Document:

exv4w8

Exhibit 4.8

NUANCE COMMUNICATIONS, INC.

STAND-ALONE

RESTRICTED STOCK UNIT AGREEMENT

	(A)	 	Name of Grantee:
	(B)	 	Credit Date:
	(C)	 	Number of Shares:
	(D)	 	Price per Share:

	(E)	 	Effective Date:

     THIS RESTRICTED STOCK PURCHASE GRANT AGREEMENT (the “Agreement”), is effective as of the date
set forth in Item E above (the “Effective Date”) between Nuance Communications, Inc., a Delaware
corporation (the “Company”) and the person named in Item A above (“Grantee”).

	 	 	THE PARTIES AGREE AS FOLLOWS:

	1.	 	Stock Purchase Rights. Pursuant to terms set forth in this Agreement, the Company hereby
credits to a separate account maintained on the books of the Company (the “Account”) Stock
Purchase Rights which will give Grantee the right to purchase that number of shares of Common
Stock of the Company, par value $0.001 (the “Shares”), listed in Item C above on the terms and
conditions set forth herein.

	2.	 	Company’s Obligation to Pay; Purchase Price. Each Stock Purchase Right has a value equal to
the Fair Market Value of a Share on the date of this Agreement. Unless and until the Stock
Purchase Rights will have vested in the manner set forth in Section 4, the Grantee will have
no right to receive the Shares subject to the Stock Purchase Rights. Prior to actual payment
of any Shares, such Stock Purchase Rights will represent an unsecured obligation of the
Company, payable (if at all) only from the general assets of the Company. The purchase price
for the Shares subject to the Stock Purchase Rights shall be the price set forth in Item D
above.

	3.	 	Definitions.

	 	(a)	 	“Administrator” means the Board or any committee of the Board that has been
designated by the Board to administer this Agreement.
	 
	 	(b)	 	“Board” means the Board of Directors of the Company.
	 
	 	(c)	 	“Code” means the Internal Revenue Code of 1986, as amended.
	 
	 	(d)	 	“Common Stock” means the Common Stock of the Company.

 

 

	 	(e)	 	“Consultant” means any person, including an advisor, engaged by the Company or
a Parent or Subsidiary to render services to such entity.
	 
	 	(f)	 	“Director” means a member of the Board or a member of the Board of Directors of
any parent or Subsidiary to render services to such entity.
	 
	 	(g)	 	“Employee” means an employee of 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 of the Company, or any
successor.
	 
	 	(h)	 	“Fiscal Year” means the fiscal year of the Company.
	 
	 	(i)	 	“Parent” means a “parent corporation”, whether now or hereafter existing, as
defined in Section 424(e) of the Code.
	 
	 	(j)	 	“Service Provider” means an Employee, Director or Consultant.
	 
	 	(k)	 	“Subsidiary” means a “subsidiary corporation”, whether now or hereafter
existing, as defined in Section 424(f) of the Code.
	 
	 	(l)	 	“Letter Agreement” means the letter agreement by and between the Company and
the Grantee dated ___.

	4.	 	Vesting. The Restricted Stock Units will vest in accordance with the terms and conditions
set forth in Exhibit A attached hereto.

	5.	 	Forfeiture upon Termination as Service Provider. Notwithstanding any contrary provision of
this Agreement, except as otherwise set forth in the Letter Agreement, if the Grantee’s status
as a Service Provider terminates for any or no reason, prior to a vesting date set forth
above, the unvested Stock Purchase Rights awarded by this Agreement will immediately terminate
and be forfeited at no cost to the Company.

	6.	 	Payment After Vesting. Any Stock Purchase Rights that vest in accordance with Section 4 will
be paid to the Grantee in Shares at the purchase price (which shall be satisfied through past
services to the Company) set forth in Section 2, provided that to the extent determined
appropriate by the Company, the Grantee shall satisfy any federal, state and local withholding
taxes with respect to such Stock Purchase Rights prior to the payment of any vested Shares to
the Grantee.

	7.	 	Rights as Stockholder. Neither the Grantee nor any person claiming under or through the
Grantee will have any of the rights or privileges of a stockholder of the Company in respect
of any Shares deliverable hereunder unless and until certificates representing such Shares
will have been issued, recorded on the records of the Company or its transfer agents or
registrars, and delivered to the Grantee.

 

 

	8.	 	Relation to the Company. Grantee is presently an officer, director, or other employee of, or
Consultant to the Company and in such capacity has become personally familiar with the
business, affairs, financial condition, and results of the operations of the Company.

	9.	 	Adjustment Upon Changes in Capitalization, Dissolution, Merger or Asset Sale.

	 	(a)	 	Changes in Capitalization. Subject to any required action by the
stockholders of the Company, the number and class of Shares that may be delivered under
this Award, shall be proportionately adjusted for any increase or decrease in the
number of issued Shares resulting from a stock split, reverse stock split, stock
dividend, combination or reclassification of the Shares, or any other increase or
decrease in the number of issued Shares 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 subject to this Award.
	 
	 	(b)	 	Dissolution or Liquidation. In the event of the proposed dissolution
or liquidation of the Company, the Administrator shall notify Grantee as soon as
practicable prior to the effective date of such proposed transaction. To the extent it
has not been previously vested, this Award 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, shares subject to this Award that remain outstanding at such time shall be
assumed or an equivalent right substituted by the successor corporation or a Parent or
Subsidiary of the successor corporation. In the event that the successor corporation
refuses to assume or substitute for the Award, the Grantee will fully vest in and have
the right to such shares even if such shares would not otherwise be vested and all
vesting criteria will be deemed achieved at target levels and all other terms and
conditions met.

	10.	 	Tax Advice. The Company has made no warranties or representations to Grantee with respect to
the income tax consequences of the transactions contemplated by the agreement pursuant to
which the Stock Purchase Rights have been issued and Shares will be purchased and Grantee is
in no manner relying on the Company or its representatives for an assessment of such tax
consequences. The Grantee acknowledges that the Grantee has not relied and will not rely upon
the Company or the Company’s counsel with respect to any tax consequences related to the Stock
Purchase Rights or the ownership, purchase, or disposition of the Shares. The Grantee assumes
full responsibility for all such

 

 

	 	 	consequences and for the preparation and filing of all tax returns and elections which may
or must be filed in connection with the Stock Purchase Rights and the Shares.

	11.	 	Withholding of Taxes.

	 	(a)	 	Notwithstanding any contrary provision of this Agreement, no certificate
representing Shares may be released from the Company unless and until the Grantee shall
have delivered to the Company the full amount of any federal, state or local income or
other taxes which the Company may be required by law to withhold with respect to such
Shares. At the election of the Company, any federal, state and local withholding taxes
with respect to the Stock Purchase Rights and/or the Shares may be paid by reducing the
number of vested Shares actually paid to the Grantee.
	 
	 	(b)	 	At the Grantee’s election, the Company may deduct from any payment of
distribution of Restricted Stock the amount of any tax required by law to be withheld
with respect to the purchase of the shares of Restricted Stock or the lapse of the
Purchase Option. Grantee must inform the Company of his or her preference for payment
of their withholding tax obligations within 30 days of receipt of the documentation.
An election form is attached hereto as Exhibit B.

	12.	 	Assignment; Binding Effect. Subject to the limitations set forth in this Agreement, this
Agreement shall be binding upon and inure to the benefit of the executors, administrators,
heirs, legal representatives, and successors of the parties hereto; provided, however, that
Grantee may not assign any of Grantee’s rights under this Agreement.
	 
	13.	 	Damages. Grantee shall be liable to the Company for all costs and damages, including
incidental and consequential damages, resulting from a disposition of the Stock Purchase
Rights which is not in conformity with the provisions of this Agreement.

	14.	 	Governing Law. This Agreement shall be governed by, and construed in accordance with, the
laws of the Commonwealth of Massachusetts excluding those laws that direct the application of
the laws of another jurisdiction.

	15.	 	Notices. All notices and other communications under this Agreement shall be in writing.
Unless and until the Grantee is notified in writing to the contrary, all notices,
communications, and documents directed to the Company and related to the Agreement, if not
delivered by hand, shall be mailed, addressed as follows:

Nuance Communications, Inc.

One Wayside Road

Burlington, MA 01803

Attention: HR Director

 

 

	 	 	Unless and until the Company is notified in writing to the contrary, all notices,
communications, and documents intended for the Grantee and related to this Agreement, if not
delivered by hand, shall be mailed to Grantee’s last known address as shown on the Company’s
books. Notices and communications shall be mailed by first class mail, postage prepaid;
documents shall be mailed by registered mail, return receipt requested, postage prepaid.
All mailings and deliveries related to the Agreement shall be deemed received when actually
received, if by hand delivery, and two business days after mailing, if by mail.

	16.	 	Arbitration. Any and all disputes or controversies arising out of this Agreement shall be
finally settled by arbitration conducted in Essex County in accordance with the then existing
rules of the American Arbitration Association, and judgment upon the award rendered by the
arbitrators may be entered in any court having jurisdiction thereof; provided that nothing in
this Section 16 shall prevent a party from applying to a court of competent jurisdiction to
obtain temporary relief pending resolution of the dispute through arbitration. The parties
hereby agree that service of any notices in the course of such arbitration at their respective
addresses as provided for in Section 15 shall be valid and sufficient.

	17.	 	No Rights to Stock Purchase Rights, Shares, Options or Employment. Other than with respect
to the Stock Purchase Rights, neither Grantee nor any other person shall have any claim or
right to be issued stock or granted an option under this agreement. Having received a Stock
Purchase Right shall not give the Grantee any right to receive any other grant or options
under any Company Plan. This Stock Purchase Right is not an employment contract and nothing
in this Stock Purchase Right shall be deemed to create in any way whatsoever any obligation on
your part to continue in the employ of the Company, or the Company to continue your employment
with the Company.

	18.	 	Entire Agreement. Company and Grantee agree that this Agreement (including its attached
Exhibits) is the complete and exclusive statement between Company and Grantee regarding its
subject matter and supersedes all prior proposals, communications, and agreements of the
parties, whether oral or written, regarding the grant Stock Purchase Rights and Shares to
Grantee.

	19.	 	Additional Conditions to Issuance of Shares. If at any time the Company will determine, in
its discretion, that the listing, registration or qualification of the Shares upon any
securities exchange or under any state or federal law, or the consent or approval of any
governmental regulatory authority is necessary or desirable as a condition to the issuance of
Shares to the Grantee, such issuance will not occur unless and until such listing,
registration, qualification, consent or approval will have been effected or obtained free of
any conditions not acceptable to the Company. The Company will make all reasonable efforts to
meet the requirements of any such state or federal law or securities exchange and to obtain
any such consent or approval of any such governmental authority.

	20.	 	Administrator Authority. The Administrator will have the power to interpret this Agreement
and to adopt such rules for the administration, interpretation and application

 

 

	 	 	of this agreement as are consistent therewith and to interpret or revoke any such rules
(including, but not limited to, the determination of whether or not any Stock Purchase
Rights have vested). All actions taken and all interpretations and determinations made by
the Administrator in good faith will be final and binding upon the Grantee, the Company and
all other interested persons. No member of the Administrator will be personally liable for
any action, determination or interpretation made in good faith with respect to this
Agreement.

	21.	 	Captions. Captions provided herein are for convenience only and are not to serve as a basis
for interpretation or construction of this Agreement.

	22.	 	Agreement Severable. In the event that any provision in this Agreement will be held invalid
or unenforceable, such provision will be severable from, and such invalidity or
unenforceability will not be construed to have any effect on, the remaining provisions of this
Agreement.

	 	 	IN WITNESS WHEREOF, the parties have executed this Agreement as of the Effective Date.

	 	 	 	 	 
	 	NUANCE COMMUNICATIONS, INC.

 	 
	 	By:  	 	 
	 	 	Paul A. Ricci 	 
	 	 	 	 
	 

     The Grantee hereby accepts and agrees to be bound by all of the terms and conditions of this
Agreement and the Plan.

	 	 	 	 	 
	 	 	 
	 	  	
 	 
	 	 	Grantee-. 	 
	 	 	 	 

 

 

	 	 	 	 	 

EXHIBIT A

VESTING TERMS AND CONDITIONS OF RESTRICTED STOCK UNITS

 

 

EXHIBIT B

	 	 	 
	TO:

	 	Grantee
	 
	 	 
	FROM:

	 	Deborah E. Sheehan, Global Equity Manager
	 
	 	 
	RE:

	 	Payment of Withholding Taxes Applicable to Restricted Stock Awards

As you know, Nuance Communications, Inc. (“Company”) granted you an award of Company restricted
stock (the “Award”). In connection with the Award, you will have taxable income at the time the
Award vests.

Under applicable law, withholding taxes are due and payable at the time the Award vests. Before
Company delivers to you any shares under the Award, Company must withhold applicable federal,
state, and local taxes (the “Withholding Tax”). The current federal supplemental wage withholding
rate is twenty-five percent (25%) or 35% if your supplemental wages exceed $1,000,000. In addition
to the federal supplemental wage withholding rate, withholding for state and local taxes may also
be required, the rate of which will vary depending on where you live..

In connection with your Award, you agreed to make appropriate arrangements regarding the
Withholding Tax applicable to your Award.

Company is offering you the opportunity to elect one of two methods to satisfy your Withholding
Tax. Select one of the two methods of payment described below:

	 	 	 
	
 
 

	 	Payment by Check. Our stock administration department will
contact you via e-mail with the amount of the Withholding Tax
due and payable. Please make your check payable to Nuance
Communications, Inc. and mail it to Nuance Communications,
Inc., Attention: Deborah E. Sheehan, One Wayside Road,
Burlington, MA 01803. You are required to satisfy your
Withholding Tax obligations by tendering to Company the amount
of the Withholding Tax due and payable the day after Company
notifies you of the amount.
	 
	 	 
	
 
 

	 	Retention of Shares by the Company. Company will retain the
number of shares equal to the amount of minimum withholding
due and payable. Fractional shares will not be retained to
satisfy any portion of the withholding tax. Accordingly, you
agree that in the event that the amount of withholding you owe
would result in a fraction of a share being owed, that amount
will be satisfied by withholding the fractional amount from
your paycheck. If such amount is required to be withheld, you
expressly acknowledge that by checking this box you are giving
the Company permission to withhold from your paycheck an
amount equal to the remaining withholding tax due and payable.

 

 

Please elect the method of payment that you wish to satisfy your Withholding Tax from the two
choices above, sign and date the form, and return it to the Deborah E. Sheehan at Nuance
Communications, Inc. You may either mail this election form to: Nuance Communications, Inc.,
Attention: Deborah E. Sheehan, One Wayside Road, Burlington, MA 01803 or fax it to 781-565-5553,
attn: Deborah E. Sheehan/Withholding Election.

By signing below, I understand (1) that Company will withhold an amount required by applicable law
to satisfy the minimum Withholding Tax applicable to my Award, and (2) agree to have such
Withholding Tax obligation satisfied by the method I checked above.

	 	 	 	 	 	 	 
	Grantee:

	 	 	 	                                         , 2008
	 	 
	

	 	 	 	Date<PAGE>
                                                                     Exhibit 4.9

                           NUANCE COMMUNICATIONS, INC.

                   FORM OF STAND-ALONE STOCK OPTION AGREEMENT

I.    NOTICE OF STOCK OPTION GRANT

      ______________

      You, __________, (the "Optionee"), have been granted a Nonstatutory Stock
Option to purchase Common Stock of the Company, subject to the terms and
conditions of this Agreement, as follows:

<TABLE>
<S>                                       <C>
      Grant Number                        ________

      Date of Agreement/Grant             April __, 2007

      Vesting Commencement Date           April __, 2007

      Exercise Price per Share            $_______

      Total Number of Shares Granted      ________

      Total Exercise Price                $________

      Type of Option:                     ___ Incentive Stock Option

                                          _X_ Nonstatutory Stock Option

      Term/Expiration Date:               April __, 20__
</TABLE>

      Vesting Schedule:

      Subject to accelerated vesting as set forth below, this Option may be
exercised, in whole or in part, in accordance with the vesting schedule attached
hereto as Exhibit A.

<PAGE>

      Termination Period:

      This Option may be exercised for 30 (THIRTY) DAYS after (i) Optionee
voluntarily ceases to be a Service Provider or (ii) Optionee's employment is
terminated for cause. In the event of an involuntary termination (not for
cause), this option may be exercised 90 (NINETY) DAYS after Optionee ceases to
be a Service Provider. Upon the death or Disability of the Optionee, this Option
may be exercised for SIX MONTHS after Optionee ceases to be a Service Provider.

      If there is a change of control transaction and Optionee's employment is
terminated within twelve months following the change of control transaction by
the Company for a reason other than cause, death or disability, and Optionee
executes a severance agreement specified by the Company (including, among other
things, a full release of claims and non-competition agreement), Optionee will
receive immediate acceleration of any unvested stock options.

      In no event shall this Option be exercised later than the Term/Expiration
Date as provided above.

II.   AGREEMENT

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

            (a) "Administrator" means the Board or any of its Committees as
      shall be responsible for administering the Company's equity compenstation
      plans.

            (b) "Agreement" means this stock option agreement between the
      Company and Optionee evidencing the terms and conditions of this Option.

            (c) "Applicable Laws" means the requirements relating to the
      administration of equity-based awards 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 that may apply to
      this Option.

            (d) "Board" means the Board of Directors of the Company.

            (e) "Code" means the Internal Revenue Code of 1986, as amended. Any
      reference to a section of the Code herein will be a reference to any
      successor or amended section of the Code.

            (f) "Committee" means a committee of Directors appointed by the
      Board.

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

            (h) "Company" means Nuance Communications, Inc. a Delaware
      corporation. With respect to the definitions of the Performance Goals, the
      Committee may determine that "Company" means Nuance Communications, Inc.
      and its consolidated subsidiaries.

                                      -2-
<PAGE>

            (i) "Consultant" means any person, including an advisor, engaged by
      the Company or a Parent or Subsidiary to render services to such entity.

            (j) "Director" means a member of the Board.

            (k) "Disability" means total and permanent disability as defined in
      Section 22(e)(3) of the Code.

            (l) "Employee" means any person, including Officers and Directors,
      employed by the Company or any Parent or Subsidiary of the Company.
      Neither service as a Director nor payment of a director's fee by the
      Company shall be sufficient to constitute "employment" by the Company.

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

            (n) "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, including without limitation
            the Nasdaq National Market or The Nasdaq SmallCap Market of The
            Nasdaq Stock Market, 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 on the day of
            determination, as reported in The Wall Street Journal or such other
            source as the Administrator deems reliable;

                  (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 on the day of determination, as reported in The
            Wall Street Journal or such other source as the Administrator deems
            reliable; 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.

            (o) "Nonstatutory Stock Option" means an Option that by its terms
      does not qualify or is not intended to qualify as an Incentive Stock
      Option.

            (p) "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.

            (q) "Option" means this Nonstatutory Stock Option.

            (r) "Optionee" means ________ or his successor.

            (s) "Optioned Stock" means the Common Stock subject to this Option.

                                      -3-
<PAGE>

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

            (u) "Rule 16b-3" means Rule 16b-3 of the Exchange Act or any
      successor to Rule 16b-3.

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

            (w) "Service Provider" means an Employee, Director or Consultant.

            (x) "Share" means a share of the Common Stock, as adjusted in
      accordance with Section J Part II of this Agreement.

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

      B. Grant of Option.

            The Compensation Committee of the Board of the Company hereby grants
to the Optionee named in the Notice of Grant attached as Part I of this
Agreement an Option to purchase the number of Shares, as set forth in the Notice
of Grant, at the Exercise Price per share set forth in the Notice of Grant,
subject to the terms and conditions of this Agreement.

      C. Exercise of Option.

            (a) Right to Exercise. This Option is exercisable during its term in
accordance with the Vesting Schedule set out in the Notice of Grant and the
applicable provisions of this Agreement.

            (b) Method of Exercise. This Option is exercisable by delivery of an
exercise notice, in the form attached as Exhibit B (the "Exercise Notice"),
which shall state the election to exercise the Option, the number of Shares in
respect of which the Option is being exercised (the "Exercised Shares"), and
such other representations and agreements as may be required by the Company. The
Exercise Notice shall be completed by the Optionee and delivered to the Stock
Plan Administrator of the Company (or its designee). The Exercise Notice shall
be accompanied by payment of the aggregate Exercise Price as to all Exercised
Shares (and the amount of any income or employment tax the Company is required
by law to withhold by reason of such exercise). This Option shall be deemed to
be exercised upon receipt by the Company of such fully executed Exercise Notice
accompanied by such aggregate Exercise Price (and any withholding tax).

            No Shares shall be issued pursuant to the exercise of this Option
unless such issuance and exercise complies with Applicable Laws. Assuming such
compliance, for income tax purposes the Exercised Shares shall be considered
transferred to the Optionee on the date the Option is exercised with respect to
such Exercised Shares.

                                      -4-
<PAGE>

      D. Method of Payment.

            Payment of the aggregate Exercise Price shall be by any of the
following, or a combination thereof, at the election of the Optionee:

            1. cash; or

            2. check; or

            3. consideration received by the Company under a cashless exercise
program implemented by the Company in connection with this Agreement; or

            4. surrender of other Shares which (i) in the case of Shares
acquired upon exercise of an option, have been owned by the Optionee for more
than six (6) months on the date of surrender, and (ii) have a Fair Market Value
on the date of surrender equal to the aggregate Exercise Price of the Exercised
Shares.

      E. Non-Transferability of Option.

            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 this Agreement shall be
binding upon the executors, administrators, heirs, successors and assigns of the
Optionee.

      F. Term of Option.

            This Option may be exercised only within the term set out in the
Notice of Grant, and may be exercised during such term only in accordance with
the terms of this Agreement.

      G. Tax Consequences.

            Some of the federal tax consequences relating to this Option, as of
the date of this Option, are set forth below. THIS SUMMARY IS NECESSARILY
INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. THE OPTIONEE
SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE
SHARES.

      H. Exercising the Option.

            1. Nonstatutory Stock Option. The Optionee may incur regular federal
income tax liability upon exercise of a NSO. The Optionee will be treated as
having received compensation income (taxable at ordinary income tax rates) equal
to the excess, if any, of the Fair Market Value of the Exercised Shares on the
date of exercise over their aggregate Exercise Price. If the Optionee is an
Employee or a former Employee, the Company will be required to withhold from his
or her compensation or collect from Optionee and pay to the applicable taxing
authorities an amount in cash equal to a percentage of this compensation income
at the time of exercise, and may refuse to honor the exercise and refuse to
deliver Shares if such withholding amounts are not delivered at the time of
exercise.

                                      -5-
<PAGE>

            2. Disposition of Shares.

                  (a) NSO. If the Optionee holds NSO Shares for at least one
year, any gain realized on disposition of the Shares will be treated as
long-term capital gain for federal income tax purposes.

      I. Termination of Relationship as a Service Provider.

            1. Optionee Ceases to be a Service Provider. If the 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 Notice of Grant above to the extent that the Option is vested
on the date of termination (but in no event later than the expiration of the
term of such Option as set forth in this Agreement). If, after termination, the
Optionee does not exercise the Option within the time specified, the Option
shall terminate, and the Shares covered by such Option terminate.

            2. Disability of Optionee. If Optionee ceases to be a Service
Provider as a result of the Optionee's Disability, the Optionee may exercise
this Option within such period of time as is specified in the Notice of Grant to
the extent the Option is vested on the date of termination (but in no event
later than the expiration of the term of such Option as set forth in this
Agreement). If, after termination, the Participant does not exercise his or her
Option within the time specified herein, the Option shall terminate, and the
Shares covered by such Option shall terminate.

            3. Death of Optionee. If Optionee dies while a Service Provider, the
Option may be exercised following the Optionee's death within such period of
time as specified in the Notice of Grant (but in no event may the Option be
exercised later than the expiration of the term of such Option as set forth in
this 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. 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. If the Option is not so exercised within the time specified
herein, the Option shall terminate, and the Shares covered by such Option shall
terminate.

            4. 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
Participant at the time that such offer is made.

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

            (a) Changes in Capitalization. Subject to any required action by the
stockholders of the Company, the number and class of Shares that may be
delivered under this Agreement and/or the number, class, and price of Shares
covered under this Agreement, shall be proportionately adjusted for any increase
or decrease in the number of issued Shares resulting from a stock split, reverse
stock split, stock dividend, combination or reclassification of the Shares, or
any other increase or decrease in the number of issued Shares 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

                                      -6-
<PAGE>

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 subject this Agreement.

            (b) Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, the Administrator shall notify the
Optionee as soon as practicable prior to the effective date of such proposed
transaction. The Administrator in its discretion may provide for the Optionee to
have the right to exercise his Option until ten (10) days prior to such
transaction as to all of the Optioned Stock covered thereby, including Shares as
to which the Option would not otherwise be exercisable. To the extent it has not
been previously exercised, the Option 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, the Option shall be assumed or an equivalent option substituted
by the successor corporation or a Parent or Subsidiary of the successor
corporation. In the event that the successor corporation refuses to assume or
substitute for the Award, the Optionee shall fully vest in and have the right to
exercise the Option as to all of the Optioned Stock, including Shares as to
which would not otherwise be vested or exercisable. If the Option 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 will be fully vested and exercisable for a
period of fifteen (15) days from the date of such notice, and the Option will
terminate upon the expiration of such period. For the purposes of this
paragraph, the Option shall be considered assumed if, following the merger or
sale of assets, the Option confers the right to purchase or receive, for each
Share subject of Optioned Stock subject to the Option immediately prior to the
merger or sale of assets, the consideration (whether stock, cash, or other
securities or property) received in the merger or sale of assets by holders of
Common Stock for each Share held on the effective date of the transaction (and
if holders were offered a choice of consideration, the type of consideration
chosen by the holders of a majority of the outstanding Shares); 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, for each Share
of Optioned Stock 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.

      K. Administration of the Agreement. The Administrator shall have the
authority, in its discretion, to construe and interpret the terms of this
Agreement and the Option granted pursuant thereto, to prescribe, amend and
rescind the rules and regulations relating to the Agreement, to determine the
Fair Market Value of the Common Stock, and to make all other determinations
deemed necessary or advisable for administering the Agreement. The
Administrator's decisions, determinations and interpretations shall be final and
binding on the Optionee and all other persons.

      L. Notices. Any notice to be given to the Company hereunder shall be in
writing and shall be addressed to the Company at its then current principal
executive office or to such other address as the Company may hereafter designate
to the Optionee by notice as provided in this Section. Any notice to be given to
the Optionee hereunder shall be addressed to the Optionee at the address set
forth beneath his signature hereto, or at such other address as the Optionee may
hereafter

                                      -7-
<PAGE>

designate to the Company by notice as provided herein. A notice shall be deemed
to have been duly given when personally delivered or mailed by registered or
certified mail to the party entitled to receive it.

      M. No Effect on Employment or Service. This Agreement will not confer upon
Optionee's right with respect to continuing the Optionee's relationship as a
Service Provider with the Company, nor will this Agreement 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, to the extent permitted by Applicable Laws.

      N. Entire Agreement; Governing Law. This Agreement constitutes 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, and may not be modified
adversely to the Optionee's interest except by means of a writing signed by the
Company and Optionee. This Agreement is governed by the internal substantive
laws, but not the choice of law rules, of Delaware.

                                      -8-
<PAGE>

                        NO GUARANTEE OF CONTINUED SERVICE

            OPTIONEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT
TO THE VESTING SCHEDULE HEREOF IS EARNED ONLY BY CONTINUING AS A SERVICE
PROVIDER AT THE WILL OF THE COMPANY (AND NOT THROUGH THE ACT OF BEING HIRED,
BEING GRANTED AN OPTION OR PURCHASING SHARES HEREUNDER). OPTIONEE FURTHER
ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED
HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS
OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A SERVICE PROVIDER FOR THE VESTING
PERIOD, FOR ANY PERIOD, OR AT ALL, 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.

      By your signature and the signature of the Company's representative below,
you and the Company agree that this Option is granted under and governed by the
terms and conditions of the this Agreement. Optionee has reviewed this Agreement
in its entirety, has had an opportunity to obtain the advice of counsel prior to
executing this Agreement and fully understands all provisions of the Agreement.
Optionee hereby agrees to accept as binding, conclusive and final all decisions
or interpretations of the Administrator upon any questions relating to this
Agreement. Optionee further agrees to notify the Company upon any change in the
residence address indicated below.

OPTIONEE:                               NUANCE COMMUNICATIONS, INC.

-----------------------------------
Signature                               By

-----------------------------------     -----------------------------------
                                        Title

                                      -9-

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