|Exhibit
10.25



Approved by Compensation Committee
3/7/02


Scientific
Learning Corporation2002 Management Incentive Plan


Goal Setting Process


Only through management
teamwork toward clearly defined common goals can we achieve our aggressive
company financial goals for 2002. Scientific Learning Corporation is committed
to a formal goal setting and regular communication process that helps us achieve
these goals. We will:
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | 1. |  | Hold
an annual goal setting meeting at the beginning of the year with all Management Incentive
Plan participants to discuss company goals and how each participant in the Management
Incentive Plan can help achieve those goals.
| |  | -- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | 2. |  | Formalize
company goals and individual goals.
| |  | -- |  | ---------------------------------------------

| |  | 3. |  | Management
meets quarterly to discuss companys performance against shared goals and to agree
upon modifications to tasks and priorities to help the company achieve its goals.
| |  | -- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | 4. |  | After
each quarterly meeting, plan participants with individual goals meet with their managers
to discuss performance against goals. At end of Q4, plan participants with individual
goals receive scoreson how well goals were achieved.
| |  | -- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Purpose of Plan / Participation in Plan


Purpose


To provide significant cash
awards to participants for the achievement and over-achievement of Scientific
Learning Corporations aggressive company financial goals for 2002.


Participants


Directors, Vice Presidents and Executives (Grades 9 and above)


Target Incentive Awards


Target incentive awards in
the Management Incentive Plan will be set to deliver market 50th
percentile total cash compensation at 100% achievement of aggressive company
revenue and profit goals for 2002. As goals are exceeded, awards will increase.


Target
Incentive Award Opportunities for Plan Participants
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|               
|---------------
|
|               
|Chairman, CEO  
|               
|President & COO
|               
|CFO            
|               
|SVP            
|               
|VP, Sales      
|               
|Other VPs      
|               
|Directors      
|               

|SCIENTIFIC LEARNING
CORPORATION - 2002 MANAGEMENT INCENTIVE PLAN


Page 1 of 3
|------------------------------------------------------------------------------

|Approved by Compensation Committee
3/7/02


Trigger


A condition to the payment
of any bonuses under the plan is that, during the year 2002, the Company
achieves net operating cash use of not more than $4,000,000 (before bonuses)
(except as provided below for the VP Sales). For example, even if an individual
achieves his/her individual goals and/or the Company achieves the revenue goal,
no bonuses would be paid under the plan if the company used $5,000,000 in
operating cash during 2002.


Goals and Profitability Condition


All participants in the
Management Incentive Plan will have shared company goals (achieved
collectively). Some positions will have individual goals (directly under the
control of the participant and focused specifically on optimizing the
achievement of the shared goals). Weighting of these goals in the plan varies by
position.


Shared Goals


Shared goals for the 2002
plan are:
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 1.   2002 net revenue of $25.7 million
2.   Operating loss of not more than $4.5 million (before bonuses)
   2002 revenue goal represents         2/3   of shared target awards   Operating loss goal represents      1/3   of shared target awards
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Individual Goals


Individual goals will vary
by participant and will be designed to help the company achieve its shared
goals. Individual goals will be developed during the goal-setting meeting and
shared with all participants. Where applicable, participants may develop up to
four individual goals.


Weighting of Shared and Individual Goals


The weighting of shared and
individual goals will vary by position.


Weighting of
Shared and Individual Goals
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|               
|---------------
|
|
|               
|Chairman, CEO  
|               
|President & COO
|               
|CFO            
|               
|SVP            
|               
|VP, Sales*     
|               
|Other VPs      
|               
|Directors      
|               

|*The VP Sales is not
subject to the operating cash use trigger. The VP Sales revenue goal is school
sales revenue of $20 million rather than the total company revenue goal.


Hurdles. Scaling and Over Achievement


Hurdles


Each goal must meet a minimum
achievement before the portion of the incentive award tied to the goal can be paid.
(Note: except as provided above for the VP Sales, no awards will be paid unless the cash
use trigger is met.)


SCIENTIFIC LEARNING
CORPORATION - 2002 MANAGEMENT INCENTIVE PLAN

Page 2 of 3
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Hurdles for goals are:
|----------------------

| |  |  | 70%
of revenue goal must be achieved before portion of the award tied to revenue is paid
| | - |  | ----------------------------------------------------------------------------------------

| |  |  | 70%
of operating loss goal must be achieved before portion of the award tied to operating
profit is paid
| | - |  | --------------------------------------------------------------------------------------------------------

| |  |  | 50%
of individual goals must be achieved before the portion of the award tied to that
individual goals is paid
| | - |  | --------------------------------------------------------------------------------------------------------------

|Scaling


Once the operating cash use
trigger has been satisfied, and the hurdle for the goal has been achieved:
|----------------------------------------------------------------------------------------------------------------

| |  |  | At
70% achievement of the goal, 20% of that goals portion of the target award is
earned.
| | - |  | -----------------------------------------------------------------------------------------

| |  |  | At
100% of the goal, 100% of that goals portion of the target award is earned.
| | - |  | -------------------------------------------------------------------------------

| |  |  | Between
70% and 100% achievement of the goal, the amount of that goals portion of the
target award earned is scaled ratably. (For example, at 85% of goal, 60% that goals
portion is earned.)
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Over Achievement


The Compensation Committee
of the Board of Directors will determine what levels of bonus will be paid if
more than the 100% of goals are achieved.


Timing of Awards


Awards are made in February
following each plan year, upon the completion of the annual audit. Plan
participants must be employed at Scientific Learning Corporation at the time
that the plan 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).


Summary of Plan Schedule
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|April 2002 - |  | Goal setting meeting
|------------ |  | --------------------

|May 2002 - |  | Management meeting:  communication of company performance.
Participants with individual goals meet with managers to discuss performance against goals
|---------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------

|July 2002 - |  | Management meeting:  communication of company performance - reset priorities if appropriate
Participants with individual goals meet with managers to discuss performance against goals
|----------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Oct. 2002 - |  | Management meeting:  communication of company performance - reset priorities if appropriate
|----------- |  | -------------------------------------------------------------------------------------------

|Dec. 2002- |  | Management meeting:  communication of company performance against goals
Participants with individual goals receive ratings on performance against those goals
|---------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------

|Feb. 2003- |  | After audit, incentive awards paid
|---------- |  | ----------------------------------

|Estimated Cost of Plan


At 100% of revenue target
and 100% of operating cash use target the estimated cost of the plan will be
approximately $822,500, or 3.5% of $23.4 million in revenues.


SCIENTIFIC LEARNING
CORPORATION - 2002 MANAGEMENT INCENTIVE PLAN


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