Sonic Foundry Initiates Corporate Governance Review

MADISON, Wis. - January 10, 2011 - Sonic Foundry, Inc. (NASDAQ: SOFO), the recognized market leader for rich media webcasting and knowledge management, today announced its Board of Directors recently initiated a corporate governance review regarding member terms and executive employment agreements.

The Board will review the length of the term (currently five years) for which each director will be elected at each election. The Board will continue to discuss the topic of governance both at meetings of the Board and outside of Board meetings.

Regarding the Company's executive employment agreements, the Board has decided to pursue new employment agreements with Rimas Buinevicius, the Company's Chief Executive Officer, and Monty Schmidt, the Company's Chief Technology Officer for reasons that include making the employment agreements with Messrs. Buinevicius and Schmidt consistent with customary practice in the industry. Accordingly, on January 4, 2011, the Company notified Messrs. Buinevicius and Schmidt that it will not renew their existing employment agreements. The existing employment agreements will expire by their terms on March 31, 2011. The Board is entering into active negotiations with Messrs. Buinevicius and Schmidt in connection with new employment agreements for these executives.