Document:

EX-10.1

Exhibit 10.1

INVACARE CORPORATION

CASH BALANCE SUPPLEMENTAL 

EXECUTIVE RETIREMENT PLAN

As Amended and Restated December 31, 2008

 

 

INVACARE CORPORATION

CASH BALANCE SUPPLEMENTAL

EXECUTIVE RETIREMENT PLAN

(As Amended and Restated Effective December 31, 2008)

Table of Contents

	 	 	 	 	 
	 	 	Page	 
	ARTICLE I
	 	 	1	 
	 
	 	 	 	 
	INTRODUCTION
	 	 	1	 
	1.1 Background
	 	 	1	 
	1.2 Name of Plan
	 	 	1	 
	1.3 Purposes of Plan
	 	 	1	 
	1.4 “Top Hat” Pension Benefit Plan
	 	 	1	 
	1.5 Tax Treatment
	 	 	1	 
	1.6 Plan Unfunded
	 	 	1	 
	1.7 Effective Date and Scope of Restatement
	 	 	2	 
	1.8 Administration
	 	 	2	 
	 
	 	 	 	 
	ARTICLE II
	 	 	3	 
	 
	 	 	 	 
	DEFINITIONS AND CONSTRUCTION
	 	 	3	 
	2.1 Definitions
	 	 	3	 
	2.2 Number and Gender
	 	 	9	 
	2.3 Headings
	 	 	9	 
	 
	 	 	 	 
	ARTICLE III
	 	 	10	 
	 
	 	 	 	 
	PARTICIPATION AND ELIGIBILITY
	 	 	10	 
	3.1 Participation
	 	 	10	 
	3.2 Commencement of Participation
	 	 	10	 
	3.3 Cessation of Active Participation
	 	 	10	 
	 
	 	 	 	 
	ARTICLE IV
	 	 	11	 
	 
	 	 	 	 
	CREDITS AND BENEFITS
	 	 	11	 
	4.1 Annual Credits
	 	 	11	 
	4.2 Earnings on Account
	 	 	12	 
	4.3 Retirement Benefit
	 	 	12	 
	4.4 Termination Benefit
	 	 	12	 
	4.5 Disability Benefit
	 	 	13	 
	4.6 Death Benefit
	 	 	13	 
	4.8 Change in Control
	 	 	13	 
	 
	 	 	 	 
	ARTICLE V
	 	 	14	 

i

 

	 	 	 	 	 
	 	 	Page	 
	FORM OF PAYMENT
	 	 	14	 
	5.1 Form of Payment
	 	 	14	 
	5.2 Change in Date or Form of Distribution
	 	 	14	 
	5.3 Transition Elections and Provisions
	 	 	15	 
	5.4 Designation of Beneficiaries
	 	 	15	 
	5.5 Change of Beneficiary Designation
	 	 	15	 
	5.6 No Beneficiary Designation
	 	 	15	 
	5.7 Withholding
	 	 	16	 
	 
	 	 	 	 
	ARTICLE VI
	 	 	17	 
	 
	 	 	 	 
	ADMINISTRATION
	 	 	17	 
	6.1 Committee
	 	 	17	 
	6.2 General Powers of Administration
	 	 	17	 
	6.3 Indemnification of Committee
	 	 	18	 
	 
	 	 	 	 
	ARTICLE VII
	 	 	19	 
	 
	 	 	 	 
	DETERMINATION OF BENEFITS, CLAIMS PROCEDURE AND ADMINISTRATION
	 	 	19	 
	7.1 Claims
	 	 	19	 
	7.2 Claim Decision
	 	 	19	 
	7.3 Request for Review of a Denied Claim
	 	 	20	 
	7.4 Review of Decision
	 	 	20	 
	7.5 Discretionary Authority
	 	 	21	 
	7.6 Disability Benefit Claims Procedures
	 	 	21	 
	 
	 	 	 	 
	ARTICLE VIII
	 	 	23	 
	 
	 	 	 	 
	AMENDMENT AND TERMINATION
	 	 	23	 
	8.1 Power to Amend or Terminate
	 	 	23	 
	8.2 Distribution Upon Plan Termination
	 	 	23	 
	 
	 	 	 	 
	ARTICLE IX
	 	 	25	 
	 
	 	 	 	 
	MISCELLANEOUS
	 	 	25	 
	9.1 Plan Not a Contract of Employment
	 	 	25	 
	9.2 Hypothetical Accounts and Creditor Status of Participants
	 	 	25	 
	9.3 Investments
	 	 	25	 
	9.4 Non-Assignability of Benefits
	 	 	26	 
	9.5 Severability
	 	 	26	 
	9.6 Governing Laws
	 	 	26	 
	9.7 Binding Effect
	 	 	26	 
	9.8 Entire Agreement
	 	 	26	 
	9.9 No Guaranty of Tax Consequences
	 	 	26	 

ii

 

INVACARE CORPORATION

CASH BALANCE SUPPLEMENTAL

EXECUTIVE RETIREMENT PLAN

(As Amended and Restated Effective December 31, 2008)

ARTICLE I

INTRODUCTION

          1.1 Background.

          The Company maintains the Invacare Corporation Supplemental Executive Retirement Plan (the
“Plan”), which was originally adopted effective May 1, 1995, and amended and restated effective
February 1, 2000. The Plan is hereby amended and restated effective December 31, 2008, in the form
set forth herein.

          1.2 Name of Plan.

          This Plan was formerly known as the Invacare Corporation Supplemental Executive Retirement
Plan, and as restated herein shall hereinafter be referred to as the Invacare Corporation Cash
Balance Supplemental Executive Retirement Plan.

          1.3 Purposes of Plan.

          The purposes of the Plan are to provide deferred compensation in order to help attract and
retain a select group of management or highly compensated Employees of Invacare Corporation (the
“Company”) and to supplement the benefits under other retirement and savings plans offered by the
Company for such Employees.

          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 intended to be maintained, however, for a select group of management or highly compensated
employees and, therefore, to be exempt from Parts 2, 3 and 4 of Title 1 of ERISA and shall be
construed and administered accordingly.

          1.5 Tax Treatment.

          The Plan is not intended to qualify under Code Section 401(a). However, the Plan is intended
to meet the requirements to avoid adverse tax consequences under Code Section 409A and shall be
construed and administered accordingly.

          1.6 Plan Unfunded.

          The Plan is intended to be unfunded for purposes of ERISA and the Code and shall be construed
and administered accordingly. All benefits shall be unfunded, unsecured promises of the Company to
be paid from the general assets of the Company and no amounts will be set aside for the benefit of
Participants or their Beneficiaries. As provided in Section 9.3, however, the Company may acquire
assets or establish a trust to assist the Company in meeting

 

 

its anticipated liabilities under the Plan; provided that all such assets continue to be
subject to the claims of the Company’s creditors in the event of its insolvency.

          1.7 Effective Date and Scope of Restatement.

          This amendment and restatement of the Plan is effective December 31, 2008 and applies in full
with respect to any Participant who terminates employment on or after December 31, 2008. All
Participants who, as of December 31, 2008, are Employees of the Company have consented to this
amendment and restatement. As amended and restated herein, this Plan utilizes a cash balance
approach, which provides retirement benefits determined with reference to hypothetical account
balances determined under a formula. Prior to this restatement, the Plan utilized a traditional
defined benefit formula.

          The terms of the Plan as in effect on December 31, 2004 (attached hereto as Exhibit A), shall
continue in full force and effect with respect to any Participant who terminated employment on or
before December 31, 2004, with vested benefits under the Plan (“Grandfathered Participants”),
except to the extent such terms are expressly amended with respect to such Grandfathered
Participants; provided that no such amendment shall be effective to the extent that it would, for
purposes of Code Section 409A, materially modify the benefits earned and vested under this Plan by
Grandfathered Participants as of December 31, 2004, unless such amendment specifically indicates
that it is intended to materially modify such benefits. Except to the extent otherwise provided in
any such amendment, the right to benefits and the time, form and amount of benefits, if any,
payable to a Grandfathered Participant, or to a Grandfathered Participant’s beneficiary, shall be
determined in accordance with the terms and provisions of the Plan in effect as of December 31,
2004 (or, if earlier, as of the date of such Grandfathered Participant’s most recent termination of
employment).

          With respect to any Participant who is not a Grandfathered Participant, but who terminated
employment on or before December 31, 2008 (“Former Participant”), the terms of the Plan as in
effect on December 31, 2004 shall apply as to the right to benefits and value of benefits, if any,
except as expressly further modified herein or in a later amendment hereunder, but the time and
form of such benefits (and the amount payable based on such time and form) shall be determined
pursuant to transition elections and provisions under Section 5.3.

          This document reflects the provisions of the Plan in effect for periods on and after December
31, 2008. For the period from January 1, 2005 through December 31, 2008, the Plan was operated in
good faith compliance with Code Section 409A and applicable transition guidance and relief
thereunder (including but not limited to Notice 2007-86), but this document is not intended to
fully reflect the operation of the Plan during such period.

          1.8 Administration.

          The Plan shall be administered by the Committee or its delegates, as set forth in Article VI.

2

 

ARTICLE II

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 hypothetical account
maintained by the Company for bookkeeping purposes in order to
determine the benefits payable hereunder, to which shall be credited
the Participant’s Credits calculated under Section 4.1, and earnings
determined in accordance with Section 4.2, and from which shall be
debited any distributions and forfeitures.
	 
	 	(b)	 	“Affiliate” means any corporation or business
organization during any period during which it would be treated,
together with the Company, as a single employer for purposes of Code
Sections 414(b) or (c).
	 
	 	(c)	 	“Base Salary” means, for any Participant for
any Plan Year, the portion of the cash compensation constituting salary
and commissions which is paid by the Company to or for the benefit of
such individual for services rendered or labor performed while a
Participant for such Plan Year, including any amounts such Participant
could have received in cash in lieu of (i) deferrals pursuant to any
qualified or nonqualified plan of deferred compensation and
(ii) contributions made on his behalf to any qualified plan maintained
by the Company or to any cafeteria plan under Code Section 125
maintained by the Company. In the event any determination is required
to be made under this Plan with respect to a Participant after the
beginning of a Plan Year but before such Participant’s Base Salary for
such Plan Year has been determined, the Base Salary as in effect at the
end of the immediately preceding Plan Year shall be used.
	 
	 	(d)	 	“Beneficiary” means the person or persons
designated by the Participant in accordance with Section 5.4 or, in the
absence of an effective designation, the person or entity described in
Section 5.6.
	 
	 	(e)	 	“Board” means the Board of Directors of the Company.
	 
	 	(f)	 	“Bonus” means, for any Participant for any Plan
Year, the target amount of bonus for such individual with respect to
such Plan Year under the Company’s Executive Incentive Bonus Plan or
any successor to such plan. In the event any determination is required
to be made under this Plan with respect to a Participant after the
beginning of a Plan Year but before such Participant’s target

3

 

	 	 	 	Bonus for such Plan Year has been determined, the Bonus as in effect
at the end of the immediately preceding Plan Year shall be used.

	 	(g)	 	“Change in Control” means the happening of any
of the following events:

	 	(i)	 	Any one person, or more than one
person acting as a group (other than (x) the Company or any of
its subsidiaries, or (y) any employee benefit plan or employee
stock ownership plan or related trust of the Company or any of
its subsidiaries, or (z) any person or entity organized,
appointed, or established by the Company or any of its
subsidiaries, for or pursuant to the terms of any such plan or
trust), acquires ownership of stock of the Company that,
together with stock held by such person or group, constitutes
more than 50% of the total fair market value or total voting
power of the stock of the Company (as determined by reference to
voting power in the election of directors). However, if any one
person, or more than one person acting as a group, is considered
to own more than 50% of the total fair market value or total
voting power of the stock of the Company, the acquisition of
additional stock by the same person or persons is not considered
to cause a Change in Control. An increase in the percentage of
stock owned by any one person, or persons acting as a group, as
a result of a transaction in which the Company acquires its
stock in exchange for cash or other property will be treated as
an acquisition of stock for purposes of this subsection (g).
This subsection (g) applies only when there is a transfer of
stock of the Company (or issuance of stock of the Company) and
stock in the Company remains outstanding after the transaction.
	 
	 	(ii)	 	Any one person, or more than one
person acting as a group (other than (x) the Company or any of
its subsidiaries, or (y) any employee benefit plan or employee
stock ownership plan or related trust of the Company or any of
its subsidiaries, or (z) any person or entity organized,
appointed, or established by the Company or any of its
subsidiaries, for or pursuant to the terms of any such plan),
acquires (or has acquired during the 12-month period ending on
the date of the most recent acquisition by such person or
persons) ownership of stock of the Company possessing 30% or
more of the total voting power of the stock of the Company (as
determined by reference to voting power in the election of
directors).

4

 

	 	(iii)	 	A majority of members of the
Board of Directors is replaced during any 12-month period by
Directors whose appointment or election is not endorsed by a
majority of the members of the Board of Directors prior to the
date of the appointment or election.
	 
	 	(iv)	 	Any one person, or more than one
person acting as a group (other than (x) the Company or any of
its subsidiaries, or (y) any employee benefit plan or employee
stock ownership plan or related trust of the Company or any of
its subsidiaries, or (z) any person or entity organized,
appointed, or established by the Company or any of its
subsidiaries, for or pursuant to the terms of any such plan),
acquires (or has acquired during the 12-month period ending on
the date of the most recent acquisition by such person or
persons), whether by operation of law or otherwise, assets from
the Company that have a total gross fair market value equal to
or more than 40% of the total gross fair market value of all of
the assets of the Company immediately prior to such acquisition
or acquisitions.

	 	 	 	In determining whether a Change in Control has occurred, this
definition shall be interpreted in accordance with regulations under
Code Section 409A.
	 
	 	(h)	 	“Code” means the Internal Revenue Code of 1986,
as amended. In general, a reference to the Code will include all
lawful regulations and pronouncements promulgated thereunder, including
without limitation, all applicable transition relief with respect to
Code Section 409A.
	 
	 	(i)	 	“Committee” means the administrative committee
named to administer the Plan pursuant to Section 6.1.
	 
	 	(j)	 	“Compensation Committee” means the Compensation
and Management Development Committee of the Board or such successor
committee as may hereafter be appointed by the Board. On and after a
Change in Control, the Compensation Committee shall consist of the same
individuals who constituted the Compensation Committee immediately
prior to the Change in Control, or such successors as may be designated
by the majority of them.
	 
	 	(k)	 	“Company” means Invacare Corporation and any
successor thereto.

5

 

	 	(l)	 	“Credit” means the annual amount credited to a
Participant’s Account calculated in accordance with Section 4.1.
	 
	 	(m)	 	“Directors” means the Board of Directors of the
Company.
	 
	 	(n)	 	“Disability” means a physical or mental
impairment that qualifies a Participant for benefits under the
Company’s Long Term Disability Plan.
	 
	 	(o)	 	“Earnings” means, for any Plan Year, the
Participant’s:

	 	(i)	 	Base Salary for such Plan Year,
plus
	 
	 	(ii)	 	the Participant’s target Bonus
for such Plan Year.

	 	(p)	 	“Employee” means any common-law employee of the
Company or any Affiliate.
	 
	 	(q)	 	“ERISA” means the Employee Retirement Income
Security Act of 1974, as amended In general, a reference to ERISA will
include all lawful regulations and pronouncements promulgated
thereunder.
	 
	 	(r)	 	“Interest Crediting Rate” shall mean six
percent (6%) interest per annum, compounded annually (or for periods
between Valuation Dates which occur more frequently than annually, at
such interest rate compounded for such periods as equates to a six
percent (6%) interest rate per annum, compounded annually), except to
the extent the Committee may declare another rate of periodic interest
or other rate of earnings to be applicable, as determined under a
methodology described in the regulations under Code Section 3121(v);
provided, however, that after a Change in Control, the Committee shall
obtain the consent of all affected Participants in order to reduce the
Interest Crediting Rate.
	 
	 	(s)	 	“Normal Retirement Date” means the earlier of a
Participant’s (i) attainment of age sixty-two (62) and completion of
fifteen (15) or more years of Vesting Service, or (ii) attainment of
age sixty-five (65).
	 
	 	(t)	 	“Participant” means each Employee who has been
selected for participation in the Plan, who has become a Participant
pursuant to Article III and who retains an Account under this Plan.
	 
	 	(u)	 	“Participation Agreement” means the Agreement
by which a Participant agrees to become a Participant and be bound by
the terms of the Plan pursuant to Section 3.2. Each Participation
Agreement shall be incorporated into and made a part of this Plan with
respect to the applicable Participant.

6

 

	 	(v)	 	“Plan” means the Invacare Corporation
Supplemental Executive Retirement Plan, as restated herein as the
Invacare Corporation Cash Balance Supplemental Executive Retirement
Plan, as amended from time to time hereafter, and as it previously
existed, to the extent applicable with respect to Grandfathered
Participants and Former Participants.
	 
	 	(w)	 	“Plan Year” means the 12-consecutive month
period commencing January 1 of each year ending on the following
December 31.
	 
	 	(x)	 	“Retirement” means a Participant’s Termination
of Employment after Normal Retirement Date.
	 
	 	(y)	 	“Termination of Employment” means the
separation from service of the Participant’s from the Company and all
Affiliates for any reason, which includes:

	 	(i)	 	a voluntary resignation;
	 
	 	(ii)	 	involuntary discharge for any
reason, with or without cause;
	 
	 	(iii)	 	retirement;
	 
	 	(iv)	 	death;
	 
	 	(v)	 	a leave of absence (including
military leave, sick leave, or other bona fide leave of
absence) but only at the point that such leave exceeds the
greatest of (i) six months, (ii) the period for which the
Participant’s right to reemployment is guaranteed either by
statute or by contract, or (iii) 12 months if such leave
constitutes sick leave arising by reason of an injury to, or
sickness of, the Participant, which, in either case, involves a
medically determinable physical or mental impairment that (y)
is expected to result in death or to last for a continuous
period of not less than 6 months, and (z) renders the
Participant unable to perform the duties of his position of
employment or any substantially similar position of employment;
or
	 
	 	(vi)	 	a permanent decrease in the
Participant’s service to a level that is no more than twenty
percent (20%) of its prior level.

	 	 	 	In determining whether a Termination of Employment has occurred,
this definition shall be interpreted in accordance with regulations
under Code Section 409A, with respect to separation from service,
including, without limitation, whether it is reasonably anticipated
that no further services will be performed

7

 

	 	 	 	by the Participant after a certain date or that the level of bona
fide services the Participant will perform after such date (whether
as an employee or as an independent contractor) would permanently
decrease to no more than twenty percent (20%) of the average level
of bona fide services performed (whether as an employee or an
independent contractor) over the immediately preceding 36-month
period (or the full period of services if the Participant has been
providing services less than 36 months).

	 	 	 	The transfer of a Participant from the Company to an Affiliate or
from an Affiliate to the Company or another Affiliate shall not
constitute a Termination of Employment for purposes of this Plan.
In addition, without limiting the generality of the foregoing, in
determining Affiliates for purposes of applying this definition of
Termination of Employment, the usual “at least 80%” standard in
Sections 1563(a)(1), (2) and (3) of the Code shall read “at least
50%” (or, where the Compensation Committee has determined that there
is a good business reason for such lower limit, “at least 20%”) for
purposes of construing Sections 414(b) and 414(c) of the Code.
	 
	 	(z)	 	“Valuation Date” means (i) the last day of each
calendar quarter and (ii) and any special valuation date designated by
the Committee.
	 
	 	(aa)	 	“Vesting Percentage” means the percentage of a
Participant’s benefit which is nonforfeitable. A Participant’s Vesting
Percentage shall be based upon his years of Vesting Service as follows:

	 	 	 	 	 
	Years of Vesting Service	 	Vesting Percentage
	Less than 1
	 	 	0	 
	1
	 	 	20	 
	2
	 	 	40	 
	3
	 	 	60	 
	4
	 	 	80	 
	5 or more
	 	 	100	 

	 	 	 	Notwithstanding the foregoing, a Participant’s benefits shall become
100% vested upon the earliest to occur of his attainment of age sixty
five (65) while employed, Disability while employed, death while
employed, and Termination of Employment within two (2) years
following a Change of Control.

8

 

	 	(bb)	 	“Vesting Service” means, except as may be
otherwise provided in a Participant’s Participation Agreement, a
Participant’s period of employment while a Participant.

          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.

          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.

9

 

ARTICLE III

PARTICIPATION AND ELIGIBILITY

          3.1 Participation.

          Participants in the Plan are those Employees who (a) are subject to the income tax laws of the
United States, (b) are members of a select group of highly compensated or management Employees, (c)
are selected by the Compensation Committee, in its sole discretion, as eligible to be Participants
and (d) agree to become Participants and to be bound by the terms of the Plan as set forth in
Section 3.2. The Compensation Committee, or its designee, shall notify each Participant of his
selection as eligible to be a Participant. An Employee who becomes a Participant in the Plan shall
remain eligible to continue participation in the Plan for each Plan Year thereafter, unless the
Compensation Committee shall determine otherwise.

          3.2 Commencement of Participation.

          Except as provided in the following sentence, an Employee who has been designated by the
Compensation Committee as eligible to become a Participant shall become a Participant effective as
of the entry date specified in a Participation Agreement entered into between the Employee and the
Company, provided that if such date is other that the first day of a calendar year, any credits
made pursuant to Section 4.1(c) for such Plan Year shall be based only on Earnings earned after the
entry date. In order to become a Participant, the Employee shall execute a Participation
Agreement, in such form as the Committee shall determine, prior to the entry date specified in a
Participation Agreement (or, if earlier, within the first 30 days after such Employee is first
designated as eligible to become a Participant). At a minimum, a Participation Agreement shall
contain the Participant’s agreement to become a Participant and be bound by the terms of the Plan,
shall specify the date of the Participant’s entry into the Plan, and shall provide for the
Participant’s election as to form of payment pursuant to Section 5.1, as shown in Exhibit B, but
may contain such additional or differing terms as the Compensation Committee determines to be
appropriate with respect to any one or more Participants.

          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 an active Participant eligible to receive credits under
Section 4.1(b) or (c), effective as of the end of any Plan Year as may be designated by the
Compensation Committee of the Board. Any such action shall be communicated to such Participant
prior to the effective date of such action. Such termination of active participation shall not
impact the time and form of payment of any amounts credited to such Participant’s Account, which
will be distributed by the Company in accordance with the other provisions hereof.

10

 

ARTICLE IV

CREDITS AND BENEFITS

          4.1 Annual Credits.

          Except to the extent the Plan is hereafter amended or terminated by the Compensation Committee
in a manner permitted by Section 8.1, there shall be credited to each Participant’s hypothetical
Account Credits determined as follows:

	 	(a)	 	Each Employee who was a Participant as of
December 31, 2008 (excluding any Grandfathered Participant or Former
Participant) shall receive an initial Credit equal to his accumulated
benefit obligation under the prior provisions of this Plan as of
December 31, 2008, based on the assumptions utilized in preparing the
audited financial statements of the Company for 2008.
	 
	 	(b)	 	Each Employee who was a Participant as of
December 31, 2008 (excluding any Grandfathered Participant or Former
Participant) shall receive an annual Credit equal to the relevant
dollar amount set forth in the Participation Agreement between the
Company and the Employee for each full or partial Plan Year commencing
with 2009 during which he is a Participant and an Employee as of
December 31 of such Year, not in excess of the maximum number of Plan
Years for such annual Credits as set forth in such Participation
Agreement. If a participant is not an Employee for a full Plan Year,
the annual Credit shall be ratably reduced to reflect the period in
which he is not an Employee.
	 
	 	(c)	 	Each Employee who first becomes a Participant
in the Plan after December 31, 2008 shall receive for each full or
partial Plan Year on and after 2009 during which he is a Participant
and an Employee a Credit equal to a percentage of his Earnings for such
Plan Year which are earned while a Participant and an Employee (with
such Credit being prorated for any partial Plan Year) based upon his
age at entry into the Plan, as set forth in the following table, or as
otherwise set forth in his Participation Agreement:

	 	 	 	 	 	 	 	 	 	 	 	 	 
	Plan	 	Credit for Plan Year as	 	Plan	 	Credit for Plan Year
	Entry	 	a Percentage of	 	Entry	 	as a Percentage of
	Age	 	Earnings	 	Age	 	Earnings
	26
	 	 	8.00	%	 	 	41	 	 	 	15.00	%
	27
	 	 	8.00	%	 	 	42	 	 	 	16.00	%
	28
	 	 	9.00	%	 	 	43	 	 	 	17.00	%
	29
	 	 	9.00	%	 	 	44	 	 	 	18.00	%
	30
	 	 	9.00	%	 	 	45	 	 	 	20.00	%
	31
	 	 	10.00	%	 	 	46	 	 	 	21.00	%

11

 

	 	 	 	 	 	 	 	 	 	 	 	 	 
	Plan	 	Credit for Plan Year as	 	Plan	 	Credit for Plan Year
	Entry	 	a Percentage of	 	Entry	 	as a Percentage of
	Age	 	Earnings	 	Age	 	Earnings
	32
	 	 	10.00	%	 	 	47	 	 	 	23.00	%
	33
	 	 	11.00	%	 	 	48	 	 	 	23.00	%
	34
	 	 	11.00	%	 	 	49	 	 	 	23.00	%
	35
	 	 	12.00	%	 	 	50	 	 	 	23.00	%
	36
	 	 	12.00	%	 	 	51	 	 	 	24.00	%
	37
	 	 	13.00	%	 	 	52	 	 	 	27.00	%
	38
	 	 	13.00	%	 	 	53	 	 	 	29.00	%
	39
	 	 	14.00	%	 	 	54	 	 	 	32.00	%
	40
	 	 	15.00	%	 	 	55+	 	 	 	35.00	%

	 	 	 	Notwithstanding the foregoing, in no event shall any annual Credit
under this subsection (c) be granted for any Plan Year for any
Participant if, as of the June 30 of such Plan Year the Account of
such Participant has a value in excess of 3.65 times his Earnings for
such Plan Year, or such other amount as may be set forth in his
Participation Agreement.

          4.2 Earnings on Account.

          As of each applicable Valuation Date, the Account of a Participant (excluding any
Grandfathered Participant or Former Participant) shall be credited with earnings in an amount equal
to his Account balance at such time times the Interest Crediting Rate.

          4.3 Retirement Benefit.

          On the first day of the seventh month after a Participant’s Retirement (or, if later, the
January 2nd of the calendar year following the Participant’s Retirement), the Participant
(excluding any Grandfathered Participant or Former Participant) shall receive or commence receipt
of his benefit hereunder, which shall be the value of his Account determined in accordance with
Section 4.7 and paid in the form determined in accordance with Section 5.1.

          4.4 Termination Benefit.

          Following a Participant’s Termination of Employment other than for Retirement under Section
4.3, the Participant shall be entitled to his Vested Percentage of his Account, paid in the form
determined in accordance with Section 5.1, with payment to be made or commence on the latest of (a)
the first day of the seventh month after a Participant’s Termination of Employment, (b) the January
2nd of the calendar year following the Participant’s Termination of Employment, or (c) the first
day of the month coincident with or next following the date the Participant reaches age 65. The
Vested Percentage shall be determined as of the date of Termination of Employment and the value of
the Account shall be determined in accordance with Section 4.7.

12

 

          4.5 Disability Benefit.

          In the event that an Employee who was a Participant (other than a Grandfathered Participant or
Former Participant) as of December 31, 2008 incurs a Termination of Employment by reason of
Disability, then as of the date of such Termination of Employment, an additional Credit shall be
added to the Account of such Participant which shall be equal to the excess, if any, of (a) 3.65
times such Participant’s Earnings for such Plan Year, prorated for years of Vesting Service
(rounded to the nearest whole year) less than 15 years (i.e., multiplied by a fraction equal to the
number of such years of Vesting Service divided by 15), over (b) the amount of such Participant’s
Account as of the date of such Termination of Employment, and no further Credits under Section
4.1(b) or (c) shall be provided with respect to any such Plan Years thereafter. In the event of
such a Termination of Employment due to Disability, payment of such Participant’s Account shall be
made in accordance with Section 4.4 or, if the Participant satisfied the requirements for
Retirement at the time of such Termination of Employment, Section 4.3.

          4.6 Death Benefit.

          On the 30th day after the death of the Participant either while employed or prior to
distribution or commencement of distribution of the Participant’s Account, the Participant’s
Beneficiary shall be entitled to receive, in lieu of any other payment hereunder (whether to the
Participant, his estate or any other beneficiary), a lump sum payment of the value of the greater
of the Participant’s Account as of the date of the Participant’s death or one times the
Participant’s Earnings for the Plan Year in which the Participant’s death occurs.

          In the event of the death of the Participant after commencement of distribution of the
Participant’s Account, but prior to payment of all benefits due, the Participant’s Beneficiary
shall be entitled to continue to receive any remaining payments due under the form of benefit
payable to the Participant prior to death.

          4.7 Valuation of Account.

          The value of the Account for purposes of any payment under Sections 4.3-4.6 shall be
determined as of the Valuation Date coinciding with or next preceding the date of payment (in the
case of installment payments, the Valuation Date preceding the date of each installment).

          4.8 Change in Control.

          In the event of the Termination of Employment of a Participant for a reason other than death
within two (2) years of a Change of Control, such Participant shall be 100% vested in his Account
and an additional Credit shall be added to the Account of such Participant which shall be equal to
the excess, if any, of (a) 3.65 times the greater of his Earnings for such Plan Year or for the
immediately preceding Plan Year, discounted from Normal Retirement Date to the date of such
Termination of Employment, if earlier, at a rate of 6% per annum, compounded annually, over (b) the
amount of his Account as of the date of such Termination of Employment. Payment of such
Participant’s Account shall be made six (6) months after such Termination of Employment.

13

 

ARTICLE V

FORM OF PAYMENT

          5.1 Form of Payment.

	 	(a)	 	A Participant may elect in accordance with the
timing set forth in Section 3.2 to receive his Account payable on
account of Retirement or Termination of Employment in (i) a lump sum
payment or (ii) annual installments amortized over a period of years
elected by the Participant not to exceed fifteen (15) years (which set
of installment payments shall be treated for purposes of Code Section
409A and the subsequent election provisions of Section 5.2 hereof as a
single payment), with earnings continuing to be credited on the unpaid
balance of the Account in accordance with the Interest Crediting Rate,
and with each installment being equal to the unpaid Account balance as
of the Valuation Date coinciding with or next preceding such
installment, divided by the remaining number of installments. After
the first installment, any later installment shall be made as of the
January 1 of the calendar year in which it would otherwise be payable
under this Section.
	 
	 	(b)	 	If the Participant fails to make a timely
election under Section 5.1(a) above, he shall be deemed to have made an
election to receive a lump sum payment.

          5.2 Change in Date or Form of Distribution.

          A Participant may make a single election to change the form of benefit which, as of his
commencement of participation is initially applicable to him pursuant to the provisions of Section
5.1, to any of the other forms of benefit permissible under Section 5.1 subject to the following
rules:

	 	(a)	 	the election may not take effect until at least
12 months after the date on which such election is made;
	 
	 	(b)	 	the payment with respect to which such election
is made must be deferred (other than a distribution upon death) for a
period of five (5) years from the date such payment would otherwise
have been paid; and
	 
	 	(c)	 	any such election may not be made less than
12 months before the date the payment is scheduled to be paid.

Such election will become irrevocable as of the last permissible date for making such election
under the earlier of (a) or (c) above.

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          5.3 Transition Elections and Provisions.

          Notwithstanding Sections 5.1 and 5.2 above, the distributions and distribution elections (and
subsequent changes thereto) permitted by the Company prior to 2009 pursuant to the transition
relief under Code Section 409A, shall be given full force and effect. In addition, Participants
who made transition elections regarding the time and form of distribution shall be permitted to
make such further elections to change the time and form of payment as are permitted by the Company
under Section 5.2 above.

          5.4 Designation of Beneficiaries.

          Each Participant shall have the right, at any time, to designate one (1) or more persons or
entities as Beneficiary (both primary as well as secondary) (a) to whom benefits under this Plan
shall be paid in the event of a Participant’s death prior to distribution or commencement of
distribution of the Participant’s Account, or (b) in the event of a Participant’s death after
commencement of distribution, to whom any remaining payments shall be paid which may remain due
under the form of benefit payable to the Participant prior to death. 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.

          5.5 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.

          5.6 No Beneficiary Designation.

          If any Participant fails to properly 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;
	 
	 	(c)	 	The Participant’s parents;
	 
	 	(d)	 	The Participant’s estate.

15

 

          5.7 Withholding.

          All distributions shall be subject to legally required income and employment tax withholding.
In addition, and to the extent permitted under Code Section 409A, the Company may elect to
accelerate a Participant’s benefit hereunder to pay any Federal Insurance Contributions Act
(“FICA”) tax imposed under Code Sections 3101, 3121(a), and Section 3121(v)(2) on compensation
deferred under the Plan (the “FICA Amount”), as well as to pay the income tax at source on wages
imposed under Code Section 3401 or the corresponding withholding provisions of applicable state,
local, or foreign tax laws as a result of the payment of the FICA Amount, and to pay the additional
income tax at source on wages attributable to the pyramiding Code Section 3401 wages and taxes
However, the total payment accelerated under this Section 5.7 must not exceed the aggregate of the
FICA Amount, and the income tax withholding related to such FICA Amount.

16

 

ARTICLE VI

ADMINISTRATION

          6.1 Committee.

          The Plan shall be administered by a Committee, which, prior to a Change in Control, shall
consist of the Company’s Chief Financial Officer, the Senior Vice President of Human Resources and
the Senior Vice President and General Counsel, or the respective successors to those positions, and
on and after a Change in Control shall be the Compensation Committee. 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 qualified individuals certain aspects of the
management and operational responsibilities of the Plan, including the employment of advisors and
the delegation of ministerial duties, 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, nor shall the Committee make
a determination as to eligibility for participation in this Plan.

          6.2 General Powers of Administration.

          The Committee shall be the Plan Administrator under ERISA (the “Administrator”). 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;

17

 

	 	(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,
subject to the review by the Compensation Committee under Sections 7.3 and 7.4, 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.

          6.3 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.

18

 

ARTICLE VII

DETERMINATION OF BENEFITS, CLAIMS PROCEDURE AND ADMINISTRATION

          7.1 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.

          7.2 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 90 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 7.3 and for the actual review of the denial under
Section 7.4.

          If no notice is provided, the claim will be deemed denied. The interpretations,
determinations and decisions of the Committee 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.

19

 

          7.3 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 Compensation Committee review the Committee’s prior
determination. Such request must be addressed to the Compensation Committee 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. In the event
the Compensation Committee has become the Committee pursuant to Section 6.1, the initial decision
on a claim for benefits under Section 7.1 shall be made by such person (including a member of the
Compensation Committee) as the Compensation Committee may select, and the review under this Section
7.3 shall be made by the Compensation Committee (or the remaining members thereof).

          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 (a) was relied upon by the Committee in making its initial claims decision, (b) 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 (c) 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.

          7.4 Review of Decision.

          Within a reasonable period of time, ordinarily not later than sixty days, after the
Compensation Committee’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
Compensation Committee will so notify the Claimant within the initial 60-day period indicating the
special circumstances requiring an extension and the date by which the Compensation Committee
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 Compensation Committee 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 Compensation Committee decides in its
discretion that the Claimant is entitled to such benefits. The decision of the Compensation
Committee 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. Without
limiting the foregoing, if the law provides that the Claimant may bring a legal action

20

 

alleging a claim for benefits under this Plan, then, no Claimant may file any lawsuit in any
court of law with respect to a claim for benefits hereunder unless such Claimant has timely and
properly taken all steps to submit his claim to the Committee and to appeal any benefit denial to
the Compensation Committee, and has otherwise followed the application and review procedures of
this Plan.

          If the Compensation Committee makes an adverse benefit determination on review, the
Compensation 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 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 Compensation Committee in making its decision, (ii)
was submitted, considered or generated in the course of the
Compensation Committee making its decision, without regard to whether
such instrument was actually relied upon by the Compensation Committee
in making its decision or (iii) demonstrates compliance by the
Compensation 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; 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.

          7.5 Discretionary Authority.

          The Committee and Compensation Committee 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.

          7.6 Disability Benefit Claims Procedures.

          With respect to the determination of a claim for a Disability Benefit, the procedures set
forth in Sections 7.2, 7.3 and 7.4 above shall be modified to the extent necessary to conform with
the requirements applicable for determinations of disability benefits under 29 C.F.R. Section
2560.503-1, including:

21

 

	 	(a)	 	The time for the initial determination of
benefit under Section 7.2 shall be 45 days (instead of 90 days), and
may be extended for two additional periods of 30 days. A notice to the
Claimant of any such extension shall be provided prior to the start of
the extension and shall indicate that the Committee has determined that
the extension is necessary due to matters beyond the control of the
Plan, the circumstances requiring the extension, the date by which a
decision is expected, the standards upon which entitlement to a
Disability Benefit is based, the unresolved issues that prevent a
decision on the claim and the additional information needed to resolve
the claim. The Claimant shall be afforded at least 45 days in which to
provide the specified information (during which time, the period for
the Committee to make a determination shall be tolled).
	 
	 	(b)	 	To the extent any internal rule, guideline,
protocol or similar criterion is relied upon in making an initial
adverse claim determination, then a copy of such rule, guideline,
protocol or criterion shall be available to the Claimant upon request,
free of charge.
	 
	 	(c)	 	The time for requesting a review under
Section 7.3 of an initial adverse claims determination shall be 180
days (instead of 60 days).
	 
	 	(d)	 	The review under Section 7.4 by the
Compensation Committee shall be made by a person or entity which is
neither the individual nor a subordinate of the individual who made the
initial determination of benefit. If the initial determination of
benefit was based in whole or in part on a medical judgment, the
Compensation Committee shall consult with an appropriate health care
professional who was not consulted in the initial determination of
benefit and who is not the subordinate of the individual consulted in
the initial claims determination. In addition, the identity of the
health care professionals consulted in connection with the initial
determination and the determination on appeal shall be available to the
Claimant upon request.

22

 

ARTICLE VIII

AMENDMENT AND TERMINATION

          8.1 Power to Amend or Terminate.

          The Company reserves the right, by action of the Compensation Committee in its sole
discretion, to retroactively or prospectively amend, modify or terminate this Plan, or any
Participation Agreement or related document, at any time. Without limiting the generality of the
foregoing, the Company specifically retains the right (but not the obligation) to make,
prospectively or retroactively, any amendment to this Plan, or any Participation Agreement or
related document as it deems necessary or desirable to more fully address issues in connection with
compliance with (or exemption from) Code Section 409A and such other laws. Notwithstanding any of
the foregoing or any other provisions contained herein, (i) no amendment, modification or
termination shall reduce the amounts credited to any Participant’s Account or otherwise impair the
rights of the Participant with respect to amounts credited to his Account without his consent, all
as determined as of the date of such amendment, modification or termination, and (ii) after a
Change in Control, the Plan, or any Participation Agreement or related document, may only be
amended, modified or terminated in any manner adverse to any Participant if the consent of all of
the affected Participants is obtained.

          8.2 Distribution Upon Plan Termination.

          In the event the Company terminates the Plan in the manner permitted under Section 8.1, no
further amounts shall be credited to Participant Accounts, and no liquidation and payment of
benefits shall occur as a result of the termination; provided, however, that subject to the
provisions of Section 8.1, the Company may, in its discretion, provide by amendment to the Plan for
the liquidation and termination of the Plan where:

	 	(a)	 	the termination and liquidation does not occur
proximate to a downturn in the financial health of the Company and
Affiliates;
	 
	 	(b)	 	the Plan and all arrangements required to be
aggregated with the Plan under Code Section 409A are terminated and
liquidated;
	 
	 	(c)	 	no payments, other than those that would be
payable under the terms of the Plan and the aggregated arrangements if
the termination and liquidation had not occurred, are made within
twelve (12) months of the date the Company takes all necessary action
to irrevocably terminate and liquidate the Plan;
	 
	 	(d)	 	all payments are made within twenty-four (24)
months of the date the Company takes all necessary action to
irrevocably terminate and liquidate the Plan; and
	 
	 	(e)	 	the Company and its Affiliates do not adopt a
new arrangement that would be aggregated with any terminated
arrangement under Code Section 409A, at any time within three (3) years
following

23

 

	 	 	 	the date of the date the Company takes all necessary action to
irrevocably terminate and liquidate the Plan.

          Notwithstanding the above, the Company may, in its discretion, provide by amendment to
liquidate and terminate the Plan where the termination and liquidation occurs within 12 months of a
corporate dissolution taxed under Code Section 331, or with the approval of a bankruptcy court
pursuant to 11 United States Code Section 503(b)(1)(A), provided that all amounts deferred under
the Plan are included in the Participants’ gross incomes in the latest of the following years (or,
if earlier, the taxable year in which the amount is actually or constructively received):

	 	(a)	 	the calendar year in which the termination and
liquidation occurs;
	 
	 	(b)	 	the first calendar year in which the amount is
no longer subject to a substantial risk of forfeiture; or
	 
	 	(c)	 	the first calendar year in which the payment is
administratively practicable.

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ARTICLE IX

MISCELLANEOUS

          9.1 Plan Not a Contract of Employment.

          The adoption and maintenance of the Plan shall not be or be deemed to be a contract of
employment 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.

          9.2 Hypothetical Accounts and Creditor Status of Participants.

          The Accounts established under this Plan shall be hypothetical in nature and shall be
maintained for bookkeeping purposes only. Neither the Plan nor any of the Accounts shall hold any
actual funds or assets. The payments to a Participant, his Beneficiary or any other distributee
hereunder shall be made from assets of the Company which shall continue, at all times, to be a part
of the general unrestricted assets of the Company. The Company’s obligation hereunder shall be an
unfunded and unsecured promise to pay money in the future. 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 and the Participation Agreement entered into by such Participant. 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. Except as provided in Section 9.3, 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.

          9.3 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 acquired assets, shall
at all times be and remain unrestricted general property and assets of the Company, and
Participants and Beneficiaries shall have no rights, other than as general creditors, with respect
to any such policies, annuities or other acquired assets. Furthermore, the Company may establish a
trust to hold such policies, annuities or other acquired assets, to be used to make, or reimburse
the Company for, payments to the Participants or Beneficiaries of all or part of the benefits under
this Plan; provided, however, that the trust assets shall at all times remain subject to the claims
of general creditors of the Company in the event of its insolvency. In the event that a trust is
established under this section, the Company shall remain liable for paying the benefits under this
Plan. However, any payment of benefits to a Participant or Beneficiary made by the trust shall
satisfy the Company’s obligation to make such payment to such person.

25

 

          9.4 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.

          9.5 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.

          9.6 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.

          9.7 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.

          9.8 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.

          9.9 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.

          9.10 Compliance with Code Section 409A.

          It is the intention and purpose of the Company that this Plan shall be, at all relevant times,
in compliance with (or exempt from) Code Section 409A and all other applicable laws, and this Plan
shall be so interpreted and administered. In no event, however, shall this section or any other
provisions of this Plan be construed to require the Company to provide any gross-up for the tax
consequences of any provisions of, or payments under, this Plan except as

26

 

may be provided in any separate agreement between the Company and any Participant, and the
Company shall have no responsibility for tax or legal consequences to any Participant (or
Beneficiary) resulting from the terms or operation of this Plan.

IN WITNESS WHEREOF, the Company has caused this Plan to be executed on this 31st day of
December, 2008.

	 	 	 	 	 	 	 
	 	 	INVACARE CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	/s/ Joseph S. Usaj
 

	 	 
	 
	 	 	 	 	 	 
	 

	 	Its:
	 	SR VP Human Resources	 	 

27EX-10.2

Exhibit 10.2

INVACARE CORPORATION CASH BALANCE

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

Participation Agreement

(Participants as of December 31, 2008)

Agreement to Participate

I,                                         , hereby agree, effective December 31, 2008, to continue my
participation in the Invacare Corporation Cash Balance Supplemental Executive Retirement Plan, as
amended and restated effective December 31, 2008 (the “Plan”). I agree to be bound by the terms of
the Plan as so amended and restated (or as it may be amended in the future in accordance with its
terms) and the terms of this Participation Agreement. In addition, I consent to the amendment and
restatement of the Invacare Corporation Supplemental Executive Retirement Plan in the form of the
Plan.

Amount of Benefits under the Plan

I understand that the Plan generally provides for credits to an account in my name as follows:

	(i)	 	an initial credit equal to my accumulated benefit obligation under the Plan as of December
31, 2008, determined in accordance with the assumptions used in preparing the Company’s
audited financial statements for 2008; plus
	 
	(ii)	 	annual credits made on or about December 31 of each calendar year beginning with 2009 equal
to such amounts as may be determined from time to time by the Compensation Committee of
Invacare Corporation (“Invacare” or the “Company”) for each year that I am both an Employee
and a Participant. I understand that it is the present intention of the Committee (which
intention, although not binding, shall not be changed except (x) in accordance with the terms
of the Plan and (y) unless and until the Committee advises me in writing of any such change)
that such annual credits will be in accordance with the column titled “Scheduled SERP
Contribution” in the chart attached as Exhibit A to this Participation Agreement and will be
provided for the number of years indicated in such Exhibit (such credits to be ratably reduced
in any year in which I am not an Employee and Participant for the full year); plus
	 
	(iii)	 	an interest credit, which unless and until changed by the Committee in accordance with the
terms of the Plan, will be computed in the manner set forth in the Plan and at the rate of six
percent (6%), compounded annually; plus
	 
	(iv)	 	the possibility of special credits in the event of my death, termination of employment due to
disability or termination of employment within the two (2) years following a change in
control.

I have been given an estimate of my initial credit amount under (i), which is reflected as the
Beginning Account Balance on Exhibit A and understand I will be advised of the final confirmed
figure after the Company’s audited financial statements are finalized. I understand that each
year’s Scheduled SERP Contribution will become final and binding as of December 31 of such year and
that interest will be credited to my account quarterly throughout each year unless and until
changed by the Committee.

I understand that (a) my Account will be charged periodically in an amount necessary to pay my
share of the FICA tax on credits received from the Company and the income tax withholding
associated with such FICA tax, (b) that the payment schedule contained on Exhibit A does not
reflect the amounts to be charged for FICA and income tax withholding and (c) that my benefits will
be taxable at ordinary income rates in effect at the time they are paid. .

Election of Form of Payment

1

 

I understand that payment of my benefits under the Plan may be subject to satisfaction of a vesting
requirement and will be made at the time and in the form provided under the Plan. If my benefit is
payable due to my Retirement or Termination of Employment, I hereby elect to receive such benefits
under the Plan in the form of:

         a single lump sum payment

OR

         annual installments over a period of          years [Note, cannot exceed 15 years].

Tax Impact

I understand that I (and not the Company) am responsible for tax or legal consequences to me or any
of my Beneficiaries resulting from the terms or operation of this Plan. Payments to me from the
Plan will be subject to applicable income and employment taxes and withholding, at or before the
time paid.

I specifically acknowledge that:

	(i)	 	as a result of the amendment and restatement of the Plan, I will incur FICA tax liabilities
as of December 31, 2008 or, if later, the time I am vested in my rights under the Plan (the
“vesting date”);
	 
	(ii)	 	as of my vesting date, the Company may use such portion of my Account as is necessary to
satisfy such FICA obligations (and related income tax withholding arising from such deemed
distribution); and
	 
	(iii)	 	thereafter, further FICA tax obligations (and related income tax withholding) will be
incurred each year that I am an Employee and a Participant in the Plan and receive credits to
my account in accordance with the terms of the Plan and this Participation Agreement. I
understand the Company will use such portion of my Account as is necessary to satisfy such
further FICA and income tax withholding obligations.

Acknowledgements

I acknowledge that (i) I have received a copy of the Plan and a Memorandum Regarding Principal
Changes in SERP dated December 12, 2008 explaining the principal revisions to the Plan, (ii) I have
reviewed those documents and have had the opportunity to discuss any questions with a
representative of Invacare and have received satisfactory answers to those questions and (iii) I
have been encouraged by the Company to discuss the terms of the amended Plan with my financial and
legal advisors and have been provided sufficient time to do so.

I understand that while the Company presently intends to continue the Plan indefinitely, it
specifically reserves the right to revise or amend the Plan at any time in accordance with its
terms, including the right to reduce the amount of annual credits and the interest crediting rate
at any time on a prospective basis, or to eliminate all future credits, including interest, at any
time. Further, I understand that this Participation Agreement will be read and interpreted in
accordance with and subject to the terms of the Plan and that any inconsistencies between this
Participation Agreement and the Plan will be resolved in favor of the Plan. All terms used in this
Participation Agreement shall have the same meaning as under the Plan.

2

 

Signed this                      day of December, 2008.

	 	 	 	 	 
	 

	 	PARTICIPANT:	 	 
	 
	 	 	 	 
	 
	 

	 	 

	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 

	 	Print Name	 	 

ACKNOWLEDGED FOR THE COMPANY:

By:                                                            

Its:                                                             

3

 

Schedule of Participation Agreements with Current Executive Officers

	 	 	 	 	 
		 	 	 	 
	Name	 	Position	 	Date of Agreement
	A. Malachi Mixon, III

	 	Chairman of the Board of
Directors and Chief Executive
Officer
	 	December 31, 2008
	 
	 	 	 	 
	Gerald B. Blouch

	 	President and Chief Operating
Officer
	 	December 31, 2008
	 
	 	 	 	 
	Robert K. Gudbranson

	 	Senior Vice President - Chief
Financial Officer
	 	December 31, 2008
	 
	 	 	 	 
	Joseph B. Richey, II

	 	President - Invacare
Technologies Division and
Senior Vice President -
Electronics and Design
Engineering
	 	December 31, 2008
	 
	 	 	 	 
	Louis F. J. Slangen

	 	Senior Vice President -
Global Market Development
	 	December 31, 2008
	 
	 	 	 	 
	Joseph S. Usaj

	 	Senior Vice President - Human
Resources
	 	December 31, 2008
	 
	 	 	 	 
	Anthony C. LaPlaca

	 	Senior Vice President and
General Counsel
	 	December 31, 2008

4

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