Invacare 2012 Annual Report Download - page 107

INVACARE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
In conjunction with these non-qualified and unfunded U.S. defined benefit plans, the company has invested
in life insurance policies related to certain employees to help satisfy these future obligations.
In Europe, the company maintains defined benefit plans in Switzerland and in the Netherlands. In
Switzerland, a statutory pension plan is maintained with a private insurance company and, in accordance with
Swiss law, the plan functions as a defined contribution plan whereby employee and employer contributions are
defined as a percentage of individual salary depending on the age of the employee and a guaranteed interest rate,
which is annually defined by the Swiss Pension Fund. Under U.S. GAAP, the plan is treated as a defined benefit
plan. In the Netherlands, the statutory pension plan contains benefits and provisions for an Old Age Pension
benefit that starts at age 65 and is payable until death and a Survivors Pension that starts immediately after the
death of the insured and is payable until the death of the surviving spouse. The plan also provides for a
Temporary Survivors Pension, an Orphans Pension and Premium Waiver During Disability. Under U.S. GAAP
the plan is treated as a defined benefit plan. Income for the plans was $105,000 in 2012 and $215,000 in 2011
versus expense of $23,000 in 2010.
Accumulated other comprehensive income associated with the SERP, Swiss pension plan, Netherlands
pension plan and DBO was $5,613,000 and $4,781,000 as of December 31, 2012 and 2011, respectively for a net
change of $832,000 with $744,000 in net periodic benefit costs recognized during the year.
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 2012, 2011 and 2010, the Committee granted 761,892, 608,896 and 646,797 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, 2012, 2011 or 2010.
Restricted stock awards for 118,200, 101,329, and 92,900 shares were granted in years 2012, 2011 and 2010
without cost to the recipients. The 2012 weighted average fair value of the 2012 restricted stock awards was
$13.41. The restricted stock awards vest ratably over the four years after the award date. There were 96,520
restricted stock awards with a weighted average fair value of $23.59 that vested in 2012 and 10,631 restricted
stock awards were forfeited in 2012.
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