8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (Date of earliest event reported)

May 12, 2005

SCANSOFT, INC.

(Exact name of registrant as specified in its charter)

DELAWARE	000-27038	94-3156479
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

9 Centennial Drive
Peabody, Massachusetts 01960
(Address of Principal Executive Offices, including Zip Code)

(978) 977-2000
(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01. Entry into a Material Definitive Agreement.

     In connection with the acquisition of MedRemote, Inc. (“MedRemote”) on May 12, 2005, and in accordance with NASDAQ Marketplace Rule 4350, ScanSoft, Inc. (“ScanSoft”) issued 446,663 shares of its common stock, in the form of stand alone restricted stock grants, as an inducement material to 14 individuals entering into employment arrangements with ScanSoft. The shares of restricted stock were granted with the approval of the Compensation Committee of ScanSoft’s Board of Directors, and vest over a three year period, subject to acceleration upon the achievement of certain performance targets. These shares are in addition to the approximately 1.54 million shares issued in the MedRemote acquisition. A copy of the form of Stand Alone Restricted Stock Purchase Agreement is attached hereto as Exhibit 10.1 and is incorporated herein by reference. For a description of the acquisition of MedRemote, see Item 8.01 below.

Item 8.01. Other Events.

     On May 12, 2005, ScanSoft completed its acquisition of MedRemote, an innovator in medical informatics and transcription workflow solutions for approximately 1.54 million shares of ScanSoft common stock, and approximately $6.2 million in cash (net of cash on hand at closing). A copy of the press release issued by ScanSoft on May 16, 2005 concerning the completion of the acquisition is filed herewith as Exhibit 99.1 and is incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits.

(c) Exhibits

10.1	Form of Stand Alone Restricted Stock Purchase Agreement.
99.1	Press Release, dated May 16, 2005, by ScanSoft, Inc.

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	ScanSoft, Inc.
By:	/s/ James R. Arnold, Jr.
	James R. Arnold, Jr.
	Chief Financial Officer

Date: May 17, 2005

EXHIBIT INDEX

Exhibit No.	Description
10.1	Form of Stand Alone Restricted Stock Purchase Agreement.
99.1	Press Release, dated May 16, 2005, by ScanSoft, Inc.

EX-10.1

                                                                    Exhibit 10.1

                                 SCANSOFT, INC.

                                   STAND-ALONE

                       RESTRICTED STOCK PURCHASE AGREEMENT

      (A)   Name of Grantee:
                                      ___________________

      (B)   Grant Date:
                                      ___________________

      (C)   Vesting Commencement Date
                                      ___________________

      (D)   Number of Shares:
                                      ___________________

      (E)   Price Per Share:                  $0.001
                                      ___________________

      (F)   Effective Date:
                                      ___________________

      THIS RESTRICTED STOCK PURCHASE AGREEMENT (the "AGREEMENT"), is made and
entered into as of the date set forth in Item F above (the "EFFECTIVE DATE")
between ScanSoft, Inc., a Delaware corporation (the "COMPANY") and the person
named in Item A above ("GRANTEE").

                          THE PARTIES AGREE AS FOLLOWS:

1.    GRANT OF STOCK. Grantee hereby purchases from the Company, and the Company
      hereby issues and sells to Grantee, the number of shares of Common Stock
      of the Company, par value $0.001 (the "SHARES"), listed in Item D above on
      the terms and conditions set forth herein. The Company shall, promptly
      after execution of this Agreement, issue a certificate representing the
      Shares registered in the name of Grantee, which certificate shall be
      retained by the Company at the Company's executive offices. In return, the
      Grantee shall deliver to the Company (a) an executed counterpart of this
      Agreement, and (b) the purchase price of the Shares in the form of a check
      payable to the Company.

2.    PURCHASE PRICE. The purchase price for the Shares shall be the price set
      forth in Item E 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 of the Company.

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

      i)    "SERVICE PROVIDER" means an Employee, Director or Consultant.

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

4. COMPANY'S RIGHT OF REPURCHASE.

      (a)   The Shares shall be subject to a right of repurchase in favor of the
            Company (the "RIGHT OF REPURCHASE") to the extent set forth on
            Exhibit A attached hereto. Except with respect to a termination
            without Cause as described in Exhibit A, if the Grantee shall cease
            to be a Service Provider for any reason (including death,
            disability, for Cause or resignation) before the Right of Repurchase
            lapses in accordance with Exhibit A, the Company may purchase the
            Shares subject to the Right of Repurchase for an amount equal to the
            price the Grantee paid for such Shares (exclusive of any taxes paid
            upon acquisition of the stock). The Grantee may not dispose of or
            transfer Shares while such Shares are subject to the Right of
            Repurchase and any such attempted transfer shall be null and void.
            The Grantee acknowledges and agrees that until such time as the
            Shares are no longer subject to the Right of Repurchase, the Shares
            shall be retained by the Company at the Company's executive offices.
            Any Shares released from the Right of Repurchase pursuant to the
            provisions set forth in Exhibit A shall be released from the
            Company's Right of Repurchase forever and shall not be subject to
            repurchase in the event of Grantee's ceasing to be a Service
            Provider for any reason.



      (b)   The Company may exercise its Right of Repurchase set forth in this
            Section 4 by written notice to the Grantee within 90 days after the
            date on which the Grantee ceases to be retained as a Service
            Provider. If the Company (or its assignees) exercises its Right of
            Repurchase, the Grantee shall, if necessary, endorse and deliver to
            the Company (or its assignees) the stock certificates representing
            the Shares being repurchased, and the Company (or its assignees)
            shall pay the Grantee the total repurchase price in cash upon such
            delivery. The Grantee shall cease to have any rights with respect to
            such repurchased Shares immediately upon receipt of the repurchase
            price.

5. STOCK CERTIFICATE RESTRICTIVE LEGENDS. Stock certificates evidencing Shares
will bear the following restrictive legend:

                  "THE SECURITIES REPRESENTED HEREBY ARE SUBJECT TO THE TERMS OF
            AN AGREEMENT BETWEEN THE COMPANY AND THE HOLDER OF SUCH SECURITIES.
            PURSUANT TO THE TERMS OF SUCH AGREEMENT, THE COMPANY HAS A RIGHT TO
            REPURCHASE SUCH SECURITIES UNDER CERTAIN CIRCUMSTANCES. A COPY OF
            THE AGREEMENT CAN BE OBTAINED FROM THE SECRETARY OF THE COMPANY."

6. 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.

7. 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 of Shares purchased 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 Common Stock, or any other increase or
            decrease in the number of issued Shares effected without receipt of
            consideration by the Company; provided, however, that a 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 of Shares subject to this
            Agreement.

      b)    Dissolution or Liquidation. In the event of the proposed dissolution
            or liquidation of the Company, the Board may provide that any
            Company Repurchase Right applicable to the Shares purchased under
            this Agreement shall lapse as to such Shares.

      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 Agreement shall be assumed by the
            successor corporation or a Parent or Subsidiary of the successor
            corporation. In the event that the successor corporation refuses to
            assume the Agreement, the Company's Repurchase Right will lapse.



8. ADMINISTRATION OF THE AGREEMENT. The Administrator shall have the authority,
in its discretion, to construe and interpret the terms of this Agreement, to
prescribe, amend and rescind rules and regulations relating to the Agreement and
to make all other determinations and amendments deemed necessary or advisable
for administering the Agreement. The Administrator's decisions and
interpretations shall be final and binding on the Grantee and all other persons.
Notwithstanding the foregoing, no amendment or alteration of this Agreement
shall adversely affect the rights of Grantee, unless mutually agreed otherwise
between the Grantee and the Administrator.

9. 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 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 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 Shares.

10. TAXES.

      a)    Withholding. 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.

      b)    Section 83(b) Election. The Grantee may elect to accelerate any
            Federal tax payment due as a result of receiving an award of Shares
            subject to the Company's Right of Repurchase by making a timely
            election pursuant to Section 83(b) of the Code, and complying with
            the procedures outlined therein. The election must be filed by the
            Grantee within 30 days from the date of grant. The Grantee
            understands that the Grantee (and not the Company) shall be
            responsible for the Grantee's own tax liability that may arise as a
            result of this investment or the transactions contemplated by this
            Agreement. The Grantee acknowledges that it is the Grantee's sole
            responsibility.

11. 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.

12. DAMAGES. Grantee shall be liable to the Company for all costs and damages,
including incidental and consequential damages, resulting from a disposition of
the Shares which is not in conformity with the provisions of this Agreement.



13. 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.

14. 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:

                                 ScanSoft, Inc.

                               9 Centennial Drive

                             Peabody, MA 01960

                   Attention: Vice President, Human Resources

      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.

15. 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 15
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 14 shall be
valid and sufficient.

16. NO RIGHTS TO SHARES, OPTIONS OR EMPLOYMENT. Other than with respect to the
Shares, neither Grantee nor any other person shall have any claim or right to be
issued stock under this Agreement. Having received a stock award under this
Agreement shall not give the Grantee any right to receive any other stock based
award. This Agreement is not an employment contract and nothing in this
Agreement shall be deemed to create in any way whatsoever any obligation on the
part of Grantee to continue in the employ of the Company, or the Company to
continue Grantee's employment with the Company.

17. 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 issuances of Shares to Grantee.



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

                                           ScanSoft, 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 OF THE

                       RESTRICTED STOCK PURCHASE AGREEMENT

                               RIGHT OF REPURCHASE

      The Right of Repurchase shall expire as follows:

1)    Subject to earlier vesting as provided in this Exhibit A, the Right of
      Repurchase with respect to 100% of the Shares shall expire on the third
      (3rd) anniversary of the Vesting Commencement Date as set forth in Item C
      of the Agreement, subject to Grantee's continuing to be a Service Provider
      on such date.

2)    Subject to the Grantee's continued status as a Service Provider on
      September 30, 2006 ("First Target Date"):

      a)    12.5% of the Shares shall be released from the Right of Repurchase
            as soon as administratively feasible following the First Target Date
            if the Company business unit consisting of a worldwide transcription
            workflow platform, either licensed or hosted on an ASP basis, along
            with associated services and structured either as a stand-alone
            business unit or integrated within the Healthcare Dictation
            business, as determined by the Administrator (the "Big Mac
            Business") (i) receives Board approval of an operating plan for the
            Big Mac Business for fiscal year 2006 (the "First Approved Plan"),
            and (ii) achieves at least 95% but less than 100% of the First
            Target (defined below) between the time period beginning on the date
            of the acquisition of the Big Mac Business by the Company and the
            First Target Date (the "First Performance Period") (no Shares be
            released pursuant to this Section 2(a) in the event Section 2(b) or
            2(c) applies); or

      b)    25% of the Shares shall be released from the Right of Repurchase as
            soon as administratively feasible following the First Target Date if
            the Big Mac Business (i) receives Board approval of the First
            Approved Plan, and (ii) achieves 100% of the First Target during the
            First Performance Period (no Shares will Shares be released pursuant
            to this Section 2(b) in the event Section 2(c) applies); or

      c)    Between 25% and 50% of the Shares shall be released from the Right
            of Repurchase as soon as administratively feasible following the
            First Target Date if the Big Mac Business (i) receives Board
            approval of the First Approved Plan, and (ii) achieves in



            excess of 100% and up to 120% of the First Target in the First
            Performance Period (in no event will Shares be released pursuant to
            this provision in the event 100% or less of the First Target is
            achieved). The additional percentage of Shares released over 25%
            shall be determined by adding (a) the product of (i) the number of
            percentage points of the First Target achieved in excess of 100%
            (rounded to the nearest percent) and (ii) 1.25, to (b) 25%.

            The "First Target" means [ ] of the revenue (Company recognizable)
forecast for the Big Mac Business in the First Performance Period.

3)    Subject to the Grantee's continued status as a Service Provider on
      September 30, 2007 ("Second Target Date") and in addition to any Shares
      released pursuant to Section 2 of this Exhibit A:

      a)    10% of the Shares shall be released from the Right of Repurchase as
            soon as administratively feasible following the Second Target Date
            if the Big Mac Business (i) receives Board approval of an operating
            plan for the Big Mac Business for fiscal year 2007 (the "Second
            Approved Plan"), and (ii) achieves at least 95% but less than 100%
            of the Second Target (defined below) between the First Target Date
            and the Second Target Date (the "Second Performance Period") (no
            Shares will be released pursuant to this Section 3(a) in the event
            Section 3(b) or 3(c) applies); or

      b)    20% of the Shares shall be released from the Right of Repurchase as
            soon as administratively feasible following the Second Target Date
            if the Big Mac Business (i) receives Board approval of the Second
            Approved Plan, and (ii) achieves 100% of the Second Target during
            the Second Performance Period (no Shares will be released pursuant
            to this Section 3(b) in the event Section 3(c) applies); or

      c)    Between 20% and 40% of the Shares shall be released from the Right
            of Repurchase as soon as administratively feasible following the
            Second Target Date if the Big Mac Business (i) receives Board
            approval of the Second Approved Plan, and (ii) achieves in excess of
            100% and up to 120% of the Second Target in the Second Performance
            Period (in no event will Shares be released pursuant to this
            provision in the event 100% or less of the Second Target is
            achieved). The additional percentage of Shares released over 20%
            shall be determined by adding (i) the number of percentage points of
            the First Target achieved in excess of 100% (rounded to the nearest
            percent), to (b) 20%.



            The "Second Target" means [ ] of the revenue (Company recognizable)
      forecast for the Big Mac Business in the Second Performance Period.

4)    Except as provided in Section 5 of this Exhibit A, if Grantee ceases to be
      a Service Provider as a result of the Company's termination of Grantee for
      a reason other than Cause, then the 100% of the Shares shall be released
      from the Right of Repurchase on the date set forth in Section 1 of this
      Exhibit A or earlier as provided in Sections 2, 3 and 4 of this Exhibit A
      and without a requirement that Grantee be a Service Provider on the
      applicable date. For purposes of this Agreement, "Cause" means Grantee's
      employment with the Company is terminated after the Administrator has
      found any of the following to exist: (i) Grantee's dishonesty that
      materially harms the Company, theft, or falsification of any Company
      records; (ii) disclosure of the Company's confidential or proprietary
      information which violates the terms of any agreement between Grantee and
      the Company; (iii) Grantee's continued substantial willful nonperformance
      (except by reason of Disability) of his employment duties after Grantee
      has received a written demand for performance by the Board and has failed
      to cure such nonperformance within 15 business days of receiving such
      notice; (iv) Grantee's conviction of, or plea of nolo contendere to, a
      felony which such conviction or plea materially harms the business or
      reputation of the Company, or (v) Grantee's termination due to death or
      Disability. For purposes of this Agreement, "Disability" means total and
      permanent disability as defined in Section 22(e)(3) of the Code.

5)    If Grantee ceases to be a Service Provider as a result of the Company's
      termination of Grantee for a reason other than Cause within six (6) months
      following a Change in Control, then the 100% of the Shares shall be
      immediately released from the Right of Repurchase. For the purposes of
      this Agreement, a "Change in Control" means: (i) any "person" (as such
      term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of
      1934, as amended) becomes the "beneficial owner" (as defined in Rule 13d-3
      under said Act), directly or indirectly, of securities of the Company
      representing 50% or more of the total voting power represented by the
      Company's then outstanding voting securities; or (ii) the date of the
      consummation of a merger or consolidation of the Company with any other
      corporation that has been approved by the stockholders of the Company,
      other than a merger or consolidation which would result in the voting
      securities of the Company outstanding immediately prior thereto continuing
      to represent (either by remaining outstanding or by being converted into
      voting securities of the surviving entity) more than fifty percent (50%)
      of the total voting power represented by the voting securities of the
      Company or such surviving entity outstanding immediately after such merger
      or consolidation; or (iii) the date of the consummation of the sale or
      disposition by the Company of all or substantially all the Company's
      assets.

      Shares will be released from the Right of Repurchase pursuant to the
accelerated vesting provided in Sections 2 and 3 above at such time as the
Administrator determines that the performance objectives described in those
sections have been met based on the Company's standard accounting practices. In
the event any of the above performance objectives are not met by the stated
dates, the installment of the Shares that would otherwise be released from the
Right of Repurchase shall be released only on the three year anniversary of the
Vesting Commencement Date, provided Grantee is a Service Provider on such date.
Notwithstanding anything to the contrary in this Exhibit A, if Grantee's
employment responsibilities are significantly changed



prior to the three year anniversary of the Vesting Commencement Date, then the
Administrator may change the performance criteria stated above to better reflect
Grantee's new employment responsibilities, as determined by the Administrator.



                                    EXHIBIT B

                  (STOCK ASSIGNMENT SEPARATE FROM CERTIFICATE)

            FOR VALUE RECEIVED, I hereby sell, assign and transfer unto
__________________ (____________________) shares of Common Stock, $.001 par
value per share, of _______________________ (the "Corporation") standing in my
name on the books of the Corporation represented by Certificate(s) Number
_______________ herewith, and do hereby irrevocably constitute and appoint
________________ attorney to transfer the said stock on the books of the
Corporation with full power of substitution in the premises.

                                                     Dated: ____________________

                                                            ____________________

      IN PRESENCE OF
                                                            ____________________

            NOTICE: The signature(s) to this assignment must correspond with the
name as written on the face of the certificate, in every particular, without
alteration, enlargement, or any change whatever and must be guaranteed by a
commercial bank, trust company or member firm of the Boston, New York or Midwest
Stock Exchange.

EX-99.1

	News Release
	From ScanSoft, Inc.

Contacts:
Richard Mack ScanSoft, Inc. Tel: 978-977-2175 Email:richard.mack@scansoft.com	Erica Hill ScanSoft, Inc. Tel: 978-977-8466 Email: erica.hill@scansoft.com

ScanSoft Acquires MedRemote, Expands into Complete
Transcription Processing Solutions for Healthcare

New Dragon™ MT Workflow System Leverages Speech Recognition and Web Standards to Reduce the $15 Billion Spent Each Year on Medical Transcription Processing

PEABODY, Mass., May 16, 2005 – ScanSoft, Inc. (Nasdaq: SSFT), a global leader of speech and imaging solutions, today announced the completion of its acquisition of MedRemote, Inc., an innovator in medical informatics and transcription workflow solutions for approximately 1.54 million shares of its Common Stock, and approximately $6.2 million in cash (net of cash on hand at closing). Through this transaction, ScanSoft introduces the Dragon MT Workflow System, a complete transcription processing solution for deployment within hospitals and medical transcription service organizations (MTSOs), and Dragon MT Remote, a hosted subscription-based solution that is powered by the Dragon MT Workflow System and ideal for any size organization. Both solutions, available immediately, leverage ScanSoft’s highly accurate Dragon speech recognition technology to automate the conversion of recorded dictation into electronic transcripts, significantly reducing manual transcription tasks.

MedRemote, a private company based in Chicago, is a recognized leader in providing complete Web-based transcription processing and workflow systems that efficiently leverage speech recognition and integrate with existing healthcare information systems. The MedRemote solution speeds access to patient data while reducing transcription processing costs by up to 70%, and has been proven by customers throughout North America, including Fallon Clinic and Valley Baptist Health System. ScanSoft will integrate the MedRemote organization in Chicago and expand its development, sales and marketing resources targeting the healthcare opportunity worldwide.

“MedRemote brings to ScanSoft an array of products, technologies and partners that expand ScanSoft’s leadership in healthcare, a set of customers that have proven the value of the MedRemote solution, and employees that are skilled in developing and delivering speech-enabled healthcare solutions,” said Paul Ricci, chairman and CEO at ScanSoft. “Combined with ScanSoft Dragon NaturallySpeaking Medical, we gain an enviable solution set that automates the way healthcare organizations capture and process their transcription data.”

MedRemote is an important component in ScanSoft’s healthcare product strategy, which is to apply highly accurate speech recognition to intelligent workflow processing solutions in order to reduce the costs associated with manually converting medical dictation into text, estimated at $10 billion in North

-more-

America and $15 billion worldwide each year. ScanSoft will deliver the solutions through its growing number of channel partners, including healthcare information systems vendors, systems integrators, digital dictation systems vendors and MTSOs. The ScanSoft solutions will be used by physicians, records management and medical transcription teams within hospitals, clinics and physician practice organizations, as well as MTSOs to enhance their current transcription services businesses.

“With speech recognition gaining wide acceptance within healthcare organizations, and with many healthcare professionals moving towards EMR solutions, our combined offerings are a natural fit to help reduce costs, speed turnaround time for patient data and most importantly improve patient care,” said Kulmeet Singh, President of MedRemote. “We are impressed by the speech recognition accuracy delivered by Dragon NaturallySpeaking, as well as the strength and depth of ScanSoft’s customers and business partners. The combination of MedRemote and ScanSoft is clearly great news for the entire healthcare industry.”

The ScanSoft Dragon MT Workflow System is built upon the proven MedRemote platform to automate the capture, conversion, verification and processing of recorded dictation. The platform delivers a profound level of productivity gain for all medical transcription teams, including those within MTSOs and large hospitals, as well as individual physicians and remote transcriptionists. Highlights of the ScanSoft-MedRemote combination include:

•   Innovative and Flexible Solutions – The ScanSoft Dragon MT Workflow System is developed using secure XML and Web standards, enabling each of its modules to be accessed from any location through standard Web browsers. The platform is tightly integrated with the Dragon MT Speech Server, which automates 80% or more of the dictation-to-transcription process when compared to manual-only approaches. Components can be combined with existing Web-based applications, and completed documentation and transcripts can be seamlessly connected to existing healthcare information systems via standard HL7 interfaces or custom connections.

•   Strong Partner Relationships – ScanSoft and MedRemote have established mutually beneficial business relationships with leading healthcare technology and service providers. MedRemote’s partner network comprises leading providers of healthcare systems and services that recognize the value of integrating cutting edge workflow tools as part of their solutions portfolio. Combined, the organization maintains a partner roster comprising leading technology healthcare providers and organizations.

•   Proven Customer Solutions – ScanSoft’s Dragon NaturallySpeaking Medical is the de-facto speech recognition solution for electronic medical records (EMR) systems, and is the most widely used desktop solution for hospitals throughout the world. When combined with MedRemote, ScanSoft can provide healthcare organizations with complete transcription processing solutions for desktop and server environments, with proven deployments at thousands of practices and facilities.

•   Industry Expertise – Both ScanSoft and MedRemote are leaders in providing healthcare organizations with solutions that increase productivity and reduce costs. The combined organization has an unrivaled depth of understanding and experience within healthcare services and information technology for transcription cost auditing, workflow automation toolsets, dictation capture, speech recognition and integration with Healthcare Information Systems (HIS), Radiology Information Systems (RIS) and EMR systems.

“Having rolled out MedRemote across our entire facility, we have been able to significantly streamline our transcription workflow with unprecedented ease,” said Edward Nazzaro, CIO, Fallon Clinic. “FallonClinic has embraced MedRemote’s web-based ASP solution as the technology platform for all of our multiple transcription vendors resulting in a 33 percent transcription savings and reduced IT support.

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Moreover, as we look to implement Epic as our EMR, we hope to use the experience of MedRemote’s workflow solutions with the expertise of ScanSoft’s speech recognition products to further erode our transcription costs.”

In connection with the acquisition of MedRemote and in accordance with NASDAQ Marketplace Rule 4350, ScanSoft granted 446,663 shares of its common stock, in the form of stand alone restricted stock grants, as an inducement material to 14 individuals entering into employment arrangements with ScanSoft. The shares of restricted stock were granted with the approval of the Compensation Committee of ScanSoft’s Board of Directors, and vest over a three year period, subject to acceleration upon the achievement of certain performance targets. These shares are in addition to the approximately 1.54 million shares issued in the transaction.

Pricing and Availability

The ScanSoft Dragon MT Workflow System and Dragon MT Remote hosted service are available immediately. For more information on the solution and pricing options please visit http://www.scansoft.com/mtworkflow or call 800-443-7077.

About MedRemote

MedRemote, an innovator in health care informatics, delivers state-of-the-art web-based solutions for dictation, transcription, speech recognition, document management, and data mining. MedRemote’s comprehensive dictation-transcription solution comprises modules for dictation, workflow management, transcription, electronic signature, document distribution, reporting and billing, speech recognition and text extraction. MedRemote solutions are installed at integrated delivery networks (IDN), hospitals, and medical groups through an ASP or a licensing model. MedRemote also embeds its industry leading technology in radiology, clinical and hospital information systems.

About ScanSoft, Inc.

ScanSoft, Inc. (Nasdaq: SSFT) is the global leader of speech and imaging solutions that are used to automate a wide range of manual processes – saving time, increasing worker productivity and improving customer service. For more information regarding ScanSoft products and technologies, please visit www.scansoft.com.

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Trademark reference: ScanSoft, the ScanSoft logo, Dragon, MT Workflow, MT Remote, MT Speech Server and NaturallySpeaking are registered trademarks or trademarks of ScanSoft, Inc. or its subsidiaries in the United States and/or other countries. All other company or product names mentioned may be the trademarks of their respective owners.

The statements in this press release that relate to future plans, events or performance are forward-looking statements that involve risks and uncertainties, including risks associated with market trends, competitive factors, and other risks identified in ScanSoft’s SEC filings. Actual results, events and performance may differ materially. Readers are cautioned not to put undue reliance on these forward-looking statements that speak only as of the date hereof.

SAFE HARBOR FOR FORWARD-LOOKING STATEMENTS

Statements in this document regarding the proposed transaction between ScanSoft and MedRemote, benefits and synergies of the transaction, future opportunities for the combined company, the future demand for, performance of, and opportunities for growth in ScanSoft’s speech solutions and productivity applications, the growth of the speech industry and the demand for speech solutions, the continued strength of existing products, services and relationships as well as the introduction of new products, services and relationships, ScanSoft’s strategic and operational plan, and

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future prospects regarding product lines, sales channels and international operations constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements that are not statements of historical fact (including statements containing the words “believes,” “plans,” “anticipates,” “expects,” estimates and similar expressions) should also be considered to be forward-looking statements. There are a number of important factors that could cause actual results or events to differ materially from those indicated by such forward-looking statements, including the ability of ScanSoft to successfully integrate MedRemote’s operations and employees; the ability to realize anticipated synergies; fluctuations in demand for ScanSoft’s existing and future products; economic conditions in the United States and abroad; ScanSoft’s ability to control and successfully manage its expenses, inventory and cash position; the effects of competition, including pricing pressure; possible defects in ScanSoft’s products and technologies; ScanSoft’s dependence on OEM customers; and the other factors described in ScanSoft’s Annual Report on Form 10-K for the year ended September 30, 2004 and its most recent quarterly reports on Form 10-Q filed with the SEC. ScanSoft disclaims any intention or obligation to update any forward-looking statements as a result of developments occurring after the date of this document.