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EMPLOYMENT AGREEMENT

     This Employment Agreement (“Agreement”) by and between Gateway, Inc., a
Delaware corporation (the “Company”), and Susan B. Parks (the “Executive”) is
made as of August 1, 2000.

     1. Employment Period; Coordination with Change of Control Compensation
Agreement.

       (a) The Company hereby agrees to employ the Executive, and the Executive
hereby accepts such employment, pursuant to the terms and conditions set forth
in this Agreement, for a period commencing August 1, 2000 (the “Commencement
Date”) and ending July 31, 2004, unless terminated earlier as provided herein
(the “Initial Employment Period”), provided that the Initial Employment Period
shall be automatically extended for successive one (1) year periods (“Additional
Periods”) unless terminated earlier as provided herein or a party gives written
notice to the other party of non-extension at least ninety (90) days prior to
the end of the Initial Employment Period or the then Additional Period. A notice
of non-extension by the Company shall be deemed a Termination without Cause as
of the end of the then Initial Employment Period or Additional Period or such
earlier date after notice as the Executive shall elect. The period of
Executive’s actual employment hereunder after the Commencement Date shall be
referred to herein as the “Employment Period.”

       (b) On or about the date hereof, Executive and the Company have entered
or will enter into a Change of Control Compensation Agreement substantially in
the form attached hereto as Exhibit “A” (the “Change of Control Agreement”).
This Agreement and the Change of Control Agreement shall each remain in effect
in accordance with their respective terms, provided, however, that:

       (i) If a Change of Control (as defined in the Change of Control
Agreement) shall occur during the Employment Period and at a time when the
Change of Control Agreement is in effect, then, (A) during the remaining Term
(as defined therein) of the Change of Control Agreement, the terms “Cause” and
“Good Reason” and “Disability” as used in this Agreement shall have the meanings
assigned to such terms in the Change of Control Agreement, (B) Sections 6(a) and
6(c) of this Agreement and the third and fourth sentences of Section 5(b) of
this Agreement shall not apply to any termination of Executive’s employment
occurring during the remaining Term of the Change of Control Agreement, and (C)
the second sentence of Section 6(b) of this Agreement shall not apply to options
and other equity awards to which Section 6.1 (C) of the change of Control
Agreement applies; and

       (ii) If a Pre-Change of Control Entitlement Event (as defined in the
Change of Control Agreement) shall occur during the Employment Period and at a
time when the Change of Control is in effect, then (A) Executive shall not be
entitled to benefits under Section 6(a) of this Agreement, (B) Sections 5(b) and
Section 6(b) of this Agreement shall be of no force or effect (it being
understood and agreed that any termination of Executive’s employment that would
qualify as both a Pre-Change of Control Entitlement Event (for purposes of the
Change of Control Agreement) and a termination of Executive’s employment for
“Cause” or without “Good Reason” (each as defined in this Agreement) shall be
treated solely as a Pre-Change of Control Entitlement Event) and (C) Executive
shall be entitled to receive Accrued Amounts (as defined in Section 6(d) of this
Agreement).

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     2. Position and Duties.

       (a) During the Employment Period, the Executive shall be employed as
Senior Vice President, Business.

       (b) The Executive shall devote her full business time, attention and best
efforts to her duties and responsibilities hereunder and shall comply with the
Company’s written rules and policies including, without limitation, the
Company’s Code of Ethics and Non-Harassment policy. It shall not be a violation
of this Section for the Executive to (i) manage her personal investments,
(ii) be involved in charitable, civic and professional activities, (iii) serve
on for profit corporate or corporate advisory boards or committees approved by
the President and Chief Executive Officer, or (iv) deliver lectures or fulfill
speaking engagements, provided that the activities referred to in subparts (i)
through (iv) do not interfere with the performance of the Executive’s
responsibilities as an employee of the Company or violate the Company’s written
rules and policies. In the event the President and Chief Executive Officer of
the Company notifies Executive in writing that any such activity presents a
conflict, or an appearance of a conflict, of interest with the Company, or
violates the Company’s written rules and policies, the Executive shall cease the
activity as soon as reasonably practicable.

     3. Salary, Bonus and Benefits.

       (a) Base Salary and Sign On Bonus. During the Employment Period, the
Executive shall receive an annual base salary of at least $425,000 (as increased
from time to time, “Annual Base Salary”), payable pursuant to the Company’s
normal payroll practices. Executive shall be paid a sign on bonus of $200,000
(less applicable payroll deductions), which bonus shall be repayable should
Executive leave Gateway (either voluntarily or involuntarily) prior to her
one-year anniversary date.

       (b) Annual Bonus. During the Employment Period, the Executive’s annual
target bonus shall be equal to 65% of the Executive’s Annual Base Salary (the
“Target Bonus”) and shall be increased or reduced in accordance with the pay-out
formula if established target performance goals are exceeded or not met. The
target performance goals shall be established by the Compensation Committee of
the Board (the Compensation Committee) at the beginning of each calendar year if
pursuant to a plan subject to Section 162(m) of the Internal Revenue Code, or
otherwise by the Company.

       (c) Benefits. The Executive shall be treated in the same manner as, and
shall be entitled to such benefits and other perquisites as provided to, other
senior executive officers (“Senior Executive Officers”) of the Company. In this
regard, the Executive shall be entitled to benefits under the Company’s
vacation, benefit and welfare plans which are generally applicable to other
Senior Executive Officers including, without limitation, the Company’s
relocation plan, the Company’s stock option plan, the retirement savings plan,
and the short-term and long-term disability plans.

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     4. Stock Options.

       (a) Initial Option Grant. Executive shall be given an initial option
grant (“Initial Options”) to purchase 300,000 shares of Gateway common stock
pursuant to the terms of the Gateway, Inc. 2000 Equity Incentive Plan (“2000
Plan”) and the related stock option agreement.

       (b) Recurring Options. Commencing in calendar year 2000 and thereafter in
each calendar year during the Employment Period, the Executive will be eligible
for option grants in accordance with the provisions of the Company’s stock
incentive plan(s) then in effect. All stock option grants under Section 4(b) of
this Agreement will be granted under, and subject to, such plans.

     5. Termination of Employment.

       (a) Termination without Cause and Termination with Cause. The Company may
terminate the Executive’s employment during the Employment Period without Cause
or with Cause. For purposes of this Agreement, Termination without Cause shall
mean any termination by the Company during the Employment Period other than for
Cause or as a result of death, retirement, or Disability. Except as provided in
Section 1(b) above, Termination for Cause shall mean termination resulting from,
as determined in the Company’s sole discretion, the Executive’s (i) conviction
(including a plea of guilty or nolo contendere) of any felony of any kind (other
than Limited Vicarious Liability or a routine traffic infraction) or any other
crime (whether it is a felony or not) involving securities fraud, theft of
assets of the Company, or falsification of the Company’s books or records;
(ii) material breach of the agreement signed by Executive as a condition of
employment (attached hereto as Exhibit “B” and made a part hereof) which breach
is not cured within twenty (20) days of written notice thereof; (iii) willful
misconduct with regard to the Company; or neglect or dereliction of duty
resulting in either case in economic harm to the Company or damage to the
Company’s name or reputation; (iv) failure to follow or in good faith attempt to
follow failure to follow or in good faith attempt to follow the reasonable
lawful direction of the President and Chief Executive Officer or Vice Chairman
or the person to whom the Executive directly reports; or (v) failure to comply
with the Company’s Code of Ethics or other policies including, without
limitation, the Company’s Non-Harassment policy. Limited Vicarious Liability, as
used above, shall mean any liability which is based on acts of the Company (x)
for which the Executive is charged solely as a result of his offices with the
Company, (y) in which he was not directly or indirectly involved, and (z) with
respect to which he had no prior knowledge or reasonable belief that a law was
being violated.

       (b) Good Reason. The Executive may terminate employment for Good Reason,
which is referred to herein as a Termination for Good Reason. Except as provided
in Section 1(b) above, Good Reason means: (i) a diminution in Executive’s title;
provided, however, that it shall not be deemed a diminution in Executive’s title
where Executive continues to carry the title Senior Vice President, (ii) the
assignment of duties to the Executive that are materially and adversely
inconsistent with the Executive’s position as Senior Vice President, (iii) any
material diminution in Executive’s authority or responsibility, or (iv) any
material breach by the Company of this Agreement. If the Executive determines
that Good Reason exists, the Executive must notify the Company in writing,
within 180 days following the Executive’s knowledge of the first event which the
Executive determines constitutes Good Reason, or such event shall not constitute
Good Reason under this Agreement. If the Company remedies such event within
sixty (60) days following receipt of notice, the Executive may not terminate
employment for Good Reason as a result of such event.

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       (c) Death, Retirement, or Disability. The Executive’s employment shall
terminate automatically upon the Executive’s death or retirement during the
Employment Period. Except as provided in Section 1(b) above, the Executive’s
employment under this Agreement shall terminate for “Disability” where the
Executive has been unable to render the material services required by his
position as a result of physical or mental incapacity (as determined by the
Company’s disability insurance carrier) for a period of 180 consecutive days and
the Company has notified the Executive of such termination while he is so
disabled. The parties agree that exceeding such a period would constitute an
undue hardship for the Company under Federal and state law including, without
limitation, the Americans with Disabilities Act and the California Fair
Employment and Housing Act.

       (d) Termination without Good Reason. The Executive may terminate her
employment with the Company without Good Reason at any time. Any such
termination is referred to herein as a Termination without Good Reason. Notice
of non-extension by the Executive under Section 1 above shall be deemed a
Termination without Good Reason as of the end of the Employment Period.

       (e) Notice of Termination. Any termination of the Executive’s employment
by the Company or by the Executive shall be communicated by Notice of
Termination to the other party. For purposes of this Agreement, a “Notice of
Termination” means a written notice which indicates the specific termination
provision in this Agreement relied upon and to the extent practicable, sets
forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination of the Executive’s employment under the provision so
indicated.

     6. Payment Obligations of the Company upon Termination.

       (a) Termination without Cause; Termination for Good Reason. Upon
(i) Termination without Cause or (ii) Termination for Good Reason during the
Employment Period, and in either case subject to and conditioned on Executive’s
timely execution and non-revocation of a Separation Agreement and General
Release of claims against the Company and its subsidiaries and affiliates in a
form satisfactory to the Company, the Company shall pay the Executive an amount
equal to two (2) times the sum of (x) the Executive’s then current Annual Base
Salary plus (y) the Executive’s then current annual Target Bonus. The amount
will be paid in a single lump sum payment within twenty (20) days after the date
of termination. Any Company stock options or other equity, if any, held by the
Executive as of the date of termination will be handled in accordance with
Section 4 of this Agreement and the applicable plan and grants. In addition, the
Executive will be entitled to Accrued Amounts, as defined in Section 6(d) below.

       (b) Termination for Cause or without Good Reason. If the Executive’s
employment is terminated by the Company for Cause or by the Executive without
Good Reason during the Employment Period, the Company will pay to the Executive
the Executive’s Annual Base Salary through the date of termination, to the
extent not yet paid, and the Company shall have no further obligations under
this Agreement. In addition, all outstanding Company stock options and other
equity awards, if any, will be handled in accordance with Section 4 of this
Agreement and the applicable plan and grants. In addition, the Executive will
also be entitled to other Accrued Amounts.

       (c) Death, Retirement, or Disability. If the Executive’s employment is
terminated by reason of the Executive’s death, retirement, or disability during
the Employment Period, the Company will pay the Executive (or the Executive’s
heirs or representatives, if applicable) the Executive’s Annual Base Salary
through the date of termination, to the extent not yet paid and other Accrued
Amounts, plus a pro-rated amount of Executive’s Target Bonus. In addition, any
Company stock options or other equity, if any, held by the Executive as of the
date of termination will be handled in accordance with Section 4 of this
Agreement and the applicable plans and grants.

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       (d) Accrued Amounts. Accrued Amounts shall mean Annual Base Salary and
expense reimbursements due for the period prior to any termination.

     7. Excise Tax.The provisions of Annex B to the Change of Control Agreement
are incorporated herein by reference and shall survive the termination of the
Change of Control Agreement.

     8. Successors.

       (a) This Agreement is personal to the Executive and shall not be
assignable by the Executive except by will or the laws of descent and
distribution. This Agreement shall inure to the benefit of and be enforceable by
the Executive’s heirs or legal representatives. Notwithstanding the foregoing,
any amounts that become payable hereunder pursuant to Section 6, shall be
payable to Executive’s estate if not paid prior to the Executive’s death.

       (b) This Agreement shall inure to the benefit of and be binding upon the
Company and its successors and assigns, provided that the Company may not assign
this Agreement except in connection with the assignment or disposition of all or
substantially all of the assets or stock of the Company or by law as a result of
a merger or consolidation and only if such assignee promptly delivers to
Executive a written assumption of this Agreement in form and substance
reasonably acceptable to Executive.

     9. Miscellaneous.

       (a) This Agreement shall be governed, by, and construed in accordance
with, the laws of the State of California, without reference to its conflict of
law rules. The captions of this Agreement are not part of the provisions hereof
and shall have no force or effect. This Agreement may not be amended or modified
except by a written agreement executed by the parties hereto or their respective
successors and legal representatives.

       (b) All notices and other communications under this Agreement shall be in
writing and shall be given by hand delivery to the other party or by registered
or certified mail, return receipt requested, postage prepaid, addressed as
follows:

  If to the Executive

Susan B. Parks
5 Burning Tree
Laguna Niguel, CA 92677

If to the Company

Gateway, Inc.
4545 Towne Centre Court
San Diego, CA 92121
Attn: General Counsel

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or to such other address as either party furnishes to the other in writing in
accordance with this Section 9(b). Notices and communications shall be effective
when actually received by the addressee.

       (c) The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision of this
Agreement. If any provision of this Agreement shall be held invalid or
unenforceable in part, the remaining portion of such provision, together with
all other provisions of this Agreement, shall remain valid and enforceable and
continue in full force and effect to the fullest extent consistent with law.

       (d) Notwithstanding any other provision of this Agreement, the Company
may withhold from amounts payable under this Agreement all federal, state, local
and foreign taxes that are required to be withheld by applicable laws or
regulations.

       (e) The Executive’s or the company’s failure to insist upon strict
compliance with any provision of, or to assert any right under, this Agreement
shall not be deemed to be a waiver of such provision or right or of any other
provision of or right under this Agreement.

       (f) Except as provided herein, the Executive and the Company acknowledge
that this Agreement constitutes the entire agreement between the parties and
supersedes any prior agreement between the Executive and the Company concerning
the subject matter hereof. Except as provided herein, the Executive shall not be
entitled to participate in any severance plans or severance programs of the
Company during the Employment Period.

       (g) The Company shall indemnify Executive with respect to claims (both
during and after employment) relating to Executive’s service as an employee and
officer of the Company and its affiliates and as a fiduciary of any benefit plan
of any of the foregoing to the full extent permitted by applicable law and the
Company shall cover the Executive under the Company’s Directors and Officers
indemnification insurance policy (as in effect from time to time) both during
and after employment with regard to actions or inactions in such capacities.

       (h) The prevailing party in any litigation with regard to this Agreement
or the grants hereunder, as determined by the Court, shall be awarded by the
Court his or its reasonable legal fees and disbursements.

       (i) This Agreement may be executed in several counterparts, each of which
shall be deemed an original, and said counterparts shall constitute but one and
the same instrument.

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     IN WITNESS WHEREOF, the Executive has hereunto set the Executive’s hand
and, pursuant to the authorization of its Board of Directors, the Company has
caused this Agreement to be executed in its name on its behalf, all as of the
day and year first above written.

COMPANY

By:
——————————————
Title:
——————————————
Date:
——————————————

Susan B. Parks
Date:
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