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 TECHNOLOGY, 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:
CODA MUSIC TECHNOLOGY, INC.
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
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The Annual Meeting of Shareholders of Coda Music Technology, Inc. will
be held on April 27, 1999, at 3:30 p.m. (Minneapolis time), at the Minneapolis
Hilton & Towers, 1001 Marquette Avenue, 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 15, 1999,
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 22, 1999
CODA MUSIC TECHNOLOGY, INC.
Annual Meeting of Shareholders
April 27, 1999
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PROXY STATEMENT
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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 27, 1999, 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 22, 1999.
OUTSTANDING SHARES AND VOTING RIGHTS
The Board of Directors of the Company has fixed March 15, 1999, 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
the Annual Meeting. At the close of business on March 15, 1999, 6,194,732 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 15, 1999. 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) 19.0%
821 Marquette Avenue
Minneapolis, MN 55402
J.M. Hixon Partners, LLC 1,158,847(3) 17.6%
821 Marquette Avenue
Minneapolis, MN 55402
Gordon F. Stofer 681,352(4) 10.9%
7601 France Avenue S.
Minneapolis, MN 55435
Cherry Tree Ventures IV 667,221(5) 10.7%
7601 France Avenue S.
Minneapolis, MN 55435
John W. Paulson 488,000(6) 7.7%
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 15, 1999, 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.
(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 137,500 shares which may be purchased upon exercise of options
which are exercisable as of March 15, 1999 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 15, 1999, 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) 19.0%
Gordon F. Stofer 681,352 (3) 10.9%
John W. Paulson 488,000 (4) 7.7%
David A. Henderson 227,300 (5) 3.7%
Ronald B. Raup 94,666 (6) 1.5%
Larry A. Pape 8,100 (7) *
Karl T. Bruhn 16,000 (8) *
Mark E. Dunn 57,000 (8) *
All officers and directors
as a group (10 persons) 2,845,599 (9) 40.60%
* 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) Includes (i) 122,026 shares held by Founding Partners II Limited
Partnership and (ii) 20,000 shares issuable pursuant to currently
exercisable warrants held by Founding Partners II Limited Partnership.
Mr. Henderson is a managing partner of Founding Partners II Limited
Partnership, and thus shares voting and dispositive power over the
shares held by such entity.
(6) Includes 94,166 shares which may be purchased upon exercise of options
which are exercisable as of March 15, 1999 or within 60 days of such
date.
(7) Includes 300 shares held by Mr. Pape's wife and 7,500 shares which may
be purchased upon exercise of options which are exercisable as of March
15, 1999 or within 60 days of such date.
(8) Such shares are not outstanding but may be purchased upon exercise of
options which are exercisable as of March 15, 1999 or within 60 days of
such date.
(9) Includes 806,244 shares which may be purchased upon exercise of options
and warrants which are exercisable as of March 15, 1999 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. David
A. Henderson and Karl T. Bruhn, current members of the Board, have advised
management that they do not wish to stand for reelection. 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 (1) 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 (2) 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 51 Chief Executive Officer and Chairman
of the Board of Directors
Ronald B. Raup 48 President, Chief Operating Officer and
Director
Gordon F. Stofer (1)(2) 52 Director
Larry A. Pape 52 Director
Benson K. Whitney (1)(2) 42 Director
(1) Member of the Compensation Committee.
(2) Member of the Audit Committee.
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.
Ronald B. Raup has been President, Chief Operating Officer and a
director of the Company since January 1, 1996, and served as Executive Vice
President from August 1995 through December 1995. From 1977 through July 1995
Mr. Raup was employed by Yamaha Corporation of America, serving as Senior Vice
President of Sales and Marketing from 1989 until his departure. Mr. Raup also
served on Yamaha's Board of Directors from 1990 until 1995.
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.
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
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 once during fiscal 1998. 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 did not meet formally during
fiscal 1998. 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 1998, the Board of Directors held four formal meetings. Each
incumbent director attended 75% 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.
Directors' Fees
Directors are not currently paid fees for attending Board or Committee
meetings. Founding Partners Development Corporation, an affiliate of David A.
Henderson, received a management fee of $2,000 per month through August 31,
1998. These fees were for Mr. Henderson's participation in various management
consultations and advice to management on operating matters on an as-needed
basis. Argus Management Ltd., an affiliate of Mr. Whitney, received a consulting
fee of $3,575 per month for four months of 1998. These fees were for Mr.
Whitney's participation in various management consultations and services
rendered on a special project. During fiscal 1998, the Company granted an option
to J.M. Hixon Partners, LLC ("Hixon") to purchase 5,000 shares at an exercise
price of $1.125 per share, in consideration of consulting services rendered by
Benson K. Whitney through Hixon. In addition, 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 29,
1998, the date of the 1998 annual meeting, Messrs. Karl T. Bruhn and Larry A.
Pape each received an option for the purchase of 1,500 shares at an exercise
price of $1.625 per share.
CERTAIN TRANSACTIONS
On May 29, 1997, the Company sold in a private placement an aggregate
of 1,872,697 shares of Common Stock at a price of $1.30 per share and issued
warrants to purchase 936,357 shares of the Company's Common Stock. The warrants
are exercisable at $2.00 per share at any time on or prior to November 28, 2000
at a price of $2.00 per share, subject to adjustment upon the happening of
certain specified events. Pursuant to certain registration rights granted to
investors in the offering, 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. J.M. Hixon Partners, LLC, David A. Henderson, Founding
Partners II (an affiliate of Mr. Henderson) and Cherry Tree Ventures IV (an
affiliate of Gordon F. Stofer) participated in the private placement by
investing $1,000,000, $13,000, $26,000 and $100,000, respectively.
Under the terms of a separate Investor Rights Agreement entered into
with J.M. Hixon Partners, LLC in connection with its participation in the
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
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.")
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 $100,000 for 1998.
Summary Compensation Table
Long-term
Annual Compensation Compensation
-------------------------------------- ------------------
Securities
Name and Principal Salary Bonus Underlying Options
Position Year ($) ($) (# of shares)
- --------------------- ---- -------- ------- ------------------
John W. Paulson, 1998 $141,597 $42,930 0
Chief Executive Officer and Chairman 1997 134,946 0 0(1)
1996 134,946 13,627 75,000
Ronald B. Raup, 1998 $161,997 $47,250 0
President and Chief Operating 1997 154,677 0 50,000(2)
Officer 1996 154,677 15,000 50,000
Mark E. Dunn, 1998 $110,496 $25,200 0
Senior Vice President 1997 105,177 0 15,000(3)
1996 105,177 6,390 22,500
(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.
Employment Agreement
The Company has an Employment Agreement with Mr. Raup which provides
for a base salary (currently $163,000) subject to annual review, and a potential
bonus. The Employment Agreement provides that Mr. Raup may terminate his
employment at any time and that the Company may terminate such employment on 30
days written notice; provided, however, if the Company terminates Mr. Raup's
employment for any reason other than for cause, the Company will pay him an
amount equal to one year's base salary.
Option/SAR Grants During 1998 Fiscal Year
No stock options or stock appreciation rights were granted to the Named
Executive Officers during the fiscal year ended December 31, 1998.
Aggregated Option/SAR Exercises During 1998 Fiscal Year
and Fiscal Year End Option/SAR Values
No options were exercised by the Named Executive Officers during fiscal
1998. The following table provides information related to the number and value
of options held at fiscal year end by the Named Executive Officers:
Number of Unexercised
Securities Underlying Value of Unexercised In-the-
Options at 12/31/98 Money Options at 12/31/98(1)
Name Exercisable Unexercisable Exercisable Unexercisable
- ---- ----------- ------------- ----------- -------------
John W. Paulson 133,786 3,714 $0 $0
Ronald B. Raup 84,167 65,833 $0 $0
Mark E. Dunn 53,875 21,125 $1,016 $3,672
(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,
1998 on the Nasdaq SmallCap Market was $1.3125.
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, 1998
all Section 16(a) filing requirements applicable to Insiders were complied with
except that Forms 3 to report an option grant were filed late by Barbara S.
Remley and Glenna A.
Dibrell, and Benson K. Whitney and J.M. Hixon Partners, LLC.
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.
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 2000 annual meeting of shareholders must be
received by the Company by November 20, 1999, to be considered for inclusion in
the Company's proxy statement and related proxy for the 2000 annual meeting.
Also, if a shareholder proposal intended to be presented at the 2000
annual meeting but not included in the Company's proxy statement and proxy is
received by the Company after February 5, 2000, then management named in the
Company's proxy form for the 2000 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, 1998, 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,
1998, 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 22, 1999
Eden Prairie, Minnesota
CODA MUSIC TECHNOLOGY, INC.
PROXY FOR ANNUAL MEETING
Of Shareholders To Be Held
April 27, 1999
The undersigned hereby appoints JOHN W. PAULSON and RONALD B. RAUP, and
each of them, with full power of substitution, as Proxies to represent and vote,
as designated below, all shares of Common Stock of Coda Music Technology, Inc.
registered in the name of the undersigned at the Annual Meeting of Shareholders
of the Company to be held at the Minneapolis Hilton & Towers, 1001 Marquette
Avenue, Minneapolis, Minnesota, at 3:30 p.m. (Minneapolis time) on April 27,
1999, and at any adjournment thereof, and the undersigned hereby revokes all
proxies previously given with respect to the meeting.
The Board of Directors recommends that you vote FOR each proposal
below.
1. Set the number of directors at five (5):
[ ] FOR [ ] AGAINST [ ] ABSTAIN
2. Elect directors: [Nominees: John W. Paulson, Ronald B. Raup, Gordon F.
Stofer, Larry A. Pape and Benson K. Whitney]
[ ] FOR all nominees listed above [ ] WITHHOLD AUTHORITY to vote
(except those whose names have for all nominees listed above
been written in below)
To withhold authority to vote for any individual nominee
write that nominee's name on the line below
---------------------------------------------------
3. OTHER MATTERS. In their discretion, the Proxies are . . .
[ ] AUTHORIZED [ ] NOT 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 FOR A PARTICULAR PROPOSAL, WILL BE VOTED FOR SUCH PROPOSAL,
AND WILL BE DEEMED TO GRANT AUTHORITY UNDER PROPOSAL NUMBER 3.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
Date: , 1999
------------------------
-------------------------------------------
-------------------------------------------
PLEASE DATE AND SIGN ABOVE exactly as name
appears at the left, indicating, where
appropriate, official position or
representative capacity. For stock held in
joint tenancy, each joint owner should sign.