Scientific Learning Corporation 2003 Management Incentive Plan

To provide significant cash awards to participants for the achievement and over-achievement of Scientific Learning’s collective financial goals, as well as each participant’s individual goals and overall performance in adding value for shareholders, customers and employees.

All members of the Leadership Team, director-level employees and selected manager-level employees. At January 31, 2003, the total number of participants was 22. The regional sales directors (K-12 and private sector) are included in sales incentive compensation plans and are therefore excluded from this Plan.

Intended to deliver market average incentive compensation at 100% achievement of goals. Awards increase for overachievement.

A condition to the payment of any bonuses under the Plan is that the Company achieves an operating profit (according to GAAP) for 2003. For example, even if an individual achieves his/her individual goals and the Company achieves the booked sales goal, if the Company records an operating loss for 2003, no bonuses will be paid under the Plan. If shared or individual goal accomplishment would call for payment of bonuses, but payment of the full bonus attributable to those goals would cause the operating profit condition not to be met, then the only bonus to be paid for such goals will be such lesser bonus as will still permit accomplishment of the operating profit trigger.

All participants in the Plan will have shared Company financial goals and individual goals closely related to the individual’s own area of responsibility.

Shared Goals

Shared goals for the 2003 Plan are:

*Booked sales for the VP Sales for the K-12 sector is defined as booked sales in the K-12 sector. His goal levels for booked sales in the K-12 sector are: Hurdle level (minimum achievement for bonus payment): $26 million; target level (100% achievement): $31 million; maximum overachievement level: $40 million. For all other participants, booked sales are total Company booked sales.

Individual Goals

Individual goal performance under the 2003 Plan is based on both the following.

*For managers and directors, the CEO has discretion to allocate the bonus opportunity differently among the various goals to reflect the priorities and responsibilities of that particular person.

Hurdles

Provided that the trigger has been satisfied, the bonus payout starts for each goal when the specified hurdle level for that goal is achieved:

Scaling

Once the hurdle for the goal has been achieved, and provided that the trigger has been satisfied:

Over Achievement

The attached chart shows the impact at particular levels of the hurdles, scaling and overachievement calculations.

Awards are made in February, following the completion of the annual audit for the prior year. Plan participants must be employed at employed at Scientific Learning when the bonus awards are made to receive an award. Participants hired during the plan year will be eligible for a pro-rated award (unless otherwise agreed to, in writing, when the participant is hired).

The Compensation Committee has discretion to pay bonuses to reflect achievement even if specific goals are not met, and to interpret the terms of the Plan.

* Subject to adjustment by the CEO, as described above.