SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act
of 1934 (Amendment No. ____)
Filed by the Registrant [ X ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
Coda Music Technolgoy, Inc.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing:
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
CODA MUSIC TECHNOLOGY, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
The Annual Meeting of Shareholders of Coda Music Technology, Inc. will
be held on April 25, 2000, at 3:30 p.m. (Minneapolis time), at the IDS Center,
50th Floor, 80 South 8th Street, Minneapolis, Minnesota, for the following
purposes:
1. To set the number of directors at five (5).
2. To elect directors for the ensuing year.
3. To consider and act upon such other matters as may properly
come before the meeting and any adjournments thereof.
Only shareholders of record at the close of business on March 13, 2000,
are entitled to notice of and to vote at the meeting or any adjournment thereof.
Your vote is important. We ask that you complete, sign, date and return
the enclosed proxy in the envelope provided for your convenience. The prompt
return of proxies will save the Company the expense of further requests for
proxies.
BY ORDER OF THE BOARD OF DIRECTORS
John W. Paulson
Chief Executive Officer
Eden Prairie, Minnesota
March 24, 2000
<PAGE>
CODA MUSIC TECHNOLOGY, INC.
Annual Meeting of Shareholders
April 25, 2000
PROXY STATEMENT
INTRODUCTION
Your Proxy is solicited by the Board of Directors of Coda Music
Technology, Inc. ("the Company") for use at the Annual Meeting of Shareholders
to be held on April 25, 2000, at the location and for the purposes set forth in
the Notice of Meeting, and at any adjournment thereof.
The cost of soliciting proxies, including the preparation, assembly and
mailing of the proxies and soliciting material, as well as the cost of
forwarding such material to beneficial owners of stock, will be borne by the
Company. Directors, officers and regular employees of the Company may, without
compensation other than their regular remuneration, solicit proxies personally
or by telephone.
Any shareholder giving a proxy may revoke it at any time prior to its
use at the meeting by giving written notice of such revocation to the Secretary
of the Company. Proxies not revoked will be voted in accordance with the choice
specified by shareholders by means of the ballot provided on the proxy for that
purpose. Proxies which are signed but which lack any such specification will,
subject to the following, be voted in favor of the proposals set forth in the
Notice of Meeting and in favor of the number and slate of directors proposed by
the Board of Directors and listed herein. If a shareholder abstains from voting
as to any matter, then the shares held by such shareholder shall be deemed
present at the meeting for purposes of determining a quorum and for purposes of
calculating the vote with respect to such matter, but shall not be deemed to
have been voted in favor of such matter. Abstentions, therefore, as to any
proposal will have the same effect as votes against such proposal. If a broker
returns a "non-vote" proxy, indicating a lack of voting instructions by the
beneficial holder of the shares and a lack of discretionary authority on the
part of the broker to vote on a particular matter, then the shares covered by
such non-vote proxy shall be deemed present at the meeting for purposes of
determining a quorum but shall not be deemed to be represented at the meeting
for purposes of calculating the vote required for approval of such matter.
The mailing address of the principal executive office of the Company is
6210 Bury Drive, Eden Prairie, Minnesota 55346-1718. The Company expects that
this Proxy Statement, the related proxy and Notice of Meeting will first be
mailed to shareholders on or about March 24, 2000.
OUTSTANDING SHARES AND VOTING RIGHTS
The Board of Directors of the Company has fixed March 13, 2000, as the
record date for determining shareholders entitled to vote at the Annual Meeting.
Persons who were not shareholders on such date will not be allowed to vote at
<PAGE>
the Annual Meeting. At the close of business on March 13, 2000, 6,355,359 shares
of the Company's Common Stock were issued and outstanding. The Common Stock is
the only outstanding class of capital stock of the Company entitled to vote at
the meeting. Each share of Common Stock is entitled to one vote on each matter
to be voted upon at the meeting. Holders of Common Stock are not entitled to
cumulative voting rights.
PRINCIPAL SHAREHOLDERS
The following table provides information concerning persons known to
the Company to be the beneficial owners of more than 5% of the Company's
outstanding Common Stock as of March 13, 2000. Unless otherwise indicated, the
shareholders listed in the table have sole voting and investment powers with
respect to the shares indicated.
Name and Address of Number of Shares Percent of
Beneficial Owner Beneficially Owned Class (1)
Benson K. Whitney 1,250,681(2) 19.7%
821 Marquette Avenue
Minneapolis, MN 55402
J.M. Hixon Partners, LLC 1,158,847(3) 18.2%
821 Marquette Avenue
Minneapolis, MN 55402
Gordon F. Stofer 681,352(4) 10.7%
7601 France Avenue S.
Minneapolis, MN 55435
Cherry Tree Ventures IV 667,221(5) 10.5%
7601 France Avenue S.
Minneapolis, MN 55435
John W. Paulson 480,500(6) 7.6%
6210 Bury Drive
Eden Prairie, MN 55346
- ------------------------
(1) Shares not outstanding but deemed beneficially owned by virtue of the
right of a person to acquire them as of March 13, 2000, or within sixty
days of such date are treated as outstanding only when determining the
percent owned by such individual and when determining the percent owned
by a group.
(2) Includes (i) 1,000 shares issuable pursuant to a currently exercisable
warrant, (ii) 769,231 shares held by J.M. Hixon Partners, LLC ("Hixon
Partners"), (iii) 384,616 shares issuable pursuant to currently
exercisable warrants held by Hixon Partners, (iv) 5,000 shares issuable
pursuant to a currently exercisable option held by Hixon Partners, (v)
65,834 shares held by Gideon Hixon Ventures ("Hixon Ventures") and (vi)
7,500 shares issuable pursuant to a currently exercisable warrant held
by Hixon Ventures. Mr. Whitney, as the managing member of Hixon
Partners, has sole voting and dispositive power over the shares held by
Hixon Partners, and has shared voting and dispositive powers over the
shares held by Hixon Ventures.
(3) Includes (i) 384,616 shares issuable pursuant to currently exercisable
warrants and (ii) 5,000 shares issuable pursuant to a currently
exercisable option.
<PAGE>
(4) Includes (i) 603,759 shares held by Cherry Tree Ventures IV, of which
Mr. Stofer is a general partner, and (ii) 63,462 shares issuable
pursuant to currently exercisable warrants held by Cherry Tree Ventures
IV. Mr. Stofer disclaims beneficial ownership in the securities held by
Cherry Tree Ventures IV.
(5) Includes 63,462 shares issuable pursuant to currently exercisable
warrants.
(6) Includes 180,000 shares which may be purchased upon exercise of options
which are exercisable as of March 13, 2000 or within 60 days of such
date.
MANAGEMENT SHAREHOLDINGS
The following table sets forth the number of shares of Common Stock
beneficially owned as of March 13, 2000, by each executive officer of the
Company named in the Summary Compensation table, by each current director and
nominee for director of the Company and by all directors and executive officers
(including the named individuals) as a group. Unless otherwise indicated, the
shareholders listed in the table have sole voting and investment powers with
respect to the shares indicated.
Name of Beneficial Number of Shares Percent of
Owner or Identity of Group Beneficially Owned Class (1)
Benson K. Whitney 1,250,681 (2) 19.7%
Gordon F. Stofer 681,352 (3) 10.7%
John W. Paulson 480,500 (4) 7.6%
Mark E. Dunn 72,583 (5) *
Ronald B. Raup 62,199 1.0%
Barbara S. Remley 37,500 (6) *
Timothy M. Heaney 28,270 (7) *
Glenna A. Dibrell 16,500 (5) *
Larry A. Pape 9,600 (8) *
All current officers and directors
as a group (8 persons) 2,639,185 (9) 41.5%
- -----------------------
* Less than 1%
(1) See footnote (1) to preceding table.
(2) See footnote (2) to preceding table.
(3) See footnote (4) to preceding table.
(4) See footnote (6) to preceding table.
(5) Such shares are not outstanding but may be purchased upon exercise of
options which are exercisable as of March 13, 2000 or within 60 days of
such date.
(6) Includes 27,500 shares which may be purchased upon exercise of options
which are exercisable as of March 13, 2000 or within 60 days of such
date.
<PAGE>
(7) Includes 1,500 shares held by a trust for the benefit of Mr. Heaney's
family and 14,045 shares which may be purchased upon exercise of
options and warrants which are exercisable as of March 13, 2000 or
within 60 days of such date. Mr. Heaney disclaims beneficial ownership
of the shares held by his children's trust.
(8) Includes 300 shares held by Mr. Pape's wife and 9,000 shares which may
be purchased upon exercise of options which are exercisable as of March
13, 2000 or within 60 days of such date.
(9) Includes 692,123 shares which may be purchased upon exercise of options
and warrants which are exercisable as of March 13, 2000 or within 60
days of such date.
ELECTION OF DIRECTORS
(Proposals #1 and #2)
General Information
The Bylaws of the Company provide that the number of directors, which
shall not be less than one, shall be determined by the Board of Directors or by
the shareholders. The Board of Directors recommends that the number of directors
be set at five and that five directors be elected at the Annual Meeting. Under
applicable Minnesota law, approval of the proposal to set the number of
directors at five, as well as the election of each nominee, requires the
affirmative vote of the holders of the greater of (A) a majority of the voting
power of the shares represented in person or by proxy at the Annual Meeting with
authority to vote on such matter or (B) a majority of the voting power of the
minimum number of shares that would constitute a quorum for the transaction of
business at the Annual Meeting.
In the absence of other instructions, each proxy will be voted for each
of the nominees listed below. If elected, each nominee will serve until the next
annual meeting of shareholders and until his successor shall be elected and
qualified. If, prior to the meeting, it should become known that any of the
nominees will be unable to serve as a director after the meeting by reason of
death, incapacity or other unexpected occurrence, the proxies will be voted for
such substitute nominee as is selected by the Board of Directors or,
alternatively, not voted for any nominee. The Board of Directors has no reason
to believe that any nominee will be unable to serve.
The names and ages of all of the director nominees and the positions
held by each with the Company are as follows:
Name Age Position
John W. Paulson 52 Chief Executive Officer and Chairman
of the Board of Directors
Gordon F. Stofer (1)(2) 53 Director
Larry A. Pape 53 Director
Benson K. Whitney (1)(2) 43 Director
Timothy M. Heaney 53 Director
- --------------------------
(1) Member of the Compensation Committee.
(2) Member of the Audit Committee.
<PAGE>
John W. Paulson has been Chief Executive Officer and Chairman of the
Board of Directors of the Company since December 1990. From 1982 to 1990, Mr.
Paulson was Chairman of Springboard Software, Inc., a publicly held company he
founded to develop and market educational and consumer software products.
Springboard was subsequently purchased by Spinnaker Software Corp. Prior to
founding Springboard, Mr. Paulson was a public school music teacher for nine
years during which time he taught band, keyboard and electronic music classes.
He has a Master of Arts in Music Education from the Eastman School of Music, is
a published composer, and has performed as a professional musician for over ten
years. Mr. Paulson has served on the Board of Directors of the National
Association of Music Merchants and the St. Paul Chamber Orchestra.
Gordon F. Stofer has been a director of the Company since January 1993.
Mr. Stofer has been an active investor in the private equity investment industry
for 19 years. He is President and co-founder of Cherry Tree Investments, Inc.
and a Managing General Partner in the Cherry Tree Ventures partnerships. Prior
to founding Cherry Tree Investments, he was a Vice President at Norwest Venture
Capital Corporation. He is currently a director of the following public
companies: Verdant Brands, Inc. and Insignia Systems, Inc.
Larry A. Pape has been a director of the Company since September 1993.
Mr. Pape is currently an independent investor. He was founder and Chief
Executive Officer of Aprisa Multimedia, Inc., a developer of Internet-based
corporate training applications, from May 1993 to 1998. From May 1992 until
April 1993, he was General Manager of the multimedia division of Radius, Inc., a
color publishing and digital video company. He has also held various management
positions at Fluent, Inc. from September 1990 to April 1992, Wicat Systems, Inc.
from May 1990 to August 1990, Fourth Shift Corporation from July 1983 to April
1990, Apple Computer, Inc., Control Data Corporation and IBM Corporation.
Benson K. Whitney has been a director of the Company since May 1997.
Mr. Whitney is the managing general partner of the Gideon Hixon Fund, a private
venture capital partnership. He also serves as Vice President and Chief
Executive Officer of Whitney Management Co., a family management company. In
these positions he has been involved in numerous early stage investments and
serves on several boards of directors. He formerly practiced law with Popham,
Haik, Schnobrich & Kaufman, specializing in regulated industries such as medical
services companies and cable television.
Timothy M. Heaney has been a director of the Company since September
1999. Since October 1999, Mr. Heaney has been Vice President and General Counsel
and a director of Techne Corporation, a manufacturer of biotechnology products.
Prior thereto he practiced law with Fredrikson & Byron, P.A., specializing in
general corporate and securities law.
Other Information
Pursuant to an Investor Rights Agreement among the Company, J.M. Hixon
Partners, LLC ("Hixon"), and certain shareholders of the Company entered into at
the time of Hixon's investment in the Company, Hixon has the right, so long as
it owns or controls 4% or more of the Company's Common Stock, to designate an
individual to serve on the Company's Board of Directors, and the shareholders
who are parties to the Agreement have agreed to vote shares of Common Stock
owned or controlled by them for such director designee. Mr. Whitney is currently
serving as the director designee under that Agreement. There are no other
<PAGE>
arrangements or understandings between any of the directors or any other person
(other than arrangements or understandings with directors acting as such)
pursuant to which any person was selected as a director or nominee of the
Company. There are no family relationships among the Company's directors.
Committee and Board Meetings
The Company's Board of Directors has two standing committees, the Audit
Committee and the Compensation Committee. The Audit Committee is responsible for
reviewing the Company's internal control procedures, the quarterly and annual
financial statements of the Company, and reviewing with the Company's
independent public accountants the results of the annual audit. The Audit
Committee met twice during fiscal 1999. The Compensation Committee recommends to
the Board of Directors from time to time the salaries and incentive compensation
to be paid to executive officers of the Company and administers the Company's
stock option plan. The Compensation Committee met four times during fiscal 1999.
Members of both of such Committees meet informally from time to time throughout
the year on Committee matters.
The Directors and Committee members often communicate informally to
discuss the affairs of the Company and, when appropriate, take formal Board and
Committee action by unanimous written consent of all Directors or Committee
members, in accordance with Minnesota law, rather than hold formal meetings.
During fiscal 1999, the Board of Directors held four formal meetings. Each
incumbent director attended 100% or more of the total number of meetings (held
during the period(s) for which he has been a director or served on committee(s))
of the Board and of committee(s) of which he was a member with the exception of
Larry A. Pape, who attended 50% of the total number of meetings.
Directors' Fees
Directors are not currently paid fees for attending Board or Committee
meetings. Under the Company's 1992 Stock Option Plan each nonemployee director
(excluding persons who were nonemployee directors on the date such provision was
adopted by the Board and excluding Benson K. Whitney, who has waived his rights
under such provision) receives a nonqualified option to purchase 5,000 shares of
the Company's Common Stock upon his or her initial election as a director and a
nonqualified option to purchase 1,500 shares of Common Stock upon each
re-election thereafter. As of April 27, 1999, the date of the 1999 annual
meeting, Larry A. Pape received an option for the purchase of 1,500 shares at an
exercise price of $1.4375 per share, and Timothy M. Heaney received an option to
purchase 5,000 shares at an exercise price of $3.25 per share upon his election
to the Board in September 1999. As a further inducement for his agreement to
serve on the Board, on September 21, 1999, Mr. Heaney was granted an additional
option to purchase 5,000 shares at an exercise price of $3.25 per share
CERTAIN TRANSACTIONS AND BUSINESS RELATIONSHIPS
Under the terms of an Investor Rights Agreement entered into with J.M.
Hixon Partners, LLC in connection with its participation in the Company's 1997
private placement, the Company has granted to J.M. Hixon Partners, LLC a right
to purchase its pro rata share of any new issuances of securities by the
Company, excluding shares issued upon exercise of currently outstanding
warrants, pursuant to employee stock plans, pursuant to a registered public
offering or in connection with an acquisition. The Investor Rights Agreement
<PAGE>
also gives J.M. Hixon Partners the right to designate an individual to serve on
the Company's Board of Directors (see "Election of Directors--Other
Information").
In connection with the Company's 1997 private placement the Company
granted to J. M. Hixon Partners, LLC and Cherry Tree Ventures IV, an affiliate
of Gordon F. Stofer, certain registration rights. The Company has prepared and
filed a registration statement on Form S-3 covering resale of the shares
acquired in the private placement and shares which may be acquired upon exercise
of the private placement warrants.
Until he joined Techne Corporation in October 1999, Mr. Heaney was a
shareholder and officer of Fredrikson & Byron, P.A. Fredrikson & Byron, P.A. is
regularly retained to provide legal services to the Company.
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth certain information regarding
compensation paid during each of the Company's last three fiscal years to the
Chief Executive Officer and each other executive officer of the Company (the
"Named Executive Officers") who received total salary and bonus compensation in
excess of $100,000 for 1999.
<TABLE>
<CAPTION>
Summary Compensation Table
Long-term
Annual Compensation Compensation
------------------------ -------------------
Securities
Name and Principal Salary Bonus Underlying Options
Position Year ($) ($) (# of shares)
---------------------------------------- ---- ----------- ----------- -----------------
<S> <C> <C> <C> <C>
John W. Paulson, 1999 $148,100 $22,215 100,000
Chief Executive Officer and Chairman 1998 141,597 42,930 0
1997 134,946 0 0(1)
Ronald B. Raup, 1999 $152,456 $ 5,000 75,000
Former President and Chief Operating 1998 161,997 47,250 0
Officer 1997 154,677 0 50,000(2)
Mark E. Dunn, 1999 $115,900 $20,862 30,000
Senior Vice President 1998 110,496 25,200 0
1997 105,177 0 15,000(3)
Barbara S. Remley, 1999 $105,000 $18,000 25,000
Chief Financial Officer 1998 62,287 14,962 45,000
Glenna A. Dibrell, 1999 $105,000 $18,000 15,000
Vice President of Marketing 1998 16,471 8,750 35,000
(1) Does not include options for 137,500 shares which were granted in 1994 and 1996 and which were repriced
in fiscal 1997.
(2) Does not include options for 100,000 shares which were granted in 1995 and 1996 and which were repriced
in fiscal 1997.
(3) Does not include options for 60,000 shares which were granted in 1993, 1994 and 1996 and which were
repriced in fiscal 1997.
</TABLE>
<PAGE>
Employment Agreement
Ronald R. Raup resigned as President and Chief Executive Officer as of
November 15, 1999. The Company had an Employment Agreement with Mr. Raup which
provided for a base salary subject to annual review, and a potential bonus. The
Employment Agreement provided that Mr. Raup could terminate his employment at
any time and that the Company could terminate such employment on 30 days written
notice; provided, however, if the Company terminated Mr. Raup's employment for
any reason other than for cause, the Company would pay him an amount equal to
one year's base salary.
Option/SAR Grants During 1999 Fiscal Year
The following table sets forth information regarding stock options
granted to the Named Executive Officers during the fiscal year ended December
31, 1999. The Company has not granted stock appreciation rights.
Number of
Securities % of Total
Underlying Options/SARs
Options/SARs Granted to Exercise or
Granted Employees in Base Price Expiration
Name (#) Fiscal Year ($/Sh) Date
---- ------- ----------- -------- ----------
John R. Paulson 25,000 (1) 7.9% $1.375 5/2/06
75,000 (2) 23.7% $2.40625 6/29/06
Ronald B. Raup 25,000 (1) 7.9% $1.375 5/2/06
50,000 (2) 15.8% $2.40625 6/29/06
Mark E. Dunn 10,000 (1) 3.2% $1.375 5/2/06
20,000 (2) 6.3% $2.40625 6/29/06
Barbara S. Remley 10,000 (1) 3.2% $1.375 5/2/06
15,000 (2) 4.7% $2.40625 6/29/06
Glenna A. Dibrell 5,000 (1) 1.6% $1.375 5/2/06
10,000 (2) 3.2% $2.40625 6/29/06
- ------------------------
(1) Such options are exercisable in 60 equal monthly installments
commencing on the last day of the month in which they were granted.
(2) Such options become exercisable on June 30, 2005, but will become
exercisable earlier: (a) to the extent of 50% of the total number of
shares in the event that prior to July 1, 2002 the reported closing
price of the Company's Common Stock is $3.00 or higher for 60
consecutive days or the Company is sold, merged or liquidated in a
transaction with a value of $3.00 per share or higher; and (b) to the
extent of the balance of the total number shares in the event that
prior to July 1, 2002 the reported closing price is $6.00 or higher for
60 calendar days or the Company is sold, merged or liquidated in a
transaction with a value of $6.00 per share or higher. One-half of such
options became exercisable on August 29, 1999 following attainment of
the requisite $3.00 closing price for 60 consecutive days.
<PAGE>
Aggregated Option/SAR Exercises During 1999 Fiscal Year
and Fiscal Year End Option/SAR Values
The following table provides information related to the exercise of
stock options during fiscal 1999 by the Named Executive Officers and the number
and value of options held at fiscal year end by such persons:
<TABLE>
<CAPTION>
Number of Unexercised
Securities Underlying Value of Unexercised In-the-
Options at 12/31/99 Money Options at 12/31/99(1)
----------------------------- ----------------------------
Shares
Acquired on Value
Name Exercise Realized(2) Exercisable Unexercisable Exercisable Unexercisable
- ---- -------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
John W. Paulson 0 N/A 178,333 59,167 $161,953 $27,891
Ronald B. Raup 0 N/A 137,499(2) 0 $128,905 0
Mark E. Dunn 0 N/A 47,708 32,292 $45,703 $29,297
Barbara S. Remley 0 N/A 23,833 46,167 $19,078 $44,203
Glenna A. Dibrell 0 N/A 13,834 36,166 $13,470 $45,593
</TABLE>
(1) Value of exercisable/unexercisable in-the-money options is equal to the
difference between the market price of the Common Stock at fiscal year
end and the option exercise price per share multiplied by the number of
shares subject to options. The closing sale price as of December 31,
1999 on the Nasdaq Stock Market was $2.50.
(2) Such options were exercised during fiscal 2000.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's executive officers, directors and persons who own more than 10 percent
of the Company's Common Stock, to file with the Securities and Exchange
Commission initial reports of ownership and reports of changes in ownership of
Common Stock and other equity securities of the Company. Officers, directors and
greater than 10% shareholders ("Insiders") are required by SEC regulations to
furnish the Company with copies of all Section 16(a) forms they file.
To the Company's knowledge, based on a review of the copies of such
reports furnished to the Company, during the fiscal year ended December 31, 1999
all Section 16(a) filing requirements applicable to Insiders were complied with.
INDEPENDENT PUBLIC ACCOUNTANT
On November 3, 1998, the Company selected McGladrey & Pullen, LLP to
serve as the Company's independent auditors for the 1998 fiscal year. The
decision to change accountants was recommended by the Company's Audit Committee
and approved by the Company's Board of Directors.
<PAGE>
There were not, in connection with the audits of the two most recent
fiscal years and any subsequent interim period preceding the selection of
McGladrey & Pullen, LLP, any disagreements with Arthur Andersen, LLP, the
independent public accountants engaged by the Company for prior years, on any
matter of accounting principles or practices, financial statement disclosure, or
auditing scope or procedure which, if not resolved to Arthur Andersen LLP's
satisfaction, would have caused it to make reference to the subject matter of
the disagreement in connection with its report, nor has Arthur Andersen LLP's
report on the financial statements of the Company for the past two years
contained an adverse opinion or disclaimer of opinion or been qualified as to
uncertainty, audit scope or accounting principles.
Representatives of McGladrey & Pullen, LLP are expected to be present
at the meeting, will be given an opportunity to make a statement regarding
financial and accounting matters of the Company if they so desire, and will be
available at the meeting to respond to appropriate questions from the Company's
shareholders.
OTHER BUSINESS
Management knows of no other matters to be presented at the meeting. If
any other matter properly comes before the meeting, the appointees named in the
proxies will vote the proxies in accordance with their best judgment.
SHAREHOLDER PROPOSALS
Any appropriate proposal submitted by a shareholder of the Company and
intended to be presented at the 2001 annual meeting of shareholders must be
received by the Company by November 23, 2000, to be considered for inclusion in
the Company's proxy statement and related proxy for the 2001 annual meeting.
Also, if a shareholder proposal intended to be presented at the 2001
annual meeting but not included in the Company's proxy statement and proxy is
received by the Company after February 8, 2001, then management named in the
Company's proxy form for the 2001 annual meeting will have discretionary
authority to vote shares represented by such proxies on the shareholder
proposal, if presented at the meeting, without including information about the
proposal in the Company's proxy materials.
ANNUAL REPORT TO SHAREHOLDERS
A copy of the Company's Annual Report to Shareholders for the fiscal
year ended December 31, 1999, accompanies this notice of meeting and Proxy
Statement. No part of the Annual Report is incorporated herein and no part
thereof is to be considered proxy soliciting material.
FORM 10-KSB
THE COMPANY WILL FURNISH WITHOUT CHARGE TO EACH PERSON WHOSE PROXY IS
BEING SOLICITED, UPON WRITTEN REQUEST OF ANY SUCH PERSON, A COPY OF THE
COMPANY'S ANNUAL REPORT ON FORM 10-KSB FOR THE FISCAL YEAR ENDED DECEMBER 31,
<PAGE>
1999, AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, INCLUDING THE
FINANCIAL STATEMENTS AND THE FINANCIAL STATEMENT SCHEDULES THERETO. THE COMPANY
WILL FURNISH TO ANY SUCH PERSON ANY EXHIBIT DESCRIBED IN THE LIST ACCOMPANYING
THE FORM 10-KSB, UPON THE PAYMENT, IN ADVANCE, OF REASONABLE FEES RELATED TO THE
COMPANY'S FURNISHING SUCH EXHIBIT(S). REQUESTS FOR COPIES OF SUCH REPORT AND/OR
EXHIBIT(S) SHOULD BE DIRECTED TO MS. BARBARA S. REMLEY, CHIEF FINANCIAL OFFICER,
AT THE COMPANY'S PRINCIPAL ADDRESS.
BY ORDER OF THE BOARD OF DIRECTORS
John W. Paulson
Chief Executive Officer
Dated: March 24, 2000
Eden Prairie, Minnesota
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Coda Music Technology, Inc.
ANNUAL MEETING
Tuesday, April 25, 2000 3:30 p.m.
[Map Appears Here]
IDS Center (50th floor)
80 S. 8th Street
Minneapolis, Minnesota
Parking Garage:
On Marquette between 7th & 8th St.
Coda Music Technology, Inc.
6210 Bury Drive, Eden Prairie, Minnesota 55346
PROXY
This proxy is solicited by the Board of Directors for use at the Annual Meeting
on April 25, 2000.
The shares of stock you hold in your account or in a dividend reinvestment
account will be voted as you specify below.
If no choice is specified, the proxy will be voted "FOR" Items 1 and 2.
By signing the proxy, you revoke all prior proxies and appoint John W. Paulson
and Barbara S. Remley, and each of them, with full power of substitution, to
vote your shares on the matters shown on the reverse side and any other matters
which may come before the Annual Meeting and all adjournments.
See reverse side for voting instructions
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PLEASE DETACH HERE
The Board of Directors Recommends a Vote FOR 1 and 2
1. Election of Directors: 01 - John W. Paulson 04 - Benson K. Whitney
02 - Gordon F. Stofer 05 - Timothy M. Heaney
03 - Larry A. Pape
[ ] Vote FOR all [ ] Vote WITHHELD
nominees (except from all nominees
as marked)
(Instructions: To withhold authority to vote [ ]
for any indicated nominee, write the number(s) [ ]
of the nominee(s) in the box provided to the right.)
1. Set the number of directors at five (5): [ ] FOR [ ] AGAINST [ ] ABSTAIN
3. In their discretion, the appointed proxies are authorized to vote upon such
other business as may properly come before the meeting.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION
IS GIVEN, WILL BE VOTED FOR EACH PROPOSAL.
Address Change? Mark Box [ ] Date____________________________________
Indicate changes below:
[ ]
Signature(s) in Box
Please sign exactly as your name(s)
appear on Proxy. If held in joint
tenancy, all persons must sign. Trustees,
administrators, etc., should include
title and authority. Corporations should
provide full name of corporation title of
authorized officer signing the proxy.
