EXHIBIT 10.16








	





AGREEMENT AND
GENERAL RELEASE 



     This
AGREEMENT AND GENERAL RELEASE (“Agreement”) is made and entered into
by and between Susan B. Parks (hereinafter “Employee”) and Gateway,
Inc., a corporation having its principal office at 14303 Gateway Place, Poway,
CA, including its subsidiaries (“Gateway” or “Company”). 



WITNESSETH: 



     WHEREAS,
Employee is currently employed as Senior Vice President, U.S. Markets; and 



     WHEREAS,
the Company and Employee have mutually agreed to sever the employment relationship; and 



     WHEREAS,
the Company has advised Employee that Employee’s off payroll date will be
11:59 PM PST on December 31, 2001 (“Separation Date”); and 



     WHEREAS,
this Agreement is being provided in connection with the requirement of Section 6
of Employee’s Employment Agreement (“Employment Agreement”); and 



     WHEREAS,
Employee understands that, pursuant to Section 6 of the Employment Agreement,
her execution and non-revocation of this Agreement constitutes a condition
precedent to the Company’s obligations under Section 6 of the Employment
Agreement; and 



     WHEREAS,
Employee and the Company desire to settle fully all employment relationship
matters between them including, but not limited to, any differences that might
have arisen out of Employee’s employment with the Company and the
termination thereof; 



     NOW,
THEREFORE, in consideration of the premises and mutual promises contained
herein, it is agreed as follows: 













	





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     1.
Employee understands that her employment with the Company will cease on her
Separation Date (which shall be 11:59 PM PST on December 31, 2001) and that,
provided she signs and does not revoke this Agreement, Employee will be provided
with the following: 



     (a)
She will be paid the amount specified in, and in accordance with, Section 6(a)
of her Employment Agreement (the “Payment”), which sum shall be
$1,485,000. The Payment shall be made within ten (10) following her Separation
Date. Employee also shall remain entitled to any deferred compensation and 401-K
plan amounts in accordance with her elections on file with the Company and the
terms and conditions of each applicable plan. Employee will be paid for all
accrued and unused PTO days and all accrued salary as of her Separation Date.
Between November 20, 2001 and Employee’s Separation Date, Employee will not
be required to report to her regular work location unless requested to do so by
the Company. In addition, such time shall be considered as work time and not
PTO. Employee will not be entitled to, and expressly waives and gives up any
right, title, or interest in, any bonus payment for calendar year 2001
under the Management Incentive Plan [or any replacement plan] or any other
bonus or incentive plan (including, without limitation, any holiday bonus)
applicable to Senior Vice Presidents or other Company employees. 



     (b)
The parties agree that, subject to approval by the Compensation Committee of the
Gateway, Inc. Board of Directors (i) any Gateway stock options or other equity
instruments, if any, held by Employee as of her Separation Date will be
accelerated and vested as of the Separation Date and (ii) Employee will have
until the close of trading on the New York Stock Exchange on the first
anniversary date of her Separation Date to exercise any stock options that were
vested as of her Separation Date. All Gateway stock options will be handled in
accordance with the applicable stock option plans and individual Option
Agreements including, without limitation, any applicable black out period. 













	





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     If
Employee dies after executing this Agreement, but before her Separation Date,
this Agreement will remain in full force and effect. 



     (c)
Employee will be provided with Executive Outplacement through the firm of Drake
Beam Morin at such geographic location within the continental United States as
Employee may elect. 



     (d)
Employee will be provided with a letter of reference signed by Ted Waitt, a copy
of which is attached as Exhibit “A”, and any reference by the
Company will be consistent therewith. 



     (e)
The Company will pay Employee’s and her dependent’s COBRA costs for a
period of twelve (12) months following her Separation Date or up to the date on
which Employee secures health care coverage from another employer of her,
whichever occurs first. Employee agrees to notify the Company in writing of the
date on which she commences health care coverage from any new employer of her. 



     (f)
Employee will continue to receive financial planning through the date on which
she commences employment with another employer, but in no event later than
December 31, 2002 . Employee will notify the Company in writing of the date on
which she commences employment with another employer. The Company also will pay
for Employee’s state and federal income tax return preparation for calendar
year 2001. 



     (g)
Employee will continue to receive relocation benefits through her Separation
Date. To the extent applicable, relocation payments will be grossed-up for tax
purposes in accordance with the terms and conditions of the Company’s
current relocation policy. 



     (h)
The Company will pay Employee’s attorneys’ fees in connection with the
negotiation of this Agreement up to a maximum amount of $3000. 



     All
payments under Sections 1(a) through (f) of this Agreement will be less legally
required payroll deductions. 













	





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     2.
The parties agree that through Employee’s Separation Date, Employee will,
among other things that Senior Management may reasonably request in connection
with Company business, (a) use her reasonable best efforts to assist in
effectuating a smooth transition of her projects, assignments and
responsibilities and (b) provide ongoing strategic and other advice and
assistance as Gateway Senior Management may determine, in its sole discretion,
to be necessary. 



     The
parties further agree that at all times following her Separation Date, Employee
will cooperate fully with the Company in providing truthful testimony as a
witness or a declarant in connection with any present or future court,
administrative, governmental agency or arbitration proceeding involving the
Company with respect to which the Employee has relevant information arising out
of her employment with the Company. Employee also will assist the Company during
the discovery phase (or prior thereto) of any judicial, administrative,
arbitration, or governmental agency proceeding involving the Company and with
respect to which the Employee has relevant information arising out of her
employment with the Company including, without limitation, meeting with counsel,
assisting and cooperating in the preparation and review of documents, and
meeting with other Company representatives. The parties agree that such
cooperation and assistance shall, to the extent practicable (giving due regard
to the needs of the Company and the requirements of Employee’s then current
work obligations), be at times and places that are mutually convenient to both
the Employee and the Company. If the parties cannot agree on mutually convenient
times and places, the Company will provide the Employee with a choice of three
acceptable dates in different weeks and places and Employee will select one of
the three. The parties agree that this procedure shall apply anytime the Company
and Employee cannot agree on a mutually convenient time and place to meet. The
Company agrees that it will pay, upon production of appropriate receipts, the
reasonable business expenses (including air transportation, hotel, and similar
expenses) incurred by Employee in connection with such assistance. Employee
represents that she is not presently aware of any conflict of interest between
herself and Gateway in connection with any pending litigation or investigations
that may give rise to a question regarding the possible need for independent
counsel with respect to the defense of such matters. 













	





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     Employee
agrees to sign, if requested by the Company, forms of resignation from any
offices which she holds in the Company. 



     The
Company represents that Employee is covered by Gateway’s Directors and
Officers liability insurance policy and officer indemnification provisions of
the Company’s by-laws and that Employee shall continue to be entitled to
indemnification and such coverage after her Separation Date in accordance with
the terms and conditions of the policy and provisions of the Company’s
by-laws relating to indemnification of officers. 



     3.
Employee agrees that she will submit all vouchers for reasonable business
expenses prior to her Separation Date or as soon thereafter as is practicable.
Employee agrees that all expense reimbursement requests will be accompanied by
receipts satisfactory to the Company in accordance with current policy. 



     4.
In accordance with her existing and continuing obligations to the Company,
Employee agrees to return to the Company, on or before her Separation Date, all
Company property or copies thereof, including, but not limited to, files,
records, computer access codes, computer programs, keys, card key passes,
instruction manuals, documents, business plans, computers of any kind (except
her Gateway PC which she shall be permitted to retain provided she first permits
Gateway personnel to remove any Gateway information from the hard-drive and any
floppy disks), software, and other property (except for Employee’s Company
provided mobile telephone, facsimile machine, Blackberry, and printer which
Employee shall be permitted to retain), which she received or prepared or helped
to prepare in connection with her employment with the Company (collectively
“Company Property”). Employee further agrees that this Agreement
constitutes an assignment to the Company of all right, title and interest in
such Company Property, and any other inventions, discoveries or, to the extent
she owns the rights, works of authorship created by Employee during the course
of her employment. 













	





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     5.
Employee affirms her obligation not to personally use or disclose Gateway
Confidential Information to any third party, except pursuant to legal process
(provided that in the case of legal process Employee first notifies Gateway in
advance of any disclosure such that Gateway has an opportunity to oppose
disclosure). As used in this Agreement, the term “Confidential
Information” means all information including, but not limited to, technical
or non-technical data, formulas, computer programs, devices, methods,
techniques, drawings, processes, methods of manufacture, financial data,
personnel data, customer specific information, production and sales information,
supplier specific information, cost information, and marketing plans and
strategies, which is (a) disclosed to or known by Employee as a consequence of
or through his employment with Gateway and (b) not generally known to persons,
corporations, organizations or others outside of Gateway. The parties agree that
inventions or discoveries by Employee during or following the Agreement Period
will not be considered Gateway Confidential Information or Gateway property,
except where such inventions or discoveries are based, directly or indirectly
and in whole or in part, on Gateway Confidential Information as defined in this
Paragraph 5. 



     6.
Employee agrees to keep this Agreement confidential and not to disclose its
contents to anyone except her lawyer, her immediate family, her health care
professional, her financial consultant, her tax advisor or a prospective
employer (and then only after informing such individuals that said information
is confidential and should not be disclosed to others), or pursuant to legal
process (provided that Employee first notifies Gateway of the legal process in
advance of any disclosure such that Gateway has an opportunity to oppose
disclosure). The prohibition against disclosure provided for in this Paragraph 6
shall not apply to the extent that Gateway has itself disclosed the Agreement or
any term in the Agreement, but only to the extent of the specific disclosure. 













	





-7- 



     7.
Employee agrees that she will not in any public forum (i.e., lectures, to the
media, in published articles, to analysts, or in comparable public forums) or,
with intent to damage the Company or its directors, officers or employees, in
private conversations (i.e., social settings, etc.) criticize, disparage,
denigrate, or speak adversely of, or disclose negative information about, the
operations, management, or performance of the Company or about any director,
officer, employee or agent of the Company. The intent of this Paragraph 7 is to
ensure that Employee does not say or do anything that damages or impairs, or
might damage or impair, in any way the business organization, goodwill, or
reputation of the Company or any of its directors, officers, employees or
agents. 



     On
its part, the Company agrees that neither it officially nor the Chief Executive
Officer nor any Senior Vice President of the Company, in such position on
November 5, 2001, will disparage or defame, or encourage others to disparage or
defame, Employee to any third party; provided, however, that nothing in this
Paragraph will prohibit them from discussing Employee among themselves, with
outside counsel or financial advisors, or with other Gateway officers or
employees in connection with Gateway business matters. 



     8.
Employee agrees that for a period of one (1) year following her Separation Date,
she will not personally, either directly or indirectly (including on behalf of
herself or on behalf of any entity with which Employee is or becomes
affiliated), (i) solicit (or otherwise interfere with Gateway’s business
relationships with) any of Gateway’s business customers with respect to the
sale of personal computers, computer related peripherals, digital information
appliances including, without limitation, or hand held personal digital
assistance devices; (ii) recruit, solicit, induce or attempt to induce, or
encourage others to recruit, solicit or induce, any employee of Gateway to
terminate their employment with, or otherwise cease their relationship with
Gateway; or (iii) hire any then current employee of Gateway. Nothing contained
in this Section 8 shall prevent Employee from providing a reference to or on
behalf of a Gateway employee, provided that such employee is not being hired by
Employee’s employer. 













	





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     9.
Employee understands and agrees that a material violation of Paragraphs 2, 4, 5,
7, or 8 of this Agreement will be considered a material breach of this
Agreement. Employee acknowledges and agrees that irreparable harm would result
from any material breach by Employee of the covenants contained in Paragraphs 2,
4, 5, 7, or 8 of this Agreement and that monetary damages alone would not
provide adequate relief for any such breach. Accordingly, the parties agree that
injunctive relief in favor of Gateway would be proper. Employee further agrees,
in addition to any other relief that may be directed by a court of competent
jurisdiction and upon a finding of a material breach, to promptly return to
Gateway $500,000, representing a portion of the total consideration received
under Section 1 of this Agreement.. 



     10.
Employee acknowledges that there are various state, local and federal laws that
prohibit, among other things, employment discrimination on the basis of age,
sex, race, color, national origin, religion, disability, sexual orientation or
veteran status and that these laws are enforced through the Equal Employment
Opportunity Commission, Department of Labor and State or Local Human Rights
agencies. Such laws include, without limitation, Title VII of the Civil Rights
Act of 1964; the Age Discrimination in Employment Act (“ADEA”); the
Older Workers Benefit Protection Act; the Americans with Disabilities Act
(“ADA”); the Employee Retirement Income Security Act
(“ERISA”); the Workers Adjustment and Retraining Notification Act
(“WARN”); 42 U.S.C. Section 1981; the California Fair Employment and
Housing Act, etc., as each may have been amended, and other state and local
human or civil rights laws as well as other statutes which regulate employment;
and the common law of contracts and torts. Employee hereby waives and releases
any rights she may have under these or any other laws with respect to his
employment and termination of employment at the Company and acknowledges that
the Company has not (a) discriminated against her, including on the basis
of age, (b) breached any contract with her, (c) committed any civil
wrong (tort) against her, or (d) otherwise acted unlawfully toward her. 













	





-9- 



     Employee
also waives any right to become, and promises not to consent to become, a member
of any class in a case in which claims are asserted against any Releasee (as
defined in Paragraph 11 hereof) that are related in any way to his employment or
the termination of her employment with Gateway, and that involve events which
have occurred as of the date of this Agreement (defined to mean the date on
which Employee signs this Agreement). If Employee, without her prior knowledge
and consent, is made a member of a class in any proceeding, she will opt out of
the class at the first opportunity afforded to her after learning of her
inclusion. In this regard, Employee agrees that she will execute, without
objection or delay, an “opt-out” form presented to her either by the
court in which such proceeding is pending or by counsel for any Releasee who is
made a defendant in any such proceeding. 



     11.
Employee, on behalf of herself and her heirs, executors, administrators,
successors and assigns, hereby unconditionally releases and discharges Gateway,
and its subsidiaries, successors, assigns, affiliates, shareholders, directors,
officers, representatives, agents and employees as well as any benefit plan and
its fiduciaries and insurors (collectively “Releasees” and
individually “Releasee”) from all known and unknown claims (including
claims for attorneys’ fees and costs), charges, actions and causes of
action, demands, damages, and liabilities of any kind or character, in law or
equity, suspected or unsuspected, past or present, that she ever had, may now
have, or may later assert against any Releasee, arising out of or related to her
employment with Gateway. To the fullest extent permitted by law, this release
includes, but is not limited to: (a) claims arising under the ADEA, the
Older Workers Benefit Protection Act, the WARN Act, the ERISA, the Family and
Medical Leave Act of 1993, the ADA, the California Fair Employment and Housing
Act, and any other federal, state, or local law prohibiting age, race, color,
gender, creed, religion, sexual preference/orientation, marital status, national
origin, mental or physical disability, veteran status, or any other form of
unlawful discrimination or claim with respect to or arising out of
Employee’s employment with or termination from Gateway; (b) claims
(whether based on common law or otherwise) arising out of or related to any
contract (whether express or implied); (c) claims under any federal, state
or local constitutions, statutes, rules or regulations; (d) claims (whether
based on common law or otherwise) arising out of any kind of tortious conduct
(whether intentional or otherwise) including but not limited to, wrongful
termination, defamation, violation of public policy; and (e) claims
included in, related to, or which could have been included in any presently
pending federal, state or local lawsuit filed by Employee or on her behalf
against any Releasee, which Employee agrees to immediately dismiss with
prejudice. 













	





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(For employees working in
California) Section 1542 of the Civil Code of the State of California states:  










	 	
“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.”






	


     Notwithstanding
the provisions of Section 1542, and for the purpose of implementing a full and
complete release and discharge of all Releasees with respect to claims in
California as well as all other jurisdictions, Employee expressly acknowledges
that this Release is intended to include not only claims that are known,
anticipated or disclosed, but also claims that are unknown, unanticipated and
undisclosed. 



     This
Paragraph 11 shall not serve as a release of rights under or preclude Employee
from filing suit to enforce the provisions of this Agreement, including her
right to indemnification under (i) the Company’s Directors and Officers
liability insurance policy and (ii) the Company’s by-laws. 













	





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     12.
Except as provided in Section 11, Employee agrees not to bring any action, suit
or administrative proceeding contesting the validity of this Agreement or
attempting to negate, modify or reform it, nor to sue any Releasee for any
reason arising out of her employment. If Employee breaches either Paragraph 11
or 12 hereof, Employee shall (i) promptly return to Gateway all
consideration received hereunder (meaning the amount and/or benefits referred to
in Section 1 of this Agreement), except for $25,000; and (ii) pay any
Releasee all of their reasonable attorneys’ fees and costs incurred in each
such action, suit or other proceeding, including any and all appeals or
petitions therefrom, provided Gateway is the successful party. Employee agrees
to pay such fees and costs within thirty (30) days of final award. With respect
to this Paragraph 12, if Employee is the successful party, Gateway will pay
Employee his reasonable attorneys’ fees and costs incurred in such action,
suit, or other proceeding, including all appeals or petitions therefrom. This
Paragraph 12 is not intended to limit Employee from instituting legal action for
the sole purpose of enforcing this Agreement or from filing a charge with, or
participating in an investigation conducted by, the Equal Employment Opportunity
Commission; provided however, that employee expressly waives and relinquishes
any rights she might have to recover damages or other relief, whether equitable
or legal, in any such proceeding concerning events or actions that arose on or
before the date Employee signed this Agreement. This Paragraph 12 is also not
intended to apply to any action brought solely under the ADEA, as amended,
including any action contesting the validity of this Agreement or attempting to
negate, modify, or reform it, except insofar as application of this
Paragraph 12 to the ADEA action would not violate federal law. 



     13.
In the event that any one or more of the provisions contained herein is for any
reason held to be unenforceable in any respect under the law of any state or of
the United States of America, such unenforceability will not affect any other
provision of this Agreement, but, with respect only to the jurisdiction holding
the provision to be unenforceable, this Agreement will then be construed as if
such unenforceable provision or provisions had never been contained herein. 













	





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     14.
The construction, interpretation and performance of this Agreement will be
governed by the laws of the State of Delaware, without regard to its conflict of
laws rule. In the event a court of competent jurisdiction declines to apply
Delaware law, despite the parties election of Delaware law, the parties agree
that the law of the state in which the Employee is working on his Separation
Date shall control, without regard to its conflict of laws rule. 



     15.
This Agreement contains the entire agreement between the Company and Employee
and fully supersedes all prior agreements or understandings pertaining to the
subject matter hereof, except for Sections 6 and 7 of the Non-Compete,
Non-Disclosure and Intellectual Property agreement (“Non-Compete”)
which Employee signed at the time of hire and which sections the parties agree
shall remain in full force and effect except with respect to the last sentence
of Section 6 which the parties agree shall be amended to delete the words
“or within one (1) year of your termination of employment”. Employee
represents and acknowledges that in executing this Agreement she has not relied
upon any representation or statement not set forth herein made by any of the
Releasees or by any of the Releasee’s agents, representatives or attorneys
with regard to the subject matter of this Agreement. 



     16.
Employee understands that, pursuant to the Older Workers Benefit Protection Act,
she has the right to (and should) consult with an attorney before signing this
Agreement, she has twenty-one (21) days to consider the Agreement before signing
it and she may revoke the Agreement within seven (7) calendar days after signing
it. Revocation can be made by delivering a written notice of revocation to: Jack
Van Berkel, Senior Vice President, Human Resources, Gateway, Inc., 14303 Gateway
Place, Poway, CA. The parties agree that the 21 day review period commenced on
November 5, 2001 and that Employee waives any right to have the 21 day review
period restarted as a consequences of revisions to the initial draft of this
Agreement. 













	





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     17.
Employee represents that she has no knowledge of any wrongdoing involving
improper or false claims against a federal or state governmental agency that
involves him or other present or former Company employees, other than those, if
any, reported by Employee to the Gateway Law Division. 



     BY
SIGNING THIS SEPARATION AGREEMENT AND GENERAL RELEASE, EMPLOYEE STATES THAT; 










			a) 		SHE
HAS READ IT AND HAS HAD SUFFICIENT TIME TO CONSIDER ITS TERMS;





			b) 		SHE
UNDERSTANDS IT AND KNOWS THAT SHE IS GIVING UP IMPORTANT RIGHTS;





			c) 		SHE
ACCEPTS ITS TERMS;





			d) 		SHE
IS AWARE OF HIS RIGHT TO (AND THAT HE SHOULD) CONSULT AN ATTORNEY BEFORE SIGNING IT AND
HAS DONE SO; AND





			e) 		SHE
HAS SIGNED IT KNOWINGLY AND VOLUNTARILY.







			
——————————————

                Susan B. Parks


Date:

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  Gateway, Inc.


By:

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Date:

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