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                                                                    EXHIBIT 10.6


                             EMPLOYMENT AGREEMENT

     THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into as of the
16/th/ day of June 1999, by and between Video City, Inc., a Delaware corporation
(the "Company"), and Richard Gibson ("Employee").

     1.   Term of Employment.  The Company hereby employs Employee, and Employee
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hereby agrees to serve the Company, under and subject to all of the terms,
conditions and provisions of this Agreement from the date hereof through June
15, 2001, in the capacity of President and Chief Operating Officer of the
Company, or to serve in such other executive capacity with the Company as the
Company's board of directors (the "Board of Directors") may from time to time
designate, provided such assignment is consistent with Employee's level of
experience and expertise.  In the performance of his duties and the exercise of
his discretion, Employee shall be under the supervision and control of, and
shall report only to, the Chairman of the Board of the Company (the "Chairman of
the Board").  Employee's duties shall be designated by the Chairman of the Board
and shall be subject to such policies and directions as may be established or
given by the Board of Directors from time to time.

     2.   Devotion of Time to Company Business.  Employee shall devote
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substantially all of his productive time, ability and attention to the business
of the Company during the term of this Agreement. Employee shall not, without
the prior written consent of the Chairman of the Board, directly or indirectly
render any services of a business, commercial or professional nature to any
other person or organization, whether for compensation or otherwise, which may
compete or conflict with the Company's business or with Employee's duties to the
Company.

     3.   Compensation.
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          3.1  Base Salary.  For all services rendered by Employee under this
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Agreement, the Company shall pay Employee a base salary ("Base Salary"), payable
semi-monthly, at the rate of $20,833.33 per month.

          3.2  Bonus.  In addition to the Base Salary, the Company shall pay
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Employee an incentive cash bonus ("Bonus") in the amount of $250,000 in the
event that during any period of three consecutive months ending on or before
October 31, 2000: (i) the average of the annualized revenue of all retail video
stores that are owned and operated by the Company or its subsidiaries ("Video
City Stores") as measured during such three month period (but adjusted for
seasonal fluctuations) equals or exceeds $650,000 per store; and (ii) the
aggregate store operating cash flow (i.e. store earnings before general and
administrative expenses, interest, taxes, depreciation and amortization, but
after all inventory purchases) of all Video City Stores owned and operated
during such three month period equals or exceeds 17 percent of the aggregate
revenues of such Video City Stores during such three month period.

          3.3  Stock Options.  In addition to the Base Salary and the Bonus,
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the Company shall grant to Employee options to purchase up to 400,000 shares of
the Company's

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Common Stock, at an exercise price of the greater of $2.00 per share or the last
sale price of the Company's Common Stock on the date of grant as reported on the
OTC Bulletin Board, pursuant to a stock option agreement containing terms and
conditions satisfactory to the Company and Employee and consistent with stock
options granted by the Company to other key employees. Such options shall vest
as follows:

               (a)  Options to purchase 100,000 shares shall vest and become
exercisable on June 16, 2000;

               (b)  Options to purchase an additional 100,000 shares shall vest
and become exercisable on June 16, 2001;

               (c)  Options to purchase an additional 100,000 shares shall vest
and become exercisable only in the event that during any period of three
consecutive months ending on or before October 31, 2000: (i) the average of the
annualized revenue of all Video City Stores owned and operated by the Company as
measured during such three month period (but adjusted for seasonal fluctuations)
equals or exceeds $550,000 per store; and (ii) the aggregate store operating
cash flow (i.e. store earnings before general and administrative expenses,
interest, taxes, depreciation and amortization, but after all inventory
purchases) of all Video City Stores owned and operated during any such three
month period equals or exceeds 16 percent of the aggregate revenues of such
Video City Stores during such three month period; and

               (d)  Options to purchase an additional 100,000 shares shall vest
and become exercisable only in the event that during any period of three
consecutive months ending on or before October 31, 2000: (i) the average of the
annualized revenue of all Video City Stores owned and operated by the Company as
measured during such three month period (but adjusted for seasonal fluctuations)
equals or exceeds $650,000 per store; and (ii) the aggregate store operating
cash flow (i.e. store earnings before general and administrative expenses,
interest, taxes, depreciation and amortization, but after all inventory
purchases) of all Video City Stores owned and operated during any such three
month period equals or exceeds 17 percent of the aggregate revenues of such
Video City Stores during such three month period; and (iii) the average of the
closing price of the Company's Common Stock, as reported by the national
securities exchange, the Nasdaq Stock Market or the OTC Bulletin Board (as the
case may be), during the 20 trading days preceding October 31, 2000 is greater
than $6.00.

     All amounts of revenue and cash flow shall be determined under this Section
3 in accordance with the usual and customary accounting practices of the Company
and consistent with generally accepted accounting principles.

     4.   Benefits.
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               (a)  In addition to the compensation set forth in Section 3,
Employee will be entitled to participate in all benefits of employment available
to other members of the Company's management, on a commensurate basis as they
may be offered from time to time by

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the Company to the Company's other management employees. Such benefits include,
but are not limited to, full medical, dental and long term disability insurance
for Employee and his wife and minor children, and participation in group life
insurance and retirement plans. During the period of his employment hereunder,
Employee will be reimbursed for reasonable business, travel and entertainment
expenses incurred in accordance with Company policy on behalf of the Company in
connection with his employment, and will be required to submit appropriate
expense reports for approval by signature of the Chairman of the Board as a
condition of reimbursement of such expenses.

               (b)  The Company shall pay a reasonable amount for Employee to
have the use of one Company-provided automobile (or an equivalent expense
allowance for an automobile owned by Employee), including insurance and other
expenses for such automobile.

               (c)  Employee shall be entitled to three weeks paid vacation for
any full fiscal year of the term of this Agreement, and a prorated portion of
three weeks vacation for any fiscal year in which Employee is not employed by
the Company for the full fiscal year.

               (d)  The Company shall pay Employee's reasonable relocation costs
and moving expenses in an amount up to $4,000 in connection with Employee's
commencement of employment with the Company. If the Company's principal office
is moved from Torrance, California, such that Employee must move his residence
in order to continue his employment as provided herein, the Company shall pay
his reasonable relocation costs, including but not limited to moving expenses.

     5.   Authority.  So long as Employee serves as President and Chief
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Operating Officer of the Company under this Agreement, he shall have the
authority and responsibilities specified in the Bylaws of the Company, except
that he shall not proceed with any matters, or permit the Company to take any
actions, which are prohibited by, or are in conflict with, resolutions or
guidelines adopted by the Board of Directors.

     6.   Termination.  This Agreement shall terminate in advance of the time
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specified in Section 1 above (and except as provided in Sections 6(c) and 6(e)
below, Employee shall have no right to receive any compensation not due and
payable to him or to his estate at the time of such termination) under any of
the following circumstances:

               (a)  Upon the death of Employee.

               (b)  In the event that Employee shall become either physically or
mentally incapacitated so as to not be capable of performing his duties as
required hereunder, and if such incapacity shall continue for a period of three
months consecutively, the Company may, at its option, terminate this Agreement
by written notice to Employee at that time or at any time thereafter while such
incapacity continues. In case of termination under this Section 6(b) or under
Section 6(a), Employee or his estate shall be entitled to receive Base Salary
and any other compensation accrued or earned as of or to the date of any
termination and for six months

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following such termination or until expiration of this Agreement, whichever is
earlier.

               (c)  By Employee, if the Company shall have materially breached
any of the provisions of this Agreement, and such termination shall have the
same effect on the payment of Employee's Base Salary and any other compensation
as a termination by the Company under Section 6(e).

               (d)  By the Company for Cause. The term "Cause" used in this
Section 6(d) means Employee (i) after repeated notices and warnings, fails to
perform his reasonably assigned duties as reasonably determined by the Company,
(ii) materially breaches any of the terms or conditions of Sections 1, 2 or 5 of
this Agreement, or (iii) commits or engages in a felony or any intentionally
dishonest or fraudulent act which materially damages the Company or the
Company's reputation. If the Company terminates Employee for Cause, no payments
or benefits under this Agreement shall become payable after the date of
Employee's termination.

               (e)  By the Company at any time, without Cause; provided,
however, in case of termination under this Section 6(e), Employee shall be
entitled to receive Base Salary and any other compensation accrued or earned as
of or to the date of any termination and for six months following such
termination or until expiration of this Agreement, whichever is earlier.

     7.   Loyalty, Non-Competition and Confidentiality.
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               (a)  Non-Competition.  Employee agrees and covenants that,
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except for the benefit of the Company (and/or any successor, parent or
subsidiary) during the Non-Competition Period (as defined in Section 7(b)) he
will not engage, directly or indirectly (whether as an officer, director,
consultant, employee, representative, agent, partner, owner, stockholder or
otherwise), in any business engaged in by the Company in the Non-Competition
Area (as defined on Section 7(c)). It is the parties' express intention that if
a court of competent jurisdiction finds or holds the provisions of this Section
7 to be excessively broad as to time, duration, geographical scope, activity or
subject, this Section 7 shall then be construed by limiting or reducing it so as
to comport with then applicable law.

               (b)  Non-Competition Period.  As used herein, the "Non-
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Competition Period" means the period beginning on the date hereof and ending on
a date which is two years after the later to occur of (i) June 16, 2003 or (ii)
the date on which Employee's employment with the Company terminates; provided,
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however, that if Employee's employment is terminated by the Company without
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Cause, the Non-Competition Period shall end on the date of such termination.

               (c)  Non-Competition Area.  As used herein, the term "Non-
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Competition Area" means anywhere in any County in which the Company conducts
business during the term of this Agreement and anywhere within a ten-mile radius
of any store operated by the Company.

               (d)  Other Employees.  Employee agrees that during the Non-
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Competition Period he shall not, directly or indirectly, for his own account or
as agent, servant or employee of

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any business entity, engage, hire or offer to hire or entice away or in any
other manner persuade or attempt to persuade any officer, employee or agent of
the Company or any subsidiary to discontinue his or her relationship with the
Company or any subsidiary.

               (e)  Confidentiality.  Employee acknowledges that he has learned
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and will learn Confidential Information, as defined in Section 7(f), relating to
the business of the Company. Employee agrees that he will not, except in the
normal and proper course of his duties, disclose or use or enable anyone else to
disclose or use, either during the Non-Competition Period or subsequently
thereto, any such Confidential Information without prior written approval of the
Chairman of the Board of the Company.

               (f)  Confidential Information.  "Confidential Information" shall
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include, but not be limited to, the following types of information regarding the
Company: corporate information, including contractual arrangements, plans,
locations, strategies, tactics, potential acquisitions or business combinations
or joint venture possibilities, policies and negotiations; marketing
information, including sales, purchasing and inventory plans, strategies,
tactics, methods, customers, advertising, promotion or market research data;
financial information, including operating results and statistics, cost and
performance data, projections, forecasts, investors, and holdings; and
operational information, including trade secrets, secret formulae, control and
inspection practices, accounting systems and controls, computer programs and
data, personnel lists, resumes, personal data, organizational structure and
performance evaluations. Confidential Information is limited to that information
which is not generally known in the industries in which the Company or any
subsidiary operates, and does not include skills, knowledge and experience
acquired by Employee during his employment with any prior employer.

               (g)  Corporate Documents. Employee agrees that all documents of
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any nature pertaining to activities of the Company or to any of the foregoing
matters in his possession now or at any time during the Non-Competition Period,
including, without limitation, memoranda, notebooks, notes, computer records,
disks, electronic information, data sheets, records and blueprints, are and
shall be the property of the Company and that they and all copies of them shall
be surrendered to the Company whenever requested by the Company from time to
time during the Non-Competition Period or thereafter and with or without request
upon termination of Employee's employment with the Company.

               (h)  Equitable Remedies.  In the event of a breach by Employee
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of any of the provisions of this Section 7, the Company, in addition to any
other remedies it may have, shall be entitled to an injunction restraining
Employee from doing or continuing to do any such act in violation of this
Section 7.

     8.   Attorney Fees.  The successful party in any litigation relating to
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matters covered by this Agreement shall be entitled to an award of reasonable
attorneys' fees in such action.

     9.   Assignment.  Neither this Agreement nor any of the rights or
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obligations of either

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party hereunder shall be assignable by either Employee or the Company, except
that this Agreement shall be assignable by the Company to and shall inure to the
benefit of and be binding upon (i) any successor of the Company by way of
merger, consolidation or transfer of all or substantially all of the assets of
the Company to an entity other than any parent, subsidiary or affiliate of the
Company and (ii) any parent, subsidiary or affiliate of the Company to which the
Company may transfer its rights hereunder.

     10.  Binding Effect.  The terms, conditions, covenants and agreements set
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forth herein shall inure to the benefit of, and be binding upon, the heirs,
administrators, successors and assigns of each of the parties hereto, and upon
any corporation, entity or person with which the Company may become merged,
consolidated, combined or otherwise affiliated.

     11.  Amendment.  This Agreement may not be altered or modified except by
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further written agreement between the parties.

     12.  Notices.  Any notice required or permitted to be given under this
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Agreement by one party to the other shall be sufficient if given or confirmed in
writing and delivered personally or mailed by first class mail, registered or
certified, return receipt requested (if mailed from the United States), postage
prepaid, addressed to such party as respectively indicated below or as otherwise
designated by such party in writing.

     If to the Company, to:         Video City, Inc.
                                    370 Amapola Avenue, Suite 208
                                    Torrance, California 90501
                                    Attention:  Robert Y. Lee
                                    Fax: (310) 533-3901

     If to Employee, to:            Richard Gibson
                                    _______________________
                                    _______________________
                                    _______________________

     13.  California Law.  This Agreement is being executed and delivered and is
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intended to be performed and shall be governed by and construed in accordance
with the laws of the State of California.

     14.  Invalidity. In the event that any one or more of the provisions
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contained in this Agreement, shall, for any reason, be held to be invalid,
illegal or unenforceable in any respect, then to the maximum extent permitted by
law, such invalidity, illegality or unenforceability shall not affect any other
provision of this Agreement.

     15.  Entire Agreement.  This Agreement constitutes the entire agreement
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between the parties pertaining to the subject matter hereof and supersedes all
prior agreements, understandings, negotiations and discussions, whether oral or
written, of the parties, and all other

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prior letters entered into by the parties.

     16.  Multiple Counterparts.  This Agreement may be executed in one or more
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counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.  Any or all signatures
required pursuant to this Agreement may be a facsimile.

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date and year first above written.


                                VIDEO CITY, INC.



                                By: /s/ Robert Y. Lee
                                   -------------------------------
                                   Robert Y. Lee
                                   Chairman of the Board
                                   and Chief Executive Officer

                                RICHARD GIBSON


                                /s/ Richard Gibson
                                -------------------------------
                                Richard Gibson

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