(e)    Shareholder Approval of 2007 Incentive Compensation Plan. On June 11, 2007, at the annual meeting of stockholders of HearUSA, Inc. (the “Company”), the stockholders approved HearUSA’s 2007 Incentive Compensation Plan (the “2007 Plan”), providing for the grant of stock options, stock appreciation rights, restricted stock and restricted stock units to directors, officers and employees of the Company. The Company’s Chief Executive Officer, Chief Financial Officer and the other named executive officers are eligible participants. A total of 2,500,000 shares of the Company’s common stock will be available for issuance under the 2007 Plan. The Compensation Committee of the Board of Directors of the Company will administer the 2007 Plan and grant awards under the 2007 Plan. The Committee has discretion to establish the terms of each award, consistent with the Plan. Any performance targets related to performance-based awards, and any performance conditions related to the lapse of restrictions on the restricted stock awards or restricted stock units, will be determined by the Compensation Committee. The 2007 Plan will remain in effect until its termination or the later of the distribution of shares subject to outstanding awards on the date of the Plan’s termination or expiration of such awards. The Company may withhold from any payment under the 2007 Plan any required withholding taxes. The Board of Directors may amend, modify, terminate, or suspend the 2007 Plan, and the Compensation Committee may amend any agreement or certificate, provided, in each instance, that any necessary approval of the stockholders is obtained and no participant’s rights are adversely affected unless otherwise permitted by an agreement or a certificate or the law. The 2007 Plan will be unfunded and will not require the segregation of any assets.

The Board of Directors of the Company had approved the 2007 Plan on April 27, 2007, subject to the approval of the stockholders.