2003 PERFORMANCE PLAN
The Invacare Corporation 2003 Performance Plan (the "Plan"), is
designed to foster the long-term growth and performance of the Company by:
enhancing the Company's ability to attract and retain highly qualified
employees, motivating employees to serve and promote the long-term interests
of the Company and its shareholders through stock ownership and
performance-based incentives, and strengthening the Company's ability to
attract, retain and incentivize highly qualified non-employee Directors and
aligning the interests of such Directors with the interests of shareholders
through stock ownership. To achieve this purpose, the Plan provides authority
for the grant of Stock Options, Restricted Stock, Stock Equivalent Units, Stock
Appreciation Rights, and other stock and performance-based incentives.
(a) "AFFILIATE"-- means "Affiliate" within the meaning given such term
in Rule 12b-2 under the Exchange Act.
(b) "AWARD" -- means the grant of Stock Options, Restricted Stock,
Stock Equivalent Units, Stock Appreciation Rights, and other stock and
performance-based incentives under this Plan, or any combination thereof.
(c) "AWARD AGREEMENT" -- means any agreement between the Company and a
Participant that sets forth terms, conditions, and restrictions applicable to an
(d) "BOARD OF DIRECTORS"-- means the Board of Directors of the Company.
(e) "CHANGE IN CONTROL"-- means, at any time after the date of the
adoption of this Plan, the occurrence of any one or more of the following:
(i) Any Person (other than any employee benefit plan or
employee stock ownership plan of the Company, or any Person organized,
appointed, or established by the Company, for or pursuant to the terms of any
such plan), alone or together with any of its Affiliates or Associates, becomes
the Beneficial Owner of 30% or more of the total outstanding voting power of the
Company, as reflected by the power to vote in connection with the election of
Directors, or commences or publicly announces an intent to commence a tender
offer or exchange offer, the consummation of which would result in the Person
becoming the Beneficial Owner of 30% or more of the total outstanding voting
power of the Company as reflected by the power to vote in connection with the
election of Directors. For purposes of this Section 2(e)(i), the terms
"Affiliates," "Associates," and "Beneficial Owner," will have the meanings given
to them in the Rights Agreement, dated as of April 2, 1991, between Invacare
Corporation and National City Bank, as Rights Agent, as amended from time to
time, or in any restatement thereof, or in any replacement Rights Agreement.
(ii) At any time during a period of 24 consecutive months,
individuals who were Directors at the beginning of the period no longer
constitute a majority of the members of the Board of Directors, unless the
election, or the nomination for election by the Company's shareholders, of each
Director who was not a Director at the beginning of the period is approved by at
least a majority of the Directors who are in office at the time of the election
or nomination and who either were Directors at the beginning of the period or
are Continuing Directors (or such nomination is approved by a committee
comprised solely of such Directors).
(iii) A record date is established for determining
shareholders entitled to vote upon (A) a merger or consolidation of Invacare
Corporation with another corporation (which is not an affiliate of Invacare
Corporation in which Invacare Corporation is not the surviving or continuing
corporation or in which all or part of the outstanding Common Shares are to be
converted into or exchanged for cash, securities, or other property, (B) a sale
or other disposition of all or substantially all of the assets of Invacare
Corporation, or (C) the reorganization, dissolution or liquidation (but not
partial liquidation) of Invacare Corporation.
(iv) The occurrence of any other event or series of events,
which, in the opinion of the Board of Directors, will, or is likely to, if
carried out, result in a change of control of Invacare Corporation.
(f) "CODE" -- means the Internal Revenue Code of 1986, or any law that
supersedes or replaces it, as amended from time to time. A reference to any
provision of the Code includes a reference to any lawful regulation or
pronouncement promulgated thereunder and to any successor provision.
(g) "COMMITTEE" -- means the Compensation Committee of the Board of
Directors, or any other committee of the Board of Directors that the Board of
Directors or the Compensation Committee authorizes to administer all or any
aspect of this Plan.
(h) "COMMON SHARES -- means Common Shares, without par value, of
Invacare Corporation, including authorized and unissued Common Shares and
treasury Common Shares.
(i) "COMPANY"-- means Invacare Corporation, an Ohio corporation, and
its direct and indirect subsidiaries, or any successor entity.
(j) "CONTINUING DIRECTOR" -- means a Director who was a Director prior
to a Change in Control or was recommended or elected to succeed a Continuing
Director by a majority of the Continuing Directors then in office (or by a
committee comprised solely of Continuing Directors).
(k) "DIRECTOR"-- means any individual who is a member of the Board of
Directors of the Company.
(l) "EXCHANGE ACT" -- means the Securities Exchange Act of 1934, and
any law that supersedes or replaces it, as amended from time to time.
(m) "FAIR MARKET VALUE" of Common Shares -- means the value of the
Common Shares determined by the Committee, or pursuant to rules established by