I. VESTING AND DELIVERY OF SHARES. The Performance Period (as defined in the Plan) for the performance shares granted hereunder shall start on [Insert Date] and end on [Insert Date]. Subject to your continuous employment with Invacare or a subsidiary (except as provided in the case of your Retirement (as defined in Article II), death or disability) through the final date of the Performance Period (the “Vesting Date”), you will be entitled to receive a number of shares of Invacare common stock (the “Shares”) equal to the number of performance shares that vest based on the levels of achievement of the performance goals set forth in Exhibit A, which may range from 0% to 150% of the Target Number. To the extent vested and deliverable, Invacare will issue you “net shares” on the Vesting Date after withholding the number of shares necessary to cover your withholding tax obligations. The net Shares will be delivered to you no later than sixty (60) days following the Vesting Date.
II. TERM OF AWARD. Your award shall not be affected by any temporary leave of absence approved in writing by Invacare and described in Section 1.421-7(h) of the Federal Income Tax Regulations. If, prior to the Vesting Date, you cease to be an employee for any reason other than Retirement, death or disability, you will forfeit any and all rights you have to the performance shares.
If you die or become disabled prior to the Vesting Date and while you are an employee, you, or your estate or personal representative, shall become vested in a prorated number of performance shares. The prorated number of performance shares shall be equal to (a) times (b), in which (a) is the Target Number of performance shares and (b) is (i) the number of completed months between the first day of the Performance Period and the date of your death or termination due to disability divided by (ii) 36. If the proration formula results in any fractional shares, such fractional shares shall be rounded to the next lower whole Share. Any Shares to which you (or your estate or personal representative) become entitled pursuant to this paragraph shall be delivered to you (or your estate or personal representative) no later than sixty (60) days following the date of your termination of employment due to disability or death.
If you Retire prior to the Vesting Date, you will be entitled to receive a pro-rata portion of the performance shares based on the level at which performance goals are attained during the Performance Period. The prorated number of performance shares shall be equal to (a) times (b), in which (a) is the actual number of performance shares that would have otherwise vested, pursuant to Article I, if you had remained employed through the end of the Performance Period and (b) is (i) the number of completed months between the first day of the Performance Period and the date of your Retirement divided by (ii) 36. If the proration formula results in any fractional shares, such fractional shares shall be rounded to the next lower whole Share. Any Shares to which you become entitled pursuant to this paragraph shall be delivered to you no later than sixty (60) days following the Vesting Date. For purposes of this Agreement, “Retirement” or “Retire” means a termination of your employment with Invacare or a subsidiary after you have attained either (i) age fifty-five (55) with ten (10) years of service to Invacare or a subsidiary or (ii) age sixty-five (65) with five (5) years of service to Invacare or a subsidiary.
If, prior to the Vesting Date, the Compensation and Management Development Committee of the Board of Directors of Invacare (the “Committee”) finds that you intentionally committed an act materially inimical to the interests of Invacare or a subsidiary, you shall forfeit all of the performance shares as of the time you committed such act, as determined by the Committee.
III. TERMINATION OF AWARD UNDER
CERTAIN CIRCUMSTANCES. The Committee may cancel your award at any time prior to the Vesting Date, in which case you shall forfeit all of the performance shares as of the date of such cancellation, if you are not in compliance with all applicable provisions of this Agreement or the Plan or if you, without the prior written consent of the Committee, engage in any of the following activities: (i) you render services for an organization, or engage in a business, that is, in the judgment of the Committee, in competition with Invacare; or (ii) you disclose to anyone outside of Invacare, or use for any purpose other than Invacare's business, any confidential information or material relating to Invacare, whether acquired by you during or after employment with Invacare, in a fashion or with a result that is or may be injurious to the best interests of Invacare, as determined by the Committee.
The Committee may, in its discretion and as a condition to the continuance of this award, require you to represent in writing that you are in compliance with all applicable provisions of this Agreement and the Plan and have not engaged in any activities referred to in clauses (i) and (ii) above.
IV. DIVIDEND EQUIVALENTS. The performance shares shall not entitle you to receive any dividends that are paid with respect to Invacare’s common stock prior to the Vesting Date. Upon the vesting of the performance shares, if any, and the issuance of Shares to you, you shall become entitled to any dividends that are paid with respect to such Shares after the Vesting Date.
V. TRANSFERABILITY. This Agreement shall be binding upon and inure to the benefit of any successor of Invacare and your heirs, estate and personal representative. Your award shall not be transferable other than by will or the laws of descent and distribution.
VI. ADJUSTMENTS OR AMENDMENTS. Subject to Section 4.06 of the Plan, in the event that, subsequent to the date of this Agreement and prior to the Vesting Date, the outstanding common shares of Invacare are, as a result of a stock split, stock dividend, combination or exchange of shares, exchange of other securities, reclassification, reorganization, redesignation, merger, consolidation, recapitalization, liquidation, dissolution, sale of assets or other such change, including, without limitation, any transaction described in Section 424(a) of the Internal Revenue Code (the “Code”), increased, decreased, changed into or exchanged for a different number or kind of shares of stock or other securities of Invacare or another entity or converted into cash, then, except as otherwise provided below, there shall automatically be substituted for each Invacare common share subject to the award, the amount of cash or other securities or property into which each outstanding Invacare common share shall be converted or exchanged. Notwithstanding the preceding provisions of this Paragraph VI, the Committee may, in its sole