Exhibit 10.1

 

FIRST AMENDMENT

TO NONSTATUTORY STOCK OPTION AGREEMENT

 

THIS FIRST AMENDMENT TO NONSTATUTORY STOCK OPTION AGREEMENT (the “First
Amendment”) is entered as of December 31, 2005 in order to amend that certain
Nonstatutory Stock Option Agreement, made in July 2003 (the “Agreement”),
between Nautilus, Inc., a Washington corporation, f/k/a The Nautilus Group, Inc.
(“Nautilus”) and Greggory C. Hammann (“Executive”).

 

RECITALS

 

WHEREAS, in July 2003 the parties entered into the Agreement pursuant to which
Nautilus granted Executive an option (the Option”) to purchase a total of
850,000 shares of common stock at $8.39 per share, which is $2 below the fair
market value of the common stock on the grant date; and

 

WHEREAS, Nautilus and Executive wish to amend the Agreement to avoid certain
adverse tax consequences that would otherwise arise under newly enacted
Section 409A of the Internal Revenue Code;

 

NOW, THEREFORE, Nautilus and Executive hereby agree as follows:

 

AGREEMENT

 

1. The exercise price for any Option shares vesting on or after January 1, 2005
is hereby changed from $8.39 per share to $10.39 per share. The exercise price
for Option shares vesting prior to January 1, 2005 shall remain $8.39 per share.

 

2. During the remaining vesting period, Nautilus will make a payment to
Executive on each subsequent vesting date in an amount equal to $2 multiplied by
the number of shares that vest on such date. The payment in respect of those
shares that vested on or after January 1, 2005, but prior to the date of this
Agreement, shall be delivered upon execution of this Agreement.

 

3. Except as specifically provided for in this First Amendment, the terms and
conditions of the Agreement remain unchanged.

 

IN WITNESS WHEREOF, the parties have executed this First Amendment as of the day
and year first above written.

 

NAUTILUS, INC.       EXECUTIVE

By:

             

/s/ Greggory C. Hammann

   

Signature

         

Greggory C. Hammann

   

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