Compensation Committee Charter

(as of June 2, 2008)

Purpose

The purpose of the Compensation Committee (the “Committee”) of Nautilus, Inc. (the “Corporation”) is to oversee the Corporation’s compensation, including equity-based plans,  and employee benefit plans and practices, including the compensation and benefits of the Corporation’s Chief Executive Officer (“CEO”) and other executive officers, to consult with the Board of Directors (the “Board”) regarding potential successors to the CEO and the other executive officers, to review and discuss with management the Corporation’s compensation discussion and analysis (“CD&A”) to be included in the Corporation’s annual proxy statement or annual report on Form 10-K files with the Securities and Exchange Commission (“SEC”),  and to oversee the preparation of, and approve, a Committee report on executive compensation in accordance with applicable SEC rules and regulations.

Membership

The Committee shall consist of a minimum of three (3) directors.  Members of the Committee and the Chair of the Committee shall be appointed by the Board upon the recommendation of the Nominating and Corporate Governance Committee and may be removed by the Board in its discretion.  All members of the Committee shall meet the independence requirements of the New York Stock Exchange listing standards and any other applicable laws, rules and regulations governing independence, as determined by the Board.

Meetings

The Committee shall meet as often as it determines is appropriate to carry out its responsibilities.  The Chair of the Committee, in consultation with the other Committee members, will determine the frequency and length of the meetings and will set agendas consistent with this charter. The Committee, in its discretion, may ask members of management or others to attend its meetings (or portions thereof) and to provide pertinent information as necessary. 

Duties and Responsibilities

The Committee shall have the following duties and responsibilities:

(a) To review periodically the goals and objectives of the Corporation’s executive compensation plans, and amend, or recommend that the Board amend, these goals and objectives if the Committee deems it appropriate.

(b) To review periodically the Corporation’s executive compensation plans in light of the Corporation’s goals and objectives with respect to such plans, and, if the Committee deems it appropriate, adopt, or recommend to the Board the adoption of, new, or the amendment of existing, executive compensation plans.

(c) To evaluate annually the performance of the CEO and, with the CEO’s participation and input, the executive officers in light of the goals and objectives of the Corporation’s executive compensation plans.  Determine and approve the CEO’s and, with the CEO’s participation and input, other executive officer’s compensation levels based on this evaluation. In determining the CEO’s and other executive officer’s compensation, the Committee shall consider all relevant factors, including the Corporation’s performance and relative stockholder return, the compensation of executives of comparable companies, and the compensation of the CEO and executive officers of the Corporation in past years.

(d) To review with the Board the decisions made by the Committee regarding the compensation of the CEO and the other executive officers of the Corporation.

(e) To approve any equity compensation awarded to any officer of the Corporation, subject to the requirements of the applicable compensation plans.

(f) To perform such duties and responsibilities as may be assigned to the Board or the Committee under the terms of any executive compensation plan or under the terms of any compensation or other employee benefit plan, including any incentive-compensation or equity based plan.

(g) To review the decisions made by the CEO as to perquisites or other personal benefits to the Corporation’s executive officers and approve such perquisites, if any, available to the CEO.

(h) To review and discuss the CD&A with management and, based on such review and discussions, to recommend to the Board that the CD&A be included in the Corporation’s annual proxy statement or annual report on Form 10-K filed with the SEC.

(i) To assure inclusion in the Corporation’s annual proxy statement, or annual report on Form 10-K filed with the SEC, a report of the Committee, prepared in accordance with the rules and regulations of the SEC, stating that the Committee has reviewed and discussed the CD&A with management and recommended to the Board its inclusion in such proxy statement or annual report on Form 10-K.

(j) To review all equity-compensation plans to be submitted for stockholder approval under the NYSE listing standards, and to review and, if appropriate, approve all equity compensation plans that are exempt from such stockholder approval requirement.

Evaluation of the Committee

The Committee shall periodically evaluate its performance. In conducting this review, the Committee shall evaluate whether this Charter appropriately addresses the matters that are or should be within its scope and shall recommend such changes as it deems necessary or appropriate. The Committee shall address all matters that the Committee considers relevant to its performance, including at least the following: the adequacy, appropriateness and quality of the information and recommendations presented by the Committee to the Board, the manner in which they were discussed or debated, and whether the number and length of meetings of the Committee were adequate for the Committee to complete its work in a thorough and thoughtful manner.

The Committee shall deliver to the Board a report, which may be oral, setting forth the results of its evaluation, including any recommended amendments to this Charter and any recommended changes to the Corporation’s or the Board’s policies or procedures.

Investigations, Studies and Outside Advisors

The Committee may conduct or authorize investigations into or studies of matters within the Committee’s scope of responsibilities, and may retain, at the Corporation’s expense, such independent counsel or other consultants or advisors as it deems necessary. The Committee shall have the sole authority to retain or terminate any compensation consultant to assist the Committee in carrying out its responsibilities, including sole authority to approve the consultant’s fees and other retention terms, such fees to be borne by the Corporation.

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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 federal or state law.