Exhibit 10(n)

 
INVACARE CORPORATION
 
DEFERRED COMPENSATION PLUS PLAN
 
(Effective January 1, 2005)
 

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INVACARE CORPORATION
DEFERRED COMPENSATION PLUS PLAN
(Effective January 1, 2005)
 

 
Table of Contents

   
Page
ARTICLE I. INTRODUCTION
1
1.2.
Name of Plan.
1
1.3.
Purposes of Plan.
1
1.4.
Top Hat Pension Benefit Plan.
1
1.5.
Plan Unfunded.
1
1.6.
Effective Date and Restatement Date.
1
1.7.
Administration.
1
ARTICLE II. DEFINITIONS AND CONSTRUCTION
2
2.1.
Definitions.
2
2.2.
Number and Gender.
5
2.3.
Headings.
6
ARTICLE III. PARTICIPATION AND ELIGIBILITY
7
3.1.
Participation.
7
3.2.
Commencement of Participation.
7
3.3.
Cessation of Active Participation.
7
ARTICLE IV. CONTRIBUTIONS AND VESTING
8
4.1.
Deferrals by Participants.
8
4.2.
Effective Date of Participation and Deferral Election Form.
8
4.3.
Modification or Revocation of Election by Participant.
9
4.4.
Matching Contributions.
9
4.5.
Make Whole Contributions.
9
4.6.
Discretionary Contributions.
9
4.7.
Suspension of Contributions.
9
4.8.
Transfer of Contributions to 401(k) Plan.
9
4.9.
Vesting.
10
ARTICLE V. ACCOUNTS
11
5.1.
Establishment of Bookkeeping Accounts.
11
5.2.
Subaccounts.
11
5.3.
Earnings Elections.
11
5.4.
Hypothetical Accounts and Creditor Status of Participants.
12
5.5.
Investments.
12

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INVACARE CORPORATION
DEFERRED COMPENSATION PLUS PLAN
(Effective January 1, 2005)
 

 
Table of Contents

   
Page
ARTICLE VI. PAYMENT OF ACCOUNT
13
6.1.
Timing of Distribution of Accounts.
13
6.2.
Adjustment for Investment Gains and Losses Upon a Distribution.
13
6.3.
Form of Payment.
13
6.4.
Change in Date or Form of Distribution.
14
6.5.
Protective Distributions.
14
6.6.
Designation of Beneficiaries.
14
6.7.
Change of Beneficiary Designation.
15
6.8.
Change in Marital Status.
15
6.9.
No Beneficiary Designation.
15
6.10.
Unclaimed Benefits.
16
6.11.
Withdrawals for Unforeseeable Emergency.
16
6.12.
Withholding.
16
ARTICLE VII. ADMINISTRATION
17
7.1.
Committee.
17
7.2.
General Powers of Administration.
17
7.3.
Indemnification of Committee.
18
ARTICLE VIII. DETERMINATION OF BENEFITS, CLAIMS PROCEDURE AND ADMINISTRATION
19
8.1.
Claims.
19
8.2.
Claim Decision.
19
8.3.
Request for Review of a Denied Claim.
20
8.4.
Review of Decision.
20
8.5.
Discretionary Authority.
21
ARTICLE IX. AMENDMENT AND TERMINATION
22
9.1.
Power to Amend or Terminate.
22
9.2.
Distribution Upon Plan Termination.
22
9.3.
Protective Amendments Due to Change in Law.
22
ARTICLE X. MISCELLANEOUS
24
10.1.
Plan Not a Contract of Employment.
24
10.2.
Non-Assignability of Benefits.
24
10.3.
Severability.
24
10.4.
Governing Laws.
24
10.5.
Binding Effect.
24
10.6.
Entire Agreement.
24
10.7.
No Guaranty of Tax Consequences.
25

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INVACARE CORPORATION
DEFERRED COMPENSATION PLUS PLAN
(Effective January 1, 2005)
 
ARTICLE I.
 
INTRODUCTION
 
1.2.            Name of Plan.
 
Invacare Corporation (the “Company”) hereby adopts the Invacare Corporation
Deferred Compensation Plus Plan (the “Plan”).
 
1.3.            Purposes of Plan.
 
The purposes of the Plan are to provide deferred compensation for a select group
of management or highly compensated Employees of the Company and to provide
eligible Employees the opportunity to maximize their elective contributions to
the Invacare Retirement Savings Plan (the “401(k) Plan”) notwithstanding certain
limitations in the Code.
 
1.4.            “Top Hat” Pension Benefit Plan.
 
The Plan is an “employee pension benefit plan” within the meaning of ERISA
Section 3(2). The Plan is maintained, however, for a select group of management
or highly compensated employees and, therefore, is exempt from Parts 2, 3 and 4
of Title 1 of ERISA. The Plan is not intended to qualify under Code Section
401(a).
 
1.5.            Plan Unfunded.
 
The Plan is unfunded. All benefits will be paid from the general assets of the
Company, which will continue to be subject to the claims of the Company’s
creditors. No amounts will be set aside for the benefit of Plan Participants or
their Beneficiaries.
 
1.6.            Effective Date and Restatement Date.
 
The Plan is effective as of the Effective Date.
 
1.7.            Administration.
 
The Plan shall be administered by the Committee or its delegates, as set forth
in Section 7.1.
 
ARTICLE II.

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DEFINITIONS AND CONSTRUCTION
 
2.1.            Definitions.
 
For purposes of the Plan, the following words and phrases shall have the
respective meanings set forth below, unless their context clearly requires a
different meaning:
 
(a)            “Account” means the bookkeeping account or accounts maintained by
the Company to reflect the Participant’s Base Salary Deferrals, Bonus Deferrals,
Matching Contributions, Discretionary Contributions, Profit Sharing
Contributions and IQC Contributions, together with all earnings, gains and
losses thereon.  Accounts shall be further denominated as Retirement Accounts or
In-Service Distribution Accounts.
 
(b)            “Base Salary” means the base rate of cash compensation, including
commissions, paid by the Company to or for the benefit of a Participant for
services rendered or labor performed while a Participant, including base pay a
Participant could have received in cash in lieu of (A) deferrals pursuant to
Section 4.1 and (B) contributions made on his behalf to any qualified plan
maintained by the Company or to any cafeteria plan under Section 125 of the Code
maintained by the Company.
 
(c)            “Base Salary Deferral” means the amount of a Participant’s Base
Salary which the Participant elects to have withheld on a pre-tax basis and
credited to his Account pursuant to Section 4.1.
 
(d)            “Beneficiary” means the person or persons designated by the
Participant in accordance with Section 6.6 or, in the absence of an effective
designation, the person or entity described in Section 6.9.
 
(e)            “Board” means the Board of Directors of the Company.
 
(f)            “Bonus Compensation” means the amount awarded to a Participant
for a Plan Year under any bonus arrangement maintained by the Company.
 
(g)            “Bonus Deferral” means the amount of a Participant’s Bonus
Compensation which the Participant elects to have withheld on a pre-tax basis
and credited to his Account pursuant to Section 4.1.
 
(h)            “Change In Control” means the happening of any of the following
events:
 
 
(i)
Any person or entity (other than any employee benefit plan or employee stock
ownership plan of Invacare Corporation, or any person or entity organized,
appointed, or established by Invacare Corporation, for or pursuant to the terms
of any such plan), alone or together with any of its Affiliates or Associates,
becomes the Beneficial Owner of thirty percent (30%) or more of the total
outstanding voting power of

 

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Invacare Corporation, as reflected by the power to vote in connection with the
election of directors, or commences or publicly announces an intent to commence
a tender offer or exchange offer the consummation of which would result in the
Person becoming the Beneficial Owner of thirty percent (30%) or more of the
total outstanding voting power of Invacare Corporation as reflected by the power
to vote in connection with the election of directors. For purposes of this
Section 2.1(h)(i), the terms “Affiliates,” “Associates,” and “Beneficial Owner”
will have the meanings given them in the Rights Agreement, dated as of April 2,
1991, between Invacare Corporation and National City Bank, as Rights Agent, as
amended from time to time.

 
 
(ii)
At any time during a period of twenty-four (24) consecutive months, individuals
who were directors at the beginning of the period no longer constitute a
majority of the members of the Board, unless the election, or the nomination for
election by the Invacare Corporation’s shareholders, of each director who was
not a director at the beginning of the period is approved by at least a majority
of the directors who are in office at the time of the election or nomination and
were either directors at the beginning of the period or are continuing
directors.

 
 
(iii)
A record date is established for determining shareholders entitled to vote upon:

 
 
(A)
A merger or consolidation of the Invacare Corporation with another corporation
(which is not an affiliate of Invacare Corporation) in which Invacare
Corporation is not the surviving or continuing company or in which all or part
of the outstanding common shares are to be converted into or exchanged for cash,
securities, or other property;

 
 
(B)
a sale or other disposition of all or substantially all of the assets of
Invacare Corporation; or

 
 
(C)
the dissolution or liquidation (but not partial liquidation) of Invacare
Corporation.

 
(i)            “Code” means the Internal Revenue Code of 1986, as amended.
 
(j)            “Committee” means the administrative committee named to
administer the Plan pursuant to Section 7.1.
 

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(k)            “Company” means Invacare Corporation and any successor thereto.
 
(l)            “Deferral Period” means the period of time for which a
Participant elects to defer receipt of the Base Salary Deferrals and Bonus
Deferrals credited to such Participant’s Account.
 
(m)            “Directors” means the Board of Directors of the Company.
 
(n)            “Disability” means that a Participant (i) is unable to engage in
any substantial gainful activity by reason of any medically determinable
physical or mental impairment which can be expected to result in death or can be
expected to last for a continuous period of not less than 12 months, or (ii) is,
by reason of any medically determinable physical or mental impairment which can
be expected to result in death or can be expected to last for a continuous
period of not less than 12 months, receiving income replacement benefits for a
period of not less than 3 months under an accident and health plan covering
employees of the Company.
 
(o)            “Discretionary Contribution” means the Company’s contribution, if
any, made pursuant to Section 4.6.
 
(p)            “Effective Date” means January 1, 2005, except where a different
date is specifically set forth.
 
(q)            “Employee” means any common-law employee of the Company.
 
(r)            “ERISA” means the Employee Retirement Income Security Act of
1974, as amended.
 
(s)            “401(k) Plan” means the Invacare Retirement Savings Plan, as in
effect on January 1, 2005, and as amended from time to time thereafter.
 
(t)            “In-Service Distribution Accounts” means an Account(s) to which a
Participant’s Base Salary Deferrals and Bonus Deferrals are credited pursuant to
the terms of the Plan and the election of a Participant.  Each of a
Participant’s In-Service Distribution Accounts is distributable in a future
calendar year which is not less than two (2) years following the deferral of
compensation into the Plan and which is selected by the Participant pursuant to
Section 4.2 hereof.  A Participant may have up to two (2) In-Service
Distribution Accounts under the Plan at any one time.
 
(u)            “Contribution” or “IQC” means the amount, if any, of non-elective
non-matching contribution made by the Company under the 401(k) Plan for a Plan
Year.
 
(v)            “Make Whole IQC Contribution” means a contribution equal to the
Invacare Quarterly Contribution that would have been made to the 401(k) Plan for
a Participant but for the limitation on compensation contained in Code Section
401(a)(17).
 
(w)            “Matching Contribution” means the amount, as determined by the
Company on an annual basis, that would be credited to the Participant’s Base
Salary Deferrals
 

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and Bonus Deferrals if such deferrals had been deferred by the Participant into
the 401(k) Plan, and which is credited by the Company to the Retirement Account
of each Participant based on such Participant’s Base Salary and Bonus Deferrals.
 
(x)            “Participant” means each Employee who has been selected for
participation in the Plan and who has become a Participant pursuant to Article
III.
 
(y)            “Participation and Deferral Election Form” means the written
agreement pursuant to which the Participant elects the amount of his Base Salary
and/or his Bonus Compensation to be deferred pursuant to the Plan, the Account
to which such deferrals are to be credited, the Deferral Period, if applicable,
the deemed investment of amounts deferred and the time and form of payment of
such amounts and such other matters as the Committee shall determine from time
to time.
 
(z)            “Plan” means the Invacare Corporation Deferred Compensation Plus
Plan, as in effect on the Effective Date, and as amended from time to time
hereafter.
 
(aa)            “Plan Year” means the twelve-consecutive month period commencing
January 1 of each year ending on the following December 31.
 
(bb)            “Profit Sharing Contribution” means the amount credited to a
Participant’s Account under the Invacare Corporation 401(k) Benefit Equalization
Plus Plan prior to December 31, 2004 and which is transferred to the
Participant’s Retirement Account under this Plan on or after the Effective Date.
 
(cc)            “Retirement” means a Participant’s termination of employment
after either (I) the attainment of age fifty-five (55) and completion of ten
(10) or more Years of Service, or (II) the attainment of age sixty-five (65).
 
(dd)            “Retirement Account” means an Account to which Base Salary
Deferrals and Bonus Deferrals are credited pursuant to the terms of the Plan and
the election of a Participant.  A Participant’s Retirement Account shall also be
credited with any Matching Contributions, Make Whole IQC Contributions, Profit
Sharing Contributions and Discretionary Contributions creditable to a
Participant under the terms of the Plan.  A Participant’s Retirement Account is
generally payable upon his Retirement.
 
(ee)            “Valuation Date” means each business day and each special
valuation date designated by the Committee.
 
(ff)            “Years of Service” shall have the same meaning as in the 401(k)
Plan.
 
2.2.            Number and Gender.
 
Wherever appropriate herein, words used in the singular shall be considered to
include the plural and words used in the plural shall be considered to include
the singular. The masculine gender, where appearing in the Plan, shall be deemed
to include the feminine gender.
 

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2.3.            Headings.
 
The headings of Articles and Sections herein are included solely for
convenience, and if there is any conflict between such headings and the rest of
the Plan, the text shall control.
 

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ARTICLE III.
 
PARTICIPATION AND ELIGIBILITY
 
3.1.            Participation.
 
Participants in the Plan are those Employees who are (a) subject to the income
tax laws of the United States, (b) members of a select group of highly
compensated or management Employees of the Company, and (c) selected by the
Committee or its delegates, in its sole discretion, as Participants. The
Committee shall notify each Participant of his selection as a Participant.  An
Employee who satisfies the eligibility requirements set forth in subsections (a)
and (b) shall remain eligible to continue participation in the Plan for each
Plan Year following his selection by the Committee as a Participant.
 
3.2.            Commencement of Participation.
 
Except as provided in the following sentence, an Employee shall become a
Participant effective as of the first day of the Plan Year following the date on
which his Participation and Deferral Election Form becomes effective. A newly
hired Employee who completes a Participation and Deferral Election Form within
30 days of the date on which he is selected by the Committee to be eligible to
participate shall become a Participant as of the date on which his Participation
and Deferral Election Form becomes effective under Section 4.2.
 
3.3.            Cessation of Active Participation.
 
Notwithstanding any provision herein to the contrary, an individual who has
become a Participant in the Plan shall cease to be a Participant hereunder
effective as of any date designated by the Committee.  Any such Committee action
shall be communicated to such Participant prior to the effective date of such
action.
 

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ARTICLE IV.
 
CONTRIBUTIONS AND VESTING
 
4.1.            Deferrals by Participants.
 
Before the first day of each calendar year, a Participant may file with the
Committee a Participation and Deferral Election Form pursuant to which such
Participant elects to make Base Salary Deferrals.  A Participant must file a
Participation and Deferral Election form to make Bonus Deferrals at a time
prescribed by the Committee which time shall be not later than six (6) months
before the end of the 12 month period over which the services upon which the
Bonus Compensation is based are performed.  A Participant shall be entitled to
defer a whole percent of his Base Salary or Bonus Compensation, subject to a
maximum deferral of fifty percent (50%) of Base Salary and one hundred percent
(100%) of Bonus Compensation.  Deferral elections shall be subject to any other
rules prescribed by the Committee in its sole discretion.
 
At the time a Participant completes a Participation and Deferral Election Form,
he shall elect to have his Base Salary Deferrals and Bonus Deferrals credited to
a Retirement Account or a In-Service Distribution Account.  An election to have
amounts credited to a In-Service Distribution Account shall specify the calendar
year in which payment of such amount shall be made or shall commence to be
made.  In the event a Participant does not elect a Deferral Period for any Base
Salary Deferrals or Bonus Deferrals for a Plan Year, such Participant shall be
deemed to have elected to have such amounts credited to a In-Service
Distribution Account with a Deferral Period of five (5) years.
 
Base Salary Deferrals will be credited to the Account of each Participant as
soon as practicable following each pay date, if and to the extent that the
Participant earned such Base Salary as an Employee for such pay date.  Bonus
Deferrals will be credited to the Account of each Participant not later than the
last day of the month in which such Bonus Compensation otherwise would have been
paid to the Participant in cash, provided that the Participant is an Employee at
the time such Bonus Compensation would have been paid.  A Participant whose
employment terminates prior to or during the calendar month in which his Bonus
Compensation would have been paid to him in cash will be paid his Bonus Deferral
in cash.  Such termination of employment shall not affect Base Salary Deferrals
and Bonus Deferrals previously credited to the Account of the affected
Participant.
 
4.2.            Effective Date of Participation and Deferral Election Form.
 
Except as provided below with respect to a new Participant, a Participant’s
Participation and Deferral Election Form shall become effective on the first day
of the Plan Year to which it relates.  The Participation and Deferral Election
Form of an Employee who first becomes eligible to participate in the Plan during
a Plan Year shall become effective with respect to services to be performed
subsequent to the election which shall be made within thirty (30) days after the
date the Employee first becomes eligible to participate in the Plan.  If an
Employee fails to timely complete a Participation and Deferral Election Form,
the Employee shall be
 

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deemed to have elected not to make Base Salary Deferrals and/or Bonus Deferrals
for such Plan Year.
 
4.3.            Modification or Revocation of Election by Participant.
 
A Participant may not prospectively change the amount of his Base Salary
Deferrals or Bonus Deferrals during a Plan Year unless the Committee determines
that he has suffered an unforeseeable emergency as is more fully described in
Section 6.11.  Unless required or permitted by law, under no circumstances may a
Participant’s Participation and Deferral Election Form be made, modified or
revoked retroactively.
 
4.4.            Matching Contributions.
 
Each Participant who elects to make Base Salary Deferrals and/or Bonus Deferrals
to the Plan and who has completed at least six (6) months of service will
receive a Matching Contribution equal to a certain percentage of the sum of
Participant’s Base Salary Deferrals and Bonus Deferrals.  The Matching
Contribution percentage to be contributed to the Plan shall be equal to the
matching contribution percentage provided under the 401(k) Plan.  Matching
Contributions will be credited to the Participant’s Retirement Account as of the
day on which the Base Salary Deferrals and/or Bonus Deferrals to which the
Matching Contributions relate are credited to the Participant’s Account.
 
4.5.            Make Whole IQC Contributions.
 
For each calendar quarter, the Retirement Account of each eligible Participant
shall be credited with the Make Whole IQC Contribution, if any, to which he is
entitled under Section 2.1(v).
 
4.6.            Discretionary Contributions.
 
For each Plan Year, the Retirement Account of each eligible Participant shall be
credited with such Discretionary Contribution, if any, as is determined by the
Company for such Plan Year.
 
4.7.            Suspension of Contributions.
 
Anything contained herein to the contrary notwithstanding, a Participant who
receives a distribution from the Plan due to an unforeseeable emergency shall
not be eligible to make deferrals hereunder for a six (6) month period after
receipt of such distribution.  If required by the terms of the 401(k) Plan, a
Participant who receives a hardship distribution under the 401(k) Plan shall not
be eligible to make deferrals under this Plan for a six (6) month period after
receipt of the hardship distribution.
 
4.8.            Transfer of Contributions to 401(k) Plan.
 
As soon as practicable following the end of each Plan Year, but in no event
later than March 15 of the Plan Year following the Plan Year for which the
Participant executed the relevant Participation and Deferral Election Form, the
lesser of:
 

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(i)            the allowable pre-tax contribution which may be made on behalf of
the Participant to the 401(k) Plan for the Plan Year for which the Participant
executed the Participation and Deferral Election Form, and
 
 
(ii)
the sum of the Base Salary Deferral and the Bonus Deferral for the Plan Year for
which the Participant executed the Participation and Deferral Election Form,

 
shall be paid directly to the Participant as compensation earned in the Plan
Year for which the Participant executed the Participation and Deferral Election
Form, unless the Participant previously elected (in both the Participation and
Deferral Election Form and his 401(k) Plan elections) to have such amount
contributed to the 401(k) Plan as an elective pre-tax contribution.
 
If the Participant elected to have such amount contributed to the 401(k) Plan as
an elective pre-tax contribution, such amount together with an amount equal to
the applicable Matching Contributions shall be transferred directly to the
Participant’s account(s) in the 401(k) Plan and the appropriate Accounts and
subaccounts of the Participant under the Plan shall be charged
accordingly.  Notwithstanding the preceding, the Plan shall not make
distributions to the Participant or the 401(k) Plan in excess of the
Participant’s Account balance.  Distributions pursuant to this Section 4.8 may
be made in one or more installments in the sole discretion of the Committee.
 
4.9.            Vesting.
 
A Participant shall be 100% vested at all times in that portion of his Account
which is attributable to Base Salary Deferrals and Bonus Deferrals.  Matching
Contributions, Make Whole IQC Contributions, Profit Sharing Contributions and
Discretionary Contributions shall vest in accordance with the vesting schedule
contained in the 401(k) Plan.  Notwithstanding the foregoing, if permitted by
the Secretary of the Treasury in regulations or rulings, all Matching
Contributions, Make Whole IQC Contributions, Profit Sharing Contributions and
Discretionary Contributions shall be 100% vested immediately upon a Change in
Control. Any provisions of the Plan relating to the distribution of a
Participant’s Account shall mean only the vested portion of such Account. Since
the Plan is unfunded, the portion of a Participant’s Account which is not vested
and therefore not distributed with the vested portion of his Account shall
remain property of the Company and shall not be allocated to the Accounts of
other Participants or otherwise inure to their benefit.
 

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ARTICLE V.
 
ACCOUNTS
 
5.1.            Establishment of Bookkeeping Accounts.
 
A separate bookkeeping Account or Accounts shall be maintained for each
Participant. Such Account(s) shall be credited with the Base Salary Deferrals
and Bonus Deferrals made by the Participant pursuant to Section 4.1, Matching
Contributions made by the Company pursuant to Section 4.4, Make Whole IQC
Contributions made pursuant to Section 4.5, Discretionary Contributions made
pursuant to Section 4.6 and any unvested amounts held under the Invacare
Corporation 401(k) Plus Benefit Equalization Plan prior to January 1, 2005 and
transferred to this Plan, credited (or charged, as the case may be) with the
hypothetical investment results determined pursuant to Section 5.3, and charged
with distributions made to or with respect to a Participant.
 
5.2.            Subaccounts.
 
Within each Participant’s bookkeeping Account, separate subaccounts shall be
maintained to the extent necessary or desirable for the administration of the
Plan.  In particular, separate bookkeeping accounts shall be maintained for
distributions to be made upon a Participant’s Retirement and for distributions
to be made upon attainment of the future calendar year distribution dates
selected by the Participant.
 
5.3.            Earnings Elections.
 
Amounts credited to a Participant’s Account shall be credited or charged with
earnings and losses based on hypothetical investments elected by the
Participant.  A Participant may elect different investment allocations for new
contributions and existing Account balances.  Only whole percentages may be
elected, the minimum percentage for any allocation is 1%, and the total
elections must allocate 100% of all new contributions and 100% of all existing
Account balances.  Investment elections may be changed daily, by written
direction.  The hypothetical investment alternatives and the procedures relating
to the election of such investments, other than those set forth in this Section
5.3, shall be determined by the Committee from time to time.  A Participant’s
Account shall be adjusted as of each Valuation Date to reflect investment gains
and losses.
 
Notwithstanding the foregoing provisions of this Section 5.3, if investment in
Invacare Stock is permitted hereunder, the Company in its sole discretion, shall
have the authority to place such restrictions upon the investment directions of
any person who is subject to Section 16(b) of the Securities Exchange Act of
1934 as amended (“Insider”) as shall be appropriate to comply with such
section.  Such restrictions shall include, but shall not be limited to the
following:  Insiders shall be permitted to submit investment directions relating
to Invacare Stock only on a “semi-annual date” which is no less than six (6)
months after the date of the most recent investment direction received from such
Insider relating to Invacare Stock.  For purposes of this Section 5.3, the term
“semi-annual date” shall mean a date which is within the period that begins the
third business day following the date on which the Company’s first fiscal
 

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quarter and third fiscal quarter summary statements of sales and earnings shall
be released and which ends on the twelfth business day following such release
date.
 
5.4.            Hypothetical Accounts and Creditor Status of Participants.
 
The Accounts established under this Article V shall be hypothetical in nature
and shall be maintained for bookkeeping purposes only, so that Base Salary
Deferrals, Bonus Deferrals, Matching Contributions, Discretionary Contributions,
Make Whole IQC Contributions and Profit Sharing Contributions can be credited to
the Participant and so that earnings and losses on such amounts so credited can
be credited (or charged, as the case may be).  Neither the Plan nor any of the
Accounts (or subaccounts) shall hold any actual funds or assets.  The right of
any person to receive one or more payments under the Plan shall be an unsecured
claim against the general assets of the Company.  Any liability of the Company
to any Participant, former Participant, or Beneficiary with respect to a right
to payment shall be based solely upon contractual obligations created by the
Plan.  Neither the Company, the Board, nor any other person shall be deemed to
be a trustee of any amounts to be paid under the Plan.  Nothing contained in the
Plan, and no action taken pursuant to its provisions, shall create or be
construed to create a trust of any kind, or a fiduciary relationship, between
the Company and a Participant, former Participant, Beneficiary, or any other
person.
 
5.5.            Investments.
 
The Company may, in its sole discretion, acquire insurance policies, annuities
or other financial vehicles for the purpose of providing future assets to the
Company to meet its anticipated liabilities under the Plan.  Such policies,
annuities, or other investments, shall at all times be and remain unrestricted
general property and assets of the Company or property of a trust established
pursuant to this Plan.  Participants and Beneficiaries shall have no rights,
other than as general creditors, with respect to any such policies, annuities or
other acquired assets.
 

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ARTICLE VI.
 
PAYMENT OF ACCOUNT
 

 
6.1.            Timing of Distribution of Accounts.
 
Distribution of a Participant’s Retirement Account shall be made or shall
commence to be made as soon as practicable following the Participant’s
Retirement.  Distribution of a Participant’s In-Service Distribution Accounts
shall be made or shall commence to be made as soon as practicable following the
expiration of the Deferral Period selected by the Participant for such
Accounts.  Notwithstanding the foregoing, the Participant’s entire Account shall
be distributed to him (or his Beneficiary in the event of his death) as soon as
practicable following the earliest to occur of the following:
 
(i)            the Participant’s death;
 
(ii)            the Participant’s disability; or
 
(iii)            the Participant’s separation from service.
 
In the event of distribution upon separation from service (for reasons other
than disability, death or Change in Control), actual payment of the
Participant’s Accounts shall not occur until six (6) months after the date of
separation from service, if the Participant is a “key employee” (as defined
under Internal Revenue Code Section 416(i) without regard to paragraph (5)
thereof), and the Company’s stock is publicly traded on an established
securities market or otherwise.
 
6.2.            Adjustment for Investment Gains and Losses Upon a Distribution.
 
Upon a distributable event described in Section 6.1, the balance of a
Participant’s Account shall be determined as of the Valuation Date immediately
following such event.
 
6.3.            Form of Payment.
 
Except as provided below, a Participant’s Retirement Account shall be paid in
one of the following forms as elected by the Participant:
 
 
(a)
A lump sum amount which is equal to the applicable Account balance; or

 
 
(b)
Substantially equal annual installments amortized over a period of years not to
exceed fifteen (15) years. Gains and losses on the unpaid balance shall continue
to be credited or charged to the Account in accordance with the provisions of
Section 5.3. The

 

--------------------------------------------------------------------------------

 
amount of the installments payable may be changed annually to reflect investment
results.

 
Except as provided below, a Participant’s In-Service Distribution Accounts shall
be paid in one of the following forms as elected by the Participant:
 
 
(a)
A lump sum amount which is equal to the applicable Account balance; or

 
 
(b)
Substantially equal annual installments amortized over a period of years not to
exceed five (5) years. Gains and losses on the unpaid balance shall continue to
be credited or charged to the Account in accordance with the provisions of
Section 5.3. The amount of the installments payable may be changed annually to
reflect investment results.

 
The form elected by a Participant with respect to his Retirement Account and/or
his In-Service Distribution Account(s) shall apply to each such entire Account.
 
Notwithstanding the form elected, if a Participant incurs a separation from
service prior to his Retirement, disability, or death or if the Participant’s
total Account value is not more than Ten Thousand Dollars ($10,000) on the last
Valuation Date prior to the commencement of distribution, the benefit shall be
paid in a single lump sum as soon as practicable following his separation from
service.
 
6.4.            Change in Date or Form of Distribution.
 
A Participant’s election with respect to the date or form of distribution may be
revised at the Committee’s sole discretion, provided that the revised election
does not accelerate the distribution of his Account.  Any revision to the date
or form of payment shall be made at least 12 months prior to the original
distribution date and any new payment commencement date must be at least five
(5) years after the original commencement date.
 
6.5.            Protective Distributions.
 
If the Administrator determines, in its sole discretion, that a Participant is
not, or may not be, a member of a “select group of management or highly
compensated employees” within the meaning of Section 201(2), 301(a)(3),
401(a)(1) or 4021(b)(6) of ERISA, then the Administrator may, in its sole
discretion, terminate the Participant’s participation in the Plan.  In such
event, if permitted by law and regulations, the Administrator may distribute all
amounts credited to the Participant’s Accounts in a single lump sum payment at
such time as the Administrator shall determine in its sole discretion.
 
6.6.            Designation of Beneficiaries.
 
Each Participant shall have the right, at any time, to designate one (1) or more
persons or an entity as Beneficiary (both primary as well as secondary) to whom
benefits under this Plan shall be paid in the event of a Participant’s death
prior to complete distribution of the
 

--------------------------------------------------------------------------------

Participant’s Account. Each Beneficiary designation shall be in a written form
prescribed by the Committee and will be effective only when filed with the
Committee during the Participant’s lifetime. Designation by a married
Participant of a Beneficiary other than the Participant’s spouse shall not be
effective unless the spouse executes a written consent that acknowledges the
effect of the designation and is witnessed by a notary public, or the consent
cannot be obtained because the spouse cannot be located.
 
6.7.            Change of Beneficiary Designation.
 
Except as provided below, any nonspousal designation of Beneficiary may be
changed by a Participant without the consent of such Beneficiary by the filing
of a new designation with the Committee. The filing of a new designation shall
cancel all designations previously filed.
 
6.8.            Change in Marital Status.
 
If the Participant’s marital status changes after the Participant has designated
a Beneficiary, the following shall apply:
 
 
(a)
If the Participant is married at death but was unmarried when the designation
was made, the designation shall be void unless the spouse has consented to it in
the manner prescribed above.

 
 
(b)
If the Participant is unmarried at death but was married when the designation
was made:

 
 
(i)
The designation shall be void if the spouse was named as Beneficiary. The
designation shall remain valid if a nonspouse Beneficiary was named.

 
 
(ii)
If the Participant was married when the designation was made and is married to a
different spouse at death, the designation shall be void unless the new spouse
has consented to it in the manner prescribed above.

 
6.9.            No Beneficiary Designation.
 
If any Participant fails to designate a Beneficiary in the manner provided
above, or if the Beneficiary designated by a deceased Participant dies before
the Participant or before complete distribution of the Participant’s benefits,
the Participant’s Beneficiary shall be the person in the first of the following
classes in which there is a survivor:
 
(a)            The Participant’s surviving spouse;
 
 
(b)
The Participant’s children in equal shares, except that if any of the children
predeceases the Participant but leaves issue surviving, then such issue shall
take by right of representation the share the parent would have taken if living;

 

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(c)
The Participant’s parents;

 
(d)            The Participant’s estate.
 
6.10.                       Unclaimed Benefits.
 
In the case of a benefit payable on behalf of a Participant, if the Committee is
unable to locate the Participant or Beneficiary to whom such benefit is payable,
such benefit may be forfeited to the Company, upon the Committee’s
determination. Notwithstanding the foregoing, if subsequent to any such
forfeiture the Participant or Beneficiary to whom such benefit is payable makes
a valid claim for such benefit, such forfeited benefit shall be paid by the
Company or restored to the Plan by the Company.
 
6.11.                       Withdrawals for Unforeseeable Emergency.
 
A Participant may apply in writing to the Committee for, and the Committee may
permit, a withdrawal of all or any part of a Participant’s Account derived from
Base Salary and Bonus Deferrals if the Committee, in its sole discretion,
determines that the Participant has incurred an unforeseeable emergency
resulting from a sudden and unexpected illness or accident of the Participant or
of a dependent (as defined in section 152(a) of the Code) of the Participant,
loss of the Participant’s property due to casualty, or other similar
extraordinary and unforeseeable circumstances arising as a result of events
beyond the control of the Participant. The amount that may be withdrawn shall be
limited to the amount reasonably necessary to relieve the emergency upon which
the request is based, plus the federal and state taxes due on the withdrawal, as
determined by the Committee. The Committee may require a Participant who
requests a withdrawal on account of an unforeseeable emergency to submit such
evidence as the Committee, in its sole discretion, deems necessary or
appropriate to substantiate the circumstances upon which the request is based.
 
6.12.                       Withholding.
 
All deferrals and distributions shall be subject to legally required income and
employment tax withholding.
 

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ARTICLE VII.
 
ADMINISTRATION
 
7.1.            Committee.
 
The Plan shall be administered by a Committee, which shall include the Senior
Vice President of Human Resources and the Chief Financial Officer. The Committee
shall be responsible for the general operation and administration of the Plan
and for carrying out the provisions thereof. The Committee may delegate to
others certain aspects of the management and operational responsibilities of the
Plan including the employment of advisors and the delegation of ministerial
duties to qualified individuals, provided that such delegation is in writing. No
member of the Committee who is a Participant shall participate in any matter
relating to his status as a Participant or his rights or entitlement to benefits
as a Participant.
 
7.2.            General Powers of Administration.
 
The Committee shall be the Plan Administrator under ERISA.  The Administrator
will be responsible for the general administration of the Plan and will have all
powers as may be necessary to carry out the provisions of the Plan and may, from
time to time, establish rules for the administration of the Plan and the
transaction of the Plan’s business.  In addition to any powers, rights and
duties set forth elsewhere in this Plan, it will have the following powers and
duties:
 
 
(a)
To enact rules, regulations, and procedures and to prescribe the use of such
forms as it deems advisable;

 
 
(b)
To appoint or employ agents, attorneys, actuaries, accountants, assistants or
other persons (who may also be Participants in this Plan or be employed by or
represent the Company) at the expense of the Company, as it deems necessary to
keep its records or to assist it in taking any other action authorized or
required under the Plan;

 
 
(c)
To interpret the Plan, and to resolve ambiguities, inconsistencies and
omissions, to determine any question of fact, to determine the right to benefits
of, and the amount of benefits, if any, payable to, any person in accordance
with the provisions of the Plan and resolve all questions arising under the
Plan;

 
 
(d)
To administer the Plan in accordance with its terms and any rules and
regulations it establishes; and

 
 
(e)
To maintain records concerning the Plan as it deems sufficient to prepare
reports, returns and other information required by the Plan or by law; and

 

--------------------------------------------------------------------------------

 
(f)
To direct the Company to pay benefits under the Plan, and to give other
directions and instructions as may be necessary for the proper administration of
the Plan.

 
Any decision, interpretation or other action made or taken by the Administrator
arising out of or in connection with the Plan, will be within the absolute
discretion of the Administrator, and will be final, binding and conclusive on
the Company, and all Participants and Beneficiaries and their respective heirs,
executors, administrators, successors and assigns.  The Administrator’s
determinations under the Plan need not be uniform, and may be made selectively
among Participants, whether or not they are similarly situated.
 
7.3.            Indemnification of Committee.
 
The Company shall indemnify the members of the Committee against any and all
claims, losses, damages, expenses, including attorney’s fees, incurred by them,
and any liability, including any amounts paid in settlement with their approval,
arising from their action or failure to act, except when the same is judicially
determined to be attributable to their gross negligence or willful misconduct.
 

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ARTICLE VIII.
 
DETERMINATION OF BENEFITS, CLAIMS PROCEDURE AND ADMINISTRATION
 
8.1.            Claims.
 
A Participant, Beneficiary or other person who believes that he or she is being
denied a benefit to which he or she is entitled (hereinafter referred to as
“Claimant”), or his or her duly authorized representative, may file a written
request for such benefit with the Committee setting forth his or her claim. The
request must be addressed to the Committee at the Company at its then principal
place of business.
 
8.2.            Claim Decision.
 
Upon receipt of a claim, the Committee shall advise the Claimant that a reply
will be forthcoming within a reasonable period of time, but ordinarily not later
than ninety days, and shall, in fact, deliver such reply within such period.
However, the Committee may extend the reply period for an additional ninety days
for reasonable cause. If the reply period will be extended, the Committee shall
advise the Claimant in writing during the initial 90-day period indicating the
special circumstances requiring an extension and the date by which the Committee
expects to render the benefit determination.
 
If the claim is denied in whole or in part, the Committee will render a written
opinion, using language calculated to be understood by the Claimant, setting
forth:
 
(a)            the specific reason or reasons for the denial;
 
 
(b)
the specific references to pertinent Plan provisions on which the denial is
based;

 
 
(c)
a description of any additional material or information necessary for the
Claimant to perfect the claim and an explanation as to why such material or such
information is necessary;

 
 
(d)
appropriate information as to the steps to be taken if the Claimant wishes to
submit the claim for review, including a statement of the Claimant’s right to
bring a civil action under Section 502(a) of ERISA following an adverse benefit
determination on review; and

 
 
(e)
the time limits for requesting a review of the denial under Section 8.3 and for
the actual review of the denial under Section 8.4.

 
If no notice is provided, the claim will be deemed denied.  The interpretations,
determinations and decisions of the Administrator will be final and binding upon
all persons with respect to any right, benefit and privilege hereunder, subject
to the review procedures set forth in this Article.
 

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8.3.            Request for Review of a Denied Claim.
 
Within sixty days after the receipt by the Claimant of the written opinion
described above, the Claimant may request in writing that the Senior Vice
President of Human Resources of the Company (“Executive Officer”) review the
Committee’s prior determination. Such request must be addressed to the Executive
Officer at the Company at its then principal place of business. The Claimant or
his or her duly authorized representative may submit written comments,
documents, records or other information relating to the denied claim, which
information shall be considered in the review under this Section without regard
to whether such information was submitted or considered in the initial benefit
determination.
 
The Claimant or his or her duly authorized representative shall be provided,
upon request and free of charge, reasonable access to, and copies of, all
documents, records and other information which (i) was relied upon by the
Committee in making its initial claims decision, (ii) was submitted, considered
or generated in the course of the Committee making its initial claims decision,
without regard to whether such instrument was actually relied upon by the
Committee in making its decision or (iii) demonstrates compliance by the
Committee with its administrative processes and safeguards designed to ensure
and to verify that benefit claims determinations are made in accordance with
governing Plan documents and that, where appropriate, the Plan provisions have
been applied consistently with respect to similarly situated claimants. If the
Claimant does not request a review of the Committee’s determination within such
60-day period, he or she shall be barred and estopped from challenging such
determination.
 
8.4.            Review of Decision.
 
Within a reasonable period of time, ordinarily not later than sixty days, after
the Executive Officer’s receipt of a request for review, it will review the
Committee’s prior determination. If special circumstances require that the
sixty-day time period be extended, the Executive Officer will so notify the
Claimant within the initial 60-day period indicating the special circumstances
requiring an extension and the date by which the Executive Officer expects to
render its decision on review, which shall be as soon as possible but not later
than 120 days after receipt of the request for review. In the event that the
Executive Officer extends the determination period on review due to a Claimant’s
failure to submit information necessary to decide a claim, the period for making
the benefit determination on review shall not take into account the period
beginning on the date on which notification of extension is sent to the Claimant
and ending on the date on which the Claimant responds to the request for
additional information.
 
Benefits under the Plan will be paid only if the Executive Officer decides in
its discretion that the Claimant is entitled to such benefits. The decision of
the Executive Officer shall be final and non-reviewable, unless found to be
arbitrary and capricious by a court of competent review. Such decision will be
binding upon the Company and the Claimant.
 
If the Executive Officer makes an adverse benefit determination on review, the
Executive Officer will render a written opinion, using language calculated to be
understood by the Claimant, setting forth:
 

--------------------------------------------------------------------------------

(a)            the specific reason or reasons for the denial;
 
 
(b)
the specific references to pertinent Plan provisions on which the denial is
based;

 
 
(c)
a statement that the Claimant is entitled to receive, upon request and free of
charge, reasonable access to, and copies of, all documents, records and other
information which (i) was relied upon by the Executive Officer in making its
decision, (ii) was submitted, considered or generated in the course of the
Executive Officer making its decision, without regard to whether such instrument
was actually relied upon by the Executive Officer in making its decision or
(iii) demonstrates compliance by the Executive Officer with its administrative
processes and safeguards designed to ensure and to verify that benefit claims
determinations are made in accordance with governing Plan documents, and that,
where appropriate, the Plan provisions have been applied consistently with
respect to similarly situated claimants; and

 
 
(d)
a statement of the Claimant’s right to bring a civil action under Section 502(a)
of ERISA following the adverse benefit determination on such review.

 
8.5.            Discretionary Authority.
 
The Committee and Executive Officer shall both have discretionary authority to
determine a Claimant’s entitlement to benefits upon his claim or his request for
review of a denied claim, respectively.
 

 
ARTICLE IX.

--------------------------------------------------------------------------------

 
AMENDMENT AND TERMINATION
 

 
9.1.            Power to Amend or Terminate.
 
The Company reserves the right, by action of its Board in its sole discretion,
to retroactively or prospectively amend, modify or terminate this Plan at any
time.
 
9.2.            Distribution Upon Plan Termination.
 
In the event that the Plan is terminated and distribution is permitted by law or
regulation, the balance in a Participant’s Account shall be paid to such
Participant or his Beneficiary in a lump sum or in equal monthly installments
over the following period, unless the Committee determines otherwise:
 
Account
Balance                                                                   
Payout Period
 
$50,000 or
less                                                                             
Lump Sum
 
More than $50,000 but less than
$250,000                                                                                     
3 Years
 
$250,000 or
more                                                                             
5 Years
 
Gains and losses shall continue to be credited or charged to the Account in
accordance with the provisions of Section 5.3. The Company reserves the right to
pay each Account in a lump sum, notwithstanding the above schedule.
 
9.3.            Protective Amendments Due to Change in Law.
 
 
(a)
Change in Tax Laws.  Without limiting the generality of the amendment and
termination provisions in Section 9.1, the Company may, by action of its Board
in its sole discretion, unilaterally amend, modify or terminate the Plan,
retroactively or prospectively, to address or reflect changes in the actual or
anticipated federal, state or local income or payroll tax consequences (or any
other tax consequences) affecting either the Company, or any Participant or
Beneficiary, including without limitation, those due to any of the following:

 
 
(i)
the enactment or amendment of any federal, state or local tax or revenue law;

 
 
(ii)
the promulgation or publication of any regulation, ruling or similar
announcement by the Secretary of the Treasury Department, the Internal Revenue
Service or any other relevant federal, state or local tax authority;

 

--------------------------------------------------------------------------------

 
(iii)
a decision by a court of competent jurisdiction involving a Participant or
Beneficiary;

 
 
(iv)
a closing agreement made under Code Section 7121 that is approved by the
Internal Revenue Service and involves a Participant, or any similar agreement
involving any state or local tax authority; or

 
 
(v)
any similar type of change or any alteration in the expectations of the Company
regarding the income or payroll tax impacts of the Plan.

 
Any such amendment or modification should be consistent, as determined by the
Company in its sole discretion, with the changes in tax consequences and may
include the transfer of unanticipated tax burdens to Participants and
Beneficiaries.
 
 
(b)
Change in Securities Laws.  Without limiting the generality of the amendment and
termination provisions in Section 9.3, the Company may, by action of its Board
in its sole discretion, unilaterally amend, modify or terminate the Plan,
retroactively or prospectively, to address or reflect changes in the securities
laws or changes in the expectations of the Company regarding the application of
securities laws to the Plan or the Company with regard to the Plan.  Any such
amendment, modification or termination should be consistent, as determined by
the Company in its sole discretion, with the changes in the actual or
anticipated securities law impacts of the Plan and may include limiting the
rights of individuals to make deferrals, refunding deferred amounts,
distributing Accounts or allowing Participants to rescind deferral elections.

 

--------------------------------------------------------------------------------

 
ARTICLE X.
 
MISCELLANEOUS
 
10.1.                       Plan Not a Contract of Employment.
 
The adoption and maintenance of the Plan shall not be or be deemed to be a
contract between the Company and any person or to be consideration for the
employment of any person. Nothing herein contained shall give or be deemed to
give any person the right to be retained in the employ of the Company or to
restrict the right of the Company to discharge any person at any time; nor shall
the Plan give or be deemed to give the Company the right to require any person
to remain in the employ of the Company or to restrict any person’s right to
terminate his employment at any time.
 
10.2.                       Non-Assignability of Benefits.
 
No Participant, Beneficiary or distributee of benefits under the Plan shall have
any power or right to transfer, assign, anticipate, hypothecate or otherwise
encumber any part or all of the amounts payable hereunder, which are expressly
declared to be unassignable and non-transferable. Any such attempted assignment
or transfer shall be void. No amount payable hereunder shall, prior to actual
payment thereof, be subject to seizure by any creditor of any such Participant,
Beneficiary or other distributee for the payment of any debt, judgment, or other
obligation, by a proceeding at law or in equity, nor transferable by operation
of law in the event of the bankruptcy, insolvency or death of such Participant,
Beneficiary or other distributee hereunder.
 
10.3.                       Severability.
 
If any provision of this Plan shall be held illegal or invalid for any reason,
said illegality or invalidity shall not affect the remaining provisions hereof;
instead, each provision shall be fully severable and the Plan shall be construed
and enforced as if said illegal or invalid provision had never been included
herein.
 
10.4.                       Governing Laws.
 
All provisions of the Plan shall be construed in accordance with the internal
laws (but not the choice of laws) of Ohio, except to the extent preempted by
federal law.
 
10.5.                       Binding Effect.
 
This Plan shall be binding on each Participant and his heirs and legal
representatives and on the Company and its successors and assigns.
 
10.6.                       Entire Agreement.
 
This document and any amendments contain all the terms and provisions of the
Plan and shall constitute the entire Plan, any other alleged terms or provisions
being of no effect.
 

--------------------------------------------------------------------------------

10.7.                       No Guaranty of Tax Consequences.
 
While the Company has established, and will maintain, the Plan, the Company
makes no representation, warranty, commitment, or guaranty concerning the
income, employment, or other tax consequences of participation in the Plan under
federal, state, or local law.
 

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the Company has caused this Plan to be executed on this 28th
day of December, 2004.
 

INVACARE CORPORATION

By /s/ Gregory C. Thompson

 
And /s/ Joseph Usaj

--------------------------------------------------------------------------------

AMENDMENT NO. 1
TO
INVACARE CORPORATION DEFERRED COMPENSATION PLUS PLAN
 
This Amendment No. 1 to the Invacare Corporation Deferred Compensation Plus Plan
is hereby adopted as of the date set forth below by Invacare Corporation, an
Ohio corporation (the “Company”).
WITNESSETH:
 
WHEREAS, effective January 1, 2005, the Company established a deferred savings
plan known as the Invacare Corporation Deferred Compensation Plus Plan (the
“Plan”) to provide unfunded deferred compensation to certain management and
highly compensated employees of the Company; and
WHEREAS, also on January 1, 2005, Internal Revenue Code Section 409A became
effective to impose new requirements on deferred compensation, including the
requirement that the form of payment be fixed at the time income is deferred,
and the requirement that any later election to change that form of payment be
subject to restrictions which include a 12-month notice period and a 5-year
postponement of the payment commencement date (the “Election Restrictions”); and
WHEREAS, the Plan is permitted to provide a “transition election” in 2006 by
which the participants can elect, on or before December 31, 2006, to change the
designated time and form of payment of their deferrals without being subject to
the Election Restrictions; and
WHEREAS, the Company desires to provide the Plan participants with such a
transition election; and

--------------------------------------------------------------------------------

WHEREAS, the Company desires to make certain additional changes to the Plan to
allow employees of the Company’s affiliates to participate, to modify a
participant’s eligibility to make bonus deferrals, to modify a participant’s
eligibility for the transfer of deferrals to the Invacare Retirement Savings
Plan, and to clarify certain forfeiture and contribution suspension provisions
applicable to in-service withdrawals;  and
WHEREAS, pursuant to Section 9.1 of the Plan, the Company has retained the right
to make amendments thereto; and
NOW, THEREFORE, the Company hereby amends the Plan, effective as of the dates
indicated below, as follows:
1.            Effective January 1, 2006, Section 1.3 of the Plan is amended by
the deletion of said Section and the substitution, in lieu thereof, of a new
Section 3.1 to read as follows:
“1.3.                       Purposes of Plan.
 
The purposes of the Plan are to provide deferred compensation for a select group
of management or highly compensated Employees and to provide eligible Employees
the opportunity to maximize their elective contributions to the Invacare
Retirement Savings Plan (the ‘401(k) Plan’) notwithstanding certain limitations
in the Code.”

2.            Effective January 1, 2006, Section 2.1 of the Plan is amended by
the deletion of the paragraph (g) therein, and the substitution, in lieu
thereof, of a new paragraph (g) to read as follows:
“(g)            ‘Employee’ means any common-law employee of the Company or any
person with whom the Company would be considered a single employer under Code
Section 414(b) or (c).”

3.            Effective January 1, 2006, Section 3.1 of the Plan is amended by
the deletion of said Section and the substitution, in lieu thereof, of a new
Section 3.1 to read as follows:

--------------------------------------------------------------------------------

“3.1.                       Participation.
Participants in the Plan are those Employees who are (a) subject to the income
tax laws of the United States, (b) members of a select group of highly
compensated or management Employees, and (c) selected by the Committee or its
delegates, in its sole discretion, as Participants. The Committee shall notify
each Participant of his selection as a Participant.  An Employee who satisfies
the eligibility requirements set forth in subsections (a) and (b) shall remain
eligible to continue participation in the Plan for each Plan Year following his
selection by the Committee as a Participant.”
 
4.            Effective January 1, 2007, Section 4.1 of the Plan is amended by
the deletion of the first paragraph therein, and the substitution, in lieu
thereof, of a new paragraph to read as follows:
“Before the first day of each calendar year, a Participant may file with the
Committee a Participation and Deferral Election Form pursuant to which such
Participant elects to make Base Salary Deferrals.  A Participant must file a
Participation and Deferral Election form to make Bonus Deferrals at a time
prescribed by the Committee which time shall be not later than six (6) months
before the end of the 12 month period over which the services upon which the
Bonus Compensation is based are performed.  A Participant shall be entitled to
defer a whole percent of his Base Salary or Bonus Compensation, subject to a
maximum deferral of fifty percent (50%) of Base Salary and one hundred percent
(100%) of Bonus Compensation.  The prior provisions notwithstanding, an Employee
who first becomes eligible to participate in the Plan during a Plan Year shall
not be entitled to make Bonus Deferrals until the first day of the calendar year
beginning on or after becoming eligible.  Deferral elections shall be subject to
any other rules prescribed by the Committee in its sole discretion.”
 
5.            Effective January 1, 2007, Section 4.8 of the Plan is amended by
the deletion of the last paragraph therein, and the substitution, in lieu
thereof, of a new paragraph to read as follows:
“If the Participant elected to have such amount contributed to the 401(k) Plan
as an elective pre-tax contribution, and the Participant is an Employee on the
last day of the Plan Year (or terminated during the Plan Year due to death,
Disability or Retirement), such amount together with an amount equal to the
applicable Matching Contributions shall be transferred directly to the
Participant’s account(s) in the 401(k) Plan and the appropriate Accounts and
subaccounts of the Participant under the Plan shall be charged accordingly.  If
the Participant made such election but failed to qualify for such transfer
because of a failure to remain an Employee on the last day of the Plan Year,
such amount shall not be
 

--------------------------------------------------------------------------------

transferred but rather shall remain in the Participant’s Account under the
Plan.  In no event shall the Plan make distributions to the Participant or
transfers the 401(k) Plan in excess of the Participant’s Account
balance.  Distributions pursuant to this Section 4.8 may be made in one or more
installments in the sole discretion of the Committee.”
 
6.            Effective January 1, 2005, a new Section 4.10 is added to the Plan
to read as follows:
 
“4.10
Suspension and Forfeiture Following Accelerated Distribution of Grandfathered
Deferrals   

 
A Participant who elects to receive an accelerated distribution from the
Participant’s account under the Benefit Equalization Plan shall forfeit the
unvested portion of his Account under the Plan and shall be suspended from
making contributions to the Plan for the two (2) consecutive Plan Years which
begin on or after the date of such distribution.”
 
7.            Effective December 31, 2006, Section 6.1 of the Plan is amended by
the deletion of the last paragraph therein, and the substitution, in lieu
thereof, of a new paragraph to read as follows:
“In the event of distribution upon separation from service (for reasons other
than disability, death or Change in Control) which occurs at a time that the
Company’s stock is publicly traded on an established securities market or
otherwise, actual payment of the Participant’s Accounts shall not occur until
six (6) months after the date of the separation from service if the Participant
is a key employee as defined under Code Section 416(i) without regard to
paragraph (5) thereof (a ‘Key Employee’).  The Committee shall identify those
individuals who constitute the Key Employees on each December 31 (beginning with
December 31, 2006) for its use in determining those Participants who shall be
considered Key Employees during the 12-month period beginning on the April 1
following such December 31.”
 
8.            Effective November 1, 2006, Section 6.4 of the Plan is amended by
the deletion of said Section and the substitution, in lieu thereof, of a new
Section 6.4 to read as follows:
“6.4.                       Change in Date or Form of Distribution.

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A Participant’s election with respect to the date or form of distribution may be
revised at the Committee’s sole discretion, provided that the revised election
does not accelerate the distribution of his Account in a manner prohibited under
Code Section 409A.  Any revision to the date or form of payment shall be made at
least 12 months prior to the original distribution date and any new payment
commencement date must be at least five (5) years after the original
commencement date.
 
The prior provisions of this Section notwithstanding, pursuant to the relief
granted in IRS Notice 2005-1, Q&A-19(c) as extended in the Proposed Treasury
Regulations under Code Section 409A (Section XI.C. of the Preambles), a
Participant shall be permitted to make a new election in 2006 regarding the form
of distribution of the Participant’s Account, provided that such election is
made in writing and filed with the Committee no later than December 31,
2006.  Such election shall be immediately effective; provided, however, that
such election shall not operate to change the form of distribution of amounts
that otherwise would be payable in 2006, nor will it operate to make payable in
2006 amounts that would not otherwise be payable in that year.”

IN WITNESS WHEREOF, the Company, by its appropriate officers duly authorized,
has caused this Amendment No. 1 to be executed as of this 28th day of December,
2006.
 

  INVACARE CORPORATION          
 
By:
/s/ Joseph Usaj       Joseph Usaj                  

 

             
 
And:
/s/ Gregory C. Thompson       Gregory C. Thompson