**Exhibit10.21**July26, 2000

**EMPLOYMENTAGREEMENT**

**OF**

**WYATTHYORA**

 

ThisEmployment Agreement (“Agreement”) is made this __ day of July, 2000 by andbetween Mackie Designs Inc., a Washington corporation (“Employer”), and WyattHyora (“Employee”).

In consideration ofthe promises and mutual covenants set forth in this Agreement, Employer andEmployee promise and agree as follows:

**1.       Term of Employment.  **Employer hereby employs Employee, and Employee hereby accepts employmentwith Employer, until such time as this Agreement or such employment isterminated as set forth in Section 5 of this Agreement.

**2.       Scope of Duties.**

**2.1.    Duties.  **Employee shallserve as Executive Vice President, with responsibility for the Manufacturing ofthe Employer and all of its subsidiaries, including, but not limited to,Eastern Acoustic Works, Inc. and Radio Cine Forniture (RCF) S.r.L.  Employee shall have such other and furtherresponsibilities, duties and goals as are reasonably established for him fromtime to time by the Chief Executive Officer, or such other person specified bymanagement from time to time.  Employeeshall report directly to the Chief Operating Officer, upon request toEmployer’s Board of Directors, or to such other person as is specified bymanagement from time to time.

**2.2.    Facilities and Staff.  **Employee will be furnished with such facilities, services, staff andworking conditions, consistent with Employer’s current practices, as aresuitable to his position and adequate for the performance of his duties.

**2.3.    Full Time and Attention.  **Employee will loyally and conscientiously devote substantially all of hisbusiness and professional time, attention and energies (exclusive of periods ofsickness and disability and such normal holiday and vacation periods as havebeen established by Employer) to the affairs of Employer.  Notwithstanding the above:

 

2.3.1.  Employeemay expend a reasonable amount of time for educational, professional orcharitable activities; and,

2.3.2. ThisAgreement shall not be interpreted to prohibit Employee from making passivepersonal investments or conducting private business affairs, as long as thoseactivities do not materially interfere with the services required under thisAgreement.

 

**2.4     Competitive Activities.  **During the term of his employment, Employee shall not, directly orindirectly, either as an officer, director, investor, Employee, consultant,agent, independent contractor, principal, partner, shareholder, or in any othercapacity whatsoever, engage or participate in any business activities orbusiness entity which is, in any way, competitive with any of the business ofEmployer, provided however, Employee shall not be restricted from holding lessthan 5% of the outstanding securities of any company whose securities are listedon a national securities exchange or automated quotation system.

**2.5     Indemnification and Insurance. ** During the entire term of hisemployment, Employee will receive the full benefit of the indemnificationprovisions for officers and directors that are then contained in Employer’sArticles of Incorporation and Bylaws, and shall be a named insured underEmployer’s Director’s and Officer’s liability insurance policy, as suchindemnification provisions and insurance policies are in effect from time to time.

 

**3.       Compensation and Expenses.**

**3.1.    Compensation.  **Duringthe term of this Agreement, Employer will pay Employee as follows:

**3.1.1.**An initial base salary of $175,000.00 per year, payable at such times andin such increments as are consistent with Employer’s usual policies, but in noevent less frequently than monthly.  Anyproposed annual salary increase and any salary decrease will be determined bythe Board; provided that Employee’s salary shall never be less than that setforth above; and

**3.1.2**. Employeeshall be a member of any bonus pool maintained by Employer from time to time onbehalf of senior management.  The bonuspool is established annually by the Compensation Committee of the Board, withthe goals and criteria adjusted from time to time as the Compensation Committeedetermines in its sole discretion, and Employee’s right of membership in thebonus pool shall give him no vested rights in any particular criteria oramounts allocated to the bonus pool.

**3.2     Expenses.  **Employer willreimburse Employee for all reasonable travel, entertainment and miscellaneousexpenses incurred in connection with the performance of his duties under thisAgreement.  Such reimbursement will bemade in accordance with general policies and procedures of Employer in effectfrom time to time relating to reimbursement.

**3.3.    Taxes and Withholding.  **Employer shall withhold or deduct from sums due to Employee all sumsrequired by applicable state or federal law.

**3.4.    Stock Options.  **Employeeshall receive 100,000 nonqualified stock options per the Mackie Designs Inc.Amended and Restated 1995 Stock Option Plan (“Plan”), as of the date of thisAgreement.  All of Employee’s optionsshall be subject to, and vest in accordance with, the terms and conditions ofthe Plan.  The options shall be at themarket price for Mackie’s shares as of the close of business on the date ofthis Agreement and shall vest 25% per year over a four (4) year periodcommencing with the date of this Agreement. 

 

**3.5**     **Moving Expenses**.  Employer shall pay Employee an amount equal to one month’s salary tocover all of the costs and expenses of his move from his present location inMeridian, Mississippi to Seattle, Washington. In addition the employer will pay a $20,000 signing bonus to theemployee to assist with the sale of the Employee’s home in Mississippi.

**4. Benefits.**

**4.1.    Vacation.  **During theterm of this Agreement, Employee will be entitled to at least 3 weeks ofvacation per year, to be taken and accounted for in accordance with Employer’spolicies for same in effect from time to time, or such additional time as is inaccordance with Employer’s published rules regarding vacation.  If additional personal time is requested byEmployee, it shall be as determined from time to time by the Chief OperatingOfficer.

**4.2.    Group Benefits.  **Employeeshall participate in any pension, insurance or other Employee benefit plan thatis maintained by Employer from time to time for employees similarlysituated.  To the extent possible,Employer will waive any waiting period required for Employee’s enrollment inany group medical plan.

 

**5. Termination.**

**5.1.   Termination.  **ThisAgreement, and Employee’s employment with Employer, shall be terminated uponthe occurrence of any one of the following events:

**5.1.1 **The conviction of Employee for any crime which is a felony underapplicable law (other than one arising from the operation of a motor vehicleunless Employee is imprisoned following a conviction or after entering a pleain connection therewith);

**5.1.2.**The dishonesty of Employee in the performance of his duties or in hisreporting to the management of Employer;

**5.1.3.**At the option of Employer if any one of the following conditions occursand persists after Employer has given Employee prior written notice of intentto terminate his employment with specific reasons therefor, and Employee failsto correct the specified problems within a period of 30 days of the effectivedate of the notice:

(A)     Chronicalcoholism, drug abuse, or addiction;

(B)     Failureof Employee to apply his full–time attention and best efforts to thebusiness of Employer, other than due to the disability of Employee;

(C)     Failureof Employee to perform consistently the duties assigned to him by Employer;

(D)     Failureof Employee to handle his work or assignments in accordance with the policiesof Employer, reasonably stated; or,

(E)     Breach byEmployee of any of the terms and conditions of this Agreement.

**5.1.4.**The death or disability of Employee;

**5.1.5.**At the option of Employee in the event of the insolvency of Employer;

**5.1.6.**At the option of Employee, without good reason, upon giving 30 days priorwritten notice;

**5.1.7.**At the option of the Employee, with good reason in accordance withsubsection 5.2.2, upon giving 30 days prior written notice; provided, thatEmployer has not corrected any breach of this Agreement specified within suchnotice within such 30 day period; or,

**5.1.8.**At the option of Employer without cause upon giving written noticeoftermination.

**5.2.    Effect of Termination.  **In the event of the termination of this Agreement and Employee’semployment hereunder:

**5.2.1 **If the termination was pursuant to Sections 5.1.7 or 5.1.8, Employeeshall be entitled to receive, during the Payment Period (as hereinafterdefined), (i) the equivalent monthly salary to that set forth in Section 3.1.1;(ii) a prorata share of any bonus earned by Employer senior management pursuantto Section 3.1.2 of this Agreement, with such pro rata share being determinedby multiplying Employee’s usual share thereof by a fraction, the numerator ofwhich is equal to the total number of working days worked by Employee duringthe relevant period over which the bonus is calculated, and the denominator ofwhich is equal to the total number of working days during the relevant periodover which the bonus is calculated; provided, that the amount payable underthis subsection, if any, shall be payable at the next regularly scheduled datefor payment of such bonus pool; and, (iii) continued participation atEmployer’s expense in all relevant Employee benefit programs to which he wouldhave been entitled if he had continued to serve in the capacity set forth inSection 2.1 during the Payment Period. All payments required to be made to Employee pursuant to this Section5.2.1 shall continue to be made regardless of whether Employee secures otheremployment with any other employer.  Forpurposes of this section, the term “Payment Period” shall mean a period of 6consecutive months following the month in which Employee is terminated.

 

**5.2.2**  Employeemay terminate this Agreement for good reason. For purposes of this Agreement, the term “good reason” shall mean (i)any breach of this Agreement by Employer which is not cured within 30 days ofwritten notice from Employee specifying the basis for the breach; (ii) the Employee’s functions or duties are materially diminished; provided thatsuch functions or duties will not be deemed to have been materially diminishedif the Employee’s title, functions and/or duties have been changed so long asthe Employee remains employed as a senior member of the Employer’s seniormanagement staff; or (iii) repeated and consistent bad faith attempts byEmployer to bring about Employee’s resignation through obstruction by theEmployer of Employee’s ability to perform his duties on the Employer’sbehalf.  In the event that the Employeeterminates this Agreement for good reason, Employee shall be entitled to thebenefits set forth in subsection 5.2.1 of this Agreement.

**5.2.3 **If the termination was pursuant to Section 5.1.4, Employee (or hisestate, as the case may be) will be entitled to receive his salary as set forthin Section 3.1.1 through the end of the calendar month in which his deathor disability occurs, and bonus pursuant to Section 3.1.2, if any, for thefiscal year during which his death or disability occurs, prorated through theend of the calendar month during which his death or disability occurs.  For purposes of this Agreement"disability" means (i) the inability of Employee to perform theduties of Employee's employment due to physical or emotional incapacity orillness, where such inability continues for ninety (90) consecutive days and isexpected to be of long-continued and indefinite duration, or (ii) Employeeshall be entitled to (A) disability retirement benefits under the federalSocial Security Act or (B) recover benefits under any long-term disabilityplan or policy maintained by the Employer. In the event of a dispute, the determination of disability shall be madereasonably by the Board of Directors of the Employer and shall be supported byadvice of a consulting physician competent in the area to which such disabilityrelates.  The consulting physician shallbe agreed to jointly by Employee and the Employer.  In the event that Employer’s physician who diagnosed thedisability and the consulting physician reach different conclusions, thephysician who diagnosed the disability and the consulting physician shallselect a third physician who shall advise the Board of Directors on Employer’sdisability.

**5.2.4**  IfEmployee was terminated pursuant to Section 5.1.5, Employee shall be relievedof the obligations set forth in Sections 8.1, 8.2 and 8.3 of this Agreement.

 

**5.2.5**  If thetermination is for any other reason than those set forth in Sections 5.1.4,5.1.7 or 5.1.8, Employee shall (i) have no rights to compensation orreimbursement for salary or bonus for any period subsequent to the date of suchtermination, (ii) have no right to participate in any Employee benefit programsunder Section 4 for any period subsequent to the date of such termination; providedthat Employer will remain obligated to meet any obligations it may have underCOBRA, and (iii) have no right to any bonus that would have been payable on adate subsequent to Employee’s termination date.

 

**5.3.    Effect of Merger, Dissolution or Transfer ofAssets.  **In the event of any voluntary or involuntarydissolution of Employer, any merger or consolidation of Employer with a thirdparty whereby Employer is not a surviving entity, or any sale of all orsubstantially all of the assets of Employer to any third party and in thefurther event that the surviving or acquiring entity declines to assume thisAgreement and/or Employee’s employment is terminated by Employer or thesurviving entity within 90 days of the effective date thereof, suchnonassumption or termination will be deemed to have taken place pursuant tosection 5.1.8 and Employee shall be entitled to the benefits set forth insection 5.2.1.

**6.       Inventions.  **Inventionsmade or conceived entirely or partially by Employee while employed by Employerwill be the property of Employer.  Asused in this Section, the term “inventions” includes all creations, whether ornot patentable or copyrightable, and all ideas, reports, or other creativeworks, including, without limitation, computer programs, manuals and relatedmaterial, which relate to the existing or proposed business of Employer or anyother business or research and development effort conducted by Employer.  All of Employee’s inventions which arecopyrightable shall be works for hire. Employee will cooperate with Employer to patent or copyright allinventions by executing all documents tendered by Employer for such purpose, atEmployer’s expense.  Employee herebygrants to Employer a power of attorney coupled with an interest, wherebyEmployer may execute and deliver any and all documents necessary to so patentor copyright any inventions in Employee’s name, place and stead as if suchexecution and delivery were done by him, with such power of attorney accruingin the event that he fails to cooperate as required by the precedingsentence.  Notwithstanding the above,this provision does not apply to any invention which was developed solely onEmployee’s own time and not using any of Employer’s equipment, supplies,facilities or information, unless (i) (a) the invention relates directlyto the business of Employer or to Employer’s actual or demonstrably anticipatedresearch or development, or (b) the invention results from any work performedby Employee for Employer and (ii) the invention was developed during theterm of his employment with Employer or any Affiliate.  For purposes of this Agreement, the term“Affiliate” shall mean Mackie Designs Inc., a Washington corporation, Radio CineForniture (RCF) S.r.L., an Italian corporation, or any entity which controls,is controlled by or is under common control with Employer.  The obligations contained in this Sectionshall survive the termination of this Agreement.

**7.       Nondisclosure of ConfidentialInformation.  **Employee acknowledges that during the term ofthis Agreement he will learn and will have access to confidential informationregarding Employer and its affiliates, including without limitation (i)confidential or secret plans, programs, documents, agreements or other materialrelating to the business, services or activities, and (ii) trade secrets,market reports, customer investigations, customer lists, files, accounts andother similar information that is proprietary information (collectivelyreferred to as “Confidential Information”). Employee acknowledges that suchConfidential Information is a special, valuable and unique asset. All records,file materials and Confidential Information obtained by Employee in the courseof employment with Employer or its affiliates or service as a director ofEmployer or its affiliates are confidential and proprietary and shall remainthe exclusive property of the appropriate entity owning the same.  Employee will not for any reason use for hisown benefit, or for the benefit of any person with whom Employee becomesassociated, any Confidential Information or disclose any such ConfidentialInformation to any person for any reason or purpose whatsoever without theprior written consent of Employer, unless such Confidential Informationpreviously shall have became public knowledge through no action or omission ofEmployee.  Employee, within three (3)days from the date upon which his employment with Employer is terminated orotherwise upon the request of Employer, shall return to Employer any and alldocuments and material that constitutes Confidential Information.  The obligations contained in this Sectionshall survive the termination of this Agreement.

 

**8.       Covenant Not to Compete:  **But for the provisions of this Section 8, Employer would not enter intothis Agreement as it does not wish competition from Employee.  Accordingly:

 

**8.1.    Noncompetition of Employee:  **Except pursuant to the terms and conditions of this Agreement and anyservices provided to any Affiliate, for a period of six months from and afterhis last date of employment with Employer, Employee shall not, directly orindirectly, singly or in partnership or in conjunction with any other person orpersons, firm, association, syndicate, company or corporation, as officer,director, consultant, employee, independent contractor, principal, agent,shareholder, partner, owner or otherwise, carry on, finance, guarantee theindebtedness of, be engaged in or permit its name or credit to be used in anyway in conjunction with any manufacturer of professional loudspeakers locatedanywhere in the United States, provided however, Employee shall not berestricted from holding less than 5% of the outstanding securities of anycompany whose securities are listed on a national securities exchange orautomated quotation system;

**8.2.    Nonsolicitation of Customers:**  During the one (1) year period from and after his last date ofemployment with Employer, Employee shall not, directly or indirectly, eitherfor its own benefit or for the benefit of others or in conjunction with anybusiness or entity which is then in competition with Employer, solicit, callon, interfere with, or attempt to divert away from Employer or any Affiliateany person or firm who was a customer of Employer or such Affiliate at anytime;

**8.3.    Nonsolicitation of Employees:  **During the one (1) year period from and after his last date of employmentwith Employer, Employee shall not, directly or indirectly, offer to employ,solicit or enlist any employee of Employer or such Affiliate to leave his orher respective employment for any reason;

**8.4.**    **InjunctiveRelief**:   In addition to damages suffered by Employeras a result of Employee’s breach of this paragraph, Employer shall be entitledto the granting of an injunction to prohibit violations of this paragraph uponreasonable proof of the occurrence of any event which contravenes itsterms.  If a bond is required withrespect to the securing of any such injunction, the parties agree that themaximum amount of any such bond shall be $1,000;

**8.5.**    **Terms**:  Employee acknowledges that the provisions of this Section 8 have beenconsidered by him and are reasonable as to time, area, and extent, havingregard to all circumstances of this transaction; and,

**8.6**.    **Severability**:   Ifany provision of this Section 8 shall be unenforceable, illegal, or contraryto the public policy of the jurisdiction in which it is sought to be enforced,such provision shall be deemed to be deleted from this Agreement and the remainingprovisions of this Section shall be and remain valid and binding upon andenforceable by the parties hereto.  Inaddition, the duration and coverage of each separate covenant may be limited bya court in which enforcement of such covenant is sought to the extent necessaryto permit the enforcement of such separate covenant.

 

**9.       Specific Performance.  **Employer and Employee recognize that the services rendered under thisAgreement by Employee are special, unique and of an extraordinary character.Accordingly, in the event of any breach by Employee of the provisions ofSections 6, 7 or 8 of this Agreement and in addition to any other remediesavailable to Employer by law, Employer may specifically enforce Employee’sobligations under such sections.

**10.     Miscellaneous.**

**10.1.  Assignability.  **Exceptas provided in Section 5.3, the rights and obligations of Employer underthis Agreement shall inure to the benefit of and be binding up the successorsand assigns of Employer.  The rights andobligations of Employee hereunder may not be assigned or alienated and anyattempt to do so by Employee will be void.

**10.2.  Separability.**   Ifany provision of this Agreement otherwise is deemed to be invalid orunenforceable or is prohibited by the laws of the state or jurisdiction whereit is to be performed, this Agreement shall considered divisible as to suchprovisions and such provision shall be inoperative in such state orjurisdiction and shall not be part of the consideration moving from either ofthe parties to the other.  The remainingprovisions of this Agreement shall be valid and binding and of like effect asthough such provision were not included.

**10.3.  Notice**.  All notices, requests, demands and other communications hereunder shallbe in writing and shall be deemed to have duly given if personally delivered,telexed or telecopied to, or, if mailed, when mailed to the other party bycertified mail, return receipt requested, at (a) in the case of Employer, thelocation of its principal executive offices, or (b) in the case of Employee,the location of his principal residence or last known principal residence.

**10.4.  Arbitration.**   Alldisputes under this Agreement shall be settled by arbitration in Boston,Massachusetts, before a single arbitrator pursuant to the rules of the AmericanArbitration Association.  Arbitrationmay be commenced at any time by any party hereto giving written notice to theother party that such dispute has been referred to arbitration under this Section10.4.  The arbitrator shall be selectedby the joint agreement of the Board of Directors of the Employer and Employee,but if they do not so agree within 20 days after the date of the noticereferred to above, the selection shall be made pursuant to the rules maintainedby such Association.  Any award renderedby the arbitrator shall be conclusive and binding upon the parties hereto;provided, however, that any such award shall be accompanied by a writtenopinion of the arbitrator giving the reasons for the award.  This provision for arbitration shall bespecifically enforceable by the parties and the decision of the arbitrator inaccordance herewith shall be final and binding and there shall be no right ofappeal therefrom.  Each party shall payits own expenses of arbitration and the expenses of the arbitrator shall beequally shared; provided, however, that if in the opinion of the arbitrator anyclaim or any defense or objection thereto was unreasonable, the arbitrator mayassess, as part of his award, all or any part of the arbitration expenses ofthe other party (including reasonable attorneys’ fees) and of the arbitratoragainst the party raising such unreasonable claim, defense or objection.

 

**10.5.  Injunctive Relief, Jurisdiction and Venue**.  TheEmployee acknowledges that the injury that would be suffered by the Employer asa result of a breach of the provisions of this Agreement would be irreparableand that an award of monetary damages to the Employer for such a breach wouldbe an inadequate remedy.  Consequently,the Employer will have the right, in addition to any other rights it may have,to obtain injunctive relief to restrain any breach or threatened breach orotherwise to specifically enforce any provision of this Agreement.  The jurisdiction and venue of all actionsbetween the parties pursuant to this section shall lie exclusively in any stateor federal court sitting in Boston, Massachusetts.

**10.6.  Governing Law.  **Thevalidity, performance, construction and effect of this Agreement shall begoverned by the internal, substantive laws of the Commonwealth ofMassachusetts, without giving effect to the conflict of laws rules thereof.

**10.7.  Waiver; Amendment.**   Thewaiver by any party to this Agreement of a breach of any provision hereof byany party shall not be construed as a waiver of any subsequent breach by anyparty.  No provision of this Agreementmay be terminated, amended, supplemented, waived or modified other than by aninstrument in writing signed by the party against whom the enforcement of thetermination, amendment, supplement, waiver or modification is sought.

**10.8.  Attorneys’ Fees**.   Inthe event of any litigation arising out of the execution of this Agreement orany claimed breach thereof, the prevailing party in such litigation shall beentitled to recover its reasonable attorneys’ fees and reasonable costs oflitigation (including on appeal thereof) in addition to any other award ordecree given or granted by the court.

**10.9.  Entire Agreement**.  This Agreement constitutes the entire agreement between the parties regardingthe subject matter, and there are no other understandings, either written ororal, which affect the terms hereof. This Agreement may be supplemented, modified or amended only by asubsequent written agreement between the parties.

 

DATED the day and year first abovewritten.

**MACKIE DESIGNS INC.**

 

By:_______________________________             ______________________________

   Title:          Chief Operating Officer                                                                           Wyatt Hyora