The company's Common Shares have a $.25 stated value. The Common Shares and the Class B Common Shares generally have identical rights, terms and conditions and vote together as a single class on most issues, except that the Class B Common Shares have ten votes per share and, in general, can only be transferred to family members or for estate planning purposes. Holders of Class B Common Shares are entitled to convert their shares into Common Shares at any time on a share-for-share basis. When Class B Common Shares are transferred out of a familial relationship, they automatically convert to Common Shares. The Board of Directors suspended further dividends on the Class B Common Shares.

As of December 31, 2019, 6,357 Class B Common Shares remained outstanding. Prior conversions of Class B Common Shares have substantially diminished the significance of the company's dual class voting structure. As of December 31, 2019, the holders of the Common Shares represent approximately 99.9% of the company's total outstanding voting power.

On May 17, 2018, the shareholders of the company approved the Invacare Corporation 2018 Equity Compensation Plan (the “2018 Plan”), which was adopted on March 27, 2018 by the company's Board of Directors (the “Board”). The company's Board adopted the 2018 Plan in order to authorize additional Common Shares for grant as equity compensation, and to reflect changes to Section 162(m) of the Internal Revenue Code (the “Code”) resulting from the U.S. Tax Cuts and Jobs Act of 2017.

Following shareholder approval of the 2018 Plan, all of the Common Shares then-remaining available for issuance under the Invacare Corporation 2013 Equity Compensation Plan (the “2013 Plan”) and all of the Common Shares that were forfeited or remained unpurchased or undistributed upon termination or expiration of awards under the 2013 Plan and under the Invacare Corporation 2003 Performance Plan (the “2003 Plan”), become available for issuance under the 2018 Plan. Awards granted previously under the 2013 Plan and 2003 Plan will remain in effect under their original terms.

The 2018 Plan uses a fungible share-counting method, under which each Common Share underlying an award of stock options or stock appreciation rights ("SAR") will count against the number of total shares available under the 2018 Plan as one share; and each Common Share underlying any award other than a stock option or a SAR will count against the number of total shares available under the 2018 Plan as two shares. Shares underlying awards made under the 2003 Plan or 2013 Plan that are forfeited or remain unpurchased or undistributed upon termination or expiration of the awards

will become available under the 2018 Plan for use in future awards. Any Common Shares that are added back to the 2018 Plan as the result of forfeiture, termination or expiration of an award granted under the 2018 Plan or the 2013 Plan will be added back in the same manner such shares were originally counted against the total number of shares available under the 2018 Plan or 2013 Plan, as applicable. Each Common Share that is added back to the 2018 Plan due to a forfeiture, termination or expiration of an award granted under the 2003 Plan will be added back as one Common Share.

The Compensation and Management Development Committee of the Board (the “Compensation Committee”), in its discretion, may grant an award under the 2018 Plan to any director or employee of the company or an affiliate. As of December 31, 2019, 3,851,945 Common Shares were available for future issuance under the 2018 Plan in connection with the following types of awards with respect to the company's Common Shares: incentive stock options, nonqualified stock options, SARs, restricted stock, restricted stock units, unrestricted stock and performance shares. The Compensation Committee also may grant performance units that are payable in cash. The Compensation Committee has the authority to determine which participants will receive awards, the amount of the awards and the other terms and conditions of the awards. The Common Shares authorized for issuance under the 2018 Plan includes an additional 3,000,000 Common Shares that were approved by shareholders at the company’s 2019 annual meeting on May 16, 2019.

At December 31, 2019, an aggregate of 905,263 Common Shares underlie awards which forfeited or expired unexercised under the 2003 and 2013 Plans and thus are available to be transferred under the 2018 Plan.

The 2018 Plan provides that shares granted come from the company's authorized but unissued Common Shares or treasury shares. In addition, the company's stock-based compensation plans allow employee participants to exchange shares for minimum withholding taxes, which results in the company acquiring treasury shares. Under these provisions, the company acquired approximately 112,000 treasury shares for $894,000 in 2019, 140,000 shares for $2,427,000 in 2018 and 85,000 shares for $1,276,000 in 2017.



	2019		2018		2017
Non-qualified and performance stock options	$	1,939	$	201	$	865
Restricted stock / units	4,772		4,305		4,648
Performance shares / units	4,399		777		1,834
Total stock-based compensation expense	$	11,110	$	5,283	$	7,347

As of December 31, 2019, unrecognized compensation expense related to equity-based compensation arrangements granted under the company's 2018 Plan and previous plans, which is related to non-vested options and shares, was as follows (in thousands):



	2019		2018		2017
Non-qualified and performance stock options	$	—	$	1,939	$	2,502
Restricted stock and restricted stock units	8,453		7,469		7,005
Performance shares and performance share units	8,269		7,441		5,523
Total unrecognized stock-based compensation expense	$	16,722	$	16,849	$	15,030

Total unrecognized compensation cost will be adjusted for future changes in actual and estimated forfeitures and for updated vesting assumptions for the performance share awards (see "Stock Options" and "Performance Shares and Performance Share Units" below). No tax benefits for share-based compensation were realized during 2019, 2018 and 2017 due to a valuation allowance against deferred tax assets. In accordance with ASC 718, any tax benefits resulting from tax deductions in excess of the compensation expense recognized is classified as a component of financing cash flows.

Generally, non-qualified stock option awards have a term of ten years and were granted with an exercise price per share equal to the fair market value of the company's Common Shares on the date of grant. Stock option awards granted in 2017 were performance-based awards which became exercisable based upon achievement of the performance goals established by the Compensation Committee as achieved over a 3-year period ending in 2019 which were subject to the Compensation Committee's exercise of negative discretion to reduce the number of options vested based on the progress towards the company's transformation.

The following table summarizes information about stock option activity for the three years ended 2019, 2018 and 2017:



	2019			Weighted Average Exercise Price		2018			Weighted Average Exercise Price		2017			Weighted Average Exercise Price
Options outstanding at January 1	1,885,362			$	18.78	2,631,569			$	19.44	2,542,732			$	21.19
Granted	—			—		—			—		756,420			12.15
Exercised	—			—		(184,549		)	14.28		(193,263		)	13.51
Canceled	(444,160		)	20.49		(561,658		)	23.34		(474,320		)	19.45
Options outstanding at December 31	1,441,202			$	18.26	1,885,362			$	18.78	2,631,569			$	19.44
Options exercise price range at December 31	$ 12.15 to					$ 12.15 to					$ 12.15 to
	$	33.36				$	33.36				$	33.36
Options exercisable at December 31	910,267					1,354,202					2,029,773
Shares available for grant at December 31*	3,851,945					3,994,255					2,131,355



	Options Outstanding				Options Exercisable
Exercise Prices	Number Outstanding At 12/31/19	Weighted Average Remaining Contractual Life (Years)	Weighted Average Exercise Price		Number Exercisable At 12/31/19	Weighted Average Exercise Price
$ 12.15 – $20.00	792,284	5.8	$	12.75	261,349	$	13.98
$ 20.01 – $25.00	306,999	1.7	24.45		306,999	24.45
$ 25.01 – $30.00	337,423	0.6	25.33		337,423	25.33
$ 30.01 – $33.36	4,496	1.4	33.36		4,496	33.36
Total	1,441,202	3.7	$	18.26	910,267	$	21.82

The 2018 Plan provides for a one-year minimum vesting period for stock options and, generally, options must be exercised within ten years from the date granted. No stock options were issued in 2019 or 2018 and those issued in 2017 were performance-based and vested after the conclusion of the three-year performance period ended December 31, 2019 based on achievement of performance goals established by the Compensation Committee and subject to the Compensation Committee's exercise of negative discretion to reduce the number of options vested based on the progress towards the company's transformation. All other outstanding stock options were issued in 2014 or prior years and were not performance-based.

For the stock options issued in 2014 and prior, 25% of such options vested one year following the issuance and provided a four-year vesting period whereby options vest equally in 25% installments in each year. Options granted with graded vesting were accounted for as single options. The fair value of options granted is estimated on the date of grant using the Black-Scholes option-pricing model. The calculated fair value of the 2017 performance option awards was $5.38 based on the following assumptions:

Expected dividend yields was based on historical dividends. Expected stock price volatility percentage was calculated at each date of grant based on historical stock prices for a period of time commensurate with the expected life of the option. The assumed expected life and forfeiture percentage were based on the company's historical analysis of option history.

The weighted-average fair value of options granted in 2017 was $5.38. The weighted-average remaining contractual life of options outstanding at December 31, 2019, 2018 and 2017 was 3.7, 3.8 and 3.9 years, respectively. The weighted-average contractual life of options exercisable at December 31, 2019 was 1.6 years. The total intrinsic value of stock awards exercised in 2019, 2018 and 2017 was $0, $755,000 and $350,000, respectively. As of December 31, 2019 and 2018, the intrinsic value of all options outstanding and of all options exercisable was $0 and $0, respectively.

The exercise of stock awards in 2019, 2018 and 2017 resulted in cash received by the company totaling $0, $2,626,000 and $2,676,000 for each period, respectively with no tax benefits for any period. The total fair value of awards vested during 2019, 2018 and 2017 was $2,844,000, $1,000 and $363,000, respectively.



	2019		Weighted Average Fair Value		2018		Weighted Average Fair Value		2017		Weighted Average Fair Value
Stock / Units unvested at January 1	637,663		$	15.04	776,520		$	13.75	878,356		$	15.87
Granted	828,484		9.86		377,299		17.48		523,412		12.37
Vested	(309,150	)	14.26		(386,275	)	15.05		(369,128	)	16.63
Canceled	(191,912	)	12.60		(129,881	)	14.43		(256,120	)	14.02
Stock / Units unvested at December 31	965,085		$	11.32	637,663		$	15.04	776,520		$	13.75

The restricted stock awards generally vest ratably over the three years after the award date. Unearned restricted stock compensation, determined as the market value of the shares at the date of grant, is being amortized on a straight-line basis over the vesting period.



	2019		Weighted Average Fair Value		2018		Weighted Average Fair Value		2017		Weighted Average Fair Value
Shares / Units unvested at January 1	448,294		$	14.37	457,879		$	12.33	309,468		$	14.58
Granted	576,737		9.93		205,164		17.48		336,694		12.02
Vested	(255,259	)	12.02		(155,766	)	12.82		—		—
Canceled	(16,500	)	11.99		(58,983	)	13.43		(188,283	)	15.48
Shares / Units unvested at December 31	753,272		$	11.82	448,294		$	14.37	457,879		$	12.33

During 2019, 2018 and 2017, the performance shares and performance share units (for non-U.S. recipients) were granted as performance awards with a 3-year performance period with payouts based on achievement of certain performance goals. The awards are classified as equity awards as they will be settled in common shares upon vesting. The number of shares earned will be determined at the end of the three-year performance period based on achievement of performance criteria for January 1, 2019 through December 31, 2021 established by the Compensation Committee at the time of grant. Recipients will be entitled to receive a number of Common Shares equal to the number of performance shares that vest based upon the levels of achievement which may range between 0% and 150% of the target number of shares with the target being 100% of the initial grant.