Document:

Unassociated Document

    
       

      Exhibit
4.1

       

      YTB
INTERNATIONAL, INC.

      TSO
STOCK PURCHASE PLAN

       

      ARTICLE 1

      PURPOSE,
SCOPE AND ADMINISTRATION OF THE PLAN

       

      1.1           Purpose and
Scope

       

      The
purpose of the YTB International, Inc. TSO Stock Purchase Plan is to
attract, retain and motivate the best available TSOs of the Company and its
Subsidiaries and to assist them in acquiring a stock ownership interest in the
Company so as to align their interests with those of the Company’s other
stockholders.

       

      1.2           Administration of
Plan

       

      The Plan
shall be administered by the Committee. The Committee shall have the power to
make, amend and repeal rules and regulations for the interpretation and
administration of the Plan.  The Committee may delegate administrative
tasks under the Plan to one or more agents. The Committee’s interpretation and
decisions with respect to the Plan shall be final and conclusive.

       

      ARTICLE 2

      DEFINITIONS

       

      Whenever
the following terms are used in this Plan, they shall have the meaning specified
below unless the context clearly indicates to the contrary.  The
singular pronoun shall include the plural where the context so
indicates.

       

      2.1           “Board” shall mean the
Committee, if such Committee has been appointed, or the Board of Directors of
the Company, if such Committee has not been appointed.

       

      2.2           “Class A Common Stock”
shall mean shares of Class A common stock of the Company, par value $0.001 per
share.

       

      2.3           “Class B Common Stock”
shall mean shares of Class B common stock of the Company, par value $0.001 per
share.

       

      2.4           “Code” shall mean the
Internal Revenue Code of 1986, as amended.

       

      2.5           “Committee” shall mean
the Committee, if any, appointed by the Board.

       

      2.6           “Company” shall mean
YTB International, Inc., a Delaware corporation.

       

      2.7           “Eligible Participant”
shall mean a natural person who has been a TSO in
good standing (as determined pursuant to policies of the Company from time to
time in effect) continuously for at least 90 days, so long as such
person continues
to be a TSO in good standing and (i) renders bona fide services that
are not in connection with the offer and sale of the Company’s securities in a
capital raising transaction and (ii) does not directly or indirectly promote or
maintain a market for the Company’s securities. Participation
of TSOs residing outside the United States will be at the discretion of the
Company and be subject to compliance with all applicable laws and
regulations.

       

      2.8           “Equity Unit” shall
mean one share of Class A Common Stock, one share of Class B Common Stock and
one Option.

       

      2.9           
“Exchange Act”
shall mean the Securities Exchange Act of 1934, as amended.

       

      2.10           “Fair Market Value” of
an Equity Unit as of a given date shall mean (i) the average of two times the
closing prices of the sales of Class A Common Stock on the trading date previous
to such date on all national securities exchanges on which such securities may
at the time be listed, or, if there have been no sales on any such exchange on
the trading date previous to such date, the average of the highest bid and
lowest asked prices on all such exchanges at the close of business on the
trading day previous to such date, or (ii) if on any date no such shares of
Class A Common Stock are so listed, the last sales price quoted in the NASDAQ
System as of 4:00 P.M., New York time on the trading date previous to such date,
or (iii) if on any date such securities are not quoted in the NASDAQ System, the
average of the highest bid and lowest asked prices on the trading date previous
to such date in the domestic over-the-counter market as reported by the National
Quotation Bureau Incorporated, or any similar successor organization, or (iv) if
Class A Common Stock is not publicly traded or quoted or sold in the
over-the-counter market, the fair market value of a share of Class A Common
Stock as established by the Committee acting in good faith.

       

      2.11           “Nonqualified Stock
Option” shall mean an Option not intended to qualify under Section 422 of
the Code.

       

      2.12           “Offering Date” shall
mean the last business day of each calendar month.

       

      2.13           “Option” shall mean a
stock option granted pursuant to the Plan to acquire one Share of Class A Common
Stock and one share of Class B Common Stock.  Options shall be
Nonqualified Stock Options and shall be evidenced by written Stock Option
Agreements.

       

      2.14           “Option Period” shall
mean the calendar month ending with each Offering Date.

       

      2.15           “Participant” shall
mean any Eligible Participant who elects to participate in the
Plan.

       

      2.16           “Plan” shall mean this
YTB International, Inc. TSO Stock Purchase Plan, as the same may be amended
from time to time.

       

      2.17           “Plan Account” shall
mean a bookkeeping account established and maintained by the Company in the name
of each Participant.

       

      2.18           “Purchase Price” shall
mean the Fair Market Value of an Equity Unit hereunder as provided in
Section 2.10 hereof.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      2.19           “Shares” shall mean
shares of Class A Common Stock and Class B Common Stock.

       

      2.20           “TSO” shall mean a Travel Site Owner of
the Company or any of the Subsidiaries.

       

      2.21           “Stock Option
Agreement” shall mean a written agreement evidencing the
Option.

       

      2.22           “Subsidiary” shall
mean any corporation in an unbroken chain of corporations beginning with the
Company if each of the corporations other than the last corporation in the
unbroken chain then owns stock possessing more than 50% of the total combined
voting power of all classes of stock in one of the other corporations in such
chain.

       

      2.23           “Termination for
Cause” shall mean termination by the Company of a Participant’s status
as a TSO by reason of: (a) an order of any federal or state regulatory
authority having jurisdiction over the Company or any Subsidiary; (b) the
willful failure of the Participant substantially to perform his or her duties as
a TSO (other than any such failure due to the Participant’s physical or mental
illness); (c) a willful breach by the Participant of any material provision of
any written agreement with the Company or any Subsidiary; (d) the Participant’s
commission of a crime that constitutes a felony or other crime of moral
turpitude or criminal fraud; (e) chemical or alcohol dependency which materially
and adversely affects the Participant’s performance of his or her duties to the
Company or any Subsidiary; (f) any act of disloyalty or breach of
responsibilities to the Company or any Subsidiary, which is intended by the
Participant to cause material harm to the Company; (g) misappropriation (or
attempted misappropriation) of any of the Company’s or any Subsidiary’s funds or
property by the Participant; or (h) the Participant’s material and intentional
violation of any Company or Subsidiary policy applicable to the
Participant.

       

      ARTICLE 3

      PARTICIPATION

       

      3.1           Election to Participate and
Payment

       

      An
Eligible Participant may elect to participate in the Plan during an Option
Period by delivering to the Company, not later than the 15th day of
the Option Period, a written notice of election to participate in the
Plan.  Such notice shall be accompanied by payment of the amount the
Participant desires to have applied to the purchase of Equity Units , which
amount may not be less than $1,000 nor more than $10,000 in any Option
Period.  Payments remitted by the Participant pursuant to this
Section 3.1 shall be credited to the Participant’s Plan
Account.

       

      3.2           Change in
Participation

       

      A
Participant may discontinue his or her participation in the Plan as provided in
Article 6 hereof, or may decrease his or her payment at any time during an
Option Period, by delivering to the Company a new written notice of election to
participate in the Plan, in the form prescribed by the Company.

       

      3.3           Rules for
Participation

       

      The
Committee shall have the authority to modify the rules and regulations regarding
changes in participation by providing Participants notice of such change 15 days
prior to the Offering Date.

       

      ARTICLE 4

      PURCHASE
OF SHARES

       

      4.1           Purchase
Price

       

      The
Purchase Price for each Equity Unit sold to Participants hereunder shall be the
Purchase Price on the Offering Date.

       

      4.2           Purchase of Equity
Units

       

      (a)           On
each Offering Date on which he or she is an Eligible Participant, each
Participant will automatically and without any action on his or her part be
deemed to have elected to purchase at the Purchase Price the largest number of
whole Equity Units which can be purchased with the amount in the Participant’s
Plan Account.  The balance, if any, remaining in the Participant’s
Plan Account (after such purchase) as of an Offering Date shall, at the election
of the Company, be either carried forward to the next Option Period or refunded.
A
Participant may not make more than one purchase under the Plan per calendar
month.

       

      (b)           As
soon as practicable following each Offering Date, the Company, pursuant to each
Participant’s instructions, will, at the
Company’s option electronically deliver to the Participant’s
designated brokerage account such number of Shares comprising the Equity Units
purchased pursuant to Section 4.2(a) above or physically deliver to the
Participant a certificate for such Shares.  In the event the
Company is required to obtain from any regulatory commission or agency authority
to issue and deliver the Shares, either physically or electronically, the
Company will seek to obtain such authority.  Inability of the Company
to obtain from any such commission or agency authority which counsel for the
Company deems necessary for the lawful issuance and delivery of the Shares,
either physical or electronic, shall relieve the Company from liability to any
Participant except to refund to him or her the amount paid.

       

      4.3           Transferability of
Rights

       

      Rights to
purchase Equity Units granted under the Plan shall not be transferable and are
exercisable only by the Participant.  No rights therein or part
thereof shall be liable for the debts, contracts or engagements of the
Participant or his or her successors in interest or shall be subject to
disposition by alienation, anticipation, pledge, encumbrance, assignment or any
other means whether such disposition be voluntary or involuntary or by operation
of law by judgment, levy, attachment, garnishment or any other legal or
equitable proceedings (including bankruptcy), and any attempt at disposition
thereof shall be null and void and of no effect.

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      ARTICLE 5

      PROVISIONS
RELATING TO CLASS A AND CLASS B COMMON STOCK

       

      5.1           Class A and Class B Common
Stock Reserved

       

      There
shall be 7,500,000 authorized but un-issued or reacquired shares of Class A
Common Stock and 7,500,000 authorized but un-issued or reacquired shares of
Class B Common Stock reserved for issuance as Equity Units pursuant to this
Plan, subject to adjustment in accordance with Section 5.2
hereof.

       

      If an
Option should expire or become unexercisable for any reason without having been
exercised in full, the unpurchased Shares which were subject thereto shall,
unless the Plan shall have been terminated, become available for future
issuances of Equity Units under the Plan.

       

      5.2           Adjustment for Changes in
Class A and Class B Common Stock

       

      In the
event that adjustments are made in the number of outstanding shares of Class A
or Class B Common Stock or the Shares are exchanged for a different class of
stock of the Company by reason of stock dividend, stock split or other
subdivision, the Committee shall make appropriate adjustments in the number and
class of Shares or other securities that may be reserved for purchase hereunder
as Equity Units.

       

      5.3           Insufficient
Shares

       

      If the
aggregate funds available for the purchase of Equity Units on any Offering Date
would cause an issuance of Shares in excess of the number provided for in
Section 5.1 hereof, (a) the Committee shall proportionately reduce the
number of Equity Units that would otherwise be purchased by each Participant in
order to eliminate such excess, and (b) the Plan shall automatically terminate
immediately after such Offering Date except with respect to outstanding Options
that have not been exercised.

       

      5.4           Rights as
Stockholders

       

      With
respect to shares of Class A Common Stock or Class B Common Stock comprising an
Equity Unit, a Participant shall not be deemed to be a stockholder and shall not
have any of the rights or privileges of a stockholder until the Shares have been
issued and either physically or electronically delivered, to him or her,
following purchase of the Shares.

       

      ARTICLE 6

      OPTIONS

       

      6.1           Term of
Option

       

      The term
of each Option shall be ten years from the date of the grant.

       

      6.2           Vesting

       

      Options
shall not be immediately exercisable, but shall vest and become exercisable at
the rate of 20% on each of the first, second, third, fourth and fifth
anniversaries of the grant.

       

      6.3           Exercise Price and
Consideration

       

      (a)           The
per share exercise price under each Option shall be the price of Class A Common
Stock on the date of the grant determined in accordance with Section 2.9
hereof.

       

      (b)           The
price to be paid for Class A Common Stock and Class B Common Stock upon exercise
of an Option shall be paid at the time of exercise by cash or check or by such
method determined by the Committee.  Payment may also be made by
delivering a properly executed exercise notice, together with irrevocable
instructions to a broker to promptly deliver to the Company the amount of sale
proceeds necessary to pay the exercise price.

       

      (c)           Prior
to issuance of Shares upon exercise of an Option, the Participant shall pay any
federal, state and local income or other tax withholding obligations of the
Company, if applicable.

       

      6.4           Non-Transferability of
Options

       

      Options
may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in
any manner other than by will or by the laws of descent or distribution and may
be exercised, during the lifetime of the Participant, only by the
Participant.

       

      6.5           Adjustments in Certain
Circumstances

       

      In the
event of the proposed dissolution or liquidation of the Company, Options will
terminate immediately prior to the consummation of such proposed action, unless
otherwise determined by the Board.  The Board may, in the exercise of
its sole discretion in such instances, declare that any Option shall terminate
as of a date fixed by Board and give each holder of an Option the right to
exercise an Option as to all or any part of the Shares covered by the Option,
including Shares as to which the Option would not otherwise be
exercisable.  In the event of a proposed sale of all or substantially
all of the assets of the Company, or the merger of the Company with or into
another corporation, the Option shall be assumed or an equivalent option shall
be substituted.

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

      ARTICLE 7

      EXERCISE
OF OPTIONS

       

      7.1           Procedure for Exercise;
Rights as a Stockholder

       

      Any
Option granted hereunder shall be exercisable during the term of the Option at
any time after vesting and under such conditions as determined by the Committee
at the time of grant, and as shall be permissible under the terms of the
Plan.  An Option may not be exercised for a fraction of a
Share.

       

      An Option
shall be deemed to be exercised when written notice of such exercise has been
given to the Company in accordance with the terms of the Option by the person
entitled to exercise the Option and full payment for the Shares with respect to
which the Option is exercised has been received by the Company.  Full
payment may, as authorized by the Committee, consist of any consideration and
method of payment allowable under Section 6.3(b) of the Plan.  Until
the issuance (as evidenced by the appropriate entry on the books of the Company
or of a duly authorized transfer agent of the Company) of the stock certificate
evidencing such Shares, no right to vote or receive dividends or any other
rights as a stockholder shall exist with respect to the Shares covered by an
Option, notwithstanding the exercise of the Option.  The Company shall
issue (or cause to be issued) such stock certificates promptly upon exercise of
the Option.  No adjustment will be made for a dividend or other right
for which the record date is prior to the date the stock certificate is issued,
except as provided in Section 6.5 of the Plan.

       

      7.2           Termination of TSO
Relationship

       

      In the
event of termination of a Participant’s continuous status as a
TSO other than as a result of death or disability or Termination for Cause,
such Participant may exercise Options to the extent exercisable on the date of
termination.  Such exercise must occur within three months (or such
shorter time as may be specified in the grant), after the date of such
termination (but in no event later than the date of expiration of the term of
such Option as set forth in the Stock Option Agreement).  Upon a
Participant’s Termination for Cause, all unexercised Options granted to such
Participant shall terminate.  To the extent that the Participant was
not entitled to exercise the Option at the date of such termination, or does not
exercise such Option within the time specified herein, the Option shall
terminate.

       

      7.3           Termination of TSO
Relationship Due to Disability of Participant

       

      Notwithstanding
the provisions of Section 7.2 above, in the event of termination of a
Participant’s continued status as a TSO as a result of total and
permanent disability (i.e., the inability to engage in any substantial gainful
activity by reason of any medically determinable physical or mental impairment
which can be expected to result in death or which has lasted or can be expected
to last for a continuous period of twelve months), such Participant may exercise
Options to the extent exercisable on the date of termination.  Such
exercise must occur within 12 months (or such sorter time as may be specified in
the Stock Option Agreement), after the date of such termination (but in no event
later than the date of expiration of the term of such Option as set forth in the
Stock Option Agreement).  To the extent that the Participant was not
entitled to exercise such Option within the time specified herein, the Option
shall terminate.

       

      7.4           Death of
Participant

       

      Notwithstanding
the provisions of Section 7.2 above, in the event of the death of a
Participant:

       

      (a)           who
is at the time of death a TSO, the Option may be exercised, at any time within
six months following the date of death (but in no event later than the date of
expiration of the term of such Option as set forth in the Stock Option
Agreement), by the Participant’s personal representative or by a person who
acquired the right to exercise the Option by bequest or inheritance, but only to
the extent of the right to exercise that had accrued as of the date of death;
or

       

      (b)           whose
Option has not yet expired, but whose continuous status as a TSO terminated
prior to the date of death, the Option may be exercised, at any time within six
months following the date of death (but in no event later than the date of
expiration of the term of such Option as set forth in the Stock Option
Agreement) by the Participant’s personal representative or by a person who
acquired the right to exercise the Option by bequest or inheritance, but only to
the extent of the right to exercise that had accrued at the date of
termination.

       

      7.5           Extension of Time for
Exercise

       

      Notwithstanding
subsections 7.2, 7.3, and 7.4 above, the Committee shall have the authority to
extend the expiration date of any outstanding Option in circumstances in which
it deems such action to be appropriate (provided that no such extension shall
extend the term of an Option beyond the date on which the Option would have
expired if no termination of the Participant’s continuous status as a
TSO had occurred.)

       

      ARTICLE 8

      TERMINATION
OF PARTICIPATION

       

      8.1           Termination of
Participation

       

      A
Participant may withdraw from the Plan at any time by written notice to the
Company prior to the close of business on an Offering Date.  Within 21
days after the notice of withdrawal is delivered, the Company shall refund the
entire amount, if any, in a Participant’s Plan Account to him or
her.  Any Eligible Participant who withdraws from the Plan may again
become a Participant in accordance with Section 3.1 hereof.

       

      8.2           Termination of
Eligibility

       

      (a)           If
a Participant ceases to be eligible under Section 3.1 hereof for any
reason, the amount in such Participant’s Plan Account will be refunded to the
Participant or his or her designated beneficiary or estate within 21 days of his
or her cessation of eligibility.

       

      (b)           Upon
payment by the Company to the Participant or his or her beneficiary or estate of
the remaining balance, if any, in Participant’s Plan Account, the Participant’s
interest in the Plan and the Participant’s rights under the Plan shall
terminate.

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

       

      ARTICLE 9

      GENERAL
PROVISIONS

       

      9.1           Condition of
Employment

       

      Neither
the creation of the Plan nor a Participant’s participation therein shall be
deemed to create any right to continue as a TSO or in any way affect the
right of the Company or a Subsidiary to terminate the relationship or status of
a Participant with the Company or any Subsidiary at any time with or without
cause.

       

      9.2           Amendment of the
Plan

       

      (a)           The
Committee may amend, suspend or terminate the Plan at any time and from time to
time, subject to the rights of the holders of outstanding Options.

       

      (b)           Upon
termination of the Plan, the balance in each Participant’s Plan Account shall be
refunded within 21 days of such termination.

       

      9.3           Use of Funds; No Interest
Paid

       

      All funds
received by the Company for purchase of Equity Units hereunder will be included
in the general funds of the Company free of any trust or other restriction and
may be used for any corporate purpose.  No interest will be paid to
any Participant or credited under the Plan.

       

      9.4           Term

       

      The Plan
shall terminate on the tenth anniversary of its approval by the Board, unless
earlier terminated in accordance with its terms.

       

      9.5           Effect Upon Other
Plans

       

      The
adoption of the Plan shall not affect any other compensation or incentive plans
in effect for the Company or any Subsidiary.  Nothing in this Plan
shall be construed to limit the right of the Company or any Subsidiary (a) to
establish any other forms of incentives or compensation for employees, agents,
consultants or representatives of the Company or any Subsidiary or (b) to grant
options or stock purchase rights otherwise than under this Plan in connection
with any proper corporate purpose, including, but not by way of limitation, the
grant or assumption of options in connection with the acquisition, by purchase,
lease, merger, consolidation or otherwise, of the business, stock or assets of
any corporation, firm or association.

       

      9.6           Conformity to Securities
Laws

       

      Notwithstanding
any other provision of this Plan, this Plan and the participation in this Plan
by any individual who is then subject to Section 16 of the Exchange Act
shall be subject to any additional limitations set forth in any applicable
exemptive rule under Section 16 of the Exchange Act (including any
amendment to Rule 16b-3 of the Exchange Act) that are requirements for the
application of such exemptive rule.  To the extent permitted by
applicable law, the Plan shall be deemed amended to the extent necessary to
conform to such applicable exemptive rule.

       

      9.7           Governing
Law

       

      The Plan
and all rights and obligations thereunder shall be construed and enforced in
accordance with the laws of the State of Delaware.

       

      
        
          
          

        

        
          5As adopted by the Compensation Committee February 17, 2009

                            	
                                Exhibit 10.1

                            

                

                

            

             

            Scientific Learning Corporation

            2009 Management Incentive Plan

            Plan Name: Scientific Learning (the “Company”) FY 2009 Management Incentive Plan (“the Plan”).

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

            Participants: All executives, vice presidents, director-level employees and selected manager-level employees (“Participants”). The estimated number of Participants in 2009 is approximately 46. The regional sales directors who are included in sales incentive compensation plans are excluded from the Plan.

            Target and Maximum Levels: Target awards are intended to deliver market-level incentive compensation at 100% achievement of goals. Awards increase for overachievement.

             

            
                	
                             

                             

                            Title

                        	
                            Target Award

                            (% of Base Salary Awarded at 100% Achievement of Goals)

                        	
                            Maximum Award

                            (Max % of Base Salary Awarded

                            on Overachievement)

                        
	
                            CEO

                        	
                            55%

                        	
                            110%

                        
	
                            CFO and SVP, Sales and Services

                        	
                            40%

                        	
                            80%

                        
	
                            Chief Technology Officer, Other Senior VPs

                        	
                            35%

                        	
                            70%

                        
	
                            Chief Ed Officer, Chief Scientist, other VPs

                        	
                            30%

                        	
                            60%

                        
	
                            Directors

                        	
                            20%

                        	
                            40%

                        
	
                            Managers

                        	
                            10%

                        	
                            20%

                        

            

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

            
                	
                            Weighting of Shared Goals and Individual Performance  

                        

            

            
                	
                            Goal

                        	
                            % of Target Award Allocated to Goal

                        
	
                            Company financial goals

                        	
                            70%

                        
	
                            Individual performance

                        	
                            30%

                        

            

             

            Note: For managers and director-level employees, the CEO has discretion to allocate the bonus opportunity differently among the various goals to reflect the priorities and responsibilities of that particular person.

             

            
                

                
                    	
                                SLC Confidential

                            	
                                Page 1 of 3

                            

                

                 

                

            

             

            
                

            

            
                

                
                    	
                                As adopted by the Compensation Committee February 17, 2009

                            	
                                Exhibit 1

                            

                

                

            

             

            Shared Goals

            Shared Company financial goals for the 2009 Plan are Booked Sales and EBITDAS. The entry, target and maximum levels for those goals are as follows:

                                                        

            
                	
                             

                        	
                            Entry Level

                            (0% Goal Achievement)

                        	
                            Target Level (100% Goal Achievement)

                        	
                            Maximum Level (200% Goal Achievement)

                        
	
                            Booked Sales

                        	
                            $44.6 million

                        	
                            $50.6 million

                        	
                            $56.6 million

                        
	
                            EBITDAS

                        	
                            $2 million

                        	
                            $4 million

                        	
                            $6 million

                        

            

             

            Until the entry level for both financial goals is exceeded, no financial goals bonus is paid. The percentage of the financial goals target bonus to be paid will range from 10%, once the $44.6M Booked Sales and $2M EBITDAS entry levels are exceeded, to 200%, when the maximum level of $56.6M Booked Sales and $6M EBITDAS is achieved. The percentage will increase from 10% to 200% as Booked Sales and EBITDAS
            increase, based on the matrix that can be found in the Appendix. EBITDAS achievement is weighted slightly more than Booked Sales Achievement in determining the amount of the bonus.

             

            The amount of bonus for shared financial goals will be calculated after the 2009 audited financial results are available. The calculation of the bonus, including any rounding, will be in the sole and absolute discretion of the Company’s CFO, with approval by the CEO.

            
                	
                            Individual Goals

                        

            

            Individual goal performance under the 2009 Plan is based on both the following:

            
                	
                             

                        	
                            •

                        	
                            Achievement of agreed-upon individual goals closely related to the Participant’s area of responsibility. These goals will be agreed in writing between the Participant and his/her manager.

                        

            

            
                	
                             

                        	
                            •

                        	
                            Contribution to adding value for shareholders, customers and employees.

                        

            

            
                	
                             

                        	
                            •

                        	
                            At and below 80% individual goal achievement, no individual goal achievement bonus is paid. At 100% individual goal achievement, 100% of the individual goal achievement target bonus is paid. At 200% individual goal achievement, 200% of the individual goal achievement target bonus is paid. From the entry level to 100% achievement and from 100% to 200%
                            achievement, the portion of the award earned scales up ratably, in steps as determined by the Company’s CFO.

                        

            

             

            Definitions:

            
                	
                             

                        	
                            •

                        	
                            Base Salary: Participant’s base salary as of 12/31/09.

                        

            

            
                	
                             

                        	
                            •

                        	
                            EBITDAS: Earnings before interest, taxes, depreciation, amortization and stock compensation expense, determined in accordance with SLC’s audited financial statements for 2009.

                        

            

            
                	
                             

                        	
                            •

                        	
                            Booked Sales: Booked sales in 2009, determined in accordance with SLC’s audited financial statements for 2009.

                        

            

            General Provisions:

            
                	
                             

                        	
                            1.

                        	
                            The Plan will be administered by Scientific Learning, which reserves the right to, at any time, amend, interpret, or terminate the Plan, in whole or in part. The obligations of the Company as set forth in this document shall be subject to modification in such manner and to such extent as the Compensation Committee of

                        

            

             

            
                

                
                    	
                                SLC Confidential

                            	
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                                As adopted by the Compensation Committee February 17, 2009

                            	
                                Exhibit 1

                            

                

                

            

             

            the Board of Directors deem necessary, or as may be necessary to comply with any law, regulation or governmental order pertaining to compensation. The Compensation Committee has discretion to pay awards to reflect achievement even if specific goals are not met.

            
                	
                             

                        	
                            2.

                        	
                            Death or Disability. If a Participant dies or becomes disabled prior to the date the awards are paid, his/her cash payment amount will be prorated to include only the full fiscal quarterly periods for which the Participant was an active Scientific Learning employee. For the purposes of this Plan “disability”
                            means that as a result of physical or mental incapacity the Participant is unable to perform his or her duties on a full-time basis for a period of 120 consecutive days. In the case of death, the payment amount will be paid to the Participant’s estate according to applicable law and established guidelines and practices.

                        

            

            
                	
                             

                        	
                            3.

                        	
                            Paid or Unpaid Leave. If a participant is on paid or unpaid leave of absence in 2009, his/her cash payment amount will be prorated to exclude that time he/she was on such leave.

                        

            

            
                	
                             

                        	
                            4.

                        	
                            Participants hired or promoted into a MIP eligible position prior to October 1, 2009 will be eligible for a pro-rated award (unless otherwise agreed to, in writing, at the time of the employment action).

                        

            

            
                	
                             

                        	
                            5.

                        	
                            Except as provided in paragraphs 2 or 3 above, Plan Participants must be employed by Scientific Learning at the time that the award is no longer subject to a risk of forfeiture in order to receive payment of an award under this Plan.

                        

            

            
                	
                             

                        	
                            6.

                        	
                            Awards will be paid in the first quarter of 2010, following the completion of the 2009 audit, provided that all awards shall be paid within two and one-half months following the end of the calendar year in which the awards are no longer subject to substantial risk of forfeiture.

                        

            

             

            
                

                
                    	
                                SLC Confidential

                            	
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                            2009 MIP and PSP Financial Goals Achievement Matrix

                        
	
                            February 23, 2009

                        
	
                             

                        	
                             

                        	
                             

                        	
                             

                        	
                             

                        	
                             

                        	
                             

                        	
                             

                        	
                             

                        	
                             

                        	
                             

                        	
                             

                        	
                             

                        
	
                             

                        	
                             

                        	
                            Booked Sales (in $M)

                        	
                             

                        	
                             

                        
	
                             

                        	
                             

                        	
                             

                        	
                             

                        	
                             

                        	
                             

                        	
                             

                        	
                             

                        	
                             

                        	
                             

                        	
                             

                        	
                             

                        	
                             

                        
	
                             

                        	
                             

                        	
                            44.6

                        	
                            46.1

                        	
                            47.6

                        	
                            49.1

                        	
                            50.6

                        	
                            52.1

                        	
                            53.6

                        	
                            55.1

                        	
                            56.6

                        	
                             

                        	
                             

                        
	
                            EBITDAS   (in $M)

                        	
                            6.0

                        	
                            120%

                        	
                            130%

                        	
                            140%

                        	
                            150%

                        	
                            160%

                        	
                            170%

                        	
                            180%

                        	
                            190%

                        	
                            200%

                        	
                            6.0

                        	
                            EBITDAS   (in $M)

                        
	
                            5.5

                        	
                            105%

                        	
                            115%

                        	
                            125%

                        	
                            135%

                        	
                            145%

                        	
                            155%

                        	
                            165%

                        	
                            175%

                        	
                            185%

                        	
                            5.5

                        
	
                            5.0

                        	
                            90%

                        	
                            100%

                        	
                            110%

                        	
                            120%

                        	
                            130%

                        	
                            140%

                        	
                            150%

                        	
                            160%

                        	
                            170%

                        	
                            5.0

                        
	
                            4.5

                        	
                            75%

                        	
                            85%

                        	
                            95%

                        	
                            105%

                        	
                            115%

                        	
                            125%

                        	
                            135%

                        	
                            145%

                        	
                            155%

                        	
                            4.5

                        
	
                            4.0

                        	
                            60%

                        	
                            70%

                        	
                            80%

                        	
                            90%

                        	
                            100%

                        	
                            110%

                        	
                            120%

                        	
                            130%

                        	
                            140%

                        	
                            4.0

                        
	
                            3.5

                        	
                            45%

                        	
                            55%

                        	
                            65%

                        	
                            75%

                        	
                            85%

                        	
                            95%

                        	
                            105%

                        	
                            115%

                        	
                            125%

                        	
                            3.5

                        
	
                            3.0

                        	
                            30%

                        	
                            40%

                        	
                            50%

                        	
                            60%

                        	
                            70%

                        	
                            80%

                        	
                            90%

                        	
                            100%

                        	
                            110%

                        	
                            3.0

                        
	
                            2.5

                        	
                            15%

                        	
                            25%

                        	
                            35%

                        	
                            45%

                        	
                            55%

                        	
                            65%

                        	
                            75%

                        	
                            85%

                        	
                            95%

                        	
                            2.5

                        
	
                            2.0

                        	
                            0%

                        	
                            10%

                        	
                            20%

                        	
                            30%

                        	
                            40%

                        	
                            50%

                        	
                            60%

                        	
                            70%

                        	
                            80%

                        	
                            2.0

                        
	
                             

                        	
                             

                        	
                            44.6

                        	
                            46.1

                        	
                            47.6

                        	
                            49.1

                        	
                            50.6

                        	
                            52.1

                        	
                            53.6

                        	
                            55.1

                        	
                            56.6

                        	
                             

                        	
                             

                        
	
                             

                        	
                             

                        	
                            Booked Sales (in $M)

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00153-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00153-of-00352.parquet"}]]