SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities and Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): December 21, 2005
INVACARE CORPORATION
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(Exact Name of Registrant as Specified in its Charter)
OHIO
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(State or Other Jurisdiction of Incorporation)
0-12938 95-2680965
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(Commission File No.) (IRS Employer Identification No.)
One Invacare Way, P.O. Box 4028, Elyria, Ohio 44036
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(Address of Principal Executive Offices)
(440) 329-6000
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(Registrant's Telephone Number, Including Area Code)
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Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 204.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
Item 1.01. Entry into a Material Definitive Agreement.
On December 21, 2005, the Board of Directors of Invacare Corporation (the
"Company"), based on the recommendation of the Compensation, Management
Development and Corporate Governance Committee (the "Committee"), approved the
acceleration of the vesting for substantially all of the Company's previously
unvested stock options which were granted under the Invacare Corporation 1994
Performance Plan, as amended, and the Invacare Corporation 2003 Performance Plan
(the "Plans"), and which are currently underwater. The Board of Directors
decided to approve the acceleration of the vesting of the Company's stock
options primarily to partially offset the recent reductions in other benefits
made by the Company and to provide additional incentive to those critical to the
Company's current cost reduction efforts.
The decision, which is effective as of December 21, 2005, accelerates the
vesting for a total of 1,368,307 of the Company's common shares; including
646,100 shares underlying options held by the Company's named executive
officers. The stock options accelerated equate to 29% of the Company's total
outstanding stock options. Vesting was not accelerated for the restricted awards
granted under the Plans and no other modifications were made to the awards that
were accelerated. The exercise prices of the accelerated options, all of which
are currently underwater, are unchanged by this acceleration of the vesting
schedules.
The acceleration of the vesting schedules of the Company's stock options was
done pursuant to Section 13(b) of the Invacare Corporation 1994 Performance
Plan, as amended, and Section 13(b) of the Invacare Corporation 2003 Performance
Plan, both of which authorize the amendment of the terms of any award, including
the acceleration of vesting. The majority of the stock options granted under the
Plans were awarded with vesting occurring over a four-year period.
All of the Company's outstanding unvested options under the Plans, which were
accelerated, had exercise prices ranging from $30.91 to $47.80 which are greater
than the Company's stock market price of $30.75 as of the effective date of the
acceleration.
Currently, the Company utilizes the disclosure-only provisions of Statement of
Financial Accounting Standards No. 123 (SFAS No. 123), Accounting for
Stock-Based Compensation. As such, the Company's current year pro-forma earnings
will reflect additional expense of approximately $12,000,000 before taxes, which
is equivalent to net earnings per share assuming dilution of approximately
$0.25. This additional expense would have been recognized between 2006 and 2009
in accordance with the Company's adoption of SFAS No. 123r, Share-Based Payment,
on January 1, 2006, if the vesting was not accelerated.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Invacare Corporation
By: /s/ Gregory C. Thompson
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Gregory C. Thompson
Chief Financial Officer
Date: December 22, 2005