Invacare 2009 Annual Report Download - page 89

INVACARE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Retirement and Benefit Plans—Continued
In conjunction with these non-qualified plans, the company has invested in life insurance policies related to
certain employees to help satisfy these future obligations. The current cash surrender value of these policies
approximates the current benefit obligations.
Shareholders’ Equity Transactions
The company’s Common Shares have a $.25 stated value. The Common Shares and the Class B Common
Shares generally have identical rights, terms and conditions and vote together as a single class on most issues,
except that the Class B Common Shares have ten votes per share, carry a 10% lower cash dividend rate and, in
general, can only be transferred to family members. Holders of Class B Common Shares are entitled to convert
their shares into Common Shares at any time on a share-for-share basis.
The 2003 Performance Plan, as amended (the “2003 Plan”), allows the Compensation and Management
Development Committee of the Board of Directors (the “Committee”) to grant up to 6,800,000 Common Shares
in connection with incentive stock options, non-qualified stock options, stock appreciation rights and stock
awards (including the use of restricted stock), which includes the addition of 3,000,000 Common Shares
authorized for issuance under the 2003 Plan, as approved by the company’s shareholders on May 21, 2009. The
maximum aggregate number of Common Shares that may be granted during the term of the 2003 Plan pursuant
to all awards, other than stock options, is 1,300,000 Common Shares. The Committee has the authority to
determine which participants will receive awards, the amount of the awards and the other terms and conditions of
the awards. During 2009, 2008 and 2007, the Committee granted 754,581, 701,594 and 503,096 non-qualified
stock options, respectively, each having a term of ten years and generally granted at the fair market value of the
company’s Common Shares on the date of grant under the 2003 Plan. There were no stock appreciation rights
outstanding at December 31, 2009, 2008 or 2007.
Restricted stock awards for 125,840, 96,800, and 80,320 shares were granted in years 2009, 2008 and 2007
without cost to the recipients. The 2009 weighted average fair value of the 2009 restricted stock awards was
$20.37. The restricted stock awards vest ratably over the four years after the award date. There were 65,121
restricted stock awards with a weighted average fair value of $26.35 that vested in 2009 and 17,325 restricted
stock awards with a weighted average fair value of $24.23 that were forfeited in 2009.
At December 31, 2009 and 2008, there were 247,961 and 204,567 shares, respectively, for restricted stock
awards that were unvested. Unearned restricted stock compensation of $4,866,000 in 2009, $4,505,000 in 2008
and $3,904,000 in 2007, determined as the market value of the shares at the date of grant, is being amortized on a
straight-line basis over the vesting period. Compensation expense of $1,783,000, $1,338,000 and $1,322,000 was
recognized in 2009, 2008 and 2007, respectively, related to restricted stock awards granted since 2004.
The 2003 Plan and the 1994 Performance Plan have provisions that allow employees to exchange mature
shares to pay the exercise price and surrender shares for the options to cover the minimum tax withholding
obligation. Under these provisions, the company acquired approximately 410,000 treasury shares for $8,841,000
in 2009, 224,000 shares for $5,334,000 in 2008 and 14,000 shares for $298,000 in 2007.
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