Exhibit 10.16
NUANCE COMMUNICATIONS, INC.
CHANGE OF CONTROL AND SEVERANCE AGREEMENT
This Change of Control and Severance Agreement (the “Agreement”) is made and
entered into by and between Daniel Tempesta (“Executive”) and Nuance
Communications, Inc., a Delaware corporation (the “Company”), effective as of
the later date on the signature page of this Agreement (the “Effective Date”).
RECITALS
1.    The Compensation Committee (the “Committee”) of the Board of Directors of
the Company (the “Board”) has determined that it is in the best interests of the
Company and its shareholders to assure that the Company will have the continued
dedication and objectivity of Executive, notwithstanding the possibility,
threat, or occurrence of a Change of Control.
2.    The Committee believes that it is imperative to provide Executive with
severance benefits upon Executive’s termination of employment under certain
circumstances to provide Executive with enhanced financial security, incentive
and encouragement to remain with the Company.
3.    Certain capitalized terms used in the Agreement are defined in Section 7
below.
AGREEMENT
NOW, THEREFORE, in consideration of Executive’s continued employment and the
mutual covenants contained herein, the parties hereto agree as follows:
1.Term of Agreement. This Agreement will have an initial term commencing on the
Effective Date and ending September 30, 2021 (the “Initial Term”). At the end of
the Initial Term, this Agreement will renew automatically for additional three
(3) year terms (each an “Additional Term”), unless either party provides the
other party with written notice of non-renewal at least sixty (60) days prior to
the date of automatic renewal. Notwithstanding the foregoing provisions of this
paragraph, if a Change of Control occurs when there are fewer than twelve
(12) months remaining during the Initial Term or an Additional Term, the term of
this Agreement will extend automatically through the date that is twelve
(12) months following the effective date of the Change of Control. If Executive
becomes entitled to benefits under Section 3 during the term of this Agreement,
the Agreement will not terminate until all of the obligations of the parties
hereto with respect to this Agreement have been satisfied. For avoidance of
doubt, Executive will not be entitled to severance benefits under Section 3 due
solely to notice of non-renewal or termination of the Agreement due to
non-renewal.
2.    At-Will Employment. The Company and Executive acknowledge that Executive’s
employment is and will continue to be at-will, as defined under applicable law,
except as otherwise

1
        

--------------------------------------------------------------------------------

specifically provided under the terms of a written employment agreement between
the Company and Executive.
3.    Severance Benefits.
(a)    Termination Other than During Change of Control Period. If Executive’s
employment with the Company and its subsidiaries is terminated (i) by the
Company other than for Cause and for a reason other than Death or Disability,
(ii) as a result of Executive’s resignation for Good Reason and such termination
occurs outside the Change of Control Period, then, subject to Section 4 and the
other provisions of this Agreement, Executive will receive from the Company:
(i)    Base Salary Severance. A lump sum severance payment equal to one hundred
percent (100%) of Executive’s annual base salary as in effect immediately prior
to the termination date.
(ii)    Target Bonus Severance. A lump sum severance payment equal to a prorated
percentage of Executive’s target bonus as in effect for the fiscal year that
includes the termination date. The prorated percentage will be determined by
dividing the number of days during the fiscal year for which Executive remained
an employee of the Company, by 365. If Executive’s target bonus for the fiscal
year including the termination date has not been set as of the termination date,
Executive instead will receive a prorated percentage of the target bonus for the
immediately preceding fiscal year.
(iii)    Equity Awards.
(1)    Termination on or Before December 31, 2019. Executive’s outstanding and
unvested time-vesting equity awards covering shares of the Company’s common
stock that were scheduled to vest on or before December 31, 2019 will become
vested in full as of the date of termination, and Executive’s outstanding and
unvested equity awards covering shares of the Company’s common stock the vesting
of which was subject to performance goals to be measured at any time on or
before December 31, 2019 will become vested in full as of the date of
termination as if the performance goals had been achieved at 100% of targeted
performance.
(2)    Termination on or after January 1, 2020. Vesting of a prorated percentage
of each (if any) of Executive’s outstanding and unvested time-vesting equity
awards (excluding any awards vesting based on performance) covering shares of
the Company’s common stock that are scheduled to vest in the year that includes
the termination date. The prorated percentage will be determined by on a
grant-by-grant basis by dividing (A) the number of days during the fiscal year
for which Executive remained an employee of the Company, by (B) the number of
days from the first day of the fiscal year through the scheduled vesting date
during the year of termination. The number of shares vesting (if any) will be
rounded to the nearest whole share. As an example only, if Executive remains an
employee for the first 30 days of the year that includes the termination date,
and 100 shares of a time-based RSU were scheduled to vest on the 90th day of
that fiscal year, Executive would receive vesting of thirty-three of the shares
that were scheduled to vest on the 90th day. For the avoidance of doubt, the
vesting provided in this Section 3(a)(iii)(2) applies only to the portion of an
award that is scheduled to vest in the year of termination. No vesting will be
provided under

2
        

--------------------------------------------------------------------------------

this Section 3(a)(iii)(2) with respect to any shares that are scheduled to vest
after the year of Executive’s termination.
(iv)    Continued Employee Benefits. Continuation coverage under the terms of
the Company medical benefit plan pursuant to the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended (“COBRA”) for Executive and/or
Executive’s eligible dependents, subject to Executive timely electing COBRA
coverage. For one year from the date of Executive’s termination the Company will
pay directly on Executive’s behalf the COBRA premiums (at the coverage levels in
effect immediately prior to Executive’s termination). Notwithstanding the
preceding sentence, if the Company determines in its sole discretion that it
cannot provide the foregoing benefit without potentially violating, or being
subject to an excise tax under, applicable law (including, without limitation,
Section 2716 of the Public Health Service Act), the Company will in lieu thereof
provide to Executive a taxable lump sum cash payment in an amount equal to the
product of (x) twelve (12), multiplied by (y) the monthly COBRA premium that
Executive otherwise would be required to pay to continue the group health
coverage for Executive and Executive’s eligible dependents, as applicable, as in
effect on the date of Executive’s termination of employment (which amount will
be based on the premium for the first month of COBRA coverage), which payment
will be made regardless of whether Executive elects COBRA continuation coverage.
For the avoidance of doubt, the taxable payment in lieu of COBRA reimbursements
may be used for any purpose, including, but not limited to continuation coverage
under COBRA, and will be subject to all applicable tax withholdings.
(b)    Termination Following a Change of Control. If during the Change of
Control Period (i) Executive’s employment with the Company and its subsidiaries
is terminated by the Company other than for Cause and for a reason other than
death or Disability or (ii) Executive resigns for Good Reason, then, subject to
Section 4 and the other provisions of this Agreement, Executive will receive
from the Company:
(i)    Severance. A lump sum severance payment equal to one hundred percent
(100%) of Executive’s annual base salary as in effect immediately prior to the
termination date (or, if greater, as in effect immediately prior to the Change
of Control).
(ii)    Target Bonus. A lump sum severance payment equal to one hundred percent
(100%) of the greater of (1) Executive’s target bonus for the year in which
Executive’s termination occurs, or (2) Executive’s target bonus in effect
immediately prior to the Change of Control.
(iii)    Continued Employee Benefits. Continuation coverage under the terms of
the Company medical benefit plan pursuant to COBRA for Executive and/or
Executive’s eligible dependents, subject to Executive timely electing COBRA
coverage. For one year from the date of Executive’s termination the Company will
pay directly on Executive’s behalf the COBRA premiums (at the coverage levels in
effect immediately prior to Executive’s termination). Notwithstanding the
preceding sentence, if the Company determines in its sole discretion that it
cannot provide the foregoing benefit without potentially violating, or being
subject to an excise tax under, applicable law (including, without limitation,
Section 2716 of the Public Health Service Act), the Company will in lieu thereof
provide to Executive a taxable lump sum cash payment in an amount equal to

3
        

--------------------------------------------------------------------------------

the product of (x) twelve (12), multiplied by (y) the monthly COBRA premium that
Executive otherwise would be required to pay to continue the group health
coverage for Executive and Executive’s eligible dependents, as applicable, as in
effect on the date of Executive’s termination of employment (which amount will
be based on the premium for the first month of COBRA coverage), which payment
will be made regardless of whether Executive elects COBRA continuation coverage.
For the avoidance of doubt, the taxable payment in lieu of COBRA reimbursements
may be used for any purpose, including, but not limited to continuation coverage
under COBRA, and will be subject to all applicable tax withholdings.
(iv)    Vesting of Time-Based Equity Awards. One hundred percent (100%) of
Executive’s outstanding and unvested time-vesting equity awards (excluding any
awards vesting based on performance) covering shares of the Company’s common
stock will become vested in full.
(c)    Vesting of Performance-Based Equity Awards.
(i)    Upon a Change of Control, a number of Executive’s then-outstanding
performance-based restricted stock units granted under the Company’s 2000 Stock
Plan or any successor thereto (the “Plan”) that are subject to performance goals
for the fiscal year in which the Change of Control occurs will become eligible
for time-based vesting as if the performance goals had been achieved at 100% of
targeted performance (the “Eligible Shares”). Following the Change of Control,
the original time-based vesting schedule for the Eligible Shares will cease to
apply and the Eligible Shares will instead vest on the last day of the
performance period in which the Change of Control occurs, subject to Executive’s
remaining a Service Provider (as defined in the Plan) through such date, or, if
earlier, upon Executive’s termination by the Company or its successor other than
for Cause or upon Executive’s resignation for Good Reason. Upon a Change of
Control, Executive’s then-outstanding performance-based restricted stock units
granted under the Plan that are subject to performance goals for fiscal years
after the fiscal year in which the Change of Control occurs will remain subject
to the terms of the Plan and the applicable award agreement except that, if
during the Change of Control Period, Executive’s employment is terminated by the
Company or its successor other than for Cause or by Executive for Good Reason,
50% of the performance-based restricted stock units that would have vested at
100% of targeted performance will vest.
(ii)    Upon a Change of Control, Executive’s then-outstanding performance-based
restricted stock units granted under the Plan (or any successor thereto) that
are subject to relative total shareholder return performance goals will become
eligible for time-based vesting based on the number of shares that would vest
based on actual performance determined as of the Change of Control (the
“Eligible TSR Shares”). Following the Change of Control, the Eligible TSR Shares
shall vest on the last day of the performance period, subject to Executive’s
remaining a Service Provider (as defined in the Plan) through such date, or, if
earlier, upon Executive’s termination by the Company or its successor other than
for Cause or upon Executive’s resignation for Good Reason.
(iii)    Except as provided in this Section 3(c), all performance-based
restricted stock units described in this Section 3(c) remain subject to the
terms of the Plan and the applicable award agreement.

4
        

--------------------------------------------------------------------------------

(d)    Voluntary Resignation; Termination for Cause. If Executive’s employment
with the Company and its subsidiaries terminates in a voluntary resignation
(other than for Good Reason during the Change of Control Period), or if the
Executive is terminated for Cause, then Executive shall not be entitled to
receive severance or other benefits except as otherwise provided by applicable
law or those (if any) as may be available under the Company’s severance and
benefit plans and policies in effect at the time of such termination.
(e)    Termination for Death or Disability. If Executive’s employment with the
Company and its subsidiaries terminates on account of Executive’s death or
absence from work due to a disability for a period in excess of ninety (90) days
in any twelve-month period that qualifies for benefits under the Company’s
long-term disability program (“Disability”), Executive will receive from the
Company:
(i)    Continuation coverage under the terms of the Company medical benefit plan
pursuant to COBRA for Executive and/or Executive’s eligible dependents, subject
to Executive or his dependents timely electing COBRA coverage. For one year from
the date of Executive’s termination the Company will pay directly on Executive’s
behalf the COBRA premiums (at the coverage levels in effect immediately prior to
Executive’s termination). Notwithstanding the preceding sentence, if the Company
determines in its sole discretion that it cannot provide the foregoing benefit
without potentially violating, or being subject to an excise tax under,
applicable law (including, without limitation, Section 2716 of the Public Health
Service Act), the Company will in lieu thereof provide to Executive a taxable
lump sum cash payment in an amount equal to the product of (x) twelve (12),
multiplied by (y) the monthly COBRA premium that Executive otherwise would be
required to pay to continue the group health coverage for Executive and
Executive’s eligible dependents, as applicable, as in effect on the date of
Executive’s termination of employment (which amount will be based on the premium
for the first month of COBRA coverage), which payment will be made regardless of
whether Executive elects COBRA continuation coverage. For the avoidance of
doubt, the taxable payment in lieu of COBRA reimbursements may be used for any
purpose, including, but not limited to continuation coverage under COBRA, and
will be subject to all applicable tax withholdings.
(ii)    One hundred percent (100%) of Executive’s outstanding and unvested
time-vesting equity awards (excluding any awards vesting based on performance)
covering shares of the Company’s common stock will become vested. In the case of
a termination for Disability, vesting under this Section 3(e) will be subject to
Executive’s compliance with Section 4 and the other provisions of this
Agreement.
(f)    Accrued Amounts. Without regard to the reason for, or the timing of,
Executive’s termination of employment, the Company shall pay Executive: (i) any
unpaid base salary due for periods prior to the date of termination,
(ii) accrued and unused vacation, as required under the applicable Company
policy; and (iii) all expenses incurred by Executive in connection with the
business of the Company prior to the date of termination in accordance with the
Company’s business expense reimbursement policy. These payments shall be made
promptly upon termination and within the period of time mandated by law.

5
        

--------------------------------------------------------------------------------

(g)    Exclusive Remedy. In the event of termination of Executive’s employment
as set forth in Section 3 of this Agreement, the provisions of Section 3 are
intended to be and are exclusive and in lieu of any other rights or remedies to
which Executive or the Company may otherwise be entitled, whether at law, tort
or contract, in equity, or under this Agreement (other than the payment of
accrued but unpaid wages, as required by law, or any unreimbursed reimbursable
expenses). During the term of this Agreement, Executive will be entitled to no
benefits, compensation or other payments or rights upon termination of
employment, including under any offer letter or other agreement with the
Company, other than those benefits expressly set forth in Section 3 of this
Agreement.
(h)    Transfer between Company and any Subsidiary. For purposes of this Section
3, if Executive’s employment relationship with the Company or any parent or
subsidiary of the Company ceases, Executive will not, solely by virtue thereof,
be determined to have been terminated without Cause for purposes of this
Agreement if Executive continues to remain employed by the Company or any
subsidiary of the Company immediately thereafter (e.g., upon transfer of
Executive’s employment from the Company to a Company subsidiary).
4.    Conditions to Receipt of Severance
(a)    Release of Claims Agreement. The receipt of any severance payments or
benefits in Section 3 pursuant to this Agreement is subject to Executive signing
and not revoking a separation agreement and release of claims in substantially
the form attached to this Agreement as Exhibit A (the “Release”), which must
become effective and irrevocable no later than the sixtieth (60th) day following
Executive’s termination of employment (the “Release Deadline”). If the Release
does not become effective and irrevocable by the Release Deadline,
Executive will forfeit any right to severance payments or benefits under this
Agreement. Any severance payments or benefits otherwise payable to Executive
between the termination date and the Release Deadline will be paid on or within
fifteen (15) days following the Release Deadline, or, if later, such time as
required by Section 5(a), except that acceleration of vesting of equity awards
not subject to Section 409A will become effective on the date the Release
becomes effective. In no event will severance payments or benefits be paid or
provided until the Release actually becomes effective and irrevocable.
(b)    Proprietary Information and Non-Competition Agreement. Executive’s
receipt of any severance payments or benefits under Section 3 will be subject to
Executive continuing to comply with the terms of any agreements between
Executive and the Company concerning inventions, confidentiality, or restrictive
covenants (the “Confidentiality Agreement”).
5.    Section 409A.
(a)    Notwithstanding anything to the contrary in this Agreement, no Deferred
Payments will be paid or otherwise provided until Executive has a “separation
from service” within the meaning of Section 409A. Similarly, no severance
payable to Executive, if any, pursuant to this Agreement that otherwise would be
exempt from Section 409A pursuant to Treasury Regulation
Section 1.409A‑1(b)(9) will be payable until Executive has a “separation from
service” within the meaning of Section 409A. In addition, if Executive is a
“specified employee” within the meaning of Section 409A at the time of
Executive’s separation from service (other than due to death), then

6
        

--------------------------------------------------------------------------------

the Deferred Payments, if any, that are payable within the first six (6) months
following Executive’s separation from service, will become payable on the first
payroll date that occurs on or after the date six (6) months and one (1) day
following the date of Executive’s separation from service. All subsequent
Deferred Payments, if any, will be payable in accordance with the payment
schedule applicable to each payment or benefit. Notwithstanding anything herein
to the contrary, if Executive dies following Executive’s separation from
service, but before the six (6) month anniversary of the separation from
service, then any payments delayed in accordance with this paragraph will be
payable in a lump sum as soon as administratively practicable after the date of
Executive’s death and all other Deferred Payments will be payable in accordance
with the payment schedule applicable to each payment or benefit. Each payment
and benefit payable under this Agreement is intended to constitute a separate
payment under Section 1.409A-2(b)(2) of the Treasury Regulations.
(b)    Any amount paid under this Agreement that satisfies the requirements of
the “short-term deferral” rule set forth in Section 1.409A-1(b)(4) of the
Treasury Regulations will not constitute Deferred Payments for purposes of this
Agreement.
(c)    Any amount paid under this Agreement that qualifies as a payment made as
a result of an involuntary separation from service pursuant to Section
1.409A-1(b)(9)(iii) of the Treasury Regulations that does not exceed the Section
409A Limit (as defined below) will not constitute Deferred Payments for purposes
of this Agreement.
(d)    The foregoing provisions are intended to comply with, or be exempt from,
the requirements of Section 409A so that none of the severance payments and
benefits to be provided hereunder will be subject to the additional tax imposed
under Section 409A, and any ambiguities or ambiguous terms herein will be
interpreted to so comply. Specifically, the payments hereunder are intended to
be exempt from the Requirements of Section 409A under the “short-term” deferral
rule set forth in Section 1.409A-1(b)(4) of the Treasury Regulations. The
Company and Executive agree to work together in good faith to consider
amendments to this Agreement and to take such reasonable actions which are
necessary, appropriate or desirable to avoid imposition of any additional tax or
income recognition before actual payment to Executive under Section 409A. In no
event will the Company reimburse Executive for any taxes or other costs that may
be imposed on Executive as a result of Section 409A or any other law.
6.    Limitation on Payments. In the event that the severance and other benefits
provided for in this Agreement or otherwise payable to Executive (i) constitute
“parachute payments” within the meaning of Section 280G of the Code, and
(ii) would be subject to the excise tax imposed by Section 4999 of the Code (the
“Excise Tax”), then Executive’s benefits under this Agreement shall be either:
(a)    delivered in full, or
(b)    delivered as to such lesser extent which would result in no portion of
such benefits being subject to the Excise Tax,
whichever of the foregoing amounts, taking into account the applicable federal,
state and local income taxes and the Excise Tax, results in the receipt by
Executive on an after-tax basis, of the

7
        

--------------------------------------------------------------------------------

greatest amount of benefits, notwithstanding that all or some portion of such
benefits may be taxable under Section 4999 of the Code. If a reduction in
severance and other benefits constituting “parachute payments” is necessary so
that benefits are delivered to a lesser extent, reduction will occur in the
following order: (1) reduction of cash payments, (2) cancellation of equity
awards granted within the twelve-month period prior to a “change of control” (as
determined under Code Section 280G) that are deemed to have been granted
contingent upon the change of control (as determined under Code Section 280G),
(3) cancellation of accelerated vesting of equity awards and (4) reduction of
continued employee benefits. In the event that accelerated vesting of equity
awards is to be cancelled, such vesting acceleration will be cancelled in the
reverse chronological order of the award grant dates.
Unless the Company and Executive otherwise agree in writing, any determination
required under this Section shall be made in writing by the Company’s
independent public accountants (the “Accountants”), whose determination shall be
conclusive and binding upon Executive and the Company for all purposes. For
purposes of making the calculations required by this Section, the Accountants
may make reasonable assumptions and approximations concerning applicable taxes
and may rely on reasonable, good faith interpretations concerning the
application of Section 280G and 4999 of the Code. The Company and Executive
shall furnish to the Accountants such information and documents as the
Accountants may reasonably request in order to make a determination under this
Section. The Company shall bear all costs the Accountants may reasonably incur
in connection with any calculations contemplated by this Section.
7.    Definition of Terms. The following terms referred to in this Agreement
will have the following meanings:
(a)    Cause. “Cause” will mean (i) any act of dishonesty or fraud taken by
Executive in connection with his or her responsibilities as an employee other
than immaterial, inadvertent acts that are promptly remedied by Executive
following notice by the Company, (ii) Executive’s breach of the fiduciary duty
or duty of loyalty owed to the Company, or material breach of the duty to
protect the Company’s confidential and proprietary information, (iii)
Executive’s conviction or plea of nolo contendere to a felony or to a crime
involving fraud, embezzlement, misappropriation of funds or any other act of
moral turpitude, (iv) Executive’s gross negligence or willful misconduct in the
performance of his or her duties, (v) Executive’s material breach of this
Agreement or a written policy of the Company; (vi) Executive’s engagement in
conduct or activities that result, or are reasonably likely to result, in
negative publicity or public disrespect, contempt or ridicule of the Company;
(vii) Executive’s failure to abide by the lawful and reasonable directives of
the Company; or (viii) Executive’s repeated failure to materially perform the
primary duties of Executive’s position provided, however, that: a termination of
the Executive’s employment pursuant to clause (vii) or clause (viii) of this
Section shall not be deemed a termination for “Cause” unless the Company
notifies Executive in writing of the alleged failure or breach that the Company
claims constitutes Cause, and Executive fails to substantially cure such failure
or breach within thirty (30) days of such notice; and provided further, however,
that clauses (vii) and (viii) of this Section shall not apply during the
pendency of a Change of Control Period and therefore no termination for Cause
may be made under such clauses during any such period. 

8
        

--------------------------------------------------------------------------------

(b)    Change of Control. “Change of Control” will mean the occurrence of any of
the following events:
(i)    any “person” (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act) becomes the “beneficial owner” (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the Company representing
more than 50% of the total voting power represented by the Company's then
outstanding voting securities;
(ii)    the consummation by the Company of a merger or consolidation of the
Company with any other corporation, other than a merger or consolidation which
would result in the voting securities of the Company outstanding immediately
prior thereto continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity) more than fifty
percent (50%) of the total voting power represented by the voting securities of
the Company or such surviving entity outstanding immediately after such merger
or consolidation (in substantially the same proportions relative to each other
as immediately prior to the transaction); or
(iii)    the consummation of the sale or disposition by the Company of all or
substantially all of the Company's assets (it being understood that the sale or
spinoff of one or more (but not all material) divisions of the Company shall not
constitute the sale or disposition of all or substantially all of the Company’s
assets).
Further and for the avoidance of doubt, a transaction will not constitute a
Change of Control if: (i) its sole purpose is to change the state of the
Company’s incorporation, or (ii) its sole purpose is to create a holding company
that will be owned in substantially the same proportions by the persons who held
the Company’s securities immediately before such transaction.
(c)     Change of Control Period. “Change of Control Period” means the period
beginning on a Change of Control and ending on the one-year anniversary of the
Change of Control.
(d)    Code. “Code” means the Internal Revenue Code of 1986, as amended.
(e)    Deferred Payments. “Deferred Payments” means any severance pay or
benefits to be paid or provided to Executive, if any, pursuant to this Agreement
that, in each case, are or when considered together with any other severance
payments or separation benefits are, considered deferred compensation under
Section 409A.
(f)    Exchange Act. “Exchange Act” means the Securities Exchange Act of 1934,
as amended.
(g)    Good Reason. “Good Reason” means Executive’s termination of employment
within thirty (30) days following the expiration of any cure period (discussed
below) following the occurrence of one or more of the following, without
Executive’s express written consent: (i) a material reduction in Executive’s
duties, authority or responsibilities; (ii) a material reduction by the Company
in the annual base compensation or target bonus opportunity (as a percentage of
base salary) of the Executive as in effect immediately prior to such reduction
provided, however, that

9
        

--------------------------------------------------------------------------------

one or more reductions in base compensation or target bonus opportunity
applicable to all executives generally that, cumulatively, total ten percent
(10%) or less in base compensation and/or ten (10) percentage points or less in
target bonus opportunity will not constitute a material reduction for purposes
of this clause (ii); (iii) the relocation of the Executive to a facility or a
location more than fifty (50) miles from the Executive’s then present location;
(iv) the failure of the Company to obtain the assumption of this agreement by
any successors contemplated in Section 8 below; or (v) a material breach by the
Company of this Agreement or any equity award agreement between Company and the
Executive.  In order for an event to qualify as Good Reason, Executive must not
terminate employment with the Company without first providing the Company with
written notice of the acts or omissions constituting the grounds for “Good
Reason” within ninety (90) days of the initial existence of the grounds for
“Good Reason” and the Company shall have failed to cure during a period of
thirty (30) days following the date of such notice.
(h)    Section 409A. “Section 409A” means Section 409A of the Code and the final
Treasury Regulations and any official Internal Revenue Service guidance
promulgated thereunder.
(i)    Section 409A Limit. “Section 409A Limit” means two (2) times the lesser
of: (i) Executive’s annualized compensation based upon the annual rate of pay
paid to Executive during the Executive’s taxable year preceding the Executive’s
taxable year of Executive’s termination of employment as determined under, and
with such adjustments as are set forth in, Treasury Regulation
1.409A-1(b)(9)(iii)(A)(1) and any Internal Revenue Service guidance issued with
respect thereto; or (ii) the maximum amount that may be taken into account under
a qualified plan pursuant to Section 401(a)(17) of the Code for the year in
which Executive’s employment is terminated.
8.    Successors.
(a)    The Company’s Successors. Any successor to the Company (whether direct or
indirect and whether by purchase, merger, consolidation, liquidation or
otherwise) to all or substantially all of the Company’s business and/or assets
will assume the obligations under this Agreement and agree expressly to perform
the obligations under this Agreement in the same manner and to the same extent
as the Company would be required to perform such obligations in the absence of a
succession. For all purposes under this Agreement, the term “Company” will
include any successor to the Company’s business and/or assets which executes and
delivers the assumption agreement described in this Section 8(a) or which
becomes bound by the terms of this Agreement by operation of law.
(b)    Executive’s Successors. The terms of this Agreement and all rights of
Executive hereunder will inure to the benefit of, and be enforceable by,
Executive’s personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees.
9.    Notice.
(a)    General. Notices and all other communications contemplated by this
Agreement will be in writing and will be deemed to have been duly given when
personally delivered, when mailed by U.S. registered or certified mail, return
receipt requested and postage prepaid, or when

10
        

--------------------------------------------------------------------------------

delivered by private courier service such as UPS or Federal Express that has
tracking capability. In the case of Executive, mailed notices will be addressed
to him or her at the home address which he or she most recently communicated to
the Company in writing. In the case of the Company, mailed notices will be
addressed to its corporate headquarters, and all notices will be directed to the
Chief Executive Officer and General Counsel of the Company.
(b)    Notice of Termination. Any termination by the Company for Cause or by
Executive for Good Reason will be communicated by a notice of termination to the
other party hereto given in accordance with Section 9(a) of this Agreement. Such
notice will indicate the specific termination provision in this Agreement relied
upon, will set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination under the provision so indicated, and will
specify the termination date (which will be not more than thirty (30) days after
the giving of such notice or any shorter period required herein).
10.    Resignation. Upon the termination of Executive’s employment for any
reason, Executive will be deemed to have resigned from all officer and/or
director positions held at the Company and its affiliates voluntarily, without
any further required action by Executive, as of the end of Executive’s
employment and Executive, at the Board’s request, will execute any documents
reasonably necessary to reflect Executive’s resignation.
11.    Miscellaneous Provisions.
(a)    No Duty to Mitigate. Executive will not be required to mitigate the
amount of any payment contemplated by this Agreement (whether by seeking new
employment or in any other manner), nor shall any such payment be reduced by any
earnings that Executive may receive from any other source.
(b)    Waiver. No waiver by either party of any breach of, or of compliance
with, any condition or provision of this Agreement by the other party will be
considered a waiver of any other condition or provision or of the same condition
or provision at another time.
(c)    Headings. All captions and section headings used in this Agreement are
for convenient reference only and do not form a part of this Agreement.
(d)    Entire Agreement. This Agreement and the Confidentiality Agreement
constitute the entire agreement of the parties hereto with respect to the
subject matter hereof and thereof. This Agreement supersedes, replaces in their
entirety and terminates any prior representations, understandings, undertakings
or agreements between the Company and the Executive, whether written or oral and
whether expressed or implied, that provided any benefits to Executive upon
termination of Executive’s employment for any reason. No waiver, alteration, or
modification of any of the provisions of this Agreement will be binding unless
in writing and signed by duly authorized representatives of the parties hereto
and which specifically mention this Agreement. For the avoidance of doubt, it is
the intention of the parties that the provisions of this Agreement providing for
acceleration or other modification of the vesting provisions of equity awards
are intended to supersede the vesting provisions of any equity awards that may
outstanding during the term of this Agreement.

11
        

--------------------------------------------------------------------------------

(e)    Governing Law. If Executive is resident in California, this Agreement
shall be governed by the internal substantive laws, but not the choice of law
rules, of the State of California, and the Company and the Executive each
consent to personal and exclusive jurisdiction and venue in the State of
California. If Executive is resident in any state or other jurisdiction other
than California, this Agreement shall be governed by the internal substantive
laws, but not the choice of law rules, of the Commonwealth of Massachusetts, and
the Company and the Executive each consent to personal and exclusive
jurisdiction and venue in the Commonwealth of Massachusetts.
(f)    Severability. The invalidity or unenforceability of any provision or
provisions of this Agreement will not affect the validity or enforceability of
any other provision hereof, which will remain in full force and effect.
(g)    Withholding. All payments made pursuant to this Agreement will be subject
to withholding of applicable income, employment and other taxes.
(h)    Counterparts. This Agreement may be executed in counterparts, each of
which will be deemed an original, but all of which together will constitute one
and the same instrument.
IN WITNESS WHEREOF, each of the parties has executed this Change of Control and
Severance Agreement, in the case of the Company by its duly authorized officer,
as of the day and year set forth below.
COMPANY    NUANCE COMMUNICATIONS, INC.
By:                            
Title:                            
Date:                            

EXECUTIVE                                 
Daniel Tempesta
Date:                            

12
        

--------------------------------------------------------------------------------

EXHIBIT A
FORM OF SEPARATION & RELEASE AGREEMENT
This Separation & Release Agreement (the “Agreement”) is made by and between
Nuance Communications, Inc., a Delaware corporation (the “Company”) and
_______________ (“Executive”). The Company and Executive are sometimes referred
to collectively as the “Parties” and individually as a “Party.”
WHEREAS, Executive has agreed to enter this Agreement whereby Executive will
release any and all claims Executive may have against the Company and other
released parties upon certain events specified in the Change of Control and
Severance Agreement by and between Company and Executive (the “Severance
Agreement”).
NOW THEREFORE, in consideration of the mutual promises made herein, the Parties
hereby agree as follows:
1.Termination. Executive’s employment from the Company terminated on
________________ (the “Termination Date”).
2.    Confidential Information. Subject to Section 13, Executive shall continue
to maintain the confidentiality of all confidential and proprietary information
of the Company and shall continue to comply with the terms and conditions of the
Proprietary Information, Inventions and Non-Competition Agreement (the
“Confidentiality Agreement”) between Executive and the Company. Executive agrees
that the above reaffirmation and agreement with the Confidentiality Agreement
shall constitute a new and separately enforceable agreement to abide by the
terms of the Confidentiality Agreement, entered and effective as of the
Effective Date. Executive specifically acknowledges and agrees that any
violation of the restrictive covenants in the Confidentiality Agreement shall
constitute a material breach of this Agreement. Executive shall return all the
Company property and confidential and proprietary information in Executive’s
possession to the Company on the Effective Date of this Agreement.
3.    Payment of Salary and Receipt of All Benefits. Executive acknowledges and
represents that, other than the severance and benefits to be paid as set forth
in the Severance Agreement, the Company has paid or provided all salary, wages,
bonuses, accrued vacation, premiums, leaves, relocation costs, interest, fees,
reimbursable expenses, commissions, stock, stock options, vesting, and any and
all other benefits and compensation due to Executive.
4.    Non-Solicitation. In exchange for the severance pay and other
consideration under the Severance Agreement to which Executive would not
otherwise be entitled, Executive agrees that for a period of one (1) year after
the Termination Date, Executive will not, without the express written consent of
the Company, in its sole discretion, [(a) solicit any business that is
competitive with the Company’s business from any client or customer of the
Company or (b) either in Executive’s individual capacity or on behalf of or
through any other entity, either directly or indirectly, hire, engage, recruit
or participate in any way in the hiring, engagement or recruitment of, or
participate in any effort to hire or solicit, any current or future employees of
the Company or any subsidiary thereof.] [Delete bracketed text for employees in
California and substitute the following: “directly

--------------------------------------------------------------------------------

or indirectly solicit any of the employees of the Company or any subsidiary
thereof to leave their employment with the Company or any subsidiary thereof.”]
5.    Non-disparagement. In exchange for the severance pay and other
consideration under the Severance Agreement to which Executive would not
otherwise be entitled, Executive agrees not to disparage the Company, the
Company’s officers, directors, employees, shareholders and agents, in any manner
likely to be harmful to them or the Company’s business, business reputation or
personal reputation. Nothing in this Agreement shall prevent either Executive or
the Company employees who are aware of the existence of this Agreement from
responding accurately and fully to any question, inquiry or request for
information when required by legal process, nor prevent Executive from engaging
in Protected Activities (as defined below).
6.    [Non-Compete. In exchange for the severance pay and other consideration
under the Severance Agreement to which Executive would not otherwise be
entitled, Executive agrees that for a period of one (1) year after the
Termination Date, Executive will not, without the express written consent of the
Company, in its sole discretion, enter, engage in, participate in, or assist,
either as an individual on your own or as a partner, joint venturer, employee,
agent, consultant, officer, trustee, director, owner, part-owner, shareholder,
or in any other capacity, in the United States of America, directly or
indirectly, any other business organization whose activities or products are
competitive with the activities or products of the Company then existing or
under development. Nothing in this Agreement shall prohibit Executive from
working for an employer that is engaged in activities or offers products that
are competitive with the activities and products of the Company so long as
Executive does not work for or with the department, division, or group in that
employer’s organization that is engaging in such activities or developing such
products. Executive recognizes that these restrictions on competition are
reasonable because of the Company’s investment in goodwill, its customer lists,
and other proprietary information and Executive’s knowledge of the Company’s
business and business plans. If any period of time or geographical area should
be judged unreasonable in any judicial proceeding, then the period of time or
geographical area shall be reduced to such extent as may be deemed required so
as to be reasonable and enforceable. Nothing in this Agreement shall preclude
Executive from making passive investments of not more than two percent (2%) of a
class of securities of any business enterprise registered under the Securities
Exchange Act of 1934, as amended.][Delete paragraph for employees located in
California.]
7.    Release of Claims. Executive agrees that the consideration to be paid in
accordance with the terms of the Severance Agreement represents settlement in
full of all outstanding obligations owed to Executive by the Company. Executive,
on behalf of himself, and his respective heirs, family members, executors and
assigns, hereby fully and forever releases the Company and its past, present and
future officers, agents, directors, employees, investors, shareholders,
administrators, affiliates, divisions, subsidiaries, parents, predecessor and
successor corporations, and assigns, from, and agrees not to sue or otherwise
institute or cause to be instituted any legal or administrative proceedings
concerning any claim, duty, obligation or cause of action relating to any
matters of any kind, whether presently known or unknown, suspected or
unsuspected, that Executive may possess arising from any omissions, acts or
facts that have occurred up until and including the Effective Date of this
Agreement including, without limitation,

-2-

--------------------------------------------------------------------------------

(a)    any and all claims relating to or arising from Executive’s employment
relationship with the Company and the termination of that relationship;
(b)    any and all claims relating to, or arising from, Executive’s right to
purchase, or actual purchase of shares of stock of the Company, including,
without limitation, any claims for fraud, misrepresentation, breach of fiduciary
duty, breach of duty under applicable state corporate law, and securities fraud
under any state or federal law;
(c)    any and all claims for wrongful discharge of employment; termination in
violation of public policy; discrimination; breach of contract, both express and
implied; breach of a covenant of good faith and fair dealing, both express and
implied; promissory estoppel; negligent or intentional infliction of emotional
distress; negligent or intentional misrepresentation; negligent or intentional
interference with contract or prospective economic advantage; unfair business
practices; defamation; libel; slander; negligence; personal injury; assault;
battery; invasion of privacy; false imprisonment; and conversion;
(d)    any and all claims for violation of any federal, state or municipal
statute, including, but not limited to, Title VII of the Civil Rights Act of
1964, the Civil Rights Act of 1991, the Age Discrimination in Employment Act of
1967, the Americans with Disabilities Act of 1990, the Fair Labor Standards Act,
the Employee Retirement Income Security Act of 1974, The Worker Adjustment and
Retraining Notification Act, the California Family Rights Act; the California
Labor Code, the California Workers’ Compensation Act, the California Fair
Employment and Housing Act, Massachusetts Law Prohibiting Unlawful
Discrimination, as amended, Mass. Gen. Laws ch. 151B, § 1 et seq., Massachusetts
Discriminatory Wage Rates Penalized Law (Massachusetts Equal Pay Law), as
amended, Mass. Gen. Laws ch. 149, § 105A et seq., Massachusetts Right to be Free
from Sexual Harassment Law, Mass. Gen. Laws ch. 214, § 1C, Massachusetts
Discrimination Against Certain Persons on Account of Age Law, Mass. Gen. Laws
ch. 149, § 24A et seq., Massachusetts Equal Rights Law, Mass. Gen. Laws ch. 93,
§ 102 et seq., Massachusetts Violation of Constitutional Rights Law, Mass. Gen.
Laws ch. 12, § 11I, Massachusetts Family and Medical Leave Law, Mass. Gen. Laws
ch. 149, § 52D; and the Massachusetts Wage Act, Mass. Gen. Laws ch. 149, § 148,
et seq.;
(e)    any and all claims for violation of the federal, or any state,
constitution;
(f)    any and all claims arising out of any other laws and regulations relating
to employment or employment discrimination; and
(g)    any and all claims for attorneys’ fees and costs.
Executive agrees that the release set forth in this section shall be and remain
in effect in all respects as a complete general release as to the matters
released. This release does not extend to any severance obligations due
Executive under the Severance Agreement and does not release claims that cannot
be released as a matter of law. Nothing in this Agreement waives Executive’s
rights to indemnification or any payments under any insurance policy, if any,
provided by any act or agreement of the Company, state or federal law or policy
of insurance.

-3-

--------------------------------------------------------------------------------

8.    Acknowledgment of Waiver of Claims under ADEA. Executive acknowledges that
Executive is waiving and releasing any rights he or she may have under the Age
Discrimination in Employment Act of 1967 (“ADEA”) and that this waiver and
release is knowing and voluntary. Executive and the Company agree that this
waiver and release does not apply to any rights or claims that may arise under
the ADEA after the Effective Date of this Agreement. Executive acknowledges that
the consideration given for this waiver and release Agreement is in addition to
anything of value to which Executive was already entitled. Executive further
acknowledges that Executive has been advised by this writing that (a) Executive
should consult with an attorney prior to executing this Agreement; (b) Executive
has at least twenty-one (21) days within which to consider this Agreement;
(c) Executive has seven (7) days following the execution of this Agreement by
the parties to revoke the Agreement; (d) this Agreement shall not be effective
until the revocation period has expired; and (e) nothing in this Agreement
prevents or precludes Executive from challenging or seeking a determination in
good faith of the validity of this waiver under the ADEA, nor does it impose any
condition precedent, penalties or costs for doing so, unless specifically
authorized by federal law. Any revocation should be in writing and delivered to
the General Counsel at the Company by close of business on the seventh day from
the date that Executive signs this Agreement. In the event Executive signs this
Agreement and returns it to the Company in less than the 21-day period
identified above, Executive hereby acknowledges that he/she has freely and
voluntarily chosen to waive the time period allotted for considering this
Agreement. The parties agree that changes, whether material or immaterial, do
not restart the running of the 21-day period.
9.    California Civil Code Section 1542. Executive acknowledges that Executive
has been advised to consult with legal counsel and is familiar with the
provisions of California Civil Code Section 1542, a statute that otherwise
prohibits the release of unknown claims, which provides as follows:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH
THE DEBTOR.
Executive, being aware of said code section, agrees to expressly waive any
rights Executive may have thereunder, as well as under any other statute or
common law principles of similar effect.
10.    No Pending or Future Lawsuits. Executive represents that he or she has no
lawsuits, claims, or actions pending in her name, or on behalf of any other
person or entity, against the Company or any other person or entity referred to
herein. Executive also represents that Executive does not intend to bring any
claims on his/her own behalf or on behalf of any other person or entity against
the Company or any other person or entity referred to herein.
11.    No Cooperation. Subject to Section 13, Executive agrees that he or she
will not counsel or assist any attorneys or their clients in the presentation or
prosecution of any disputes, differences, grievances, claims, charges, or
complaints by any third party against the Company and/or any officer, director,
employee, agent, representative, shareholder or attorney of the Company, unless
under a subpoena or other court order to do so or as related directly to the
ADEA waiver in this Agreement.

-4-

--------------------------------------------------------------------------------

12.    No Admission of Liability. Executive understands and acknowledges that
this Agreement constitutes a compromise and settlement of disputed claims. No
action taken by the Company, either previously or in connection with this
Agreement shall be deemed or construed to be (a) an admission of the truth or
falsity of any claims heretofore made or (b) an acknowledgment or admission by
the Company of any fault or liability whatsoever to the Executive or to any
third party.
13.    Protected Activity. Executive understands that nothing in this Agreement
or in the Confidentiality Agreement shall in any way limit or prohibit Executive
from engaging for a lawful purpose in any Protected Activity. For purposes of
this Agreement, “Protected Activity” shall mean filing a charge, complaint or
report with, or otherwise communicating with, cooperating with or participating
in any investigation or proceeding that may be conducted by any federal, state
or local government agency or commission, including the Securities and Exchange
Commission, the Equal Employment Opportunity Commission, the Occupational Safety
and Health Administration, and the National Labor Relations Board (“Government
Agencies”). Executive understands that in connection with such Protected
Activity, Executive is permitted to disclose documents or other information as
permitted by law, and without giving notice to, or receiving authorization from,
the Company. Executive agrees to take all reasonable precautions to prevent any
unauthorized use or disclosure of any information that may constitute Company
Proprietary Information under this Agreement or the Confidentiality Agreement to
any parties other than the relevant Government Agencies. Executive further
understands that Protected Activity does not include the disclosure of any
Company attorney-client privileged communications
14.    Miscellaneous.
(a)    Costs. The Parties shall each bear their own costs, expert fees,
attorneys’ fees and other fees incurred in connection with this Agreement.
(b)    Authority. Executive represents and warrants that Executive has the
capacity to act on his or her own behalf and on behalf of all who might claim
through Executive to bind them to the terms and conditions of this Agreement.
(c)    No Representations. Executive represents that Executive has had the
opportunity to consult with an attorney, and has carefully read and understands
the scope and effect of the provisions of this Agreement. Neither Party has
relied upon any representations or statements made by the other Party hereto
which are not specifically set forth in this Agreement.
(d)    Severability. In the event that any provision hereof becomes or is
declared by a court of competent jurisdiction to be illegal, unenforceable or
void, this Agreement shall continue in full force and effect without said
provision.
(e)    Attorneys’ Fees. Except with regard to a legal action challenging or
seeking a determination in good faith of the validity of the waiver herein under
the ADEA, in the event that either Party brings an action to enforce or effect
its rights under this Agreement, the prevailing Party shall be entitled to
recover its costs and expenses, including the costs of mediation, arbitration,
litigation, court fees, and reasonable attorneys’ fees incurred in connection
with such an action.

-5-

--------------------------------------------------------------------------------

(f)    Entire Agreement. This Agreement, along with the Severance Agreement and
the Confidentiality Agreement, represents the entire agreement and understanding
between the Company and Executive concerning Executive’s separation from the
Company.
(g)    No Oral Modification. This Agreement may only be amended in writing
signed by Executive and the Chief Executive Officer of the Company.
(h)    Governing Law. [FOR MA RESIDENTS:] [This Agreement shall be governed by
the internal substantive laws, but not the choice of law rules, of the
Commonwealth of Massachusetts, and the Company and the Executive each consent to
personal and exclusive jurisdiction and venue in the Commonwealth of
Massachusetts.] [FOR CA RESIDENTS:] [This Agreement shall be governed by the
internal substantive laws, but not the choice of law rules, of the State of
California, and the Company and the Executive each consent to personal and
exclusive jurisdiction and venue in the State of California.]
(i)    Effective Date. This Agreement is effective eight (8) days after it has
been signed by both Executive, so long as it has been signed by the Parties and
has not been revoked by either Party before that date (the “Effective Date”).
(j)    Counterparts. This Agreement may be executed in counterparts, and each
counterpart shall have the same force and effect as an original and shall
constitute an effective, binding agreement on the part of each of the
undersigned.
(k)    Voluntary Execution of Agreement. Executive understands and agrees that
Executive is executing this Agreement voluntarily and without any duress or
undue influence on the part or behalf of the Company or any third party, with
the full intent of releasing all of Executive’s claims against the Company and
other persons referenced herein. Executive acknowledge that:
(i)    Executive has read this Agreement;
(ii)    Executive has been represented in the preparation, negotiation, and
execution of this Agreement by legal counsel of Executive’s own choice or has
voluntarily declined to seek such counsel;
(iii)    Executive understand the terms and consequences of this Agreement and
of the releases it contains; and
(iv)    Executive is fully aware of the legal and binding effect of this
Agreement.
Signature Page Follows

IN WITNESS WHEREOF, the Parties have executed this Separation & Release
Agreement on the respective dates set forth below.

COMPANY:    NUANCE COMMUNICATIONS, INC.
By:                            
Title:                            
Date:                            

EXECUTIVE:                                  
Date:                            

-6-