Document:

ex10_4.htm

EXHIBIT 10.4

 

July 12, 2012

 

Jane A. Freeman

PO Box 8465

Emeryville, CA  94662

	
RE: 

	
EMPLOYMENT OFFER

Dear Jane:

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

	
Position:

	
Chief Financial Officer and Treasurer,  reporting to Robert Bowen, Chief Executive Officer.

	
Effective Date:

	
The effective date is July 10, 2012.

	
Salary:

	
Your base salary will be $19,166.67 per month ($230,000.00 annually).  You will be paid semimonthly on the 15th and the last day of each month, subject to payroll withholding and deductions.  Based on your duties and responsibilities, you will be categorized as “exempt” and will be ineligible for overtime pay.

 

	

Incentive

Compensation:

	
In addition to your base salary, at the end of 2012 you will be eligible for a bonus equivalent to 40% of your base salary, prorated based on a partial year of employment (i.e., approximately 24% of your base salary, given a start date of July 10, 2012), payable at the discretion of the Board of Directors.  This bonus is contingent upon your continued employment with the Company through December 31, 2012.

	
Paid Time Off:

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

	
Equity Grants:

	
As part of your new hire package, it will be recommended to the Compensation Committee of the Board of Directors that you be granted an option to purchase up to 100,000 shares of common stock of the Company under the Company’s Stock Option Plan.  The option exercise price will be the then current fair market value of the common stock on the date of grant, which will be the Company’s next standard equity grant date, October 1, 2012.   The shares will vest over a 12-month period, vesting 1/4th on October 10, 2012 and 1/12th on the 10th day of each month thereafter; provided, however, that in the event you cease employment with the Company prior to July 10, 2013 as a result of a mutual agreement between you and the Company, any then unvested options will immediately vest upon the termination of your employment.  The grant of the options is subject to compliance with applicable securities laws.

	 	

Additionally, it will be recommended that you receive an award of 100,000 restricted stock units (RSUs) of Scientific Learning Common Stock under the Company’s Equity Incentive Plan.  This award will be granted on October 1, 2012, with 50% of the units vesting on each of January 10, 2013 and July 10, 2013; provided, however, that in the event you cease employment with the Company prior to July 10, 2013 as a result of a mutual agreement between you and the Company, any then unvested units will immediately vest upon the termination of your employment.  This award is subject to compliance with applicable federal and state securities laws.

 

  

  

  

 

	
 

	

If your employment ends, through mutual agreement, before these grants are fully vested the vesting will be accelerated so that both grants become fully vested.

 

	
 
Health

Insurance:

	
The Company will reimburse you for reasonable medical insurance costs during the period of your employment up to the costs the Company would ordinarily pay on your behalf under the Company’s current group health plan for Company employees.

 

	

At-Will

Employment:

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

 

Please sign one copy and return it to Gina Larue in the Human Resources department by July 12, 2012 to indicate your agreement to your employment at the Company on the terms set forth above.

 

	Sincerely,	 	 	 
	 	 	 	 	 
	

SCIENTIFIC LEARNING CORPORATION

	 	 	 
	 	 	 	 	 
	By	/s/ Robert C. Bowen	 	July 12, 2012	 
	 	Robert C. Bowen    	 	Date	 
	 	Chief Executive Officer	 	 	 
	 	 	 	 	 
	 	ACCEPTED AND AGREED:	 	 	 
	 	 	 	 	 
	By	/s/ Jane A. Freeman	 	July 12, 2012 	 
	 	Jane A. Freeman  	 	DateExhibit 10.1

 

Universal
Security Instruments, Inc. 

2011
Non-Qualified Stock Option Plan

 

		1.	purpose.

 

The purpose of the
Universal Security Instruments, Inc. (the “Company”) 2011 Non-Qualified Stock Option Plan (the “Plan”)
is to promote the financial interests of the Company, including its growth and performance, by encouraging directors, officers,
employees of and consultants to the Company and its subsidiaries to acquire an ownership position in the Company, enhancing the
ability of the Company and its subsidiaries to attract and retain employees of outstanding ability, and providing directors, employees
and consultants with a way to acquire or increase their proprietary interest in the Company’s success.

 

		2.	shares subject
to the plan.

 

Subject to adjustment
as provided in Section 13 hereof, up to 120,000 of shares of common stock, par value $.01 per share, of the Company (the “Shares”)
shall be available for the grant of options under the Plan. The Company shall reserve and keep available such number of Shares
as will satisfy the requirements of all outstanding options granted under the Plan. Shares subject to an option that expires unexercised,
that is forfeited, terminated or canceled, in whole or in part, shall thereafter again be available for grant under the Plan.

 

		3.	administration.

 

The Plan shall be administered
by the Compensation Committee (the “Committee”) of the Board of Directors of the Company (the “Board”)
or, if the Board does not create the Committee, by the Board which shall function as the Committee. A majority of the Committee
shall constitute a quorum, and the acts of a majority shall be the acts of the Committee.

 

Subject to the provisions
of the Plan, the Committee shall (i) from time to time select directors, officers and employees of and consultants to the Company
and its subsidiaries who will participate in the Plan (the “Participants”), (ii) determine the Shares subject
to option, (iii) have the authority to interpret the Plan, to establish, amend and rescind any rules and regulations relating to
the Plan, (iv) determine the terms and provisions of any agreements entered into hereunder, and (v) make all other determinations
necessary or advisable for the administration of the Plan. The Committee may correct any defect, supply any omission or reconcile
any inconsistency in the Plan or in any option in the manner and to the extent it shall deem desirable to carry it into effect.
The determinations of the Committee in the administration of the Plan, as described herein, shall be final and conclusive.

 

		4.	eligibility.

 

All directors, officers
and employees of the Company and its subsidiaries and, subject to the following sentence, consultants to the Company and its subsidiaries,
all as determined by the Committee, are eligible to be Participants in the Plan. As used herein, an eligible Participant which
is a “consultant” means any consultant or adviser to the Company and its subsidiaries if: (i) the consultant
or adviser renders bona fide services to the Company or any subsidiary of the Company; (ii) the services rendered by the consultant
or adviser are not in connection with the offer or sale of securities in a capital-raising transaction and do not directly or indirectly
promote or maintain a market for the Company’s securities; and (iii) the consultant or adviser is a natural person who
has contracted directly with the Company or any subsidiary of the Company to render such services.

 

		5.	options;
exercise price.

 

Options under the Plan
will be non-qualified stock options. The Committee shall establish the option price at the time each stock option is granted.

 

    	 

    	 

    

 

		6.	exercise
of options.

 

Except as herein provided,
options shall be exercisable for such period as specified by the Committee. In no event may options be exercisable more than 10
years after their date of grant. The option price of each Share as to which a stock option is exercised shall be paid in full at
the time of such exercise. Such payment shall be made in cash, by tender of Shares owned by the Participant valued at fair market
value as of the date of exercise and in such other consideration as the Committee deems appropriate, or by a combination of cash,
Shares and such other consideration. To exercise the option, the optionee or his successor shall give written notice to the Company’s
Chief Financial Officer at the Company’s principal office, setting forth the number of Shares being purchased and the date
of exercise of the option, which date shall be at least five days after the giving of such notice unless otherwise agreed to by
the Committee and the optionee. Such notice shall be accompanied by full payment of the option exercise price for Shares being
purchased and a written statement that the Shares are purchased for investment and not with a view toward distribution. However,
this statement shall not be required in the event the Shares subject to the option are registered with the Securities and Exchange
Commission. If the option is exercised by the successor of the optionee, following his death, proof shall be submitted, satisfactory
to the Committee, of the right of the successor to exercise the option. Shares issued pursuant to this Plan which have not been
registered with the Securities and Exchange Commission shall be appropriately legended. No Shares shall be issued pursuant to the
Plan until full payment for such Shares has been made. The optionee shall have no rights as a shareholder with respect to
optioned Shares until the date of exercise of the option with respect to such Shares. No adjustment shall be made for dividends
(ordinary or extraordinary, whether in cash, securities or other property) or distributions or other rights for which the record
date is prior to such date of exercise, except as otherwise provided herein. The Company shall not be required to transfer or deliver
any certificates for Shares purchased upon any exercise of any option until after compliance with all then applicable requirements
of law. Any fraction of a Share required to satisfy such obligation shall be disregarded and the amount due shall instead be paid
in cash to the Participant.

 

		7.	option agreements.

 

The granting of an
option shall take place only when a written Option Agreement substantially in the form of Exhibit A hereto is executed
by the Company and the optionee and delivered to the optionee. All options under this Plan shall be evidenced by such written Option
Agreement between the Company and the optionee. Such Option Agreement shall contain such further terms and conditions, not inconsistent
with the foregoing, related to the grant or the time or times of exercise of options as the Committee shall prescribe.

 

		8.	withholding.

 

The Company shall have the right to deduct
from any payment to be made pursuant to the Plan, or to require prior to the issuance or delivery of any Shares or the payment
of cash under the Plan, any taxes required by law to be withheld therefrom. The Committee, in its sole discretion, may permit a
Participant to elect to satisfy such withholding obligation by having the Company retain the number of Shares the fair market value
of which equals the mount required to be withheld.

 

		9.	nontransferability.

 

No option shall be
assignable or transferable, and no right or interest of any Participant shall be subject to any lien, obligation or liability of
the Participant, except by will or the laws of descent and distribution.

 

		10.	no right
to employment.

 

No person shall have
any claim or right to be granted an option, and the grant of an option shall not be construed as giving a Participant the right
to be retained in the employ or as a director of the Company or its subsidiaries. Further, the Company and its subsidiaries expressly
reserve the right at any time to dismiss a Participant free from any liability, or any claim under the Plan, except as provided
herein or in any agreement entered into hereunder.

 

		11.	termination
of rights; death.

 

All unexercised or
unexpired options granted or awarded under this Plan will terminate, be forfeited and will lapse immediately if such Participant’s
employment or relationship with the Company and its subsidiaries is terminated for any reason, unless the Committee permits the
exercise of such options for a period not to exceed 90 days after the date of such termination. If a Participant’s employment
or relationship with the Company is terminated by reason of his death, such Participant’s personal representatives, estate
or heirs (as the case may be) may exercise, subject to any restrictions imposed by the Committee at the time of the grant, any
option which was exercisable by the Participant as of the date of his death for a period of 180 days after the date of the Participant’s
death.

 

    	- 2 -

    	 

    

 

		12.	registration.

 

If the Company shall
be advised by its counsel that any Shares deliverable upon any exercise of an option are required to be registered under the Securities
Act of 1933, or that the consent of any other authority is required for the issuance of such Shares, the Company may effect registration
or obtain such consent, and delivery of Shares by the Company may be deferred until registration is effected or such consent is
obtained.

 

		13.	adjustment
of and changes in shares.

 

In the event of any
change in the outstanding Shares by reason of any Share dividend or split, recapitalization, merger, consolidation, spinoff, combination
or exchange of Shares or other corporate change, or any distributions to shareholders other than regular cash dividends, the Committee
may make such substitution or adjustment, if any, as it deems to be equitable, as to the exercise price, number or kind of Shares
or other securities issued or reserved for issuance pursuant to the Plan and to outstanding options.

 

		14.	amendment.

 

The Board of Directors
may amend or terminate the Plan or any portion thereof at any time, provided that no amendment shall be made without shareholder
approval if such approval is necessary by law or regulation.

 

		15.	effective
date.

 

The Plan has been adopted
by the Board of Directors of the Company and, upon approval of the Shareholders of the Company, shall be effective as of August
1, 2011. Unless extended or earlier terminated by the Board of Directors, the Plan shall continue in effect until, and shall terminate
on, the tenth anniversary of the effective date of the Plan. Unless so extended, no additional options may be granted on or after
the tenth anniversary of the effective date of the Plan.

  

    	- 3 -

    	 

    

 

Exhibit A 

 

Universal
Security Instruments, Inc.

2011
Non-Qualified Stock Option Plan

Stock
Option Agreement

 

THIS STOCK OPTION AGREEMENT
is made this ___ day of _______, 201__, by and between Universal Security Instruments,
Inc., a Maryland corporation (the “Company”), and _____________________________ (the “Optionee”).

 

WHEREAS, the Board
of Directors of the Company considers it desirable and in the Company’s interest that the Optionee be given an opportunity
to purchase its shares of common stock, par value $.01 per share (the “Shares”), pursuant to the terms and conditions
of the Company’s 2011 Non-Qualified Stock Option Plan (the “Plan”) to provide an incentive for the Optionee
and to promote the interests of the Company.

 

NOW, THEREFORE, it
is agreed as follows:

 

1.            Incorporation
of the Terms of the Plan. This Stock Option Agreement is subject to all of the terms and conditions of the Plan, and the terms
of the Plan are hereby incorporated herein by reference and made a part hereof.

 

2.            Grant of Option.
The Company hereby grants to Optionee an option to purchase from the Company ________ Shares (“Option Shares”)
at the exercise price per Share set forth below. Subject to earlier expiration or termination of the option granted hereunder,
this option shall expire on the ___th anniversary of the date hereof.

 

3.            Period of
Exercise of Option. The Optionee shall be entitled to exercise the option granted hereunder to purchase Option Shares as follows:

 

Exercise Date                   No.
of Shares                      Exercise
Price per Share

 

in each case, together with the number
of Option Shares which Optionee was theretofore entitled to purchase.

 

4.            Additional
Exercise Periods. In the event of the death of the Optionee, or if the Optionee’s employment or relationship with the
Company or its subsidiaries is terminated for any reason, the option granted hereunder may be exercised as set forth in the Plan.

 

5.            Method of
Exercise. In order to exercise the options granted hereunder, Optionee must give written notice to the Chief Financial Officer
of the Company at the Company’s principal place of business, accompanied by full payment of the exercise price for the Option
Shares being purchased, in accordance with the terms and provisions of the Plan.

 

6.            Manner of
Payment. An Optionee may pay the option price for Shares purchased upon exercise of the option as set forth in the Plan.

 

IN WITNESS WHEREOF,
the parties have caused this Agreement to be executed under seal, intending this to be a sealed instrument, as of the date first
above written.

 

	witness/attest:	 	Universal Security Instruments,
    Inc.
	 	 	 
	 	 	By:	 	 (SEAL)
	 	 	 
	 	 	Optionee

 

	 	 	 	 (SEAL)

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