Document:

EX-10.3

Exhibit 10.3

AGREEMENT

          This AGREEMENT (“Agreement”), is made as of the 31st day of December, 2008, between INVACARE
CORPORATION, an Ohio corporation (“Invacare”), and                                         (the “Executive”).

          Invacare previously has entered into an agreement with Executive that is similar to this
Agreement in recognition of the importance of the Executive’s services to the continuity of
management of Invacare and based upon its determination that it will be in the best interests of
Invacare to encourage the Executive’s continued attention and dedication to the Executive’s duties
in the potentially disruptive circumstances of a possible Change of Control of Invacare. (As used
in this Agreement, the term “Change of Control” and certain other capitalized terms have the
meanings ascribed to them in Section 10 hereof.)

          Invacare has determined that it is necessary to amend and restate such previous agreement with
Executive based on certain changes to the existing Change of Control Agreements between Invacare
and certain of its executive officers, including Executive, that were reviewed and approved by the
Compensation, Management Development and Corporate Governance Committee of Invacare including,
without limitation, revisions intended to comply with Internal Revenue Code Section 409A.

          Invacare and the Executive agree, effective as of the date first set forth above (the
“Effective Date”), as follows:

          1. Additional Payment if Executive is Employed by Invacare on First Anniversary of the
Date of a Change of Control or if Employment is Terminated in Certain Circumstances Within One Year
of a Change of Control. If, following the occurrence of a Change of Control, either (i) the
Executive continues to be employed by Invacare or one of its Affiliates on the first anniversary of
the date of the Change of Control, or (ii) the Executive’s employment with Invacare is terminated
by Invacare for any reason other than Cause, Disability, or death, or is terminated by the
Executive for Good Reason, within one year after the Change of Control, then Invacare shall pay to
the Executive, within ten business days after the earlier of such events, a lump-sum amount equal
to the sum of (a) the Executive’s Annual Base Salary plus (b) the Executive’s
Target Bonus.

          2. Severance Benefits if Employment is Terminated in Certain Circumstances Within Three Years
of a Change of Control. If, within three years following the occurrence of a Change of Control,
the Executive’s employment with Invacare is terminated by Invacare for any reason other than Cause,
Disability, or death, or is terminated by the Executive for Good Reason, then the provisions of
this Section 2 shall become applicable in all respects and Invacare shall pay to the Executive, in
addition to any amount paid or payable pursuant to Section 1 above, the amounts specified in
Sections 2.1, 2.2, 2.3, 2.4, and 2.5 on the dates indicated therein, shall provide to the Executive
the benefits specified in Section 2.6 for the periods specified

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therein, and shall cause certain rights of the Executive (or his or her Beneficiary (or
Beneficiaries), as applicable) to vest as provided in Sections 2.7, 2.8, 2.9, and 2.10:

     2.1 Lump Sum Severance Benefit. Invacare shall pay to the Executive, within
ten business days after the Termination Date, a lump sum severance benefit equal to two
times the sum of (i) the Executive’s Annual Base Salary plus (ii) the
Executive’s Target Bonus.

     2.2 Invacare Retirement Savings Plan. Invacare shall pay to the Executive,
within 60 days after the Termination Date, a lump sum amount equal to three times the
highest amount of total contributions (including both matching contributions and other
employer contributions) made by Invacare to the Invacare Retirement Savings Plan (or
related successor plan or plans) with respect to the Executive for any single plan year
ending on or after the date that is three years before the date of the Change of Control.
In the event the Executive is not fully vested under the Invacare Retirement Savings Plan
as of the Termination Date, the lump sum amount payable under this Section 2.2 shall be
increased to include an amount equal to the non-vested portion of the Executive’s account
under the Invacare Retirement Savings Plan.

     2.3 401(k) Plus Plan. Invacare shall pay to the Executive, within 60 days
after the Termination Date, a lump sum amount equal to three times the highest amount of
the employer contributions (including both matching contributions and other employer
contributions) credited to the Invacare 401(k) Plus Benefit Equalization Plan (or related
successor plan or plans) (the “401(k) Plus Plan”) for the benefit of the Executive for any
single plan year ending on or after the date that is three years before the date of the
Change of Control.

     2.4 Deferred Compensation Plus Plan. Invacare shall pay to the Executive,
within 60 days after the Termination Date, a lump sum amount equal to three times the
highest amount of the employer contributions (including both matching contributions and
other employer contributions) credited to the Invacare Deferred Compensation Plus Plan (or
related successor plan or plans) for the benefit of the Executive for any single plan year
ending on or after the date that is three years before the date of the Change of Control.

     2.5 SERP. Invacare shall pay to the Executive, within 60 days after the
Termination Date, a lump sum amount equal to the sum of the contributions and credited
interest which were scheduled to be added to Executive’s account under the Invacare Cash
Balance Supplemental Executive Retirement Plan (or related successor plan or plans), during
the three year period immediately following the Termination Date (including prorated
amounts, as applicable), if Executive had continued in the employ of Invacare through the
third anniversary of the Termination Date, all as reflected on the attachment to the
participation agreement executed by the Executive in connection with such plan

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     2.6 Insurance Benefits. Invacare shall provide to the Executive, from the
Termination Date through the third anniversary of the Termination Date, continuing coverage
under health, life, and disability insurance programs at least equal in all respects to the
highest level of such coverage provided by Invacare to the Executive at any time during the
period beginning one year before the Change of Control and ending on the Termination Date.

     2.7 Stock Options and Restricted Stock. In respect of all options to purchase
Invacare stock and all shares of restricted stock that have been granted to the Executive
pursuant to any stock option or restricted stock agreement, plan or arrangement sponsored
by Invacare and which remain outstanding as of the Termination Date, and notwithstanding
any other provision to the contrary contained in any stock option or restricted stock
agreement, plan or arrangement, Invacare shall:

               (a) with respect to all options, cause such options:

	 	(i)	 	to become exercisable in
full as of the Termination Date;
	 
	 	(ii)	 	to continue to be
exercisable until the earlier to occur of the second
anniversary of the Termination Date or the expiration date of
the option;
	 
	 	(iii)	 	to be exercisable (and/or
to be eligible to satisfy any tax withholding requirements in
connection with the exercise of the options) using shares of
Invacare common stock previously owned by the Executive
and/or shares subject to the options being exercised as
consideration in lieu of a cash payment or other arrangement,
but only to the extent that any such exercise of the option
(and/or withholding tax payments) would not result in
Invacare being required to take an additional charge in
respect of such exercise in determining and reporting its net
income for financial accounting purposes; and

               (b) with respect to all restricted stock, cause
such restricted stock:

	 	(i)	 	to become vested in full as
of the Termination Date; and
	 
	 	(ii)	 	to be eligible to satisfy
any tax withholding requirements in connection with such
vesting of the restricted stock using shares of Invacare
common stock previously owned by the Executive and/or shares
of restricted stock that become so vested as consideration
(in lieu of a cash payment or other

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	 	 	 	arrangement) for the payment of withholding tax, but only
to the extent that any such withholding tax payments would
not result in Invacare being required to take an
additional charge in respect of such accelerated vesting
or withholding tax payment in determining and reporting
its net income for financial accounting purposes.

     2.8 Vesting of Certain Rights. Invacare shall cause the Executive’s rights
under (a) the Invacare 401(k) Plus Plan, (b the Invacare Deferred Compensation Plus Plan
and (c) the Invacare Cash Balance Supplemental Executive Retirement Plan, to become, as of
the Termination Date, immediately vested in full.

     2.9 Death of the Executive. In the event of the Executive’s death at any time
after the Termination Date through the third anniversary of the Termination Date, then,
assuming the Executive was, as of such time, entitled to receive payments and/or benefits
pursuant to Sections 1 and/or 2 of this Agreement:

     (a) the amounts described in Sections 1, 2.1, 2.2, 2.3, 2.4, and 2.5, to the
extent not paid to the Executive, shall be paid to the Beneficiary as soon as
practicable following the Executive’s death;

     (b) any person who would have been entitled to coverage as the Executive’s
dependent (or otherwise because of the Executive’s coverage) under any health
insurance program maintained by Invacare (as described in Section 2.6) shall
continue to be provided with such coverage as though the Executive had survived
through the third anniversary of the Termination Date;

     (c) such persons as may be entitled thereto shall receive such benefits as may
be provided under any Employee Benefit Plans in accordance with the terms of such
Employee Benefit Plans;

     (d) such persons as may be entitled thereto shall receive such benefits as may
be provided under any other agreement the Executive may have with Invacare or an
Affiliate including, without limitation, any agreement relating to options to
purchase Invacare stock.

     2.10 Alternate Form of Benefit. Notwithstanding the preceding provisions of
this Section 2, to the extent the Executive cannot, as a matter of law, or pursuant to the
customs or policies of any insurance underwriter or the terms of any benefit plan, realize
any benefit or advantage described above in this Section 2 (and especially Section 2.6), or
if Invacare reasonably believes that providing the Executive with any such benefit or
advantage would be economically disadvantageous because doing so would cause Invacare to
lose tax or other

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benefits or would cause Executive to incur additional taxes or lose other benefits,
Invacare shall notify the Executive and shall pay to the Executive an additional amount or
provide a comparable benefit which shall, taking account of any federal, state and local
income taxes incurred by the Executive in respect of such payments or benefits, place the
Executive in the same, or substantially the same, position, on an after-tax basis, as
though he had realized such benefit or advantage; provided, that the amount of any
payment to the Executive pursuant to the preceding clause shall be calculated at Invacare’s
cost and expense by the Accounting Firm, and its determination of such amount shall be
final and binding upon both the Executive and Invacare, and the Executive and Invacare
shall each provide the Accounting Firm with such information as it may reasonably request
in order to calculate any such amount; provided further, that in no event shall any
such additional amount or comparable benefit be provided to the Executive prior to or
materially after the time the original payment or benefit would have been provided.

     2.11 Later Time for Payment on Account of Termination. Notwithstanding the
preceding provisions of Sections 1 and 2, solely to the extent required to comply with
applicable provisions of Internal Revenue Code Section 409A (“Section 409A”) with respect
to any amounts or benefits not exempt from 409A, payments made pursuant to Sections 1 (ii),
2.1, 2.2, 2.3, 2.4, 2.5 and 2.6 on account of the Executive’s termination of employment
shall: (a) not commence until the date that is six months and a day following the
Termination Date; and (b) upon commencement, include along with the initial payment an
amount sufficient to reimburse the Executive for reasonable lost interest at a rate of 6%
per annum, compounded annually, incurred during the period commencing on the date which is
60 days after the Termination Date through the date of payment by Invacare. In the event
that Invacare, in the exercise of its reasonable discretion, determines that a delay in
payments under this Section 2.11 is required in order to comply with Code Section 409A,
Invacare shall, within two business days after the Termination Date, deposit the entire
amount due and to become due under Sections 1(ii) and 2, in the trust established by
Invacare with Wachovia Bank of North Carolina, N.A. pursuant to a Benefit Security Trust
Agreement dated August 21, 1996, as such agreement may be amended from time to time in
accordance with its terms. Payments to the Executive from such trust shall thereafter be
made in accordance with this Section 2.11; provided, however, that Invacare shall remain
fully obligated to the Executive for the full and complete satisfaction of its liabilities
and obligations under this Agreement.

     3. Excess Parachute Payment Gross-Up; Section 409A Gross-Up.

     3.1 Potential for Excess Parachute Payments and for Section 409A Liability.
Invacare and the Executive acknowledge that, upon or following a Change of Control, one or
more payments or distributions or acceleration or alteration of rights or benefits to be
made by Invacare to or for the benefit of the

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Executive (whether paid or payable or distributed or distributable pursuant to the
terms of this Agreement, under some other plan, agreement, or arrangement, or otherwise) (a
“Payment”) may be determined to be an “excess parachute payment” that is not deductible by
Invacare for Federal income tax purposes and with respect to which the Executive will be
subject to an excise tax, penalties or interest because of Sections 280G and 4999,
respectively, of the Internal Revenue Code. Invacare and the Executive also acknowledge
that, upon or following a Change of Control, one or more Payments may be determined to give
rise to liability on the part of the Executive for accelerated or additional tax (or
interest or penalties) under Section 409A of the Internal Revenue Code. If benefits become
payable to the Executive under Sections 1 or 2 of this Agreement, the Accounting Firm,
which shall make all determinations required to be made under this Section 3, shall
determine whether any Payment would be an excess parachute payment and whether any Payment
would give rise to Section 409A liability on the part of the Executive. The Accounting
Firm shall communicate its determination, together with detailed supporting calculations,
to Invacare and to the Executive within 30 days after the Termination Date or such earlier
time as is requested by Invacare. Invacare and the Executive shall cooperate with each
other and the Accounting Firm and shall provide necessary information so that the
Accounting Firm may make all such determinations. Invacare shall pay all of the fees of the
Accounting Firm for services performed by the Accounting Firm as contemplated in this
Section 3.

     3.2 Excess Parachute Payment Gross-Up. If any Payment gives rise, directly or
indirectly, to liability on the part of the Executive for excise tax, penalties or interest
as a result of Section 4999 of the Internal Revenue Code, Invacare shall make additional
cash payments to the Executive, from time to time and at the same time, as any Payment
constituting an excess parachute payment is paid or provided to the Executive (or as soon
thereafter as is practicable and, in any event, no later than March 15 of the calendar year
which follows the calendar year in which the excess parachute payment was made or provided
to the Executive), in such amounts as are necessary to put the Executive in the same
position, after payment of all federal, state, and local taxes (whether income taxes,
excise taxes under Section 4999 of the Internal Revenue Code or otherwise, or other taxes)
and payment of penalties and interest arising as a result of Section 4999 of the Internal
Revenue Code, as the Executive would have been in after payment of all federal, state, and
local income taxes if the Payments had not given rise to an excise tax, penalties or
interest as a result of Section 4999 of the Internal Revenue Code.

     3.3 Section 409A Gross-Up. If any Payment gives rise, directly or indirectly,
to liability on the part of the Executive for tax, penalties or interest as a result of
409A, Invacare shall make additional cash payments to the Executive, from time to time and
at the same time, as any Payment giving rise to such liability is paid or provided to the
Executive (or as soon thereafter as is practicable and, in any event, no later than March
15 of the calendar year which follows the calendar year in which the Payment giving rise to
Section 409A liability was

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made or provided to the Executive), in such amounts as are necessary to put the
Executive in the same position, after payment of all federal, state, and local taxes
(whether income taxes, excise taxes under 409A or otherwise, or other taxes) and interest
and penalties, as the Executive would have been in after payment of all federal, state, and
local income taxes if the Payments had not given rise to excise taxes, penalties or
interest under 409A; provided, however, that in no event shall Invacare be required
to make additional cash payments under this Section 3.3 if the Accounting Firm determines
that doing so would result in a windfall to the Executive due to duplicative gross-up
provisions in this Agreement or in any other binding arrangement.

     4. Other Benefits.

     4.1 Reimbursement of Certain Expenses After a Change of Control. Invacare
shall pay, as incurred (in no event later than the end of the Executive’s taxable year
following the year in which such expenses were incurred), all expenses incurred by the
Executive at any time during the longer of 20 years or the Executive’s lifetime, including
the reasonable fees of counsel engaged by the Executive, in respect of enforcing the
Executive’s rights hereunder and/or defending any action brought to have this Agreement
declared invalid or unenforceable.

     4.2 Sick Leave Pay for Executive. If, after a Change of Control and prior to
the Termination Date, the Executive is unable to perform services for Invacare for any
period by reason of accidental bodily injury or sickness, Invacare will pay and provide to
the Executive, as sick leave pay, all compensation and benefits to which the Executive
would have been entitled had the Executive continued to be actively employed by Invacare
through the earliest of the following dates (the “Sick Leave Period”): (a) the first date
on which the Executive is again capable of performing services for Invacare consistent with
past practice, or (b) the date on which the Executive’s employment is terminated by
Invacare by reason of Disability or otherwise, or (c) the date on which Invacare has paid
and provided 29 months of compensation and benefits to the Executive during the period of
the Executive’s incapacity, or (d) the date of the Executive’s death. Notwithstanding the
foregoing, the Sick Leave Period may not be greater than 6 months unless the Executive’s
injury or sickness can be expected to result in death or can be expected to last for a
continuous period of not less than 6 months, and such injury or sickness renders the
Executive unable to perform the duties of his position of employment or any substantially
similar position of employment. The foregoing sick leave pay is intended to compensate
Executive for compensation and benefits that he otherwise would have earned during the Sick
Leave Period, and shall not reduce or otherwise have any effect on Executive’s rights to
receive any other compensation, benefits or other Payments hereunder for any other reason,
including as may be owed arising out of cessation of Executive’s employment.

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          5. No Set-Off; No Obligation to Seek Other Employment or to Otherwise Mitigate Damages; No
Effect Upon Other Plans. Invacare’s obligation to make the payments provided for in this
Agreement and otherwise to perform its obligations hereunder shall not be affected by any set-off,
counterclaim, recoupment, defense, or other claim whatsoever which Invacare may have against the
Executive. The Executive shall not be required to mitigate damages or the amount of any payment
provided for under this Agreement by seeking other employment or otherwise. The amount of any
payment provided for under this Agreement shall not be reduced by any compensation or benefits
earned by the Executive as the result of employment by another employer or otherwise after the
termination of the Executive’s employment.

          6. Taxes; Withholding of Taxes. Without limiting the right of Invacare to withhold
taxes pursuant to this Section 6, the Executive shall be responsible (after taking into account all
payments to be made by Invacare to or on behalf of the Executive under Sections 1 or 2 hereof, and
any gross-ups required under Section 3 hereof) for all income, excise, and other taxes (federal,
state, city, or other) imposed on or incurred by the Executive as a result of receiving the
payments provided in this Agreement, including, without limitation, the payments provided under
Sections 1 or 2 of this Agreement. Subject to Section 3.1 hereof, Invacare may withhold from any
amounts payable under this Agreement all federal, state, city, or other taxes as Invacare shall
determine to be required pursuant to any law or government regulation or ruling. Without limiting
the generality of the foregoing, Invacare may withhold from any amount payable under this Agreement
amounts sufficient to satisfy any withholding requirements that may arise out of any benefit
provided to or in respect of the Executive by Invacare under Section 2 of this Agreement.

          7. Term of this Agreement. This Agreement shall be effective as of the date first
above written and shall thereafter apply to any Change of Control occurring on or before December
31, 2009 or during any succeeding applicable term, and on December 31, 2009 and on December 31 of
each succeeding year thereafter (a “Renewal Date”), the term of this Agreement, if not previously
terminated, shall be automatically extended for an additional year unless either party has given
notice to the other, at least one year in advance of that Renewal Date, that the Agreement shall
not apply to any Change of Control occurring after that Renewal Date.

     7.1 Termination of Agreement Upon Termination of Employment Before a Change of
Control. This Agreement shall automatically terminate on the first date occurring
before a Change of Control on which the Executive is no longer employed by Invacare, except
that, for purposes of this Agreement, any involuntary termination of employment of the
Executive or any termination by the Executive for Good Reason that is effected within 6
months before a Change in Control and primarily in contemplation of a Change of Control
that actually occurs after the date of the termination shall be deemed to be a termination
of the Executive’s employment as of the date immediately after that Change of Control, and
in such case, the Change in Control shall constitute the date as of which the Executive’s
right to payment hereunder shall become vested.

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     7.2 No Termination of Agreement During Three Year Period Beginning on Date of a
Change of Control. After a Change of Control, this Agreement may not be terminated.
However, if the Executive’s employment with Invacare continues for more than three years
following the occurrence of a Change of Control, then, for all purposes of this Agreement
other than Sections 1 and 4.1, that particular Change of Control shall thereafter be
treated for purposes of this Agreement as if it never occurred; provided, however, that the
foregoing shall not deprive Executive of any rights, benefits or payments (or allow
Invacare to avoid any obligations) that were or became vested under this or any other
agreement, plan or arrangement.

          8. Internal Revenue Code Section 409A. This Agreement is intended to meet the
requirements for exemption from (or to the extent not exempt, compliance with) Section 409A
(including without limitation, the exemptions for short-term deferrals and separation pay
arrangements), and this Agreement shall be so construed and administered. Notwithstanding anything
in this Agreement to the contrary, at any time prior to a Change in Control, Invacare may
unilaterally amend this Agreement, retroactively or prospectively, while maintaining the spirit of
this Agreement and after consultation with Executive, to secure exemption from (or, to the extent
not exempt, to ensure compliance with), the requirements of 409A and to avoid adverse tax
consequences to Executive thereunder. Furthermore, at any time prior to a Change in Control, the
Executive agrees to execute such further instruments and take such further action as may be
necessary to comply with 409A or to avoid adverse tax consequences to Executive thereunder.

          9. Miscellaneous.

          9.1 Successor to Invacare. In the event that

	 	(a)	 	Invacare transfers all or substantially all
of its assets to another corporation or entity; or
	 
	 	(b)	 	(i) Invacare consolidates with or merges
with or into any other corporation or entity and

	 
	 	 	 	(ii) either (x) Invacare is not the surviving corporation or
entity of such consolidation or merger or (y) Invacare is the
surviving corporation or entity of such consolidation or merger
but the shareholders of Invacare immediately prior to the
consummation of such merger or consolidation do not own securities
representing a majority of the outstanding voting power of such
surviving corporation or entity or its parent after the
consummation of the consolidation or merger,

then, in any of such events, the entity surviving such consolidation or merger and each
Affiliate thereof having an individual net worth of $5 million or more shall assume joint
and several liability for this Agreement in a signed writing and

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deliver a copy thereof to the Executive. Upon such assumption, the successor corporation or
entity and each Affiliate thereof having an individual net worth of $5 million or more
shall become obligated to perform the obligations of Invacare under this Agreement and the
term “Invacare” as used in this Agreement shall be deemed to refer to such successor entity
and such Affiliates jointly and severally. Any failure of Invacare to obtain the written
agreement of such successor or surviving entity (including a parent successor entity) and
the required Affiliates to assume this Agreement before the effectiveness of any such
succession shall be deemed to be a material breach of this Agreement.

     9.2 Notices. Notices and all other communications provided for in this
Agreement shall be in writing and shall be deemed to have been duly given when delivered in
person or by confirmed facsimile transmission (to the Senior Vice President of Human
Resources of Invacare in the case of notices to Invacare and to the Executive in the case
of notices to the Executive) or mailed by United States registered mail, return receipt
requested, postage prepaid, addressed as follows:

If to Invacare:

Invacare Corporation

One Invacare Way

Elyria, OH 44035

Attention: Senior Vice President of Human Resources

If to the Executive:

                                        

                                        

                                        

or such other address as either party may have furnished to the other in writing in
accordance herewith, except that notices of change of address shall be effective only upon
receipt.

     9.3 Employment Rights. Nothing expressed or implied in this Agreement shall
create any right or duty on the part of Invacare or the Executive to have the Executive
continue as an officer of Invacare or an Affiliate of Invacare or to remain in the
employment of Invacare or an Affiliate of Invacare.

     9.4 Administration. Invacare shall be responsible for the general
administration of this Agreement and for making payments under this Agreement. All fees and
expenses billed by the Accounting Firm for services contemplated under this Agreement shall
be the responsibility of Invacare.

     9.5 Source of Payments. Any payment specified in this Agreement to be made by
Invacare may be made directly by Invacare solely from its general

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assets, and the Executive shall have the rights of an unsecured general creditor of
Invacare with respect thereto.

     9.6 Validity. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision of this
Agreement which shall remain in full force and effect.

     9.7 Modification; Waiver. No provision of this Agreement may be modified,
waived, or discharged unless such waiver, modification, or discharge is agreed to in a
writing signed by the Executive and Invacare. No waiver by either party hereto at any time
of any breach by the other party of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same time or at any prior or subsequent time.

     9.8 Entire Agreement; Supercession. Except as otherwise specifically provided
herein, this Agreement, including its attachments, contains the entire agreement between
the parties concerning the subject matter hereof and incorporates and supersedes any and
all prior discussions or agreements, written or oral, the parties may have had with respect
to such subject matter, including without limitation that certain change of control
agreement previously entered into by Invacare and the Executive, which is hereby amended
and restated in its entirety; provided, however, that except as expressly provided
otherwise herein, nothing in this Agreement shall affect any rights the Executive or anyone
claiming through the Executive may have in respect of either (a) any Employee Benefit Plan
which provides benefits to or in respect of the Executive or (b) any other agreements the
Executive may have with Invacare or an Affiliate of Invacare, including without limitation
any employment or severance protection agreements the Executive may have with Invacare or
an Affiliate of Invacare.

     9.9 Post-Mortem Payments; Designation of Beneficiary. As indicated in Section
2.9, in the event that, following the termination of the Executive’s employment with
Invacare, the Executive is entitled to receive any payments pursuant to this Agreement and
the Executive dies, such payments shall be made to the Executive’s Beneficiary designated
hereunder. At any time after the execution of this Agreement, the Executive may prepare,
execute, and file with the Secretary of Invacare a copy of the Designation of Beneficiary
form attached to this Agreement as Exhibit A. The Executive shall thereafter be free to
amend, alter or change such form; provided, however, that any such amendment,
alteration or change shall be made by filing a new Designation of Beneficiary form with the
Secretary or the Senior Vice President of Human Resources of Invacare. In the event the
Executive fails to designate a beneficiary, following the death of the Executive, all
payments of the amounts specified by this Agreement which would have been paid to the
Executive’s designated beneficiary pursuant to this Agreement shall instead be paid to the
Executive’s spouse, if any, if she survives the Executive or, if there is no spouse or she
does not survive the Executive, to the Executive’s estate.

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     9.10 Service with Affiliates. Any services the Executive performs for an
Affiliate of Invacare shall be deemed performed for Invacare. Any transfer of the
Executive’s employment from Invacare to an Affiliate of Invacare, or from an Affiliate of
Invacare to Invacare, or from an Affiliate of Invacare to another Affiliate of Invacare
shall be deemed not to constitute a termination of the Executive’s employment with
Invacare.

     9.11 Time Periods. Any action required to be taken under this Agreement within
a certain number of days shall be taken within that number of calendar days;
provided, however, that if the last day for taking such action falls on a weekend
or a holiday, the period during which such action may be taken shall be automatically
extended to the next business day. If the day for taking any action under this Agreement
falls on a weekend or a holiday, such action may be taken on the next business day.
Notwithstanding the foregoing, no such extension shall permit an action to be taken at a
time that would cause an exempt payment to become subject to Section 409A or to cause a
payment that would otherwise be compliant with Section 409A to cease to be so compliant.

     9.12 Incorporation by Reference. The incorporation herein of any terms by
reference to another document shall not be affected by the termination of any agreement set
forth in such other document or the invalidity of any provisions thereof.

     9.13 Binding Effect; Construction of Agreement. This Agreement shall inure to
the benefit of and be enforceable by the Executive’s personal representatives, executors,
administrators, successors, heirs, and designees (including, without limitation, the
Beneficiary). Upon the Executive’s death, for purposes of this Agreement, the term
“Executive” shall be deemed to include, as applicable, any person (including, without
limitation, the Beneficiary) who is entitled to benefits under this Agreement following the
Executive’s death.

     9.14 Governing Law. All questions concerning the construction, validity and
interpretation of this Agreement and the exhibits hereto will be governed by and construed
in accordance with the internal laws of the State of Ohio, without giving effect to any
choice of law or conflict of law provision or rule (whether of the State of Ohio or any
other jurisdiction) that would cause the application of the laws of any jurisdiction other
than the State of Ohio.

     9.15 Representations and Warranties of Invacare. Invacare represents and
warrants to the Executive that (i) Invacare is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Ohio; (ii) Invacare has the
power and authority to enter into and carry out this Agreement, and there exists no
contractual or other restriction upon its so doing; (iii) Invacare has taken such corporate
action as is necessary or appropriate to enable it to enter into and perform its
obligations under this Agreement; and (iv) this Agreement constitutes the legal, valid and
binding obligation of Invacare, enforceable against Invacare in accordance with its terms.

12

 

     9.16 Gender. The use of the feminine, masculine or neuter pronoun shall not
be restrictive as to gender and shall be interpreted in all cases as the context may
require.

     10. Definitions.

     10.1 Accounting Firm. The term “Accounting Firm” means the independent
auditors of Invacare for the fiscal year preceding the year in which the Change of Control
occurred and such firm’s successor or successors; provided, however, if such firm is unable
or unwilling to serve and perform in the capacity contemplated by this Agreement, Invacare
shall select another national accounting firm of recognized standing to serve and perform
in that capacity under this Agreement, except that such other accounting firm shall not be
the then independent auditors for Invacare or any of its Affiliates.

     10.2 Affiliate. The term “Affiliate” shall mean, with respect to any person
or entity, any other person or entity which controls, is controlled by, or is under common
control with such person or entity within the meaning of Section 414(b) or (c) of the
Internal Revenue Code.

     10.3 Annual Base Salary. “Annual Base Salary” means the highest annual rate
of base salary payable by Invacare to the Executive at any time between the Effective Date
and the Termination Date.

     10.4 Beneficiary. “Beneficiary” means the person designated by the Executive
as his beneficiary pursuant to Section 9.9 or such other person as determined pursuant to
Section 9.9 hereof.

     10.5 Cause. The employment of the Executive by Invacare shall have been
terminated for “Cause” if, after a Change of Control and prior to the termination of
employment, any of the following has occurred:

     (a) the Executive shall have been convicted of a felony,

     (b) the Executive commits an act or series of acts of dishonesty in the course
of the Executive’s employment which are materially inimical to the best interests
of Invacare and which constitutes the commission of a felony, all as determined by
the vote of three-fourths of all of the members of the Board of Directors of
Invacare (other than the Executive, if the Executive is a Director of Invacare),
which determination is confirmed by a panel of three arbitrators appointed and
acting in accordance with the rules of the American Arbitration Association for the
purpose of reviewing that determination,

     (c) any federal or state regulatory agency with jurisdiction over Invacare has
issued a final order, with no further right of appeal, that has the effect of
suspending, removing, or barring the Executive from continuing his service as an
officer or director of Invacare, or

13

 

     (d) after being notified in writing by the Board of Directors of Invacare to
cease any particular Competitive Activity, the Executive shall intentionally
continue to engage in such Competitive Activity more than thirty (30) days after
receipt of such notice while the Executive remains in the employ of Invacare.

     10.6 Change of Control. A “Change of Control” shall be deemed to have occurred
at the first time on which, after the Effective Date:

     (a) There is a report filed on Schedule 13D or Schedule 14D-1 (or any
successor schedule, form, or report), each as adopted under the Securities Exchange
Act of 1934, as amended, disclosing the acquisition, in a transaction or series of
transactions, by any person (as the term “person” is used in Section 13(d) and
Section 14(d)(2) of the Securities Exchange Act of 1934, as amended), other than
(1) A. Malachi Mixon and/or any Affiliate of A. Malachi Mixon, (2) Invacare or any
of its subsidiaries, (3) any employee benefit plan or employee stock ownership plan
or related trust of Invacare or any of its subsidiaries, or (4) any person or
entity organized, appointed or established by Invacare or any of its subisidiaries
for or pursuant to the terms of any such plan or trust, of such number of shares of
Invacare as entitles that person to exercise 30% or more of the voting power of
Invacare in the election of Directors; or

     (b) During any period of 24 consecutive calendar months, individuals who at
the beginning of such period constitute the Directors of Invacare cease for any
reason to constitute at least a majority of the Directors of Invacare unless the
election of each new Director of Invacare (over such period) was approved or
recommended by the vote of at least two-thirds of the Directors of Invacare then
still in office who were Directors of Invacare at the beginning of the period; or

     (c) There is a merger, consolidation, combination (as defined in Section
1701.01(Q), Ohio Revised Code), majority share acquisition (as defined in Section
1701.01(R), Ohio Revised Code), or control share acquisition (as defined in Section
1701.01(Z)(1), Ohio Revised Code, or in Invacare’s Articles of Incorporation)
involving Invacare and, as a result of which, the holders of shares of Invacare
prior to the transaction become, by reason of the transaction, the holders of such
number of shares of the surviving or acquiring corporation or other entity as
entitles them to exercise less than fifty percent (50%) of the voting power of the
surviving or acquiring corporation or other entity in the election of Directors; or

     (d) There is a sale, lease, exchange, or other transfer (in one transaction or
a series of related transactions) of all or substantially all of the assets of
Invacare, but only if the transferee of the assets in such transaction is not a
subsidiary of Invacare; or

14

 

     (e) The shareholders of Invacare approve any plan or proposal for the
liquidation or dissolution of Invacare, but only if the transferee of the assets of
Invacare in such liquidation or dissolution is not a subsidiary of Invacare.

If an event described in any of Clauses (a), (b), (c), (d), and (e) occurs, a Change of
Control shall be deemed to have occurred for all purposes of this Agreement and, except as
provided in the last sentence of Section 7.2, that Change of Control shall be irrevocable.

     10.7 Competitive Activity. The Executive shall be deemed to have engaged in
“Competitive Activity” if the Executive engages in any business or business activity (other
than as a director, officer, or employee of Invacare) in which Invacare engages as of the
time of the notice provided in Section 10.5(d).

     10.8 Demotion or Removal. The Executive shall be deemed to have been subjected
to “Demotion or Removal” if, during the three year period commencing on the date of a
Change of Control, other than by Voluntary Resignation or with the Executive’s written
consent, the Executive ceases to hold the highest position held by him at any time during
the one year period ending on the date of the Change of Control with all of the duties,
authority, and responsibilities of that office as in effect at any time during the one year
period ending on the date of the Change of Control.

     10.9 Disability. For purposes of this Agreement, the Executive’s employment
will have been terminated by Invacare by reason of “Disability” of the Executive only if
(a) as a result of accidental bodily injury or sickness, the Executive has been unable to
perform his normal duties for Invacare for a period of 180 consecutive days, and (b) the
Executive begins to receive payments under the executive long term disability plan or its
successor plan(s) sponsored by Invacare not later than 30 days after the Termination Date.

     10.10 Employee Benefit Plan. “Employee Benefit Plan” means any plan or
arrangement defined as such in 29 U.S.C. §1002 which provides benefits to the employees of
Invacare or its Affiliates.

     10.11 Good Reason. The Executive shall have “Good Reason” to terminate his
employment under this Agreement if, at any time after a Change of Control has occurred and
before the third anniversary of that Change of Control, one or more of the events listed in
(a) through (f) of this Section 10.11 occurs and, based on that event, the Executive gives
notice of such event (and of his intention to terminate his employment if Invacare does not
cure such condition(s)) on a date that is both (i) within 90 days of the occurrence of that
event and (ii) not later than the third anniversary of that Change of Control, and Invacare
does not cure the condition(s) constituting the event within 30 days after such notice:

15

 

     (a) The Executive is subjected to a Demotion or Removal involving a material
diminution in the Executive’s authority, duties, or responsibilities or in those of
the individual to whom the Executive is required to report; or

     (b) The Executive’s Annual Base Salary is materially reduced (which for this
purposes shall be deemed to occur if the reduction is five percent (5%) or
greater); or

     (c) The Executive’s opportunity for incentive compensation is materially
reduced from the level of his opportunity for incentive compensation as in effect
immediately before the date of the Change of Control or from time to time
thereafter (which for this purposes shall be deemed to occur if the reduction is
equivalent to a five percent (5%) or greater reduction in Executive’s Annual Base
Salary); or

     (d) The Executive is excluded (other than by his volitional action(s)) from
full participation in any benefit plan or arrangement maintained for senior
executives of Invacare generally, and such exclusion materially reduces the
benefits provided to the Executive; or

     (e) The Executive’s principal place of employment for Invacare is relocated a
material distance (which for this purpose shall be deemed to be more than 35 miles)
from One Invacare Way, Elyria, Ohio; or

     (f) Any other action or inaction that constitutes a material breach by
Invacare of this Agreement or any other agreement under which the Executive
provides his services to Invacare.

     10.12 Internal Revenue Code. A reference to any provision of the Internal
Revenue Code means that provision of the Internal Revenue Code of 1986, as amended, and any
successor provision, and any applicable regulations promulgated thereunder.

     10.13 Target Bonus. “Target Bonus” means the Executive’s Annual Base Salary
multiplied by the higher of (a) the target bonus percentage in effect for the Executive
under Invacare’s bonus plan during the fiscal year immediately preceding the fiscal year in
which the Change of Control occurs, or (b) the target bonus percentage in effect for the
Executive under Invacare’s bonus plan during the fiscal year in which the Change of Control
occurs.

     10.14 Termination Date. “Termination Date” means the date on which (and
related terms, such as “termination of employment” and “terminate employment” mean a
situation in which) the Executive incurs a separation from service with Invacare and all of
its Affiliates within the meaning of Section 409A. A separation from service under Section
409A includes a quit, discharge, or retirement, or a leave of absence (including military
leave, sick leave, or other

16

 

bona fide leave of absence such as temporary employment by the government, at the
point that such leave exceeds the greater of six months, the period for which the
Participant’s right to reemployment is provided either by statute or by contract, or in the
case of sick leave, 29 months, if the Executive’s injury or sickness can be expected to
result in death or can be expected to last for a continuous period of not less than 6
months, and such injury or sickness renders the Executive unable to perform the duties of
his position of employment or any substantially similar position of employment). A
separation from service under Section 409A also occurs upon a permanent decrease in service
to a level that is no more than twenty percent (20%) of its prior level. For this purpose,
whether a separation from service has occurred is determined based on whether it is
reasonably anticipated that no further services will be performed by the Executive after a
certain date or that the level of bona fide services the Executive 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 Executive has been providing
services less than 36 months).

     10.15 Voluntary Resignation. A “Voluntary Resignation” shall have occurred if
the Executive terminates his employment with Invacare by voluntarily resigning at his own
instance without having been requested to so resign by Invacare, except that any
resignation by the Executive will not be deemed to be a Voluntary Resignation if, at the
time of that resignation, the Executive had Good Reason to resign.

          IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written
above.

	 	 	 	 	 
	 	INVACARE CORPORATION

(“Invacare”)

 	 
	 	By  	 	 
	 	Joseph S. Usaj, Senior Vice President of 	 
	 	Human Resources 	 
	 
	 	 	 
	 	 	 
	 
	 	(the “Executive”) 	 
	 	 	 	 
	 

17

 

Exhibit A

DESIGNATION OF BENEFICIARY

			
	To:	 	Invacare Corporation

Attn: Secretary

     I, the undersigned,                                         , am a party to a certain Agreement with Invacare
Corporation, an Ohio corporation, dated as of December 31, 2008 (the “Agreement”). Pursuant to the
agreement, I have the right to designate a person or persons to receive, in the event of my death,
any amounts that might become payable to me under the Agreement. I hereby exercise this right and
direct that, upon my death, any amounts payable to me under the Agreement shall be distributed in
the proportions set forth below to the following person(s) if he, she or they survive me, namely:

	 	 	 	 	 
	Beneficiary	 	Relationship	 	Percent Share
	 	 	 	 	 
	 
	 	 
	 	 
	 	 	 	 	 
	 
	 	 
	 	 
	 	 	 	 	 
	 
	 	 
	 	 
	 	 	 	 	 
	 
	 	 
	 	 
	 	 	 	 	 
	 
	 	 
	 	 

     If none of the above-designated person (s) survives me, any amounts payable under the
Agreement shall be distributed to                     .

     Any and all previous designations of beneficiary made by me are hereby revoked, and I hereby
reserve the right to revoke this designation of beneficiary.

	 	 	 	 	 	 	 
	Date:

	 	 
 

	 	 
	 	  
	 
	 	 	 	 	 	 
	 	 	   	 	 
	 

	 	 	 	(Signature)	 	 
	 
	 	 	 	 	 	 
	 	 	   	 	 
	 

	 	 	 	(Print name)	 	 

18

 

Schedule of Change of Control 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

19EX-10.4

Exhibit 10.4

INVACARE CORPORATION

DEFERRED COMPENSATION PLUS PLAN

 

 

INVACARE CORPORATION

DEFERRED COMPENSATION PLUS PLAN

(Effective January 1, 2005)

Table of Contents

	 	 	 	 	 
	 	 	Page	 
	 
	 	 	 	 
	ARTICLE I
	 	 	1	 
	 
	 	 	 	 
	INTRODUCTION
	 	 	1	 
	1.1 Name of Plan
	 	 	1	 
	1.2 Purposes of Plan
	 	 	1	 
	1.3 “Top Hat” Pension Benefit Plan
	 	 	1	 
	1.4 Plan Unfunded
	 	 	1	 
	1.5 Effective Date
	 	 	1	 
	1.6 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	 
	3.4 Protective Measures
	 	 	10	 
	 
	 	 	 	 
	ARTICLE IV
	 	 	11	 
	 
	 	 	 	 
	CONTRIBUTIONS AND VESTING
	 	 	11	 
	4.1 Deferrals by Participants
	 	 	11	 
	4.2 Effective Date of Participation and Deferral Election Form
	 	 	12	 
	4.3 Modification or Revocation of Election by Participant
	 	 	12	 
	4.4 Matching Contributions
	 	 	12	 
	4.5 Make Whole IQC Contributions
	 	 	12	 
	4.6 Discretionary Contributions
	 	 	12	 
	4.7 Suspension of Contributions
	 	 	13	 
	4.8 Vesting
	 	 	13	 
	4.9 Suspension and Forfeiture Following Accelerated Distribution of
Grandfathered Deferrals
	 	 	13	 
	 
	 	 	 	 
	ARTICLE V
	 	 	14	 
	 
	 	 	 	 
	ACCOUNTS
	 	 	14	 
	5.1 Establishment of Bookkeeping Accounts
	 	 	14	 
	5.2 Subaccounts
	 	 	14	 
	5.3 Earnings Elections
	 	 	14	 
	5.4 Hypothetical Accounts and Creditor Status of Participants
	 	 	15	 
	5.5 Investments
	 	 	15	 
	 
	 	 	 	 
	ARTICLE VI
	 	 	16	 
	 
	 	 	 	 
	PAYMENT OF ACCOUNT
	 	 	16	 
	6.1 Timing of Distribution of Accounts
	 	 	16	 

i

 

	 	 	 	 	 
	 	 	Page	 
	 
	 	 	 	 
	6.2 Adjustment for Investment Gains and Losses Upon a Distribution
	 	 	16	 
	6.3 Form of Payment
	 	 	16	 
	6.4 Change in Date or Form of Distribution
	 	 	17	 
	6.5 Transition Elections
	 	 	18	 
	6.6 Designation of Beneficiaries
	 	 	18	 
	6.7 Change of Beneficiary Designation
	 	 	18	 
	6.8 No Beneficiary Designation
	 	 	18	 
	6.9 Withdrawals for Unforeseeable Emergency
	 	 	19	 
	6.10 Withholding
	 	 	19	 
	 
	 	 	 	 
	ARTICLE VII
	 	 	20	 
	 
	 	 	 	 
	ADMINISTRATION
	 	 	20	 
	7.1 Committee
	 	 	20	 
	7.2 General Powers of Administration
	 	 	20	 
	7.3 Indemnification of Committee
	 	 	21	 
	 
	 	 	 	 
	ARTICLE VIII
	 	 	22	 
	 
	 	 	 	 
	DETERMINATION OF BENEFITS, CLAIMS PROCEDURE AND ADMINISTRATION
	 	 	22	 
	8.1 Claims
	 	 	22	 
	8.2 Claim Decision
	 	 	22	 
	8.3 Request for Review of a Denied Claim
	 	 	23	 
	8.4 Review of Decision
	 	 	23	 
	8.5 Discretionary Authority
	 	 	24	 
	 
	 	 	 	 
	ARTICLE IX
	 	 	25	 
	 
	 	 	 	 
	AMENDMENT AND TERMINATION
	 	 	25	 
	9.1 Power to Amend or Terminate
	 	 	25	 
	9.2 Distribution Upon Plan Termination
	 	 	25	 
	 
	 	 	 	 
	ARTICLE X
	 	 	27	 
	 
	 	 	 	 
	 MISCELLANEOUS
	 	 	27	 
	10.1 Plan Not a Contract of Employment
	 	 	27	 
	10.2 Non-Assignability of Benefits
	 	 	27	 
	10.3 Severability
	 	 	27	 
	10.4 Governing Laws
	 	 	27	 
	10.5 Binding Effect
	 	 	27	 
	10.6 Entire Agreement
	 	 	27	 
	10.7 No Guaranty of Tax Consequences
	 	 	28	 

 ii

 

 

INVACARE CORPORATION

DEFERRED COMPENSATION PLUS PLAN

(Effective January 1, 2005)

ARTICLE I

INTRODUCTION

          1.1 Name of Plan.

          Invacare Corporation (the “Company”) hereby adopts the Invacare Corporation Deferred
Compensation Plus Plan (the “Plan”).

          1.2 Purposes of Plan.

          The purposes of the Plan are to provide deferred compensation for a select group of management
or highly compensated Employees and to provide eligible Employees the opportunity to defer receipt
of a portion of Base Salary, Bonus Compensation and/or other compensation.

          1.3 “Top Hat” Pension Benefit Plan.

          The Plan is an “employee pension benefit plan” within the meaning of ERISA Section 3(2). The
Plan is maintained, however, for a select group of management or highly compensated employees and,
therefore, is exempt from Parts 2, 3 and 4 of Title 1 of ERISA. The Plan is not intended to qualify
under Code Section 401(a).

          1.4 Plan Unfunded.

          The Plan is unfunded. All benefits will be paid from the general assets of the Company, which
will continue to be subject to the claims of the Company’s creditors. No amounts will be set aside
for the benefit of Plan Participants or their Beneficiaries.

          1.5 Effective Date.

          The Company maintains the Invacare Corporation 401(k) Plus Benefit Equalization Plan (“Prior
Plan”) which relates to certain deferred compensation amounts which were deferred, earned and
vested on or prior to December 31, 2004, plus earnings and losses attributable thereto. Such
amounts remain subject to all terms and provisions of the Prior Plan which are not intended to be
modified by the terms hereof, or otherwise materially modified, so as to allow such amounts to be
exempt from Code Section 409A.

          The Company now establishes the Invacare Corporation Deferred Compensation Plus Plan,
effective January 1, 2005, which relates to (i) amounts deferred after December 31, 2004, and (ii)
any amounts previously deferred under the Prior Plan but which were not vested prior to January 1,
2005 (all liabilities with respect to such amounts being hereby transferred to this Plan), plus
earnings and losses attributable thereto. The Plan is effective as of the Effective Date;
provided, however, that in general this document reflects the provisions of the Plan in effect for
periods on and after January 1, 2009. For the period between the Effective Date and

1

 

January 1, 2009, 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.

          1.6 Administration.

          The Plan shall be administered by the Committee or its delegates, as set forth in Section 7.1.

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 bookkeeping account or
accounts maintained by the Company to reflect the Participant’s Base
Salary Deferrals, Bonus Deferrals, Matching Contributions, IQC
Contributions, Discretionary Contributions and Prior Plan Unvested
Amounts, together with all earnings, gains and losses thereon.
Accounts shall be further denominated as Retirement Accounts or
In-Service Distribution Accounts.
	 
	 	(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 the base rate of cash
compensation, including commissions, paid by the Company to or for the
benefit of a Participant for services rendered or labor performed while
a Participant, including base pay a Participant could have received in
cash in lieu of (i) deferrals pursuant to Section 4.1 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.
	 
	 	(d)	 	“Base Salary Deferral” means the amount of a
Participant’s Base Salary which the Participant elects to have withheld
hereunder and credited to his Account pursuant to Section 4.1.
	 
	 	(e)	 	“Beneficiary” means the person or persons
designated by the Participant in accordance with Section 6.6 or, in the
absence of an effective designation, the person or entity described in
Section 6.8.
	 
	 	(f)	 	“Board” means the Board of Directors of the Company.
	 
	 	(g)	 	“Bonus Compensation” means the amount that is
awarded to a Participant for a Plan Year under any bonus arrangement
maintained by the Company and is “performance-based compensation” under
Code Section 409A.
	 
	 	(h)	 	“Bonus Deferral” means the amount of a
Participant’s Bonus Compensation which the Participant elects to have
withheld hereunder and credited to his Account pursuant to Section 4.1.

3

 

	 	(i)	 	“Change of Control” means the first time on
which, after the Effective Date:

	 	(i)	 	There is a report filed on
Schedule 13D or Schedule 14D-1 (or any successor schedule,
form, or report), each as adopted under the Securities Exchange
Act of 1934, as amended, disclosing the acquisition, in a
transaction or series of transactions, by any person (as the
term “person” is used in Section 13(d) and Section 14(d)(2) of
the Securities Exchange Act of 1934, as amended), other than
(1) A. Malachi Mixon and/or any Affiliate of A. Malachi Mixon,
(2) Invacare or any of its subsidiaries, (3) any employee
benefit plan or employee stock ownership plan or related trust
of Invacare or any of its subsidiaries, or (4) any person or
entity organized, appointed or established by Invacare or any
of its subsidiaries for or pursuant to the terms of any such
plan or trust, of such number of shares of Invacare as entitles
that person to exercise 30% or more of the voting power of
Invacare in the election of Directors; or
	 
	 	(ii)	 	During any period of 24
consecutive calendar months, individuals who at the beginning
of such period constitute the Directors of Invacare cease for
any reason to constitute at least a majority of the Directors
of Invacare unless the election of each new Director of
Invacare (over such period) was approved or recommended by the
vote of at least two-thirds of the Directors of Invacare then
still in office who were Directors of Invacare at the beginning
of the period; or
	 
	 	(iii)	 	There is a merger,
consolidation, combination (as defined in Section 1701.01(Q),
Ohio Revised Code), majority share acquisition (as defined in
Section 1701.01(R), Ohio Revised Code), or control share
acquisition (as defined in Section 1701.01(Z)(1), Ohio Revised
Code, or in Invacare’s Articles of Incorporation) involving
Invacare and, as a result of which, the holders of shares of
Invacare prior to the transaction become, by reason of the
transaction, the holders of such number of shares of the
surviving or acquiring corporation or other entity as entitles
them to exercise less than fifty percent (50%) of the voting
power of the surviving or acquiring corporation or other entity
in the election of Directors; or
	 
	 	(iv)	 	There is a sale, lease,
exchange, or other transfer (in one transaction or a series of
related transactions) of all or substantially all of the assets
of Invacare, but only if the

4

 

	 	 	 	transferee of the assets in such transaction is not a
subsidiary of Invacare; or

	 	(v)	 	The shareholders of Invacare
approve any plan or proposal for the liquidation or dissolution
of Invacare, but only if the transferee of the assets of
Invacare in such liquidation or dissolution is not a
subsidiary of Invacare.

	 	 	 	If an event described in any of Clauses (a), (b), (c), (d), and (e)
occurs, a Change of Control shall be deemed to have occurred for all
purposes of this Agreement and that Change of Control shall be
irrevocable.
	 
	 	(j)	 	“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.
	 
	 	(k)	 	“Committee” means the administrative committee
named to administer the Plan pursuant to Section 7.1.
	 
	 	(l)	 	“Company” means Invacare Corporation and any
successor thereto.
	 
	 	(m)	 	“Deferral Period” means the period of time for
which a Participant elects to defer receipt of the Base Salary
Deferrals and Bonus Deferrals credited to such Participant’s In-Service
Account(s).
	 
	 	(n)	 	“Directors” means the Board of Directors of the
Company.
	 
	 	(o)	 	“Disability” means, with respect to any
Participant, that such Participant is, by reason of any medically
determinable physical or mental impairment which can be expected to
result in death or can be expected to last for a continuous period of
not less than 12 months, either (i) unable to engage in any substantial
gainful activity, or (ii) receiving income replacement benefits for a
period of not less than 3 months under an accident and health plan
covering employees of the Company. Without limitation, for purpose of
this Plan, a Participant will be deemed to have a Disability if the
Participant is determined to be totally disabled by the Social Security
Administration, or is determined to be disabled in accordance with a
disability insurance program of the Company or any Affiliate (provided
that the definition of disability applied under such disability
insurance program complies with the requirements of Section 409A).

5

 

	 	(p)	 	“Discretionary Contribution” means the
Company’s contribution, if any, made pursuant to Section 4.6.
	 
	 	(q)	 	“Effective Date” means January 1, 2005, except
where a different date is specifically set forth.
	 
	 	(r)	 	“Employee” means any common-law employee of the
Company or any Affiliate.
	 
	 	(s)	 	“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.
	 
	 	(t)	 	“401(k) Plan” means the Invacare Retirement
Savings Plan, as in effect on January 1, 2005, and as amended from time
to time thereafter.
	 
	 	(u)	 	“In-Service Distribution Accounts” means an
Account(s) to which a Participant’s Base Salary Deferrals and Bonus
Deferrals are credited pursuant to the terms of the Plan and the
election of a Participant. Each of a Participant’s In-Service
Distribution Accounts is distributable in a future calendar year which
is not less than two (2) years following the end of the Plan Year in
which the deferral of compensation was made and which is selected by
the Participant pursuant to Section 4.1 hereof. A Participant may have
up to two (2) In-Service Distribution Accounts under the Plan at any
one time.
	 
	 	(v)	 	“IQC Contributions” means the amount, if any,
of Invacare Quarterly Contributions made by the Company under the
401(k) Plan for a Plan Year.
	 
	 	(w)	 	“Key Employee” means a “specified employee”
within the meaning of Code Section 409A(a)(2)(B)(i). For purposes of
this Plan, “Key Employees” will be identified on the basis of the 12
month period ending each December 31 and each such identification will
apply during the 12 month period commencing on the succeeding April 1.
	 
	 	(x)	 	“Make Whole IQC Contribution” means a
contribution equal to the Invacare Quarterly Contribution that would
have been made to the 401(k) Plan for a Participant but for the
limitation on compensation contained in Code Section 401(a)(17).
	 
	 	(y)	 	“Matching Contribution” means the matching
amount, as determined by the Company each year, that would be credited
to the Participant’s Account based on Base Salary Deferrals and

6

 

	 	 	 	Bonus Deferrals under the 401(k) Plan if such deferrals had been
deferred by the Participant into the 401(k) Plan (but without regard
to the limitations of Code Sections 401(a)(17), 415 or other relevant
limitations under the Code), reduced by the actual matching
contributions made on deferrals under the 401(k) Plan. Any Matching
Contribution shall be credited by the Company to the Retirement
Account of each Participant at such time or times as the Company
determines.
	 
	 	(z)	 	“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.
	 
	 	(aa)	 	“Participation and Deferral Election Form”
means the written agreement pursuant to which the Participant elects
the amount of his Base Salary and/or his Bonus Compensation to be
deferred pursuant to the Plan, the Account to which such deferrals are
to be credited, the Deferral Period, if applicable, the deemed
investment of amounts deferred and the time and form of payment of such
amounts and such other matters as the Committee shall determine from
time to time.
	 
	 	(bb)	 	“Plan” means the Invacare Corporation Deferred
Compensation Plus Plan, as in effect on the Effective Date, and as
amended from time to time hereafter.
	 
	 	(cc)	 	“Plan Year” means the 12-consecutive month
period commencing January 1 of each year ending on the following
December 31.
	 
	 	(dd)	 	“Prior Plan Unvested Amounts” means any
unvested amount credited to a Participant’s Account under the Invacare
Corporation 401(k) Benefit Equalization Plus Plan as of December 31,
2004 which is transferred to the Participant’s Retirement Account under
this Plan on or after the Effective Date.
	 
	 	(ee)	 	“Retirement” means a Participant’s Termination
of Employment after the attainment of age fifty-five (55) and
completion of ten (10) Years of Service or more.
	 
	 	(ff)	 	“Retirement Account” means an Account to which
Base Salary Deferrals and Bonus Deferrals are credited pursuant to the
terms of the Plan and the election of a Participant. A Participant’s
Retirement Account shall also be credited with any Matching
Contributions, Make Whole IQC Contributions, Profit Sharing
Contributions and Discretionary Contributions creditable to a
Participant under the terms of the Plan. A Participant’s Retirement
Account is generally payable upon his Retirement.

7

 

	 	(gg)	 	“Termination of Employment” means the
separation from service of a Participant 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 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

8

 

determining Affiliates for purposes of applying this definition of
Termination of Employment, the usual “at least 80%” standard in Code
Section 1563(a)(1), (2) and (3) 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 Code Sections 414(b) and 414(c).

	 	(hh)	 	“Unforeseeable Emergency” means a severe
financial hardship to a Participant within the meaning of Code Section
409A resulting from: (i) an illness or accident of the Member or the
Member’s spouse or dependent (as defined in Code Section 152 without
regard to Code Sections 152(b)(1), (b)(2) and (d)(1)(B)); (ii) loss of
the Participant’s property due to casualty; or (iii) other similar
extraordinary and unforeseeable circumstances arising as a result of
events beyond the control of the Participant.
	 
	 	(ii)	 	“Valuation Date” means each business day.
	 
	 	(jj)	 	“Years of Service” shall have the same meaning
as in the 401(k) Plan.

          2.2 Number and Gender.

          Wherever appropriate herein, words used in the singular shall be considered to include the
plural and words used in the plural shall be considered to include the singular. The masculine
gender, where appearing in the Plan, shall be deemed to include the feminine gender.

          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 are (a) subject to the income tax laws of the
United States, (b) members of a select group of highly compensated or management Employees, and (c)
selected by the Committee or its delegates, in its sole discretion, as Participants. The Committee
shall notify each Participant of his selection as a Participant. An Employee who satisfies the
eligibility requirements set forth in subsections (a) and (b) shall remain eligible to continue
participation in the Plan for each Plan Year following his selection by the Committee as a
Participant unless the Committee shall determine otherwise.

          3.2 Commencement of Participation.

          Except as provided in the following sentence, an Employee shall become a Participant effective
as of the first day of the Plan Year following the date on which his Participation and Deferral
Election Form becomes effective.

          3.3 Cessation of Active Participation.

          Notwithstanding any provision herein to the contrary, an individual who has become a
Participant in the Plan shall cease to be a Participant hereunder, effective as of such date as may
be designated by the Committee, provided that for purposes of ceasing Base Salary Deferrals and
Bonus Deferrals, such date may only occur as of the end of a Plan Year, except to the extent
otherwise permitted under Code Section 409A. Any such Committee action shall be communicated to
such Participant prior to the effective date of such action.

          3.4 Protective Measures.

          If the Administrator determines, in its sole discretion, that a Participant is not, or may not
be, a member of a “select group of management or highly compensated employees” within the meaning
of Section 201(2), 301(a)(3), 401(a)(1) or 4021(b)(6) of ERISA, then the Administrator may, in its
sole discretion, terminate the Participant’s participation in the Plan as of the last day of the
then current Plan Year. Such Participant’s deferral election(s) shall also be cancelled as of the
last day of such Plan Year. Such termination of participation shall not impact the time and form
of payment of the amounts credited to such Participant’s Accounts, which will be distributed by the
Company in accordance with the other provisions hereof.

10

 

ARTICLE IV

CONTRIBUTIONS AND VESTING

          4.1 Deferrals by Participants.

          No later than the last day of the Plan Year immediately preceding the Plan Year to which the
Participation and Deferral Election Form relates, a Participant who elects to make Base Salary
Deferrals must file with the Committee a Participation and Deferral Election Form pursuant to which
such Participant elects to make Base Salary Deferrals.

          A Participant must file a Participation and Deferral Election Form to make Bonus Deferrals at
a time prescribed by the Committee which time shall be not later than six (6) months before the end
of the 12 month period over which the services upon which the Bonus Compensation is based are
performed, provided that in no event may an election to defer be made after such Bonus Compensation
to which the Bonus Deferral relates has become readily ascertainable.

          A deferral election will be irrevocable as of the last permissible date for making such
election, as described in this Section 4.1.

          A Participant shall be entitled to defer a whole percent of his Base Salary or Bonus
Compensation, subject to a maximum deferral of fifty percent (50%) of Base Salary and one hundred
percent (100%) of Bonus Compensation.

          At the time a Participant completes a Participation and Deferral Election Form, he shall elect
to have his Base Salary Deferrals and Bonus Deferrals credited to a Retirement Account or an
In-Service Distribution Account.

          An election to have amounts credited to an In-Service Distribution Account shall specify the
Deferral Period applicable to such amounts by specifying the calendar year in which payment of
amounts in such In-Service Distribution Account shall be made or shall commence to be made in
accordance with Section 6.1, which shall be no sooner than two full years following the Plan Year
to which such deferrals relate and whether the distribution is to be paid in a lump sum or in
annual installments amortized over a specified period of years not to exceed five (5) years in
accordance with Section 6.3(b). A Participant shall be permitted a maximum of two In-Service
Distribution Accounts in existence at any time. Once a Participant has two In-Service Distribution
Accounts established, he may make further In-Service Distribution elections only if the amount
subject to such further elections can be properly allocated to an existing In-Service Distribution
Account. In the event an election to have amounts credited to an In-Service Distribution Account
fails to specify a valid Deferral Period, then any amounts subject to such election shall be
credited to an In-Service Distribution Account with a Deferral Period of two full years following
the Plan Year to which the deferrals relate. If the Participant already has two existing
In-Service Distribution Accounts, the amounts subject to the election shall be credited to the
Account that has a remaining Deferral Period that is closest to but not less than two years.

11

 

          Base Salary Deferrals will be credited to the Account of each Participant as soon as
practicable following each pay date, if and to the extent that the Participant earned such Base
Salary as an Employee for such pay date. Bonus Deferrals will be credited to the Account of each
Participant not later than the last day of the month in which such Bonus Compensation otherwise
would have been paid to the Participant in cash, provided that if the Participant has incurred a
Termination of Employment at the time the Bonus Compensation would otherwise have been paid, the
Bonus Deferral shall be immediately distributed from the Plan if the Participant has received full
distribution of his Account; otherwise, it shall be credited to the Plan and paid in accordance
with the timing and form of payment otherwise applicable to such Participant’s Retirement Account.

          4.2 Effective Date of Participation and Deferral Election Form.

          Except as provided below with respect to a new Participant, a Participant’s Participation and
Deferral Election Form shall become effective on the first day of the Plan Year to which it
relates. If an Employee fails to timely complete a Participation and Deferral Election Form in
accordance with Section 4.1, the Employee shall be deemed to have elected not to make Base Salary
Deferrals and/or Bonus Deferrals for such Plan Year.

          4.3 Modification or Revocation of Election by Participant.

          Subject to Section 6.10, a Participant may not prospectively change the amount of his Base
Salary Deferrals or Bonus Deferrals during a Plan Year. Unless required or permitted by law, under
no circumstances may a Participant’s Participation and Deferral Election Form be made, modified or
revoked retroactively.

          4.4 Matching Contributions.

          Each Participant who elects to make Base Salary Deferrals and/or Bonus Deferrals to the Plan
and who has completed at least six (6) months of service with the Company or any Affiliate will
receive Matching Contributions in accordance with the applicable matching contribution percentage
formula provided under the 401(k) Plan. Matching Contributions will be credited to the
Participant’s Retirement Account at such time or times as the Company shall determine.

          4.5 Make Whole IQC Contributions.

          Each year, the Retirement Account of each eligible Participant shall be credited with the Make
Whole IQC Contribution, if any, to which he is entitled under Section 2.1(x).

          4.6 Discretionary Contributions.

          For each Plan Year, the Retirement Account of each eligible Participant shall be credited with
such Discretionary Contribution, if any, as is determined by the Company for such Plan Year at such
time or times as the Company shall determine.

12

 

          4.7 Suspension of Contributions.

          Anything contained herein to the contrary notwithstanding, if a Participant receives a
distribution from the Plan due to an Unforeseeable Emergency, any existing deferral election(s)
made under Section 4.1 shall be cancelled. Any future deferral election made under Section 4.1
shall apply only to Base Salary or Bonus Compensation that would otherwise be payable at least six
(6) months after receipt of such distribution. If required by the terms of the 401(k) Plan, if a
Participant receives a hardship distribution under the 401(k) Plan, he shall have any existing
deferral election(s) made under Section 4.1 cancelled. Any future deferral election made under
Section 4.1 shall apply only to Base Salary or Bonus Compensation that would otherwise be payable
at least six (6) months after receipt of such distribution.

          4.8 Vesting.

          A Participant shall be 100% vested at all times in that portion of his Account which is
attributable to Base Salary Deferrals and Bonus Deferrals. Matching Contributions, Make Whole IQC
Contributions, Discretionary Contributions and Prior Plan Unvested Amounts shall vest in accordance
with the vesting schedule contained in the 401(k) Plan. Notwithstanding the foregoing, all
Matching Contributions, Make Whole IQC Contributions, Profit Sharing Contributions and
Discretionary Contributions shall be 100% vested immediately upon a Change in Control or a
Participant’s Disability. Any provisions of the Plan relating to the distribution of a
Participant’s Account shall mean only the vested portion of such Account. Since the Plan is
unfunded, the portion of a Participant’s Account which is not vested and therefore not distributed
with the vested portion of his Account shall remain property of the Company and shall not be
allocated to the Accounts of other Participants or otherwise inure to their benefit.

          4.9 Suspension and Forfeiture Following Accelerated Distribution of
Grandfathered Deferrals.

          If a Participant elects to receive an accelerated distribution from the Participant’s account
under the Invacare Corporation 401(k) Plus Benefit Equalization Plan, he shall forfeit the
unvested portion of his Account under the Plan and shall be suspended from making future deferral
elections under Section 4.1 for the two (2) consecutive Plan Years which begin on or after the date
of such distribution, although any existing deferral election(s) under Section 4.1 for the Plan
Year in which such accelerated distribution is taken shall remain in force.

13

 

ARTICLE V

ACCOUNTS

          5.1 Establishment of Bookkeeping Accounts.

          A separate bookkeeping Account or Accounts shall be maintained for each Participant. Such
Account(s) shall be credited with the Base Salary Deferrals and Bonus Deferrals made by the
Participant pursuant to Section 4.1, Matching Contributions made by the Company pursuant to Section
4.4, Make Whole IQC Contributions made pursuant to Section 4.5, Discretionary Contributions made
pursuant to Section 4.6 and any Prior Plan Unvested Amount credited (or charged, as the case may
be) with the hypothetical investment results determined pursuant to Section 5.3, and charged with
distributions made to or with respect to a Participant.

          5.2 Subaccounts.

          Within each Participant’s bookkeeping Account, separate subaccounts shall be maintained to the
extent necessary or desirable for the administration of the Plan. At a minimum, a Retirement
Account shall be maintained for distributions to be made upon a Participant’s Retirement or other
Termination of Employment and an In-Service Distribution Account shall be maintained for
distributions to be made upon expiration of each Deferral Period selected by the Participant under
Section 4.1.

          5.3 Earnings Elections.

          Amounts credited to a Participant’s Account shall be credited or charged with earnings and
losses based on hypothetical investments elected by the Participant. A Participant may elect
different investment allocations for new contributions and existing Account balances. Only whole
percentages may be elected, the minimum percentage for any allocation is 1%, and the total
elections must allocate 100% of all new contributions and 100% of all existing Account balances.
Investment elections may be changed daily, in accordance with procedures established by the
Committee. The hypothetical investment alternatives and the procedures relating to the election of
such investments, other than those set forth in this Section 5.3, shall be determined by the
Committee from time to time. A Participant’s Account shall be adjusted as of each Valuation Date
to reflect investment gains and losses.

          Notwithstanding the foregoing provisions of this Section 5.3, if investment in Invacare stock
is permitted hereunder, the Company in its sole discretion, shall have the authority to place such
restrictions upon the investment directions of any person who is subject to Section 16(b) of the
Securities Exchange Act of 1934 as amended (“Insider”) as shall be appropriate to comply with such
section. Such restrictions shall include, but shall not be limited to the following: Insiders
shall be permitted to submit investment directions relating to Invacare stock only on a
“semi-annual date” which is no less than six (6) months after the date of the most recent
investment direction received from such Insider relating to Invacare Stock. For purposes of this
Section 5.3, the term “semi-annual date” shall mean a date which is within the period that begins
the third business day following the date on which the Company’s first fiscal quarter and

14

 

third fiscal quarter summary statements of sales and earnings shall be released and which ends
on the twelfth business day following such release date.

          5.4 Hypothetical Accounts and Creditor Status of Participants.

          The Accounts established under this Article V shall be hypothetical in nature and shall be
maintained for bookkeeping purposes only. Neither the Plan nor any of the Accounts (or
subaccounts) 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 right of any
person to receive one or more payments under the Plan shall be an unsecured claim against the
general assets of the Company. Any liability of the Company to any Participant, former
Participant, or Beneficiary with respect to a right to payment shall be based solely upon
contractual obligations created by the Plan. Neither the Company, the Board, nor any other person
shall be deemed to be a trustee of any amounts to be paid under the Plan. Except as provided in
Section 5.5, nothing contained in the Plan, and no action taken pursuant to its provisions, shall
create or be construed to create a trust of any kind, or a fiduciary relationship, between the
Company and a Participant, former Participant, Beneficiary, or any other person.

          5.5 Investments.

          The Company may, in its sole discretion, acquire insurance policies, annuities or other
financial vehicles for the purpose of providing future assets to the Company to meet its
anticipated liabilities under the Plan. Such policies, annuities, or other acquired assets, shall
at all times be and remain unrestricted general property and assets of the Company or property of a
trust established pursuant to this Plan. Participants and Beneficiaries shall have no rights,
other than as general creditors, with respect to any such policies, annuities or other acquired
assets. 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.

15

 

ARTICLE VI

PAYMENT OF ACCOUNT

          6.1 Timing of Distribution of Accounts.

          Distribution of a Participant’s entire Account (including any undistributed In-Service
Distribution Accounts) shall be made or shall commence to be made as soon as practicable, but no
later than 90 days, following the Participant’s Retirement or other Termination of Employment or
death. Prior to a Participant’s Termination of Employment, distribution of a Participant’s
In-Service Distribution Account(s) shall be made or shall commence to be made as soon as
practicable after, but no later than 90 days following the expiration of the Deferral Period
selected by the Participant for such Account(s). Notwithstanding the foregoing, if a Participant
is a Key Employee, in the event of distribution upon Termination of Employment (for reasons other
than death), actual payment of the Participant’s Accounts shall not occur prior to the first day of
the seventh month following the Termination of Employment.

          6.2 Adjustment for Investment Gains and Losses Upon a Distribution.

          For purposes of any distributions hereunder, the value of a Participant’s Account shall be
determined as of the Valuation Date immediately preceding the time such distribution is to be made.

          6.3 Form of Payment.

	 	(a)	 	In general, all distributions hereunder shall
be made in the form of a single lump sum payment. Notwithstanding the
foregoing, at the time a Participant makes his first deferral election
hereunder, a Participant may elect that if his Account is payable by
reason of Retirement, payment shall be made in a lump sum or in annual
installments amortized over a period of years not to exceed fifteen
(15) years. Gains and losses on the unpaid balance shall continue to be
credited or charged to the Account in accordance with the provisions of
Section 5.3. Each annual installment shall be equal to the value of
the Account as of the Valuation Date immediately preceding the date of
payment divided by the number of installments remaining.
	 
	 	(b)	 	Except as provided below, a Participant’s
In-Service Distribution Account(s) shall be paid in one of the
following forms as elected by the Participant:

	 	(i)	 	A lump sum amount which is
equal to the applicable Account balance; or

16

 

	 	(ii)	 	Annual installments amortized
over a period of years not to exceed five (5) years. Gains and
losses on the unpaid balance shall continue to be credited or
charged to the Account in accordance with the provisions of
Section 5.3. Each annual installment shall be equal to the
value of the Account as of the Valuation Date immediately
preceding the date of payment divided by the number of
installments remaining.

          Notwithstanding the form elected, if at the time of distribution by reason of Termination of
Employment, a Participant’s total Account value under the Plan and all similar arrangements that
would constitute a single nonqualified deferred compensation plan as defined under Treasury
Regulation 1.409A-1(c)(2) is not more than the amount specified in Code Section 402(g)(1)(B), as
adjusted from time to time, then the benefit shall be paid in a single lump sum as soon as
practicable but no later than 90 days following the distribution event; provided, however, that if
a Participant is a Key Employee, payment of the Participant’s Accounts for reasons other than death
shall not occur prior to the first day of the seventh month following the Termination of
Employment.

          6.4 Change in Date or Form of Distribution.

          In general, the form of payment elected by a Participant with respect to his Retirement
Account shall be determined by the Participant’s election made at the time he makes his initial
deferral election hereunder. Furthermore, the time and form of payment of any In-Service
Distribution Account shall be determined by the Participant’s election made at the time he first
elects such In-Service Distribution Account. Notwithstanding the foregoing, a Participant may
elect one time to change the form of payment of his Retirement Account or the time and form of
payment of his In-Service Distribution Account. Any such revised election shall be made by
submitting such election in the form determined by the Committee and shall be 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 or
Unforeseeable Emergency) for a period of not less than five (5) years
from the date such payment would otherwise have been paid; and
	 
	 	(c)	 	any subsequent election affecting a
distribution at a specified time (or pursuant to a fixed schedule) may
not be made less than 12 months before the date the payment is
scheduled to be paid.

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

17

 

          6.5 Transition Elections.

          Notwithstanding Sections 4.3, 6.3 and 6.4 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
shall be permitted to make such further elections to change the time and form of payment as are
permitted by the Company under Section 6.4 above.

          6.6 Designation of Beneficiaries.

          Each Participant shall have the right, at any time, to designate one (1) or more persons or an
entity as Beneficiary (both primary as well as secondary) to whom benefits under this Plan shall be
paid in the event of a Participant’s death prior to complete distribution of the Participant’s
Account. Each Beneficiary designation shall be in such form as prescribed by the Committee and will
be effective only when filed with the Committee during the Participant’s lifetime. Designation by a
married Participant of a Beneficiary other than the Participant’s spouse shall not be effective
unless the spouse executes a written consent that acknowledges the effect of the designation and is
witnessed by a notary public, or the consent cannot be obtained because the spouse cannot be
located.

          6.7 Change of Beneficiary Designation.

          Except as provided below, any nonspousal designation of Beneficiary may be changed by a
Participant without the consent of such Beneficiary by the filing of a new designation with the
Committee. The filing of a new designation shall cancel all designations previously filed.

          6.8 No Beneficiary Designation.

          If any Participant fails to designate a Beneficiary in the manner provided above, or if the
Beneficiary designated by a deceased Participant dies before the Participant or before complete
distribution of the Participant’s benefits, the Participant’s Beneficiary shall be the person in
the first of the following classes in which there is a survivor:

	 	(a)	 	The Participant’s surviving spouse;
	 
	 	(b)	 	The Participant’s children in equal shares,
except that if any of the children predeceases the Participant but
leaves issue surviving, then such issue shall take by right of
representation the share the parent would have taken if living;
	 
	 	(c)	 	The Participant’s parents;
	 
	 	(d)	 	The Participant’s estate.

18

 

          6.9 Withdrawals for Unforeseeable Emergency.

          A Participant may apply in writing to the Committee for, and the Committee may permit, a
withdrawal of all or any part of a Participant’s Account, together with all earnings, gains and
losses thereon, if the Committee, in its sole discretion, determines that the Participant has
incurred an Unforeseeable Emergency. The amount that may be withdrawn shall be limited to the
amount reasonably necessary to relieve the Unforeseeable Emergency upon which the request is based,
plus the federal and state taxes due on the withdrawal, as determined by the Committee. The
Committee may require a Participant who requests a withdrawal on account of an Unforeseeable
Emergency to submit such evidence as the Committee, in its sole discretion, deems necessary or
appropriate to substantiate the circumstances upon which the request is based and the
unavailability of other resources with which the Participant may relieve the Unforeseeable
Emergency.

          6.10 Withholding.

          All distributions shall be subject to legally required income and employment tax withholding.
All deferrals shall be determined net of any required tax or other withholdings (including, without
limitation, withholdings for FICA tax).

19

 

ARTICLE VII

ADMINISTRATION

          7.1 Committee.

          The Plan shall be administered by a Committee, which shall include the Senior Vice President
of Human Resources, the Chief Financial Officer and the Senior Vice President and General Counsel,
or the respective successors to those positions. The Committee shall be responsible for the general
operation and administration of the Plan and for carrying out the provisions thereof. The Committee
may delegate to others certain aspects of the management and operational responsibilities of the
Plan including the employment of advisors and the delegation of ministerial duties to qualified
individuals, provided that such delegation is in writing. No member of the Committee who is a
Participant shall participate in any matter relating to his status as a Participant or his rights
or entitlement to benefits as a Participant.

          7.2 General Powers of Administration.

          The Committee shall be the Plan Administrator under ERISA (the “Administrator”). The
Administrator will be responsible for the general administration of the Plan and will have all
powers as may be necessary to carry out the provisions of the Plan and may, from time to time,
establish rules for the administration of the Plan and the transaction of the Plan’s business. In
addition to any powers, rights and duties set forth elsewhere in this Plan, it will have the
following powers and duties:

	 	(a)	 	To enact rules, regulations, and procedures and
to prescribe the use of such forms as it deems advisable;
	 
	 	(b)	 	To appoint or employ agents, attorneys,
actuaries, accountants, assistants or other persons (who may also be
Participants in this Plan or be employed by or represent the Company)
at the expense of the Company, as it deems necessary to keep its
records or to assist it in taking any other action authorized or
required under the Plan;
	 
	 	(c)	 	To interpret the Plan, and to resolve
ambiguities, inconsistencies and omissions, to determine any question
of fact, to determine the right to benefits of, and the amount of
benefits, if any, payable to, any person in accordance with the
provisions of the Plan and resolve all questions arising under the
Plan;
	 
	 	(d)	 	To administer the Plan in accordance with its
terms and any rules and regulations it establishes; and
	 
	 	(e)	 	To maintain records concerning the Plan as it
deems sufficient to prepare reports, returns and other information
required by the Plan or by law; and

20

 

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

          Any decision, interpretation or other action made or taken by the Administrator arising out of
or in connection with the Plan, will be within the absolute discretion of the Administrator, and
will be final, binding and conclusive on the Company, and all Participants and Beneficiaries and
their respective heirs, executors, administrators, successors and assigns. The Administrator’s
determinations under the Plan need not be uniform, and may be made selectively among Participants,
whether or not they are similarly situated.

          7.3 Indemnification of Committee.

          The Company shall indemnify the members of the Committee against any and all claims, losses,
damages, expenses, including attorney’s fees, incurred by them, and any liability, including any
amounts paid in settlement with their approval, arising from their action or failure to act, except
when the same is judicially determined to be attributable to their gross negligence or willful
misconduct.

21

 

ARTICLE VIII

DETERMINATION OF BENEFITS, CLAIMS PROCEDURE AND ADMINISTRATION

          8.1 Claims.

          A Participant, Beneficiary or other person who believes that he or she is being denied a
benefit to which he or she is entitled (hereinafter referred to as “Claimant”), or his or her duly
authorized representative, may file a written request for such benefit with the Committee setting
forth his or her claim. The request must be addressed to the Committee at the Company at its then
principal place of business.

          8.2 Claim Decision.

          Upon receipt of a claim, the Committee shall advise the Claimant that a reply will be
forthcoming within a reasonable period of time, but ordinarily not later than ninety days, and
shall, in fact, deliver such reply within such period. However, the Committee may extend the reply
period for an additional ninety days for reasonable cause. If the reply period will be extended,
the Committee shall advise the Claimant in writing during the initial 90-day period indicating the
special circumstances requiring an extension and the date by which the Committee expects to render
the benefit determination.

          If the claim is denied in whole or in part, the Committee will render a written opinion, using
language calculated to be understood by the Claimant, setting forth:

	 	(a)	 	the specific reason or reasons for the denial;
	 
	 	(b)	 	the specific references to pertinent Plan
provisions on which the denial is based;
	 
	 	(c)	 	a description of any additional material or
information necessary for the Claimant to perfect the claim and an
explanation as to why such material or such information is necessary;
	 
	 	(d)	 	appropriate information as to the steps to be
taken if the Claimant wishes to submit the claim for review, including
a statement of the Claimant’s right to bring a civil action under
Section 502(a) of ERISA following an adverse benefit determination on
review; and
	 
	 	(e)	 	the time limits for requesting a review of the
denial under Section 8.3 and for the actual review of the denial under
Section 8.4.

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

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          8.3 Request for Review of a Denied Claim.

          Within sixty days after the receipt by the Claimant of the written opinion described above,
the Claimant may request in writing that the Senior Vice President of Human Resources of the
Company (“Executive Officer”) review the Committee’s prior determination. Such request must be
addressed to the Executive Officer at the Company at its then principal place of business. The
Claimant or his or her duly authorized representative may submit written comments, documents,
records or other information relating to the denied claim, which information shall be considered in
the review under this Section without regard to whether such information was submitted or
considered in the initial benefit determination.

          The Claimant or his or her duly authorized representative shall be provided, upon request and
free of charge, reasonable access to, and copies of, all documents, records and other information
which (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.

          8.4 Review of Decision.

          Within a reasonable period of time, ordinarily not later than sixty days, after the Executive
Officer’s receipt of a request for review, it will review the Committee’s prior determination. If
special circumstances require that the sixty-day time period be extended, the Executive Officer
will so notify the Claimant within the initial 60-day period indicating the special circumstances
requiring an extension and the date by which the Executive Officer expects to render its decision
on review, which shall be as soon as possible but not later than 120 days after receipt of the
request for review. In the event that the Executive Officer extends the determination period on
review due to a Claimant’s failure to submit information necessary to decide a claim, the period
for making the benefit determination on review shall not take into account the period beginning on
the date on which notification of extension is sent to the Claimant and ending on the date on which
the Claimant responds to the request for additional information.

          Benefits under the Plan will be paid only if the Executive Officer decides in its discretion
that the Claimant is entitled to such benefits. The decision of the Executive Officer shall be
final and non-reviewable, unless found to be arbitrary and capricious by a court of competent
review. Such decision will be binding upon the Company and the Claimant. Without limiting the
foregoing, if the law provides that the Claimant may bring a legal action 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

23

 

Executive Officer, and has otherwise followed the application and review procedures of this
Plan.

          If the Executive Officer makes an adverse benefit determination on review, the Executive
Officer will render a written opinion, using language calculated to be understood by the Claimant,
setting forth:

	 	(a)	 	the specific reason or reasons for the denial;
	 
	 	(b)	 	the specific references to pertinent Plan
provisions on which the denial is based;
	 
	 	(c)	 	a statement that the Claimant is entitled to
receive, upon request and free of charge, reasonable access to, and
copies of, all documents, records and other information which (i) was
relied upon by the Executive Officer in making its decision, (ii) was
submitted, considered or generated in the course of the Executive
Officer making its decision, without regard to whether such instrument
was actually relied upon by the Executive Officer in making its
decision or (iii) demonstrates compliance by the Executive Officer with
its administrative processes and safeguards designed to ensure and to
verify that benefit claims determinations are made in accordance with
governing Plan documents, and that, where appropriate, the Plan
provisions have been applied consistently with respect to similarly
situated claimants; and
	 
	 	(d)	 	a statement of the Claimant’s right to bring a
civil action under Section 502(a) of ERISA following the adverse
benefit determination on such review.

          8.5 Discretionary Authority.

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

24

 

ARTICLE IX

AMENDMENT AND TERMINATION

          9.1 Power to Amend or Terminate.

          The Company reserves the right, by action of its Board in its sole discretion, to
retroactively or prospectively amend, modify or terminate this Plan at any time.

          9.2 Distribution Upon Plan Termination.

          In the event the Company terminates the Plan in the manner permitted under Section 9.1, no
liquidation and payment of benefits shall occur as a result of the termination; provided, however,
that subject to the provisions of Section 9.1, 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 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;

25

 

	 	(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.

          Notwithstanding the above, the Company may, in its discretion and pursuant to irrevocable
action, provide by amendment to liquidate and terminate the Plan where the termination and
liquidation occurs within the 30 days preceding or the 12 months following a “change in control
event” (as defined under Code Section 409A), provided that the Plan and all arrangements required
to be aggregated with the Plan under Code Section 409A are terminated and liquidated with respect
to each Participant who experiences the “change in control event,” and provided that under the
terms of the termination and liquidation all such Participants are required to receive all amounts
of compensation deferred under the Plan and all aggregated arrangements within 12 months of the
irrevocable amendment.

26

 

ARTICLE X

MISCELLANEOUS

          10.1 Plan Not a Contract of Employment.

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

          10.2 Non-Assignability of Benefits.

          No Participant, Beneficiary or distributee of benefits under the Plan shall have any power or
right to transfer, assign, anticipate, hypothecate or otherwise encumber any part or all of the
amounts payable hereunder, which are expressly declared to be unassignable and non-transferable.
Any such attempted assignment or transfer shall be void. No amount payable hereunder shall, prior
to actual payment thereof, be subject to seizure by any creditor of any such Participant,
Beneficiary or other distributee for the payment of any debt, judgment, or other obligation, by a
proceeding at law or in equity, nor transferable by operation of law in the event of the
bankruptcy, insolvency or death of such Participant, Beneficiary or other distributee hereunder.

          10.3 Severability.

          If any provision of this Plan shall be held illegal or invalid for any reason, said illegality
or invalidity shall not affect the remaining provisions hereof; instead, each provision shall be
fully severable and the Plan shall be construed and enforced as if said illegal or invalid
provision had never been included herein.

          10.4 Governing Laws.

          All provisions of the Plan shall be construed in accordance with the internal laws (but not
the choice of laws) of Ohio, except to the extent preempted by federal law.

          10.5 Binding Effect.

          This Plan shall be binding on each Participant and his heirs and legal representatives and on
the Company and its successors and assigns.

          10.6 Entire Agreement.

          This document and any amendments contain all the terms and provisions of the Plan and shall
constitute the entire Plan, any other alleged terms or provisions being of no effect. The Plan,
together with any Participation and Deferral Election Forms, constitute the entire agreement
between the parties with respect to the subject matter hereof.

27

 

          10.7 No Guaranty of Tax Consequences.

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

          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 addition to the general amendment rights of the
Company with respect to the Plan, the Company specifically retains the unilateral right (but not
the obligation) to make, prospectively or retroactively, any amendment to this Plan or any 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.  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
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.

28

 

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

	 	 	 	 	 	 	 
	 	 	INVACARE CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	/s/ Joseph S. Usaj	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Its
	 	SR VP Human Resources

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