SCIENTIFIC LEARNING
CORPORATION 
1999 EMPLOYEE STOCK PURCHASE PLAN 



Adopted April 22,
1999

Approved By Stockholders May 28, 1999 

Amended March, 2002

Approved By Stockholders May
21, 2002 

Amended October 9, 2002

Approved By Stockholders __, 2003  



1.    PURPOSE.  



        (a)                  The
purpose of the 1999 Employee Stock Purchase Plan (the “Plan”) is           to
provide a means by which employees of Scientific Learning Corporation, a
          Delaware corporation (the “Company”), and its Affiliates, as defined
          in subparagraph 1(b), which are designated as provided in subparagraph 2(b),
may           be given an opportunity to purchase common stock of the Company.  



        (b)                  The
word “Affiliate” as used in the Plan means any parent corporation           or
subsidiary corporation of the Company, as those terms are defined in Sections
          424(e) and (f), respectively, of the Internal Revenue Code of 1986, as amended
          (the “Code”).  



        (c)                  The
Company, by means of the Plan, seeks to retain the services of its           employees,
to secure and retain the services of new employees, and to provide           incentives
for such persons to exert maximum efforts for the success of the           Company.  



        (d)                  The
Company intends that the rights to purchase stock of the Company granted           under
the Plan be considered options issued under an “employee stock           purchase
plan” as that term is defined in Section 423(b) of the Code.  



2.    ADMINISTRATION.  



        (a)                  The
Plan shall be administered by the Board of Directors (the “Board”)           of
the Company unless and until the Board delegates administration to a           Committee,
as provided in subparagraph 2(c). Whether or not the Board has           delegated
administration, the Board shall have the final power to determine all           questions
of policy and expediency that may arise in the administration of the           Plan.  



        (b)                  The
Board shall have the power, subject to, and within the limitations of, the
          express provisions of the Plan:  



                (i)                  To
determine when and how rights to purchase stock of the Company shall be           granted
and the provisions of each offering of such rights (which need not be
          identical).  



                (ii)                  To
designate from time to time which Affiliates of the Company shall be eligible
          to participate in the Plan.  





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                (iii)                  To
construe and interpret the Plan and rights granted under it, and to           establish,
amend and revoke rules and regulations for its administration. The           Board, in
the exercise of this power, may correct any defect, omission or           inconsistency
in the Plan, in a manner and to the extent it shall deem necessary           or expedient
to make the Plan fully effective.  



                (iv)                  To
amend the Plan as provided in paragraph 13.  



                (v)                  Generally,
to exercise such powers and to perform such acts as the Board deems           necessary
or expedient to promote the best interests of the Company and its           Affiliates
and to carry out the intent that the Plan be treated as an           “employee stock
purchase plan” within the meaning of Section 423 of           the Code.  



        (c)                  The
Board may delegate administration of the Plan to a Committee composed of not
          fewer than two (2) members of the Board (the “Committee”) constituted
          in accordance with the requirements of Rule 16b-3 (“Rule 16b-3”)
under           the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
          If administration is delegated to a Committee, the Committee shall have, in
          connection with the administration of the Plan, the powers theretofore
possessed           by the Board, subject, however, to such resolutions, not inconsistent
with the           provisions of the Plan, as may be adopted from time to time by the
Board. The           Board may abolish the Committee at any time and revest in the Board
the           administration of the Plan.  



3.    SHARES
SUBJECT TO THE PLAN. 



        (a)                  Subject
to the provisions of paragraph 12 relating to adjustments upon changes           in stock
and subject to Section 3(c) below, the stock that may be sold pursuant           to
rights granted under the Plan shall not exceed in the aggregate Seven Hundred
          Thousand (700,000) shares of the Company’s common stock (the “Common
          Stock”). If any right granted under the Plan shall for any reason
terminate           without having been exercised, the Common Stock not purchased under
such right           shall again become available for the Plan.  



        (b)                  The
stock subject to the Plan may be unissued shares or reacquired shares,           bought
on the market or otherwise.  



        (c)                  Notwithstanding
any provision herein to the contrary, in the event the Plan is           not approved by
holders of at least two-thirds of the Company’s outstanding           common stock
within twelve months of the date a right is first granted hereunder           following
the October 2002 amendment of the Plan, then, unless an exemption from
          qualification is available with respect to such grant that does not require
          compliance with the provisions of 260.140.45 of the California Code of
          Regulations, any right granted hereunder which (i) followed the October 2002
          amendment of the Plan and (ii) was granted at a time when the total number of
          securities issuable upon exercise of all outstanding options [exclusive of
          rights described in Section 260.140.40 and warrants described in Sections
          260.140.43 and 260.140.44 of the California Code of Regulations, and any
          purchase plan or agreement as described in Section 260.140.42 of the California
          Code of Regulations (provided that the purchase plan or agreement provides that
          all securities will have a purchase price of 100% of the fair value, as
          determined in accordance with Section 260.140.50 of the California Code of
          Regulations, of the security either at the time the person is granted the right
          to purchase securities under the plan or agreement or at the time the purchase
          is consummated)] and the total number of securities called for under any bonus
          or similar plan or agreement exceeded 30% of the Company’s then
outstanding           securities, calculated on an as-converted to common stock basis,
shall be void.  





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4.     GRANT
OF RIGHTS; OFFERING. 



        (a)                  The
Board or the Committee may from time to time grant or provide for the grant           of
rights to purchase Common Stock of the Company under the Plan to eligible
          employees (an “Offering”) on a date or dates (the “Offering
          Date(s)”) selected by the Board or the Committee. Each Offering shall be
in           such form and shall contain such terms and conditions as the Board or the
          Committee shall deem appropriate, which shall comply with the requirements of
          Section 423(b)(5) of the Code that all employees granted rights to purchase
          stock under the Plan shall have the same rights and privileges. The terms and
          conditions of an Offering shall be incorporated by reference into the Plan and
          treated as part of the Plan. The provisions of separate Offerings need not be
          identical, but each Offering shall include (through incorporation of the
          provisions of this Plan by reference in the document comprising the Offering or
          otherwise) the period during which the Offering shall be effective, which
period           shall not exceed twenty-seven (27) months beginning with the Offering
Date, and           the substance of the provisions contained in paragraphs 5 through 8,
          inclusive.  



        (b)                  If
an employee has more than one right outstanding under the Plan, unless he or
          she otherwise indicates in agreements or notices delivered hereunder:
          (1) each agreement or notice delivered by that employee will be deemed to
          apply to all of his or her rights under the Plan, and (2) a right with a
          lower exercise price (or an earlier-granted right, if two rights have identical
          exercise prices), will be exercised to the fullest possible extent before a
          right with a higher exercise price (or a later-granted right, if two rights
have           identical exercise prices) will be exercised.  



5.    ELIGIBILITY.  



        (a)                  Rights
may be granted only to employees of the Company or, as the Board or the
          Committee may designate as provided in subparagraph 2(b), to employees of any
          Affiliate of the Company. Except as provided in subparagraph 5(b), an employee
          of the Company or any Affiliate shall not be eligible to be granted rights
under           the Plan, unless, on the Offering Date, such employee has been in the
employ of           the Company or any Affiliate for such continuous period preceding
such grant as           the Board or the Committee may require, but in no event shall the
required           period of continuous employment be equal to or greater than two (2)
years. In           addition, unless otherwise determined by the Board or the Committee
and set           forth in the terms of the applicable Offering, no employee of the
Company or any           Affiliate shall be eligible to be granted rights under the Plan,
unless, on the           Offering Date, such employee’s customary employment with
the Company or           such Affiliate is for at least twenty (20) hours per week and at
least five (5)           months per calendar year.  



        (b)                  The
Board or the Committee may provide that, each person who, during the course           of
an Offering, first becomes an eligible employee of the Company or designated
          Affiliate will, on a date or dates specified in the Offering which coincides
          with the day on which such person becomes an eligible employee or occurs
          thereafter, receive a right under that Offering, which right shall thereafter
be           deemed to be a part of that Offering. Such right shall have the same
          characteristics as any rights originally granted under that Offering, as
          described herein, except that:  





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                (i)                  the
date on which such right is granted shall be the “Offering Date”          of
such right for all purposes, including determination of the exercise price of
          such right;  



                (ii)                  the
period of the Offering with respect to such right shall begin on its           Offering
Date and end coincident with the end of such Offering; and  



                (iii)                  the
Board or the Committee may provide that if such person first becomes an
          eligible employee within a specified period of time before the end of the
          Offering, he or she will not receive any right under that Offering.  



        (c)                  No
employee shall be eligible for the grant of any rights under the Plan if,
          immediately after any such rights are granted, such employee owns stock
          possessing five percent (5%) or more of the total combined voting power or
value           of all classes of stock of the Company or of any Affiliate. For purposes
of this           subparagraph 5(c), the rules of Section 424(d) of the Code shall apply
in           determining the stock ownership of any employee, and stock which such
employee           may purchase under all outstanding rights and options shall be treated
as stock           owned by such employee.  



        (d)                  An
eligible employee may be granted rights under the Plan only if such rights,
          together with any other rights granted under “employee stock purchase
          plans” of the Company and any Affiliates, as specified by Section
423(b)(8)           of the Code, do not permit such employee’s rights to purchase
stock of the           Company or any Affiliate to accrue at a rate which exceeds twenty
five thousand           dollars ($25,000) of fair market value of such stock (determined
at the time           such rights are granted) for each calendar year in which such
rights are           outstanding at any time.  



        (e)                  Officers
of the Company and any designated Affiliate shall be eligible to           participate in
Offerings under the Plan, provided, however, that the Board may           provide in an
Offering that certain employees who are highly compensated           employees within the
meaning of Section 423(b)(4)(D) of the Code shall not be           eligible to
participate.  



6.    RIGHTS;
PURCHASE PRICE.  



        (a)                  On
each Offering Date, each eligible employee, pursuant to an Offering made           under
the Plan, shall be granted the right to purchase up to the number of           shares of
Common Stock of the Company purchasable with a percentage designated           by the
Board or the Committee not exceeding fifteen percent (15%) of such           employee’s
Earnings (as defined by the Board or the Committee in each           Offering) during the
period which begins on the Offering Date (or such later           date as the Board or
the Committee determines for a particular Offering) and           ends on the date stated
in the Offering, which date shall be no later than the           end of the Offering. The
Board or the Committee shall establish one or more           dates during an Offering
(the “Purchase Date(s)”) on which rights           granted under the Plan shall
be exercised and purchases of Common Stock carried           out in accordance with such
Offering.  





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        (b)                  In
connection with each Offering made under the Plan, the Board or the Committee
          may specify a maximum number of shares that may be purchased by any employee as
          well as a maximum aggregate number of shares that may be purchased by all
          eligible employees pursuant to such Offering. In addition, in connection with
          each Offering that contains more than one Purchase Date, the Board or the
          Committee may specify a maximum aggregate number of shares which may be
          purchased by all eligible employees on any given Purchase Date under the
          Offering. If the aggregate purchase of shares upon exercise of rights granted
          under the Offering would exceed any such maximum aggregate number, the Board or
          the Committee shall make a pro rata allocation of the shares available in as
          nearly a uniform manner as shall be practicable and as it shall deem to be
          equitable.  



        (c)                  The
purchase price of stock acquired pursuant to rights granted under the Plan
          shall be not less than the lesser of:  



                (i)                  an
amount equal to eighty-five percent (85%) of the fair market value of the           stock
on the Offering Date; or  



                (ii)                  an
amount equal to eighty-five percent (85%) of the fair market value of the           stock
on the Purchase Date.  



7.    PARTICIPATION;
WITHDRAWAL; TERMINATION. 



        (a)                  An
eligible employee may become a participant in the Plan pursuant to an           Offering
by delivering a participation agreement to the Company within the time
          specified in the Offering, in such form as the Company provides. Each such
          agreement shall authorize payroll deductions of up to the maximum percentage
          specified by the Board or the Committee of such employee’s Earnings during
          the Offering (as defined by the Board or Committee in each Offering). The
          payroll deductions made for each participant shall be credited to an account
for           such participant under the Plan and shall be deposited with the general
funds of           the Company. A participant may reduce (including to zero) or increase
such           payroll deductions, and an eligible employee may begin such payroll
deductions,           after the beginning of any Offering only as provided for in the
Offering. A           participant may make additional payments into his or her account
only if           specifically provided for in the Offering and only if the participant
has not           had the maximum amount withheld during the Offering.  



        (b)                  At
any time during an Offering, a participant may terminate his or her payroll
          deductions under the Plan and withdraw from the Offering by delivering to the
          Company a notice of withdrawal in such form as the Company provides. Such
          withdrawal may be elected at any time prior to the end of the Offering except
as           provided by the Board or the Committee in the Offering. Upon such withdrawal
          from the Offering by a participant, the Company shall distribute to such
          participant all of his or her accumulated payroll deductions (reduced to the
          extent, if any, such deductions have been used to acquire stock for the
          participant) under the Offering, without interest, and such participant’s
          interest in that Offering shall be automatically terminated. A
          participant’s withdrawal from an Offering will have no effect upon such
          participant’s eligibility to participate in any other Offerings under the
          Plan but such participant will be required to deliver a new participation
          agreement in order to participate in subsequent Offerings under the Plan.  





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        (c)                  Rights
granted pursuant to any Offering under the Plan shall terminate           immediately
upon cessation of any participating employee’s employment with           the Company
and any designated Affiliate, for any reason, and the Company shall           distribute
to such terminated employee all of his or her accumulated payroll           deductions
(reduced to the extent, if any, such deductions have been used to           acquire stock
for the terminated employee) under the Offering, without interest.  



        (d)                  Rights
granted under the Plan shall not be transferable by a participant           otherwise
than by will or the laws of descent and distribution, or by a           beneficiary
designation as provided in paragraph 14 and, otherwise during his or           her
lifetime, shall be exercisable only by the person to whom such rights are
          granted.  



8.    EXERCISE. 



        (a)                  On
each Purchase Date specified therefor in the relevant Offering, each           participant’s
accumulated payroll deductions and other additional payments           specifically
provided for in the Offering (without any increase for interest)           will be
applied to the purchase of whole shares of stock of the Company, up to           the
maximum number of shares permitted pursuant to the terms of the Plan and the
          applicable Offering, at the purchase price specified in the Offering. No
          fractional shares shall be issued upon the exercise of rights granted under the
          Plan. The amount, if any, of accumulated payroll deductions remaining in each
          participant’s account after the purchase of shares which is less than the
          amount required to purchase one share of stock on the final Purchase Date of an
          Offering shall be held in each such participant’s account for the purchase
          of shares under the next Offering under the Plan, unless such participant
          withdraws from such next Offering, as provided in subparagraph 7(b), or is no
          longer eligible to be granted rights under the Plan, as provided in
          paragraph 5, in which case such amount shall be distributed to the
          participant after such final Purchase Date, without interest. The amount, if
          any, of accumulated payroll deductions remaining in any participant’s
          account after the purchase of shares which is equal to the amount required to
          purchase whole shares of stock on the final Purchase Date of an Offering shall
          be distributed in full to the participant after such Purchase Date, without
          interest.  



        (b)                  No
rights granted under the Plan may be exercised to any extent unless the           shares
to be issued upon such exercise under the Plan (including rights granted
          thereunder) are covered by an effective registration statement pursuant to the
          Securities Act of 1933, as amended (the “Securities Act”) and the
Plan           is in material compliance with all applicable state, foreign and other
          securities and other laws applicable to the Plan. If on a Purchase Date in any
          Offering hereunder the Plan is not so registered or in such compliance, no
          rights granted under the Plan or any Offering shall be exercised on such
          Purchase Date, and the Purchase Date shall be delayed until the Plan is subject
          to such an effective registration statement and such compliance, except that
the           Purchase Date shall not be delayed more than twelve (12) months and the
Purchase           Date shall in no event be more than twenty-seven (27) months from the
Offering           Date. If on the Purchase Date of any Offering hereunder, as delayed to
the           maximum extent permissible, the Plan is not registered and in such
compliance,           no rights granted under the Plan or any Offering shall be exercised
and all           payroll deductions accumulated during the Offering (reduced to the
extent, if           any, such deductions have been used to acquire stock) shall be
distributed to           the participants, without interest.  





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9.    COVENANTS
OF THE COMPANY. 



        (a)                  The
Company shall seek to obtain from each federal, state, foreign or other
          regulatory commission or agency having jurisdiction over the Plan such
authority           as may be required to issue and sell shares of stock upon exercise of
the rights           granted under the Plan. If, after reasonable efforts, the Company is
unable to           obtain from any such regulatory commission or agency the authority
which counsel           for the Company deems necessary for the lawful issuance and sale
of stock under           the Plan, the Company shall be relieved from any liability for
failure to issue           and sell stock upon exercise of such rights unless and until
such authority is           obtained.  



10.    USE
OF PROCEEDS FROM STOCK. 



        Proceeds
from the sale of stock pursuant to rights granted under the Plan shall constitute general
funds of the Company.  



11.     RIGHTS
AS A STOCKHOLDER.  



        A
participant shall not be deemed to be the holder of, or to have any of the rights of a
holder with respect to, any shares subject to rights granted under the Plan unless and
until the participant’s shareholdings acquired upon exercise of rights under the
Plan are recorded in the books of the Company.  



12.    ADJUSTMENTS
UPON CHANGES IN STOCK. 



        (a)                  If
any change is made in the stock subject to the Plan, or subject to any rights
          granted under the Plan (through merger, consolidation, reorganization,
          recapitalization, reincorporation, stock dividend, dividend in property other
          than cash, stock split, liquidating dividend, combination of shares, exchange
of           shares, change in corporate structure or other transaction not involving the
          receipt of consideration by the Company), the Plan and outstanding rights will
          be appropriately adjusted in the class(es) and maximum number of shares subject
          to the Plan and the class(es) and number of shares and price per share of stock
          subject to outstanding rights. Such adjustments shall be made by the Board or
          the Committee, the determination of which shall be final, binding and
          conclusive. (The conversion of any convertible securities of the Company shall
          not be treated as a “transaction not involving the receipt of
consideration           by the Company.”)  



        (b)                  In
the event of: (1) a dissolution or liquidation of the Company;           (2) a merger or
consolidation in which the Company is not the surviving           corporation; (3) a
reverse merger in which the Company is the surviving           corporation but the shares
of the Company’s Common Stock outstanding           immediately preceding the merger
are converted by virtue of the merger into           other property, whether in the form
of securities, cash or otherwise; or           (4) the acquisition by any person, entity
or group within the meaning of           Section 13(d) or 14(d) of the Exchange Act or
any comparable successor           provisions (excluding any employee benefit plan, or
related trust, sponsored or           maintained by the Company or any Affiliate of the
Company) of the beneficial           ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act,           or comparable successor rule) of securities
of the Company representing at least           fifty percent (50%) of the combined voting
power entitled to vote in the           election of directors, then, as determined by the
Board in its sole discretion           (i) any surviving or acquiring corporation may
assume outstanding rights or           substitute similar rights for those under the
Plan, (ii) such rights may           continue in full force and effect, or (iii)
participants’ accumulated           payroll deductions may be used to purchase
Common Stock immediately prior to the           transaction described above and the
participants’ rights under the ongoing           Offering terminated.  





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13.    AMENDMENT
OF THE PLAN. 



        (a)                  The
Board at any time, and from time to time, may amend the Plan. However,           except
as provided in paragraph 12 relating to adjustments upon changes in           stock, no
amendment shall be effective unless approved by the stockholders of           the Company
to the extent stockholder approval is necessary for the Plan to           satisfy the
requirements of Section 423 of the Code, Rule 16b-3 or any Nasdaq or           securities
exchange listing requirements.  



        (b)                  The
Board may in its sole discretion submit any other amendment to the Plan for
          stockholder approval, including.  



        (c)                  It
is expressly contemplated that the Board may amend the Plan in any respect           the
Board deems necessary or advisable to provide employees with the maximum
          benefits provided or to be provided under the provisions of the Code and the
          regulations promulgated thereunder relating to employee stock purchase plans
          and/or to bring the Plan and/or rights granted under it into compliance
          therewith.  



        (d)                  Rights
and obligations under any rights granted before amendment of the Plan           shall not
be impaired by any amendment of the Plan, except with the consent of           the person
to whom such rights were granted, or except as necessary to comply           with any
laws or governmental regulations, or except as necessary to ensure that           the
Plan and/or rights granted under the Plan comply with the requirements of
          Section 423 of the Code.  



14.    DESIGNATION
OF BENEFICIARY. 



        (a)                  A
participant may file a written designation of a beneficiary who is to receive
          any shares and cash, if any, from the participant’s account under the Plan
          in the event of such participant’s death subsequent to the end of an
          Offering but prior to delivery to the participant of such shares and cash. In
          addition, a participant may file a written designation of a beneficiary who is
          to receive any cash from the participant’s account under the Plan in the
          event of such participant’s death during an Offering.  



        (b)                  The
participant may change such designation of beneficiary at any time by           written
notice. In the event of the death of a participant and in the absence of           a
beneficiary validly designated under the Plan who is living at the time of           such
participant’s death, the Company shall deliver such shares and/or cash           to
the executor or administrator of the estate of the participant, or if no such
          executor or administrator has been appointed (to the knowledge of the Company),
          the Company, in its sole discretion, may deliver such shares and/or cash to the
          spouse or to any one or more dependents or relatives of the participant, or if
          no spouse, dependent or relative is known to the Company, then to such other
          person as the Company may designate.  





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15.    TERMINATION
OR SUSPENSION OF THE PLAN. 



        (a)                  The
Board in its discretion may suspend or terminate the Plan at any time.           Unless
sooner terminated, the Plan shall terminate either (i) at the time that           all of
the shares subject to the Plan’s share reserve, as increased and/or
          adjusted from time to time, have been issued under the terms of the Plan, or
          (ii) to the extent the Company is subject to Section 260.140.42 of Title 10 of
          the California Code of Regulations at the time any rights are granted under the
          Plan, on the day before the tenth (10th) anniversary of the date the Plan is
          adopted by the Board, or approved by the stockholders of the Company, whichever
          is earlier. No rights may be granted under the Plan while the Plan is suspended
          or after it is terminated.  



        (b)                  Rights
and obligations under any rights granted while the Plan is in effect           shall not
be impaired by suspension or termination of the Plan, except as           expressly
provided in the Plan or with the consent of the person to whom such           rights were
granted, or except as necessary to comply with any laws or           governmental
regulation, or except as necessary to ensure that the Plan and/or           rights
granted under the Plan comply with the requirements of Section 423 of the           Code.  



16.    EFFECTIVE
DATE OF PLAN. 



        The
Plan shall become effective on the same day that the Company’s initial public
offering of shares of common stock becomes effective (the “Effective Date”),
but no rights granted under the Plan shall be exercised unless and until the Plan has
been approved by the stockholders of the Company within twelve (12) months before or
after the date the Plan is adopted by the Board or the Committee, which date may be prior
to the Effective Date.  



17.     INFORMATION
OBLIGATION.  



        To
the extent required by Section 260.140.46 of Title 10 of the California Code of
Regulations, the Company shall deliver financial statements to Participants at least
annually. This Section 17 shall not apply to key employees whose duties in connection
with the Company assure them access to equivalent information.  





9.