INVACARE CORPORATION
                              1994 PERFORMANCE PLAN
 
 
1.       Purpose
 
     The Invacare  Corporation 1994 Performance Plan, as the same may be amended
(the "Plan"),  is designed to foster the long-term growth and performance of the
Company by: (a)  enhancing  the  Company's  ability to attract and retain highly
qualified  employees  and (b)  motivating  employees  to serve and  promote  the
long-term interests of the Company and its shareholders  through stock ownership
and  performance-based  incentives.  To achieve this purpose,  the Plan provides
authority for the grant of Stock Options,  Restricted  Stock,  Stock  Equivalent
Units,  Stock  Appreciation  Rights,  and  other  stock  and   performance-based
incentives.
 
2.       Definitions
 
     (a)  "Affiliate" -- means the same definition as under Rule 12b-2 under the
Exchange Act.
 
     (b) "Award" -- means the grant of Stock Options,  Restricted  Stock,  Stock
Equivalent Units,  Stock Appreciation  Rights,  Cash Awards, and other stock and
performance-based incentives under this Plan.
 
     (c) "Award  Agreement"  -- means any  agreement  between  the Company and a
Participant that sets forth terms, conditions, and restrictions applicable to an
Award.
 
     (d) "Board of Directors" -- means the Board of Directors of the Company.
 
     (e) "Cash Award" -- is defined in Section 6(b) (iv).
 
     (f)  "Change  in  Control"  --  means,  at any time  after  the date of the
adoption of this Plan, the occurrence of any one or more of the following:
 
          (i)  Any Person  (other  than any  employee  benefit  plan or employee
               stock  ownership  plan of the Company,  or any Person  organized,
               appointed,  or established by the Company, for or pursuant to the
               terms  of any  such  plan),  alone  or  together  with any of its
               Affiliates or Associates,  becomes the Beneficial Owner of 30% or
               more of the total  outstanding  voting power of the  Company,  as
               reflected by the power to vote in connection with the election of
               Directors,  or  commences  or  publicly  announces  an  intent to
               commence a tender  offer or exchange  offer the  consummation  of
               which would result in the Person becoming the Beneficial Owner of
               30% or more of the total outstanding  voting power of the Company
               as reflected by the power to vote in connection with the election
               of  Directors.  For purposes of this Section 2 (f) (i), the terms
               "Affiliates," "Associates," and "Beneficial Owner," will have the
               meanings given to them in the Rights Agreement, dated as of April
               2, 1991, between Invacare  Corporation and National City Bank, as
               Rights Agent, as amended from time to time.
 
          (ii) At any time during a period of 24 consecutive months, individuals
               who were  Directors  at the  beginning  of the  period  no longer
               constitute  a majority of the members of the Board of  Directors,
               unless  the  election,  or the  nomination  for  election  by the
               Company's  shareholders,  of each Director who was not a Director
               at the beginning of the period is approved by at least a majority
               of the Directors who are in office at the time of the election or
               nomination  and were either  Directors  at the  beginning  of the
               period or are Continuing Directors.
 
          (iii)A  record  date  is  established  for  determining   shareholders
               entitled to vote upon (A) a merger or  consolidation  of Invacare
               Corporation with another  corporation  (which is not an affiliate
               of Invacare Corporation) in which Invacare Corporation is not the
               surviving or  continuing  corporation  or in which all or part of
               the  outstanding  Common  Shares  are  to be  converted  into  or
               exchanged for cash, securities,  or other property, (B) a sale or
               other  disposition of all or  substantially  all of the assets of
               Invacare Corporation,  or (C) the dissolution or liquidation (but
               not partial liquidation) of Invacare Corporation.
 
     (g) "Class B Common  Shares" -- means  Class B Common  Shares,  without par
value, of Invacare Corporation, including authorized and unissued Common Shares.
 
     (h)  "Code" -- means the  Internal  Revenue  Code of 1986,  or any law that
supersedes or replaces it, as amended from time to time.
 
     (i)  "Committee"  --  means  the  Compensation  Committee  of the  Board of
Directors,  or any other  committee of the Board of Directors  that the Board of
Directors  authorizes to administer this Plan. The Committee will be constituted
in a manner that satisfies the disinterested  administration  standard set forth
in Rule 16b-3.
 
     (j) "Common Shares" -- means Common Shares,  without par value, of Invacare
Corporation, including authorized and unissued Common Shares and treasury Common
Shares.
 
     (k) "Company" -- means Invacare Corporation,  an Ohio corporation,  and its
direct and indirect subsidiaries.
 
     (l) "Continuing Director" -- means a Director who was a Director prior to a
Change in Control or was recommended or elected to succeed a Continuing Director
by a majority of the Continuing Directors then in office.
 
     (m) "Director" -- means a director of Invacare Corporation.
 
     (n) "Exchange  Act" -- means the  Securities  Exchange Act of 1934, and any
law that supersedes or replaces it, as amended from time to time.
 
     (o) "Fair Market  Value" of Common  Shares -- means the value of the Common
Shares  determined by the  Committee,  or pursuant to rules  established  by the
Committee on a basis consistent with regulations under the Code.
 
     (p)  "Incentive  Stock  Option"  -- means a Stock  Option  that  meets  the
requirements of Section 422 of the Code.
 
     (q) "Notice of Award" -- means any notice by the Committee to a Participant
that  advises  the  Participant  of the grant of an Award or sets  forth  terms,
conditions, and restrictions applicable to an Award.
 
     (r)  "Participant"  -- means any  person to whom an Award has been  granted
under this Plan.
 
     (s) "Person" -- means an individual, partnership,  corporation (including a
business trust), joint stock company, trust, unincorporated  association,  joint
venture or other entity, or a governmental authority.
 
     (t) "Restricted  Stock" -- means an Award of Common Shares that are subject
to restrictions or risk of forfeiture.
 
     (u) "Rule  16b-3" -- means Rule 16b-3 under the  Exchange  Act, or any rule
that supersedes or replaces it, as amended from time to time.
 
     (v) "Stock Appreciation Right" -- is defined in Section 6(b) (ii).
 
     (w) "Stock Award" -- is defined in Section 6(b) (ii).
 
     (x) "Stock  Equivalent  Unit" -- means an Award that is valued by reference
to the value of Common Shares.
 
     (y) "Stock Option" -- is defined in Section 6(b) (iii).
 
3.       Eligibility
 
     All employees of the Company and its Affiliates,  whether or not Directors,
are eligible  for the grant of Awards.  The  selection of any such  employees to
receive  Awards will be within the  discretion of the  Committee.  More than one
Award may be granted to the same employee.
 
     Notwithstanding the foregoing, any individual that renounces in writing any
right  that he or she may have to  receive  Awards  under the Plan  shall not be
eligible to receive any Awards hereunder.
 
4.       Common Shares Available for Awards; Adjustment
 
     (a) Number of Common Shares. The aggregate number of Common Shares that may
be subject to Awards,  including  Stock Options,  granted under this Plan during
the term of this Plan will be equal to One Million  (1,000,000)  Common  Shares,
subject to any adjustments made in accordance with the terms of this Section 4.
 
     The   assumption  of  obligations  in  respect  of  awards  granted  by  an
organization  acquired by the Company, or the grant of Awards under this Plan in
substitution  for any such awards,  will not reduce the number of Common  Shares
available in any fiscal year for the grant of Awards under this Plan.
 
     Common  Shares  subject  to an  Award  that is  forfeited,  terminated,  or
canceled  without having been  exercised  (other than Common Shares subject to a
Stock Option that is canceled upon the exercise of a related Stock  Appreciation
Right) will again be available for grant under this Plan,  without  reducing the
number of Common  Shares  available in any fiscal year for grant of Awards under
this Plan,  except to the extent that the  availability  of those Common  Shares
would cause this Plan or any Awards  granted  under this Plan to fail to qualify
for the exemption  provided by Rule 16b-3. In addition,  any Common Shares which
are retained to satisfy a Participant's withholding tax obligations or which are
transferred  to the Company by a Participant  to satisfy such  obligations or to
pay all or any portion of the exercise price of the Award in accordance with the
terms of the  Plan,  the Award  Agreement  or the  Notice of Award,  may be made
available for reoffering under the Plan to any Participant, except to the extent
that the availability of those Common Shares would cause this Plan or any Awards
granted  under this Plan to fail to qualify for the  exemption  provided by Rule
16b-3.
 
     (b) No  Fractional  Common  Shares.  No  fractional  Common  Shares will be
issued,  and the  Committee  will  determine  the  manner  in which the value of
fractional Common Shares will be treated.
 
     (c)  Adjustment.  In the event of any change in the Common Shares by reason
of  a  merger,  consolidation,  reorganization,   recapitalization,  or  similar
transaction,  including any  transaction  described  under Section 424(a) of the
Code,  or in the event of a stock  dividend,  stock split,  or  distribution  to
shareholders  (other  than  normal  cash  dividends),  the  Committee  will have
authority to adjust, in any manner that it deems equitable, the number and class
of Common  Shares  that may be issued  under this Plan,  the number and class of
Common Shares subject to outstanding  Awards,  the exercise price  applicable to
outstanding  Awards,  and the Fair Market  Value of the Common  Shares and other
value  determinations  applicable  to  outstanding  Awards,  including as may be
allowed or required under Section 424(a) of the Code.
 
5.       Administration
 
     (a)  Committee.  This  Plan  will be  administered  by the  Committee.  The
Committee  will,  subject to the terms of this Plan,  have the authority to: (i)
select the eligible employees who will receive Awards, (ii) grant Awards,  (iii)
determine  the number and types of Awards to be granted to  eligible  employees,
(iv)  determine  the  terms,  conditions,   vesting  periods,  and  restrictions
applicable to Awards,  including timing and price, (v) adopt,  alter, and repeal
administrative rules and practices governing this Plan, (vi) interpret the terms
and provisions of this Plan and any Awards  granted under this Plan,  including,
where applicable,  determining the method of valuing any Award and certifying as
to the satisfaction of such Awards,  (vii) prescribe the forms of any Notices of
Award,  Award Agreements,  or other instruments  relating to Awards,  and (viii)
otherwise supervise the administration of this Plan.
 
     (b)  Delegation.  The  Committee  may delegate any of its  authority to any
other person or persons that it deems appropriate,  provided the delegation does
not cause this Plan or any Awards granted under this Plan to fail to qualify for
the exemption provided by Rule 16b-3 or for the exemption from Section 162(m) of
the Code for performance-based compensation.
 
     (c)  Decisions  Final.  All  decisions by the  Committee,  and by any other
Person or Persons to whom the Committee has delegated  authority,  to the extent
permitted by law, will be final and binding on all Persons.
 
     (d) No  Liability.  Neither the  Committee  nor any of its members shall be
liable for any act taken by the Committee pursuant to the Plan. No member of the
Committee shall be liable for the act of any other member.
 
6.       Awards
 
     (a) Grant of Awards.  The  Committee  will  determine  the type or types of
Awards to be  granted  to each  Participant  and will set  forth in the  related
Notice of Award or Award Agreement the terms,  conditions,  vesting periods, and
restrictions  applicable  to each  Award.  Awards  may be  granted  singly or in
combination  or  tandem  with  other  Awards.  Awards  may  also be  granted  in
replacement  of, or in  substitution  for,  other awards granted by the Company,
whether or not granted under this Plan;  without  limiting the  foregoing,  if a
Participant  pays all or part of the exercise price or taxes  associated with an
Award by the  transfer of Common  Shares or the  surrender  of all or part of an
Award  (including  the  Award  being  exercised),  the  Committee  may,  in  its
discretion, grant a new Award to replace the Common Shares that were transferred
or the Award that was surrendered. The Company may assume obligations in respect
of awards  granted by any Person  acquired by the Company or may grant Awards in
replacement of, or in substitution for, any such awards.
 
     (b) Types of  Awards.  Awards  may  include,  but are not  limited  to, the
following:
 
          (i)  Stock  Appreciation  Right -- means a right to receive a payment,
               in cash or  Common  Shares,  equal to the  excess of (A) the Fair
               Market Value, or other specified valuation, of a specified number
               of Common Shares on the date the right is exercised  over (B) the
               Fair Market Value, or other specified  valuation,  of such Common
               Shares on the date the right is granted, all as determined by the
               Committee.  The right may be  conditioned  upon the occurrence of
               certain  events,  such as a Change in Control of the Company,  or
               may be unconditional, as determined by the Committee.
 
          (ii) Stock  Award -- means an  Award  that is made in  Common  Shares,
               Restricted  Stock, or Stock Equivalent Units or that is otherwise
               based  on, or valued  in whole or in part by  reference  to,  the
               Common  Shares.  All or part of any Stock Award may be subject to
               conditions,  restrictions, and risks of forfeiture, as and to the
               extent established by the Committee. Stock Awards may be based on
               the Fair Market Value of the Common Shares, or on other specified
               values or methods of valuation, as determined by the Committee.
 
          (iii)Stock  Option -- means a right to purchase a specified  number of
               Common  Shares,  during a  specified  period,  and at a specified
               exercise  price,  all as  determined  by the  Committee.  A Stock
               Option may be an  Incentive  Stock  Option or a Stock Option that
               does not qualify as an Incentive Stock Option. In addition to the
               terms, conditions,  vesting periods, and restrictions established
               by the  Committee,  Incentive  Stock Options must comply with the
               requirements  of Section 422 of the Code. The exercise price of a
               Stock Option that does not qualify as an  Incentive  Stock Option
               may be more or less  than the  Fair  Market  Value of the  Common
               Shares on the date the Stock Option is granted.
 
          (iv) Cash Award -- An Award  denominated  in cash.  All or part of any
               Cash  Award  may be  subject  to  conditions  established  by the
               Committee,  including but not limited to future  service with the
               Company or the achievement of specific performance objectives.
 
     (c) Limits on Awards. The maximum aggregate number of Common Shares (i) for
which  Stock  Options  may be  granted,  and (ii) with  respect  to which  Stock
Appreciation  Rights  may be  granted,  to any  particular  employee  during any
calendar year during the term of this Plan is 200,000 Common Shares,  subject to
adjustment in accordance with Section 4(c).
 
7.       Deferral of Payment
 
     With the  approval of the  Committee,  the  delivery of the Common  Shares,
cash, or any combination thereof subject to an Award may be deferred,  either in
the form of  installments  or a single future  delivery.  The Committee may also
permit  selected  Participants  to  defer  the  receipt  of some or all of their
Awards, as well as other compensation, in accordance with procedures established
by the Committee to assure that the  recognition  of taxable  income is deferred
under the Code.  Deferred amounts may, to the extent permitted by the Committee,
be credited as cash or Stock Equivalent  Units. The Committee may also establish
rules and procedures for the crediting of interest on deferred cash payments and
dividend equivalents on Stock Equivalent Units.
 
8.       Payment of Exercise Price
 
     The exercise price of a Stock Option (other than an Incentive Stock Option)
and any Stock Award for which the Committee has  established  an exercise  price
may be paid in cash, by the transfer of Common  Shares,  by the surrender of all
or part of an Award (including the Award being  exercised),  or by a combination
of these methods, as and to the extent permitted by the Committee.  The exercise
price of an  Incentive  Stock  Option may be paid in cash,  by the  transfer  of
Common  Shares,  or by a  combination  of these  methods,  as and to the  extent
permitted by the  Committee  but may not be paid by the surrender of all or part
of an Award. The Committee may prescribe any other method of paying the exercise
price that it determines to be consistent with applicable law and the purpose of
this Plan.
 
     In the event Common  Shares that are  Restricted  Stock are used to pay the
exercise  price of a Stock Award,  that number of the Common  Shares issued upon
the  exercise  of the  Award  equal to the  number  of  Common  Shares  that are
Restricted  Stock that have been used to pay the exercise  price will be subject
to the same restrictions as the Restricted Stock.
 
9.       Taxes Associated with Award
 
     Prior to the payment of an Award or upon the  exercise or release  thereof,
the Company may withhold,  or require a Participant to remit to the Company,  an
amount sufficient to pay any Federal, state, and local taxes associated with the
Award.  The Committee  may, in its  discretion  and subject to such rules as the
Committee  may adopt,  permit a Participant  to pay any or all taxes  associated
with the Award (other than an Incentive  Stock  Option) in cash, by the transfer
of Common  Shares,  by the surrender of all or part of an Award  (including  the
Award being exercised),  or by a combination of these methods. The Committee may
permit a Participant to pay any or all taxes  associated with an Incentive Stock
Option in cash, by the transfer of Common  Shares,  or by a combination of these
methods  or by any other  method  which  does not  disqualify  the  option as an
Incentive Stock Option under applicable provisions of the Code.
 
10.      Termination of Employment
 
     If  the  employment  of  a  Participant  terminates  for  any  reason,  all
unexercised,  deferred,  and unpaid  Awards may be  exercisable  or paid only in
accordance  with rules  established  by the  Committee  or as  specified  in the
particular  Award Agreement or Notice of Award.  Such rules may provide,  as the
Committee deems appropriate, for the expiration,  continuation,  or acceleration
of the vesting of all or part of the Awards.
 
11.      Termination of Awards Under Certain Conditions
 
     The Committee may cancel any unexpired,  unpaid,  or deferred Awards at any
time if the Participant is not in compliance  with all applicable  provisions of
this Plan or with any Notice of Award or Award Agreement or if the  Participant,
without  the  prior  written  consent  of  the  Company,  engages  in any of the
following activities:
 
          (i)  Renders services for an  organization,  or engages in a business,
               that is, in the judgment of the Committee,  in  competition  with
               the Company.
 
          (ii) Discloses  to  anyone  outside  of the  Company,  or uses for any
               purpose  other  than  the  Company's  business  any  confidential
               information or material relating to the Company, whether acquired
               by the Participant  during or after  employment with the Company,
               in a  fashion  or  with  a  result  that  the  Committee,  in its
               judgment,  deems is or may be injurious to the best  interests of
               the Company.
 
     The Committee  may, in its discretion and as a condition to the exercise of
an Award,  require a Participant  to acknowledge in writing that he or she is in
compliance  with all  applicable  provisions  of this Plan and of any  Notice of
Award or Award  Agreement and has not engaged in any  activities  referred to in
clauses (i) and (ii) above.
 
12.      Change in Control
 
     In the event of a Change  in  Control  of the  Company,  unless  and to the
extent  otherwise   determined  by  the  Board  of  Directors,   (i)  all  Stock
Appreciation  Rights  and Stock  Options  then  outstanding  will  become  fully
exercisable as of the date of the Change in Control,  (ii) all  restrictions and
conditions  applicable to Restricted Stock and other Stock Awards will be deemed
to have been  satisfied  as of the date of the Change in Control,  and (iii) all
Cash  Awards  will be  deemed to have  been  fully  earned as of the date of the
Change in Control. Any such determination by the Board of Directors that is made
after the  occurrence  of a 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.
 
13.      Amendment, Suspension, or Termination of this Plan; Amendment of
         Outstanding Awards
 
     (a)  Amendment,  Suspension,  or  Termination  of this  Plan.  The Board of
Directors  may amend,  suspend,  or terminate  this Plan at any time;  provided,
however,  that in no event, without the approval of the Company's  shareholders,
shall any action of the Committee or the Board of Directors result in:
 
          (i)  Increasing,  except as  provided  in  Section  4(c)  hereof,  the
               maximum  number of Common  Shares  that may be  subject to Awards
               granted under the Plan;
 
          (ii) Making any change which would cause any option  granted under the
               Plan as an Incentive  Stock Option not to qualify as an Incentive
               Stock Option within the meaning of Section 422 of the Code; or
 
          (iii)Making any change which would  eliminate the  exemption  provided
               by Rule  16b-3 for this Plan and for  Awards  granted  under this
               Plan.
 
     (b) Amendment of Outstanding  Awards. The Committee may, in its discretion,
amend  the  terms of any  Award,  prospectively  or  retroactively,  but no such
amendment may impair the rights of any  Participant  without his or her consent.
The Committee  may, in whole or in part,  waive any  restrictions  or conditions
applicable to, or accelerate the vesting of, any Award.
 
14.      Awards to Foreign Nationals and Employees Outside the United States
 
     To the extent that the Committee  deems  appropriate to comply with foreign
law or  practice  and to further the purpose of this Plan,  the  Committee  may,
without  amending this Plan,  (i) establish  special rules  applicable to Awards
granted to  Participants  who are foreign  nationals,  are employed  outside the
United States, or both, including rules that differ from those established under
this Plan, and (ii) grant Awards to such  Participants  in accordance with those
rules.
 
15.      Nonassignability
 
     Unless  otherwise  determined by the Committee,  (i) no award granted under
the Plan may be transferred or assigned by the Participant to whom it is granted
other than by will,  pursuant to the laws of descent and distribution,  and (ii)
an Award  granted  under this Plan may be  exercised,  during the  Participant's
lifetime,  only by the  Participant  or by the  Participant's  guardian or legal
representative;  except that, no Incentive  Stock Option may be  transferred  or
assigned pursuant to a qualified domestic  relations order or exercised,  during
the   Participant's   lifetime,   by  the   Participant's   guardian   or  legal
representative.
 
16.      Governing Law
 
     The  interpretation,  validity,  and  enforcement of this Plan will, to the
extent not otherwise  governed by the Code or the securities  laws of the United
States, be governed by the laws of the State of Ohio.
 
17.      No Rights as Employees/Shareholders
 
     Nothing  in the Plan or in any Award  Agreement  or  Notice of Award  shall
confer upon any  Participant  any right to continue in the employ of the Company
or an  Affiliate,  or to serve as a member  of the Board of  Directors  or to be
entitled to receive any  remuneration  or benefits  not set forth in the Plan or
such Award  Agreement or Notice of Award,  or to interfere  with or limit either
the right of the Company or an  Affiliate to terminate  the  employment  of such
Participant  at any time or the  right of the  shareholders  of the  Company  to
remove him or her as a member of the Board of Directors  with or without  cause.
Nothing contained in the Plan or in any Award Agreement or Notice of Award shall
be construed as entitling any  Participant  to any rights of a shareholder  as a
result of the grant of an Award  until such time as Common  Shares are  actually
issued to such  Participant  pursuant to the exercise of a Stock  Option,  Stock
Appreciation Right or other Stock Award.
 
18.      Effective and Termination Dates
 
     (a)  Effective  Date.  This Plan was  approved by the Board of Directors on
January 28, 1994 and becomes  effective upon adoption by the affirmative vote of
the holders of a majority of the voting power of the Company  represented by the
Class A and Class B Common  Shares,  represented  in person or by proxy,  at any
annual or special meeting of shareholders at which a quorum is present. The Plan
shall be deemed to be adopted on the date of such shareholder meeting.
 
     (b)  Termination  Date. This Plan will continue in effect until midnight on
May 23, 2004; provided,  however, that Awards granted on or before that date may
extend beyond that date and restrictions and other terms and conditions  imposed
on Restricted Stock or any other Award granted on or before that date may extend
beyond such date.
 
     IN WITNESS  WHEREOF,  the undersigned by its duly authorized  officer,  has
hereunto set forth its signatures as of the effective date of the Plan.
 
                               INVACARE CORPORATION
 
 
                               By: /s/ A.M. Mixon
                               --------------------------------------------
                               A.M. Mixon, Chairman, Chief Executive Officer and
                               President
 
 
                               By: /s/ Thomas R. Miklich
                                -------------------------------------------
                               Thomas R. Miklich, Chief Financial Officer and
                               Treasurer
 
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