exhibit10.htm


     

    Exhibit
      10.1

    
 

    INVACARE
      CORPORATION

    AMENDED
      AND RESTATED 2003 PERFORMANCE PLAN

    


    
      	
              1.

            	
              Purpose

            


    

     

    The
      Invacare Corporation 2003 Performance Plan (the “Plan”), is designed to foster
      the long-term growth and performance of the Company by: (a) enhancing the
      Company’s ability to attract and retain highly qualified employees, (b)
      motivating employees to serve and promote the long-term interests of the Company
      and its shareholders through stock ownership and performance-based incentives,
      and (c) strengthening the Company’s ability to attract, retain and incentivize
      highly qualified non-employee Directors and aligning the interests of such
      Directors with the interests of shareholders through stock
      ownership.  To achieve this purpose, the Plan provides authority for
      the grant of Stock Options, Restricted Stock, Stock Equivalent Units, Stock
      Appreciation Rights, and other stock and performance-based
      incentives.

     

    
      	
              2.

            	
              Definitions

            


    

     

    (a)           “Affiliate”
      -- means “Affiliate” within the meaning given such term in Rule 12b-2 under the
      Exchange Act.

     

    (b)           “Award”
      -- means the grant of Stock Options, Restricted Stock, Stock Equivalent Units,
      Stock Appreciation Rights, and other stock and performance-based incentives
      under this Plan, or any combination thereof.

     

    (c)           “Award
      Agreement” -- means any agreement between the Company and a
      Participant that sets forth terms, conditions, and restrictions applicable
      to an
      Award.

     

    (d)           “Board
      of Directors” -- means the Board of Directors of the
      Company.

     

    (e)           “Change
      in Control” -- means, at any time after the date of the adoption
      of this Plan, the occurrence of any one or more of the following:

     

    (i)           Any
      Person (other than any employee benefit plan or employee stock ownership plan
      of
      the Company, or any Person organized, appointed, or established by the Company,
      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 30% or more of
      the
      total outstanding voting power of the Company, as reflected by the power to
      vote
      in connection with the election of Directors, or commences a tender offer or
      exchange offer, the consummation of which would result in the Person becoming
      the Beneficial Owner of 30% or more of the total outstanding voting power of
      the
      Company as reflected by the power to vote in connection with the election of
      Directors.  For purposes of this Section 2(e)(i), the terms
“Affiliates,” “Associates,” and “Beneficial Owner,” will have the meanings given
      to 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, or in any restatement thereof, or in any replacement
      Rights Agreement.

     

    (ii)           At
      any time during a period of 24 consecutive months, individuals who were
      Directors at the beginning of the period no longer constitute a majority of
      the
      members of the Board of Directors, unless the election, or the nomination for
      election by the Company’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 who
      either were Directors at the beginning of the period or are Continuing Directors
      (or such nomination is approved by a committee comprised solely of such
      Directors).

     

    (iii)           A
      record date is established for determining shareholders entitled to vote upon
      (A) a merger or consolidation of Invacare Corporation with another corporation
      (which is not an affiliate of Invacare Corporation in which Invacare Corporation
      is not the surviving or continuing corporation 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
      reorganization, dissolution or liquidation (but not partial liquidation) of
      Invacare Corporation.

     

    (iv)           The
      occurrence of any other event or series of events, which, in the opinion of
      the
      Board of Directors, will, or is likely to, if carried out, result in a change
      of
      control of Invacare Corporation.

     

    (f)           “Code”
      -- means the Internal Revenue Code of 1986, or any law that supersedes or
      replaces it, as amended from time to time.  A reference to any
      provision of the Code includes a reference to any lawful regulation or
      pronouncement promulgated thereunder and to any successor
      provision.

     

    (g)           “Committee”
      -- means the Compensation, Management Development and Corporate Governance
      Committee of the Board of Directors, or any other committee of the Board of
      Directors that the Board of Directors or the Compensation Committee authorizes
      to administer all or any aspect of this Plan.

     

    (h)           “Common
      Shares” -- means Common Shares, without par value, of Invacare
      Corporation, including authorized and unissued Common Shares and treasury Common
      Shares.

     

    (i)           “Company”
      -- means Invacare Corporation, an Ohio corporation, and its direct and indirect
      subsidiaries, or any successor entity.

     

    (j)           “Continuing
      Director” -- means a Director who was a Director prior to a Change
      in Control or was recommended or elected to succeed a Continuing Director by
      a
      majority of the Continuing Directors then in office (or by a committee comprised
      solely of Continuing Directors).

     

    (k)           “Director”
      -- means any individual who is a member of the Board of Directors of the
      Company.


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


     

    (l)           “Exchange
      Act” -- means the Securities Exchange Act of 1934, and any law
      that supersedes or replaces it, as amended from time to time.

     

    (m)           “Fair
      Market Value” of Common Shares -- means the value of the Common
      Shares determined by the Committee, or pursuant to rules established by the
      Committee.

     

    (n)           “Incentive
      Stock Option” -- means a Stock Option that meets the requirements
      of Section 422 of the Code, or any successor or replacement
      provision.

     

    (o)           “Notice
      of Award” -- means any notice by the Committee to a Participant
      that advises the Participant of the grant of an Award or sets forth terms,
      conditions, and restrictions applicable to an Award.

     

    (p)           “Participant”
      -- means any person to whom an Award has been granted under this
      Plan.

     

    (q)           “Performance
      Objectives” -- means the achievement of performance objectives
      established pursuant to this Plan.  Performance Objectives may be
      described in terms of Company-wide objectives or objectives that are related
      to
      the performance of the individual Participant or the subsidiary, division,
      department or function within the Company in respect of which the Participant
      performs services during a specified time period.  Any Performance
      Objectives applicable to Awards intended to qualify as “performance-based
      compensation” under Section 162(m) of the Code (the “Performance-Based
      Exception”) shall be limited to specified levels of or increases in the
      Company’s, or subsidiary’s, or division’s, or department’s, or function’s return
      on equity, earnings per Common Share, total earnings, earnings growth, return
      on
      capital, operating measures (including, but not limited to, operating margin
      and/or operating costs), return on assets, or increase in the Fair Market Value
      of the Common Shares.  Except in the case of such an Award intended to
      qualify under Section 162(m) of the Code, if the Committee determines that
      a
      change in the business, operations, corporate structure or capital structure
      of
      the Company, or the manner in which it conducts its business, or other events
      or
      circumstances render the Performance Objectives unsuitable, the Committee may
      modify such Performance Objectives or the related minimum acceptable level
      of
      achievement, in whole or in part, as the Committee deems appropriate and
      equitable.

     

    The
      Committee shall have the discretion to adjust the determinations of the degree
      of attainment of the pre-established Performance Objectives; provided, however,
      that Awards which are designed to qualify for the Performance-Based Exception,
      may not be adjusted upward (the Committee shall retain the discretion to adjust
      such Awards downward).

     

    In
      the
      event that applicable tax and/or securities laws change to permit Committee
      discretion to alter the governing performance measures without obtaining
      shareholder approval of such changes, the Committee shall have sole discretion
      to make such changes without obtaining shareholder approval.  In
      addition, in the event that the Committee determines that it is advisable to
      grant Awards which shall not qualify for the Performance-Based Exception, the
      Committee may make such grants without satisfying the requirements of Code
      Section 162(m).


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


     

    (r)           “Person”
      -- means an individual, partnership, corporation (including a business trust),
      joint stock company, trust, unincorporated association, joint venture or other
      entity, or a governmental authority.

     

    (s)           “Plan”
      -- means this Invacare Corporation 2003 Performance Plan, as set forth herein
      and as hereafter may be amended from time to time in accordance with the terms
      hereof.

     

    (t)           “Restricted
      Stock” -- means an Award of Common Shares that are subject to
      restrictions or risk of forfeiture based on time and/or
      performance.

     

    (u)           “Rule
      16b-3” -- means Rule 16b-3 under the Exchange Act, or any rule
      that supersedes or replaces it, as amended from time to time.

     

    (v)           “Stock
      Appreciation Right” -- means any rights granted pursuant to an
      Award described in Section 6(b)(i).

     

    (w)           “Stock
      Award” -- means Awards granted in Section 6(b)(ii).

     

    (x)           “Stock
      Equivalent Unit” -- means an Award that is valued by reference to
      the value of Common Shares.

     

    (y)           “Stock
      Option” -- means an option to purchase Common Shares as described
      in Section 6(b)(iii).

     

    
      	
              3.

            	
              Eligibility

            


    

     

    All
      Directors and employees of the Company and its Affiliates are eligible for
      the
      grant of Awards.  The selection of any such persons to receive Awards
      will be within the discretion of the Committee.  More than one Award
      may be granted to the same person.

     

    Notwithstanding
      the foregoing, any individual who renounces in writing any right that he or
      she
      may have to receive Awards under the Plan shall not be eligible to receive
      any
      Awards hereunder.

     

    
      	
              4.

            	
              Common
                Shares Available for Awards;
                Adjustment

            


    

     

    (a)           Number
      of Common Shares.  The aggregate number of Common Shares that may
      be subject to Awards, including specifically Incentive Stock Options, granted
      under this Plan during the term of this Plan will be equal to Three Million
      Eight Hundred Thousand (3,800,000) Common Shares, subject to any adjustments
      made in accordance with the terms of this Section 4.

     

    The
      assumption of obligations in respect of awards granted by an organization
      acquired by the Company, or the grant of Awards under this Plan in substitution
      for any such awards, will not reduce the number of Common Shares available
      in
      any fiscal year for the grant of Awards under this Plan.


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


     

    Common
      Shares subject to an Award that is forfeited, terminated, or canceled without
      having been exercised (other than Common Shares subject to a Stock Option that
      is canceled upon the exercise of a related Stock Appreciation Right) will again
      be available for grant under this Plan, without reducing the number of Common
      Shares available in any fiscal year for grant of Awards under this Plan, except
      to the extent that the availability of those Common Shares would cause this
      Plan
      or any Awards granted under this Plan to fail to qualify for the exemption
      provided by Rule 16b-3.

     

    (b)           No
      Fractional Common Shares.  No fractional Common Shares will be
      issued, and the Committee will determine the manner in which the value of
      fractional Common Shares will be treated.

     

    (c)           Adjustment.  In
      the event of any change in the Common Shares by reason of a merger,
      consolidation, reorganization, recapitalization, or similar transaction,
      including any transaction described under Section 424(a) of the Code, or in
      the
      event of a stock dividend, stock split, reverse stock split, or distribution
      to
      shareholders (other than normal cash dividends), the Committee will have
      authority to adjust, in any manner that it deems equitable, the number and
      class
      of Common Shares that may be issued under this Plan, the number and class of
      Common Shares subject to outstanding Awards, the per share exercise price
      applicable to outstanding Awards, and the Fair Market Value of the Common Shares
      and other value determinations applicable to outstanding Awards (i.e., Stock
      Equivalent Units, for example), including as may be allowed or required under
      Section 424(a) of the Code.

     

    
      	
              5.

            	
              Administration

            


    

     

    (a)           Committee.  This
      Plan will be administered by the Committee; provided, however, that the Board
      of
      Directors may, in its discretion, at any time and from time to time, administer
      the Plan in which case the term “Committee” shall be deemed to be the Board of
      Directors.  The Committee will, subject to the terms of this Plan,
      have the authority to: (i) select the eligible employees who will receive
      Awards, (ii) grant Awards, (iii) determine the number and types of Awards to
      be
      granted to eligible employees, (iv) determine the terms, conditions, vesting
      periods, and restrictions applicable to Awards, including timing, price, and,
      if
      applicable, Performance Objectives, subject to, and consistent with, the
      provisions of the Plan, (v) adopt, alter, and repeal administrative rules and
      practices governing this Plan, (vi) interpret the terms and provisions of this
      Plan and any Awards granted under this Plan, including, where applicable,
      determining the method of valuing any Award and certifying as to the
      satisfaction of such Awards, (vii) prescribe the forms of any Notices of Award,
      Award Agreements, or other instruments relating to Awards, (viii) supervise
      the
      administration of this Plan, and (ix) make all other determinations and take
      all
      other actions as the Committee deems necessary for the administration and
      operation of the Plan.  The Committee may employ attorneys,
      consultants, accountants, or other professional advisors to assist it in the
      administration of the Plan.

     

    (b)           Delegation.  The
      Committee may delegate any of its authority to any other person or persons
      that
      it deems appropriate.


     

    (c)           Decisions
      Final.  All decisions by the Committee, and by any other Person
      or Persons to whom the Committee has delegated authority, to the extent
      permitted by law, will be final and binding on all Persons.

    

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    (d)           No
      Liability.  Neither the Committee nor any of its members shall be
      liable for any act taken by the Committee pursuant to the Plan.  No
      member of the Committee shall be liable for the act of any other
      member.

     

    
      	
              6.

            	
              Awards

            


    

     

    (a)           Grant
      of Awards.  The Committee will determine the type or types of
      Awards to be granted to each Participant and will set forth in the related
      Notice of Award or Award Agreement the terms, conditions, vesting periods,
      and
      restrictions applicable to each Award.  Awards may be granted singly
      or in combination or  tandem with other Awards.  Awards may
      also be granted in replacement of, or in substitution for, other awards granted
      by the Company, whether or not granted under this Plan; without limiting the
      foregoing, if a Participant pays all or part of the exercise price or taxes
      associated with an Award by the transfer of Common Shares or the surrender
      of
      all or part of an Award (including the Award being exercised), the Committee
      may, in its discretion, grant a new Award to replace the Common Shares that
      were
      transferred or the Award that was surrendered.  The Company may assume
      obligations in respect of awards granted by any Person acquired by the Company
      or may grant Awards in replacement of, or in substitution for, any such
      awards.  In no event shall any Stock Option or Stock Appreciation
      Right be granted to a Participant in exchange for the Participant’s agreement to
      permit the cancellation of one or more Stock Options or Stock Appreciation
      Rights previously granted to such Participant if the exercise price of the
      new
      grant is lower than the exercise price of the cancelled
      grant.  Moreover, in no event shall a previously granted Stock Option
      or Stock Appreciation Right be amended to reduce the exercise price, except
      in
      accordance with an adjustment pursuant to Section 4(c).

     

    (b)           Types
      of Awards.  Awards may include, but are not limited to, the
      following:

    


    (i)           Stock
      Appreciation Right -- means a right to receive a payment, in cash or Common
      Shares, equal to the excess of (A) the Fair Market Value, or other specified
      valuation, of a specified number of Common Shares on the date the right is
      exercised over (B) the Fair Market Value, or other specified valuation, of
      such
      Common Shares on the date the right is granted, all as determined by the
      Committee.  The right may be conditioned upon the occurrence of
      certain events, such as a Change in Control of the Company, or may be
      unconditional, as determined by the Committee.

     

    (ii)           Stock
      Award -- means an Award that is made in Common Shares, Restricted Stock, or
      Stock Equivalent Units or that is otherwise based on, or valued in whole or
      in
      part by reference to, the Common Shares, but does not include Stock
      Options.  All or part of any Stock Award may be subject to conditions
      (including, but not limited to, the passage of time or the achievement of
      Performance Objectives), restrictions, and  risks of forfeiture, as
      and to the extent established by the Committee.  Stock Awards may be
      based on the Fair Market Value of the
      Common Shares, or on other specified values or methods of valuation, as
      determined by the Committee.

    

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    (iii)           Stock
      Option -- means a right to purchase a specified number of Common Shares,
      during a specified period, and at a specified exercise price, all as determined
      by the Committee.  A Stock Option may be an Incentive Stock Option or
      a Stock Option that does not qualify as an Incentive Stock
      Option.  The term of each Stock Option shall be fixed by the
      Committee, but in no event shall the term exceed ten years after the date such
      Stock Option is granted.  In addition to the terms, conditions,
      vesting periods, and restrictions established by the Committee, Incentive Stock
      Options must comply with the requirements of Section 422 of the Code and
      regulations promulgated thereunder, including, but not limited to, the
      requirements that Incentive Stock  Options (A) may not be granted to
      non-employee Directors, and (B) the aggregate Fair Market Value of the Common
      Shares that first becomes exercisable in any calendar year shall not exceed
      $100,000 (measured as of the effective grant date of the Award).  The
      exercise price of a Stock Option may not be less than 100% of the Fair Market
      Value on the date the Stock Option is granted; provided, however, up to 200,000
      Common Shares for which Stock Options that do not qualify as Incentive Stock
      Options may be granted may have an exercise price of not less than 75% of the
      Fair Market Value on the date such Stock Option is granted, subject to
      adjustment in accordance with Section 4(c) hereof.

     

    (c)           Limits
      on Awards under the Plan.  The maximum aggregate number of Common
      Shares that may be granted during the term of this Plan pursuant to all Awards,
      other than Stock Options, is 300,000 Common Shares, subject to adjustment in
      accordance with Section 4(c) hereof.

     

    (d)           Limits
      on Individual Awards.  The maximum aggregate number of Common
      Shares for which Stock Options may be granted to any particular employee during
      any calendar year during the term of this Plan is 400,000 Common Shares, subject
      to adjustment in accordance with Section 4(c) hereof.  The maximum
      aggregate number of Common Shares for each of (i) Stock Appreciation Rights
      and
      (ii) other Stock Awards which may be granted to any particular employee during
      any calendar year during the term of this Plan is 50,000 Common Shares (or
      100,000 Common Shares in the aggregate), subject to adjustment in accordance
      with Section 4(c) hereof.

     

    
      	
              7.

            	
              Deferral
                of Payment

            


    

     

    With
      the
      approval of the Committee, the delivery of the Common Shares, cash, or any
      combination thereof subject to an Award, or the Award itself, may be deferred,
      either in the form of installments or a single future delivery.  The
      Committee also may permit selected Participants to defer the receipt of some
      or
      all of their Awards, as well as other compensation, in accordance with
      procedures established by the Committee, including to assure that the
      recognition of taxable income is deferred under the Code.  Deferred
      amounts may, to the extent permitted by the Committee, be credited as cash
      or
      Stock Equivalent Units.  The Committee also may establish rules and
      procedures for the crediting of interest on deferred cash payments and dividend
      equivalents on Stock Equivalent Units.


    
      	
              8.

            	
              Payment
                of Exercise Price

            


    

     

    The
      exercise price of a Stock Option (other than an Incentive Stock Option) and
      any
      Stock Award for which the Committee has established an exercise price may be
      paid in cash, by the transfer of Common Shares, by the surrender of all or
      part
      of an Award (including the Award being exercised), or by a combination of these
      methods, as and to the extent permitted by the Committee.  The
      exercise price of an Incentive Stock Option may be paid in cash, by the transfer
      of Common Shares, or by a combination of these methods, as and to the extent
      permitted by the Committee but may not be paid by the surrender of all or part
      of an Award.  The Committee may prescribe any other method of paying
      the exercise price that it determines to be consistent with applicable law
      and
      the purpose of this Plan.

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    In
      the
      event Common Shares that are Restricted Stock are used to pay the exercise
      price
      of a Stock Award to the extent provided by the Committee, then that number
      of
      the Common Shares issued upon the exercise of the Award equal to the number
      of
      Common Shares that are Restricted Stock that have been used to pay the exercise
      price will be subject to the same restrictions as the Restricted
      Stock.

     

    
      	
              9.

            	
              Taxes
                Associated with Award

            


    

     

    Prior
      to
      the payment of an Award or upon the exercise or release thereof, the Company
      may
      withhold, or require a Participant to remit to the Company, an amount sufficient
      to pay any Federal, state, and local taxes associated with the
      Award.  The Committee may, in its discretion and subject to such rules
      as the Committee may adopt, permit a Participant to pay any or all taxes
      associated with the Award (other than an Incentive Stock Option) in cash, by
      the
      transfer of Common Shares, by the surrender of all or part of an Award
      (including the Award being exercised), or by a combination of these
      methods.  The Committee may permit a Participant to pay any or all
      taxes associated with an Incentive Stock Option in cash, by the transfer of
      Common Shares, or by a combination of these methods or by any other method
      which
      does not disqualify the option as an Incentive Stock Option under applicable
      provisions of the Code.  If Common Shares are used to satisfy
      withholding tax obligations, such Common Shares shall be valued based on the
      Fair Market Value thereof as of the date when the withholding for taxes is
      required to be made.  Notwithstanding the foregoing, except as
      otherwise provided by the Committee or in the terms of the Award, the Company
      shall have the right to require a Participant to pay cash to satisfy withholding
      taxes as a condition to the payment of any Award (whether in cash or Common
      Shares) under the Plan.

     

    
      	
              10.

            	
              Termination
                of Employment

            


    

     

    If
      the
      employment of a Participant terminates for any reason, all unexercised,
      deferred, and unpaid Awards may be exercisable or paid only in accordance with
      rules established by the Committee or as specified in the particular Award
      Agreement or Notice of Award.  Such rules may provide, as the
      Committee deems appropriate, for the expiration, continuation, or acceleration
      of the vesting of all or part of the Awards, provided that any such rules shall
      comply with Section 422 of the Code to the extent such Award is intended to
      qualify as an Incentive Stock Option.


    
      	
              11.

            	
              Termination
                of Awards Under Certain
                Conditions

            


    

     

    The
      Committee may cancel any unexpired, unpaid, or deferred Awards at any time
      if
      the Participant is not in compliance with all applicable provisions of this
      Plan
      or with any Notice of Award or Award Agreement.  Further, if the
      Participant, without the prior written consent of the Company, engages in any
      of
      the following activities:

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    (i)           Within
      eighteen (18) months after the date a Participant terminates his or her
      employment with the Company or its Affiliates for any reason, the Participant
      then accepts employment with any competitor of the Company, or otherwise renders
      services for an organization, or engages in a business, that is, in the judgment
      of the Committee, in competition with the Company, or

     

    (ii)           Discloses
      to anyone outside of the Company, or uses for any purpose other than the
      Company’s business any confidential information or material relating to the
      Company, whether acquired by the Participant during or after employment with
      the
      Company, in a fashion or with a result that the Committee, in its judgment,
      deems is or may be injurious to the best interests of the Company;

     

    then
      the Committee may, in its discretion, at any time thereafter, cancel any
      unexpired, unpaid or deferred Awards or may require the Participant to return
      the economic value of any Award that the Participant realized or obtained (as
      of
      the date of exercise, vesting or payment) during the time period commencing
      six
      months prior to such Participant’s termination date and ending after the date
      when all of the Committee members discover that the Participant engaged in
      any
      activities referred to in clauses (i) and (ii) above.

     

    The
      Committee may, in its discretion and as a condition to the exercise of an Award,
      require a Participant to acknowledge in writing that he or she is in compliance
      with all applicable provisions of this Plan and of any Notice of Award or Award
      Agreement and has not engaged in any activities referred to in clauses (i)
      and
      (ii) above.

     

    
      	
              12.

            	
              Change
                in Control

            


    

     

    In
      the
      event of a Change in Control of the Company, unless and only then to the extent
      otherwise determined by the Board of Directors or as otherwise prescribed in
      an
      Award Agreement, (i) all Stock Appreciation Rights and Stock Options then
      outstanding will become fully exercisable as of the date of the Change in
      Control, and (ii) all restrictions and conditions applicable to Restricted
      Stock
      and other Stock Awards will be deemed to have been satisfied as of the date
      of
      the Change in Control.  Any such determination by the Board of
      Directors that is made after the occurrence of a Change in Control will not
      be
      effective unless a majority of the Directors then in office are Continuing
      Directors and the determination is approved by a majority of the Continuing
      Directors.


    
      	
              13.

            	
              Amendment,
                Suspension, or Termination of this Plan; Amendment of Outstanding
                Awards

            


    

     

    (a)           Amendment,
      Suspension, or Termination of this Plan.  The Board of Directors
      may amend, suspend, or terminate this Plan at any time and from time to time
      in
      such respects as the Board of Directors may deem necessary or appropriate;
      provided, however, that in no event, without the approval of the Company’s
      shareholders, shall any action of the Committee or the Board of Directors result
      in increasing, except as provided in Section 4(c) hereof, the maximum number
      of
      Common Shares that may be subject to Awards granted under the Plan.

    

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    (b)           Amendment
      of Outstanding Awards.  The Committee may, in its discretion,
      amend the terms of any Award, prospectively or retroactively, but no such
      amendment may impair the rights of any Participant without his or her consent,
      or reduce the exercise price of any Stock Option or Stock Appreciation Right,
      except in accordance with an adjustment pursuant to Section 4(c).  The
      Committee may, in whole or in part, waive any restrictions or conditions
      applicable to, or accelerate the vesting of, any Award.

     

    
      	
              14.

            	
              Awards
                to Foreign Nationals and Employees Outside the United
                States

            


    

     

    To
      the
      extent that the Committee deems appropriate to comply with foreign law or
      practice and to further the purpose of this Plan, the Committee may, without
      amending this Plan, (i) establish special rules applicable to Awards granted
      to
      Participants who are foreign nationals, are employed outside the United States,
      or both, including rules that differ from those established under this Plan,
      and
      (ii) grant Awards to such Participants in accordance with those
      rules.

     

    
      	
              15.

            	
              Miscellaneous
                Terms

            


    

     

    (a)           Nonassignability.  Unless
      and except to the extent otherwise determined by the Committee (which may be
      contained in the applicable Award Agreement or Notice of Award), (i) no Award
      granted under the Plan may be transferred or assigned by the Participant to
      whom
      it is granted other than by will or pursuant to the laws of descent and
      distribution, and (ii) an Award granted under this Plan may be exercised, during
      the Participant’s lifetime, only by the Participant or guardian or other legal
      representative.

     

    (b)           No
      Rights as Employees/Shareholders.  Nothing in the Plan or in any
      Award Agreement or Notice of Award shall confer upon any Participant any right
      to continue in the employ of the Company or an  Affiliate, or to serve
      as a member of the Board of Directors or to be entitled to receive any
      remuneration or benefits not set forth in the Plan or such Award Agreement
      or
      Notice of Award, or to interfere with or limit either the right of the Company
      or an Affiliate to terminate the employment of such Participant at any time
      or
      the right of the shareholders of the Company to remove him or her as a member
      of
      the Board of Directors with or without cause.  Nothing contained in
      the Plan or in any Award Agreement or Notice of Award shall be construed as
      entitling any Participant to any rights of a shareholder as a result of the
      grant of an Award until such time as Common  Shares are actually
      issued to such Participant pursuant to the exercise of a Stock Option, Stock
      Appreciation Right or other Stock Award.

     

    (c)           Unfunded
      Plan.  The Plan shall be unfunded and the Company shall not be
      required to segregate any assets that may at any time be represented by Awards
      under the Plan.  Any liability of the Company to any person with
      respect to any Award under the Plan shall be based solely upon any contractual
      obligations that may be effected pursuant to the Plan.  No such
      obligation of the Company shall be deemed to be secured by any pledge of, or
      other encumbrance on, any property of the Company.

    

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    (d)           Other
      Company Benefit and Compensation Programs.  Payments and other
      benefits received by a Participant under an Award made pursuant to the Plan
      shall not be deemed a part of a Participant’s regular, recurring compensation
      for purposes of any termination indemnity or severance pay law of any country
      and shall not be included in, nor have any effect on, the determination of
      benefits under any pension or other employee benefit plan or similar arrangement
      provided by the Company or any Affiliate, unless (i) expressly so provided
      by
      such other plan or arrangement or (ii) the Committee expressly determines that
      an Award or a portion thereof should be included as recurring
      compensation.  Nothing contained in the Plan shall prohibit the
      Company or any Affiliate from establishing other special awards, incentive
      compensation plans, compensation programs and other similar arrangements
      providing for the payment of performance, incentive or other compensation to
      employees.  Payments and benefits provided to any employee under any
      other plan shall be governed solely by the terms of such other
      plan.

     

    (e)           Securities
      Law Restrictions.  In no event shall the Company be obligated to
      issue or deliver any Common Shares or other Awards if such issuance or delivery
      shall constitute a violation of any provisions of any law or regulation of
      any
      governmental authority or securities exchange.  No Common Shares or
      other Awards shall be issued under the Plan unless counsel for the Company
      shall
      be satisfied that such issuance will be in compliance with all applicable
      Federal and state securities laws and regulations and all requirements of any
      securities exchange on which the Common Shares are listed.

     

    (f)           Invalidity.  In
      the event any provision of the Plan shall be held to be invalid or unenforceable
      for any reason, such invalidity or unenforceability shall not affect the
      remaining provisions of the Plan.

     

    (g)           Successors.  All
      obligations of the Company with respect to Awards granted under the Plan are
      binding on any successor to the Company, whether as a result of a direct or
      indirect purchase, merger, consolidation or otherwise of all or substantially
      all of the business and/or assets of the Company.

     

    (h)           Governing
      Law.  The interpretation, validity, and enforcement of this Plan
      will, to the extent not otherwise governed by the Code or the securities laws
      of
      the United States, be governed by the laws of the State of Ohio.

     

    
      	
              16.

            	
              Effective
                and Termination Dates

            


    

     

    (a)           Effective
      Date.  This Plan will be effective on May 21, 2003, upon approval
      by the shareholders of the Company at the 2003 annual meeting of
      shareholders.

     

    (b)           Termination
      Date.  This Plan will continue in effect until midnight on May
      20, 2013; provided, however, that Awards granted on or before that date may
      extend beyond that date and restrictions and other terms and conditions imposed
      on Restricted Stock or any other Award granted on or before that date may extend
      beyond such date.

    


    



    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    IN
      WITNESS WHEREOF, the undersigned by its duly authorized officer, has hereunto
      set forth its signatures as of the 23rd day of August, 2006.

    


    INVACARE
      CORPORATION

    


    


    By:    /s/
      A.
      Malachi Mixon,
      III                                                                           

    A.
      Malachi Mixon, III,

    Chairman
      of the Board and

    Chief
      Executive Officer

    


    


    By:    /s/
      Gregory C.
      Thompson                                                                           

    Gregory
      C. Thompson,

    Senior
      Vice President and

    Chief
      Financial Officer