Document:

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                                                                 EXHIBIT - 10.23

                             SEVERANCE AGREEMENT AND
                          GENERAL RELEASE OF ALL CLAIMS

      By the terms of this Severance Agreement and General Release of all Claims
("RELEASE") and in consideration of the promises made herein and for good and
valuable consideration described below, intending to be legally bound, the
undersigned STANLEY GOMAN ("GOMAN"), on behalf of himself, his heirs, executors,
administrators, and assigns, does hereby fully release, acquit and discharge,
separately and jointly, MTS, INCORPORATED dba TOWER RECORDS, as well as its
officers, directors, shareholders, managers, agents, employees, heirs,
affiliates, parent companies, subsidiaries, successors, assigns and all other
persons and associations (also referred to as "COMPANY"), from any and all
claims, demands, suits, losses, contracts, liabilities, obligations and causes
of action, known or unknown, whether in law or in equity, including but not
limited to claims for discrimination under the Fair Employment and Housing Act,
Title VII of the Civil Rights Act of 1964, and the Age Discrimination in
Employment Act (ADEA), claims under the Worker Adjustment and Retraining
Notification (WARN) Act, wrongful termination, claims under any provision of the
California Labor Code, breach of contract, breach of public policy, physical or
mental harm or distress or any other claims, which now exist or may arise from
any matter, fact, circumstance, happening or thing whatsoever, occurring or
failing to occur prior to the execution of this RELEASE, relating to or in any
connection with GOMAN'S employment with COMPANY (collectively "Claims") to the
full extent permitted by law.

      1. Consideration

      (a) In consideration for the execution of this RELEASE, COMPANY agrees to
pay GOMAN the total sum of one million, forty-nine thousand, six hundred
seventeen dollars ($1,049,617.00), which amount shall be paid in equal biweekly
installments, less applicable payroll deductions consistent with GOMAN's most
recent W-4 form on file with COMPANY, over thirty-five (35) months beginning
with the next scheduled payroll date that is eight (8) calendar days after the
COMPANY receives the executed RELEASE.

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      (b) As further consideration for this RELEASE, COMPANY agrees to forgive
all merchandise debt or other personal loans extended by COMPANY to GOMAN as of
October 14, 2002, provided that GOMAN is responsible for all tax withholding and
tax liability resulting from such debt and loan forgiveness.

      (c) As further consideration for this RELEASE, COMPANY agrees to pay
continuation of Company provided Health Insurance coverage (includes medical,
vision and dental) for GOMAN and his dependents for twelve (12) months,
beginning the first date of the first month following the Termination Date
(defined below) as long as GOMAN elects COBRA continuation coverage and as long
as COMPANY continues to provide these coverages to its employees. The necessary
forms for COBRA continuation coverage will be provided by MTS' Human Resources
department as required by law.

      (d) COMPANY further agrees to pay up to $6,000 for GOMAN to utilize three
(3) months of executive-level out-placement assistance provided by Right
Management Consultants provided that said service is utilized on or before
December 2003.

      (e) COMPANY agrees that GOMAN and his wife may receive employee discounts
(to the extent that employees continue to receive said discounts) with COMPANY
for life, not to exceed one thousand ($1,000) dollars of discounted merchandise
purchased per calendar year. GOMAN agrees to monitor the purchases made by
himself and his wife to ensure that no more than one thousand ($1,000) dollars
of discounted merchandise is purchased in any given calendar year.

      (f) COMPANY and GOMAN agree that GOMAN shall be entitled to keep
twenty-one (21) pairs of the COMPANY season tickets to Sacramento Kings' home
games (regular season 2002-2003). The parties agree that GOMAN has already
returned the tickets he is not entitled to and has already been given the
tickets he may keep. GOMAN retains no further rights to any of the COMPANY's
Sacramento Kings tickets.

      (g) The parties agree that the compensation to be paid pursuant to section
1 of this RELEASE is specifically paid and designated to compensate GOMAN fully
and totally for his release of any and all

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known and unknown CLAIMS arising from or associated with his employment or the
separation of his employment with COMPANY, except for vested benefits accrued
during his employment.

      (h) COMPANY makes no representations as to the taxable status of the
consideration paid pursuant to this RELEASE. If at some future date it should be
determined by any taxing entity that some portion or all of the amount
referenced above should be treated differently, GOMAN agrees to be solely
responsible for characterizing, allocating and reporting to taxing agencies the
consideration stated herein, and for paying any taxes, assessments, charges or
penalties that may be attributable to the consideration.

      (i) GOMAN and COMPANY agree that this RELEASE shall not be construed as a
waiver of any rights GOMAN may have under section 2802 of the California Labor
Code for indemnification if GOMAN is subject to a third-party claim made arising
out of conduct he engaged in within the course of his employment.

      (j) COMPANY agrees to provide one positive letter of recommendation for
GOMAN signed by Michael T. Solomon or Russell Solomon, upon request.

      2. GOMAN hereby expressly acknowledges that his employment relationship
with COMPANY terminates effective October 18, 2002 ("Termination Date").

      3. GOMAN acknowledges that he has received payment for all wages and other
compensation owed to him through the Termination Date, except for his accrued,
unused vacation. GOMAN specifically requested that he not be paid his accrued,
unused vacation until January 2003 and specifically waives any rights he may
have to penalties under section 203 of the California Labor Code because he
requested the delay of payment. COMPANY agrees that it will pay GOMAN his
accrued, unused vacation in January 2003, on or before January 3, 2003 via mail.

      4. GOMAN covenants that at no time subsequent to the execution of this
RELEASE will he file or maintain, or cause or permit the filing or maintenance
of, in any state, federal or foreign court, or before any local, state, or
federal administrative agency, or any other tribunal, a lawsuit of any kind,
nature and character whatsoever, which he may have, has ever had, or may in the
future have against

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COMPANY which is based in whole or in part on any matter relating to or in any
connection with his employment with COMPANY, except for vested benefits accrued
during his employment.

      5. GOMAN further expressly acknowledges that in executing this RELEASE he
is waiving both known CLAIMS, as well as claims that he does not know about.
GOMAN expressly acknowledges that this RELEASE constitutes a waiver of all
claims of any kind, whether known or unknown, foreseen or unforeseen, suspected
or unsuspected; and in furtherance of this intention, GOMAN expressly waives and
relinquishes all rights and benefits under Section 1542 of the California Civil
Code which provides:

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

      6. This RELEASE does not constitute an admission of liability or
wrongdoing. Neither the execution and delivery of this RELEASE nor any payments
nor the performance of any acts in connection therewith shall be construed at
any time or place to be an admission by COMPANY that they at any time performed
or failed to perform any act, which performance or failure to perform was or is
in violation of the rights of GOMAN and/or which performance or failure to
perform gives rise to any valid claim for damages or any other relief
whatsoever.

      7. GOMAN represents that he has returned to the COMPANY, all COMPANY
files, memoranda, documents, records, tapes, computer disks, computers, copies
of the above items, credit cards, keys, and any other COMPANY property in
GOMAN'S possession. COMPANY acknowledges that GOMAN has received certain items
from his MTS office and the parties agree that he is entitled to keep these
items.

      8. GOMAN agrees that he shall not disclose, provide or reveal, directly or
indirectly, any confidential information, proprietary information, or trade
secrets of COMPANY, and that he shall hold such information in the strictest
confidence. GOMAN may only reveal such information when compelled to do so by a
valid subpoena, court order, or as otherwise compelled by law, but in either
case only after

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providing MTS INCORPORATED's Legal Department with prior written notice and
opportunity to contest such subpoena or other requirement. Written notice shall
be provided as soon as practicable, but in no event less than five (5) business
days prior to any such disclosure or, if later, within one business day after
GOMAN receives notice compelling such disclosure.

      9. Non-Disparagement - GOMAN agrees that he will not knowingly make,
repeat, or authorize any statements, comments, remarks or publications of any
type or of any nature which would disparage the reputation of COMPANY, or its
current and former directors, officers, employees, and shareholders, or any of
them, at any time in the future (collectively, "DISPARAGING REMARKS"). This
includes but is not limited to DISPARAGING REMARKS as to any events,
circumstances, occurrences, interactions, transactions, observations or dealings
of any kind, at any time, involving GOMAN, COMPANY, or both.

      10. GOMAN represents and warrants that no other person had, or has, or
claims any interest in the claims referred to in this RELEASE; that he has the
sole right and exclusive authority to execute this RELEASE and to receive the
consideration therefore; and that he has not sold, assigned, transferred,
conveyed or otherwise disposed of any claim or demand relating to the CLAIMS
herein.

      11. GOMAN agrees that he shall keep the terms of this Agreement, including
the amount of consideration referred to in Paragraph 1, CONFIDENTIAL, and he
promises and covenants not to disclose, publicize, or cause to be disclosed or
publicized in any manner, directly or indirectly, the terms or conditions of
this Agreement except (i) to his accountants, auditors, insurance agents,
insurance companies or adjusters, financial advisors, attorneys, and spouse,
provided GOMAN first ensures that such persons also agree to this pledge of
confidentiality, (ii) to state and federal taxing authorities, and (iii) as
legally required when compelled by applicable law (i.e. under subpoena) and then
only under the procedures set forth in section 8 of this RELEASE. GOMAN
acknowledges that confidentiality is a key and material provision of this
RELEASE and that a violation of this provision could result in significant

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consequences to COMPANY and shall be considered a material breach of the
RELEASE, providing COMPANY with all available remedies under law.

      12. GOMAN agrees that he will cooperate with COMPANY with regard to
defending or prosecuting any future claims, lawsuits or actions which arose
during GOMAN'S employment with COMPANY, which may require GOMAN'S testimony,
deposition, or advice. COMPANY will reimburse GOMAN for any reasonable travel
related expenses he incurs in conjunction with said cooperation providing that
GOMAN obtains preapproval for said reimbursement from Michael Solomon or the
highest level employee in MTS' human resources department prior to incurring the
expense.

      13. GOMAN expressly states that he has read this RELEASE and understands
all of its terms. GOMAN represents and acknowledges that he has not relied on
any oral or other extraneous representations in agreeing to execute this RELEASE
and that this RELEASE is executed voluntarily and with full knowledge of its
significance.

      14. ACKNOWLEDGEMENTS:

            (a) GOMAN understands, represents and acknowledges that COMPANY has
      given him forty-five (45) days to consider whether or not to execute this
      RELEASE;

            (b) GOMAN understands, represents and acknowledges that he has been
      encouraged to consult with a financial advisor, accountant, attorney
      and/or other advisor before deciding whether or not to sign this RELEASE.
      COMPANY encourages GOMAN to seek legal counsel before entering into this
      RELEASE.

            (c) After executing this RELEASE, GOMAN understands, represents and
      acknowledges that he has seven (7) calendar days from the date of
      execution ("revocation period") to revoke his agreement to the terms of
      this RELEASE. The parties agree and understand that any revocation under
      this provision must be in writing and received (facsimile acceptable) by
      Shauna Pompei, V.P. Compensation and Benefits, 2500 Del Monte Street, West
      Sacramento, CA 95691 (facsimile - 916-373-2434), by 11:59 p.m. on the last
      day of the revocation period;

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            (d) GOMAN agrees, understands and acknowledges that at the time he
      was presented with this RELEASE he was provided with a document entitled
      EXHIBIT A, which provided the following information: (1) any class, unit
      or group of individuals covered by the REDUCTION IN FORCE, the eligibility
      factors for the REDUCTION IN FORCE, and the time limits applicable to the
      REDUCTION IN FORCE program; and (2) the job titles and ages of all
      individuals eligible or selected for the REDUCTION IN FORCE and the ages
      of the individuals in the same job classification or organizational unit
      who were not selected for the REDUCTION IN FORCE; and

            (e) that in exchange for the consideration given to GOMAN in this
      RELEASE, GOMAN is waiving any known or unknown claims for age
      discrimination including, but not limited to, claims for age
      discrimination under the California Fair Employment and Housing Act and
      Federal Age Discrimination in Employment Act.

      15. This RELEASE is the entire agreement between the parties related to
the termination of GOMAN'S employment with MTS, Incorporated. This RELEASE may
not be modified or changed in any manner nor may any provision of it or any
legal remedy with respect to it be waived except by a writing signed by GOMAN
and the then current President of the Company.

      16. This RELEASE shall be construed under the laws of the State of
California. Venue for any dispute, mediation or arbitration related to this
RELEASE shall be in Sacramento County, California.

      17. Challenging the Releases Contained Herein

      Should GOMAN attempt to legally challenge the enforceability of any part
of the releases contained in this RELEASE, GOMAN must first do the following:
(a) prior to initiating any challenge regarding the enforceability of any
release contained within this RELEASE, deliver a certified or cashier's check to
the COMPANY equal to all monetary benefits he has received pursuant to this
RELEASE, and (b) provide to the COMPANY in writing a statement that all future
benefits or payments that EMPLOYEE is to receive from the COMPANY pursuant to
this RELEASE shall be suspended

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pending the results of the challenge of enforceability. COMPANY shall deposit
the amount that GOMAN has repaid and any payments due during the suspension
period in an interest bearing account pending the determination of
enforceability. If the RELEASE is determined to be enforceable, COMPANY will pay
GOMAN the amount in the interest bearing account and end the suspension of
payments, unless otherwise agreed in writing by the parties. If the RELEASE is
determined to be unenforceable, the amount in the interest bearing account shall
be paid back to the COMPANY and the suspension of any future benefits or
payments shall become permanent, unless otherwise agreed in writing by the
parties.

      18. Dispute Resolution, Claims Related to Release

      Employee and Company agree that any future dispute over this RELEASE, its
terms, or its enforceability shall be resolved under the following procedures:

            (a) The party making a claim or grievance shall present such claim
or grievance and the relief requested to the other party in writing.

            (b) If the other party does not agree to the relief requested or
otherwise satisfy the demand of the party claiming to be aggrieved, the parties
shall submit the dispute to non-binding mediation before a mediator jointly
selected by the parties. If the parties cannot agree on a mediator, a mediator
shall be appointed by the Judicial Arbitration and Mediations Service (JAMS).
The costs of the mediation shall be borne equally by the parties.

            (c) If the mediation does not produce a resolution of the dispute,
the parties agree that the dispute shall be resolved by final and binding
arbitration. Any such dispute shall be submitted to the American Arbitration
Association for binding arbitration. The arbitration shall be conducted by an
arbitrator approved and agreeable by both parties, or if no agreement can be
reached, then selected in accordance with the Employment Rules of the American
Arbitration Association. The arbitrator shall have the authority to resolve the
dispute and interpret the RELEASE. The arbitrator shall not have authority to
add to, modify, blue-line, change or disregard any lawful terms of this
Agreement or to issue

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an award that is contrary to California law. The prevailing party in any such
controversy or claim shall be entitled to reasonable attorneys' fees for actual
hours worked at a reasonable rate, without any premium or multiplier. The
parties shall share in the cost of the arbitration equally, unless otherwise
ordered by the arbitrator for good cause. GOMAN and COMPANY agree that if one
party submits a claim to arbitration that each party will be required to pay
directly to the arbitrator and/or arbitration organization one-half of the
filing and forum fees as required by the arbitrator and/or arbitration
organization.

            (d) Arbitration shall be the exclusive final remedy for any dispute
between the parties relating to the breach, enforceability, or interpretation
this RELEASE.

      19. Dispute Resolution - Claims Not Related to Release

      GOMAN and COMPANY agree that in the event there are any future disputes
between the parties not related to the enforceability, breach, or interpretation
of this RELEASE, said disputes shall be resolved as indicated in the preceding
section, including an award of all reasonable actual attorneys' fees to the
prevailing party. However, in claims not related to this RELEASE, if mediation
is unsuccessful the dispute shall be resolved not through arbitration, but
instead, through the appropriate court of law, without a jury, instead of the
arbitration provisions above. The parties recognize that they are both waiving
certain rights to trial by jury, and do so knowingly in order to hasten the
resolution of any such dispute and minimize costs.

      20. GOMAN and COMPANY each understand and agree that if any provision of
this RELEASE is found to be unenforceable, all other portions shall remain fully
enforceable to the extent permitted by law.

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           PLEASE READ CAREFULLY - RELEASE OF KNOWN AND UNKNOWN CLAIMS

      I agree to all of the foregoing without reservation.

      Executed at ________________________, this ____ day of ____________,2002.

                                            ____________________________________
                                            STANLEY GOMAN

      Executed at ________________________, this ____ day of ____________,2002.

                                            MTS, INCORPORATED

                                            ____________________________________
                                            By:
                                            Its:

                 CERTIFICATE OF ACKNOWLEDGMENT OF NOTARY PUBLIC

STATE OF CALIFORNIA         )

                            )        ss:

COUNTY OF                   )

      ON __________________________, 2002, STANLEY GOMAN appeared before me, the
undersigned, personally appeared, personally known to me or proved to me on the
basis of satisfactory evidence to be the person who executed the within
instrument, and that be his signature on the instrument, the person executed the
instrument. I declare under penalty of perjury that the person whose name is
subscribed to this instrument appears to be of sound mind and under no duress,
fraud, or undue influence.

         WITNESS my hand and official seal.

         _________________________________________
                      Notary Public

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                                    EXHIBIT A

      The following information is provided to you in accordance with the Age
Discrimination in Employment Act, as amended, 29 U.S.C. Section 626(f)(1)(H).

      1.    The class, unit, or group of individuals covered by this program are
            as follows:

            Executive employees affected by the reorganization of the Company
            headquarters in West Sacramento, California, occurring on or about
            October 14, 2002.

      2.    The eligibility factors for this program are as follows:

            Those executive employees terminated as a result of the
            reorganization of the Company headquarters in West Sacramento,
            California on or about October 14, 2002.

      3.    The time limits applicable to this program are as follows:

            The employees were notified of their layoff on or about October 14,
            2002. The employees will each have 45 days to consider the severance
            package presented to them after negotiations are complete.

      4.    The job titles and ages of all individuals affected or selected for
            the reorganization are as follows:

<TABLE>
<CAPTION>
TITLE                                                     AGE
-----                                                     ---
<S>                                                       <C>
Chief Operations Officer/Bayside                          52
Legal Manager/General Counsel                             53
Chief Marketing Officer                                   53
VP & Chief Operating Officer                              54
</TABLE>

      5.    The job titles and ages of all individuals in the same job
            classification or organizational unit, who were not affected or
            selected for the reorganization are as follows:

<TABLE>
<CAPTION>
TITLE                                                     AGE
-----                                                     ---
<S>                                                       <C>
Chief Information Officer                                 40
Senior V.P - Corporate Development                        45
Chief Executive Officer                                   54
Chairman                                                  77
</TABLE>

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                             SUPPLEMENTAL AGREEMENT

      This AGREEMENT is between STANLEY GOMAN, on one hand, and MTS
INCORPORATED, on the other hand.

      This Agreement ("AGREEMENT") supplements and modifies the SEVERANCE
AGREEMENT AND GENERAL RELEASE OF ALL CLAIMS ("SEVERANCE AGREEMENT") presented to
STANLEY GOMAN ("GOMAN") on November 20th, 2002 and already executed on November
20th, 2002 ("Execution Date").

      If GOMAN does not exercise his right to revoke the SEVERANCE AGREEMENT
pursuant to section 14(c) of the SEVERANCE AGREEMENT, MTS INCORPORATED ("MTS" or
"COMPANY") agrees to pay GOMAN the sum of one million ($1,000,000.00), less
mutually agreed upon applicable payroll deductions. Payment shall be made either
by wire transfer, or check available for pick-up by GOMAN within eight (8)
calendar days after the Execution Date or two (2) business days after this
Agreement is fully executed by both parties, whichever comes later.

      COMPANY makes no representations as to the taxable status of the
consideration paid pursuant to this RELEASE. If at some future date it should be
determined by any taxing entity that some portion or all of the amount
referenced above should be treated differently, GOMAN agrees to be solely
responsible for characterizing, allocating and reporting to taxing agencies the
consideration stated herein, and for paying any taxes, assessments, charges or
penalties that may be attributable to the consideration. In addition, GOMAN
agrees to indemnify the COMPANY for any and all tax liability or related
interest or penalties incurred as a result of any taxing entity finding that the
withholdings pursuant to this agreement were insufficient.

      GOMAN agrees that he shall keep the terms of this AGREEMENT, including the
amount of consideration paid under this AGREEMENT, CONFIDENTIAL, and he promises
and covenants not to disclose, publicize, or cause to be disclosed or publicized
in any manner, directly or indirectly, the terms or conditions of this AGREEMENT
except (i) to his accountants, auditors, insurance agents, insurance companies
or adjusters, financial advisors, attorneys, and spouse, provided GOMAN first
ensures that such persons also agree to this pledge of confidentiality, (ii) to
state and federal taxing authorities, and (iii) as legally required when
compelled by applicable law (i.e. under subpoena). GOMAN acknowledges that
confidentiality is a key and material provision of this AGREEMENT and that a
violation of this provision could result in significant consequences to COMPANY
and shall be considered a material breach of this AGREEMENT, providing COMPANY
with all available remedies under law.

      GOMAN expressly states that he has read this AGREEMENT and understands all
of its terms. GOMAN represents and acknowledges that he has not relied on any
oral or other extraneous representations in agreeing to execute this AGREEMENT
and that

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this AGREEMENT is executed voluntarily and with full knowledge of its
significance. GOMAN has been given the opportunity to review this AGREEMENT with
an attorney.

      Should GOMAN attempt to challenge any portion of this AGREEMENT, GOMAN
agrees that he must deliver a certified or cashier's check to the COMPANY equal
to all monetary benefits he has received pursuant to this AGREEMENT before
challenging this AGREEMENT. COMPANY shall deposit the amount that GOMAN has
repaid in a separate interest bearing escrow account pending the determination
of the dispute/grievance. GOMAN further agrees that if the AGREEMENT is
challenged all payments due under this AGREEMENT while the dispute is pending
will cease and be suspended pending resolution of the dispute and that such
payments shall be made to the escrow account and not to GOMAN. The money in
escrow will be distributed in accordance with the parties' agreement, or if no
agreement is reached, then in accordance with the arbitrator's decision.

      GOMAN and COMPANY agree that any future dispute over this AGREEMENT, its
terms, or its enforceability shall be resolved under the following procedures:

            (a) The party making a claim or grievance shall present such claim
or grievance and the relief requested to the other party in writing.

            (b) If the other party does not agree to the relief requested or
otherwise satisfy the demand of the party claiming to be aggrieved, the parties
shall submit the dispute to non-binding mediation before a mediator jointly
selected by the parties. If the parties cannot agree on a mediator, a mediator
shall be appointed by the Judicial Arbitration and Mediations Service (JAMS).
The costs of the mediation shall be borne equally by the parties.

            (c) If the mediation does not produce a resolution of the dispute,
the parties agree that the dispute shall be resolved by final and binding
arbitration. Any such dispute shall be submitted to the American Arbitration
Association for binding arbitration. The arbitration shall be conducted by an
arbitrator approved and agreeable by both parties, or if no agreement can be
reached, then selected in accordance with the Employment Rules of the American
Arbitration Association. In any such arbitration proceeding, any hearing must be
transcribed by a certified court reporter and any decision must be consistent
with the law of California and supported by findings of fact and conclusions of
law. The arbitrator shall have the authority to resolve the dispute and
interpret this AGREEMENT. The arbitrator shall not have authority to add to,
modify, blue-line, change or disregard any lawful terms of this AGREEMENT or to
issue an award that is contrary to California law. The prevailing party in any
such controversy or claim shall be entitled to reasonable attorneys' fees for
actual hours worked at a reasonable rate, without any premium or multiplier. The
parties shall share in the cost of the arbitration equally, unless otherwise
ordered by the arbitrator for good cause.

            (d) Arbitration shall be the exclusive final remedy for any dispute
between the parties relating to the breach, enforceability, or interpretation
this AGREEMENT.

      This AGREEMENT may not be modified or changed in any manner nor may any
provision of it or any legal remedy with respect to it be waived except by a
writing signed by GOMAN and the then current Chief Executive Officer of the
Company. This

                                                                               2
<PAGE>
AGREEMENT shall not be effective unless actually signed by BOTH GOMAN and a
representative of MTS INCORPORATED actually authorized to enter into this
Agreement in the signature line immediately below this paragraph.

      We agree to all of the foregoing without reservation.

      Executed at ________________________, this ____ day of ____________,2002.

                                            ____________________________________
                                            STANLEY GOMAN

      Executed at ________________________, this ____ day of ____________,2002.

                                            MTS, INCORPORATED

                                            ____________________________________
                                            By:
                                            Its:

CERTIFICATE OF ACKNOWLEDGMENT OF NOTARY PUBLIC

STATE OF CALIFORNIA         )
                            )        ss:
COUNTY OF                   )

      ON __________________________, 2002, STANLEY GOMAN appeared before me, the
undersigned, personally appeared, personally known to me or proved to me on the
basis of satisfactory evidence to be the person who executed the within
instrument, and that be his signature on the instrument, the person executed the
instrument. I declare under penalty of perjury that the person whose name is
subscribed to this instrument appears to be of sound mind and under no duress,
fraud, or undue influence.

         WITNESS my hand and official seal.

         _________________________________________
         Notary Public<PAGE>
                                                                   EXHIBIT 10.24

                             SEVERANCE AGREEMENT AND
                          GENERAL RELEASE OF ALL CLAIMS

      By the terms of this Severance Agreement and General Release of all Claims
("RELEASE") and in consideration of the promises made herein and for good and
valuable consideration described below, intending to be legally bound, the
undersigned RON NUGENT ("NUGENT"), on behalf of himself, his heirs, executors,
administrators, and assigns, does hereby fully release, acquit and discharge,
separately and jointly, MTS, INCORPORATED dba TOWER RECORDS, as well as its
officers, directors, shareholders, managers, agents, employees, heirs,
affiliates, parent companies, subsidiaries, successors, assigns and all other
persons and associations (also referred to as "COMPANY"), from any and all
claims, demands, suits, losses, contracts, liabilities, obligations and causes
of action, known or unknown, whether in law or in equity, including but not
limited to claims for discrimination under the Fair Employment and Housing Act,
Title VII of the Civil Rights Act of 1964, and the Age Discrimination in
Employment Act (ADEA), claims under the Worker Adjustment and Retraining
Notification (WARN) Act, wrongful termination, claims under any provision of the
California Labor Code, breach of contract, breach of public policy, physical or
mental harm or distress or any other claims, which now exist or may arise from
any matter, fact, circumstance, happening or thing whatsoever, occurring or
failing to occur prior to the execution of this RELEASE, relating to or in any
connection with NUGENT'S employment with COMPANY (collectively "Claims") to the
full extent permitted by law.

      1. Consideration

      (a) In consideration for the execution of this RELEASE, COMPANY agrees to
pay NUGENT the total sum of two hundred and ninety five thousand dollars
($295,000.00), which amount shall be paid in equal biweekly installments, less
applicable payroll deductions, over twelve (12) months beginning with the next
scheduled payroll date that is ten (10) calendar days after the COMPANY receives
the executed RELEASE.

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                                                         EMPLOYEE'S INITIALS ___
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      (b) As further consideration for this RELEASE, COMPANY agrees to pay to
NUGENT a 2002 year-end bonus of sixty two thousand and five hundred dollars
($62,500), less applicable payroll deductions, representing a pro rated bonus of
ten months. This bonus shall be paid by the end of December, 2002.

      (c) As further consideration for this RELEASE, COMPANY agrees to pay
continuation of Company provided Health Insurance coverage for NUGENT and his
dependents for twelve (12) months, beginning the first date of the first month
following the Termination Date (defined below) as long as NUGENT elects COBRA
continuation coverage and as long as COMPANY continues to provide this coverage
for its employees. The necessary forms for COBRA continuation coverage will be
provided by MTS' Human Resources department as required by law.

      (d) COMPANY further agrees to pay up to $6,000 for NUGENT to utilize three
(3) months of executive-level out-placement assistance provided by Right
Management Consultants provided that said service is utilized on or before
December 2003.

      (e) COMPANY agrees that NUGENT and his wife may receive employee discounts
(to the extent that employees continue to receive said discounts) with COMPANY
for life, not to exceed one thousand ($1,000) dollars of discounted merchandise
purchased per calendar year. NUGENT agrees to monitor the purchases made by
himself and his wife to ensure that no more than one thousand ($1,000) dollars
of discounted merchandise is purchased in any given calendar year.

      (f) The parties agree that the compensation to be paid pursuant to section
1 of this RELEASE is specifically paid and designated to compensate NUGENT fully
and totally for his release of any and all known and unknown CLAIMS arising from
or associated with his employment or the separation of his employment with
COMPANY, except for vested benefits accrued during his employment.

      (g) COMPANY makes no representations as to the taxable status of the
consideration paid pursuant to this RELEASE. If at some future date it should be
determined by any taxing entity that some portion or all of the amount
referenced above should be treated differently, NUGENT agrees to be solely

                                     - 2 -
                                                         EMPLOYEE'S INITIALS ___
<PAGE>
responsible for characterizing, allocating and reporting to taxing agencies the
consideration stated herein, and for paying any taxes, assessments, charges or
penalties that may be attributable to the consideration.

      2. NUGENT hereby expressly acknowledges that his employment relationship
with COMPANY terminated effective October 18, 2002 ("Termination Date").

      3. NUGENT acknowledges that he has received payment for all wages and
other compensation owed to him through the Termination Date, including
compensation for all accrued, unused vacation or other paid time off to which he
is entitled.

      4. NUGENT covenants that at no time subsequent to the execution of this
RELEASE will he file or maintain, or cause or permit the filing or maintenance
of, in any state, federal or foreign court, or before any local, state, or
federal administrative agency, or any other tribunal, a lawsuit of any kind,
nature and character whatsoever, which he may have, has ever had, or may in the
future have against COMPANY which is based in whole or in part on any matter
relating to or in any connection with his employment with COMPANY, except for
vested benefits accrued during his employment.

      5. NUGENT further expressly acknowledges that in executing this RELEASE he
is waiving both known CLAIMS, as well as claims that he does not know about.
NUGENT expressly acknowledges that this RELEASE constitutes a waiver of all
claims of any kind, whether known or unknown, foreseen or unforeseen, suspected
or unsuspected; and in furtherance of this intention, NUGENT expressly waives
and relinquishes all rights and benefits under Section 1542 of the California
Civil Code which provides:

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

      6. This RELEASE does not constitute an admission of liability or
wrongdoing. Neither the execution and delivery of this RELEASE nor any payments
nor the performance of any acts in connection therewith shall be construed at
any time or place to be an admission by COMPANY that they at any time performed
or failed to perform any act, which performance or failure to perform was or is
in violation of

                                     - 3 -
                                                         EMPLOYEE'S INITIALS ___
<PAGE>
the rights of NUGENT and/or which performance or failure to perform gives rise
to any valid claim for damages or any other relief whatsoever.

      7. NUGENT represents that he has returned to the COMPANY, all COMPANY
files, memoranda, documents, records, tapes, computer disks, computers, copies
of the above items, credit cards, keys, and any other COMPANY property in
NUGENT'S possession.

      8. NUGENT agrees that he shall not disclose, provide or reveal, directly
or indirectly, any confidential information, proprietary information, or COMPANY
trade secrets, and that he shall hold such information in the strictest
confidence. NUGENT may only reveal such information when compelled to do so by a
valid subpoena or as otherwise compelled by law, but in either case only after
providing MTS INCORPORATED's Legal Department with prior written notice and
opportunity to contest such subpoena or other requirement. Written notice shall
be provided as soon as practicable, but in no event less than five (5) business
days prior to any such disclosure or, if later, within one business day after
NUGENT receives notice compelling such disclosure.

      9. Non-Disparagement - NUGENT agrees that he will not knowingly make,
repeat, or authorize any statements, comments, remarks or publications of any
type or of any nature which would disparage the reputation of COMPANY, or its
current and former directors, officers, employees, and shareholders, or any of
them, at any time now or in the future (collectively, "DISPARAGING REMARKS").
This includes but is not limited to DISPARAGING REMARKS as to any events,
circumstances, occurrences, interactions, transactions, observations or dealings
of any kind, at any time, involving NUGENT, COMPANY, or both.

      10. NUGENT represents and warrants that no other person had, or has, or
claims any interest in the claims referred to in this RELEASE; that he has the
sole right and exclusive authority to execute this RELEASE and to receive the
consideration therefore; and that he has not sold, assigned, transferred,
conveyed or otherwise disposed of any claim or demand relating to the CLAIMS
herein.

                                     - 4 -
                                                         EMPLOYEE'S INITIALS ___
<PAGE>
      11. NUGENT agrees that he shall keep the terms of this Agreement,
including the amount of consideration referred to in Paragraph 1, CONFIDENTIAL,
and he promises and covenants not to disclose, publicize, or cause to be
disclosed or publicized in any manner, directly or indirectly, the terms or
conditions of this Agreement except (i) to his accountants, auditors, insurance
agents, insurance companies or adjusters, financial advisors, attorneys, and
spouse, provided NUGENT first ensures that such persons also agree to this
pledge of confidentiality, (ii) to state and federal taxing authorities, and
(iii) as legally required when compelled by applicable law (i.e. under subpoena)
and then only under the procedures set forth in section 8 of this RELEASE.
NUGENT acknowledges that confidentiality is a key and material provision of this
RELEASE and that a violation of this provision could result in significant
consequences to COMPANY and shall be considered a material breach of the
RELEASE, providing COMPANY with all available remedies under law.

      12. NUGENT agrees that he will cooperate with COMPANY with regard to
defending or prosecuting any future claims, lawsuits or actions which arose
during NUGENT'S employment with COMPANY, which may require NUGENT'S testimony,
deposition, or advice.

      13. NUGENT expressly states that he has read this RELEASE and understands
all of its terms. NUGENT represents and acknowledges that he has not relied on
any oral or other extraneous representations in agreeing to execute this RELEASE
and that this RELEASE is executed voluntarily and with full knowledge of its
significance.

      14. ACKNOWLEDGEMENTS:

            (a) NUGENT understands, represents and acknowledges that COMPANY has
      given him forty-five (45) days to consider whether or not to execute this
      RELEASE;

            (b) NUGENT understands, represents and acknowledges that he has been
      encouraged to consult with a financial advisor, accountant, attorney
      and/or other advisor before deciding whether or not to sign this RELEASE.
      COMPANY encourages NUGENT to seek legal counsel before entering into this
      RELEASE.

                                     - 5 -
                                                         EMPLOYEE'S INITIALS ___
<PAGE>
            (c) After executing this RELEASE, NUGENT understands, represents and
      acknowledges that he has seven (7) calendar days from the date of
      execution ("revocation period") to revoke his agreement to the terms of
      this RELEASE. The parties agree and understand that any revocation under
      this provision must be in writing and received (facsimile acceptable) by
      Shauna Pompei, V.P. Compensation and Benefits, 2500 Del Monte Street, West
      Sacramento, CA 95691 (facsimile - 916-373-2434), by 11:59 p.m. on the last
      day of the revocation period;

            (d) NUGENT agrees, understands and acknowledges that at the time he
      was presented with this RELEASE he was provided with a document entitled
      EXHIBIT A, which provided the following information: (1) any class, unit
      or group of individuals covered by the REDUCTION IN FORCE, the eligibility
      factors for the REDUCTION IN FORCE, and the time limits applicable to the
      REDUCTION IN FORCE program; and (2) the job titles and ages of all
      individuals eligible or selected for the REDUCTION IN FORCE and the ages
      of the individuals in the same job classification or organizational unit
      who were not selected for the REDUCTION IN FORCE; and

            (e) that in exchange for the consideration given to NUGENT in this
      RELEASE, NUGENT is waiving any known or unknown claims for age
      discrimination including, but not limited to, claims for age
      discrimination under the California Fair Employment and Housing Act and
      federal Age Discrimination in Employment Act.

      15. This RELEASE is the entire agreement between the parties related to
the subject matter of the RELEASE as well as the termination of NUGENT'S
employment with MTS, Incorporated. This RELEASE may not be modified or changed
in any manner nor may any provision of it or any legal remedy with respect to it
be waived except by a writing signed by NUGENT and the then current Chief
Executive Officer of the Company.

      16. This RELEASE shall be construed under the laws of the State of
California. Venue for any dispute, mediation or arbitration related to this
RELEASE shall be in Sacramento County, California.

                                     - 6 -
                                                         EMPLOYEE'S INITIALS ___
<PAGE>
      17. Challenging the Releases Contained Herein

      Should NUGENT attempt to challenge the enforceability of any part of the
releases contained in this RELEASE, NUGENT must first do the following: (a)
prior to initiating any challenge regarding the enforceability of any release
contained within this RELEASE, deliver a certified or cashier's check to the
COMPANY equal to all monetary benefits he has received pursuant to this RELEASE,
and (b) provide to the COMPANY in writing a statement that all future benefits
or payments that EMPLOYEE is to receive from the COMPANY pursuant to this
RELEASE shall be suspended pending the results of the challenge of
enforceability. COMPANY shall deposit the amount that NUGENT has repaid and any
payments due during the suspension period in an interest bearing account pending
the determination of enforceability. If the RELEASE is determined to be
enforceable, COMPANY will pay NUGENT the amount in the interest bearing account
and end the suspension of payments, unless otherwise agreed in writing by the
parties. If the RELEASE is determined to be unenforceable, the amount in the
interest bearing account shall be paid back to the COMPANY and the suspension of
any future benefits or payments shall become permanent, unless otherwise agreed
in writing by the parties.

      18. Dispute Resolution, Claims Related to Release

      Employee and Company agree that any future dispute over this RELEASE, its
terms, or its enforceability shall be resolved under the following procedures:

            (a) The party making a claim or grievance shall present such claim
or grievance and the relief requested to the other party, in writing.

            (b) If the other party does not agree to the relief requested or
otherwise satisfy the demand of the party claiming to be aggrieved, the parties
shall submit the dispute to non-binding mediation before a mediator jointly
selected by the parties. If the parties cannot agree on a mediator, a mediator
shall be appointed by the Judicial Arbitration and Mediations Service (JAMS).
The costs of the mediation shall be borne equally by the parties.

                                     - 7 -
                                                         EMPLOYEE'S INITIALS ___
<PAGE>
            (c) If the mediation does not produce a resolution of the dispute,
the parties agree that the dispute shall be resolved by final and binding
arbitration. Any such dispute shall be submitted to the American Arbitration
Association for binding arbitration. The arbitration shall be conducted by an
arbitrator approved and agreeable by both parties, or if no agreement can be
reached, then selected in accordance with the Employment Rules of the American
Arbitration Association. The arbitrator shall have the authority to resolve the
dispute and interpret the RELEASE. The arbitrator shall not have authority to
add to, modify, blue-line, change or disregard any lawful terms of this
Agreement or to issue an award that is contrary California law. The prevailing
party in any such controversy or claim shall be entitled to reasonable
attorneys' fees for actual hours worked at a reasonable rate, without any
premium or multiplier. The parties shall share in the cost of the arbitration
equally, unless otherwise ordered by the arbitrator for good cause.

            (d) Arbitration shall be the exclusive final remedy for any dispute
between the parties relating to the breach, enforceability, or interpretation of
this RELEASE.

      19. Dispute Resolution - Claims Not Related to Release

      NUGENT and COMPANY agree that in the event there are any future disputes
between the parties not related to the breach, enforceability, or interpretation
of this RELEASE, said disputes shall be resolved as indicated in the preceding
section, except that if mediation is unsuccessful the dispute shall be resolved
through the appropriate court of law, without a jury, instead of the arbitration
provisions above. The parties recognize that they are both waiving certain
rights to trial by jury, and do so knowingly in order to hasten the resolution
of any such dispute and minimize costs.

      20. NUGENT and COMPANY each understand and agree that if any provision of
this RELEASE is found to be unenforceable, all other portions shall remain fully
enforceable to the extent permitted by law.

                                     - 8 -
                                                         EMPLOYEE'S INITIALS ___
<PAGE>
           PLEASE READ CAREFULLY - RELEASE OF KNOWN AND UNKNOWN CLAIMS

      I agree to all of the foregoing without reservation.

      Executed at ________________________, this ____ day of ____________,2002.

                                            ____________________________________

                                            RON NUGENT

      Executed at ________________________, this ____ day of ____________,2002.

                                            MTS, INCORPORATED

                                            ____________________________________
                                            By:
                                            Its:

                 CERTIFICATE OF ACKNOWLEDGMENT OF NOTARY PUBLIC

STATE OF CALIFORNIA          )
                             )        ss:
COUNTY OF                    )

      ON __________________________, 2002, RON NUGENT appeared before me, the
undersigned, personally appeared, personally known to me or proved to me on the
basis of satisfactory evidence to be the person who executed the within
instrument, and that be his signature on the instrument, the person executed the
instrument. I declare under penalty of perjury that the person whose name is
subscribed to this instrument appears to be of sound mind and under no duress,
fraud, or undue influence.

         WITNESS my hand and official seal.

         _________________________________________
                               Notary Public

                                     - 9 -
<PAGE>
                                    EXHIBIT A

      The following information is provided to you in accordance with the Age
Discrimination in Employment Act, as amended, 29 U.S.C. Section 626(f)(1)(H).

      1.    The class, unit, or group of individuals covered by this program are
            as follows:

            Executive employees affected by the reorganization of the Company
            headquarters in West Sacramento, California on or about October 14,
            2002.

      2.    The eligibility factors for this program are as follows:

            Those executive employees terminated as a result of the
            reorganization of the Company headquarters in West Sacramento,
            California on or about October 14, 2002.

      3.    The time limits applicable to this program are as follows: 45 days
            from October 18, 2002.

      4.    The job titles and ages of all individuals affected or selected for
            the reorganization are as follows:

<TABLE>
<CAPTION>
TITLE                                                     AGE
-----                                                     ---
<S>                                                       <C>
Chief Operations Officer/Bayside                          52
Legal Manager/General Counsel                             53
Chief Marketing Officer                                   53
VP & Chief Operating Officer                              54
</TABLE>

      5.    The job titles and ages of all individuals in the same job
            classification or organizational unit, who were not affected or
            selected for the reorganization are as follows:

<TABLE>
<CAPTION>
TITLE                                                     AGE
-----                                                     ---
<S>                                                       <C>
Chief Information Officer                                 40
Senior V.P - Corporate Development                        45
Chief Executive Officer                                   54
Chairman                                                  77
</TABLE>

                                     - 10 -
                                                         EMPLOYEE'S INITIALS ___

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