PEABODY, Mass., - June 12, 2001 - ScanSoft, Inc. (Nasdaq: SSFT), a leading provider of paper-to-digital solutions for desktop, network and corporate workgroups, announced that Microsoft Corp. has shipped Microsoft® Office XP with ScanSoft’s Optical Character Recognition (OCR) technology. This release is the first commercial application resulting from the partnership between Microsoft and ScanSoft® first announced in late 1999.

Microsoft Office Document Imaging (MODI) is a new tool included in Microsoft Office XP that gives users the ability to integrate hard-copy documents into their Office XP workflow. Powered by ScanSoft’s OCR engine, users can scan and index paper documents within Office XP and later search and retrieve them for reference and communication. No longer limited to key word searches, Office Document Imaging makes it much easier for users to find and reuse all paper-based corporate knowledge.

Included in MODI is a direct upgrade button for ScanSoft’s professional level OCR product offering – OmniPage Pro®. From within the Help Menu of MODI, users can select a menu item to upgrade from the basic OCR software. The user is presented with a brief overview of the upgrade value and can then click directly to ScanSoft’s Web site for more information and purchase.

“The inclusion of ScanSoft’s OCR technology within Office XP will create much greater market awareness about the value of OCR technology for the knowledge worker,” said Wayne Crandall, ScanSoft’s senior vice president of sales and marketing.“It also represents an excellent opportunity for us to market our flagship OmniPage Pro OCR product to the Microsoft Office XP user community.”

Businesses today still rely on paper-based documents, whether they are communicated electronically for printing and reading or legacy documents that are contained in file cabinets. CR technology eliminates the need to manually retype these documents.

OmniPage Pro turns paper-based documents into fully electronic documents that can be edited without the need to retype. The functionality and benefits gained with an upgrade to OmniPage Pro are:

Maintaining Page Layout - accurately recognizes and recreates complex document elements such as multiple-columns, tables, color pictures, headers and footers, line art, insets, reverse video text, and drop caps. The result is an editable electronic document that is true to the original.
Formatted HTML Output - allows users to convert paper to formatted Web pages without losing page layout.
Table Recognition - converts both ruled and un-ruled tables into spreadsheets, MS Word tables and HTML tables. Advanced tools allow users to analyze a table and check the results before the recognition process to enable correct table cell recognition.
Proof Reader - OmniPage Pro gives its users the tools needed to conveniently review and correct OCR results.
Batch OCR - allows users to run large OCR jobs while they are away from their computer.
Direct OCR™ - allows users to start and run OmniPage Pro from within many popular desktop applications.
Third Party Application Support - OmniPage Pro can output to more than 25 file types, enabling users to put their OCR results to work in the application of their choice.

ScanSoft is offering users of Microsoft Office XP a special upgrade price of $299.99 for OmniPage Pro. This represents a 40% discount from suggested list prices and is available at http://www.scansoft.com/products/omnipage/pro/officexp.asp

About ScanSoft, Inc.

Headquartered in Peabody, Mass., with European headquarters in The Netherlands, ScanSoft, Inc. (Nasdaq: SSFT) is a global leader in paper-to-digital solutions for the desktop, network, Internet and mobile environments that enable users to leverage the power of their scanners, digital cameras and other electronic devices. ScanSoft’s award-winning product line – OmniPage Pro, TextBridge Pro, PaperPort Deluxe, Pagis Pro, OmniForm, eOmniForm, and numerous software developer’s kits, enables users to capture, recognize, edit, manage and share documents and photos electronically by taking advantage of ScanSoft’s cutting-edge technology.

ScanSoft has established numerous strategic partnerships with the industry’s leading scanner and multifunction vendors to deliver the most comprehensive and cost-effective solutions for its customers. Vendors who have chosen ScanSoft’s cutting-edge products and technologies include Brother, Canon, Epson, Fujitsu, Hewlett-Packard, IBM/Lotus, Mustek, Primax, Sharp, Symantec Corporation, Visioneer, Xerox and others. ScanSoft’s leading technologies have been licensed by Microsoft for use in Office XP and other future products.

ScanSoft software is sold, marketed and supported worldwide through retail, dealer and OEM channels and the Internet, capturing the small to medium size business and corporate markets. There are more than 8 million registered users of ScanSoft products. ScanSoft can be found on the Web at www.scansoft.com.

Trademark reference: ScanSoft, OmniPage, TextBridge, PaperPort, PaperPort Deluxe, Pagis, OmniForm, eOmniForm, Direct OCR and Developer’s Kit 2000 are registered trademarks or trademarks of ScanSoft, Inc., in the United States and/or other countries. All other trademarks and trade names are hereby recognized and may be registered to their respective holders.

Safe Harbor Statement

Except for the historical information contained herein, the matters set forth in this press release, including, but not limited to, statements as to the features and perceived benefits of ScanSoft’s OCR engine and OmniPage Pro, are forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995.These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially, including the market acceptance of ScanSoft’s OCR engine and OmniPage Pro, the impact of competitive products, and other risks detailed from time to time in ScanSoft’s SEC reports. ScanSoft disclaims any intent or obligation to update these forward-looking statements.

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