NETGATEWAY, INC.

                    1999 STOCK OPTION PLAN FOR NON-EXECUTIVES


1.       Purpose; Type of Awards; Construction.

     The purpose of the 1999 Stock Option Plan for  Non-Executives  (the "Plan")
of NetGateway,  Inc., a Nevada  corporation (the  "Company"),  is to attract and
retain employees (including officers),  consultants and persons willing to serve
as directors of the Company,  or any Subsidiary or Affiliate which now exists or
hereafter is organized or acquired, and to furnish additional incentives to such
persons by  encouraging  them to acquire a proprietary  interest in the Company.
Pursuant  to  Section 6 of the Plan,  there may be  granted  Options,  including
"incentive stock options" and "nonqualified stock options". The Plan is intended
to satisfy the  requirements of Rule 16b-3  promulgated  under Section 16 of the
Exchange  Act  and  shall  be  interpreted  in  a  manner  consistent  with  the
requirements thereof.

2.   Definitions.

     For purposes of the Plan, the following terms shall be defined as set forth
below:

     (a)  "Administrator"  means the Board or, if and so long as a Committee has
been established and is in existence, the Committee.

     (b) "Affiliate"  means any entity if, at the time of granting of an Option,
(i) the Company, directly, owns at least 20% of the combined voting power of all
classes of stock of such entity or at least 20% of the  ownership  interests  in
such entity or (ii) such entity,  directly or  indirectly,  owns at least 20% of
the combined voting power of all classes of stock of the Company.

     (c)  "Beneficiary"  means the person,  persons,  trust or trusts which have
been  designated  by an Optionee in his or her most recent  written  beneficiary
designation  filed with the Company to receive the benefits  specified under the
Plan  upon  his or her  death,  or,  if there is no  designated  Beneficiary  or
surviving  designated  Beneficiary,  then the person,  persons,  trust or trusts
entitled by will or the applicable  laws of descent and  distribution to receive
such benefits.

     (d) "Board" means the Board of Directors of the Company.

     (e) "Change in Control" means a change in control of the Company which will
be deemed to have occurred if:

               (i) any "person," as such term is used in Section 13(d) and 14(d)
          of the Exchange Act (other than an Exempt  Person),  is or becomes the
          "beneficial  owner" (as defined in Rule 13d-3 under the Exchange Act),
          directly or indirectly,  of securities of the Company representing 50%
          or more of the combined voting power of the Company's then outstanding
          voting securities;

               (ii) during any period of two consecutive years,  individuals who
          at the  beginning  of such period  constitute  the Board,  and any new
          director (other than a director designated by a person who has entered
          into an agreement  with the Company to effect a transaction  described
          in clause (i),  (iii), or (iv) of this Section 2(e)) whose election by
          the Board or nomination for election by the Company's stockholders was
          approved by a vote of at least a majority of the directors  then still
          in office who either were  directors at the beginning of the period or
          whose  election or nomination for election was previously so approved,
          cease for any reason to constitute at least a majority thereof;
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               (iii)  the  stockholders  of the  Company  approve  a  merger  or
          consolidation  of the Company with any other  corporation,  other than
          (A) a  merger  or  consolidation  which  would  result  in the  voting
          securities  of  the  Company  outstanding  immediately  prior  thereto
          continuing to represent  (either by remaining  outstanding or by being
          converted  into voting  securities of the surviving or parent  entity)
          50% or more of the combined  voting power of the voting  securities of
          the Company or such surviving or parent entity outstanding immediately
          after such merger or  consolidation  or (B) a merger or  consolidation
          effected to  implement a  recapitalization  of the Company (or similar
          transaction)  in which no "person" (as  hereinbefore  defined),  other
          than an Exempt  Person,  acquired 50% or more of the  combined  voting
          power of the Company's then outstanding securities, or

               (iv)  the  stockholders  of the  Company  approve  of a  plan  of
          complete  liquidation  of the Company or an agreement  for the sale or
          disposition  by  the  Company  of  all  or  substantially  all  of the
          Company's assets (or any transaction having a similar effect).

     (f) "Code" means the Internal Revenue Code of 1986, as amended from time to
time.

     (g) "Committee" means the compensation  committee of the Board,  consisting
exclusively of two or more Non-Employee Directors (as defined in Rule 16b-3), if
and as the  same  may be  established  by the  Board  to  administer  the  Plan;
provided,  however,  that to the extent required for the Plan to comply with the
applicable  provisions of Section 162(m) of the Code,  "Committee"  means either
such committee or a subcommittee  of that  committee,  as the case may be, which
shall be  constituted  to comply  with the  applicable  requirements  of Section
162(m) of the Code and the regulations promulgated thereunder.

     (h) "Company"  means  NetGateway,  Inc., a corporation  organized under the
laws of the State of Nevada, or any successor corporation.

     (i) "Exchange  Act" means the  Securities  Exchange Act of 1934, as amended
from time to time, and as now or hereafter construed, interpreted and applied by
regulations, rulings and cases.

     (j)  "Exempt  Person"  means  (1) the  Company,  (2) any  trustee  or other
fiduciary holding securities under an employee benefit plan of the Company,  (3)
any  corporation  owned,  directly or  indirectly,  by the  stockholders  of the
Company in  substantially  the same  proportions as their ownership of Stock, or
(4) any person or group of persons  who,  immediately  prior to the  adoption of
this Plan,  owned more than 50% of the combined  voting  power of the  Company's
then outstanding voting securities.

     (k) "Fair Market Value" means, with respect to Stock or other property, the
fair market value of such Stock or other property  determined by such methods or
procedures  as  shall be  established  from  time to time by the  Administrator.
Notwithstanding the foregoing,  the per share Fair Market Value of Stock as of a
particular  date  shall  mean (i) if the  shares of Stock  are then  listed on a
national securities exchange,  the closing sales price per share of Stock on the
national  securities  exchange on which the Stock is principally traded, for the
last preceding date on which there was a sale of such Stock on such exchange, or
(ii) if the shares of Stock are then traded on the National Market System of the
National   Association  of  Securities   Dealers   Automated   Quotation  System
("NASDAQ"),  the reported per share  closing price of the Stock on the day prior
to such date or, if there was no such price  reported for such date, on the next
preceding  date for which such a price was  reported,  or (iii) if the shares of
Stock are then  traded in an  over-the-counter  market  other than on the NASDAQ
National Market System,  the average of the closing bid and asked prices for the
shares of Stock in such  over-the-counter  market for the last preceding date on
which  there was a sale of such Stock in such  market,  or (iv) if the shares of
Stock are not then  listed on a  national  securities  exchange  or traded in an
over-the-counter   market,  such  value  as  the  Administrator,   in  its  sole
discretion, shall determine in good faith.

     (l) "ISO" means any Option  intended to be and  designated  as an incentive
stock option within the meaning of Section 422 of the Code.

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     (m) "NQSO" means any Option not designated as an ISO.

     (n) "Option"  means a right,  granted to an Optionee  under Section 6(b) of
the Plan,  to  purchase  shares of Stock.  An Option  may be either an ISO or an
NQSO.

     (o)  "Optionee"  means a person who, as an  employee  (including  officer),
consultant or director of the Company,  a Subsidiary  or an Affiliate,  has been
granted an Option.

     (p)  "Plan"  means  this  NetGateway,  Inc.  1999  Stock  Option  Plan  for
Non-Executives, as amended from time to time.

     (q)  "Rule  16b-3"  means  Rule  16b-3,  as from  time  to time in  effect,
promulgated by the Securities  and Exchange  Commission  under Section 16 of the
Exchange Act, including any successor to such Rule.

     (r)  "Stock"  means the common  stock,  par value  $.001 per share,  of the
Company.

     (s) "Stock Option  Agreement"  means any written  agreement,  contract,  or
other instrument or document evidencing an Option.

     (t)  "Subsidiary"  means any corporation in which the Company,  directly or
indirectly, owns stock possessing 50% or more of the total combined voting power
of all classes of stock of such corporation.

3.  Administration

     The Plan shall be  administered  by the  Administrator.  The  Administrator
shall have the authority in its discretion, subject to and not inconsistent with
the express  provisions of the Plan, to administer  the Plan and to exercise all
the powers and authorities either  specifically  granted to it under the Plan or
necessary or advisable in the  administration  of the Plan,  including,  without
limitation, the authority to grant Options; to determine the persons to whom and
the time or times at which Options  shall be granted;  to determine the type and
number of Options to be granted,  the number of shares of Stock to which Options
may relate and the terms,  conditions,  restrictions  and  performance  criteria
relating to any Options;  to determine  whether,  to what extent, and under what
circumstances  Options  may  be  settled,  canceled,  forfeited,  exchanged,  or
surrendered;  to make  adjustments  in the  terms  and  conditions  of,  and the
criteria and  performance  objectives  included in,  Options in  recognition  of
unusual or  non-recurring  events  affecting  the Company or any  Subsidiary  or
Affiliate  or the  financial  statements  of the  Company or any  Subsidiary  or
Affiliate,  or in  response  to  changes in  applicable  laws,  regulations,  or
accounting  principles;  to designate Affiliates;  to construe and interpret the
Plan and any Options;  to  prescribe,  amend and rescind  rules and  regulations
relating to the Plan; to determine the terms and  provisions of the Stock Option
Agreements  (which need not be  identical  for each  Optionee);  and to make all
other determinations deemed necessary or advisable for the administration of the
Plan.

     The  Administrator  may appoint a chairperson  and a secretary and may make
such rules and  regulations  for the  conduct of its  business  as it shall deem
advisable,  and shall keep minutes of its meetings.  All  determinations  of the
Administrator  shall be made by a  majority  of its  members  either  present in
person or  participating  by  conference  telephone  at a meeting  or by written
consent.  The Administrator may delegate to one or more of its members or to one
or more  agents such  administrative  duties as it may deem  advisable,  and the
Administrator  or any person to whom it has  delegated  duties as aforesaid  may
employ one or more persons to render  advice with respect to any  responsibility
the  Administrator  or such  person  may have  under  the Plan.  All  decisions,
determinations  and  interpretations  of the  Administrator  shall be final  and
binding on all persons, including the Company, and any Subsidiary,  Affiliate or
Optionee  (or any person  claiming any rights under the Plan from or through any
Optionee) and any stockholder.

     No member of the Board or Committee shall be liable for any action taken or
determination  made in good faith with respect to the Plan or any Option granted
hereunder.

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4.   Eligibility.

     Options  may be granted to  employees  of the  Company  and its  present or
future Subsidiaries and Affiliates,  in the discretion of the Administrator.  In
determining  the person to whom Options shall be granted and the type of Options
granted  (including  the number of shares to be covered  by such  Options),  the
Administrator  shall take into account such factors as the  Administrator  shall
deem relevant in connection with accomplishing the purposes of the Plan.

5.   Stock Subject to the Plan.

     The  maximum  number of shares of Stock  reserved  for the grant of Options
under the Plan shall be  2,000,000  shares of Stock,  subject to  adjustment  as
provided  herein.  Such  shares  may,  in whole or in part,  be  authorized  but
unissued  shares or shares  that  shall  have been or may be  reacquired  by the
Company in the open market, in private transactions or otherwise.  The number of
shares of Stock  available  for issuance  under the Plan shall be reduced by the
number of shares of Stock subject to outstanding  Options. If any shares subject
to an Option are forfeited,  canceled,  exchanged or surrendered or if an Option
otherwise  terminates  or  expires  without  a  distribution  of  shares  to the
Optionee,  the shares of Stock with respect to such Option shall,  to the extent
of any  such  forfeiture,  cancellation,  exchange,  surrender,  termination  or
expiration, again be available for Options under the Plan. In no event shall any
Optionee  acquire,  pursuant to any awards of Options under this Plan, more than
15% of the  aggregate  number of shares of Stock  reserved  for awards under the
Plan.

     In the event that the  Administrator  shall  determine that any dividend or
other  distribution  (whether in the form of cash,  Stock,  or other  property),
recapitalization,   stock  split,   reverse   split,   reorganization,   merger,
consolidation,  spin-off,  combination,  repurchase, or share exchange, or other
similar  corporate  transaction  or  event,  affects  the  Stock  such  that  an
adjustment is  appropriate  in order to prevent  dilution or  enlargement of the
rights of an Optionee  under the Plan,  then the  Administrator  shall make such
equitable  changes or adjustments as it deems necessary or appropriate to any or
all of (i) the number and kind of shares of Stock which may thereafter be issued
in connection  with Options,  (ii) the number and kind of shares of Stock issued
or issuable in respect of  outstanding  Options,  and (iii) the exercise  price,
grant price,  or purchase  price  relating to any Option;  provided  that,  with
respect to ISOs, such adjustment shall be made in accordance with Section 424(h)
of the Code.

6.   Specific Terms of Options.

     (a)  General.  The term of each  Option  shall be for such period as may be
determined by the  Administrator.  The  Administrator may make rules relating to
Options,  and may impose on any Option or the exercise  thereof,  at the date of
grant or thereafter, such additional terms and conditions, not inconsistent with
the provisions of the Plan, as the Administrator shall determine.

     (b) Options.  The Administrator is authorized to grant Options to Optionees
on the following terms and conditions:

          (i) Type of Option. The Stock Option Agreement evidencing the grant of
     an Option under the Plan shall designate the Option as an ISO (in the event
     its  terms,  and  the  individual  to  whom  it  is  granted,  satisfy  the
     requirements for ISOs under the Code), or an NQSO.

          (ii) Exercise Price. The exercise price per share of Stock purchasable
     under an Option shall be determined by the Administrator;  provided that in
     the case of an ISO,  such  exercise  price  shall be not less than the Fair
     Market  Value of a share of Stock on the date of grant of such  Option and,
     in the case of an ISO  granted  to the holder of more than 10% of the Stock
     outstanding at the date of grant of such Option,  such exercise price shall
     be not less than 110% of the Fair Market Value on such date of grant. In no
     event shall the exercise  price for the purchase of shares of Stock be less
     than par value.  The exercise  price for Stock  subject to an Option may be
     paid in cash or by an exchange of Stock  previously  owned by the Optionee,
     or a combination  of both,  in an amount  having a combined  value equal to
     such exercise price. Any shares of Stock exchanged upon the exercise of any


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     Option  shall be valued at the Fair Market  Value on the date on which such
     shares are exchanged. An Optionee also may elect to pay all or a portion of
     the aggregate  exercise  price by having shares of Stock with a Fair Market
     Value  on the  date of  exercise  equal  to the  aggregate  exercise  price
     withheld  by the  Company or sold by a  broker-dealer  in  accordance  with
     applicable law.

          (iii)  Term and  Exercisability  of  Options.  The  date on which  the
     Administrator  adopts a  resolution  expressly  granting an Option shall be
     considered  the day on which  such  Option  is  granted.  Options  shall be
     exercisable over the exercise period (which shall not exceed ten years from
     the date of grant  or five  years  from the date of grant in the case of an
     ISO  granted to a holder of more than 10% of Stock  outstanding  as of such
     date),  at such times and upon such  conditions  as the  Administrator  may
     determine,  as reflected in the Stock  Option  Agreement.  An Option may be
     exercised  to the extent of any or all full shares of Stock as to which the
     Option has become exercisable, by giving written notice of such exercise to
     the  Company's  Secretary  and paying the  exercise  price as  described in
     Section 6(b)(ii).

          (iv)  Termination of  Employment,  etc. An Option may not be exercised
     unless the Optionee is then in the employ of the Company or any  Subsidiary
     or  Affiliate  (or a company  or a parent  or  subsidiary  company  of such
     company  issuing or assuming the Option in a  transaction  to which Section
     424(a) of the Code  applies),  and unless  the  Optionee  has  continuously
     maintained  any of such  relationships,  since  the  date of  grant  of the
     Option;  provided that, the Stock Option  Agreement may contain  provisions
     extending  the  exercisability  of  Options,  in  the  event  of  specified
     terminations,  to a date not later than the expiration date of such Option.
     The  Administrator may establish a period during which the Beneficiaries of
     an Optionee who died while an employee,  director or independent contractor
     of the Company or any Subsidiary or Affiliate or during any extended period
     referred to in the immediately preceding proviso may exercise those Options
     which were exercisable on the date of the Optionee's death;  provided that,
     no Option shall be exercisable after its expiration date.

          (v)  Nontransferability.  Options  shall  not  be  transferable  by an
     Optionee except by will or the laws of descent and  distribution  and shall
     be exercisable  during the lifetime of an Optionee only by such Optionee or
     his guardian or legal representative.

          (vi) Other Provisions. Options may be subject to such other conditions
     as the Administrator may prescribe in its discretion.

7.   Change in Control Provisions.

     In the event of a Change in Control,  any and all Options then  outstanding
shall become fully exercisable and vested, whether or not theretofore vested and
exercisable.

8.   General Provisions.

     (a) Compliance with Legal and Exchange Requirements. The Plan, the granting
and exercising of Options  thereunder,  and the other obligations of the Company
under  the  Plan  and any  Stock  Option  Agreement,  shall  be  subject  to all
applicable federal and state laws, rules and regulations,  and to such approvals
by any regulatory or governmental agency as may be required. The Company, in its
discretion,  may  postpone  the  issuance  or delivery of Stock under any Option
until completion of such stock exchange listing or registration or qualification
of such Stock or other required action under any state,  federal or foreign law,
rule or regulation as the Company may consider appropriate,  and may require any
Optionee to make such  representations  and furnish such  information  as it may
consider  appropriate  in  connection  with the issuance or delivery of Stock in
compliance with applicable laws, rules and regulations.

     (b) No Right to Continued  Employment,  etc.  Nothing in the Plan or in any
Option granted or Stock Option Agreement entered into pursuant to the Plan shall
confer upon any Optionee the right to continue in the employ of the Company, any
Subsidiary  or any  Affiliate,  as the case  may be,  or to be  entitled  to any


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remuneration  or  benefits  not set  forth  in the  Plan or  such  Stock  Option
Agreement or to  interfere  with or limit in any way the right of the Company or
any such  Subsidiary  or  Affiliate  to terminate  such  Optionee's  employment,
directorship or independent contractor relationship.

     (c) Taxes.  The Company or any  Subsidiary  or Affiliate is  authorized  to
withhold from any Option  granted,  any payment  relating to an Option under the
Plan  (including  from a  distribution  of  Stock),  or any other  payment to an
Optionee,  amounts of  withholding  and other taxes due in  connection  with any
transaction  involving  an  Option,  and  to  take  such  other  action  as  the
Administrator  may deem  advisable  to enable the  Company  and an  Optionee  to
satisfy  obligations  for  the  payment  of  withholding  taxes  and  other  tax
obligations  relating to any Option.  This authority shall include  authority to
withhold or receive Stock or other property and to make cash payments in respect
thereof in satisfaction of an Optionee's tax obligations.

     (d) Amendment and  Termination  of the Plan.  The Board may at any time and
from time to time alter,  amend,  suspend,  or terminate the Plan in whole or in
part; provided that, no amendment which requires  stockholder  approval in order
for the Plan to continue  to comply  with Rule 16b-3 or Sections  422 and 424 of
the Code and the regulations  promulgated  thereunder  shall be effective unless
the same shall be  approved by the  requisite  vote of the  stockholders  of the
Company entitled to vote thereon.  Notwithstanding  the foregoing,  no amendment
shall  affect  adversely  any  of  the  rights  of any  Optionee,  without  such
Optionee's consent, under any Option theretofore granted under the Plan.

     (e) No Rights to Options; No Stockholder Rights. No Optionee shall have any
claim to be granted any Option under the Plan,  and there is no  obligation  for
uniformity of treatment of Optionees. Except as provided specifically herein, an
Optionee or a transferee of an Option shall have no rights as a stockholder with
respect to any shares  covered by the Option until the date of the issuance of a
stock certificate to such Optionee for such shares.

     (f)  Unfunded  Status of Options.  The Plan is intended  to  constitute  an
"unfunded" plan for incentive and deferred  compensation.  Nothing  contained in
the Plan or any Option shall give any such  Optionee any rights that are greater
than those of a general creditor of the Company.

     (g) No Fractional  Shares. No fractional shares of Stock shall be issued or
delivered pursuant to the Plan or any Option. The Administrator  shall determine
whether cash,  other Options,  or other property shall be issued or paid in lieu
of such  fractional  shares or  whether  such  fractional  shares or any  rights
thereto shall be forfeited or otherwise eliminated.

     (h) Governing Law. The Plan and all  determinations  made and actions taken
pursuant hereto shall be governed by the laws of the State of California without
giving effect to the conflict of laws principles thereof.

     (i) Effective Date. The Plan shall be effective as of July 1, 1999.

     (j) Plan  Termination.  The Board may  terminate  the Plan at any time with
respect  to any  shares  of  Stock  that  are not  subject  to  Options.  Unless
terminated  earlier by the Board,  the Plan shall  terminate ten years after the
effective  date and no Options  shall be granted under the Plan after such date.
Termination  of the Plan under this  Section 8(j) will not affect the rights and
obligations   of  any  Optionee  with  respect  to  Options   granted  prior  to
termination.



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