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================================================================================
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 Section 240.14a-11(c) or Section 240.14a-12
MACKIE DESIGNS 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)(4) 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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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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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.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
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[LOGO]
__________________________
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
May 6, 1999
___________________________
TO THE SHAREHOLDERS:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of MACKIE
DESIGNS INC., a Washington corporation (the "Company"), will be held on
Thursday, May 6, 1999, at 9:00 a.m., local time, at the Columbia Winery, 14030
N.E. 145th Street, Woodinville, Washington, for the following purposes:
1. To elect two directors to serve a three-year term and until their
successors are elected.
2. To elect one director previously appointed by the Board of Directors to
complete the remaining two years of his three-year term and until his
successor is elected.
3. To approve an amendment to the Company's Second Amended and Restated
1995 Stock Option Plan.
4. To transact such other business as may properly come before the meeting
or any postponement or adjournment thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
Only shareholders of record at the close of business on March 19, 1999 are
entitled to notice of and to vote at the Annual Meeting and any adjournments
thereof.
All shareholders are cordially invited to attend the Annual Meeting. However,
to assure your representation at the meeting, you are urged to mark, sign, date
and return the enclosed proxy as promptly as possible in the postage-prepaid
envelope enclosed for that purpose. Any shareholder attending the meeting may
vote in person even if he or she returned a proxy.
By Order of the Board of Directors
Greg C. Mackie
President and Chief Executive Officer
Woodinville, Washington
April 2, 1999
IMPORTANT
---------
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE SIGN AND RETURN THE
ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE IN THE ENCLOSED POSTAGE-PREPAID
ENVELOPE. IF A QUORUM IS NOT REACHED, THE COMPANY WILL HAVE THE ADDED EXPENSE
OF REISSUING THESE PROXY MATERIALS. IF YOU ATTEND THE MEETING, AND SO DESIRE,
YOU MAY WITHDRAW YOUR PROXY AND VOTE IN PERSON.
<PAGE>
MACKIE DESIGNS INC.
16220 Wood-Red Road, N.E.
Woodinville, Washington 98072
(206) 487-4333
____________________
PROXY STATEMENT
____________________
INFORMATION CONCERNING SOLICITATION AND VOTING
General
The enclosed proxy is solicited on behalf of the Board of Directors of Mackie
Designs Inc. (the "Company") for use at the Annual Meeting of Shareholders to be
held on Thursday, May 6, 1999 at 9:00 a.m., local time, or at any postponement
or adjournment thereof (the "Meeting"), for the purposes set forth herein and in
the accompanying Notice of Annual Meeting of Shareholders. The Meeting will be
held at the Columbia Winery, 14030 N.E. 145th Street, Woodinville, Washington
(telephone number (425) 488-2776).
These proxy solicitation materials will be mailed on or about April 2, 1999 to
all shareholders entitled to vote at the Meeting.
Record Date
Shareholders of record of the Company's Common Stock at the close of business
on March 19, 1999 are entitled to notice of, and to vote at, the Meeting. On
March 19, 1999, 12,324,558 shares of the Company's Common Stock were issued and
outstanding.
Revocability of Proxies
Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before its use by delivering to the Company a written
notice of revocation, a duly executed proxy bearing a later date, or by
attending the meeting and voting in person.
Voting
Holders of shares of Common Stock are entitled to one vote per share on all
matters. A majority of the shares issued and outstanding as of March 19, 1999,
must be present in person or represented by proxy at the Meeting for the
transaction of business. Nominees for election of directors are elected by
plurality vote of all votes cast at the Meeting. Approval of amendment to the
Company's Second Amended and Restated 1995 Stock Option Plan (the "Option Plan")
requires the affirmative vote of a majority of the shares present at the Meeting
in person or by proxy and entitled to vote. Abstentions and broker non-votes
(i.e., shares held by brokers that are present but not voted because the brokers
were prohibited from exercising authority) are counted for purposes of
determining whether a quorum exists at the Meeting. Abstentions and broker non-
votes are not counted and have no effect in determining whether a plurality
exists with respect to a given nominee but do have the effect of a "no" vote in
determining whether other proposals, including amendments to the Option Plan,
are approved.
Solicitation
The Company bears the cost of soliciting proxies. In addition to use of the
mail, proxies may be solicited personally or by telephone by directors, officers
and employees of the Company who will not be specially compensated for such
activities. Such solicitations may be made personally, or by mail, facsimile,
telephone,
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telegraph or messenger. The Company will also request persons, firms and
companies holding shares in their names or in the name of their nominees, which
are beneficially owned by others, to send proxy materials to and obtain proxies
from such beneficial owners. The Company will reimburse such persons for their
reasonable expenses incurred in that connection.
Deadline for Receipt of Shareholder Proposals for 2000 Annual Meeting
Proposals of shareholders that are intended to be presented by such
shareholders at the Company's 2000 Annual Meeting must be received by the
Company no later than December 18, 1999 in order that such proposals may be
included in the proxy statement and form of proxy relating to that meeting.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
The Company's bylaws provide that the Company shall have not less than three
nor more than 10 directors, with the exact number set by the Board of Directors.
The size of the Board of Directors is currently set at six directors.
The directors of the Company are divided into three classes. One class of
directors is elected each year, and the members of such class will hold office
for a three-year term and until their successors are duly elected and qualified
or until their death, resignation or removal from office. Class 1 consists of
Walter Goodman and David M. Tully, whose terms will expire at the 1999 Annual
Meeting of Shareholders; Class 2 consists of Raymond B. Ferguson and C. Marcus
Sorenson, whose terms will expire at the 2000 Annual Meeting of Shareholders;
and Class 3 consists of Greg C. Mackie and Gregory Riker. Mr. Mackie's term
will expire at the 2001 Annual Meeting of Shareholders, and Mr. Riker's term
expires at the 1999 Annual Meeting of Shareholders, as explained below.
At the Meeting, two Class 1 directors will be elected to serve three-year
terms until the 2002 Annual Meeting and until their successors are elected and
qualified. The nominees for Class 1 directors are Walter Goodman and David M.
Tully, who are currently members of the Board of Directors of the Company.
In addition, at the Meeting one Class 3 director will be elected to serve a
two-year term until the 2001 Annual Meeting and until his successor is elected
and qualified. The nominee for Class 3 director is Gregory Riker. Following
the 1998 Annual Meeting of Shareholders, Mr. Riker was appointed by the Board of
Directors in May 1998 to fill a vacancy that was created when the Board of
Directors increased the number of directors from five to six. Under the
Washington Business Corporations Act as codified under RCW 23B.08.050, the term
of a director elected to fill a vacancy expires at the next shareholder's
meeting at which directors are elected. Accordingly, Mr. Riker is up for
election as a Class 3 director to serve until the 2001 Annual Meeting and until
his successor is elected and qualified.
Walter Goodman, David M. Tully and Gregory Riker are collectively referred to
as "the Nominees." The Board of Directors recommends a vote FOR the Nominees.
The persons named on the enclosed proxy (the proxy holders) will vote for
election of the Nominees unless you have withheld authority for them to do so on
your proxy card. If the Nominees are unable or decline for good cause to serve
as a director at the time of the Meeting, the proxies will be voted for any
nominee named by the current Board of Directors to fill the vacancy. As of the
date of this Proxy Statement, the Board of Directors is not aware that a Nominee
is unable and/or will decline to serve as a director. There is no cumulative
voting for election of directors.
The Company's directors, including the Nominees, executive officers and key
employees are as follows:
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<TABLE>
<CAPTION>
Name Age Position
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Nominees:
Walter Goodman(1)(3) 75 Director (Class 1)
David M. Tully(2) 55 Secretary, Treasurer and Director (Class 1)
Gregory Riker(3) 45 Director (Class 3)
Continuing Directors:
Raymond B. Ferguson(1)(2)(3) 53 Director (Class 2)
Greg C. Mackie(1)(2) 49 President, Chief Executive Officer and Director (Class 3)
C. Marcus Sorenson 51 Director (Class 2)
Other Executive Officers and Key Employees:
Roy D. Wemyss 48 Executive Vice President and Chief Operating Officer
William A. Garrard 44 Vice President and Chief Financial Officer
David E. Firestone 47 Vice President--Product Development
Robert A. May 45 Vice President--Manufacturing
Peter Watts 39 Vice President--Engineering
Robert Tudor 32 Director of Software Development
Ron M. Koliha 48 Director of Marketing and Communications
- ----------------------
</TABLE>
(1) Member of the Audit Committee
(2) Member of the Compensation Committee
(3) Member of the Option Committee
Nominees
Walter Goodman has been a director of the Company since 1995. Since 1993, Mr.
Goodman has acted as consultant to companies in the audio industry. From 1967
to 1993, he held various positions with Harman International ("Harman"), an
audio company that owns several of the company's major competitors including
Soundcraft LTD., Allen & Heath Brenell LTD. and DOD Electronics Corporation.
Mr. Goodman was Chairman and Chief Executive Officer of Harman from 1977 to 1980
and was President of its International Division from 1972 to 1977 and from 1980
to 1993. Mr. Goodman served on the Board of Governors of the Electronic
Industries Association from 1963 to 1980, was President of the Institute of High
Fidelity from 1970 to 1972 and was inducted into the Audio Hall of Fame in 1979.
Gregory Riker has over 20 years of experience in the high-tech industry.
During his nine years at Microsoft Corporation ("Microsoft") from 1989 to 1998,
Mr. Riker worked as Director of Advanced Consumer Technology, creating the
Microsoft Home, the Auto PC and wearable computers. Mr. Riker came to Microsoft
from Electronic Arts, Inc., the world's largest publisher of entertainment
software. As Vice President of Technology for Electronic Arts from 1983 to 1989,
Mr. Riker was responsible for its proprietary game development system allowing
software artists to bring products to market more quickly. Mr. Riker first
began his high-tech career with Atari, Inc. in 1981. He currently works as a
lecturer and consultant in the high-tech industry.
David M. Tully has been Secretary, Treasurer and a director of the Company
since its inception in 1988. From 1975 to 1994, Mr. Tully was the owner and
President of Priebe Electronics, a major supplier of components to the Company
and a division of Quadra Investment Ltd. He is currently President of SMB
Corporation, a holding company.
Continuing Directors
Raymond B. "Buck" Ferguson has been a director of the Company since March
1997. Since 1994, Mr. Ferguson has been a consultant regarding business and
real estate matters. From 1983 to 1994, he held various
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positions at Microsoft, including Senior Director of Administration and Senior
Director of Investor Relations. Mr. Ferguson received his J.D. degree from Duke
University School of Law in 1970.
Greg C. Mackie founded the Company in 1988 and since then has served as its
President and Chief Executive Officer and as a director. From 1978 to 1985, he
was President of Audio Control Corporation ("Audio Control"), a company he co-
founded and that specialized in equalizers and analyzers for the home consumer
electronics market. From 1970 to 1978, Mr. Mackie was President of Technical
Audio Products Company (TAPCO), also a company he co-founded which is generally
credited with pioneering the professional multi-channel live music mixer as a
discrete product.
C. Marcus Sorenson has been a director of the Company since 1990. Since 1975,
he has been President and owner, together with his wife, Judith B. Sorenson, of
C.M. Sorenson Company, Inc., dba Calwest Marketing South, a manufacturers'
representative and distributor of consumer and professional electronics that
acted as the Company's exclusive representative for southern California and
southern Nevada through January 1997. Mr. Sorenson is also a partner in
Blacker-Sorenson Audio Group that has acted since January 1997 as the Company's
exclusive representative for southern California and southern Nevada.
Other Executive Officers and Key Employees
Roy D. Wemyss was appointed Executive Vice President and Chief Operating
Officer of the Company in April 1997; he served as the Company's interim Chief
Operating Officer from November 1996 until his appointment. From 1993 to 1996,
Mr. Wemyss was involved in several start-up operations, primarily engaged in
product development. From 1990 to 1993, Mr. Wemyss served as Senior Vice
President of James Hardie Building Boards Inc., a gypsum and fiber cement
company. From 1987 to 1990, he served as James Hardie Gypsum Inc.'s Vice
President--General Manager and, from 1985 to 1987, served as general manager of
Norwest Gypsum. From 1983 to 1984, Mr. Wemyss was Financial Controller, then
Production Manager, of Sauder Industries Limited (Trufit Division). From 1972
to 1983, he was on the professional staff of Price Waterhouse, a public
accounting firm, at various international locations.
William A. Garrard has served as Vice President and Chief Financial Officer of
the Company since June 1997. During May and June 1997, he served as a
consultant to the Company. Mr. Garrard holds the professional designation of
Chartered Accountant, granted by the Institute of Chartered Accountants of
British Columbia. From 1993 until he joined the Company, he operated an
independent public accounting business. From 1978 to 1993, Mr. Garrard was on
the professional staff of Price Waterhouse.
David E. Firestone served as Vice President--Sales and Marketing of the
Company from 1992 until January 1997 at which time he was appointed Vice
President--Product Development. From 1987 to 1992, he held sales and product
development positions with JBL Professional, a subsidiary of Harman, and was
Sales Manager for Audio Control from 1982 to 1987.
Robert A. May has served as Vice President--Manufacturing of the Company since
July 1997. From 1995 until he joined the Company, Mr. May was Vice President--
Manufacturing at Physio-Control Corporation, the leading developer and
manufacturer of cardiac defibrillators ("Physio-Control"). He held other
positions with Physio-Control in Manufacturing and Quality Assurance from 1991
to 1994. Prior to joining Physio-Control, Mr. May was involved in the
development and manufacture of ophthalmic devices, holding positions in the
areas of Product Development, Research and Development, Business Development and
Manufacturing.
Peter Watts has been employed by the Company since 1995 and currently serves
as Vice President--Engineering. From 1977 to 1995, he served as Head of
Research and Development at Trident Audio Developments in England, one of the
original manufacturers of mixers. At Trident, Mr. Watts designed the Trident
Di-An console, the world's first fully automated, digitally controlled analog
sound mixer.
Ron M. Koliha has been employed by the Company since 1992; he currently serves
as Director of Marketing and Communications. From 1989 to 1992, he served as a
marketing and advertising consultant to the Company. From 1984 to 1989, he was
Communications Director of Rogersound Lab Inc., a consumer electronics
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retail chain. From 1980 to 1984, Mr. Koliha was Director of Marketing at Audio
Control. Mr. Koliha has also been Assistant Creative Director and Senior
Copywriter at several New York and Seattle advertising agencies and is the
recipient of numerous advertising awards.
Robert J. Tudor has been employed by the Company since 1997 and currently
serves as Director of Software Development. In 1989, he co-founded ResNova
Software, Inc. ("ResNova"), a developer of telecommunication software and
internet technologies, including Novalink Professional, that became the platform
for HTML and HTTP information servers. ResNova was one of the 12 companies
that participated in the Internet Action Task Force (IATF) to develop the HTML
and World Wide Web standard. ResNova's technology was acquired by Microsoft in
1996 and was used in Microsoft's development of Outlook Express for Macintosh.
Prior to ResNova, Mr. Tudor was a mix engineer/record producer and co-founder of
Metropolis Recording Studios in Boston and worked with various recording artists
including Bobby Brown, Amy Mann, Peter Wolf, New Kids on the Block, Billy Idol,
Bel Biv Devoe, New Edition, TAM TAM, and QTe. Mr. Tudor is also the creator of
OnRecord Services, an online system for musicians, and the co-creator of
Novalink, the first graphical BBS software.
Board Meetings, Nominations by Shareholders and Committees
The Board of Directors of the Company held a total of seven meetings during
the year ended December 31, 1998.
The Board of Directors acts as a nominating committee for selecting nominees
for election as directors. The Company's bylaws also permit shareholders to
make nominations for the election of directors, if such nominations are made
pursuant to timely notice in writing to the Company's Secretary. To be timely,
notice must be delivered to, or mailed to and received at, the principal
executive offices of the Company not less than 60 days nor more than 90 days
prior to the date of the meeting, provided that at least 60 days' notice or
prior public disclosure of the date of the meeting is given or made to
shareholders. If less than 60 days' notice or prior public disclosure of the
date of the meeting is given or made to shareholders, notice by the shareholder
to be timely must be received by the Company not later than the close of
business on the tenth day following the date on which such notice of the meeting
was mailed or such public disclosure was made. Public disclosure of the date of
the Meeting was made in a press release on February 26, 1999. A shareholder's
notice of nomination must also set forth certain information specified in
Section 2.3.2 of the Company's bylaws concerning each person the shareholder
proposes to nominate for election and the nominating shareholder.
The Company's Board of Directors currently has an Audit Committee, a
Compensation Committee and an Option Committee. The Audit Committee (1)
recommends engagement of the Company's independent certified public accountants,
(2) reviews the scope of the audit, (3) considers comments made by the
independent certified public accountants with respect to accounting procedures
and internal controls and the consideration given thereto by management, and (4)
reviews internal accounting procedures and controls with the Company's financial
and accounting staff. The Audit Committee, which currently consists of Messrs.
Ferguson, Goodman and Mackie, held one meeting in 1998. The Compensation
Committee reviews executive compensation and establishes executive compensation
levels; the Compensation Committee, which currently consists of Messrs.
Ferguson, Mackie and Tully, met four times in 1998. The Option Committee
administers the Company's Second Amended and Restated 1995 Stock Option Plan and
currently consists of Messrs. Ferguson, Goodman and Riker; during 1998, the
Option Committee held three meetings.
During 1998, no director attended fewer than 75% of the aggregate of (1) the
total number of meetings of the Board of Directors and (2) the total number of
meetings of all committees of the Board of Directors on which such director
served (during the period he served).
Director Compensation
For serving as directors of the Company, each director who is not an employee
of the Company ("Outside Director") is paid (1) an annual fee of $7,500, payable
in quarterly payments of $1,875; (2) a $1,000 fee for each Board meeting
attended in person ($500 if attended by telephone); and (3) a $500 fee for each
Board committee meeting attended in person ($250 if attended by telephone). The
Company also reimburses travel and lodging
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expenses incurred in connection with attending meetings of the Board and its
committees. Each newly appointed Outside Director is entitled to receive 10,000
non-qualified stock options pursuant to the terms of the Company's Amended and
Restated 1995 Stock Option Plan (the "Option Plan"). In addition, each director
is entitled to receive an annual grant of 5,000 non-qualified stock options
pursuant to the terms of the Option Plan in recognition of his or her service on
the Board during the preceding year, which awards are made each December; no
director, however, who was otherwise awarded options for service on the Board
during the same fiscal year would be eligible to receive such an award.
EXECUTIVE COMPENSATION
The following table sets forth certain information concerning the compensation
paid by the Company to its Chief Executive Officer and the four other most
highly compensated executive officers (collectively, the "Named Executives")
during the year ended December 31, 1998.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long-Term
Annual Compensation Compensation
----------------------------------------------------------------------------
Awards
----------------------
Other Shares
Annual Underlying
Name and Principal Position Year Salary Bonus Compensation Options
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Greg C. Mackie 1996 $175,000 $200,732 -- --
President and Chief Executive 1997 175,000 74,828 -- 225,000
Officer 1998 250,000 24,671 -- 5,000
Roy D. Wemyss 1996 -- -- 25,752(1) --
Executive Vice President 1997 118,686 28,641 122,343(1) 200,000
and Chief Operating Officer 1998 200,000 24,107 500(3) 50,000
Patric L. Wiesmann(2) 1996 -- -- -- --
Vice President--Marketing 1997 143,750 41,906 -- 150,000
and Business Development 1998 153,750 20,556 -- 15,000
Peter Watts 1996 102,000 28,903 -- --
Vice President--Engineering 1997 124,000 39,619 -- 75,000
1998 150,000 8,109 -- 15,000
William A. Garrard 1996 -- -- -- --
Vice President and Chief 1997 54,166 11,127 -- 100,000
Financial Officer 1998 125,000 17,622 -- 20,000
- --------------------------------
</TABLE>
(1) Mr. Wemyss served as the Company's interim Chief Operating Officer from
November 1996 through April 1997 and during that period was paid as a
consultant. These amounts consist of consulting fees paid to a corporation
owned by Mr. Wemyss.
(2) Mr. Wiesmann joined the Company in January 1997 and resigned in March 1999.
(3) Consists of matching contributions made by the Company under its 401(k)
profit-sharing plan. Salary deferrals into the 401(k) plan are included in
the Salary column.
The following table provides information with respect to the Named Executives
concerning the grants of options during the year ended December 31, 1998.
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<TABLE>
<CAPTION>
Potential
Realizable
Value at
OPTION GRANTS IN LAST FISCAL YEAR Assumed Annual
Rates of Stock
Individual Grants Price
--------------------------------------------------------------------------- Appreciation
Percent of Total for
Number of Shares Options Granted to Exercise Option Term(1)
Underlying Granted to Employees in Price Per Expiration ----------------------
Name Options Granted Fiscal Year Share Date 5% 10%
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Greg C. Mackie 5,000 *% $6.78 12/14/08 $ 55,200 $ 87,950
Roy D. Wemyss 50,000 8.6% $6.69 11/09/08 545,000 867,500
Patric L. Weismann 15,000 2.6% $6.69 11/09/08 163,500 260,250
Peter Watts 15,000 2.6% $6.69 11/09/08 163,500 260,250
William A. Garrard 20,000 3.5% $6.69 11/09/08 218,000 347,000
</TABLE>
- --------------
*Less than 1%.
(1) The potential realizable value is calculated based upon the term of the
option at its time of grant (10 years) and is calculated by assuming that
the stock price on the date of grant appreciates at the indicated annual
rate compounded annually for the entire term of the option and that the
option is exercised and sold on the last day of its term for the
appreciated price. The 5% and 10% assumed rates of appreciation are derived
from the rules of the Securities and Exchange Commission and do not
represent the Company's estimates or projection of the future Common Stock
price. There can be no assurance that the Common Stock will appreciate at
any particular rate or at all in future years.
The following table provides information with respect to the Named Executives
concerning the exercise of options during the last fiscal year and unexercised
options held as of December 31, 1998.
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN LAST
FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
Number of Shares
Underlying Unexercised Value of Unexercised In-the-Money
Options at FY-End Options at FY-End(1)
-------------------------------------- ------------------------------------
Shares
Acquired on Value
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
- --------------------------------------------------------------------------------------------- ------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Greg C. Mackie -- -- 63,750 196,250 -- --
Roy D. Wemyss -- -- 50,000 200,000 $12,500 $15,500
Patric L. Weismann -- -- 37,500 127,500 9,375 21,525
Peter Watts -- -- 37,500 52,500 -- --
William A. Garrard -- -- 25,000 95,000 -- --
</TABLE>
- --------------
(1) Amounts reflected are based upon the market value of the Common Stock as of
December 31, 1998 ($6.25) minus the applicable exercise price, multiplied
by the number of shares underlying the options.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION*
Executive Compensation Philosophy
The Compensation Committee of the Board of Directors, composed of Raymond B.
Ferguson, Greg C. Mackie and David M. Tully, is responsible for setting and
administering the policies and programs that govern
- ---------------
* The report of the Compensation Committee shall not be deemed incorporated by
reference by any general statement incorporating by reference this Proxy
Statement into any filing under either the Securities Act of 1933, as amended,
or the Securities Exchange Act of 1934, as amended (together, the "Acts"),
except to the extent that the Company specifically incorporates such report by
reference; and further, such report shall not otherwise be deemed filed under
the Acts.
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compensation for the executive officers of the Company. The Board of Directors'
Stock Option Committee ("Option Committee"), composed of Raymond B. Ferguson,
Walter Goodman and Gregory Riker, administers the Company's Second Amended and
Restated 1995 Stock Option Plan (the "Option Plan"). The goal of the Company's
executive compensation policy is to ensure that an appropriate relationship
exists between compensation and corporate performance, while at the same time
attracting, motivating and retaining executive officers.
The key components of the Company's compensation program are base salary and
cash bonuses, as well as potential long-term compensation through stock options.
These components are administered with the goal of providing total compensation
that is competitive in the marketplace, rewards successful financial performance
and aligns executive officers' interests with those of stockholders. The
Compensation Committee reviews executive compensation on an annual basis, or
more often if necessary, and determines, subject to the Board's approval, base
salary and cash bonuses for executive officers. The Option Committee makes all
decisions with respect to stock option grants.
Management Incentive Plan
The Compensation Committee believes that a significant proportion of total
cash compensation for executive officers should be a function of the Company's
performance. This approach creates a direct incentive for executive officers to
achieve desired performance goals and places a significant percentage of each
executive officer's compensation at risk. Consequently, the Compensation
Committee has established and administers the Company's Management Incentive
Plan (the "Management Incentive Plan"), a bonus program based on the Company's
achievement of certain earnings criteria that are available to executive
officers and key employees the Committee designates from time to time. Each
participant is entitled to receive a percentage of a bonus pool, with the amount
and timing of the pool and each individual's percentage participation
established by the Compensation Committee. The Management Incentive Plan shall
continue until terminated by the Board of Directors.
For 1998, the Compensation Committee set the quarterly bonus pool at 6.0% of
the Company's pre-bonus operating income and subject to certain minimum
performance levels. In 1998, bonuses aggregating $135,656 were paid to six
executive officers and three key employees of the Company.
For 1999, the Compensation Committee has adopted a plan that provides for
quarterly and annual bonuses payable once predetermined minimum earnings levels
are achieved by the Company.
Equity Participation
The Company uses stock options granted under its Option Plan both to reward
past performance and to motivate future performance, especially long-term
performance. The Compensation Committee believes that through the use of stock
options, executive interests are directly tied to enhancing shareholder value.
Stock options under the Option Plan have a term of 10 years and generally vest
25% per year, beginning on the first anniversary date of the grant. Under the
Option Plan, as it is proposed to be amended at the 1999 Annual Meeting of
Shareholders, a maximum of 4,500,000 shares of the Company's Common Stock may be
issued.
The stock options provide value to the recipients only when the market price
of the Company's Common Stock increases above the option grant price and only as
the shares vest and become exercisable. While option grants are made by the
Option Committee, the Compensation Committee considers these grants in making
its cash compensation decisions.
Compensation of Chief Executive Officer
The Chief Executive Officer's compensation is set using the Compensation
Committee's general philosophy as described above and consequently is subject in
large part to the Company's performance. In 1998, Mr. Mackie received a base
salary of $250,000 and bonuses totaling $24,671 pursuant to the bonus program
described above. In 1998, he was also granted options to purchase 5,000 shares
of Common Stock under the Option Plan.
9
<PAGE>
Deductibility of Executive Compensation
The Compensation Committee has considered the impact of Section 162(m) of the
Internal Revenue Code adopted under the Omnibus Budget Reconciliation Act of
1993, which section disallows a deduction for any publicly held corporation for
individual compensation exceeding $1 million in any taxable year for the CEO and
the four other most highly compensated executive officers, unless such
compensation meets certain exceptions to the general rule. Compensation paid by
the Company to each of its executive officers in 1998 was below $1 million, and
therefore Section 162(m) did not affect the tax deductions available to the
Company. The Committee will continue to monitor the applicability of the
section to the Company's compensation programs and will determine at a later
date what actions, if any, the Company should take to qualify for available tax
deductions.
COMPENSATION COMMITTEE
Raymond B. Ferguson
Greg C. Mackie
David M. Tully
Compensation Committee Interlocks and Insider Participation
Since its formation in 1995, the Compensation Committee has consisted of Greg
C. Mackie, David M. Tully and a third outside director. Mr. Mackie is President
and Chief Executive Officer of the Company, and Mr. Tully is its
Secretary/Treasurer. No member of the Compensation Committee or executive
officer of the Company has a relationship that would constitute an interlocking
relationship with executive officers or directors of another entity.
PRINCIPAL SHAREHOLDERS
The following table sets forth certain information regarding beneficial
ownership of the Company's Common Stock as of December 31, 1998, by (1) each
person who is known by the Company to own beneficially more than 5% of the
Company's outstanding Common Stock; (2) each of the Company's Named Executives;
(3) each director; and (4) all current executive officers and directors as a
group.
10
<PAGE>
<TABLE>
<CAPTION>
Directors, Named Executives Percent of Outstanding Shares
and 5% Shareholders Shares Beneficially Owned(1) Beneficially Owned
- ----------------------------------------------- ------------------------------------------- ------------------------------
<S> <C> <C>
Greg C. Mackie(2)(3) 5,054,500(4) 40.9%
C. Marcus Sorenson and Judith B. Sorenson(2)(5) 2,551,250(6) 20.6%
David M. Tully(2)(7) 2,387,550(8) 19.3%
Roy D. Wemyss(2) 68,800(9) *
Patric L. Weismann(2) 37,500(10) *
David E. Firestone(2) 140,500(10) 1.1%
Walter Goodman(2) 63,750(11) *
Raymond B. Ferguson(2)(12) 18,500(13) *
Gregory Riker(2) -- --
William A. Garrard(2) 25,000(10) *
Peter Watts(2) 38,655(14) *
All directors and executive officers as a
group (eleven persons)(9) 10,386,005 84.1%
</TABLE>
- -------------------------
* Less than 1%.
(1) A person is deemed to be the beneficial owner of securities that can be
acquired by such person within 60 days of December 31, 1998, the date of
this table, upon the exercise of options. Each beneficial owner's
percentage ownership is determined by assuming that options that are held
by such person (but not those held by another person) and that are
exercisable within 60 days of December 31, 1998 have been exercised. Unless
otherwise noted, the Company believes that all persons' name in the table
have sole voting and investment power with respect to all shares of Common
Stock beneficially owned by them.
(2) The address of the shareholder is care of Mackie Designs Inc., 16220 Wood-
Red Road, N.E., Woodinville, Washington 98072.
(3) Includes 232,200 shares held by four trusts for the benefit of Mr. Mackie's
immediate family. Mr. Mackie serves as trustee for each of these trusts.
(4) Consists of 63,750 shares subject to options exercisable within 60 days of
December 31, 1998.
(5) C. Marcus Sorenson and Judith B. Sorenson are husband and wife. Includes
480,300 shares held by six trusts for the benefit of the Sorensons'
children and grandchildren. The Sorensons serve as co-trustees of each of
these trusts. Mrs. Sorenson has granted Mr. Sorenson a proxy to vote the
2,069,700 shares they jointly own, which proxy expires in July 2000 or upon
earlier revocation by Mrs. Sorenson.
(6) Consists of 1,250 shares subject to options exercisable within 60 days of
December 31, 1998.
(7) Includes 398,400 shares held by two trusts for the benefit of Mr. Tully's
children. Mr. Tully serves as trustee of both of these trusts.
(8) Includes 1,250 shares subject to options exercisable within 60 days of
December 31, 1998.
(9) Includes 50,000 shares subject to options exercisable within 60 days of
December 31, 1998.
(10) Consists of shares subject to options exercisable within 60 days of
December 31, 1998.
(11) Includes 8,750 shares subject to options exercisable within 60 days of
December 31, 1998.
(12) Consists of shares held jointly with Mr. Ferguson's wife.
(13) Includes 2,500 shares subject to options exercisable within 60 days of
December 31, 1998.
(14) Includes 37,500 shares subject to options exercisable within 60 days of
December 31, 1998.
11
<PAGE>
CERTAIN TRANSACTIONS
Blacker-Sorenson Audio Group ("Blacker-Sorenson"), a company in which C.
Marcus Sorenson is a partner, acted as the Company's exclusive manufacturers'
representative for southern California and southern Nevada in 1998. Blacker-
Sorenson received payments from the Company pursuant to this arrangement of
$295,273 in 1998.
In December 1994, the Company entered into a lease with Mackie Holdings,
L.L.C. ("Mackie Holdings"), a limited liability company beneficially owned by
Greg C. Mackie, C. Marcus Sorenson, Judith B. Sorenson and David M. Tully, that
expires December 31, 2004 for office and manufacturing facilities. The monthly
rent under this lease is $56,613, adjusted annually for changes in the consumer
price index. Monthly rent expenses in 1998 were $60,982. Taxes, insurance,
utilities and maintenance are the responsibility of the Company. During 1998,
Mackie Holdings was paid a total of $826,664 pursuant to this lease. The Company
believes that the lease is on terms at least as favorable to the Company as
might have been obtained from unaffiliated parties.
PERFORMANCE GRAPH
The following graph compares the cumulative total shareholder return for the
Company's stock at December 31, 1998 since August 18, 1995 (the date on which
the Company's stock was first traded on the Nasdaq National Market System after
its initial public offering) to the cumulative return over such period of (1)
the Total Return Index of the Nasdaq Stock Market--US and (2) the Total Return
Index of the Nasdaq Stock Market--Electronic Components. The graph assumes that
on August 18, 1995 $100 was invested in the Common Stock of the Company and in
each of the comparative indices. The stock price performance on the following
graph is not necessarily indicative of future stock price performance.
[PERFORMANCE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
8/18/95 12/31/95 12/31/96 12/31/97 12/31/98
-----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Mackie Designs Inc......... $ 100.00 $ 78.95 $ 45.61 $ 43.86 $ 43.86
Nasdaq US.................. 100.00 102.43 126.00 154.60 217.22
Nasdaq Electronic
Components................ 100.00 82.21 142.12 149.00 230.36
</TABLE>
12
<PAGE>
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Under the securities laws of the United States, the Company's directors, its
officers and any persons holding more than 10% of the Company's Common Stock
must report their initial ownership to the Securities and Exchange Commission
("SEC"). Specific filing deadlines of these reports have been established, and
the Company must disclose in this Proxy Statement any failure to file by these
dates during the fiscal year ended December 31, 1998. The Company believes that
all of these filing requirements have been satisfied. In making this statement
the Company has relied solely on written representations of its directors and
officers and any 10% holders and copies of the reports that they filed with the
SEC.
PROPOSAL NO. 2
APPROVAL OF AMENDMENT TO THE COMPANY'S SECOND
AMENDED AND RESTATED 1995 STOCK OPTION PLAN
Background
The Second Amended and Restated 1995 Stock Option Plan (the "Option Plan") was
originally adopted by the Board of Directors and approved by the shareholders of
the Company in April 1995, amended and restated by the Board of Directors in
September 1996, which amendment and restatement was approved by the shareholders
in April 1997 and again amended and restated by the Board of Directors in April
1998, which amendment and restatement was approved by the shareholders in May
1998. In February 1999, the Board of Directors amended the Option Plan to
increase the number of shares issuable thereunder to 4,500,000, which amendment
is subject to shareholder approval at the Meeting. The Option Plan is not
subject to the Employee Retirement Income Security Act of 1974 and is not a
qualified pension, profit sharing or bonus plan under Section 401(a) of the
Internal Revenue Code of 1986, as amended (the "Code").
The Option Plan currently provides for the grant of options to purchase up to
3,500,000 shares of the Company's Common Stock to eligible participants. On
December 31, 1998, options to purchase 3,417,900 shares were outstanding under
the Option Plan, 2,010,950 of which were immediately exercisable, and options to
purchase 850 shares remained available for grant. The exercise prices of the
outstanding options ranged from $5.55 to $13.88 per share. As of December 31,
1998, approximately 156 employees had been granted options under the Option
Plan. On December 31, 1998, the closing market price of the Company's Common
Stock was $6.25.
Amendment
Subject to shareholder approval, the Board of Directors has amended the Option
Plan to increase the number of shares of Common Stock of the Company issuable
under the Option Plan from 3,500,000 to 4,500,000 shares.
The Board of Directors believes that the Amendment promotes the interests of
the Company and its shareholders by assisting the Company in attracting,
retaining and motivating key employees of the Company and its subsidiaries and
motivating certain non-employees of the Company and its subsidiaries. The Board
of Directors recommends a vote FOR the Amendment.
Who May Participate in the Plan
Directors (including directors who are not employees), officers and other
key employees of the Company and selected non-employee agents, consultants,
advisors, persons involved in the sale or distribution of the Company's products
and independent contractors of the Company are currently eligible to receive
options under the Option Plan. In determining to whom it should grant options,
the Company has developed the following performance formula:
13
<PAGE>
Salaried employees should receive option grants from time to time in
recognition of exceptional service to the Company in such amounts as the
Committee, in its sole discretion, shall authorize. Average performance by an
employee is expected and is not, standing alone, sufficient basis for a grant of
options. Options should be granted only when service is consistently from above
average to exceptional during the period of measurement. Options should be
granted by the Committee only after consultation with management and in
furtherance of the objectives and goals set forth in the Company's currently
adopted Business Plan. In granting options, the Committee need not treat all
employees alike, whether similarly situated or not, but instead should consider
in each instance such factors as: the profitability of the efforts of the
employee or the unit of the Company in which he or she is employed, effort
expended, results achieved, savings realized, loyalty to Company, adherence to
Company policies and goals and matters of like import.
Options may be granted by the Committee to key management employees and
employees with skills deemed critical to the Company's success. Such options
should be granted effective the first day of employment of qualifying employees,
and should be granted only after consultation between management and the
Committee. The Committee may designate a certain number of options to be
available for certain employment positions that are open and give management
leave to suggest to the Committee the identity of the person who will be hired
to fill such position, provided that no grant of an option is final until
granted by the Committee under the terms of the Plan, and the Committee may
refuse management's request in any such regard.
An option granted under the Option Plan may be either an "incentive stock
option," as defined in Section 422 of the Code ("ISO"), or a non-statutory stock
option ("NSO"). ISOs may be granted only to employees of the Company and are
subject to the following limitations, in addition to restrictions applicable to
all stock options under the Option Plan:
(1) An ISO may not be granted to an employee who at the time of grant owns
in excess of 10% of the outstanding Common Stock of the Company, unless
the exercise price under the option is at least 110% of the fair market
value of the stock subject to the option as of the date of grant of the
option and the option term is no more than five years.
(2) The aggregate fair market value (determined as of the time the option
is granted) of stock with respect to which ISOs are exercisable for the
first time by an optionee during any calendar year (under all option
plans of the Company) will not exceed $100,000.
Options that do not meet the above qualifications will be treated as NSOs. The
option price of ISOs will not be less than 100% of the fair market value of such
shares on the date the option is granted.
Exercise of Options
No option shall be exercisable until it has vested. The Plan Administrator
has the power to set the vesting schedule for each option. Unless the option
agreement executed by the optionee expressly otherwise provides, the option
shall vest on a cumulative basis as to one-quarter of the total number of shares
covered thereby on each of the first, second, third and fourth anniversary dates
of the date of the grant of the option. No option shall be exercisable after
the expiration of 10 years from the date it is granted, except in the case of an
ISO granted to a 10% shareholder (in which event the option must be exercised
within five years). An ISO is not exercisable prior to the expiration of 12
months from the date it is granted.
To the extent the right to purchase shares has accrued under the option, the
option may be exercised from time to time by written notice to the Company,
stating the number of shares being purchased and accompanied by the payment in
full of the option price of such number of shares, such payment to be made in
cash or, upon approval of the Plan Administrator, by (1) delivering shares
previously held by the option holders; (2) executing a promissory note in a form
approved by the Plan Administrator; (3) directing the Company to withhold shares
otherwise issuable upon exercise of the option; or (4) delivering an irrevocable
election to a broker directing the broker to use the proceeds of the sale of the
shares to pay the purchase price.
14
<PAGE>
If any option expires or terminates before being exercised in full or in part,
the shares not acquired upon exercise of that option may be made subject to
additional options granted under the Option Plan.
Duration of Options
Vested options shall terminate, to the extent not previously exercised, upon
the occurrence of the first of the following events: (1) the expiration of the
option, as designated by the Plan Administrator; (2) the date of an optionee's
termination of employment with the Company or any related corporation for cause
(as determined in the sole discretion of the Plan Administrator); (3) the
expiration of 90 days from the date of an optionee's termination of employment
with the Company or any related corporation for any reason whatsoever other than
cause, death or disability unless the exercise period is extended by the Plan
Administrator until a date not later than the expiration date of the option; or
(4) the expiration of one year from the date of death of the optionee or
cessation of an optionee's employment by reason of disability unless the
exercise period is extended by the Plan Administrator until a date not later
than the expiration date of the option.
Assignment
During the lifetime of the optionee, the option will be exercisable only by
the optionee and will not be assignable or transferable, except that the Plan
Administrator may, in its discretion, authorize the transfer of NSOs by gift to
members of the optionee's family or trusts or partnerships for the exclusive
benefit of the family members, or to charitable organizations.
Duration of the Plan and Amendment
Options may be granted under the Option Plan from time to time until April 3,
2005. The Board may at any time terminate or amend the Option Plan, provided
that any modification that materially increases the benefits accruing to
participants or the number of shares that may be issued under the Option Plan,
or materially modifies the requirements as to eligibility for participation in
the Option Plan, will become effective only upon approval of the holders of a
majority of the securities of the Company present, or represented, and entitled
to vote at a meeting duly held in accordance with the laws of the state of
Washington.
Change in Control
The Option Plan provides that upon a merger, consolidation, acquisition of
property or stock, separation, reorganization or liquidation of the Company as a
result of which shareholders of the Company receive cash, stock or other
property, any option granted under the Option Plan shall terminate, but the
optionee shall have the right immediately prior to such event to exercise such
option, in whole or part, to the extent the vesting requirements set forth in
his or her option agreement have been satisfied, unless stated otherwise in his
or her option agreement. Upon such event, if the shareholders of the Company
receive capital stock of another corporation, all options granted under the
Option Plan shall be converted into options to purchase shares of such other
corporation unless the Company and the corporation issuing exchange shares
determine in their sole discretion that any or all such options shall not be
converted but instead shall terminate and the optionee shall have the right to
exercise such option immediately prior to consummation of the exchange. In the
event of a "change in control" of the Company, any options or portions of
options outstanding as the date of such event that are not yet fully vested
shall become immediately exercisable in full. "Change in control" is defined in
the Option Plan as (1) an extraordinary event, such as certain mergers or
consolidations, a transfer of substantially all of the Company's assets or
adoption of a plan or proposal for liquidation or dissolution of the Company;
(2) an acquisition by any person of shares of common stock or securities
convertible into common stock if after the acquisition the person beneficially
owned at least 20% of the combined voting power of the Company's then
outstanding securities; or (3) a change in the Board of Directors in which the
current members of the Board (the "Continuing Directors") cease to constitute at
least a majority of the Board, provided that any person becoming a director
whose nomination for election was approved by a majority of the Continuing
Directors (other than a nomination of an individual who assumed office in
connection with an actual threatened election contest relating to the election
of the directors of the Company, as such terms are used in Rule 14a-11 of
Regulation 14A under the Exchange Act of 1934) shall be deemed to be a
Continuing Director.
15
<PAGE>
Administration of the Option Plan
The Option Plan is administered by the Plan Administrator which is a committee
of the Board of Directors consisting of three non-employee directors appointed
by the Board; non-employee directors are defined as members of the Board of
Directors who are not officers of the Company or its affiliates, do not receive
compensation for services other than as a director in an amount in excess of
$60,000 annually, and do not have an interest in certain transactions or are not
otherwise engaged in certain business relationships with the Company or its
affiliates.
Certain Federal Income Tax Consequences
The following summary discusses certain of the federal income tax consequences
associated with (1) the grant of a stock option under the Option Plan, (2) the
exercise of such option and (3) the disposition of shares received upon the
exercise of an option. This description of tax consequences is based upon
present federal tax laws and regulations, but does not purport to be a complete
description of the federal income tax consequences applicable to an optionee
under the Option Plan.
Non-Statutory Stock Options
The grant of an NSO (including any option exceeding the limitations on ISOs
described above) to an optionee will not be a taxable event so long as the
option does not have a readily ascertainable fair market value. Options granted
pursuant to the Option Plan should not have a readily ascertainable fair market
value because they are not actively traded on an established securities market,
are not transferable, are not immediately exercisable in full upon grant and
have more than a nominal exercise price. Accordingly, the optionee will not be
subject to any income tax consequences with respect to such option unless and
until the option is exercised.
Upon the exercise of an NSO, the optionee generally must recognize ordinary
compensation income equal to the "spread" between the exercise price and the
fair market value of the Common Stock on the date of exercise. However, if the
Common Stock received by the optionee is not vested (that is, the optionee's
right to enjoy the full benefits of ownership of the Common Stock is conditioned
on rendering further services or is subject to other restrictions that
constitute a substantial risk of forfeiture), then the optionee would not be
required to include such "spread" in income upon exercise, unless the optionee
elected to do so under the special, but somewhat complicated, rules of Section
83(b) of the Code.
The amount and character of any gain or loss realized on a subsequent
disposition of Common Stock by the optionee generally would depend on, among
other things, whether such disposition occurred before or after such Common
Stock vested, whether an election under Code Section 83(b) with respect to such
shares had been made and the length of time such shares were held by the
employee.
Incentive Stock Options
There are no federal income tax consequences associated with the grant of an
ISO to an employee. However, in contrast to the exercise of an NSO, the
exercise of an ISO will not cause an employee to recognize taxable income for
regular income tax purposes (although the employee could be subject to an
alternative minimum tax liability as described below). If the employee holds
the shares acquired upon exercise of the ISO for a minimum of two years from the
date of the grant of the ISO, and for at least one year after exercise, any gain
realized by the optionee on the subsequent sale or exchange of such shares
generally would be treated as long-term capital gain. If the shares are sold or
otherwise disposed of prior to the expiration of such periods (a "disqualifying
disposition"), then a portion of any gain recognized by the employee that would
otherwise be characterized as capital gain would instead be taxable as ordinary
compensation income. The amount of such gain that would be characterized as
ordinary income would not exceed an amount equal to the excess of (1) the fair
market value of such shares as of the date the option was exercised over (2) the
amount paid for such shares. Any loss recognized upon a taxable disposition of
the shares generally would be characterized as a capital loss.
16
<PAGE>
Upon exercise of an ISO by an employee, the alternative minimum taxable income
of such employee must be determined as if such ISO were an NSO. Accordingly,
such employee will be required to include as alternative minimum taxable income
the excess (if any) of the value of the shares received upon exercise as of the
date such shares are vested over the amount paid for such shares. Such employee
would then be required to pay the greater of such employee's regular or
alternative minimum tax liability computed with respect to such year.
Compensation Deduction
To the extent compensation income is recognized by an optionee in connection
with the exercise of an NSO or a "disqualifying disposition" of stock obtained
upon exercise of an ISO, the Company generally would be entitled to a matching
compensation deduction (assuming the withholding requirements are satisfied).
OTHER MATTERS
The Company knows of no other matters to be submitted at the Meeting. If any
other matters properly come before the meeting, it is the intention of the
persons named in the enclosed form of proxy to vote the shares they represent as
the Board of Directors may recommend.
ADDITIONAL INFORMATION
A copy of the Company's Annual Report to the Securities and Exchange
Commission on Form 10-K for the fiscal year ended December 31, 1998 is available
without charge upon written request to: Corporate Secretary, Mackie Designs
Inc., 16220 Wood-Red Road, N.E., Woodinville, Washington 98072.
By Order of the Board of Directors
Greg C. Mackie
President and Chief Executive Officer
Woodinville, Washington
April 2, 1999
17
<PAGE>
PROXY
MACKIE DESIGNS INC.
16220 Wood-Red Road, N.E.
Woodinville, Washington 98072
This Proxy is Solicited on Behalf of the Board of Directors
for the Annual Meeting of Shareholders, May 6, 1999
The undersigned hereby appoints Greg C. Mackie and David M. Tully, or each
of them, as proxies, each with power of substitution, to vote for and on behalf
of the undersigned at the Annual Meeting of Shareholders of the Company to be
held on May 6, 1999, and at any adjournment thereof, upon matters properly
coming before the Meeting, as set forth in the related Notice of Annual Meeting
and Proxy Statement, both of which have been received by the undersigned.
Without otherwise limiting the general authorization given hereby, said proxies
are instructed to vote as follows:
1. Election of the following nominees for Directors: Walter Goodman, David M.
Tully, and Gregory Riker.
(The Board of Directors recommends a vote "FOR")
[ ] FOR the nominees listed above [ ] WITHHOLD AUTHORITY to vote for the
nominees listed above
2. To approve amendment to the Company's Second Amended and Restated 1995 Stock
Option Plan.
(The Board of Directors recommends a vote "FOR")
FOR [ ] AGAINST [ ] ABSTAIN [ ]
(Continued and to be dated and signed on reverse side)
________________________________________________________________________________
<PAGE>
In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the Meeting.
This proxy when properly executed will be voted in the manner directed
herein by the undersigned holder.
If no direction is made, this proxy will be voted for Proposals 1 and 2.
Please sign exactly as name appears below. When shares are held by joint
tenants, both should sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign in full corporate name by the president or other authorized officer. If a
partnership, please sign in partnership name by authorized person.
___________________________________
Signature
___________________________________
Signature if held jointly
Dated:_______________________, 1999
PLEASE MARK, SIGN, DATE AND RETURN
THE PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE
