exhibit10i.htm

EX-10.I 4 exhibit10i.htm INVACARE 401(K) PLUS PLAN exhibit10i.htm

Exhibit 10(i)

INVACARE CORPORATION

401(K) PLUS BENEFIT EQUALIZATION PLAN

(As amended and restated effective January 1, 2003)

INVACARE CORPORATION

401(K) PLUS BENEFIT EQUALIZATION PLAN

(As amended and restated effective January 1, 2003)

Table of Contents

		Page
Article I 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	1

Article II DEFINITIONS AND CONSTRUCTION		2
	2.1 Definitions	2
	2.2 Number and Gender	5
	2.3 Headings	5

Article III PARTICIPATION AND ELIGIBILITY		6
	3.1 Participation	6
	3.2 Commencement of Participation	6
	3.3 Cessation of Active Participation	6

Article IV DEFERRALS, MATCHING & PROFIT SHARING CONTRIBUTIONS		7
	4.1 Deferrals by Participants	7
	4.2 Effective Date of Participation and Deferral Election Form	7
	4.3 Modification or Revocation of Election by Participant	7
	4.4 Matching Contributions	8
	4.5 Make Whole Contributions	8
	4.6 Discretionary Contributions	8
	4.7 Hardship Distribution Under 401(k) Plan	8

Article V VESTING, DEFERRAL PERIODS AND EARNINGS ELECTIONS		9
	5.1 Vesting	9
	5.2 Deferral Periods	9
	5.3 Earnings Elections	9

Table of Contents

		Page
Article VI ACCOUNTS		10
	6.1 Establishment of Bookkeeping Accounts	10
	6.2 Subaccounts	10
	6.3 Hypothetical Nature of Accounts	10

Article VII PAYMENT OF ACCOUNT		11
	7.1 Timing of Distribution of Benefits	11
	7.2 Adjustment for Investment Gains and Losses Upon a Distribution	12
	7.3 Form of Payment or Payments	12
	7.4 Accelerated Distribution	12
	7.5 Designation of Beneficiaries	13
	7.6 Amendments	13
	7.7 Change in Marital Status	13
	7.8 No Beneficiary Designation	14
	7.9 Unclaimed Benefits	14
	7.10 Hardship Withdrawals	14
	7.11 Withholding	14

Article VIII ADMINISTRATION		15
	8.1 Committee	15
	8.2 General Powers of Administration	15
	8.3 Indemnification of Committee	15

Article IX DETERMINATION OF BENEFITS, CLAIMS PROCEDURE AND ADMINISTRATION		16
	9.1 Claims	16
	9.2 Claim Decision	16
	9.3 Request for Review	16
	9.4 Review of Decision	17
	9.5 Discretionary Authority	18

Article X MISCELLANEOUS		19
	10.1 Plan Not a Contract of Employment	19
	10.2 Non-Assignability of Benefits	19
	10.3 Amendment and Termination	19
	10.4 Unsecured General Creditor Status Of Employee	20
	10.5 Severability	20
	10.6 Governing Laws	20
	10.7 Binding Effect	20
	10.8 Entire Agreement	20
	10.9 No Guaranty of Tax Consequences	20

INVACARE CORPORATION

401(K) PLUS BENEFIT EQUALIZATION PLAN

(As amended and restated effective January 1, 2003)

Article I

INTRODUCTION

1.1 Name of Plan.

Invacare Corporation (the "Company") hereby amends in its entirety and

restates the Invacare Corporation 401(k) Plus Benefit Equalization 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 of the Company

and to provide eligible Employees the opportunity to maximize their

elective contributions to the Invacare Retirement Savings Plan (the "401(k)

Plan") notwithstanding certain limitations in the Code.

1.3 "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 and Restatement Date.

The Plan was originally effective as of March 1, 1994. The amended and

restated Plan is effective as of the Restatement Date.

1.6 Administration.

The Plan shall be administered by the Committee or its delegates, as

set forth in Section 8.1.

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 maintained by the Company

on behalf of each Participant pursuant to Section 6.1.

(b) "Base Salary" means the base rate of cash compensation, including

commissions, paid by the Company to or for the benefit of a Participant for

services rendered or labor performed while a Participant, including base

pay a Participant could have received in cash in lieu of (A) deferrals

pursuant to Section 4.1 and (B) contributions made on his behalf to any

qualified plan maintained by the Company or to any cafeteria plan under

Section 125 of the Code maintained by the Company.

Salary which the Participant elects to have withheld on a pre tax basis and

credited to his Account pursuant to Section 4.1.

(d) "Beneficiary" means the person or persons designated by the

Participant in accordance with Section 7.5 or, in the absence of an

effective designation, the person or entity described in Section 7.8.

(e) "Board" means the Board of Directors of the Company.

(f) "Bonus Compensation" means the amount awarded to a Participant for

a Plan Year under any bonus arrangement maintained by the Company.

(g) "Bonus Deferral" means the amount of a Participant's Bonus

Compensation which the Participant elects to have withheld on a pre tax

basis and credited to his Account pursuant to Section 4.1.

(h) "Change In Control" means the happening of any of the following

events:

(i) Any person or entity (other than any employee benefit plan or

employee stock ownership plan of Invacare Corporation, or any person

or entity organized, appointed, or established by Invacare

Corporation, for or pursuant to the terms of any such plan), alone or

together with any of its Affiliates or Associates, becomes the

Beneficial Owner of thirty percent (30%) or more of the total

outstanding voting power of Invacare Corporation, as reflected by the

power to vote in connection with the election of directors, or

commences or publicly announces an intent to commence a tender offer

or exchange offer the consummation of which would result in the Person

becoming the Beneficial Owner of thirty percent (30%) or more of the

total outstanding voting power of Invacare Corporation as reflected by

the power to vote in connection with the election of directors. For

purposes of this Section 2.1(h)(i), the terms "Affiliates,"

"Associates," and "Beneficial Owner" will have the meanings given them

in the Rights Agreement, dated as of April 2, 1991, between Invacare

Corporation and National City Bank, as Rights Agent, as amended from

time to time.

(ii) At any time during a period of twenty-four (24) consecutive

months, individuals who were directors at the beginning of the period

no longer constitute a majority of the members of the Board, unless

the election, or the nomination for election by the Invacare

Corporation's shareholders, of each director who was not a director at

the beginning of the period is approved by at least a majority of the

directors who are in office at the time of the election or nomination

and were either directors at the beginning of the period or are

continuing directors.

(iii) A record date is established for determining shareholders

entitled to vote upon:

(A) A merger or consolidation of the Invacare Corporation

with another corporation (which is not an affiliate of Invacare

Corporation) in which Invacare Corporation is not the surviving

or continuing company or in which all or part of the outstanding

common shares are to be converted into or exchanged for cash,

securities, or other property;

(B) a sale or other disposition of all or substantially all

of the assets of Invacare Corporation; or

liquidation) of Invacare Corporation.

(i) "Code" means the Internal Revenue Code of 1986, as amended.

(j) "Committee" means the administrative committee named to administer

the Plan pursuant to Section 8.1.

(k) "Company" means Invacare Corporation and any successor thereto.

(l) "Deferral Period" means the period of time for which a Participant

elects to defer receipt of the Base Salary Deferrals and Bonus Deferrals

credited to such Participant's Account. Deferral Periods shall be measured

on the basis of Plan Years, beginning with the Plan Year that commences

immediately following the Plan Year for which the applicable Base Salary

Deferrals and Bonus Deferrals are credited to the Participant's Account.

(m) "Directors" means the Board of Directors of the Company.

(n) "Discretionary Contribution" means the Company's contribution, if

any, made pursuant to Section 4.6.

(o) "Restatement Date" means January 1, 2003, except where a different

date is specifically set forth. In addition, Section 4.7 and Article IX are

each effective January 1, 2002.

(p) "Employee" means any common-law employee of the Company.

(q) "ERISA" means the Employee Retirement Income Security Act of 1974,

as amended.

(r) "401(k) Plan" means the Invacare Retirement Savings Plan, as

amended from time to time.

(s) "IQC Quarterly Employer Contribution" means a contribution equal

to the contribution that would have been made to the 401(k) Plan for a

Participant but for the limitation on compensation contained in Section

401(a)(17) of the Code. Make Whole Contributions commenced as of January 1,

2001.

(t) "Matching Contribution" means the amount, as determined by the

Company on an annual basis, that would be credited to the Participant's

Base Salary Deferrals and Bonus Deferrals if such deferrals had been

deferred by the Participant into the 401(k) Plan, which is credited by the

Company to the Account of each Participant based on such Participant's Base

Salary and Bonus Deferrals.

(u) "Participant" means each Employee who has been selected for

participation in the Plan and who has become a Participant pursuant to

Article III.

(v) "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 Deferral Period, if any, 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.

(w) "Plan" means the Invacare Corporation 401(k) Plus Benefit

Equalization Plan, as in effect on the Restatement Date and as amended from

time to time hereafter.

(x) "Plan Year" means the twelve-consecutive month period commencing

January 1 of each year ending on the following December 31.

(y) "Profit Sharing Contribution" means the amount, if any, as

determined by the Company of non-elective non-matching contribution which

would have been made for or allocated to a Participant under the 401(k)

Plan for a Plan Year, but which is not made or allocated because of the

limitation on compensation which may be taken into account under Code

Section 401(a)(17) and/or the Participant's participation in this Plan.

Annual Profit Sharing Contributions ceased as of December 31, 2000.

"Retirement" means the termination of employment after the attainment of

age fifty-five (55) and upon completion of ten (10) or more years of

service.

(z) "Retirement" means the termination of employment after the

attainment of age fifty-five (55) and upon completion of ten (10) or more

years of service.

(aa) "Valuation Date" means the last business day of each calendar

month and each special valuation date designated by the Committee.

(bb) "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.

Article III

PARTICIPATION AND ELIGIBILITY

3.1 Participation.

Participants in the Plan are those Employees who are (a) subject to

the income tax laws of the United States, (b) members of a select group of

highly compensated or management Employees of the Company, and (c) selected

by the Committee or its delegates, in its sole discretion, as Participants.

The Committee shall notify each Participant of his selection as a

Participant.

3.2 Commencement of Participation.

Except as provided in the following sentence, an Employee shall become

a Participant effective as of the first day of the Plan Year following the

date on which his Participation and Deferral Election Form becomes

effective. A newly hired Employee who completes a Participation and

Deferral Election Form within 30 days of the date on which his employment

commences shall become a Participant as of the date on which his

Participation and Deferral Election Form becomes effective under Section

4.2.

3.3 Cessation of Active Participation.

Notwithstanding any provision herein to the contrary, an individual

who has become a Participant in the Plan shall cease to be a Participant

hereunder effective as of any date designated by the Committee. In the

event of such cessation, the last four sentences of Section 4.1 shall apply

as if such cessation had been a termination of employment. Any such

Committee action shall be communicated to such Participant prior to the

effective date of such action.

Article IV

DEFERRALS, MATCHING & PROFIT SHARING CONTRIBUTIONS

4.1 Deferrals by Participants.

Before the first day of each Plan Year, a Participant may file with

the Committee a Participation and Deferral Election Form pursuant to which

such Participant elects to make Base Salary Deferrals and/or Bonus

Deferrals. Any such Participant election shall be subject to a maximum of

fifty percent (50%) of Base Salary and one hundred percent (100%) of Bonus

Compensation, an annual minimum of two thousand dollars ($2000), and to any

other rules prescribed by the Committee in its sole discretion. Base Salary

Deferrals will be credited to the Account of each Participant as of the

last day of each calendar month, if and to the extent that the Participant

earned such Base Salary as an Employee in such calendar month. Bonus

Deferrals will be credited to the Account of each Participant as of the

last day of the month in which such Bonus Compensation otherwise would have

been paid to the Participant in cash, provided that the Participant is an

Employee at the time such Bonus Compensation would have been paid. A

Participant whose employment terminates prior to or during the calendar

month in which his Bonus Compensation would have been paid to him in cash

will be paid his Bonus Deferral in cash. Such termination of employment

shall not affect Base Salary Deferrals and Bonus Deferrals previously

credited to the Account of a Participant whose employment terminates.

4.2 Effective Date of Participation and Deferral Election Form.

A Participant's annual Participation and Deferral Election Form shall

become effective on the first day of the Plan Year to which it relates. The

Participation and Deferral Election Form of Employees who are first

employed by the Company during a Plan Year shall become effective as of the

first 401(k) Plan enrollment date following his date of employment on which

the Employee is eligible to participate in the 401(k) Plan provided the

Participation and Deferral Election Form is completed prior to that date.

If a Participant fails to complete a Participation and Deferral Election

Form before the first day of the Plan Year in which Participant shall earn

the compensation to which the Participation and Deferral Election Form

relates or if a newly hired Employee fails to complete the Participation

and Deferral Election Form prior to the first 401(k) Plan enrollment date

following his date of hire, the Participant or Employee, as the case may

be, 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.

A Participant may change the amount of his Base Salary or Bonus

Deferrals during a Plan Year as of the first day of each calendar quarter

provided that such change is made no later than the day immediately

preceding the first day of the calendar quarter or unless the Committee

determines that he has suffered a severe, sudden and unforeseeable hardship

as is more fully described in Section 7.10. 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 and/or Bonus Deferrals

to the Plan and who has completed at least six (6) months of service will

receive a Matching Contribution equal to a certain percentage of the sum of

Participant's Base Salary and Bonus Deferrals. The Matching Contribution

percentage to be contributed to the Plan shall be equal to the matching

contribution percentage provided in the 401(k) Plan. Matching Contributions

will be credited to the Participant's Account as of the last day of the

calendar month in which the Base Salary and/or Bonus Deferrals to which the

Matching Contributions relate are credited to the Participant's Account.

4.5 IQC Quarterly Employer Contributions.

For each calendar quarter, the Account of each Participant shall be

credited with such Make Whole Contribution, if any, to which he is entitled

under Section 2.1(s).

4.6 Discretionary Contributions.

For each Plan Year, the Account of each Participant shall be credited

with such Discretionary Contribution, if any, as is determined by the

Company for such Plan Year.

4.7 Hardship Distribution Under 401(k) Plan.

If required by the terms of the 401(k) Plan, a Participant who

receives a hardship distribution under the 401(k) Plan shall not be

eligible to make deferrals for a six (6) month period after receipt of the

hardship distribution.

Article V

VESTING, DEFERRAL PERIODS AND EARNINGS ELECTIONS

5.1 Vesting.

A Participant shall be 100% vested at all times in the amount of his

Account which is attributable to Base Compensation Deferrals and Bonus

Deferrals. Matching Contributions, IQC Quarterly Employer Contributions and

Profit Sharing Contributions shall vest in accordance with the terms of the

401(k) Plan. Discretionary Contributions shall vest in accordance with the

Company's determination which shall be made when such contributions are

made. Notwithstanding the foregoing, all Matching Contributions, Profit

Sharing Contributions, Discretionary Contributions and IQC Quarterly

Employer Contributions shall be 100% vested immediately upon a Change in

Control. Any provisions of the Plan relating to the distribution of a

Participant's Account shall mean only the vested portion of such Account.

Since the Plan is unfunded, the portion of a Participant's Account which is

not vested and therefore not distributed with the vested portion of his

Account shall remain property of the Company and not be allocated to

Accounts of other Participants or otherwise inure to their benefit.

5.2 Deferral Periods.

A Deferral Period may be (a) for any period of five (5) years or more

but may not end later than the year in which the Participant would attain

age 70 or (b) until a Participant's termination of employment. A

Participant must specify on the Participation and Deferral Election Form

the Deferral Period for the Base Salary Deferrals and Bonus Deferrals to be

made to the Plan for the Plan Year to which the Participation and Deferral

Election Form relates, subject to the provisions of Section 7.1(a) and

rules determined by the Committee from time to time. In the event a

Participant does not elect a Deferral Period for any Base Salary Deferrals

or Bonus Deferrals for a Plan Year, such Participant shall be deemed to

have elected a Deferral Period of five (5) years. If the Participant elects

a period of years (option (a)) and is entitled to a distribution pursuant

to such election prior to the events listed in Sections 7.1(b)(i),

7.1(b)(ii), and 7.1(b)(iii), distribution pursuant to such election shall

not include Matching Contributions, Profit Sharing Contributions,

Discretionary Contributions and Make Whole Contributions and earnings on

those amounts. Any such distribution must be in a lump sum.

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 (contributions made by the Participant

and by the Company) and existing Account balances. Only whole percentages

may be elected, and the total elections must allocate 100% of all new

contributions and 100% of all existing Account balances. Investment

elections may be changed once per calendar quarter, effective as of the

first day of such quarter, by written direction given at least seven days

before the start of such quarter. 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.

Article VI

ACCOUNTS

6.1 Establishment of Bookkeeping Accounts.

A separate bookkeeping Account shall be maintained for each

Participant. Such account 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, IQC

Quarterly Employer Contributions made pursuant to Section 4.5,

Discretionary Contributions made pursuant to Section 4.6 and Profit Sharing

Contributions, if any, made prior to January 1, 2001, 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.

6.2 Subaccounts.

Within each Participant's bookkeeping Account, separate subaccounts

shall be maintained to the extent necessary for the administration of the

Plan.

6.3 Hypothetical Nature of Accounts.

The Account established under this Article VI shall be hypothetical in

nature and shall be maintained for bookkeeping purposes only, so that Base

Salary Deferrals, Bonus Deferrals, Matching Contributions, Discretionary

Contributions, IQC Quarterly Employer Contributions and Profit Sharing

Contributions can be credited to the Participant and so that earnings and

losses on such amounts so credited can be credited (or charged, as the case

may be). Neither the Plan nor any of the Accounts (or subaccounts) shall

hold any actual funds or assets. The right of any person to receive one or

more payments under the Plan shall be an unsecured claim against the

general assets of the Company. Any liability of the Company to any

Participant, former Participant, or Beneficiary with respect to a right to

payment shall be based solely upon contractual obligations created by the

Plan. Neither the Company, the Board, nor any other person shall be deemed

to be a trustee of any amounts to be paid under the Plan. Nothing contained

in the Plan, and no action taken pursuant to its provisions, shall create

or be construed to create a trust of any kind, or a fiduciary relationship,

between the Company and a Participant, former Participant, Beneficiary, or

any other person.

Article VII

PAYMENT OF ACCOUNT

7.1 Timing of Distribution of Benefits.

(a) Distribution of Contribution to 401(k) Plan. As soon as

practicable, but in no event later than March 15 of the Plan Year following

the Plan Year for which the Participant executed the Participation and

Deferral Election Form, the lesser of.

(i) the allowable before-tax contribution which may be made on

behalf of the Participant to the 401(k) Plan for the Plan Year for

which the Participant executed the Participation and Deferral Election

Form, and

(ii) the sum of the Base Salary Deferral and the Bonus Deferral

for the Plan Year for which the Participant executed the Participation

and Deferral Election Form,

shall be paid directly to Participant as compensation earned in the Plan

Year for which the Participant executed the Participation and Deferral

Election Form, unless the Participant previously elected (in both the

Participation and Deferral Election Form and his 401(k) Plan elections) to

have such amount contributed to the 401(k) Plan as an elective before-tax

contribution.

If the Participant elected to have such amount contributed to the 401(k)

Plan as an elective before-tax contribution, such amount together with an

amount equal to the applicable Matching Contributions shall be transferred

directly to the Participant's Account in the 401(k) Plan and the

appropriate subaccounts of Participant's Account shall be charged

accordingly. Notwithstanding the preceding, the Plan shall not make

distributions to the Participant or the 401(k) Plan in excess of the

Participant's Account balance. Distributions pursuant to this Section

7.1(a) may be made in one or more installments in the sole discretion of

the Committee.

(b) Distribution After Deferral Period. Distribution of that portion

of a Participant's Account which is not distributed under Section 7.1(a)

shall be made as soon as practicable following the date the Deferral Period

for such amounts ends and following the valuation described in Section 7.2.

Notwithstanding the foregoing, the Participant's entire Account shall be

distributed to him (or his Beneficiary in the event of his death) as soon

as practicable following the earliest to occur of the following and after

the valuation described in 7.2:

(i) the Participant's death;

(ii) the Participant's permanent disability (as defined in the

Company's long-term disability program); or

(iii) the Participant's termination of employment.

7.2 Adjustment for Investment Gains and Losses Upon a Distribution.

Upon a distributable event described in Section 7.1(b), the balance of

a Participant's Account shall be determined as of the Valuation Date

immediately following such event.

7.3 Form of Payment or Payments.

Except as provided below, benefits as a result of death or other

termination of employment shall be paid in the form elected by the

Participant. The form elected shall apply to the entire Account. The

election may be amended, provided that the amended election does not

increase the duration of payments in the previous election. Any amendment

to the form of benefits shall be effective beginning in the calendar year

following the submission of the amendment. If a Participant terminates

employment and qualifies as "Retirement" as defined under Section 2.1(z),

the form of benefit shall be:

(a) A lump sum amount which is equal to the applicable Account

balance; or

(b) Substantially equal installments of the Account amortized over a

period of five (5), ten (10) or fifteen (15) years or sixty (60), one

hundred twenty (120), or one hundred eighty (180) months. Gains and losses

on the unpaid balance shall continue to be credited or charged to the

Account in accordance with the provisions of Section 5.3. The amount of the

installments payable may be changed periodically to reflect investment

results.

Notwithstanding the form elected, if a Participant terminates

employment prior to qualifying for "Retirement" as defined under Section

2.1(z) or if the Participant's total Account is no more than twenty

thousand dollars ($20,000) on the last Valuation Date prior to the

commencement of distribution, the benefit shall be paid in a lump sum.

7.4 Accelerated Distribution.

Notwithstanding any other provision of the Plan, a Participant shall

be entitled to receive, upon written request to the Committee or its

delegates, a lump sum distribution of his vested Account balance, subject

to the following penalty:

(a) If the distribution is requested within twenty-four (24) months

following a Change in Control, five percent (5%) of the Account shall be

forfeited and ninety-five percent (95%) of the Account paid to the

Participant.

(b) If the distribution is requested following termination of

employment and the Account is in pay status, five percent (5%) of the

previously unpaid Account shall be forfeited and ninety-five percent (95%)

of the previously unpaid Account paid to the Participant.

(a) or (b) above, five percent (5%) of the vested Account shall be

forfeited and ninety-five percent (95%) of the vested Account shall be paid

to the Participant. The unvested portion of the Account shall be forfeited.

The Account balance shall be determined as of the Valuation Date

immediately following the date on which the Committee receives the written

request. A Participant who receives a distribution under this section shall

forfeit participation in the Plan with regard to his election to defer

compensation for the remainder of the Plan Year and the following Plan

Year. The amount payable under this section shall be paid in a lump sum as

soon as practical following the receipt of the Participant's written

request by the Committee and the valuation of his Account.

7.5 Designation of Beneficiaries.

Each participant shall have the right, at any time, to designate one

(1) or more persons or an entity as Beneficiary (both primary as well as

secondary) to whom benefits under this Plan shall be paid in the event of a

Participant's death prior to complete distribution of the Participant's

Account. Each Beneficiary designation shall be in a written form prescribed

by the Committee and will be effective only when filed with the Committee

during the Participant's lifetime. Designation by a married Participant of

a Beneficiary other than the Participant's spouse shall not be effective

unless the spouse executes a written consent that acknowledges the effect

of the designation and is witnessed by a notary public, or the consent

cannot be obtained because the spouse cannot be located.

7.6 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.

7.7 Change in Marital Status.

If the Participant's marital status changes after the Participant has

designated a Beneficiary, the following shall apply:

(a) If the Participant is married at death but was unmarried when the

designation was made, the designation shall be void unless the spouse has

consented to it in the manner prescribed above.

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

designation was made:

(i)The designation shall be void if the spouse was named as

Beneficiary.

(ii)The designation shall remain valid if a nonspouse

Beneficiary was named.

is married to a different spouse at death, the designation shall be void

unless the new spouse has consented to it in the manner prescribed above.

7.8 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;

(d) The Participant's estate.

7.9 Unclaimed Benefits.

In the case of a benefit payable on behalf of a Participant, if the

Committee is unable to locate the Participant or Beneficiary to whom such

benefit is payable, such benefit may be forfeited to the Company, upon the

Committee's determination. Notwithstanding the foregoing, if subsequent to

any such forfeiture the Participant or Beneficiary to whom such benefit is

payable makes a valid claim for such benefit, such forfeited benefit shall

be paid by the Company or restored to the Plan by the Company.

7.10 Hardship Withdrawals.

A Participant may apply in writing to the Committee for, and the

Committee may permit, a hardship withdrawal of all or any part of a

Participant's Account derived from Base Salary and Bonus Deferrals if the

Committee, in its sole discretion, determines that the Participant has

incurred a severe financial hardship resulting from a sudden and unexpected

illness or accident of the Participant or of a dependent (as defined in

section 152(a) of the Code) of the Participant, loss of the Participant's

property due to casualty, or other similar extraordinary and unforeseeable

circumstances arising as a result of events beyond the control of the

Participant, as determined by the Committee, in its sole and absolute

discretion. The amount that may be withdrawn shall be limited to the amount

reasonably necessary to relieve the hardship or financial 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 hardship withdrawal 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. In the

event of a hardship withdrawal, a Participant shall not be permitted to

make deferrals for the remainder of the Plan Year and the following Plan

Year

7.11 Withholding.

All deferrals and distributions shall be subject to legally required

income and employment tax withholding. Article VIII ADMINISTRATION

Article VIII

ADMINISTRATION

8.1 Committee.

The Plan shall be administered by a Committee, which shall include the

Senior Vice President of Human Resources and the Chief Financial Officer.

The Committee shall be responsible for the general operation and

administration of the Plan and for carrying out the provisions thereof. The

Committee may delegate to others certain aspects of the management and

operational responsibilities of the Plan including the employment of

advisors and the delegation of ministerial duties to qualified individuals,

provided that such delegation is in writing. No member of the Committee who

is a Participant shall participate in any matter relating to his status as

a Participant or his rights or entitlement to benefits as a Participant.

8.2 General Powers of Administration.

The Committee shall have all powers necessary or appropriate to enable

it to carry out its administrative duties. Not in limitation, but in

application of the foregoing, the Committee shall have discretionary

authority to construe and interpret the Plan and determine all questions

that may arise hereunder as to the status and rights of Employees,

Participants, and Beneficiaries. The Committee may exercise the powers

hereby granted in its sole and absolute discretion. The Committee may

promulgate such regulations as it deems appropriate for the operation and

administration of the Plan. No member of the Committee shall be personally

liable for any actions taken by the Committee unless the member's action

involves willful misconduct.

8.3 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.

Article IX

DETERMINATION OF BENEFITS,

CLAIMS PROCEDURE AND ADMINISTRATION

9.1 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.

9.2 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;

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 9.3 and for the actual review of the denial under Section 9.4.

9.3 Request for Review.

Within sixty days after the receipt by the Claimant of the written

opinion described above, the Claimant may request in writing that the

Senior Vice President of Human Resources of the Company ("Executive

Officer") review the Committee's prior determination. Such request must be

addressed to the Executive Officer at the Company at its then principal

place of business. The Claimant or his or her duly authorized

representative may submit written comments, documents, records or other

information relating to the denied claim, which information shall be

considered in the review under this Section without regard to whether such

information was submitted or considered in the initial benefit

determination.

The Claimant or his or her duly authorized representative shall be

provided, upon request and free of charge, reasonable access to, and copies

of, all documents, records and other information which (i) was relied upon

by the Committee in making its initial claims decision, (ii) was submitted,

considered or generated in the course of the Committee making its initial

claims decision, without regard to whether such instrument was actually

relied upon by the Committee in making its decision or (iii) demonstrates

compliance by the Committee with its administrative processes and

safeguards designed to ensure and to verify that benefit claims

determinations are made in accordance with governing Plan documents and

that, where appropriate, the Plan provisions have been applied consistently

with respect to similarly situated claimants. If the Claimant does not

request a review of the Committee's determination within such 60-day

period, he or she shall be barred and estopped from challenging such

determination.

9.4 Review of Decision.

Within a reasonable period of time, ordinarily not later than sixty

days, after the Executive Officer's receipt of a request for review, it

will review the Committee's prior determination. If special circumstances

require that the sixty-day time period be extended, the Executive Officer

will so notify the Claimant within the initial 60-day period indicating the

special circumstances requiring an extension and the date by which the

Executive Officer expects to render its decision on review, which shall be

as soon as possible but not later than 120 days after receipt of the

request for review. In the event that the Executive Officer extends the

determination period on review due to a Claimant's failure to submit

information necessary to decide a claim, the period for making the benefit

determination on review shall not take into account the period beginning on

the date on which notification of extension is sent to the Claimant and

ending on the date on which the Claimant responds to the request for

additional information.

Benefits under the Plan will be paid only if the Executive Officer

decides in its discretion that the Claimant is entitled to such benefits.

The decision of the Executive Officer shall be final and non-reviewable,

unless found to be arbitrary and capricious by a court of competent review.

Such decision will be binding upon the Company and the Claimant.

If the Executive Officer makes an adverse benefit determination on

review, the Executive Officer will render a written opinion, using language

calculated to be understood by the Claimant, setting forth:

(a) the specific reason or reasons for the denial;

(b) the specific references to pertinent Plan provisions on which the

denial is based;

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.

9.5 Discretionary Authority.

The Committee and Executive Officer shall both have discretionary

authority to determine a Claimant's entitlement to benefits upon his claim

or his request for review of a denied claim, respectively.

Article X

MISCELLANEOUS

10.1 Plan Not a Contract of Employment.

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

be a contract between the Company and any person or to be consideration for

the employment of any person. Nothing herein contained shall give or be

deemed to give any person the right to be retained in the employ of the

Company or to restrict the right of the Company to discharge any person at

any time; nor shall the Plan give or be deemed to give the Company the

right to require any person to remain in the employ of the Company or to

restrict any person's right to terminate his employment at any time.

10.2 Non-Assignability of Benefits.

No Participant, Beneficiary or distributee of benefits under the Plan

shall have any power or right to transfer, assign, anticipate, hypothecate

or otherwise encumber any part or all of the amounts payable hereunder,

which are expressly declared to be unassignable and non-transferable. Any

such attempted assignment or transfer shall be void. No amount payable

hereunder shall, prior to actual payment thereof, be subject to seizure by

any creditor of any such Participant, Beneficiary or other distributee for

the payment of any debt, judgment, or other obligation, by a proceeding at

law or in equity, nor transferable by operation of law in the event of the

bankruptcy, insolvency or death of such Participant, Beneficiary or other

distributee hereunder.

10.3 Amendment and Termination.

The Board may from time to time, in its discretion, amend, in whole or

in part, any or all of the provisions of the Plan; provided, however, that

no amendment may be made which would impair the rights of a Participant

with respect to amounts already credited to his Account. The Board may

terminate the Plan at any time. In the event that the Plan is terminated,

the balance in a Participant's Account shall be paid to such Participant or

his Beneficiary in a lump sum or in equal monthly installments over the

following period, unless the Committee determines otherwise:

Account Balance Payout Period

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

$50,000 or less Lump Sum

More than $50,000 but less than $250,000 3 Years

$250,000 or more 5 Years

Gains and Losses shall continue to be credited or charged to the

Account in accordance with the provisions of Section 5.3. The Company

reserves the right to pay each Account in a lump sum, notwithstanding the

above schedule.

10.4 Unsecured General Creditor Status Of Employee.

The payments to a Participant, his Beneficiary or any other

distributee hereunder shall be made from assets which shall continue, for

all purposes, to be a part of the general, unrestricted assets of the

Company; no person shall have nor acquire any interest in any such assets

by virtue of the provisions of this Agreement. The Company's obligation

hereunder shall be an unfunded and unsecured promise to pay money in the

future. To the extent that the Participant, a Beneficiary, or other

distributee acquires a right to receive payments from the Company under the

provisions hereof, such right shall be no greater than the right of any

unsecured general creditor of the Company; no such person shall have nor

acquire any legal or equitable right, interest or claim in or to any

property or assets of the Company.

In the event that, in its discretion, the Company purchases an

insurance policy or policies insuring the life of a Participant (or any

other property) to allow the Company to recover the cost of providing the

benefits, in whole, or in part, hereunder, neither the Participant, his

Beneficiary or other distributee shall have nor acquire any rights

whatsoever therein or in the proceeds therefrom. The Company shall be the

sole owner and beneficiary of any such policy or policies and, as such,

shall possess and may exercise all incidents of ownership therein. No such

policy, policies or other property shall be held in any trust for a

Participant, Beneficiary or other distributee or held as collateral

security for any obligation of the Company hereunder.

10.5 Severability.

If any provision of this Plan shall be held illegal or invalid for any

reason, said illegality or invalidity shall not affect the remaining

provisions hereof; instead, each provision shall be fully severable and the

Plan shall be construed and enforced as if said illegal or invalid

provision had never been included herein.

10.6 Governing Laws.

All provisions of the Plan shall be construed in accordance with the

internal laws (but not the choice of laws) of Ohio, except to the extent

preempted by federal law.

10.7 Binding Effect.

This Plan shall be binding on each Participant and his heirs and legal

representatives and on the Company and its successors and assigns.

10.8 Entire Agreement.

This document and any amendments contain all the terms and provisions

of the Plan and shall constitute the entire Plan, any other alleged terms

or provisions being of no effect.

10.9 No Guaranty of Tax Consequences.

While the Company has established, and will maintain, the Plan, the

Company makes no representation, warranty, commitment, or guaranty

concerning the income, employment, or other tax consequences of

participation in the Plan under federal, state, or local law.

IN WITNESS WHEREOF, the Company has caused this Plan to be executed on

this 13th day of May, 2004.

INVACARE CORPORATION

By: /s/ Gregory C. Thompson

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

Title: Senior Vice President and

Chief Financial Officer

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

By: /s/ A. Malachi Mixon, III

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

Title: Chairman and Chief Executive Officer

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

AMENDMENT NO. 1

INVACARE CORPORATION 401(k) PLUS BENEFIT EQUALIZATION PLAN

This Amendment No. 1 is executed as of the date set forth below by

Invacare Corporation (the "Company").

WITNESSETH:

WHEREAS, the Company maintains the Invacare Corporation 401(k) Plus

Benefit Equalization Plan, as amended and restated effective January 1,

2003 (the "Plan"), to provide nonqualified retirement benefits for certain

employees of the Company; and

WHEREAS, pursuant to Section 10.3 of the Plan, the Company has

retained the right to make amendments thereto; and

WHEREAS, the Company desires to amend the Plan in order to permit

participants to change their investment elections on a daily basis;

NOW, THEREFORE, pursuant to Section 10.3 of the Plan, the Company

hereby amends Section 5.3 of Article V of the Plan, effective as of

December 1, 2003, by the deletion of said Section 5.3 in its entirety and

the substitution in lieu thereof of a new Section 5.3 to read as follows:

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

10%, and the total elections must allocate 100% of all new contributions

and 100% of all existing Account balances. Investment elections may be

<page>

changed daily, by written direction. The hypothetical investment

alternatives and the procedures relating to the election of such

investments, other than those set forth in this Section 5.3, shall be

determined by the Committee from time to time. A Participant's Account

shall be adjusted as of each Valuation Date to reflect investment gains and

losses."

IN WITNESS WHEREOF, Invacare Corporation, by its proper officer, has

caused this Amendment No. 1 to be executed as of the 30th day of April,

2004.

INVACARE CORPORATION

By: /s/ Gregory C. Thompson

AMENDMENT NO. 2

INVACARE CORPORATION 401(K) PLUS BENEFIT EQUALIZATION PLAN

This Amendment No. 2 to the Invacare Corporation 401(k) Plus Benefit Equalization Plan is hereby adopted as of the date set forth below by Invacare Corporation, an Ohio corporation (the “Company”).

WITNESSETH:

WHEREAS, the Company has established a deferred savings plan known as the Invacare Corporation 401(k) Plus Benefit Equalization Plan (the “Plan”) to provide unfunded deferred compensation to certain management and highly compensated employees of the Company; and

WHEREAS, pursuant to Section 10.3 of the Plan, the Company has retained the right to make amendments thereto; and

WHEREAS, the Company desires to amend the Plan in order to prevent further deferrals thereunder;

NOW, THEREFORE, effective as of December 31, 2004, the Company hereby adopts this Amendment No. 2 as follows:

1. Freeze of Plan. Subject to Section 2 of this Amendment, effective December 31, 2004 (the “Freeze Date”), the Plan shall be frozen. Thereafter, no additional deferrals may be made under the Plan. Otherwise the Plan shall be administered after the Freeze Date as provided in the Plan, subject to permissible amendments to the Plan, including amendments made after the Freeze Date.

2. Material Modification. The provisions of Section 1 of this Amendment No. 2 are intended to prevent further deferral under the Plan so that all deferrals will be subject to rules in effect prior to the effective date of Section 409A of the Code. If this Amendment No. 2 would otherwise be deemed a “material modification” of the Plan under such Section 409A, this Amendment No. 2 shall at all times be deemed void ab initio.

IN WITNESS WHEREOF, the Company, by its appropriate officers duly authorized, has caused this Amendment No. 2 to be executed as of this day of December, 2004.

INVACARE CORPORATION

By /s/ Gregory C. Thompson

And /s/ Joseph Usaj

AMENDMENT NO. 3

INVACARE CORPORATION 401(K) PLUS BENEFIT EQUALIZATION PLAN

This Amendment No. 3 to the Invacare Corporation 401(k) Plus Benefit Equalization Plan is hereby adopted as of the date set forth below by Invacare Corporation, an Ohio corporation (the “Company”).

WITNESSETH:

WHEREAS, Code Section 409A became effective January 1, 2005, to impose various restrictions on deferred compensation; and

WHEREAS, effective December 31, 2004, the Company amended the Plan to cease further deferrals for the purpose of grandfathering the exemption from Code Section 409A of those deferrals which were vested as of that date; and

WHEREAS, those deferrals which were not vested under the Plan as of December 31, 2004 (the “Post-2004 Deferrals”) will be governed under the Plan as it will be amended to provide for a segregated component consistent with Code Section 409A for such Post-2004 Deferrals; and

WHEREAS, Code Section 409A generally requires that the time and form of payment of deferred compensation be fixed at the time the compensation is deferred,

and requires that any later election to change the time or form of payment be subject to restrictions which include a 12-month notice period and a 5-year postponement of the payment commencement date (the “Election Restrictions”);

WHEREAS, the Post-2004 Deferrals have been administered consistent with Code Section 409A and are paid in a single lump sum unless the participant: (a) terminates employment after reaching age fifty-five (55) and completing ten (10) years of service, (b) the participant’s account is more than twenty thousand dollars ($20,000), and (c) the participant has in effect an election to instead receive payment in substantially equal monthly installments over a period of five (5), ten (10), or fifteen (15) years; and

WHEREAS, the participants have not yet been afforded the opportunity to make a payment election with regard to their Post-2004 Deferrals; and

WHEREAS, Code Section 409A permits the Plan to provide a “transition election” in 2006 by which participants can, on or before December 31, 2006 and subject to certain conditions, elect to change the form of payment of their Post 2004 Deferrals without being subject to the Election Restrictions; and

WHEREAS, the Company desires to provide the Plan participants with such a transition election for 2006; and

WHEREAS, pursuant to Section 10.3 of the Plan, the Company has retained the right to make amendments thereto; and

NOW, THEREFORE, the Company hereby amends the Plan, effective as of the dates indicated below, as follows:

1. Effective November 1, 2006, a new Section 7.3A is added after Section 7.3 as it pertains to Post-2004 Deferrals to read as follows:

“7.3A Special Transition Election in 2006.

Pursuant to the relief granted in IRS Notice 2005-1, Q&A-19(c) as extended in the Proposed Treasury Regulations under Code Section 409A (Section XI.C. of the Preambles), a Participant shall be permitted to make a new election in 2006 regarding the form of distribution of the Participant’s Account, provided that such election is made in writing and filed with the Committee no later than December 31, 2006. Such election shall be immediately effective; provided, however, that such election shall not operate to change the form of distribution of amounts that otherwise would be payable in 2006, nor will it operate to make payable in 2006 amounts that would not otherwise be payable in that year.”

IN WITNESS WHEREOF, the Company, by its appropriate officers duly authorized, has caused this Amendment No. 3 to be executed as of this 28th day of December, 2006.

INVACARE CORPORATION

By /s/ Joseph Usaj

By /s/ Gregory C. Thompson