Document:

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                                                                    Exhibit 10.3

                            SONIC INNOVATIONS, INC.

                                2000 STOCK PLAN

     1.   Purposes of the Plan.  The purposes of this 2000 Stock Plan are:
          --------------------

          .    to attract and retain the best available personnel for positions
               of substantial responsibility,

          .    to provide additional incentive to Service Providers, and

          .    to promote the success of the Company's business.

          Options granted under the Plan may be Incentive Stock Options or
Nonstatutory Stock Options, as determined by the Administrator at the time of
grant. Stock Purchase Rights may also be granted under the Plan.

     2.   Definitions.  As used herein, the following definitions shall apply:
          -----------

          (a) "Administrator" means the Board or any of its Committees as shall
               -------------
be administering the Plan, in accordance with Section 4 of the Plan.

          (b) "Applicable Laws" means the requirements relating to the
               ---------------
administration of stock option plans under U. S. state corporate laws, U.S.
federal and state securities laws, the Code, any stock exchange or quotation
system on which the Common Stock is listed or quoted and the applicable laws of
any foreign country or jurisdiction where Options or Stock Purchase Rights are
granted under the Plan.

          (c) "Board" means the Board of Directors of the Company.
               -----

          (d) "Code" means the Internal Revenue Code of 1986, as amended.
               ----

          (e) "Committee" means a committee of Directors appointed by the Board
               ---------
in accordance with Section 4 of the Plan.

          (f) "Common Stock" means the common stock of the Company.
               ------------

          (g) "Company" means Sonic Innovations, Inc., a Delaware corporation.
               -------

          (h) "Director" means a member of the Board.
               --------

          (i) "Disability" means total and permanent disability as defined in
               ----------
Section 22(e)(3) of the Code.
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          (j)  "Employee" means any person employed by the Company or any Parent
                --------
or Subsidiary of the Company.  A Service Provider shall not cease to be an
Employee in the case of (i) any leave of absence approved by the Company or (ii)
transfers between locations of the Company or between the Company, its Parent,
any Subsidiary, or any successor.  For purposes of Incentive Stock Options, if
reemployment upon expiration of a leave of absence approved by the Company is
not guaranteed, on the 91st day of such leave any Incentive Stock Option shall
cease to be treated as an Incentive Stock Option and shall be treated as a
Nonstatutory Stock Option.

          (k)  "Exchange Act" means the Securities Exchange Act of 1934, as
                ------------
amended.

          (l)  "Fair Market Value" means, as of any date, the value of Common
                -----------------
Stock determined as follows:

               (i)   If the Common Stock is listed on any established stock
exchange or a national market system, its Fair Market Value shall be the closing
sales price for such stock (or the closing bid, if no sales were reported) as
quoted on such exchange or system for the last market trading day prior to the
time of determination;

               (ii)  If the Common Stock is regularly quoted by a recognized
securities dealer but selling prices are not reported, the Fair Market Value of
a Share of Common Stock shall be the mean between the high bid and low asked
prices for the Common Stock on the last market trading day prior to the day of
determination; or

               (iii) In the absence of an established market for the Common
Stock, the Fair Market Value shall be determined in good faith by the
Administrator.

          (m)  "Incentive Stock Option" means an Option intended to qualify as
                ----------------------
an incentive stock option within the meaning of Section 422 of the Code and the
regulations promulgated thereunder.

          (n)  "Nonstatutory Stock Option" means an Option not intended to
               -------------------------
qualify as an Incentive Stock Option.

          (o)  "Officer" means a person who is an officer of the Company within
                -------
the meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.

          (p)  "Option" means a stock option granted pursuant to the Plan.
                ------

          (q)  "Option Agreement" means an agreement between the Company and an
                ----------------
Optionee evidencing the terms and conditions of an individual Option grant.  The
Option Agreement is subject to the terms and conditions of the Plan.

          (r)  "Optionee" means the holder of an outstanding Option or Stock
                --------
Purchase Right granted under the Plan.

          (s)  "Parent" means a "parent corporation," whether now or hereafter
                ------
existing, as defined in Section 424(e) of the Code.

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          (t)  "Plan" means this 2000 Stock Plan.
                ----

          (u)  "Restricted Stock Purchase Agreement" means a written agreement
                -----------------------------------
between the Company and the Optionee evidencing the terms and restrictions
applying to stock purchased under a Stock Purchase Right.

          (v)  "Rule 16b-3" means Rule 16b-3 of the Exchange Act or any
                ----------
successor to Rule 16b-3, as in effect when discretion is being exercised with
respect to the Plan.

          (w)  "Section 16(b) " means Section 16(b) of the Exchange Act.
                -------------

          (x)  "Service Provider" means an Employee, Director or any provider of
                ----------------
service to the Company.

          (y)  "Share" means a share of the Common Stock, as adjusted in
                -----
accordance with Section 13 of the Plan.

          (z)  "Stock Purchase Right" means the right to purchase Common Stock
                --------------------
pursuant to Section 11 of the Plan.

          (aa) "Subsidiary" means a "subsidiary corporation", whether now or
                ----------
hereafter existing, as defined in Section 424(f) of the Code.

     3.   Stock Subject to the Plan.  Subject to the provisions of Section 13 of
          -------------------------
the Plan, the maximum aggregate number of Shares that may be optioned and sold
under the Plan is 1,578,947 Shares, plus an annual increase to be added on each
January 1/st/ equal to the lesser of (i) 789,474 shares, (ii) 5% of the
outstanding shares on that date, or (iii) a lesser amount of Shares as
determined by the Board.  The Shares may be authorized, but unissued, or
reacquired Common Stock.

          If an Option or Stock Purchase Right expires or becomes unexercisable
without having been exercised in full, or is surrendered pursuant to an option
exchange program, the unpurchased Shares which were subject thereto shall become
available for future grant or sale under the Plan (unless the Plan has
terminated); provided, however, that Shares that have actually been issued under
the Plan, whether upon exercise of an Option or Stock Purchase Right, shall not
be returned to the Plan and shall not become available for future distribution
under the Plan, except that if Shares of Restricted Stock are repurchased by the
Company at their original purchase price, such Shares shall become available for
future grant under the Plan.

     4.   Administration of the Plan.
          --------------------------

          (a)  Procedure.
               ---------

               (i)     Multiple Administrative Bodies. Different Committees with
                       ------------------------------
respect to different groups of Service Providers may administer the Plan.

               (ii)    Section 162(m). To the extent that the Administrator
                       --------------
determines it to be desirable to qualify Options granted hereunder as
"performance-based compensation" within the

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meaning of Section 162(m) of the Code, the Plan shall be administered by a
Committee of two or more "outside directors" within the meaning of Section
162(m) of the Code.

               (iii)   Rule 16b-3. To the extent desirable to qualify
                       ----------
transactions hereunder as exempt under Rule 16b-3, the transactions contemplated
hereunder shall be structured to satisfy the requirements for exemption under
Rule 16b-3.

               (iv)    Other Administration. Other than as provided above, the
                       --------------------
Plan shall be administered by (A) the Board or (B) a Committee, which committee
shall be constituted to satisfy Applicable Laws.

          (b)  Powers of the Administrator.  Subject to the provisions of the
               ---------------------------
Plan, and in the case of a Committee, subject to the specific duties delegated
by the Board to such Committee, the Administrator shall have the authority, in
its discretion:

               (i)     to determine the Fair Market Value;

               (ii)    to select the Service Providers to whom Options and Stock
Purchase Rights may be granted hereunder;

               (iii)   to determine the number of shares of Common Stock to be
covered by each Option and Stock Purchase Right granted hereunder;

               (iv)    to approve forms of agreement for use under the Plan;

               (v)     to determine the terms and conditions, not inconsistent
with the terms of the Plan, of any Option or Stock Purchase Right granted
hereunder. Such terms and conditions include, but are not limited to, the
exercise price, the time or times when Options or Stock Purchase Rights may be
exercised (which may be based on performance criteria), any vesting acceleration
or waiver of forfeiture restrictions, and any restriction or limitation
regarding any Option or Stock Purchase Right or the shares of Common Stock
relating thereto, based in each case on such factors as the Administrator, in
its sole discretion, shall determine;

               (vi)    to reduce the exercise price of any Option or Stock
Purchase Right to the then current Fair Market Value if the Fair Market Value of
the Common Stock covered by such Option or Stock Purchase Right shall have
declined since the date the Option or Stock Purchase Right was granted;

               (vii)   to institute an option exchange program whereby
outstanding Options are surrendered in exchange for Options with a lower
exercise price;

               (viii)  to construe and interpret the terms of the Plan and
Options and Stock Purchase Rights granted pursuant to the Plan;

               (ix)    to prescribe, amend and rescind rules and regulations
relating to the Plan, including rules and regulations relating to sub-plans
established for the purpose of qualifying for preferred tax treatment under
foreign tax laws;

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               (x)    to modify or amend each Option or Stock Purchase Right
(subject to Section 15(c) of the Plan), including the discretionary authority to
extend the post-termination exercisability period of Options longer than is
otherwise provided for in the Plan;

               (xi)   to allow Optionees to satisfy withholding tax obligations
by electing to have the Company withhold from the Shares to be issued upon
exercise of an Option or Stock Purchase Right that number of Shares having a
Fair Market Value equal to the amount required to be withheld;

               (xii)  to authorize any person to execute on behalf of the
Company any instrument required to effect the grant of an Option or Stock
Purchase Right previously granted by the Administrator;

               (xiii) to make all other determinations deemed necessary or
advisable for administering the Plan.

          (c)  Effect of Administrator's Decision.  The Administrator's
               ----------------------------------
decisions, determinations and interpretations shall be final and binding on all
holders of Options or Stock Purchase Rights.

     5.   Eligibility.  Nonstatutory Stock Options and Stock Purchase Rights may
          -----------
be granted to Service Providers.  Incentive Stock Options may be granted only to
Employees.

     6.   Limitations.
          -----------

          (a)   Each Option shall be designated in the Option Agreement as
either an Incentive Stock Option or a Nonstatutory Stock Option. However,
notwithstanding such designation, to the extent that the aggregate Fair Market
Value of the Shares with respect to which Incentive Stock Options are
exercisable for the first time by the Optionee during any calendar year (under
all plans of the Company and any Parent or Subsidiary) exceeds $100,000, such
Options shall be treated as Nonstatutory Stock Options. For purposes of this
Section 6(a), Incentive Stock Options shall be taken into account in the order
in which they were granted.

          (b)   Neither the Plan nor any Option or Stock Purchase Right shall
confer upon an Optionee any right with respect to continuing the Optionee's
relationship as a Service Provider with the Company, nor shall they interfere in
any way with the Optionee's right or the Company's right to terminate such
relationship at any time, with or without cause.

          (c)   The following limitations shall apply to grants of Options:

                (i)   No Service Provider shall be granted, in any fiscal year
of the Company, Options to purchase more than 500,000 Shares.

                (ii)  In connection with his or her initial service, an Employee
may be granted Options to purchase up to an additional 500,000 Shares, which
shall not count against the limit set forth in subsection (i) above.

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                (iii) The foregoing limitations shall be adjusted
proportionately in connection with any change in the Company's capitalization as
described in Section 13.

                (iv)  If an Option is cancelled in the same fiscal year of the
Company in which it was granted (other than in connection with a transaction
described in Section 13), the cancelled Option will be counted against the
limits set forth in subsections (i) and (ii) above. For this purpose, if the
exercise price of an Option is reduced, the transaction will be treated as a
cancellation of the Option and the grant of a new Option.

     7.   Term of Plan.  Subject to Section 19 of the Plan, the Plan shall
          ------------
become effective upon its adoption by the Board.  It shall continue in effect
for a term of ten (10) years unless terminated earlier under Section 15 of the
Plan.

     8.   Term of Option.  The term of each Option shall be stated in the Option
          --------------
Agreement. In the case of an Incentive Stock Option, the term shall be ten (10)
years from the date of grant or such shorter term as may be provided in the
Option Agreement. Moreover, in the case of an Incentive Stock Option granted to
an Optionee who, at the time the Incentive Stock Option is granted, owns stock
representing more than ten percent (10%) of the total combined voting power of
all classes of stock of the Company or any Parent or Subsidiary, the term of the
Incentive Stock Option shall be five (5) years from the date of grant or such
shorter term as may be provided in the Option Agreement.

     9.   Option Exercise Price and Consideration.
          ---------------------------------------

          (a)  Exercise Price. The per share exercise price for the Shares to be
               --------------
issued pursuant to exercise of an Option shall be determined by the
Administrator, subject to the following:

                 (i)   In the case of an Incentive Stock Option

                       (A) granted to an Employee who, at the time the Incentive
Stock Option is granted, owns stock representing more than ten percent (10%) of
the voting power of all classes of stock of the Company or any Parent or
Subsidiary, the per Share exercise price shall be no less than 110% of the Fair
Market Value per Share on the date of grant.

                       (B) granted to any Employee other than an Employee
described in paragraph (A) immediately above, the per Share exercise price shall
be no less than 100% of the Fair Market Value per Share on the date of grant.

                 (ii)  In the case of a Nonstatutory Stock Option, the per Share
exercise price shall be determined by the Administrator. In the case of a
Nonstatutory Stock Option intended to qualify as "performance-based
compensation" within the meaning of Section 162(m) of the Code, the per Share
exercise price shall be no less than 100% of the Fair Market Value per Share on
the date of grant.

                 (iii) Notwithstanding the foregoing, Options may be granted
with a per Share exercise price of less than 100% of the Fair Market Value per
Share on the date of grant pursuant to a merger or other corporate transaction.

                                      -6-
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          (b)  Waiting Period and Exercise Dates.  At the time an Option is
               ---------------------------------
granted, the Administrator shall fix the period within which the Option may be
exercised and shall determine any conditions that must be satisfied before the
Option may be exercised.

          (c)  Form of Consideration.  The Administrator shall determine the
               ---------------------
acceptable form of consideration for exercising an Option, including the method
of payment. In the case of an Incentive Stock Option, the Administrator shall
determine the acceptable form of consideration at the time of grant. Such
consideration may consist entirely of:

               (i)    cash;

               (ii)   check;

               (iii)  promissory note;

               (iv)   other Shares which (A) in the case of Shares acquired upon
exercise of an option, have been owned by the Optionee for more than six months
on the date of surrender, and (B) have a Fair Market Value on the date of
surrender equal to the aggregate exercise price of the Shares as to which said
Option shall be exercised;

               (v)    consideration received by the Company under a cashless
exercise program implemented by the Company in connection with the Plan;

               (vi)   a reduction in the amount of any Company liability to the
Optionee, including any liability attributable to the Optionee's participation
in any Company-sponsored deferred compensation program or arrangement;

               (vii)  any combination of the foregoing methods of payment; or

               (viii) such other consideration and method of payment for the
issuance of Shares to the extent permitted by Applicable Laws.

     10.  Exercise of Option.
          ------------------

          (a)  Procedure for Exercise; Rights as a Shareholder.  Any Option
               -----------------------------------------------
granted hereunder shall be exercisable according to the terms of the Plan and at
such times and under such conditions as determined by the Administrator and set
forth in the Option Agreement.  Unless the Administrator provides otherwise,
vesting of Options will be suspended during any unpaid leave of absence.

               An Option shall be deemed exercised when the Company receives:
(i) written or electronic notice of exercise (in accordance with the Option
Agreement) from the person entitled to exercise the Option, and (ii) full
payment for the Shares with respect to which the Option is exercised. Full
payment may consist of any consideration and method of payment authorized by the
Administrator and permitted by the Option Agreement and the Plan. Shares issued
upon exercise of an Option shall be issued in the name of the Optionee or, if
requested by the Optionee, in the name of the Optionee and his or her spouse.
Until the Shares are issued (as evidenced by the appropriate

                                      -7-
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entry on the books of the Company or of a duly authorized transfer agent of the
Company), no right to vote or receive dividends or any other rights as a
shareholder shall exist with respect to the Optioned Stock, notwithstanding the
exercise of the Option. The Company shall issue (or cause to be issued) such
Shares promptly after the Option is exercised. No adjustment will be made for a
dividend or other right for which the record date is prior to the date the
Shares are issued, except as provided in Section 13 of the Plan.

               Exercising an Option in any manner shall decrease the number of
Shares thereafter available, both for purposes of the Plan and for sale under
the Option, by the number of Shares as to which the Option is exercised. No
option may be exercised after the expiration of the term as set forth in the
Option Agreement. Unvested Shares at the date of termination, Disability, or
death shall revert to the Plan. If, after termination, Disability, or death,
the Optionee's Options are not exercised within the timeframe specified herein,
the unexercised Shares shall revert to the Plan.

          (b)  Termination of Relationship as a Service Provider. If an Optionee
               -------------------------------------------------
ceases to be a Service Provider, other than upon the Optionee's death or
Disability, the Optionee may exercise his or her Option within such period of
time as is specified in the Option Agreement to the extent that the Option is
vested on the date of termination. In the absence of a specified time in the
Option Agreement, the Option shall remain exercisable for three (3) months
following the Optionee's termination.

          (c)  Disability of Optionee.  If an Optionee ceases to be a Service
               ----------------------
Provider as a result of the Optionee's Disability, the Optionee may exercise his
or her Option within such period of time as is specified in the Option Agreement
to the extent the Option is vested on the date of termination.  In the absence
of a specified time in the Option Agreement, the Option shall remain exercisable
for twelve (12) months following the Optionee's Disability.

          (d)  Death of Optionee.  If an Optionee dies while a Service Provider,
               -----------------
the Option may be exercised within such period of time as is specified in the
Option Agreement by the Optionee's estate or by a person who acquires the right
to exercise the Option by bequest or inheritance, but only to the extent that
the Option is vested on the date of death.  In the absence of a specified time
in the Option Agreement, the Option shall remain exercisable for twelve (12)
months following the Optionee's death.  The Option may be exercised by the
executor or administrator of the Optionee's estate or, if none, by the person(s)
entitled to exercise the Option under the Optionee's will or the laws of descent
or distribution.

          (e)  Buyout Provisions. The Administrator may at any time offer to buy
               -----------------
out for a payment in cash or Shares an Option previously granted based on such
terms and conditions as the Administrator shall establish and communicate to the
Optionee at the time that such offer is made.

     11.  Stock Purchase Rights.
          ---------------------

          (a)  Rights to Purchase. After the Administrator determines that it
               ------------------
will offer Stock Purchase Rights under the Plan, it shall advise the offeree in
writing or electronically, of the terms, conditions and restrictions related to
the offer, including the number of Shares that the offeree shall be entitled to
purchase, the price to be paid, and the time within which the offeree must
accept such

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offer. The offer shall be accepted by execution of a Restricted Stock Purchase
Agreement in the form determined by the Administrator.

          (b)  Repurchase Option. Unless the Administrator determines otherwise,
               -----------------
the Restricted Stock Purchase Agreement shall grant the Company a repurchase
option exercisable upon the voluntary or involuntary termination of the
purchaser's service with the Company for any reason (including death or
Disability). The purchase price for Shares repurchased pursuant to the
Restricted Stock Purchase Agreement shall be the original price paid by the
purchaser and may be paid by cancellation of any indebtedness of the purchaser
to the Company. The repurchase option shall lapse at a rate determined by the
Administrator.

          (c)  Other Provisions.  The Restricted Stock Purchase Agreement shall
               ----------------
contain such other terms, provisions and conditions not inconsistent with the
Plan as may be determined by the Administrator in its sole discretion.

          (d)  Rights as a Shareholder.  Once the Stock Purchase Right is
               -----------------------
exercised, the purchaser shall have the rights equivalent to those of a
shareholder, and shall be a shareholder when his or her purchase is entered upon
the records of the duly authorized transfer agent of the Company.  No adjustment
will be made for a dividend or other right for which the record date is prior to
the date the Stock Purchase Right is exercised, except as provided in Section 13
of the Plan.

     12.  Non-Transferability of Options and Stock Purchase Rights.  Unless
          --------------------------------------------------------
determined otherwise by the Administrator, an Option or Stock Purchase Right may
not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any
manner other than by will or by the laws of descent or distribution and may be
exercised, during the lifetime of the Optionee, only by the Optionee. If the
Administrator makes an Option or Stock Purchase Right transferable, such Option
or Stock Purchase Right shall contain such additional terms and conditions as
the Administrator deems appropriate.

     13.  Adjustments Upon Changes in Capitalization, Dissolution, Merger or
          ------------------------------------------------------------------
Asset Sale.
----------

          (a)  Changes in Capitalization.  Subject to any required action by the
               -------------------------
shareholders of the Company, the number of shares of Common Stock covered by
each outstanding Option and Stock Purchase Right, and the number of shares of
Common Stock which have been authorized for issuance under the Plan but as to
which no Options or Stock Purchase Rights have yet been granted or which have
been returned to the Plan upon cancellation or expiration of an Option or Stock
Purchase Right, as well as the price per share of Common Stock covered by each
such outstanding Option or Stock Purchase Right, shall be proportionately
adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other increase or
decrease in the number of issued shares of Common Stock effected without receipt
of consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration."  Such adjustment shall be made by the Board,
whose determination in that respect shall be final, binding and conclusive.
Except as expressly provided herein, no issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any class,
shall affect, and no adjustment by reason thereof shall

                                      -9-
<PAGE>

be made with respect to, the number or price of shares of Common Stock subject
to an Option or Stock Purchase Right.

          (b)  Dissolution or Liquidation.  In the event of the proposed
               --------------------------
dissolution or liquidation of the Company, the Administrator shall notify each
Optionee as soon as practicable prior to the effective date of such proposed
transaction. The Administrator in its discretion may provide for an Optionee to
have the right to exercise his or her Option until ten (10) days prior to such
transaction as to all of the Shares covered thereby, including Shares as to
which the Option would not otherwise be exercisable. In addition, the
Administrator may provide that any Company repurchase option applicable to any
Shares purchased upon exercise of an Option or Stock Purchase Right shall lapse
as to all such Shares, provided the proposed dissolution or liquidation takes
place at the time and in the manner contemplated. To the extent it has not been
previously exercised, an Option or Stock Purchase Right will terminate
immediately prior to the consummation of such proposed action.

          (c)  Merger or Asset Sale.  In the event of a merger of the Company
               --------------------
with or into another corporation, or the sale of substantially all of the assets
of the Company, each outstanding Option and Stock Purchase Right shall be
assumed or an equivalent option or right substituted by the successor
corporation or its Parent. In the event that the successor corporation refuses
to assume or substitute for the Option or Stock Purchase Right, the Optionee
shall fully vest in and have the right to exercise the Option or Stock Purchase
Right as to all of the Shares, including Shares which would not otherwise be
vested or exercisable. If an Option or Stock Purchase Right becomes fully vested
and exercisable in lieu of assumption or substitution in the event of a merger
or sale of assets, the Administrator shall notify the Optionee in writing or
electronically that the Option or Stock Purchase Right shall be fully vested and
exercisable for a period of fifteen (15) days from the date of such notice, and
the Option or Stock Purchase Right shall terminate upon the expiration of such
period. For the purposes of this paragraph, the Option or Stock Purchase Right
shall be considered assumed if, following the merger or sale of assets, the
option or right confers the right to purchase or receive the consideration
(whether stock, cash, or other securities or property) received in the merger or
sale of assets by holders of Common Stock on the effective date of the
transaction provided, however, that if such consideration received in the merger
or sale of assets is not solely common stock of the successor corporation or its
Parent, the Administrator may, with the consent of the successor corporation,
provide for the consideration to be received upon the exercise of the Option or
Stock Purchase Right, to be solely common stock of the successor corporation or
its Parent equal in fair market value to the per share consideration received by
holders of Common Stock in the merger or sale of assets.

     14.  Date of Grant.  The date of grant of an Option or Stock Purchase Right
          -------------
shall be, for all purposes, the date on which the Administrator makes the
determination granting such Option or Stock Purchase Right, or such other later
date as is determined by the Administrator.  Notice of the determination shall
be provided to each Optionee within a reasonable time after the date of such
grant.

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<PAGE>

     15.  Amendment and Termination of the Plan.
          -------------------------------------

          (a)  Amendment and Termination.  The Board may at any time amend,
               -------------------------
alter, suspend or terminate the Plan.

          (b)  Shareholder Approval.  The Company shall obtain shareholder
               --------------------
approval of any Plan amendment to the extent necessary and desirable to comply
with Applicable Laws.

          (c)  Effect of Amendment or Termination.  No amendment, alteration,
               ----------------------------------
suspension or termination of the Plan shall impair the rights of any Optionee,
unless mutually agreed otherwise between the Optionee and the Administrator,
which agreement must be in writing and signed by the Optionee and the Company.
Termination of the Plan shall not affect the Administrator's ability to exercise
the powers granted to it hereunder with respect to Options granted under the
Plan prior to the date of such termination.

     16.  Conditions Upon Issuance of Shares.
          ----------------------------------

          (a)  Legal Compliance.  Shares shall not be issued pursuant to the
               ----------------
exercise of an Option or Stock Purchase Right unless the exercise of such Option
or Stock Purchase Right and the issuance and delivery of such Shares shall
comply with Applicable Laws and shall be further subject to the approval of
counsel for the Company with respect to such compliance.

          (b)  Investment Representations.  As a condition to the exercise of an
               --------------------------
Option or Stock Purchase Right, the Company may require the person exercising
such Option or Stock Purchase Right to represent and warrant at the time of any
such exercise that the Shares are being purchased only for investment and
without any present intention to sell or distribute such Shares if, in the
opinion of counsel for the Company, such a representation is required.

     17.  Inability to Obtain Authority.  The inability of the Company to obtain
          -----------------------------
authority from any regulatory body having jurisdiction, which authority is
deemed by the Company's counsel to be necessary to the lawful issuance and sale
of any Shares hereunder, shall relieve the Company of any liability in respect
of the failure to issue or sell such Shares as to which such requisite authority
shall not have been obtained.

     18.  Reservation of Shares.  The Company, during the term of this Plan,
          ---------------------
will at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.

     19.  Shareholder Approval.  The Plan shall be subject to approval by the
          --------------------
shareholders of the Company within twelve (12) months after the date the Plan is
adopted.  Such shareholder approval shall be obtained in the manner and to the
degree required under Applicable Laws.

                                      -11-<PAGE>

                                                                    Exhibit 10.4

                            SONIC INNOVATIONS, INC.

                       2000 EMPLOYEE STOCK PURCHASE PLAN

          The following constitute the provisions of the 2000 Employee Stock
Purchase Plan of Sonic Innovations, Inc. (the "Plan").

     1.   Purpose.  The purpose of the Plan is to provide employees of the
          -------
Company and its Designated Subsidiaries with an opportunity to purchase Common
Stock of the Company through accumulated payroll deductions.  It is the
intention of the Company to have the Plan qualify as an "employee stock purchase
plan" under Section 423 of the Internal Revenue Code of 1986, as amended.  The
provisions of the Plan, shall be construed so as to extend and limit
participation in a manner consistent with the requirements of that section of
the Code.

     2.   Definitions.
          -----------

          (a)  "Board" means the Board of Directors of the Company or any
                -----
committee thereof designated by the Board of Directors of the Company in
accordance with Section 14 of the Plan.

          (b)  "Code" means the Internal Revenue Code of 1986, as amended.
                ----

          (c)  "Common Stock" means the common stock of the Company.
                ------------

          (d)  "Company" means Sonic Innovations, Inc. and any Designated
                -------
Subsidiary of the Company.

          (e)  "Compensation" means all gross earnings including commissions,
                ------------
overtime, shift premium, incentive compensation, bonuses and other compensation.

          (f)  "Designated Subsidiary" means any subsidiary of the Company that
                ---------------------
has been designated by the Board as eligible to participate in the Plan.

          (g)  "Employee" means any individual who is an employee of the Company
                --------
for tax purposes.  For purposes of the Plan, the employment relationship shall
be treated as continuing intact while the individual is on sick leave or other
leave of absence approved by the Company.  Where the period of leave exceeds 90
days and the individual's right to reemployment is not guaranteed either by
statute or by contract, the employment relationship shall be deemed to have
terminated on the 91/st/ day of such leave.

          (h)  "Enrollment Date" means the first Trading Day of each Offering
                ---------------
Period.

          (i)  "Exercise Date" means the last Trading Day of each Purchase
                -------------
Period.

          (j)  "Fair Market Value" means, as of any date, the value of Common
                -----------------
Stock determined as follows:
<PAGE>

               (i)     If the Common Stock is listed on any established stock
exchange or a national market system, its Fair Market Value shall be the closing
sales price for such stock (or the closing bid, if no sales were reported) as
quoted on such exchange or system for the last market trading day prior to the
date of determination.

               (ii)    If the Common Stock is regularly quoted by a recognized
securities dealer but selling prices are not reported, its Fair Market Value
shall be the mean of the closing bid and asked prices for the Common Stock prior
to the date of determination.

               (iii)   In the absence of an established market for the Common
Stock, the Fair Market Value thereof shall be determined in good faith by the
Board; or

               (iv)    For purposes of the Enrollment Date of the first Offering
Period under the Plan, the Fair Market Value shall be the initial price to the
public as set forth in the final prospectus included within the registration
statement on Form S-1 filed with the Securities and Exchange Commission (the
"SEC") for the initial public offering of the Company's Common Stock (the
"Registration Statement").

          (k)  "Offering Periods" means the periods of approximately 24
                ----------------
months during which an option granted pursuant to the Plan may be exercised,
commencing on the first Trading Day on or after May 1/st/ and November 1/st/ of
each year and terminating on the last Trading Day in the periods ending twenty-
four months later; provided, however, that the first Offering Period under the
Plan shall commence with the first Trading Day on or after the date on which the
SEC declares the Company's Registration Statement effective and ending on the
last Trading Day on or before April 30, 2002 The duration and timing of Offering
Periods may be changed pursuant to Section 4 of this Plan.

          (l)  "Plan" means this 2000 Employee Stock Purchase Plan.
                ----

          (m)  "Purchase Period" means the approximately six month period
                ---------------
commencing after one Exercise Date and ending with the next Exercise Date.

          (n)  "Purchase Price" means 85% of the Fair Market Value of a share of
                --------------
Common Stock on the Enrollment Date or on the Exercise Date, whichever is lower;
provided however, that the Purchase Price may be adjusted by the Board pursuant
to Section 20.

          (o)  "Trading Day" means a day on which national stock exchanges are
                -----------
open for trading.

     3.   Eligibility.
          -----------

          (a)  Any Employee who shall be employed by the Company on a given
Enrollment Date shall be eligible to participate in the Plan.

          (b)  Any provisions of the Plan to the contrary notwithstanding, no
Employee shall be granted an option under the Plan (i) to the extent that,
immediately after the grant, such Employee (or any other person whose stock
would be attributed to such Employee pursuant to Section 424(d) of the Code)
would own capital stock of the Company and/or hold outstanding options to
purchase

                                      -2-
<PAGE>

such stock possessing five percent (5%) or more of the total combined voting
power or value of all classes of capital stock of the Company or any subsidiary;
or (ii) to the extent that his or her rights to purchase stock under all
employee stock purchase plans of the Company and its subsidiaries accrues at a
rate which exceeds Twenty Thousand Dollars ($20,000) worth of stock (determined
at the fair market value of the shares at the time such option is granted) for
each calendar year in which such option is outstanding at any time.

     4.   Offering Periods.  The Plan shall be implemented by consecutive,
          ----------------
overlapping Offering Periods with a new Offering Period commencing on the first
Trading Day on or after May 1/st/ and November 1/st/ each year, or on such other
date as the Board shall determine; provided, however, that the first Offering
Period shall commence with the first Trading Day on or after the date on which
the SEC declares the Company's Registration Statement effective and ending on
the last Trading Day on or before April 30, 2002.  The Board shall have the
power to change the commencement dates and duration of Offering Periods with
respect to future offerings without shareholder approval if such change is
announced at least five (5) days prior to the scheduled beginning of the first
Offering Period to be affected thereafter.

     5.   Participation.
          -------------

          (a)  An eligible Employee may become a participant in the Plan by
completing an agreement authorizing payroll deductions in the form of Exhibit A
and filing it with the Company's human resources department prior to the
applicable Enrollment Date.

          (b)  Payroll deductions for a participant shall commence on the first
payroll following the Enrollment Date and shall end on the last payroll in the
Offering Period to which such authorization is applicable, unless sooner
terminated by the participant as provided in Section 10 hereof.

     6.   Payroll Deductions.
          ------------------

          (a)  At the time a participant files his or her subscription
agreement, he or she shall elect to have payroll deductions made on each pay day
during the Offering Period in an amount not exceeding ten percent (10%) of the
Compensation which he or she receives on each pay day during the Offering
Period.

          (b)  All payroll deductions made for a participant shall be credited
to his or her account under the Plan and shall be withheld in whole percentages
only. A participant may not make any additional payments into such account.

          (c)  A participant may discontinue his or her participation in the
Plan as provided in Section 10 hereof, or may increase or decrease the rate of
his or her payroll deductions during the Offering Period by filing with the
Company a new agreement authorizing a change in payroll deduction rate. A
participant's agreement shall remain in effect for successive Offering Periods
unless terminated as provided in Section 10 hereof.

          (d)  Notwithstanding the foregoing, to the extent necessary to comply
with Section 423(b)(8) of the Code and Section 3(b) hereof, a participant's
payroll deductions may be decreased by the Company at any time during a Purchase
Period.  Payroll deductions shall recommence at the

                                      -3-
<PAGE>

rate provided in such participant's agreement at the beginning of the first
Purchase Period which is scheduled to end in the following calendar year.

          (e)  At the time the Company's Common Stock issued under the Plan is
disposed of, the participant must make adequate provision for the Company's
federal, state, or other tax withholding obligations, if any, which arise upon
the disposition of the Common Stock.  The Company may, but shall not be
obligated to, withhold from the participant's compensation the amount necessary
for the Company to meet applicable withholding obligations.

     7.   Grant of Option.  On the Enrollment Date of each Offering Period,
          ---------------
each participating Employee shall be granted an option to purchase on each
Exercise Date up to a number of shares of the Company's Common Stock determined
by dividing such Employee's payroll deductions accumulated prior to such
Exercise Date and retained in the Participant's account as of the Exercise Date
by the applicable Purchase Price; provided that in no event shall an Employee be
permitted to purchase during each Purchase Period more than 5,263 shares of the
Company's Common Stock (subject to any adjustment pursuant to Section 19), and
provided further that such purchase shall be subject to the limitations set
forth in Sections 3(b) and 13 hereof.  The Board may, for future Offering
Periods, increase or decrease, in its absolute discretion, the maximum number of
shares of the Company's Common Stock an Employee may purchase during each
Purchase Period of such Offering Period.  Exercise of the option shall occur as
provided in Section 8 hereof, unless the participant has withdrawn pursuant to
Section 10 hereof.  The option shall expire on the last day of the Offering
Period.

     8.   Exercise of Option.
          ------------------

          (a)  Unless a participant withdraws from the Plan as provided in
Section 10 hereof, his or her option for the purchase of shares shall be
exercised automatically on the Exercise Date, and the maximum number of full
shares subject to option shall be purchased for such participant at the
applicable Purchase Price with the accumulated payroll deductions in his or her
account.  No fractional shares shall be purchased; any payroll deductions
accumulated in a participant's account which are not sufficient to purchase a
full share shall be retained in the participant's account for the subsequent
Purchase Period.

          (b)  If the Board determines that, on a given Exercise Date, the
number of shares with respect to which options are to be exercised may exceed
the number of shares of Common Stock that were authorized under the Plan, the
Board may in its sole discretion provide that the Company shall make a pro rata
allocation of the shares of Common Stock available for purchase on such Exercise
Date, and (i) continue all Offering Periods then in effect, or (ii) terminate
any or all Offering Periods then in effect pursuant to Section 20 hereof.

     9.   Delivery.  As promptly as practicable after each Exercise Date on
          --------
which a purchase of shares occurs, the Company shall arrange the delivery to
each participant, as appropriate, of a certificate representing the shares
purchased upon exercise of his or her option.

     10.  Withdrawal.  A participant may withdraw all but not less than all
          ----------
the payroll deductions credited to his or her account and not yet used to
exercise his or her option under the Plan at any time by giving written notice
to the Company in the form of Exhibit B.  All of the participant's

                                      -4-
<PAGE>

payroll deductions credited to his or her account shall be paid to such
participant promptly after receipt of notice of withdrawal and such
participant's option for all Offering Periods then in progress shall be
automatically terminated, and no further payroll deductions for the purchase of
shares shall be made for such Offering Periods. Payroll deductions shall not
resume at the beginning of the succeeding Offering Period unless the participant
delivers to the Company a new agreement.

     11.  Termination of Employment.
          -------------------------

          Upon a participant's ceasing to be an Employee for any reason, he or
she shall be deemed to have elected to withdraw from the Plan and the payroll
deductions credited to such participant's account during the Purchase Period but
not yet used to exercise the option shall be returned to such participant or, in
the case of his or her death, to the person or persons entitled thereto under
Section 15 hereof, and such participant's option shall be automatically
terminated.

     12.  Interest.  No interest shall accrue on the payroll deductions of
          --------
a participant in the Plan.

     13.  Stock.
          -----

          (a)  Subject to adjustment upon changes in capitalization of the
Company as provided in Section 19 hereof, the maximum number of shares of the
Company's Common Stock which shall be made available for sale under the Plan
shall be 263,158 shares plus an annual increase to be added on each January
1/st/ equal to the lesser of (i) 105,263 shares, (ii) 1% of the outstanding
shares on such date, or (iii) a lesser amount determined by the Board.

          (b)  The participant shall have no interest or voting right in shares
covered by his option until such option has been exercised.

          (c)  Shares to be delivered to a participant under the Plan shall be
registered in the name of the participant or in the name of the participant and
his or her spouse.

     14.  Administration.  The Plan shall be administered by the Board or a
          --------------
committee of members of the Board appointed by the Board.  The Board or its
committee shall have full and exclusive discretionary authority to construe,
interpret and apply the terms of the Plan, to determine eligibility and to
adjudicate all disputed claims filed under the Plan.  Every finding, decision
and determination made by the Board or its committee shall, to the full extent
permitted by law, be final and binding upon all parties.

     15.  Designation of Beneficiary.  A participant may file a written
          --------------------------
designation of a beneficiary who is to receive any shares and cash from the
participant's account under the Plan in the event of such participant's death.
If a participant is married and the designated beneficiary is not the spouse,
spousal consent shall be required for such designation to be effective.  Such
designation of beneficiary may be changed by the participant at any time by
written notice.  In the event of the death of a participant and in the absence
of a valid beneficiary, the Company shall deliver such shares and cash to the
executor or administrator of the estate of the participant.

     16.  Transferability. Neither payroll deductions credited to a
          ---------------
participant's account nor any rights with regard to the exercise of an option to
receive shares under the Plan may be assigned,

                                      -5-
<PAGE>

transferred, pledged or otherwise disposed of in any way (other than by will,
the laws of descent and distribution, or as provided in Section 15 hereof) by
the participant. Any such attempt at assignment, transfer, pledge or other
disposition shall be without effect.

     17.  Use of Funds. All payroll deductions received or held by the Company
          ------------
under the Plan may be used by the Company for any corporate purpose, and the
Company shall not be obligated to segregate such payroll deductions.

     18.  Reports. Individual accounts shall be maintained for each participant
          -------
in the Plan. Statements of account shall be given to participating Employees at
least annually, which statements shall set forth the amounts of payroll
deductions, the Purchase Price, the number of shares purchased and the remaining
cash balance, if any.

     19.  Adjustments Upon Changes in Capitalization, Dissolution, Liquidation,
          --------------------------------------------------------------------
Merger or Asset Sale.
--------------------

          (a)  Changes in Capitalization.  Subject to any required action by the
               -------------------------
shareholders of the Company, the shares authorized and remaining under the Plan,
the maximum number of shares each participant may purchase each Purchase Period,
the price per share and the number of shares of Common Stock covered by each
option under the Plan which has not yet been exercised shall be proportionately
adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other increase or
decrease in the number of shares of Common Stock effected without receipt of
consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration."  Such adjustment shall be made by the Board,
whose determination in that respect shall be final, binding and conclusive.
Except as expressly provided herein, no issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any class,
shall affect, and no adjustment by reason thereof shall be made with respect to,
the number or price of shares of Common Stock subject to an option.

          (b)  Dissolution or Liquidation.  In the event of the proposed
               --------------------------
dissolution or liquidation of the Company, the Offering Period then in progress
shall be shortened by setting a new Exercise Date (the "New Exercise Date").
The Board shall notify each participant in writing, at least ten (10) business
days prior to the New Exercise Date, that the Exercise Date for the
participant's option has been changed to the New Exercise Date.

          (c)  Merger or Asset Sale.  In the event of a proposed sale of all or
               --------------------
substantially all of the assets of the Company, or the merger of the Company
with or into another corporation, each outstanding option shall be assumed or an
equivalent option substituted by the successor corporation.  In the event that
the successor corporation refuses to assume or substitute for the option, any
Purchase Periods then in progress shall be shortened by setting a new Exercise
Date (the "New Exercise Date") and any Offering Periods then in progress shall
end on the New Exercise Date.  The Board shall notify each participant in
writing, at least ten (10) business days prior to the New Exercise Date, that
the Exercise Date for the participant's option has been changed to the New
Exercise Date.

                                      -6-
<PAGE>

     20.  Amendment or Termination.
          ------------------------

          (a)  The Board of Directors of the Company may at any time and for any
reason terminate or amend the Plan. Except as provided in Section 20 hereof, no
such termination can affect options previously granted, provided that an
Offering Period may be terminated by the Board of Directors on any Exercise Date
if the Board determines that the termination of the Offering Period or the Plan
is in the best interests of the Company and its shareholders. Except as provided
in Section 19 and this Section 20 hereof, no amendment may make any change in
any option theretofore granted which adversely affects the rights of any
participant. To the extent necessary to comply with Section 423 of the Code (or
any successor rule or provision or any other applicable law, regulation or stock
exchange rule), the Company shall obtain shareholder approval in such a manner
and to such a degree as required.

          (b)  Without shareholder consent and without regard to whether any
participant rights may be considered to have been "adversely affected," the
Board (or its committee) shall be entitled to change the Offering Periods, limit
the frequency and/or number of changes in the amount withheld during an Offering
Period, establish the exchange ratio applicable to amounts withheld in a
currency other than U.S. dollars, permit payroll withholding in excess of the
amount designated by a participant in order to adjust for delays or mistakes in
the Company's processing of properly completed withholding elections, establish
reasonable waiting and adjustment periods and/or accounting and crediting
procedures to ensure that amounts applied toward the purchase of Common Stock
for each participant properly correspond with amounts withheld from the
participant's Compensation, and establish such other limitations or procedures
as the Board (or its committee) determines in its sole discretion advisable
which are consistent with the Plan.

          (c)  In the event the Board determines that the ongoing operation of
the Plan may result in unfavorable financial consequences, the Board may, in its
discretion and, to the extent necessary or desirable, modify or amend the Plan
to reduce or eliminate such financial consequences including, but not limited
to:  (i) altering the Purchase Price for any Offering Period including an
Offering Period underway;  (ii) shortening any Offering Period so that Offering
Period ends on a new Exercise Date, including an Offering Period underway; and
(iii) allocating shares.  Such modifications or amendments shall not require
shareholder approval or the consent of any Plan participants.

     21.  Notices. All notices or other communications by a participant to the
          -------
Company in connection with the Plan shall be deemed to have been duly given when
received in the form specified by the Company at the location, or by the person,
designated by the Company for the receipt thereof.

     22.  Conditions Upon Issuance of Shares. Shares shall not be issued with
          ----------------------------------
respect to an option unless the exercise of such option and the issuance and
delivery of such shares pursuant thereto shall comply with all applicable
provisions of law, domestic or foreign, including, without limitation, the
Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as
amended, and the requirements of any stock exchange upon which the shares may
then be listed.

          As a condition to the exercise of an option, the Company may require
the person exercising such option to represent and warrant at the time of any
such exercise that the shares are

                                      -7-
<PAGE>

being purchased only for investment and without any present intent to sell or
distribute such shares if, in the opinion of counsel for the Company, such a
representation is required by any of the aforementioned applicable provisions of
law.

     23.  Term of Plan.  The Plan shall become effective upon of its adoption by
          ------------
the Board of Directors and approval by the shareholders of the Company.  It
shall continue in effect for a term of 10 years unless sooner terminated under
Section 20 hereof.

     24.  Automatic Transfer to Low Price Offering Period.  To the extent
          -----------------------------------------------
permitted by any applicable laws, regulations, or stock exchange rules, if the
Fair Market Value of the Common Stock on any Exercise Date in an Offering Period
is lower than the Fair Market Value of the Common Stock on the Enrollment Date
of such Offering Period, then all participants in such Offering Period shall be
automatically withdrawn from such Offering Period immediately after the exercise
of their option on such Exercise Date and automatically re-enrolled in the
immediately following Offering Period as of the first day thereof.

                                      -8-
<PAGE>

                            SONIC INNOVATIONS, INC.
                       2000 EMPLOYEE STOCK PURCHASE PLAN
                                   AGREEMENT

_____ Original Application                           Enrollment Date:___________
_____ Change in Payroll Deduction Rate
_____ Change of Beneficiary
1.   I hereby elect to participate in the 2000 Employee Stock Purchase Plan (the
     "ESPP") and to purchase shares of the Company's Common Stock in accordance
     with this Agreement and the ESPP.

2.   I hereby authorize payroll deductions from each paycheck in the amount of
     ____% of my Compensation on each payday (from 0 to 10% in whole
     percentages) during the Offering Period.

3.   I understand that if I do not withdraw from an Offering Period, my
     accumulated payroll deductions will be used to automatically exercise my
     option to purchase shares of Common Stock at the applicable Purchase Price.

4.   I have received a copy of the complete ESPP.  I understand that my
     participation in the ESPP is in all respects subject to the terms of the
     ESPP and I hereby agree to be bound by the terms of the ESPP.

5.   My shares purchased under the ESPP should be issued in the name(s) of:

     ___________________________________________________________________________
     (Employee or Employee and Spouse only).

6.   I understand that if I dispose of any shares received by me pursuant to the
     ESPP within one year after the Exercise Date, I will be treated for federal
     income tax purposes as having received ordinary income at the time of such
     disposition in an amount equal to the excess of the fair market value of
     the shares at the time such shares were purchased by me over the price
     which I paid for the shares. I hereby agree to notify the Company in
     writing within 30 days after the date of any disposition of my shares and I
     will make adequate provision for Federal, state or other tax withholding
     obligations, if any, which arise upon the disposition of the shares. The
     Company may, but will not be obligated to, withhold from my compensation
     the amount necessary to meet any applicable withholding obligation.

7.   In the event of my death, I hereby designate the following as my
     beneficiary(ies) to receive all payments and shares due me under the ESPP:

     ________________________________________________________________________
     (Name)                (Social Security Number)           (Relationship)

I UNDERSTAND THAT THIS AGREEMENT SHALL REMAIN IN EFFECT THROUGHOUT SUCCESSIVE
OFFERING PERIODS UNLESS TERMINATED BY ME.

Dated:________________    ____________________________________________________
                          Signature of Employee        Social Security
                                                       Number

                          ____________________________________________________
                          Spouse's Signature (If beneficiary other than spouse)
<PAGE>

                                                                       EXHIBIT B

                            SONIC INNOVATIONS, INC.

                       2000 EMPLOYEE STOCK PURCHASE PLAN

                             NOTICE OF WITHDRAWAL

     I hereby withdraw from the 2000 Employee Stock Purchase Plan (the "ESPP").
I hereby direct the Company to pay to me as promptly as practicable all the
payroll deductions credited to my account with respect to the ESPP.  I
understand and agree that my options for such Offering Period(s) in progress
will be automatically terminated.  I also understand that no further payroll
deductions will be made for the purchase of shares in the Offering Period(s) in
progress and that I shall be eligible to participate in succeeding Offering
Periods only by delivering to the Company a new Agreement.

                              ___________________________________________
                              Name

                              ___________________________________________
                              Social Security Number

                              ___________________________________________
                              Signature

                              ___________________________________________
                              Date
<PAGE>

                    SONIC INNOVATIONS, INC. (the "Company")

                         2000 STOCK PLAN (the "Plan")

                   STOCK OPTION AGREEMENT (the "Agreement")

Optionee:
--------

     Name:                    ________________________________________

     Social Security Number:  ________________________________________

Terms:
-----

     You have been granted an option (the "Option") to purchase Common Stock of
the Company, subject to the terms and conditions of the Plan (which is
incorporated herein by reference) and this Stock Option Agreement, as follows:

<TABLE>
<S>                          <C>                        <C>                          <C>
Grant Number                  ____________________      Exercise Price per Share     $____________________

Date of Grant                 ____________________      Total Exercise Price         $____________________

Vesting Commencement Date     ____________________      Type of Option               __ Incentive Stock Option

Option Shares Granted         ____________________                                   __ Nonstatutory Stock Option

Expiration Date               ____________________
</TABLE>

Vesting Schedule:
----------------

     This Option may be exercised, in whole or in part, in accordance with the
following schedule:

     [25% of the Option Shares shall vest each anniversary on the Vesting
Commencement Date, subject to the Optionee continuing to be a Service Provider
on such dates].

Termination Period:
------------------

     This Option may be exercised for three months after Optionee ceases to be a
Service Provider as defined in the Plan. Upon the death or Disability of the
Optionee, this Option may be exercised for twelve months after Optionee ceases
to be a Service Provider. In no event shall this Option be exercised later than
the Expiration Date.

Exercise:
--------

     This Option is exercisable by delivery of an "Exercise Notice" to the
Company's CFO. The Exercise Notice shall be accompanied by payment. Payment of
the aggregate Exercise Price shall be by any of the following, or a combination
thereof, at the election of the Optionee: cash; check; consideration received by
the Company under a cashless option exercise program; surrender of Company
common stock which in the case of
<PAGE>

shares acquired upon exercise of an option, have been owned by the Optionee for
more than six (6) months on the date of surrender; or with the Plan
Administrator's consent, delivery of Optionee's promissory note in a form
agreeable to the Plan Administrator.

OPTIONEE SHOULD CONSULT A TAX ADVISOR BEFORE EXERCISING THIS OPTION OR DISPOSING
OF THE SHARES.

General:
-------

     This Option may not be transferred in any manner otherwise than by will or
by the laws of descent or distribution and may be exercised during the lifetime
of Optionee only by the Optionee. The terms of the Plan and this Agreement shall
be binding upon the executors, administrators, heirs, successors and assigns of
the Optionee.

     The Plan and this Agreement constitute the entire agreement of the parties
with respect to the subject matter hereof and supersede in their entirety all
prior undertakings and agreements of the Company and Optionee with respect to
the subject matter hereof.

     In the event of a conflict between the terms and conditions of the Plan and
the terms and conditions of this Agreement, the terms and conditions of the Plan
shall prevail.

     If designated as an Incentive Stock Option ("ISO"), this Option is intended
to qualify as an Incentive Stock Option under Section 422 of the Code. However,
if this Option is intended to be an Incentive Stock Option, to the extent that
it exceeds the $100,000 rule of Code Section 422(d) it shall be treated as a
Nonstatutory Stock Option ("NSO").

OPTIONEE ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT DOES NOT CONSTITUTE AN
EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A SERVICE PROVIDER AND
SHALL NOT INTERFERE WITH OPTIONEE'S RIGHT OR THE COMPANY'S RIGHT TO TERMINATE
OPTIONEE'S RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR WITHOUT
CAUSE.

OPTIONEE:                           SONIC INNOVATIONS, INC.

_____________________________       ______________________________
Signature                           By

_____________________________       ______________________________
Print Name                          Name and Title

                                      -2-
<PAGE>

                            SONIC INNOVATIONS, INC.

                                2000 STOCK PLAN

                                EXERCISE NOTICE

Optionee Name:           ______________________________

Social Security Number:  ______________________________

     1.   I hereby elect to purchase ______________ shares (the "Shares") of the
Common Stock of Sonic Innovations, Inc. under and pursuant to the 2000 Stock
Plan (the "Plan") and the Stock Option Agreement dated _____________ (the
"Agreement"). The purchase price of $_______ per share as required by the
Agreement, is herewith delivered.

     2.   I have received, read and understand the Plan and the Agreement and
agree to abide by and be bound by their terms and conditions.

     3.   I understand that until the issuance (as evidenced by the appropriate
entry on the books of Sonic Innovations, Inc. or of a duly authorized transfer
agent of the Company) of the Shares, I have no rights as a shareholder with
respect to the Shares.

     4.   I understand that I may suffer adverse tax consequences as a result of
my purchase or disposition of the Shares.  I have consulted with any tax
consultants I have deemed advisable in connection with the purchase or
disposition of the Shares and I am not relying on the Company for any tax
advice.

_____________________________            ________________________

Signature                                Date

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