Document:

<PAGE>

                                                                    EXHIBIT 10.3

CERTAIN INFORMATION (INDICATED BY ASTERISKS) IN THIS EXHIBIT HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION.

                                                                    EXHIBIT 10.3

                      AMENDED AND RESTATED SUPPLY AGREEMENT

     This Amended and Restated Supply Agreement, is made as of the 10th day of
February, 2006 ("Execution Date"), among Siemens Hearing Instruments, Inc., a
Delaware corporation, with an address at 10 Constitution Avenue, Piscataway, New
Jersey 08855 ("SHI" or "Seller"), certain subsidiaries and affiliates of Siemens
Aktiengesellschaft (collectively, the "Siemens Affiliates") and HearUSA, Inc.
(formerly HEARx, Ltd.), a Delaware corporation, with an address at 1250
Northpoint Parkway, West Palm Beach, FL 33407 ("HearUSA" or "Buyer").

     WHEREAS, Buyer is a retail seller of hearing aids in the United States and
also services hearing healthcare programs sponsored by HMOs and insurance
companies; and

     WHEREAS, Seller is a manufacturer of hearing aids and sells such hearing
aids to retail resellers, including Buyer, for resale to consumers; and

     WHEREAS, Buyer and Seller determined that it would be in their respective
best interests to assure a steady supply of hearing aids of various styles and
capacities (the "Products") from Seller in order that Buyer may efficiently and
economically distribute such Products through its current and future retail
outlets ("Facilities") and, to that end, entered into a Supply Agreement as of
December 7, 2001 (the "Original Supply Agreement"); and

     WHEREAS, the parties have now determined that it would be in their
respective best interests to amend and restate the Original Supply Agreement,
extending their relationship until January 2011, all in accordance with the
terms and conditions contained herein.

     NOW, THEREFORE, the parties hereto agree as follows:

     1. Purchase and Sale. Subject to the provisions contained in this
Agreement, Seller has agreed to sell and Buyer has agreed to buy those Products
listed on Exhibit A to this Agreement during the term of this Agreement. The
Siemens Affiliates manufacture or may manufacture certain of the Products
offered hereunder, and those Products manufactured and supplied by the Siemens
Affiliates and purchased by Buyer will be included within the definition of
Products under this Agreement and included in the calculations set forth in
Section 4 hereof. If any Siemens Affiliate shall sell any of the Products to the
Buyer, such Siemens Affiliate shall execute and deliver a counterpart,

<PAGE>

substantially in the form of Exhibit B, to SHI and the Buyer. Upon the execution
of such counterpart, such Siemens Affiliate shall become a party hereto and be
bound by all the terms and conditions hereof as a "Seller" to the same extent as
though such Siemens Affiliate had originally executed this Agreement. The
parties understand and agree that Exhibit A may be amended from time to time,
upon mutual agreement of the Seller and Buyer, to add or delete Products. In
addition, it is specifically understood that Buyer is purchasing the Products
for the purpose of resale in all of Buyer's Facilities, including, without
limitation, any new Facilities which may be or are owned, operated, affiliated
with or managed by Buyer.

     2. Term. The term of this Agreement is five (5) years, commencing on the
Execution Date (the "Term").

     3. Terms and Conditions of Sale. The Buyer will submit its orders for
Products either on the forms provided therefor or via a website provided by
Seller and payment shall be made by Buyer for products delivered and accepted
within sixty (60) days from the date of statement by Seller.

     4. Ordering Process and Pricing. Buyer understands that Seller has offered
special terms and pricing to Buyer as consideration for the purchase compliance
levels committed to by Buyer, and that Seller is willing to continue to provide
Products to Buyer in a manner consistent with the relationship enjoyed to date
by Seller and Buyer. Subject to Section 3 hereof, Buyer agrees to purchase, in
each Fiscal Quarter during the term of this Agreement (which, for the purposes
of this calculation, shall be each of the three month periods ending on the last
Saturday of the months of March, June, September and December), at least ninety
percent (90%) of Buyer's quarterly purchases of hearing aid products; provided
however, that:

          (i) if the Buyer has purchased, on a cumulative basis from May 1, 2001
through the applicable Fiscal Quarter, 90% or more of the total number of
hearing aids purchased by the Borrower, net of returns (the "Minimum Purchase
Percentage"), the Buyer shall be deemed to have complied with the minimum
purchase requirements of this Supply Agreement; and

          (ii) in the event the Buyer has not complied with the provisions of
4(i) above, if the Borrower has purchased, on a cumulative basis from May 1,
2001 through the applicable Fiscal Quarter, eighty percent (80%) or more of the
total number of hearing aids purchased by the Borrower but less than ninety
percent (90%) of the total number of hearing aids purchased by the Borrower in
each of the two preceding consecutive Fiscal Quarters, the Borrower shall be
deemed to have complied with the minimum purchase requirements of this Supply
Agreement.

          For purposes of this Section 4, (A) the Fiscal Quarter in which the
last day of the Term occurs (unless such day is the last day of a Fiscal
Quarter), shall mean the period commencing on the first day of such Fiscal
Quarter and ending on the last day of the Term (such period, the "Final Contract
Fiscal Quarter"), (B) the "quarterly purchases"

                                       -2-

<PAGE>

described above shall refer to such purchases made during the applicable Final
Contract Fiscal Quarter, and (C) the 90% requirement shall be reduced to a
number equal to the product of 90% multiplied by a fraction, the numerator of
which is the number of days in the applicable Final Contract Fiscal Quarter and
the denominator of which is the actual number of days in the Fiscal Quarter in
which the last day of the Term occurs.

          In exchange for this purchase commitment, Seller has offered to sell
the Products to Buyer at the prices set forth on Exhibit A. During the term of
this Agreement, upon written notice to Buyer not later than sixty (60) days
prior to the effective date thereof, Seller may adjust the list prices for the
Products, such adjustment to take effect on the date set forth on such notice.
Seller may not change the list prices for the Products more often than ****** in
any contract year and the prices shall not be increased more than ****** above
the then-current prices at the time of such change, unless Buyer fails to meet
its purchase requirements set forth in Section 4, at which time the parties
shall meet to discuss the adjustments which need to be made should Buyer
continue not to meet such purchase requirements. In the event Buyer defaults in
its obligation to meet the agreed purchase requirements, Seller, in its sole
discretion, shall have the right to take any or all of the following actions
hereunder: (i) adjust prices or terms and conditions of sale with respect to the
provision of Products for the remaining contract years of the Agreement, (ii)
seek reimbursement from Buyer for the difference between the special pricing
offered in connection with this Agreement and the then-current list prices for
the Products, (iii) obtain injunctive relief compelling Buyer to refrain from
purchasing hearing aids from any vendor other than Seller until the end of the
term of this Agreement, (iv) obtain injunctive relief compelling Buyer to
purchase all its requirements for hearing aids from Seller until the end of the
term of this Agreement, or (v) terminate this Agreement in accordance with
Section 11 hereof.

          Further, if Buyer meets the purchase commitments set out in this
Agreement, Buyer is able to liquidate certain loans made by Seller to Buyer
pursuant to that Amended and Restated Credit Agreement entered into of even date
herewith by and between Buyer and Seller (the "Credit Agreement"). In the event
that the Tranche A Loan and all Tranche C Loans (as those terms are defined in
the Credit Agreement) are repaid by Buyer prior to the Maturity Date (as defined
in the Credit Agreement), so long as Buyer meets the Minimum Purchase Percentage
set out above, Seller shall credit to Borrower hereunder substantially
equivalent rebates of ******* annually through the term hereof for so long as
such cumulative Minimum Purchase Percentage is achieved by Buyer.

     5. Product Representations. Seller makes the following representations and
warranties with respect to the Products sold hereunder:

     (a) Each Product shall be manufactured (i) in conformity with all
applicable requirements of the Food and Drug Administration ("FDA") and (ii) in
accordance with all applicable United States federal, state and local statutes,
ordinances and regulations, including but not limited to the Food, Drug and
Cosmetic Act (21 USC 301 et seq.) (the "Act"), as amended from time to time, and
the regulations thereunder, including Good Manufacturing Practice Regulations,
which are currently in force or which are hereafter

                                      -3-

<PAGE>

adopted. At the time of shipment of any Product, it will not be adulterated or
misbranded within the meaning of the Act and will not be a product which would
violate any section of the Act if introduced into interstate commerce in the
United States.

     (b) Seller has good and marketable title to, and the right to sell, the
Products.

     (c) The manufacture and sale of the Product, and its use in accordance with
all applicable approvals theretofore obtained and Seller's directions for use,
shall not, to the knowledge of Seller, infringe any intellectual property rights
of any third parties.

     6. Covenants of Seller. Seller covenants and agrees as follows with respect
to the Products:

     (a) Seller shall conduct its manufacturing operations in a safe and prudent
manner, in compliance with all applicable laws and regulations, including, but
not limited to, those dealing with occupational safety and health, those dealing
with public safety and health, those dealing with protection of the environment,
and those dealing with disposal of wastes and in compliance with the applicable
provisions of this Agreement.

     (b) Seller shall use commercially reasonable efforts to have the Products
listed on the "pick lists" maintained by each of the Canadian provinces.

     (c) Seller shall use commercially reasonable efforts to (i) fill Buyer's
orders for Products on time and (ii) deliver Products that function as per
specifications and that meet the requirements of the orders submitted by Buyer,
in each case consistent with past practices of Buyer and Seller.

     (d) Seller shall use commercially reasonable efforts to remain one of the
technology leaders in the field of hearing healthcare; provided that nothing
contained herein shall limit or prohibit Seller from conducting its business in
accordance with the policies and procedures established from time to time by
Seller's Board of Directors or with the overall policies and procedures of
Siemens Aktiengesellschaft.

     7. Indemnification by Seller.

     (a) Subject to the provisions of subsection 7(b) below, Seller agrees to
indemnify, defend and hold harmless Buyer, its affiliates and their respective
employees, agents and representatives, against any and all claims, losses,
damages and liabilities, including reasonable attorneys' fees, incurred by any
of them arising out of any breach of any representation by Seller, resulting
from the actual adulteration or misbranding of Product, or any defect in
materials or workmanship.

     (b) The foregoing indemnify shall not be effective to the extent any such
claim, loss, damage or liability is based upon (i) any act of Buyer or any of
its affiliates, agents or representatives, (ii) any act of Buyer or any of its
affiliates, agents or representatives done jointly with any party other than
Seller, or (iii) any claim arising as a result of any

                                      -4-

<PAGE>

unauthorized alteration, modification or change to the Product by any party
other than Seller.

     8. Indemnification by Buyer.

     (a) Subject to the provisions of subsection 8(b) below, Buyer agrees to
indemnify, defend and hold harmless Seller, its affiliates and their respective
employees, agents and representatives, against any and all claims, losses,
damages and liabilities, including reasonable attorneys' fees, incurred by any
of them arising out of any act of Buyer relative to the marketing, distribution
and sale of Products.

     (b) The foregoing indemnity shall not be effective nor shall it be
enforceable in the event any such claim, loss, damage or liability is based upon
(i) any act of Seller or any of its affiliates, agents or representatives, (ii)
any act of Seller or any of its affiliates, agents or representatives done
jointly with any party other than Buyer, or (iii) any claim arising as a result
of any unauthorized alteration, modification or change to the Product by any
party other than Buyer, or any defect in materials or workmanship.

     9. Procedures Related to Indemnification.

     (a) A party seeking indemnification under the terms of this Agreement shall
be referred to as the "indemnified party" and the person who is to provide such
indemnification shall be referred to as the "indemnifying party." The
indemnified party shall notify in writing the indemnifying party with reasonable
promptness of its discovery of any matter giving rise to a claim of indemnity.
The failure or delay in so notifying the indemnifying party shall not relieve
indemnifying party of its obligations to indemnify unless, and only to the
extent that, the indemnifying party's defense of such claim is materially
prejudiced as a result of such delay. The indemnified party shall provide the
indemnifying party as soon as practicable all information and documentation
related to the matter for which the indemnified party seeks indemnification. The
indemnifying party shall be given access to all books and records in the
possession or under the control of the indemnified party that the indemnifying
party reasonably determines to be related to such claim.

     (b) Promptly upon receipt of notice from the indemnified party, the
indemnifying party shall take over control of the defense of any action, claim
or litigation arising out of the indemnification provisions of this Agreement.
The indemnified party shall support and assist the indemnifying party in the
defense, but all costs, expenses and related charges, including but not limited
to attorneys' fees, shall be for the account of the indemnifying party, except
to the extent such independent counsel is representing the indemnified party for
defenses available to it but not available to the indemnifying party. If the
indemnified party wishes to retain its own counsel to advise and assist in the
defense of such claim, it may do so, but the expense of retaining such
independent counsel shall be for the account of the indemnified party and the
indemnifying party shall retain complete control over the defense. If, after
receipt of notice, the indemnifying party does not defend the interests of the
indemnified party or does not take appropriate

                                      -5-

<PAGE>

action to defend and hold harmless the indemnified party, then, and in that case
only, the indemnified party shall be entitled to retain counsel, defend the
action, claim or litigation, and seek compensation for all of its costs of
defense from the indemnifying party. The indemnified party shall not, without
the prior consent of the indemnifying party, enter into any settlement the
result of which would materially limit or modify the rights of the indemnifying
party under this Agreement.

     10. Recall. In the event of any recall of any Product, whether voluntary or
involuntary, Seller shall replace the recalled Product without charge to Buyer.
In addition, Seller shall pay all of Buyer's reasonable out of pocket expenses
incurred in connection with such recall. In no event shall Seller be liable for
any loss of use, revenue or anticipated profits, loss of stored, transmitted or
recorded data, or for any incidental, unforeseen, special, punitive or
consequential damages arising out of or in connection with this Agreement, or
the sale or use of the Products, or arising out of the actions taken by Seller
in response to a recall or other action required by law, regulation or agency
with oversight over the operations and business of Seller; provided, however,
that nothing in this Section 10 shall limit Seller's indemnification obligations
under Section 7 for losses incurred by Buyer for which Buyer is entitled to
indemnification arising out of a claim by any third party.

     11. Termination.

     (a) Either party may terminate this Agreement in the event of a material
breach by the other which remains uncured (or where significant steps toward
effecting the cure shall not have been taken) within sixty (60) days after
written notice is given to the breaching party specifying the nature of the
breach. The parties agree that Buyer's failure to meet the purchase requirements
set forth in Section 4 or to make payments as required under this Agreement
shall be material breaches, giving Seller the right subject to the cure period,
but not the obligation, to terminate this Agreement. The remedy of termination
shall be without prejudice to any other rights or remedies available to the
non-breaching party under this Agreement or at law.

     (b) Notwithstanding subsection (a) hereinabove, Seller may terminate this
Agreement effective immediately if any proceeding shall be instituted by or
against the Buyer seeking to adjudicate it a bankrupt or insolvent or seeking
liquidation, winding up, reorganization, arrangement, adjustment, protection,
relief or composition of it or its debts under any law relating to bankruptcy,
insolvency or reorganization or relief of debtors, or seeking the entry of an
order for relief or the appointment of a custodian, receiver, trustee or other
similar official for it or for any substantial part of its property and, in the
case of any such proceedings instituted against Buyer (but not instituted by it)
either such proceedings shall remain undismissed or unstayed for a period of
sixty (60) days or any of the actions sought in such proceedings shall occur; or
the Buyer shall take any corporate action to authorize any of the actions set
forth above in this subsection (b). Buyer may terminate this Agreement if Seller
voluntarily or involuntarily becomes bankrupt or is unable to fulfill its
obligations hereunder.

                                      -6-

<PAGE>

     (c) Buyer may terminate this Agreement if (i) the US Food and Drug
Administration takes any final action the result of which is to ban the
manufacture, sale or introduction into interstate commerce of any Product or to
impose significant restrictions on its use in the hearing field or generally or
(ii) Seller purchases or operates any entity which sells hearing aids through
retail outlets.

     (d) Termination or expiration of this Agreement for any reason shall not
(i) release either party from any liability or obligation which has already
accrued as of the effective date of such termination or (ii) constitute a waiver
or release of, or otherwise be deemed to prejudice or adversely affect, any
rights, remedies or claims, whether for damages or otherwise, which a Party may
have hereunder, at law, equity or otherwise.

     12. Representations and Warranties.

     (a) Seller represents and warrants that:

          (i) Seller is a corporation duly organized, validly existing and in
     good standing under the laws of its state of incorporation and has
     requisite power and authority to own, lease and operate its properties and
     to carry on its business as currently conducted, and is qualified to do
     business in all jurisdictions where it currently conducts business.

          (ii) Seller has the power and authority to enter into this Agreement
     and to perform its obligations hereunder, and the execution of this
     Agreement has been duly authorized by all necessary corporate or other
     action.

          (iii) This Agreement constitutes a legal, valid and binding obligation
     of Seller, and is enforceable against it in accordance with its terms,
     except to the extent such enforceability may be subject to (a) the laws of
     bankruptcy, insolvency, fraudulent conveyance or other laws relating to
     creditors' rights or (b) general equitable principles.

          (iv) The execution and delivery of this Agreement and the performance
     by Seller of its obligations hereunder will not violate any laws or
     regulations applicable to Seller, conflict with or cause a breach of any
     obligations to a third party, or violate, breach or conflict with any of
     the terms of Seller's Certificate of Incorporation or By-Laws.

     (b) Buyer represents and warrants that:

          (i) Buyer is a corporation duly organized, validly existing and in
     good standing under the laws of its state of organization and has requisite
     power and authority to own, lease and operate its properties and to carry
     on its business as currently conducted, and is qualified or will be
     qualified to do business in all jurisdictions where it does or will conduct
     business.

                                      -7-

<PAGE>

          (ii) Buyer has the power and authority to enter into this Agreement,
     including the power and authority to make payments in respect of purchases
     and other transactions arising herefrom, and to perform its obligations
     hereunder. The execution of this Agreement has been duly authorized by all
     necessary corporate, governmental or other action.

          (iii) This Agreement constitutes a legal, valid and binding obligation
     of Buyer, and is enforceable against it in accordance with its terms,
     except to the extent such enforceability may be subject to (a) the laws of
     bankruptcy, insolvency, fraudulent conveyance or other laws relating to
     creditors' rights or (b) general equitable principles.

          (iv) To the best of Buyer's knowledge, Buyer does not have any
     liabilities or obligations of any nature, whether absolute, accrued,
     contingent or otherwise, that would be material to its or their financial
     condition or business operations that have not been disclosed to Seller.

          (v) The execution and delivery of this Agreement and the performance
     by Buyer of its obligations hereunder will not violate any laws or
     regulations applicable to Buyer, conflict with or cause a breach of any
     obligations of Buyer to a third party, or violate, conflict with or cause a
     breach of any of the terms of Buyer's Certificate of Incorporation or
     By-Laws.

     (c) Product Complaint Procedures. Buyer agrees to provide all complaints
with respect to the Products to Seller, in writing and in the English language,
in a timely manner. Submitted complaints shall contain sufficient detail to
enable Seller to adequately investigate the reported problem. Complaints
pertaining to injury or death shall be reported to Seller in five (5) working
days or less from the date of Buyer's receipt of such complaint in order that
Seller may comply with the requisite FDA Medical Device Reporting requirements.
Seller will take appropriate steps to make all necessary filings and reports to
regulatory agencies in accordance with its obligations. When requested so to do,
Buyer will use its best commercial efforts to provide evaluation and
investigation support to Seller. Seller, as service provider for the Products,
is responsible for analysis of service reports, service repair data, service
trends and telephone support for potential complaints or corrective action
requirements, all as set forth in the Quality Systems Regulation and other FDA
instructions. Buyer agrees to return parts involved in a complaint to Seller
promptly, and in any event within thirty (30) days after notification by Buyer
to Seller of the complaint.

     13. Dispute Resolution.

     (a) In an effort to effectively and economically manage the resolution of
any disagreement which might arise during the term of this Agreement with
respect to the obligations of the parties, or with respect to actions to be
taken or not taken under the terms of the Agreement, the parties agree to
appoint a representative (at the line manager level or its equivalent) to meet
and discuss the disagreement. If such representatives,

                                      -8-

<PAGE>

after a good faith effort, are not able to resolve the disagreement to the
mutual satisfaction of the parties, the disagreement then shall be submitted to
the respective Vice Presidents of the parties for their attention. If the Vice
Presidents are not able to negotiate a mutually acceptable resolution of the
dispute, then the parties agree to submit the disagreement to arbitration and
the provisions of clause (b) of this Section shall apply.

     (b) Subject to the provisions of subsection (a) hereinabove, any
disagreement, dispute, controversy or claim arising out of this Agreement,
including without limitation, interpretation thereof, or any alleged breach or
invalidity, which cannot be resolved through the good faith negotiations of the
parties shall be resolved through arbitration. The arbitration shall be
conducted in accordance with the commercial arbitration rules of the American
Arbitration Association (except to the extent such rules conflict with the
provisions of this Agreement, in which event, this Agreement shall control). The
tribunal shall be composed of three arbitrators (one selected by each party and
the third selected by the arbitrators selected by the parties) and shall be
conducted in New York, New York ("Site"). Any arbitration proceedings shall be
conducted in confidence and the award or decision of the tribunal shall be final
and binding upon the parties. The award of the arbitrators shall be enforceable
by any court having jurisdiction thereof.

     (c) Nothing contained herein shall prohibit or limit in any way any party
from seeking or obtaining preliminary or interim injunctive or other equitable
relief from a court for a breach or alleged breach of any of the covenants and
agreements of the other party to this Agreement.

     14. Notices. When any notice is required or permitted to be given under any
provision of this Agreement, such notice shall be made in writing and signed by
or on behalf of the party giving such notice, mailed certified mail, postage
prepaid, return receipt requested, or sent by nationally recognized overnight
courier, and addressed to the party to whom such notice is to be given at the
addresses set forth below. Notices are considered delivered on the postmarked
date or the date delivered to a courier for next workday delivery. Either party
may change its address for the receipt of any notice in the manner set forth
above.

To Seller:                            To Buyer:

Siemens Hearing Instruments, Inc..    HearUSA, Inc.
10 Constitution Avenue                1250 Northpoint Parkway
Piscataway, New Jersey 08855          West Palm Beach, FL 33407
Attention: Chief Financial Officer    Attention: President
Telecopy No. (732) 562-6688           Telecopy No. (561) 688-8893

Copy to:                              Copy to:

Associate General Counsel             LaDawn Naegle, Esq.
Siemens Corporation                   Bryan Cave LLP
186 Wood Avenue South                 700 13th Street, N.W., Suite 700

                                      -9-

<PAGE>

Iselin, NJ 08830                      Washington, DC 20005
                                      Telecopy No. (202) 508-6200

     15. New Products. The parties understand and agree that the development of
new hearing aids is both anticipated and encouraged. Buyer wishes to be able to
sell new and improved Products. As new Products become commercially available
from Seller, Seller will provide notice to Buyer of such availability, and such
Products will be added to this Agreement as soon as they are commercially
available upon the mutual agreement of the parties. Seller shall determine the
prices for such new Products, such prices to be commercially reasonable and
consistent with the quantity discounts provided under this Agreement. Such
Products shall be subject to the same adjustments in price as described above
for the current Products. As a result of the development of new technology,
certain of the current Products may become less valuable in the marketplace. To
the extent practicable, Seller will continue to offer the older Products, but
Buyer agrees to channel its marketing efforts and those of the Facilities
towards the introduction and sale of the new Products added to this Agreement.
As the scope of the Products changes, certain older Products may be deleted from
the Products offered under this Agreement, upon the mutual agreement of the
parties.

     16. Miscellaneous Provisions.

     (a) No Assignment. Neither this Agreement, nor the rights or duties of any
party thereunder, may be assigned without the written consent of the other
party, which consent shall not be unreasonably withheld or delayed, provided,
however, that Seller shall be permitted to assign this Agreement to a
subsidiary, parent or affiliated entity of Seller. In the event of a Change of
Control (as defined in the Credit Agreement) during the term of this Agreement,
Seller shall have the right to determine whether or not, in its discretion, this
Agreement should be assigned to the third party or the entity which results from
the Change of Control, and, should Seller so request, Buyer will provide or
arrange to have provided to Seller, additional assurance of the abilities and
willingness of the third party or new entity to assume the obligations and
provide the services of Buyer hereunder. If Seller does not consent to an
assignment of this Agreement, Buyer shall have the right to terminate the
Agreement on sixty (60) days prior written notice without any further obligation
or liability hereunder. Seller shall retain all rights which it has or may have
up to the effective date of such termination. This Agreement shall be binding on
Seller and Buyer and their respective successor and permitted assigns.

     (b) No Waiver. No waiver of a breach of any provision of this Agreement
shall constitute a waiver of any other breach of such provision, nor shall any
such waiver be construed as a continuing waiver.

     (c) Governing Law. This Agreement is governed by and construed in
accordance with the laws of the State of New York, without giving effect to such
State's conflict of laws provisions (other than Sections 5-1401 and 5-1402 of
the New York General Obligations Law).

                                      -10-

<PAGE>

     (d) Force Majeure. No party shall be liable for failure to perform or delay
in performing its obligations under this Agreement, and shall not be deemed to
be in breach of its obligations hereunder, if and to the extent and for so long
as such failure or delay in performance or breach is due to natural disaster,
war, strikes or other labor disputes, any loss or disruption of facilities, or
any other cause beyond the reasonable control of such party. The affected party
shall promptly provide the other party with notice of such occurrence, shall
diligently attempt to restore or continue its performance, and shall advise when
such event of force majeure shall have ended.

     (e) Housemark Usage. In connection with the transactions contemplated under
this Agreement, Seller has authorized Buyer to use Seller's housemark 'SIEMENS'
in accordance with Seller's regulations and guidelines for the use of such
housemark. In order to assure proper usage of its housemark, Seller reserves the
right to review all proposed usages of the housemark by Buyer.

     (f) Complete Agreement. This Agreement, and the Exhibits hereto, represents
the complete and exclusive statement of the arrangement between the parties with
respect to the matters contained herein and supersedes all prior agreements and
representations, oral or written, on the same subject matter. Amendments to this
Agreement shall not be effective unless made in writing and signed by the
parties hereto. In the event of a conflict between the terms contained in any of
the Exhibits relating to this Agreement and the terms of this Agreement, the
text of this Agreement shall govern. If there are terms in the Exhibits which
govern activities related thereto and which are not addressed in this Agreement,
the terms of the Exhibit shall govern. If the nature of the activities to be
conducted pursuant to this Agreement anticipate the preparation, execution and
use of other agreements ("ancillary documents") in respect of specific
activities, such ancillary documents will be subject to the terms of this
Agreement to the extent the terms therein are not in conflict with this
Agreement, and in an event of conflict, the terms of the ancillary documents
shall control the activities described therein.

     (g) No Agency. The relationship established hereby is in all respects a
commercial relationship. Nothing herein shall be construed as imposing any
fiduciary obligations on either party, or as establishing any partnership or
joint venture between the parties, or as rendering one part an agent of the
other. No agent or employee of one party shall be deemed to be an employee or
agent of the other. The parties acknowledge that their relationship is one of
independent buyer and seller and that, as separate entities, they have entered
into this Agreement for their respective business interests.

     (h) Confidentiality. Buyer and Seller agree that this Agreement, including
any Exhibits, appendices or ancillary agreements, as well as the nature of the
services to be provided one to the other hereunder, are confidential. The
parties agree to keep this Agreement and the information disclosed in, in
connection with and with respect to this Agreement as confidential and not
reveal such information to any other entity now, during or after the termination
or expiration of this Agreement. The parties may, however, admit to the
existence of a supply agreement between them. This restriction does not apply to
any information that (i) is or becomes public through the process of law,

                                      -11-

<PAGE>

or through no fault of either party, or (ii) that was revealed to either party
by a third party not owing an obligation of confidentiality to the party who
owns the information disclosed, (iii) information that is rightfully in the
recipient's possession or part of recipient's general knowledge prior to the
receipt of such confidential information, or (iv) information that is required
to be disclosed by law, the order of a court or regulation of a governmental
agency having jurisdiction over the parties; provided, however, in the event
this Agreement is a "Material Agreement" or Buyer is otherwise required by the
SEC to file this Agreement, Buyer shall provide to Seller for Seller's prior
review: (i) a copy of Buyer's proposed redacted version of the Agreement, and
(ii) Buyer's explanatory cover letter to the SEC. Buyer shall incorporate all
redactions reasonably requested by Seller, provided all redactions are requested
upon the advice of Seller's counsel.

     (i) Taxes. Each party shall remain responsible for any taxes assessed
against such party which are to be paid by such party as a result of the
transactions hereunder.

     (j) Headings; Counterparts. The headings contained in this Agreement are
for convenience of reference only and shall not constitute a part hereof, or
define, limit or in any was affect the meaning of any of the terms or provisions
hereof. This Agreement may be executed in two or more counterparts and any party
hereto may execute any such counterpart. Each counterpart, when executed and
delivered, shall be deemed to be an original and all of such counterparts taken
together shall be deemed to be one and the same instrument.

     (k) Public Announcements. Except as the other party shall authorize in
writing, or as required by law, the parties shall not disclose, and shall cause
their respective officers, directors, employees, affiliates and advisors not to
disclose, any matter or matters relating to this transaction to any person not
an officer, director, employee, affiliate or advisor of such party. In the event
a party is required by law to make a public announcement or disclosure, such
party shall, if practicable, consult with the other as to the timing and content
of such announcement before such announcement is made. The parties shall agree
about the content of any statement or communication to the public or the media
prior to the release thereof.

     (l) Rebates. Buyer acknowledges that rebates that are realized by Buyer as
a result of meeting the Minimum Purchase Percentage set out in Section 4 above
may be reportable in connection with Federal and State reimbursement programs in
which Buyer participates pursuant to Section 1128 (B) (b) of the Social Security
Act. In order to comply with any such reporting obligations, Seller agrees to
cooperate with Buyer in identifying total rebate amounts as requested.

     (m) Survival of Certain Provisions. Notwithstanding the termination or
expiration of this Agreement, the following provisions shall survive, along with
either party's obligations to pay any payments or fees accrued prior to
termination or expiration: Sections 7, 8, 9, 10, 11(d), 13, 14 and 17.

                                      -12-

<PAGE>

                            [SIGNATURE PAGE FOLLOWS.]

                                      -13-

<PAGE>

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective as of the Execution Date.

                                        HearUSA, INC.

                                        By: /s/ Stephen J. Hansbrough
                                            ------------------------------------
                                        Name: Stephen J. Hansbrough
                                        Title: President and Chief Executive
                                               Officer

                                        SIEMENS HEARING INSTRUMENTS, INC.

                                        By: /s/ William J. Lankenau
                                            ------------------------------------
                                        Name: William J. Lankenau
                                        Title: President & CEO

                                      -14-
<PAGE>

CERTAIN INFORMATION (INDICATED BY ASTERISKS) IN THIS EXHIBIT HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION.

                                    EXHIBIT A

HEARUSA PRICING SCHEDULE FOR CUSTOM AND BTE PRODUCTS
effective February 1, 2006 through December 31, 2006

                                                                 NEW - EFFECTIVE
                                                                 2/1/06

<TABLE>
<CAPTION>
                                                         HEARUSA    HEARUSA
                                          SINGLE UNIT   DISCOUNT   NET PRICE
                                          -----------   --------   ---------
<S>              <C>                      <C>           <C>        <C>
LIFE             BTE
                 ACURIS Life                 $1,391       ****%      $****
                 ACURIS Life Kits            $2,883       ****%      $****
                 ARTIS Life                  $1,167       ****%      $****
                 CIELO Life                  $  833       ****%      $****
                 epocket Remote Control      $  101       ****%      $****

ACURIS           CUSTOM
                 ITE                         $1,525       ****%      $****
                 HS                          $1,576       ****%      $****
                 ITC / MC                    $1,677       ****%      $****
                 CIC                         $1,828       ****%      $****
                 BTE
                 ACURIS S                    $1,626       ****%      $****
                 ACURIS P                    $1,904       ****%      $****

TRIANO           CUSTOM
                 ITE                         $1,363       ****%      $****
                 HS                          $1,438       ****%      $****
                 ITC / MC                    $1,533       ****%      $****
                 CIC                         $1,682       ****%      $****
                 BTE
                 TRIANO S                    $1,480       ****%      $****
                 TRIANO SL                   $1,548       ****%      $****
                 TRIANO 3                    $1,788       ****%      $****
                 TRIANO 3 P                  $1,879       ****%      $****
                 TRIANO SP                   $1,565       ****%      $****

ARTIS WITH E2E   CUSTOM
                 ITE                         $1,373       ****%      $****
                 HS                          $1,418       ****%      $****
                 ITC / MC                    $1,509       ****%      $****
                 CIC                         $1,645       ****%      $****
</TABLE>

                                       -1-

<PAGE>

<TABLE>
<S>              <C>                      <C>           <C>        <C>
                 BTE
                 ARTIS e2e S                 $1,463       ****%      $****

ARTIS            CUSTOM
                 ITE                         $  996       ****%      $****
                 HS                          $1,072       ****%      $****
                 ITC / MC                    $1,147       ****%      $****
                 CIC                         $1,297       ****%      $****
                 BTE
                 ARTIS S                     $1,167       ****%      $****

PRISMA 2         CUSTOM
                 ITE                         $  832       ****%      $****
                 HS                          $  895       ****%      $****
                 ITC / MC                    $  958       ****%      $****
                 CIC                         $1,084       ****%      $****
                 BTE
                 PRISMA 2                    $  931       ****%      $****
                 PRISMA 2 K/2 K+             $  930       ****%      $****
                 PRISMA 2 Power              $1,039       ****%      $****
                 PRISMA 2 VC                 $  975       ****%      $****
                 PRISMA 2 P VC               $1,083       ****%      $****
                 PRISMA 2 D SP               $1,102       ****%      $****

CIELO            CUSTOM
                 ITE                         $  738       ****%      $****
                 HS                          $  813       ****%      $****
                 ITC / MC                    $  907       ****%      $****
                 CIC                         $1,055       ****%      $****
                 BTE
                 CIELO S                     $  833       ****%      $****
                 CIELO Dir                   $  844       ****%      $****

MUSIC PRO        CUSTOM
                 ITE                         $  633       ****%      $****
                 HS                          $  697       ****%      $****
                 ITC / MC                    $  778       ****%      $****
                 CIC                         $  905       ****%      $****
                 BTE
                 MUSIC Pro                   $  678       ****%      $****
                 MUSIC Pro S                 $  715       ****%      $****
                 MUSIC Pro Dir               $  724       ****%      $****
                 MUSIC Pro SP                $  727       ****%      $****
</TABLE>

                                       -2-
<PAGE>

<TABLE>
<S>              <C>                      <C>           <C>        <C>
PHOENIX          CUSTOM
                 ITE                         $ 417        ****%      $****
                 HS                          $ 476        ****%      $****
                 ITC / MC                    $ 553        ****%      $****
                 CIC                         $ 672        ****%      $****
                 BTE
                 PHOENIX 104                 $ 468        ****%      $****
                 PHOENIX 204                 $ 468        ****%      $****
                 PHOENIIX 304                $ 468        ****%      $****

INFINITI PRO     CUSTOM
                 ITE                         $ 422        ****%      $****
                 HS                          $ 497        ****%      $****
                 ITC / MC                    $ 595        ****%      $****
                 CIC                         $ 746        ****%      $****
                 BTE
                 INFINITI Pro                $ 487        ****%      $****
                 INFINITI Pro S              $ 513        ****%      $****
                 INFINITI Pro Dir            $ 519        ****%      $****
                 INFINITI Pro SP             $ 525        ****%      $****

PHOENIX ONE      CUSTOM
                 ITE                         $ 399        ****%      $****
                 HS                          $ 477        ****%      $****
                 ITC / MC                    $ 576        ****%      $****
                 CIC                         $ 732        ****%      $****
                 BTE
                 PHOENIX 113                 $ 383        ****%      $****
                 PHOENIX 213                 $ 383        ****%      $****
                 PHOENIIX 313                $ 383        ****%      $****
</TABLE>

HEARUSA PRICING SCHEDULE FOR OPTIONS
effective February 1, 2006 through December 31, 2006

                                                          NEW - EFFECTIVE 2/1/06

<TABLE>
<CAPTION>
                                  SINGLE
                                   UNIT    HEAR USA   HEAR USA
OPTIONS                           PRICE    DISCOUNT     PRICE
------------------------------   -------   --------   --------
<S>                              <C>       <C>        <C>
AGC-O CONTROL                    $ 33.00     ****%      $****
CLEAR COAT                       $ 32.00     ****%      $****
FILAMENT VC                      $ 59.00     ****%      $****
GAIN CONTROL                     $ 33.00     ****%      $****
</TABLE>

                                       -3-

<PAGE>

<TABLE>
<S>                              <C>       <C>        <C>
MPO CONTROL                      $ 33.00     ****%      $****
SCREW SET VC                     $ 32.00     ****%      $****
SOFT CANAL                       $ 32.00     ****%      $****
TELECOIL                         $ 59.00     ****%      $****
TELECOIL (SWITCHLESS)            $ 73.00     ****%      $****
TONE (N-H) SWITCH                $ 33.00     ****%      $****
TONE (N-L) SWITCH                $ 33.00     ****%      $****
TONE (N-H) CONTROL               $ 33.00     ****%      $****
TONE (N-L) CONTROL               $ 33.00     ****%      $****
TWINMIC SYSTEM                   $133.00     ****%      $****
VOICEMIC                         $133.00     ****%      $****
24 HOUR SERVICE                  $ 49.00     ****%      $****
REMAKE / RECASE                  $ 61.00     ****%      $****
REMAKE/RECASE- NO MODEL CHANGE   $ 61.00     ****%      $****
CONV BTE >5YR OUT-WARR SERVICE   $127.00     ****%      $****
CONV BTE OUT OF WARRANTY SVC     $ 69.00     ****%      $****
CONV ITE >5YR OUT WARR SERVICE   $127.00     ****%      $****
CONV ITE OUT OF WARR SERVICE     $ 69.00     ****%      $****
DIG BTE OUT OF WARRANTY          $129.00     ****%      $****
DIG ITE OUT OF WARRANTY SERV     $129.00     ****%      $****
ITE 1-2YR DAMAGE SERVICE         $181.00     ****%      $****
PROG ANALOG BTE OUT OF WARR      $108.00     ****%      $****
PROG ANALOG ITE OUT OF WARR      $108.00     ****%      $****
DHL EXPRESS OVERNIGHT/NEXT DAY   $ 16.00     ****%      $****
DHL EXPRESS OVERNIGHT/NEXT DAY   $ 18.00     ****%      $****
</TABLE>

*    The parties agree that the "ship to" addresses determine the level of
     pricing charged to the purchasers under the terms of this Agreement.

                                       -4-

<PAGE>

                                    EXHIBIT B

                    AGREEMENT TO BE BOUND BY SUPPLY AGREEMENT

TO:     SIEMENS HEARING INSTRUMENTS, INC.

AND TO: HearUSA, INC.

          The undersigned hereby acknowledges and confirms that the undersigned
(i) has received a copy of the Supply Agreement, dated as of February 10, 2006
(the "Agreement"), by and among Siemens Hearing Instruments, Inc., certain
Siemens Affiliates and HearUSA, Inc., a copy of which is attached hereto, (ii)
has read and understands fully the provisions of the Agreement and (iii)
proposes to become a party thereto as a "Seller" in accordance with the
provisions of the Agreement.

          From and after the date hereof, the undersigned hereby covenants and
agrees to be bound by the Agreement, as such Agreement may be amended, modified,
replaced, restated or supplemented from time to time in accordance with the
provisions thereof, as a party in the same manner and to the same extent as if
the undersigned had been an original party to the Agreement as a "Seller".

          Unless otherwise defined in this Counterpart, capitalized terms used
herein and not otherwise defined shall have the meanings ascribed to such terms
in the Agreement.

                            DATED: February 10, 2006

                                        [NAME OF SIEMENS AFFILATE]

                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------

Address for Notices:
_____________________________________

_____________________________________

_____________________________________

                                       -5-exv10w1

 

AMERITRADE HOLDING CORPORATION

1996 DIRECTORS INCENTIVE PLAN

As Amended and Restated Effective May 10, 2006

     1. History and Purpose. Ameritrade Online Holdings Corp. (“Old Ameritrade”)
established the Ameritrade Holding Corporation 1996 Directors Incentive Plan (the “Plan”) to
attract and retain as non-employee directors persons whose abilities, experience and judgment can
contribute to the continued progress of the company and its subsidiaries and to facilitate the
directors’ ability to acquire a proprietary interest in the company. Old Ameritrade was formerly
known as Ameritrade Holding Corporation prior to the closing of the merger involving Old Ameritrade
and Datek Online Holdings Corp. on September 9, 2002 (the “Merger”). As a result of the Merger, Old
Ameritrade became a subsidiary of a newly formed corporation, Ameritrade Holding Corporation
(“Ameritrade” or the “Company”) effective as of September 9, 2002 (the “Merger Closing Date”) and
as of the Merger Closing Date Ameritrade assumed the Plan, and all outstanding obligations under
the Plan. The Board of Directors of Ameritrade (the “Board”) approved an amendment and
restatement, subject to stockholder approval, as of September 9, 2005 (the “Restatement Date”), and
stockholders approved the Plan on January 4, 2006. The Board subsequently approved this amendment
and restatement, which did not require stockholder approval, as of May 10, 2006 (the “New Effective
Date”). The following provisions constitute an amendment, restatement and continuation of the Plan
as of the New Effective Date.

     2. Administration.

          2.1 Administration By Committee. The Plan shall be administered by the Compensation
Committee (the “Committee”) of the Board. Notwithstanding the foregoing, no member of the
Committee shall act with respect to the administration of the Plan except to the extent consistent
with the exempt status of the Plan under Rule 16b-3 promulgated under the Securities Exchange Act
of 1934, as amended (“Rule 16b-3”).

          2.2 Authority. Subject to the provisions of the Plan, the Committee shall have the
authority to (a) interpret the Plan and to adopt, amend and rescind administrative guidelines and
other rules and regulations relating to the Plan, (b) correct any defect or omission and to
reconcile any inconsistency in the Plan or in any payment made hereunder, and (c) make all other
determinations and to take all other actions necessary or advisable for the implementation and
administration of the Plan. The determination of the Committee on matters within its authority
shall be conclusive and binding on the Company and all other persons.

     3. Participation. Only Non-Employee Directors shall be eligible to participate in the
Plan. As of any applicable date, a “Non-Employee Director” is a person who is serving as a
director of the Company and who is not an employee of the Company or any subsidiary of the Company
as of that date.

     4. Definition of Fair Market Value. For purposes of the Plan, the “Fair Market Value”
of a share of common stock of the Company (“Stock”) as of any date shall be the closing market

1

 

composite price for such Stock as reported on NASDAQ on that date or, if Stock is not traded
on that date, on the next preceding date on which Stock was traded.

     5. Shares Subject to the Plan.

          5.1 Number of Shares Reserved. The shares of Stock with respect to which awards may
be made under the Plan or which may be distributed pursuant to elections under Sections 9 or 10 of
the Plan shall be shares currently authorized but unissued or currently held or subsequently
acquired by the Company as treasury shares, including shares purchased in the open market or in
private transactions. Subject to the provisions of subsection 5.3, the number of shares of Stock
which may be issued with respect to awards under the Plan or distributed pursuant to elections made
in accordance with Section 9 or 10 of the Plan shall not exceed 2,531,393 shares in the aggregate
(which includes the 71,393 shares necessary to reflect the adjustment of outstanding awards
pursuant to the Plan in order to take into account the special cash dividend paid by Ameritrade
Holding Corporation on January 24, 2006).

          5.2 Reusage of Shares.

	 	(a)	 	In the event of the exercise or termination (by reason of forfeiture,
expiration, cancellation, surrender or otherwise) of any award under the Plan, that
number of shares of Stock that was subject to the award but not delivered shall again
be available for awards under the Plan.
	 
	 	(b)	 	In the event that shares of Stock are delivered under the Plan as a Stock Award
(as defined in Section 7) and are thereafter forfeited or reacquired by the Company
pursuant to rights reserved upon the award thereof, such forfeited or reacquired shares
shall again be available for awards under the Plan.
	 
	 	(c)	 	Notwithstanding the provisions of paragraphs (a) or (b), the following shares
shall not be available for reissuance under the Plan: (i) shares with respect to which
the Non-Employee Director has received the benefits of ownership (other than voting
rights), either in the form of dividends or otherwise, and (ii) shares which are
surrendered in payment of the Option Price (as defined in subsection 6.3) upon the
exercise of an Option.

          5.3 Adjustments to Shares Reserved. In the event of any merger, consolidation,
reorganization, recapitalization, spinoff, stock dividend, stock split, reverse stock split,
exchange or other distribution with respect to shares of Stock or other change in the corporate
structure or capitalization affecting the Stock, the type and number of shares of stock which are
or may be subject to awards under the Plan and the terms of any outstanding awards (including the
price at which shares of stock may be issued pursuant to an outstanding award) shall be equitably
adjusted by the Committee, in its sole discretion, to preserve the value of benefits awarded or to
be awarded to Non-Employee Directors under the Plan. In determining what adjustment, if any, is
appropriate pursuant to the preceding sentence, the Committee may rely on the advice of such
experts as they deem appropriate, including counsel, investment bankers and the accountants of the
Company.

2

 

     6. Options.

          6.1 Definitions. The grant of an “Option” under this Section 6 entitles the
Non-Employee Director to purchase shares of Stock at the Option Price, subject to the terms of this
Section 6. Options granted under this Section 6 shall be non-qualified stock options which are not
intended to be “incentive stock options” as that term is described in section 422(b) of the
Internal Revenue Code of 1986, as amended (the “Code”).

          6.2 Awards of Options. Each Non-Employee Director shall be awarded Options under this
Section 6 in accordance with the following:

	 	(a)	 	Upon his election to the Board for his first term, each Non-Employee Director
shall be awarded an Option to purchase such number of shares of Stock as determined by
the Chairman of the Board; provided, however, that such award shall be approved by the
Board.
	 
	 	(b)	 	At such times as the Board shall determine, each Non-Employee Director shall be
awarded an Option to purchase that number of shares of Stock determined by the Board
and approved by the members of the Board other than those receiving the grant of an
Option pursuant to this paragraph (b). In determining the number of shares of Stock
subject to an Option under this paragraph (b), the Board may take into account such
objective or subjective factors as it determines appropriate.

          6.3 Option Price. The price at which shares of Stock may be purchased upon the
exercise of an Option (the “Option Price”) shall be not less than the greater of (i) the Fair
Market Value of a share of Stock as of the date on which the Option is granted, or (ii) the par
value of a share of Stock on such date.

          6.4 Exercise. Except as otherwise provided in the Plan, each Option granted to a
Non-Employee Director under this Section 6 shall become exercisable in substantially equal annual
installments over a period of three years, beginning with the first anniversary of the date of
grant and no Option shall be exercisable after the Expiration Date (as defined in Section 8).
Notwithstanding a Non-Employee Director’s termination of service as a director, Options shall
continue to vest over a period of three years unless the Non-Employee Director terminates for
cause. If a Non-Employee Director’s service as a director terminates for Cause, Options shall
continue to vest over a period of one year following such termination of service. The full Option
Price of each share of Stock purchased upon the exercise of any Option shall be paid at the time of
such exercise and, as soon as practicable thereafter, a certificate representing the shares so
purchased shall be delivered to the person entitled thereto. The Option Price shall be payable in
cash or in shares of Stock (valued at Fair Market Value as of the day of exercise), or in any
combination thereof.

     7. Stock Awards.

          7.1 Definition. Subject to the terms of this Section 7, a “Stock Award” under the
Plan is either: (i) a grant of shares of Stock to a Non-Employee Director, or (ii) the grant of

3

 

restricted stock units representing the right to receive a share of Stock in the future; the
vesting of which is subject to the conditions described in subsection 7.3. The period beginning on
the date of the grant of a Stock Award and ending on the vesting or forfeiture of such Stock (as
applicable) underlying any Stock Award is referred to as the “Restricted Period”.

          7.2 Non-Discretionary Awards. Upon his election to the Board for his first term, each
Non-Employee Director shall be awarded a Stock Award in such number pursuant to this Section 7 as
determined by the Chairman of the Board; provided, however, that such Stock Award shall be approved
by the Board; and provided further that, the Fair Market Value of the Stock Award to a Non-Employee
Director pursuant to this subsection 7.2 shall be approximately $20,000 or such other amount
determined by the Board from time to time.

          7.3 Vesting. Except as otherwise provided in the Plan, the shares of Stock subject to
a Stock Award under this Section 7 shall become vested in substantially equal annual installments
over a period of three years, beginning with the first anniversary of the date of grant and all
shares of Stock subject to a Stock Award pursuant to this Section 7 which are not vested on the
Expiration Date shall be forfeited.

          7.4 Rights with Respect to Stock. If a Stock Award is made in the form of shares of
Stock, and not in the form of restricted stock units, then beginning on the date of the grant of
shares of Stock comprising such Stock Award, and including any applicable Restricted Period, the
Non-Employee Director, as owner of such shares, shall have the right to vote such shares; provided,
however, that payment of dividends with respect to Stock Awards shall be subject to the following:

	 	(a)	 	On and after date that a Non-Employee Director has a fully earned and vested
right to the shares comprising a Stock Award, and the shares have been distributed to
the Non-Employee Director, the Non-Employee Director shall have all dividend rights
(and other rights) of a stockholder with respect to such shares.
	 
	 	(b)	 	Prior to the date that a Non-Employee Director has a fully earned and vested
right to the shares comprising a Stock Award, the Committee, in its sole discretion,
may award Dividend Rights (as defined below) with respect to such shares.
	 
	 	(c)	 	On and after the date that a Non-Employee Director has a fully earned and
vested right to the shares comprising a Stock Award, but before the shares have been
distributed to the Non-Employee Director, the Non-Employee Director shall be entitled
to Dividend Rights with respect to such shares, at the time and in the form determined
by the Committee.

Unless otherwise provided in the form of award agreement for any Stock Award in the form of
restricted stock units, no rights of a stockholder (including specifically Dividend Rights) will
apply with respect to shares of Stock under such a Stock Award until the actual shares of Stock are
issued with respect to the restricted stock unit.

4

 

If applicable, a “Dividend Right” with respect to shares comprising a Stock Award shall entitle the
Non-Employee Director, as of each dividend payment date, to an amount equal to the dividends
payable with respect to a share of Stock multiplied by the number of such shares. Dividend Rights
shall be settled in the same form (either cash or in shares of Stock) as dividends paid to
shareholders of the Company.

     8. Expiration of Awards. The “Expiration Date” with respect to an award under the
Plan means the earlier of the following dates:

	 	(a)	 	the ten-year anniversary of the date on which the award is granted; or
	 
	 	(b)	 	the one-year anniversary of the date on which the Non-Employee Director’s
service as a director of the Company terminates for cause.

     9. Payment of Retainers; Elections.

          9.1 Payment of Retainer. Subject to the terms and conditions of the Plan, for each
fiscal year of the Company (the “Award Year”), each individual who is a Non-Employee Director shall
be paid a retainer in an amount determined from time to time by the Board (the “Retainer”) in
accordance with and subject to the following:

	 	(a)	 	For each Award Year, a “Cash Retainer” shall be payable to each individual who
is a Non-Employee Director as of the first day of the Award Year in an amount equal to
one-half of the Retainer for the Award Year; and
	 
	 	(b)	 	For each Award Year, a “Stock Retainer” shall be payable to each individual who
is a Non-Employee Director as of the first day of the Award Year in an amount equal to
one-half of the Retainer for the Award Year, which Stock Retainer shall be payable
either in (i) shares of Stock or (ii) restricted stock units representing a right to
receive shares of Stock in the future, both having a Fair Market Value equal to the
Stock Retainer on the date of grant, with the Fair Market Value of any fractional share
payable in cash.
	 
	 	(c)	 	Notwithstanding the foregoing, if a Non-Employee Director has met the specified
requirements of the Ameritrade Holding Corporation Equity Ownership and Disposition
Guidelines, the Non-Employee Director may elect to receive all or any portion of the
Stock Retainer in cash. The portion of a Non-Employee Director’s retainer which is
paid in cash pursuant to this paragraph (c) shall be treated as part of the Cash
Retainer.

Notwithstanding the foregoing, (i) the Board, in its sole discretion, may determine that an Award
Year of less than 12 months is appropriate, in which case, the amount of the Retainer and any other
amounts payable to a Non-Employee Director for such Award Year to which any provision of the Plan
applies shall be calculated and shall be payable as determined by the Board in its sole discretion,
and (ii) in no event shall the Retainer for the Award Year commencing on September 28, 2002 (the
“2003 Award Year”) be payable prior to October 11, 2002.

5

 

          9.2 Elections to Receive Stock. Subject to the terms and conditions of the Plan, each
Non-Employee Director may elect to forego receipt of all or any portion of the Eligible Cash
Payments (as defined below) payable to him in any Award Year beginning after the date of his
election and instead to receive whole shares of Stock of equivalent value to the Eligible Cash
Payments so foregone (determined in accordance with subsection 9.4). An election under this
subsection 9.2 to have Eligible Cash Payments paid in shares of Stock shall be valid only if it is
in writing, signed by the Non-Employee Director, and filed with the Committee in accordance with
uniform and nondiscriminatory rules adopted by the Committee, including, but not limited to, rules
required to cause the receipt of Stock pursuant to any such election to be exempt under Rule 16b-3.
For purposes of the Plan, the term “Eligible Cash Payments” means the Cash Retainer and meeting
fees and committee fees that would otherwise be payable to the Non-Employee Director by the Company
in cash as established, from time to time, by the Board or any committee thereof.
Notwithstanding the foregoing, in no event shall any Eligible Cash Payments for the 2003 Award Year
be payable prior to October 11, 2002

          9.3 Revocation of Election to Receive Stock. Once effective, an election pursuant to
subsection 9.2 to receive Stock shall remain in effect for successive Award Years until it is
revised or revoked. Any such revision or revocation shall be in writing, signed by the
Non-Employee Director, shall be effective for the Award Year next following the date on which it is
received by the Committee, or such later date specified in such notice, and shall be filed with the
Committee in accordance with uniform and nondiscriminatory rules established by the Committee,
including, but not limited to, rules required to cause the receipt of Stock (or the receipt of cash
in lieu of Stock as previously elected) to be exempt under Rule 16b-3.

          9.4 Equivalent Amount of Stock. The number of whole shares of Stock to be distributed
to any Non-Employee Director by reason of his election pursuant to subsection 9.2 to receive Stock
in lieu of Eligible Cash Payments shall be equal to (rounded to the nearest whole number of
shares):

	 	(a)	 	the amount of the Eligible Cash Payments which the Non-Employee Director has
elected to have paid to him in shares of Stock;
	 
	 	 	 	DIVIDED BY
	 
	 	(b)	 	the Fair Market Value of a share of Stock as of the date on which such Eligible
Cash Payments would otherwise have been payable to the Non-Employee Director; provided,
however, that in the case of Eligible Cash Payments which were payable (i) for the 2003
Award Year to individuals who were Non-Employee Directors as of the first day of the
2003 Award Year and (ii) on or prior to October 11, 2002, Fair Market Value under this
paragraph (b) shall be determined as of October 1, 2002.

          9.5 Discretionary Vesting of Stock Retainer. The Committee may impose any vesting
conditions on Stock Awards intended to be Stock Retainers pursuant to this Section 9 as it deems
appropriate from time to time.

6

 

     10. Deferred Compensation.

          10.1 Deferral of Compensation. Subject to the terms and conditions of the Plan, each
Non-Employee Director, by filing a written ‘Deferral Election’ with the Committee in accordance
with uniform and nondiscriminatory rules adopted by the Committee, may elect to defer the receipt
of all or any portion of the Eligible Deferral Amounts (as defined below) otherwise payable to him
on or after the Effective Date until a future date (the ‘Distribution Date’) specified by the
Non-Employee Director in his Deferral Election as of which payment of his Deferred Compensation
Account (as defined in subsection 10.2) shall commence in accordance with subsection 10.3. If no
Distribution Date is specified in a Non-Employee Director’s Deferral Election, the Distribution
Date shall be deemed to be the first business day in January of the year following the date on
which the Non-Employee Director ceases to be a director of the Company for any reason. A
Non-Employee Director’s Deferral Election shall be effective with respect to Eligible Deferral
Amounts otherwise payable to him for services rendered after the last day of the fiscal year in
which such election is filed with the Committee; provided, however, that:

	 	(a)	 	a Deferral Election which is filed within 30 days of the date on which a
director first becomes a Non-Employee Director shall be effective with respect to all
Eligible Deferral Amounts otherwise payable to him for periods after the date on which
the Deferral Election is filed; and
	 
	 	(b)	 	by notice filed with the Committee in accordance with uniform and
nondiscriminatory rules established by it, a director may terminate or modify any
Deferral Election as to Eligible Deferral Amounts payable for services rendered after
the last day of the fiscal year in which such notice is filed with the Committee;
provided, however, that no modification may be made to the Distribution Date unless the
Non-Employee Director shall file such notice with the Committee at least six months
prior thereto.

Notwithstanding the provisions of paragraph (b) next above, the Committee may, in its sole
discretion, after considering all of the pertinent facts and circumstances, approve a change to the
Distribution Date which is requested by a Non-Employee Director less than six months prior thereto.
For purposes of the Plan, the term ‘Eligible Deferral Amounts’ shall mean the Retainer (including
both the Cash Retainer and the Stock Retainer) and meeting fees and committee fees that would
otherwise be payable to the Non-Employee Director by the Company, all as established from time to
time by the Board or any committee thereof.

          10.2 Crediting and Adjustment of Deferred Amounts. The amount of any Eligible
Deferral Amounts deferred pursuant to a Non-Employee Director’s Deferral Election in accordance
with subsection 10.1 (“Deferred Compensation”) shall be credited to a bookkeeping account
maintained by the Company in the name of the Non-Employee Director (the “Deferred Compensation
Account”), which account shall consist of two subaccounts, one known as the “Cash Subaccount” and
the other as the “Company Stock Subaccount.” Any portion of the Stock Retainer and any Eligible
Cash Payments that the Non-Employee Director has elected to receive in Stock pursuant to subsection
9.2 and, in each case, with respect to which the Non-Employee

7

 

Director has made a Deferral Election pursuant to subsection 10.1 shall be credited to his
Company Stock Subaccount. Any other Deferred Compensation shall be credited to his Cash
Subaccount. A Non-Employee Director’s Deferred Compensation Account shall be adjusted as follows:

	 	(a)	 	As of the first day of each fiscal quarter occurring after the Effective Date
(which dates are referred to herein as “Accounting Dates”), the Non-Employee Director’s
Cash Subaccount shall be adjusted as follows:

	 	(i)	 	first, the amount of any distributions from the Cash
Subaccount made since the last preceding Accounting Date shall be charged to
the Cash Subaccount;
	 
	 	(ii)	 	next, the balance of the Cash Subaccount after
adjustment in accordance with subparagraph (i) above shall be credited with
interest since the last preceding Accounting Date computed at the prime rate as
reported by The Wall Street Journal for such date, or if such date is not a
business day, for the next preceding business day; and
	 
	 	(iii)	 	finally, after adjustment in accordance with the
foregoing provisions of this subsection 10.2, the Cash Subaccount shall be
credited with the Deferred Compensation otherwise payable to the Non-Employee
Director since the last preceding Accounting Date which is to be credited to
the Cash Subaccount.

	 	(b)	 	The Non-Employee Director’s Company Stock Subaccount shall be adjusted as
follows:

	 	(i)	 	as of any date on or after the Effective Date on which Eligible
Deferral Amounts would have been payable to the Non-Employee Director in Stock
but for his or her Deferral Election, the Non-Employee Director’s Company Stock
Subaccount shall be credited with that number of stock units (“Stock Units”)
equal to the number of shares of Stock to which he would have been entitled as
of the applicable date;
	 
	 	(ii)	 	as of the date on which shares of Stock are distributed to the
Non-Employee Director in accordance with subsection 10.3 below, the Company
Stock Subaccount shall be charged with an equal number of Stock Units; and
	 
	 	(iii)	 	as of the record date for any dividend paid on Stock, the
Company Stock Subaccount shall be credited with that number of additional Stock
Units which is equal to the number obtained by multiplying the number of Stock
Units then credited to the Company Stock Subaccount by the amount of the cash
dividend or the fair market value (as determined by the Board of

8

 

	 	 	 	Directors) of any dividend in kind payable on a share of Stock, and dividing
that product by the then Fair Market Value of a share of Stock.

	 	 	 	In the event of any merger, consolidation, reorganization, recapitalization,
spinoff, stock split, reverse stock split, rights offering, exchange or other change
in the corporate structure or capitalization of the Company affecting the Stock,
each Non-Employee Director’s Company Stock Subaccount shall be equitably adjusted in
such manner consistent with subsection 5.3

          10.3 Payment of Deferred Compensation Account. Except as otherwise provided in this
subsection 10.3 or subsection 10.4, the balances credited to a Non-Employee Director’s Deferred
Compensation Account shall each be payable to the Non-Employee Director in 10 annual installments
commencing as of the Distribution Date and continuing on each annual anniversary thereof.
Notwithstanding the foregoing, a Non-Employee Director may elect, by filing a notice with the
Committee at least six months prior to the Distribution Date, to change the number of payments to a
single payment or to any number of annual payments not in excess of ten. Each such payment shall
include a cash portion, if applicable, and a Stock portion, if applicable, as follows:

	 	(a)	The cash portion to be paid as of the Distribution Date or any anniversary
thereof and charged to the Cash Subaccount shall be equal to the balance of the Cash
Subaccount multiplied by a fraction, the numerator of which is one and the denominator
of which is the number of remaining payments to be made, including such payment.
	 
	 	(b)	The Stock portion to be paid as of the Distribution Date or any anniversary
thereof and charged to the Company Stock Subaccount shall be distributed in whole shares of Stock, the number of shares of which shall be determined by rounding to the
next highest integer the product obtained by multiplying the number of Stock Units then
credited to the Non-Employee Director’s Company Stock Subaccount by a fraction, the
numerator of which is one and the denominator of which is the number of remaining
payments to be made, including such payment.

Notwithstanding the foregoing, the Committee, in its sole discretion, may distribute all balances
in any Deferred Compensation Account to a Non-Employee Director (or former Non-Employee Director)
in a lump sum as of any date.

          10.4 Payments in the Event of Death. If a Non-Employee Director dies before payment
of his Deferred Compensation Account commences, all amounts then credited to his Deferred
Compensation Account shall be distributed to his Beneficiary (as described below), as soon as
practicable after his death, in a lump sum. If a Non-Employee Director dies after payment of his
Deferred Compensation Account has commenced but before the entire balance of such account has been
distributed, the remaining balance thereof shall be distributed to his Beneficiary, as soon as
practicable after his death, in a lump sum. Any amounts in the Cash Subaccount shall be
distributed in cash and any amounts in the Stock Subaccount shall be distributed in whole shares of
Stock determined in accordance with paragraph 10.3(b). For

9

 

purposes of the Plan, the Non-Employee Director’s “Beneficiary” is the person or persons the
Non-Employee Director designates, which designation shall be in writing, signed by the Non-Employee
Director and filed with the Committee prior to the Non-Employee Director’s death. A Beneficiary
designation shall be effective when filed with the Committee in accordance with the preceding
sentence. If more than one Beneficiary has been designated, the balance in the Non-Employee
Director’s Deferred Compensation Account shall be distributed to each such Beneficiary per capita.
In the absence of a Beneficiary designation or if no Beneficiary survives the Non-Employee
Director, the Beneficiary shall be the Non-Employee Director’s estate.

     11. Replacement Awards. Each holder of an award related to the common stock of Old
Ameritrade which was granted pursuant to the Plan prior to the Merger Closing Date and which was
outstanding as of the Merger Closing Date after giving effect to the transactions contemplated by
the Merger (the “Existing Awards”), will, as of the Merger Closing Date, be automatically granted a
“Replacement Award” under the Plan and the Existing Awards shall be cancelled in exchange for the
Replacement Awards. The number of shares of Stock and, if applicable, the Option Price per share
of Stock, subject to a Replacement Award shall be equal to the same number of shares of common
stock of Old Ameritrade and, if applicable, the same Option Price per share, subject to
corresponding Existing Award. Except as provided in the preceding sentence, the Replacement Awards
granted pursuant to this Section 11 shall be subject to the same terms and conditions as the
corresponding Existing Awards.

     12. Miscellaneous.

          12.1 Duration. The Plan shall be unlimited in duration and, in the event of Plan
termination, shall remain in effect as long as any awards under it are outstanding.

          12.2 Withholding Payments. To the extent that any Non-Employee Director would incur
an obligation for Nebraska state income taxes on account of an award or payment to him under the
Plan or the exercise of any award under the Plan (referred to as the “Withholding Obligation”), the
Company, in its sole discretion, may make a cash payment to such Non-Employee Director in an amount
such that, after payment of all federal, state or local taxes on such cash payment, the
Non-Employee Director retains a cash payment equal to the Withholding Obligation.

          12.3 Limit on Distribution. Distribution of shares of Stock or other amounts under
the Plan shall be subject to the following:

	 	(a)	 	Notwithstanding any other provision of the Plan, the Company shall have no
liability to deliver any shares of Stock under the Plan or make any other distribution
of benefits under the Plan unless such delivery or distribution would comply with all
applicable laws and the applicable requirements of any securities exchange or similar
entity.
	 
	 	(b)	 	To the extent that the Plan provides for issuance of certificates to reflect
the transfer of shares of Stock, the transfer of such shares may be effected on a non-

10

 

	 	 	 	certificated basis, to the extent not prohibited by applicable law or the rules of
any stock exchange.

          12.4 Transferability. Awards under the Plan are not transferable except as designated
by a Non-Employee Director by will or by the laws of descent and distribution. To the extent that
the Non-Employee Director who receives an award under the Plan has the right to exercise such
award, the award may be exercised during the lifetime of the Non-Employee Director only by the
Non-Employee Director.

          12.5 Notices. Any notice or document required to be filed with the Committee under
the Plan will be properly filed if delivered or mailed by registered mail, postage prepaid, to the
Committee, in care of the Company, at its principal executive offices. The Committee may, by
advance written notice to affected persons, revise such notice procedure from time to time. Any
notice required under the Plan (other than a notice of election) may be waived by the person
entitled to notice.

          12.6 Form and Time of Elections. Unless otherwise specified herein, each election
required or permitted to be made by any Non-Employee Director or other person entitled to benefits
under the Plan, and any permitted modification or revocation thereof, shall be in writing filed
with the Committee at such times, in such form, and subject to such restrictions and limitations,
not inconsistent with the terms of the Plan, as the Committee shall require. Any notice required
under the Plan may be waived by the person entitled thereto.

          12.7 Agreement With the Company. At the time of an award to a Non-Employee Director
under the Plan, the Committee may require a Non-Employee Director to enter into an agreement with
the Company in a form specified by the Committee, agreeing to the terms and conditions of the Plan
and to such additional terms and conditions, not inconsistent with the Plan, as the Committee may,
in its sole discretion, prescribe.

          12.8 Limitation of Implied Rights.

	 	(a)	 	Neither a Non-Employee Director nor any other person shall, by reason of the
Plan, acquire any right in or title to any assets, funds or property of the Company
whatsoever, including, without limitation, any specific funds, assets, or other
property which the Company, in its sole discretion, may set aside in anticipation of a
liability under the Plan. A Non-Employee Director shall have only a contractual right
to the amounts, if any, payable under the Plan, unsecured by any assets of the Company.
Nothing contained in the Plan shall constitute a guarantee by the Company that the
assets of such companies shall be sufficient to pay any benefits to any person.
	 
	 	(b)	 	The Plan does not constitute a contract of continued service, and participation
in the Plan shall not give any Non-Employee Director the right to be retained as a
director of the Company, nor any right or claim to any benefit under the Plan, unless
such right or claim has specifically accrued under the terms of the Plan. Except as
otherwise provided in the Plan, no award under the Plan shall confer

11

 

	 	 	 	upon the holder thereof any right as a shareholder of the Company prior to the date
on which he fulfills all service requirements and other conditions for receipt of
such rights.

          12.9 Evidence. Evidence required of anyone under the Plan may be by certificate,
affidavit, document or other information which the person acting on it considers pertinent and
reliable, and signed, made or presented by the proper party or parties.

          12.10 Gender and Number. Where the context admits, words in one gender shall include
the other gender, words in the singular shall include the plural and the plural shall include the
singular.

          12.11 Source of Payments. The provisions of Sections 9 and 10 constitute only
unfunded, unsecured promises of the Company to make payments to directors (or other persons) in the
future in accordance with the terms of the Plan.

          12.12 Nonassignment. Neither a director’s nor any other person’s rights to payments
under the Plan are subject in any manner to anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance, attachment or garnishment by creditors of the director.

          12.13 Code Section 409A. Notwithstanding Section 13, the Committee reserves the right
to revise the Plan and any Stock Awards granted hereunder as it deems necessary or advisable, in
its sole discretion and without the consent of the Non-Employee Director, to comply with Section
409A of the Code or to otherwise avoid the imposition of any additional tax or income recognition
under Section 409A of the Code prior to the actual receipt of shares of Stock pursuant to any Stock
Award.

     13. Amendment and Termination. The Board may, at any time, amend or terminate the
Plan, provided that, subject to subsection 5.3 (relating to certain adjustments to shares) and
subsection 10.3 (relating to lump sum payments of amounts held in a Non-Employee Director’s
Deferred Compensation Account), no amendment or termination may, without the consent of the
Non-Employee Director or beneficiary, if applicable, materially adversely affect the rights of any
Non-Employee Director or beneficiary under any award made under the Plan or rights already accrued
hereunder prior to the date such amendment is adopted by the Board.

     14. Change in Control. Notwithstanding any provision in the Plan to the contrary,
upon a Change in Control, all outstanding Options will become fully exercisable and all outstanding
Stock Awards shall become fully vested. For purposes of the Plan, the term “Change in Control”
means a change the beneficial ownership of the Company’s voting stock or a change in the
composition of the Board which occurs as follows:

	 	(a)	 	Any “person” (as such term is used in Section 13(d) and 14(d)(2) of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”)) is or becomes a
beneficial owner, directly or indirectly, of stock of the Company representing 30
percent or more of the total voting power of the Company’s then outstanding stock.

12

 

	 	(b)	 	A tender offer (for which a filing has been made with the Securities Exchange
Commission (“SEC”) which purports to comply with the requirements of Section 14(d) of
the Exchange Act and the corresponding SEC rules) is made for the stock of the Company,
which has not been negotiated and approved by the Board. In case of a tender offer
described in this paragraph (b), the Change in Control will be deemed to have occurred
upon the first to occur of (i) any time during the offer when the person (using the
definition in (a) above) making the offer owns or has accepted for payment stock of the
Company with 25 percent or more of the total voting power of the Company’s stock, or
(ii) three business days before the offer is to terminate unless the offer is withdrawn
first, if the person making the offer could own, by the terms of the offer plus any shares owned by this person, stock with 50 percent or more of the total voting power of
the Company’s stock when the offer terminates.
	 
	 	(c)	 	Individuals who were the Board’s nominees for election as directors of the
Company immediately prior to a meeting of the shareholders of the Company involving a
contest for the election of directors shall not constitute a majority of the Board
following the election.”

13

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00104-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00104-of-00352.parquet"}]]