<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
Registration Statement
Under
The Securities Act of 1933
SONIC FOUNDRY, INC.
(Exact name of small business issuer as specified in its charter)
MARYLAND 39-1783372
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
754 Williamson Street, Madison, WI 53703 (608)256-3133
(Address of principal executive offices) (Issuer's telephone number)
Sonic Foundry, Inc. 1995 Stock Option Plan (1,000,000 shares)
Sonic Foundry, Inc. Non-Employee Directors Stock Option Plan (90,000 shares)
Shareholder Relations Consultant Warrants (126,000 shares)
(Full title of plans)
Rimas P. Buinevicius
Chief Executive Officer
754 Williamson St.
Madison, WI 53703
(608)256-3133
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Calculation of Registration Fee
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
Proposed Maximum Amount of
Title of Securities Amount to be Aggregate Offering Registration
to be Registered Registered Price(1) Fee
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Common Stock,
$0.01 par value per 1,216,000 shares $9,886,080 $2,748.33
share
- ----------------------------------------------------------------------------------------------
</TABLE>
(1) Computed pursuant to Rule 457(c) and (h) based on the average of the high
and low sales prices reported by the American Stock Exchange on March 22,
1999, which was $8.13.
1
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
ITEM 1. PLAN INFORMATION
The information required for this item is included in documents distributed to
each Participant.
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION
The information required for this item is included in documents distributed to
each Participant.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents are incorporated in this Registration Statement by
reference:
1. The Registrant's Annual Report on Form 10-KSB for the fiscal year ended
September 30, 1998 filed on December 22, 1998 pursuant to Section 13(a) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), which
Annual Report contains audited financial statements for the fiscal year
ended September 30, 1998.
2. The Registrant's Quarterly Report on Form 10-QSB for the fiscal quarter
ended December 31, 1998 filed pursuant to the Exchange Act.
3. The description of the Registrant's Common Stock contained in the
Registrant's registration statement on Form 8-A filed on April 22, 1998 with
the Commission under Section 12(g) of the Exchange Act.
All documents filed by the Registrant with the Securities and Exchange
Commission pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act
after the date hereof and prior to the filing of a post-effective amendment
which indicates that all of the securities offered hereby have been sold or
which de-registers such securities remaining unsold shall also be deemed to be
incorporated by reference into this Registration Statement and to be a part
hereof commencing on the respective dates on which such documents are filed.
Any statement incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Registration Statement to the extent that a
statement contained herein or in any other subsequently filed document that also
is or is deemed to be incorporated by reference herein modifies or supersedes
such statement. Any statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Registration
Statement.
2
<PAGE>
ITEM 4. DESCRIPTION OF SECURITIES
Not required
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
The law firm of McBreen, McBreen & Kopko will be furnishing an opinion as to the
legality of the Common Stock registered under this Registration Statement.
During fiscal 1998, the Company paid $196,441 to McBreen, McBreen & Kopko for
legal services. Frederick H. Kopko, Jr. is a partner of McBreen, McBreen &
Kopko. Mr. Kopko is a director of the Company and is the beneficial owner of
173,024 shares of Series B 5% Cumulative Convertible Preferred Stock. Mr. Kopko
also was granted an option to purchase 10,000 shares of Common Stock at an
exercise price of $5.00 per share under the Directors Stock Option Plan.
ITEM 6. INDEMDIFICATION OF DIRECTORS AND OFFICERS
The Articles of Incorporation of the Company limit the liability of the
directors of the Company to the Company or its stockholders (in their capacity
as directors but not in their capacity as officers) to the fullest extent
permitted by the Maryland General Corporation Law ("MGCL"). Accordingly,
pursuant to the terms of the MGCL as presently in effect, the Company may
indemnify any director unless it is established that: (i) the act or omission of
the director was material to the matter giving rise to the proceeding and was
committed in bad faith or was the result of active and deliberate dishonesty;
(ii) the director actually received an improper personal benefit in money,
property or services; or (iii) in the case of any criminal proceeding, the
director had reasonable cause to believe that the act or omission was unlawful.
In addition, the Company's Bylaws require the Company to indemnify each person
who is or was, a director, officer, employee or agent of the Company to the
fullest extent permitted by the laws of the State of Maryland in the event he is
involved in legal proceedings by reason of the fact that he is or was a
director, officer, employee or agent of the Company, or is or was serving at the
Company's request as a director, officer, employee or agent of another
corporation, partnership or other enterprise. The Company may also advance to
such persons expenses incurred in defending a proceeding to which
indemnification might apply, upon terms and conditions, if any, deemed
appropriate by the Board of Directors upon receipt of an undertaking by or on
behalf of such director or officer to repay all such advanced amounts if it is
ultimately determined that he is not entitled to be indemnified as authorized by
the laws of the State of Maryland.
3
<PAGE>
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable
ITEM 8. EXHIBITS
<TABLE>
<CAPTION>
Exhibit Number Description
-------------- -----------
<S> <C>
4.1 Amended and Restated Articles of Incorporation of the
Registrant/1/
4.2 Amended and Restated By-Laws of the Registrant/1/
4.3 Registrant's 1995 Stock Option Plan/2/
4.4 Registrant's Non-Employee Directors' Stock Option
Plan/2/
4.5 Form of Warrant
5.1 Opinion of McBreen, McBreen & Kopko regarding the
legality of the Common Stock registered hereby.
23.1 Consent of McBreen, McBreen & Kopko (included in its
opinion to be filed as Exhibit 5.1 hereto)
23.2 Consent of Ernst & Young, LLP
</TABLE>
ITEM 9. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement;
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) that, individually or in
the aggregate, represent a fundamental change in the information
set forth in the Registration Statement; and
- ---------------------------
Both of such documents were previously filed as exhibits to the Company's
Registration Statement on Form SB-2 dated February 10, 1998 (Registration No.
333-46005) and are incorporated herein by reference.
Both of such documents were previously filed as exhibits to the Company's
Registration Statement on Amendment No. 2 to Form SB-2 dated April 3, 1998
(Registration No. 333-46005) and are incorporated herein by reference.
4
<PAGE>
(iii)To include any material information with respect to the plan of
distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement;
PROVIDED, HOWEVER, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant pursuant to
Section 13 or 15(d) of the Exchange Act that are incorporated by reference in
the Registration Statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a
new Registration Statement relating to the securities offered therein,
and the offering of the securities at that time shall be deemed to be
the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered that remain unsold at the termination
of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of
the Registrant's annual report pursuant to Section 13(a) or 15(d) of the
Exchange Act that is incorporated by reference in the Registration
Statement shall be deemed to be a new Registration Statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Securities Act of 1933 and is, therefore, unenforceable.
If a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful defense
of any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless, in the opinion of its counsel, the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question of whether such indemnification by it is against
public policy as expressed in the Securities Act of 1933 and will be
governed by the final adjudication of such issue.
5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant certifies
that is has reasonable grounds to believe it meets all the requirements for
filing on Form S-8 and has duly caused this Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of
Madison, State of Wisconsin, on this 26th day of March, 1999.
Sonic Foundry, Inc.
By /s/ Rimas Buinevicius
----------------------------------
Rimas Buinevicius, Chairman
and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below
constitutes and appoints Rimas Buinevicius and Kenneth Minor his true and lawful
attorney-in-fact and agent with full power of substitution and resubstitution,
for him and in his name, place and stead, in any and all capacities, to sign any
and all amendments (including post-effective amendments) to this Registration
Statement, and to file the same, with all exhibits thereto and other documents
in connection therewith, with the Securities Exchange Commission, granting unto
said attorney-in-fact and agent full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premised, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitutes or substitute may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated:
<TABLE>
<CAPTION>
Signature Title Date
- ---------------------------- ------------------------------------------------------ ---------------------
<S> <C> <C>
/s/ Rimas Buinevicius Chairman of the Board , Chief Executive Officer and March 26, 1999
- ---------------------------- Treasurer
Rimas Buinevicius (Principal Executive Officer)
/s/ Kenneth Minor Chief Financial officer March 26, 1999
- ---------------------------- (Principal Financial and Accounting Officer)
Kenneth Minor
/s/ Monty Schmidt President and Director March 26, 1999
- ----------------------------
Monty Schmidt
/s/ Curtis Palmer Executive Vice President, Chief Technology Officer March 26, 1999
- ---------------------------- and Director
Curtis Palmer
/s/ Frederick Kopko Secretary and Director March 26, 1999
- ----------------------------
Frederick Kopko
/s/ Arnold Pollard Director March 26, 1999
- ----------------------------
Arnold Pollard
/s/ David Kleinman Director March 26, 1999
- ----------------------------
David Kleinman
</TABLE>
6
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Page
Item Number Sequentially
------ Description Numbered
-------------------------------------------------------------- --------
<S> <C> <C> <C>
4.1 Amended and Restated Articles of Incorporation of the N/A
Registrant
4.2 Amended and Restated By-Laws of the Registrant N/A
4.3 Registrant's 1995 Stock Option Plan N/A
4.4 Registrant's Non-Employee Directors' Stock Option Plan N/A
4.5 Form of Warrant 8
5.1 Opinion of McBreen, McBreen & Kopko as to the legality of 18
the stock registered hereby
23.1 Consent of McBreen, McBreen & Kopko N/A
23.2 Consent of Ernst & Young LLP 20
</TABLE>
<PAGE>
Warrant Certificate
For the Purchase
of ______ Shares
Void After 5:00 P.M. Central Standard Time on ____________
SONIC FOUNDRY, INC.
COMMON STOCK PURCHASE WARRANT CERTIFICATE
THIS CERTIFIES that, for value received, Sonic Foundry, Inc., a Maryland
corporation (hereinafter called the "Company"), upon the surrender of this
Warrant Certificate, evidencing a number of Common Stock Purchase Warrants
("Warrants") equal to the number of Shares set forth above, to the Company at
its principal executive office, will sell and deliver, or cause to be sold and
delivered, to ____________. ("Warrant Holder") or registered assigns, ________
fully paid and nonassessable Shares of Common Stock, par value $.01 per share,
of the Company ("Shares"), evidenced by a certificate therefor, upon payment of
the warrant price for the number of Shares in respect of which this Warrant
Certificate is exercised; provided, however, that under certain conditions set
forth hereinafter the number of Shares purchasable upon the exercise of the
warrants evidenced hereby may be increased or reduced, or other securities,
property and/or cash may become deliverable in lieu thereof upon the exercise of
the Warrants evidenced hereby. In such event the term "Shares" shall mean,
unless the context otherwise requires, the shares or other securities, property
and cash at the time receivable upon the exercise of the warrants evidenced
hereby. This Warrant Certificate may be surrendered and is exercisable on or
after the date hereof (the "Exercise Date") and before 5:00 P.M. Central
Standard time, _____________ (the "Expiration Date"). The warrant price at
which the Shares shall be purchasable (the "Purchase Price") upon the exercise
of the warrants evidenced hereby shall be $5.00 per share, or, in the event of
any subdivision of warrants pursuant to Section 4 hereof, such other purchase
price as may then be in effect. The Purchase Price is payable, upon the
exercise of the Warrants evidenced hereby, in cash, or by certified or official
bank check, or postal or express money order, payable in United States Dollars,
to the order of the Company. The right of purchase represented by this Warrant
Certificate is exercisable, at the election of the registered holder hereof,
either as an entirety or from time to time for part only of the Shares specified
herein and, in the event that this Warrant Certificate is exercised in respect
of less than all of such Shares, a new Warrant Certificate for the remaining
number of such Shares will be issued on such surrender.
Upon any exercise of the Warrants evidenced by this Warrant Certificate,
the form of election to purchase attached hereto must be duly executed and the
accompanying instructions for the registration and delivery of Shares must be
filled in.
This Warrant Certificate and the Warrants evidenced hereby are subject
to the terms and conditions hereinafter set forth:
1. Deliver of Share Certificates on Exercise. As soon as practicable after
-----------------------------------------
the exercise of Warrants and payment of the Purchase Price, the Company at its
expense (including the payment by it of any applicable issue tax) will cause to
be issued in the name of and delivered to the holder hereof, or subject to the
provisions of Section 6, as such holder (upon payment by such holder of any
applicable transfer taxes) may direct, a certificate or certificates for the
number of full Shares to which such holder shall be entitled upon such exercise,
and cash as provided in Section 2 hereof, in respect of any fraction of a Share
otherwise issuable upon such exercise.
All Shares issued upon the exercise of Warrants shall be duly issued and
outstanding and fully paid and nonassessable.
<PAGE>
Irrespective of the date of issue and delivery of certificates for any Shares
issuable upon the exercise of Warrants, each person in whose name any such
certificate is issued shall for all purposes be deemed to have become the holder
of record of the Shares represented thereby on the date on which this Warrant
Certificate was duly completed, executed and surrendered and payment of the
Purchase Price was tendered in proper form. Each person holding any Shares
received upon exercise of Warrants shall be entitled to receive only dividends
or distributions which are payable to holders of record on or after the date on
which such person became the holder of record of such Shares.
2. Payment of Cash in Lieu of Fractional Share. The Company shall not be
-------------------------------------------
required to issue fractional Shares upon exercise of Warrants. If a fractional
interest in a Share would be otherwise deliverable upon the exercise of
Warrants, the Company shall make payment therefor in cash at the Market Price
thereof on the last business day before the exercise date. The term "Market
Price" shall mean the closing price of the Shares on the date in question on the
principal securities exchange on which the Shares may then be listed or, if the
Shares are not listed on a national securities exchange or have not traded on
that date on such exchange, the closing bid price of the Shares on such date on
such exchange or in the over-the-counter securities market as the case may be.
3. Adjustments in Shares Receivable upon Exercise of Warrants. If the
----------------------------------------------------------
Company shall (1) subdivide its outstanding Shares, (2) combine its outstanding
Shares into a smaller number of Shares, (3) issue by reclassification of its
Shares any shares of the Company, (4) merge or consolidate, or (5) sell, lease,
exchange or otherwise transfer or distribute all or a material portion of the
assets of the Company in a distribution to its shareholders, the number of
Shares issuable upon the exercise of each warrant evidenced by this Warrant
Certificate shall be the same number and kind of Shares and the same amount of
securities, property, or cash as the holder hereof would have been entitled to
receive upon the happening of the above events if immediately prior to any such
event such holder had exercised such warrant and had purchased Shares. For this
purpose, any event described in (1) through (5) in the preceding sentence shall
be deemed to have occurred immediately after the opening of business on the day
following the date fixed for the determination of the stockholders entitled to
participate in such event.
The Company may retain a firm of independent public accountants of recognized
standing, which may be the firm regularly retained by the Company, selected by
the Board of Directors of the Company, to make any computation required under
this Section, and a certificate signed by such firm shall be conclusive evidence
of the correctness of any computation made under this Section.
Whenever the Company shall take any action requiring an adjustment in the
Shares receivable upon the exercise of a warrant, the Company shall promptly
cause to be mailed to the registered holder hereof, at such holder's address
appearing on the Warrant register, a notice stating the date of the action, the
type of action and the adjustment required. Failure to give such notice, or any
defect therein, shall not affect the legality or validity of the action taken or
of any distribution in connection therewith.
4. Subdivision of Warrants. If as a result of an adjustment under Section 3
-----------------------
or 6 hereof ("the Adjustment"), the Shares receivable upon the exercise of a
Warrant immediately after the Adjustment shall constitute a multiple (the
"Multiple"), which Multiple shall be a whole number, of the Shares which would
have been receivable upon exercise of a Warrant immediately prior to the
Adjustment, then the Company may at its discretion subdivide the number of
Warrants evidenced by this Warrant Certificate into a number of Warrants equal
to the number of Shares which would have been receivable upon exercise of all of
the Warrants evidenced by this Warrant Certificate immediately prior to the
Adjustment, multiplied by the Multiple.
<PAGE>
Upon such subdivision of Warrants (the "Subdivision") this Warrant Certificate
shall, immediately and without any further action by the Company or the holder
thereof, evidence a number of Warrants equal to the number of Warrants evidenced
by this Warrant Certificate immediately prior to the Subdivision, multiplied by
the Multiple; and each Warrant evidenced hereby shall entitle the registered
holder hereof to purchase the Shares which would have been receivable upon
exercise of such Warrant immediately prior to the Adjustment at a Purchase Price
equal to the Purchase Price in effect immediately prior to the Subdivision,
divided by the Multiple. Promptly following the Subdivision the Company shall
cause to be mailed to the registered holder hereof, at such holder's address
appearing on the Warrant register, a notice stating the date and nature of the
Subdivision and the new Purchase Price effective with the Subdivision. Failure
to give such notice, or any defect therein, shall not affect the legality or
validity of the Subdivision. In connection with the Subdivision, the Company
may at its election make provision for exchange of this Warrant Certificate for
a new form of Warrant Certificate.
5. Registration. The Company or its agent shall maintain books for the
------------
transfer and registration of Warrants. Such registers shall show the names and
addresses of the respective holders of the Warrant Certificates and the number
of Shares for which each such Warrant Certificate has been issued.
6. Restrictions on Transfer. This Warrant Certificate, the Warrants
------------------------
evidenced hereby and the Shares (the "Warrant Shares") issuable upon the
exercise of the Warrants evidenced hereby (the Warrant Certificate, the Warrants
and the Warrant Shares are collective referred to as the "Warrant Securities")
shall not be transferable except upon satisfaction of the conditions specified
in this Section 6. For all purposes of this Section 6 the term "transfer" shall
include any transfer, sale, pledge or hypothecation.
6.1 Termination of Restrictions. Notwithstanding the foregoing provisions of
---------------------------
this Section 6, on or after the Exercise Date, the restrictions imposed by this
Section 6 upon the transferability of any particular Warrant Shares, shall
terminate when (1) such securities shall have been effectively registered under
the Securities Exchange Act of 1934 ("Securities Act") and sold by the holder
thereof in accordance with such registration, or (2) a written opinion to the
effect that such restrictions are no longer required or necessary under any
federal or state securities law or regulation has been received from counsel
satisfactory to the Company or (3) a letter shall have been issued by the staff
of the Securities and Exchange Commission (the "Commission") or a ruling shall
have been issued by the Commission or its staff stating that no action will be
recommended by such staff or taken by the Commission, as the case may be, if
such Warrant Shares are transferred without registration under the Securities
Act, and such Warrant Shares are transferred in accordance with the conditions
set forth in such letter or ruling.
6.2 Compliance with Rule 144. At the request of any holder thereof who
------------------------
proposes to sell Warrant Shares in compliance with Rule 144 promulgated by the
Commission under the Securities Act ("Rule 144"), the Company shall forthwith
furnish to such holder a written statement concerning the Company's compliance
with any issuer requirements of the Commission as set forth in such Rule, as
such Rule may be amended from time to time.
6.3 Incidental Registrations. If the Company at any time subsequent to the
------------------------
Exercise Date but on or before the Expiration Date proposes to register any
Shares under the Securities Act (other than on Form S-8 or another similar form)
on a form which permits inclusion of the Warrant Shares, and the Warrant Shares
have not already been registered pursuant to Section 6.4, it shall use its best
efforts to cause all Warrant Shares to be registered under the Securities Act,
all to the extent requisite to permit the sale or other disposition by such
holder of the Warrant Shares so registered in the manner intended by such holder
as set forth in such request.
6.4 Registration Procedures. If and whenever the Company is required by the
-----------------------
provisions of this Section 6 to use its best efforts to effect the registration
of any of the Warrant Shares under the Securities Act, the Company shall, as
expeditiously as possible:
<PAGE>
A. prepare and file with the Commission a Registration Statement (or a
post-effective amendment to an appropriate existing Registration
Statement of the Company which is then effective under the Securities
Act, as the case may be) with respect to such Warrant Shares and use
its best efforts to cause such Registration Statement (or such
Registration Statement as so post-effectively amended, as the case may
be) to become and remain effective under the Securities Act for the
period provided in this Section 6.
B. prepare and file with the Commission such amendments and supplements
to such Registration Statement (or such Registration Statement as
post-effectively amended, as the case may be) and the Prospectus
used in connection therewith as may be necessary to keep such
Registration Statement (or such Registration Statements post-
effectively amended, as the case may be) effective and to comply with
the provisions of the Securities Act with respect to the sale or other
disposition of all Warrant Shares covered by such Registration
Statement (or such registration statement as post-effectively amended,
as the case may be) whether the seller or sellers of such Warrant
Shares shall desire to sell or otherwise dispose of the same, but only
to the extend provided in this Section 6;
C. furnish to each seller of Warrant Shares covered by such Registration
Statement (or such Registration Statement as post-effectively amended,
as the case may be), such numbers of copies of a Prospectus, including
a preliminary Prospectus, in conformity with the requirements of the
Securities Act, and such other documents, as such seller may
reasonably request in order to facilitate the public sale or other
disposition of such Warrant Shares;
D. use every reasonable effort to register or qualify the Warrant Shares
covered by such Registration Statement (or such Registration Statement
as post-effectively amended, as the case may be) under such other
securities or Blue Sky laws of such jurisdiction as each seller
thereof shall reasonably request, and do any and all other acts and
things which may be necessary under such securities or Blue Sky laws
to enable such seller to consummate the public sale or other
disposition in such jurisdiction of the Warrant Shares owned by such
seller covered by such Registration Statement (or such Registration
Statement as post-effectively amended, as the case may be), except
that the Company shall not for any such purpose be required to qualify
to do business as a foreign corporation in any jurisdiction wherein it
is not so qualified or subject itself to taxation in any such
jurisdiction; and
E. before filing the Registration Statement or any Prospectus or any
amendment or supplement to the Registration Statement or any
Prospectus with the Commission, furnish counsel for each seller of
Warrant Shares covered or to be covered by such Registration Statement
with copies of all such documents proposed to be filed, which shall be
subject to the reasonable approval of such counsel; provided, however,
-------- -------
that notwithstanding any other provision of this Section 6, the
Company's obligation to register securities pursuant to this Section 6
shall be limited such that (1) the Company shall have no obligation to
include any Warrant Shares in a registration statement under the
Securities Act to the extent the holder of such Warrant Shares is, in
the opinion of counsel satisfactory to such holder, then eligible to
resell all of such shares immediately under Rule 144, provided the
Company bears the cost of all legal fees and expenses necessary in
securing or ascertaining the exemption from registration afforded by
Rule 144; (2) the Company shall be required to register the Warrant
Shares only if and to the extent that holders requesting such
registration furnish the Company with such information as the Company
may reasonably request; (3) the Company shall not be obligated to keep
any registration statement filed in accordance with this Section 6
effective for more than ninety days; and (4) the Company's obligation
to include any Warrant Shares in a registration statement under the
Securities Act
<PAGE>
pursuant to Section 6.3 shall be limited to the extent the managing underwriter
for such offering recommends in good faith that it would be in the Company's
best interest to limit or the Company is required by contractual obligation to
limit in whole or in part, the number of Warrant Shares to be included in such
registration statement.
6.5 Expenses. All expenses incurred in effecting the
--------
registrations provided for in this Section 6, including, without limitation, all
registration and filing fees, printing expenses, fees and disbursements of
counsel for the Company, expenses of any audits incident to or required by any
such registration and expenses of complying with the securities or Blue Sky laws
of any jurisdiction, but excluding fees and disbursements of counsel for the
sellers and underwriting commissions and discounts attributable to the Warrant
Shares being sold by the sellers, shall be paid by the Company.
6.6 Indemnification.
---------------
A. In the event of any registration of any Warrant Shares under
the Securities Act pursuant to this Section 6, the Company shall
indemnify and hold harmless each seller of such Warrant Shares, each
underwriter (as defined in the Securities Act), the directors and
officers of such underwriter, each other person who participates in
the offering of such securities and each other person, if any who
controls (within the meaning of the Securities Act) such seller,
underwriter or participating person against any losses, claims,
damages or liabilities, joint or several, to which such seller,
underwriter, director or officer, participating person or controlling
person may become subject under the Securities Act, the rules or
regulations promulgated thereunder by the Commission or any other
statute, rule or regulation or at common law, in so far as such
losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon (1) an untrue statement or alleged
untrue statement of material fact contained, on the effective date
thereof, in any Registration Statement (or a post-effective amendment
to such Registration Statement, as the case may be) under which such
Warrant Shares were registered under the Securities Act, any
preliminary Prospectus or final Prospectus contained therein, or any
summary Prospectus issued in connection with such Warrant Shares, or
any amendment or supplement thereto, or (2) an omission or alleged
omission to state in any such document a material fact required to be
stated therein or necessary to make the statements therein not
misleading, and shall reimburse each such seller, underwriter,
director or officer, participating person or controlling person for
any legal or other expenses reasonably incurred by such seller,
underwriter, director or officer, participating person or controlling
person in connection with investigating or defending any such loss,
claim, damage, liability or any action with respect thereto; provided,
--------
however, that the Company shall not be liable to any seller,
-------
underwriter, director or officer, participating person, or controlling
person in any such case to the extent that any such loss, claim,
damage or liability (or any action in respect thereof) arises out of
or is based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in such Registration Statement (or
such Registration Statement as post-effectively amended, as the case
may be), preliminary Prospectus, final Prospectus, summary Prospectus,
or amendment or supplement thereto, in reliance upon and in conformity
with information furnished to the Company by such seller, underwriter,
director or officer, participating person, or controlling person in
any such case to the extent that any such loss, claim, damage or
liability (or any action in respect thereof) arises out of or is based
upon an untrue statement or alleged untrue statement or omission or
alleged omission made in such Registration Statement (or such
Registration Statement as post-effectively amended, as the case may
be), preliminary Prospectus, final Prospectus, summary Prospectus, or
amendment or supplement thereto, in reliance upon and in conformity
with information furnished to the Company by such seller, underwriter,
director or officer, participating person, or controlling person, and
shall survive the transfer of Warrant Shares by such seller.
Exhibit 4.5 12
<PAGE>
B. Each holder of any Warrant Security shall, by acceptance
thereof, severally and not jointly, indemnify and hold harmless each
other holder of any Warrant Security, the Company, its directors an
officers, each underwriter (as defined in the Securities Act), the
directors and officers of such underwriter, each other person who
participates in the offering of Warrant Shares, and each other person,
if any, who controls (within the meaning of the Securities Act) the
Company or any underwriter, against any losses, claims, damages or
liabilities, joint or several, to which any such other holder, the
Company, any such director or officer, any such underwriter, any such
participating person, or any such controlling person may become
subject under the Securities Act, the rules or regulations promulgated
thereunder by the Commission or any other statute, rule or regulation
or at common law, in so far as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based
upon (1) an untrue statement or alleged untrue statement of a material
fact contained, on the effective date thereof, in any Registration
Statement (or a post-effective amendment to such Registration
Statement, as the case may be) under which Warrant Shares were
registered under the Securities Act, any preliminary Prospectus or
final Prospectus contained therein, or any summary Prospectus issued
in connection with such Warrant Share, or any amendment or supplement
thereto, or (2) an omission or alleged omission to state in any such
document a material fact required to be stated therein or necessary to
make the statements therein not misleading, in the case of (1) or (2)
to the extent, but only to the extent, that such untrue statement or
omission or alleged untrue statement or alleged omission was made in
such Registration Statement (or such Registration Statement as post-
effectively amended, as the case may be), preliminary Prospectus,
final Prospectus, summary Prospectus, or amendment or supplement
thereto in reliance upon and in conformity with information furnished
to the Company by such holder specifically for use therein, and shall
reimburse the Company, each such other holder, underwriter, director
or officer, participating person, or controlling person for any legal
or any other expenses reasonably incurred in connection with
investigating or defending any such loss, claim, damage, liability or
any action with respect thereto.
C. Indemnification similar to that specified in Subsections
6.6A and 6.6B hereof shall be given by the Company and each holder of
any Warrant Shares (with such modifications as shall be appropriate)
covered by any registration or other qualification of securities under
any federal or state securities law or regulation other than the
Securities Act with respect to any such registration or other
qualification effected pursuant to this Section 6.
D. Within 30 days after receipt of an indemnified party under
Subsections 6.6A, 6.6B, or 6.6C hereof of a complaint, claim or other
notice of any loss, claim, damage, liability or action giving rise to
a claim for indemnification under any such Subsection, such
indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under any such Subsection, notify the
indemnifying party in writing of the commencement thereof; but the
omission so to notify the indemnifying party shall not relieve it, him
or her from any liability which it, he or she may have to any
indemnified party otherwise than under such Subsections. In case any
such action shall be brought against any indemnified party and it, he
or she shall notify the indemnifying party of the commencement
thereof, the indemnifying party shall be entitled to participate
therein, and to the extent that it, he or she shall wish, to assume
the defense thereof, with counsel satisfactory to such indemnified
party (who shall not, except with the consent of the indemnified
party, be counsel to the indemnifying party), and, after notice from
the indemnifying party to such indemnified party of its, his or her
election so to assume the defense thereof, the indemnifying party
shall not be liable to such indemnified party under any such
Subsection for any legal expenses or other counsel or any other
expenses, in each case subsequently incurred by such indemnified
party, in connection with the defense thereof other than reasonable
costs of investigation.
Exhibit 4.5 13
<PAGE>
6.7 Restrictive Legend. So long as any particular Warrant Shares are
------------------
not freely transferable, the certificates evidencing such Warrant Shares may be
stamped or otherwise inscribed with an appropriate legend to such effect.
6.8 Transfer and Exchanges of Warrant Certificates. Upon compliance
----------------------------------------------
with the provisions of this Section 6, the Company shall transfer, from time to
time, any outstanding Warrant Certificates upon the books to be maintained by
the Company for that purpose, upon surrender thereof for transfer properly
endorsed or accompanied by appropriate instructions for transfer. Upon any such
transfer, a new Warrant Certificate shall be issued to the transferee and the
surrendered Warrant Certificate shall be cancelled. A Warrant Certificate may
be exchanged, at the option of the holder thereof, when surrendered at the
principal office of the Company, for another Warrant Certificate, or other
Warrant Certificates of different denominations, of like tenor and representing
in the aggregate the right to purchase a like number of shares.
7. Mutilated or Missing Warrant Certificates. In case this Warrant
-----------------------------------------
Certificate shall be mutilated, lost, stolen or destroyed, the Company may in
its discretion issue and deliver in exchange and substitution for and upon
cancellation hereof, or in lieu of and substitution therefor, a new Warrant
Certificate of like tenor and representing an equivalent right or interest; but
only upon receipt of evidence satisfactory to the Company of such mutilation,
loss, theft or destruction hereof and indemnity, if requested, also satisfactory
to it. Applicants for such substitute Warrant Certificates shall also comply
with such other reasonable regulations and pay such other reasonable charges as
the Company may prescribe.
8. Reservation of Shares, etc. The Company shall at all times keep
--------------------------
reserved, out of its authorized and unissued Shares or Shares held in its
treasury, a number of Shares sufficient to provide for the exercise of all
outstanding Warrants, including, without limitation, the Warrants evidenced by
this Warrant Certificate, and any Transfer Agent for the Shares is hereby
irrevocably authorized and directed to reserve such number of Shares as shall be
requisite for such purpose. The Company shall supply such Transfer Agent with
duly executed Share certificates for such purpose and will itself provide or
otherwise make available any cash which may be payable as provided in Section 2
hereof.
9. Warrant Holder Not Deemed a Shareholder. Nothing contained in
---------------------------------------
this Warrant Certificate shall be construed as conferring upon the holder hereof
the right to vote or to consent or to receive notice as a shareholder in respect
of the meetings of shareholders for any purpose, or any other rights whatsoever,
as a shareholder of the Company.
10. Agreement of Holders Hereof. The holder of this Warrant
---------------------------
Certificate by accepting the same consents and agrees with the Company that:
A. this Warrant Certificate is transferable only on the
registry books of the Company by the registered holder hereof in
person or by such holder's attorney duly authorized in writing, and
only if surrendered at the principal executive office of the Company,
duly endorsed, or accompanied by a proper instrument of transfer
satisfactory to the Company in its sole discretion; and
B. the Company may deem and treat the person in whose name this
Warrant Certificate is registered as the absolute owner for all
purposes whatsoever and the Company shall not be affected by any
notice to the contrary.
11. Survival of Indemnities and Agreements. All indemnities and
--------------------------------------
agreements set forth in Section 6 hereof shall survive the exercise of the
Warrants evidenced hereby, the issuance of Warrant Shares upon such exercise and
the transfer of any Warrant Shares.
Exhibit 4.5 14
<PAGE>
12. Successors and Assigns. This Warrant Certificate and the
----------------------
indemnities and agreements made herein shall inure to the benefit of and be
binding upon the Company, the holder hereof and their respective successors,
assigns, heirs, executors, and administrators.
13. Applicable Law. This Warrant Certificate will be deemed to be a
--------------
contract made under the laws of the State of Wisconsin and for all purposes
shall be construed in accordance with the substantive laws of said State,
without giving effect to the principles of conflicts of law thereof.
SONIC FOUNDRY, INC.
By:_______________________________
Chief Financial Officer
ATTEST:
___________________________________
<PAGE>
ELECTION TO PURCHASE
--------------------
To: SONIC FOUNDRY, INC.
The undersigned hereby irrevocably elects to exercise the warrants
evidenced by the attached Warrant Certificate, and to purchase thereunder
__________ Shares of the stock provided for therein, and requests that
certificates for such Shares shall be issued in the name of
________________________________________, Social Security or Taxpayer
Identification Number ______________________, and be delivered to
___________________________________________________________ at
___________________________________________________________________, and, if
said number of Shares shall not be all the Shares purchasable thereunder, that a
new Warrant Certificate for the balance remaining of the Shares purchasable
under the attached Warrant Certificate be registered in the name of, and
delivered to, the undersigned at the address stated below.
Dated:________________________________
Name of Warrant Holder:
_____________________________________
(please print)
Address:______________________________
_____________________________________
Signature:_____________________________
_____________________________________
Note: The above signature must correspond with the name as written upon the
first page of this Warrant Certificate in every particular, without
alteration or enlargement or any change whatsoever.
Signature Guaranteed:
Exhibit 4.5 16
<PAGE>
ASSIGNMENT
----------
FOR VALUE RECEIVED _____________________________ hereby sells, assigns
and transfers unto: Name:_____________________________________,
Address:______________________________________________________, Social Security
or Taxpayer Identification No:__________________, the attached Warrant
___________, together with all right, title and interest therein, and does
hereby irrevocably constitute and appoint _____________________________________
attorney, to transfer said Warrant ______________ on the books of SONIC FOUNDRY,
INC. with full power of substitution in the premises.
Dated:___________________________
________________________________
Note: The above signature must correspond
with the name as written upon the first page
of the Warrant Certificate as initially
issued in every particular, without
alteration or enlargement or any change
whatsoever.
Signature Guaranteed: ______________________
Exhibit 4.5 17
<PAGE>
[Letterhead of McBreen, McBreen & Kopko]
March 26, 1999
Sonic Foundry, Inc.
754 Williamson Street
Madison, WI 53703
Re: Sonic Foundry, Inc. Form S-8 Registration Statement
Ladies and Gentlemen:
At your request, I have examined the Registration Statement on Form S-8 (the
"Registration Statement") which you intend to file with the Securities and
Exchange Commission in connection with the registration under the Securities Act
of 1933,1 as amended, of 1,216,000 shares of common stock, par value $0.01 (the
"S-8 Shares"), of Sonic Foundry, Inc., a Maryland corporation (the "Company"),
which are to be offered and sold by the Company pursuant to the 1995 Stock
Option Plan, the Non-Employee Directors Stock Option Plan, the Shareholder
Relations Consultant Warrants between the Company and Vencap, Inc. dated July
24, 1996 and July 15, 1998, and the Shareholder Relations Consultant Warrant
between the Company and Marit A. Fremstad dated July 15, 1998 (collectively,
such agreements and plans are hereinafter referred to as the "Plans").
I have examined the Company's Certificate of Incorporation and Bylaws; the
Company's minute books; the corporate records in connection with the Plans and
the sale of the S-8 Shares; and such other documents of the Company as I have
considered necessary or appropriate for the purposes of this opinion.
On the basis of such examinations and reviews, I advise you that I am of the
opinion that the S-8 Shares, when offered and sold in the manner provided in the
Prospectus contained in the Registration Statement, will be validly issued,
fully paid and non-assessable.
This opinion is limited solely to matter as of the laws of the State of
Illinois; the general corporation law of the State of Maryland; and the laws of
the United States of America.
Exhibit 5.1 18
<PAGE>
We hereby advise you that Frederick H. Kopko, Jr., a partner of this law firm,
is a director of the Company, beneficially owns 173,024 shares of Series B 5%
Cumulative Convertible Preferred Stock and holds options to purchase 10,000
shares of Common Stock issued under the Non-Directors Stock Option Plan. We
hereby consent to the use of this opinion as an exhibit to the Registration
Statement.
Very truly yours,
McBreen, McBreen & Kopko
By______________________
Exhibit 5.1 19
<PAGE>
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Registration Statement
(Form S-8) pertaining to the Sonic Foundry, Inc. 1995 Stock Option Plan, the
Sonic Foundry, Inc. Non-Employee Directors Stock Option Plan and the Shareholder
Relations Consultant Warrants of our report dated November 6, 1998, with respect
to the financial statements of Sonic Foundry, Inc. included in it's Annual
Report (Form 10-KSB) for the year ended September 30, 1998, filed with the
Securities and Exchange Commission.
ERNST & YOUNG LLP
Milwaukee, Wisconsin
March 23, 1999
Exhibit 23.2 20
