Document:

Exhibit 10.2

  

SEVERANCE AGREEMENT

 

THIS SEVERANCE AGREEMENT
(the “Agreement”), dated as of April 22, 2015 (the “Execution Date”), by and between C. Evan Ballantyne
(the “Executive”) and Synthetic Biologics, Inc., a Nevada corporation (“Synthetic”), effective as of the
Effective Date defined in Section 14(f) recites and provides as follows:

 

WHEREAS, Executive
has served as the Chief Financial Officer of Synthetic pursuant to an Employment Agreement, dated March 18, 2015 (the “Employment
Agreement”); and

 

WHEREAS, Executive
and Synthetic desire to terminate the Employment Agreement; and

 

WHEREAS, Synthetic
and Executive have reached agreement on all matters relating to the employment of Executive by Synthetic and the termination of
the Employment Agreement; and

 

WHEREAS, Synthetic
and Executive desire to set forth all of the terms and conditions of their mutual understanding in this Agreement.

 

NOW, THEREFORE, based
upon their mutual promises and other good and valuable consideration, Synthetic and Executive agree as follows:

 

1. RESIGNATION.
Executive hereby irrevocably, unconditionally and voluntarily resigns from his position as Chief Financial Officer and from any
position with any subsidiary or affiliate of Synthetic, effective as of May 14, 2015 (the “Resignation Date”). In connection
with Executive’s resignation and as of the Resignation Date, it is agreed that:

 

(a)No Duties.  From
and after the Resignation Date, Executive shall have no further obligation or authority to perform duties and functions on behalf
of Synthetic and/or its subsidiaries or affiliates and shall refrain from performing such duties or functions.

 

(b) Cooperation.  Anything
to the contrary in this Agreement notwithstanding, Executive shall cooperate with Synthetic as to any requests by it in connection
with the transition to a replacement officer or as otherwise deemed necessary by it for its business, including, without limitation,
any ongoing legal matters to which Executive has involvement in or other knowledge, as and when requested by Synthetic’s
Chief Executive Officer and/or Chairperson of the Board; provided that such cooperation does not materially interfere with
Executive’s regular business activities.  Synthetic shall further reimburse Executive for any approved, reasonable
expenses incurred by him as a result of his cooperation.   

 

(c)No Contact. 
For a period of twelve (12) months following the Resignation Date: (i) except outside the work environment, Executive shall have
no contact with suppliers,  Synthetic Related Parties (as defined in Paragraph 5(a) below) and/or  current
employees of Synthetic and any Synthetic Related Parties, except  in connection with Executive’s benefits,  compensation,
administrative matters or as requested by Synthetic’s Chief Executive Officer; and (ii) with respect to investors and suppliers
of Synthetic and any Synthetic Related, Executive will not discuss Synthetic, any Synthetic Related Parties and/or those entities’
respective businesses or operations.

 

2.SEVERANCE COMPENSATION.  In
consideration of Executive’s undertakings contained in this Agreement, Synthetic shall:

 

    	 

    	 

    

 

(a)Pay, as soon as
practicable after the Effective Date of this Agreement, any accrued base salary, accrued vacation pay and expense reimbursements
under the Employment Agreement remaining unpaid as of the Effective Date of this Agreement.

 

(b)Commencing seven
(7) days following the effective date of the Additional Release, which is defined below, and continuing for twelve (12) months
thereafter, Synthetic shall make payments to Executive of his base salary of Three Hundred Thirty Five Thousand Dollars ($335,000)
in accordance with the payroll policy of Synthetic, net of all payroll, Medicare, Social Security, state and federal taxes and
deductions which Synthetic is obligated to make.

 

(c)Commencing seven
(7) days following the effective date of the Additional Release and continuing until the earliest of: (i) twelve (12) months thereafter;
(ii) the date Executive becomes eligible for substantially equivalent health insurance in connection with new employment or self-employment;
or (iii) the date the Executive ceases to be eligible for COBRA continuation coverage for any reason, including plan termination,
pay for the COBRA premiums necessary to continue the Executive’s and his covered dependents’ health insurance coverage
in effect for himself (and his covered dependents). In the event Synthetic does not learn of the employment identified in the preceding
sentence until after it has made a payment or payments pursuant to this Paragraph 2(c), Executive shall return any compensation
to which he was not entitled under this Paragraph 2(c). In addition, payments under this Paragraph 2(c) shall cease in the event
that Executive materially breaches this Agreement.

 

(d)Notwithstanding
anything to the contrary contained in this Agreement, Synthetic shall only be obligated to make payments under Sections 2(b) and
2(c) if the Additional Release has been executed and has not been revoked prior to the eighth day following the execution thereof.

  

3.RELEASES.

 

(a)In consideration
of Synthetic’s undertakings contained in this Agreement, excluding Paragraphs 2(c) and 2(d), Executive has executed the Release,
which is attached hereto as Exhibit A (the “Release”) and expressly incorporated in this Agreement, at the time
of execution of this Agreement.

 

(b)In consideration
of Synthetic’s undertakings contained in this Agreement, on the Resignation Date Executive must execute the Additional Release,
which is attached hereto as Exhibit B and expressly incorporated in this Agreement, (the “Additional Release”)

 

(c)In consideration
of Executive’s undertakings contained in the Severance Agreement to which Synthetic is not otherwise entitled, Synthetic
releases Executive from, and promises and agrees not to sue Executive for or in respect of, any and all claims, charges, complaints,
liabilities, obligations, promises, agreements, damages, actions and expenses (including attorney’s fees and costs) of any
nature whatsoever, known or unknown, which Synthetic now has or claims to have against Executive from the beginning of time to
the date of this Agreement, provided, however, that this release shall not bar or waive any claims arising out of
business-related willful misconduct or criminal conduct.

 

4.NO BENEFITS NOT
SET OUT IN THIS AGREEMENT.  No salary, benefits, bonus payment, vacation pay, sick pay or other payments or additional
monies beyond the sums identified in Paragraph 2 of this Agreement will be made by Synthetic to Executive or on Executive’s
behalf and the parties agree that no salary, benefits, bonus payment or other payments beyond the sums identified in Paragraph
2 are owing, provided, however, that Executive shall receive such salary and other compensation from the Execution Date through
the Resignation Date.

 

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5.NO DISPARAGEMENT.

 

(a)In consideration
of Synthetic’s undertakings contained in this Agreement to which Executive is not otherwise entitled, Executive agrees that
he and his agents, family and/or representatives shall refrain from: (i) all conduct, verbal or otherwise, which would materially
damage the reputation, goodwill or standing in the community of Synthetic, its affiliates, subsidiaries, divisions, agents and
related parties and their respective principals, owners (direct or indirect), members, directors, officers, agents, servants, employees,
parties, attorneys and other professionals, successors and assigns (collectively, the “Synthetic Related Parties”);
and (ii) referring to or in any way commenting on Synthetic and/or any of the other Synthetic Related Parties in or through the
general media or any public domain (including without limitation, internet websites, blogs, chat rooms and the like), which would
materially damage the reputation, goodwill or standing in the community of Synthetic and/or any of the other Synthetic Related
Parties.

 

(b)In consideration
of Executive’s undertakings contained in this Agreement to which Synthetic is not otherwise entitled, Synthetic and its officers
and directors  agree that they shall refrain from: (i) all conduct, verbal or otherwise, which would materially damage
the reputation, goodwill or standing in the community of Executive and (ii) referring to or in any way commenting on Executive
in or through the general media or any public domain (including without limitation, internet websites, blogs, chat rooms and the
like), which would materially damage the reputation, goodwill or standing in the community of Executive.

 

6.TERMS ARE CONFIDENTIAL.  Until
such time as Synthetic is required to disclose the existence and terms of this Agreement, Executive shall keep the terms and conditions
of this Agreement strictly confidential.  Executive hereby agrees not to disclose the existence of this Agreement or
any of the terms of this Agreement (including without limitation the amounts referred to in Paragraph 2) to any person, including
without limitation, any current or former employee of or applicant for employment with Synthetic and/or any of the other Synthetic
Related Parties, with the exception of Executive’s attorney, accountant, tax preparer or spouse or as compelled by legal
process, provided Executive’s attorneys, accountants, tax preparers, or spouses are informed of this provision requiring
confidentiality and such person agrees to be bound by its terms.

 

7.RETURN OF SYNTHETIC
PROPERTY.  All documents, records, data, equipment (including, without limitation: any computer or computers; any electronic
storage device; computer hard drives; flash drives; discs and the like), Synthetic charge or credit cards, any Synthetic electronic
communication devices (including cellular telephones, BlackBerry®, PDA and the like) and other physical property, whether or
not pertaining to Confidential Information, which were furnished to Executive by Synthetic or were procured by Executive in connection
with Executive’s services to Synthetic and/or its subsidiaries or affiliates will be and remain the sole property of Synthetic.
Executive will, at Synthetic’s expense, travel to Synthetic’s Ann Arbor, Michigan offices to assist in the download
of Synthetic’s records and data retrieval from Executive’s computer. Executive will return to Synthetic forthwith all
such materials and property except as provided in Paragraph 8 of this Agreement.

 

8.STOCK SHARES
AND OPTIONS. Synthetic acknowledges that all of the vested unexercised stock options heretofore granted to Executive shall be exercisable
by Executive at any time prior to December 31, 2015 provided that Executive has executed the Additional Release and has not revoked
the Additional Release prior to the eighth day following the execution thereof.  

 

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9. CONFIDENTIAL
INFORMATION.

 

(a)“Confidential
Information” means any information concerning or referring in any way to the business of Synthetic and/or its subsidiaries
and affiliates disclosed to or acquired by the Executive through or as a consequence of the Executive’s affiliation as an
employee of Synthetic and/or member of it and/or its subsidiaries or affiliates. For purposes of this Agreement, Confidential Information
consists of information proprietary to Synthetic and/or its subsidiaries and affiliates which is not generally known to the public
and which in the ordinary course of business is maintained by Synthetic and/or its subsidiaries and affiliates as confidential.
By way of example and without limitation, Confidential Information consists of computer software, trade secrets, patents, inventions,
copyrights, techniques, designs, and other technical information in any way concerning or referring to scientific, technical or
mechanical aspects of Synthetic’s and/or its subsidiaries’ and affiliates’ products, concepts, processes, machines,
engineering, research and development. Confidential Information also includes, without limitation, information in any way concerning
or referring to Synthetic’s and/or its subsidiaries’ and affiliates’ business methods, business plans, forecasts
and projections, operations, organizational structure, finances, customers, funding, pricing, costing, marketing, purchasing, merchandising,
sales, products, product information, suppliers, customers, employees or their compensation, data processing, software and all
other information designated by Synthetic and/or its subsidiaries and affiliates as “confidential.” Confidential Information
shall not include any information or material that is or becomes generally available to the public other than as a result of a
wrongful disclosure by: (a) a person otherwise bound to the provisions hereof, or (b) any person bound by a duty of confidentiality
or similar duty owed to Synthetic and/or its subsidiaries and affiliates.

 

(b)Duty of Confidentiality.
Executive will maintain in confidence and will not, directly or indirectly, disclose or use (or allow others to disclose or use)
any Confidential Information belonging to Synthetic and/or its subsidiaries and affiliates, whether in oral, written, electronic
or permanent form, except as directed in writing by the Board of Directors of Synthetic and/or its subsidiaries or affiliates.

 

(c)Return of Confidential
Information. Executive shall deliver forthwith to Synthetic and/or its subsidiaries and affiliates as the case may be all original
Confidential Information (and all copies thereof) in Executive’s possession or control belonging to Synthetic and/or its
subsidiaries and affiliates and all tangible items embodying or containing Confidential Information.

 

(d)Survival.
This Agreement together with the Employment Agreement and any previous Confidentiality and Non-Disclosure Agreement between the
Executive and Synthetic and/or its subsidiaries and affiliates shall survive termination of employment.

 

(e)Injunctive
Relief. Executive acknowledges that a violation or attempted violation on Executive’s part of any agreement in this Paragraph
9 will cause irreparable damage to Synthetic and/or its subsidiaries and affiliates, and accordingly, Executive agrees that Synthetic
and/or its subsidiaries and affiliates as the case may be shall be entitled as a matter of right to an injunction from any court
of competent jurisdiction restraining any violation or further violation of such agreement by Executive without the obligation
of posting a bond; such right to an injunction, however, shall be cumulative and in addition to whatever other remedies that Synthetic
and/or its subsidiaries and affiliates may have.  The existence of any claim of Executive, whether predicated on this
Agreement or otherwise, shall not constitute a defense to the enforcement by Synthetic of the covenants contained in this Agreement.

 

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10.ASSIGNMENT OF
RIGHTS. Executive has disclosed to Synthetic any and all designs, intellectual property, software, inventions, discoveries, or
improvements (individually and collectively, “Inventions”) made by Executive as a result or product of his employment
relationship with Synthetic and/or its subsidiaries and affiliates. Executive hereby assigns to Synthetic or its relevant subsidiary
or affiliate without additional compensation the entire worldwide right, title and interest in and to any such Inventions (whether
disclosed or not), and related intellectual property rights and without limitation all copyrights, copyright renewals or reversions,
trademarks, trade names, trade dress rights, industrial design, industrial model, inventions, priority rights, patent rights, patent
applications, patents, design patents and any other rights or protections in connection therewith or related thereto, for exploitation
in any form or medium, of any kind or nature whatsoever, whether now known or hereafter devised. To the extent that any work created
by Executive can be a work for hire pursuant to U.S. Copyright Law, the parties deem such work a work for hire and Executive should
be considered the author thereof. Executive shall, at the request of Synthetic or its relevant subsidiary or affiliate, without
additional compensation execute, acknowledge and deliver to Synthetic or its relevant subsidiary or affiliate such instruments
and documents as Synthetic or its relevant subsidiary or affiliate may require to perfect, transfer and vest in Synthetic or its
relevant subsidiary or affiliate the entire right, title and interest in and to such inventions. In the event that Executive does
not timely perform such obligations, Executive hereby makes Synthetic or its relevant subsidiary or affiliate and its officers
his attorney-in-fact and gives them the power of attorney to perform such obligations and to execute such documents on Executive’s
behalf. Executive shall cooperate with Synthetic or its relevant subsidiary or affiliate, upon Synthetic’s or its relevant
subsidiary’s or affiliate’s request and at Synthetic’s or its relevant subsidiary’s or affiliate’s
cost but without additional compensation, in the preparation and prosecution of patent, trademark, industrial design and model,
and copyright applications worldwide for protection of rights to any Inventions.

 

11.NON-COMPETE;
NON-SOLICITATION.

 

(a)Non-Compete.
For a period commencing on the Effective Date of this Agreement (as defined below) and ending one (1) year after the Effective
Date of this Agreement (the “Non-Competition Period”), Executive shall not, directly or indirectly, whether as an officer,
director, stockholder, partner, proprietor, associate, representative, consultant, or in any capacity whatsoever engage in, become
financially interested in, participate in, be employed by or have any business connection with any other person, corporation, firm,
partnership or other entity whatsoever which competes with Synthetic, anywhere throughout the world, in any line of business engaged
in (or planned to be engaged in) by Synthetic other than de minimis stock holdings in public companies; provided, however,
that anything above to the contrary notwithstanding, he may own, as a passive investor, securities of any competitor corporation,
so long as his direct holdings in any one such corporation shall not in the aggregate constitute more than one percent (1%) of
the voting stock of such corporation, and provided that the Executive promptly discloses to the Board any such participation,
other than such de minimis stock holding.

 

(b)Non-Solicitation.
During the Non-Competition Period identified in Paragraph 11(a) above, Executive shall not, directly or indirectly: (i) induce
or attempt to induce or aid others in inducing anyone working at Synthetic or its subsidiaries or affiliates to cease working at
Synthetic or its subsidiaries or affiliates, or in any way interfere with the relationship between Synthetic or its subsidiaries
or affiliates and anyone working at Synthetic or its subsidiaries or affiliates except in the proper exercise of Executive’s
authority; or (ii) in any way interfere with the relationship between Synthetic or its subsidiaries or affiliates and any customer,
supplier, licensee or other business relation of Synthetic or its subsidiaries or affiliates.

 

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(c)Scope.
If, at the time of enforcement of this Paragraph 11, a court shall hold that the duration, scope, area or other restrictions stated
herein are unreasonable under circumstances then existing, the parties agree that the maximum duration, scope, area or other restrictions
reasonable under such circumstances shall be substituted for the stated duration, scope, area or other restrictions.

 

(d)Independent
Agreement. The existence of any claim or cause of action of Executive against Synthetic or any of its subsidiaries or affiliates,
whether or not predicated upon the terms of this Agreement, shall not constitute a defense to the enforcement of these covenants.

 

(e)Injunctive
Relief. Executive acknowledges that a violation or attempted violation on Executive’s part of any agreement in this Paragraph
11 will cause irreparable damage to Synthetic and/or its subsidiaries or affiliates, and accordingly, Executive agrees that Synthetic
and/or its subsidiaries or affiliates shall be entitled as a manner of right to an injunction from any court of competent jurisdiction
restraining any violation or further violation of such agreement by Executive without the obligation of posting a bond; such right
to an injunction, however, shall be cumulative and in addition to whatever other remedies that Synthetic and/or its subsidiaries
or affiliates may have. The existence of any claim of Executive, whether predicated on this Agreement or otherwise, shall not constitute
a defense to the enforcement by Synthetic and/or its subsidiaries or affiliates of the covenants contained in this Agreement.

 

12. ARBITRATION.  No
dispute between one or more Synthetic Related Parties and Executive shall be the subject of a lawsuit filed in state or federal
court. Instead, any such dispute shall be submitted to binding arbitration before the American Arbitration Association (“AAA”)
or, if Synthetic and Executive agree in a separate writing, another individual or organization or an individual or organization
that a court appoints. Notwithstanding the above, either Synthetic or Executive may file with an appropriate state or federal court
a claim for injunctive relief in any case where the filing party seeks provisional injunctive relief or where permanent injunctive
relief is not available in arbitration. The filing of a claim for injunctive relief in state or federal court shall not allow either
party to raise any other claim outside of arbitration. It is understood that both sides are hereby waiving the right to a jury
trial.

 

(a) The arbitration
shall be initiated in Montgomery County, Maryland and shall be administered by AAA under its commercial arbitration rules before
a single arbitrator that shall be mutually agreed upon by the parties hereto. If the parties cannot agree on a single arbitrator,
then an arbitrator shall be selected in accordance with the rules of AAA. The arbitration must be filed within one year of the
act or omission which gives rise to the claim. Each party shall be entitled to take one deposition, and to take any other discovery
as is permitted by the Arbitrator. In determining the extent of discovery, the Arbitrator shall exercise discretion, but shall
consider the expense of the desired discovery and the importance of the discovery to a just adjudication.

 

(b) The Arbitrator
shall render an award that conforms to the facts, as supported by competent evidence (except that the Arbitrator may accept written
declarations under penalty of perjury, in addition to live testimony), and the law as it would be applied by a court sitting in
the State of Maryland. The cost of arbitration shall be advanced equally by the parties. Any party may apply to a court of competent
jurisdiction for entry of judgment on the arbitration award.

 

(c) This Agreement
supersedes all previous Agreements between the Executive and Synthetic, except for Synthetic’s Proprietary Information, Inventions,
Non-Solicitation and Non-Competition Agreement executed by the Executive and the provisions of Section 8 and 9 of the Employment
Agreement.  To the extent that there is any conflict between this Agreement and any earlier agreement between Synthetic
and Executive, this Agreement governs.

 

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13.SUCCESSORS.

 

(a)This Agreement
shall be binding upon and inure to the benefit of Executive and Executive’s heirs and shall not be assignable beyond Executive
and his heirs.

 

(b) This Agreement
shall inure to the benefit of Synthetic and its successors and assigns. Synthetic may assign this Agreement to any successor or
affiliated entity, subsidiary, sibling, or parent company, provided that such assignee is financially qualified to fulfill obligations
hereunder and in the event of such assignment, Synthetic agrees to guarantee all obligations hereunder.

 

14. MISCELLANEOUS

 

(a)Executive shall
notify Synthetic of any and all employment or other compensated work he obtains during the period from the Effective Date of this
Agreement through and including April 30, 2016.  Such notice shall identify the name and address of the employer or person
or entity that provides the compensation for the work involved, Executive’s title, duties and responsibilities, and fully
identify all compensation that Executive is to receive in connection with the work or employment.

 

(b)This Agreement
shall be governed by and construed in accordance with the laws of the State of Maryland, without reference to the principles of
conflict of laws. The captions of this Agreement are not part of the provisions hereof and shall have no force or effect.  This
Agreement contains the full and complete understanding between the parties hereto and supersedes all prior understandings, whether
written or oral, pertaining to the subject matter hereof. This Agreement may not be amended or modified otherwise than by written
agreement executed by Executive and by the designated representative of the Board.

 

(c)All notices and
other communications hereunder shall be in writing and shall be given by hand delivery, by registered or certified mail, return
receipt requested, postage prepaid, by reputable overnight courier (such as Federal Express or UPS), by facsimile, or by e-mail
to such address as either party shall have furnished to the other in writing in accordance herewith. Notice may be given to Synthetic
or Executive as follows:

 

	 	For Synthetic:	For Executive:
	 	 	 
	 	
        155 Gibbs Street, Suite 412

        Rockville, Maryland 20850
	
        The last address for Executive listed

        in Synthetic’s records

	 	
         

        With a Copy to:

         
	
         

         

	 	
        Gracin & Marlow, LLP

        The Chrysler Building

        405 Lexington Avenue, 26th Floor

        New York, New York 10174

        Attn: Leslie Marlow, Esq.
	 

 

(d)The invalidity
or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of
this Agreement.

 

(e)The failure of
either party to insist upon strict compliance with any provision of this Agreement, or the failure to assert any right either party
may have hereunder, shall not be deemed to be a waiver of such provision or right or any other provision or right of this Agreement.

 

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(f)Notwithstanding
anything to the contrary contained in this Agreement, this Agreement shall become effective on the seventh day after the date of
this Agreement (which is also the date of execution of the Release), provided the Executive does not exercise his right to revoke
the Release (“Effective Date”). If Executive revokes the Release during such seven-day period, this Agreement shall
not become effective.

 

 

(The Remainder of this pages is intentionally
blank)

 

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 IN WITNESS WHEREOF, Executive
has hereunto set Executive’s hand and, pursuant to the authorization from its Board of Directors, Synthetic has caused these
presents to be executed in its name on its behalf, all as of the day and year first above written.

 

	SYNTHETIC BIOLOGICS, INC.,

	 	 	EXECUTIVE	 
	
         

         
		 	 	 	 
	By:	/s/ Jeffrey Riley	 	 	/s/ C. Evan Ballantyne	 
	 	
        Name: Jeffrey Riley

        Title: Chief Executive Officer
	 	 	C. Evan Ballantyne	 

 

 

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EXHIBIT A

 

RELEASE

 

This Release dated
as of April 22, 2015, between C. Evan Ballantyne, an individual (the “Executive”), and Synthetic Biologics, Inc. (“Synthetic”),
a Nevada corporation, recites and provides as follows:

 

WHEREAS, Executive
serves or served as the Chief Financial Officer of Synthetic and/or its subsidiaries pursuant to an Employment Agreement dated
March 18, 2015 (the “Employment Agreement”); and

 

WHEREAS, Executive
and Synthetic desire to terminate the Employment Agreement and Executive has resigned his employment with of Synthetic and/or of
its subsidiaries; and

 

WHEREAS, Synthetic
and Executive have reached agreement on all matters relating to the employment of Executive by Synthetic and the termination of
his Employment Agreement; and

 

WHEREAS, Synthetic
and Executive have set the terms and conditions of their agreement in the Severance Agreement dated April 22, 2015 (“Severance
Agreement”) to which this Release is Exhibit A; and

 

WHEREAS, the Severance
Agreement obligates Executive to execute this Release.

 

NOW, THEREFORE, based
upon their mutual promises and other good and valuable consideration contained in the Severance Agreement, Executive agrees as
follows:

 

1. In consideration
of Synthetic’s undertakings contained in the Severance Agreement to which Executive is not otherwise entitled, Executive
releases Synthetic, its affiliates, subsidiaries, divisions, agents and related parties and their respective principals, owners
(direct or indirect), members, directors, officers, agents, servants, employees, parties, attorneys and other professionals, successors
and assigns (collectively, the “Synthetic Related Parties”) from, and promises not to sue Synthetic and/or any of the
other Synthetic Related Parties for or in respect of, any and all claims, charges, complaints, liabilities, obligations, promises,
agreements, damages, actions and expenses (including attorney’s fees and costs) of any nature whatsoever, known or unknown,
which Executive now has or claims to have against Synthetic and/or any of the other Synthetic Related Parties jointly, severally
or singly from the beginning of time to the date of this Agreement, including, without limitation, claims relating to Executive’s
employment with Synthetic or the termination of his employment, claims based in contract, tort, constitutional, statutory or common
law, and claims under any federal, state, or local statute, order, law or regulation, governing terms or conditions of employment,
including but not limited to wages, benefits or discrimination in employment on the basis of any protected characteristic.  This
release applies to rights and claims arising under the National Labor Relations Act, Age Discrimination in Employment Act of 1967
(29 U.S.C. §§621, et seq.), Title VII of the Civil Rights Act (“Title VII”), the Americans with Disabilities
Act (“ADA”), Genetic Information Nondiscrimination Act of 2008 (“GINA”), Uniformed Services Employment
and Reemployment Rights Act (“USERRA”), the Employee Retirement Income Security Act (“ERISA”) (excluding
any claims for accrued, vested benefits), the Maryland Fair Employment Practice Act (“FEPA”), and the Maryland Wage
Act.  This release does not release Synthetic or Synthetic Related Parties from obligations under the Severance Agreement.

 

    	 

    	 

    

 

2. Notwithstanding
Paragraph 1 of this Release, Executive may bring a claim for breach of the Severance Agreement.  If any claim covered
in Paragraph 1 of this Release, other than for a breach of the Severance Agreement or to enforce his rights under the Severance
Agreement, is brought by Executive, to the greatest extent permitted by applicable law, Synthetic and/or the other Synthetic Related
Parties shall be entitled to its and/or their attorney’s fees and costs upon prevailing on such claim.

 

3. Executive acknowledges
the following:

 

(a)He has read and
understands this Release and the Severance Agreement;

 

(b) Before executing
this Release and the Severance Agreement, he has been offered at least 21 days to consider his rights and obligations under this
Release and the Severance Agreement;

 

(c)The period of
time he has to consider his rights and obligations under this Release and the Severance Agreement is reasonable;

 

(d) Before executing
this Release and the Severance Agreement, Synthetic advised him in writing to consult with an attorney and he has done so;

 

(e) He has knowingly
and voluntarily elected to enter into this Release and the Severance Agreement and releases Synthetic from any and all claims,
subject to the stated limitations in this Release, in exchange for valuable consideration which is in addition to anything of value
to which he is already entitled;

 

(f) The Release constitutes
a waiver of all rights and claims he may have under the Age Discrimination in Employment Act of 1967 (29 U.S.C. §§621,
et seq.);

 

(g) This Release
does not waive any rights or claims by Executive that may arise after this Release is finally accepted and executed; and

 

(h) For a period
of seven (7) days following the execution of this Release and the Severance Agreement, Executive may revoke this Release and the
Severance Agreement by sending written notice of same to Synthetic, addressed to Mr. Jeffrey Riley, 155 Gibbs Street, Suite 412,
Rockville, Maryland 20850.  For the revocation to be effective, Synthetic must receive the written notice by not later
than the close of business on the seventh day after Executive signs this Release.  This Release shall not become effective
or enforceable until this seven-day revocation period has expired without Executive having exercised his right to revoke.

 

(i)Nothing in this
Release and Severance Agreement is intended to, or shall, interfere with Executive’s rights under federal, state, or local
civil rights or employment discrimination laws (including, but not limited to, Title VII, the ADA, the ADEA, GINA, USERRA, or their
state or local counterparts) to file or otherwise institute a charge of discrimination, to participate in a proceeding with any
appropriate federal, state, or local government agency enforcing discrimination laws, or to cooperate with any such agency in its
investigation, none of which shall constitute a breach of this Release and Severance Agreement. Executive shall not, however, be
entitled to any relief, recovery, or monies in connection with any such action, charge or proceeding brought against Synthetic
and/or the other Synthetic Related Parties, regardless of who filed or initiated any such complaint, charge, or proceeding.

 

 

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	SYNTHETIC BIOLOGICS, INC.

	 	 	EXECUTIVE	 
	 	 	 	 	 	 
	By:	/s/ Jeffrey Riley	 	 	/s/ C. Evan Ballantyne	 
	 	
        Name: Jeffrey Riley

        Title: Chief Executive Officer
	 	 	C. Evan Ballantyne	 

 

 

 

 

 

STATE OF____________:

 

COUNTY OF _________:

 

 

On the        day of April, in the year 2015 before
me, the undersigned, personally appeared Jeffrey Riley, personally known to me or proved to me on the basis of satisfactory evidence
to be the individual whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his
capacity and with the authority of Synthetic Biologics, Inc., and that by his signature on the instrument, the corporation upon
which the individual acted executed the instrument.

 

 

 

	 	 	 
	Notary Signature	 	 

 

 

 

 

 STATE OF____________:

 

COUNTY OF _________:

 

 

On the day of April in the year 2015 before
me, the undersigned, personally appeared C. Evan Ballantyne, personally known to me or proved to me on the basis of satisfactory
evidence to be the individual whose name is subscribed to the within instrument and acknowledged to me that he executed the same
in his capacity, and that by his signature on the instrument the individual executed the instrument.

 

 

 

	 	 	 
	Notary Signature	 	 

 

 

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EXHIBIT B

 

ADDITIONAL RELEASE

 

This Release dated
as of May 14, 2015, between C. Evan Ballantyne, an individual (the “Executive”), and Synthetic Biologics, Inc. (“Synthetic”),
a Nevada corporation, recites and provides as follows:

 

WHEREAS, Executive
serves or served as the Chief Financial Officer of Synthetic and/or its subsidiaries pursuant to an Employment Agreement dated
March 18, 2015 (the “Employment Agreement”); and

 

WHEREAS, Executive
and Synthetic desire to terminate the Employment Agreement and Executive has resigned his employment with of Synthetic and/or of
its subsidiaries; and

 

WHEREAS, Synthetic
and Executive have reached agreement on all matters relating to the employment of Executive by Synthetic and the termination of
his Employment Agreement; and

 

WHEREAS, Synthetic
and Executive have set the terms and conditions of their agreement in the Severance Agreement dated April 22, 2015 (“Severance
Agreement”) to which this Release is Exhibit B; and

 

WHEREAS, the Severance
Agreement obligates Executive to execute this Release.

 

NOW, THEREFORE, based
upon their mutual promises and other good and valuable consideration contained in the Severance Agreement, Executive agrees as
follows:

 

1. In consideration
of Synthetic’s undertakings contained in the Severance Agreement to which Executive is not otherwise entitled, Executive
releases Synthetic, its affiliates, subsidiaries, divisions, agents and related parties and their respective principals, owners
(direct or indirect), members, directors, officers, agents, servants, employees, parties, attorneys and other professionals, successors
and assigns (collectively, the “Synthetic Related Parties”) from, and promises not to sue Synthetic and/or any of the
other Synthetic Related Parties for or in respect of, any and all claims, charges, complaints, liabilities, obligations, promises,
agreements, damages, actions and expenses (including attorney’s fees and costs) of any nature whatsoever, known or unknown,
which Executive now has or claims to have against Synthetic and/or any of the other Synthetic Related Parties jointly, severally
or singly from the beginning of time to the date of this Agreement, including, without limitation, claims relating to Executive’s
employment with Synthetic or the termination of his employment, claims based in contract, tort, constitutional, statutory or common
law, and claims under any federal, state, or local statute, order, law or regulation, governing terms or conditions of employment,
including but not limited to wages, benefits or discrimination in employment on the basis of any protected characteristic.  This
release applies to rights and claims arising under the National Labor Relations Act, Age Discrimination in Employment Act of 1967
(29 U.S.C. §§621, et seq.), Title VII of the Civil Rights Act (“Title VII”), the Americans with Disabilities
Act (“ADA”), Genetic Information Nondiscrimination Act of 2008 (“GINA”), Uniformed Services Employment
and Reemployment Rights Act (“USERRA”), the Employee Retirement Income Security Act (“ERISA”) (excluding
any claims for accrued, vested benefits), the Maryland Fair Employment Practice Act (“FEPA”), and the Maryland Wage
Act.  This release does not release Synthetic or Synthetic Related Parties from obligations under the Severance Agreement.

 

    	4

    	 

    

 

2. Notwithstanding
Paragraph 1 of this Release, Executive may bring a claim for breach of the Severance Agreement.  If any claim covered
in Paragraph 1 of this Release, other than for a breach of the Severance Agreement or to enforce his rights under the Severance
Agreement, is brought by Executive, to the greatest extent permitted by applicable law, Synthetic and/or the other Synthetic Related
Parties shall be entitled to its and/or their attorney’s fees and costs upon prevailing on such claim.

 

3. Executive acknowledges
the following:

 

(b)He has read and
understands this Release and the Severance Agreement;

 

(b) Before executing
this Release and the Severance Agreement, he has been offered at least 21 days to consider his rights and obligations under this
Release and the Severance Agreement;

 

(c)The period of
time he has to consider his rights and obligations under this Release and the Severance Agreement is reasonable;

 

(d) Before executing
this Release and the Severance Agreement, Synthetic advised him in writing to consult with an attorney and he has done so;

 

(e) He has knowingly
and voluntarily elected to enter into this Release and the Severance Agreement and releases Synthetic from any and all claims,
subject to the stated limitations in this Release, in exchange for valuable consideration which is in addition to anything of value
to which he is already entitled;

 

(f) The Release constitutes
a waiver of all rights and claims he may have under the Age Discrimination in Employment Act of 1967 (29 U.S.C. §§621,
et seq.);

 

(g) This Release
does not waive any rights or claims by Executive that may arise after this Release is finally accepted and executed; and

 

(h) For a period
of seven (7) days following the execution of this Release and the Severance Agreement, Executive may revoke this Release and the
Severance Agreement by sending written notice of same to Synthetic, addressed to Mr. Jeffrey Riley, 155 Gibbs Street, Suite 412,
Rockville, Maryland 20850.  For the revocation to be effective, Synthetic must receive the written notice by not later
than the close of business on the seventh day after Executive signs this Release.  This Release shall not become effective
or enforceable until this seven-day revocation period has expired without Executive having exercised his right to revoke.

 

(j)Nothing in this
Release and Severance Agreement is intended to, or shall, interfere with Executive’s rights under federal, state, or local
civil rights or employment discrimination laws (including, but not limited to, Title VII, the ADA, the ADEA, GINA, USERRA, or their
state or local counterparts) to file or otherwise institute a charge of discrimination, to participate in a proceeding with any
appropriate federal, state, or local government agency enforcing discrimination laws, or to cooperate with any such agency in its
investigation, none of which shall constitute a breach of this Release and Severance Agreement. Executive shall not, however, be
entitled to any relief, recovery, or monies in connection with any such action, charge or proceeding brought against Synthetic
and/or the other Synthetic Related Parties, regardless of who filed or initiated any such complaint, charge, or proceeding.

 

    	5

    	 

    

 

	SYNTHETIC BIOLOGICS, INC.

	 	 	EXECUTIVE	 
	 	 	 	 	 	 
	By:	 	 	 	 	 
	 	
        Name :Jeffrey Riley

        Title: Chief Executive Officer
	 	 	C. Evan Ballantyne	 

 

 

 

 

 

STATE OF____________:

 

COUNTY OF _________:

 

 

On the ____ day of May, in the year 2015
before me, the undersigned, personally appeared Jeffrey Riley, personally known to me or proved to me on the basis of satisfactory
evidence to be the individual whose name is subscribed to the within instrument and acknowledged to me that he executed the same
in his capacity and with the authority of Synthetic Biologics, Inc., and that by his signature on the instrument, the corporation
upon which the individual acted executed the instrument.

 

 

 

	 	 	 
	Notary Signature	 	 

 

 

 

 

 STATE OF____________:

 

COUNTY OF _________:

 

 

On the ____ day of May in the year 2015
before me, the undersigned, personally appeared C. Evan Ballantyne, personally known to me or proved to me on the basis of satisfactory
evidence to be the individual whose name is subscribed to the within instrument and acknowledged to me that he executed the same
in his capacity, and that by his signature on the instrument the individual executed the instrument.

 

 

 

	 	 	 
	Notary Signature	 	 

 

 

    	6Ex 10.1 - 2015 LTIP

	
	
	Exhibit 10.1

NAUTILUS, INC.
2015 LONG-TERM INCENTIVE PLAN

1.    PURPOSE 
  
The purpose of the Nautilus, Inc. 2015 Long-Term Incentive Plan (the “Plan”) is to advance the interests of Nautilus, Inc., a Washington corporation (“Nautilus”), and its Subsidiaries (Nautilus and its Subsidiaries hereinafter collectively, the “Corporation”), by enhancing the Corporation’s ability to attract and retain highly qualified personnel and directors and aligning the long-term interests of participants with those of shareholders. This Plan permits the grant of stock options, stock appreciation rights, restricted stock, performance units and 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 a Stock Option, Stock Appreciation Right, Restricted Stock, Performance Unit or Stock Unit granted to a Participant pursuant to the Plan. 

		
	(c)
	“Award Agreement” means (as applicable) an Option Agreement, an SAR Agreement, a Restricted Stock Agreement, a Stock Unit Agreement and/or a Performance Unit Agreement.

		
	(d)
	“Board of Directors” means the Board of Directors of Nautilus. 

		
	(e)
	“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. 

		
	(f)
	“Committee” means the Compensation Committee of Nautilus. 

		
	(g)
	“Common Stock” means the common stock, without par value, of Nautilus authorized for issuance by Nautilus.

		
	(h)
	“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. 

		
	(i)
	“Executive Officer” means any “officer” of Nautilus as such term is defined in Rule 16a‐1 under the Exchange Act. 

		
	(j)
	“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. 

		
	(a)
	“Incentive Stock Option” or “ISO” means a Stock Option designated as, and qualified as, an “incentive stock option” within the meaning of Code Section 422.

		
	(b)
	“Nonqualified Stock Options” or “NSO” means a Stock Option other than an Incentive Stock Option. 

		
	(c)
	“Option Agreement” means the document(s) evidencing the Award of a Stock Option.

		
	(d)
	“Outside Director” means a member of the Board of Directors who is not otherwise an employee of the Corporation. 

		
	(e)
	“Participants” means those individuals who hold unexercised Awards and any authorized transferee of such individuals. 

		
	(f)
	“Performance Period” means the period described in subsection 10(d) during which a Performance Unit Award is earned.

		
	(g)
	“Performance-Based Award” means an Award that vests only upon the satisfaction of one or more of the Qualifying Performance Criteria specified in subsection 11(b). 

		
	(h)
	“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.

		
	(i)
	“Performance Unit Agreement” means the document(s) evidencing a Performance Unit Award. 

		
	(j)
	“Plan” means the Nautilus, Inc. 2015 Long Term Incentive Plan as stated in this document and any amendments to it.

		
	(k)
	“Qualifying Performance Criteria” has the meaning set forth in subsection 11(b).

		
	(l)
	“Restricted Stock Award” means an Award of Shares, the grant, issuance, retention, vesting, termination and/or forfeiture of which is subject to the terms and conditions stated in a Restricted Stock Agreement.

		
	(m)
	“Restricted Stock Agreement” means the document(s) evidencing an Award of Restricted Stock. 

		
	(n)
	“SAR Agreement” means the document(s) evidencing a Stock Appreciation Right Award.

		
	(o)
	“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 12. 

		
	(p)
	“Stock Appreciation Right” or “SAR” means a right to receive, in cash or stock (as determined by the Committee), an amount, with respect to a specific number of Shares, equal to or otherwise based on the excess of:

		
	(1)
	The market value of a Share at the time of exercise over; 

		
	(2)
	The exercise price of the right, subject to the terms and conditions stated in the SAR Agreement. 

		
	(q)
	“Stock Option” means a right to purchase a number of Shares at such exercise price, at such times, and on such other terms and conditions as are specified in or determined pursuant to the Option Agreement. The Committee may grant Stock Options intended to qualify as Incentive Stock Options and Stock Options that are Nonqualified Stock Options, as the Committee, in its sole discretion, shall determine. 

		
	(r)
	“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 Stock Unit Agreement.

		
	(s)
	“Stock Unit Agreement” means the document(s) evidencing a Stock Unit Award. 

		
	(t)
	“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 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.  

		
	(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;

		
	(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 12;

		
	(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

		
	(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 member of the Board of Directors, 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 under the Plan may be granted to:

		
	(a)
	Any employee of the Corporation;

		
	(b)
	Any non-employee member of the Board of Directors or the board of directors (or other governing body) of any Subsidiary; and

		
	(c)
	Any non-employee consultant who provides services to the Corporation.

5.    EFFECTIVE DATE AND EXPIRATION OF PLAN 

		
	(a)
	Effective Date.  This Plan was approved by the Board of Directors on February 12, 2015 and will become effective on April 28, 2015 subject to shareholder approval at the 2015 Annual Meeting of the shareholders of Nautilus.

		
	(b)
	Expiration Date.  

		
	(1)
	The Plan shall remain available for the grant of Awards until the earlier of:

		
	(A)
	April 28, 2025; 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.  

		
	(1)
	Subject to adjustment as provided in paragraph (2) below and in Section 12, the aggregate number of Shares that may be granted pursuant to Awards under the Plan is 1,300,000 plus any Shares reserved under Nautilus’ 2005 Long-Term Incentive Plan, as amended, that are not subject to a grant on April 28, 2015, or as to which the option award is forfeited on or after April 28, 2015.  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.  

		
	(2)
	The aggregate number of Shares available for issuance under the Plan shall be reduced by two (2) Shares for each Share delivered in settlement of any SAR, Restricted Stock, Stock Unit or Performance Unit Award, and one (1) Share for each Share delivered in settlement of a Stock Option Award.

		
	(b)
	Limitations on Grants.  

		
	(1)
	The aggregate number of Shares subject to Stock Options or Stock Appreciation Rights granted under this Plan during any calendar year to any one Participant shall not exceed 1,000,000. 

		
	(2)
	The aggregate number of Shares subject to Restricted Stock or Stock Unit Awards granted under this Plan during any calendar year to any one Participant shall not exceed 1,000,000.  

		
	(3)
	Notwithstanding anything to the contrary in this Plan, the limitations in paragraphs (1) and (2) above shall be subject to adjustment under Section 12, but only to the extent that such adjustment will not 

affect the status of any Award intended to qualify as “performance-based compensation” within the meaning of Code Section 162(m).  

		
	(4)
	The aggregate number of Shares issued pursuant to Incentive Stock Options granted under the Plan shall not exceed 1,000,000, which limitation shall be subject to adjustment under Section 12 only to the extent that adjustment is allowable under Code Section 422. 

  
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)
	Stock Options, pursuant to the terms and conditions of a Stock Option Agreement. 

		
	(2)
	Stock Appreciation Rights, pursuant to the terms and conditions of an SAR Agreement.  

		
	(3)
	Restricted Stock, pursuant to the terms and conditions of a Restricted Stock Agreement.

		
	(4)
	Stock Units, pursuant to the terms and conditions of a Stock Unit Agreement. 

		
	(5)
	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.

		
	(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.    STOCK OPTIONS AND SARS 
  
		
	(a)
	The Committee may grant Stock Options or SARs only to those eligible individuals described in Section 4 who are selected by the Committee as Participants. 

		
	(b)
	No Participant shall have any rights as a shareholder with respect to any Shares subject to Stock Options or SARs under the Plan until the Shares have been issued. 

		
	(c)
	Each Stock Option or SAR shall be evidenced only by an Option Agreement or SAR Agreement approved by the Committee and executed by the Committee and the Participant.  Each Stock Option grant will expressly identify the Stock Option as an ISO or as a Nonqualified Stock Option.  Awards of Stock Options or SARs granted pursuant to the Plan need not be identical, but each must contain or be subject to the following terms and conditions: 

		
	(1)
	Price.  The exercise price of each Stock Option or SAR granted under the Plan shall be established by the Committee and set forth in the applicable Option Agreement or SAR Agreement. The exercise price per Share shall not be less than 100% of the Fair Market Value of a Share on the date of grant.  The exercise price of a Stock Option shall be paid in cash or in such other form if and to the extent permitted by the Committee, including without limitation, by delivery of already-owned Shares with an aggregate value equal to the exercise price, withholding (either actually or by attestation) of Shares with an aggregate value equal to the exercise price otherwise issuable under such Stock Option and/or by payment under a broker-assisted sale and remittance program acceptable to the Committee. 

		
	(2)
	No Repricing.  Other than in connection with a change in the capitalization of Nautilus (as described in Section 12), in no event may any Stock Option or SAR without shareholder approval be amended to decrease the exercise price, be cancelled in exchange for cash or other Awards or in conjunction with the grant of any new Stock Option or SAR with a lower exercise price, or otherwise be subject to any action that would be treated as a “repricing” of such Stock Option or SAR under applicable stock exchange listing standards or accounting standards.  

		
	(3)
	Duration, Exercise and Termination of Stock Options and SARs.  Each Stock Option or SAR shall be exercisable at such times and in such installments during the period prior to the expiration of the Stock Option or SAR as determined by the Committee and set forth in the Option Agreement or SAR Agreement.  The Committee may make the exercise of any Stock Option or SAR subject to continued employment, the passage of time and/or such performance requirements as deemed appropriate by the Committee and set forth in the Option Agreement or SAR Agreement.  At any time after the grant of a Stock Option or SAR, the Committee may reduce or eliminate any restrictions on the Participant’s right to exercise all or part of the Stock Option or SAR.  Upon exercise of a Stock Option or SAR, settlement and payment shall occur at the time(s) and in the manner set forth in the applicable Option Agreement or SAR Agreement.  

		
	(4)
	Termination of Employment.  The Option Agreement or SAR Agreement may provide for the forfeiture or cancellation of the Stock Option or SAR, in whole or in part, in the event of the Participant’s termination of employment or service.  In all cases, the Option Agreement or SAR Agreement shall provide that vesting shall cease in the event of the Participant’s termination of employment or service.

		
	(5)
	Conditions and Restrictions Upon Securities Subject to Stock Options or SARs.  Subject to the express provisions of the Plan, the Committee may provide in the Option Agreement or SAR Agreement that the Shares issued upon exercise of a Stock Option or SAR shall be subject to such further conditions or agreements as the Committee in its discretion may specify, including without limitation, conditions on vesting or transferability, forfeiture or repurchase provisions. 

		
	(6)
	Settlement of SARs.  Settlement of SARs upon exercise may be satisfied through cash payments, the delivery of Shares, or a combination thereof, as the Committee shall determine.

 
		
	(7)
	Other Terms and Conditions.  Option Agreements and SAR Agreements may also contain such other provisions, which shall not be inconsistent with any of the foregoing terms, as the Committee shall deem appropriate. 

		
	(8)
	ISOs.  Stock Options intending to qualify as ISOs shall be subject to the following conditions:

		
	(A)
	ISOs may be granted only to employees of Nautilus or a “subsidiary corporation” of Nautilus within the meaning of Code Section 424(f).  

		
	(B)
	No Stock Option intended to qualify as an ISO shall be granted to any person if, immediately after the grant of such Award, such person would own stock, including stock subject to outstanding Awards held by that person under the Plan or any other plan established by the Corporation, amounting to more than 10% of the total combined voting power or value of all classes of stock of the Corporation.   

		
	(C)
	The aggregate Fair Market Value of the Common Stock (determined at the time of grant) for which ISOs are exercisable for the first time by the Participant during any calendar year, under all of the plans of the Corporation under which Incentive Stock Options may be issued, may not exceed $100,000.  

		
	(D)
	To the extent a Stock Option that, by its terms, is intended to be an Incentive Stock Option exceeds this $100,000 limit, the portion of the Stock Option in excess of such limit shall be treated as a Nonqualified Stock Option.

		
	(E)
	To the extent that the Option Agreement specifies that a Stock Option is intended to qualify as an ISO, the provisions of the Option Agreement shall be construed and interpreted accordingly. 

  
9.    RESTRICTED STOCK AND STOCK UNITS 
  
		
	(a)
	The Committee may grant Restricted Stock or Stock Units only to those eligible individuals described in Section 4 who are selected by the Committee.  

		
	(b)
	Awards of Restricted Stock or Stock Units shall be evidenced by Restricted Stock Agreements or Stock Unit Agreements approved by the Committee and executed by the Committee and the Participant. Awards of Restricted Stock or 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 Agreement and 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;

		
	(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 Agreement or Stock Unit Agreement shall set forth the price, if any, as determined by the Committee at which Shares of Restricted Stock or Stock Units shall be sold or awarded to a Participant.

		
	(3)
	Share Vesting.  The grant, issuance, retention and/or vesting of Shares under Restricted Stock or Stock Unit Awards shall be at such time and in such installments as determined by the Committee or under criteria established by the Committee. 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 or 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 Award or 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 Award is granted. 

		
	(4)
	Termination of Employment.  The Restricted Stock Agreement or Stock Unit Agreement may provide for the forfeiture or cancellation of the Restricted Stock or 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 Agreement or 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 Stock Units under the Plan until said Shares have been issued.  A Participant shall have rights as a shareholder with respect to any Shares subject to a Restricted Stock Award under the Plan only to the extent specified in this Plan or the Restricted Stock Agreement evidencing such Award. 

		
	(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 Stock Unit Agreement.  Until a Stock Unit is so settled, the number of Shares represented by a Stock Unit shall be subject to adjustment pursuant to Section 12.

10.    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 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 12.  

		
	(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 (1) 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.

11.    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; 

		
	(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; and

		
	(3)
	In the case of a Stock Option intended to qualify as an ISO, only to the extent consistent with Code Section 422. 

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;

		
	(T)
	Brand recognition/acceptance;

		
	(U)
	Product ship targets; or

		
	(V)
	Customer satisfaction.  

		
	(2)
	Provided that such adjustments are consistent with the regulations under Code Section 162(m), 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 Options, SARs, 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.  Unless otherwise provided by the Committee in the Award Agreement, 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 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 have not vested or been issued or that are subject to any restrictions or conditions on the record date for dividends. 

		
	(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 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)
	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. 

  
		
	(f)
	Subsidiary Awards.  In the case of a grant of an Award to any Participant who is employed by or a service provider to a Subsidiary, such grant may, if the Committee so directs, be implemented by Nautilus issuing any subject Shares to the Subsidiary, for such lawful consideration as the Committee may determine, upon the condition or understanding that the Subsidiary will transfer the Shares to the Participant in accordance with the terms of the Award specified by the Committee pursuant to the provisions of the Plan. Notwithstanding any other provision hereof, such Award may be issued by and in the name of the Subsidiary and shall be deemed granted on such date as the Committee shall determine. 

		
	(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, other than an Outside Director, has committed an act of misconduct as described below, the Committee may suspend the exercise, 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, other than an Outside Director, 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. For any Participant who is an Executive Officer, the determination of the Committee shall be subject to the approval of the Board of Directors.  

		
	(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 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.

12.    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)
	No right to purchase fractional Shares shall result from any adjustment of Stock Options or SARs pursuant to this Section 12. In case of any such adjustment, the Shares subject to the Stock Option or SAR shall be rounded down to the nearest whole share. 

		
	(d)
	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 continuation by Nautilus (if Nautilus is a surviving corporation), for accelerated vesting and accelerated expiration, or for settlement in cash.  

  
13.    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 Shares, a Stock Option or SAR may not be exercised, in whole or in part, and a Restricted Stock Award, Stock Unit Award, Performance Unit Award, Stock Option or SAR shall not vest unless such listing, qualification, consent or approval has been unconditionally obtained. 
  
14.    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, provided, however, that Nautilus shall submit for shareholder approval any amendment (other than an amendment pursuant to the adjustment provisions of Section 12) required to be submitted for shareholder approval by the rules of any national securities exchange on which the Shares are listed for trading or that otherwise would: 

		
	(1)
	Increase the maximum number of Shares for which Awards may be granted under this Plan; 

		
	(2)
	Reduce the price at which Stock Options may be granted below the price provided for in subsection 8(c)(1); 

		
	(3)
	Reduce the exercise price of outstanding Stock Options; 

		
	(4)
	Extend the term of this Plan; 

		
	(5)
	Change the classes of persons eligible to be Participants (as described in Section 4); or 

		
	(6)
	Increase the limits provided for in Section 6. 

  
		
	(b)
	In addition, no such 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. 

		
	15.
	PARTICIPANTS IN FOREIGN COUNTRIES

The Committee shall have the authority to adopt such modifications, procedures and sub-plans as may be necessary or advisable to comply with provisions of the laws of foreign countries in which the Corporation may operate.

16.    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. 

17.    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. 

		
	(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. 

18.    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. 

19.    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.  No Stock Option shall be exercisable and no Shares shall be issued and/or transferable under any other Award unless a registration statement with respect to the Shares underlying such Stock Option or Award is effective and current or the Corporation has determined that such registration is unnecessary. 
  

20.    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

		
	(b)
	Any tax consequence expected, but not realized, by any Participant or other person due to the receipt, exercise or settlement of any Stock Option or other Award granted under the Plan. 

		
	21.
	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

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