Nautilus 2005 Annual Report Download - page 67

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Table of Contents
Item 9B. Other Information
The following summarizes certain Company events otherwise required to be disclosed in a current report on Form 8-K. Because these
events occurred within four business days of the filing of this annual report on Form 10-K, they are being disclosed herein in lieu of a separate
8-K filing.
Item 1.01. Entry into a Material Definitive Agreement.
On March 10, 2006, the Company entered into a First Amendment Agreement with KeyBank National Association and U.S. Bank
National Association, amending their original Credit Agreement dated November 18, 2005. In the amendment, the lenders waived a default as
of December 31, 2005 regarding maintaining a fiscal quarter end fixed charge coverage ratio of 1.2 to 1. The ratio is calculated as of the end of
each fiscal quarter on a rolling four-fiscal quarter basis. The amendment reduces the required ratio through the fiscal quarter ending September
30, 2006 to .75 to 1, and excludes the expenditures of $5,112,753, $4,902,310, and $3,223,326 in the second through fourth fiscal quarters of
2005 from the consolidated capital expenditures component of the calculation.
Until the fixed charge coverage ratio equals or exceeds 1.2 to 1, the Company may not make capital distributions for the repurchase of
shares of its stock in an aggregate amount exceeding $30,000,000, but may do so thereafter if there is no outstanding event of default.
The amendment allows for interest payments to be made on subordinated indebtedness if there is no outstanding event of default. The
amendment also retroactively amended certain technical provisions.
A copy of the amendment is attached hereto as Exhibit 10.28 and is incorporated herein. The foregoing description of the amendment
does not purport to be complete and is qualified in its entirety by reference to such exhibit.
Item 2.03. Creation of a Direct Financial Obligation or an obligation Under an Off
-Balance Sheet Arrangement of a Registrant.
The terms of the amended direct financial obligation are summarized in the Item 1.01 disclosure set forth above.
PART III
Item 10. Directors and Executive Officers of the Registrant
The information required by this item is included under the captions Election of Directors, Executive Officers, and Section 16(a)
Beneficial Ownership Reporting Compliance,
respectively, in the Company’s Proxy Statement for its 2006 Annual Meeting of Stockholders
and is incorporated herein by reference.
The Company has adopted the Nautilus, Inc. Code of Business Conduct and Ethics, which is a code of conduct and ethics that applies to
all employees, directors and officers, including the Company’s principal executive officer, principal financial officer and principal accounting
officer. The Code of Business Conduct and Ethics is available on the Company’s website, www.nautilus.com.
Item 11. Executive Compensation
The information required by this item is included under the caption Executive Compensation in the Company’s Proxy Statement for its
2006 Annual Meeting of Stockholders and is incorporated herein by reference.
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