without limitation: (1) Restrictions under an insider trading policy; (2) Restrictions designed to delay and/or coordinate the timing and manner of sales by the Participant or Participants; and (3) Restrictions as to the use of a specified brokerage firm for such resales or other transfers. (g) Suspension or Termination of Awards Upon Misconduct. (1) If at any time (including after a notice of exercise has been delivered) the Committee reasonably believes that a Participant has committed an act of misconduct as described below, the Committee may suspend the vesting and settlement, as applicable, of any Award granted to the Participant pending a final determination of whether such an act of misconduct has been committed. If the Committee determines a Participant has committed an act of misconduct, any Award granted to the Participant may, in the discretion of the Committee, be forfeited, in whole or in part. (2) Any determination by the Committee with respect to the foregoing shall be final, conclusive, and binding on all interested parties. (3) For purposes of this subsection, an “act of misconduct” means embezzlement, fraud, dishonesty in the performance of or willful neglect of job duties, nonpayment of any obligation owed to the Corporation, breach of fiduciary duty or deliberate disregard of Corporation rules, material breach of an agreement between the Participant and the Corporation, the unauthorized disclosure of any Corporation trade secret or confidential information, conduct constituting unfair


 
707472.0021/8576991.1 14 competition, or inducing any customer to breach a contract with the Corporation, or any other conduct resulting in material (as determined by the Committee in its discretion) loss, damage or injury to the Corporation. 11. ADJUSTMENT OF AND CHANGES IN THE COMMON STOCK (a) The existence of outstanding Awards shall not affect in any way the right or power of Nautilus or its shareholders to make or authorize any or all adjustments, recapitalizations, reorganizations, exchanges, or other changes in the capital structure or business of Nautilus, or any merger or consolidation of Nautilus or any issuance of Shares or other securities or subscription rights thereto, or any issuance of bonds, debentures, preferred or prior preference stock ahead of or affecting the Common Stock, the Shares or other securities of Nautilus or the rights thereof, or the dissolution or liquidation of Nautilus, or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise. Further, except as expressly provided in the Plan or by the Committee unless the Committee determines, in its sole discretion, that an adjustment is necessary or appropriate and is not inconsistent with applicable law, including Code Sections 409A and 424(h), no adjustment by reason thereof shall be made with respect to, the number of Shares subject to any and all Awards previously granted or the exercise or purchase price per Share under such Awards because of: (1) The issuance by Nautilus of shares of stock or any class of securities convertible into shares of any class of stock, for cash, property, labor or services, upon direct sale, upon the exercise of rights or warrants to subscribe therefor, or upon conversion of shares or obligations of Nautilus convertible into such shares or other securities; (2) The payment of a dividend in property other than Shares; or (3) The occurrence of any similar transaction whether or not for fair value. (b) If the number of outstanding Shares of Nautilus for which the Award is then exercisable or as to which the Award is to be settled shall at any time be changed or exchanged by declaration of a stock dividend, stock split, reverse stock split, combination of shares, extraordinary dividend of cash and/or assets, recapitalization, reorganization or any similar event affecting the capital structure of Nautilus or the number of Shares outstanding, the Committee shall, subject to and consistent with the requirements of applicable law, including Code Sections 409A and 424(h), appropriately and equitably adjust the number and kind of Shares which are subject to this Plan or subject to any Awards granted under the Plan, including Awards previously granted, and the exercise or settlement prices of such Awards, so as to maintain the proportionate number of Shares without changing the aggregate exercise or settlement price. (c) Any Award Agreement and related documents may include such terms relating to the effect of any merger, reorganization or changes in control affecting Nautilus as the Committee determines in its discretion to be appropriate, to the extent not inconsistent with Code Sections 409A and 424(h). Subject to any such terms, in the event Nautilus is a party to a merger or other reorganization, outstanding Awards shall be subject to the agreement of merger or reorganization. Such agreement may provide, without limitation, for the assumption of outstanding Awards by the surviving corporation or its parent, for their


 
707472.0021/8576991.1 15 continuation by Nautilus (if Nautilus is a surviving corporation), for accelerated vesting and accelerated expiration, or for settlement in cash. 12. LISTING OR QUALIFICATION OF COMMON STOCK In the event that the Board of Directors determines in its discretion that the listing or qualification of the Shares available for issuance under the Plan on any securities exchange or quotation or trading system or other consent or approval under any applicable law or governmental regulation is necessary as a condition to the issuance of such Restricted Stock Unit Award or Performance Unit Award shall not vest unless such listing, qualification, consent or approval has been unconditionally obtained. 13. TERMINATION OR AMENDMENT OF THE PLAN (a) The Board of Directors may amend, alter or discontinue the Plan, and the Board or the Committee may, to the extent permitted by the Plan, amend any Award Agreement or other document relating to an Award made under this Plan. (b) No amendment or alteration shall be made which would impair the rights of any Participant, without such Participant’s consent, under any Award theretofore granted, provided that no such consent shall be required with respect to any amendment or alteration if the Committee determines in its sole discretion that such amendment or alteration either: (1) Is required or advisable in order for the Corporation, the Plan or the Award to satisfy or conform to any law or regulation or to meet the requirements of any accounting standard; or (2) Is not reasonably likely to significantly diminish the benefits provided under such Award or that any such diminishment has been adequately compensated. 14. WITHHOLDING To the extent required by applicable federal, state, local or foreign law, the Committee may and/or a Participant shall make arrangements satisfactory to the Corporation for the satisfaction of any and all taxes, including any withholding tax or payroll tax obligations, that arise with respect to any Award, the issuance of Shares or payment of cash upon exercise or settlement of an Award or any sale of Shares. The Corporation shall not be required to issue Shares or to recognize the disposition of such Shares until such tax obligations are satisfied. To the extent permitted or required by the Committee, these obligations may or shall be satisfied by having the Corporation withhold a portion of the Shares of stock that otherwise would be issued to a Participant under such Award or by tendering Shares previously acquired by the Participant. 15. GENERAL PROVISIONS (a) Employment At Will. Neither the Plan nor the grant of any Award nor any action by Nautilus, any Subsidiary, the Committee or any Administrator shall be held or construed to confer upon any person any right to be continued in the employ of Nautilus or a Subsidiary. Nautilus and each Subsidiary expressly reserves the right to discharge, without liability but subject to his or her rights under this Plan, any Participant whenever, in the sole discretion of Nautilus or a Subsidiary, as the case may be, its interest may so require. By accepting Awards under this Plan, the Participant acknowledges and agrees that such


 
707472.0021/8576991.1 16 grant of an Award is a voluntary gratification in the sense of art. 322d Swiss Code of Obligations ("CO") and under no circumstances shall constitute a salary component. (b) Governing Law. This Plan and any Award Agreements and other documents relating to Awards under the Plan shall be interpreted and construed in accordance with the laws of the State of Washington and applicable federal law. The Committee may provide that any dispute as to any Award shall be presented and determined in such forum as the Committee may specify, including through binding arbitration. Any reference in this Plan, or in an Award Agreement or related document, to a provision of law or to a rule or regulation shall be deemed to include any successor law, rule or regulation of similar effect or applicability. (c) Unfunded Plan. Insofar as it provides for Awards, the Plan shall be unfunded. Although bookkeeping accounts may be established with respect to Participants who are granted Awards under this Plan, any such accounts will be used merely as a bookkeeping convenience. The Corporation shall not be required to segregate any assets which may at any time be represented by Awards, nor shall this Plan be construed as providing for such segregation, nor shall the Corporation or the Committee be deemed to be a trustee of stock or cash to be awarded under the Plan. 16. NON-EXCLUSIVITY OF PLAN Neither the adoption of this Plan by the Board of Directors nor the submission of this Plan to the shareholders of the Corporation for approval shall be construed as creating any limitations on the power of the Board of Directors or the Committee to adopt such other incentive arrangements as either may deem desirable, including without limitation, the granting of stock options, stock appreciation rights, restricted stock, stock units or performance units other than under this Plan, and such arrangements may be either generally applicable or applicable only in specific cases. 17. COMPLIANCE WITH OTHER LAWS AND REGULATIONS This Plan, the grant and exercise of Awards under the Plan, and the obligation of the Corporation to sell, issue or deliver Shares under such Awards, shall be subject to all applicable federal, state and local laws, rules and regulations and to such approvals by any governmental or regulatory agency as may be required. The Corporation shall not be required to register in a Participant’s name or deliver any Shares prior to the completion of any registration or qualification of such Shares under any federal, state or local law or any ruling or regulation of any government body which the Committee shall determine to be necessary or advisable. To the extent the Corporation is unable (or the Committee deems it infeasible) to obtain authority from any regulatory body having jurisdiction, which authority is deemed by the Corporation’s counsel to be necessary to the lawful issuance and sale of any Shares under the Plan, the Corporation shall be relieved of any liability with respect to the failure to issue or sell such Shares as to which such requisite authority shall not have been obtained. 18. LIABILITY OF CORPORATION The Corporation shall not be liable to a Participant or other persons as to: (a) The non-issuance or sale of Shares as to which the Corporation has been unable to obtain from any regulatory body having jurisdiction the authority deemed by the Corporation’s counsel to be necessary to the lawful issuance and sale of any Shares under the Plan; and


 
707472.0021/8576991.1 17 (b) Any tax consequence expected, but not realized, by any Participant or other person due to the receipt, exercise or settlement of any Award granted under the Plan. 19. DESIGNATION OF BENEFICIARY The Committee shall establish such procedures and prescribe such forms as it deems appropriate for a Participant to designate a beneficiary to receive any amounts payable under an Award in the event of the Participant’s death.