UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                  SCHEDULE 14A
                    PROXY STATEMENT PURSUANT TO SECTION 14(a)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

Filed by the Registrant  [X]

Filed by a Party other than the Registrant  [ ]

Check the appropriate box:

[X]  Preliminary Proxy Statement          [ ]  CONFIDENTIAL, FOR USE OF THE
                                               COMMISSION ONLY
                                              (AS PERMITTED BY RULE 14a-6(e)(2))
[ ]  Definitive Proxy Statement
[ ]  Definitive Additional Materials
[ ]  Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12

                              INVACARE CORPORATION
--------------------------------------------------------------------------------
                (NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

--------------------------------------------------------------------------------
    (NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)

Payment of Filing Fee (Check the appropriate box):

[X] No fee required.

[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

     (1)  Title of each class of securities to which transaction applies:

     (2)  Aggregate number of securities to which transaction applies:

     (3)  Per unit  price  or other  underlying  value of  transaction  computed
          pursuant to Exchange  Act Rule 0-11 (Set forth the amount on which the
          filing fee is calculated and state how it was determined):

     (4)  Proposed maximum aggregate value of transaction:

     (5)  Total fee paid:

[ ] Fee paid previously with preliminary materials.

[ ] Check box if any part of the fee is offset as provided by Exchange Act
    Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
    paid previously. Identify the previous filing by registration statement
    number, or the Form or Schedule and the date of its filing.

     (1)  Amount Previously Paid:

     (2)  Form, Schedule or Registration Statement No.:

     (3)  Filing Party:

     (4)  Date Filed:



                       [GRAPHIC OMITTED][GRAPHIC OMITTED]


                              Invacare Corporation
                                One Invacare Way
                               Elyria, Ohio 44035


                                                                April [__], 2007
To the Shareholders of

                             INVACARE CORPORATION:

     This  year's  Annual  Meeting  of  Shareholders  will be held at 10:00 A.M.
(EDT),  on  Thursday,  May 24, 2007,  at the Lorain  County  Community  College,
Spitzer  Conference Center,  Grand Room, 1005 North Abbe Road, Elyria,  Ohio. We
will be reporting on Invacare's  activities  and you will have an opportunity to
ask questions about its operations.

     We hope that you are planning to attend the annual  meeting  personally and
we look  forward to seeing  you.  Whether or not you expect to attend in person,
the  return  of the  enclosed  proxy  as  soon  as  possible  would  be  greatly
appreciated  and will ensure that your shares will be  represented at the annual
meeting. If you do attend the annual meeting, you may, of course,  withdraw your
proxy should you wish to vote in person.

     On behalf of the Board of Directors and management of Invacare Corporation,
I would like to thank you for your continued support and confidence.

                                 Sincerely yours,



                                  /s/A. Malachi Mixon, III

                                  A. Malachi Mixon, III
                                  Chairman and
                                  Chief Executive Officer




                       [GRAPHIC OMITTED][GRAPHIC OMITTED]


                              Invacare Corporation

                    Notice of Annual Meeting of Shareholders
                           To Be Held On May 24, 2007

     The Annual Meeting of Shareholders of Invacare  Corporation (the "Company")
will be held at the Lorain County Community College,  Spitzer Conference Center,
Grand Room,  1005 North Abbe Road,  Elyria,  Ohio on Thursday,  May 24, 2007, at
10:00 A.M. (EDT), for the following purposes:

     1.   To elect four directors to the class whose three-year term will expire
          in 2010;

     2.   To consider  and vote upon  amendments  to the  Company's  Amended and
          Restated  Articles  of  Incorporation  to permit the  Company to issue
          non-certificated shares;

     3.   To ratify  the  appointment  of Ernst & Young  LLP as our  independent
          auditors for our 2007 fiscal year;

     4.   To  consider  and  vote  upon  a  shareholder  proposal,  if  properly
          presented at the annual meeting; 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 Thursday, March 29, 2007 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 sign, date and mail the enclosed proxy
card in the return envelope provided. Shareholders who attend the annual meeting
may revoke their proxy and vote in person.

                                 By Order of the Board of Directors,



                                 Dale C. LaPorte
                                 Secretary


April [__], 2007





                       [GRAPHIC OMITTED][GRAPHIC OMITTED]


                              Invacare Corporation
                          -----------------------------

                                 Proxy Statement
                     For the Annual Meeting of Shareholders
                                  May 24, 2007
                          -----------------------------

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 24, 2007 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.  This proxy  statement  is being mailed to  shareholders  on or about
April [__], 2007.

Who is paying for this proxy solicitation?

     We 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,  our  directors,  officers or
employees,  without additional  compensation,  may make solicitations personally
and by telephone.  We 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 29, 2007, the
record date for the meeting,  are  entitled to receive  notice of and to vote at
the annual  meeting.  On this record date,  there were [ ] common shares and [ ]
Class B common shares outstanding and entitled to vote.

How many votes do I have?

     On each  matter  to be voted  on,  you  have one vote for each  outstanding
common  share  you own as of March 29,  2007 and ten votes for each  outstanding
Class B common share you own as of March 29, 2007.

How do I vote?

     If you are a  shareholder  of record,  you can vote in person at the annual
meeting  or you can  vote by  signing  and  mailing  in your  proxy  card in the
enclosed  envelope.  If you are a shareholder of record,  the proxy holders will
vote your shares based on your directions.

     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"
proposals 1, 2 and 3, and "AGAINST"  proposal 4 and will use their discretion on
any other  proposals  and other  matters  that may be brought  before the annual
meeting.

     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.



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,  the
voting  instruction card should be used to vote the number of common shares that
you are entitled to vote under the plan. If you do not vote timely,  your shares
will not be counted.

What are the voting recommendations of the Board of Directors?

         Our Board of Directors recommends that you vote:

          o    "For" the election of the four  nominated  directors to the class
               whose three-year term will expire in 2010;

          o    "For"  the  amendments  to the  Company's  Amended  and  Restated
               Articles  of   Incorporation  to  permit  the  Company  to  issue
               non-certificated shares;

          o    "For"  ratifying  the  appointment  of  Ernst & Young  LLP as our
               independent auditors for our 2007 fiscal year; and

          o    "Against" the shareholder proposal.

What vote is required to approve each proposal?

     Except as otherwise provided by Invacare's amended and restated articles of
incorporation  or code of  regulations,  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. No holder of shares
of any class has cumulative voting rights in the election of directors.

          o    Election of Directors  (Proposal  No. 1). The nominees  receiving
               the greatest number of votes will be elected. A proxy card marked
               "Withhold  Authority" with respect to the election of one or more
               directors  will not be voted  with  respect  to the  director  or
               directors  indicated.  Abstentions and broker non-votes will have
               no effect on the election of directors.

          o    Approval and adoption of the amendments to the Company's  Amended
               and Restated  Articles of  Incorporation to permit the Company to
               issue non-certificated  shares (Proposal No. 2). The approval and
               adoption of the amendments to the Company's  Amended and Restated
               Articles  of   Incorporation  to  permit  the  Company  to  issue
               non-certificated  shares  requires  the  affirmative  vote  of  a
               majority of the votes cast. A proxy card marked as "Abstain" with
               respect to the  approval and  adoption of the  amendments  to the
               Company's Amended and Restated Articles of Incorporation will not
               be voted, although it will be counted for purposes of determining
               the  number  of  shares  entitled  to vote.  Accordingly,  if you
               "Abstain"  from  voting,  it will  have  the  same  effect  as an
               "Against"  vote.  Broker  non-votes  will  have no  effect on the
               approval and adoption of the amendment to the plan.

          o    Ratification  of Auditors  (Proposal No. 3).  Ratification of the
               appointment  of  Ernst & Young  LLP as our  independent  auditors
               requires the affirmative  vote of a majority of the votes cast. A
               proxy card marked as "Abstain"  with respect to the  ratification
               of the  appointment  of  Ernst & Young  LLP  will  not be  voted,
               although  it will be counted  for  purposes  of  determining  the
               number of shares entitled to vote. Accordingly,  if you "Abstain"
               from voting,  it will have the same effect as an "Against"  vote.
               Broker non-votes will have no effect on the ratification.

          o    Approval of  Shareholder  Proposal  (Proposal No. 4). If properly
               presented at the annual meeting,  the approval of the shareholder
               proposal requires the affirmative vote of a majority of the votes
               cast.  A proxy  card  marked as  "Abstain"  with  respect  to the
               Shareholder  Proposal  will  not be  voted,  although  it will be
               counted for purposes of determining the number of shares entitled
               to vote. Accordingly,  if you "Abstain" from voting, it will have

                                       2

               the same effect as an "Against" vote.  Broker non-votes will have
               no effect on the approval of the shareholder proposal.

What constitutes a quorum?

     A quorum of shareholders  will be present at the annual meeting if at least
a majority of the  aggregate  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, [ ] votes were outstanding;  therefore,
shareholders  representing  at least [ ] votes will be required  to  establish a
quorum.  Abstentions  and broker  non-votes  will be counted  towards the quorum
requirement.

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 either submitting
another  properly  completed  proxy  card with a later  date,  sending a written
notice to our  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.

                              ELECTION OF DIRECTORS
                                (Proposal No. 1)

     At the annual meeting, four directors will be elected to serve a three-year
term  until the  annual  meeting  in 2010 or until  their  successors  have been
elected and qualified.  Each of the nominees is presently a director of Invacare
and has  indicated  their  willingness  to serve  another  term as a director if
elected.  If any nominee should become  unavailable  for election,  which is not
currently expected,  it is intended that the shares represented by proxy will be
voted for any  substitute  nominee(s) as may be named by the Board of Directors.
In no event  will the proxy  holders  vote for more than  four  nominees  or for
persons other than those named below and any substitute nominee for any of them.

Nominees for Terms Expiring in 2010

     John R.  Kasich,  54,  has been a  director  since  2001.  Mr.  Kasich is a
Managing  Director of Lehman  Brothers'  investment  banking group.  He spent 18
years as a member of the House of Representatives of the United States Congress,
and served as head of the House Budget  Committee  from 1995 to 2000. He was the
chief architect of the Balanced Budget Act of 1997, which eliminated the federal
budget deficits. As a committee chairman, he was the House's top negotiator with
the White  House  over  details  of the plan,  setting  spending  limits for all
federal  government  agencies and cutting taxes. Mr. Kasich serves as a director
of Worthington  Industries,  Inc. (NYSE),  Columbus,  Ohio, a diversified  steel
processor that focuses on steel processing and  metals-related  businesses.  Mr.
Kasich is also the host of "Heartland" on the Fox News Channel.

     Dan T. Moore,  III, 67, has been a director  since 1980. Mr. Moore has been
President  of Dan T.  Moore Co.  since  1979 and is  Chairman  of four  advanced
materials manufacturing companies:  Flow Polymers,  Inc., Soundwich,  Inc., Team
Wendy LLC and Impact Ceramics LLC. He is a director of Hawk Corporation  (AMEX),
Cleveland,  Ohio,  a supplier of friction  products  for brakes,  clutches,  and
transmissions used in aerospace, industrial and specialty applications, and is a
director of Park-Ohio Holdings Corp (NasdaqNM),  Cleveland,  Ohio, a provider of
supply chain logistics and a manufacturer of engineered  products.  Mr. Moore is
also a Trustee of the Cleveland Clinic Foundation.

     Joseph B. Richey,  II, 70, has been a director  since 1980.  Mr. Richey has
been President-Invacare  Technologies and Senior Vice  President-Electronic  and
Design  Engineering  since  1992.   Previously,   Mr.  Richey  was  Senior  Vice
President-Product  Development  from 1984 to 1992, and Senior Vice President and
General Manager-North American Operations from September 1989 to September 1992.
Mr. Richey also serves as a director of Steris  Corporation  (NYSE),  Cleveland,
Ohio, a manufacturer  and  distributor of medical  sterilizing  equipment and as

                                       3

Chairman of the Board of Directors and CEO of  NeuroControl  Corporation,  North
Ridgeville,   Ohio,  a  privately  held  company,  which  develops  and  markets
electromedical  stimulation systems for stroke patients,  and is a member of the
Board of Trustees for Case Western Reserve  University and The Cleveland  Clinic
Foundation.

     General  James L.  Jones,  63,  was  unanimously  elected  to the  board by
Invacare's  current  directors  effective  March  2,  2007.  General  Jones  was
commissioned  into the Marine Corps in 1967,  served in Vietnam as a platoon and
company  commander and became  Commandant  of the Marine Corps in 1999.  General
Jones  graduated  from the  National  War  College  in 1985 and later  served as
Military  Assistant to the U.S.  Secretary of Defense.  General  Jones  recently
retired as Supreme Allied Commander of NATO (North Atlantic Treaty Organization)
and  Commander  of the  United  States  European  Command.  General  Jones has a
Bachelor of Science degree and Honorary Doctorate from Georgetown University.

           Invacare's Board of Directors recommends that shareholders
           vote "FOR" the election of the four directors to the class
                   whose three-year term will expire in 2010.

Directors whose Terms Will Expire in 2009

     James C. Boland,  67, has been a director  since 1998. Mr. Boland served as
President and Chief Executive  Officer of CAVS/Gund Arena Company (the Cleveland
Cavaliers,  a  professional  team, and Gund Arena) from January 1998 to December
31, 2002, at which time he became  Vice-Chairman of the company. The name of the
company was changed to  Cavaliers  Operating  Company,  LLC in 2005.  Before his
retirement  from Ernst & Young LLP in 1998,  Mr. Boland served for 22 years as a
partner of Ernst & Young in various roles,  including Vice Chairman and Regional
Managing Partner,  as well as a member of the firm's  Management  Committee from
1988 to  1996,  and as Vice  Chairman  of  National  Accounts  from  1997 to his
retirement.  Mr. Boland is a director of The  Sherwin-Williams  Company  (NYSE),
Cleveland, Ohio, a manufacturer and distributor of coatings and related products
and The Goodyear Tire & Rubber Company (NYSE),  Akron,  Ohio, one of the world's
leading  manufacturers  of  tires  and  rubber  products,  and is a  Trustee  of
Bluecoats, Inc. and The Harvard Business School Club of Cleveland.

     Gerald B. Blouch,  60, has been  President and a director of Invacare since
November 1996. Mr. Blouch has been Chief  Operating  Officer since December 1994
and Chairman-Invacare  International since December 1993. Previously, Mr. Blouch
was President-Homecare Division from March 1994 to December 1994 and Senior Vice
President-Homecare Division from September 1992 to March 1994. Mr. Blouch served
as Chief  Financial  Officer of Invacare from May 1990 to May 1993 and Treasurer
of  Invacare  from March  1991 to May 1993.  Mr.  Blouch is also a  director  of
NeuroControl  Corporation,  North  Ridgeville,  Ohio, a privately  held company,
which  develops  and  markets  electromedical  stimulation  systems  for  stroke
patients.

     William M. Weber,  67, has been a director  since 1988. In August 2005, Mr.
Weber became  President  and CEO of Air  Enterprises  L.L.C.,  which designs and
manufactures  custom high end air handling  equipment for critical  areas in the
hospital,  drug and educational  markets. Mr. Weber also serves as a director of
Air  Enterprises  L.L.C.  From 1994 to 2005, Mr. Weber was President of Roundcap
L.L.C. and a principal of Roundwood Capital L.P., a partnership that invested in
public and private  companies.  From 1968 to 1994,  Mr.  Weber was  President of
Weber, Wood, Medinger, Inc., Cleveland, Ohio, a commercial real estate brokerage
and consulting firm.


Directors whose Terms Will Expire in 2008

     Michael F. Delaney,  58, has been a director  since 1986.  Since 1983,  Mr.
Delaney has been the Associate Director of Development of the Paralyzed Veterans
of America,  a national  veterans' service  organization in Washington,  D.C. In
October 2003,  Mr.  Delaney's  title changed to Development  Officer,  Corporate
Marketing.

     C. Martin Harris, M.D., 50, has been a director since 2003. Since 1996, Dr.
Harris has been 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

                                       4

Foundation Department of General Internal Medicine. Additionally, since 2000, he
has been Executive Director of e-Cleveland Clinic, a series of e-health clinical
programs  offered  over the  Internet.  Nationally,  Dr.  Harris  serves  as the
Chairman of the National Health Information  Infrastructure (NHII) Task Force of
the Healthcare  Information and Management Systems Society (HIMSS),  the largest
information and management systems society in the world. He is also the Chairman
of the  Foundation  Board  for the  e-Health  Initiative,  a public  policy  and
advocacy group that encourages the interoperability of information technology in
healthcare.

     Bernadine P. Healy, M.D., 62, has been a director since 1996. Dr. Healy has
been a columnist  and Health  Editor for U.S.  News & World Report since October
2002.  She has served on The  President's  Council of  Advisors  on Science  and
Technology  (PCAST) since 2001, and served as a chair of the Ohio  Commission to
Reform  Medicaid in 2003.  Dr. Healy was President  and CEO,  American Red Cross
from September 1999 to December 2001. From 1995 to August 1999, Dr. Healy served
as the Dean and  Professor  of Medicine  of the  College of Medicine  and Public
Health of The Ohio State University,  Columbus,  Ohio. Dr. Healy is a Trustee of
the Battelle Memorial Institute in Columbus,  Ohio and is a director of Ashland,
Inc.  (NYSE),  Covington,  Kentucky,  a company in  specialized  chemicals;  The
Progressive  Corporation  (NYSE),  Cleveland,   Ohio,  an  automobile  insurance
company;  and National City  Corporation  (NYSE),  Cleveland,  Ohio, a financial
holding company with assets over $100 billion, providing a full range of banking
and financial services.

     A. Malachi  Mixon,  III, 66, has been a director  since 1979. Mr. Mixon has
been Chief Executive Officer since 1979 and Chairman of the Board since 1983 and
also served as  President  until 1996,  when Gerald B. Blouch,  Chief  Operating
Officer,  was elected as our  President.  Mr.  Mixon serves as a director of The
Lamson &  Sessions  Co.  (NYSE),  Cleveland,  Ohio,  a  supplier  of  engineered
thermoplastic  products,  and The  Sherwin-Williams  Company (NYSE),  Cleveland,
Ohio, a manufacturer and distributor of coatings and related products. Mr. Mixon
also  serves  as  Chairman  of the Board of  Trustees  of The  Cleveland  Clinic
Foundation,  Cleveland,  Ohio,  one  of the  world's  leading  academic  medical
centers.



              APPROVAL AND ADOPTION OF AMENDMENTS TO THE COMPANY'S
                 AMENDED AND RESTATED ARTICLES OF INCORPORATION
                                (Proposal No. 2)

     The Board of Directors has  approved,  subject to the approval and adoption
by the Company's  shareholders,  a certificate  of amendment  (the  "Amendment")
containing  amendments  to  the  Company's  Amended  and  Restated  Articles  of
Incorporation  that would  allow the  Company to issue  shares and  provide  for
transfers of shares  without  issuing  physical  certificates  to evidence those
shares ("non-certificated shares").

     We are asking our  shareholders  to approve and adopt the  Amendment to the
Amended  and  Restated  Articles  of  Incorporation.   This  item  requires  the
affirmative  vote of a majority  of the votes cast at the  Annual  Meeting.  The
Board of Directors recommends that you vote "For" this proposal.

     The full text of the  Amendment  to the  Amended and  Restated  Articles of
Incorporation  is attached to this proxy  statement as Appendix A. The following
description  of the  Amendment  is  qualified  in its  entirety by  reference to
Appendix A.

Current Articles of Incorporation Requirements

     The Company's Amended and Restated Articles of Incorporation  currently can
be  interpreted to require the Company to issue  physical  certificates  to each
shareholder  of record  evidencing  the shares  owned by such  shareholder.  The
current  version of the  Amended and  Restated  Articles  of  Incorporation  was
consistent with the requirements of Ohio law when adopted.  However,  in view of
changes in Ohio law, developments in technology and recordkeeping processes and,
in  particular,  listing  requirements  recently  adopted  by the New York Stock
Exchange (the "NYSE"),  the Board of Directors  believes that the Company should
have the flexibility to issue non-certificated shares.

                                       5

Reason for and Effects of Proposed Amendment

     Ohio law now permits the Company, subject to certain restrictions, to issue
shares and provide for transfers of shares without issuing physical certificates
to evidence  those  shares.  In  addition,  the NYSE,  the exchange on which the
Company's  shares are traded,  recently adopted listing  requirements  mandating
that,  effective  January 1,  2008,  companies  listed on the NYSE,  such as the
Company,  be  eligible  to  issue  non-certificated  shares  so  that  they  may
participate  in  a  "Direct   Registration   Program"  operated  by  a  security
depository.  The  proposed  Amendment  to the Amended and  Restated  Articles of
Incorporation  is  necessary  in order for the  Company to be  eligible to issue
non-certificated  shares and participate in this program, as required under NYSE
rules.  Accordingly,  the proposed  Amendment  would permit the Company to issue
such  non-certificated  shares to shareholders of record, while at the same time
mandating  that  the  Company  continue  to  comply  with all  applicable  legal
requirements  and the listing  standards of NYSE with respect to issuing shares.
In addition, the Amendment also would provide that, with the exception of shares
held under certain  employee benefit plans (as to which the Company may require,
unless  prohibited  by  law,  that  non-certificated  shares  be  issued),  each
shareholder  of  record  would  have a  right,  so  long  as it is  required  by
applicable law and upon request, to have a physical  certificate or certificates
issued to evidence his or her shares.

     If  approved  by   shareholders   and   implemented   by  the  Company,   a
non-certificated  share program would be administered by the Company's  transfer
agent,  currently  National City Bank. Under such a program,  the transfer agent
would maintain an electronic record of the name of the applicable shareholder of
record and the number of shares owned.  The transfer  agent also would  maintain
systems  and   controls   designed  to  track   accurately   the   ownership  of
non-certificated  shares by  shareholders  of record and,  when  directed by the
shareholder,  to provide  for the  transfer  of such  shares  pursuant  to those
directions. Except as otherwise may be required by law, and subject to the terms
of any applicable  employee  benefit plan, the rights and obligations of holders
of non-certificated shares and holders of physical shares for a particular class
and series of shares would be identical.

     While the  proposed  Amendment  would make the  Company  eligible  to issue
non-certificated  shares,  the Company  does not  currently  anticipate  issuing
non-certificated  shares to  shareholders  of record.  The Company will consider
this issue from time to time and, if the Company  determines  in the future that
the cost savings,  ease of administration,  technical feasibility or shareholder
acceptance  of such a program  justify  the use of  non-certificated  shares for
shareholders  of record,  the Board of Directors may choose to implement  such a
program in the future. However, as noted above, even if a non-certificated share
program were to be  implemented  in the future,  the  proposed  Amendment to the
Amended and Restated  Articles of  Incorporation  provides that each shareholder
would  have a  right,  so long as it is  required  by  applicable  law and  upon
request, to have physical certificates issued to evidence his or her shares.

  The Company's Board of Directors recommends that shareholders vote "FOR" the
           approval and adoption of the Amendment to the Amended and
                       Restated Articles of Incorporation.


               RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
                                (Proposal No. 3)

     The Audit  Committee  has  appointed  Ernst & Young LLP to  continue as our
independent  auditors and to audit our financial  statements  for the year ended
December 31, 2007. The Audit Committee and the Board of Directors are asking you
to ratify this  appointment.  During the year ended  December 31, 2006,  Ernst &
Young LLP served as our principal  auditors and provided tax and other services.
See "Independent Auditors." 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.

         Invacare's Board of Directors recommends that shareholders vote
                  "FOR" the ratification of the appointment of
                 Ernst & Young LLP as our independent auditors.

                                       6

                              SHAREHOLDER PROPOSAL
                                (Proposal No. 4)

     The proposal set forth below has been submitted by a group of the Company's
shareholders.  The Company will  furnish to any person,  orally or in writing as
requested, the name and address of, and the number of Common Shares held by, the
shareholder proponents promptly upon any written or oral request.

                              Shareholder Proposal

     A group of  shareholders  has given  notice  that it intends to present the
proposal set forth below for action at the Annual Meeting.

          "BE IT RESOLVED, that the stockholders of Invacare Corporation request
          that the Board of Directors take the necessary steps to declassify the
          Board of  Directors  and  establish  annual  elections  of  directors,
          whereby  directors would be elected annually and not by classes.  This
          policy  would  take  effect  immediately,  and  be  applicable  to the
          re-election of any incumbent  director  whose term,  under the current
          classified system, subsequently expires."

          The following statement was submitted in support of the resolution:

          "We  believe  that the ability to elect  directors  is the single most
          important use of the  shareholder  franchise.  Accordingly,  directors
          should be accountable to shareholders on an annual basis. The election
          of  directors  by  classes,  for  three-year  terms,  in our  opinion,
          minimizes accountability and precludes the full exercise of the rights
          of shareholders to approve or disapprove annually the performance of a
          director or directors.

          In addition, since only one-third of the Board of Directors is elected
          annually,  we believe that classified  boards could frustrate,  to the
          detriment of long-term shareholder  interest,  the efforts of a bidder
          to acquire  control or a challenger to engage  successfully in a proxy
          contest.

          We urge your support for the proposal to repeal the  classified  board
          and establish that all directors be elected annually."

                         Statement of Board of Directors
                          Opposing Shareholder Proposal

     The Board of Directors  unanimously  recommends  that you vote AGAINST this
shareholder proposal. The Board of Directors does not believe that this proposal
will promote the best interests of the Company or its shareholders.

     The Company's Code of Regulations provides for the election of directors in
three  classes.  Each class  serves for a term of three  years,  with one class,
constituting  approximately  one-third of the Board of Directors,  being elected
each year at the Company's Annual Meeting of Shareholders.

     The election of directors by classes assures that approximately  two-thirds
of the Board will have prior  experience  with and  knowledge of Invacare.  This
provides needed continuity and solid knowledge of the Company's business and the
industry in which it  operates.  Directors  familiar  with  Invacare are able to
provide informed oversight of corporate  policies and the perspective  necessary
for the orderly development of sound,  long-term  strategic planning.  An abrupt
change in the Board of Directors could impair  Invacare's  progress in achieving
its long-term strategic goals.

     It is important  that  Invacare's  employees,  shareholders,  customers and
suppliers,  as well as others with whom the Company does  business,  are able to
rely on the continuity and stability of the Company's corporate policies.

                                       7

     A  classified   board  reduces  the  Company's   vulnerability  to  certain
potentially abusive takeover tactics and encourages potential acquirers to enter
into arm's length  negotiations  with experienced  directors as opposed to a few
large  shareholders.  The ability to resist abusive  takeover tactics allows the
Board of Directors to consider how best to preserve  Invacare's  long-term value
to shareholders as well as its relationships  with its customers,  suppliers and
employees  around the globe. A classified board gives the Board of Directors the
opportunity to review any takeover proposal,  study appropriate alternatives and
achieve the best results for all shareholders, both large and small.

     The Board of  Directors  believes  that  directors  elected to a classified
board are no less  accountable or responsive to shareholders  than they would be
if elected  annually.  The same standards of performance  apply to all directors
regardless of the term of service.  Invacare's  Code of Regulations  permits the
removal  of  directors  for cause by  majority  vote at any  special  meeting of
shareholders properly called for that purpose, subject to certain limitations as
described in the Code of Regulations.  Accordingly,  you have the opportunity as
shareholders  to express your views  regarding  the Board's  performance  and to
influence  its  composition  by voting at each annual  election of directors and
through the removal procedures permitted by Invacare's Code of Regulations.

   The Board of Directors remains convinced that a classified board is in the
   best interest of Invacare and its shareholders and should not be changed.
  Accordingly, the Board of Directors unanimously recommends that shareholders
    vote AGAINST the adoption of the Shareholder Proposal (Proposal No. 4).



                                       8



SHARE OWNERSHIP OF PRINCIPAL HOLDERS AND MANAGEMENT

Who are the largest holders of Invacare's  outstanding common shares and what is
their total voting power?

     The following  table shows, as of February 23, 2007, the share ownership of
each  person or group  known by  Invacare  to  beneficially  own more than 5% of
either class of common shares of Invacare:


                                                                                  Class B
                                                       Common Shares            Common Shares
                                                    Beneficially owned       Beneficially owned*
                                                                                                        Percentage of
                                                  Number                     Number                  total voting power
Name and business address                           of                         of                       beneficially
of beneficial owner                               Shares      Percentage     shares     Percentage          owned
------------------------                          ------      ----------     ------     ----------          -----
                                                                                              
A. Malachi Mixon, III                           2,493,158          7.7%     703,912       63.3%             21.9%
One Invacare Way,
Elyria, Ohio 44035 (1)

Joseph B. Richey, II                              841,141          2.7%     376,262       33.9%             10.9%
One Invacare Way,
Elyria, Ohio 44035 (2)

Ariel Capital Management, LLC                   8,142,169         26.4%        -            -               19.4%
200 E. Randolph Dr., Suite 2900,
Chicago, IL 60601 (3)(4)

NFJ Investment Group LP                         1,807,450          5.9%        -            -                4.3%
2100 Ross Avenue, Suite 1840,
Dallas, TX 75201 (3)(5)

Lord, Abbett & Co. LLC                          1,706,671          5.5%        -            -                4.1%
90 Hudson Street,
Jersey City, NJ 07302 (3)(6)

Wellington Management Company, LLP              1,602,260          5.2%        -            -                3.8%
75 State Street,
Boston, MA 02109 (3)(7)

*    All holders of Class B common  shares are entitled to convert any or all of
     their  Class  B  common   shares  to  common  shares  at  any  time,  on  a
     share-for-share  basis. In addition,  Invacare may not issue any additional
     Class B common  shares  unless the  issuance  is in  connection  with share
     dividends on, or share splits of, Class B common shares.

(1)  Includes  1,474,050 common shares that may be acquired upon the exercise of
     stock options during the 60 days following  February 23, 2007. For purposes
     of calculating  the percentage of  outstanding  common shares  beneficially
     owned by Mr. Mixon and his percentage of total shares  beneficially  owned,
     the common  shares which he had the right to acquire  during that period by
     exercise of stock options are considered to be  outstanding.  The number of
     shares shown as  beneficially  owned by Mr. Mixon also  includes (i) 18,482
     common  shares owned by the trustee for Invacare  Retirement  Savings Plan,
     (ii) 279,283  common shares owned of record by Mr.  Mixon's  spouse,  (iii)
     24,576  common  shares  owned by the  trustee for a 1997  grantor  retained
     annuity trust created by Mr. Mixon,  (iv) 24,577 common shares owned by the
     trustee for a 1997 grantor  retained  annuity trust created by Mr.  Mixon's
     spouse,  (v) 39,866  common  shares owned by the trustee for a 2003 grantor
     retained  annuity trust created by Mr. Mixon, and (vi) 39,866 common shares
     owned by the trustee for a 2003 grantor  retained  annuity trust created by
     Mr. Mixon's spouse. Mr. Mixon disclaims  beneficial ownership of the shares

                                       9

     held by his spouse and the grantor  retained  annuity trusts created by the
     reporting person's spouse.

(2)  Includes 182,500 common shares,  which may be acquired upon the exercise of
     stock options during the 60 days following  February 23, 2007. For purposes
     of calculating  the percentage of  outstanding  common shares  beneficially
     owned by Mr. Richey and his percentage of total shares  beneficially owned,
     the common  shares which he had the right to acquire  during that period by
     exercise of stock options are deemed to be outstanding.

(3)  The number of common shares beneficially owned is based upon a Schedule 13G
     filed by the holder with the SEC to reflect share  ownership as of December
     31, 2006.

(4)  The Schedule 13G was filed by Ariel Capital Management, LLC, which has sole
     voting power with respect to 6,297,272 of the 8,142,169 common shares held,
     and sole  dispositive  power with  respect to  8,141,299  of the  8,142,169
     common shares held.

(5)  The  Schedule  13G was filed by NFJ  Investment  Group  LP,  which has sole
     voting power and sole  dispositive  power with respect to all  1,807,450 of
     the common shares held.

(6)  The Schedule 13G was filed by Lord Abbett & Co. LLC,  which has sole voting
     power with respect to 1,599,971 of the 1,706,671  common  shares held,  and
     sole  dispositive  power with respect to all 1,706,671 of the common shares
     held.

(7)  The Schedule 13G was filed by Wellington Management Company, LLP, which has
     sole voting  power and sole  dispositive  power with respect to none of the
     1,602,260 common shares held.

How many common  shares do each of Invacare's  directors and executive  officers
hold and what is their level of total voting power?

     The  following  table  sets  forth,  as of  February  23,  2007,  the share
ownership  of all  directors,  our Chief  Executive  Officer  and our four other
highest paid  executive  officers and all directors and executive  officers as a
group:


                                                  Common Shares           Class B Common Shares
                                               beneficially  owned         beneficially owned**
                                                                                                      Percentage of
                                                                                                    total voting power
                                              Number                     Number                        beneficially
 Name of beneficial owner                   of shares     Percentage    of shares    Percentage           owned
 ------------------------                   ---------     ----------    ---------    ----------           -----
                                                                                            
 Gerald B. Blouch (3).......................  774,043        2.5%           -            -                 1.8%
 James C. Boland (3)........................   56,072          *            -            -                  *
 Michael F. Delaney (3).....................   25,105          *            -            -                  *
 C. Martin Harris, M.D. (3).................   23,925          *            -            -                  *
 Bernadine P.  Healy, M.D. (3)..............   47,320          *            -            -                  *
 John R. Kasich (3).........................   36,419          *            -            -                  *
 A. Malachi Mixon, III (1)..................2,493,158        7.7%         703,912      63.3%              21.9%
 Dan T. Moore, III (3)......................  115,696          *            -            -                  *
 Joseph B. Richey, II (2)...................  841,141        2.7%         376,262      33.9%              10.9%
 Louis F.J. Slangen (3).....................  205,394          *            -            -                  *
 Gregory C. Thompson (3)....................  187,661          *            -            -                  *
 William M. Weber (3).......................  123,278          *            -            -                  *
 All executive officers and Directors as
 a group (14 persons) (3)...................5,009,262       14.8%       1,080,174      97.2%              35.2%



10

*    Less than 1%.
**   All holders of Class B common  shares are entitled to convert any or all of
     their  Class  B  common   shares  to  common  shares  at  any  time,  on  a
     share-for-share  basis. In addition,  Invacare may not issue any additional
     Class B common  shares  unless the  issuance  is in  connection  with share
     dividends on, or share splits of, Class B common shares.

(1)  See Footnote 1 to the preceding table.

(2)  See Footnote 2 to the preceding table.

(3)  The common shares  beneficially owned by Invacare's  executive officers and
     directors as a group include an aggregate of 2,879,668  common shares which
     may be  acquired  upon the  exercise  of stock  options  during the 60 days
     following  February 23, 2007. For purposes of calculating the percentage of
     outstanding  common  shares   beneficially  owned  by  each  of  Invacare's
     executive  officers and  directors,  and all of them as a group,  and their
     percentage of total shares beneficially owned, common shares which they had
     the  right to  acquire  by  exercise  of stock  options  within  60 days of
     February 23, 2007, are considered to be  outstanding.  The number of common
     shares that may be acquired by the  exercise of such stock  options for the
     noted individuals is as follows:  Mr. Blouch,  625,900 shares;  Mr. Boland,
     53,064 shares; Mr. Delaney,  14,105 shares; Dr. Harris,  23,925 shares; Dr.
     Healy, 36,437 shares; Mr. Kasich,  36,419 shares; Mr. Moore, 29,953 shares;
     Mr. Slangen,  173,000 shares; Mr. Thompson,  159,100 shares; and Mr. Weber,
     18,365 shares.

Section 16(a) Beneficial Ownership Compliance

     The rules of the SEC  require  us to  disclose  late  filings of reports of
stock ownership,  and changes in stock ownership, by our directors and executive
officers. To the best of Invacare's knowledge, all of the filings were made on a
timely basis in 2006.

                              CORPORATE GOVERNANCE

How many times did the Board meet in 2006?

     The Board of  Directors  held five  meetings  during the fiscal  year ended
December 31, 2006.  Each director  attended at least 75% of the aggregate of (1)
the total number of meetings of the Board of Directors held during the period he
or she  served as a  director  and (2) the  total  number  of  meetings  held by
committees of the Board on which he or she served. Board members are expected to
attend  Invacare's  annual meeting of shareholders,  and each director  attended
last year's annual shareholder  meeting.  The  non-management  directors meet in
executive  sessions  after  the  end of each of the  regularly  scheduled  Board
meetings.  The chairpersons of the four standing  committees of the Board rotate
presiding over such sessions.

What codes of ethics apply to directors, officers and employees?

     We have  adopted a Code of Business  Conduct and Ethics that applies to all
directors,  officers and  employees.  We also have adopted a separate  Financial
Code of Ethics  that  applies  to our Chief  Executive  Officer  (our  principal
executive  officer) and our Chief  Financial  Officer (our  principal  financial
officer  and  principal  accounting  officer).  You can find  both  codes on our
website at www.invacare.com  by clicking on the link for Investor Relations.  We
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,  on our website.  You also can obtain a printed
copy of these documents,  free of charge, by writing to:  Shareholder  Relations
Department,  Invacare  Corporation,  One Invacare Way, P.O. Box 4028, Elyria, OH
44036-2125.

Has the Board adopted corporate governance guidelines?

     The Board has adopted Corporate Governance Guidelines. This document can be
found on our website at  www.invacare.com  by clicking on the link for  Investor
Relations.  You also can obtain a printed copy of this document, free of charge,

                                       11

by writing to:  Shareholder  Relations  Department,  Invacare  Corporation,  One
Invacare Way, P.O. Box 4028, Elyria, OH 44036-2125.

Who are the current members of the different Board committees?


                                                          Compensation,
                                   Audit            Management Development and          Nominating     Investment
           Director              Committee        Corporate Governance Committee        Committee       Committee
------------------------------  ----------        ------------------------------        ----------     ----------
                                                                                               
Gerald B. Blouch
James C. Boland                      *                          **
Michael F. Delaney                                                                                          *
C. Martin Harris, M.D.                                                                                      *
Bernadine P. Healy, M.D.                                        *                                           **
General James L. Jones                                                                      *               *
John R. Kasich                                                                              **              *
A. Malachi Mixon, III
Dan T. Moore, III                    *                                                      *
Joseph B. Richey, II
William M. Weber                     **                         *                           *

----------
     *    Member
     **   Chairperson

What are the principal functions of the Board committees?

     The Board has an Audit Committee;  a Compensation,  Management  Development
and Corporate Governance Committee;  a Nominating  Committee;  and an Investment
Committee.

     Audit  Committee.  The Audit Committee  assists the Board in monitoring (i)
Invacare's compliance with legal and regulatory requirements, (ii) the integrity
of Invacare's financial statements, and (iii) the independence,  performance and
qualifications  of Invacare's  internal and independent  auditors.  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 link for Investor  Relations.
You also can obtain a printed copy of this document,  free of charge, by writing
to: Shareholder  Relations Department,  Invacare Corporation,  One Invacare Way,
P.O. Box 4028, Elyria, OH 44036-2125. The Audit Committee met eight times during
2006.

     Our 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 each of James C. Boland and William
M.  Weber  qualify  as an "audit  committee  financial  expert"  as that term is
defined in Item 401(h) of Regulation S-K. As audit committee  financial experts,
each of Messrs.  Boland and Weber satisfy the New York Stock Exchange accounting
and financial management expertise requirements.

     Compensation,  Management  Development and Corporate Governance  Committee.
The  Compensation,  Management  Development and Corporate  Governance  Committee
assists the Board in developing  and  implementing  (i)  executive  compensation
programs that are fair and equitable and that are effective in the  recruitment,
retention  and  motivation of executive  talent  required to  successfully  meet
Invacare's strategic  objectives,  (ii) a management  succession plan that meets
Invacare's present and future needs, and (iii) Invacare's  corporate  governance
policies and guidelines.  See  "Compensation  Discussion and Analysis" below for
additional information on the committee and its activities.  Each of the current
members of the  Compensation,  Management  Development and Corporate  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 Compensation, Management Development and
Corporate  Governance  Committee,  which is  available  at  www.invacare.com  by
clicking on the link for Investor Relations.  You also can obtain a printed copy
of  this  document,  free  of  charge,  by  writing  to:  Shareholder  Relations

                                       12

Department,  Invacare  Corporation,  One Invacare Way, P.O. Box 4028, Elyria, OH
44036-2125. The Committee met four times during 2006.

     Nominating  Committee.  The  Nominating  Committee  assists  the  Board  in
identifying and recommending  individuals qualified to become directors and will
consider all qualified nominees recommended by shareholders. Each of the current
members of the Nominating 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
Committee,  which is available at  www.invacare.com  by clicking on the link for
Investor Relations. You also can obtain a printed copy of this document, free of
charge, by writing to: Shareholder Relations  Department,  Invacare Corporation,
One Invacare Way, P.O. Box 4028, Elyria, OH 44036-2125. The Nominating Committee
met one time during 2006.

     Investment  Committee.  The  Investment  Committee  assists  the  Board  in
monitoring  the  investments of the Invacare  Retirement  Savings Plan and other
plans designated by the Board or the Investment  Committee.  Each of the current
members of the Investment 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  Investment
Committee,  which is available at  www.invacare.com  by clicking on the link for
Investor Relations. You also can obtain a printed copy of this document, free of
charge, by writing to: Shareholder Relations  Department,  Invacare Corporation,
One Invacare Way, P.O. Box 4028, Elyria, OH 44036-2125. The Investment Committee
met one time during 2006.

How does the Board determine whether non-employee directors are independent?

     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  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 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 Invacare or its affiliates;
     (ii) has not had an  immediate  family  member  who has  been  employed  by
          Invacare or its affiliates as an executive officer;
     (iii)has not received,  and has not had an immediate family  member who has
          received,  more than  $100,000  per year in direct  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);
     (iv) has not been  affiliated  with or  employed  by a  present  or  former
          internal or external auditor of Invacare;
     (v)  has not had an immediate family member who has been affiliated with or
          employed in a professional capacity (partner, principal or manager) by
          a former internal or external auditor of Invacare;
     (vi) has not been employed,  and has not had 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
     (vii)has not been an executive  officer or an employee of another  company,
          and has not had 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 the most recent  fiscal year,  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  director  will  be  considered
independent  if he or she does not have any of the  relationships  described  in
clauses (i) - (vii) above, and:

                                       13

     (i)  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
     (ii) does not  serve,  and does not have an  immediate  family  member  who
          serves, as an officer, director or trustee of a foundation (other than
          Invacare's 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 director has a  relationship  of the type  described in
clauses (i) or (ii) in the immediately preceding paragraph that falls outside of
the "safe harbor"  thresholds  set forth in such clauses (i) and (ii), 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.  Invacare will
explain  in its next  proxy  statement  the  basis  for any  Board of  Directors
determination  that a relationship  is immaterial  despite the fact that it does
not meet the categorical standards of immateriality set forth in clauses (i) and
(ii) in the immediately preceding paragraph.

     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 affiliates.  Based on this review, the Board affirmatively  determined
that each of Messrs.  Delaney,  Boland, Weber, Kasich and Moore, Dr. Harris, Dr.
Healy and General  Jones is  independent  and do not have any direct or indirect
material  relationship with Invacare  pursuant to the categorical  standards set
forth in Invacare's Corporate Governance Guidelines.

How are proposed  director  nominees  identified,  evaluated and recommended for
nomination?

     The Nominating Committee will seek candidates for an open director position
by soliciting  suggestions  from Committee  members,  the Chairman of the Board,
incumbent directors,  senior management or others. The Committee also may retain
a third-party  executive  search firm to identify  candidates from time to time.
Additionally,  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 and  shareholders.  The Committee will
accept shareholder recommendations regarding potential candidates for the Board,
provided that shareholders send their  recommendations to the Chairperson of the
Committee,  c/o  Executive  Officers,  Invacare  Corporation,  One Invacare Way,
Elyria, Ohio 44036, with the following information:

     o    The name and contact information for the candidate;

     o    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;

     o    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

                                       14

     o    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 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  Committee's evaluation criteria set forth
below, as well as compliance  with all other legal and regulatory  requirements.
The  Nominating  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
Committee,  after  consultation  with the  Chairman  of the Board,  will  decide
whether additional consideration of the candidate is warranted.

     If additional  consideration  is warranted,  the  Nominating  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 also may ask
the candidate to meet with senior  management.  The Committee then evaluates the
candidate  against the standards and  qualifications  set out in the  Nominating
Committee's charter. Additionally, the Nominating Committee shall 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:

     o    The director's value to the Board; and

     o    Whether the director's re-election would be consistent with Invacare's
          governance guidelines.

     After completing the Nominating Committee's evaluation of new candidates or
existing  directors  whose  term is  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  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 Committee and the entire Board of Directors.

How can shareholders communicate with the Board?

     Shareholders may communicate their concerns directly to the entire Board or
specifically to non-management  directors of the Board. Such  communications may
be 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 44036. 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
Audit Committee, respectively, on a quarterly basis.

Certain Relationships and Related Transactions

     The  Company has  adopted a written  policy for the review of  transactions
with  related  persons.  The  policy  generally  requires  review,  approval  or
ratification of transactions  involving amounts exceeding  $120,000 in which the
Company is a participant  and in which a director,  director-nominee,  executive
officer,  or a significant  shareholder of the Company,  or an immediate  family
member  of any of the  foregoing  persons,  has a direct  or  indirect  material
interest.  These  transactions  must be reported for review by the Compensation,
Management Development and Corporate Governance Committee. Following review, the
Compensation,   Management   Development  and  Corporate   Governance  Committee
determines to approve or ratify these transactions,  taking into account,  among
other factors it deems appropriate,  whether they are on terms no less favorable
to the Company  than those  available  with other  unaffiliated  parties and the
extent of related  person's  interest in the  transaction.  The  Chairman of the

                                       15

Compensation,  Management Development and Corporate Governance Committee has the
authority  to approve  or ratify  any  related  party  transaction  in which the
aggregate  amount  involved is expected to be less than  $1,000,000.  The policy
provides for standing  pre-approval of certain related party transactions,  even
if  the  amounts  involved  exceed  $120,000,   including  certain  transactions
involving: compensation paid to executive officers and directors of the Company;
other companies or charitable  organizations  where the amounts  involved do not
exceed $1,000,000 or 2% of the organization's total annual revenues or receipts;
proportional  benefits  to all  shareholders;  rates or  charges  determined  by
competitive  bids;  services as a common or contract  carrier or public utility;
and banking-related services.

     During 2006,  Invacare purchased travel services from a third party private
aircraft charter company.  One of the aircraft  available for use by the charter
company is owned by an entity owned by Mr. Mixon and Mr.  Richey.  Invacare paid
approximately  $1,013,000 to the charter company in 2006 for use of the aircraft
owned by Mr. Mixon and Mr. Richey.  Invacare believes that the transactions were
on terms no less  favorable  than those  Invacare  would  expect to obtain  from
unrelated parties.

     Since  early  1995,   Invacare  has  made   investments  in  and  loans  to
NeuroControl  Corporation  ("NeuroControl"),   a  North  Ridgeville,  Ohio-based
privately-held  company  that  develops and markets  electromedical  stimulation
systems  for  stroke  patients.   During  2006,   Invacare  loaned  NeuroControl
$1,600,000  to help  support  its  efforts to obtain FDA  approval to market its
stimulation  systems in the United States. As of December 31, 2006, Invacare had
no net exposure related to its investment in and advances to NeuroControl  after
consideration  of  cumulative   reserves  and  amounts   written-off,   totaling
approximately $26 million.  A substantial  portion of Invacare's  investment and
advances  was made  pursuant to a secured  credit  facility.  Mr.  Richey is the
Chairman of the Board and Chief Executive Officer of NeuroControl and Mr. Blouch
serves as a Director of  NeuroControl.  Each of Dr.  Bernadine Healy and Messrs.
Evans,  Moore, Weber (through his spouse),  Mixon and Richey own minority equity
interests in NeuroControl Corporation,  having invested the following amounts in
NeuroControl in 1997 or earlier: $50,000, $50,000, $100,000,  $100,000, $245,000
and $7,513,  respectively.  In  addition,  (i) a private  investment  fund,  the
general partner of which is owned and controlled by Messrs. Mixon and Weber, has
invested $350,000 in NeuroControl,  (ii) a different private investment fund, in
which Mr. Mixon is one of the three managing members of the general partner, has
invested  an  aggregate  of $750,000 in  NeuroControl,  and (iii) The  Cleveland
Clinic,  Dr. Martin Harris'  employer,  has invested an aggregate of $750,001 in
NeuroControl.  Collectively,  the  aforementioned  Invacare  directors and other
related  parties own an aggregate  of  approximately  9.7% of the  fully-diluted
equity  ownership of  NeuroControl  and  Invacare  owns an  additional  30.1% of
NeuroControl's  equity.  Invacare formed a committee in 2004, comprised of three
disinterested  directors,  to evaluate the  appropriateness  and/or terms of any
additional future advances or other  investments in NeuroControl.  The committee
assessed the status of  NeuroControl's  research and  authorized  an  additional
investment  by the  Company  during  2006.  For  financial  reporting  purposes,
Invacare  started to  consolidate  its  investment in  NeuroControl  for periods
beginning  with the quarter ended March 31, 2005. In the fourth quarter of 2006,
the  Company's  board of  directors  made a decision  to no longer fund the cash
needs of NeuroControl, to commence a liquidation process and cease operations as
it was decided that the additional  investment  necessary to  commercialize  the
business was not in the best interest of the company. Therefore, funding of this
investment ceased on December 31, 2006.

     The  relationships  described  above have been  reviewed  and  ratified  in
accordance  with the Company's  policy for review of  transactions  with related
persons.


                       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.

                                       16

Report of the Audit Committee

     The Audit  Committee  assists the Board of Directors in its  oversight  and
monitoring of:

     o    the integrity of the Company's financial statements;
     o    the  independence,  performance  and  qualifications  of the Company's
          internal and independent auditors; and
     o    the Company's compliance with legal and regulatory requirements.

     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 link for Investor Relations.

     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.  Ernst & Young LLP, the Company's  independent  registered
public  accounting  firm for  2006,  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 management's  assessment of the Company's
internal control over financial reporting as of December 31, 2006, and expressed
an opinion  with  respect  to the  Company's  internal  control  over  financial
reporting as of December 31, 2006.

     In December 2002, management established an internal audit function for the
Company.  The Company  engaged a third party to conduct  internal audit services
and report its  analyses,  findings  and  recommendations  directly to the Audit
Committee.  During 2006, the Audit Committee met with this third party 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 its  internal  auditors  relative  to the  Company's  financial  reporting.
Management  represented  to the Audit  Committee  that the  Company's  financial
statements  were prepared in accordance  with  accounting  principles  generally
accepted in the United States,  and the Audit  Committee  reviewed and discussed
the  audited  financial  statements  with  management  and  Ernst &  Young  LLP,
including  a  discussion  of the  quality,  not just the  acceptability,  of the
accounting principles,  the reasonableness of specific judgments and the clarity
of disclosures in the financial  statements.  The Audit Committee also discussed
with Ernst & Young LLP such other  matters as are required to be discussed  with
the Audit  Committee by Statement  on Auditing  Standards  No. 61, as amended by
Statement on Auditing Standards No. 90, (Communication with Audit Committees).

     In addition,  Ernst & Young LLP provided to the Audit Committee the written
disclosures and letter  required by Independence  Standards Board Standard No. 1
(Independence   Discussions  With  Audit   Committees),   and  by  all  relevant
professional and regulatory  standards,  related to the auditors'  independence.
The Audit Committee discussed with Ernst & Young LLP their independence from the
Company  and its  management  and  considered  the  compatibility  of  non-audit
services with the auditors' independence.

     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 December 31, 2006 for filing with the Securities
and Exchange Commission.

     The  Audit  Committee  has  appointed  Ernst & Young  LLP as the  Company's
independent  auditors  for its 2007  fiscal  year  and the  Company  is  seeking
ratification for such appointment at the 2007 Annual Meeting of Shareholders.

                                       17

                                 AUDIT COMMITTEE

                           William M. Weber, Chairman
                                 James C. Boland
                                Dan T. Moore, III
Independent Auditors

     The Audit  Committee and the Board of Directors have selected Ernst & Young
LLP  to  continue  as  our  independent  auditors  and to  audit  the  financial
statements of Invacare for the fiscal year ending  December 31, 2007.  The Audit
Committee is asking you to ratify this appointment.

         Fees for services rendered by Ernst & Young LLP were:

                                                          2006             2005
                                                          ----             ----
      Audit Fees                                    $3,607,000       $4,166,000
      Audit-Related Fees                                25,000           44,000
      Tax Fees
           Tax Compliance Services                     518,000          611,000
           Tax Advisory Services                       522,000          753,000
                                                     ---------       ----------
                                                     1,040,000        1,364,000
      All Other Fees                                         -                -
                                                     ---------       ----------
      Total                                         $4,672,000       $5,574,000
                                                    ==========       ==========

     Audit Fees. Fees for audit services  include fees associated with the audit
of our  annual  financial  statements  and  review  of our  quarterly  financial
statements,    including    statutory    audits   required    domestically   and
internationally,  and the auditors'  attestation report on internal control over
financial  reporting as 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.  Audit-related  services principally include accounting
consultations,  audits in connection with proposed or completed acquisitions and
advisory assistance.

     Tax Fees. Fees for tax services include tax compliance,  tax advice and tax
planning.

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 our
independent  auditors.  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
auditor is engaged to perform  it.  The Audit  Committee  has  delegated  to the
Chairperson  of the Audit  Committee  authority  to  approve  certain  permitted
services,  provided that the Chairperson reports any such decisions to the Audit
Committee at its next scheduled meeting.

                                       18



                             EXECUTIVE COMPENSATION

                      Compensation Discussion and Analysis

Introduction

     The Compensation, Management Development and Corporate Governance Committee
of the  Board of  Directors  (the  "Compensation  Committee")  operates  under a
written  charter  adopted by the Board of Directors and is  responsible  for the
approval and  administration  of the Company's  existing and proposed  executive
compensation  plans.  This  includes  determining  the contents of the Company's
executive compensation plans, authorizing the awards to be made pursuant to such
plans and reviewing and approving  annually all compensation  decisions relating
to the Company's  officers,  including the Chairman and Chief Executive  Officer
and the other executive  officers named in the Summary  Compensation  Table (the
"Named Executive Officers").

     The members of the  Compensation  Committee are James C. Boland,  Chairman,
Bernadine  P. Healy and  William M. Weber.  Each of the  current  members of the
Compensation  Committee  meets the definitions of (i)  "independent"  within the
meaning of the New York  Stock  Exchange  listing  standards  and the  Company's
Corporate  Governance  Guidelines,  (ii) a  "non-employee  director"  within the
meaning of Rule 16b-3 promulgated under the Securities  Exchange Act of 1934, as
amended, and (iii) an "outside director" within the meaning of Section 162(m) of
the Internal Revenue Code of 1986, as amended.

         Charter

     The Board of Directors of the Company has adopted a charter which describes
the responsibilities, functions and authority of the Compensation Committee. The
full  text  of  the  charter  is   available   on  the   Company's   website  at
www.invacare.com  by clicking on the link for "Investor  Relations."  There were
three  meetings and one telephone  conference of the  Compensation  Committee in
2006.

         Compensation Consultant

     The Company's  Human  Resources  Department and other members of management
assist  the  Compensation  Committee  in its  administration  of  the  Company's
executive  compensation  program.  As  part of this  assistance,  the  Company's
management  engages  Towers  Perrin  as  an  outside  independent   compensation
consultant to advise management and the Compensation  Committee on the Company's
compensation philosophy, focusing on the three primary elements of the Company's
executive compensation program: annual base salary, annual cash bonus awards and
long-term  equity  incentive  awards.  Towers  Perrin  is a global  professional
services firm that provides human resources consulting services to a majority of
the Fortune 1000 U.S. companies.

     The independent consultant's primary role is to analyze the competitiveness
of, and provide  recommendations  on, the  structure  and amounts of annual base
salary,  annual cash bonus awards and long-term  equity  incentive  awards to be
paid to the Company's  executives.  In order to gauge the competitiveness of the
Company's executive compensation levels, the independent consultant provides the
Compensation  Committee  with market data regarding  annual base salary,  annual
cash bonus  awards and  long-term  equity  incentive  awards paid by  competitor
companies.  The Compensation  Committee and the independent  consultant  believe
that  the  Company's  most  direct  competitors  for  executive  talent  are not
necessarily  the  companies  included in the peer group  established  to compare
shareholder  returns.   Accordingly,   in  identifying  the  group  of  surveyed
employers,  the independent consultant assembles market data on companies having
projected revenues similar to that of the Company,  with particular  emphasis on
durable goods manufacturers, on larger employers within the health care industry
and on larger  employers which may be significant  competitors  with the Company
for  executive  talent.  The  Compensation   Committee  considers   compensation
information  from two groups of competitors in assessing and determining the pay
of  executive  officers.  The  Company's  "primary  competitor  group"  includes
healthcare  equipment and supply  companies with annual revenues ranging from $1
billion to $3 billion. The "secondary  competitor group" includes companies from
across various  industries having annual revenue similar to that of the Company.
The Compensation  Committee relies on the independent consultant to identify the
individual companies which make up these competitor groups.

                                       19

     The assembled  data is then reviewed by the CEO, the Senior Vice  President
of Human Resources and the independent consulting firm and, with respect to each
of  the  top   executive   officer   positions,   adjusted   for  the  scope  of
responsibilities  of  the  position  within  the  Company  as  compared  to  the
responsibilities  of positions  within the companies  included in the competitor
groups.  The  Compensation  Committee  then compares the Company's  compensation
practices with those of the other  companies  included in the competitor  groups
and takes the results into account when establishing compensation guidelines for
executives.

     The independent  consultant has been engaged by the Company in the capacity
described above for the last three fiscal years and received a fee of $41,350 as
compensation  for its  services in 2006.  A  representative  of the  independent
consultant  attended two of the Compensation  Committee meetings in 2006. Towers
Perrin  does not provide the  Company  any other  consulting  or other  services
outside  of  those  associated  with  advising  the  Company  on  its  executive
compensation programs.

         Role of Executives in Establishing Compensation

     The Company's CEO assesses the  performance of each of the Company's  other
executive officers and provides recommendations to the Compensation Committee as
to the structure and amounts of salary,  cash bonus awards and equity  incentive
awards  to  be  paid  to  such  executive  officers.   The  CEO  formulates  his
recommendations  with  the  assistance  of the  independent  consultant  and the
Company's  Senior Vice President of Human  Resources.  The CEO also provides the
Compensation Committee input regarding the performance  requirements  associated
with the Company's annual cash bonuses and long-term compensation awards.

     The CEO and the Senior Vice  President of Human  Resources both attend each
meeting of the Compensation  Committee for the purpose of providing insight into
the Company's  performance,  the performance of individual  executives and their
contribution to the Company's  performance and to make recommendations as to the
structure and implementation of elements of executive compensation.  The CEO and
the Senior Vice  President  of Human  Resources  each  excuses  himself from any
discussions of his individual  compensation by the Compensation  Committee.  The
Compensation  Committee believes that the input of these executives provides the
Compensation  Committee with information necessary to make informed decisions on
executive  compensation  that are consistent with the  Compensation  Committee's
overall philosophy.

General Compensation Philosophy

     The  Compensation   Committee  has  determined  that  the  Company,   as  a
performance-driven   business,   should  reward  outstanding   performance  with
appropriate compensation. The Compensation Committee's strategy for carrying out
this philosophy is to:

     o    link executive  compensation  with the Company's  annual and long-term
          financial performance, with a particular focus on earnings per share;
     o    understand external market factors which might affect such performance
          but be outside the control of executives;
     o    align the long-term interests of executives with those of shareholders
          through  equity-based   compensation   elements  and  stock  ownership
          guidelines; and
     o    recognize the  importance of maintaining  compensation  at competitive
          levels in order to attract and retain talented executives.

In determining appropriate compensation awards for the Company's executives, the
Compensation Committee generally does not consider the amount of compensation or
awards earned or achieved in prior years.  Instead,  the Compensation  Committee
focuses on the  current  performance  and  achievements  of the  Company and the
executive  as  well  as  the  executive's   present  and  potential  for  future
contribution to the Company's success.

     The  Company's  executive  compensation  program  consists of three primary
components:  base salary, an annual cash bonus and long-term compensation awards
in the form of stock awards.  In general,  base salaries are  established  at or
near market median levels for comparable positions. Cash bonuses are designed to
provide executives with cash compensation levels (salary plus bonus) that are at
or near the 75th  percentile of individuals in similar jobs if the Company meets

                                       20

demanding  annual  financial  performance   objectives.   These  objectives  are
established  in advance  and  reflective  of the  opportunities  and  challenges
present in the  Company's  industry.  In  addition,  long-term  compensation  is
awarded in the form of stock options,  restricted stock grants or in other forms
deemed  appropriate  by the  Compensation  Committee  in  order to  provide  key
executives with competitive  financial benefits,  to the extent that shareholder
value is enhanced.  These awards  normally  target the median value of long-term
incentives   received  by   executives   in  similar   positions  at  competitor
organizations.

     The Company also  provides its  executives  with  certain  other  benefits,
including the opportunity to participate in a 401(k) retirement  savings plan, a
non-qualified deferred compensation plan and a supplemental executive retirement
plan. Certain  compensatory  insurance benefits and other perquisites  described
below and in the Summary  Compensation Table also are available to the Company's
executives. Each Named Executive Officer also has entered into an agreement with
the Company that  provides for certain  benefits upon a change of control of the
Company.  The  Compensation  Committee  believes  these  agreements  help retain
executives  and provide for  management  continuity in the event of an actual or
threatened change-in-control. They also help ensure executive's interests 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.  The
Company  believes  that  these  benefits  are an  important  part of an  overall
compensation package that helps to attract and retain talented executives.

     The Compensation Committee believes these various elements of the executive
compensation program further the Company's business objectives and the interests
of  its  shareholders  by  attracting  and  retaining  the  talented   executive
leadership  necessary for the growth and success of the  Company's  business and
motivating  its executives to exert the maximum  possible  effort to further the
interests of shareholders.

Elements of Compensation

         Annual Base Salary

     The  Company   establishes   salary  levels  which  recognize  the  skills,
competencies,  experience and individual  performance an executive brings to his
or her position.  As a result,  changes in salary focus  primarily on changes in
the executive's  responsibilities  and an assessment of their annual performance
against pre-established objectives.  Generally, the Compensation Committee seeks
to establish an annual base salary level for each  executive  that  approximates
the  50th  percentile  of  levels  established  for  executives  having  similar
responsibilities  by  employers  surveyed  by the  independent  consultant.  The
Compensation  Committee  believes that  establishing base salaries at this level
helps the Company attract and retain  talented  executives and, when paired with
the opportunity to earn annual cash bonuses and long-term  compensation  awards,
appropriately rewards executives based on performance.

     In  establishing  salary levels for each executive  other than the CEO, the
Compensation  Committee,  at its  regular  meeting  early  in the  fiscal  year,
considers  annual survey  information  from the independent  consultant and also
reviews annual  recommendations  from the CEO. The  Compensation  Committee also
takes into account  whether each  executive  met key  financial  and  individual
objectives  established  at the  beginning  of each  year,  and  considers  each
executive's  potential future contributions to the Company.  Important financial
performance  objectives  that are  considered by the  Compensation  Committee in
establishing  base salary  levels  (some of which may not be  applicable  to all
executives) include: net sales, income from operations,  cost controls, earnings
before income tax, earnings per share, return on assets and return on net assets
employed.  Individual  objectives  generally  focus  on  the  performance  of an
executive  within  his or her area of  specific  responsibility.  Operating  and
individual  objectives  vary  for  each  executive  and  typically  change  from
year-to-year. Financial and individual objectives are considered subjectively in
the  aggregate  by  the  Compensation  Committee  and  the  CEO.  They  are  not
specifically  weighted in assessing  performance  and determining any changes to
base salaries.

     The base salary levels  established  for 2006 were based on the  subjective
judgment of the  Compensation  Committee,  taking  into  account the CEO's input
regarding each  executive's  performance and the targeted salary ranges based on
market salary  information  received  from the  independent  consultant.  Of the
Company's  Named  Executive  Officers other than the CEO, the base salary of Mr.
Thompson was at the targeted 50th percentile  range,  while the base salaries of
Messrs.  Blouch,  Richey and Slangen were at 132%, 140% and 125% of the targeted

                                       21

50th percentile range,  respectively.  In establishing the base salary levels of
Messrs.  Blouch,  Richey and Slangen, the Compensation  Committee recognized the
particular talents, unique skills, experience,  length of service to the Company
and depth of industry  knowledge of each of these executives and determined that
base salary levels above the targeted  range would help retain these  executives
during a time of significant industry uncertainty.  On average, the salary level
for these four executives increased 4.5% from the average level in 2005.

     In determining the CEO's base salary for 2006, the  Compensation  Committee
took into account:

     o    survey  results  regarding  the  50th  percentile  salary  of  CEOs at
          comparable employers;
     o    certain financial performance objectives as described above;
     o    consolidation  of key  manufacturing  facilities in the United States,
          Europe and Australia under the CEO's leadership;
     o    acceleration of various initiatives to improve internal  manufacturing
          capabilities;
     o    continued efforts to extend current product lines, complement existing
          businesses,  utilize and enhance its distribution strength, streamline
          operations and expand its geographic presence;
     o    strong   commitment  to  reenergizing   the  Company's   research  and
          development activities which has led to the successful introduction of
          a number of new and/or improved products;
     o    the CEO's role as the leading  industry  spokesperson on behalf of the
          home  medical  equipment  industry,  which  has put the  Company  in a
          position to directly impact  reimbursement  outcomes in a positive way
          and which has been  acknowledged  by certain of our customers by their
          expression  of  appreciation  for our  efforts on behalf of the entire
          industry;
     o    progress made in meeting the Company's long-term strategic  objectives
          set by management and reviewed by the Board of Directors each year;
     o    the CEO's continuing  commitment to geographic  expansion and focus on
          growing the respiratory  business,  as well as his attention to issues
          of management succession; and
     o    the CEO's length of service and leadership.

These  accomplishments  and  consideration  of  potential  future  contributions
resulted  in the  CEO's  base  salary  being  set at 129% of the  targeted  50th
percentile salary. This base salary constituted a 1.8% increase from 2005.

         Annual Cash Bonus

     Consistent with its philosophy,  the Compensation  Committee  provides each
executive an opportunity to earn an annual cash bonus  resulting in total annual
cash  compensation  (salary plus bonus) that falls at or near the market's  75th
percentile of executives in comparable  positions at surveyed employers.  Annual
cash  bonuses  increase  executives'  focus  on  specific  short-term  corporate
financial  goals.  As a result,  cash  bonuses  balance  the  objectives  of the
Company's  other pay  programs,  which focus to a greater  extent on  individual
performance  (salaries),  long-term  financial  results and stock  price  growth
(restricted stock and stock options).  Finally, annual bonuses allow the Company
to manage fixed compensation costs but still provide executives with competitive
cash  compensation.  The terms of the cash bonus  program are  contained  in the
Invacare  Corporation  Executive Incentive Bonus Plan (the "Executive  Incentive
Bonus Plan"),  which was approved by the Company's  shareholders  in 2005 and is
further  described  under the Grants of  Plan-Based  Awards For Fiscal Year 2006
Table.

     The  Compensation  Committee  annually  determines the  appropriate  target
bonuses for each executive  officer (as a percentage of the executive's  salary)
so that total annual cash  compensation for such executive officer will reach or
slightly exceed the market's 75th percentile,  but with the potential to receive
additional  bonus  amounts  if  such  objectives  are  exceeded  (subject  to  a
$5,000,000 limit). In determining the target amounts, the Compensation Committee
takes into account the cash bonus  opportunities  established  by the competitor
groups identified by the independent consultant,  and also may determine that an
executive's  individual  performance  (taking  into  account  the  same  factors
discussed  above with  respect  to base  salary)  and level of  responsibilities
warrant a change in the  bonus  target  percentage  from the  Company's  general

                                       22

targeted amounts.  The Compensation  Committee does not take into account awards
earned under other reward programs in determining annual bonus opportunities and
does not have an established policy on the desired mix between cash and non-cash
compensation.  Target  bonuses for the Named  Executive  Officers  for 2006 were
established as 100% of base salary for Mr. Mixon,  95% of salary for Mr. Blouch,
and 75% of salary for each of Messrs. Richey, Thompson and Slangen.

     Each year, the Compensation  Committee  considers a recommendation from the
CEO regarding the appropriate target for that year's earnings per share at which
target  bonuses  will be  earned.  The  Compensation  Committee  also takes into
account the Company's  forecasted  annual  operating  plan,  which is thoroughly
reviewed  and  discussed  by the  entire  Board of  Directors  at its  strategic
planning  retreat early in the fiscal year.  Targeted  earnings per share before
unusual  items is  generally  set at a level  which the  Compensation  Committee
believes is  challenging  but  achievable,  and when achieved,  supports  paying
executives  annual  cash  compensation  at the  market's  75th  percentile.  The
Compensation  Committee has generally not awarded  bonuses to the executives for
years in which the Company's  earnings per share before unusual or non-recurring
charges did not improve over the prior year. As a result,  the executives earned
bonuses  in only  one  year in the  five  years  from  2002  through  2006.  The
Compensation  Committee  may adjust  this  practice in the future to reflect the
realities  imposed by  external  market  factors  which  continue to affect home
healthcare.  If earnings per share  exceeds the minimum level up to the targeted
level or higher,  annual cash bonuses earned by executives  increase on a linear
basis.

     Pursuant to the Executive Incentive Bonus Plan, the Compensation  Committee
originally  established  a cash bonus plan for 2006  under  which the  Company's
executive  officers  would earn cash  bonuses if the  Company  achieved  various
earnings  per share  targets for 2006.  The  Compensation  Committee  and senior
management believe earnings per share represents important bottom-line financial
results  that  investors  use to  evaluate  the  Company's  stock  price  value.
Individual performance or Compensation Committee discretion has not historically
played  a role  in  determining  the  level  of  annual  cash  bonuses  paid  to
executives.  For 2006,  the  following  levels of earnings per share (EPS) would
result in the following bonus payments:

     o    Below Threshold   ->     EPS < $1.90   ->    No bonuses paid

     o    Threshold         ->     EPS = $1.90   ->    50% of target bonus paid

     o    Target            ->     EPS = $2.15   ->    100% of target bonus paid

     o    Exceed Target     ->     EPS = $2.40   ->    150% of target bonus paid

If the Company reached an earnings per share level between or above the targets,
the target  bonus was to be  adjusted on a  straight-line  basis up to a maximum
amount of $5,000,000.

     The Company experienced  disappointing  financial results in the first half
of 2006 because of several  external  market  factors,  including  uncertainties
resulting from dramatic changes in government reimbursement policies and pricing
pressures  arising from increased foreign  competition.  Based on these results,
the  Compensation  Committee  determined  it was unlikely the earnings per share
performance targets established at the start of the year would be achieved. As a
result,  executives  would earn no cash bonuses for 2006,  the fifth year in the
past six in  which  the  Company  had  paid no cash  bonuses.  In light of these
circumstances,  the Compensation Committee established a new cash bonus plan for
the  second-half  of 2006.  In doing so, the  Compensation  Committee  sought to
motivate its executives to continue to improve the Company's  financial  results
by establishing challenging,  but realistically  achievable,  earnings per share
goals for the  remainder of the year.  The  "second-half  2006" cash bonus plan,
which is further  described in the Grants of Plan-Based  Awards Table,  provided
each  executive  with a chance to earn a cash bonus equal to 30% to 50% of their
target bonus opportunity under the original 2006 bonus plan. These bonuses could
be received if the Company  achieved  earnings  per share  results  ranging from
$0.90 to $1.08 per share  during the  period of July 15,  2006 to  December  31,
2006. These goals for the  "second-half  2006" bonus equal those of the original
2006 cash bonus plan on an annualized basis.

     Earnings per share for 2006 were below the amounts  targeted under both the
original 2006 cash bonus plan and the second-half 2006 cash bonus plan and, as a
result, no bonuses were paid to Named Executive Officers for 2006, including the
CEO.

                                       23

         Long-Term Compensation Awards

     The third primary element of the Company's executive  compensation  program
is comprised of long-term  compensation awards, which the Compensation Committee
has  historically  delivered in the form of stock options and  restricted  stock
awards. Under the Company's equity incentive plans approved by shareholders, the
Company also may grant awards in the form of other equity and  performance-based
incentives,  as may be deemed appropriate by the Compensation  Committee.  These
awards  generally  have  unlimited  potential  based on the  performance  of the
Company's stock.

     Historically,  the long-term  compensation  awards  consisted  primarily of
stock  options,  with the CEO, the  President and the CFO receiving a relatively
small portion of their  long-term  awards in the form of restricted  stock.  The
Compensation  Committee  believes  the  primary  benefit of stock  options is to
motivate  executives  to  increase  shareholder  value as options  only  produce
rewards to  executives  if the  Company's  stock price  increases.  In addition,
options  help  executives  comply with the  Company's  ownership  guidelines  by
building stock ownership.  While restricted stock awards also align  executives'
interests with those of  shareholders  and increase stock  ownership,  they also
help in attracting and retaining  executive talent.  The latter issue has become
more important to the Compensation Committee as the Company continues to address
fundamental changes in its industry and its effect on the Company's  performance
and stock price.  Accordingly,  the Compensation  Committee changed the basis of
its long-term  compensation awards for 2006. In 2006, one-half of an executive's
total long term incentive value was delivered in the form of stock options, with
the remaining value  delivered in the form of restricted  stock. In this manner,
the Compensation Committee accomplished its twin goals of increasing shareholder
value and retaining key executives.  The Compensation  Committee also recognized
restricted  stock would reduce the  dilution to the  Company's  shareholders  as
compared  with the use of stock  options  and also may  decrease  the  Company's
expense  for  long-term  compensation  awards.  As  part  of  its  charter,  the
Compensation Committee continues to study alternatives to its current allocation
of equity compensation awards in light of these and other factors.

     In 2006,  the  independent  compensation  consultant  determined the median
value of long term  compensation  awards to executives  in similar  positions at
companies in the  competitor  groups.  One-half of this value is converted  into
target stock option grants based on the  Black-Scholes  option  valuation model,
the same one used by the Company to determine its accounting  cost.  Minimum and
maximum  grant  guidelines  are developed  around target grants  according to an
executive's salary grade or level, organizational level, reporting relationships
and  job   responsibilities  to  maintain  internal  equity  in  the  grants  to
participants.  The other half of an executive's  target  long-term  compensation
value is delivered as shares of restricted  stock.  The estimated  value of each
restricted  share  is based  on the  Company's  stock  price  and the  estimated
dividends individuals can receive over the vesting period. Outstanding long-term
compensation  granted  in  prior  years  and  held by an  executive  officer  is
generally not  considered  when the  Compensation  Committee  determines the new
long-term compensation to be granted.  Moreover, the Compensation Committee does
not have any targeted mix between short- and long-term  compensation elements as
well as cash and non-cash reward elements.

     Actual long-term  compensation  awards to each executive in 2006 were based
on the subjective judgment of the Compensation  Committee.  In determining these
awards, the Compensation Committee took into account several factors.  First, it
considered the targeted range of long-term  incentive  compensation based on the
independent  consultant's  assessment of median long-term  incentives awarded to
similarly situated executives in the competitor groups.  Second, it assessed the
executive's performance in 2005 relative to the same goals used to determine the
executive's base salary levels.  Finally,  it considered the  recommendations of
the CEO.  No  particular  weight was  assigned  to any one of these  areas.  The
long-term  compensation granted to each of the Company's  executives,  including
the CEO, in 2006  resulted in a value of long-term  compensation  at or near the
targeted range for each executive.

     Stock  options are  generally  issued under the Invacare  Corporation  2003
Performance  Plan as  non-qualified  options with an exercise price equal to the
Company's  closing  price on the New York Stock  Exchange  on the date of grant.
Stock options become  exercisable in accordance  with a schedule  established by
the  Compensation  Committee upon grant.  Typically  options become  exercisable
ratably  over a four  year  period  (25%  annually)  after  the date of grant to
support executive retention and expire after ten years to reward long-term stock
price  appreciation.  Restricted  stock is  generally  issued  at no cost to the
executive  and  vests  in  accordance   with  a  schedule   established  by  the

                                       24

Compensation  Committee upon grant. Similar to options,  restricted stock awards
typically  vest  ratably  each  year  over  the  four  years.  The  terms of the
restricted  stock  grants  provide  that  the  executive  shall  cover  any  tax
withholding  obligation of the Company upon vesting. The Compensation  Committee
believes  that the  value of  restricted  stock  awards to  executives  would be
diminished  if the  executive  was  required  to pay  cash  to  cover  this  tax
withholding obligation, and, therefore, the terms of the restricted stock awards
generally allow the executive,  subject to certain restrictions,  to surrender a
portion of the vested shares to the Company to cover such  obligation at a value
per share equal to the closing price of the Company's common shares as quoted on
the New York Stock  Exchange on the date of the surrender of shares.  Holders of
restricted  stock are entitled to receive the same  dividends on their  unvested
shares  of stock as are  declared  and paid by the  Company  to  holders  of the
Company's outstanding common shares.

     The Compensation  Committee  generally  schedules its regular meetings from
six to twelve  months in  advance.  The timing of these  meetings  is  dependent
primarily on the availability of individual  Compensation  Committee members and
is generally not  influenced by the Company's  executive  officers.  In adopting
this practice,  the Compensation Committee has sought to establish a regular and
predictable  regimen for the granting of equity  incentive awards that minimizes
the likelihood of outside influence on the grant process. Until 2006, restricted
stock awards to the Company's CEO,  President and CFO were typically  granted at
its March meeting.  Stock options to these  executives and other  employees were
typically  awarded at the Compensation  Committee's  meeting in August. In 2006,
the Compensation Committee granted restricted stock awards to executive officers
in March and August and stock options to executive  officers and other employees
in August. The Compensation Committee's decision in the middle of 2006 to change
the  allocation  of stock  options and  restricted  stock  granted to executives
resulted in a deviation from the  Compensation  Committee's  normal  practice of
granting restricted stock only at its March meeting. The Compensation  Committee
expects to establish a normal  practice of granting  restricted  stock and stock
options  only in August of each year.  The Company  does not attempt to time the
grants  of  options  or  other  stock  incentives  to the  release  of  material
non-public  information.  Moreover,  the Company does not foresee ever  adopting
such a practice.

     In addition to the annual grants described above,  equity-based  grants are
also made occasionally  during the course of the year to new hires or to current
employees in connection with a promotion. The terms of outstanding stock options
or restricted  stock also may be amended as part of a termination  or retirement
package  offered  to  a  departing  employee.  The  Compensation  Committee  has
delegated to the CEO, the President,  the Chief Financial Officer and the Senior
Vice President of Human  Resources the following  authority with respect to such
grants and amendments:  (1) any two of the four  executives may,  subject to the
approval and ratification of the Compensation Committee,  grant stock options to
a key  employee,  other than an  employee  who would  constitute  an  "executive
officer"  under  Section 16 of the  Securities  Exchange Act of 1934, as amended
(the "Exchange Act"), in connection with an offer of employment to such employee
or with a promotion of such  employee,  which  grants shall be made  pursuant to
terms  and  conditions  approved  by the  Compensation  Committee  generally  in
connection  with stock option grants and shall be deemed made as of the official
start date of the  employee's  employment  with the Company at an exercise price
equal to the closing price of the  Company's  common shares as quoted on the New
York Stock  Exchange on such date; and (2) any two of the four  executives  may,
subject to the approval and  ratification of the Compensation  Committee,  amend
any outstanding stock option grants made to an employee,  other than an employee
who would  constitute  an "executive  officer"  under Section 16 of the Exchange
Act, in connection  with a termination  or  retirement  package  offered to such
employee,  which amendments may include  acceleration of vesting or extension of
the employee's  exercise  rights up to the final  termination  date of the stock
option.

     In December 2005, the Compensation  Committee and the Board of Directors of
the Company  approved full  acceleration  of the vesting of all of the Company's
then  outstanding  and unvested  stock options with an exercise  price per share
greater than $30.75,  the closing price of the Company's shares on the effective
date of the action . The Company  accelerated the vesting of these stock options
primarily to partially  offset  reductions in other benefits made by the Company
in 2005 (such as higher  deductible  amounts and lower Company  contributions to
the  Company's  healthcare  plans)  and to provide an  additional  incentive  to
motivate the Company's  employees to reduce  operating  costs.  In addition,  in
connection with the Company's adoption of Financial  Accounting  Standards Board
Statement of Financial  Accounting Standards No. 123 (revised 2004) ("FAS 123R")
on January 1, 2006, the Company would have been required to recognize additional
expense  between 2006 and 2009 with respect to the stock  options if the vesting
of such options had not been accelerated.  The Compensation  Committee's  action

                                       25

involved 1,368,307 of the Company's  outstanding stock options, or approximately
29% of the total options  outstanding.  This included options for 646,100 shares
held by the Named  Executive  Officers.  None of these options were exercised in
2006 as their exercise prices remained greater than Company's stock price during
the year. The vesting of outstanding restricted stock awards was not accelerated
and no other terms,  including  the exercise  prices,  of the stock options that
were accelerated were changed as part of this action by the Company.

         Personal Benefits and Perquisites

     The Company provided its Named Executive  Officers  certain  perquisites in
2006, which the Compensation  Committee believes are commensurate with the types
of benefits and perquisites provided to similarly situated executives within the
competitor groups identified by the independent consultant. The Company believes
these benefits are set at a reasonable  level,  are highly valued by recipients,
have limited cost,  are part of a competitive  reward  program and are useful in
attracting and retaining qualified  executives.  They are not tied to individual
or Company  performance.  These perquisites  include the payment of country club
dues and initiation fees, the payment of premiums on excess liability insurance,
an annual physical exam and health screening,  and the availability of corporate
sporting  event  tickets  for  personal  use,  as  described  under the  Summary
Compensation Table.

     The Company currently leases three corporate suites for use at major league
baseball,  professional  football and  professional  basketball  games.  It also
leases the right to eight courtside seats for professional basketball games. The
right to continue  these leases and annually to renew the courtside  seats is an
asset of the Company and the annual costs of these suites and seats are paid for
by the  Company.  In the event that the Company  determines  not to renew one or
more of the leases or the seat rights,  it has granted a right of first  refusal
to the CEO to assume  its  rights  and  obligations  with  respect to any of the
foregoing.  Should the CEO decide to exercise  his right of first  refusal,  all
subsequent  costs  associated with the use of the suite and/or seat rights would
become the personal obligation of the CEO.

         Elements of Post-Termination Compensation

     The Company  has  established  the  Invacare  Retirement  Savings  Plan,  a
qualified  401(k)  defined   contribution  plan,  to  which  the  Company  makes
contributions on behalf of the each of the Named Executive Officers. The Company
also maintains and pays premiums on behalf of each Named Executive Officer other
than the CEO and Mr. Richey under the Invacare Executive Disability Income Plan,
and  maintains  and pays the  premiums  on behalf  of the CEO  under a  separate
disability  insurance policy.  The Executive  Disability Income Plan supplements
the  coverage  provided  under the  long-term  disability  plan  provided by the
Company to all of its employees,  providing the executive with total  disability
coverage  of up to  70% of the  executive's  annual  salary.  The  Company  also
provides  other  benefits  such  as  medical,  dental  and  life  insurance  and
disability coverage to each Named Executive Officer in a flexible benefits plan,
which  also is  provided  to all other  eligible  U.S.  based  employees  of the
Company.  The Company  offers  these plans to its  executives  in order to offer
benefits  that are  competitive  with welfare  benefit  plans  provided by other
companies with which the Company competes for executive talent.

     The Company  provides  its  executives  with  certain  post-employment  and
severance  arrangements as summarized below and further  described  elsewhere in
this  proxy  statement.   The  Compensation   Committee  believes  the  benefits
summarized  below  are  vital  to  the  attraction  and  retention  of  talented
executives  and,  thus,  to the  long-term  success of the Company.  These plans
provide executives with the opportunity to address long-term  financial planning
with a greater degree of certainty than is available in the case of their annual
compensation  program,  which can be impacted by various subjective factors that
may be  unforeseeable  and  beyond the  executive's  control.  These  plans also
address the Company's interest in continuing to motivate executives in the event
of corporate  instability,  such as a change of control or  unforeseen  industry
changes which affect the performance of the Company.

     The Company  provides its executives with the opportunity to participate in
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 and,  thus,  provides the  executives  with  additional

                                       26

pre-tax  savings  opportunities  for  retirement.   In  addition  to  individual
deferrals, the Company provides a matching contribution and additional quarterly
contribution for participating executives which are similar in percentage to the
Company contributions made to the Invacare Retirement Savings Plan. This plan is
actually two plans operating  effectively as one. Originally  established as the
Invacare  Corporation  401(k) Plus Benefit  Equalization  Plan (the "401(k) Plus
Plan"),  the plan  continues to be  available  currently  to  executives  as the
Invacare  Corporation  Deferred  Compensation Plus Plan (the "DC Plus Plan"). In
order to address the  requirements of Section 409A of the Internal Revenue Code,
effective January 1, 2005, the Company froze the 401(k) Plus Plan and prohibited
further  deferrals and  contributions  to the 401(k) Plus Plan for  compensation
earned  after  December 31, 2004.  All benefits of the  participants  earned and
vested in the 401(k) Plus Plan as of December  31, 2004 remain  preserved  under
the existing  plan  provisions.  In  conjunction  with this change,  the Company
adopted the DC Plus Plan,  effective  January 1, 2005, to provide its executives
with a Section  409A-compliant,  non-qualified  contributory  savings plan going
forward. These plans are referred to in this proxy statement collectively as the
"DC Plus  Plan"  and are  further  described  under the  Non-Qualified  Deferred
Compensation Table.

     The Company also has established a Supplemental  Executive  Retirement Plan
for certain executive  officers to supplement other savings plans offered by the
Company  and  provide  a  specific  level of  replacement  compensation  for the
executive  in  retirement.  In order to comply with Section 409A of the Internal
Revenue Code, the Company froze the original  Supplemental  Executive Retirement
Plan  and  adopted  a new plan  which is  intended  to work in  tandem  with the
original plan and operate  effectively  as one plan.  These  combined  plans are
referred to in this proxy  statement  collectively as the "SERP." The purpose of
these plans is to provide for basic life and income security needs and recognize
career contributions. The normal benefit under the SERP is a single-life annuity
in an  amount  equal  to 50% of a  participant's  final  earnings,  which is the
participant's  annual base salary and target bonus on the April 1st  immediately
preceding or coincident  with the date of the  termination of the  participant's
employment,  multiplied by a service ratio, which is the participant's  years of
service  divided  by 15 years (but not more than one).  This  normal  benefit is
subject  to  certain  reductions,  including  the  annuitized  value of  Company
contributions  on behalf of the participant to the Invacare  Retirement  Savings
Plan and the DC Plus Plan, one-half of the participant's  annual Social Security
benefit, and other offsets. In February 2000, the Compensation Committee granted
to Messrs.  Gerald B. Blouch,  President and Chief Operating Officer,  and Louis
F.J.  Slangen,  Senior Vice  President-Global  Sales and Marketing,  the maximum
level of replacement compensation (50%) in recognition of their valuable service
to the Company.  As further  described below,  the offsets  described above that
would  otherwise have been applicable to Mr. Mixon's benefit under the SERP have
been waived by the Company in recognition of Mr. Mixon's  successful  management
succession planning and past contributions to the success of the Company.  Also,
upon joining the Company in 2002,  Mr.  Thompson was credited with five years of
service under the SERP in recognition  of the valuable  skills and experience he
brought to the Company and as a further  inducement for him to join the Company.
The SERP is  further  described  elsewhere  in this  proxy  statement  under the
Pension Benefits Table.

     Effective  January 1, 2005,  the  Company  terminated  its  sponsored  life
insurance plan. To replace this benefit, the Company established a Death Benefit
Only Plan ("DBO Plan") for its executives  other than the CEO. By  participating
in the DBO Plan, an executive  agrees to limit his coverage  under the Company's
other group life  insurance  plans to a maximum of $50,000.  Under the DBO Plan,
the executive's  designated  beneficiary  shall receive a benefit equal to three
times the  executive's  highest annual base salary plus target bonus (subject to
certain  limitations) as in effect on the April 1st preceding or coincident with
his death if a participant dies while employed by the Company.  If a participant
dies  after  attaining  age 65 or  after  his  employment  with the  Company  is
otherwise  terminated  following a change of control of the  Company,  a payment
equal to his highest  annual  base salary plus target  bonus as in effect on the
April 1st preceding or  coincident  with such event will be payable on behalf of
the participant. The Company may, in its discretion, pay an additional amount in
order to "gross up" the participant for some or all of the income taxes that may
result from the  benefits  described  above.  The DBO Plan is further  described
under Other Potential Post-Employment Compensation.

     To  ensure  the  continuity  of  corporate  management  and  the  continued
dedication  of key  executives  during any period of  uncertainty  caused by the
possible  threat of a  takeover,  the  Company  entered  into  change of control
severance protection agreements with key executives, including each of the Named
Executive  Officers.  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 for additional benefits if there is a termination of the executive's
employment  with the  surviving  entity  within  three years after the change of
control.  Following  a review  of these  agreements  and  comparable  agreements

                                       27

entered  into  by  other  companies  with  similarly  situated  executives,  the
Compensation  Committee determined to amend the terms of these agreements during
2006 for the purpose of  updating  the  agreements  to  incorporate  certain new
benefit  arrangements  adopted by the Company and to comply with Section 409A of
the Internal Revenue Code.

     The Company has also entered into separate  agreements with Mr. Blouch, Mr.
Richey,  Mr.  Slangen and Mr.  Thompson  that provide for the payment of certain
severance  benefits  upon  terminations  of employment  other than  terminations
following a change of control of the  Company.  These  agreements  retain  these
executives  and provide for  management  continuity in the event of an actual or
threatened  change-in-control.  They also help ensure that executive's interests
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. These
agreements  are  further   described  under  Other   Potential   Post-Employment
Compensation.

     In March 2000,  in  recognition  of the CEO's many years of service and the
successful  financial  performance of the Company,  the  Compensation  Committee
established a Chairman and CEO Retirement Program.  Under the program,  upon his
retirement,   Mr.  Mixon  is  to  be  provided  with  a  spending   account  for
reimbursement  of expenses  incurred  in an ongoing  role as  consultant  to the
Company,  and certain other  benefits,  for five years following his retirement.
The  Chairman  and CEO  Retirement  Program is  further  described  under  Other
Post-Employment Compensation.

Compensation Policies

         Section 162(m) of the Internal Revenue Code

     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  to  the  company  unless  the  compensation  qualifies  for  an
exception.  Section 162(m) provides an exception to the deductibility  limit for
"performance-based  compensation"  if certain  requirements  are met,  including
shareholder  approval  of the  material  terms  of  the  performance  goal.  The
Company's  equity incentive plans and annual cash bonus plan have been submitted
to and  approved  by the  Company's  shareholders.  The  Compensation  Committee
therefore  believes  that (i) cash bonuses paid to key  executives in accordance
with the Executive Incentive Bonus Plan, and (ii) grants of stock options to key
executives  under the Company's equity incentive plans pursuant to the Company's
long-term  compensation  awards  qualify for full  deductibility  under  Section
162(m).  However,  restricted stock grants and certain cash bonus awards paid to
key executive officers (other than under the Executive Incentive Bonus Plan) may
not qualify for the exception for performance-based  compensation. To the extent
practicable  in  view of its  compensation  philosophy,  the  Company  seeks  to
structure  its  executive  compensation  to  satisfy  the  requirements  for the
performance-based  compensation  exception under Section  162(m).  Nevertheless,
based  upon the  Company's  current  compensation  structure,  the  Compensation
Committee  believes  that it is in the best  interests  of the  Company  and its
shareholders  for the Compensation  Committee to retain  flexibility in awarding
incentive  compensation  in the form of  restricted  stock grants and cash bonus
awards   that  may  not  qualify  for  the   exception   for   performance-based
compensation.  The Compensation  Committee will continue to review and evaluate,
as necessary,  the impact of Section 162(m) on the Company and intends to make a
determination with respect to this issue on an annual basis.

         Section 409A of the Internal Revenue Code

     Section  409A  of  the  Internal  Revenue  Code  generally   provides  that
arrangements  involving the deferral of compensation  that do not comply in form
and operation  with Section 409A or are not exempt from Section 409A are subject
to increased tax, penalties and interest. If a deferred compensation arrangement
does not comply  with or is not  exempt  from  Section  409A,  employees  may be
subject to accelerated or additional tax, or interest or penalties, with respect
to the  compensation.  The Company  generally  seeks to  structure  its deferred
compensation  arrangements  with its  employees to comply with or qualify for an
exemption from Section 409A. The Compensation  Committee  believes that deferred
compensation  arrangements  that do not  comply  with  Section  409A would be of
significantly diminished value to its executives.  Accordingly, the Compensation

                                       28

Committee  has  amended  its   supplemental   executive   retirement   plan  and
non-qualified deferred compensation plans to comply with Section 409A.

         Stock Ownership Guidelines

     The Company  maintains stock  ownership  guidelines for its Named Executive
Officers and other  executives  for the purpose of aligning the interests of key
executives with those of the  shareholders  of the Company.  They also reinforce
the primary reason for offering  long-term  compensation  awards.  Moreover,  it
holds those  executives  most  responsible for creating  shareholder  value more
accountable  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:

     o    CEO - five times base salary

     o    President - three times salary

     o    CFO - two times salary

     o    Other executive officers - two times salary

     Executive  officers  are expected to reach these levels of ownership by the
later of May 2010 or five years from the  executive's  hire date.  The number of
shares  required  to be  held  is  established  by  multiplying  the  applicable
executive's  salary by the  applicable  multiple and  dividing by the  Company's
average  daily stock for the  previous  year.  "Stock  ownership"  is defined to
include  shares held  directly and  indirectly  by the  executive,  all unvested
restricted  stock  held  by the  executive  and  30% of  the  shares  underlying
unexercised  stock options held by the  executive  that are "in the money" by at
least 20%.  For  purposes of this policy,  ownership  of the  Company's  Class B
common shares is treated as ownership of common shares.




                                       29

             Report of the Compensation, Management Development and
            Corporate Governance 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  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 2007 Annual
Meeting of Shareholders.

                    COMPENSATION, MANAGEMENT DEVELOPMENT AND
                         CORPORATE GOVERNANCE COMMITTEE

                          James C. Boland, Chairperson
                            Bernadine P. Healy, M.D.
                                William M. Weber

The above  Report of the  Compensation,  Management  Development  and  Corporate
Governance  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.


          Compensation Committee Interlocks and Insider Participation

     No  member  of  the  Compensation,  Management  Development  and  Corporate
Governance Committee was at any time during 2006 or at any other time an officer
or employee of the Company or any of its  subsidiaries.  No executive officer of
the  Company  serves  as a member  of the  board of  directors  or  compensation
committee  of any entity that has one or more  executive  officers  serving as a
member  of  the  Company's  Board  of  Directors  or  Compensation,   Management
Development and Corporate Governance  Committee.  James C. Boland,  Bernadine P.
Healy, MD and William M. Weber were the non-employee directors who served on the
Compensation,  Management  Development and Corporate Governance Committee during
2006.



                                       30

                           Summary Compensation Table

     The following table presents the total  compensation to the Chief Executive
Officer,  Chief  Financial  Officer and the three other most highly  compensated
executive officers of the Company in 2006 (the "Named Executive Officers").


-------------------------------------------------------------------------------------------------------------------------
Name and        Year     Salary     Bonus     Stock       Option     Non-Equity   Change in     All Other  Total ($)
Principal                ($) (1)    ($)       Awards      Awards     Incentive    Pension       Compensa
Position                                      ($) (2)     ($) (3)    Plan Compen- Value and     -tion
                                                                     sation       Nonqualified  ($) (7)
                                                                     ($)(4)       Deferred
                                                                                  Compensation
                                                                                  Earnings
                                                                                   ($) (5)
                                                                                
--------------- -------- ---------- --------- ----------- ---------- ---------- -------------- ----------- --------------
A. Malachi      2006     1,074,450     --     497,383     707,443       --      1,095,261      118,397     3,492,934
Mixon III                                                                                      (8)
Chairman and
Chief
Executive
Officer
-------------------------------------------------------------------------------------------------------------------------
Gerald B.       2006       674,200     --     297,140     285,065       --        593,781       70,840     1,921,026
Blouch                                                                                          (9)
President and
Chief
Operating
Officer
-------------------------------------------------------------------------------------------------------------------------
Gregory C.      2006       401,200     --     197,366     134,101       --        199,008       66,431       998,106
Thompson                                                                                        (10)
Chief
Financial
Officer
-------------------------------------------------------------------------------------------------------------------------
Joseph B.       2006       422,200     --       5,099      72,270        --         -- (6)      42,426       541,995
Richey II                                                                                      (11)
President-Invacare
Technologies
and Senior
Vice
President -
Electronics
and Design
Engineering
-------------------------------------------------------------------------------------------------------------------------
Louis F.J.      2006       386,200      --      5,099      72,270        --       253,201       55,598       772,368
Slangen                                                                                         (12)
Senior Vice
President-Global
Sales and
Marketing
-------------------------------------------------------------------------------------------------------------------------

                                       31

(1)  Of the amounts  disclosed in this column,  the  following  Named  Executive
     Officers  deferred the following  portions of such amounts into the DC Plus
     Plan during 2006: (i) Mr. Mixon: $98,011; (ii) Mr. Blouch:  $18,397;  (iii)
     Mr.  Thompson:  $18,148;  (iv) Mr. Richey:  $15,289;  and (v) Mr.  Slangen:
     $10,405.

(2)  The values reported in this column  represent the dollar amount  recognized
     for  financial  statement  purposes for the fiscal year ended  December 31,
     2006 in  accordance  with FAS 123R with  respect  to all  restricted  stock
     awarded to each officer  during  2006.  For a summary of the terms of these
     awards,  see the Grants of  Plan-Based  Awards  Table that  follows.  For a
     description  of the  assumptions  made in computing the values  reported in
     this  column,  see  "Shareholders'  Equity  Transactions"  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, 2006.

(3)  The values reported in this column  represent the dollar amount  recognized
     for  financial  statement  purposes for the fiscal year ended  December 31,
     2006 in accordance  with FAS 123R with respect to all stock options awarded
     to each officer  during 2006.  For a summary of the terms of these  awards,
     see the Grants of Plan-Based  Awards Table that follows.  For a description
     of the  assumptions  made in computing the values  reported in this column,
     see  "Shareholders'  Equity  Transactions"  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, 2006.

(4)  The targeted levels  established by the Compensation  Committee pursuant to
     the Executive Incentive Bonus Plan for 2006 were not achieved. Accordingly,
     no compensation was paid to the officers under  non-equity  incentive plans
     in 2006. For a description of the 2006 bonus  opportunities  established by
     the  Compensation  Committee under the Executive  Incentive Bonus Plan, see
     footnote (4) to the Grants of Plan-Based Awards Table that follows.

(5)  The amounts  reported in this column  represent the amounts  accrued by the
     Company in 2006 to comply  with the  requirements  of FAS 87 and FAS 158 as
     they relate to the accumulated  benefit  obligation to the named executives
     under the SERP.  Because four of the named  executive  officers are already
     fully vested under the SERP, there was no material increase during the year
     in the actual benefit payable under the SERP to any of the named executives
     except Mr. Thompson who was credited with an additional year of service. No
     above market or preferential earnings on nonqualified deferred compensation
     were earned by any officer in 2006.

(6)  The  aggregate  change in the actuarial  present  value of the  accumulated
     benefits  under the SERP for Mr.  Richey in 2006 was a decrease of $58,820.
     The value of Mr.  Richey's SERP benefit is decreasing  annually,  primarily
     due to his age and the  relationship  between  the  rate of  change  in his
     annual   compensation   and  the  rate  projected  in  the  SERP's  benefit
     calculation factors.

(7)  Compensation  reported in this column  includes  (i) the value of dividends
     earned on outstanding  restricted  stock awards granted prior to 2006 (with
     respect to the 2006 restricted stock awards,  the value of future dividends
     was  factored  into the grant  date fair value  disclosed  in the Grants of
     Plan-Based  Awards For Fiscal Year 2006  Table);  (ii) the value of Company
     contributions  made  in 2006  on  behalf  of the  officer  to the  Invacare
     Retirement  Savings Plan and the DC Plus Plan;  (iii) the value of premiums
     paid by the Company under the Company's  Executive  Disability  Income Plan
     (or,  in the case of Mr.  Mixon,  the premium  under a separate  disability
     insurance  policy);  and  (iv)  the  incremental  cost  to the  Company  of

                                       32

     perquisites provided by the Company, which include:  country club dues, the
     payment of premiums on excess liability insurance,  an annual physical exam
     and health  screening,  and the  availability  of corporate  sporting event
     tickets  for  personal  use.  Perquisites  are  valued  on the basis of the
     aggregate  incremental  cost to the Company of providing the  perquisite to
     the applicable  officer.  The value of personal use of corporate  suites or
     tickets is the price shown on the ticket for the event and does not include
     annual fees or charges attributable to suite rental or ticket availability.

(8)  Other  compensation  for Mr.  Mixon  includes  $13,000  contributed  by the
     Company to the Invacare  Retirement Savings Plan and $53,396 contributed by
     the Company to the DC Plus Plan.

(9)  Other  compensation  for Mr. Blouch  includes  $13,000  contributed  by the
     Company to the Invacare  Retirement Savings Plan and $30,048 contributed by
     the Company to the DC Plus Plan.

(10) Other  compensation for Mr. Thompson  includes  $12,032  contributed by the
     Company to the Invacare  Retirement Savings Plan and $14,123 contributed by
     the Company to the DC Plus Plan.

(11) Other  compensation  for Mr. Richey  includes  $12,452  contributed  by the
     Company to the Invacare  Retirement Savings Plan and $15,348 contributed by
     the Company to the DC Plus Plan.

(12) Other  compensation  for Mr. Slangen  includes  $11,636  contributed by the
     Company to the Invacare Retirement Savings Plan, $13,104 contributed by the
     Company to the DC Plus Plan and  $13,396 in  premiums  paid by the  Company
     under the Executive Disability Income Plan.


                                       33

                Grants of Plan-Based Awards For Fiscal Year 2006

     The following  table shows,  for the Named Executive  Officers,  plan-based
awards to those  officers  during 2006,  including  restricted  stock awards and
stock option grants, as well as other incentive plan awards.


-------------------------------------------------------------------------------------------
Name          Grant       Estimated Future     All Other  All Other   Exercise  Grant
              Date         Payouts Under       Stock      Option      or Base   Date Fair
                        Non-Equity Incentive   Awards:    Awards:     Price of  Value of
                            Plan Awards        Number of  Number of   Option    Stock and
                                               Shares of  Securities  Awards    Options
                                               Stock or   Underlying  ($/Sh)    Awards ($)
                                               Units      Options
                                                  (#)         (#)
                      ------- ------  ------
                      Thresh- Target  Maxi-
                       hold    ($)    mum($)
----------    ------  ------- ------  ------   ---------  ----------  --------  -----------
                                                        
A. Malachi    3/8/06                           14,929 (1)                       $ 31.26
Mixon III     8/23/06                          35,200 (2)                       $ 22.66
              8/23/06                                     88,100 (3)  $ 22.66   $  8.03
              (4)     (4)      (4)     (4)
-------------------------------------------------------------------------------------------
Gerald B.     3/8/06                           9,239 (1)                        $ 31.26
Blouch        8/23/06                          14,200 (2)                       $ 22.66
              8/23/06                                     35,500 (3)  $ 22.66   $  8.03
              (4)     (4)      (4)     (4)
-------------------------------------------------------------------------------------------
Gregory C.    3/8/06                           5,154 (1)                        $ 31.26
Thompson      8/23/06                          6,700 (2)                        $ 22.66
              8/23/06                                     16,700 (3)  $ 22.66   $  8.03
              (4)     (4)      (4)     (4)
-------------------------------------------------------------------------------------------
Joseph B.     8/23/06                          3,600 (2)                        $ 22.66
Richey II     8/23/06                                     9,000 (3)   $ 22.66   $  8.03
              (4)     (4)      (4)     (4)
-------------------------------------------------------------------------------------------
Louis F.J.    8/23/06                          3,600 (2)                        $ 22.66
Slangen       8/23/06                                     9,000 (3)   $ 22.66   $  8.03
              (4)     (4)      (4)     (4)
-------------------------------------------------------------------------------------------

(1)  Restricted  shares  granted  pursuant  to  the  Invacare  Corporation  2003
     Performance  Plan (the "2003  Plan").  These shares vest in 25%  increments
     over four years,  commencing May 1, 2007.  Dividends accrue and are payable
     based on the total shares awarded as of the date of grant,  irrespective of
     whether the shares have vested.

(2)  Restricted  shares granted  pursuant to the 2003 Plan. These shares vest in
     25% increments  over four years,  commencing  November 15, 2007.  Dividends
     accrue and are payable based on the total shares  awarded as of the date of
     grant, irrespective of whether the shares have vested.

(3)  Stock options to purchase  common  shares of the Company  granted under the
     2003 Plan.  These options become  exercisable  in 25% increments  over four
     years, commencing September 30, 2007 and expire on August 23, 2016.

(4)  On March 8, 2006, the Compensation Committee established  performance goals
     under the  Executive  Incentive  Bonus Plan for the  purpose  of  providing
     financial  incentives for 2006 to certain key  employees,  including all of
     the officers  included in the above table (the "original 2006 bonus plan").
     Under  this  plan,  if the  Company  achieved  certain  earnings  per share
     targets,  the executives would earn a bonus amount equal to a percentage of
     the  executive's  "target  bonus" for 2006.  Target  bonuses  for the Named

                                       34

     Executive  Officers were  established as 100% of base salary for Mr. Mixon,
     95% of base  salary  for Mr.  Blouch,  and 75% of base  salary  for each of
     Messrs.  Richey,  Thompson and Slangen. Under the original 2006 bonus plan,
     performance goals were set at levels of $1.90 per share to $2.15 per share.
     If the $1.90 earnings per share target had been achieved, then each officer
     would have been entitled to 50% of his target bonus.  If the $2.15 earnings
     per share  target  had been  achieved,  then each  officer  would have been
     entitled to 100% of his target  bonus.  If the Company  reached an earnings
     per share level  between or above the  targets,  the target bonus was to be
     adjusted on a  straight-line  basis up to a maximum  amount of  $5,000,000.
     None of these goals were achieved.

     On August 23, 2006, the Compensation  Committee approved a second-half 2006
     bonus opportunity under the Executive  Incentive Bonus Plan for the purpose
     of providing  financial  incentives to certain key employees for the period
     of July 15 to December 31, 2006 (the "second-half 2006 bonus plan").  Under
     the second-half  2006 bonus plan,  performance  goals were set at levels of
     $0.90 per share to $1.08 per share.  The target  bonuses  set forth for the
     officers in the original 2006 bonus plan were  retained in the  second-half
     2006 bonus plan. If the $0.90  earnings per share target had been achieved,
     then each officer would have been  entitled to 30% of his target bonus.  If
     the $1.08  earnings per share target had been  achieved,  then each officer
     would have been entitled to 50% of his target bonus. If the Company reached
     an earnings per share level between or above the targets,  the target bonus
     was to be  adjusted  on a  straight-line  basis.  None of these  goals were
     achieved.

     The  second-half  2006  bonus  plan  was  structured  by  the  Compensation
     Committee  such that no  participant  could  receive a bonus under both the
     second-half  2006 bonus plan and the original 2006 bonus plan.  Because the
     performance targets were not met under either plan, there was no non-equity
     incentive plan  compensation to the officers during 2006. See  Compensation
     Discussion and Analysis above for further discussion of these bonus plans.

         Restricted Stock and Stock Options

     Each of the  restricted  stock awards and stock option  grants set forth in
the above table was awarded  under the 2003 Plan.  Under the 2003 Plan,  and the
restricted stock and 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.

     Adjustments.  In the event of a  recapitalization,  stock  dividend,  stock
split,  reverse  stock  split,  distribution  to  shareholders  (other than cash
dividends),  or similar transaction,  the Compensation  Committee can adjust, in
any manner that it deems  equitable,  the number and class of shares that may be
issued under the 2003 Plan and the number and class of shares,  and the exercise
price, 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) within 18
months after the date such participant  terminates  employment with the Company,
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  Invacare,  or uses for any purpose  other than
Invacare's  business,  any confidential  information relating to the Company. In
addition,  the Compensation  Committee may, subject to certain conditions in the
2003 Plan and in its discretion,  require the participant to return the economic
value of any award that the participant  realized or obtained prior to and after
such participant engaged in any of the above activities.

     Amendment of Awards.  The  Compensation  Committee may, in its  discretion,
amend the terms of any award under the 2003 Plan,  including to waive,  in whole
or in part, any  restrictions or conditions  applicable to, or to accelerate the
vesting of, any award.  This  authority is subject to certain  restrictions.  In
particular,  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  transactions
described above.

     In addition, in the event of a change in control of the Company, as defined
in the 2003 Plan, unless the Board of Directors  determines  otherwise,  (1) all
outstanding  stock  options and stock  appreciation  rights  will  become  fully

                                       35

exercisable,  and (2) all restrictions  and conditions  applicable to restricted
stock and other  awards  exercisable  for common  shares of the Company  will be
deemed to have been satisfied. Any other determination by the Board of Directors
that is made after the occurrence of the change in control will not be effective
unless a majority of the Directors then in office are "continuing directors" and
the  determination  is approved by a majority of the "continuing  directors" for
this purpose (or is approved by a committee comprised solely of such "continuing
directors").  "Continuing  directors"  are Directors who were in office prior to
the  change in  control or were  recommended  or elected to succeed  "continuing
directors" by a majority of the  "continuing  directors" then in office (or by a
committee comprised solely of such "continuing directors" then in office).

     The above description highlights certain terms and conditions applicable to
the  restricted  stock and option  awards set forth in the Grants of  Plan-Based
Awards Table above. This summary is not a complete  description of the 2003 Plan
and is  qualified  in its  entirety  by  reference  to the 2003 Plan,  which was
included as Appendix A to the  Company's  definitive  proxy  statement  filed in
connection  with its 2006  Annual  Meeting of  Shareholders,  and to the form of
Stock  Option  Agreement  under the 2003 Plan and the form of  Restricted  Stock
Agreement  under the 2003 Plan,  which are included as Exhibits 10(y) and 10(x),
respectively,  to the  Company's  Annual Report on Form 10-K for the fiscal year
ended December 31, 2006.

         Executive Incentive Bonus Plan

     The Executive Incentive Bonus Plan was unanimously  approved and adopted by
the  Compensation  Committee as of March 2, 2005 and was approved and adopted by
the shareholders of the Company on May 25, 2005. See the Compensation Discussion
and Analysis for a discussion of awards under the Executive Incentive Bonus Plan
during 2006.

     Purpose.  The  Executive  Incentive  Bonus Plan is  intended  to provide an
incentive to the Company's executive officers to improve the Company's 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 on the  payment  date in order to receive an award  under the  Executive
Incentive Bonus Plan,  unless the officer's  employment  terminated prior to the
payment as a result of death, disability, or retirement. Unless the Compensation
Committee determines  otherwise,  an officer whose employment terminates for any
other  reason  prior to the payment date will not be eligible to receive a bonus
award.  For  2006,  the  Compensation  Committee  determined  that the  eligible
participants under the plan included Messrs. Mixon, Blouch, Thompson, Richey and
Slangen, as well as the Company's Senior Vice President of Business  Development
and General Counsel and the Senior Vice President of Human Resources.

     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.  For each calendar year or
other  predetermined   performance  period,  the  Compensation   Committee  will
establish  a target  bonus for each  eligible  officer,  payable if a  specified
performance goal is satisfied for such performance period.

     Performance  Goals. The performance  goal for each performance  period will
provide for a targeted level or levels of  performance  using one or more of the
following  predetermined  measurements:  stock  price,  net sales,  income  from
operations,  earnings  before  income tax,  earnings per share,  cost  controls,
return on assets,  and return on net assets employed.  For 2006, the bonus award
was based  upon  satisfaction  of an  earnings  per  share  target,  as  further
described above in the footnotes to the Grants of Plan-Based Awards table.

                                       36

     The performance goal for a performance  period is established in writing by
the  Compensation  Committee on or before the latest date  permissible to enable
the bonus award to qualify as  "performance  based  compensation"  under Section
162(m) of the Internal Revenue Code. The Compensation  Committee may during this
same time period 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 target bonus  payable to any officer for a  performance
period  exceed  $5,000,000.  This maximum bonus amount was set in part to permit
the  Executive  Incentive  Bonus  Plan to  accommodate  continued  growth of the
Company  and also to  comply  with the  requirements  of  Section  162(m) of the
Internal  Revenue  Code.  The Board of Directors  believes  that this limit will
provide  the  Compensation  Committee  with  sufficient  flexibility  to  reward
exceptional  contributions  toward the  Company's  success.  As described in the
Compensation  Discussion  and Analysis  elsewhere in this proxy  statement,  the
Compensation  Committee  currently  seeks  to give  each  executive  officer  an
opportunity  to earn an annual cash bonus that would result in total annual cash
compensation  to  the  executive  officer  that  approximates  the  75th  market
percentile of  compensation  paid by other  employers with which the Company may
compete for executive talent.

     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.

     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.  Amendments  will be  subject to the  approval  of the
Company's  shareholders  in such manner and with such  frequency  as is required
under Section 162(m) of the Internal Revenue Code.


                                       37

                 Outstanding Equity Awards at December 31, 2006

     The following table shows,  for the Named Executive  Officers,  outstanding
equity awards held by such officers at December 31, 2006.


--------- -------------------------------------------------------------- ----------------------------------------------
                                    Option Awards                                        Stock Awards
--------- -------------------------------------------------------------- ----------------------------------------------
Name         Number       Number of     Equity       Option    Option     Number of  Market     Equity      Equity
             of           Securities    Incentive    Exercise  Expiration Shares or  Value of   Incentive   Incentive
             Securities   Underlying    Plan         Price     Date       Units of   Shares or  Plan        Plan
             Underlying   Unexercised   Awards:        ($)                Stock That Units of   Awards:     Awards:
             Unexercised  Options       Number of                         Have Not   Stock      Number of   Market or
             Options         (#)        Securities                        Vested     That Have  Unearned    Payout
                 (#)      Unexercisable Underlying                           (#)     Not Vested Shares,     Value of
             Exercisable                Unexercised                                   ($)       Units or    Unearned
                                        Unearned                                                Other       Shares,
                                        Options                                                 Rights      Units or
                                           (#)                                                  That Have   Other
                                                                                                Not Vested  Rights
                                                                                                   (#)      That Have
                                                                                                            Not Vested
                                                                                                              ($)
----------  ------------  ------------- ----------- --------- ---------- ---------- ----------- ---------- ------------
                                                                                
-----------------------------------------------------------------------------------------------------------------------
A. Malachi   127,600                                 $ 25.1250 2/20/07
Mixon III    120,750                                 $ 23.6250 3/5/08
             149,500                                 $ 23.6875 3/1/09
             176,600                                 $ 18.6875 8/31/09
             250,000                                 $ 23.4375 3/6/10
             141,300                                 $ 25.1250 8/24/10
             112,800                                 $ 33.50   10/31/11
             122,400                                 $ 36.40   8/21/12
                                                                         3,670 (1)   $ 90,099
             137,900                                 $ 37.70   8/20/13
                                                                         5,254 (2)   $ 128,986
             142,000                                 $ 44.30   8/24/14
                                                                         8,134 (3)   $ 199,690
             120,800                                 $ 41.87   9/8/15
                                                                         14,929 (4)  $ 366,507
                           88,100 (5)                $ 22.66   8/23/16
                                                                         35,200 (6)  $ 864,160
-----------------------------------------------------------------------------------------------------------------------
Gerald B.    70,000                                  $ 25.1250 2/20/07
Blouch       57,600                                  $ 23.6250 3/5/08
             63,700                                  $ 23.6875 3/1/09
             75,300                                  $ 18.6875 8/31/09
             100,000                                 $ 23.4375 3/6/10
             63,300                                  $ 25.1250 8/24/10
             50,600                                  $ 33.50   10/31/11
             55,000                                  $ 36.40   8/21/12
                                                                         2,273 (1)   $ 55,802
             58,700                                  $ 37.70   8/20/13
                                                                         3,254 (2)   $ 79,886
             56,300                                  $ 44.30   8/24/14
                                                                         5,034 (8)   $ 123,585
             45,400                                  $ 41.87   9/8/15
                                                                         9,239 (4)   $ 226,817
                           35,500 (5)                $ 22.66   8/23/16
                                                                         14,200 (6)  $ 348,610
-----------------------------------------------------------------------------------------------------------------------
                                       38

Gregory C.   82,000                                  $ 32.70   11/04/12
Thompson                                                                 1,280 (1)   $ 31,424
             28,800                                  $ 37.70   8/20/13
                                                                         1,746 (2)   $ 42,864
             25,900                                  $ 44.30   8/24/14
                                                                         2,808 (7)   $ 68,936
             22,400                                  $ 41.87   9/8/15
                                                                         5,154 (4)   $ 126,531
                           16,700 (5)                $ 22.66   8/23/16
                                                                         6,700 (6)   $ 164,485
-----------------------------------------------------------------------------------------------------------------------
Joseph B.    41,000                                  $ 25.1250 2/20/07
Richey II    17,900                                  $ 23.6250 3/5/08
             21,600                                  $ 23.6875 3/1/09
             25,500                                  $ 18.6875 8/31/09
             21,000                                  $ 25.1250 8/24/10
             15,800                                  $ 33.50   10/31/11
             17,000                                  $ 36.40   8/21/12
             15,400                                  $ 37.70   8/20/13
             25,900                                  $ 44.30   8/24/14
             22,400                                  $ 41.87   9/8/15
                           9,000 (5)                 $ 22.66   8/23/16
                                                                         3,600 (6)   $ 88,380
-----------------------------------------------------------------------------------------------------------------------
Louis F.J.   18,600                                  $ 23.6250 3/5/08
Slangen      21,800                                  $ 23.6875 3/1/09
             21,000                                  $ 25.1250 8/24/10
             20,000                                  $ 33.50   10/31/11
             21,800                                  $ 36.40   8/21/12
             21,500                                  $ 37.70   8/20/13
             25,900                                  $ 44.30   9/30/14
             22,400                                  $ 41.87   9/8/15
                           9,000 (5)                 $ 22.66   8/23/16
                                                                         3,600 (6)   $ 88,380
-----------------------------------------------------------------------------------------------------------------------


(1)  These restricted shares vest on May 1, 2007.
(2)  Half of these  restricted  shares vest on May 1, 2007,  with the  remaining
     half to vest on May 1, 2008.
(3)  These  restricted  shares vest according to the following  schedule:  2,712
     vest on May 1, 2007;  2,711 vest on May 1, 2008;  and 2,711  shares vest on
     May 1, 2009.
(4)  These restricted  shares vest in approximate 25% increments over four years
     commencing May 1, 2007.
(5)  These stock options become  exercisable  in 25% increments  over four years
     commencing September 30, 2007.
(6)  These  restricted  shares vest in 25% increments over four years commencing
     November 15, 2007.
(7)  These restricted shares vest in approximate 1/3 increments over three years
     starting May 1, 2007.


            Option Exercises and Stock Vested During Fiscal Year 2006

     The following table shows,  for the Named Executive  Officers,  information
regarding  each exercise of a stock option and each vesting of restricted  stock
during 2006.


          ----------------------------------------------------------------------------------------------
                                             Option Awards                      Stock Awards
          ---------------------  ------------------------------------- ---------------------------------
                    Name               Number of     Value Realized     Number of      Value Realized
                                        Shares         on Exercise        Shares         on Vesting
                                       Acquired            ($)           Acquired            ($)
                                     on Exercise                        on Vesting
                                     (#) (#)
          ---------------------  ------------------------------------- ---------------------------------
                                                                                 
          A. Malachi Mixon III          81,000          $ 696,600
                                                                          3,175           $ 96,520
                                                                          3,671           $111,598
                                                                          2,628           $ 79,891
                                                                          2,712           $ 82,445
          ----------------------------------------------------------------------------------------------
          Gerald B. Blouch              38,400          $ 330,240
                                                                          1,964           $ 59,706
                                                                          2,272           $ 69,069
                                                                          1,627           $ 49,461
                                                                          1,679           $ 51,042
          ----------------------------------------------------------------------------------------------
          Gregory C. Thompson                                             1,280           $ 38,912
                                                                            873           $ 26,539
                                                                            937           $ 28,485
          ----------------------------------------------------------------------------------------------
          Joseph B. Richey II           24,300          $ 196,101
          ----------------------------------------------------------------------------------------------
          Louis F.J. Slangen              --                                --
          ----------------------------------------------------------------------------------------------



                                       40



                      Pension Benefits for Fiscal Year 2006

     The following  table  presents  certain  information  for each of the Named
Executive Officers with respect to the SERP.


                 ---------------- --------------- ----------------- ---------------- ----------------
                 Name             Plan Name (1)   Number of Years   Present          Payments
                                                  Credited Service  Value of         During Last
                                                        (#)         Accumulated      Fiscal Year
                                                                    Benefit               ($)
                                                                    ($) (2)
                 ---------------- --------------- ----------------- ---------------- ----------------
                                                                         
                 A. Malachi       SERP            26                9,068,353 (3)          --
                 Mixon III
                 ------------------------------------------------------------------------------------
                 Gerald B.        SERP            15                3,307,313              --
                 Blouch
                 ------------------------------------------------------------------------------------
                 Gregory C.       SERP            9 (4)             568,621                --
                 Thompson
                 ------------------------------------------------------------------------------------
                 Joseph B.        SERP            22                2,247,371              --
                 Richey II
                 ------------------------------------------------------------------------------------
                 Louis F.J.       SERP            19                1,400,750              --
                 Slangen
                 ------------------------------------------------------------------------------------

               (1)  The SERP is the Company's  original  Supplemental  Executive
                    Retirement  Plan and a new plan which is intended to work in
                    tandem with the original plan to operate  effectively as one
                    plan,  as  further   described   below  under   Supplemental
                    Executive Retirement Plan (collectively, the "SERP").

               (2)  This column  presents the  actuarial  present  value of each
                    officer's  accumulated  benefit under the  applicable  plan,
                    computed as of the same pension plan  measurement  date used
                    for financial statement reporting purposes.  For purposes of
                    this  calculation,  Named Executive  Officers are assumed to
                    have worked  until the normal  retirement  age as defined in
                    the SERP, which is the attainment of age 65.

               (3)  In  recognition  of Mr.  Mixon's  successful  completion  of
                    management succession planning and his past contributions to
                    the Company, in 2000, the Compensation  Committee waived the
                    "Company contribution offset" to his SERP balance.

               (4)  In  consideration  of his joining  the Company in 2002,  Mr.
                    Thompson was credited  with five years of service  under the
                    SERP.

         Supplemental Executive Retirement Plan

     In 1995, the Company established the SERP for certain executive officers to
supplement  other  savings  plans  offered  by the  Company  so as to  provide a
specific level of replacement  compensation  for retirement.  In order to comply
with Section 409A of the Internal  Revenue  Code,  in 2005 the Company froze the
original  Supplemental  Executive  Retirement  Plan  and  adopted  a  new  plan,
effective in 2005,  which is intended to work in tandem with the  original  plan
and operate effectively as one plan.

     Under the SERP,  the  normal  retirement  date is either  age 65 or, if the
executive  has  reached 15 years of  service,  age 62.  The normal  benefit is a
single-life annuity in an amount equal to 50% of a participant's final earnings,

                                       41

which is the participant's  annual base salary and target bonus on the April 1st
immediately  preceding or  coincident  with the date of the  termination  of the
participant's   employment,   multiplied  by  a  service  ratio,  which  is  the
participant's years of service divided by 15 years (but not more than one). This
normal benefit is subject to certain reductions,  including the annuitized value
of Company contributions to the Invacare Retirement Savings Plan and the DC Plus
Plan,  one-half of the annual Social  Security  benefit,  and other offsets.  An
early retirement  benefit is available once the executive reaches age 55 with 10
years of service, in an amount equal to the normal retirement benefit reduced by
6% for each year that precedes the executive's  normal retirement date under the
plan. A  participant's  benefits under the SERP vest over five years (i.e.,  20%
per year),  so that a  participant  is fully  vested  (100%)  five  years  after
becoming  a  participant  in the  SERP.  The  SERP  also  provides  for  certain
disability benefits,  termination benefits and change of control benefits.  Upon
disability,  the participant becomes 100% vested and unreduced normal retirement
benefits are commenced.  Upon termination  prior to early or normal  retirement,
the  participant  receives the vested portion of the accrued  normal  retirement
benefit  reduced  by 6% for each  year  that  precedes  the  executive's  normal
retirement date under the plan. Upon a change of control,  if the  participant's
employment  is  subsequently  terminated  for any reason other than death within
three  years  after the  change of  control  (two  years for  amounts  under the
original plan), the participant  receives a lump sum benefit that is actuarially
equivalent to his normal retirement benefit and is treated as 100% vested with a
service  ratio of one (i.e.,  treated  as having at least 15 years of  service).
Actuarial  equivalence  is  calculated  on the basis of the 1983  Group  Annuity
Mortality table and the greater of 8% annual interest or Moody's  Corporate Bond
Yield Average rate for the prior calendar year.

     The SERP is a nonqualified plan and, thus, the benefits accrued under these
plans would be subject to the claims of the Company's  general  creditors if the
Company  were to file  for  bankruptcy.  The  benefits  will be paid (1) from an
irrevocable  grantor  trust which has been  partially  funded from the Company's
general funds and/or (2) directly from the Company's general funds.

     The present value of each Named  Executive  Officer's  accumulated  benefit
under the SERP is  calculated  based on a number of factors,  including  current
compensation  data, the  provisions of the SERP, and the following  assumptions:
the executive  salary will increase at a rate of 5% per year; the consumer price
index will increase at a rate of 3% per year;  the  executive's  retirement  age
will be age 65;  the  corporate  annual  income  tax  rate  will be 40%;  future
contributions by the Company to the SERP will increase at a rate of 5% per year;
earnings on Company  contributions  to the SERP will average 8% per year;  and a
discount rate of 6.75%.


                                       42

             Nonqualified Deferred Compensation for Fiscal Year 2006

     The following  table presents  information  for each of the Named Executive
Officers regarding contributions,  earnings,  withdrawals and balances under the
DC Plus Plan.


         --------------------------------------------------------------------------------------------------------
         Name             Executive        Registrant         Aggregate        Aggregate      Aggregate Balance
                      Contributions in  Contributions in  Earnings in 2006    Withdrawals/     At December 31,
                            2006              2006           ($) (3)(4)       Distributions          2006
                           ($) (1)           ($) (2)                             ($) (5)             ($)
                                                                                      
         -----------  ----------------  ----------------  -----------------  ---------------  -------------------
         A. Malachi       98,011            53,396            490,762            19,120            4,227,951
         Mixon III
         --------------------------------------------------------------------------------------------------------
         Gerald B.        18,397            30,048            63,250             69,733            812,489
         Blouch
         --------------------------------------------------------------------------------------------------------
         Gregory C.       18,148            14,123            14,471             19,120            120,406
         Thompson
         --------------------------------------------------------------------------------------------------------
         Joseph B.        15,289            15,348            (26,674)           15,120            591,122
         Richey II
         --------------------------------------------------------------------------------------------------------
         Louis F.J.       10,405            13,104            140,676            19,120            1,516,524
         Slangen
         --------------------------------------------------------------------------------------------------------

               (1)  The amounts reported in this column represent the portion of
                    the  officer's  salary  and/or  bonus,  as  reported  in the
                    "Salary,"    "Bonus"   and   "Non-Equity    Incentive   Plan
                    Compensation"  columns of the  Summary  Compensation  Table,
                    that was deferred into the plan.

               (2)  The amounts  reported in this column have been included with
                    respect  to each  officer  in the "All  Other  Compensation"
                    column of the Summary Compensation Table above, as described
                    in footnote (7) to that Table.

               (3)  No portion  of the  amounts  reported  in this  column  that
                    represent  accrued interest has been included in the "Change
                    in  Pension  Value and  Nonqualified  Deferred  Compensation
                    Earnings" column of the Summary  Compensation  Table,  since
                    none  of the  amounts  reported  in  this  column  represent
                    above-market or preferential interest or earnings accrued on
                    the applicable plan.

               (4)  Please  see the  discussion  below  under DC Plus Plan for a
                    description of how earnings under the plan are calculated.

               (5)  The  withdrawal  shown  reflects a transfer to the officer's
                    account under the tax-qualified  Invacare Retirement Savings
                    Plan up to the amount allowed by IRS  limitations,  pursuant
                    to the terms of the DC Plus Plan.

                                       43

         DC Plus Plan

     The DC Plus Plan is a  non-qualified  contributory  savings plan for highly
compensated  employees.  The program is offered to allow  participants  to defer
compensation  above the amount allowed in the Invacare  Retirement Savings Plan,
the  Company's  qualified  retirement  plan,  and to provide  participants  with
additional pre-tax savings opportunities. The DC Plus Plan is actually two plans
operating  effectively  as one. In 2004,  the Company froze what was  originally
established  as the  401(k)  Plus  Plan and  prohibited  further  deferrals  and
contributions to that plan for  compensation  earned after December 31, 2004. It
then adopted the DC Plus Plan,  effective  January 1, 2005,  in order to address
the  requirements of Section 409A of the Internal  Revenue Code. All benefits of
the  participants  earned and vested in the 401(k) Plus Plan as of December  31,
2004  remain  preserved  under the  existing  plan  provisions.  These plans are
referred to in this proxy statement collectively as the "DC Plus Plan."

     The DC Plus Plan allows  participants  to defer all or any portion of their
annual cash bonus  compensation  and up to 50% of their salary to the plan.  The
Company provides a matching  contribution on amounts deferred of up to an annual
maximum  of 2% of salary,  as well as a  quarterly  contribution  of up to 4% of
salary  for the  benefit  of  eligible  participants.  The DC Plus Plan works in
tandem with the Invacare  Retirement  Savings Plan, in that the  participant can
elect for funds to be transferred  to the qualified plan on an annual basis,  as
determined by IRS limitations.  Participants may allocate contributions among an
array of funds  representing  a full range of  risk/return  profiles,  including
Company common shares reflected in phantom share units.  Employee  deferrals and
contributions  by the Company for the benefit of each employee are credited with
earnings,  gains or losses based on the performance of investment funds selected
by the  employee.  Earnings  under the DC Plus  Plan are based on the  following
underlying  funds,  which had the  following  annual  returns in 2006:  Fidelity
Equity Income Fund, 15.2%;  Fidelity Spartan U.S. Equity Fund,  12.0%;  Fidelity
Growth Company,  5.8%;  Fidelity  Low-Priced Stock Fund, 11.0%; Harbor Small Cap
Growth  Institutional,  8.8%;  Harbor  Small Cap Value  Return,  6.9%;  Fidelity
Diversified  International  Fund,  15.5%;  Dodge  & Cox  Balanced  Fund,  10.9%;
Invacare Common Shares,  -29.6%;  Fidelity Freedom Income Fund,  4.7%;  Fidelity
Freedom 2000 Fund, 5.2%; Fidelity Freedom 2010 Fund, 6.9%; Fidelity Freedom 2020
Fund, 8.4%;  Fidelity Freedom 2030 Fund, 9.2%; Fidelity Freedom 2040 Fund, 9.6%;
PIMCO Total Return Admin,  3.4%; and Fidelity Managed Income,  3.4%. These funds
generally  are  the  same as are  offered  for  investment  under  the  Invacare
Retirement  Savings  Plan.  Participants  do not have any direct  interest in or
ownership of the funds.  Participant's  contributions are always 100% vested and
employer  contributions  vest  according  to a five year  graduated  scale.  All
distributions  from the  plan are in the form of cash and paid in a single  lump
sum upon  termination  of  employment  unless the  participant  has a qualifying
termination  (i.e.,  after  reaching  retirement  age or on  account of death or
disability),  the account is over the  required  threshold  amount  (i.e.,  over
$20,000  in the  401(k)  Plus  Plan  portion  and  $10,000  in the DC Plus  Plan
portion),  and the  participant  has elected to receive  payment in installments
instead  of a lump  sum.  The  installment  period  can  not  exceed  15  years.
Distributions  under the DC Plus Plan may be made only upon  termination  of the
employee's  employment,  death,  disability  or  hardship,  or at a time certain
specified by the employee at the time of deferral in  accordance  with the terms
of the plan.  Elections to  participate  in the DC Plus Plan must be made by the
employee in accordance with the requirements of the plan and applicable law.

     For a  description  of the SERP,  see the  narrative  following the Pension
Benefits Table included above.

                                       44



                  Other Potential Post-Employment Compensation

Severance and Change of Control Benefits

     Upon   termination  of  employment  for  certain   reasons  (other  than  a
termination following a change of control of the Company) severance benefits may
be paid to the Named Executive  Officers.  The severance benefits payable to Mr.
Blouch are addressed in his Severance Protection Agreement, discussed below, and
the  severance  benefits  payable to Messrs.  Richey,  Slangen and  Thompson are
addressed  in the  description  of each of their  respective  letter  agreements
below.  Mr. Mixon is not covered  under a general  severance  agreement,  but is
entitled  to receive  benefits  under a change of control  agreement  (discussed
below under Change of Control  Agreements) like all of the other Named Executive
Officers and under a Chairman and CEO Retirement  Program (discussed below under
Chairman and CEO Retirement Program).

         Severance Protection Agreement

     In 2002, the Company entered into a Severance Protection Agreement with Mr.
Blouch.  Under  the  terms  of the  agreement,  if Mr.  Blouch's  employment  is
terminated  by  reason  of death or  disability,  by the  Company  for cause (as
defined  in the  agreement)  or by Mr.  Blouch  other  than for good  reason (as
defined in the  agreement),  he or his estate is entitled to receive  payment of
any   compensation  and  benefits  accrued  but  unpaid  at  the  time  of  such
termination.  If Mr. Blouch's employment is terminated by the Company other than
for cause or by Mr. Blouch for good reason (but not due to death or  disability)
and,  if Mr.  Blouch is not  entitled  to receive  benefits  under his change of
control agreement (discussed below under Change of Control Agreements),  he then
is entitled to receive the following benefits:

     o    compensation  equal to three  times the amount of his then  applicable
          annual base salary, to be paid in three equal annual installments;

     o    75% of his target bonus for the year in which  employment  ends, to be
          paid in three equal annual installments;

     o    any   then-outstanding   stock  option  grant  or  stock  award  shall
          immediately  vest in full as of the date of termination of employment,
          unless stated otherwise in the option agreement; and

     o    the exercise period of any unexercised  stock option shall be extended
          until the  earlier  of two  years  after  the date of  termination  of
          employment or expiration of the option, unless stated otherwise in the
          option agreement.  In addition, Mr. Blouch may exercise all options by
          means of a cashless  exercise  program,  so long as (a) the program is
          permitted under applicable law, and (b) the Company is not required to
          recognize additional compensation expense as a result of the exercise.

In  accordance  with the  terms  described  above,  assuming  that Mr.  Blouch's
employment  with the Company was  terminated by the Company other than for cause
or by Mr.  Blouch for good  reason  (but not due to death or  disability)  as of
December  31,  2006,  the  amounts  and/or  values of the  benefits  he would be
entitled to receive are as follows: (1) $2,022,600 in respect of three times his
applicable base salary;  (2) $480,368 in respect of 75% of his applicable target
bonus;  and (3)  $782,000 in respect of the  present  value of  acceleration  of
vesting of outstanding  unvested stock option grants and restricted stock awards
and of the extension of the exercise  periods of outstanding  unexercised  stock
options, for a total of $3,284,968.

     The agreement  contains  provisions  which restrict Mr. Blouch's ability to
engage in any business that is competitive  with the Company's  business,  or to
solicit  Company  employees,  customers or  suppliers  for a period of two years
following the date of  termination of his employment or two years after the last
payment due to Mr. Blouch pursuant to the severance  provisions described above,
whichever is later. The agreement also contains provisions  requiring Mr. Blouch
to maintain the  confidentiality  of non-public  Company  information during and
after his employment and to assign to the Company any rights that he may have in
any intellectual property developed in the course of his employment.

                                       45

         Other Severance Arrangements

     The Company has entered into letter agreements with each of Messrs. Richey,
Slangen and Thompson which provide that, upon a termination of employment  other
than by the Company for cause or  following a change of control of the  Company,
each  executive will be entitled to  continuation  of his  then-applicable  base
salary for one year,  to receive a pro rata  portion of his target bonus for the
year in which  his  employment  ends  based on the date of  termination,  and to
continuation  of health  insurance  benefits until the earlier of the end of the
severance  period or such  time as he  obtains  employment  that  provides  such
coverage.

     In accordance with the terms described above,  assuming that the employment
of each of Messrs.  Richey,  Slangen and Thompson was  terminated by the Company
other  than  for  cause  as of  December  31,  2006,  and  assuming  that  these
individuals  were not  entitled  to  benefits  under  their  change  of  control
agreements,  the  amounts  and/or  values of the  benefits  they  each  would be
entitled to receive are as follows: (1) Mr. Richey would be entitled to $422,200
in respect of the continuation of his current base salary for one year, $316,650
in  respect  of his  target  bonus  for the year and  $6,480 in  respect  of the
continuation of his current health insurance  benefits for one year, for a total
of $745,330;  (2); Mr.  Slangen  would be entitled to $386,200 in respect of the
continuation of his current base salary for one year, $289,650 in respect of his
target  bonus for the year and  $6,480 in  respect  of the  continuation  of his
current health insurance benefits for one year, for a total of $682,330; and (3)
Mr. Thompson would be entitled to $401,200 in respect of the continuation of his
current  base salary for one year,  $300,900 in respect of his target  bonus for
the year and  $6,480  in  respect  of the  continuation  of his  current  health
insurance benefits for one year, for a total of $708,580.

     The  Company   also  has  entered   into  a   technical   information   and
non-competition  agreement  with each of Messrs.  Richey,  Slangen and  Thompson
which   contain   provisions   requiring   each   executive   to  maintain   the
confidentiality  of  non-public   Company   information  during  and  after  his
employment  and to  assign to the  Company  any  rights  that he may have in any
intellectual property developed in the course of his employment.  The agreements
also contain provisions which restrict each executive's ability to engage in any
business that is competitive with the Company's business,  or to solicit Company
employees, customers or suppliers for a period of three years following the date
of termination of his  employment;  provided that, if the executive is unable to
obtain  employment  consistent with his training and education solely because of
the  non-competition  provisions  of  the  agreement,  the  provisions  will  be
effective  only  for so  long  as the  Company  makes  monthly  payments  to the
executive  equal to his monthly  base salary at the time of  termination  of his
employment with the Company  (including  payment of premiums for health and life
insurance as generally provided to the Company's employees).

         Change of Control Agreements

     The Company has entered into change of control  agreements  with certain of
its executive  officers,  including each of the Named  Executive  Officers.  The
agreements  continue  through  December  31 of each  year and are  automatically
extended  in  one-year  increments  unless the  Company  gives  prior  notice of
termination  at least one year in  advance.  These  agreements  are  intended to
ensure  the  continuity  of  management  and  the  continued  dedication  of the
executives  during any period of uncertainty  caused by the possible threat of a
takeover.

     In the event that there is a change of control of the  Company  (as defined
in the agreement) and the executive remains employed by the Company on the first
anniversary  of the change of control,  the  executive  is entitled to receive a
retention  bonus payment equal to the sum of (a) the highest  annual base salary
paid by the Company to the executive  since the effective date of the agreement;
and (b) the higher of the executive's  target bonus amounts for the two previous
fiscal years (such sum being  hereinafter  referred to as "Base  Compensation").
Assuming a change of control of the Company as of December 31, 2006,  if each of
the Named  Executive  Officers  were to remain  employed by the Company one year
after the change of control, he would be entitled to receive a retention payment
equal to his Base Compensation as follows:  (1) Mr. Mixon:  $2,148,900;  (2) Mr.
Blouch: $1,314,690; (3) Mr. Richey: $738,850; (4) Mr. Slangen: $675,850; and (5)
Mr. Thompson: $702,100.

     If the executive is terminated  without cause (as defined in the agreement)
or resigns for good reason (as defined in the  agreement) at any time during the
three year period  following a change of control under the  conditions set forth
in the agreements, the executive will receive, in addition to accrued but unpaid
salary, bonus and vacation pay, the following:

                                       46

     o    a  lump  sum  amount  equal  to  three  times  the  executive's   Base
          Compensation,  less  the  one  year  retention  payment  paid  to  the
          executive, if any, as described above;

     o    a lump sum amount equal to three times the greatest  contribution made
          by the Company to each of the Invacare  Retirement  Savings Plan,  the
          401(k) Plus Plan and the DC Plus Plan on behalf of the  executive  for
          any year in the three years prior to the change of control;

     o    a lump sum  amount  equal to the  difference  between  (a) the  amount
          payable to the executive  under the Company's  SERP and (b) the amount
          that would have been payable to the executive under the Company's SERP
          if the executive had continued to be employed by the Company for three
          years after  termination  of employment at the highest level of annual
          compensation  received by the  executive  from the Company in any year
          during the three years prior to the change of control;

     o    continuing  coverage under the Company's  health,  life and disability
          insurance  programs  (including those available only to executives and
          those generally available to employees of the Company) for three years
          after termination of employment;

     o    accelerated vesting of all outstanding unvested stock options, so that
          all  options  become  exercisable  in full  and  will  continue  to be
          exercisable for two years after termination (unless the option earlier
          expires by its terms);

     o    accelerated vesting of all outstanding restricted stock;

     o    immediate  vesting  of  the  executive's  rights  under  the  Invacare
          Retirement  Savings Plan,  the 401(k) Plus Plan,  the DC Plus Plan and
          the SERP (as if the executive  achieved the maximum normal  retirement
          benefit);

     o    a lump sum payment as necessary to "gross up," on an after-tax  basis,
          the  executive's  compensation  for all excise taxes and any penalties
          and interest  imposed by Section 4999 of the Internal Revenue Code and
          Section 409A of the Internal Revenue Code.

     The table below reflects the  approximate  amounts that would be payable to
each Named Executive Officer under the individual  change of control  agreements
assuming that the change of control  occurred at December 31, 2006 and that such
executive's  employment  was  terminated in a manner  triggering  payment of the
above  benefits,  including a gross-up  for certain  taxes in the event that any
payments  made in  connection  with a change in control  would be subject to the
excise tax imposed by Section 4999 of the Internal  Revenue  Code,  and assuming
that no payments would be subject to excise tax or penalties  imposed by Section
409A of the Internal Revenue Code.


---------------- ------------- -------------- ------------- ------------- -------------- ------------- -------------
                               Retirement                   Early         Early
                 Lump Sum      Plan           Continuing    Vesting of    Vesting of     Estimated
                 Severance     Enhancement    Benefit       Stock         Restricted     Tax Gross
Name             Amount (1)    (2)            Plan          Options (4)   Stock (4)      Up (5)        Total
                                              Coverage (3)
---------------- ------------- -------------- ------------- ------------- -------------- ------------- -------------
                                                                                  
A. Malachi       $ 6,976,491   $        --    $ 46,440       $ 58,931        $462,316    $        --   $ 7,544,178
Mixon III
---------------- ------------- -------------- ------------- ------------- -------------- ------------- -------------
Gerald B.        $ 4,095,273   $        --    $ 47,781       $ 23,669        $214,178    $        --   $ 4,380,901
Blouch
---------------- ------------- -------------- ------------- ------------- -------------- ------------- -------------
Gregory C.       $ 2,377,902   $  3,063,922   $ 45,828       $ 11,135        $124,673    $ 2,723,921   $ 8,347,381
Thompson
---------------- ------------- -------------- ------------- ------------- -------------- ------------- -------------
Joseph B.        $ 2,397,591   $        --    $ 28,524       $  6,055        $ 33,616    $        --   $ 2,465,786
Richey II
---------------- ------------- -------------- ------------- ------------- -------------- ------------- -------------
Louis F. J.      $ 2,189,337   $        --    $ 62,628       $  6,055        $ 33,616    $        --   $ 2,291,636
Slangen
---------------- ------------- -------------- ------------- ------------- -------------- ------------- -------------

                                       47

--------------
(1)  This amount is  comprised of (i) a lump sum amount equal to three times the
     executive's  Base   Compensation   (which  is  $6,446,700  for  Mr.  Mixon,
     $3,944,070 for Mr. Blouch, $2,106,300 for Mr. Thompson,  $2,216,550 for Mr.
     Richey and  $2,027,550  for Mr.  Slangen);  (ii) a lump sum amount equal to
     three times the greatest  contribution made by the Company on behalf of the
     executive for any year in the three years prior to the change of control to
     (A) the  Invacare  Retirement  Savings  Plan  (which is $39,000 for Messrs.
     Mixon,  Blouch,  Richey and Slangen and $44,850 for Mr. Thompson),  (B) the
     401(k) Plus Plan (which is $325,230 for Mr. Mixon,  $18,687 for Mr. Blouch,
     $69,975  for Mr.  Thompson,  $93,885  for Mr.  Richey and  $81,543  for Mr.
     Slangen),  (C) the DC Plus Plan (which is $165,561 for Mr.  Mixon,  $93,516
     for Mr.  Blouch,  $44,376  for Mr.  Thompson,  $48,156  for Mr.  Richey and
     $41,244  for  Mr.  Slangen),  and  (iii) a lump  sum  amount  equal  to the
     difference  between (a) the amount payable to the executive  under the SERP
     and (b) the amount that would have been payable to the executive  under the
     SERP if he had  continued  to be  employed  by the  Company for three years
     after  termination  of  employment  (which is  $112,401  for Mr.  Thompson;
     Messrs.  Mixon,  Blouch,  Richey and  Slangen  are each 100%  vested with a
     service ratio that allows for maximum benefits under the SERP and therefore
     receive no additional benefit pursuant to the applicable  provisions of the
     change of control agreements).

(2)  This amount is comprised of (i) the present value of the difference between
     (a) the  actuarial  equivalent  of the  retirement  benefit  payable to the
     executive under the SERP assuming the vesting  percentage and service ratio
     are  accelerated  to  allow  for  maximum  benefits  and (b) the  actuarial
     equivalent of the  retirement  benefit  currently  payable to the executive
     under the SERP without acceleration,  which is $3,042,272 for Mr. Thompson;
     (ii) the  present  value of the  difference  between  (a) the amount of the
     executive's  vested account balance under the Invacare  Retirement  Savings
     Plan, assuming 100% vesting of all contributions, and (b) the amount of the
     executive's  currently vested account balance under the Invacare Retirement
     Savings Plan, which is $10,070 for Mr. Thompson; (iii) the present value of
     the  difference  between (a) the amount of the  executive's  vested account
     balance  under  the  401(k)  Plus  Plan,   assuming  100%  vesting  of  all
     contributions  and (b)  the  amount  of the  executive's  currently  vested
     account  balance  under the  401(k)  Plus  Plan,  which is  $6,693  for Mr.
     Thompson;  and (iv) the  present  value of the  difference  between (a) the
     amount of the  executive's  vested account  balance under the DC Plus Plan,
     assuming  100%  vesting  of all  contributions  and (b) the  amount  of the
     executive's  currently vested account balance under the DC Plus Plan, which
     is $4,887 for Mr. Thompson. Assuming a change of control of the Company and
     termination of his  employment as of December 31, 2006, Mr.  Thompson would
     become  100%  vested in the SERP with a service  ratio that would allow for
     maximum  benefits.  Messrs.  Mixon,  Blouch,  Richey and  Slangen  are each
     currently  100%  vested  in each of the  above  mentioned  plans  and  have
     achieved the service ratio  necessary to allow for maximum  benefits  under
     the SERP and therefore would receive no additional  benefits under the SERP
     as a result of a change of control.

(3)  This amount  represents the present value of continuing  coverage under the
     Company's health,  life and disability  insurance programs (including those
     available only to executives and those generally  available to employees of
     the Company) for three years following the date of termination.

(4)  These  awards  would  become  vested and the amount  shown  represents  the
     present  value of the  acceleration  of vesting  under  Section 4999 of the
     Internal Revenue Code.

(5)  The estimated tax gross-up is calculated  assuming that a change of control
     of the Company and  termination of the executive's  employment  occurred at
     December 31, 2006 and assuming  that none of the payments  made pursuant to
     the  change  of  control  agreements  were  made in  consideration  of past
     services.

Retirement and Other Post-Termination Benefits

     The Company maintains other plans and arrangements with its Named Executive
Officers which provide for post-employment benefits upon the retirement or death
of the executives, as further described below.

                                       48

         Retirement Plans

     The Company's Named  Executive  Officers are eligible to participate in the
SERP and the DC Plus Plan.  The SERP and the  present  value of the  accumulated
benefits of each Named Executive Officer under the SERP are described  elsewhere
in this proxy statement under the Pension  Benefits Table.  The DC Plus Plan and
the aggregate account balance of each Named Executive Officer under the plan are
described  elsewhere in this proxy  statement under the  Non-Qualified  Deferred
Compensation Table.

         Death Benefit Only Plan

     The Company maintains a Death Benefit Only Plan ("DBO Plan") for its senior
executives  other than the CEO. By  participating  in the DBO Plan, an executive
agrees to limit his  coverage  under the  Company's  other group life  insurance
plans  to a  maximum  of  $50,000.  Under  the  DBO  Plan,  subject  to  certain
limitations, if a participant dies while employed by the Company, his designated
beneficiary shall receive a benefit equal to three times the executive's highest
annual base salary plus target bonus as in effect on the April 1st  preceding or
coincident with his death. If a participant dies after attaining age 65 or after
his employment  with the Company is otherwise  terminated  following a change of
control of the Company,  a payment equal to his highest  annual base salary plus
target  bonus as in effect on the April 1st  preceding or  coincident  with such
event will be payable on behalf of the  participant.  The  Company  may,  in its
discretion,  pay an additional amount in order to "gross up" the participant for
some or all of the  income  taxes that may result  from the  benefits  described
above. With respect to each Named Executive  Officer,  if the executive had died
on December  31,  2006,  the  following  amounts  would have been  payable on an
after-tax basis under the DBO Plan: (1) $3,944,070 to the  beneficiaries  of Mr.
Blouch;  (2) $738,850 to the  beneficiaries  of Mr. Richey (who is over age 65);
(3) $2,027,550 to the  beneficiaries  of Mr. Slangen;  and (4) $2,106,300 to the
beneficiaries  of Mr.  Thompson.  Upon a change of control of the  Company,  the
Company's obligations under the DBO Plan will be binding on any successor to the
Company and the foregoing  benefits would be payable to a participant  under the
DBO Plan in  accordance  with the terms  described  above  upon the death of the
participant following the change of control.

         Chairman and CEO Retirement Program

     In March 2000, the Company  established a retirement program for Mr. Mixon.
Under the  program,  upon his  retirement,  Mr.  Mixon is to be provided  with a
spending account of $1,000,000 for reimbursement of office and clerical support,
financial  and legal  planning  and other  reasonable  expenses  incurred  in an
ongoing role as  consultant  to the Company.  If, after five years,  any amounts
remain in such account, the remaining amounts are to be paid to Mr. Mixon or his
beneficiaries.  The program further  provides that, for the five years following
his  retirement,  Mr. Mixon will be reimbursed  for the cost of private or first
class airfare of up to a maximum of $150,000 in the aggregate,  the cost of home
security  expenses  of up to $2,000  per year and the  annual  premium  cost for
medical insurance for Mr. Mixon and his spouse that is substantially  similar to
that  maintained  by the  Company  on his  behalf  prior to his  retirement.  In
addition, during the five years after his retirement, Mr. Mixon will continue to
be eligible to  participate,  at the Company's  cost, in such personal  umbrella
insurance  coverage and medical  check-up  benefit plans as may be maintained by
the Company for its senior executives. The program will terminate on the earlier
of the fifth anniversary of Mr. Mixon's  retirement from the Company or a change
of control of the  Company  as  defined  under the Change of Control  Agreements
described  above.  The Company  estimates that,  assuming that Mr. Mixon retired
from the Company at December 31, 2006,  the total amount payable to Mr. Mixon in
connection  with  the  foregoing   benefits  would  be  equal  to  approximately
$1,250,650.




                                       49



                            Compensation of Directors

     Non-employee  directors were paid a $35,000 annual retainer in 2006,  which
was  increased  from  $30,000 for 2005,  $2,000 per Board  meeting  attended and
$1,500 per committee meeting  attended,  or $2,000 per committee meeting for the
committee chairperson. If the Board or a committee meets via teleconference, the
directors  attending  the  meeting  receive  one-half  of the  normal  Board  or
committee meeting  attendance fee. The Chairman of the Audit Committee  receives
an  additional  retainer  of $5,000  per year.  In  addition,  all  non-employee
directors  receive  annual  stock  option  grants to acquire up to 4,000  shares
vesting over a four-year term.

     Directors  are  eligible to defer  compensation  payable by the Company for
their services as a director into discounted (to 75% of market value on the date
of grant)  stock  options  granted  under the 2003  Plan.  Mr.  Boland  deferred
$51,000,  Mr. Delaney deferred $4,100,  Dr. Harris deferred $32,800,  Mr. Kasich
deferred $43,000 and Mr. Weber deferred $58,000 of their 2006  compensation and,
as a result, each was issued stock options on December 16, 2005 with an exercise
price per share discounted 25% from the closing price per share of the Company's
common shares as quoted on the New York Stock Exchange on that date.


                        2006 Director Compensation Table


------------------------------------------------------------------------------------------------------------
    Name        Fees     Stock     Option       Non-Equity        Change in      All Other       Total
             Earned or   Awards    Awards     Incentive Plan       Pension      Compensation     ($)
              Paid in     ($)      ($) (1)     Compensation       Value and         ($)
                Cash                                ($)          Nonqualified
                ($)                                                Deferred
                                                                 Compensation
                                                                   Earnings
------------ ----------  ------  ---------    --------------     ------------   -------------    -----------
                                                                            
James Boland 60,000 (2)    --    3,025 (3)          --                --             --          63,025
------------------------------------------------------------------------------------------------------------
Michael      45,500 (4)    --    3,025 (5)          --                --             --          48,525
Delaney
------------------------------------------------------------------------------------------------------------
Dr. C.       45,500 (6)    --    3,025 (7)          --                --             --          48,525
Martin
Harris
------------------------------------------------------------------------------------------------------------
Dr.          50,250 (8)    --    3,025 (9)          --                --             --          53,275
Bernadine
Healy
------------------------------------------------------------------------------------------------------------
John Kasich  45,500 (10)   --    3,025 (11)         --                --             --          48,525
------------------------------------------------------------------------------------------------------------
Dan T. Moore 53,750 (12)   --    3,025 (13)         --                --             --          56,775
------------------------------------------------------------------------------------------------------------
William      66,250 (14)   --    3,025 (15)         --                --         5,084 (16)      74,359
Weber
------------------------------------------------------------------------------------------------------------

(1)  The values reported in this column  represent the dollar amount  recognized
     for  financial  statement  purposes for the fiscal year ended  December 31,

                                       50

     2006 in accordance  with FAS 123R with respect to all stock options awarded
     to each  director  during  2006.  The grant  date  fair  value of the stock
     options  granted  to  each  of the  directors  in  2006  was  $8.97.  For a
     description  of the  assumptions  made in computing the values  reported in
     this  column,  see  "Shareholders'  Equity  Transactions"  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, 2006.

(2)  The fees to Mr. Boland include a $35,000 retainer, $8,000 for attendance at
     four Board  meetings,  $6,000 for attendance (as committee  chair) at three
     meetings  of  the  Compensation,   Management   Development  and  Corporate
     Governance  Committee,  $6,000 for attendance at four meetings of the Audit
     Committee,  $3,000 for  attendance at four  teleconference  meetings of the
     Audit Committee,  $1,000 for attendance at one Board teleconference meeting
     and $1,000 for  attendance  (as committee  chairman) at one  teleconference
     meeting of the Compensation  Committee.  Mr. Boland deferred certain of his
     2006 Director fees, as further described above.

(3)  As of the end of the fiscal  year,  Mr.  Boland held  options to buy 57,541
     common  shares  of  the  Company  under  the  Invacare   Corporation   1992
     Non-Employee  Directors  Stock Option Plan, the Invacare  Corporation  1994
     Performance Plan and the Invacare  Corporation  2003 Performance  Plan. All
     options  were  granted  between  October  30,  1998 and March 8,  2006,  at
     exercise  prices  between  $16.03 to $47.01 per share,  will expire between
     October 30, 2008 and March 8, 2016,  and became or will become  exercisable
     between October 30, 1999 and March 31, 2010.

(4)  The fees to Mr. Delaney include a $35,000  retainer,  $8,000 for attendance
     at four  Board  meetings,  $1,500  for  attendance  at one  meeting  of the
     Investment  Committee and $1,000 for attendance at one Board teleconference
     meeting. Mr. Delaney deferred certain of his 2006 Director fees, as further
     described above.

(5)  As of the end of the fiscal  year,  Mr.  Delaney held options to buy 17,864
     common  shares  of  the  Company  under  the  Invacare   Corporation   1994
     Performance Plan and the Invacare  Corporation  2003 Performance  Plan. All
     options were  granted  between  March 2, 1999 and  December  15,  2006,  at
     exercise prices between  $16.3125 to $47.01 per share,  will expire between
     March 2, 2009 and December 15, 2016, and became or will become  exercisable
     between March 31, 2000 and March 31, 2010.

(6)  The fees to Dr. Harris include a $35,000 retainer, $8,000 for attendance at
     four Board meetings, $1,500 for attendance at one meeting of the Investment
     Committee and $1,000 for  attendance at one Board  teleconference  meeting.
     Mr. Harris deferred certain of his 2006 Director fees, as further described
     above.

(7)  As of the end of the fiscal  year,  Dr.  Harris held  options to buy 27,922
     common  shares  of  the  Company  under  the  Invacare   Corporation   1994
     Performance Plan and the Invacare  Corporation  2003 Performance  Plan. All
     options  were  granted  between  February  5,  2003 and March 8,  2006,  at
     exercise  prices  between  $22.68 to $47.01 per share,  will expire between
     February 5, 2013 and March 8, 2016,  and became or will become  exercisable
     between December 31, 2003 and March 31, 2010.

(8)  The fees to Dr. Healy include a $35,000 retainer,  $8,000 for attendance at
     four Board meetings, $2,000 for attendance at one meeting of the Investment
     Committee  (as  committee  chairperson),  $4,500  for  attendance  at three
     meetings  of the  Compensation  Committee  and $750 for  attendance  at one
     teleconference meeting of the Compensation Committee.

(9)  As of the end of the fiscal  year,  Dr.  Healy  held  options to buy 39,437
     common  shares  of  the  Company  under  the  Invacare   Corporation   1994
     Performance Plan and the Invacare  Corporation  2003 Performance  Plan. All
     options were granted  between  March 2, 1999 and March 8, 2006, at exercise
     prices  between  $16.03 to $47.01 per share,  will expire  between March 2,
     2009 and March 8, 2016, and became or will become exercisable between March
     31, 2000 and March 31, 2010.

                                       51

(10) The fees to Mr. Kasich include a $35,000 retainer, $8,000 for attendance at
     four Board meetings, $1,500 for attendance at one meeting of the Investment
     Committee  and  $1,000  for   attendance   (as  committee   chair)  of  one
     teleconference  meeting of the Nominating  Committee.  Mr. Kasich  deferred
     certain of his 2006 Director fees, as further described above.

(11) As of the end of the fiscal  year,  Mr.  Kasich held  options to buy 48,457
     common  shares  of  the  Company  under  the  Invacare   Corporation   1992
     Non-Employee  Directors  Stock Option Plan, the Invacare  Corporation  1994
     Performance Plan and the Invacare  Corporation  2003 Performance  Plan. All
     options were  granted  between  March 1, 2001 and  December  15,  2006,  at
     exercise prices between  $18.1875 to $47.01 per share,  will expire between
     March 1, 2011 and December 15, 2016, and became or will become  exercisable
     between March 31, 2002 and March 31, 2010.

(12) The fees to Mr. Moore include a $35,000 retainer,  $8,000 for attendance at
     four Board meetings,  $750 for attendance at one teleconference  meeting of
     the  Nominating  Committee,  $6,000 for  attendance at four meetings of the
     Audit Committee,  $3,000 for attendance at four teleconference  meetings of
     the Audit  Committee and $1,000 for attendance at one Board  teleconference
     meeting.

(13) As of the end of the fiscal  year,  Mr.  Moore  held  options to buy 32,953
     common  shares  of  the  Company  under  the  Invacare   Corporation   1994
     Performance Plan and the Invacare  Corporation  2003 Performance  Plan. All
     options were granted  between  March 2, 1999 and March 8, 2006, at exercise
     prices between  $16.3125 to $47.01 per share,  will expire between March 2,
     2009 and March 8, 2016, and became or will become exercisable between March
     31, 2000 and March 31, 2010.

(14) The fees to Mr. Weber include a $35,000 retainer,  $8,000 for attendance at
     four  Board  meetings,  $4,500  for  attendance  at three  meetings  of the
     Compensation,  Management Development and Corporate Governance Committee, a
     $5,000 retainer as Chairman of the Audit  Committee,  $8,000 for attendance
     (as committee  chair) at four meetings of the Audit  Committee,  $4,000 for
     attendance  (as  committee  chair) at four  teleconference  meetings of the
     Audit Committee,  $1,000 for attendance at one Board teleconference meeting
     and $750 for  attendance at a  teleconference  meeting of the  Compensation
     Committee. Mr. Weber deferred certain of his 2006 Director fees, as further
     described above.

(15) As of the end of the fiscal  year,  Mr.  Weber  held  options to buy 21,365
     common  shares  of  the  Company  under  the  Invacare   Corporation   1994
     Performance Plan and the Invacare  Corporation  2003 Performance  Plan. All
     options were granted  between  March 2, 1999 and March 8, 2006, at exercise
     prices  between  $19.50 to $47.01 per share,  will expire  between March 2,
     2009 and March 8, 2016, and became or will become exercisable between March
     31, 2000 and March 31, 2010.

(16) Other compensation  includes personal use of corporate suites or tickets to
     sporting  events.   See  the  discussion  in  footnote  7  to  the  Summary
     Compensation  Table for a  description  of the  Company's  methodology  for
     determining the incremental cost of this perquisite.

                                       52


                      Equity Compensation Plan Information

     The following table provides  information as of December 31, 2006 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 2003 Performance  Plan, the Invacare  Corporation 1994
Performance Plan and the Invacare Corporation 1992 Non-Employee  Directors Stock
Option Plan.


                                                                                         Number of securities
                                       Number of securities      Weighted-average      remaining available for
                                         to be issued upon      exercise price of       future issuance under
                                            exercise of            outstanding        equity compensation plans
                                       outstanding options,     options, warrants       (excluding securities
 Plan Category                          warrants and rights         and rights         reflected in column(a))
 -------------                          -------------------         ----------         -----------------------
                                                (a)                    (b)                       (c)
                                                                                        
Equity compensation plans  approved
by security holders                           4,724,651               $30.68                1,784,033 (1)

Equity compensation plans not                                             __                       __
approved by security holders                    305,578 (2)
                                              ---------               ------

Total                                         5,030,229               $30.68                1,784,033
                                              =========               ======                =========

----------

(1)  Represents shares available under the Invacare Corporation 2003 Performance
     Plan.  The  Invacare  Corporation  2003  Performance  Plan  allows  for the
     granting of no more than 300,000 shares at an exercise price of zero and no
     more than 200,000  shares at an exercise  price of not less than 75% of the
     market  value on the date the option is granted.  All other  option  grants
     must be made at not less than the  market  value on the date the  option is
     granted.

(2)  Represents  phantom  share  units in the  401(k)  Plus Plan and the DC Plus
     Plan.


                                  OTHER MATTERS

     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 instructed to do otherwise.

     Any  shareholder who wishes to submit a proposal for inclusion in the proxy
material to be distributed by Invacare in connection  with its annual meeting of
shareholders to be held in 2008 must do so no later than December [__], 2007. To
be eligible for inclusion in our 2008 proxy material,  proposals must conform to
the requirements of Regulation 14A under the Securities Exchange Act of 1934, as
amended.

     Unless we receive a notice of a shareholder  proposal to be brought  before
the 2008 annual  meeting by February  [__],  2007,  then  Invacare  may vote all
proxies in their  discretion with respect to any shareholder  proposal  properly
brought before such annual meeting.

     Upon the receipt of a written request from any  shareholder,  Invacare
     will mail, at no charge to the shareholder,  a copy of Invacare's 2006
     Annual Report on Form 10-K,  including the  financial  statements  and
     schedules  required  to be filed  with  the  Securities  and  Exchange
     Commission,  for Invacare's most recent fiscal year.  Written requests
     for any Reports should be directed to:

                                       53

                           Shareholder Relations Department
                           Invacare Corporation
                           One Invacare Way, P.O. Box 4028
                           Elyria, Ohio 44036-2125

     You are urged to sign and return your proxy promptly in the enclosed return
envelope to make certain your shares will be voted at the annual meeting.

                                     By Order of the Board of Directors,





                                    Dale C. LaPorte
                                    Secretary



                                       54

                                                                      Appendix A

     The  following is the full text of the proposed  amendments  to the Amended
and  Restated   Articles  of   Incorporation   of  Invacare   Corporation   (the
"Corporation"),  reflecting  the  amendments  described in Proposal No. 2 of the
Corporation's Proxy Statement dated April [_], 2007.

     RESOLVED,   that  the  Corporation's   Amended  and  Restated  Articles  of
Incorporation be and hereby is amended as follows:

     1.  Paragraph  4.1(i) of Article  IV,  Subdivision  B of the  Corporation's
Amended and Restated  Articles of Incorporation is hereby amended to read in its
entirety as follows:

               "(i) Each Class B Common Share shall be convertible, at any time,
               at the office of any transfer  agent for the Common Shares of the
               Corporation,  and at such other  place or places,  if any, as the
               Board  of  Directors  may  determine,  into  one  fully  paid and
               nonassessable  Common Share of the Corporation  upon surrender at
               such office or other  place of the  certificate  or  certificates
               representing  any  certificated  Class B Common  Shares  so to be
               converted  or,  in the  case  of  non-certificated  shares,  upon
               written   request  in  form  and  substance   acceptable  to  the
               Corporation or any transfer agent for the shares,  accompanied by
               such  assurances as the  Corporation  or such transfer  agent may
               require.  In no  event,  upon  conversion  of any  Class B Common
               Shares into Common  Shares,  shall any allowance or adjustment be
               made in respect of dividends on the Class B Common  Snares or the
               Common Shares."

     2.  Paragraph  4.1(ii) of Article IV,  Subdivision  B of the  Corporation's
Amended and Restated  Articles of Incorporation is hereby amended to read in its
entirety as follows:

               "(ii)  Class B  Common  Shares  shall  be  deemed  to  have  been
               converted  and the  person  converting  the same  shall  become a
               holder of Common  Shares for the purpose of  receiving  dividends
               and for all  other  purposes  whatsoever  as of the date when the
               Class B Common  Shares to be  converted  are  surrendered  to the
               Corporation as provided in paragraph 4.1(v)."

     3.  Paragraph  4.1(v) of Article  IV,  Subdivision  B of the  Corporation's
Amended and Restated  Articles of Incorporation is hereby amended to read in its
entirety as follows:

               "(v) Before any holder of Class B Common Shares shall be entitled
               to convert the same into  Common  Shares,  he shall give  written
               notice to the  Corporation  at the office of a transfer agent for
               the Common Shares,  or at such other place or places,  if any, as
               the  Board of  Directors  may  determine,  that he  elects  so to
               convert Class B Common Shares in form and substance acceptable to
               the  Corporation  or such transfer  agent,  accompanied by a duly
               endorsed  stock  power  and/or  such  other   assurances  as  the
               Corporation  or such transfer  agent may require,  including,  if
               appropriate,  endorsed  certificate(s) (for certificated  shares)
               and duly  executed  instruments  of  transfer.  Unless the Common
               Shares  are to be issued in the name of the  registered  owner of
               the Class B Common Shares so converted, the holder shall state in
               writing the name or names in which he wishes the Common Shares to
               be issued,  and shall  furnish all requisite  stock  transfer and
               stock issuance tax stamps,  or funds  therefor.  The  Corporation
               shall as soon as practicable after such deposit of Class B Common
               Shares, accompanied by the written notice above prescribed, issue
               and deliver,  at the office or place at which such Class B Common
               Shares were  deposited,  to the person for whose  account Class B
               Common  Shares  were  so  surrendered,  or  to  his  assignee  or
               assignees,  the number of full Common Shares to which he shall be
               entitled as aforesaid."

     4. The last sentence of Paragraph  4.2 of Article IV,  Subdivision B of the
Corporation's  Amended and Restated  Articles of Incorporation is hereby amended
to read in its entirety as follows:

               "In the event of any such automatic conversion, each certificated
               and  non-certificated   Class  B  Common  Share  will  thereafter
               represent a Common Share."

                                      A-1

     5. Paragraph 6.1(i)(A)(4) of Article IV, Subdivision B of the Corporation's
Amended and Restated  Articles of Incorporation is hereby amended to read in its
entirety as follows:

               "(4) A  corporation  if all of the  outstanding  capital stock of
               such  corporation is  beneficially  owned by, or a partnership if
               all of the partners are and all of the partnership  interests are
               beneficially  owned by, the Holder and his Permitted  Transferees
               determined  under this  paragraph  6.1(1)(A)  provided that if by
               reason of any change in the  ownership  of such stock or partners
               or partnership  interests,  such corporation or partnership would
               no longer qualify as a Permitted Transferee of such Holder or his
               Permitted  Transferees,  all Class B Common  Shares  then held by
               such   corporation   or   partnership   shall   immediately   and
               automatically,  without  further  act or deed on the  part of the
               Corporation or any other person,  be converted into Common Shares
               on a share-for-share basis, and certificated and non-certificated
               Class B Common Shares shall thereupon and thereafter be deemed to
               represent the like number of Common Shares;"

     6. Paragraph 6.3 of Article IV, Subdivision B of the Corporation's  Amended
and Restated Articles of Incorporation is hereby amended to read in its entirety
as follows:

               "6.3 The Corporation shall note on certificates  representing the
               Class  B  Common  Shares  and  on  written  notices  relating  to
               non-certificated   Class  B  Common   Shares   that   there   are
               restrictions  on  transfer  and  registration  of transfer to the
               extent imposed by paragraph 6.1."

     7. The last sentence of Paragraph  6.5 of Article IV,  Subdivision B of the
Corporation's  Amended and Restated  Articles of Incorporation is hereby amended
to read in its entirety as follows:

               "In the event  that a holder of Class B Common  Shares  transfers
               such shares after the effective  date of such  cancellation  to a
               non-Permitted  Transferee,  such transfer shall  presumptively be
               deemed to be an election  by such holder to convert  such Class B
               Common  Shares  into  Common  Shares  immediately  prior  to  the
               effectiveness of such transfer unless the transferring  holder or
               his  agent  shall  give  written  notice  to the  Company  or its
               transfer  agent at the  time of  delivery  of the  Class B Common
               Shares to be  transferred  that the holder and the  transferee of
               such Class B Common  Shares intend to transfer the Class B Common
               Shares and that no such conversion is intended."

     8. The  following is hereby  inserted as a new  Paragraph (c) at the end of
Article VI of the Corporation's Amended and Restated Articles of Incorporation:

               "(c) Subject to and in a manner not inconsistent  with applicable
               law, the Board of Directors may provide by  resolution  that some
               or all of any or all  classes  and  series of  shares of  capital
               stock  of  the  Corporation  shall  be  non-certificated  shares,
               provided   that  the   resolution   shall  not  apply  to  shares
               represented by a certificate until the certificate is surrendered
               to  the  Corporation  and  the  resolution  shall  not  apply  to
               certificated  shares  issued  in  exchange  for  non-certificated
               shares.  Except as  expressly  provided  by law,  the  rights and
               obligations  of the  holders of  non-certificated  shares and the
               rights  and   obligations   of  the   holders   of   certificates
               representing  shares  of the  same  class  and  series  shall  be
               identical. Notwithstanding the foregoing, a shareholder of record
               shall have the right, so long as it may be required by applicable
               law, to receive one or more certificates representing some or all
               of the  shares  held of  record by such  shareholder  by making a
               written request therefor to the Corporation or any transfer agent
               for  the  applicable   class  of  shares,   accompanied  by  such
               assurances as the Corporation or such transfer agent may require;
               provided,  however,  that  shareholders  holding  shares  of  the
               Corporation under one or more of the Corporation's  benefit plans
               for officers, directors and/or employees shall have no such right
               to have  certificates  representing  shares  issued unless such a
               right is provided for under the applicable benefit plan, required
               by applicable law or otherwise  ordered by the Board of Directors
               or a committee thereof."

                                      A-2

     RESOLVED  FURTHER,  that the President and Secretary of the  Corporation be
and they are hereby authorized and directed to execute and file in the office of
the Secretary of State of Ohio an appropriate Certificate of Amendment,  pay any
filing fees and take any and all other  actions in order to carry out the intent
and purposes of the preceding  resolution and render effective such amendment to
the Amended and Restated Articles of Incorporation.

                                   * * * * *






                                      A-3

                                                                      Appendix B

                              INVACARE CORPORATION
                PROXY FOR COMMON SHARES AND CLASS B COMMON SHARES

                 Annual Meeting of Shareholders --- May 24, 2007
           This Proxy is solicited on behalf of the Board of Directors

     The undersigned  hereby (i) appoints GERALD B. BLOUCH,  GREGORY C. THOMPSON
and DALE C. LAPORTE, and each of them, as Proxy holders and attorneys, with full
power of  substitution,  to appear  and vote all the  Common  Shares and Class B
Common Shares of INVACARE  CORPORATION  (the  "Company"),  which the undersigned
shall be entitled to vote at the Annual Meeting of  Shareholders of the Company,
to be held at the Lorain County Community  College,  Spitzer  Conference Center,
Grand Room,  1005 North Abbe Road,  Elyria,  Ohio on  Thursday,  May 24, 2007 at
10:00 A.M. (EDT) and at any  adjournments  thereof,  hereby revoking any and all
Proxies  heretofore given, and (ii) authorizes and directs said Proxy holders to
vote all the Common Shares and Class B Common Shares of the Company  represented
by this Proxy as follows, with the understanding that if no directions are given
below,  said  shares  will be voted  "FOR" the  election  of the four  Directors
nominated  by the  Board  of  Directors,  "FOR"  Proposal  No.  2 and No.  3 and
"AGAINST" Proposal No. 4.

     (1)  ELECTION of Directors each to serve a three year term ending in 2010.

     ( )  FOR all nominees listed (except as   ( )  WITHHOLD AUTHORITY to vote
          marked to the contrary below)             for all nominees listed

             John R. Kasich, Dan T. Moore, III, Joseph B. Richey, II
                           and General James L. Jones

     (Instruction:  To withhold  authority to vote for any  individual  nominee,
     write that nominee's name on the following line.)

--------------------------------------------------------------------------------

     (2)  PROPOSAL to consider and vote upon amendments to the Company's Amended
          and Restated  Articles of Incorporation to permit the Company to issue
          non-certificated shares..

     ( )FOR the Proposal  ( )AGAINST the Proposal ( )ABSTAIN from the Proposal

     (3)  PROPOSAL to ratify  appointment  of Ernst & Young LLP as the Company's
          independent auditors.

     ( )FOR the Proposal  ( )AGAINST the Proposal ( )ABSTAIN from the Proposal

     (4)  PROPOSAL to consider and vote upon a shareholder proposal, if properly
          presented at the annual meeting.

     ( )FOR the Proposal  ( )AGAINST the Proposal ( )ABSTAIN from the Proposal

     (5)  In their  discretion  to act on any other  matters  which may properly
          come before the Annual Meeting.

                                      (Continued and to be signed on other side)


                      (Proxy --- continued from other side)


                                  Dated: _______________________________ , 2007


                                  ______________________________________
                                  Signature

                                  ______________________________________
                                  (Signature if held jointly)

                                  Your signature to the Proxy form should be
                                  exactly the same as the name imprinted hereon.
                                  Persons signing as executors, administrators,
                                  trustees or in similar capacities should so
                                  indicate. For joint accounts, the name of each
                                  joint owner must be signed.


       Please date, sign and return promptly in the accompanying envelope.

                                                                      Appendix C

                              INVACARE CORPORATION
                    COMMON SHARES AND CLASS B COMMON SHARES
                             VOTING INSTRUCTION CARD

                 Annual Meeting of Shareholders --- May 24, 2007
             This Card is solicited on behalf of the trustees of the
                        Invacare Retirement Savings Plan

     The undersigned  hereby  instructs the trustees of the Invacare  Retirement
Savings  Plan to vote the Common  Shares and Class B Common  Shares of  INVACARE
CORPORATION  (the  "Company")  which the  undersigned  is  entitled to vote as a
participant  in an  employee  benefit  plan which may be funded by the  Invacare
Retirement Savings Plan at the Annual Meeting of Shareholders of the Company, to
be held at the Lorain County Community College, Spitzer Conference Center, Grand
Room, 1005 North Abbe Road, Elyria, Ohio on Thursday, May 24, 2007 at 10:00 A.M.
(EDT) and at any adjournments  thereof.  The undersigned  authorizes and directs
the  trustees of the  Invacare  Retirement  Savings  Plan to vote all the Common
Shares  and Class B Common  Shares of the  Company  represented  by this Card as
follows,  with the  understanding  that if no directions  are given below,  said
shares will be voted "FOR" the election of the four  Directors  nominated by the
Board of Directors, "FOR" Proposal No. 2 and No. 3 and "AGAINST" Proposal No. 4.

     (1)  ELECTION of Directors each to serve a three year term ending in 2010.

     ( )  FOR all nominees listed (except as   ( )  WITHHOLD AUTHORITY to vote
          marked to the contrary below)             for all nominees listed

             John R. Kasich, Dan T. Moore, III, Joseph B. Richey, II
                           and General James L. Jones

     (Instruction:  To withhold  authority to vote for any  individual  nominee,
     write that nominee's name on the following line.)

--------------------------------------------------------------------------------

     (2)  PROPOSAL to consider and vote upon amendments to the Company's Amended
          and Restated  Articles of Incorporation to permit the Company to issue
          non-certificated shares..

     ( )FOR the Proposal  ( )AGAINST the Proposal ( )ABSTAIN from the Proposal

     (3)  PROPOSAL to ratify  appointment  of Ernst & Young LLP as the Company's
          independent auditors.

     ( )FOR the Proposal  ( )AGAINST the Proposal ( )ABSTAIN from the Proposal

     (4)  PROPOSAL to consider and vote upon a shareholder proposal, if properly
          presented at the annual meeting.

     ( )FOR the Proposal  ( )AGAINST the Proposal ( )ABSTAIN from the Proposal

     (5)  In their  discretion  to act on any other  matters  which may properly
          come before the Annual Meeting.

                                      (Continued and to be signed on other side)


                      (Proxy --- continued from other side)



                                  Dated: _______________________________ , 2007


                                  ______________________________________
                                  Signature

                                  ______________________________________
                                  (Signature if held jointly)

                                  Your signature to the Instruction Card form
                                  should be exactly the same as the name
                                  imprinted hereon.  Persons signing as
                                  executors, administrators, trustees or in
                                  similar capacities should so indicate. For
                                  joint accounts, the name of each  joint owner
                                  must be signed.

       Please date, sign and return promptly in the accompanying envelope.