Document:

Exhibit 10.1

 

AIRCRAFT TIME SHARING AGREEMENT

 

This AIRCRAFT TIME
SHARING AGREEMENT (“Agreement”) is made and entered as of the 15th
day of February 2006, by and between GUITAR CENTER, INC., a Delaware corporation
(the “Company”), with an address of 5795 Lindero Canyon Road, Westlake Village,
CA, 91362; and Marty Albertson (“Executive”), with an address of 5795 Lindero
Canyon Road, Westlake Village, CA, 91362.

 

WHEREAS, the Company is
the owner of a Dassault-Brequet Falcon 50 aircraft (the “Aircraft”); and

 

WHEREAS, the Executive
desires to lease the Aircraft with flight crew from the Company pursuant to the
time sharing arrangement set forth below.

 

NOW, THEREFORE, in
consideration of the promises set forth below, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the Company and the Executive agree as follows:

 

1.                                       Lease
of Aircraft. Subject to the terms and conditions of this Agreement, the
Company agrees, at the request of the Executive and when and to the extent
available, to lease the Aircraft to the Executive on a flight-by-flight and
time sharing basis under Federal Aviation Regulation (“FAR”) Sections 91.501(b)(6) and
(c)(1). The Company agrees to make the Aircraft available to the Executive for
flights at such times as the Company does not require the Aircraft to be
available for flights for Company business purposes. The Company shall be
responsible for maintaining appropriate records that identify those specific
flights where the Aircraft has been leased to the Executive pursuant to the
terms of this Agreement.

 

2.                                       Consideration.
The Executive shall incur and pay the Company the following costs and
expenses associated with operation of the specific flights when the Aircraft is
leased by Executive from the Company pursuant to the terms of this Agreement:

 

a.               Expenses for fuel,
oil, lubricants and other additives;

 

b.              Crew travel
expenses, including food, lodging, and ground transportation;

 

c.               Hangar and tie-down
costs when the Aircraft is required by the Executive to be away from the
Aircraft’s base of operation;

 

d.              Insurance obtained
for the specific flight;

 

e.               Landing fees,
airport taxes, and similar assessments;

 

f.                 Customs, foreign
permit, and similar fees directly related to the flight;

 

g.              In-flight food and
beverage;

 

h.              Passenger ground
transportation; and

 

 

i.                  Flight planning
and weather contract services.

 

Notwithstanding
the foregoing, the amount or allocable share of such costs shall not, in any
event, exceed the costs permitted to be charged by the Company to the Executive
pursuant to Section 91.501(d) of the FAR, as the same may be
revised from time to time.

 

3.                                       Payments.
The Company will invoice the Executive for the costs and expenses of specific
flights as incurred. The invoices will be due within thirty (30) days of
receipt. Payment of such invoices shall be made in full to the Company at 5795
Lindero Canyon Road, Westlake Village, CA, 91362, or as otherwise agreed by the
parties.

 

4.                                       Taxes.
The amounts payable by the Executive under FAR Section 91.501(d) for
leasing the Aircraft will be increased by the applicable federal excise tax as
imposed under Internal Revenue Code Section 4261. It is the responsibility
of the Company to collect and remit the tax on the amounts paid. The Company is
responsible for the collection and payment of all other State or Federal taxes
that may arise from the transactions contemplated by this Agreement.

 

5.                                       Operational
Control. At all times when the Aircraft is leased by the Executive pursuant
to this Agreement, the Company shall be responsible for, and retain full and
complete operational control of, the Aircraft. The Company is responsible for
providing the crew, the physical and technical operation of the Aircraft, and
the safe performance of all flights. The Company will furnish two experienced
and competent pilots satisfactory to the Executive on all occasions when the
Aircraft is in use pursuant to this Agreement. Such pilots shall be under the
direction and control of the Company at all times. One of such pilots shall be
the captain of the Aircraft and shall have full control of its operations at
all times, and the judgment of such pilot as to the suitability of the weather,
terrain, mechanical condition or capacity of the Aircraft and other similar
decisions shall be conclusive.

 

6.                                       Aircraft
Use. The Company and the Executive agree to use the Aircraft in accordance
with the time sharing provisions contained in 91.501 of the FAR, as well as any
other applicable portions of FAR Part 91.

 

7.                                       Maintenance.
The Company, at its own cost and expense, will service, maintain and repair the
Aircraft in compliance with all maintenance standards of the Aircraft and all
requirements of FAR Part 91. The Company will also provide suitable hangar
and storage facilities for the Aircraft at its own expense. Aircraft
maintenance and inspection takes precedence over Aircraft scheduling unless
such maintenance or inspections can be safely deferred in accordance with
applicable laws and regulations and within the sound discretion of the captain.

 

8.                                       Insurance.
The Company, at its own expense, shall maintain liability insurance upon the
Aircraft with limits for bodily injury and for property damage which are
satisfactory to Executive.

 

9.                                       Indemnification.
The Company agrees to indemnify, defend, and hold the Executive harmless from
any claims, suits, liabilities, losses, costs or expenses for injury to persons
or damage to property arising in any way out of the operation of the Aircraft
pursuant to this Agreement.

 

2

 

10.                                 Effective
Date; Term. This Agreement shall be effective as of April 1, 2005 and
shall continue in full force and effect for a term of one year, and shall
thereafter be automatically renewed for continuous periods of one year without
re-execution. Notwithstanding the immediately preceding sentence, either party may terminate
this Agreement at any time for any or no reason by giving thirty (30) days’
prior written notice to the other party of its intention to terminate. This
Agreement supersedes any prior agreements between the parties relating to
Aircraft operations and use.

 

11.                                 Assignment.
No party shall have the right to assign its interests or rights hereunder, in
whole or part, without the prior written consent of the other party, except
that the Company may assign its interest hereunder to a wholly-owned
affiliate without the consent of the Executive.

 

12.                                 Notice.
Any statement, consent, or notice required or permitted by this Agreement shall
be given by mail or hand delivery to the party concerned at the addresses
listed above, except that notice with respect to the operation or use of the
Aircraft may be given by telephone.

 

13.                                 Warranties.
The Executive warrants to the Company that, during the Executive’s lease of the
Aircraft, the Aircraft shall not be used or employed, except as authorized by
the FAR. The Company warrants that the Aircraft has been maintained under Part 91
of the FAR from the date of the Company’s purchase of the Aircraft to the date of
this Agreement.

 

14.                                 No
Carriage For Compensation or Hire. It is understood and agreed that the
Company and the Executive shall neither sell seats to passengers or space for
cargo, nor in any other manner use the Aircraft for the carriage of goods or passengers
for compensation or hire, and that the Aircraft shall be operated within the
applicable rules of Part 91 Subpart F of the FAR during the term
of this Agreement.

 

15.                                 Counterparts.
This Agreement may be executed in counterparts, all of which when executed
shall constitute an original.

 

16.                                 Governing
Law. This Agreement shall be governed by and construed in accordance with
the laws of the State of California, without regard to the conflicts of laws
provisions thereof.

 

17.                                 Truth-In-Leasing
Statement Under FAR 91.23.

 

AN EXECUTED COPY
OF THIS AGREEMENT WILL BE MAILED TO THE FEDERAL AVIATION ADMINISTRATION, FLIGHT
STANDARDS TECHNICAL DIVISION, POST OFFICE BOX 25724, OKLAHOMA CITY, OKLAHOMA
73125, WITHIN 24 HOURS OF THE TIME OF EXECUTION HEREOF.

 

THE AIRCRAFT
REFERENCED HEREIN HAS BEEN MAINTAINED AND INSPECTED UNDER FAR PART 91 FOR
THE ENTIRE PERIOD FROM THE DATE OF THE COMPANY’S PURCHASE OF THE AIRCRAFT TO
THE DATE HEREOF. SAID AIRCRAFT WILL BE MAINTAINED AND INSPECTED UNDER PART 91
OF THE FEDERAL AVIATION REGULATIONS FOR OPERATIONS TO BE CONDUCTED UNDER THIS
AGREEMENT DURING THE DURATION OF THIS AGREEMENT.

 

3

 

THE COMPANY,
LOCATED AT THE ABOVE LISTED ADDRESS, IS CONSIDERED TO BE IN OPERATIONAL CONTROL
OF THE AIRCRAFT AND UNDERSTANDS AND IS FAMILIAR WITH ITS RESPONSIBILITIES WITH
REGARD TO THE OPERATION OF AIRCRAFT UNDER THE FEDERAL AVIATION REGULATIONS.

 

A COPY OF THIS
AGREEMENT SHALL BE CARRIED ON THE AIRCRAFT AT ALL TIMES AND SHALL BE MADE
AVAILABLE FOR REVIEW UPON REQUEST BY THE ADMINISTRATOR OR HIS REPRESENTATIVE.

 

AN EXPLANATION OF
THE FACTORS BEARING ON OPERATIONAL CONTROL AND THE PERTINENT FEDERAL AVIATION
REGULATIONS CAN BE OBTAINED FROM THE NEAREST FAA FLIGHT STANDARDS DISTRICT
OFFICE.

 

THE COMPANY CERTIFIES
THAT IT UNDERSTANDS ITS RESPONSIBILITIES FOR COMPLIANCE WITH APPLICABLE FEDERAL
AVIATION REGULATIONS.

 

IN WITNESS WHEREOF, the
parties hereto have caused this Agreement to be executed on their behalf by
their duly authorized representatives as of the date first above written.

 

	
  Company:

  	
  Executive:

  
	
   

  	
   

  
	
  GUITAR CENTER, INC.

  	
  MARTY ALBERTSON

  
	
   

  	
   

  
	
  By: 

  	
  /s/ Leland P.
  Smith

  	
   

  	
  /s/ MARTY
  ALBERTSON

  	
   

  
	
   

  	
   

  
	
  Name: Leland P.
  Smith

  	
   

  
	
   

  	
   

  
	
  Title: Executive
  Vice President

  	
   

  
					

 

4Exhibit 10.2

 

TRANSITION AGREEMENT

 

This Transition Agreement (the “Agreement”) is
made effective as of February 10, 2006, by and between Bruce L. Ross (“Executive”)
and Guitar Center, Inc., a Delaware corporation (the “Company”),
with reference to the following facts:

 

A.                                   Executive and
the Company are parties to that certain Third Amended and Restated Employment
Agreement, dated as of July 1, 2003, as amended by Amendment No. 1 to
Third Amended and Restated Employment Agreement, dated as of January 1,
2004 (collectively, the “Employment Agreement”).

 

B.                                     Executive’s status
as Chief Financial Officer of the Company will end due to a voluntary resignation
from such office effective on March 31, 2006 (the “Officer Cessation Date”),
and Executive’s status as an employee of the Company will end effective on June 30,
2006.

 

C.                                     Executive and
the Company desire to assure a smooth and effective transition of Executive’s
duties to his successor and to wind-up their employment relationship amicably.

 

D.                                    Section 4(f) of
the Employment Agreement provides that as a condition to Executive’s receipt of
any post termination benefits described therein, Executive shall be required to
execute a release of all claims.

 

NOW, THEREFORE, in consideration of the mutual
covenants and agreements hereinafter set forth, the parties agree as follows:

 

1.                                       Termination Date. Executive
acknowledges that his status as Chief Financial Officer shall end due to his
voluntary resignation from such office on March 31, 2006, and his employment
with the Company will end due to his voluntary resignation as an employee
effective June 30, 2006 (the “Termination Date”).

 

2.                                       Separation Payments and Benefits. Without admission of any liability, fact or claim, the
Company hereby agrees, subject to the execution hereof by both parties and Executive’s
performance of his continuing obligations pursuant to this Agreement and the Employment
Agreement, to provide Executive the severance benefits set forth in Section 3(b) of
the Employment Agreement and certain other benefits. Specifically, the Company and
Executive agree as follows:

 

(a)                          Base Salary and Severance
Benefit. The Company shall continue to pay to Executive his base
salary of $320,000 per annum (“Base Salary”) through the Termination
Date in accordance with the Company’s normal payroll practices. In addition,
the Company shall pay to Executive, as a severance benefit, an amount equal to
his Base Salary for the one year period beginning July 1, 2006 and ending June 30,
2007 (the “Severance Period”), with the portion of such amount payable
during the Severance Period to be paid as follows: (i) no payment shall be
made during the period from July 1, 2006 through December 31, 2006, (ii) no
later than January 10, 2007, the Company shall make a lump-sum cash payment
of $160,000, plus an interest payment equal to the prime rate (or similar base
rate) of interest as published from time to time by Wells Fargo Bank, N.A. (“WFB
Prime Rate”) to reflect the payment of such amount in a deferred lump sum
instead of on a periodic basis in accordance with the Company’s normal payroll
practices, and (iii) for the period January 1, 2007 through June 30,
2007, the severance benefit shall be paid on a periodic basis in accordance
with the Company’s normal payroll practices. All of the payments required to be
made to Executive in respect during the Severance Period shall be 

 

1

 

payable
to Executive irrespective of his death, disability or commencement of other
employment and none of the severance benefits payable hereunder shall be
reduced due to any other remuneration received by Executive from providing
personal services during the Severance Period.

 

(b)                         Bonus. At the same time as bonuses are paid to other
executives, and in any event no later than March 14, 2007, the Company
shall pay to Executive, as additional severance, and in lieu of any entitlement
to a bonus, a lump-sum amount of $270,000.

 

(c)                          Business Expenses. The Company shall reimburse Executive
for all outstanding expenses incurred prior to the Termination Date and in the
course of performing Executive’s duties as an employee of the Company which are
consistent with the Company’s policies in effect from time to time with respect
to travel, entertainment and other business expenses, subject to the Company’s
requirements with respect to reporting and documenting such expenses.

 

(d)                         Healthcare. With respect to healthcare
benefits, Executive and his family members shall continue to be enrolled in the
Company’s healthcare plans until the Termination Date, and shall have all the healthcare
benefits provided to all other full time employees participating therein on the
same basis as Executive has heretofore participated (subject to any change in
such plans that affects all participants). Thereafter, so long as Executive is
eligible, the Company shall pay, pursuant to the provisions of the Consolidated
Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), the
monthly premium for Executive through June 30, 2007; provided, however,
that for the period July 1, 2006 through December 31, 2006, the
Executive shall advance such payments, which shall be reimbursed by the
Company, with interest at the WFB Prime Rate from the date paid, no later than January 10,
2007. For the period January 1, 2007 through June 30, 2007, the
Company shall pay such premiums directly. After the Severance Period, Executive
may, if eligible, elect to continue healthcare coverage at his expense under
the provisions of COBRA.

 

(e)                          Automobile Benefit. Executive’s Company automobile
benefit consisting of lease payments and insurance shall continue through June 30,
2007; provided, however, that for the period July 1, 2006
through December 31, 2006, the Executive shall advance such all payments,
which shall be reimbursed by the Company, with interest at the WFB Prime Rate
from the date paid, no later than thirty days after Executive has submitted
appropriate documentation consistent with the Company’s requirements with
respect to reporting and documenting such expenses (but in no event shall
payment be required prior to January 10, 2007). For the period January 1,
2007 through June 30, 2007, the Company shall reimburse such expenses
promptly after they are incurred. Effective July 1, 2007, Executive may either
assume the lease obligation on the car, or return it to the Company which will
then accept all further responsibility. Executive agrees that usage of the
vehicle will be consistent with his historical practices.

 

(f)                            Stock Options. The Company and Executive acknowledge
that they are parties to stock option agreements representing Executive’s right
to purchase an aggregate of 107,000 shares of Guitar Center’s common stock as
summarized on Exhibit A to this Agreement (collectively the “Stock
Option Agreements”). Guitar Center and Executive acknowledge that the Stock
Option Agreements remain in full force and effect in accordance with their
terms and the related plan documents and agree that (i) any such 

 

2

 

options
which were granted under the Stock Option Agreements and were not vested on or
before the Termination Date shall become fully exercisable on the Termination
Date and (ii) Executive agrees to exercise such options, if at all, (A) on
or before December 29, 2006 in the case of stock-options identified as “non-qualified
stock options” on Exhibit A, and (B) on or before the 90th day after the Termination Date in the case
stock options identified as “incentive stock options” on Exhibit A,
subject to any extended exercise period provided in the Option Agreements (or
the plans under which the options have been granted) due to death or disability.
Any unexercised options granted under the Stock Option Agreements which remain
unexercised as of the close of business on the last date that such option is
exercisable pursuant to the immediately preceding sentence shall immediately
thereafter terminate and be of no further force or effect. Executive further
acknowledges that he will have continuing obligations under Section 16(a) and
16(b) of the Securities Exchange Act of 1934, as amended to report his
transactions in Company common stock for six months subject to the termination
of his status as an executive officer of the Company on the Officer Cessation
date.

 

(g)                         LTIP and Other Arrangements. For the avoidance of doubt, the
Company and Executive acknowledge and agree that Executive will not be eligible
to receive any award under the Guitar Center, Inc. 2005 Long Term
Incentive Plan or any other compensation arrangement except as otherwise
expressly provided for herein.

 

(h)                         Taxes. Executive understands and agrees that all payments
under this Agreement will be subject to appropriate tax withholding and other deductions, as and to the extent required by law. To the
extent any taxes may be payable by the Executive for the benefits provided
to him by this Agreement beyond those withheld by the Company, the Executive
agrees to pay them himself and to indemnify and hold the Company and the other
entities released herein harmless for any tax claims or penalties, and
associated attorneys’ fees and costs, resulting from any failure by him to make
required payments

 

(i)                             Sole Separation Benefit. Executive agrees that the payments
provided by this Agreement are not required under the Company’s normal policies
and procedures and are provided as a severance solely in connection with this
Agreement and the Employment Agreement. Executive further acknowledges and
agrees that the payments referenced in this Agreement constitute adequate and valuable
consideration, in and of themselves, for the promises contained in this
Agreement.

 

3.                                       Full Payment; Termination of Employment Agreement; Survival. Executive acknowledges that the payment and arrangements
herein shall constitute full and complete satisfaction of any and all amounts
properly due and owing to Executive as a result of his employment with the
Company and the termination thereof, and upon satisfaction of the Company’s
obligations hereunder the Employment Agreement shall be terminated without any
further obligation of the Company; provided, however, that (a) Sections
5, 6, 7 (except subsections (a)(i) and (a)(ii)), 10, 11 and 12 thereof are
incorporated herein by this reference and shall survive termination of the
Employment Agreement, it being expressly understood that the provisions of Section 12(a)(iii) of
the Employment Agreement apply to any payments that the Company is otherwise
required to make hereunder after the Termination Date, and (b) the Company
and Executive acknowledge that (i) they are parties to an Indemnification
Agreement by and between the Company and Executive, dated May 28, 2004
(the “Indemnification Agreement”), (ii) the Indemnification
Agreement remains and shall remain following the Termination Date in full force
and effect in accordance with it terms and (iii) nothing in this Agreement
shall in any way limit or terminate the Company’s continuing obligation to
indemnify Executive under the Indemnification Agreement, the Company’s Restated
Certificate of Incorporation, 

 

3

 

the Company’s
Bylaws, Delaware General Corporation Law or other applicable legal requirement
or the availability of Executive to access any relevant policies of insurance
maintained by the Company (collectively, clauses (a) and (b) represent
the “Surviving Obligations”).

 

4.                                       General Release. As a
material inducement for the Company to enter into this Agreement, and in
exchange for the performance of the Company’s obligations under this Agreement
provided for herein, Executive knowingly and voluntarily waives and releases
all rights and claims, known and unknown, which Executive may have against
the Company and/or any of the Company’s related or affiliated entities or
successors, or any of their current or former officers, directors, managers,
employees, agents, insurance carriers, auditors, accountants, attorneys or
representatives, including any and all charges, complaints, claims,
liabilities, obligations, promises, agreements, contracts, controversies, damages,
actions, causes of action, suits, rights, demands, costs, losses, debts and
expenses of any kind. This includes, but is not limited to, claims for
employment discrimination, harassment, wrongful termination, constructive
termination, violation of public policy, breach of any express or implied
contract, breach of any implied covenant, fraud, intentional or negligent
misrepresentation, emotional distress, defamation, or any other claims relating
to Executive’s relationship with the Company. This also includes a release of
any claims under any federal, state or local laws or regulations, including,
but not limited to: (1) Title VII of the Civil Rights Act of 1964, 42
U.S.C. § 2000(e) et  seq. (race, color, religion, sex,
and national origin discrimination); (2) the Age Discrimination in
Employment Act, 29 U.S.C. § 621 et  seq. (age
discrimination); (3) Section 1981 of the Civil Rights Act of 1866, 42
U.S.C. 1981 (race discrimination); (4) the Equal Pay Act of 1963, 29
U.S.C. § 206 (equal pay); (5) the California Fair Employment and
Housing Act, Cal. Gov’t. Code §12900, et  seq. (discrimination,
including race, color, national origin, ancestry, disability, medical
condition, marital status, sex, sexual orientation; sexual or racial harassment
and age); (6) the California Labor Code § 200, et  seq.
(salary, commission, compensation, benefits and other matters); (7) the
Fair Labor Standards Act, 29 U.S.C. § 201, et  seq. (wage and
hour matters, including overtime pay); (8) COBRA; (9) Executive Order
11141 (age discrimination); (10) Section 503 of the Rehabilitation
Act of 1973, 29 U.S.C. § 701, et  seq. (disability
discrimination); (11) the Executive Retirement Income Security Act of 1974, as
amended, 29 U.S.C. § 1001, et  seq. (employee benefits); (12)
Title I of the Americans with Disabilities Act (disability discrimination);
(13) California Labor Code Section 132(a) (discrimination based on
filing a workers’ compensation claim); (14) California Civil Code § 1786, et seq. (investigation reports); (15) any
applicable California Industrial Welfare Commission Order (wage matters); and
(16) Oregon Revised Statutes Section 659A.001, et  seq. (employment
discrimination and Oregon Family Leave Act). Notwithstanding the foregoing, it
is expressly agreed that Executive does not hereby release (a) any of the Surviving
Obligations, or (b) any breach by the Company of the terms of this
Agreement. The matters that are the subject of the releases referred to in this
Paragraph 4 of this Agreement shall be referred to collectively as the “Released
Matters”.

 

5.                                       Acknowledgements Related to ADEA. Executive understands and acknowledges that:

 

(a)                          This
Agreement constitutes a voluntary waiver of any and all rights and claims he
has against the Company as of the date of the execution of this Agreement,
including rights or claims arising under the federal Age Discrimination in
Employment Act, 29 U.S.C. 621, et  seq.

 

(b)                         He has
waived rights or claims pursuant to this Agreement and in exchange for
consideration, the value of which exceeds payment or remuneration to which Executive
was already entitled.

 

4

 

(c)                          He is hereby
advised that he may consult with an attorney of his choosing concerning
this Agreement prior to executing it.

 

(d)                         He has been
afforded a period of at least twenty one (21) days to consider the terms of
this Agreement, and in the event he should decide to execute this Agreement in
fewer than twenty one (21) days, he has done so with the express understanding
that he has been given and declined the opportunity to consider this Agreement
for a full twenty one (21) days.

 

(e)                          He may revoke
this Agreement at any time during the seven (7) days following the date of
execution of this Agreement, and this Agreement shall not become effective or
enforceable until such revocation period has expired.

 

6.                                       Transition and Consulting.
Executive further agrees that:

 

(a)                          Transition. Each of the Company and the
Executive shall use their respective reasonable commercial efforts from the
date hereof through the Termination Date to cooperate with each other in good
faith to facilitate a smooth transition of Executive’s duties to other
executives of the Company.

 

(b)                         Consulting. From July 1, 2006 through October
1, 2006, Executive shall be available, on a non-exclusive basis, as a
consultant to respond to inquiries from the Company regarding transitional
matters, including but not limited to discussion of SEC filings made prior to
the March 31, 2006, providing insight into relationships with appropriate
parties in the investment community with the goal of facilitating the
transition of those relationships to the new CFO of the Company and other input
and analysis, the goal of which to enhance the effectiveness of the new CFO of
the Company, provided that such inquiries would not interfere in any
significant manner with other business pursuits (including other employment) by
Executive.  The parties agree that the
consideration provided for in this Agreement shall be sufficient to constitute
adequate consideration for the fair value of the foregoing consulting
undertakings.

 

(c)                          Transfer of Company Property. On or before the Termination Date, he will turn over to the
Company all files, memoranda, records, and other documents, and any other
physical or personal property which are the property of the Company and which
he had in his possession, custody or control at the time he signed this
Agreement; provided, however, that Executive shall be able to keep his current
lap top computer, provided by the Company; and provided, further, that
Executive may retain his cellular phone (Blackberry) so long as the
service obligation is promptly transferred to Executive following the
Termination Date.

 

7.                                       California Section 1542 Waiver. Executive acknowledges that there is a risk that subsequent
to the execution of this Agreement, he may incur or suffer damage, loss or
injury to persons or property that is in some way caused by or connected with Executive’s
employment or the termination thereof, but that is unknown or unanticipated at
the time of the execution of this Agreement. Executive does hereby specifically
assume such risk and agrees that this Agreement and the releases contained
herein shall and do apply to all unknown or unanticipated results of any and
all matters caused by or connected with Executive’s employment or the
termination thereof, as well as those currently known or anticipated. Accordingly,
Executive acknowledges that he has read the provisions of California Civil Code
Section 1542, which provides as follows:

 

A general release does not extend to claims which the creditor does not
know or suspect to exist in his or her favor at the time of executing the
release, which if known to him or her must have materially affected his or her settlement
with the debtor

 

5

 

and
that he expressly waives, relinquishes and forfeits all rights and benefits
accorded by the provisions of California Civil Code Section 1542, and
furthermore waives any rights that he might have to invoke said provisions or
other States’ laws of similar effect now or in the future with respect to the
releases contained herein.

 

8.                                       Executive Representations.
Executive warrants and represents that (a) he has not filed or authorized
the filing of any complaints, charges or lawsuits against the Company with any
governmental agency or court, and that if, unbeknownst to Executive, such a
complaint, charge or lawsuit has been filed on his behalf, he will immediately
cause it to be withdrawn and dismissed, (b) he has reported all hours
worked as of the date of this Agreement and has been paid all compensation,
wages, bonuses, commissions, and/or benefits to which he may be entitled
and no other compensation, wages, bonuses, commissions and/or benefits are due to
him, except as provided in this Agreement, (c) he has no known workplace
injuries or occupational diseases and has been provided and/or has not been
denied any leave requested under the Family and Medical Leave Act, the
California Family Rights Act or the Oregon Family Leave Act, (d) the
execution, delivery and performance of this Agreement by the Executive does not
and will not conflict with, breach, violate or cause a default under any
agreement, contract or instrument to which the Executive is a party or any
judgment, order or decree to which the Executive is subject, and (e) upon
the execution and delivery of this Agreement by the Company and the Executive,
this Agreement will be a valid and binding obligation of the Executive,
enforceable in accordance with its terms.

 

9.                                       No Assignment. Executive
warrants and represents that no portion of any of the Released Matters, and no
portion of any recovery or settlement to which Executive might be entitled, has
been assigned or transferred to any other person, firm or corporation not a
party to this Agreement, in any manner, including by way of subrogation or
operation of law or otherwise. If any claim, action, demand or suit should be
made or instituted against the Company because of any such purported assignment,
subrogation or transfer, Executive agrees to indemnify and hold harmless the
Company against such claim, action, suit or demand, including necessary
expenses of investigation, attorneys’ fees and costs.

 

10.                                 Company Representations. The Company warrants and represents that
the execution, delivery and performance of this Agreement by the Company has
been duly authorized and that this Agreement constitutes the valid and binding
obligation of the Company, enforceable in accordance with its terms.

 

11.                                 Miscellaneous. This
Agreement is the entire agreement between the parties with regard to the
subject matter hereof. Executive acknowledges that there are no other
agreements, written, oral or implied, and that he may not rely on any
prior negotiations, discussions, representations or agreements. This Agreement may be
modified only in writing, and such writing must be signed by both parties and
recited that it is intended to modify this Agreement. This Agreement may be
executed in separate counterparts, each of which is deemed to be an original
and all of which taken together constitute one and the same agreement. In the
event of any material breach of this Agreement, not cured within ten (10) days
after written notice, the non-defaulting party shall have all rights and
remedies available under law.

 

(Signature page(s) follow)

 

6

 

IN WITNESS WHEREOF, the undersigned have caused this
Transition Agreement to be duly executed and delivered as of the date indicated
next to their respective signatures below.

 

	
  DATED: February 14, 2006

  	
   

  
	
   

  	
     BRUCE L. ROSS

  	
   

  
	
   

  	
  Bruce L. Ross

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GUITAR CENTER, INC.

  
	
  DATED: February 14, 2006

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
     LELAND P. SMITH

  	
   

  
	
   

  	
   

  	
        Leland P. Smith

  	
   

  
	
   

  	
   

  	
        Executive Vice President

  	
   

  

 

S-1

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00097-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00097-of-00352.parquet"}]]