[Aspect Letterhead]


February 16, 2000


Mr. Gary L. Smith
Chief Operating Officer
Aspect Communications
San Jose, CA  95131

Dear Gary:

     This letter agreement (the "Agreement") is to confirm the terms of your
ongoing employment with Aspect Communications Corporation (the "Company") and
supersedes and replaces all prior oral and/or written agreements regarding the
subject matter hereof between you and the Company.

     1.   This Agreement will commence on the date hereof and continue until
February 28, 2002 (the "Original Term"), unless extended for one or more
                        -------------
additional one-year terms upon mutual written agreement between you and the
Company or unless terminated pursuant to the terms described herein.  Approval
by the Company shall be evidenced by the adoption of resolutions by the
Compensation Committee of the Board of Directors of the Company (the
"Committee").  In the event that the Company has entered into discussions with a
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third party regarding a Change of Control in the beneficial ownership of the
Company (as defined below) and such Change of Control discussions are ongoing at
the end of the Original Term or any extension, this Agreement automatically
shall be extended until the later of (a) the end of a period of eighteen (18)
months following the closing of such Change of Control transaction or (b) at the
time that the parties have ceased their discussions.

     2.   You are employed as Chief Operating Officer of the Company, and as
such report to the Company's CEO/President. Your job duties and responsibilities
are described on Exhibit A attached hereto. You agree to the best of your
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ability and experience that you will, to the reasonable satisfaction of the
Company and its Board, at all times loyally and conscientiously perform all of
the duties and obligations required of you pursuant to the terms of this
Agreement; provided, however, that you shall not be precluded from engaging in
civic, charitable or religious activities, from devoting a reasonable amount of
time to private investments, or from serving on the boards of directors of other
business entities with the prior written approval of the Board of Directors of
the Company (the "Board"), so long as such activities or service do not
interfere with your responsibilities to the Company hereunder. You will comply
with and be bound by the Company's operating policies, procedures and practices
in effect from time to time during the term of your employment.
<PAGE>

     3.   You acknowledge that your employment is and will continue to be at-
will, as defined under applicable law, and that your employment with the Company
may be terminated by either party at any time for any or no reason, with or
without cause, and with or without notice. If your employment terminates for any
reason, you will not be entitled to any payments, benefits, damages, award or
compensation other than as provided in this Agreement. Notwithstanding the
foregoing, you still shall have the right to receive (i) payment of regular
monthly salary and any bonus that has accrued but is unpaid on the date of
termination, (ii) payment of all of your accrued and unused vacation through the
date of termination, (iii) following your submission of proper expense reports,
reimbursement by the Company for all expenses reasonably and necessarily
incurred by you in connection with the business of the Company prior to
termination, (iv) vested contributions and earnings from the Company's 401(k)
plan, and (v) your rights under any of the Company's employee benefit plans,
policies or arrangements in accordance with the terms of such plans, policies
and arrangements. Any payments described in this paragraph shall be made
promptly upon termination, but in any event in compliance with applicable law
and any applicable terms of the Company's plans, policies, and arrangements. The
rights and duties created by this paragraph may not be modified in any way
except by a written agreement executed by you and the Chief Executive Officer on
behalf of the Company.

     4.   If your employment is involuntarily terminated other than for Cause
(as defined below) or terminated by you following a Constructive Termination (as
defined below) at any time upon or within twelve (12) months following a Change
of Control (the "Coverage Period"), you will be entitled to receive payment of
severance benefits equal to 24 months of your regular monthly salary plus your
annual target bonus (subject to any applicable tax withholding) in effect on the
date of your termination or upon the occurrence of the Change of Control,
whichever is greater. (Effective January 1, 2001, the Coverage Period shall be
expanded to include the period beginning three (3) months prior to the
occurrence of a Change of Control and ending thirteen (13) months following a
Change of Control.) Payment will be made in a lump sum not more than thirty (30)
days following the date of termination. Provided that you make a timely election
to continue coverage under the Company's group health plans pursuant to the
Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA"), health
insurance benefits with the same coverage provided to you prior to the
termination (e.g. medical, dental, optical, mental health) will be provided at
the Company's cost for eighteen (18) months following the termination date, but
not longer than until you are covered by comparable health insurance benefits
from another employer or are otherwise ineligible for COBRA continuation
coverage. Nothing in this Section 4 shall restrict the ability of the Company or
its successor from changing some or all of the terms of such health insurance
benefits, the cost to participants, or other features of such benefits;
provided, however, that all similarly situated participants are treated the
same. In addition, and except as otherwise determined below, each stock option
and share of restricted stock you hold that is not otherwise fully exercisable
and/or vested (i.e., released from the Company's repurchase option) as of the
termination date shall become immediately exercisable and/or vested in full as
of such date.

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<PAGE>

          Notwithstanding the foregoing, you shall not be required to mitigate
the amount of any payment provided for in this Agreement by seeking other
employment or otherwise nor, except for your eligibility for COBRA continuation
coverage, shall the amount of any payment or benefit provided for in this
paragraph be reduced or otherwise affected by any compensation or benefits
received by you as a result of employment by another employer or self-
employment, by any retirement benefits regardless of source, by offset against
any amount claimed to be owed by you to the Company, or otherwise.

     5.   In the event that the severance and other benefits provided to you by
this Agreement (i) constitute "parachute payments" within the meaning of Section
280G of the Internal Revenue Code of 1986, as amended (the "Code"), or any
                                                            ----
comparable successor provisions, and (ii) but for this paragraph would be
subject to the excise tax imposed by Section 4999 of the Code, or any comparable
successor provisions (the "Excise Tax"), then your benefits hereunder shall be
either

                    (i)  provided to you in full, or

                    (ii) provided to you as to such lesser extent
                         which would result in no portion of such
                         benefits being subject to the Excise Tax,

whichever of the foregoing amounts, when taking into account applicable federal,
state, local and foreign income and employment taxes, the Excise Tax, and any
other applicable taxes, results in the receipt by you, on an after-tax basis, of
the greatest amount of benefits, notwithstanding that all or some portion of
such benefits may be taxable under the Excise Tax. Unless the Company and you
agree otherwise in writing, any determination required under this paragraph
shall be made in writing in good faith by a qualified third party (the
"Professional Service Firm"). In the event of a reduction of benefits hereunder,
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you shall be given the choice of which benefits to reduce, in the event that the
reduction to zero dollars ($0) of all benefits paid in cash is insufficient to
avoid liability under the Excise Tax. For purposes of making the calculations
required by this paragraph, the Professional Service Firm may make reasonable
assumptions and approximations concerning applicable taxes and may rely on
reasonable, good faith interpretations concerning the application of the Code,
and other applicable legal authority. The Company and you shall furnish to the
Professional Service Firm such information and documents as the Professional
Service Firm may reasonably request in order to make a determination under this
Section 5. The Company shall bear all costs the Professional Service Firm may
reasonably incur in connection with any calculations contemplated by this
paragraph.

          If, notwithstanding any reduction described in this paragraph, the
Internal Revenue Service ("IRS") determines that you are liable for the Excise
                           ---
Tax as a result of the receipt of the payment of benefits described above, then
you shall be obligated to pay back to the Company, within thirty (30) days after
a final IRS determination or in the event that you challenge the final IRS
determination, a final judicial determination, a portion of the payment equal to
the "Repayment Amount." The Repayment Amount with respect to the payment of
benefits shall be the smallest amount, if any, as shall be required to be paid
to the Company so that your net after-tax proceeds with respect to any payment
of benefits (after taking into account the payment of the Excise Tax and all
other applicable taxes imposed on such payment) shall be maximized. The
Repayment Amount with respect to the payment of benefits shall be zero if a
Repayment Amount of more than zero would not result in your net

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<PAGE>

after-tax proceeds with respect to the payment of such benefits being maximized.
If the Excise Tax is not eliminated pursuant to this paragraph, you shall pay
the Excise Tax.

          Notwithstanding any other provision of this paragraph, if (i) there is
a reduction in the payment of benefits as described in this paragraph, (ii) the
IRS later determines that you are liable for the Excise Tax, the payment of
which would result in the maximization of your net after-tax proceeds
(calculated as if your benefits previously had not been reduced), and (iii) you
pay the Excise Tax, then the Company shall pay to you those benefits which were
reduced pursuant to this paragraph contemporaneously or as soon as
administratively possible after you pay the Excise Tax so that your net after-
tax proceeds with respect to the payment of benefits is maximized.

     6.   For purposes of this Agreement, the following definitions will apply:

          (a)  "Cause" for your termination will exist if the Company terminates
                -----
your employment for any of the following reasons: (i) you willfully fail to
substantially perform your duties hereunder (other than any such failure due to
your physical or mental illness), and such willful failure is not remedied
within ten (10) business days after written notice from the Company's Chief
Executive Officer, which written notice shall state that failure to remedy such
conduct may result in an involuntary termination for Cause; (ii) you engage in
willful and serious misconduct (including, but not limited to, an act of fraud
or embezzlement) that has caused or is reasonably expected to result in material
injury to the Company or any of its affiliates, (iii) you are convicted of or
enter a plea of guilty or nolo contendere to a crime that constitutes a felony
related to your employment with the Company or which materially adversely
affects your ability to perform your duties on behalf of the Company, or (iv)
you willfully breach any of your obligations hereunder or under any other
written agreement or covenant with the Company or any of its affiliates,
including, but not limited to, the Confidentiality Agreement, and such willful
breach is not remedied within ten (10) business days after written notice from
the Company's Chief Executive Officer, which written notice shall state that
failure to remedy such conduct may result in an involuntary termination for
Cause.

          (b)  "Change of Control" will mean (i) a dissolution or liquidation of
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the Company; (ii) a sale, lease or other disposition of all or substantially all
of the assets of the Company so long as the Company's stockholders of record
immediately prior to such transaction will, immediately after such transaction,
hold less than fifty percent (50%) of the voting power of the acquiring entity;
(iii) an acquisition of the Company by another entity by means of any
transaction or series of related transactions (including, without limitation,
any reorganization, merger or consolidation but excluding any merger effected
exclusively for the purpose of changing the domicile of the Company), so long as
the Company's stockholders of record immediately prior to such transaction or
series of related transactions will, immediately after such transaction or
series of related transactions, hold less than fifty percent (50%) of the voting
power of the surviving or acquiring entity; or (iv) the individuals who, as of
the date of this Agreement, are members of the Board (the "Incumbent Board"),
cease for any reason to constitute at least fifty percent (50%) of the Board. If
the election, or nomination for election by the Company's stockholders, of any
new director was approved by a vote of at least fifty percent (50%) of the
Incumbent Board, such new director shall be considered as a member of the
Incumbent Board.

               Effective January 1, 2001, "Change of Control" will mean (i) a
dissolution or liquidation of the Company; (ii) a sale, lease or other
disposition of all or substantially all of the assets of the Company so long as
the Company's stockholders

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<PAGE>

immediately prior to such transaction will, immediately after such transaction,
fail to possess direct or indirect beneficial ownership of more than fifty
percent (50%) of the voting power of the acquiring entity (for purposes of this
clause 7(b)(ii), any person who acquired securities of the Company prior to the
occurrence of such asset transaction in contemplation of such transaction and
who after such transaction possesses direct or indirect ownership of at least
ten percent (10%) of the securities of the acquiring entity immediately
following such transaction shall not be included in the group of stockholders of
the Company immediately prior to such transaction); (iii) either a merger or
consolidation in which the Company is not the surviving corporation and the
stockholders of the Company immediately prior to the merger or consolidation
fail to possess direct or indirect beneficial ownership of more than fifty
percent (50%) of the voting power of the securities of the surviving corporation
(or if the surviving corporation is a controlled affiliate of another entity,
then the required beneficial ownership shall be determined with respect to the
securities of that entity which controls the surviving corporation and is not
itself a controlled affiliate of any other entity) immediately following such
transaction, or a reverse merger in which the Company is the surviving
corporation and the stockholders of the Company immediately prior to the reverse
merger fail to possess direct or indirect beneficial ownership of more than
fifty percent (50%) of the securities of the Company (or if the Company is a
controlled affiliate of another entity, then the required beneficial ownership
shall be determined with respect to the securities of that entity which controls
the Company and is not itself a controlled affiliate of any other entity)
immediately following the reverse merger (for purposes of this clause 6(b)(iii),
any person who acquired securities of the Company prior to the occurrence of a
merger, reverse merger, or consolidation in contemplation of such transaction
and who after such transaction possesses direct or indirect beneficial ownership
of at least ten percent (10%) of the securities of the Company or the surviving
corporation (or if the Company or the surviving corporation is a controlled
affiliate, then of the appropriate entity as determined above) immediately
following such transaction shall not be included in the group of stockholders of
the Company immediately prior to such transaction); (iv) an acquisition by any
person, entity or group within the meaning of Section 13(d) or 14(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), or any
comparable successor provisions (excluding any employee benefit plan, or related
trust, sponsored or maintained by the Company or a subsidiary or other
controlled affiliate of the Company) of the beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act, or comparable
successor rule) of securities of the Company representing at least fifty percent
(50%) of the combined voting power entitled to vote in the election of
directors; or (v) the individuals who, as of the date of this Agreement, are
members of the Board (the "Incumbent Board"), cease for any reason to constitute
at least fifty percent (50%) of the Board. If the election, or nomination for
election by the Company's stockholders, of any new director was approved by a
vote of at least fifty percent (50%) of the Incumbent Board, such new director
shall be considered as a member of the Incumbent Board.

     (c)  "Constructive Termination" will be deemed to occur if (A)(i) your
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duties and responsibilities as Chief Operating Officer of the Company (or a
successor corporation) are materially diminished from your duties and
responsibilities as in effect at any time from the time immediately prior to the
occurrence of a Change of Control or at any time thereafter, without your prior
written consent; (ii) any reduction in the total value of your base compensation
and benefits occurs; (iii) your new business office location is either (a) more
than thirty (30) miles in distance from your current business office location or
(b) greater than your current commute to and from your current business office
location; and (B) within sixty (60) days immediately following such event
described in clauses (i) through (iii) above, you elect to terminate your
employment voluntarily.  For purposes of this definition and this Agreement,
however, a change in title with substantially the same duties and
responsibilities

5
<PAGE>

shall not be considered a Constructive Termination, should this result solely
from an acquisition by a larger company in which you have continuing
responsibilities for the acquiror which are substantially the same as those you
had for the Company when it was independent.

     7.   You have signed a document entitled "Employee Agreement" (the
"Confidentiality Agreement") substantially in the form attached hereto as
 -------------------------
Exhibit B.  You hereby represent and warrant to the Company that you have
---------
complied with all obligations under the Confidentiality Agreement and agree to
continue to abide by the terms of the Confidentiality Agreement and further
agree that the provisions of the Confidentiality Agreement will survive any
termination of this Agreement or of your employment relationship with the
Company.

          8.   Upon your involuntary termination of employment other than for
Cause or your voluntary termination following a Constructive Termination, and as
a condition of the receipt of any benefits under this Agreement, you shall
execute an effective release (the "Release") in substantially the form
                                   -------
incorporated herein and attached hereto as Exhibit C (or if you are under forty
                                           ---------
(40) years old at the time of such termination, in substantially the form
attached hereto as Exhibit C with appropriate changes to reflect the
inapplicability of the Age Discrimination in Employment Act) as shall ultimately
be determined by the Company. Such Release shall specifically relate to all of
your rights and claims in existence at the time of such execution and shall
confirm your obligations under the Confidentiality Agreement. It is understood
that you have twenty-one (21) days to consider whether to execute such Release,
and you may revoke such Release within seven (7) business days after execution.
In the event you do not execute such Release within the twenty-one (21) day
period, or if you revoke such Release within the subsequent seven (7) business
day period, no benefits shall be payable under this Agreement and this Agreement
shall be null and void. Notwithstanding the foregoing, in addition to or in lieu
of the Release attached hereto as Exhibit C, you may be required to execute and
deliver an effective release in such other form as the Company may, in its sole
discretion, determine to be necessary or appropriate in order to comply with the
requirements of the laws of any jurisdiction applicable to you in order to make
a general release of claims effective and enforceable.

     9.   You represent that you have not entered into any agreements,
understandings, or arrangements with any other person or entity which would be
breached by you as a result of, or that would in any way preclude or prohibit
you from entering into this Agreement or performing any of the duties and
responsibilities provided for herein.

     10.  Any successor to the Company as a result of the occurrence of a Change
of Control (whether direct or indirect and whether by purchase, lease, merger,
consolidation, liquidation or otherwise) or otherwise which succeeds to all or
substantially all of the Company's business and/or assets shall assume the
obligations under this Agreement and agree expressly to perform the obligations
under this Agreement in the same manner and to the same extent as the Company
would be required to perform such obligations in the absence of a succession.
For all purposes under this Agreement, the term "Company" shall include any
successor to the Company's business and/or assets which executes and delivers
the assumption agreement described in this paragraph or which becomes bound by
the terms of this Agreement by operation of law.

6
<PAGE>

          The terms of this Agreement and all of your rights hereunder shall
inure to the benefit of, and be enforceable by, your personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees or legatees.

     11.  This Agreement, including any Exhibits hereto, constitutes the sole
agreement of the parties and supersedes all negotiations and prior agreements
with respect to the subject matter hereof, i.e., the rights and responsibilities
of you and the Company in the event of certain terminations of your employment
with the Company relating to the occurrence of a Change of Control.

     12.  Any term of this Agreement may be amended or waived only with the
written consent of the parties.

     13.  Any notice required or permitted by this Agreement will be in writing
and will be deemed sufficient upon receipt, when delivered personally, by
facsimile or by a nationally-recognized delivery service (such as Federal
Express or Express Mail), or 72 hours after being deposited in the U.S. mail as
certified or registered mail with postage prepaid, if such notice is addressed
to the party to be notified at such party's address as set forth below or as
subsequently modified by written notice.

     14.  The validity, interpretation, construction and performance of this
Agreement will be governed by the laws of the State of California, without
giving effect to the principles of conflict of laws.

     15.  If one or more provisions of this Agreement are held to be
unenforceable under applicable law, the parties agree to re-negotiate such
provision in good faith. In the event that the parties cannot reach a mutually
agreeable and enforceable replacement for such provision, then (i) such
provision will be excluded from this Agreement or a legal authority of competent
jurisdiction (including an arbitrator) will have the authority to modify or
replace the invalid or unenforceable provision with a valid and enforceable
provision that most accurately embodies the parties' intention with respect to
the invalid or unenforceable provision, (ii) the balance of the Agreement will
be interpreted as if such provision were so excluded, modified or replaced and
(iii) the balance of the Agreement will be enforceable in accordance with its
terms.

     16.  You and the Company agree to attempt to settle any disputes arising in
connection with this Agreement through good faith consultation. In the event
that we are not able to resolve any such disputes within fifteen (15) days after
notification in writing to the other, we agree that any dispute or claim arising
out of or in connection with this Agreement will be finally settled by binding
arbitration in Santa Clara County, California in accordance with the rules of
the American Arbitration Association by one arbitrator appointed in accordance
with said rules. The arbitrator will apply California law, without reference to
rules of conflicts of law or rules of statutory arbitration, to the resolution
of any dispute. Judgment on the award rendered by the arbitrator may be entered
in any court having jurisdiction thereof. Notwithstanding the foregoing, the
parties may apply to any court of competent jurisdiction for preliminary or
interim equitable relief, or to compel arbitration in accordance with this
paragraph, without breach of this arbitration provision. You agree that punitive
damages will not be awarded. This paragraph will not apply to the
Confidentiality Agreement.

          If there is termination of your employment with the Company followed
by a dispute as to whether you are entitled to the benefits provided under this
Agreement, then,

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<PAGE>

during the period of that dispute the Company shall pay you fifty percent (50%)
of the amount specified in Section 4 hereof (except that the Company shall pay
one hundred percent (100%) of any insurance premiums provided for in Section 4),
if, and only if, you agree in writing that if the dispute is resolved against
you, you shall promptly refund to the Company all payments you receive plus
interest at the rate provided in Section 1274(d) of the Code, compounded
quarterly. If the dispute is resolved in your favor, promptly after resolution
of the dispute the Company shall pay you the sum that was withheld during the
period of the dispute plus interest at the rate provided in Section 1274(d) of
the Code, compounded quarterly.

          Notwithstanding any other provisions of this Agreement, if you either
(i) bring any action to enforce your rights pursuant to this Agreement, or (ii)
defend any legal challenge to your rights hereunder, you shall be entitled to
recover reasonable attorneys' fees and costs incurred in connection with such
action from the Company, payable on a monthly basis, regardless of the outcome
of such action; provided, however, that in the event such action is commenced by
you, the court finds the claim was brought in good faith.

     17.  You acknowledge that, in executing this Agreement, you have had the
opportunity to seek the advice of independent legal counsel, and have read and
understood all of the terms and provisions of this Agreement.

     Please indicate your agreement with the above terms by signing below.


                                   Sincerely,

                                   Aspect Communications Corporation

                                   /s/ Beatriz Infante
                                   Beatriz Infante

                                   Title: Chief Executive Officer and President

                                   Address: 1310 Ridder Park Drive
                                            San Jose, CA 95131

                                   Facsimile Number: (408) 325-2261


     My signature below signifies my agreement with the above terms.

     By: /s/ Gary L. Smith
        ----------------------------------------
     Address:  _________________________________

     Facsimile Number:__________________________

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<PAGE>

                                   EXHIBIT A
                                   ---------

                           DESCRIPTION OF JOB DUTIES
                           -------------------------
                             AND RESPONSIBILITIES
                             --------------------
<PAGE>

                                   EXHIBIT B
                                   ---------

                          CONFIDENTIALITY  AGREEMENT
                          --------------------------
<PAGE>

                                   EXHIBIT C
                                   ---------

                                    RELEASE
                                    -------

Source: OneCLE Business Contracts.