Nautilus 2000 Annual Report Download - page 37

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7.ACCRUED LIABILITIES
Accrued liabilities at December31 consisted of the following:
1999 2000
Accrued payroll $ 2,318,771 $ 3,178,847
Accrued warranty expense 383,356 447,194
Sales return reserve 786,921 1,307,000
Accrued other 562,472 411,184
Total $ 4,051,540 $ 5,344,225
8.COMMITMENTS AND CONTINGENCIES
Lines of Credit
During 1999, the Company obtained a line of credit for $5million with a bank which was increased to $10million in 2000. The line is secured
by the Company's general assets, and interest is payable on outstanding borrowings under the line at the bank's prime rate (9.5% at
December31, 2000). There were no outstanding borrowings on the line of credit at December31, 2000.
Operating Leases
The Company leases its Vancouver, Washington call center facility under an operating lease which expires April30, 2002. The lease
commitment is subject to an annual rent adjustment based upon changes in the consumer price index, limited to a 6.0% annual change. The
agreement provides for an annual cancellation provision by the Company upon proper notification.
Since December1999, the Company has leased a distribution center in Las Vegas, Nevada to service the Southwestern United States. This
operating lease expires November30, 2002.
Nautilus HPS,Inc. leases trucks and trailers and other equipment used in the Nautilus commercial business. These leases expire over various
terms through December2002.
Rent expense under all leases was $239,197 in 1998, $664,922 in 1999, and $473,920 in 2000.
Obligations
Future minimum lease payments under the operating leases during the years ending December31 are as follows:
2001 $
595,141
2002 416,130
Total minimum lease payments $
1,011,271
9.STOCK OPTIONS
The Company's stock-based compensation plan was adopted in June1995. The Company can issue both nonqualified stock options to the
Company's officers and directors and qualified options to the Company's employees. The plan was amended in June2000 so the Company may
grant options for up to 5,305,412 shares of common stock. At December31, 2000, 1,985,136 shares are available for future issuance under the
plan. The plan is administered by the Company's Board of Directors which determines the terms and conditions of the various grants awarded
under these plans. Stock options granted generally have an exercise price equal to the closing market price of the Company's stock on
35
2002. EDGAR Online, Inc.