Exhibit 10

 

NAUTILUS, INC.

 

NON-EMPLOYEE DIRECTOR

NONSTATUTORY STOCK OPTION AGREEMENT

 

Nautilus, Inc. (the “Company”), through its Board of Directors or a Committee
thereof (the “Plan Administrator”), has granted to [Name] (the “Optionee”), an
option to purchase a total of [ · ] shares of the Company’s Common Stock (the
“Option Shares”), at an exercise price of $[            ] for each Option Share.
This Option has been granted on                              (the “Grant Date”)
pursuant to the Nautilus, Inc. 2005 Long Term Incentive Plan (the “Plan”) which
is incorporated herein by reference. The terms defined in the Plan shall have
the same defined meanings herein.

 

1. Nature of the Option. This Option is a nonstatutory stock option and is not
intended to qualify for any special tax benefits to the Optionee.

 

2. Exercise Price. The exercise price is $ [ · ] U.S. for each Option Share,
which price is not less than the Fair Market Value per share of the Common Stock
on the date of grant.

 

3. Date Exercisable; Vesting.

 

  3.1 This Option has been granted upon Optionee’s election or appointment to
the Company’s Board of Directors. This Option shall become exercisable as to all
Option Shares on the date of the next annual meeting of the Company’s
shareholders following the date of grant, provided that Optionee shall have
continued to serve as a director of the Company until such date.

 

  3.2 In the event Optionee does not continue to serve as a director of the
Company until the date of the next annual meeting of the Company’s shareholders
following the date of grant, this Option shall terminate as of the date Optionee
is no longer serving as a director of the Company, and this Option shall not be
exercisable as to any of the Option Shares.

 

4. Exercise of Option. The Option may be exercised in whole or in part by
delivery to the Company, from time to time, of written notice, signed by
Optionee, specifying the number of Option Shares that Optionee then desires to
purchase, together with cash or check payable to the order of the Company, or
other form of payment acceptable to the Plan Administrator, for an amount of
United States dollars equal to the exercise price of such Option Shares.

 

5. Duration of Option; Suspension or Termination of Option.

 

  5.1 Subject to earlier termination in accordance with the Plan, this Option,
to the extent not previously exercised, shall terminate upon the earliest of the
following dates:

 

  (i) Three months after the date on which Optionee is no longer serving as a
member of the Company’s Board of Directors;

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  (ii) The date seven (7) years from the Grant Date (the “Expiration Date”); or

 

  (iii) The date of any transfer of the Option in violation of Section 6.

 

  5.2 Suspension or Termination of Stock Options and SARs. This Option shall be
subject to suspension or termination by the Plan Administrator as set forth in
Section 8(d) of the Plan.

 

6. Non-Transferability of Option. This Option may not be transferred in any
manner otherwise than by will or by the laws of the descent or distribution or
pursuant to a qualified domestic relations order as defined by Section 414(p) of
the Internal Revenue Code or Title I of the Employee Retirement Income Security
Act or the rules thereunder, and may be exercised during the lifetime of
Optionee only by the Optionee. The terms of this Option shall be binding upon
the executors, administrators, heirs, successors and assigns of the Optionee.

 

7. Adjustments Upon Recapitalization, Reorganization, and Certain Other Events.
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 Option shall be subject to adjustment by the Plan
Administrator in accordance with the Plan. This Option shall become immediately
exercisable, without regard to any contingent vesting provision set forth
herein, 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.

 

8. Disputes. Any dispute or disagreement that may arise under or as a result of
this Agreement, or any question as to the interpretation of this Agreement or
the Plan, shall be determined by the Plan Administrator in its absolute
discretion, and any such determination shall be final, binding, and conclusive
on all affected persons.

 

9. Taxation Upon Exercise of Option. Optionee understands that upon exercise of
this Option, Optionee may recognize income for federal income tax purposes in an
amount equal to the excess of the then fair market value of the Option Shares
over the exercise price. The Company will be required to withhold tax from
Optionee’s current compensation with respect to such income; to the extent that
Optionee’s current compensation is insufficient to satisfy the withholding tax
liability, the Company may require the Optionee to make a cash payment to cover
such liability as a condition of exercise of this Option.

 

10. Governing Law. This agreement shall be interpreted and construed in
accordance with the laws of the State of Washington.

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    OPTIONEE           NAUTILUS, INC.            

By:

       

Signature

         

Signature

                     

Print Name

         

Print Name

               

Its: