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))
[ ] Definitive Proxy Statement
[X] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-12
Liquid Audio Inc.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than 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:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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[ ] 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.
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EXPLANATORY NOTE
Liquid Audio, Inc., a Delaware corporation, is filing the materials
contained in this Schedule 14A with the Securities and Exchange Commission on
September 20, 2002 with respect to its 2002 annual meeting of stockholders.
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[LIQUID AUDIO LOGO]
FOR IMMEDIATE RELEASE
ISS RECOMMENDS AGAINST TAKEOVER BY MM COMPANIES
LIQUID AUDIO RESPONDS TO MM COMPANIES' PRESS RELEASE, CLARIFIES MISLEADING
CHARACTERIZATION OF ISS DECISION
REDWOOD CITY, Calif., Sept. 20 - Liquid Audio, Inc. (Nasdaq: LQID - News) today
announced that Institutional Shareholder Services (ISS), which provides proxy
advisory services to institutional investors, mutual funds and other
fiduciaries, has recommended that its clients vote against the takeover
proposals by a group led by MM Companies, Inc. Specifically, ISS has recommended
that Liquid Audio stockholders vote against Proposal 3, which would amend the
company's by-laws to expand the size of its board of directors; Proposal 4,
which would amend the company's by-laws to authorize only stockholders to fill
newly created directorships; and Proposal 5, which would elect four nominees of
the MM Companies group to fill the new positions on the board of directors, at
the company's annual meeting to be held on September 26, 2002. As stated in MM
Companies' press release issued earlier today, ISS also recommended that Liquid
Audio stockholders vote for the nominees of the MM Companies group to serve as
Class III directors for a term of three years.
"We are pleased that ISS, the nation's leading proxy voting advisory service,
recommends that stockholders vote against the takeover proposals of the MM
Companies group," stated Gerry Kearby, president and CEO of Liquid Audio, Inc.
"We believe that it is in the best interests of stockholders to vote against
Proposals 3, 4 and 5, in order to prevent MM Companies from taking control of
the company and managing its assets and cash in the same way it did for
Musicmaker.com."
Liquid Audio, Inc. is a leading provider of software, infrastructure and
services for the secure digital delivery of media over the Internet. The Liquid
Audio solution gives content owners, Web sites and companies the ability to
publish, syndicate and securely sell digital media online with copy protection
and copyright management. Using the Liquid(TM) Player software, available for
free download at www.liquidaudio.com, consumers can preview and purchase
downloadable music from hundreds of affiliate Web sites in the Liquid Music
Network(TM).
NOTE: Liquid Audio, Liquid Player, Liquid Music Network and the Liquid Audio
logo are trademarks of Liquid Audio, Inc.
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Liquid Audio, Liquid Player, Liquid Music Network and the Liquid Audio
logo are trademarks of Liquid Audio, Inc.
For more information, press only:
Kim Strop, Liquid Audio, Inc., (650) 549-2194, email: kstrop@liquidaudio.com
Forward-Looking Statements
All statements made in this release, other than statements of historical fact,
are forward-looking statements. The words "anticipate," "believe," "estimate,"
"expect," "intend," "will," "guidance" and similar expressions typically are
used to identify forward-looking statements. Forward-looking statements are
based on the then-current expectations, beliefs, assumptions, estimates and
forecasts about the businesses of Liquid Audio and Alliance Entertainment Corp.
and the industries and markets in which the companies operate. Those statements
are not guarantees of future performance and
involve risks, uncertainties and assumptions that will be difficult to predict.
Therefore, actual outcomes and results may differ materially from what is
expressed or implied by those forward-looking statements. Factors that may
affect Liquid Audio's and Alliance Entertainment's businesses, financial
condition and operating results include the effects of changes in the economy,
consumer spending, the stock market and the industries in which they operate
generally, changes affecting the Internet and e-commerce, the ability of the
companies to maintain relationships with strategic partners and suppliers, the
ability of the companies to timely and successfully develop, maintain and
protect their technology and product and service offerings and execute
operationally and the ability of the companies to attract and retain qualified
personnel. These factors may also include, but are not limited to, general
market conditions, our ability to develop new products to meet market demand,
our ability to successfully combine two geographically dispersed businesses, our
ability to realize synergies of the merger; our ability to maintain cost
controls; the mix of products and services our customers require and the effects
of natural disasters, international conflicts and other events beyond our
control. More information about potential factors that could affect Liquid Audio
can be found in its most recent Form 10-K, Form 10-Q and other reports and
statements filed by Liquid Audio with the Securities and Exchange Commission
("SEC"). Each of Liquid Audio and Alliance Entertainment expressly disclaims any
intent or obligation to update those forward-looking statements, except as
otherwise specifically stated by it.
Additional Information and Where to Find It
Liquid Audio has filed a Registration Statement on SEC Form S-4 in connection
with the merger and plans to file a Tender Offer Statement on Schedule TO in
connection with the offer. Investors and stockholders of Liquid Audio and
Alliance Entertainment are urged to read the Registration Statement and the
Tender Offer Statement carefully when it is available. The Registration
Statement contains important information about the companies, the merger and
related matters. Investors and stockholders will be able to obtain free copies
of these documents through the web site maintained by the SEC at
http://www.sec.gov. Free copies of the Registration Statement and these other
documents may also be obtained from Liquid Audio by directing a request through
the Liquid Audio Web site at http://www.liquidaudio.com or by mail to Liquid
Audio, Inc., Attention: Investor Relations.
In addition to the Registration Statement and the Tender Offer Statement, Liquid
Audio files annual, quarterly and special reports, proxy statements and other
information with the SEC. You may read and copy any reports, statements or other
information filed by Liquid Audio at the SEC's public reference rooms at 450
Fifth Street, N.W., Washington, D.C. 20549 or at any of the SEC's other public
reference rooms in New York and Chicago. Please call the SEC at 1-800-SEC-0330
for further information on the public reference rooms. Liquid Audio's filings
with the SEC are also available to the public from commercial document-retrieval
services and at the Web site maintained by the SEC at http://www.sec.gov.
Interests of Certain Persons in the Merger
The directors and executive officers of Liquid Audio and Alliance Entertainment
have interests in the merger, some of which may differ from, or may be in
addition to, those of the stockholders of Liquid Audio and Alliance
Entertainment generally. A description of the interests that the directors and
executive officers of the companies have in the merger is available in the
Registration Statement.
Solicitation of Proxies
Liquid Audio and Alliance Entertainment, their respective directors, executive
officers and certain other members of their management and employees may be
soliciting proxies from stockholders of Liquid Audio and Alliance Entertainment
in favor of the merger. Information concerning the participants is set forth in
the Registration Statement filed with the SEC.