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EXHIBIT 10.3
 
July 11, 2012

Robert C. Bowen
3430 N. Mountain Ridge #2
Mesa, Arizona  85207

RE: 
EMPLOYMENT OFFER

Dear Bob:

On behalf of Scientific Learning Corporation (the “Company”), I am pleased to
offer you the following position.  This offer is subject to approval by the
Compensation Committee of the Board of Directors.

Position:
Chairman and Chief Executive Officer, reporting to the Board of Directors of the
Company.

 

Salary:
Your starting base salary will be $23,333.34 per month ($280,000.00
annually).  You will be paid semimonthly on the 15th and the last day of each
month, subject to payroll withholding and deductions.  Based on your duties and
responsibilities, you will be categorized as “exempt” and will be ineligible for
overtime pay. Your salary will be reviewed by the Board of Directors on January
1, 2013.

 

Incentive Compensation:
In addition to your base salary, at the end of 2012 you will be eligible for a
bonus equivalent to 50% of your base salary, prorated based on a partial year of
employment (i.e., approximately 24% of your base salary, given a start date of
July 8, 2012), payable at the discretion of the Board of Directors.  This bonus
is contingent upon your continued employment with the Company through December
31, 2012.

 
If the Board of Directors approves the Scientific Learning Bonus Plan for 2013,
the target bonus for you, as Chairman and Chief Executive Officer, will be 55%
of base salary up to 110% with over achievement.

 

Effective Date:
The effective date is July 8, 2012.

 

Paid Time Off:
Your accrual rate for paid time off will be 6.67 hours per pay period. The
Company may modify its standard benefits from time to time as it deems
necessary, which would also modify the benefits available to you.

Health Insurance:
You have requested, and the Company has agreed, that you will waive health
insurance as an employee of the Company but the Company will continue to
reimburse you for reasonable medical insurance costs that you have obtained on
your own behalf for you and your spouse. Reasonable medical insurance costs
means the cost of a medical insurance plan that supplements the coverage
available to you and your spouse from any available federal and/or state
government source (e.g., Medicare or its successor) so that such coverage
collectively approximates, to the extent reasonable, the scope of coverage and
out of pocket expenditures available to you under the medical insurance benefits
at Scientific Learning at this time.  You agree to provide Scientific Learning
with all documentation/invoices/receipts regarding the cost of such supplemental
medical insurance. If you predecease your spouse, Scientific Learning will
continue to reimburse the same costs for your spouse only for the same time
period.  This reimbursement will continue throughout your employment and for a
period of five (5) years after your employment ends.

 
 
 

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Equity Grants:
As part of your new hire package, it will be recommended to the Compensation
Committee of the Board of Directors that you be granted an option to purchase up
to 150,000 shares of common stock of the Company under the Company’s Stock
Option Plan.  The option exercise price will be the then current fair market
value of the common stock on the date of grant, which will  be the Company’s
next standard equity grant date, October 1, 2012.   The shares will be subject
to vesting over four years from your date of hire with an initial one-year cliff
(at which time 25% will vest, with the remainder vesting 1/48th monthly over the
following 36 months).  The grant of the options is subject to compliance with
applicable securities laws.

 

 
Additionally,it will be recommended that you receive an award of 150,000
restricted stock units (RSUs) of Scientific Learning Common Stock under the
Company’s Equity Incentive Plan.  This award will be granted on October 1, 2012
and will vest, in equal installments, every six months for 48 months.  This
award is subject to compliance with applicable federal and state securities
laws.

Travel Expenses

 
You will be reimbursed for reasonable expenses incurred for traveling from your
home in Minnesota or your second home in Arizona to the office in Oakland,
California in accordance with the Company’s applicable expense reimbursement
policies.

 
· 
Transportation: commercial airline using economy class/coach

 
· 
Airport parking

 
· 
Rental Car (or other form of local transportation not to exceed, in the
aggregate, the reasonable cost of a rental car)

 
· 
Hotel accommodations (moderately priced) or other mutually agreeable
accommodations

 
 
In the event any of the travel expenses reimbursed pursuant to this section are
ever classified as taxable income, the Company will provide you with a tax gross
up equal to the tax liability thus incurred.  The previous sentence will survive
the termination of your employment so long as the expenses remain subject to
classification as taxable income by applicable taxing authorities.

 
At-Will
Employment:
Throughout your employment at Scientific Learning, your employment is
at-will.  At-will employment provides protection of our mutual rights. You or
the Company may terminate your employment relationship at any time for any
reason whatsoever, with or without cause or advance notice.  This at-will
employment relationship and other terms of your employment may not be changed
except in writing signed by a duly-authorized officer of our Company.

 

Prior
Agreements:
Upon signing this offer letter agreement, effective July 8, 2012, the current
Independent Contractor Agreement between you and the Company will be
terminated.  Additionally, the benefits provided under section 3 of the current
Retirement Agreement between you and Company, dated December 17, 2009, will no
longer be in effect, as they will be superseded by the related provisions of
this agreement.

 
 

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Please sign one copy and return it to Gina Larue in the Human Resources
department by July 12, 2012 to indicate your agreement to your employment at the
Company on the terms set forth above.
 
Sincerely,
 
SCIENTIFIC LEARNING CORPORATION
          By
/s/ Dino Rossi
   
July 12, 2012
 
Dino Rossi 
    Date  
On behalf of the Board of Directors
               
ACCEPTED AND AGREED:
                        By /s/ Robert C. Bowen     July 12, 2012   Robert C.
Bowen     Date

 
 

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