The 50% is only if you break the warranty (abuse, modifications, past 5 years, etc.). Within 5 years, if you don't abuse them and they do go out, then the replacement is free (not including warranty). At least that's what it read like. If you do break warranty, or pass the 5 year mark, it'll cost 125 dollars to replace. Technically, they don't have to replace it after the warranty period (or warranty voided), but they are offering the opportunity to at a great discount.
This warranty and replacement plan is more than generous on the side of the manufacturer. You really can't ask for much more than this.
Don't forget the biggest thing. They want to hear how you broke it. Honestly if I get a good check before the end of this, I'm upping my pledge to get a second pair. If for nothing else so that I'll have a good gift to give a friend.