Document:

CONSULTING AGREEMENT

     This  Agreement  is  entered  into between BOOTS & COOTS INTERNATIONAL WELL
CONTROL,  INC.  (the  "Company"),  and K. KIRK KRIST (the "Consultant") upon the
                       -------                             ----------
following  terms  and  conditions:

                                    PREAMBLE

The  parties  acknowledge  and  agree  that  this  Consulting  Agreement  (the
"Agreement")  does  not affect, negate, supersede, detract from, reduce or limit
the  inherent responsibilities, obligations, or fiduciary duties associated with
any  services of Consultant as a member or Chairman of the Board of Directors of
Company.

                                  1.   SERVICES
                                       --------

Consultant  agrees  to  provide,  AS  AN  INDEPENDENT  CONTRACTOR, AND NOT AS AN
EMPLOYEE  OF  THE  COMPANY,  management  consulting  services  (together,  the
"Services")  to  Company,  including  the  following:

     (a)  Under  the  direction  and  control  of  the Board of Directors of the
          Company,  Consultant  will advise and assist Company's Chief Executive
          Officer  and  his  management  staff  regarding  Company's  finances,
          business  development,  strategic  planning, mergers and acquisitions,
          public  disclosures, financial community relations, public and private
          equity  and  debt  transactions  or  similar  matters;

     (b)  In  specific and with the advice and consent of the Board of Directors
          and  in cooperation with the Chief Executive Officer, Consultant shall
          work  to  (i) resolve all outstanding legal issues, (ii) negotiate the
          redemption  or  conversion of the Prudential debt and accrued interest
          into  an  equity instrument, (iii) identify and complete a significant
          merger(s)  or acquisition(s) in accordance with the strategy set forth
          by  the  Board  of Directors and on terms satisfactory to the Board of
          Directors,  and  (iv)  carry  out  the  additional  duties  and
          responsibilities  of  the  Chairman  of the Board of Director over and
          above  those  required  of  a  Director;

     (c)  Consultant  shall provide such other advisory services as the Board of
          Directors  may  request  from  time  to  time;  and

     (d)  Consultant  will  foster  and  promote  the positive attributes of the
          Company  in  all  respects  and  assist  the Company's Chief Executive
          Officer in achieving the goals of the Company as and when requested by
          the  Company's  Board  of  Directors.

                2.   TERMINATION OF PRIOR COMPENSATION AGREEMENT
                     -------------------------------------------

The  Company  and  Consultant hereby agree that the agreement by and between the
parties hereto dated May 1, 2003, under which Consultant was compensated for the
performance  of  extraordinary  services  to  the  Company  as the non-executive
Chairman  (the  "Prior Compensation
                 ------------------

<PAGE>
Agreement"),  is  effectively  terminated,  and  that this Agreement cancels and
---------
supersedes  that  Prior  Compensation  Agreement.

                                    3.   TERM
                                         ----

This  Agreement  shall  be effective as of July 15, 2004 (the "Effective Date")
                                                                --------------
and  shall continue for a period of TWO (2) YEARS from the Effective Date hereof
(the  "Consulting  Term").  The  Consulting  Term  and  this  Agreement shall be
       ----------------
automatically  renewed  for  successive  one  (1)  year  terms  unless notice of
termination  is given in writing by either party to the other party at least six
(6) months prior to the expiration of the initial term or any such renewal term.
Any change in Consultant's status as a Director of the Company or as Chairman of
the  Board  of  the  Company  shall not affect the Consulting Term nor any other
rights  and  obligations  of  the  parties  under  this  Agreement.

                           4.   CONDUCT OF CONSULTANT
                                ---------------------

During  the Consulting Term, Consultant shall devote his best efforts to promote
the  interests  of  the Company, and will perform the Services in a diligent and
faithful  manner, consistent with sound business practices, and shall devote his
full  time,  effort and energy to the Company during the period he works for the
Company.  During  the Consulting Term, Consultant agrees to continue to serve as
a  Director  on the Company's Board of Directors, if elected to such position by
the  stockholders  of the Company, and as Chairman of the Board of Directors, if
elected  to  such position by the Board of Directors.  However, in the event the
Company's  shareholders  do  not  re-elect  the  Consultant as a Director of the
Company or in the event the Board of Directors elects another as Chairman of the
Board  of  the  Company,  such involuntary failure to serve in either or both of
those  roles  shall  not  be  a  breach of this Agreement by Consultant, and the
rights  and  obligations  of  the parties under this Agreement shall continue in
accordance  with  its  terms.

Nothing  in  this  Agreement  shall  be  deemed  to preclude the Consultant from
participating in other business, charitable or community opportunities if and to
the  extent  that  (i)  such business opportunities are not directly competitive
with or similar to the business of the Company, (ii) the Consultant's activities
with  respect to such opportunities do not have a material adverse effect on his
performance  of  the  Services  hereunder, and (iii) the Consultant's activities
with  respect  to  such  opportunity have been fully disclosed in writing to the
Company's  Board  of  Directors.

                                5.   COMPENSATION
                                     ------------

In  consideration  of  the  Services  that  Consultant  performs for the Company
hereunder,  the  Company shall pay Consultant, as an independent contractor, the
following:

5.1  Compensation.  During the Consulting Term, the Company shall pay Consultant
     ------------
at  the  rate of $1,000.00 PER DAY (the "Base Compensation"), payable monthly on
                                         -----------------
the  last  day  of each month, with no deductions or withholdings, in accordance
with  an invoice submitted by Consultant for the number of days worked on behalf
of  Company, including any business expenses incurred in accordance with Company
policy.  The  number  of  days  to  be  worked each month shall be set in mutual
agreement  between  Consultant  and  the Company prior to the month, adjusted as
necessary  for Consultant to accomplish the tasks set forth in this Agreement or
in mutual agreement with the Company.  Any and all taxes or other charges levied
against  the  Company  or  Consultant  as  a  result of any compensation paid to
Consultant  hereunder  shall  be  for  the sole account of Consultant, who shall
defend  and  hold Company harmless therefor.  This day rate may be adjusted from
time  to  time  by  the  Board  of  Directors  in  its  sole  discretion.

<PAGE>
5.2  Retainer.  In  order  to  accomplish  the  specific tasks set forth in this
     --------
Agreement,  Consultant  shall devote his full time, effort and energy during the
INITIAL  YEAR  of  this Agreement and shall be paid a fixed retainer on the last
day  of  each  month  in  the  amount  of  $20,100.00 plus all approved business
expenses.

5.3  Other.  Consultant,  in  his  services  as a Director of the Company, shall
     -----
participate  in  the  Company's  Director Compensation and Performance Incentive
Plan,  as  amended from time to time by the Board of Directors or a compensation
committee appointed by the Board of Directors, and the Board of Directors or the
compensation  committee,  as the case may be, shall have the authority to adjust
such  participation upward or downward from time to time in its sole discretion.
While  as  a  director  of  the  Company, and as available to all directors, the
Consultant  and  his dependents shall be entitle to coverage under the Company's
standard policy of hospitalization and major medical insurance on the same terms
provided  to  employees  of  the  Company.

In  addition  and  upon  execution  of this agreement and adoption of a Board of
Director  resolution  authorizing such action as a reward for prior services, if
not  already  so  awarded,  Consultant  shall  be  awarded  a one-time OPTION TO
PURCHASE 250,000 SHARES of the Company's Common Stock at the current fair market
value per share, which option shall be immediately vested. In addition and as an
incentive  for future performance, Consultant shall be awarded 300,000 SHARES OF
RESTRICTED  COMMON  SHARES  that  will vest in equal amounts over the subsequent
five  years  and an OPTION FOR 150,000 COMMON SHARES that will vest over the two
years  of  this Agreement, both of which having such other terms as specified in
the  Company's  long  term  incentive  plan.  Upon  resolution of the Prudential
obligation to the satisfaction of the Board of Directors, half of the restricted
stock  shall  accelerate  and  be  immediately  vested.  Upon  completion  of  a
sufficiently  large  merger or acquisition on terms satisfactory to the Board of
Directors,  half  of  the  restricted  stock  award  shall  accelerate  and  be
immediately  vested.

                                  6.   EXPENSES
                                       --------

The  Company  shall  reimburse  Consultant  for  all  reasonable  expenses  and
disbursements  incurred  by Consultant, and approved by appropriate designees of
the  Compensation  Committee,  in  his  performance  of  the Services, including
expenses  for  entertainment and travel, as are consistent with the policies and
procedures  of the Company and Internal Revenue Service regulations.  Travel and
other  expenses from Consultant's home to the Company's office are not included.
The Company shall furnish Consultant with a cellular telephone at the expense of
the  Company.  The Company shall rent to Consultant one fully equipped office at
the  headquarters  of the Company for the amount of $100 per month, which amount
shall  be  deducted  from  the  invoiced  payment  due to Consultant each month.

                           7.   INDEPENDENT CONTRACTOR
                                ----------------------

The  parties  hereto  acknowledge  and  agree  that  the  Consultant shall be an
independent  contractor  during  the  Consulting  Term  and that he shall not be
deemed  an  employee  of  the  Company.  In  acknowledging  that he is providing
Services  as  an  independent contractor, the Consultant acknowledges and agrees
that,  except  as  specifically  provided  herein,  he  shall not be entitled to
participate  in  any insurance, qualified or nonqualified benefit plans or other
fringe  benefits  provided  by  the Company to its employees and that, except as
required  by  federal,  state or local law, the Company shall not be required to
withhold  nor  shall  the  Company  withhold  any  income,  social  security,
unemployment  or other taxes or similar payments from the amounts payable to the
Consultant  hereunder.  In  the  event  the  Company shall be required by law to
withhold  any

<PAGE>
such  taxes  or  payments  from amounts payable to the Consultant hereunder, the
amounts  payable  to  the  Consultant  shall  be  reduced  accordingly.

                          8.   CONFIDENTIAL INFORMATION
                               ------------------------

Consultant  acknowledges  that  in the course of his engagement hereunder by the
Company,  Consultant  will  receive  certain  trade  secrets  and  confidential
information  belonging  to  the  Company which the Company desires to protect as
confidential.  For  the  purposes  of  this  Agreement,  the  term "confidential
information"  shall  mean information or documents of any nature and in any form
relating  to the Company or its business which at the time is not known to those
persons  outside of the Company engaged in business similar to that conducted by
the  Company  unless such information is generally available.  Consultant agrees
that  such  information  is  confidential  and  that  he  will  not  reveal such
information  to  anyone  other than officers, directors, employees or authorized
agents  of  the  Company.  Upon  termination  of this Agreement, for any reason,
Consultant  shall  surrender  all  papers,  documents  and other property of the
Company.

 9.   INFORMATION, IDEAS, CONCEPTS, IMPROVEMENTS, DISCOVERIES, INVENTIONS, ETC.
      -------------------------------------------------------------------------

Consultant  agrees that during the Consulting Term he will promptly disclose, in
writing,  all  information,  ideas,  concepts,  improvements,  discoveries  and
inventions,  whether  patentable or not, and whether or not reduced to practice,
which  are  conceived,  developed,  made  or  acquired by the Consultant, either
individually, or jointly with others, and which relate to the business, products
or  services  of  the  Company,  or  any  of  its  subsidiaries  or  affiliates,
irrespective  of whether such information, idea, concept, improvement, discovery
or  invention  was conceived, developed, discovered or acquired by Consultant on
the  job,  or  elsewhere  (collectively,  the  "Inventions").  The  Company  and
                                                ----------
Consultant  have  agreed  as  follows  regarding  the  Inventions:

     (a)  All  inventions  are,  and  shall be, the property of the Company.  In
this  context,  all  drawings, memoranda, notes, records, files, correspondence,
manuals, models, specifications, computer programs, maps and all other writings,
or materials of any time embodying any such Inventions are and shall be the sole
and  exclusive  property  of  the  Company.

     (a)  Consultant  hereby  specifically  sells,  assigns and transfers to the
Company  all  of  his  worldwide  right,  title  and interest in and to all such
Inventions,  and  any  United  States  or  foreign  applications  for  patents,
inventor's  certificates  or  other industrial rights that may be filed thereon,
including  divisions,  continuations,  continuations-in-part,  reissues  and/or
extensions  thereof,  and  applications  for registration of any names and marks
included  therewith.  Both during the Consulting Term and thereafter, Consultant
shall assist the Company and its nominees at all times in the protection of such
Inventions,  both  in the United States and all foreign countries, including but
not  limited to, the execution of all lawful oaths and all assignment documents,
not  inconsistent  with this Agreement, requested by the Company, or its nominee
in  connection with the preparation, prosecution, issuance or enforcement of any
applications  for  United States or foreign letters patent, including divisions,
continuations,  continuations-in-part,  reissue,  and/or extensions thereof, and
any  application  for  the  registration  of names and marks included therewith.

     (b)  Moreover,  if  during  the  Consulting  Term,  Consultant  creates any
original work of authorship which is the subject matter of copyright relating to
the  Company's  business,  products,  or  services, whether such work is created
solely  by  Consultant  or  jointly  with  others,  the

<PAGE>
Company  shall  be  deemed  the  author  of such work if the work is prepared by
Consultant  in the scope of his activities under this Agreement; or, if the work
is  not  prepared  by  Consultant  within the scope of his activities under this
Agreement,  but  is  specifically  ordered by the Company as a contribution to a
collective  work,  as a part of a motion picture or other audiovisual work, as a
translation,  as  a  supplementary work, as a compilation or as an instructional
text,  then  the  work  shall  be  considered to be a work made for hire and the
Company  shall  be  the  author  of the work.  In the event such work is neither
prepared  by  the  Consultant  within  the  scope  of  his activities under this
Agreement  or  is  not a work specially ordered and deemed to be a work made for
hire,  then  Consultant  hereby  agrees  to  assign, and by these presents, does
assign,  to  the  Company  an  undivided  one-half  interest  in  and  to all of
Consultant's  worldwide  right,  title  and  interest in and to the work and all
rights  or copyright therein, including but not limited to, the execution of all
formal  assignment  documents  requested  by  the  Company  or  its nominee, not
inconsistent  with  this  Agreement,  and  the execution of all lawful oaths and
applications  for  registration  of  copyright  in the United States and foreign
countries.

                          10.  AGREEMENT NOT TO SOLICIT
                               ------------------------

During  the  Consulting  Term  and  for  a  period  of  one  (1)  year after the
termination  of  this  Agreement  (the  "Termination  Date"),  regardless of how
                                         -----------------
terminated,  Consultant  will  not,  solely,  jointly,  or as a partner, member,
contractor,  Consultant  or agent of any partnership or as an officer, director,
employee,  agent,  contractor, stockholder or investor in any other entity or in
any  other  capacity,  directly  or  indirectly:

     (a)  induce,  or  attempt  to  induce,  any  person  or  party  who, on the
Termination  Date  is  employed by or affiliated with the Company or at any time
during  the  term  of  this covenant is, or may be, or becomes an employee of or
affiliated  with  the  Company,  to  terminate  his,  her  or  its employment or
affiliation  with  the  Company;

     (b)  induce,  or attempt to induce, any person, business or entity which is
or  becomes  a  customer  or  supplier  of  the Company, or which otherwise is a
contracting  party  with the Company, as of the Termination Date, or at any time
during  the  term  hereof,  to  terminate  any  written  or  oral  agreement  or
understanding  with  the  Company,  or  to  interfere  in  any  manner  with any
relationship  between  the  Company  and  such  customer  or  supplier;  or

     (c)  employ  or  otherwise  engage  in  any  capacity any person who at the
Termination  Date  or  at any time during the period two (2) years prior thereto
was  employed,  or otherwise engaged, in any capacity by the Company and who, by
reason  thereof  is  or  is  reasonably  likely  to  be  in  possession  of  any
confidential  information.

Consultant acknowledges and agrees that the provisions of this paragraph 10
constitute a material, mutually bargained for portion of the consideration to be
delivered under this Agreement and failure to comply with this paragraph 10
shall be deemed a breach of this Agreement.

                         11.  TERMINATION BY THE COMPANY
                              --------------------------

Notwithstanding  the  provisions  of paragraph 3, the Company may terminate this
Agreement  if  any  of  the  following  occur:

     (a)  the  death  of  Consultant;

<PAGE>
     (b)  the  Consultant  becomes,  in  the  good faith opinion of the Board of
Directors,  physically  or  mentally disabled, for a period of more than six (6)
consecutive  months, to the extent he is unable to perform his duties hereunder;

     (c)  for  any  reason,  or for no reason, at the end of the initial term of
this  Agreement  or  any  renewal  thereof;  or

     (d)  for  "Cause",  which  for  purposes  of  this  Agreement  shall  mean
Consultant  (i)  has  engaged  in  gross negligence or willful misconduct in the
performance  of  the  Services,  (ii) has willfully refused without proper legal
reason  to  perform  the  Services required of him hereunder (provided, however,
that  no  act or failure to act pursuant to subsections (i) and (ii) above shall
be deemed "willful" if due primarily to an error in judgment or negligence or if
made  in good faith with reasonable belief that such act is in the best interest
of  the  Company),  (iii) has materially breached any material provision of this
Agreement  (and  such  breach remains uncorrected 30 days following Consultant's
receipt  of  written  notice  of  the  breach  from  the  Company),  or (iv) the
Consultant  commits,  is  arrested or officially charged with any felony, or any
crime  involving  moral  turpitude,  which,  in  the  good  faith opinion of the
Company,  would  impair  Consultant's  ability  to perform the Services or would
impair the business reputation of the Company, or Consultant misappropriates any
funds  or property of the Company; provided, however, that this Agreement may be
                                   --------  -------
terminated pursuant to this paragraph 11(d) only if such termination is approved
by  at  least two-thirds of the members of the Board of Directors, excluding the
Consultant, after Consultant has been given written notice by the Company of the
specific reason for such termination and an opportunity for Consultant, together
with  his  counsel,  to  be heard before the Board of Directors.  Members of the
Board  of  Directors may participate in any hearing that is required pursuant to
this  paragraph 11(d) by means of conference telephone or similar communications
equipment whereby all persons participating in the hearing can hear and speak to
each  other;  provided,  however,  that  at least one-half of the members of the
              --------   -------
Board  of  Directors  shall  attend  the  hearing  in  person.

                         12.  TERMINATION BY CONSULTANT
                              -------------------------

Notwithstanding  the  provisions  of  paragraph 3, Consultant may terminate this
Agreement  if  any  of  the  following  occur:

     (a)  in  connection  with or based upon a material breach by the Company of
any  material  provision  of  this  Agreement;  provided, however, that prior to
                                                --------  -------
Consultant's  termination  of  this  Agreement  under  this  paragraph  12(a),
Consultant  must give written notice to the Company of any such breach, and such
breach  must  remain  uncorrected  for  30  days  following such written notice;

     (b)  immediately  upon  a Change in Control, where a "Change in Control" is
defined  to  mean  (i)  any merger, consolidation or reorganization in which the
Company  is  not  the  surviving  entity (or survives only as a subsidiary of an
entity),  (ii)  any sale, lease, exchange, or other transfer of (or agreement to
sell,  lease,  exchange,  or otherwise transfer) all or substantially all of the
assets  of  the  Company  to any other person or entity (in one transaction or a
series  of  related  transactions),  (iii)  dissolution  or  liquidation  of the
Company,  (iv) when any person or entity, including a "group" as contemplated by
Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, acquires or
gains  ownership  or  control  (including, without limitation, power to vote) of
more  than  50%  of  the outstanding shares of the Company's voting stock (based
upon  voting  power),  (v)  as  a  result  of  or in connection with a contested
election of directors, the persons who were directors of the Company before such
election  shall  cease  to  constitute  a

<PAGE>
majority  of  the  Board of Directors, or (vi) any event that is reported by the
Company  under  Item  1  of  a  Form  8-K filed with the Securities and Exchange
Commission;  provided,  however,  that  the  term  "Change in Control" shall not
include  any  reorganization,  merger,  consolidation, sale, lease, exchange, or
similar  transaction  involving  solely  the  Company and one or more previously
wholly-owned  subsidiaries  of  the  Company  unless such matter is described in
clause  (vi)  above;  or

     (c)  at  any  time, for any other reason whatsoever, in the sole discretion
of  Consultant.

                        13.  TERMINATION AND COMPENSATION
                             ----------------------------

     (a)  Termination and Compensation.  In the event that the Company elects to
          ----------------------------
terminate  this  Agreement  prior  to the expiration of initial term, or renewal
term,  of  this  Agreement  for  any  reason other than termination for Cause as
expressly  provided  for  in  Paragraph  11(d), or if Consultant terminates this
Agreement  pursuant  to  Sections  12(a)  or 12(b), then, and in that event, the
Company shall pay to Consultant, on the Termination Date, an amount equal to the
unpaid  balance  of the initial retainer plus any outstanding business expenses.
Separately,  if  Consultant  shall resign as a member of the Board of Directors,
then  the Company shall continue providing hospitalization and medical insurance
as before for six months, and thereafter Consultant, as a former director, shall
be  entitled  to  continuing  coverage  as any other employee terminated for any
reason  other  than for cause.  In the event of a termination for Cause pursuant
to paragraph 11(d) or if Consultant terminates pursuant to 12(c), this Agreement
shall  be  wholly terminated and Consultant shall not be entitled to any further
compensation  or  any  other  benefits provided for herein.  However, any of the
provisions  of  this  Agreement  relating  to  activities  and conduct after the
termination  of  the  consulting relationship between the Company and Consultant
shall  remain  in  full  force  and  effect  and  fully  enforceable.

     (b)  No Duty to Mitigate Losses.  Any compensation or remuneration received
          --------------------------
by Consultant from a third party for the providing of personal services (whether
by  employment  or  by  functioning  as an independent contractor) following the
termination  of this Agreement shall not reduce the Company's obligation to make
any  payments  to  Consultant  (or  the amount of such payments) pursuant to the
terms  of  paragraph  13.

                                OTHER PROVISIONS

14.  NOTICES.  All  notices  or  other communications pursuant to this Agreement
     -------
may  be  given by personal delivery, or by certified mail, addressed to the home
office of the Company or to the last known address of Consultant.  Notices given
by  personal delivery shall be deemed given at the time of delivery, and notices
sent by certified mail shall be deemed given when deposited with the U.S. Postal
Service.

15.  ENTIRETY  OF  AGREEMENT;  AMENDMENT.  This  Agreement  contains  the entire
     -----------------------------------
understanding of the parties and all of the covenants and agreements between the
parties  with respect to Consultant's performance of the Services.  No amendment
to  this Agreement shall be effective unless it is in writing and signed by both
the  parties  hereto.

16.  GOVERNING  LAW.  This  Agreement  shall  be  construed  and  enforced  in
     --------------
accordance  with,  and  be  governed  by,  the  laws  of  the  State  of  Texas.

17.  WAIVER.  The  failure of either party to enforce any rights hereunder shall
     ------
not  be  deemed  to be a waiver of such rights, unless such waiver is an express
written  waiver  which  has  been

<PAGE>
signed  by the waiving party.  Waiver of one breach shall not be deemed a waiver
of  any  other  breach  of  the  same  or  any  other  provision  hereof.

18.  ASSIGNMENT.  This Agreement shall not be assignable by Consultant.  Subject
     ----------
to  Sections 12(b) and 13(b) hereof, in the event of a future disposition of the
properties and business of the Company by merger, consolidation, sale of assets,
or  otherwise,  then the Company may assign this Agreement and all of its rights
and  obligations  to  the acquiring or surviving entity; provided, that any such
entity  shall  assume  all  of  the  obligations  of  the  Company  hereunder.

19.  COUNTERPARTS.  This  Agreement  may  be  executed  in  any  number  of
     ------------
counterparts,  each  of which shall be deemed to be an original for all purposes
hereof.

20.  ARBITRATION.  Any  dispute, controversy or claim arising out of or relating
     -----------
to  this Agreement and/or the Services provided by Consultant hereunder shall be
submitted  to  and finally settled by binding arbitration to be held in Houston,
Texas,  in  accordance with the rules of the American Arbitration Association in
effect  on  the  Effective  Date,  and  judgment  upon the award rendered by the
arbitrator(s)  may  be  entered  in  any court having jurisdiction thereof.  All
agreements  contemplated  herein  to be entered into to which the parties hereto
are  parties  shall contain provisions which provide that all claims, actions or
disputes  pursuant  to,  or  related  to,  such agreements shall be submitted to
binding  arbitration.  In  any  proceeding to enforce the provisions hereof, the
prevailing  party  shall  be entitled to recover reasonable expenses incurred by
him,  including  reasonable  attorneys'  fees.

This Agreement is entered into as of the Effective Date.

"COMPANY"

BOOTS & COOTS INTERNATIONAL WELL CONTROL, INC.

By: ____________________________________

Title: _________________________________

"CONSULTANT"

________________________________________
K. Kirk Krist

<PAGE>EXHIBIT 4.1

                            GATEWAY DISTRIBUTORS LTD.
              EMPLOYEE STOCK INCENTIVE PLAN FOR THE YEAR 2004 NO. 4

     1.     General  Provisions.
            -------------------

     1.1     Purpose.  This  Stock  Incentive  Plan  (the "Plan") is intended to
             -------
allow  designated officers and employees (all of whom are sometimes collectively
referred  to  herein  as  the "Employees," or individually as the "Employee") of
Gateway  Distributors  LTD.,  a  Nevada  corporation  (the  "Company")  and  its
Subsidiaries  (as  that  term is defined below) which they may have from time to
time (the Company and such Subsidiaries are referred to herein as the "Company")
to receive certain options (the "Stock Options") to purchase common stock of the
Company,  par value $0.001 per share (the "Common Stock"), and to receive grants
of  the Common Stock subject to certain restrictions (the "Awards").  As used in
this  Plan,  the  term  "Subsidiary"  shall  mean  each  corporation  which is a
"subsidiary  corporation" of the Company within the meaning of Section 424(f) of
the Internal Revenue Code of 1986, as amended (the "Code").  The purpose of this
Plan  is  to  provide  the  Employees,  who  make  significant and extraordinary
contributions  to  the  long-term  growth  and  performance of the Company, with
equity-based  compensation  incentives, and to attract and retain the Employees.

     1.2     Administration.
             --------------

     1.2.1     The Plan shall be administered by the Compensation Committee (the
"Committee")  of,  or  appointed  by, the Board of Directors of the Company (the
"Board").  The  Committee  shall select one of its members as Chairman and shall
act  by  vote  of  a  majority  of a quorum, or by unanimous written consent.  A
majority  of  its  members  shall  constitute  a quorum.  The Committee shall be
governed  by the provisions of the Company's Bylaws and of Nevada law applicable
to  the  Board,  except as otherwise provided herein or determined by the Board.

     1.2.2     The  Committee  shall  have  full  and complete authority, in its
discretion,  but  subject  to the express provisions of this Plan (a) to approve
the Employees nominated by the management of the Company to be granted Awards or
Stock  Options;  (b)  to  determine  the number of Awards or Stock Options to be
granted  to  an  Employee; (c) to determine the time or times at which Awards or
Stock  Options  shall be granted; (d) to establish the terms and conditions upon
which  Awards  or  Stock  Options  may be exercised; (e) to remove or adjust any
restrictions and conditions upon Awards or Stock Options; (f) to specify, at the
time  of  grant,  provisions  relating to exercisability of Stock Options and to
accelerate  or otherwise modify the exercisability of any Stock Options; and (g)
to  adopt such rules and regulations and to make all other determinations deemed
necessary or desirable for the administration of this Plan.  All interpretations
and  constructions  of  this  Plan  by  the  Committee,  and  all of its actions
hereunder,  shall  be  binding  and  conclusive on all persons for all purposes.

     1.2.3     The  Company  hereby  agrees  to indemnify and hold harmless each
Committee  member  and each Employee, and the estate and heirs of such Committee
member  or  Employee,  against  all  claims,  liabilities,  expenses, penalties,
damages  or  other  pecuniary losses, including legal fees, which such Committee
member  or  Employee,  his  estate  or  heirs  may  suffer  as  a  result of his
responsibilities,  obligations  or  duties  in connection with this Plan, to the
extent  that  insurance,  if  any, does not cover the payment of such items.  No
member  of  the  Committee  or  the  Board  shall  be  liable  for any action or
determination made in good faith with respect to this Plan or any Award or Stock
Option  granted  pursuant  to  this  Plan.

     1.3     Eligibility  and  Participation.  The Employees eligible under this
             -------------------------------
Plan shall be approved by the Committee from those Employees who, in the opinion
of  the  management  of  the Company, are in positions which enable them to make
significant  contributions  to  the  long-term  performance  and  growth  of the
Company.  In  selecting  the  Employees  to  whom  Award or Stock Options may be
granted,  consideration  shall  be given to factors such as employment position,
duties  and  responsibilities, ability, productivity, length of service, morale,
interest  in  the  Company  and  recommendations  of  supervisors.

     1.4     Shares  Subject  to this Plan.  The maximum number of shares of the
             -----------------------------
Common  Stock  that  may be issued pursuant to this Plan shall be 8,000,000,000,
subject to adjustment pursuant to the provisions of Paragraph 4.1.  If shares of
the Common Stock awarded or issued under this Plan are reacquired by the Company
due  to  a

                                        1
<PAGE>
forfeiture  or  for  any  other  reason,  such  shares  shall  be  cancelled and
thereafter  shall  again  be  available  for  purposes of this Plan.  If a Stock
Option  expires,  terminates  or is cancelled for any reason without having been
exercised in full, the shares of the Common Stock not purchased thereunder shall
again be available for purposes of this Plan.  In the event that any outstanding
Stock  Option  or Award under this Plan for any reason expires or is terminated,
the  shares  of  Common  Stock allocable to the unexercised portion of the Stock
Option  or  Award shall be available for issuance under the Gateway Distributors
LTD.  Non-Employee  Directors  and  Consultants Retainer Stock Plan for the Year
2004  No.  3.  The Compensation Committee of the Board shall have the authority,
in its discretion, to increase the number of shares available for issuance under
this  Plan,  while correspondingly decreasing the number of shares available for
issuance  under  the  Gateway  Distributors  LTD.  Non-Employee  Directors  and
Consultants  Retainer  Stock  Plan  for  the  Year  2004  No.  3.

     2.     Provisions  Relating  to  Stock  Options.
            ----------------------------------------

     2.1     Grants  of Stock Options.  The Committee may grant Stock Options in
             ------------------------
such amounts, at such times, and to the Employees nominated by the management of
the  Company  as the Committee, in its discretion, may determine.  Stock Options
granted  under  this  Plan shall constitute "incentive stock options" within the
meaning  of  Section  422  of the Code, if so designated by the Committee on the
date  of  grant.  The  Committee  shall  also have the discretion to grant Stock
Options  which  do  not  constitute  incentive stock options, and any such Stock
Options  shall be designated non-statutory stock options by the Committee on the
date  of  grant.  The  aggregate Fair Market Value (determined as of the time an
incentive  stock  option  is  granted) of the Common Stock with respect to which
incentive  stock  options  are  exercisable  for  the first time by any Employee
during  any  one calendar year (under all plans of the Company and any parent or
subsidiary  of  the  Company)  may not exceed the maximum amount permitted under
Section  422  of the Code (currently, $100,000.00).  Non-statutory stock options
shall  not  be  subject  to  the limitations relating to incentive stock options
contained  in the preceding sentence.  Each Stock Option shall be evidenced by a
written  agreement (the "Option Agreement") in a form approved by the Committee,
which shall be executed on behalf of the Company and by the Employee to whom the
Stock  Option is granted, and which shall be subject to the terms and conditions
of  this  Plan.  In  the  discretion of the Committee, Stock Options may include
provisions  (which  need  not  be  uniform),  authorized by the Committee in its
discretion,  that  accelerate  an  Employee's  rights  to exercise Stock Options
following  a  "Change in Control," upon termination of the Employee's employment
by  the  Company  without  "Cause" or by the Employee for "Good Reason," as such
terms  are  defined in Paragraph 3.1 hereof.  The holder of a Stock Option shall
not  be  entitled  to  the privileges of stock ownership as to any shares of the
Common  Stock  not  actually  issued  to  such  holder.

     2.2     Purchase  Price.  The  purchase  price  (the  "Exercise  Price") of
             ---------------
shares  of  the  Common Stock subject to each Stock Option (the "Option Shares")
shall  not  be less than 85 percent of the Fair Market Value of the Common Stock
on the date of the grant of the option.  For an Employee holding greater than 10
percent  of the total voting power of all stock of the Company, either Common or
Preferred, the Exercise Price of an incentive stock option shall be at least 110
percent of the Fair Market Value of the Common Stock on the date of the grant of
the  option.  As  used  herein,  "Fair  Market Value" means the mean between the
highest  and  lowest  reported  sales prices of the Common Stock on the New York
Stock  Exchange  Composite Tape or, if not listed on such exchange, on any other
national  securities  exchange  on  which  the  Common Stock is listed or on The
Nasdaq  Stock  Market,  or,  if  not  so listed on any other national securities
exchange  or  The  Nasdaq Stock Market, then the average of the bid price of the
Common  Stock  during  the  last  five  trading  days  on the OTC Bulletin Board
immediately  preceding  the  last  trading day prior to the date with respect to
which  the  Fair  Market  Value is to be determined.  If the Common Stock is not
then  publicly  traded,  then the Fair Market Value of the Common Stock shall be
the  book value of the Company per share as determined on the last day of March,
June,  September,  or  December  in  any  year  closest  to  the  date  when the
determination  is  to  be  made.  For  the  purpose  of  determining  book value
hereunder,  book  value  shall be determined by adding as of the applicable date
called  for  herein  the capital, surplus, and undivided profits of the Company,
and after having deducted any reserves theretofore established; the sum of these
items  shall  be divided by the number of shares of the Common Stock outstanding
as  of  said date, and the quotient thus obtained shall represent the book value
of  each  share  of  the  Common  Stock  of  the  Company.

     2.3     Option Period.  The Stock Option period (the "Term") shall commence
             -------------
on  the  date of grant of the Stock Option and shall be 10 years or such shorter
period  as is determined by the Committee.  Each Stock Option shall provide that
it  is  exercisable over its term in such periodic installments as the Committee
may  determine,  subject to the provisions of Paragraph 2.4.1.  Section 16(b) of
the  Securities  Exchange  Act  of  1934,  as  amended  (the

                                        2
<PAGE>
"Exchange  Act")  exempts persons normally subject to the reporting requirements
of  Section  16(a)  of  the  Exchange  Act  (the "Section 16 Reporting Persons")
pursuant  to  a qualified employee stock option plan from the normal requirement
of  not  selling  until  at least six months and one day from the date the Stock
Option  is  granted.

     2.4     Exercise  of  Options.
             ---------------------

     2.4.1     Each  Stock  Option may be exercised in whole or in part (but not
as  to  fractional  shares) by delivering it for surrender or endorsement to the
Company,  attention  of  the Corporate Secretary, at the principal office of the
Company,  together with payment of the Exercise Price and an executed Notice and
Agreement of Exercise in the form prescribed by Paragraph 2.4.2.  Payment may be
made  (a)  in  cash,  (b)  by  cashier's or certified check, (c) by surrender of
previously owned shares of the Common Stock valued pursuant to Paragraph 2.2 (if
the Committee authorizes payment in stock in its discretion), (d) by withholding
from  the  Option  Shares which would otherwise be issuable upon the exercise of
the Stock Option that number of Option Shares equal to the exercise price of the
Stock  Option,  if  such  withholding  is  authorized  by  the  Committee in its
discretion,  or  (e)  in the discretion of the Committee, by the delivery to the
Company  of the optionee's promissory note secured by the Option Shares, bearing
interest  at  a  rate  sufficient  to  prevent  the imputation of interest under
Sections  483 or 1274 of the Code, and having such other terms and conditions as
may  be  satisfactory  to  the  Committee.  Subject  to  the  provisions of this
Paragraph  2.4  and Paragraph 2.5, the Employee has the right to exercise his or
her  Stock  Options  at the rate of at least 20 percent per year over five years
from  the  date  the  Stock  Option  is  granted.

     2.4.2     Exercise  of  each Stock Option is conditioned upon the agreement
of  the  Employee  to  the  terms  and conditions of this Plan and of such Stock
Option  as  evidenced  by  the Employee's execution and delivery of a Notice and
Agreement  of  Exercise  in  a  form  to  be  determined by the Committee in its
discretion.  Such Notice and Agreement of Exercise shall set forth the agreement
of  the Employee that (a) no Option Shares will be sold or otherwise distributed
in violation of the Securities Act of 1933, as amended (the "Securities Act") or
any  other  applicable  federal  or state securities laws, (b) each Option Share
certificate  may be imprinted with legends reflecting any applicable federal and
state  securities  law  restrictions  and conditions, (c) the Company may comply
with  said securities law restrictions and issue "stop transfer" instructions to
its  Transfer  Agent  and  Registrar without liability, (d) if the Employee is a
Section  16 Reporting Person, the Employee will furnish to the Company a copy of
each  Form  4  or Form 5 filed by said Employee and will timely file all reports
required  under  federal  securities  laws, and (e) the Employee will report all
sales  of  Option  Shares  to the Company in writing on a form prescribed by the
Company.

     2.4.3     No  Stock  Option  shall  be  exercisable  unless  and  until any
applicable  registration  or  qualification  requirements  of  federal and state
securities  laws,  and  all  other  legal requirements, have been fully complied
with.  At no time shall the total number of securities issuable upon exercise of
all  outstanding  options  under  this  Plan, and the total number of securities
provided  for under any bonus or similar plan or agreement of the Company exceed
a  number  of  securities  which  is equal to 30 percent of the then outstanding
securities  of  the  Company,  unless  a  percentage  higher  than 30 percent is
approved  by at least two-thirds of the outstanding securities entitled to vote.
The  Company  will  use  reasonable  efforts  to maintain the effectiveness of a
Registration  Statement  under  the  Securities  Act  for  the issuance of Stock
Options  and  shares  acquired  thereunder,  but there may be times when no such
Registration  Statement  will  be  currently  effective.  The  exercise of Stock
Options  may  be  temporarily  suspended without liability to the Company during
times  when  no  such  Registration  Statement is currently effective, or during
times  when,  in  the  reasonable  opinion  of the Committee, such suspension is
necessary  to  preclude  violation  of  any  requirements  of  applicable law or
regulatory  bodies  having  jurisdiction  over the Company.  If any Stock Option
would expire for any reason except the end of its term during such a suspension,
then  if  exercise  of such Stock Option is duly tendered before its expiration,
such  Stock  Option  shall  be  exercisable  and exercised (unless the attempted
exercise  is  withdrawn)  as  of the first day after the end of such suspension.
The Company shall have no obligation to file any Registration Statement covering
resales  of  Option  Shares.

     2.5     Continuous  Employment.  Except as provided in Paragraph 2.7 below,
             ----------------------
an Employee may not exercise a Stock Option unless from the date of grant to the
date of exercise the Employee remains continuously in the employ of the Company.
For  purposes  of  this Paragraph 2.5, the period of continuous employment of an
Employee with the Company shall be deemed to include (without extending the term
of the Stock Option) any period during which the Employee is on leave of absence
with  the  consent of the Company, provided that such leave of absence shall not
exceed  three  months and that the Employee returns to the employ of the Company
at  the

                                        3
<PAGE>
expiration  of  such  leave  of absence.  If the Employee fails to return to the
employ of the Company at the expiration of such leave of absence, the Employee's
employment with the Company shall be deemed terminated as of the date such leave
of absence commenced.  The continuous employment of an Employee with the Company
shall also be deemed to include any period during which the Employee is a member
of  the Armed Forces of the United States, provided that the Employee returns to
the  employ  of  the  Company  within  90  days (or such longer period as may be
prescribed  by  law)  from  the  date  the  Employee first becomes entitled to a
discharge  from  military service.  If an Employee does not return to the employ
of  the  Company  within  90 days (or such longer period as may be prescribed by
law)  from  the  date  the  Employee  first becomes entitled to a discharge from
military  service, the Employee's employment with the Company shall be deemed to
have  terminated  as  of  the  date  the  Employee's  military  service  ended.

     2.6     Restrictions  on  Transfer.  Each  Stock  Option granted under this
             --------------------------
Plan shall be transferable only by will or the laws of descent and distribution.
No  interest  of  any  Employee  under this Plan shall be subject to attachment,
execution, garnishment, sequestration, the laws of bankruptcy or any other legal
or  equitable  process.  Each  Stock  Option  granted  under  this Plan shall be
exercisable  during  an  Employee's  lifetime  only  by  the  Employee or by the
Employee's  legal  representative.

     2.7     Termination  of  Employment.
             ---------------------------

     2.7.1     Upon  an  Employee's  Retirement,  Disability  (both  terms being
defined  below)  or  death,  (a)  all Stock Options to the extent then presently
exercisable  shall remain in full force and effect and may be exercised pursuant
to  the  provisions thereof, and (b) unless otherwise provided by the Committee,
all  Stock  Options to the extent not then presently exercisable by the Employee
shall  terminate  as of the date of such termination of employment and shall not
be  exercisable  thereafter.  Unless  employment  is  terminated  for  cause, as
defined  by applicable law, the right to exercise in the event of termination of
employment,  to the extent that the optionee is entitled to exercise on the date
the  employment  terminates  as  follows:

          (i)     At  least  six  months  from  the  date  of  termination  if
termination  was  caused  by  death  or  disability.

          (ii)     At  least 30 days from the date of termination if termination
was  caused  by  other  than  death  or  disability.

     2.7.2     Upon  the  termination  of  the employment of an Employee for any
reason other than those specifically set forth in Paragraph 2.7.1, (a) all Stock
Options  to  the  extent then presently exercisable by the Employee shall remain
exercisable  only  for a period of 90 days after the date of such termination of
employment  (except that the 90 day period shall be extended to 12 months if the
Employee  shall die during such 90 day period), and may be exercised pursuant to
the  provisions  thereof,  including  expiration  at  the  end of the fixed term
thereof,  and  (b) unless otherwise provided by the Committee, all Stock Options
to  the extent not then presently exercisable by the Employee shall terminate as
of  the  date  of  such  termination  of employment and shall not be exercisable
thereafter.

     2.7.3     For  purposes  of  this  Plan:

          (a)     "Retirement"  shall  mean  an  Employee's  retirement from the
employ of the Company on or after the date on which the Employee attains the age
of  65  years;  and

          (b)     "Disability"  shall  mean total and permanent incapacity of an
Employee, due to physical impairment or legally established mental incompetence,
to perform the usual duties of the Employee's employment with the Company, which
disability  shall  be determined (i) on medical evidence by a licensed physician
designated  by  the  Committee, or (ii) on evidence that the Employee has become
entitled  to  receive  primary  benefits as a disabled employee under the Social
Security  Act  in  effect  on  the  date  of  such  disability.

                                        4
<PAGE>
     3.     Provisions  Relating  to  Awards.

     3.1     Grant  of  Awards.  Subject  to  the  provisions  of this Plan, the
             -----------------
Committee shall have full and complete authority, in its discretion, but subject
to  the  express  provisions  of this Plan, to (1) grant Awards pursuant to this
Plan,  (2)  determine  the  number of shares of the Common Stock subject to each
Award  (the  "Award Shares"), (3) determine the terms and conditions (which need
not be identical) of each Award, including the consideration (if any) to be paid
by the Employee for such Common Stock, which may, in the Committee's discretion,
consist  of  the  delivery  of  the  Employee's  promissory  note  meeting  the
requirements  of  Paragraph 2.4.1, (4) establish and modify performance criteria
for  Awards,  and (5) make all of the determinations necessary or advisable with
respect  to Awards under this Plan.  Each Award under this Plan shall consist of
a  grant  of  shares  of the Common Stock subject to a restriction period (after
which  the  restrictions shall lapse), which shall be a period commencing on the
date  the  Award  is  granted  and  ending  on  such date as the Committee shall
determine  (the  "Restriction Period").  The Committee may provide for the lapse
of  restrictions  in installments, for acceleration of the lapse of restrictions
upon  the  satisfaction  of  such  performance  or  other  criteria  or upon the
occurrence  of  such  events as the Committee shall determine, and for the early
expiration  of  the  Restriction  Period upon an Employee's death, Disability or
Retirement  as  defined  in  Paragraph 2.7.3, or, following a Change of Control,
upon  termination  of an Employee's employment by the Company without "Cause" or
by  the  Employee  for  "Good  Reason,"  as those terms are defined herein.  For
purposes  of  this  Plan:

     "Change  of  Control"  shall be deemed to occur (a) on the date the Company
first  has  actual  knowledge  that any person (as such term is used in Sections
13(d)  and  14(d)(2)  of  the  Exchange Act) has become the beneficial owner (as
defined  in  Rule  13(d)-3  under  the Exchange Act), directly or indirectly, of
securities of the Company representing 40 percent or more of the combined voting
power  of  the  Company's  then  outstanding  securities, or (b) on the date the
stockholders of the Company approve (i) a merger of the Company with or into any
other  corporation  in  which the Company is not the surviving corporation or in
which  the  Company  survives  as  a  subsidiary  of another corporation, (ii) a
consolidation  of  the  Company with any other corporation, or (iii) the sale or
disposition  of  all  or  substantially all of the Company's assets or a plan of
complete  liquidation.

     "Cause,"  when  used  with reference to termination of the employment of an
Employee  by  the  Company  for  "Cause,"  shall  mean:

               (a)     The  Employee's continuing willful and material breach of
his duties to the Company after he receives a demand from the Chief Executive of
the  Company  specifying  the  manner  in  which he has willfully and materially
breached  such  duties, other than any such failure resulting from Disability of
the  Employee  or  his  resignation  for  "Good  Reason,"  as defined herein; or

               (b)     The  conviction  of  the  Employee  of  a  felony;  or

               (c)     The  Employee's  commission of fraud in the course of his
employment  with  the  Company,  such  as  embezzlement  or  other  material and
intentional  violation  of  law  against  the  Company;  or

               (d)     The  Employee's gross misconduct causing material harm to
the  Company.

     "Good  Reason"  shall  mean  any  one  or  more of the following, occurring
following  or in connection with a Change of Control and within 90 days prior to
the  Employee's resignation, unless the Employee shall have consented thereto in
writing:

               (a)     The  assignment  to  the  Employee of duties inconsistent
with his executive status prior to the Change of Control or a substantive change
in  the  officer  or officers to whom he reports from the officer or officers to
whom  he  reported  immediately  prior  to  the  Change  of  Control;  or

               (b)     The  elimination  or  reassignment  of  a majority of the
duties and responsibilities that were assigned to the Employee immediately prior
to  the  Change  of  Control;  or

                                        5
<PAGE>
               (c)     A  reduction by the Company in the Employee's annual base
salary  as  in  effect  immediately  prior  to  the  Change  of  Control;  or

               (d)     The  Company  requiring the Employee to be based anywhere
outside  a  35-mile radius from his place of employment immediately prior to the
Change  of  Control,  except for required travel on the Company's business to an
extent  substantially consistent with the Employee's business travel obligations
immediately  prior  to  the  Change  of  Control;  or

               (e)     The  failure  of  the  Company  to  grant  the Employee a
performance  bonus  reasonably  equivalent  to the same percentage of salary the
Employee  normally  received  prior  to  the Change of Control, given comparable
performance  by  the  Company  and  the  Employee;  or

               (f)     The  failure  of  the  Company  to  obtain a satisfactory
Assumption  Agreement  (as  defined  in  Paragraph  4.13  of  this  Plan) from a
successor,  or  the  failure  of  such  successor  to  perform  such  Assumption
Agreement.

     3.2     Incentive  Agreements.  Each Award granted under this Plan shall be
             ---------------------
evidenced  by  a written agreement (an "Incentive Agreement") in a form approved
by  the Committee and executed by the Company and the Employee to whom the Award
is  granted.  Each  Incentive  Agreement  shall  be  subject  to  the  terms and
conditions of this Plan and other such terms and conditions as the Committee may
specify.

     3.3     Amendment,  Modification and Waiver of Restrictions.  The Committee
             ---------------------------------------------------
may  modify  or  amend  any  Award  under this Plan or waive any restrictions or
conditions  applicable  to  the Award; provided, however, that the Committee may
not  undertake  any  such  modifications,  amendments  or  waivers if the effect
thereof  materially increases the benefits to any Employee, or adversely affects
the  rights  of  any  Employee  without  his  consent.

     3.4     Terms and Conditions of Awards.  Upon receipt of an Award of shares
             ------------------------------
of  the  Common  Stock  under  this Plan, even during the Restriction Period, an
Employee  shall  be  the  holder  of record of the shares and shall have all the
rights  of  a  stockholder with respect to such shares, subject to the terms and
conditions  of  this  Plan  and  the  Award.

     3.4.1     Except  as otherwise provided in this Paragraph 3.4, no shares of
the  Common  Stock  received  pursuant  to  this  Plan shall be sold, exchanged,
transferred,  pledged,  hypothecated  or  otherwise  disposed  of  during  the
Restriction Period applicable to such shares.  Any purported disposition of such
Common  Stock  in  violation  of  this  Paragraph  3.4  shall  be null and void.

     3.4.2     If  an Employee's employment with the Company terminates prior to
the expiration of the Restriction Period for an Award, subject to any provisions
of  the Award with respect to the Employee's death, Disability or Retirement, or
Change  of Control, all shares of the Common Stock subject to the Award shall be
immediately  forfeited  by  the  Employee and reacquired by the Company, and the
Employee  shall  have  no  further  rights  with  respect  to the Award.  In the
discretion  of  the Committee, an Incentive Agreement may provide that, upon the
forfeiture  by  an  Employee  of  Award  Shares,  the Company shall repay to the
Employee the consideration (if any) which the Employee paid for the Award Shares
on  the  grant  of  the Award.  In the discretion of the Committee, an Incentive
Agreement  may also provide that such repayment shall include an interest factor
on  such  consideration  from  the date of the grant of the Award to the date of
such  repayment.

     3.4.3     The  Committee  may require under such terms and conditions as it
deems  appropriate  or  desirable that (a) the certificates for the Common Stock
delivered  under  this Plan are to be held in custody by the Company or a person
or  institution  designated by the Company until the Restriction Period expires,
(b)  such  certificates shall bear a legend referring to the restrictions on the
Common Stock pursuant to this Plan, and (c) the Employee shall have delivered to
the  Company  a  stock  power  endorsed  in  blank relating to the Common Stock.

                                        6
<PAGE>
     4.     Miscellaneous  Provisions.
            -------------------------

     4.1     Adjustments  Upon  Change  in  Capitalization.
             ---------------------------------------------

     4.1.1     The  number and class of shares subject to each outstanding Stock
Option,  the Exercise Price thereof (and the total price), the maximum number of
Stock  Options that may be granted under this Plan, the minimum number of shares
as  to which a Stock Option may be exercised at any one time, and the number and
class  of shares subject to each outstanding Award, shall not be proportionately
adjusted  in  the  event of any increase or decrease in the number of the issued
shares  of  the  Common  Stock which results from a split-up or consolidation of
shares,  payment  of  a  stock  dividend  or dividends exceeding a total of five
percent  for  which  the  record  dates  occur  in  any  one  fiscal  year,  a
recapitalization  (other than the conversion of convertible securities according
to  their  terms),  a combination of shares or other like capital adjustment, so
that  (a)  upon  exercise  of  the  Stock Option, the Employee shall receive the
number  and  class  of shares the Employee would have received prior to any such
capital adjustment becoming effective, and (b) upon the lapse of restrictions of
the  Award Shares, the Employee shall receive the number and class of shares the
Employee  would  have  received  prior  to  any such capital adjustment becoming
effective.

     4.1.2     Upon  a  reorganization,  merger  or consolidation of the Company
with  one  or  more  corporations  as  a  result of which the Company is not the
surviving  corporation  or  in  which  the  Company  survives  as a wholly-owned
subsidiary of another corporation, or upon a sale of all or substantially all of
the  property  of  the  Company  to  another  corporation,  or  any  dividend or
distribution  to  stockholders  of more than 10 percent of the Company's assets,
adequate  adjustment  or  other provisions shall be made by the Company or other
party  to  such transaction so that there shall remain and/or be substituted for
the  Option  Shares and Award Shares provided for herein, the shares, securities
or assets which would have been issuable or payable in respect of or in exchange
for  such  Option Shares and Award Shares then remaining, as if the Employee had
been  the  owner  of  such  shares as of the applicable date.  Any securities so
substituted  shall  be  subject  to  similar  successive  adjustments.

     4.2     Withholding Taxes.  The Company shall have the right at the time of
             -----------------
exercise  of  any  Stock  Option,  the  grant  of  an  Award,  or  the  lapse of
restrictions on Award Shares, to make adequate provision for any federal, state,
local  or  foreign  taxes  which it believes are or may be required by law to be
withheld  with  respect  to  such  exercise (the "Tax Liability"), to ensure the
payment  of  any such Tax Liability.  The Company may provide for the payment of
any  Tax Liability by any of the following means or a combination of such means,
as  determined  by  the  Committee  in  its  sole and absolute discretion in the
particular  case  (1)  by requiring the Employee to tender a cash payment to the
Company,  (2) by withholding from the Employee's salary, (3) by withholding from
the  Option  Shares which would otherwise be issuable upon exercise of the Stock
Option,  or  from  the  Award  Shares  on  their  grant  or  date  of  lapse  of
restrictions,  that  number of Option Shares or Award Shares having an aggregate
Fair  Market  Value (determined in the manner prescribed by Paragraph 2.2) as of
the  date  the  withholding tax obligation arises in an amount which is equal to
the  Employee's  Tax  Liability or (4) by any other method deemed appropriate by
the  Committee.  Satisfaction  of  the  Tax  Liability of a Section 16 Reporting
Person  may  be made by the method of payment specified in clause (3) above only
if  the  following  two  conditions  are  satisfied:

               (a)     The  withholding of Option Shares or Award Shares and the
exercise  of  the  related  Stock  Option  occur at least six months and one day
following  the  date  of  grant  of  such  Stock  Option  or  Award;  and

               (b)     The  withholding of Option Shares or Award Shares is made
either (i) pursuant to an irrevocable election (the "Withholding Election") made
by  the  Employee  at  least six months in advance of the withholding of Options
Shares  or  Award  Shares,  or  (ii)  on  a  day within a 10-day "window period"
beginning  on  the  third  business  day  following  the  date of release of the
Company's  quarterly  or  annual  summary  statement  of  sales  and  earnings.

     Anything herein to the contrary notwithstanding, a Withholding Election may
be  disapproved  by  the  Committee  at  any  time.

                                        7
<PAGE>
     4.3     Relationship  to  Other  Employee Benefit Plans.  Stock Options and
             -----------------------------------------------
Awards  granted hereunder shall not be deemed to be salary or other compensation
to  any  Employee  for  purposes  of  any pension, thrift, profit-sharing, stock
purchase  or any other employee benefit plan now maintained or hereafter adopted
by  the  Company.

     4.4     Amendments and Termination.  The Board of Directors may at any time
             --------------------------
suspend,  amend  or  terminate  this  Plan.  No amendment, except as provided in
Paragraph  3.3,  or  modification of this Plan may be adopted, except subject to
stockholder  approval, which would (1) materially increase the benefits accruing
to  the  Employees  under  this  Plan,  (2)  materially  increase  the number of
securities  which may be issued under this Plan (except for adjustments pursuant
to  Paragraph  4.1  hereof),  or  (3)  materially  modify the requirements as to
eligibility  for  participation  in  this  Plan.

     4.5     Successors  in  Interest.  The  provisions  of  this  Plan  and the
             ------------------------
actions of the Committee shall be binding upon all heirs, successors and assigns
of  the  Company  and  of  the  Employees.

     4.6     Other  Documents.  All documents prepared, executed or delivered in
             ----------------
connection  with this Plan (including, without limitation, Option Agreements and
Incentive  Agreements)  shall  be,  in  substance  and  form, as established and
modified  by  the Committee; provided, however, that all such documents shall be
subject in every respect to the provisions of this Plan, and in the event of any
conflict between the terms of any such document and this Plan, the provisions of
this  Plan  shall  prevail.

     4.7     Fairness  of  the  Repurchase Price.  In the event that the Company
             -----------------------------------
repurchases  securities  upon  termination  of employment pursuant to this Plan,
either:  (a)  the  price  will  not  be  less  than the fair market value of the
securities  to  be repurchased on the date of termination of employment, and the
right to repurchase will be exercised for cash or cancellation of purchase money
indebtedness  for the securities within 90 days of termination of the employment
(or  in the case of securities issued upon exercise of options after the date of
termination,  within  90  days  after  the  date of the exercise), and the right
terminates  when the Company's securities become publicly traded, or (b) Company
will  repurchase  securities  at  the original purchase price, provided that the
right  to  repurchase  at  the  original purchase price lapses at the rate of at
least  20  percent  of the securities per year over five years from the date the
option  is  granted  (without  respect  to  the date the option was exercised or
became  exercisable)  and  the right to repurchase must be exercised for cash or
cancellation of purchase money indebtedness for the securities within 90 days of
termination  of  employment  (or  in  case of securities issued upon exercise of
options  after  the  date  of  termination, within 90 days after the date of the
exercise).

     4.8     No  Obligation  to  Continue  Employment.  This Plan and the grants
             ----------------------------------------
which  might be made hereunder shall not impose any obligation on the Company to
continue  to  employ  any  Employee.  Moreover, no provision of this Plan or any
document executed or delivered pursuant to this Plan shall be deemed modified in
any  way  by any employment contract between an Employee (or other employee) and
the  Company.

     4.9     Misconduct  of an Employee.  Notwithstanding any other provision of
             --------------------------
this  Plan,  if  an  Employee  commits fraud or dishonesty toward the Company or
wrongfully  uses  or  discloses  any  trade  secret,  confidential data or other
information  proprietary to the Company, or intentionally takes any other action
which  results  in material harm to the Company, as determined by the Committee,
in  its  sole and absolute discretion, the Employee shall forfeit all rights and
benefits  under  this  Plan.

     4.10     Term  of  Plan.  No  Stock  Option  shall be exercisable, or Award
              --------------
granted,  unless  and until the Directors of the Company have approved this Plan
and  all  other  legal requirements have been met.  This Plan was adopted by the
Board  effective  August  24,  2004.  No  Stock Options or Awards may be granted
under  this  Plan  after  August  24,  2014.

     4.11     Governing  Law.  This  Plan and all actions taken thereunder shall
              --------------
be  governed  by,  and  construed  in  accordance with, the laws of the State of
Nevada.

     4.12     Assumption  Agreements.  The  Company will require each successor,
              ----------------------
(direct  or  indirect, whether by purchase, merger, consolidation or otherwise),
to  all  or substantially all of the business or assets of the Company, prior to
the  consummation  of  each such transaction, to assume and agree to perform the
terms  and  provisions

                                        8
<PAGE>
remaining  to  be  performed  by  the Company under each Incentive Agreement and
Stock  Option  and  to  preserve the benefits to the Employees thereunder.  Such
assumption  and  agreement shall be set forth in a written agreement in form and
substance  satisfactory  to the Committee (an "Assumption Agreement"), and shall
include  such  adjustments,  if any, in the application of the provisions of the
Incentive  Agreements  and Stock Options and such additional provisions, if any,
as  the  Committee shall require and approve, in order to preserve such benefits
to  the  Employees.  Without  limiting  the  generality  of  the  foregoing, the
Committee  may  require  an  Assumption  Agreement  to  include  satisfactory
undertakings  by  a  successor:

               (a)     To  provide  liquidity to the Employees at the end of the
Restriction  Period  applicable  to  the Common Stock awarded to them under this
Plan,  or  on  the  exercise  of  Stock  Options;

               (b)     If  the  succession  occurs  before the expiration of any
period  specified  in  the  Incentive Agreements for satisfaction of performance
criteria  applicable  to  the  Common  Stock awarded thereunder, to refrain from
interfering  with  the Company's ability to satisfy such performance criteria or
to  agree  to  modify  such  performance criteria and/or waive any criteria that
cannot  be  satisfied  as  a  result  of  the  succession;

               (c)     To  require  any  future  successor  to  enter  into  an
Assumption  Agreement;  and

               (d)     To  take or refrain from taking such other actions as the
Committee  may  require  and  approve,  in  its  discretion.

     4.13     Compliance  with  Rule  16b-3.  Transactions  under  this Plan are
              -----------------------------
intended  to  comply  with  all  applicable conditions of Rule 16b-3 promulgated
under the Exchange Act.  To the extent that any provision of this Plan or action
by  the  Committee  fails to so comply, it shall be deemed null and void, to the
extent  permitted  by  law  and  deemed  advisable  by  the  Committee.

     4.14     Information to Shareholders.  The Company shall furnish to each of
              ---------------------------
its  stockholders  financial  statements  of  the  Company  at  least  annually.

     IN  WITNESS WHEREOF, this Plan has been executed effective as of August 24,
2004.

                                        GATEWAY DISTRIBUTORS LTD.

                                        By /s/ Richard A. Bailey
                                           -------------------------------------
                                           Richard A. Bailey, President

                                        9
<PAGE>

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