AMENDMENT NO. 1
EMPLOYMENT AGREEMENT
This Amendment No. 1 to the Employment Agreement made the 5th day of June,
1996 (the "Agreement"), between Guitar Center Management Company, Inc., a
California corporation (the "Company"), and Xxxxx Xxxx (the "Executive") is
entered into this 15th day of October 1996.
WHEREAS, the Company has amended its 1996 Performance Stock Option Plan
(the "Plan");
WHEREAS, material provisions of the Agreement relate to the Executive's
rights to receive options issued pursuant to the Plan;
WHEREAS, the parties wish to amend the Agreement in order to set forth
provisions consistent with the intent of the Agreement and to modify certain
provisions relating to the grant of options under the Plan;
In consideration of the mutual covenants contained herein and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
Section 1. Section 3(e) of the Agreement is hereby deleted in its
entirety and the following is hereby inserted in lieu thereof:
"(e) the Company shall issue Executive options to acquire
units for the purchase of shares of Common Stock and Junior
Preferred Stock as described in the amounts and on the dates
set forth on Exhibit A hereto."
Section 2. Exhibit A to the Agreement is hereby deleted in its entirety
and the following is hereby inserted in lieu thereof and shall constitute
Exhibit A to the Agreement:
"Exhibit A
Defined terms used herein, but not defined herein,
shall have the meaning ascribed to them in the attached
Employment Agreement or the Company's Amended and Restated
1996 Performance Stock Option Plan (the "Plan").
1. Within 15 days after the execution of the attached
Agreement, the Company shall grant Executive an option to
acquire 8,669 Units pursuant to the Plan with the Units to
vest 1/3 after one year, 2/3 after two years, 100% after 3
years.
2. If any Reserved Units become Units Available for
Award pursuant to Section 7(c) of the Plan on 12/31/97 and
Executive is still employed by the Company at such time,
then the Company shall grant Executive an option to receive
3,000 of such Units Available for Award with the Units to
vest 1/2 after one year and 100% after two years.
3. If any Reserved Units become Units Available for
Award pursuant to Section 7(c) of the Plan on 12/31/98 and
Executive is still employed by the Company at such time,
then the Company shall grant Executive an option to receive
2,000 of
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such Units Available for Award with the Units to vest 100%
after one year.
4. If any Reserved Units become Units Available for
Award pursuant to Section 7(c) of the Plan on 12/31/99 and
Executive is still employed by the Company at such time,
then the Company shall grant Executive an option to receive
3,668 of such Units Available for Award with the Units to
vest immediately upon grant.
5. If any Reserved Units become Units Available for
Award pursuant to Section 7(e) of the Plan and Executive is
still employed by the Company at such time, the Company
shall grant to Executive an option to acquire that number of
such Units Available for Award equal to (x) the lesser of
8,669 or 10% of such Units Available for Award MINUS (y) the
number of Units Available for Award that were subject to the
options issued pursuant to paragraphs 2, 3 and 4 above.
6. Any share numbers referred to in this Exhibit A shall be
subject to adjustment as contemplated by Section 11 of the Plan.
7. All options issued pursuant to this Agreement
shall be exercisable for $100 per Unit.
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8. All options issued pursuant to this Agreement
prior to the Company's initial public offering shall be
NQOs."
Section 3. This Amendment shall be effective as of June 5, 1996.
Section 4. Except as provided for in this Amendment Number 1 all of the
provisions of the Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment Number
1 to the Agreement.
GUITAR CENTER MANAGEMENT
COMPANY, INC.
By
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Name:
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Title:
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XXXXX XXXX
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