Exhibit 10.3

CONSULTING AGREEMENT

THIS CONSULTING AGREEMENT (“Agreement”), dated as of March 31, 2011, is made and
entered into by and between Monty Schmidt (“Schmidt” or “Employee”) and SONIC
FOUNDRY, INC., a Maryland corporation having its principal offices at 222 West
Washington Avenue, Suite 775, Madison, Wisconsin 53703 (hereinafter referred to
as “Sonic Foundry” or “Company”).

WITNESSETH:

WHEREAS, Schmidt has decided voluntarily to resign from employment with the
Company and to resign from membership on the Company’s Board of Directors; and

WHEREAS, the Company and Schmidt have agreed that Schmidt’s employment with the
Company shall terminate, effective as of the close of business on March 31,
2011, and that his membership on the Company’s Board of Directors shall
terminate effective as of the close of business on the same date; and

WHEREAS, Schmidt and the Company are desirous of Schmidt assisting the Company
in the capacity of a consultant; and

WHEREAS, Schmidt and the Company now desire to memorialize, by the execution of
this Agreement, their understanding with respect to all matters relating to
Schmidt’s resignation from employment and resignation from the Board of
Directors and his continued assistance to the Company as a consultant;

NOW, THEREFORE, in consideration of the premises and mutual promises contained
herein, as well as the payment of the monies and other benefits to Schmidt as
hereinafter recited, the receipt and sufficiency of which are hereby
acknowledged by Schmidt, it is agreed as follows:

1. TRANSITION DATE. Employee’s tenure as an employee and as a member of the
Board of Directors of the Company shall cease as of the close of business on
March 31, 2011 and on such date shall begin his tenure as a consultant to the
Company on the terms and conditions set forth herein (the “Transition Date”).
Except as specifically set forth below, all salary, commission, benefits and
rights thereto shall cease as of the Transition Date. The terms of the
employment agreement dated January 1, 2001, between Employee and the Company, as
amended, shall be of no further force or effect.

2. TERMINATION OF EMPLOYMENT. Employee acknowledges that he is receiving
consideration under this Agreement to which he would not otherwise be entitled.
Employee further agrees and recognizes that by signing this Agreement, his
employment relationship with the Company is permanently and irrevocably severed
as of the Termination Date, and that the Company and its related, affiliated,
parent or subsidiary companies have no obligation, contractual or otherwise, to
hire, rehire, re-employ, or recall Employee in the future, except for the
obligation in connection with the consulting services set forth herein.

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3. OBSERVER STATUS. Employee shall have non-voting observer status on the Board
of Directors until March 31, 2012, provided that if Schmidt is in breach of this
Agreement or if this Agreement is otherwise terminated as provided for herein,
Schmidt’s observer status shall terminate as of such date of breach or date of
termination of this Agreement.

4. SEVERANCE BENEFITS. In return for Employee’s execution of and adherence to
this Agreement, including the releases that form a material part of this
Agreement, the Company shall provide Employee with certain benefits, including
benefits to which he would not otherwise be entitled.

5. CONSULTING FEES. The Company shall pay Schmidt $23,016.66 per month for
consulting services, for the period April 1, 2011 through April 1, 2012 (the
“Consulting Period”). Payments shall be made on the Company’s regular paydays,
and shall not be subject to withholding or other deductions. In the event of
Schmidt’s death before the end of the Consulting Period, any remaining payments
which would have otherwise become due Schmidt during the remainder of the
Consulting Period shall be paid to Schmidt’s estate. In addition, the Company
shall pay Schmidt $3,362.50 to account for a 3% salary increase, retroactive to
November 1, 2010.

6. GROUP HEALTH PLAN. Schmidt shall be entitled to elect for himself and any of
his dependents who are currently covered under the terms and conditions of the
Company’s group health plan “continuation coverage” (including dental coverage)
as provided under Section 4980B of the Internal Revenue Code of 1986, as amended
(“COBRA”). To the extent that Schmidt elects continuation coverage under COBRA,
the Company will reimburse him for the cost of such continuation coverage for
himself and his covered dependents during the Consulting Period. After the
Consulting Period, Schmidt shall bear the full cost of such continuation
coverage. In the event of Schmidt’s death before the end of the Consulting
Period, and to the extent Schmidt’s surviving dependents retain continuation
coverage under COBRA after his death, the Company will reimburse them for the
cost through the end of the Consulting Period.

7. VACATION DAYS. Within thirty (30) days following the execution of this
Agreement, the Company shall pay Schmidt (or his estate in the event of his
death) for fifteen vacation days accrued but unused by Schmidt through the
Transition Date.

8. LIFE AND DISABILITY INSURANCE. Subject to any limitations imposed by
applicable laws or by the underwriters of any group or individual life or
disability insurance policies maintained by the Company, the Company shall
continue any coverage of Schmidt under such group or individual life and
disability insurance policies through the Consulting Period which is currently
maintained, and the Company shall bear a portion of the cost of such coverage in
accordance with the Company’s policies in effect as of the Transition Date. If
the Company is unable to continue such coverage to the extent such coverage is
currently maintained, the Company shall pay to Schmidt an amount sufficient on
an after-tax basis to obtain such coverage (less any amount he would have
otherwise been required to contribute to the cost of Company-provided coverage)
through the end of the Consulting Period.

 

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9. ADDITIONAL CONSIDERATION. As additional consideration for the releases
hereunder, the Company shall pay Schmidt (or his estate in the event of his
death) One Thousand Dollars ($1,000.00) in a single lump sum payment within
thirty (30) days following his execution of this Agreement. Such payment shall
be treated as additional consulting fees. Schmidt acknowledges and agrees that
he would not otherwise be entitled to this payment.

10. ATTORNEY’S FEES. The Company shall reimburse Schmidt for the reasonable
attorney’s fees actually incurred by him in connection with the negotiation of
the terms and provisions of this Agreement, provided Schmidt or his attorney
provides the Company with the attorney’s invoice for such fees, which invoice
shall include an itemized statement of the fees charged. The Company shall
reimburse Schmidt for such fees within thirty (30) days following the Company’s
receipt of the attorney’s invoice.

11. STOCK OPTIONS. The Employee has 19,980 outstanding vested options pursuant
to the Company’s stock option plans, and 4,000 unvested outstanding options
pursuant to the Company’s stock option plans. All of Employee’s unvested options
shall vest immediately. An additional 6,000 options shall be granted to Employee
on or about the Transition Date (the “Option Grant Date”), provided that, if on
the Option Grant Date, the market price of the Company’s common stock is greater
than $15.21 per share, Employee shall be awarded a cash amount equal to 6,000
multiplied by the difference between the stock price on the Option Grant Date
and $15.21. Accordingly, Schmidt and the Company agree and acknowledge that
Schmidt shall have the vested right under the stock option plans, as so amended,
to exercise options to purchase up to 29,980 shares of the Company’s common
stock. All options shall remain exercisable in accordance with and subject to
the terms and provisions of the stock option plans (excluding terms relating to
early expiration following termination of employment). The Company makes no
representation or warranties as to the tax implications of any or all of the
aforesaid stock option modifications but does represent that this agreement with
respect to stock options is not in conflict with and is permissible under the
terms of all applicable stock option plans.

12. CONSULTING SERVICES.

(a) The Employee agrees to provide consulting services to the Company. All
compensation shall be paid to the Employee via Form 1099s. The Employee shall be
considered an independent contractor.

(b) The Employee’s consulting shall be on an occasional, as-requested,
non-exclusive basis and shall not unreasonably interfere with Employee’s
employment with another (third party) employer. The time required shall not
exceed 8 hours per week and may be performed outside of normal business hours at
the Employee’s option. The Company shall give the Employee at least 48 hours
notice before any consulting assignment. The Employee agrees to use his best
efforts to make himself available in a timely manner subject to the Parties’
understanding the Employee will have primary responsibilities with a new
employer that will take precedence. There will be no accumulation of hours from
week-to-week, except to cure a

 

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default by Employee, if any. The Employee shall not be entitled to an office on
the Company premises.

(c) In performing his consulting services Employee shall report directly to the
Company’s Board of Directors. The Employee’s duties shall consist exclusively of
the following, and any other duties reasonably and directly related thereto:

 

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Participate positively in announcement of management transition.

 

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On request of the Board, provide critique of architectural changes to the
Company’s products.

 

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On request of the Board, provide input on industry technology changes as they
relate to the Company’s products.

 

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Assist in authoring quotes endorsing the Company’s products. In the event that
the Company provides quotes attributable to Employee, Employee shall endorse
such quotes unless he reasonably disagrees with the content thereof, provided
such quotes shall not be made public without Schmidt’s prior written approval.

 

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On request of the Board, provide technical support for software which Employee
may have authored during his employment with the Company.

13. OWNERSHIP OF EQUIPMENT. The Company will transfer ownership of all
Employee’s computer hardware and attached equipment together with any software
and data on the computer, subject to provisions of paragraph 14 below to him at
no cost at the Transition Date. Employee may retain his email address
monty@sonicfoundry.com for one year following the Transition Date, but agrees to
forward all business-related communications to the Company.

14. OWNERSHIP AND DISCLOSURE OF INFORMATION.

(a) Generally. The parties acknowledge that Sonic Foundry and its affiliates
(individually and collectively, the “Companies”), have developed and intend to
continue to develop and to formulate, acquire and use commercially valuable
technical and non-technical information, design and specification documents,
concepts, technology, know-how, improvements, proposals, patent applications,
techniques, marketing plans, strategies, forecasts, inventions (not limited by
the definition of an invention contained in the United States Patent Laws),
Trade Secrets (as defined in Sec. 3426.1(d) of the Uniform Trade Secrets Act)
and processes which are considered proprietary by the Companies, particularly
including, without limitation, software, customer and supplier lists, books and
records, computer programs, pricing information and business plans
(collectively, the “Proprietary Information”). It is necessary for the Companies
to protect the Proprietary Information by patents or copyrights or by holding it
secret and confidential.

 

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(b) Access to Proprietary Information. The parties acknowledge that Employee has
access to the Proprietary Information and that the disclosure or misuse of such
Proprietary Information could irreparably damage the Companies and/or their
respective clients or customers.

(c) Nondisclosure to others. Except as directed by Sonic Foundry in writing or
verbally, Employee shall not at any time during or after the date hereof
disclose any Proprietary Information to any person whatsoever, examine or make
copies of any reports or other documents, papers, memoranda or extracts for use
other than in connection with his duties with Sonic Foundry or utilize for his
own benefit or for the benefit of any other party any such Proprietary
Information and will use reasonable diligence to maintain the confidential,
secret or proprietary character of all Proprietary Information, provided,
however, that Employee may disclose any of such Proprietary Information if
compelled to do so by a court or governmental agency, provided further, however,
that to the extent allowed by law, Employee shall give Sonic Foundry three
business days notice prior to such disclosures.

(d) Property of Sonic Foundry. Employee agrees that any inventions, discoveries,
improvements, or works which during the Consulting Period are conceived, first
reduced to practice, made, developed, suggested by, or created in anticipation
of, in the course of or as a result of work done under this Agreement (or
pursuant to and during his previous employment agreement) by Employee and which
are reasonably related to Sonic Foundry’s automated rich media application
software and systems business or other business activities of Sonic Foundry
existing on or developed during the term of this Agreement shall become the
absolute property of Sonic Foundry. Employee further agrees that all such
inventions, discoveries, improvements, creations, or works, and all letters,
patent or copyrights that may be obtained therefore shall be the property of
Sonic Foundry, and Employee agrees to do every act and thing requisite to vest
said patents or copyrights in Sonic Foundry without any other or additional
consideration to Employee than herein expressed.

(e) Survivability. Employee acknowledges that his obligations hereunder shall
continue beyond the term of this Agreement with respect to any Proprietary
Information (as defined paragraph (a) hereof) which came into his possession
during the term of this Agreement.

(f) Duties Upon Transition. Except as set forth in paragraph 13, at the
Transition Date, Employee shall deliver immediately to Sonic Foundry all
computer software, correspondence, letters, contracts, call reports, price
lists, manuals, mailing lists, customer lists, advertising materials, ledgers,
supplies, equipment, checks, petty cash, and all other materials and records of
any kind and other embodiments of information that may be in Employee’s
possession or under his control which belong to Sonic Foundry or have been
obtained from Sonic Foundry by Employee, including any and all copies of such
items previously described in this paragraph.

15. RELEASE OF CLAIMS BY EMPLOYEE. In consideration of the covenants set forth
in this Agreement, and for other good and valuable consideration, receipt of
which is

 

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hereby acknowledged, Employee, on behalf of his successors, assigns and legal
representatives, fully, irrevocably and unconditionally releases and discharges
the Company, as well as its officers, directors, shareholders, agents,
employees, and representatives, in their capacity as such and otherwise,
including their heirs, executors and administrators, as well as related,
affiliated, subsidiary, predecessor and parent companies, successors and
assigns, separately and collectively, and each of them (collectively “Company
Releasees”), from all actions, causes of action, suits, debts, charges,
complaints, claims, liabilities, obligations, promises, agreements,
controversies, damages and expenses, including attorneys fees, of any nature
whatsoever, known or unknown, suspected or unsuspected, which Employee ever had,
now has, or may have against Company Releasees, up to the date of Employee’s
signing of this Agreement, by reason of any act, event or omission concerning
any matter or thing, including, without limiting the generality of the
foregoing, any claims against Company Releasees, arising from or relating,
either directly or indirectly, to Employee’s status as an employee of the
Company or any separation of that employment, any claims arising from any
emotional, bodily or personal injuries, loss of income, employment benefits,
wrongful discharge, or discrimination, whether based on sex, sexual orientation,
age, disability, medical condition, race, religion, national origin, ancestry,
marital status, or any other characteristic or category or combination of same,
as well as any alleged violation by Releasees of any federal, state or local
statutes, ordinances or common law, including, but not limited to, Title VII of
the Civil Rights Act of 1964, the Age Discrimination in Employment Act of 1967,
the Americans With Disabilities Act, the Family and Medical Leave Act, the Fair
Labor Standards Act, the Equal Pay Act, or any of the Company’s own policies,
procedures or purported express or implied agreements or contracts with
Employee. All such claims are forever barred by this Agreement whether they
arise in contract or tort or under a statute or any other law. The final release
of all claims by Employee against Sonic Foundry constitutes a material part of
the consideration flowing from Employee to Sonic Foundry under this Agreement,
and each of the individuals and entities included within the term “Company
Releasees” is an intended beneficiary of this consideration.

16. RELEASE OF CLAIMS BY COMPANY. In consideration of the covenants set forth in
this Agreement, and for other good and valuable consideration, receipt of which
is hereby acknowledged, Company, on behalf of its successors, assigns and legal
representatives, fully, irrevocably and unconditionally releases and discharges
the Employee, his successors, assigns and legal representatives, separately and
collectively, and each of them (collectively “Employee Releasees”), from all
actions, causes of action, suits, debts, charges, complaints, claims,
liabilities, obligations, promises, agreements, controversies, damages and
expenses, including attorneys’ fees, of any nature whatsoever, known or unknown,
suspected or unsuspected, which Company ever had, now has, or may have against
Employee Releasees, up to the date of Employee’s signing of this Agreement, by
reason of any act, event or omission concerning any matter or thing, including,
without limiting the generality of the foregoing, any claims against Employee
Releasees, arising from or relating, either directly or indirectly, to
Employee’s status as an employee of the Company or any separation of that
employment. All such claims are forever barred by this Agreement whether they
arise in contract or tort or under a statute or any other law. The final release
of all claims by Sonic Foundry against Employee constitutes a material part of
the consideration flowing from Sonic Foundry to Employee under

 

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this Agreement, and each of the individuals and entities included within the
term “Employee Releasees” is an intended beneficiary of this consideration.

17. RESTRICTIVE COVENANT. Employee covenants and agrees that during the period
commencing with the date hereof and ending one (1) year from the Transition Date
(the “Non-Compete Period”), employee will not compete or attempt to compete with
or become associated with any business which competes with the Companies’
automated rich media application software and systems business, or any business
activities of the Companies existing on or developed subsequent to the date
hereof. Employee covenants and agrees that he will not, without the prior
written consent of Sonic Foundry during the Non-Compete Period: (a) solicit any
customer of the Companies; (b) solicit any contracts which were either being
solicited by, or which were under contract with, the Companies by performing or
causing to be performed any work which was either being solicited by, or which
was under contract with, Sonic Foundry; or (c) induce any sales, operating,
technical or other personnel of the Companies to leave the service, employ or
business of the Companies. Employee agrees that he will not violate these
provisions: (a) directly or indirectly; (b) in any capacity, either individually
or as a member of any firm; (c) as an officer, director, stockholder, partner or
employee of any business; or (d) through or with any persons, relatives (either
through blood or marriage), firms, corporations or individuals controlled by or
associated with him (each and every such method of violation referred to in
clauses (a) through (d) shall hereinafter be referred to as an “indirect
violation”). Employee further agrees that doing or causing to be done any of the
actions prohibited in these provisions by means of an indirect violation shall
constitute a violation of these provisions as though violated by Employee,
subject to all of the remedies to Sonic Foundry provided for herein and as
otherwise provided by law. These obligations supersede and replace the
non-competition provisions set out in Employee’s prior employment agreement
which provisions shall be of no further force or effect.

18. NON-DISPARAGEMENT. Each Party hereby agrees that during the Consulting
Period he or it will not make any public statement that serves to defame or
disparage the professional capabilities, character or reputation the other
Party, or in the case of Sonic Foundry, its officers, employees, or directors.

19. EMPLOYEE ACKNOWLEDGEMENTS. Employee understands and agrees that Employee:

Has carefully read and fully understands all of the provisions of this
Agreement;

Has been offered a full twenty-one (21) days from receipt of this Agreement to
consider its terms, and having had adequate opportunity to consider the terms of
the Agreement and consult with advisors of his choice, has elected to waive the
21 day period and sign the Agreement as of the date hereof;

 

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Is, through this Agreement, releasing Sonic Foundry from any and all claims
Employee may have against Sonic Foundry, including but not limited to claims
under the Age Discrimination in Employment Act, as amended;

Knowingly and voluntarily agrees to all of the terms set forth in this
Agreement;

Knowingly and voluntarily intends to be legally bound by the same;

Was advised and is hereby advised in writing to consider the terms of this
Agreement and to consult with an attorney of Employee’s choice prior to
executing this Agreement; and

Has a full seven (7) days following his execution of this Agreement to revoke
this Agreement and has been and hereby is advised in writing that this Agreement
shall not become effective or enforceable until the revocation period has
expired. Revocation must occur by hand delivery of a letter of revocation to
Gary Weis at Sonic Foundry, Inc., 222 West Washington Avenue, Suite 775,
Madison, Wisconsin 53703.

20. COMPANY RIGHTS UPON EMPLOYEE BREACH.

(a) If the Company reasonably believes that the Employee is in breach of his
obligations set forth herein, except for the obligations in the paragraphs
entitled “Ownership and Disclosure of Information” and “Restrictive Covenants”,
then it shall provide the Employee with written notice of the alleged default
specifying in detail its reasons for the alleged breach. The Employee may
suspend payments due hereunder pending arbitration of any disputes pursuant to
paragraph 24 hereof.

(b) If the Employee prevails in arbitration (or, in the event of an alleged
breach of paragraphs 14 and 17, litigation), then the Company shall pay to
Employee any sums then due together with interest at the rate of 10%, accelerate
any remaining payments and release the Employee from any further consulting
obligations.

21. LEGAL PROCEEDINGS; AGREEMENT AS A DEFENSE. This Agreement may be plead as a
full and complete defense to, and may be used as the basis for an injunction
against, any action, suit, or other proceeding which may be instituted,
prosecuted or attempted in breach of this Agreement, except for an action based
on a breach of this Agreement. If, contrary to this Agreement, Schmidt files a
lawsuit or other legal proceeding against Sonic Foundry, the Company shall have
the option, in its sole discretion, either to raise this Agreement as a defense,
or to rescind this Agreement, in which case Schmidt shall refund to the Company
all amounts paid to him hereunder and no further payments shall be due to
Schmidt hereunder. If the Company files a lawsuit or other legal proceeding
against Schmidt, Schmidt shall have the option, in his sole discretion, either
to raise this Agreement as a defense, or to rescind this Agreement in which case
no further benefits shall be due to Schmidt hereunder. Notwithstanding the
foregoing, nothing in this Agreement shall be construed to prevent either party
from pursuing claims against the other for breach of this Agreement and from
recovering appropriate legal or equitable relief in connection with such claims.

 

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22. NO OTHER BENEFITS. Employee acknowledges that, except as set forth herein,
he is not entitled to any compensation, monies or benefits from the Company,
including but not limited to compensation for accrued vacation, bonuses,
commissions, expenses or other forms of compensation or benefits. Except as set
forth herein, Schmidt hereby waives all rights to any payments.

23. TAXES. Schmidt will be responsible for any taxes which may be due as a
result of any payments made by the Company or benefits otherwise provided as
described above, and Schmidt agrees to indemnify and hold the Company harmless
from any claim and expenses that the Company may incur as a result of any
failure by Schmidt to pay any such taxes.

24. ARBITRATION; GOVERNING LAW. Any controversy or claim arising out of, or
relating to this Agreement or the breach thereof, other than claims pursuant to
the paragraphs entitled “Ownership and Disclosure of Information” and
“Restrictive Covenants”, shall be settled by binding arbitration in the City of
Madison pursuant to the laws of the State of Wisconsin in accordance with the
rules then obtaining of the America Arbitration Association, and judgments upon
the award rendered may be entered in any court having jurisdiction thereof. This
Agreement shall be governed by and construed in accordance with the substantive
laws of the State of Wisconsin. The arbitrators shall have the power in their
discretion to award attorneys’ fees and other legal costs and expenses to the
prevailing party in connection with any arbitration.

25. ASSIGNMENT OF CLAIMS. Employee warrants to the Company that he has not
assigned any claim or cause of action released herein. The Company warrants to
the Employee that it has not assigned any claim or cause of action released
herein.

26. NOTICES. Any notice required or permitted to be given under this Agreement
shall be sufficient if in writing and sent by certified mail to his residence,
in the case of Employee, or to its principal office, in the case of Sonic
Foundry.

27. WAIVER OF BREACH. The waiver by Sonic Foundry of a breach of any provision
of this Agreement by Employee shall not operate or be construed as a waiver of
any subsequent breach by Employee.

28. ASSIGNMENT. The rights and obligations of Sonic Foundry under this Agreement
shall inure to the benefit of and shall be binding upon the successors and
assigns of Sonic Foundry.

29. COUNTERPARTS. This document may be executed in multiple counterparts, each
of which shall be considered an original.

30. VOLUNTARY AGREEMENT. EMPLOYEE ACKNOWLEDGES AND AGREES THAT HE HAS BEEN
ADVISED THAT THIS AGREEMENT IS A BINDING LEGAL DOCUMENT. EMPLOYEE FURTHER AGREES
THAT HE HAS HAD ADEQUATE TIME AND A REASONABLE OPPORTUNITY TO REVIEW THE
PROVISIONS OF THIS AGREEMENT, HAS BEEN ADVISED TO SEEK LEGAL ADVICE

 

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REGARDING ALL ITS ASPECTS, AND THAT IN EXECUTING THIS AGREEMENT EMPLOYEE HAS
ACTED VOLUNTARILY AND HAS NOT RELIED UPON ANY REPRESENTATION MADE BY THE COMPANY
OR ANY OF ITS EMPLOYEES OR REPRESENTATIVES REGARDING THIS AGREEMENT’S SUBJECT
MATTER AND/OR EFFECT. EMPLOYEE HAS READ AND FULLY UNDERSTANDS THIS AGREEMENT AND
VOLUNTARILY AGREES TO ITS TERMS.

31. COMPROMISE. It is understood and agreed by the parties that this is a
compromise agreement and that the furnishing by the Company of the consideration
for this Agreement shall not be deemed or construed as an admission of liability
or wrongdoing. The liability for any and all released claims is expressly denied
by the Company and Employee.

32. INTERPRETATION. This Agreement is to be interpreted without regard to the
draftsman. The terms and intent of this Agreement, with respect to the rights
and obligations of the parties, shall be interpreted and construed on the
express assumption that each party participated equally in its drafting.

33. EQUITABLE RELIEF; PARTIAL ENFORCEMENT. Sonic Foundry and Employee have
agreed that violation or breach of the paragraphs entitled “Ownership and
Disclosure of Information” and “Restrictive Covenants” will result in
irreparable injury to the Companies and shall entitle the Companies to equitable
relief in addition to any other remedies provided at law. Sonic Foundry and
Employee have further agreed in the event that only a portion of such paragraphs
shall be deemed enforceable or valid that portion of such paragraphs as shall be
enforceable or valid shall be enforced. Sonic Foundry and Employee have further
agreed that the court making a determination of the validity or enforceability
of such paragraphs shall have the power and authority to rewrite the
restrictions contained in such paragraphs to include the maximum portion of the
restrictions included within such paragraphs as are enforceable, valid and
consistent with the intent of the parties as expressed in such paragraphs. In
the event that any court rather than arbitration proceeding is initiated by
Sonic Foundry in order to obtain equitable relief per this paragraph, absent
assertion of a frivolous claim or defense, each party shall bear its or his own
legal expenses in connection with such proceeding.

34. ENTIRE AGREEMENT; WRITTEN AMENDMENT. This instrument contains the entire
agreement of the parties with respect to the subject matter hereof. This
Agreement may only be amended, modified, extended or discharged and the
provisions of this Agreement may only be waived by an agreement in writing
signed by the party against whom enforcement of any waiver, change,
modification, extension or discharge is sought.

35. NOTIFICATION OF DISCONTINUATION OF DIRECTORS AND OFFICERS LIABILITY
INSURANCE. The Company will give Employee thirty days notice in the event it
elects to discontinue any directors and officers liability insurance applicable
to Employee.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year first above written.

 

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SONIC FOUNDRY, INC. By:  

/s/ Gary Weis

Its:   Chief Executive Officer  

/s/ Monty Schmidt

  Monty Schmidt

 

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