X0202 4 2006-02-15 0 0001021113 GUITAR CENTER INC GTRC 0001106648 ALBERTSON MARTIN C/O GUITAR CENTER, INC. 5795 LINDERO CANYON ROAD WESTLAKE VILLAGE CA 91362 1 1 0 0 Chairman and CEO Contract 2006-02-15 4 X 0 0 0 D Common Stock 197974 0 I By Trust Mr. Albertson, through The Albertson Family Living Trust u/a/d 1993 (the "Trust"), a living trust created by Mr. Albertson and of which he and his spouse serve as co-trustees, settled a portion of the variable prepaid forward contract (the "Contract") it had previously entered into with Merrill Lynch, Pierce, Fenner, & Smith Incorporated ("Merrill Lynch") on or about February 17, 2004. Under the terms of the Contract, Merrill Lynch sold 450,000 shares of Common Stock into the public market in accordance with the paragraphs (f) and (g) of Rule 144 of the Securities Act of 1933, as amended. The Trust received aggregate proceeds of $13,414,500. The Contract provides that on each of February 1, 2006 and February 15, 2006 (the "Settlement Dates"), the Trust will deliver a number of shares of Common Stock to Merrill Lynch (or, at the election of the Trust, the cash equivalent of such shares) as follows: (a) if the price of the Common Stock on each Settlement Date ("Settlement Price") is less than $31.77, a delivery of 225,000 shares; (b) if the Settlement Price is equal to or greater than the $31.77 ("Downside Threshold") but less than or equal to $38.53 per share ("Upside Threshold), a delivery of shares equal to (($31.77 + (Settlement Price-$38.53)) x 225,000. On the first Settlement Date, February 1, 2006, the Settlement Price of the Common Stock was $55.36. Accordingly, on that date the Trust settled its obligation by delivering to Merrill Lynch 197,525 shares of Common Stock and retaining ownership of the remaining 27,475 pledged shares attributable to the first Settlement Date. On the second Settlement Date, February 15, 2006, the Settlement Price of the Common Stock was $56.28. Accordingly, on that date the Trust settled its obligation by delivering to Merrill Lynch 197,974 shares of Common Stock and retaining ownership of the remaining 27,026 pledged shares [attributable to the second Settlement Date]. Bruce L. Ross (attorney-in-fact) 2006-02-16