Exhibit 10.38

GUITAR CENTER, INC.    EMPLOYEE STOCK PURCHASE PLAN

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GUITAR CENTER, INC.    EMPLOYEE STOCK PURCHASE PLAN

TABLE OF CONTENTS

|    |  |                                                                  |  | Page
|--- |  | ---------------------------------------------------------------- |  | ----
|1.  |  | Definitions                                                      |  | 1   
|2.  |  | Stock Subject to the Plan                                        |  | 3   
|3.  |  | Grant of Options                                                 |  | 3   
|4.  |  | Exercise of Options; Option Price                                |  | 4   
|5.  |  | Withdrawal from the Plan                                         |  | 5   
|6.  |  | Termination of Employment                                        |  | 5   
|7.  |  | Restriction upon Assignment                                      |  | 6   
|8.  |  | No Rights of Stockholders until Shares Issued                    |  | 6   
|9.  |  | Changes in the Stock and Corporate Events; Adjustment of Options |  | 6   
|10. |  | Use of Funds; No Interest Paid                                   |  | 7   
|11. |  | Dividends                                                        |  | 7   
|12. |  | Amendment, Suspension or Termination of the Plan                 |  | 8   
|13. |  | Administration by Committee; Rules and Regulations               |  | 8   
|14. |  | Designation of Subsidiary Corporations                           |  | 9   
|15. |  | No Rights as an Employee                                         |  | 9   
|16. |  | Term; Approval by Stockholders                                   |  | 9   
|17. |  | Effect upon Other Plans                                          |  | 9   
|18. |  | Conditions to Issuance of Stock Certificates                     |  | 9   
|19. |  | Notification of Disposition                                      |  | 10  
|20. |  | Notices                                                          |  | 10  
|21. |  | Headings                                                         |  | 10  

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GUITAR CENTER, INC.    EMPLOYEE STOCK PURCHASE PLAN

Guitar Center, Inc., a Delaware corporation (the "Company"), hereby adopts the Guitar Center, Inc. Employee Stock Purchase Plan (the "Plan"),
effective as of February 8, 2001.

The
purposes of the Plan are as follows:



1.  Definitions.Whenever any of the following terms is used in the Plan with the first letter or
letters capitalized, it shall have the following meaning unless the context clearly indicates to the contrary (such definitions to be equally applicable to both the singular and the plural forms of
the terms defined):



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2.  Stock Subject to the Plan.Subject to the provisions of Section 9 hereof (relating to
adjustments upon changes in the Stock) and Section 12 hereof (relating to amendments of the Plan), the Stock that may be sold pursuant to Options granted under the Plan shall not exceed in the
aggregate Five Hundred Thousand (500,000) shares of Stock. The shares of Stock sold pursuant to Options granted under the Plan may be unissued shares or treasury shares of Stock, or shares of Stock
bought on the Nasdaq National Market, or other market or stock exchange, or repurchased in private transactions, for purposes of the Plan.

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3.  Grant of Options.



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4.  Exercise of Options; Option Price.



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5.  Withdrawal from the Plan.



6.  Termination of Employment.



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7.  Restriction upon Assignment.An Option granted under the Plan shall not be transferable other than
by will or the laws of descent and distribution, and is exercisable during the Employee's lifetime only by the Employee. Except as provided in Section 6(b) hereof, an Option may not be
exercised to any extent except by the Employee. The Company shall not recognize and shall be under no duty to recognize any assignment or alienation of the Employee's interest in the Plan, the
Employee's Option or any rights under the Employee's Option.

8.  No Rights of Stockholders until Shares Issued.With respect to shares of Stock subject to an Option,
an Employee shall not be deemed to be a stockholder of the Company, and the Employee shall not have any of the rights or privileges of a stockholder, until such shares have been issued to the Employee
or his or her nominee following exercise of the Employee's Option. No adjustments shall be made for dividends (ordinary or extraordinary, whether in cash securities, or other property) or distribution
or other rights for which the record date occurs prior to the date of such issuance, except as otherwise expressly provided herein.

9.  Changes in the Stock and Corporate Events; Adjustment of Options.



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10.  Use of Funds; No Interest Paid.All funds received or held by the Company under the Plan shall be
included in the general funds of the Company free of any trust or other restriction and may be used for any corporate purpose. No interest will be paid to any Employee or credited to any Employee's
Account with respect to such funds.

11.  Dividends.



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12.  Amendment, Suspension or Termination of the Plan.The Board may amend, suspend, or terminate the
Plan at any time and from time to time, provided that approval by a vote of the holders of the outstanding shares of the Company's capital stock entitled to vote shall be required to amend the Plan
to: (a) change the number of shares of Stock that may be sold pursuant to Options under the Plan, (b) alter the requirements for eligibility to participate in the Plan, or (c) in
any manner that would cause the Plan to no longer be an "employee stock purchase plan" within the meaning of Section 423(b) of the Code.

13.  Administration by Committee; Rules and Regulations.



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14.  Designation of Subsidiary Corporations.The Board shall designate from among the Subsidiary
Corporations, as determined from time to time, the Subsidiary Corporation or Subsidiary Corporations whose Employees shall be eligible to be granted Options under the Plan. The Board may designate a
Subsidiary Corporation, or terminate the designation of a Subsidiary Corporation, without the approval of the stockholders of the Company.

15.  No Rights as an Employee.Nothing in the Plan shall be construed to give any person (including any
Eligible Employee) the right to remain in the employ of the Company, a Parent Corporation or a Subsidiary Corporation or to affect the right of the Company, any Parent Corporation or any Subsidiary
Corporation to terminate the employment of any person (including any Eligible Employee) at any time, with or without cause.

16.  Term; Approval by Stockholders.Subject to approval by the stockholders of the Company in
accordance with this Section, the Plan shall be in effect until December 31, 2010, unless sooner terminated in accordance with Section 12. No Option may be granted during any period of
suspension
of the Plan or after termination of the Plan. The Plan shall be submitted for the approval of the Company's stockholders within twelve (12) months after the date of the adoption of the Plan by
the Board. Options may be granted prior to such stockholder approval; provided, however, that such Options shall not be exercisable prior to the time when the Plan is approved by the Company's
stockholders; and, provided, further, that if such approval has not been obtained by the end of said 12-month period, all Options previously granted under the Plan shall thereupon
terminate without being exercised.

17.  Effect upon Other Plans.The adoption of the Plan shall not affect any other compensation or
incentive plans in effect for the Company, any Parent Corporation or any Subsidiary Corporation. Nothing in this Plan shall be construed to limit the right of the Company, any Parent Corporation or
any Subsidiary Corporation to: (a) establish any other forms of incentives or compensation for employees of the Company, any Parent Corporation or any Subsidiary Corporation or (b) grant
or assume options otherwise than under the Plan in connection with any proper corporate purpose, including, but not by way of limitation, the grant or assumption of options in connection with the
acquisition, by purchase, lease, merger, consolidation or otherwise, of the business, stock or assets of any corporation, firm or association.

18.  Conditions to Issuance of Stock Certificates.The Company shall not be required to issue or deliver
any certificate or certificates for shares of Stock purchased upon the exercise of Options prior to fulfillment of all the following conditions:



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19.  Notification of Disposition.Each Employee shall give prompt notice to the Company of any
disposition or other transfer of any shares of Stock purchased upon exercise of an Option if such disposition or transfer is made: (a) within two (2) years from the Date of Grant of the
Option, or (b) within one (1) year after the transfer of such shares of Stock to such Employee upon exercise of such Option. Such notice shall specify the date of such disposition or
other transfer and the amount realized, in cash, other property, assumption of indebtedness or other consideration, by the Employee in such disposition or other transfer.

20.  Notices.Any notice to be given under the terms of the Plan to the Company shall be addressed to
the Company in care of its Secretary and any notice to be given to any Employee shall be addressed to such Employee at such Employee's last address as reflected in the Company's records. By a notice
given pursuant to this Section, either party may designate a different address for notices to be given to it, him or her. Any notice which is required to be given to an Employee shall, if the Employee
is then deceased, be given to the Employee's personal representative if such representative has previously informed the Company of his status and address by written notice under this Section. Any
notice shall have been deemed duly given if enclosed in a properly sealed envelope or wrapper addressed as aforesaid at the time it is deposited (with postage prepaid) in a post office or branch post
office regularly maintained by the United States Postal Service.

21.  Compliance with Laws.All Eligible Employees will have equal rights and privileges under this Plan
so that this Plan qualifies as an "employee stock purchase plan" within the meaning of Section 423 of the Code or applicable Treasury regulations thereunder. Any provision of this Plan that is
inconsistent with Section 423 or applicable Treasury regulations will, without further act or amendment by the Company or the Board, be reformed to comply with the equal rights and privileges
requirement of Section 423 or applicable Treasury regulations. This Plan is intended to conform to the extent necessary with all provisions of the Securities Act of 1933, as amended, and the
Exchange Act and any and all regulations and rules promulgated by the Securities and Exchange Commission under those acts, including Rule 16b-3. This Plan is intended to be
administered, and options will be granted and may be exercised, only in a manner which conforms to these laws, rules and regulations. To the extent permitted by applicable law, this Plan and Options
granted hereunder shall be deemed amended to the extent necessary to conform to these laws, rules and regulations.

22.  Headings.Headings are provided herein for convenience only and are not to serve as a basis for
interpretation or construction of the Plan.

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