Updated & Effective August 2021
Compensation Committee Charter
The purpose of the Compensation Committee (the “Committee”) is to assist the Board of Directors (the “Board”) of Nautilus, Inc. (the “Company”) in fulfilling its responsibilities by (a) overseeing the Company’s compensation and benefit programs, including compensation and benefits of the Company’s executive officers, (b) overseeing preparation of the Compensation Discussion and Analysis (“CD&A”) for inclusion in the Company’s annual report and proxy statement, and (c) overseeing preparation of and approving the Committee report to shareholders required by the Securities and Exchange Commission (the “SEC”) to be included in the Company’s annual report and proxy statement.
Members of the Committee shall be appointed by and may be removed by the Board. The Committee shall be comprised of not less than three members of the Board. Each member of the Committee shall be independent in accordance with the provisions of Rule 10C-1(b)(1) under Securities Exchange Act of 1934, as amended (the “Exchange Act”) and the rules of the New York Stock Exchange (the “NYSE”).
The Board shall designate the chairperson of the Committee, provided that if the Board does not so designate a chairperson, the members of the Committee, by majority vote, may designate a chairperson.
The Committee shall meet with such frequency and at such intervals as it shall determine is necessary to carry out its duties and responsibilities. Typically, the Committee will meet at least once every fiscal quarter.
The presence in person or by telephone of a majority of the Committee’s members shall constitute a quorum for any meeting of the Committee. All actions of the Committee require the vote of a majority of its members present at a meeting of the Committee at which a quorum is present.
The Committee shall have the authority, in its sole discretion, to select, retain and obtain the advice of a compensation consultant as necessary to assist with the execution of its duties and responsibilities as set forth in this Charter. The Committee shall set the compensation, and oversee the work, of the compensation consultant. The Committee shall have the authority, in its sole discretion, to retain and obtain the advice and assistance of outside legal counsel and such other advisors as it deems necessary to fulfill its duties and responsibilities under this Charter. The Committee shall set the compensation, and oversee the work, of its outside legal counsel and other advisors. The Committee shall receive appropriate funding from the Company, as determined by the Committee in its capacity as a committee of the Board, for the payment of compensation to its compensation consultants, outside legal counsel and any other advisors. However, the Committee shall not be required to implement or act consistently with the advice or recommendations of its compensation consultant, legal counsel or other advisor to the compensation committee, and the authority granted in this Charter shall not affect the ability or obligation of the Committee to exercise its own judgment in fulfillment of its duties under this Charter.
In retaining or seeking advice from compensation consultants, outside counsel and other advisors (other than the Company’s in-house counsel), the Committee must take into consideration the factors specified in the applicable rules and guidelines established by the NYSE, including Section 303A.05(c)(iv) of the NYSE Listed company manual. The Committee may retain, or receive advice from, any compensation advisor, after considering the specified factors. The Committee is not required to assess the independence of any compensation consultant or other advisor that acts in a role limited to consulting on any broad-based plan that does not discriminate in scope, terms or operation in favor of executive officers or directors and that is generally available to all salaried employees or providing information that is not customized for a particular company or that is customized based on parameters that are not developed by the consultant or advisor, and about which the consultant or advisor does not provide advice.
The Committee shall evaluate whether any compensation consultant retained or to be retained by it has any conflict of interest in accordance with Item 407(e)(3)(iv) of Regulation S-K.
Responsibilities and Powers
While the members of the Committee have the duties and responsibilities set forth in this Charter, nothing contained in this Charter is intended to create, or should be construed as creating, any responsibility or liability of members of the Committee, except to the extent otherwise provided under applicable law.
In furtherance of its purpose, the Committee shall have the following duties and responsibilities:
- Review periodically the goals and objectives of the Company’s executive compensation plans, and establish or amend, or recommend that the Board establish or amend, such goals and objectives as the Committee deems appropriate.
- Review periodically the Company’s executive compensation plans, in light of the goals and objectives relevant to such plans, and adopt, or recommend that the Board adopt, such new executive compensation plans or amendments to existing plans as the Committee deems appropriate.
- Evaluate annually the performance of the Chief Executive Officer (“CEO”) and, with the CEO’s participation and input, the performance of the other executive officers, in light of the goals and objectives of the Company’s executive compensation plans. Based on this performance evaluation, determine the CEO’s compensation and, with the CEO’s participation and input, the compensation of the other executive officers. In determining the compensation of executive officers, the Committee shall consider relevant factors such as the Company’s performance and shareholder returns, compensation of similar executives of comparable companies and compensation of the Company’s executive officers in prior years.
- Review with the Board any decisions made by the Committee regarding compensation of the Company’s executive officers.
- Approve any incentive or equity-based compensation to be awarded to an executive officer of the Company, subject to the provisions of any applicable compensation plan.
- With the CEO’s input and participation, review perquisites or other personal benefits to be made available or offered to the Company’s executive officers and approve such benefits, if any, available or offered to the CEO.
- Review and discuss with management the CD&A and related executive compensation information and determine whether to recommend to the Board that such CD&A and related executive compensation information be included in the Company’s annual report and proxy statement.
- Oversee the preparation of and approve the Committee report required by the SEC to be included in the Company’s annual proxy statement.
- Review any equity-based compensation plan required to be submitted for shareholder approval under applicable rules or listing standards of the NYSE. Review and, if appropriate, approve any equity-based compensation plan that is exempt from such shareholder approval requirement.
- Consider the results of the most recent shareholder advisory vote on executive compensation (“Say on Pay Vote“) required by Section 14A of the Exchange Act in evaluating and determining executive compensation policies and decisions.
- Review and recommend to the Board for approval the frequency with which the Company will conduct Say on Pay Votes, taking into account the results of the most recent stockholder advisory vote on frequency of Say on Pay Votes required by Section 14A of the Exchange Act, and review and approve the proposals regarding the Say on Pay Vote and the frequency of the Say on Pay Vote to be included in the Company’s proxy statement.
- Review the Company’s incentive compensation arrangements to determine whether they encourage excessive risk-taking, to review and discuss at least annually the relationship between risk management policies and practices and compensation, and to evaluate compensation policies and practices that could mitigate any such risk.
- Report the Committee’s recommendations or any action taken by unanimous consent to the Board after each Committee meeting. Maintain written minutes of Committee meetings, copies of which shall be provided to the Board.
- Conduct and present to the Board an annual performance self-evaluation of the Committee.
- Monitor developments in rules and regulations consistent with the purpose of the Committee and make appropriate and timely changes to the duties performed by the Committee.
- At least annually, review this Charter and recommend any proposed changes to the Board for approval.
- Perform other duties and responsibilities that are consistent with the purpose of the Committee and assigned to the Board under the provisions of any compensation or employee benefit plan, or that the Committee otherwise deems appropriate.
- Annually review the compensation and benefits of Board members.