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EXHIBIT 10.3

                              EMPLOYMENT AGREEMENT

         This Employment Agreement ("Agreement") is made this 19th day of May,
1997, by and between Mackie Designs Inc., a Washington corporation ("Mackie"),
and William A. Garrard ("Garrard").

In consideration of the promises and mutual covenants set forth in this
Agreement, Mackie and Garrard promise and agree as follows:

1.   Term of Employment. Mackie hereby employs Garrard, and Garrard hereby
accepts employment with Mackie, for a period commencing May 19, 1997, and
continuing until terminated as set forth in Section 5 of this Agreement.

2.   Scope of Duties.

     2.1  Duties. Garrard shall serve as Chief Financial Officer ("CFO"), with
principal responsibility for overseeing Mackie's accounting, finances and
treasury. Garrard shall have such other and further responsibilities, duties and
goals as are established for him from time to time by Mackie's Chief Operating
Officer, Chief Executive Officer or Board of Directors. Garrard shall report
directly to Mackie's Chief Operating Officer and, upon request, to Mackie's
Chief Executive Officer and/or Board.

     2.2  Facilities and Staff.Garrard will be furnished with such facilities,
services, staff and working conditions, consistent with Mackie's current
practices, as are suitable to his position and adequate for the performance of
his duties.

     2.3  Full Time and Attention. Garrard will loyally and conscientiously
devote substantially all of his business and professional time, attention and
energies (exclusive of periods of sickness and disability and such normal
holiday and vacation periods as have been established by Mackie) to the affairs
of Mackie. Notwithstanding the above:

          2.3.1 Garrard may expend a reasonable amount of time for educational,
professional or charitable activities; and,

          2.3.2 This Agreement shall not be interpreted to prohibit Garrard from
making passive personal investments or conducting private business affairs, as
long as those activities do not materially interfere with the services required
under this Agreement.

     2.4  Competitive Activities. During the term of his employment, Garrard
shall not, directly or indirectly, either as an officer, director, investor,
employee, consultant, agent, independent contractor, principal, partner,
shareholder, or in any other capacity whatsoever, engage or participate in any
business activities or business entity which is, in any way, competitive with
any of the business of Mackie.

     2.5  Indemnification and Insurance. During the entire term of his
employment, Garrard will receive the full benefit of the indemnification
provisions for officers and directors that are then contained in Mackie's
Articles of Incorporation and Bylaws, and shall be a named insured under
Mackie's Director's and Officer's liability insurance policy, as such
indemnification provisions and insurance policies are in effect from time to
time.

3.   Compensation and Expenses.


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     3.1  Compensation. During the term of this Agreement, Mackie will pay
Garrard as follows:

          3.1.1 An initial base salary of $100,000 per year, payable at such
times and in such increments as are consistent with Mackie's usual policies. Any
proposed annual salary increase and any salary decrease will be determined by
the Board; provided that Garrard's salary shall never be less than that set
forth above; and,

          3.1.2 Garrard shall be a member of any bonus pool maintained by Mackie
from time to time on behalf of senior management. Garrard's initial target bonus
for the year 1997 within such pool shall be $75,000, which will be prorated over
the time actually worked in 1997. The bonus plan is established annually by the
Compensation Committee of the Board, with the goals and criteria adjusted from
time to time as the Compensation Committee determines in its sole discretion,
and Garrard's right of membership in the bonus pool shall give him no vested
rights in any particular criteria or amounts allocated to the bonus pool (other
than his initial target bonus for the year 1997).

     3.2  Stock Options. Garrard shall receive 100,000 incentive stock options
per Mackie's Amended and Restated 1995 Stock Option Plan ("Plan"), as of a date
to be determined by the committee administering the Plan. All of Garrard's
options shall be subject to, and vest in accordance with, the terms and
conditions of the Plan; provided that, notwithstanding the vesting schedule
contained in the Plan, vesting of the following specified percentages of any
unvested portions of Garrard's options will accelerate to 100% immediately upon
Mackie's attainment of any one of the following goals:

          3.2.1 40% of the then unvested portion of such options will vest on
the last day of any calendar quarter ("Measurement Day") in which Mackie's
earnings per share, measured over the 4 consecutive calendar quarters ending on
the Measurement Day, equal or exceed $1.08. Increases in earnings per share
resulting from repurchases by Mackie of its common shares will not be considered
in determining whether this goal has been achieved. The amount of sales derived
from business entities acquired by Mackie between the date of this Agreement and
the Measurement Day will not be considered in determining whether this goal has
been achieved.

          3.2.2 30% of the then unvested portion of such options will vest on
any Measurement Day, if the operating income margin reaches an average of 16.5%
measured over the 4 consecutive calendar quarters ending on the Measurement Day.
The operating income margin shall be determined without regard to the operations
of any business entity acquired by Mackie during this period. The term
"operating income margin" shall have that meaning as is ascribed to it by
generally accepted accounting practices (GAAP), consistently applied.

          3.2.3 30% of the then unvested portion of such options will vest on
any Measurement Day if the total sales of Mackie, net of returns, have reached
at least $146,471,850 measured over the 4 consecutive calendar quarters ending
on the Measurement Day. The amount of sales derived from business entities
acquired by Mackie between the date of this Agreement and the Measurement Day
will not be considered in determining whether this goal has been achieved.

          3.2.4 Unless otherwise agreed between the CEO and Garrard, the issue
of whether any of the above goals has been attained will be determined in
accordance with Mackie's regularly prepared, internal financial statements as
prepared in accordance with GAAP, consistently applied over the periods in
question; provided, that if the Measurement Day is December 31 of any year, the
attainment of such goals will be determined in accordance with the final audited
statements for the fiscal year in question.

          3.2.5 In the event of a "Change in Control," as that term is defined
in the Plan, any of Garrard's options or portions of such options outstanding as
of the date such Change in Control is



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determined to have occurred that are not yet fully vested on such date shall
become immediately exercisable in full.

     3.3  Expenses. Mackie will reimburse Garrard for all reasonable travel,
entertainment and miscellaneous expenses incurred in connection with the
performance of his duties under this Agreement. Such reimbursement will be made
in accordance with general policies and procedures of Mackie in effect from time
to time relating to reimbursement.

     3.5  Taxes and Withholding. Mackie shall withhold or deduct from sums due
to Garrard all sums required by applicable state or federal law.

     3.6  Moving Expenses. Mackie shall pay Garrard's reasonable expenses of
moving his household goods and personal items from Vancouver, British Columbia
to the Woodinville, Washington area; provided that Mackie shall not be obligated
to pay more than $7,500.00 for such purpose.

4.   Benefits.

     4.1  Vacation. During the term of this Agreement, Garrard will be entitled
to at least 10 days of personal/sick time per year, to be taken and accounted
for in accordance with Mackie's policies for same in effect from time to time.
If additional personal time is requested by Garrard, it shall be as determined
from time to time by the CEO.

     4.2  Group Benefits. Garrard shall participate in any pension, insurance or
other employee benefit plan that is maintained by Mackie from time to time for
employees similarly situated. To the extent possible, Mackie will waive any
waiting period required for Garrard's enrollment in any group medical plan.

     4.3  Travel Insurance. Mackie will purchase and maintain a travel accident
insurance policy on Garrard's life in the face amount of $250,000, payable to
Garrard's designated beneficiary; provided, that Garrard must submit to any
physical examination necessary to secure such a policy, and that Mackie's
obligation to purchase such a policy shall depend upon Garrard meeting basic
insurability standards, if any. This requirement may be satisfied by the
provision of group insurance for employees of Mackie, as long as Garrard is a
member of the eligible group.

5.   Termination.

     5.1  Termination. This Agreement, and Garrard's employment with Mackie,
shall be terminated upon the occurrence of any one of the following events:

          5.1.1 The conviction of Garrard for any crime which is a felony under
applicable law;

          5.1.2 At the option of Mackie if any one of the following conditions
occurs and persists after Mackie has given Garrard prior written notice of
intent to terminate his employment with specific reasons therefor, and Garrard
fails to correct the specified problems within a period of 30 days of the
effective date of the notice:

                (A) Chronic alcoholism, drug abuse, or addiction;

                (B) Failure of Garrard to apply his full-time attention and best
                    efforts to the business of Mackie;


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                (C) Failure of Garrard to perform consistently the duties
                    assigned to him by Mackie; or,

                (D) Failure of Garrard to handle his work or assignments in
                    accordance with the policies of Mackie, reasonably stated.

          5.1.3 The death of Garrard;

          5.1.4 At the option of Garrard in the event of the insolvency of
Mackie;

          5.1.5 At the option of Garrard upon giving 90 days prior written
notice;

          5.1.6 At the option of Mackie upon giving written notice of
termination.

     5.2  Effect of Termination. In the event of the termination of this
Agreement and Garrard's employment hereunder:

          5.2.1 If the termination was pursuant to Section 5.1.6, Garrard shall
be entitled to receive, during the Payment Period (as hereinafter defined), (i)
the equivalent monthly salary to that set forth in Section 3.1.1; (ii) a prorata
share of any bonus earned by Mackie senior management pursuant to Section 3.1.2
of this Agreement, with such pro rata share being determined by multiplying
Garrard's usual share thereof by a fraction, the numerator of which is equal to
the total number of working days worked by Garrard during the relevant period
over which the bonus is calculated, and the denominator of which is equal to the
total number of working days during the relevant period over which the bonus is
calculated; provided, that the amount payable under this subsection, if any,
shall be payable at the next regularly scheduled date for payment of such bonus
pool; and, (iii) participation in all relevant employee benefit programs to
which he would have been entitled if he had continued to serve as CFO of Mackie
during the Payment Period. All payments required to be made to Garrard pursuant
to this Section 5.2.1 shall continue to be made regardless of whether Garrard
secures other employment with any other employer. For purposes of this section,
the term "Payment Period" shall mean a period of 6 consecutive months following
the month in which Garrard is terminated.

          5.2.2 If the termination is for any other reason than that set forth
in Section 5.1.6, Garrard shall (i) have no rights to compensation or
reimbursement for salary or bonus for any period subsequent to the date of such
termination, (ii) have no right to participate in any employee benefit programs
under Section 4 for any period subsequent to the date of such termination;
provided that Mackie will remain obligated to meet any obligations that it may
have under COBRA, and (iii) have no right to any bonus that would have been
payable on a date subsequent to Garrard's termination date.

     5.3  Effect of Merger, Dissolution or Transfer of Assets. In the event of
any voluntary or involuntary dissolution of Mackie, any merger or consolidation
of Mackie with a third party whereby Mackie is not a surviving entity, or any
sale of all or substantially all of the assets of Mackie to any third party and
in the further event that the surviving or acquiring entity declines to assume
this Agreement and/or Garrard's employment is terminated by Mackie or the
surviving entity within 90 days of the effective date thereof, such
nonassumption or termination will be deemed to have taken place pursuant to
section 5.1.6 and Garrard shall be entitled to the benefits set forth in section
5.2.1.

6.   Inventions. Inventions made or conceived entirely or partially by Garrard
while employed by Mackie will be the property of Mackie. As used in this
Section, the term "inventions" includes all creations, whether or not patentable
or copyrightable, and all ideas, reports, or other creative works, including,
without limitation, computer programs, manuals and related material, which
relate to the existing or proposed business of Mackie or any other business or
research and development effort


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conducted by Mackie. All of Garrard's inventions which are copyrightable shall
be works for hire. Garrard will cooperate with Mackie to patent or copyright all
inventions by executing all documents tendered by Mackie for such purpose.
Garrard hereby grants to Mackie a power of attorney coupled with an interest,
whereby Mackie may execute and deliver any and all documents necessary to so
patent or copyright any inventions in Garrard's name, place and stead as if such
execution and delivery were done by him, with such power of attorney accruing in
the event that he fails to cooperate as required by the preceding sentence. This
provision will be construed in conformity with RCW 49.44.140. Notwithstanding
the above, this provision does not apply to any invention which was developed
solely on Garrard's own time and not using any of Mackie's equipment, supplies,
facilities or information, unless (a) the invention relates directly to the
business of Mackie or to Mackie's actual or demonstrably anticipated research or
development, or (b) the invention results from any work performed by Garrard for
Mackie.

7.   Nondisclosure of Confidential Information. Garrard acknowledges that during
the term of this Agreement he will learn and will have access to confidential
information regarding Mackie and its affiliates, including without limitation
(i) confidential or secret plans, programs, documents, agreements or other
material relating to the business, services or activities, and (ii) trade
secrets, market reports, customer investigations, customer lists, files,
accounts and other similar information that is proprietary information
(collectively referred to as "Confidential Information"). Garrard acknowledges
that such Confidential Information is a special, valuable and unique asset. All
records, file materials and Confidential Information obtained by Garrard in the
course of employment with Mackie or its affiliates or service as a director of
Mackie or its affiliates are confidential and proprietary and shall remain the
exclusive property of the appropriate entity owning the same. Garrard will not
for any reason use for his own benefit, or for the benefit of any person with
whom he may be associated, any Confidential Information or disclose any such
Confidential Information to any person for any reason or purpose whatsoever
without the prior written consent of Mackie, unless such Confidential
Information previously shall have became public knowledge through no action or
omission of Garrard. Garrard, within three (3) days from the date upon which his
employment with Mackie is terminated or otherwise upon the request of Mackie,
shall return to Mackie any and all documents and material that constitutes
Confidential Information.

8.   Specific Performance. Mackie and Garrard recognize that the services
rendered under this Agreement by Garrard are special, unique and of an
extraordinary character. Accordingly, in the event of any breach by Garrard of
the provisions of Sections 6 and 7 of this Agreement and in addition to any
other remedies available to Mackie by law, Mackie may specifically enforce
Garrard's obligations under such sections.

9.   Miscellaneous.

     9.1  Assignability. The rights and obligations of Mackie under this
Agreement shall inure to the benefit of and be binding up the successors and
assigns of Mackie. The rights and obligations of Garrard hereunder may not be
assigned or alienated and any attempt to do so by Garrard will be void.

     9.2  Separability. If any provision of this Agreement otherwise is deemed
to be invalid or unenforceable or is prohibited by the laws of the state or
jurisdiction where it is to be performed, this Agreement shall considered
divisible as to such provisions and such provision shall be inoperative in such
state or jurisdiction and shall not be part of the consideration moving from
either of the parties to the other. The remaining provisions of this Agreement
shall be valid and binding and of like effect as though such provision were not
included.

     9.3  Notice. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have duly given if
personally delivered, telexed or telecopied to, or, if


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mailed, when mailed to the other party by certified mail, return receipt
requested, at (a) in the case of Mackie, the location of its principal executive
offices, or (b) in the case of Garrard, the location of his principal residence
or last known principal residence.

     9.4  Jurisdiction and Venue. The jurisdiction and venue of all actions
between the parties shall lie exclusively in the Superior Court in and for the
State of Washington located in King County, Washington.

     9.5  Governing Law. The validity, performance, construction and effect of
this Agreement shall be governed by the internal, substantive laws of the State
of Washington, without giving effect to the conflict of laws rules thereof.

     9.6  Waiver Amendment. The waiver by any party to this Agreement of a
breach of any provision hereof by any party shall not be construed as a waiver
of any subsequent breach by any party. No provision of this Agreement may be
terminated, amended, supplemented, waived or modified other than by an
instrument in writing signed by the party against whom the enforcement of the
termination, amendment, supplement, waiver or modification is sought.

     9.7  Attorneys' Fees. In the event of any litigation arising out of the
execution of this Agreement or any claimed breach thereof, the prevailing party
in such litigation shall be entitled to recover its reasonable attorneys' fees
and reasonable costs of litigation (including on appeal thereof) in addition to
any other award or decree given or granted by the court.

     9.8  Entire Agreement. This Agreement constitutes the entire agreement
between the parties regarding the subject matter, and there are no other
understandings, either written or oral, which affect the terms hereof. This
Agreement may be supplemented, modified or amended only by a subsequent written
agreement between the parties.

DATED the day and year first above written.

MACKIE DESIGNS, INC.



By:_______________________________          ___________________________________
   Title:                                   William A. Garrard



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