Exhibit
10.2


 


AMENDMENT

TO THE

2004 GUITAR CENTER, INC.

INCENTIVE STOCK AWARD PLAN


 


                Pursuant
to the authority reserved to the Board of Directors (the “Board”) of Guitar Center, Inc. (the “Company”), a corporation organized under
the laws of State of Delaware, under Section 11.3 of the Guitar Center, Inc.
2004 Incentive Stock Award Plan (the “Plan”),
the Board hereby amends the Plan as follows.


 


1.             Effective as of November 2, 2006, Article I of the Plan
is hereby amended to incorporate a new section following section 1.16,
renumbering each subsequent section accordingly, to read in its entirety as
follows:


1.17          “Equity Restructuring” shall mean a non-reciprocal
transaction between the Company and its stockholders, such as a stock dividend,
stock split, spin-off, rights offering or recapitalization through a large,
nonrecurring cash dividend, that affects the shares of Common Stock (or other
securities of the Company) or the share price of Common Stock (or other
securities) and causes a change in the per share value of the Common Stock
underlying outstanding Awards.


2.             Effective as of November 2, 2006, Section 11.4(a) of the
Plan is hereby amended to read in its entirety as follows:


                (a)           Subject to Section 11.4(e), in the event that the
Administrator determines that other than an Equity Restructuring any dividend
or other distribution (whether in the form of cash, Common Stock, other
securities or other property), reorganization, merger, consolidation,
combination, repurchase, liquidation, dissolution, or sale transfer, exchange
or other disposition of all or substantially all of the assets of the Company, or
exchange of Common Stock or other securities of the Company, issuance or
warrants or other rights to purchase Common Stock or other securities of the
Company or other similar corporate transaction or event, in the Administrator’s
sole discretion, affects the Common Stock such that an adjustment is determined
by the Administrator to be appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be made available
under the Plan or with respect to an Award, then the Administrator shall, in
such manner as it may deem equitable, adjust any or all of:


(i)            The number and kind of shares of
Common Stock (or other securities or property) with respect to which Awards may
be granted or awarded (including, but not limited to, adjustments of the
limitations in Section 2.1 on the maximum number and kind of shares which may
be issued and adjustments of the Award Limit);


(ii)           The number and kind of shares of
Common Stock (or other securities or property) subject to outstanding Awards;
and


 


 

















 


(iii)          The grant or exercise price with
respect to any Award.


3.             Effective as of November 2, 2006, Section 11.4 of the
Plan is hereby amended to incorporate a new subsection (f) following existing subsection
(e), to read in its entirety as follows:


(f)
           In connection with the
occurrence of any Equity Restructuring, and notwithstanding anything to the
contrary in Section 11.4(a) and 11.4(b):


(i)                   The
number and type of securities subject to each outstanding Award and the
exercise price or grant price thereof, if applicable, will be proportionately
adjusted.  The adjustments provided under
this Section 11.4(f)(i) shall be nondiscretionary and shall be final and
binding on the affected Holder and the Company.


(ii)  The Administrator shall make such
proportionate adjustments, if any, as the Administrator in its discretion may
deem appropriate to reflect such Equity Restructuring with respect to the aggregate
number and kind of shares that may be issued under the Plan (including, but not
limited to, adjustments of the limitations in Section 2.1 and the Award Limit).


4.             Notwithstanding anything in this Amendment to the Plan
to the contrary, this Amendment to the Plan shall not apply to, and instead
Section 11.4(a) of the Plan shall apply to, any Award to which the adoption of
this Amendment to the Plan by the Board would (A) result in a penalty tax under
Section 409A of the Code and the Department of Treasury proposed and final
regulations and guidance thereunder or (B) cause any Incentive Stock Option to
fail to qualify as an “incentive stock option” under Section 422 of the Code.


 


* * * * * * * *


Executed
on November 2, 2006


	
  GUITAR CENTER, INC.

  
	
   

  
	
   

  
	
  By:

  
	
   

  
	
  /s/ Leland P. Smith

  
	
  Officer

  



 


 


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