DEF 14A 1 proxy2021.htm DEF 14A Document

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
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Exchange Act of 1934
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Invacare Corporation
 
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April 5, 2021

Dear Fellow Shareholder,

Enclosed are Invacare’s 2021 Proxy Statement and voting materials. The proxy statement is a means for us to communicate with the Company’s shareholders about important governance matters. We use the proxy statement to provide information about our Board of Directors, our governance practices, the alignment of our executive compensation program with the interests of our shareholders and to ask for shareholder approval of important business matters. The alignment of the Company's management and its Board of Directors with shareholders is an essential part of our relationship, helping ensure we are delivering long-term value to the Company’s owners. We appreciate your taking the time to review the enclosed information, so we can remain engaged with you as we keep pace with changes in the world around us.

As stewards of Invacare, our management team greatly values its engagement with our shareholders. In these proxy materials, we highlight key elements that demonstrate our ongoing commitment to good corporate governance. In 2020, we worked hard to mitigate the adverse impacts of the pandemic on our business and operations and delivered strong financial performance. Our results were significantly improved over the prior year, as we made continued progress on long-term value creation projects and developed a full pipeline of new products.

Shareholder Engagement
We strive to maintain an active dialogue with our shareholders throughout the year. This direct communication provides us valuable insight into the perspectives and expectations of our shareholders, while also validating the actions and initiatives we have undertaken.

Corporate Governance
We routinely evaluate Invacare’s governance practices to ensure strong Board accountability, shareholder rights, and policies that maintain investor and public trust. We are pleased with the diverse perspectives and backgrounds, deep expertise, and strong industry-specific experience on our Board. In 2021, our Board welcomed a new member, which increased our gender diversity and provided new expertise directly linked to our strategy to drive culture change toward profitable growth.

Quality of Earnings
Long-term quality of earnings is based on doing business “the right way,” so all results we generate begin with Quality. Our accomplishments over the course of 2020 were driven by our relentless drive to overcome the supply chain challenges of the global pandemic and address the demand for our medical devices, which are an essential part of patient care. The management team is centrally focused on generating sustainable profitability and delivering long-term shareholder value. The plan is straightforward: provide customers differentiated value.

Executive Compensation
Our executive compensation program aligns with our business strategies and shareholder interests. Our shareholder engagement discussions have provided consistent feedback that our investors favor incentive compensation arrangements tied to specific performance measures that drive long-term



performance and value creation. Our compensation program is designed to reward long-term business success, balancing rewards for in-period financial performance with material improvements to how we sustainably operate, including in ways which may not yet be yielding robust financial results. By doing both, we believe shareholders’ interests are met with short-term results, increased long-term quality of earnings performance and Company value.

Environmental, Social and Governance Responsibility
We believe Invacare’s commitment to strong principles of environmental stewardship, corporate social responsibility and good governance practices is essential to achieving our goals and delivering sustainable shareholder value. We believe that the principles of Diversity, Equity and Inclusion form an important part of our culture and are aligned with our mission of Making Life's Experiences Possible. They align "how" we conduct our business with the interests of shareholders, customers, employees, suppliers and community constituents. As we continue to advance our policies and practices in this area, our Board intends to provide guidance and oversee management's adherence to these principles.
Summary
Despite the challenges of this past year, we are pleased with our progress toward our long-term financial and strategic goals. We continue to believe that the Company has great potential to deliver sustainable value for its customers, employees and owners. We appreciate the continued interest and feedback from our shareholders. Our commitment to creating shareholder value through Invacare’s mission is unwavering.

We encourage you to use the Proxy Statement, along with other materials, such as Invacare’s Annual Report on Form 10-K, to help you participate in this year’s shareholder voting process.

Please vote your proxy. Whether or not you expect to attend the Annual Meeting in person, please return the enclosed proxy card as soon as possible to ensure your shares are represented.

Thank you for your continued support of Invacare.
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Matthew E. MonaghanC. Martin Harris, M.D.
Chairman of the BoardLead Independent Director
President and Chief Executive Officer

Invacare Corporation
One Invacare Way, Elyria, OH 44035 USA
440-329-6000 www.invacare.com



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Invacare Corporation
Notice of Annual Meeting of Shareholders
To Be Held On May 20, 2021
The 2021 Annual Meeting of Shareholders of Invacare Corporation (the “Company”) will be held at the Company's Headquarters, One Invacare Way, Elyria, Ohio on Thursday, May 20, 2021, at 8:30 A.M. EDT, for the following purposes:
1.    To elect ten Directors for a one-year term expiring in 2022;
2.    To approve and adopt Amendment No. 3 to the Invacare Corporation 2018 Equity Compensation Plan;
3.    To ratify the appointment of Ernst & Young LLP as the Company's independent registered public accounting firm for the 2021 fiscal year;
4.    To hold an advisory vote to approve the compensation of the Company's named executive officers; and
5.    To transact any other business as may properly come before the Annual Meeting.
Holders of common shares and Class B common shares of record as of the close of business on Monday, March 23, 2021 are entitled to vote at the Annual Meeting. It is important that your shares be represented at the Annual Meeting. For that reason, we ask that you promptly vote your proxy. If you are a shareholder of record, you can vote in one of the following ways:
1.Via the internet, by using www.proxyvote.com.
2.By telephone, by calling the number on your proxy card, voting instruction card, or notice.
3.By mail, by marking, signing, dating and mailing your proxy card if you requested printed materials, or your voting instruction card
4.In person, by attending the Annual Meeting.
We are actively monitoring the health and safety concerns and government recommendations and restrictions relating to the COVID-19 pandemic. As a result, we may impose precautionary procedures on meeting attendees or may decide to hold the Annual Meeting at a different location. If we decide to change the location of the Annual Meeting, we will announce the decision to do so in advance, and details on how to attend will be issued by press release (which will be filed with the SEC) and available at www.invacare.com. If you are planning to attend the Annual Meeting, please be sure to check our website for any updates and continue to review guidance from public health authorities as the time for the Annual Meeting approaches. As always, we encourage you to vote your shares by proxy prior to the Annual Meeting.
By Order of the Board of Directors,
Anthony C. LaPlaca, Secretary
April 5, 2021

Important Notice Regarding the Availability of Proxy Materials
for the Shareholder Meeting to Be Held on May 20, 2021:
The Notice of Annual Meeting Proxy Statement and the
2020 Annual Report and the means to vote by the internet are available
at www.proxyvote.com




TABLE OF CONTENTS



TABLE OF CONTENTS





Proxy Summary
PROXY SUMMARY
The Board of Directors is pleased to present this year's notice of Annual Meeting and Proxy Statement.
To assist you in reviewing the proposals to be acted upon at the Annual Meeting, the Company is providing the following information on corporate governance highlights, Board composition, the Company’s business improvement strategy, and key executive compensation actions and decisions. This is a summary only and does not contain all the information that should be considered in connection with this proxy statement. For more complete information, please read this entire proxy statement and the Company’s 2020 Annual Report on Form 10-K before voting.
Annual Meeting of Shareholders
Date and TimeMay 20, 2021 at 8:30 A.M. EDT
PlaceCompany's Headquarters
One Invacare Way, Elyria, Ohio 44035
Record DateMarch 23, 2021
Voting
Holders of outstanding common shares and Class B common shares as of the record date are entitled to vote at the Annual Meeting
Stock Symbol
IVC
Exchange
NYSE
Transfer Agent
EQ Shareowner Services

Annual Meeting Proposals
Item of BusinessBoard's RecommendationSee
Page(s)
(1)To elect ten Directors for a one-year term expiring in 2022FOR all Nominees
(2)To approve and adopt Amendment No. 3 to the Invacare Corporation 2018 Equity Compensation PlanFOR
(3)To ratify the appointment of Ernst & Young LLP as the Company's independent registered public accounting firm for its 2021 fiscal yearFOR
(4)To hold an advisory vote to approve the compensation of the Company's named executive officersFOR

Corporate Governance Highlights
We are committed to maintaining a strong corporate governance structure, which we believe promotes the long-term interests of shareholders and strengthens Board and management accountability. We believe good governance fosters trust in the Company by all stakeholders, including our shareholders, customers, employees and the communities that we serve. Our corporate governance framework includes the following features:
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Proxy Summary
*Annual election of Directors, with majority voting and resignation policy*Annual self-assessments and evaluation of Board and committees
*9 of 10 Directors are independent*No "poison pill" in place
*Lead Independent Director with oversight of independent Directors' executive sessions and information flow to the Board*Formal code of conduct, ethics hotline, and ethics training and communications to reinforce Invacare's culture of compliance
*Shareholder majority voting standard to amend charter or code of regulations*Risk oversight by full Board and designated committees
*Policy restricting Directors to serve on no more than three other public company boards*Prohibition of hedging, pledging, and short sales by Executive Officers and Directors
*Board conducts annual evaluation of Chairman, President and CEO*Annual Say-on-Pay vote
Board Composition
Our Board has continued to undergo a transformation in recent years. As of the 2021 Annual Meeting, if all nominees are elected, average Director tenure and age will be approximately 6 years and 58 years, respectively. This represents a significant turnover since January 2014, when average tenure and age were approximately 15 years and 66 years, respectively. We are proud of the qualifications, breadth of leadership skills and industry experience, and the gender, racial and ethnic diversity, of our Board. Among our non-executive Directors, diversity by gender is 50% and diversity by race and ethnicity is 30%.

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Proxy Summary
Board of Directors and Committees
Our Board is composed of individuals with the integrity, skills and expertise necessary to oversee the business. A strong philosophy of active engagement and constructive debate are guiding principles for how the Board conducts itself for the benefit of shareholders. The following table summarizes information about each of our Director nominees, whose qualifications are further described on Pages 12-22.
Age & Director SinceCommittees *IndependentCEO ExperienceHealthcare Experience0-5 Year TenureDiversity**International / Europe ExperienceFinancial Turn-
around
Susan H. Alexander
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64

2016
RAC (Chair)

Nom/Gov
þþþþþ
Julie A.
Beck
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59

2019
Audit

Nom/Gov
þþþþþ
Petra Danielsohn-Weil, PhD
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61

2018
Comp

RAC
þþþþþ
Stephanie L. Fehr
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56

2021
Comp

Nom/Gov
þþþþþ
Diana S. Ferguson
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58

2018
Audit

Nom/Gov
þþþ
Marc M. Gibeley
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56

2015
Audit

Comp
þþþþ

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Proxy Summary
Age & Director SinceCommittees *IndependentCEO ExperienceHealthcare Experience0-5 Year TenureDiversity**International / Europe ExperienceFinancial Turn-
around
C. Martin Harris, M.D.
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64

2003
Comp

Nom/Gov
(Chair)
þþþ
Matthew E. Monaghan
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53

2015
N/Aþþþþ
Clifford D. Nastas
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58

2015
Audit (Chair)

RAC
þþþþ
Baiju R.
Shah
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49

2011
Comp (Chair)

RAC
þþþþ

* Audit - Audit Committee
Comp - Compensation and Management Development Committee
Nom/Gov - Nominating and Governance Committee
RAC - Regulatory and Compliance Committee

** gender, racial, ethnic
Our Commitment to ESG and DEI Principles
Invacare continues to develop and expand its Environmental, Social and Governance ("ESG") program, which was formerly referred to as our Corporate Social Responsibility (CSR) program. We have expanded our ESG focus to include our actions and commitment to promoting and sustaining Diversity, Equity and Inclusion ("DEI") at all levels of the organization. Last year, our Board of Directors asserted active oversight of our ESG and DEI journey by assigning oversight responsibility to the Nominating & Governance Committee to provide specific program guidance and adding program reviews as a regular agenda item at each quarterly Board meeting.
Our executive leadership believes ESG and DEI principles are important parts of our culture and are aligned with our mission of Making Life's Experiences Possible by supporting accessibility to, and enabling inclusion in, activities of daily living for the people who utilize our products and their caregivers. For our associates, some highlights of our program include:
Expanded sustainability objectives in new product development; examples include:
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Proxy Summary
Launched shower chair product line which replaced plastic with "green" materials;
Developing new respiratory product with recyclable materials and minimal mixed materials;
Consumption of renewable energy on our Ohio campus;
Promoting an ethical and socially conscious supply chain.
The Company believes that an innovative workforce needs to be diverse, with skills and perspectives drawn from a broad spectrum of backgrounds and experiences. We are promoting a workplace that is safe from hazards and free from discrimination and harassment, and we are training our associates on harassment prevention, the importance of diversity and bias avoidance.
The Company is proud of its diversity in the composition of the Board of Directors and executive leadership and we strive to continue to expand the diversity among our total workforce. Our global and U.S. demographics as of December 31, 2020 are summarized in the tables below:
Global Gender Demographics
FemaleMale
Manager & Above26%74%
Individual Contributors (1)42%58%
Manufacturing and Warehouse31%69%
Total Invacare35%65%
U.S. Race and Ethnicity Demographics
Manager & AboveIndividual Contributors (1)Manufacturing and Warehouse Total U.S.
Black / African American5%6%11%8%
Asian5%1%2%3%
Hispanic / Latino6%11%40%24%
White82%80%46%64%
Multiracial, Native American and Pacific Islander2%2%1%1%
(1) Below Manager who do not supervise others
Our ESG Report can be found at www.invacare.com, by clicking on "Corporate Social Responsibility" under the "About Us" tab.
Executive Leadership Driving Business Improvement
Invacare designs, manufactures and distributes durable medical devices that assist people with congenital, acquired and degenerative conditions. In these circumstances, the people who use our devices may be otherwise challenged with basic needs of living or may be immobile or dependent upon others for essential care. Our solutions help people with these challenges in four areas of care: move, breathe, rest, and essential hygiene.
The Company is executing a multi-year strategy to return to profitability by focusing its resources on products and services that provide greater healthcare value in clinically complex rehabilitation, respiratory therapy, and post-acute care. Key elements of the business optimization and growth plans are:
Globally, continue to drive all business segments and product lines based on their potential to achieve a leading market position and to support profitability goals;
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Proxy Summary
In Europe, leverage centralized innovation and supply chain capabilities while reducing the cost and complexity of a legacy infrastructure;
In North America, adjust the portfolio to consistently grow profitability amid cost increases by adding new products, reducing costs and continuing to improve customers' experience;
In Asia Pacific, remain focused on sustainable growth and expansion in the southeast Asia region; and
Take actions globally to reduce working capital and improve free cash flow.
COVID-19 Impact
This proxy statement includes highlights of historic business developments and discussions of our compensation and governance practices in 2020. We continue to actively monitor the impact of the COVID-19 pandemic, which significantly impacted our business in 2020 with reduced net sales, higher costs and supply chain disruptions on a global basis. The pandemic resulted in high demand for our respiratory and bed products which were deployed in the fight against COVID-19. This increased demand was offset by lower sales of our mobility and seating and lifestyle products as public health restrictions reduced access to care facilities and to our customers. During the year, we took significant actions to mitigate the negative financial and operational impacts of the pandemic. These actions included voluntary temporary reductions in salary of 10% by our named executive officers, and deferrals of 2020 salary increases and 2019 bonus payments by our broader management team, including the named executive officers, until the end of 2020. The Compensation and Management Development Committee adjusted the performance targets for incentive plans to account for the adverse impacts of the pandemic. The adjustments to our compensation programs are further discussed in the “Compensation Discussion and Analysis” section of this proxy statement.
Executive Compensation
Our executive compensation program is based on the following key principles:
Pay for PerformanceOur executives are rewarded for meeting or exceeding financial and operating performance objectives and for leadership excellence, with increased at-risk compensation at higher, more influential levels.
Alignment with Shareholders' InterestsOur performance goals are established with the long-term objective of creating sustainable and profitable growth.
Attraction of Top TalentCompensation, together with other factors, enables us to attract key talent to build our core businesses and expand as a healthcare technology company in meaningful ways.
Retention of TalentOur compensation program is structured to appropriately motivate our important and talented employees to remain with the Company and continue making significant long-term contributions.
Compensation Governance Practices
We have several governance practices which we believe support the soundness and efficacy of our compensation programs. In short:
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Proxy Summary
What We DoWhat We Don't Do
þ Pay for Performance
ý No Gross-Ups for Excise Taxes in New Arrangements
þ Annual Say-on-Pay Vote
ý No Repricing Stock Options
þ Clawback Policy
ý No Hedging or Pledging of Company Stock
þ Short-Term and Long-Term Incentives
ý No Dividend Equivalents on Unvested Equity Grants
þ Independent Compensation Consultant
þ Stock Ownership Guidelines
þ Limited Perquisites and No Related Tax Gross-Ups
þ Double-Trigger Change of Control Agreements
þ Mitigate Inappropriate Risk Taking
Executive Compensation is Tied to Performance
To promote the strategic goals of our business transformation and considering the investments being made in the Company's long-term earnings potential which may not, by their nature, each result in immediate financial improvements, the performance-based elements of our executive compensation program are based on financial and non-financial metrics that are indicative of progress toward these goals.
Our corporate performance was a key factor in our 2020 named executive officer (NEO) compensation program. Highlights of the alignment of our pay practices with performance are as follows:
A substantial portion of the named executive officers’ total compensation is “at risk” based on performance goals.
We utilize both long-term and short-term awards, comprised of long-term equity-based awards and an annual cash bonus award.
A significant percentage of long-term incentive awards are performance based.
The key metrics for our annual cash bonus awards were Free Cash Flow, which is an important indicator of the Company's overall financial performance, and Adjusted Operating Income, which is an important measure of operating performance. Combined, these metrics formed a compelling incentive to achieve good financial performance with appropriate stewardship.
A key metric for vesting performance share awards in 2020 was Average Gross Profit Percentage, which is a leading indicator of progress on our business improvement strategy to shift in focus to higher margin, clinically complex product solutions, along with an Adjusted EBITDA performance metric that reflected the overall relative improvement of shareholder value.
The Company uses multiple performance measures and seeks to provide an appropriate mix of annual and long-term incentives that balance short-term and long-term objectives.
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Proxy Summary
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See Pages 49-91 for additional information regarding executive compensation.
Shareholder Engagement Program

The Company conducted its investor outreach program again this year, in which the Chief Executive Officer and other members of senior management, together with the independent Chair of the Board's Compensation and Management Development Committee (the "Compensation Committee"), participated. The Company contacted institutional investors who, in the aggregate, owned over 80% of the outstanding common shares as of September 30, 2020, and the two major proxy advisory firms, to request meetings. We were pleased to have held productive meetings with institutional investors that held approximately 35% of our outstanding shares and with one of the leading proxy advisory firms. Several of our largest holders and one of the proxy advisory firms indicated that they had no concerns to express with the Company and declined our meeting requests. During these engagement meetings, the Company discussed its progress on its business improvement initiatives, its Board composition, diversity and refreshment, corporate governance highlights, its ESG initiatives and DEI commitment, and its responsible performance-based pay practices. In addition, we sought input related to potential increases in the shares available under the Company's equity compensation plan. In the course of the discussions, the Company received positive feedback on these matters and engaged in constructive dialog concerning the Company's alignment of pay and performance. Overall, the Company did not receive any material concerns with its executive compensation practices, and the Company believes its practices are aligned with the interests of shareholders.
Response to Advisory Vote
Approximately 92% of the votes cast at the 2020 Annual Meeting of Shareholders on the non-binding advisory vote on the compensation of the Company's named executive officers were voted in support of the Company's executive compensation program. Advisory say-on-pay votes have been held annually since 2011, and the Board of Directors has determined that say-on-pay votes will continue to be held every year until the next shareholder vote on the frequency of say-on-pay votes. The Compensation Committee considered the results of the 2020 say on pay vote to be an indication of shareholder support for the structure of the Company's executive compensation program, its philosophy and objectives, the outcomes associated with the program and the Compensation Committee's overall governance of the executive compensation process.
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Questions and Answers
QUESTIONS & ANSWERS REGARDING ANNUAL MEETING
Why am I receiving these materials?
This proxy statement is furnished in connection with the solicitation of proxies by the Board of Directors of Invacare for use at the Annual Meeting of Shareholders to be held on May 20, 2021, and any adjournments or postponements that may occur. The time, place and purposes of the Annual Meeting are set forth in the Notice of Annual Meeting of Shareholders, which accompanies this proxy statement. The Notice of Annual Meeting of Shareholders, this proxy statement the 2020 annual report, and the accompanying proxy card were first furnished to shareholders on April 5, 2021.
Who is paying for this proxy solicitation?
The Company will pay the expense of soliciting proxies, including the cost of preparing, assembling and mailing the notice, proxy statement and proxy. In addition to the solicitation of proxies by mail, Invacare's Directors, officers or employees, without additional compensation, may make solicitations personally and by telephone. The Company has engaged Alliance Advisors LLC to assist with solicitation of proxies for a fee of $15,000 plus reimbursement of certain disbursements and expenses. The Company may also reimburse brokerage firms, banks and other agents for the cost of forwarding proxy materials to beneficial owners.
Who is entitled to vote?
Only shareholders of record at the close of business on March 23, 2021, the record date for the Annual Meeting, are entitled to receive notice of and to vote at the Annual Meeting. On this record date, there were 34,822,377 common shares and 3,667 Class B common shares outstanding and entitled to vote.
How many votes do I have?
On each voting item, you have one vote for each outstanding common share you own as of March 23, 2021, and ten votes for each outstanding Class B common share you own as of March 23, 2021.
Except as otherwise provided by Invacare's amended and restated Articles of Incorporation or amended and restated Code of Regulations, each as amended to date, or required by law, holders of common shares and Class B common shares will at all times vote on all matters, including the election of Directors, together as one class. The holders of common shares and Class B common shares will vote together as one class on all four proposals described in this proxy statement. No holder of shares of any class has cumulative voting rights in the election of Directors.
The Company’s Class B common shares were authorized in 1987 and issued to then existing shareholders. Because of the transfer restrictions that apply to the Class B common shares, over time, substantially all of the Class B common shares have been converted to common shares. The Company is not permitted to issue any additional Class B common shares except in very limited circumstances, and the Company has no intention to do so. In 2018, the Company’s Board of Directors voted to discontinue providing a dividend to holders of Class B common shares, and the Company undertook an outreach campaign to contact the holders of Class B common shares to explain the change and remind them of their rights to convert their Class B shares to common shares. As of March 23, 2021, the remaining 3,667 shares of Class B common shares outstanding, with respect to which the Company has no right of redemption, represented approximately 0.11% of total voting power.
How do I vote?
If you are a shareholder of record, you can vote in one of the following ways:
1.Via the internet, by visiting www.proxyvote.com.
2.By telephone, by calling the number on your proxy card, voting instruction card, or notice.
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Questions and Answers

3.By mail, by marking, signing, dating and mailing your proxy card if you requested printed materials or your voting instruction card.
4.In person, by attending the Annual Meeting.
If you sign and return your proxy card, but do not properly direct how your shares should be voted on a proposal, the proxy holders will vote “FOR” each of the Director nominees named in proposal 1, “FOR” proposals 2, 3 and 4 and will use their discretion on any other proposals and other matters that may be brought before the Annual Meeting.
The Board of Directors does not know of any matters to be presented at the Annual Meeting other than those stated in the Notice of Annual Meeting of Shareholders. However, if other matters properly come before the Annual Meeting, it is the intention of the persons named in the accompanying proxy to vote based on their best judgment on any other matters unless properly instructed to do otherwise.
If you hold common shares through a broker or nominee, you may vote in person at the Annual Meeting only if you have obtained a signed proxy from your broker or nominee giving you the right to vote your shares. If you hold your common shares in street name through a broker or other nominee, you should follow their instructions on how to vote your shares, which may include separate electronic voting instructions.
We continue to actively monitor the health and safety concerns and public health restrictions relating to the COVID-19 pandemic. As a result, we may impose precautionary procedures on meeting attendees or may decide to hold the Annual Meeting at a different location. If we decide to change the location of the Annual Meeting, we will announce the decision to do so in advance, and details on how to participate will be issued by press release (which will be filed with the SEC) and available at www.invacare.com. If you are planning to attend the Annual Meeting, please be sure to check our website for any updates and continue to review guidance from public health authorities as the time for the Annual Meeting approaches.
How do I vote my common shares held in the Invacare Retirement Savings Plan?
If you are a participant in the Invacare Retirement Savings Plan, you can instruct the plan trustee as to how to vote the number of common shares that you are entitled to vote under the plan, via the internet, by telephone, or by mail, by following the directions described above "How do I vote?" If you do not timely instruct the trustee for the Invacare Retirement Savings Plan as to how to vote the shares credited to your account under the plan, your shares, together with all other uninstructed shares, will be voted in the same proportions that shares for which instructions were received will be voted.
What are the voting recommendations of the Board of Directors?
The Board of Directors recommends that you vote:
For” the election of the 10 Director nominees for a one-year term expiring in 2022;
For” the approval and adoption of Amendment No. 3 to the Invacare Corporation 2018 Equity Compensation Plan;
For” the ratification of the appointment of Ernst & Young LLP as the Company's independent
registered public accounting firm for its 2021 fiscal year; and
For” the approval of the compensation of the named executive officers.
What constitutes a quorum?
A quorum of shareholders will be present at the Annual Meeting if at least a majority of the aggregate combined voting power of common shares and Class B common shares outstanding on the record date are represented, in person or by proxy, at the Annual Meeting. On the record date, 34,859,047 votes were represented by outstanding shares; therefore, shareholders representing at least 17,429,524 votes will be required to establish a quorum. Abstentions and broker non-votes will be counted for the purpose of determining the presence of a quorum.
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Questions and Answers
Can I revoke or change my vote after I submit a proxy?
Yes. You can revoke your proxy or change your vote at any time before the proxy is exercised at the Annual Meeting. This can be done by executing and submitting a subsequent properly completed proxy card, sending a written notice to the Company's Secretary, or by attending the Annual Meeting and voting in person. You should be aware that simply attending the Annual Meeting will not automatically revoke your previously submitted proxy; rather you must notify an Invacare representative at the Annual Meeting of your desire to revoke your proxy and vote in person.
Can I access the Notice of Annual Meeting, Proxy Statement and 2020 Annual Report on the Internet?
The Notice of Annual Meeting, Proxy Statement and 2020 Annual Report and the means to vote by internet are available at www.proxyvote.com.
If you want to receive a paper or email copy of these documents, you must request one. There is NO charge for requesting a copy. Please choose one of the methods described in the Notice that was mailed to you.
If you hold your shares in a bank or brokerage account, your bank or broker may also furnish you with these documents electronically. Please check the information provided in the proxy materials furnished to you by your bank or broker regarding the availability of this service.
Brokerage firms have the authority under the New York Stock Exchange rules to vote shares on certain “routine” matters when their customers do not provide voting instructions. However, on other matters, when the brokerage firm has not received voting instructions from its customers, the brokerage firm cannot vote the shares on that matter and a “broker non-vote” occurs. Proposal 3 related to the ratification of the appointment of the Company's independent registered public accounting firm is a routine matter, but the other proposals in this proxy statement are non-routine matters. Please be sure to give specific voting instructions to your broker so that your vote can be counted.
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Election of Directors (Proposal 1)

ELECTION OF DIRECTORS
(Proposal No. 1)
All Director nominees are nominated for election to serve a one-year term until the Annual Meeting in 2022 or until their successors have been duly elected. Each of the nominees has indicated his or her willingness to serve as a Director if elected.
Nominees
NameAgePosition with the CompanyDirector Since
Matthew E. Monaghan53Chairman, President & CEO2015
Susan H. Alexander64Independent Director2016
Julie A. Beck59Independent Director2019
Petra Danielsohn-Weil, PhD61Independent Director2018
Stephanie L. Fehr56Independent Director2021
Diana S. Ferguson58Independent Director2018
Marc M. Gibeley56Independent Director2015
C. Martin Harris, M.D.64Lead Independent Director2003
Clifford D. Nastas58Independent Director2015
Baiju R. Shah49Independent Director2011

Votes Required
The nominees receiving the greatest number of votes will be elected. A proxy that indicates “Withhold Authority” with respect to the election of one or more Directors will not be voted with respect to the nominee or nominees indicated. Abstentions and broker non-votes will not be voted for or withheld from the election of Directors and will not be counted for purposes of determining the number of votes cast in the election of Directors. However, please note that our majority voting Director resignation procedures under our Code of Regulations require any Director nominee who receives a greater number of votes marked “Withhold Authority” than marked “For” his or her election in an uncontested election of Directors to promptly tender his or her resignation to the Board following certification of the shareholder vote. Under the Company's procedures, the Nominating and Governance Committee, or another committee comprised entirely of independent Directors or the Board of Directors, will, within 90 days following the certification of the shareholder vote, consider, and the Board will determine, whether to accept the resignation. The Board's determination and explanation of its decision will be promptly disclosed in a press release or Form 8-K submitted to the SEC.
Director Biographies and Qualifications
Below is certain biographical information regarding our Director nominees, as well as a discussion of the qualifications that led the Board of Directors to conclude that each Director nominee should serve as a Director of the Company. Each of the individuals listed below has a wealth of knowledge, experience and expertise developed over a lifetime of achievement. In the discussion below, we have not detailed all of the numerous factors considered by the Board, but rather have highlighted the primary qualifications that led the Board to conclude that each of the following individuals should serve as a Director. The Board of Directors believes that the current Board composition reflects an appropriately diverse group of individuals with relevant knowledge and experience that greatly benefits the Company.
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Election of Directors (Proposal 1)
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Susan H. Alexander
Age 64
Director Since 2016* Nominating and Governance Committee
Independent* Regulatory and Compliance Committee (Chair)
BACKGROUND
Susan H. Alexander has been a Director since December 2016. Ms. Alexander has served as Chief Legal Officer and Secretary, or in similarly-titled roles, of Biogen Inc. (NASDAQ: BIIB), a biopharmaceutical company, since 2006. Prior to joining Biogen, Ms. Alexander served as the Senior Vice President, General Counsel and Corporate Secretary of PAREXEL International Corporation (NASDAQ: PRXL), a biopharmaceutical services company from 2003 to 2006. From 2001 to 2003, Ms. Alexander served as General Counsel of IONA Technologies, a software company. From 1995 to 2001, Ms. Alexander served as Counsel at Cabot Corporation, a specialty chemicals and performance materials company. Prior to that, Ms. Alexander was a partner at the law firms of Hinckley, Allen & Snyder and Fine & Ambrogne. Ms. Alexander serves as Governing Trustee of Dana Farber Cancer Institute.
QUALIFICATIONS
The Board concluded that Ms. Alexander should serve as a Director of the Company primarily due to her experience in the bio- and med-tech industries gained through her legal executive leadership roles in Biogen and PAREXEL International. Ms. Alexander has a broad range of executive corporate governance and legal experience both from private law and general counsel positions in global med-tech, software and manufacturing companies and will bring strong cross-functional legal, regulatory and senior management expertise to the Board. The Board believes that Ms. Alexander’s background and experience will be valuable in contributing to the Board’s oversight of the Company’s regulatory and compliance functions, particularly as the Company seeks to continue the transformation of its business and drive toward more clinically complex product solutions in the health care industry.
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Election of Directors (Proposal 1)

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Julie A. Beck
Age 59
Director Since 2019* Audit Committee
Independent* Nominating and Governance Committee
BACKGROUND
Julie A. Beck was appointed a Director in September 2019. Ms. Beck has served as Senior Vice President and Chief Financial Officer of NOVA Chemicals Corporation, a petrochemical company, since 2016. Prior to joining NOVA Chemicals, Ms. Beck served as Chief Financial Officer of the mining and machinery business of Joy Global, Inc., a former NYSE-listed manufacturer and servicer of heavy equipment used for minerals extraction from 2008 to 2016. From 2014 to 2016, Ms. Beck also served as Global Vice President of Supply Chain, Operational Excellence and Quality for Joy Global, Inc. Ms. Beck previously served in various positions, including Chief Financial Officer, at both Journal Register Company, a former NYSE-listed publishing organization, and Norwood Promotional Products, Inc., a global consumer products and promotional products manufacturer. Prior to that, Ms. Beck served in financial positions for Temple-Inland, Inc., a corrugated packaging and building products company, and Rockwell Automation (NYSE: ROK), an industrial automation equipment manufacturer. Ms. Beck is a certified public accountant.
QUALIFICATIONS
The Board concluded that Ms. Beck should serve as a Director of the Company primarily due to her deep expertise in finance, accounting, financial reporting and internal controls management, as well as her experience in managing global supply chain, business systems and quality control operations. Ms. Beck has extensive financial and operational management experience from positions with both private and public manufacturing, industrial and consumer businesses, including international companies with sizable and far reaching global operations. The Board believes that Ms. Beck’s background and experience will be valuable in further strengthening the Board’s financial and accounting expertise and in contributing to the Board’s oversight of the Company’s transformation and business operations, particularly the Company’s international operations.

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Election of Directors (Proposal 1)
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Petra Danielsohn-Weil, PhD
Age 61
Director Since 2018* Compensation and Management Development Committee
Independent* Regulatory and Compliance Committee
BACKGROUND

Petra Danielsohn-Weil, PhD has been a Director since May 2018. From 2014 until her retirement in August 2017, Ms. Danielsohn-Weil was the Regional President for Pfizer Essential Health - Europe. Pfizer Essential Health is a producer of non-viral anti-infectives, biosimilars and sterile injectable medicines and is a business unit of Pfizer Inc. (NYSE:PFE), a research-based, global biopharmaceutical company. Ms. Danielsohn-Weil previously served in various general management, regional and global business unit executive roles in Europe and the United States for Pfizer from 2000 through 2014. Prior to that she served in various commercial and strategic leadership roles in Europe and the US for Warner-Lambert from 1988 until its acquisition by Pfizer in 2000. She serves as a board member of NovaMedica LLP, a pharmaceutical company owned by Russian and U.S. investors and a portfolio company of Rusnano JSC Corporation. Since 2019, Ms. Danielsohn-Weil has been a member of the supervisory Board of Gruenenthal Pharma GmbH.
QUALIFICATIONS
The Board concluded that Ms. Danielsohn-Weil, PhD should serve as a Director of the Company primarily based on her wealth of executive experience leading biotech businesses in the European market, including in commercial development, business integration, research and development, sales, digital marketing, and implementing long-term strategic plans in a complex environment. In light of the Company’s significant operations in Europe, the Board believes that Ms. Danielsohn-Weil’s background and unique experience in emerging markets in the European biotech space will be invaluable as the Company seeks to continue the transformation of its business.

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Election of Directors (Proposal 1)

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Stephanie L. Fehr
Age 56
Director Since 2021* Compensation and Management Development Committee
Independent* Nominating and Governance Committee
BACKGROUND

Stephanie L. Fehr was appointed a Director on March 25, 2021. Ms. Fehr has served since 2017 as Executive Vice President and Chief Human Capital Officer of UnitedHealthcare, a division of UnitedHealth Group (NYSE: UGH), Minnetonka, MN, which provides healthcare benefits to an array of customers and markets. Prior to joining UnitedHealthcare, Ms. Fehr spent 17 years in Human Resources and Talent leadership roles with Apple Computer Inc. (NASDAQ: AAPL), Cupertino, CA, which designs, develops and sells consumer electronics, computer software, and online services from 2000 to 2017.
QUALIFICATIONS
The Board concluded that Ms. Fehr should serve as a Director of the Company primarily based on her wealth of executive level experience in human resources and talent development in leading healthcare and technology businesses. She has a wide range of experience in the design, development and implementation of talent strategies, organizational design, and leadership training. The Board believes that Ms. Fehr's background and experience in human capital leadership will be invaluable as the Company continues to drive performance excellence, business process improvement and culture and organizational change.
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Election of Directors (Proposal 1)

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Diana S. Ferguson
Age 58
Director Since 2018* Audit Committee
Independent* Nominating and Governance Committee
BACKGROUND

Diana S. Ferguson has been a Director since July 2018. Ms. Ferguson has served as Principal and Founder of Scarlett Investments LLC, a private investment company, since 2013. Ms. Ferguson served as Chief Financial Officer from 2018 to December 2020 of, and as consultant from 2013 to 2018 to, Cleveland Avenue, LLC, a venture capital firm with a focus in the food and beverage industry. From 2010 to 2011, Ms. Ferguson served as Chief Financial Officer for the Chicago Board of Education. Prior to 2010, Ms. Ferguson served as Senior Vice President and Chief Financial Officer of the Folgers Coffee Company, a maker of coffee products, and Executive Vice President and Chief Financial Officer of Merisant Worldwide Inc., a consumer staples company. Ms. Ferguson also served as Chief Financial Officer of Sara Lee Foodservice, a division of Sara Lee Corporation, a consumer goods company, and served in a number of leadership positions at Sara Lee, including Senior Vice President of Strategy and Corporate Development, as well as Treasurer, Ms. Ferguson currently serves on the Boards of Directors of Frontier Communications (NasdaqGS:FTR), Mattel, Inc. (NASDAQ:MAT), and Sally Beauty Holdings Inc. (NYSE:SBH).

QUALIFICATIONS
The Board concluded that Ms. Ferguson should serve as a Director of the Company primarily based on her more than 30 years of finance experience in the manufacturing, financial and consumer industries, as well as the public-sector. In particular, her strong background of executive leadership in corporate finance and strategic development at several multinational organizations well-qualifies her as a Director and a member of the Company’s Audit Committee. The Board believes that Ms. Ferguson’s demonstrated leadership and ability to provide strategic oversight for financial management of the Company’s resources will be invaluable during the Company’s transformation.

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Election of Directors (Proposal 1)

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Marc M. Gibeley
Age 56
Director Since 2015* Audit Committee
Independent* Compensation and Management Development
  Committee
BACKGROUND
Marc M. Gibeley has been a Director since November 2015. Mr. Gibeley has served as Chief Executive Officer and a Director of Nutritional Medicinals, LLC, a producer of organic whole food feeding tube formulas and meal replacements, since November 2018. Prior to that, Mr. Gibeley served as Chief Executive Officer and Director of Scientific Intake Ltd. Co., a medical device and digital healthcare company focused on weight management and the prevention of obesity related chronic diseases, from October 2016 to January 2018. Prior to that, Mr. Gibeley served as Head of Diabetes Care North America for Roche Holding AG (SIX: RO), a leading research-focused pharmaceuticals and diagnostics healthcare company from 2011 through 2016. Mr. Gibeley served as the President and Chief Executive Officer of WaveRx, a venture-backed diabetes neuropathy medical device company, from 2008 through 2011. Prior to joining WaveRx, Mr. Gibeley worked for several consumer packaged goods companies, including Procter & Gamble (NYSE: PG), Eastman Kodak (NYSE: KODK) and Kraft Foods (NASDAQ: KHC).
QUALIFICATIONS
The Board concluded that Mr. Gibeley should serve as a Director of the Company primarily due to his extensive experience in leading and managing medical device companies that have undergone substantial changes and transformed to focus on marketing products directly to consumers. He has a wide range of management expertise, including in sales, marketing, finance, customer support and product launches, as well as in regulatory affairs, manufacturing, and operations and commercial development, which has been developed over a career in consumer products businesses at various stages of development. The Board believes that Mr. Gibeley’s background and experience will be valuable in contributing to the Board’s oversight of the Company’s strategy, finance and operations, particularly as the Company seeks to continue the transformation of its business and responds to the drive toward consumerism in the health care industry.
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Election of Directors (Proposal 1)
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C. Martin Harris, M.D.
Age 64* Lead Independent Director
Director Since 2003* Nominating and Corporate Governance Committee (Chair)
Independent* Compensation and Management Development Committee
BACKGROUND
C Martin Harris, M.D., has been a Director since January 2003 and Lead Independent Director since May 2012. He also served as Invacare's Interim Chairman of the Board from December 2014 until May 2015. Since December 2016, Dr. Harris has served as the Associate Vice President of the Health Enterprise and Chief Business Officer of the Dell Medical School at The University of Texas, Austin. From 1996 until October 2016, Dr. Harris served as the Chief Information Officer and Chairman of the Information Technology Division of The Cleveland Clinic Foundation in Cleveland, Ohio and a Staff Physician for The Cleveland Clinic Hospital and The Cleveland Clinic Foundation Department of General Internal Medicine. Dr. Harris served from 2000 to 2016 as the Executive Director of e-Cleveland Clinic, a series of e-health clinical programs offered over the internet. Dr. Harris serves as a Director of Thermo Fisher Scientific Inc. (NYSE: TMO), Waltham, Massachusetts, which provides analytical instruments, equipment, reagents and consumables, software and services for research, manufacturing, analysis, discovery and diagnostics as a Director of Colgate Palmolive Company (NYSE: CL), New York, NY., a consumer products producer of household, dental and oral consumer products. As of January 4, 2021, Dr. Harris serves as a member of the MultiPlan Corporation board (NASDAQ:MPLN), New York City, which provides data analytics and technology-enabled cost management solutions to the U.S. healthcare industry. Prior to March 2021, Dr. Harris served as a Director of HealthStream, Inc. (NASDAQ: HSTM).
QUALIFICATIONS
The Board concluded that Dr. Harris should serve as a Director of the Company primarily due to his experience in the healthcare industry as a leader of healthcare organizations and also his expertise in the use of information technology in the healthcare industry. Dr. Harris is nationally recognized for his leadership in developing and organizing electronic management of medical information, including electronic medical records. Through his work with organizations such as e-Cleveland Clinic and the National Health Information Infrastructure Task Force, Dr. Harris has gained experience which enables him to provide valuable input to the Board, and ultimately the Company, as to the latest developments and trends involving the use of information to enhance healthcare diagnoses, patient outcomes and cost efficiencies. In particular, he is able to assist the Board in staying abreast of developments in technological advances in the home medical equipment industry. Dr. Harris' understanding of information technology developments in the healthcare industry and his experience in business governance matters have proven to be instrumental to the Board's management of the Company's own strategy and information technology resources.
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Election of Directors (Proposal 1)

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Matthew E. Monaghan
Age 53
Director Since 2015
Chairman of the Board
President and
Chief Executive Officer
BACKGROUND
Matthew E. Monaghan has been the Company’s President and Chief Executive Officer since April 2015 and Chairman of the Board since May 2015. Prior to joining Invacare, Mr. Monaghan served as a business unit leader at Zimmer Holdings (now Zimmer Biomet NYSE: ZBH), a major orthopedic implant company, serving first as Vice President and General Manager of the company’s Global Hips business (December 2009 to January 2014) and later as Senior Vice President of Hips and Reconstructive Research (January 2014 until joining Invacare). While at Zimmer, Mr. Monaghan was responsible for the Hip Division’s new product development, engineering, marketing, clinical studies, quality, regulatory affairs and results of the shared sales and supply chain functions. Later, those responsibilities also included directing global research for various areas of material, process and product innovation. Prior to joining Zimmer in 2009, Mr. Monaghan spent eight years as an operating executive for two leading private equity firms, Texas Pacific Group (TPG) and Cerberus Capital Management, where he led acquisitions and operational improvements of portfolio companies in medical device and consumer goods and service industries. For the first 13 years of his career, Mr. Monaghan held various engineering, financial and management positions at General Electric (NYSE: GE). Since November 2016, Mr. Monaghan has served as a Director of Syneos Health (NASDAQ: SYNH), a contract research and contract commercial organization serving the needs of pharmaceutical clients.
QUALIFICATIONS
The Board concluded that Mr. Monaghan should serve as a Director of the Company primarily due to his role as Chief Executive Officer, as well as his considerable experience in managing and operating businesses, including medical device businesses subject to FDA regulation. The Board anticipates that Mr. Monaghan, in his role as Chief Executive Officer, will provide the Board with management perspective that will be valuable in overseeing the Company’s business operations and transformation.
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Election of Directors (Proposal 1)
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Clifford D. Nastas
Age 58
Director Since 2015* Audit Committee (Chair)
Independent* Regulatory and Compliance Committee
BACKGROUND
Clifford D. Nastas has been a Director since May 2015. Mr. Nastas has served as Chief Executive Officer and President of Tempel Steel, an independent manufacturer of precision magnetic steel laminations for the motor, generator, auto and transformer industries, since May 2019. Mr. Nastas served as President and Chief Executive Officer of Radiac Abrasives Company, a manufacturer of conventional bonded and super abrasives in North America from January 2016 until December 2018. Since 2014, Mr. Nastas has been a Director of Dan T. Moore Company, Inc., a holding company of diverse advanced materials manufacturing and technology businesses and became co-chairman in 2016. Also since 2014, Mr. Nastas has served as a Director of Shorr Packaging Corporation, an ESOP-owned company that distributes packaging supplies throughout North America. Mr. Nastas served as Chief Executive Officer and a Director of Material Sciences Corporation (formerly, Nasdaq: MASC), Elk Grove Village, Illinois, a publicly traded diversified industrial manufacturing company providing high-value coated metal, acoustical and lightweight composite solutions from 2005 until the company was sold in March 2014. From 2001 to 2005, Mr. Nastas served in various capacities at Material Sciences, including as President and Chief Operating Officer. Prior to joining Material Sciences, Mr. Nastas served in various general management, sales, and manufacturing capacities with Honeywell International, formerly Allied Signal (NYSE: HON), Morris Township, New Jersey, Avery Dennison Corporation (NYSE: AVY), Glendale, California, and Ford Motor Company (NYSE: F), Dearborn, Michigan.
QUALIFICATIONS
The Board concluded that Mr. Nastas should serve as a Director of the Company primarily due to his extensive business leadership and management expertise, which includes a broad range of experience in management, operations, sales, marketing, product development and engineering in a number of global businesses, including as the CEO of a publicly-traded company. The Board believes that Mr. Nastas’ experience and background will enable him to provide the Board will valuable insight into numerous aspects of the Company’s business.
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Election of Directors (Proposal 1)

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Baiju R. Shah
Age 49
Director Since 2011* Compensation and Management Development
  Committee (Chair)
Independent* Regulatory and Compliance Committee
BACKGROUND
Baiju R. Shah has been a Director since May 2011. Mr. Shah serves as the President & CEO of Greater Cleveland Partnership, a metropolitan business chamber which promotes economic growth in the region, beginning in April 2021. Mr. Shah also has served as a Senior Advisor to FasterCures since 2019. Prior to April 2021, he served as the Senior Fellow for Innovation at the Cleveland Foundation since July 2019 and as Managing Director of Accelevate Ventures, an advisory firm focused on launching and accelerating innovation platforms in bioscience and health care, since March 2019. From September 2012 until February 2019, Mr. Shah served as the Chief Executive Officer and a Director of BioMotiv, LLC, a company focused on developing drug discoveries from research institutions into new medicines. Prior to that, Mr. Shah served as President and Chief Executive Officer and a Director of BioEnterprise Cleveland from 2004 to August 2012, as Senior Vice President from 2003 to 2004 and as Vice President from 2002 to 2003. BioEnterprise is a Cleveland-based business formation, recruitment and acceleration initiative designed to grow health care companies and commercialize biomedical technologies. Prior to BioEnterprise, Mr. Shah worked for McKinsey & Company, where he was a leader in its Growth and Business Building practice. Since November 2020, Mr. Shah has served as a Director of Athersys, Inc. (NASDAQ: ATHX), Cleveland, Ohio, a biotechnology company focused on regenerative medicine. In addition, Mr. Shah served as a member of the Citizens Financial Group (NYSE: CFG) advisory board from 2012 through 2018.
QUALIFICATIONS
The Board concluded that Mr. Shah should serve as a Director of the Company primarily due to his experience in the healthcare and biomedical industry gained through his leadership of BioMotiv and BioEnterprise and advisory work with FasterCures, and guidance of innovation alliances. The business insight gained through his work at BioMotiv, BioEnterprise and McKinsey & Company, in particular, and his demonstrated abilities in advancing initiatives to help companies grow and expand, provides Mr. Shah with a perspective on healthcare business and growth initiatives that is invaluable to the Board.
Invacare's Board of Directors recommends that shareholders vote “FOR” the election
of all ten Director nominees for a term expiring in 2022.
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Corporate Governance

CORPORATE GOVERNANCE
Corporate Governance Guidelines
The Board has adopted Corporate Governance Guidelines which contain principles that, along with the charters of the standing committees of the Board of Directors, provide the framework for Invacare's corporate governance. Among other things, the Corporate Governance Guidelines establish principles relating to:
responsibilities and functions of the Board of Directors, such as meeting, orientation and continuing education guidelines;
the composition of the Board, including Director independence and other qualification requirements;
responsibilities of the Chairman of the Board, the Chief Executive Officer and the Lead Independent Director;
the establishment and functioning of Board committees;
executive sessions of non-management Directors;
Chief Executive Officer succession planning; 
Board access to management, and evaluation of the Chief Executive Officer;
communication and interaction by the Board with shareholders and other interested parties;
share ownership guidelines for Directors and executive officers;
engagement by an independent committee of the Board with shareholder proponents following a majority vote on a shareholder proposal; and
periodic self-assessment by the Board and each Board committee.
A copy of the Corporate Governance Guidelines can be found on the Company's website at www.invacare.com by clicking on the Investor Relations tab and then selecting the Corporate Governance link.
Director Independence
To be considered independent under the New York Stock Exchange independence criteria under Section 303A (the “NYSE Standards”), the Board of Directors must determine that a non-employee Director does not have a direct or indirect material relationship with Invacare. The Board of Directors has adopted the following guidelines (set forth in the Corporate Governance Guidelines) to assist it in making such determinations:
A non-employee Director will be considered independent if he or she, at any time that is considered relevant under the NYSE Standards (subject to any applicable transition rules of the NYSE Standards):
(i) has not been employed by the Company or its affiliates;
(ii) has not had an immediate family member who has been employed by the Company or its affiliates as an executive officer;
(iii) has not received, and has not had an immediate family member who has received, more than such annual amount of direct compensation from the Company as may be considered relevant from time to time under the NYSE Standards, other than Director and committee fees and pension or other forms of deferred compensation for prior service (provided such deferred compensation is
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Corporate Governance

not in any way contingent on continued service);
(iv) is not a partner of the Company's present internal or external auditor;
(v) does not have an immediate family member who is a partner of Invacare's present internal or external auditor;
(vi) has not been a partner or employee of a present or former internal or external auditor of Invacare who worked on Invacare's audit;
(vii) does not have an immediate family member who has been a partner or employee of a present or former internal or external auditor of Invacare who worked on Invacare's audit;
(viii) has not been employed, and does not have an immediate family member who has been employed, as an executive officer of another company where any of Invacare's present executives serve on that company's compensation committee; and
(ix) has not been an executive officer or an employee of another company, and does not have an immediate family member who has been an executive officer of another company, that does business with Invacare and makes payments to, or receives payments from, Invacare for property or services in an amount that, in any one of the three last fiscal years, exceeds the greater of $1 million or 2% of such other company's consolidated gross revenues.
Additionally, the following commercial and charitable relationships will be considered immaterial relationships and a non-employee Director will be considered independent if he or she does not have any of the relationships described in clauses (i) - (ix) above, and:
(A) is not an executive officer of another company, and does not have an immediate family member who is an executive officer of another company, that is indebted to the Company, or to which Invacare is indebted, where the total amount of either company's indebtedness to the other is more than 5% of the total consolidated assets of the other company and exceeds $100,000 in the aggregate; and
(B) does not serve, and does not have an immediate family member who serves, as an officer, Director or trustee of a foundation, university, charitable or other not for profit organization, and Invacare's, or Invacare foundation's, annual discretionary charitable contributions (any matching of employee charitable contributions will not be included in the amount of contributions for this purpose) to the organization, in the aggregate, are more than 5% percent of that organization's total annual revenues (or charitable receipts in the event such organization does not generate revenues).  
In the event that a non-employee Director has a relationship of the type described in clauses (A) or (B) in the immediately preceding paragraph that falls outside of the “safe harbor” thresholds set forth in such clauses (A) and (B), or if the Director had any such relationship during the prior three years that fell outside of such “safe harbor” thresholds, then in any such case, the Board of Directors annually shall determine whether the relationship is material or not, and therefore, whether the Director would be independent or not. If any relationship does not meet the categorical standards of immateriality set forth in clauses (i) and (ii) in the immediately preceding paragraph, Invacare will explain in its next proxy statement the basis for any Board of Directors determination that such relationship is immaterial.
In addition, any Director serving on the Audit Committee of Invacare may not be considered independent if he or she directly or indirectly receives any compensation from Invacare other than Director and committee fees and pension or other forms of deferred compensation for prior service (provided such compensation is not in any way contingent on continued service).
The Board examined the transactions and relationships between Invacare and its affiliates and each of the Directors, any of their immediate family members and their applicable affiliates. Based on this review, the Board affirmatively determined that each of the Directors, other than Mr. Monaghan, is
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Corporate Governance
independent and does not have any direct or indirect material relationship with Invacare pursuant to the categorical standards set forth in Invacare's Corporate Governance Guidelines and the NYSE Standards.
Board Meetings, Annual Meeting of Shareholders and Attendance
During the fiscal year ended December 31, 2020, the Board of Directors held four regular quarterly meetings and ten additional meetings. Each Director attended at least 75% of the aggregate of (1) the total number of meetings held by the Board of Directors and (2) the total number of meetings held by committees of the Board on which he or she served during 2020. Board members are expected to attend Invacare's Annual Meeting of Shareholders in person or by video conference. Each Director then serving on the Board attended last year's annual shareholders meeting.
Executive Sessions
Independent Directors meet in executive sessions, presided over by the Company's Lead Independent Director, at the end of each of the regularly scheduled quarterly Board meetings. In addition, the Directors meet in director-only executive sessions, presided over by the Chairman of the Board, after the end of each of the regularly scheduled quarterly Board meetings.
Board Nominations and Shareholder Recommendations
The Nominating and Governance Committee has regularly retained an internationally recognized third-party executive search firm to identify candidates for independent Director positions to augment board membership. The Committee also may solicit candidate suggestions from Committee members, the Chairman of the Board, incumbent Directors, senior management or others. In 2020, the Company's retained executive search firm identified Ms. Stephanie L. Fehr as a Board candidate.
The Committee will consider any unsolicited recommendation for a potential candidate to the Board from Committee members, the Chairman of the Board, other Board members, management or shareholders. The Committee will accept shareholder recommendations regarding potential candidates for the Board, provided that shareholders send their recommendations to the Chair of the Nominating and Governance Committee, c/o Executive Offices, Invacare Corporation, One Invacare Way, Elyria, Ohio 44035, with the following information:
The name and contact information for the candidate;
A brief biographical description of the candidate, including his or her employment for at least the last five years, educational history, and a statement that describes the candidate's qualifications to serve as a Director;
A statement describing any relationship between the candidate and the nominating shareholder, and between the candidate and any employee, Director, customer, supplier, vendor or competitor of Invacare; and
The candidate's signed consent to be a candidate and to serve as a Director if nominated and elected, including being named in Invacare's proxy statement.
Once the Nominating and Governance Committee has identified a prospective candidate, the Committee makes a determination whether to conduct a full evaluation of the candidate. This initial determination is based primarily on the Board's need to fill a vacancy or desire to expand the size of the Board, the likelihood that the candidate can meet the Nominating and Governance Committee's evaluation criteria set forth below, as well as compliance with all other legal and regulatory requirements. The Nominating and Governance Committee will rely on public information about a candidate, personal knowledge of any committee or Board member or member of management regarding the candidate, as well as any information submitted to the Committee by the person recommending a candidate for consideration. The Nominating and Governance Committee, after consultation with the Chairman of the Board, will decide whether additional consideration of the candidate is warranted. 
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Corporate Governance

If additional consideration is warranted, the Nominating and Governance Committee may request the candidate to complete a questionnaire that seeks additional information about the candidate's independence, qualifications, experience and other information that may assist the Committee in evaluating the candidate. The Committee may interview the candidate in person or by telephone and may ask the candidate to meet with senior management and/or other Directors. The Committee would then evaluate the candidate against the standards and qualifications set out in the Nominating and Governance Committee's charter. While the Board does not maintain a policy regarding the diversity of its members, the Nominating and Governance Committee charter specifies that a Director should have a range of experience and knowledge relevant to the Company, and that such relevant experience and knowledge may be gained through diverse or unique life experiences. The Nominating and Governance Committee and the Board believe that the current Board composition reflects a diverse group of individuals with relevant knowledge and experience that greatly benefits the Company. Additionally, the Nominating and Governance Committee will consider other relevant factors as it deems appropriate (including independence issues and familial or related party relationships).
Before nominating an existing Director for re-election at an Annual Meeting, the Committee will consider:
The Director's value to the Board; and
Whether the Director's re-election would be consistent with Invacare's governance guidelines.
After completing the Nominating and Governance Committee's evaluation of new candidates or existing Directors whose terms are expiring, if the Committee believes the candidate would be a valuable addition to the Board or the existing Director is a valued member of the Board, then the Nominating and Governance Committee will make a recommendation to the full Board that such candidate or existing Director should be nominated by the Board. The Board will be responsible for making the final determination regarding prospective nominees after considering the recommendation of the Committee. These procedures were adhered to with respect to nominees for election at this meeting, who were unanimously recommended by the Nominating and Governance Committee and the entire Board of Directors.
Lead Independent Director
The Company has a Lead Independent Director who is responsible for coordinating the activities of the independent Directors. Dr. Harris served as Lead Independent Director in 2020. The following are the specific responsibilities of the Lead Independent Director set forth in the Company's Corporate Governance Guidelines:
(i) advising the Chairman of the Board as to an appropriate schedule of Board meetings, seeking to ensure that the independent and non-executive Directors can perform their duties responsibly while not interfering with the flow of Company operations;
(ii) providing the Chairman of the Board with input as to the preparation for the agendas for the Board and Committee meetings;
(iii) advising the Chief Executive Officer as to the quality, quantity and timeliness of the flow of information from Company management that is necessary for the independent and non-executive Directors to effectively and responsibly perform their duties; although Company management is responsible for the preparation of materials for the Board, the Lead Independent Director may specifically request the inclusion of certain material;
(iv) interviewing, along with the chair of the Nominating and Governance Committee, all Board candidates, and making recommendations to the Nominating and Governance Committee and the Board;  
(v) assisting the Board and Company officers in assuring compliance with the Company's Corporate Governance Guidelines;
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Corporate Governance
(vi) recommending revisions to the Corporate Governance Guidelines as appropriate;
(vii) coordinating and developing the agenda for and moderating executive sessions of the Board's independent Directors; acting as principal liaison between the independent Directors and the Chairman and Chief Executive Officer on sensitive issues;
(viii) evaluating, along with the members of the Compensation and Management Development Committee, the performance of the Chairman and Chief Executive Officer; meeting with the Chairman and Chief Executive Officer to discuss the Committee's evaluation of performance;
(ix) discussing with the Chairman of the Board and the Nominating and Governance Committee the membership of the various Board Committees, as well as selection of the Committee chairs;
(x) responding to the concerns of any Directors, whether or not these concerns are discussed with the full Board;
(xi) with input from the Chairman of the Board, assisting the Nominating and Governance Committee in its role with the annual self-assessment and evaluation process of the Board and its committees;
(xii) acting as a resource for, and counsel to, the Chairman of the Board; and
(xiii) performing other responsibilities as delegated by the Board.
A description of the responsibilities of the Lead Independent Director also is included as Exhibit C to Invacare's Corporate Governance Guidelines, which is available at www.invacare.com by clicking on the Investor Relations tab and then the Corporate Governance link.
Determination of Current Board Leadership Structure
The Board believes that the Chief Executive Officer is best situated to serve as Chairman of the Board because he is the Director most familiar with the Company's business and industry. The Board believes that the combined roles of Chief Executive Officer and Chairman of the Board provides an efficient and effective leadership model for Invacare by fostering clear accountability, effective decision-making, and alignment of corporate strategy. The Board’s independent Directors bring experience, oversight and expertise from outside the Company and industry, while the Chief Executive Officer brings company and industry-specific experience and expertise. One of the key responsibilities of the Board is to develop strategic direction and hold management accountable for the execution of strategy once it is developed. The Board believes the combined role of Chief Executive Officer and Chairman, together with a Lead Independent Director having the duties described above, is in the best interests of shareholders because it strikes an appropriate balance for the Company; with the Chief Executive Officer also serving as Chairman, there is unified leadership and a focus on strategic development and execution, while the Lead Independent Director helps assure independent oversight of management.
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Corporate Governance

Members of the Board Committees
The composition of the Board committees, as of April 5, 2021, is set forth below.
DirectorAudit
Committee
Nominating and Governance
Committee
Compensation and
Management
Development
Committee
Regulatory and Compliance
Committee
Susan H. AlexanderMemberChair
Julie A. BeckMemberMember
Petra Danielsohn-Weil, PhD  MemberMember
Stephanie L. FehrMemberMember
Diana S. FergusonMemberMember
Marc M. GibeleyMemberMember
C. Martin Harris, M.D. - Lead Independent DirectorChairMember
Clifford D. NastasChair Member
Baiju R. Shah ChairMember


Principal Functions of the Board Committees
The Board has an Audit Committee; a Nominating and Governance Committee; a Compensation and Management Development Committee; and a Regulatory and Compliance Committee.
Audit Committee.    The Audit Committee assists the Board in monitoring (i) the integrity of Invacare's financial statements, (ii) the independence, performance and qualifications of Invacare's internal and independent auditors, (iii) Invacare's compliance with legal and regulatory requirements related to the Company's financial statements and accounting policies (iv) Invacare's risk assessment and management process. The specific functions and responsibilities of the Audit Committee are set forth in the Audit Committee Charter adopted by the Board of Directors, a copy of which is available at www.invacare.com by clicking on the Investor Relations tab and then the Corporate Governance link. The Audit Committee met seven times during 2020.
The Board has determined that each member of the Audit Committee satisfies the current independence standards of the New York Stock Exchange listing standards and Section 10A(m)(3) of the Securities Exchange Act of 1934, as amended. The Board also has determined that Clifford D. Nastas, the Chair of the Audit Committee, Julie A. Beck and Diana S. Ferguson each qualifies as an “audit committee financial expert” as that term is defined in Item 407(d)(5) of Regulation S-K.
Nominating and Governance Committee.    The Nominating and Governance Committee assists the Board (i) in identifying and recommending individuals qualified to become Directors and will consider all qualified nominees recommended by shareholders, and (ii) on all matters relating to corporate governance of the Company, including, but not limited to, the development and implementation of the Company's corporate governance and ESG policies and guidelines. Each of the current members of the Nominating and Governance Committee is independent within the meaning of the New York Stock Exchange listing standards and Invacare's Corporate Governance Guidelines. The Board of Directors has adopted a charter for the Nominating and Governance Committee, which is available at www.invacare.com by clicking on the Investor Relations tab and then the Corporate Governance link. The Nominating and Governance Committee met six times during 2020. Ms. Fehr joined the Board of Directors and the Nominating and Governance Committee on March 25, 2021.
Compensation and Management Development Committee.    The Compensation and Management Development Committee assists the Board in developing and implementing (i) executive compensation programs that are fair, equitable and aligned with the interests of shareholders and that are effective in
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Corporate Governance
the recruitment, retention and motivation of executive talent required to successfully meet Invacare's strategic objectives and (ii) a management succession plan that meets Invacare's present and future needs. See “Compensation Discussion and Analysis” for additional information on the committee and its activities. Each of the current members of the Compensation and Management Development Committee is independent within the meaning of the New York Stock Exchange listing standards, including the standards in Rule 303A.02(a)(ii), and Invacare's Corporate Governance Guidelines. The Board of Directors has adopted a charter for the Compensation and Management Development Committee, which is available at www.invacare.com by clicking on the Investor Relations tab and then the Corporate Governance link. The Compensation and Management Development Committee met eleven times during 2020. Ms. Fehr joined the Board of Directors and the Compensation and Management Development Committee on March 25, 2021.
Regulatory and Compliance Committee.    The Regulatory and Compliance Committee assists the Board in its oversight of the Company's legal and regulatory compliance matters, including medical device regulatory compliance. Each of the current members of the Regulatory and Compliance Committee is independent within the meaning of the New York Stock Exchange listing standards and Invacare's Corporate Governance Guidelines. The Board of Directors has adopted a charter for the Regulatory and Compliance Committee, which is available at www.invacare.com by clicking on the Investor Relations tab and then the Corporate Governance link. The Regulatory and Compliance Committee met four times during 2020.
Board Role in Risk Oversight
Risk is inherent in any business, and the Company's management is responsible for the day-to-day management of risks that it faces. The Board, on the other hand, has responsibility for the oversight of risk management. In its risk oversight role, the Board has the responsibility to evaluate the risk management process to ensure its adequacy and to seek assurances that it is implemented properly by management.
The Board believes that full and open communication between management and the Board of Directors is essential for effective risk management and oversight. At each quarterly meeting, the Board of Directors receives presentations from senior management on business operations, financial results and strategic matters, including a quarterly assessment of the sensitivity of the various business, financial, operational, information technology, compliance and human capital risks faced by the Company, and discusses the Company's strategies, key challenges, and risks and opportunities. Relevant members of senior management attend significant portions of the Board's quarterly meetings, as well as many of the Board committee meetings, in order to address any questions or concerns raised by the Board on risk management-related and other matters.
The Board's committees assist the Board in fulfilling its oversight responsibilities in certain areas of risk. The Audit Committee assists the Board in fulfilling its oversight responsibilities, including oversight of the Company's enterprise risk management process and its assessment and management of risk in the areas of financial reporting, internal controls, business and operations, financial statements and accounting policies and information systems. Enterprise risk assessment reports of the various business, financial, operational, information technology, compliance and human capital risks faced by the Company are provided to the Audit Committee by management and the Company's internal auditors on a quarterly basis. The Regulatory and Compliance Committee assists the Board in its oversight of the Company's legal and regulatory compliance matters generally, including medical device regulatory compliance matters. The Compensation and Management Development Committee assists the Board in fulfilling its oversight responsibilities with respect to the management of risks arising from the Company's compensation policies and programs, talent management and succession planning for executive officers and employment related risks. The Nominating and Governance Committee assists the Board in fulfilling its oversight responsibilities with respect to the management of risks associated with Board organization and structure, code of conduct, insider trading, conflict of interest policies and corporate governance, as well as overseeing the membership and independence of the Board of Directors. From time to time, the Board may establish special committees to assist it in the monitoring and oversight of certain risks.
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Corporate Governance

However, while these committees are responsible for evaluating certain risks and overseeing the management of those risks, the entire Board is regularly informed about those risks and committee activities through committee reports.
Codes of Ethics
Invacare has adopted a Code of Business Conduct and Ethics that applies to all Directors, officers and employees. Invacare has also adopted a separate Financial Code of Ethics that applies to its Chief Executive Officer (its principal executive officer), its Chief Financial Officer (its principal financial officer and principal accounting officer) and its controller or persons performing similar functions. Investors can find both codes on the Company's website at www.invacare.com by clicking on the Investor Relations tab and then selecting the Corporate Governance link. Invacare will post any amendments to the codes, as well as any waivers that are required to be disclosed pursuant to the rules of the Securities and Exchange Commission and the New York Stock Exchange, within four business days, on its website.
Employees have been notified that if they have any questions or concerns regarding financial integrity, legal or regulatory compliance, ethical business conduct, or activities that may be improper under the Company’s Code of Business Conduct and Ethics, or otherwise have work related concerns, they are invited to speak with their supervisor, or any other member of management at any time. They also may report any concerns in writing to the Chief Executive Officer or the Chair of the Audit Committee, or submit a report to the Company’s EthicsPoint ethics and compliance hotline reporting service, which is used to consolidate and summarize reports received. All EthicsPoint reports are reviewed by the Audit Committee.
The Company’s EthicsPoint service is not intended to replace other communication channels already in place. However, if employees have a concern regarding a financial integrity, legal or regulatory compliance, or ethics related matter, or believe they cannot communicate effectively using existing internal channels, they may report the concern through the Company’s EthicsPoint hotline reporting service by telephone or online at http://invacare.ethicspoint.com. Reports through EthicsPoint may be made anonymously and without reprisals for matters reported in good faith.
Compensation Committee Interlocks and Insider Participation
No member of the Compensation Committee was at any time during 2020 or at any other time an officer or employee of the Company or any of its subsidiaries. In addition, during 2020, none of the Company's executive officers served as a member of the board of directors or the compensation committee of any other entity that has one or more executive officers serving on the Company's Board or Compensation Committee. Marc M. Gibeley, C. Martin Harris M.D., Baiju R. Shah and Petra Danielsohn-Weil, PhD were the non-employee Directors who served on the Compensation Committee during 2020. Stephanie L. Fehr was appointed to the Compensation Committee on March 25, 2021.
Director Orientation Program
Each new Director is provided an orientation to become acquainted with the Company’s business, history, strategy, plans, financial statements, compliance programs, Corporate Governance Guidelines, Code of Business Conduct and Ethics, Insider Trading Policy, and public reporting and disclosure requirements and the Company’s related policies and practices. Each new Director is invited to visit one or more of the Company's facilities and is introduced to the Company’s leadership team, key management personnel, internal auditors, and independent auditors. In addition, from time to time, Directors receive information and updates on legal and regulatory changes that affect the Company, its employees and the operation of the Board. The Nominating and Governance Committee from time to time makes other recommendations regarding further educational opportunities for Directors.
Communications with the Board
Shareholders and other interested parties may communicate their concerns directly to the entire Board or specifically to non-management Directors of the Board. Such communications may be
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Corporate Governance
confidential or anonymous, if so designated, and may be submitted in writing to the following address: Shareholder Communication, c/o Executive Offices, Invacare Corporation, One Invacare Way, Elyria, Ohio 44035. The status of all outstanding concerns addressed to the entire Board or only to non-management Directors will be reported to the Chairman of the Board or to the chair of the Nominating and Governance Committee, respectively, on a quarterly basis.
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Director Compensation and Stock Ownership Guidelines
DIRECTOR COMPENSATION AND STOCK OWNERSHIP GUIDELINES
Director Compensation Program

The Compensation Committee is responsible for reviewing and making recommendations to the Board regarding all matters pertaining to compensation paid to non-employee Directors for Board, committee and committee chair services. In making non-employee Director compensation recommendations, the Compensation Committee takes various factors into consideration, including, but not limited to, the responsibilities of Directors generally, as well as committee chairs, and the form and amount of compensation paid to Directors by comparable companies. The Director compensation program is intended to be equitable based on the work required of non-employee Directors serving a healthcare technology company of our size and scope, and to tie a significant portion of non-employee Directors’ compensation to shareholder interests through the grant of restricted stock units.
Early in 2020, the Compensation Committee reviewed the compensation paid to our non-employee Directors relative to our peer group (see Compensation Discussion and Analysis), which indicated that our total non-employee Director compensation was slightly below the median compensation paid by our peers. Based on this review, effective January 2020, the annual retainer was increased by $5,000 to $65,000 and the value of each non-employee Director’s annual equity compensation award was increased by $10,000. The Board of Directors, in reaction to the impacts of the COVID-19 pandemic, decided to reduce the Director retainer compensation by 20% for ninety days during 2020. The Compensation Committee periodically reviews our non-employee Director compensation and such compensation may be adjusted in the future as appropriate based on our peer group information and Company performance.
The Company's 2020 Director compensation program provided that non-employee Directors were paid the following cash compensation:
Annual Cash Retainer$65,000 
Lead Independent Director Additional Fee20,000 
Committee Chair Additional Fees:
Audit15,000 
Compensation and Management Development15,000 
Regulatory and Compliance15,000 
Nominating and Governance10,000 
Fee per meeting in excess of 24 meetings1,500 
Additionally, in March 2020, each non-employee Director was granted a restricted stock unit award of 15,439 shares, which vests in full on May 15, 2021.
Director Stock Ownership Guidelines
The Company maintains stock ownership guidelines for its non-employee Directors for the purpose of aligning the interests of the Directors with those of the shareholders of the Company. Each non-employee Director is expected to own common shares equal in value to five (5) times the annual cash retainer fee.
“Stock ownership” is defined to include shares held directly or indirectly by the Director, all unvested restricted stock held by the Director and 30% of the shares underlying unexercised stock options held by the Director that are “in the money” by at least 20%.
Directors are expected to reach their respective ownership levels under the stock ownership guidelines over five (5) years from the date they join the Board of Directors and maintain that level of stock ownership afterward. The guidelines provide that Directors are required to hold their “net shares”
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Director Compensation and Stock Ownership Guidelines

from equity awards until they reach their applicable minimum ownership level, and once they reach the minimum level, they must hold their net shares from equity awards for at least one (1) year after such shares have vested, in the case of restricted stock awards, or have been acquired upon the exercise of stock options. “Net shares” means the difference between the actual shares awarded and any shares sold, surrendered or withheld to pay for taxes or to finance the cost of exercising a stock option.
All of the Directors have either met the guidelines or are pursuing goals to meet the guidelines within the established timeframe.
Director Deferred Compensation Plan
All non-employee Directors may participate in the Company’s Director Deferred Compensation Plan, which permits participants to defer all or a part of their annual cash compensation and all or a part of their annual restricted stock unit grant. Participants may choose to defer either until they leave the Board of Directors or for a specified number of years, with a minimum of two years and a maximum of ten years, as specified at the time of the participant’s deferral election.
Deferred cash compensation may be credited to a “stock-unit” account that is deemed invested in the Company’s common shares or to an account that earns interest at a rate specified by the Compensation Committee. Deferred restricted stock unit grants are credited to the stock-unit accounts. Stock-unit accounts are credited with dividend equivalent units based on the number of vested stock units credited to the account as of the applicable dividend record date. The value in a Director’s account balance is distributed to the Director in a lump sum promptly following the end of the applicable deferral period. The value in a Director’s stock-unit account is determined by multiplying the number of units credited to the account by the fair market value of the Company’s common shares at the end of the deferral period, and is paid to the Director in an equivalent number of common shares of the Company issued under the Invacare Corporation 2018 Equity Compensation Plan. Partial shares are rounded up or down to the nearest whole share. The value in a Director’s interest-bearing account will be paid to the Director in cash.
In 2020, Ms. Ferguson elected to defer 100% of her 2020 restricted stock unit grant until her separation from the Board.
Fiscal 2020 Director Compensation Table
Name (10)
Fees Earned or
Paid in Cash ($)
Stock Awards
($)(1)  
Total ($)  
Susan H. Alexander79,750 (2)111,161 190,911 
Julie A. Beck70,750 (3)111,161 181,911 
Petra Danielsohn-Weil, PhD72,250 (4)111,161 183,411 
Diana S. Ferguson72,250 (5)111,161 183,411 
Marc M. Gibeley75,250 (6)111,161 186,411 
C. Martin Harris, M.D.100,750 (7)111,161 211,911 
Clifford D. Nastas85,000 (8)111,161 196,161 
Baiju R. Shah87,250 (9)111,161 198,411 
(1)    The values reported in this column represent the dollar amount of expense, calculated in accordance with ASC 718, Compensation - Stock Compensation, to be recognized for financial statement purposes over the respective vesting periods with respect to all restricted stock units awarded to each Director during 2020. These time-based restricted stock units were granted pursuant to the Invacare Corporation 2018 Equity Compensation Plan, and vest in full on May 15, 2021. For a description of the assumptions made in computing the values reported in this column, see “Equity Compensation” in the Notes to Consolidated Financial Statements contained in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2020.
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Director Compensation and Stock Ownership Guidelines
(2)    The fees earned by Ms. Alexander include a $65,000 retainer, a $15,000 additional fee for her service as Chair of the Regulatory and Compliance Committee, a $3,250 reduction in fees approved by the Board for 2020 due to the COVID-19 pandemic and $3,000 of fees for meetings in excess of 24.
(3)    The fees earned by Ms. Beck include a $65,000 retainer, a $3,250 reduction in fees approved by the Board for 2020 due to the COVID-19 pandemic and $9,000 of fees for meetings in excess of 24.
(4)    The fees earned by Ms. Danielsohn-Weil include a $65,000 retainer, a $3,250 reduction in fees approved by the Board for 2020 due to the COVID-19 pandemic and $10,500 of fees for meetings in excess of 24.
(5)    The fees earned by Ms. Ferguson include a $65,000 retainer, a $3,250 reduction in fees approved by the Board for 2020 due to the COVID-19 pandemic and $10,500 of fees for meetings in excess of 24.
(6)    The fees earned by Mr. Gibeley include a $65,000 retainer, a $3,250 reduction in fees approved by the Board for 2020 due to the COVID-19 pandemic and $13,500 of fees for meetings in excess of 24.
(7)    The fees earned by Dr. Harris include a $65,000 retainer, a $20,000 additional fee for his service as Lead Independent Director, a $10,000 fee for his service as Chair of the Nominating and Governance Committee, a $3,250 reduction in fees approved by the Board for 2020 due to the COVID-19 pandemic and $9,000 of fees for meetings in excess of 24.
(8)    The fees earned by Mr. Nastas include a $65,000 retainer, a $15,000 additional fee for his service as Chair of the Audit Committee, a $3,250 reduction in fees approved by the Board for 2020 due to the COVID-19 pandemic, $4,500 of fees for meetings in excess of 24 and a $3,750 inadvertent overpayment that will be corrected in 2021.
(9)    The fees earned by Mr. Shah include a $65,000 retainer, a $15,000 fee for his service as Chair of the Compensation and Management Development Committee, a $3,250 reduction in fees approved by the Board for 2020 due to the COVID-19 pandemic and $10,500 of fees for meetings in excess of 24.
(10)    Ms. Fehr was appointed to the Board on March 25, 2021, and thus, is not included in the table.

Outstanding Director Equity Awards at December 31, 2020
The following table shows outstanding equity awards held by each Director at December 31, 2020.
 
Option Awards  
Stock Awards  
Name (2)
Number
of
Securities
Underlying
Unexercised
Options
Exercisable (#) 
Option
Exercise
Price ($)  
Option
Expiration
Date  
Number of
Shares or
Units of
Stock That
Have not
Vested (#)  
Market
Value of
Shares or
Units of
Stock
That
Have not
Vested ($)  
Susan H. Alexander15,439(1)138,179
Julie A. Beck15,439(1)138,179
Petra Danielsohn-Weil, PhD15,439(1)138,179
Diana S. Ferguson15,439(1)138,179
Marc M. Gibeley15,439(1)138,179
C. Martin Harris, M.D.15,439(1)138,179
Clifford D. Nastas15,439(1)138,179
Baiju R. Shah4,49633.365/19/202115,439(1)138,179
(1)    The restricted stock unit award vests in full on May 15, 2021 after a one-year "cliff" vesting period.
(2)    Ms. Fehr was appointed to the Board on March 25, 2021, and thus, is not included in the table.
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Approval and Adoption of Amendment No. 3 to the 2018 Equity Compensation Plan (Proposal 2)
APPROVAL AND ADOPTION OF AMENDMENT NO. 3 TO THE
INVACARE CORPORATION 2018 EQUITY COMPENSATION PLAN
(Proposal No. 3)
The second proposal to be acted upon at the Annual Meeting is the approval of Amendment No. 3 (the “Amendment”) to the Invacare Corporation 2018 Equity Compensation Plan (the “2018 Equity Plan”), adopted on March 25, 2021 by the Company's Board of Directors (the “Board”). The Board's adoption of the Amendment is subject to approval by the shareholders at the Annual Meeting. If the Amendment is approved by shareholders, it will become effective on the day following the Annual Meeting.
The Board believes that equity-based compensation payable under the 2018 Equity Plan enables the Company to continue to attract and retain talented directors and employees and provide an incentive for those directors and employees to increase the Company's value. In addition, the Board believes stock ownership is important because it aligns the interests of the Company's key employees with the interests of its shareholders. The Board approved, and has recommended that the Company’s shareholders approve and adopt, the Amendment in order to provide the Company with a sufficient reserve of common shares for future grants under the 2018 Equity Plan.
Summary of the 2018 Equity Plan
The following summary of the Amendment and the material features of the 2018 Equity Plan is qualified in its entirety by reference to the full text of the Amendment and the 2018 Equity Plan, which are set forth in Appendix A and Appendix B to this Proxy Statement, respectively.
Amendment - Material Changes
The Amendment increases the maximum number of the Company common shares, without par value, available for issuance under the 2018 Equity Plan by 2,500,000 shares. The Amendment also increases the maximum number of shares available for awards of incentive stock options by 2,500,000 shares.
The Amendment also modifies the 2018 Equity Plan to limit the number of shares that may be withheld to satisfy a participant's tax withholding obligations to an amount no greater than the maximum statutory withholding rates in the participant's applicable tax jurisdictions.
Eligibility and Types of Awards
The Compensation and Management Development Committee of the Board (the “Compensation Committee”), in its discretion, may grant an award under the 2018 Equity Plan to any director or employee of the Company or an affiliate. There are nine non-employee directors and approximately 80 employees who would be eligible to participate in the 2018 Equity Plan as of March 25, 2021.
The 2018 Equity Plan provides for the following types of awards with respect to the common shares of the Company: incentive stock options, nonqualified stock options, stock appreciation rights (“SARs”), restricted stock, restricted stock units, unrestricted stock, and performance shares. The Compensation Committee also may grant performance units that are payable in cash.
Common Shares Subject to the 2018 Equity Plan
Available Shares
The maximum number of the Company common shares, without par value, available for issuance under the 2018 Equity Plan will not exceed the sum of the following:
8,700,000 shares; plus
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Approval and Adoption of Amendment No. 3 to the 2018 Equity Compensation Plan (Proposal 2)
any shares remaining for issuance under the Invacare Corporation 2013 Equity Compensation Plan (the “2013 Equity Plan”) at the time of approval of the 2018 Equity Plan by shareholders; plus
any shares covered by an award under the 2018 Equity Plan, the 2013 Equity Plan or the Invacare Corporation Amended and Restated 2003 Performance Plan (the “2003 Equity Plan”) that are forfeited or remain unpurchased or undistributed upon termination or expiration of the award.
The maximum number of shares available for awards of incentive stock options is 8,700,000 shares.
Fungible Share-Counting Method
The 2018 Equity Plan uses a fungible share-counting method, under which:
each common share underlying an award of stock options or SARs will count against the number of total shares available under the 2018 Equity 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 Equity Plan as two shares.
Any common shares that are added back to the 2018 Equity Plan as the result of the cancellation or forfeiture of an award granted under the 2018 Equity Plan or the 2013 Equity Plan will be added back in the same manner such shares were originally counted against the total number of shares available under the 2018 Equity Plan or 2013 Equity Plan, as applicable. Each common share that is added back to the 2018 Equity Plan due to a cancellation or forfeiture of an award granted under the 2003 Equity Plan will be added back as one common share.
Individual Limits on Awards
The 2018 Equity Plan sets annual limits with respect to awards, as follows:
no participant will be granted stock options or SARs for more than 1,500,000 common shares, in the aggregate, during any calendar year;
no participant will be granted awards of restricted stock, restricted stock units or performance shares for more than 1,500,000 common shares, in the aggregate, during any calendar year;
no non-employee director will be granted awards of restricted stock, restricted stock units or performance shares for more than 300,000 common shares, in the aggregate, during any calendar year;
no participant will receive any awards payable in cash that have an aggregate maximum value as of their respective grant dates in excess of $7,500,000 during any calendar year; and
no non-employee director will receive any awards payable in cash that have an aggregate maximum value as of their respective grant dates in excess of $2,000,000 during any calendar year.
Outstanding Common Shares and Awards
As of March 23, 2021, there were:
34,826,044 of the Company's common shares outstanding;
1,043,604 stock options granted under the Company’s equity compensation plans (and no SARs) outstanding with an average exercise price of $16.04 and average remaining term of 3.5 years, 531,160 of which are performance-based stock options with an average exercise price of
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Approval and Adoption of Amendment No. 3 to the 2018 Equity Compensation Plan (Proposal 2)
$12.15 and average remaining term of 6.0 years and 512,444 of which are stock options with an average exercise price of $20.06 and average remaining term of 1.0 years;
a total of 3,239,741 full-value awards granted under the Company’s equity compensation plans outstanding, 1,244,488 of which are time-based restricted stock awards that are included in the number of the Company's common shares outstanding, 496,699 of which are time-based restricted stock unit awards, 1,389,419 of which are performance-based share awards and 109,185 of which are performance-based share units; and
1,522,688 common shares remaining available for issuance under the 2018 Equity Plan, including 376,516 aggregate common shares that were forfeited or remained unpurchased or undistributed upon termination or expiration of awards under the 2013 Equity Plan and the 2003 Equity Plan, that are available for issuance under the 2018 Equity Plan upon a executing permitted transfer.
Any shares covered by an outstanding award under the 2013 Equity Plan or 2003 Equity Plan that are subsequently forfeited or remain unpurchased or undistributed upon termination or expiration of the award also will become available for issuance under the 2018 Equity Plan. No new grants or awards may be made under the 2013 Equity Plan or the 2003 Equity Plan.
Adjustments
In the event of any stock dividend, stock split, consolidation, reorganization, merger, spinoff, or similar transaction affecting the Company's common shares, the Compensation Committee will adjust the number of shares available for grants, the number of shares subject to the full-value award limits and individual limits, and the number of shares and price under outstanding grants made before the event, as provided in the 2018 Equity Plan.
 No Liberal Share Counting/Recycling Provisions
The 2018 Equity Plan prohibits liberal share counting by requiring that no shares tendered in payment of a stock option's exercise price may be added back into the aggregate share limit. The 2018 Equity Plan also provides that no shares withheld in satisfaction of tax withholding obligations may be added back into the aggregate share limit. The number of common shares covered by a SAR, to the extent that it is exercised and settled in common shares, and whether or not shares are actually issued to a participant upon exercise of the SAR, will be considered issued or transferred. Lastly, in the event that the Company repurchases common shares with stock option exercise proceeds, those shares will not be added to the aggregate plan limit.
Administration
The 2018 Equity Plan will be administered by the Compensation Committee, which has broad discretionary authority under the 2018 Equity Plan. The Compensation Committee may delegate all or any part of its authority and powers under the 2018 Equity Plan to one or more directors or officers of the Company. The Compensation Committee may not, however, delegate its authority and powers:
with respect to awards to persons covered by Section 16 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”); or
in a way that would jeopardize the 2018 Equity Plan's satisfaction of Rule 16b-3 of the Exchange Act.
 Performance Targets and Performance Measures
The Compensation Committee may condition awards on the achievement of certain objective performance targets (“Performance Targets”) established by the Compensation Committee. The performance measures used to establish the Performance Targets will be based on any of the factors listed below, alone or in combination, as determined by the Compensation Committee. Such factors may
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Approval and Adoption of Amendment No. 3 to the 2018 Equity Compensation Plan (Proposal 2)
be applied on a corporate-wide or business-unit basis, include or exclude one or more of the Company's affiliates or subsidiaries, may be in comparison with plan, budget, or prior performance, and/or may be on an absolute basis or in comparison with peer-group performance. Performance measures may differ from participant to participant and from award to award. The factors that may be used as performance measures will be one or more of the following: return on equity; earnings per share; net income; pre-tax income; operating income; revenue; earnings before interest and taxes; earnings before interest, taxes, depreciation and amortization; cash flow; free cash flow; economic profit; total earnings; earnings growth; return on capital; operating measures (including, but not limited to, operating margin and/or operating costs); return on assets; return on net assets; return on capital; return on invested capital; increase in the fair market value of the Company's common shares; or total shareholder return.
In setting performance measures, the Compensation Committee may provide that any financial factor will be determined in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”) or will be adjusted to exclude any or all GAAP or non-GAAP items.
If the Compensation Committee determines that a change in the business, operations, corporate structure or capital structure of the Company, or the manner in which it conducts its business, or other events or circumstances render the Performance Targets unsuitable, the Compensation Committee may modify such performance measures or the related minimum acceptable level of achievement.
Minimum Vesting Periods
The 2018 Equity Plan provides for a one-year minimum vesting period for stock options, SARs and performance-based full-value awards and time-based full value awards. Full-value awards include grants of restricted stock, restricted stock units, performance shares, performance units and unrestricted stock grants. However, up to 5% of the shares available under the 2018 Equity Plan can be used for awards that are not subject to the minimum vesting restrictions.
No Accelerated Vesting
Under the 2018 Equity Plan, no amendment to an award may accelerate the vesting or payment of the award except in the case of a participant’s death or disability.
Dividends and Dividend Equivalents
The 2018 Equity Plan specifies that no dividends, dividend equivalents or other distributions will be paid currently on any award of restricted stock, restricted stock units, performance shares or performance units before the lapse of restrictions on the award. No dividends, dividend equivalents or other distributions will be paid currently on any award of stock options or SARs before the exercise of the award.
No Repricing
Repricing or replacement of underwater options and SARs is prohibited without shareholder approval under the 2018 Equity Plan, except with respect to adjustments made in connection with certain corporate events or transactions described above in "Common Shares Subject to the 2018 Equity Plan - Adjustments."
Description of Award Types
Subject to the limits imposed by the 2018 Equity Plan, which are generally described in this proposal, the Compensation Committee, in its discretion, may award any of the following types of awards to a participant: incentive stock options; nonqualified stock options; stock appreciation rights; restricted stock; restricted stock units; performance shares; performance units; and unrestricted stock.

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Approval and Adoption of Amendment No. 3 to the 2018 Equity Compensation Plan (Proposal 2)
Stock Options
The Compensation Committee may grant nonqualified stock options and/or incentive stock options. The Compensation Committee establishes the exercise price, which may not be less than 100% of the fair market value of the common shares on the grant date. Stock options may not be re-priced without shareholder approval unless in connection with certain corporate events or transactions described above in "Common Shares Subject to the 2018 Equity Plan - Adjustments." The Compensation Committee establishes the vesting date and the term of the option, subject to a maximum term of 10 years. A participant may pay the exercise price in cash, or if permitted by the Compensation Committee, by cashless exercise through a broker, by a net exercise, by delivering previously-owned Company common shares having a fair market value equal to the exercise price, any other manner permitted by the Compensation Committee and applicable law, or a combination of the foregoing. An award agreement for a stock option may provide that such option becomes exercisable in the event of the participant's death, disability or retirement.
Additional limits and rules apply to incentive stock options. For example, the Compensation Committee may not grant an employee incentive stock options to the extent that it would result in the employee first being able to exercise incentive stock options to purchase shares with an aggregate fair market value (determined as of the grant date) of more than $100,000 in any year.
As of March 23, 2021, the closing price for one common share quoted on the New York Stock Exchange was $7.99.
Stock Appreciation Rights (SARs)
The Compensation Committee may grant stock appreciation rights (“SARs”). The value of SARs is based on the increase in the value of the Company's common shares from the grant date to the date on which the employee exercises the SAR. The Compensation Committee determines the vesting and exercise periods for each SAR. A SAR must expire not later than 10 years after the grant date. SARs may be granted in connection with or separate from stock option grants. An award agreement for a SAR may provide that such SAR becomes exercisable in the event of the participant's death, disability or retirement or in connection with a change in control.
Restricted Stock
The Compensation Committee may grant restricted Company common shares or “restricted stock.” At the time of grant, the Compensation Committee will specify the period of restriction, the number of shares granted, and the conditions of the award. At the time of the award, the Compensation Committee will establish the period that must lapse and/or the performance targets that must be satisfied for the restrictions to lapse. An award agreement for restricted stock may provide for the earlier termination of restrictions on such restricted stock in the event of the participant's death, disability or retirement.
Restricted Stock Units
The Compensation Committee may grant restricted stock units. Restricted stock units will be evidenced by an award agreement containing such terms and provisions, consistent with the 2018 Equity Plan, as the Compensation Committee may approve. A grant of restricted stock units constitutes an agreement by the Company to deliver common shares or cash to the participant in the future in consideration of the performance of services, but subject to the fulfillment of such conditions during the restriction period as the Compensation Committee may specify. During the applicable restriction period, the participant will have no right to transfer any rights under his or her award, will have no rights of ownership in the common shares deliverable upon payment of the restricted stock units, and will have no right to vote the common shares. An award agreement for restricted stock units may provide for the earlier termination of restrictions on such restricted stock units in the event of the participant's death, disability or retirement.
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Approval and Adoption of Amendment No. 3 to the 2018 Equity Compensation Plan (Proposal 2)
Performance Shares/Units
The Compensation Committee may grant performance units and/or performance shares that may be subject to the achievement of Performance Targets based on one or more of the performance measures listed under “Performance Targets and Performance Measures” above. Performance units and/or performance shares may be paid in the form of cash, shares, or a combination of cash and shares. An award agreement for performance shares or performance units may provide for the earlier lapse of restrictions or other modifications in the event of the participant's death, disability or retirement.
Unrestricted Share Grants
The Compensation Committee may grant common shares, without restrictions on the shares granted. However, no more than 5% of the shares available under the 2018 Equity Plan can be used for awards that are not subject to the plan’s minimum vesting restrictions.
Change in Control
The treatment of outstanding awards upon a change in control would depend on whether or not the awards are assumed by the entity effecting the change in control. In general, a change in control will be deemed to have occurred under the 2018 Equity Plan if: (i) a person or group acquires 30% or more of the voting power of the Company in the election of directors (excluding certain purchases by the Company or its benefit plans); (ii) the Company experiences a turn-over (not approved by at least two-thirds of the Company's directors) of a majority of its directors during a two-year period; (iii) the Company consummates a reorganization, merger or consolidation resulting in a substantial change in ownership of 50% or more of the voting power of the Company; (iv) the Company consummates a sale of all or substantially all of its assets; or (v) the Company's shareholders approve a liquidation or dissolution of the Company.
Upon the occurrence of a change in control, any awards made to a participant under the 2018 Equity Plan that are assumed by the surviving entity will continue to vest and become exercisable in accordance with the terms of the original grant unless, during the two-year period commencing on the date of the change in control, the participant's employment is involuntarily terminated by the Company for reasons other than for “cause” (as defined in the 2018 Equity Plan) or the participant terminates his or her employment for “good reason” (as defined in the 2018 Equity Plan) (a so-called "double trigger"). If a participant's employment is terminated under such circumstances, any outstanding stock options and SARs will become fully vested and exercisable, any restrictions that apply to awards made pursuant to the 2018 Equity Plan will lapse, and any awards that are subject to Performance Targets will immediately be earned or vested in a prorated amount and the prorated amount will become immediately payable (unless prohibited by Section 409A of the Internal Revenue Code (the “Code”)) in accordance with their terms as if all of the Performance Targets have been achieved at their target levels as of the date of termination. For these purposes, the “prorated amount” will be based on the actual level of achievement against the award’s Performance Targets during the performance period up to the date of the change of control and the number of full months that elapsed during the award’s performance period up to and including the date of the change of control. The Compensation Committee may, in good faith, adjust Performance Targets to account for the shortened performance period.
Upon the occurrence of a change in control, any awards made under the 2018 Equity Plan that are not assumed by the entity effecting the change in control and are not subject to Performance Targets will become fully vested and exercisable on the date of the change in control. A prorated amount (as defined above) of any awards made under the 2018 Equity Plan that are subject to Performance Targets will immediately vest and become immediately payable (unless prohibited by Code Section 409A) in accordance with their terms.
For each stock option and SAR that is not assumed in connection with a change in control, the holder will receive a payment equal to the difference between the consideration received by holders of common shares in the change in control transaction and the exercise price of the applicable stock option
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Approval and Adoption of Amendment No. 3 to the 2018 Equity Compensation Plan (Proposal 2)
or SAR, if such difference is positive. Any stock options or SARs with an exercise price that is higher than the per share consideration received by holders of common shares in connection with the change in control transaction will be canceled for no additional consideration.
For any awards of restricted stock, restricted stock units, performance shares or performance units that are not assumed in connection with the change in control, the holder of those awards will receive the consideration that he or she would have received in the change in control transaction had he or she been a holder of the number of common shares equal to the number of restricted stock units and/or shares of restricted stock covered by the award and the number of common shares payable for awards subject to Performance Targets (unless prohibited by Code Section 409A) earned or vested in a prorated amount (as defined above) in accordance with their terms as if all of the Performance Targets have been achieved at their target levels as of the date of the change in control.
If the payment or benefit underlying an award constitutes a deferral of compensation under Code Section 409A, then the payment or delivery will be made on the date of payment or delivery originally provided for such payment or benefit in the applicable award agreement.
Amendment and Termination
The Board of Directors may amend, suspend, or terminate the 2018 Equity Plan at any time. Shareholder approval of an amendment will be required only to the extent necessary to satisfy applicable legal, regulatory agency and stock exchange rules.
Clawback Rights
Any awards or payments made under the 2018 Equity Plan are subject to certain “clawback” rights of the Company. The 2018 Equity Plan provides that the Board may, to the extent permitted by applicable law, require reimbursement of any incentive compensation paid to a participant if and to the extent that (1) the amount of incentive compensation was calculated based upon the achievement of certain financial results that were subsequently reduced due to a restatement, (2) the participant engaged in any fraud or intentional misconduct that significantly contributed to the need for the restatement, and (c) the amount of the bonus or incentive compensation that would have been awarded to the participant had the financial results been properly reported would have been lower than the amount actually awarded. In addition, the Board may terminate the participant’s employment, authorize legal action, or take such other action to enforce the participant’s obligations to the Company as it may deem appropriate.
Compliance with Section 409A of the Internal Revenue Code
To the extent applicable, it is intended that the 2018 Equity Plan and any grants made thereunder comply with or be exempt from the provisions of Code Section 409A so that the income inclusion provisions of Code Section 409A (a)(1) do not apply to the participants. The 2018 Equity Plan and any grants made under the 2018 Equity Plan will be administered in a manner consistent with this intent.
Federal Income Tax Consequences
Tax Consequences for the Participants
The federal income tax consequences to a participant vary depending upon the type of award granted under the 2018 Equity Plan. Generally, there are no federal income tax consequences to an employee upon the grant or exercise of an incentive stock option. If the employee holds the shares purchased through the exercise of an incentive stock option for more than two years after the grant day and one year after the exercise date (“required holding period”), the employee will be eligible for capital gains treatment on any excess of the sales price over the option price upon selling the shares. However, if the employee sells the shares during the required holding period, he or she must recognize ordinary income on the date of sale equal to the difference between the option price and the fair market value of
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Approval and Adoption of Amendment No. 3 to the 2018 Equity Compensation Plan (Proposal 2)
the shares on the exercise date. The balance of the employee's gain, if any, on the sale of the shares is subject to capital gains treatment.
The recipient of a non-qualified stock option realizes ordinary income upon exercising the option equal to the difference between the option price and the fair market value on the exercise date of the shares purchased. Upon the subsequent sale of any such shares by the recipient, any appreciation or depreciation in the value of the shares after the exercise date will be treated as a capital gain or loss for the recipient.
A participant generally does not recognize income from the grant of restricted stock until the restrictions on the shares lapse. Pursuant to Code Section 83(b), a participant may elect to recognize income at the time of the grant, based on the value of the shares at that time.
A participant generally does not recognize income from the grant of restricted stock units until the restrictions on the restricted stock units lapse. At that time, the participant must recognize as ordinary income an amount equal to the fair market value of the shares underlying the restricted stock units.
No income generally will be recognized upon the grant of performance shares or performance units. Upon payment in respect of the earn-out of performance shares or performance units, the recipient generally will be required to include as taxable ordinary income in the year of receipt an amount equal to the amount of cash received and the fair market value of any unrestricted common shares received.
In general, awards of unrestricted stock are taxable to the participants and deductible by the Company at the time paid.
Tax Consequences to the Company or Subsidiary
To the extent that a participant recognizes ordinary income in the circumstances described above, the Company or the subsidiary for which the participant performs services will be entitled to a corresponding deduction provided that, among other things, the income meets the test of reasonableness, is an ordinary and necessary business expense, is not an “excess parachute payment” within the meaning of Code Section 280G and to the extent the award, combined with other payments, does not exceed the $1 million limitation on certain executive compensation under Code Section 162(m). In the case of grants of incentive stock options, the Company does not receive an income tax deduction, provided that the employee disposes of the shares after the required holding period.
Registration with the SEC
The Company intends to file a Registration Statement on Form S-8 with the Securities and Exchange Commission pursuant to the Securities Act of 1933, as amended, relating to the issuance of the additional common shares authorized for issuance under the Amendment as soon as practicable after approval of the Amendment by the Company's shareholders.
New Non-Discretionary Plan Benefits
It is not possible to determine specific amounts and types of awards that may be awarded in the future under the 2018 Equity Plan because the grant and actual pay-out of awards under such plans are discretionary. However, the Company's current compensation program for Directors described under the Compensation of Directors section contemplates that non-employee Directors will be awarded restricted stock grants with a target value of $130,000 on an annual basis. Any new Director who joins the Board receives an award of a pro-rated number of shares of the most recent annual grant based on the months remaining until the next annual grant.
The following table sets forth the awards granted in March 2021 under the terms of the Company's current director compensation program to each of the nine non-executive Directors who are standing for re-election at the 2021 annual meeting:
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Approval and Adoption of Amendment No. 3 to the 2018 Equity Compensation Plan (Proposal 2)
Name and PositionDollar ValueNumber of Common Shares
Non-Executive Director Group (1)$130,00013,388(2)
(1)The dollar value and number of common shares are presented on a per person basis. The Non-Executive Director Group is comprised of the nine incumbent non-employee Directors who received awards in March 2021 and who are standing for re-election at the annual meeting.
(2)Reflects $130,000 divided by $9.71, which was the 30-day average closing price per share as of February 28, 2021.
EQUITY COMPENSATION PLAN INFORMATION
The following table provides information as of December 31, 2020 about our common shares that may be issued upon the exercise of options, warrants and rights granted under all of our existing equity compensation plans, including the Invacare Corporation 2018 Equity Compensation Plan.
Column (a)Column (b)Column (c)
Plan Category 
Number of  securities
to be issued upon exercise of outstanding options, warrants and rights
Weighted-average
exercise  price of
outstanding  options,
warrants and rights  
Number of securities
remaining available  for future issuance under equity  compensation plans
(excluding securities reflected in column (a))
Equity compensation plans approved by security holders1,081,804$16.073,540,534(1)
Equity compensation plans not approved by security holders443(2)
Total1,082,247$16.073,540,534
(1)    Represents shares available under the Invacare Corporation 2018 Equity Compensation Plan. This amount reflects the balance after reduction of (i) an aggregate of 1,145,458 shares underlying restricted share and restricted share unit awards outstanding at December 31, 2020 and (ii) an aggregate of 1,026,785 shares underlying performance share and performance share unit awards outstanding at December 31, 2020. Performance shares and performance share unit awards outstanding assumes awards at targets. For purposes of the number of shares available for future issuance, performance share and units awards assume achievement of maximum targets, even though the actual payout under such awards may be less than the 150% award maximum. Performance share and performance share unit awards and restricted share and restricted share unit awards granted under the 2018 Equity Plan and 2013 Equity Plan reduce the number of securities remaining at a rate of 2 shares for each full value share awarded. An aggregate of 375,066 shares underlying awards are available under the 2013 Equity Plan and 2003 Performance Plan at December 31, 2020. Shares underlying awards outstanding under the 2013 Equity Plan and 2003 Equity Plan may become available under the 2018 Equity Plan to the extent such awards are forfeited or expire unexercised.
(2)    Represents phantom share units in the DC Plus Plan or a predecessor plan, which were allocated to participants' accounts at their discretion as their investment choice.
Votes Required (Proposal 2)
The approval and adoption of Amendment No. 3 to the Invacare Corporation 2018 Equity Compensation Plan requires the affirmative vote of the holders of a majority of the votes cast on the proposal. Abstentions and broker non-votes will not be voted for or against the proposal and will not be counted in the number of votes cast on the proposal. Accordingly, abstentions and broker non-votes will have no effect on the outcome of the vote.
Invacare's Board of Directors recommends that shareholders vote “FOR
the approval and adoption of Amendment No. 3 to the Invacare Corporation 2018 Equity Compensation Plan.
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Auditor Ratification (Proposal 3)
RATIFICATION OF APPOINTMENT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
(Proposal No. 3)
The Audit Committee has appointed Ernst & Young LLP to continue as the Company's independent registered public accounting firm and to audit its financial statements for the year ended December 31, 2021. The Audit Committee and the Board of Directors are requesting shareholders to ratify this appointment. During the year ended December 31, 2020, Ernst & Young LLP served as the Company's principal auditors and provided tax and other services. Ernst & Young LLP has served as the Company's independent auditor since 1984. The Audit Committee believes the continued retention of Ernst & Young LLP as our independent auditor is in the best interests of the Company and shareholders. See “Independent Registered Public Accounting Firm.” Representatives of Ernst & Young LLP are expected to be present at the Annual Meeting and will have an opportunity to make a statement if they so desire and will be available to respond to appropriate questions.  
Votes Required (Proposal 3)
Ratification of the appointment of Ernst & Young LLP as the Company's independent registered public accounting firm requires the affirmative vote of the holders of a majority of the votes cast on the proposal. Abstentions will not be voted for or against the ratification of the appointment of Ernst & Young LLP and will not be counted in the number of votes cast on the proposal. 

Invacare's Board of Directors recommends that shareholders vote “FOR
the ratification of the appointment of Ernst & Young LLP as the Company's independent
registered public accounting firm for the year ended December 31, 2021.

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Report of the Audit Committee
AUDIT COMMITTEE AND RELATED MATTERS
The following Report of the Audit Committee does not constitute soliciting material and should not be deemed filed or incorporated by reference into any other Company filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the extent the Company specifically incorporates this Report by reference therein.
Report of the Audit Committee
The Audit Committee assists the Board of Directors in its oversight and monitoring of:
the integrity of the Company's financial statements;
the Company's enterprise risk management process;
the independence, performance and qualifications of the Company's internal auditors and independent registered public accounting firm; and
the Company's compliance with legal and regulatory requirements related to the Company's financial statements and accounting policies.
The Audit Committee's activities are governed by a written charter adopted by the Board of Directors, which is available on the Company's website (www.invacare.com) by clicking on the Investor Relations tab and then the Corporate Governance link.
Each member of the Audit Committee satisfies the independence requirements set forth in the New York Stock Exchange listing standards and Rule 10A-3 of the Securities Exchange Act of 1934, as amended.
Management has the primary responsibility for the Company's financial statements and the reporting process, including the system of internal and disclosure controls and assessing the effectiveness of internal control over financial reporting. Ernst & Young LLP, the Company's independent registered public accounting firm for 2020, audited the annual financial statements prepared by management and expressed an opinion on the conformity of those financial statements with accounting principles generally accepted in the United States. Ernst & Young LLP also audited the Company's internal control over financial reporting as of 2020 and issued an opinion with respect to the Company's internal control over financial reporting as of 2020.  
The Company's Vice President of Internal Audit, together with a nationally-recognized third-party auditing firm, as well as other outside expert consulting firms, conduct the Company's internal audit processes. During 2020, the Audit Committee met with the Vice President of Internal Audit and Ernst & Young LLP, with and without management present, to discuss their examinations, their continuing evaluation of the Company's internal and disclosure controls and the overall quality of the Company's internal procedures and controls over financial reporting.
As part of its oversight responsibilities described above, the Audit Committee met and held discussions with management, with Ernst & Young LLP and with the Company's Vice President of Internal Audit relative to the Company's financial reporting. The Audit Committee reviewed with Ernst & Young LLP, which is responsible for expressing an opinion on the conformity of the audited consolidated financial statements and related schedules with US generally accepted accounting principles, its judgments as to the quality, not just the acceptability, of the Company’s accounting principles and such other matters as are required to be discussed with the Committee by the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), including PCAOB Auditing Standard No. 1301, Communications With Audit Committees, the rules of the Securities and Exchange Commission, and other applicable regulations. In addition, the Committee has discussed with Ernst & Young LLP the firm’s independence from Company management and the Company, including the matters in the letter from the
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Report of the Audit Committee
firm required by PCAOB Rule 3526, Communication with Audit Committees Concerning Independence, and considered the compatibility of non-audit services with Ernst & Young LLP’s independence.
In addition, Ernst & Young LLP provided to the Audit Committee the written disclosures and letter required by PCAOB Ethics and Independence Rule 3526 (Communications With Audit Committees Concerning Independence), and by all relevant professional and regulatory standards, related to the auditors' independence. The Audit Committee discussed with Ernst & Young LLP its independence from the Company and its management and considered the compatibility of non-audit services with the independence of Ernst & Young LLP.
Based on the reviews and discussions referred to above, the Audit Committee recommended to the Board of Directors, and the Board of Directors has approved, that the audited financial statements be included in the Company's Annual Report on Form 10-K for the year ended 2020 for filing with the Securities and Exchange Commission.
The Audit Committee has appointed Ernst & Young LLP as the Company's independent registered public accounting firm for its 2021 fiscal year, and the Company is seeking ratification of such appointment at the 2021 Annual Meeting of Shareholders.

AUDIT COMMITTEE
Clifford D. Nastas, Chair
Julie A. Beck
Diana S. Ferguson
Marc M. Gibeley

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Independent Registered Public Accounting Firm
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
FEES AND SERVICES
Independent Registered Public Accounting Firm and Fees
The Audit Committee has selected Ernst & Young LLP to continue as the Company's independent registered public accounting firm and to audit the financial statements of Invacare for the fiscal year ending December 31, 2021. The Audit Committee and the Board of Directors are requesting shareholders to ratify this appointment.  Fees for services rendered by Ernst & Young LLP in 2020 and 2019 were:
 20202019
Audit Fees$2,802,000 $2,994,000 
Audit-Related Fees15,000 9,000 
Total Audit and Audit-Related Fees2,817,000 3,003,000 
Tax Fees  
Tax Compliance Services550,000 660,000 
Tax Advisory Services936,000 369,000 
Total Tax Fees1,486,000 1,029,000 
Total Fees$4,303,000 $4,032,000 
Audit Fees.    Fees for audit services include fees associated with the audit of the Company's annual financial statements and review of the Company's quarterly financial statements, including fees for statutory audits that are required domestically and internationally and fees related to the completion and delivery of the auditors' attestation report on internal control over financial reporting required under Section 404 of the Sarbanes-Oxley Act. Audit fees also include fees associated with providing consents and review of documents filed with the SEC, other services in connection with statutory and regulatory filings or engagements, as well as accounting consultations billed as audit consultations and other accounting and financial reporting consultation and research work necessary to comply with generally accepted auditing standards.
Audit-Related Fees.    Fees for audit-related services principally include fees associated with accounting consultations, audits in connection with proposed or completed acquisitions and other accounting advisory assistance.
Tax Fees.    Fees for tax services include fees associated with tax compliance, advice and planning services.
Pre-Approval Policies and Procedures
The Audit Committee has adopted a policy that requires advance approval for all audit, audit-related, tax services, and other services performed by the Company's independent registered public accounting firm. The policy provides for pre-approval by the Audit Committee of specifically defined audit and non-audit services. Unless the specific service has been previously pre-approved with respect to that year, the Audit Committee must approve the permitted service before the independent registered public accounting firm is engaged to perform it. During 2020, no services were provided to the Company by Ernst & Young LLP other than in accordance with the pre-approval policies and procedures described above.
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Advisory Vote on Executive Compensation (Proposal 4)
ADVISORY VOTE ON EXECUTIVE COMPENSATION
(Proposal No. 4)
Pursuant to Section 14A of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), the Company is providing its shareholders with the opportunity to cast an advisory vote at the Annual Meeting to approve the compensation of the named executive officers, as disclosed in this proxy statement pursuant to the Securities and Exchange Commission's compensation disclosure rules. The shareholder vote on executive compensation is an advisory vote only, and it is not binding on the Company or the Board of Directors.
At its 2020 Annual Meeting of Shareholders, the Company provided its shareholders with the opportunity to cast an advisory vote to approve the compensation of its named executive officers as disclosed in the proxy statement for the 2020 Annual Meeting, and the Company's shareholders approved the proposal. As the Board of Directors views it as a good corporate governance practice, and because the Company's shareholders previously indicated they were in favor of an annual advisory vote, the Company is again requesting its shareholders to approve the compensation of its named executive officers as disclosed in this proxy statement in accordance with the SEC's rules.
This proposal, commonly known as a “say-on-pay” proposal, gives the shareholders the opportunity to express their views on the Company's named executive officers' compensation by an advisory vote at the 2021 Annual Meeting. This vote is not intended to address any specific item of compensation, but rather the overall compensation of the Company's named executive officers and the philosophy, policies and practices described in this proxy statement. Accordingly, the Company will recommend that its shareholders vote “FOR” the following resolution at the Annual Meeting:
“RESOLVED, that the Company's shareholders approve, on an advisory basis, the compensation of the named executive officers, as disclosed in the Company's Proxy Statement for the 2021 Annual Meeting of Shareholders pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the compensation discussion and analysis, the compensation tables and any related material disclosed in this proxy statement.”
The say-on-pay vote is advisory, and therefore not binding on the Company, the Compensation Committee or the Board of Directors. The Compensation Committee values the opinions of the shareholders, and to the extent there is any significant vote against the named executive officer compensation as disclosed in this Proxy Statement, the Company will consider its shareholders' concerns, and the Compensation Committee will evaluate whether any actions are necessary to address those concerns. The next say-on-pay vote will occur at the Company's 2022 Annual Meeting.
Votes Required (Proposal 4)
Advisory approval of the compensation of our named executive officers requires the affirmative vote of the holders of a majority of the votes cast on the proposal. Abstentions and broker non-votes will not be voted for or against approval of our executive compensation and will not be counted in the number of votes cast on the proposal.

Invacare's Board of Directors recommends that shareholders vote “FOR” the approval
of the compensation of the named executive officers, as disclosed in this Proxy Statement.

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Executive Compensation
EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
Executive Summary
This Compensation Discussion and Analysis ("CD&A") describes our compensation philosophy and programs and compensation decisions made under those programs for fiscal year 2020 for our named executive officers, who are listed below.
NameTitle
Matthew E. MonaghanChairman, President and Chief Executive Officer
Kathleen P. LeneghanSenior Vice President and Chief Financial Officer
Anthony C. LaPlacaSenior Vice President, General Counsel, Chief Administrative Officer and Secretary
Ralf A. LeddaSenior Vice President and General Manager, EMEA
Angela GoodwinChief Information Technology Officer
Principles of Our Compensation Program
Pay for PerformanceA key principle of our compensation philosophy is pay for performance. We reward our executives for meeting or exceeding financial and operating performance objectives and for leadership excellence, with increased at-risk compensation at higher, more influential levels.
Alignment with Shareholders' InterestsWe reward performance that meets or exceeds the performance goals that the Compensation Committee establishes for the Company with the long-term objective of creating sustainable and profitable growth.
Attraction of Top TalentCompensation, in combination with a meaningful mission, modern workplace and professional environment, enables us to attract key talent to build our core businesses, leverage existing technology and expand as a healthcare technology company in meaningful ways.
Retention of TalentWe structure our compensation program to appropriately motivate our important talented employees to remain with the Company and continue making significant long-term contributions.
Key Indicators of Performance
To address changes in the Company's business dynamics over the past several years, the Company has undertaken a multi-year strategy of business optimization improvements to drive efficiency and focus in the business. The Company has made significant investments in areas such as quality, gross margin expansion, new product innovation and business restructuring to achieve its long-term objectives. These investments have been made at the expense of short-term earnings but are expected to position the Company on a sustainable path to long-term profitability and generate value for the Company's shareholders.

To appropriately align executives with shareholders' interest in restoring sustainable, profitable growth and achieving the Company’s long-term goals, 2020 executive compensation was driven, in part, by key financial indicators of progress in executing the Company's business strategy, which the Company believes are contributing to an increase in Company value, future earnings power and growth potential, and in part, by customary financial metrics that are more related to total shareholder return (TSR).
Summary of 2020 Company Performance

In 2020, the Company continued to execute on its business optimization strategy and build upon the improvements made to its business over the past several years. The Company achieved important elements of its financial goals for the year, with significant improvements in profitability and free cash flow
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Executive Compensation
performance, despite a pandemic which restricted sales opportunities and posed constraints on the Company's supply chain. The Company launched new products with compelling features, improved gross profit margin through favorable sales mix and continued to manage SG&A expenses. In addition, the Company executed on two key business improvement initiatives, completing its German plant consolidation and progressing its information technology modernization program. Importantly, the Company's North America segment, as currently constituted, returned to profitability for the first time in several years. As a result of the improved financial performance, the Company achieved breakeven free cash flow for the year. In 2020, the Company improved its capital structure by repurchasing and/or effectively extending the maturity of substantially all of its outstanding convertible indebtedness due to 2021.
Compensation Actions related to the COVID-19 Pandemic
In early 2020, before the pandemic, the Compensation Committee established the 2020 compensation program, including the performance targets for the 2020 annual bonus plan and the long-term incentive plan ("LTIP") awards. As the COVID-19 pandemic unfolded through the second quarter of 2020 the Company experienced tremendous disruptions and challenges to its business. The Company quickly adopted public health measures to ensure safe work environments for its associates, while ensuring its facilities remained open as essential business operations to produce necessary medical equipment used for COVID-19 patient care. The pandemic led to an increase in demand for the Company's respiratory products, beds, and therapeutic support surfaces. However, this increased demand was more than offset by a decline in sales of mobility and seating and lifestyle products, as public health restrictions implemented in the Company's markets limited patients' access to healthcare and the Company's access to its customers. During this time, the Company was also impacted by severe global supply chain disruptions. As a result of the numerous challenges, the Company took actions to reduce costs and preserve liquidity. The pandemic-driven business decline resulted in lower net sales and the Company adjusted its outlook for 2020 accordingly.
As part of the Company's pandemic-related cost reductions, in March 2020, the named executive officers agreed to voluntarily defer payment of 20% of their respective base salaries for April 2020, 100% of their respective annual cash bonuses earned in 2019, and any salary increase in 2020. They subsequently agreed to a 10% reduction in their respective base salaries for a period of three months beginning in May 2020. The Company's directors also agreed to a 20% reduction of their cash compensation over a three-month period. With the loosening of pandemic-related public health restrictions, improved adaptation to remote working practices and implementation of new remote patient and customer fittings and trials, the Company's business began to improve in the third and fourth quarters. The deferred amounts of compensation were later paid to the named executive officers in the fourth quarter of 2020.
In light of the impact of the pandemic and the revised business outlook, following the second quarter of 2020, the Compensation Committee reviewed the original, pre-pandemic annual bonus plan goals for adjusted operating income and free cash flow and the adjusted EBITDA goals for the last year of the three-year LTIP period, to determine whether those goals remained appropriate, were realistically achievable and would continue to provide appropriate motivational value at a critical time for the Company. Based on this review, the Compensation Committee determined:
That the public restrictions on clinical access and the global supply chain disruptions resulting from the pandemic were so adverse to the Company's operations that achieving operational performance for 2020 at or above the prior year's levels would be a substantial achievement and enhancement of shareholder value worthy of performance-based compensation.
That modifying the goals during the year, rather than adopting a year-end discretionary bonus approach, would allow the Company to maintain a performance-based compensation arrangement based on objective measures, consistent with its pay-for-performance philosophy and the existing structure of its incentive plans.
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To modify the annual bonus plan and establish new goals for the full year 2020 annual bonuses, and even as revised, the annual bonus plan targets remained above the prior year's comparable performance levels, to incentivize year-over-year improvement, even with the challenges of the pandemic.
To review the goals applicable to LTIP awards made for the 2018-2020 and 2019-2021 performance cycles, as the original pre-pandemic goals were based on performance measures for the final year of each cycle, 2020 and 2021, respectively, and to revise the 2020 and 2021 adjusted EBITDA performance goals to levels that were more realistically achievable, but still above the prior year's comparable performance levels, to further incent long-term improvement to the business, despite the continued challenges of the pandemic.
By year end, the Company had achieved operational results that exceeded the prior year's results, despite the extraordinary challenges presented by the pandemic, resulting in annual bonus and LTIP payouts above target to the named executive officers. These goals and results are further described below under "Annual Cash Incentive" and "Long-Term Incentive Plan."
How 2020 Executive Compensation is Tied to Performance
The Company's performance was a key factor in the 2020 named executive officer compensation program:
Link to Company Performance
For 2020, 55% of our Chief Executive Officer's target compensation was performance-based and 50% of the average of the other named executive officers' target compensation was performance-based.
Utilize Long- and Short-term Awards
Each named executive officer's performance-based compensation comprises an annual cash bonus opportunity and a long-term equity incentive award consisting of performance shares and restricted stock. For the annual cash bonus, the target award is established at the beginning of the fiscal year and the actual award is determined based on performance against pre-established goals. In 2020, targets were revised during the year in response to the impact of the COVID-19 pandemic, as further described below. Performance shares provide the opportunity for vesting at the end of the three-year performance period if pre-established financial goals are met. Time-based restricted stock enhances the Company's ability to retain executives and provides value based on the Company's stock price performance. In determining the mix of performance shares and time-based restricted stock, substantially greater emphasis is placed on performance shares to further motivate executives to pursue goals associated with the Company's financial performance. The Company believes that its mix places greater emphasis on performance-based equity compared to many of the Company's peers.
Focus on Corporate Performance Metrics
Cash Bonus: For 2020, Adjusted Operating Income and Free Cash Flow were the key metrics for our annual cash bonus awards. These metrics are described below under the heading "Corporate Goals and Results for 2020." Actual performance for both Adjusted Operating Income and Free Cash Flow were above the established thresholds for payment, which resulted in cash bonus payouts to the named executive officers as further described below under the heading "Actual Annual Cash Incentive Awards for 2020."
Long-Term Incentive Awards: Vesting of the performance-based LTIP awards granted in 2020 is based on two mechanisms. First, the program allows for a maximum level of 150% of target if an initial financial performance threshold is achieved or exceeded at the end of the three-year
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performance period (2020-2022) applicable to the awards. Second, a key financial measurement area that the Compensation Committee deems an important indicator of the progress of the Company’s transformation to profitability will be used to determine if all, some or none of the maximum awards will actually be earned. Average Gross Margin was established as the initial financial performance metric and Adjusted EBITDA was established as the key end-of-period financial performance metric, for the Company's performance-based long-term awards in 2020. The 2020 Gross Margin was above the average target level established for the end of the 2020-2022 period but must be sustained for 2021 and 2022 in order for awards to qualify for payout.
The performance shares previously awarded in 2018 completed their three-year performance period on December 31, 2020. Similar to the 2020 awards described above, performance shares earned pursuant to the 2018 awards were based on an Average Gross Margin target for the three-year performance period that qualified the performance shares at 150% of target, each subject to reduction by the Compensation Committee based on its evaluation of the Company’s actual performance. As described below under the heading “Results of Performance Shares Granted in 2018,” the Company’s Average Gross Margin performance exceeded the threshold for qualifying, and, after the Compensation Committee evaluated the Company’s progress in the key financial performance metric of Adjusted EBITDA, it determined that the amount of performance shares that were earned by the named executive officers was 114% of target rather than 150% of target (which constituted 48% of the original target value of the awards due to the decline in the Company's stock price over the performance period).
Compensation and Performance Alignment
While the Compensation Committee seeks to align the pay of all of the Company’s executives with the Company’s performance and the interests of its shareholders, the Compensation Committee believes that this alignment is especially important in the case of the Chief Executive Officer. Because performance-based compensation comprised 55% of the Chief Executive Officer's total target compensation for 2020, the Company’s pay for performance and alignment with shareholders' interests is demonstrated by comparing the Chief Executive Officer's realized or currently realizable pay to his target compensation opportunity.

The actual pay realized or currently realizable by the Chief Executive Officer has averaged to approximately 93.8% of his target compensation opportunity for the past three years, reflecting the Company’s actual performance relative to its annual and long-term incentive goals during that period.



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Target opportunity reflects base salary, target bonus and the grant date value of the Chief Executive Officer’s equity awards, which for 2020 included a one-time equity award associated with the renewal of his employment agreement. Realized or realizable pay reflects the Chief Executive Officer's base salary, actual cash bonuses paid, the vesting date value of any equity awards earned and unrealized value of unvested equity awards based on a $8.95 stock price, which was the Company's December 31, 2020 closing stock price. The realizable value of the Chief Executive Officer’s unvested and outstanding performance shares assumes the achievement of target goals.

The Compensation Committee also examined the alignment of the Chief Executive Officer's pay with performance relative to the peer companies used in determining his target pay opportunities. This analysis focused on the Chief Executive Officer's realizable pay ranking relative to peers in comparison to the Company's TSR ranking versus the group for the five-year period from 2015 to 2019 (the latest year for which data are available for peers). As a result, the analysis assesses one of the principal aims of the Company's compensation program - appropriately rewarding executives for the creation of value for shareholders. As shown in the following table, the Company's compensation program has produced realizable pay levels relative to peers that are directionally and reasonably aligned with the Company's TSR results relative to those companies. For the 2015-2019 period, the Company's TSR and realizable pay levels for its Chief Executive Officer were both well below the median levels of its peers.

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Investor Feedback
At the 2020 Annual Meeting, the Company’s shareholders approved the compensation of the Company’s named executive officers, with holders of approximately 92% of the votes cast voting in favor of the proposal commonly known as “say-on-pay.” The Board of Directors has determined that say-on-pay votes will be held annually until the next shareholder vote on the frequency of say-on-pay votes.
The Company continued its annual investor outreach program in 2020 and contacted most of its top 25 institutional investors as well as the two leading proxy advisory firms to request meetings. Institutional investors holding approximately 35% of the Company’s outstanding shares, based on holdings as of September 30, 2020, either held telephonic meetings with the Company. In addition, the Company held a meeting with one of the proxy advisory firms. The remaining investors that were contacted and the other proxy advisory firm declined the Company's meeting requests indicating that they had no concerns to address with the Company. The independent Chair of the Compensation Committee participated in all but one of these meetings, along with senior management. The discussions at the meetings included:
Progress on the Company's business optimization initiatives;
Responses and actions related to the COVID-19 pandemic;
Financial performance highlights through third quarter 2020 compared to 2019;
Corporate governance highlights;
Board composition, experience, tenure and diversity;
Environmental, Social & Governance ("ESG") program updates;
Diversity, Equity & Inclusion ("DEI") progress;
Executive compensation program highlights, pay practices and pay for performance alignment; and
Equity plan replenishment of shares for shareholder consideration and approval.
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In the course of the discussions, the Company received positive feedback on these matters and engaged in constructive dialog concerning the Company's alignment of pay and performance. Overall, the Company did not receive any material concerns with its executive compensation pay practices, and the Company believes its practices are aligned with shareholders.
The Compensation Committee considered the results of the 2020 say-on-pay vote and feedback from the outreach program to be an indication of shareholder support for the structure of the Company’s executive compensation program, its philosophy and objectives, the outcomes associated with the program and the Compensation Committee’s overall governance of the executive compensation practices. Accordingly, the Compensation Committee believes that its executive compensation decisions in 2020 are consistent with the principles that the Company’s shareholders supported in their 2020 say-on-pay vote.
Compensation Program Highlights
þ What We Do
Pay for Performance: Approximately 50-55% of each named executive officer’s target annual compensation is tied to corporate performance.
Annual Say-on-Pay Vote: We conduct an annual Say-on-Pay advisory vote by our shareholders. At our 2020 Annual Meeting, approximately 92% of the votes cast on the Say-on-Pay proposal were in favor of the 2019 compensation of our named executive officers.
Clawback Policy: We have a policy that allows our Board to require repayment to the Company of any incentive compensation paid to our executive officers if and to the extent that the financial results on which the compensation was based are restated due to the fraud or intentional misconduct of the executive officer.
Short-Term and Long-Term Incentives: Our annual and long-term plans provide a balance of cash- and equity-based incentives that generally reflect market median practices of our peers and other companies of our size. We use different performance metrics for our annual and long-term plan awards tied to business objectives over the respective periods. Historically, payouts under our awards have reflected our performance compared to those objectives and our relative shareholder returns.
Independent Compensation Consultant: The Compensation Committee engages a compensation consultant, who is independent of the Company and management.
Stock Ownership Guidelines: To further align to the interests of shareholders, we have significant stock ownership guidelines, which require our Chief Executive Officer to hold five times and our other named executive officers to hold two times their respective annual base salaries in Company shares.
Limited Perquisites and Related Tax Gross-Ups: We provide limited perquisites and no related tax gross-ups.
Double-Trigger Change of Control Arrangements: Our change of control and equity award agreements generally require a qualifying termination of employment in addition to a change of control before change of control benefits or accelerated equity vesting are triggered.
Mitigate Inappropriate Risk Taking: In addition to our clawback policy, stock ownership guidelines and prohibition of hedging, we structure our compensation program in an effort to minimize inappropriate risk taking by our executive officers and other employees, including using multiple performance metrics that are different for our annual and long-term incentive plans and multi-year performance periods and capping our annual incentive bonus plan and performance share awards.
ý What We Don't Do
Gross-ups for Excise Taxes in New Agreements: Our change of control agreements with our CEO and our other named executive officers appointed after 2008 do not contain a gross-up for
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excise taxes that may be imposed as a result of severance or other payments deemed made in connection with a change of control.
Reprice Stock Options: Our equity incentive plan prohibits the repricing of stock options and stock appreciation rights without prior shareholder approval.
Hedging and Pledging: Our insider trading policy prohibits all key personnel and Directors from hedging or pledging their economic interest in the Company common shares they hold.
Dividend Equivalents: Our equity compensation plan provides that holders of equity awards will be entitled to receive cash dividends on shares only after they vest, and on stock options and SARs only after they are exercised.
Accelerated Vesting: Our equity compensation plan provides that no amendment to an award under the plan may accelerate the vesting or payment of the award except in the case of death or disability.
Setting Executive Compensation
Compensation Committee Administration
The Compensation Committee is comprised of independent Directors and is responsible for approving and administrating the Company’s executive compensation plans.
Setting Goals
Each year, the Compensation Committee reviews the compensation program and pay practices. This review includes determining whether the Company’s compensation levels are competitive with its peer group and other similarly situated companies and whether any changes should be made to remain competitive and effective.
The Compensation Committee determines the principal components of compensation for the named executive officers each year and sets the performance goals for each performance-based compensation component. The Compensation Committee meets regularly throughout the year and reviews the Company’s performance to date against the performance goals.
As discussed under “Risk Assessment,” when establishing the annual compensation program for named executive officers, the Compensation Committee takes into consideration the potential risks associated with the program and structures it to provide appropriate incentives without encouraging excessive risk taking.
Making Determinations
The Compensation Committee’s decisions to award compensation are based on its assessment of each executive’s performance during the year against a variety of factors which may include corporate and personal goals, leadership qualities, operational performance, business responsibilities, current compensation arrangements and long-term potential to enhance shareholder value. Among the factors which may be considered are financial and non-financial measures such as revenue, profit, cash flow, product innovations, individual achievements, and improvements that create value. To set executive target compensation, the Company does not necessarily adhere to rigid formulae or react immediately to short-term changes in business performance.
In making its decisions, the Compensation Committee reviews input from the independent compensation consultant and from management, who provides the Compensation Committee with analysis and recommendations regarding base salary adjustments, payout levels under annual incentive plans and equity awards. The Chief Executive Officer does not provide recommendations regarding his own compensation programs, and the compensation decisions concerning the Chief Executive Officer are deliberated by the Committee in the absence of the Chief Executive Officer.
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Role of Independent Consultant
In 2020, the Compensation Committee continued its engagement of Pay Governance LLC (“Pay Governance”) as its independent compensation consultant to advise it on executive and non-employee director compensation matters. The Compensation Committee has the sole discretion to retain and replace, as necessary, compensation consultants to provide it with independent advice
Pay Governance’s primary role is to analyze the competitiveness of, and provide recommendations on, the structure and amounts of each major element of compensation for the Company’s executives. During 2020, representatives of Pay Governance participated in nine of the Compensation Committee’s meetings. In 2020, Pay Governance provided no services to the Company other than to advise the Compensation Committee on executive and non-employee Director compensation matters. In addition, in early 2020, the Compensation Committee conducted an evaluation of the independence of Pay Governance and, based on this review, did not identify any conflict of interest raised by the work performed by Pay Governance. When conducting this evaluation, the Compensation Committee took into consideration the factors set forth in Exchange Act Rule 10C-1 and the NYSE’s listing standards.
Compensation Philosophy and Objectives
Philosophy
The Company’s executive compensation is intended to:
reward its executives for leading improvements that contribute to shareholder value with sustained financial and operating performance and leadership excellence;
align the executives’ interests with those of the Company’s shareholders;
enable the Company to attract needed talent in key positions; and
encourage executives to remain with the Company and continue making significant long-term contributions.
Market Compensation - Survey Data and Peer Group
To gauge the competitiveness of the Company’s executive compensation levels and to help ensure that the Company is positioned to attract and retain qualified executives in the face of competitive pressures, the Compensation Committee engages Pay Governance annually to identify the compensation paid to executives of other companies which are determined to be comparable to the Company based on various factors. This information is referred to in this CD&A as “market compensation.” The market compensation is derived from a combination of survey data and comparative information from a peer group of companies, as described below.
Survey Data
Pay Governance annually reviews survey data from nationally recognized compensation and human resources consulting firms and identifies the compensation levels with respect to annual base salaries, cash bonus awards and long-term incentive awards for each executive position paid by companies in the survey. The Compensation Committee bases its compensation decisions, in part, on survey data. Survey data is comprised of similar companies in terms of revenue, industry, multinational operations and number of employees and is adjusted to reflect the size of the Company or the relevant business unit.
Peer Group
In addition to survey data, Pay Governance also annually prepares comparative information regarding annual base salaries, cash bonus awards and long-term incentive awards for the named executive officers of a peer group of companies, which in 2020 comprised data from 18 companies. All of the peer group companies are in the health care equipment and supply industry, the life sciences industry, or have businesses in similar or related industries. The Compensation Committee considers these
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industries to be its primary market for executive talent, particularly for executives in key operations positions. Peers are selected based primarily on revenue. The Compensation Committee also looks at market capitalization, total assets, invested capital and number of employees. Companies in the peer group generally have annual revenue ranging from $500 million to $3.0 billion, market capitalization ranging from $1.0 billion to $7.0 billion, total assets ranging from $500 million to $4.5 billion, invested capital ranging from $500 million to $4.0 billion, and a number of employees ranging from 1,000 to 12,000. The Company’s number of employees approximated the median of the companies in the group. While the market capitalizations, annual revenues and total assets of most of the companies in the group exceed those of the Company, the scope and complexity of the Company’s operations is similar to those of the companies in the group and requires key executives with similar levels of talent, experience and sophistication.
For 2020, the Company’s peer group consisted of the following 18 companies:
Avanos Medical, Inc.DexCom, Inc.MSA Safety Incorporated
Bio-Rad Laboratories, Inc.Haemonetics CorporationMerit Medical Systems, Inc.
Bruker CorporationHill-Rom Holdings, Inc.Natus Medical, Inc.
Cantel Medical Corp.Integer Holdings CorporationNuVasive, Inc.
Chart Industries, Inc.Integra LifeSciences Hldg Corp.OSI Systems, Inc.
CONMED CorporationMasimo CorporationWest Pharmaceutical Services, Inc.
The companies in this group are reviewed from time to time and may be changed to account for differences between the Company and specific peers. For 2020 compensation, the peer group was unchanged from that used for 2019.
Competitive Positioning
The Compensation Committee used compensation data from pay surveys and from its comparative group, which is referred to as “market compensation” in this section, as well as input from Pay Governance and from the Chief Executive Officer and the Company's human resources personnel, to assist it in determining whether the Company’s compensation is competitive and reasonable. The Compensation Committee considers market compensation practices and incorporates flexibility in the Company’s compensation programs and in the assessment process, so adjustments can be made in an evolving business environment, including market conditions, which may be beyond management’s control. Philosophically, the Compensation Committee strives to maintain compensation, both overall and by individual element, within a reasonable range around the market median.
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Components of Executive Compensation
The major components of the Company’s 2020 executive compensation program, the primary purpose of each component and the form of compensation of each component are described in the following table.
ComponentPrimary PurposeForm of Compensation
Base SalaryProvides base compensation for day-to-day performance of job responsibilities; recognizes individual skills, competencies, experience and tenure with the Company.Fixed, short-term cash compensation.
Annual BonusIncentivizes and rewards performance over the year based on achieving annual Company performance goals set by the Board.Variable or performance-based, short-term cash compensation.
Performance Share AwardsEncourages improvement in the long-term performance of the Company, both in financial performance relative to internal long-term strategic goals and in share price appreciation, thereby aligning interests of executives with the interests of shareholders.Variable or performance-based, long-term equity compensation, which vests at the end of a three-year period based upon the achievement of financial performance goals.
Time-Based Restricted StockStrengthens the retention value of the compensation program and further aligns interests of executives with the interests of shareholders through share price appreciation and dividends on vested shares.Fixed, long-term equity compensation, which vests ratably over a three-year period.
Other Employee and Executive BenefitsProvides a broad-based executive compensation program for employee retention, retirement and health; provides management continuity in the event of an actual or threatened change of control.Employee benefit plans, programs and arrangements generally available to all employees; executive retirement and savings programs; limited perquisites; severance and change of control benefits.
The executives are compensated principally by using a combination of fixed and performance-based compensation and annual and multi-year compensation, which are delivered in cash and equity-based awards. The Compensation Committee does not have a specific policy on the desired mix between fixed and variable, short and long-term, and cash and equity compensation.
For each of the major components of the Company’s executive compensation program, the following table summarizes the Company’s target level of compensation relative to market compensation and the Company’s actual level of compensation relative to market compensation for 2020.
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ComponentTarget LevelActual Level for 2020
Base Salary50th percentile of market.Named executive officers at approximately 50th percentile, with amount paid below 50th percentile due to temporary reductions.
Annual Bonus50th percentile of market, based on achieving target performance goals.Target bonuses at 50th percentile. Actual bonuses earned were above target for four of five named executive officers.
Total Cash Compensation (Base Salary + Annual Bonus)50th percentile of market if target goals achieved.
Target compensation at 50th percentile. Actual cash compensation paid to named executive officers was slightly above the 50th percentile.
Long-Term Equity Incentive Awards (Performance Share Awards + Time-Based Restricted Stock)50th percentile of market if target goals achieved.
Target compensation and opportunities approximated the 50th percentile.

2020 Base Salary and Incentive Compensation
The executive compensation program ties a substantial portion of the named executive officers’ overall target annual compensation to corporate performance goals. The Compensation Committee uses multiple measures to provide an appropriate mix of annual and long-term incentives that balance short-term and long-term objectives, based on the Company’s compensation philosophy and market compensation. The mix is not subject to any pre-determined formula.
CEO Compensation MixOther NEO Compensation Mix
Salary 14.5%Salary 39.6%
Restricted Shares 30.3%Restricted Shares 10.4%
Target Annual Bonus 16.1%Target Annual Bonus 25.5%
Target Performance Shares 39.1%Target Performance Shares 24.5%
 = 55.2% at risk = 50.0% at risk

Fiscal Year 2020 Compensation
Base Salary
Each year, the Compensation Committee sets salaries that reflect the executives' skills, competencies, experience and performance. As a result, changes in salary focus primarily on an assessment of the executive’s performance in relation to the executive’s responsibilities. In addition, the Compensation Committee reviews market data, which provides a comparison of the executive’s salary relative to the salary of executives in the Company's peer group. The Compensation Committee also considers executive performance related to specific responsibilities and other factors such as the individuals’ potential for future contributions, specific talents, unique skills, depth of industry knowledge and experience. The financial impact of changes in compensation are also considered.
Based on these considerations, the Compensation Committee determined that it was appropriate to approve the following increases in salaries for the named executive officers in order to maintain levels for each of them at approximately the 50th percentile of market: Mr. Monaghan, 11.0%; Ms. Leneghan, 6.7%; Mr. LaPlaca, 7.0% (of which, 5% related to his promotion to Chief Administrative Officer during 2020); Mr. Ledda, 2.0%; and Ms. Goodwin, 3.0%. As described above, the named executive officers agreed to defer payment of 20% of their respective base salaries for April 2020 and their respective 2020 salary
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increases, and reduce their respective base salaries by 10% for a period of three months during 2020, in order to mitigate the financial and operational impacts of the COVID-19 pandemic. The 2020 base salaries actually paid to the named executive officers are set forth in the Summary Compensation Table.
Annual Cash Incentive
Incentive Bonus Plan Target Percentage. During 2020, each named executive officer had an opportunity to earn an annual cash bonus under the Company’s Executive Incentive Bonus Plan. Each named executive officer’s potential award was expressed as a percentage of his or her base salary. After the end of the fiscal year, the Compensation Committee determined the amount of each named executive officer’s actual annual cash bonus based upon the achievement of a combination of predetermined corporate goals.
Corporate Goals. The annual bonus plan is intended to provide an incentive to the named executive officers for achieving challenging annual performance goals that are indicative of overall Company performance. A primary objective of the plan is to provide significant reward opportunities for the achievement of targets that require substantial effort to achieve. For 2020, the Compensation Committee established performance targets under the bonus plan based on Free Cash Flow and Adjusted Operating Income. Adjusted Operating Income is a general metric of operating performance, while Free Cash Flow is a metric used by the Company as an important indicator of the overall financial performance of the Company and its ability to finance various capital decisions and fund continuing operations. The Committee believed these factors appropriately balanced incentives to improve operating performance and manage cash flow during the on-going renovation of the business.
If the minimum thresholds for both Free Cash Flow and Adjusted Operating Income are exceeded, the amount of the bonus paid is determined by the relative levels of actual Free Cash Flow and Adjusted Operating Income achievement by the Company as compared to the goals, up to a maximum value.
For Mr. Ledda, the Adjusted Operating Income goal was based partially (75%) on a goal for his respective regional segment (Europe) and partially (25%) on the consolidated corporate goal. For the Chief Executive Officer and the other named executive officers other than Mr. Ledda, annual cash bonuses were dependent entirely on consolidated corporate goals.
Response to COVID-19 Pandemic
In accordance with its customary practice, in early 2020, before the impact of the pandemic was apparent, the Compensation Committee established a minimum annual Free Cash Flow goal as a prerequisite to the payout of any bonus and threshold, target and maximum levels for the Adjusted Operating Income goals based on the Company's business outlook for 2020 at that time. These initial goals are included in the table below under the caption "Pre-Pandemic Goals".
Given the significant disruption from the COVID-19 pandemic on the Company's operations and financial performance and the substantial resources deployed to adapt to the changed business environment, the Compensation Committee determined to evaluate a minimum bonus achievement based on the Company's actual performance in the first half of 2020 and establish new goals for the full year 2020 annual bonuses to provide a more realistic incentive to drive an effective response to the pandemic, and to enhance shareholder value, consistent with the Company's pay-for-performance philosophy.
In light of this conclusion, the Compensation Committee established new Free Cash Flow and Adjusted Operating Income goals for threshold, target and maximum achievement based on the Company's outlook for the second half of 2020. The amount of the bonus paid is determined by the relative levels of actual Free Cash Flow and Adjusted Operating Income achievement by the Company compared to the goals, up to a maximum value, using a matrix established by the Compensation Committee. In addition, the Compensation Committee evaluated the first half 2020 performance and determined that the Company's actual performance through the second quarter of 2020 was on track to meet or exceed its pre-pandemic target performance, despite the onset of pandemic disruptions midway
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through the second quarter. As a result, the Compensation Committee determined to provide for a minimum payout of 30% of the executive's target bonus amount based on actual performance through the second quarter of 2020. Actual free cash flow and actual adjusted operating income for the first half of 2020 were substantially higher compared to actual results for the first half of 2019.
Corporate Goals and Results for 2020
The specific performance goals for each of threshold, target and maximum of levels of achievement, as well as the actual level of performance achieved for 2020 are displayed in the following table (in millions, except percentages). The modified threshold, target and maximum levels were set with consideration to the impact of the pandemic, as discussed above, as well as the Company's 2019 actual financial performance.
Metric ($ in millions)ThresholdTargetMaximumActual Performance
Pre-Pandemic Goals
Free Cash Flow (1) (Prerequisite)$5.0$5.0$5.0(3)
Adjusted Operating Income (2)$2.0$20.0$30.0(3)
Modified Goals
Free Cash Flow (1)$(10.0)$(3.0)$5.0$0.01
Adjusted Operating Income (2)$(2.0)$6.0$20.0$8.9
Payout as a % of Target0%100%150%120%
(1) Free Cash Flow was defined as net cash provided (used) by operating activities, less purchases of property and equipment plus proceeds, including advances from sales of property and equipment.
(2) Adjusted Operating Income was defined as operating income (loss) excluding the impact of restructuring charges, intangible asset write-downs, and gain on sale of business.
(3) Actual performance was below the pre-pandemic threshold for Free Cash Flow and between pre-pandemic threshold and target for Adjusted Operating Income, which would have resulted in no bonus being earned.
To measure achievement and determine payouts based on the modified goals, the Compensation Committee approved the matrix presented below, which includes the corporate performance metrics, structure, targets and payouts for 2020 (in millions, except for payout percentages).
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Actual Annual Cash Incentive Awards for 2020
The actual payouts under the annual cash bonus plan were computed based on the Company’s actual corporate performance relative to the goals established under the plan for 2020, as outlined above. The payout amount for Mr. Ledda reflects that the Europe segment achieved segment Adjusted Operating Income at 53.8% of target. The payment of bonuses is reflected in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table included in this proxy statement, and in the table below:
2020 Target Award (% of Base Salary)2020 Actual Payout (% of Target)2020 Actual Payout Amount
Mr. Monaghan107.9%120%$1,200,280
Ms. Leneghan70%120%$365,400
Mr. LaPlaca75%120%$411,300
Mr. Ledda*50%70.5%$171,220*
Ms. Goodwin50%120%$188,490
* 75% Europe results and 25% consolidated results.

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Annual Cash Incentive Awards for Last Seven Years

The actual payouts to the Chief Executive Officer under the Company’s annual cash bonus plan over the last seven fiscal years have been directionally aligned with the Company’s performance as measured by total shareholder return, or TSR, over the same period. In years when actual payouts approximated target levels, the Company’s TSR for that year approximated that of the median of the S&P 1500. Similarly, in years when the Company’s TSR was below that of the S&P 1500 median, actual payouts were below target.

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Long-Term Incentive Plan
The Company’s long-term equity compensation program for named executive officers includes performance share awards, referred to as “performance shares,” and time-based restricted stock awards, referred to as “restricted stock.” The program is intended to promote the Company’s long-term success and increase shareholder value by further aligning the named executive officers’ total compensation with the interests of shareholders. Each share of restricted stock is one restricted common share of the Company, and each vested performance share represents the right to receive one common share of the Company.
The Compensation Committee approved a long-term equity compensation program with regular annual awards for 2020 having values weighted 70% in performance shares and 30% in restricted stock for each of the named executive officers. This mix of equity awards was intended to enhance the performance-based incentives to increase shareholder value in the program by emphasizing awards tied to achieving long-term financial objectives that will support future value creation while managing shareholder dilution and compensation expense.
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Executive Compensation
In making equity awards in 2020, the Compensation Committee reviewed information provided by Pay Governance regarding the median market value of long-term compensation awards, as well as median market value of total direct compensation. Equity award guidelines for the regular annual awards to named executive officers were generally developed around target grant values at 100% of the market median according to each executive’s salary and target cash compensation level, organizational level, reporting relationships and job responsibilities, to link executive compensation and the achievement of various long-term Company goals.
The Compensation Committee considered each named executive officer’s performance and the Company’s overall performance when determining the actual grant value of the 2020 awards of performance shares and restricted stock of each named executive officer. The equity awards approximated the targeted range for each named executive officer. The Awards granted in 2020 to each of the named executive officers are set forth in the Grants of Plan-Based Awards for Fiscal Year 2020 Table.
The following outlines the Company’s long-term incentive plan structure and the key elements of each type of award for the named executive officers:
Long-Term Incentive Plan ("LTIP") Mix
Performance SharesRestricted Stock
Vest at end of 3-year period based on achievement key financial goals3-year time-based vesting period; One-third of shares vest each year
LTIP Mix70%30%
Performance Shares Granted in 2020  
The performance shares granted in 2020 initially are based on a minimum three-year average annual Gross Margin percentage ("Average Gross Margin Percentage") over the three-year performance period ending December 31, 2022. Meeting or exceeding the initial performance goal will permit the performance share awards to potentially vest at 150% of the target number of shares specified in the applicable award agreement. This 150% maximum is less than the 200% maximum used by others in the Company's peer group, and allows the Company to better manage the use of equity plan shares. At the end of the period, the Compensation Committee will then compare the Company's actual level of Adjusted EBITDA* for the last year of the period to specific performance goals established by the Compensation Committee, to determine what portion of the performance shares made available for the 2020 performance awards will actually be earned, if any. Both of these financial measures are important indicators of the Company’s progress in executing its long-term strategy, and are different from, and thus balance the performance metrics used for the annual cash incentive.
Because the 2020 performance shares are based on the Average Gross Margin Percentage performance over three years and because the Compensation Committee will evaluate the Company's progress at the end of the three-year period based on its level of Adjusted EBITDA at that time to determine actual amounts earned, it is difficult to predict the amount of performance shares that may vest, if any, at the end of the performance period. The Company's Gross Margin performance in 2020 was above the average target level established for the three-year period, and such performance must be sustained for 2021 and 2022 in order for awards to qualify for payout.
Results of Performance Shares Granted in 2018
The three-year performance period for the performance shares granted in 2018 was completed on December 31, 2020. The Compensation Committee established an initial qualifying performance goal for the 2018-2020 cycle based on a target for Average Gross Margin percentage over three years of 26.5%. Meeting or exceeding the initial performance goal qualifies the performance share awards at 150% of target. Actual vesting of all, some or none of the awards qualified by achievement of the Average Gross Margin goal is based on the Company’s level of Adjusted EBITDA for the third year of the period as
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Executive Compensation
compared to specific performance goals for each of the threshold, target and maximum levels of achievement established by the Compensation Committee.
Prior to the onset of the pandemic, the Compensation Committee had established an Adjusted EBITDA performance goal for 2020 to be used to determine the portion of the 2018 performance awards that would be earned at the end of 2020, which is included in the table below under the caption "Pre-Pandemic Goal". In light of the impact of the pandemic on the Company's operating and financial performance, the Compensation Committee reviewed the Adjusted EBITDA performance goal for 2020 to determine whether to revise the threshold, target and maximum levels to reflect goals that were realistically achievable and would provide appropriate incentive compensation opportunities. The Compensation Committee retained the initial qualifying goal of Average Gross Margin of 26.5% over the three-year performance period, but concluded that establishing a revised Adjusted EBITDA goal for 2020 with a target approximately equal to the Company's actual Adjusted EBITDA performance for 2019 would provide a more realistic incentive and reflect a substantial achievement and enhancement of shareholder value, in light of the impact of the pandemic, consistent with the Company's pay-for-performance philosophy and the existing structure of the LTIP.
The Average Gross Margin percentage for the 2018-2020 cycle was 28.2%, which exceeded target and initially qualified the 2018 performance shares at 150% of target. The Compensation Committee then evaluated the Company’s actual 2020 Adjusted EBITDA as compared to established goals. The specific performance goals for each of threshold, target and maximum level of achievement, as well as the actual level of performance achieved for 2020, are displayed in the following table (in millions, except percentages).
MetricThresholdBelow TargetTargetAbove TargetMaximumActual Performance
Pre-Pandemic Goal
Adjusted EBITDA (2)$<29.0$29.0$45.0$49.5$54.0(1)
Modified Goal
Adjusted EBITDA (2)$<17.2$22.9$28.6$34.3$40.0$31.9
Payout as a % of Target0%50%100%125%150%114%
(1) Actual performance was between pre-pandemic threshold and target.
(2) "Adjusted EBITDA” for this purpose is net income (loss) plus income taxes, net interest expense, net gain (loss) on convertible debt derivatives, net loss on impairment charges, depreciation and amortization, equity compensation, charges related to restructuring activities, loss on debt extinguishment including debt finance charges and fees and impact from divestitures.
The amount of performance shares that were earned by the named executive officers at 114% of target constituted 48% of the original target value of the awards due to the decline in the Company's stock price over the performance period. The actual payouts under the performance shares for Messrs. Monaghan, LaPlaca and Ledda and Ms. Leneghan are set forth in the table below. Ms. Goodwin was not employed by the Company in 2018 and thus received no performance shares.
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Executive Compensation
2018 Performance Shares
2020 Actual Payout (% of Target)2020 Actual Payout Amount (Shares)
Mr. Monaghan114%150,924
Ms. Leneghan114%21,186
Mr. LaPlaca114%12,934
Mr. Ledda114%13,382
Results of Performance Shares Granted in 2019
The three-year performance period for performance shares granted in 2019 will conclude on December 31, 2021. Prior to the onset of the pandemic, the vesting of the awards for the 2019-2021 cycle was structured based 25% on an Average Gross Margin percentage goal over the three-year period and 75% on an Adjusted EBITDA goal for the third year. For the 25% portion, meeting or exceeding the initial performance goal would qualify the performance share awards at 150% of target, and the Compensation Committee would evaluate the Company’s performance against non-financial goals to determine what portion of the 25% of performance shares would actually be earned. The vesting of the other 75% portion of performance shares was based on achieving a 2021 Adjusted EBITDA performance goal determined by the Compensation Committee.
In light of the impact of the pandemic, the Compensation Committee determined to modify the performance goals applicable to the 2019 performance awards to align with the LTIP program structure utilized in prior years and to provide an incentive opportunity that is more appropriate and reasonable to achieve. While the target Average Gross Margin percentage for the three-year period remains the same as under the pre-pandemic structure, as modified, Average Gross Margin is the initial goal applicable to the entire performance share award, consistent with the LTIP award structure used in prior years. If the initial goal is achieved, shares actually earned under the awards will be based on revised threshold, target and maximum Adjusted EBITDA goals for 2021 (intended to represent more realistically achievable levels while still representing improvement over prior year performance). As with the annual cash bonus and the 2018 performance awards, the Compensation Committee concluded that modifying the 2019 awards was appropriate and would provide a more realistic incentive which, if the new goals are met, would reflect a substantial achievement and enhancement of shareholder value.
Because the achievement of the requisite goals is based on the Company's performance as of the end of the period, it is difficult to predict the amount of performance shares that may vest, if any. The Company's Gross Margin performance in 2019 and 2020 was above the average target level but the Company must achieve at least the threshold Adjusted EBITDA performance for 2021 in order for any awards to vest.
Performance Share Award Vesting During Last Five Years
As with the actual payouts to the Chief Executive Officer under the Company’s annual cash bonus plan, the level of performance shares actually earned since the LTIP program’s inception has generally reflected the Company’s TSR performance over the same period. The level of performance shares earned by the CEO for three of the last five fiscal years relative to the Company’s average 3-year TSR performance as compared to that of the median of the S&P 1500 is illustrated below.
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Executive Compensation
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Restricted Stock Granted in 2020
The restricted stock granted in 2020 was issued at no cost to the recipient and vests ratably over three years based on continued service by the recipient. To further enhance its retention value, the terms of the restricted stock allow the holder, subject to certain restrictions, to surrender a portion of the vested shares to the Company to cover any minimum tax withholding obligation. The grants of restricted stock provide that the holders of that restricted stock will be entitled to receive cash dividends declared and paid by the Company on the Company’s outstanding common shares only to the extent vested at the time of the dividend.
CEO Employment Agreement
In 2020, the Company entered into a new employment agreement with Mr. Monaghan that replaced his original agreement, which was to expire on March 31, 2020. The agreement has a term of approximately three years, ending on May 31, 2023.
In structuring Mr. Monaghan's compensation arrangements under the agreement, the Compensation Committee sought to provide Mr. Monaghan with annual compensation targeted at the market median of the Company's compensation peer group in light of his leadership of the Company's business transformation, while retaining some flexibility for adjustment by the Compensation Committee.
The new agreement provides Mr. Monaghan with a base salary of $927,000 per year effective January 1, 2020, an annual bonus target opportunity of 107.9% of his annual base salary and continued participation in the Company's LTIP with an annual equity grant consisting of 70% performance shares and 30% restricted stock. To incentivize Mr. Monaghan to enter into the new agreement, he also received an additional one-time award of 118,764 restricted shares scheduled to vest over three years in three annual installments of 25% after each of the first two years and 50% after the third year. The vesting
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Executive Compensation
schedule for this award is weighted so that 50% of the shares vest after the third year, to enhance retention value of the award and the new agreement.
Mr. Monaghan's severance arrangements under the agreement remain substantially similar to those provided under his original agreement and are further described under the caption "Severance Arrangements" in the Other Post-Employment Compensation section of this proxy statement. Mr. Monaghan's existing change of control, indemnity and technical information and non-competition agreements with the Company remain in full force and effect and were unchanged by the new employment agreement.
Retirement and Other Benefits
The Company maintains the plans described below to provide U.S.-based executives the opportunity to address long-term financial and retirement planning with a degree of certainty and to provide financial stability in the event the executives are impacted by unforeseeable factors beyond their control.
The Company maintains the Invacare Retirement Savings Plan, a qualified 401(k) defined contribution plan, for its eligible employees, to which the Company has the discretion to make matching and quarterly contributions on behalf of participants, including each of the U.S.-based named executive officers. The amounts of the contributions made by the Company to the Invacare Retirement Savings Plan on behalf of U.S.-based named executive officers are set forth in a footnote to the Summary Compensation Table and are consistent with the benefits provided to all other employees who participate in the plan, up to the regulatory limits imposed on the plan for highly compensated employees.
The Company provides its highly compensated U.S. employees, including named executive officers, the opportunity to participate in the Deferred Compensation Plus Plan (“DC Plus Plan”), a non-qualified contributory savings plan, which allows the executives to defer compensation above the amount permitted to be contributed to the Invacare Retirement Savings Plan. Thus, the DC Plus Plan provides the executives with the opportunity to save additional pre-tax funds for retirement up to the amount that the executive otherwise would have been able to save under the Invacare Retirement Savings Plan but for the regulatory limits imposed on that plan for highly compensated employees. As a result, highly compensated employees are eligible to save for retirement at the same rate (based on percentage of compensation) as other employees. In addition to individual deferrals, the Company has the discretion to provide matching contributions and additional quarterly contributions for participating executives which are similar in percentage to the Company's contributions to employees who participate in the Invacare Retirement Savings Plan. The amounts of the contributions made by the Company on behalf of each named executive officer to the DC Plus Plan are set forth in the Non-Qualified Deferred Compensation Table and a footnote to the Summary Compensation Table. The terms of the DC Plus Plan are further described following the Non-Qualified Deferred Compensation for Fiscal Year 2020 Table.
The Company also provides a Supplemental Executive Retirement Plan, or “SERP,” to one of the named executive officers who was in his role prior to 2011, to supplement other savings plans offered by the Company and to provide replacement compensation for the executive in retirement. The change in the present value of the accumulated benefit obligation to the named executive officer who participates in the SERP is set forth in the Summary Compensation Table. The present value of the aggregate accumulated benefit obligation to the named executive officer under the SERP is included in the Pension Benefits for Fiscal Year 2020 Table, and the terms of the SERP are further described following that table.
Effective July 1, 2011, the Compensation Committee, based on the recommendation of management, (1) reduced the discretionary quarterly contributions by the Company for all participants in the Invacare Retirement Savings Plan and DC Plus Plan from 4% to 1% of total cash compensation and (2) suspended the contributions by the Company for all participants in the SERP and reduced the interest accrual rate under the SERP from 6% to 0%. The reductions remain in effect indefinitely, until the Company or, in the case of the SERP, the Compensation Committee determines to restore them. The
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Executive Compensation
Compensation Committee closed the SERP to new participants in 2011, so the only named executive officer participating in the SERP was Mr. LaPlaca.
Perquisites and Other Personal Benefits
The Company provided named executive officers certain limited perquisites in 2020, which the Compensation Committee believes are reasonable, competitive and useful in attracting and retaining executives. They are not tied to individual or Company performance. The named executive officers do not receive any "gross-up" payments to cover the taxes associated with any perquisites. These include certain benefits provided to all eligible U.S.-based employees of the Company, such as medical, dental, life and disability insurance, and certain non-core benefits such as an annual physical exam and health screening. Perquisites are reported in the Summary Compensation Table.
Under Mr. Monaghan’s employment agreement, he is entitled to reimbursement of expenses (no greater than the cost of a refundable business class air ticket) related to his use of his personal airplane for Company business travel under certain circumstances. Mr. Monaghan did not use his personal aircraft in 2020 for Company business travel.
The Company maintains a death benefit only plan in which certain of the named executive officers participate, which is described in Other Potential Post-Employment Compensation.
Severance and Change of Control Benefits
Severance Benefits. The Company has entered into agreements with each of the named executive officers that provide for the payment of certain severance benefits upon a termination of employment other than a termination following a change of control of the Company. These agreements provide some level of income continuity should an executive’s employment be terminated without cause by the Company, or, in the case of the Chief Executive Officer, by the executive for good reason. These agreements are further described under Other Potential Post-Employment Compensation.
Change of Control Benefits. Each named executive officer also has entered into an agreement with the Company that provides for certain benefits generally payable in the event of a termination following a change of control of the Company. The Company believes that these agreements help retain executives and provide for management continuity in the event of an actual or threatened change of control. They also help to ensure that the interests of executives remain aligned with shareholders’ interests during a time when their continued employment may be in jeopardy. Finally, they provide some level of income continuity should an executive’s employment be terminated without cause following a change of control. The "double-trigger" nature of the agreements provide for the payment and provision of certain benefits to the executives if there is a change of control of the Company and a termination of the executive’s employment with the surviving entity within two years (three years in the case of Mr. LaPlaca, which includes a one-year retention benefit upon a change of control) after the change of control. These agreements are further described under Other Potential Post-Employment Compensation.
Equity Grant Practices and Other Policies
Equity Grant Practices
The Compensation Committee’s practice is to make annual grant determinations in March of each year, following the expected release of earnings for the prior fiscal year in late January or early February, without regard to whether the Company otherwise is in possession of material non-public information. Accordingly, the Company made its annual grant determinations for 2020 in March 2020.
Equity-based grants also are made occasionally, during the year, to new hires or to current employees in connection with a promotion or other special recognition. Any two of the Chief Executive Officer, the Chief Financial Officer and the Chief Administrative Officer may, subject to the approval and ratification of the Compensation Committee, grant equity-based awards to an employee, other than an executive officer, in connection with an offer of employment or promotion.
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Executive Compensation
Equity Run Rate  
In determining the total number of equity-based grants to be awarded each year, the Compensation Committee attempts to strike a reasonable balance between the benefits achieved by providing incentives to a wide range of key employees of the Company and the shareholder dilution that results from an equity incentive plan. While the Compensation Committee has not set a formal limit on the number of awards which may be granted in any year, over the past five years, the average annual “run rate” of equity awards granted by the Company was 3.4%. For these purposes, “run rate” is defined as the number of equity awards granted in a year compared to the total number of outstanding shares in that same year. As of December 31, 2020, the Company’s outstanding equity awards were 9.5% of total shares outstanding while shares available for future awards under the 2018 Equity Compensation Plan amounted to another 10.3% of total shares outstanding. The Compensation Committee believes that the percentage of equity awards outstanding is higher than desired but is principally attributable to the term of stock options when granted (10 years), and the exercise prices of a substantial portion of the outstanding stock options being above the Company’s stock price over the last several years, which has generally resulted in fewer stock options being exercised. As of December 31, 2020, there were 3,254,047 equity awards outstanding under the 2018 Equity Compensation Plan and its predecessor plans of which 1,081,804 or 33.2% were stock options with exercise prices higher than the closing price of the Company’s common shares on that date.
Stock Ownership Guidelines
The Company maintains stock ownership guidelines for its Directors, named executive officers and other executives to align the interests of Directors and key executives with those of the shareholders of the Company. The guidelines also reinforce the primary reason for offering long-term compensation awards. Moreover, it holds those executives most responsible for creating shareholder value more accountable with that alignment than other employees.
Under the current guidelines of the stock ownership program, executives are expected to own shares equal in value to the following levels:
Chief Executive Officer - five times base salary
Chief Financial Officer - two times base salary
Other Executive Officers - two times base salary
The number of shares required to be held by each executive is established by multiplying the applicable executive’s salary by the applicable multiplier and dividing by the Company’s average daily stock price for the previous year.
Under the stock ownership guidelines, each non-employee Director is expected to own shares equal in value to five (5) times the cash portion of the annual retainer fee paid to such Director. The number of shares required to be held by each non-employee Director is established by multiplying the cash portion of the annual retainer by five and dividing by the Company’s average daily stock price for the previous year.
“Stock ownership” is defined to include shares held directly or indirectly by the Director or executive, all unvested restricted stock held by the Director or executive and 30% of the shares underlying unexercised stock options held by the Director or executive where the option strike price is at least 20% below the market closing price at the evaluation date.
Directors and executive officers are expected to reach their respective ownership levels under the stock ownership guidelines over five (5) years from their date of hire or promotion, and to maintain at least that level of stock ownership continuously thereafter while employed. All of the Directors and named executive officers have either met the guidelines or are pursuing the goals to meet the guidelines within the expected time.
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Executive Compensation
Holding Period. The share ownership guidelines provide that Directors and executive officers subject to the guidelines are required to hold their “net shares” from vested equity awards until they reach their applicable minimum ownership level, and once they reach the minimum level, they must hold their net shares from equity awards for at least one (1) year after such shares have vested, in the case of restricted stock awards, or have been acquired upon the exercise of stock options. “Net shares” means the difference between the actual shares awarded and any shares sold, surrendered or withheld to pay for taxes or to finance the cost of exercising a stock option.
Hedging and Pledging Prohibition
As part of its policy relating to the trading of Invacare securities by Company insiders, the Company prohibits all employees who may gain access to material nonpublic information regarding the Company and all directors of the Company, and their designees, from hedging the economic risk of their ownership, pledging their shares, or trading in any interest or position relating to the future price of the Company securities, such as a put, call or short sale. This includes a prohibition on purchasing any financial instrument (including any prepaid variable forward contract, equity swap, collar, and exchange fund), or otherwise engaging in any transaction, that hedges or offsets, or is designed to hedge or offset, any decrease in the market value of Company equity securities; provided that, the foregoing is not intended to prohibit broad-based diversification transactions such as mutual fund investments.
Policy Regarding Clawback of Incentive Compensation
If the Board of Directors or any appropriate Board committee has determined that fraud or intentional misconduct by a participant in the Executive Incentive Bonus Plan was a significant contributing factor to the Company having to restate all or a portion of its financial statement(s), the Board or such committee may take actions it deems necessary, in its discretion, to remedy the misconduct and to prevent its recurrence. In determining what remedies to pursue, the Board or appropriate committee would consider all relevant factors, including whether the restatement was the result of fraud or intentional misconduct. The Executive Incentive Bonus Plan provides that the Board may, to the extent permitted by applicable law, in appropriate cases, require reimbursement of any bonus or incentive compensation paid to the participant for any fiscal period commencing on or after January 1, 2008, if and to the extent that, (a) the amount of incentive compensation was calculated based upon the achievement of certain financial results that were subsequently reduced due to a restatement, (b) the participant engaged in any fraud or intentional misconduct that significantly contributed to the need for the restatement, and (c) the amount of the bonus or incentive compensation that would have been awarded to the participant, had the financial results been properly reported would have been lower than the amount actually awarded. In addition, the Board may dismiss the participant, authorize legal action, or take such other action to enforce the participant’s obligations to the Company as it deems appropriate in view of all the facts surrounding the particular case.
The Board of Directors, at the recommendation of the Compensation Committee, adopted a policy providing the Board of Directors the discretion to recover any equity compensation awarded to a participant on or after January 1, 2008 if the Board of Directors, or any appropriate committee, has determined that any fraud or intentional misconduct by the participant was a significant contributing factor to the Company having to restate all or a portion of its financial statement(s).
Tax Implications - Deductibility of Executive Compensation
Section 162(m) of the Internal Revenue Code generally provides that certain compensation in excess of $1 million per year paid to a public company’s chief executive officer and any of its four other highest paid executive officers is not deductible by the company. Prior to 2017, this deductibility limit was subject to an exception for “performance-based compensation” that met certain procedural requirements. As part of the 2017 Tax Cuts & Jobs Act (the “Tax Act”), the ability to rely on the performance-based compensation exception was eliminated. As a result of the Tax Act, the Company is no longer able to deduct any compensation paid to its named executive officers in excess of $1 million after November 2, 2017.
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Executive Compensation
To the extent practicable in view of its compensation philosophy, the Company historically sought to structure its executive compensation to satisfy the requirements for the performance-based compensation exception under Section 162(m), while retaining the flexibility to award discretionary incentive compensation that may not qualify for the exception for performance-based compensation.
The Compensation Committee has the discretion to provide compensation which may not be deductible by reason of Section 162(m). In light of the repeal of the performance based compensation exception in Section 162(m), the Compensation Committee has approved awards that are not fully deductible because of Section 162(m) and expects in the future that it may approve additional compensation that is not deductible for income tax purposes.
The Compensation Committee also considers the impact of Section 409A of the Internal Revenue Code, and the Company generally seeks to structure its compensation arrangements with its employees to comply with or qualify for an exemption from Section 409A to avoid possible adverse tax consequences that may result from noncompliance.
Risk Assessment
The Compensation Committee, with the assistance of the independent compensation consultant, had previously conducted a risk assessment of the Company’s compensation policies and practices for its employees, including those related to the executive compensation programs discussed above. The Compensation Committee, in conducting the assessment, analyzed associated risks and considered mitigating factors. Based upon its review of the assessment and of the material developments in the Company’s compensation policies and practices since the assessment, the Compensation Committee believes that the Company’s compensation policies and practices do not encourage excessive or unnecessary risk-taking and are not reasonably likely to have a material adverse effect on the Company.
Report of the Compensation and Management Development
Committee on Executive Compensation
The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with the Company's management. Based on that review and discussion, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in the Company's Annual Report on Form 10-K and in the Company's definitive proxy statement prepared in connection with its 2021 Annual Meeting of Shareholders.
COMPENSATION AND MANAGEMENT DEVELOPMENT COMMITTEE
Baiju R. Shah, Chair
Petra Danielsohn-Weil, PhD
Marc M. Gibeley
C. Martin Harris, M.D.

The above Report of the Compensation and Management Development Committee does not constitute soliciting material and should not be deemed filed with the Commission or subject to Regulation 14A or 14C (other than as provided in Item 407 of Regulation S-K) or to the liabilities of Section 18 of the Exchange Act, except to the extent that the Company specifically requests that the information in this Report be treated as soliciting material or specifically incorporates it by reference into a document filed under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act. If this Report is incorporated by reference into the Company's Annual Report on Form 10-K, such disclosure will be furnished in such Annual Report on Form 10-K and will not be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act as a result of furnishing the disclosure in this manner.
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Summary Compensation Table
The following table presents the total compensation for the years indicated for the named executive officers of the Company.
Name and Principal
Position 
Year
Salary
($) 
Bonus
($)  
Stock
Awards
($)(2)  
Non-
Equity
Incentive
Plan
Compen-
sation
($)  
Change in
Pension  Value
and
Non-qualified
Deferred
Compen-sation
Earnings
($)(3)
All Other
Compen-sation
($)(4)  
Total
($)  
Matthew E. Monaghan2020906,1274,310,4681,200,28043,365(5)6,460,240
Chairman, President and Chief Executive Officer2019835,0006,453,6541,008,26344,000(5)8,340,917
2018807,0294,464,19954,162(5)5,325,390
Kathleen P. Leneghan2020424,810799,450365,40017,178(6)1,606,838
Senior Vice President and Chief Financial Officer2019407,6401,694,091304,71118,715(6)2,425,157
2018391,15013,500(1)760,42021,490(6)1,186,560
Anthony C. LaPlaca2020433,654239,855411,3009,960(7)1,094,769
Senior Vice President, General Counsel, Chief Administrative Officer and Secretary
2019427,283574,777368,53211,501(7)1,382,093
2018418,904382,59514,595(7)816,094
Ralf A. Ledda2020475,073248,272171,22039,808(8)934,373
Senior Vice President and General Manager (EMEA)2019421,914594,954146,08540,197(8)1,203,150
2018412,560396,00539,732(8)848,297
Angela Goodwin2020306,525109,415188,49010,140(9)614,570
Chief Information Technology Officer
 
(1)    Ms. Leneghan was appointed Senior Vice President and Chief Financial Officer on February 22, 2018, after having served as Interim Chief Financial Officer since November 2017. Ms. Leneghan earned a bonus of $9,000 per month while serving as Interim CFO for January and half of February 2018.
(2)    The values reported in this column represent the aggregate grant date fair value, calculated in accordance with ASC 718, Compensation - Stock Compensation, of all restricted stock and performance shares awarded to each officer during the fiscal year. The value of performance share awards was estimated, as of the grant date, assuming that achievement of the performance targets would be 150% of target; however, the Compensation Committee retained discretion to reduce payouts under the awards if it deems appropriate, based on the actual performance over the three-year period and progress towards the transformation. For a description of the assumptions made in computing the values reported in this column, see Equity Compensation in the Notes to Consolidated Financial Statements contained in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2020.
(3)    There were no changes in the present value of the accumulated benefit obligations to any named executive officer who participated in the SERP in 2020, 2019 or 2018. No above market or preferential earnings on nonqualified deferred compensation were earned by any named executive officer in 2020, 2019 or 2018.
(4)    Compensation reported in this column includes (i) the value of Company contributions made in each fiscal year on behalf of the officer to the Invacare Retirement Savings Plan or Swiss Retirement Plan (in the case of Mr. Ledda) and the DC Plus Plan; (ii) in the case of Mr. Monaghan and Ms. Leneghan, amounts paid for life insurance premiums; (iii) in the case of Mr. Ledda and Ms. Leneghan, amounts paid for car allowances, and (iv) the incremental cost to the Company of perquisites provided by the Company, which include: an annual physical exam and health
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screening. Perquisites are valued on the basis of the aggregate incremental cost to the Company of providing the perquisite to the applicable officer.
(5)    Other compensation for Mr. Monaghan includes (i) in 2020, $34,310 paid by the Company for life insurance premiums, $2,088 contributed by the Company to the DC Plus Plan, $6,967 contributed by the Company to the Invacare Retirement Savings Plan; (ii) in 2019, $34,310 paid by the Company for life insurance premiums, $2,019 contributed by the Company to the DC Plus Plan, $7,671 contributed by the Company to the Invacare Retirement Savings Plan and (iii) in 2018, $34,310 paid by the Company for life insurance premiums, $12,371 contributed by the Company to the DC Plus Plan, $7,481 contributed by the Company to the Invacare Retirement Savings Plan.
(6)    Other compensation for Ms. Leneghan includes (i) in 2020, $9,576 paid by the Company for life insurance premiums, $6,583 contributed by the Company to the Invacare Retirement Savings Plan,$1,019 contributed by the Company to the DC Plus Plan; (ii) in 2019, $9,492 paid by the Company for life insurance premiums, $8,235 contributed by the Company to the Invacare Retirement Savings Plan, $988 contributed by the Company to the DC Plus Plan and (iii) in 2018, $9,486 paid by the Company for life insurance premiums, $8,752 contributed by the Company to the Invacare Retirement Savings Plan,$1,752 contributed by the Company to the DC Plus Plan and $1,500 paid for car allowances.
(7)    Other compensation for Mr. LaPlaca includes (i) in 2020, $6,626 contributed by the Company to the Invacare Retirement Savings Plan and $1,068 contributed by the Company to the DC Plus Plan;(ii) in 2019, $8,383 contributed by the Company to the Invacare Retirement Savings Plan and $1,047 contributed by the Company to the DC Plus Plan and (iii) in 2018, $8,250 contributed by the Company to the Invacare Retirement Savings Plan and $4,175 contributed by the Company to the DC Plus Plan.
(8)    Other compensation for Mr. Ledda includes (i) in 2020, $32,276 contributed by the Company to the Swiss Retirement Plan and $7,532 as a car allowance; (ii) in 2019, $32,706 contributed by the Company to the Swiss Retirement Plan and $7,491 as a car allowance; (iii) in 2018, $32,260 contributed by the Company to the Swiss Retirement Plan and $7,472 as a car allowance.
(9)    Other compensation for Ms. Goodwin includes in 2020, $5,000 paid by the Company for housing allowance and $5,140 contributed by the Company to the Invacare Retirement Savings Plan.
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Executive Compensation
Equity Compensation
Grants of Plan-Based Awards for Fiscal Year 2020
The following table shows, for the named executive officers, plan-based awards to those officers during 2020, including restricted stock and performance share awards, and incentive plan opportunities under the Executive Incentive Bonus Plan.
Name 
Grant
Date
Estimated Future Payouts Under Non-Equity Incentive Plan Awards
Estimated Future Payouts Under Equity Incentive Plan Awards
All Other
Stock
Awards:
Number of
Shares of
Stock or Units
(#)
All Other
Option
Awards:
Number of
Securities
Underlying
Options
(#)
Exercise
or Base
Price of
Option
Awards
($/Sh)
Grant
Date Fair
Value of
Stock and
Option
Awards
($/Sh)
  Thres-hold  
($)  
Target
($)  
Maxi-mum
($)  
  Thres- hold  
(#)  
Target
(#)
Maxi-mum
(#) (3) 
Matthew E. Monaghan3/27/2020(1)265,5577.10
3/27/2020(2)3,425342,516513,7747.08
3/27/2020(4)10,0021,000,2331,500,350
Kathleen P. Leneghan3/27/2020(1)      33,846  7.10
3/27/2020(2)79078,975118,4637.08
3/27/2020(4)3,045304,500456,750
Anthony C. LaPlaca3/27/2020(1)   10,1557.10
3/27/2020(2)   23723,69435,5417.08
3/27/2020(4)3,428342,750514,125
Ralf A. Ledda3/27/2020(1)10,5127.10
3/27/2020(2)24524,52536,7887.08
3/27/2020(4)2,435243,504365,257
Angela Goodwin3/27/2020(1)      4,632  7.10
3/27/2020(2)   10810,80916,214 7.08
3/27/2020(4)1,571157,075235,613
     
 
(1)    Time-Based Restricted Shares granted pursuant to the 2018 Equity Plan. These shares are scheduled to vest in one-third installments on each of May 15, 2021, May 15, 2022 and May 15, 2023, respectively.  
(2)    Performance Share Awards granted under the 2018 Equity Plan. These performance shares are scheduled to vest on December 31, 2022 based on and subject to achieving performance targets. See the Long-Term Incentive Compensation discussion in Compensation Discussion and Analysis above for a description of the terms of these awards.
(3)    Meeting or exceeding the initial performance goal will qualify the performance share awards at 150% of target which is reflected as the maximum number of shares which could be earned; however, the Compensation Committee retained discretion to reduce payouts under the awards if it deems it to be appropriate, based on actual performance over the three-year.
(4)    On March 27, 2020, the Compensation Committee established performance goals under the Executive Incentive Bonus Plan for the purpose of providing financial incentives for 2020 to certain key employees, including the named executive officers, which goals were subsequently modified during 2020 in response to the impacts of the COVID-19 pandemic.
Restricted Stock and Performance Share and Performance Option Awards
Each restricted stock and performance share and performance option award set forth in the tables in this "Equity Compensation" section was awarded under either the 2018 Equity Plan, or its predecessor, the 2013 Equity Plan. Under the plans and the performance share, restricted stock and Performance option award agreements entered into in connection with the awards, the Compensation Committee may make certain adjustments to the awards and the awards may be terminated or amended, as further described below.
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Executive Compensation
Vesting. Shares of restricted stock generally are scheduled to vest in annual one-third increments over a three-year period beginning on May 15 of the year following the year of grant. If the recipient’s employment terminates for any reason other than the recipient’s death, then he or she will forfeit the unvested restricted shares. If the recipient dies during the vesting period, then his or her estate (or designated beneficiary) will become vested in a prorated number of restricted shares.
Performance shares and performance options generally vest after a three-year performance period, based on the level of achievement of predetermined performance goals. The performance shares granted in 2020, 2019, and 2018 may be earned in a range between 0% and 150% of the number of shares specified in the applicable award agreement, depending on the Company’s performance for the performance period compared to the initial performance goal. Meeting or exceeding the initial performance goal will qualify the performance share awards at 150% of target, however the Compensation Committee retained discretion to reduce the awards if it deems it to be appropriate, based on actual performance over the three-year period and progress towards the Company's transformation. The Compensation Committee determined to take this approach due to the difficulty of setting specific financial performance goals during the Company’s business transformation. Performance goals for performance shares are based on gross margin percentage. Recipients may be entitled to a prorated number of shares, based on actual performance, if their employment terminates during the performance period due to death, disability or retirement.
Dividends and Dividend Equivalents. Recipients are not entitled to receive any dividends that are paid with respect to the Company’s common shares prior to the vesting of their restricted stock or performance shares and exercise of performance options. Following the vesting of the restricted stock or performance shares or exercise of performance options, the recipient will become entitled to any dividends that are paid with respect to the vested portion of the shares underlying their restricted stock or performance shares after the applicable vesting date or the portion of shares exercised under their performance options after the applicable exercise date.
Adjustments. In the event of a recapitalization, stock dividend, stock split, reverse stock split, distribution to shareholders (other than cash dividends), or a similar transaction, the Compensation Committee will adjust, in any manner that it deems equitable, the number and class of shares that may be issued under the plans and the number and class of shares applicable to outstanding awards.
Termination of Awards. The Compensation Committee may cancel any awards if, without the Company's prior written consent, the participant (1) renders services for an organization, or engages in a business, that is (in the judgment of the Compensation Committee) in competition with the Company, or (2) discloses to anyone outside of the Company, or uses for any purpose other than the Company's business, any confidential information relating to the Company.
Amendment of Awards. The Compensation Committee may, subject to certain restrictions, amend the terms of any award under the plans, including to waive, in whole or in part, any restrictions or conditions applicable to any award. The Compensation Committee may not amend an award in a manner that impairs the rights of any participant without his or her consent, or to reprice any stock options or stock appreciation rights at a lower exercise price, unless in accordance with an adjustment in the context of certain corporate transactions described above.
In the event of a change of control of the Company (as defined under the plans), the restricted shares, performance shares and performance options will continue under their original vesting or performance schedule if the awards are assumed or replaced by the new entity. If, however, the awards are not assumed by the new entity, then, upon the change of control, the restricted stock will fully vest and the performance shares and performance options will vest as if a target level of performance was achieved. If the recipient’s employment is terminated without cause or by the recipient for good reason (as both terms are defined in the plans) following a change of control, then he or she will fully vest in the restricted shares and vest in the target number of performance shares.
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Executive Compensation
Clawback. If the Board of Directors or any appropriate Board committee has determined that fraud or intentional misconduct by a participant in the Executive Incentive Bonus Plan was a significant contributing factor to the Company having to restate all or a portion of its financial statement(s), the Board or such committee may take actions it deems necessary, in its discretion, to remedy the misconduct and to prevent its recurrence. In determining what remedies to pursue, the Board or appropriate committee would take into account all relevant factors, including whether the restatement was the result of fraud or intentional misconduct. The Executive Incentive Bonus Plan provides that the Board may, to the extent permitted by applicable law, in appropriate cases, require reimbursement of any bonus or incentive compensation paid to the participant for any fiscal period commencing on or after January 1, 2008, if and to the extent that, (1) the amount of incentive compensation was calculated based upon the achievement of certain financial results that were subsequently reduced due to a restatement, (2) the participant engaged in any fraud or intentional misconduct that significantly contributed to the need for the restatement, and (c) the amount of the bonus or incentive compensation that would have been awarded to the participant had the financial results been properly reported would have been lower than the amount actually awarded. In addition, the Board may terminate the participant’s employment, authorize legal action, or take such other action to enforce the participant’s obligations to the Company as it may deem appropriate.
2018 Equity Compensation Plan
The Invacare Corporation 2018 Equity Compensation Plan is referred to in this proxy statement as the “2018 Equity Plan”. The 2018 Equity Plan is the Company’s shareholder-approved equity compensation plan, and is the successor to the Company’s 2013 Equity Compensation Plan (the "2013 Equity Plan") and 2003 Performance Plan. Under the 2018 Equity Plan, Directors and employees of the Company and its affiliates may be granted the following types of awards with respect to the Company’s common shares: incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units, unrestricted stock, and performance shares. The maximum number of Company common shares, without par value, available for issuance under the 2018 Equity Plan will not exceed the sum of the following: 6,200,000 shares, subject to increase by 2,500,000 based on the result of Proposal 2 in this Proxy Statement, plus any shares covered by an outstanding award made under the 2013 Equity Plan or the Company’s 2003 Performance Plan that are forfeited or remain unpurchased or undistributed upon termination or expiration of the award. As of December 31, 2020, there were 3,915,600 shares available for issuance under the 2018 Equity Plan inclusive of 375,066 aggregate shares under the Company’s 2013 Equity Compensation Plan and 2003 Performance Plan which can be transferred into the 2018 Equity Plan.
Executive Incentive Bonus Plan
The Executive Incentive Bonus Plan was approved and adopted by the shareholders of the Company on May 25, 2005, and was reapproved by the shareholders of the Company on May 20, 2010 and again on May 14, 2015. See the Compensation Discussion and Analysis for a discussion of awards under the Executive Incentive Bonus Plan during 2020.
Purpose. The Executive Incentive Bonus Plan is intended to provide an incentive to the Company’s executive officers to improve the Company’s inherent value, operating results and to enable the Company to recruit and retain key officers by making the Company’s overall compensation program competitive with compensation programs of other companies with which the Company competes for executive talent.
Administration. The plan is administered by the Compensation Committee, which generally has the authority to determine the manner in which the Executive Incentive Bonus Plan will operate, to interpret the provisions of the plan and to make all determinations under the plan.
Eligibility and Participation. All officers of the Company are eligible to be selected to participate in the Executive Incentive Bonus Plan. The Compensation Committee has the discretion to select those officers who will participate in the plan in any given year. A participant must be employed by the Company
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Executive Compensation
on the payment date in order to receive a bonus payment under the Executive Incentive Bonus Plan, unless the officer’s employment is terminated prior to the payment date as a result of death, disability, or retirement, in which case the officer may receive a prorated payment. In 2020, there were eight participants in the Executive Incentive Bonus Plan, including the named executive officers.
Awards under the Executive Incentive Bonus Plan. Awards under the plan are designed to ensure that the compensation of the Company’s officers is commensurate with their responsibilities and contribution to the success of the Company based on market levels indicated by compensation data obtained from time to time by the Company or the independent consultant engaged by the Compensation Committee. For each calendar year or other predetermined performance period, the Compensation Committee will establish a target bonus for each eligible officer, which is payable based on the level(s) of achievement of a specified performance goal(s) for the performance period. When making final payout determinations, the Compensation Committee may exercise negative discretion to award less than the maximum potential cash bonus amount.
Performance Goals. The performance goal(s) for each performance period will provide for a targeted level or levels of performance using one or more of the following predetermined measurements: return on equity; earnings per share; net income; pre-tax income; operating income; revenue; earnings before interest and taxes; earnings before interest, taxes, depreciation and amortization; cash flow; free cash flow; economic profit; total earnings; earnings growth; return on capital; operating measures (including, but not limited to, operating margin and/or operating costs); return on assets; return on net assets; return on capital; return on invested capital; increase in the fair market value of the shares; or total shareholder return. For 2020, the bonus opportunity was based upon satisfaction of established bonus targets described in the section entitled "Compensation Discussion and Analysis."
The performance goal for a performance period is established in writing by the Compensation Committee during the first 90 days of the year. During this same time period, the Compensation Committee may adjust or modify the calculation of a performance goal for the performance period in order to prevent the dilution or enlargement of the rights of participants (1) in the event of, or in anticipation of, any unusual or extraordinary corporate item, transaction, event or development; (2) in recognition of, or in anticipation of, any other unusual or nonrecurring events affecting the Company, or the financial statements of the Company, or in response to, or in anticipation of, changes in applicable laws, regulations, accounting principles or business conditions; and (3) in view of the Compensation Committee’s assessment of the Company’s business strategy, performance of comparable organizations, economic and business conditions, and any other circumstances deemed relevant by the Compensation Committee. The Compensation Committee may establish various levels of bonus depending upon relative performance toward a performance goal.
The target bonus payable to any officer for a performance period is a specified percentage of the officer’s compensation for the performance period, but in no event will the bonus payable to any officer for a performance period exceed $5,000,000.
In the event of a change in control of the Company, the amount payable to each eligible participant in the plan at the time of such change in control would be equal to the greater of (1) the target bonus that would have been paid if the performance goal for the calendar year in which the change in control occurs had been achieved, or (2) the bonus that would have been paid to the participant if the performance goal that was actually achieved during the portion of the calendar year which occurs prior to the change in control is annualized for the entire calendar year.
Clawback. If the Board of Directors or any appropriate committee has determined that any fraud or intentional misconduct by a participant in the Executive Incentive Bonus Plan was a significant contributing factor to the Company having to restate all or a portion of its financial statement(s), the Board or committee may take, in its discretion, such actions as it deems necessary to remedy the misconduct and prevent its recurrence. In determining what remedies to pursue, the Board or committee will take into account all relevant factors, including whether the restatement was the result of fraud or intentional misconduct. The Board may, to the extent permitted by applicable law, in all appropriate cases, require
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Executive Compensation
reimbursement of any bonus or incentive compensation paid to the participant for any fiscal period commencing on or after January 1, 2008 if and to the extent that (1) the amount of incentive compensation was calculated based upon the achievement of certain financial results that were subsequently reduced due to a restatement, (2) the participant engaged in any fraud or intentional misconduct that significantly contributed to the need for the restatement, and (3) the amount of the bonus or incentive compensation that would have been awarded to the participant had the financial results been properly reported would have been lower than the amount actually awarded. In addition, the Board may terminate the participant’s employment, authorize legal action, or take such other action to enforce the participant’s obligations to the Company as it may deem appropriate in view of all the facts surrounding the particular case.
Amendment and Termination. The Company reserves the right, exercisable by the Compensation Committee, to amend the Executive Incentive Bonus Plan at any time and in any respect, or to terminate the plan in whole or in part at any time and for any reason.
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Executive Compensation
Outstanding Equity Awards held by the named executive officers at December 31, 2020
 
Option Awards  
Stock Awards  
Name 
Number of
Securities
Underlying
Unexercised
Options
Exercisable (#) 
Number of
Securities
Underlying
Unexercised
Options
Unexercisable (#)
Option
Exercise
Price
($)  
Option
Expiration
Date  
Number of
Shares or
Units of
Stock  That
Have not
Vested (#)  
Market
Value of
Shares or
Units of
Stock
That
Have not
Vested ($)  
Equity Incentive Plan Awards:
Number of
Unearned
Shares, Units
or Other Rights
That Have not
Vested (#)  
Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have not Vested ($)  
Matthew E. Monaghan400,00012.1503/16/27
150,925(1)1,350,779
18,912(2)169,262
96,232(3)861,276
505,263(4)4,522,104
146,793(6)1,313,797
118,764(6)1,062,938
513,774(8)4,598,277
Kathleen P. Leneghan6,60024.4509/02/21
8,00013.3708/14/22
8,00014.4903/18/23
21,187(1)189,624
7,500(5)67,125
2,655(2)23,762
25,261(3)226,086
132,632(4)1,196,341
33,846(6)302,922
118,462(7)1,060,235
Anthony C. LaPlaca11,20024.4509/02/21  
 13,500 13.3708/14/22  
 13,500 14.4903/18/23  
12.153/16/2027
12,934(1)115,759
1,621(2)14,508
8,571(3)76,710
45,000(4)402,750