SCIENTIFIC LEARNING CORP
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<TYPE>EX-10.3
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<TITLE>Prepared by MerrillDirect</TITLE>

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<p align=right><font size=4 face=Times>Exhibit 10.3</font></p>

<p align=center><b><font size=4 face=Times>SCIENTIFIC
LEARNING CORPORATION<br>
1999 EQUITY INCENTIVE PLAN</font></b></p>

<p align=center><b><font size=4 face=Times>STOCK
OPTION AGREEMENT<br>
(INCENTIVE STOCK OPTION OR NONSTATUTORY STOCK OPTION)</font></b></p>

<p align=left><font size=3 face=Times>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Pursuant to your Notice of Grant of Stock
Options (&#147;Grant Notice&#148;) and this Stock Option Agreement, Scientific Learning
Corporation (the &#147;Company&#148;) has granted you an option under its 1999 Equity
Incentive Plan (the &#147;Plan&#148;) to purchase the number of shares of the Company&#146;s
Common Stock indicated in your Grant Notice at the exercise price indicated in
your Grant Notice.&nbsp; Defined terms not
explicitly defined in this Stock Option Agreement but defined in the Plan shall
have the same definitions as in the Plan.</font></p>

<p align=left><font size=3 face=Times>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The details of your option are as follows:</font></p>

<p align=left><font size=3 face=Times>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; VESTING.</b>&nbsp; Subject to the limitations contained herein,
your option will vest as provided in your Grant Notice, provided that vesting
will cease upon the termination of your Continuous Service.</font></p>

<p align=left><font size=3 face=Times>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; NUMBER
OF SHARES AND EXERCISE PRICE</b><b>.</b>&nbsp; The number of shares of Common Stock subject
to your option and your exercise price per share referenced in your Grant
Notice may be adjusted from time to time for Capitalization Adjustments, as
provided in the Plan.</font></p>

<p align=left><font size=3 face=Times>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; EXERCISE
PRIOR TO VESTING (&#147;EARLY EXERCISE&#148;).</b> &nbsp;If permitted in your Grant Notice (i.e.,
Schedule A indicates that &#147;Early Exercise&#148; of your option is permitted) and
subject to the provisions of your option, you may elect at any time that is
both (i) during the period of your Continuous Service and (ii) during the term
of your option, to exercise all or part of your option, including the nonvested
portion of your option; provided, however, that:</font></p>

<p align=left><font size=3 face=Times>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </b>a partial exercise of
your option shall be deemed to cover first vested shares of Common Stock and
then the earliest vesting installment of unvested shares of Common Stock;</font></p>

<p align=left><font size=3 face=Times>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </b>any shares of Common
Stock so purchased from installments that have not vested as of the date of
exercise shall be subject to the purchase option in favor of the Company as
described in the Company&#146;s form of Early Exercise Stock Purchase Agreement;</font></p>

<p align=left><font size=3 face=Times>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </b>you shall enter into
the Company&#146;s form of Early Exercise Stock Purchase Agreement with a vesting
schedule that will result in the same vesting as if no early exercise had
occurred; and</font></p>

<p align=left><font size=3 face=Times>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </b>if your option is an incentive stock option, then, as provided in the
Plan, to the extent that the aggregate Fair Market Value (determined at the
time of grant) of the shares of Common Stock with respect to which your option
plus all other incentive stock options you hold are exercisable for the first
time by you during any calendar year (under all plans of the Company and its
Affiliates) exceeds one hundred thousand dollars ($100,000), your option(s) or
portions thereof that exceed such limit (according to the order in which they
were granted) shall be treated as nonstatutory stock options.</font></p>

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<p align=left><font size=3 face=Times>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; METHOD
OF PAYMENT.</b>&nbsp; Payment of the exercise price is
due in full upon exercise of all or any part of your option.&nbsp; You may elect to make payment of the
exercise price by one or more of the following:</font></p>

<p align=left><font size=3 face=Times>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </b>by cash or check; or</font></p>

<p align=left><font size=3 face=Times>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </b>in the Company&#146;s sole
discretion at the time your option is exercised and provided that at the time
of exercise the Common Stock is publicly traded and quoted regularly in <i>The Wall
Street Journal</i>, &nbsp;pursuant to a program developed under
Regulation T as promulgated by the Federal Reserve Board that, prior to the
issuance of Common Stock, results in either the receipt of cash (or check) by
the Company or the receipt of irrevocable instructions to pay the aggregate
exercise price to the Company from the sales proceeds.</font></p>

<p align=left><font size=3 face=Times>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; WHOLE
SHARES.</b>&nbsp; You may exercise your option only for whole
shares of Common Stock.</font></p>

<p align=left><font size=3 face=Times>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECURITIES
LAW COMPLIANCE.</b>&nbsp; Notwithstanding anything to the
contrary contained herein, you may not exercise your option unless the shares
of Common Stock issuable upon such exercise are then registered under the
Securities Act or, if such shares of Common Stock are not then so registered,
the Company has determined that such exercise and issuance would be exempt from
the registration requirements of the Securities Act.&nbsp; The exercise of your option must also comply with other
applicable laws and regulations governing your option, and you may not exercise
your option if the Company determines that such exercise would not be in
material compliance with such laws and regulations.</font></p>

<p align=left><font size=3 face=Times>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; TERM.</b>&nbsp; You may not exercise your option before the
commencement of its term or after its term expires.&nbsp; The term of your option commences on the Date of Grant and
expires upon the <b><i>earliest</i></b> of
the following:</font></p>

<p align=left><font size=3 face=Times>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </b>three (3) months after
the termination of your Continuous Service for any reason other than Disability
or death, provided that if during any part of such three- (3-) month period you
may not exercise your option solely because of the condition set forth in the
preceding paragraph relating to &#147;Securities Law Compliance,&#148; your option shall
not expire until the earlier of the Expiration Date or until it shall have been
exercisable for an aggregate period of three (3) months after the termination
of your Continuous Service;</font></p>

<p align=left><font size=3 face=Times>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </b>twelve (12) months
after the termination of your Continuous Service due to your Disability;</font></p>

<p align=left><font size=3 face=Times>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </b>twelve (12) months
after your death if you die either during your Continuous Service;</font></p>

<p align=left><font size=3 face=Times>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </b>the Expiration Date
indicated in your Grant Notice; or</font></p>

<p align=left><font size=3 face=Times>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </b>the day before the
tenth (10th) anniversary of the Date of Grant.</font></p>

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<p align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <font size=3 face=Times>If your option is an incentive stock option, note that,
to obtain the federal income tax advantages associated with an &#147;incentive stock
option,&#148; the Code requires that at all times beginning on the date of grant of your option and ending on
the day three (3) months before the date of your option&#146;s exercise, you must be
an employee of the Company or an Affiliate, except in the event of your death
or Disability.&nbsp; The Company has provided
for extended exercisability of your option under certain circumstances for your
benefit but cannot guarantee that your option will necessarily be treated as an
&#147;incentive stock option&#148; if you continue to provide services to the Company or
an Affiliate as a Consultant or Director after your employment terminates or if
you otherwise exercise your option more than three (3) months after the date
your employment terminates.</font></p>

<p align=left><font size=3 face=Times>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>8.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; EXERCISE.</b></font></p>

<p align=left><font size=3 face=Times>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </b>You may exercise the
vested portion of your option (and the unvested portion of your option if your
Grant Notice so permits) during its term by delivering a Notice of Exercise (in
a form designated by the Company) together with the exercise price to the
Secretary of the Company, or to such other person as the Company may designate,
during regular business hours, together with such additional documents as the
Company may then require.</font></p>

<p align=left><font size=3 face=Times>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </b>By exercising your
option you agree that, as a condition to any exercise of your option, the
Company may require you to enter into an arrangement providing for the payment
by you to the Company of any tax withholding obligation of the Company arising
by reason of (1) the exercise of your option, (2) the lapse of any substantial
risk of forfeiture to which the shares of Common Stock are subject at the time
of exercise, or (3) the disposition of shares of Common Stock acquired upon
such exercise.</font></p>

<p align=left><font size=3 face=Times>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </b>If your option is an
incentive stock option, by exercising your option you agree that you will
notify the Company in writing within fifteen (15) days after the date of any
disposition of any of the shares of the Common Stock issued upon exercise of
your option that occurs within two (2) years after the date of your option
grant or within one (1) year after such shares of Common Stock are transferred
upon exercise of your option.</font></p>

<p align=left><font size=3 face=Times>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>9.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; TRANSFERABILITY.</b>&nbsp; Your option is not transferable, except by
will or by the laws of descent and distribution, and is exercisable during your
life only by you.&nbsp; Notwithstanding the
foregoing, by delivering written notice to the Company, in a form satisfactory
to the Company, you may designate a third party who, in the event of your
death, shall thereafter be entitled to exercise your option.</font></p>

<p align=left><font size=3 face=Times>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>10.&nbsp;&nbsp;&nbsp;&nbsp; OPTION
NOT A SERVICE CONTRACT.</b>&nbsp; Your option
is not an employment or service contract, and nothing in your option shall be
deemed to create in any way whatsoever any obligation on your part to continue
in the employ of the Company or an Affiliate, or of the Company or an Affiliate
to continue your employment.&nbsp; In
addition, nothing in your option shall obligate the Company or an Affiliate,
their respective stockholders, Boards of Directors, Officers or Employees to
continue any relationship that you might have as a Director or Consultant for
the Company or an Affiliate.</font></p>

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<p align=left><font size=3 face=Times>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>11.&nbsp;&nbsp;&nbsp;&nbsp; WITHHOLDING
OBLIGATIONS.</b></font></p>

<p align=left><font size=3 face=Times>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </b>At the time you
exercise your option, in whole or in part, or at any time thereafter as
requested by the Company, you hereby authorize withholding from payroll and any
other amounts payable to you, and otherwise agree to make adequate provision
for (including by means of a &#147;cashless exercise&#148; pursuant to a program
developed under Regulation T as promulgated by the Federal Reserve Board to the
extent permitted by the Company), any sums required to satisfy the federal,
state, local and foreign tax withholding obligations of the Company or an
Affiliate, if any, which arise in connection with your option.</font></p>

<p align=left><font size=3 face=Times>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </b>Upon your request and
subject to approval by the Company, in its sole discretion, and compliance with
any applicable conditions or restrictions of law, the Company may withhold from
fully vested shares of Common Stock otherwise issuable to you upon the exercise
of your option a number of whole shares of Common Stock having a Fair Market
Value, determined by the Company as of the date of exercise, not in excess of
the minimum amount of tax required to be withheld by law.&nbsp; If the date of determination of any tax
withholding obligation is deferred to a date later than the date of exercise of
your option, share withholding pursuant to the preceding sentence shall not be
permitted unless you make a proper and timely election under Section&nbsp;83(b)
of the Code, covering the aggregate number of shares of Common Stock acquired
upon such exercise with respect to which such determination is otherwise deferred,
to accelerate the determination of such tax withholding obligation to the date
of exercise of your option.&nbsp;
Notwithstanding the filing of such election, shares of Common Stock
shall be withheld solely from fully vested shares of Common Stock determined as
of the date of exercise of your option that are otherwise issuable to you upon
such exercise.&nbsp; Any adverse consequences
to you arising in connection with such share withholding procedure shall be
your sole responsibility.</font></p>

<p align=left><font size=3 face=Times>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </b>You may not exercise
your option unless the tax withholding obligations of the Company and/or any
Affiliate are satisfied.&nbsp; Accordingly,
you may not be able to exercise your option when desired even though your
option is vested, and the Company shall have no obligation to issue a certificate
for such shares of Common Stock or release such shares of Common Stock from any
escrow provided for herein.</font></p>

<p align=left><font size=3 face=Times>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>12.&nbsp;&nbsp;&nbsp;&nbsp; NOTICES.</b>&nbsp; Any notices provided for in your option or
the Plan shall be given in writing and shall be deemed effectively given upon receipt
or, in the case of notices delivered by mail by the Company to you, five (5)
days after deposit in the United States mail, postage prepaid, addressed to you
at the last address you provided to the Company.</font></p>

<p align=left><font size=3 face=Times>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>13.&nbsp;&nbsp;&nbsp;&nbsp; GOVERNING
PLAN DOCUMENT.</b>&nbsp; Your option is subject to all
the provisions of the Plan, the provisions of which are hereby made a part of
your option, and is further subject to all interpretations, amendments, rules
and regulations which may from time to time be promulgated and adopted pursuant
to the Plan.&nbsp; In the event of any
conflict between the provisions of your option and those of the Plan, the
provisions of the Plan shall control.</font></p>

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