GATEWAY 2000 INC, S-8, 1996-07-25

GATEWAY 2000 INC
S-8, 1996-07-25
ELECTRONIC COMPUTERS

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AS FILED WITH THE COMMISSION ON JULY 25, 1996
REGISTRATION NO. 333-________

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------------------

GATEWAY 2000, INC.
(Exact name of registrant as specified in its charter)

DELAWARE 42-1249184
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)

610 Gateway Drive
North Sioux City, South Dakota 57049

(Address of principal executive offices) (zip code)

Gateway 2000, Inc. 1996 Long-Term Incentive Equity Plan
Gateway 2000, Inc. 1996 Non-Employee Directors Stock Option Plan

(Full title of the plans)

William M. Elliott, Esq.
Senior Vice President, General Counsel and Secretary
610 Gateway Drive
North Sioux City, South Dakota 57049

(Name and address of agent for service)

(605) 232-2000
(Telephone number, including area code, of agent for service)

CALCULATION OF REGISTRATION FEE

TITLE OF SECURITIES AMOUNT TO BE PROPOSED MAXIMUM OFFERING PROPOSED MAXIMUM AGGREGATE AMOUNT OF
TO BE REGISTERED (1) REGISTERED (1) PRICE PER SHARE (2) OFFERING PRICE (2) REGISTRATION FEE

<S> <C> <C> <C> <C>
Common Stock, $.01 par value 6,700,000 shares $33.9375 $227,381,250 $78,407.32
</TABLE>

(1) Estimated pursuant to Rule 457(c) under the Securities Act of 1933 solely
for the purpose of calculating the amount of the registration fee based
upon the average of the high and low sales prices reported per share of the
Common Stock on the Nasdaq National Market on July 23, 1996, which was
$33.9375.

PART I.

INFORMATION REQUIRED IN SECTION 10(A) PROSPECTUS

The document(s) containing the information specified in Part I of Form
S-8 will be sent or given to participating employees as specified by Rule
428(b)(1) of the Securities Act of 1933, as amended (the "Securities Act").
These documents and the documents incorporated by reference into this
Registration Statement pursuant to Item 3 of Part II of this Registration
Statement, taken together, constitute a prospectus that meets the requirements
of Section 10(a) of the Securities Act.

PART II

INFORMATION REQUIRED IN THIS REGISTRATION STATEMENT

ITEM 3. CORPORATION OF DOCUMENTS BY REFERENCE

Gateway 2000, Inc. (the "Company") hereby incorporates the following
documents herein by reference:

(a) The Company's Annual Report on Form 10-K for the year ended
December 31, 1995;

(b) The Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1996;

(c) All other reports filed by the Company pursuant to Sections 13(a)
or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), on or after December 31, 1995; and

(d) The description of the Company's Common Stock, $.01 par value (the
"Common Stock"), contained in the registration statement filed by the Company on
November 3, 1993, as amended on September 16, 1994, on Form 8-A under Section 12
of the Exchange Act including any subsequent amendment or any report or other
filing with the Securities and Exchange Commission updating such description.

In addition, all documents subsequently filed by the Company pursuant
to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act after the date of
this Registration Statement and prior to the filing of a post-effective
amendment to this Registration Statement which indicates that all securities
offered hereby have been sold or which deregisters all such securities then
remaining unsold shall be deemed to be incorporated herein by reference and to
be a part hereof from the date of filing of such documents.

Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Registration Statement to the extent that a statement
contained herein or in any subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Registration
Statement.

ITEM 4. DESCRIPTION OF SECURITIES

Not Applicable.

ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL

None.

ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS

Reference is made to Section 145 of the General Corporation Law of the
State of Delaware which provides for indemnification of directors and officers.

Under its Certificate of Incorporation and Bylaws, the Company will, to
the full extend permitted by the General Corporation Law of the State of
Delaware, indemnify each person made or threatened to be made a party to any
civil, criminal or investigative action, suit or proceeding by reason of the
fact that such person is or was a director, officer or employee or agent of the
Company or is or was serving at the request of the Company as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise. The Company's Certificate of Incorporation and Bylaws
state that the indemnification provided therein is not exclusive. The Company
has also entered into an Indemnification Agreement with each director and
certain officers which provides that the Company will indemnify the director or
officer in connection with any such actions, suits or proceedings.

The Company has in force an insurance policy under which its directors
and officers are insured, within the limits and subject to the limitations in
the policy, against certain expenses in connection with the defense of such
actions, suits or proceedings to which they are parties by reason of being or
having been directors or officers.

ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED

Not Applicable.

ITEM 8. EXHIBITS

4.1 Gateway 2000, Inc. 1996 Long-Term Incentive Equity Plan

4.2 Form of Agreement with respect to the Gateway 2000, Inc. 1996
Long-Term Incentive Equity Plan

4.3 Gateway 2000, Inc. 1996 Non-Employee Directors Stock Option
Plan

4.4 Form of Agreement with respect to the 1996 Non-Employee
Directors Stock Option Plan

4.5 Specimen Certificate for the Company's Common Stock, par value
$.01 per share (filed as Exhibit 4.1 to Amendment No. 2 the
Company's Registration Statement on Form S-1 (No. 33-70618)
and incorporated herein by reference)

5.1 Opinion of Winston & Strawn

23.1 Consent of Coopers & Lybrand L.L.P.

23.2 Consent of Winston & Strawn (included in their opinion filed
as Exhibit 5.1)

24.1 Powers of Attorney (included on the signature page hereof)

ITEM 9. UNDERTAKINGS

(a) The Company hereby undertakes:

(1) To file, during any period in which offers or sales are
being made of the securities registered hereby, a post-effective
amendment to this Registration Statement:

(i) To include any prospectus required by Section
10(a)(3) of the Securities Act;

(ii) To reflect in the prospectus any facts or events
arising after the effective date of this Registration
Statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in this
Registration Statement;

(iii) To include any material information with
respect to the plan of distribution not previously disclosed
in this Registration Statement or any material change to such
information in this Registration Statement;

provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) of this
section do not apply if the registration statement is on Form S-3, Form
S-8 or Form F-3, and the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic
reports filed with or furnished to the Commission by the Registrant
pursuant to Section 13 or Section 15(d) of the Exchange Act that are
incorporated by reference in this Registration Statement.

(2) That, for the purpose of determining any liability under
the Securities Act, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.

(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.

(b) The Company hereby further undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the Company's
annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act
(and, where applicable, each filing of the annual report of the employee benefit
plans pursuant to Section 15(d) of the Exchange Act) that is incorporated by
reference in this Registration Statement shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.

(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Company pursuant to the foregoing provisions, or otherwise, the Company
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Company of expenses
incurred or paid by a director, officer or controlling person of the Company in
the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Company will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as
amended, the Company certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of North Sioux City, South Dakota as of the 25th
day of July, 1996.

GATEWAY 2000, INC.

By:/s/ David J. McKittrick
David J. McKittrick
Senior Vice President, Chief
Financial Officer
and Treasurer

Each person whose signature appears below constitutes and
appoints David J. McKittrick and William M. Elliott, and each of them (with full
power to each of them to act alone), his true and lawful attorney-in-fact and
agent, with full power of substitution and resubstitution, for him and in his
name, place and stead, in any and all capacities, to sign any or all amendments
(including post-effective amendments) to this Registration Statement, and to
file the same, with all exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all said attorneys-in-fact
and agents, or any of them, or their substitutes, may lawfully do or cause to be
done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.

Signature Title Date
<S> <C> <C>
/s/ Theodore W. Waitt Chairman of the Board and July 25, 1996
Theodore W. Waitt Chief Executive Officer
(Principal Executive Officer)
and Director

/s/ Richard D. Snyder President and Chief Operating July 25, 1996
Richard D. Snyder Officer and Director

/s/ David J. McKittrick Senior Vice President, Chief July 25, 1996
David J. McKittrick Financial Officer and Treasurer
(Principal Financial Officer and
Principal Accounting Officer)

________________________________ Director
Charles G. Carey

/s/ James W. Cravens Director July 25, 1996
James W. Cravens

/s/ George H. Krauss Director July 25, 1996
George H. Krauss

/s/ Douglas L. Lacey Director July 25, 1996
Douglas L. Lacey

________________________________ Director
James F. McCann
</TABLE>

EXHIBIT
NUMBER DESCRIPTION

4.1 Gateway 2000, Inc. 1996 Long-Term Incentive Equity Plan

4.2 Form of Agreement with respect to the Gateway 2000, Inc. 1996
Long-Term Incentive Equity Plan

4.3 Gateway 2000, Inc. 1996 Non-Employee Directors Stock Option
Plan

4.4 Form of Agreement with respect to the 1996 Non-Employee
Directors Stock Option Plan

5.1 Opinion of Winston & Strawn

23.1 Consent of Coopers & Lybrand L.L.P.

23.2 Consent of Winston & Strawn (included in their opinion filed
as Exhibit 5.1)

24.1 Powers of Attorney (included on the signature page hereof)

1996 LONG-TERM INCENTIVE EQUITY PLAN

1. PURPOSE. The 1996 Long-Term Incentive Equity Plan (the "Plan") is
intended to promote the long-term success of Gateway 2000, Inc. (the "Company")
and its stockholders by strengthening the Company's ability to attract and
retain highly competent managers and other selected employees and to provide a
means to encourage stock ownership and proprietary interest in the Company.

2. TERM. The Plan shall become effective upon its ratification and
approval by the affirmative vote of the holders of a majority of the securities
of the Company present or represented, and entitled to vote at, a meeting of
stockholders of the Company, and shall terminate at the close of business on the
fifth anniversary of such approval date unless terminated earlier by the
Compensation Committee (as defined in Section 3). After termination of the Plan,
no future awards may be granted, but previously granted awards shall remain
outstanding in accordance with their applicable terms and conditions and the
terms and conditions of the Plan.

3. PLAN ADMINISTRATION. A committee (the "Compensation Committee")
appointed by the Board of Directors of the Company (the "Board") shall be
responsible for administering the Plan. The Compensation Committee shall be
comprised of two or more non-employee members of the Board who shall qualify as
disinterested persons to administer the Plan as contemplated by (1) Rule 16b-3
under the Securities and Exchange Act of 1934, as amended (the "Exchange Act"),
or any successor rules; and (2) Section 162(m) of the Internal Revenue Code of
1986, as amended (the "Code"). The Compensation Committee shall have full and
exclusive power to interpret the Plan and to adopt such rules, regulations and
guidelines for carrying out the Plan as it may deem necessary or proper, and
such power shall be executed in the best interests of the Company and in keeping
with the objectives of the Plan. This power includes but is not limited to
selecting award recipients, establishing all award terms and conditions and
adopting modifications, amendments and procedures, as well as rules and
regulations governing awards under the Plan. The interpretation and construction
of any provision of the Plan or any option or right granted hereunder and all
determinations by the Compensation Committee in each case shall be final,
binding and conclusive with respect to all interested parties.

4. ELIGIBILITY. Any employee of the Company shall be eligible to
receive one or more awards under the Plan. "Company" includes any entity that is
directly or indirectly controlled by the Company or any entity in which the
Company has a significant equity interest, as determined by the Compensation
Committee.

5. SHARES OF COMMON STOCK SUBJECT TO THE PLAN. Subject to the
provisions of Section 6 of the Plan, the aggregate number of shares of Common
Stock, $.01 par value, of the Company ("Shares") which may be transferred to
participants under the Plan shall be 6,400,000. The aggregate number of Shares
that may be issued under awards pursuant to Section 8.3 of the Plan shall not
exceed 3,200,000 Shares, and the aggregate number of Shares that may be covered
by awards granted to any single individual under the Plan shall not exceed
500,000 Shares per fiscal year of the Company. Any or all of the Shares may be
granted in the form of incentive stock options ("ISOs") intended to comply with
Section 422 of the Code.

Shares subject to awards under the Plan which expire, terminate, or are
canceled prior to exercise or, in the case of awards granted under Section 8.3,
do not vest, shall thereafter be available for the granting of other awards.
Shares which have been exchanged by a participant as full or partial payment to
the Company in connection with any award under the Plan, also shall thereafter
be available for the granting of other awards. In instances where a stock
appreciation right ("SAR") or other award is settled in cash, the Shares covered
by such award shall remain available for issuance under the Plan. Likewise, the
payment of cash dividends and dividend equivalents paid in cash in conjunction
with outstanding awards shall not be counted against the Shares available for
issuance. Any Shares that are issued by the Company, and any awards that are
granted through the assumption of, or in substitution for, outstanding awards
previously granted by an acquired entity shall not be counted against the Shares
available for issuance under the Plan.

Any Shares issued under the Plan may consist in whole or in part of
authorized and unissued Shares or of treasury Shares, and no fractional Shares
shall be issued under the Plan. Cash may be paid in lieu of any fractional
Shares in settlements of awards under the Plan.

6. ADJUSTMENTS. In the event of any stock dividend, stock split,
combination or exchange of Shares, merger, consolidation, spin-off,
recapitalization or other distribution (other than normal cash dividends) of
Company assets to stockholders, or any other change affecting Shares or Share
price, such proportionate adjustments, if any, as the Compensation Committee in
its discretion may deem appropriate to reflect such change shall be made
with respect to (1) the aggregate number of Shares that may be issued under the
Plan; (2) each outstanding award made under the Plan; and (3) the exercise price
per Share for any outstanding stock options, SARs or similar awards under the
Plan.

7. FAIR MARKET VALUE. "Fair Market Value," for all purposes under the
Plan, shall mean the closing price of a Share as reported daily in The Wall
Street Journal or similar, readily available public source for the date in
question. If no sales of Shares were made on such date, the closing price of a
Share as reported for the preceding day on which a sale of Shares occurred shall
be used.

8. AWARDS. The Compensation Committee shall determine the type or types
of award(s) to be made to each participant. Awards may be granted singly, in
combination or in tandem. Awards also may be made in combination or in tandem
with, in replacement of, as alternatives to or as the payment form for grants or
rights under any other compensation plan or individual contract or agreement of
the Company including those of any acquired entity. The types of awards that may
be granted under the Plan are:

8.1. STOCK OPTIONS. A stock option is a right to purchase a
specified number of Shares during a specified period as determined by
the Compensation Committee. The purchase price per Share for each stock
option shall be not less than 100% of Fair Market Value on the date of
grant, except if a stock option is granted retroactively in tandem with
or as a substitution for a SAR, the exercise price may be no lower than
the Fair Market Value of a Share as set forth in award agreements for
such tandem or replaced SAR. A stock option may be in the form of an
ISO which, in addition to being subject to applicable terms, conditions
and limitations established by the Compensation Committee, complies
with Section 422 of the Code. The price at which Shares may be
purchased under a stock option shall be paid in full by the optionee at
the time of the exercise in cash or such other method permitted by the
Compensation Committee, including (1) tendering Shares (with prior
approval of the Chief Executive Officer if Shares are owned less than
six months); (2) authorizing a third party to sell the Shares (or a
sufficient portion thereof) acquired upon exercise of a stock option
and assigning the delivery to the Company of a sufficient amount of the
sale proceeds to pay for all the Shares acquired through such exercise;
or (3) any combination of the above.

8.2. SARs. A SAR is a right to receive a payment, in cash
and/or Shares, equal to the excess of the Fair Market Value of a
specified number of Shares on the date the SAR is exercised over the
Fair Market Value on the date the SAR was granted as set forth in the
applicable award agreement; except that if a SAR is granted
retroactively in tandem with or in substitution for a stock option, the
designated Fair Market Value set forth in the award agreement shall be
no lower than the Fair Market Value of a Share for such tandem or
replaced stock option.

8.3. STOCK AWARDS. A stock award is a grant made or
denominated in Shares or units equivalent in value to Shares. All or
part of any stock award may be subject to conditions and restrictions
established by the Compensation Committee, as set forth in the
applicable award agreement, which may include, but are not limited to,
continuous service with the Company and/or the achievement of
performance goals. The performance criteria that may be used by the
Compensation Committee in granting a stock award contingent on
performance goals shall consist of earnings, earnings per share,
revenues, profit growth, profit-related return ratios, cash flow or
total stockholder return. The Compensation Committee may select one
criterion or multiple criteria for measuring performance, and the
measurement may be stated in absolute terms or relative to comparable
companies.

Notwithstanding anything to the contrary contained in the Plan, the
Compensation Committee may grant a stock award which is not contingent on
performance goals or which is contingent on performance goals other than those
specified in this Section 8.3, provided the Compensation Committee shall have
determined that such award is not required to satisfy the requirements for
"qualified performance-based compensation" within the meaning of Section 162(m)
of the Code.

9. DIVIDENDS AND DIVIDEND EQUIVALENTS. The Compensation Committee may
provide that any awards under the Plan earn dividends or dividend equivalents.
Such dividends or dividend equivalents may be paid currently or may be credited
to a participant's account. Any crediting of dividends or dividend equivalents
may be subject to such restrictions and conditions as the Compensation Committee
may establish, including reinvestment in additional Shares or Share equivalents.

10. DEFERRALS AND SETTLEMENTS. Payment of awards may be in the form of
cash, stock, other awards or combinations thereof as the Compensation Committee
shall determine at the time of grant, and with such restrictions as it may
impose. The Compensation Committee also may require or permit participants to
elect to defer the issuance of Shares or the settlement of awards in cash under
such rules and procedures as it may establish under the Plan. It also may
provide that deferred settlements include the payment or crediting of interest
on the deferral amounts, or the payment or crediting of dividend equivalents
where the deferral amounts are denominated in Shares.

11. TRANSFERABILITY AND EXERCISABILITY. Awards granted under the Plan
shall not be transferable or assignable other than (1) by will or the laws of
descent and distribution; (2) by gift or other transfer of an award to any trust
or estate in which the original award recipient or such recipient's spouse or
other immediate relative has a substantial beneficial interest, or to a spouse
or other immediate relative, provided that any such transfer is permitted by
Rule 16b-3 under the Exchange Act as in effect when such transfer occurs and the
Board does not rescind this provision prior to such transfer; or (3) pursuant to
a qualified domestic relations order (as defined by the Code). However, any
award so transferred shall continue to be subject to all the terms and
conditions contained in the instrument evidencing such award.

In the event that a participant terminates employment with the Company
to assume a position with a governmental, charitable, educational or other
non-profit institution, the Compensation Committee may subsequently authorize a
third party, including but not limited to a "blind" trust, to act on behalf of
and for the benefit of such participant regarding any outstanding awards held by
the participant subsequent to such termination of employment. If so permitted by
the Compensation Committee, a participant may designate a beneficiary or
beneficiaries to exercise the rights of the participant and receive any
distribution under the Plan upon the death of the participant.

12. AWARD AGREEMENTS. Awards under the Plan shall be evidenced by
agreements as approved by the Compensation Committee that set forth the terms,
conditions and limitations for each award, which may include the term of an
award (except that in no event shall the term of any ISO exceed a period of ten
years from the date of its grant), the provisions applicable in the event the
participant's employment terminates, and the Compensation Committee's authority
to unilaterally or bilaterally amend, modify, suspend, cancel or rescind any
award. The Compensation Committee need not require the execution of any such
agreement, in which case acceptance of the award by the participant shall
constitute agreement to the terms of the award.

13. FOREIGN PARTICIPATION. In order to assure the viability of awards
granted to participants employed in foreign countries, the Compensation
Committee may provide for such special terms as it may consider necessary or
appropriate to accommodate differences in local law, tax policy or custom.
Moreover, the Compensation Committee may approve such supplements to, or
amendments, restatements or alternative versions of the Plan as it may consider
necessary or appropriate for such purposes without thereby affecting the terms
of the Plan as in effect for any other purposes; provided that, no such
supplements, amendments, restatements or alternative versions shall increase the
Share limitations contained in Section 5 of the Plan.

14. ACCELERATION AND SETTLEMENT OF AWARDS. The Compensation Committee
shall have the discretion, exercisable at any time before a sale, merger,
consolidation, reorganization, liquidation or change of control of the Company,
as defined by the Compensation Committee, to provide for the acceleration of
vesting and for settlement, including cash payment of an award granted under the
Plan, upon or immediately before the effectiveness of such event. However, the
granting of awards under the Plan shall in no way affect the right of the
Company to adjust, reclassify, reorganize or otherwise change its capital or
business structure, or to merge, consolidate, dissolve, liquidate, sell or
transfer all or any portion of its businesses or assets.

15. PLAN AMENDMENT. The Plan may be amended by the Compensation
Committee as it deems necessary or appropriate to better achieve the purposes of
the Plan, except that no such amendment shall be made without the approval of
the Company's stockholders which would increase the number of Shares available
for issuance in accordance with Sections 5 and 6 of the Plan, or cause the Plan
not to comply with Rule 16b-3 (or any successor rule) under the Exchange Act or
Section 162(m) of the Code. The Board may suspend the Plan or terminate the Plan
at any time; provided that, that no such action adversely affects any
outstanding benefit. Any Shares authorized under Section 5 (or any amendment
thereof) with respect to which no Award is granted prior to termination of the
Plan, or with respect to which an Award is terminated, forfeited or canceled
after termination of the Plan, shall automatically be transferred to any
subsequent long-term incentive equity plan for employees of the Company.

16. TAX WITHHOLDING. The Company shall have the right to deduct from
any settlement of an award made under the Plan, including the delivery or
vesting of Shares, a sufficient amount to cover withholding of any federal,
state or local taxes required by law, or to take such other action as may be
necessary to satisfy any such withholding obligations. The Compensation
Committee may, in its discretion and subject to such rules as it may adopt,
permit participants to use Shares to satisfy required tax withholding (with
prior approval of the Chief Executive Officer if Shares are owned less than six
months) and such Shares shall be valued at the Fair Market Value as of the
settlement date of the applicable award.

17. REGISTRATION OF SHARES. Notwithstanding any other provision of the
Plan, the Company shall not be obligated to offer or sell any Shares unless such
Shares are at that time effectively registered or exempt from registration under
the Securities Act of 1933, as amended (the "Securities Act") and the offer and
sale of such Shares are otherwise in compliance with all applicable federal and
state securities laws and the requirements of any stock exchange or similar
agency on which the Company's securities may then be listed or quoted. The
Company shall have no obligation to register the Shares under the federal
securities laws or take any other steps as may be necessary to enable the Shares
to be offered and sold under federal or other securities laws. Prior to
receiving Shares, a Plan participant may be required to furnish representations
or undertakings deemed appropriate by the Company to enable the offer and sale
of the Shares or subsequent transfers of any interest in such Shares to comply
with the Securities Act and other applicable securities laws. Certificates
evidencing Shares shall bear any legend required by, or useful for the purposes
of compliance with, applicable securities laws, this Plan or award agreements.

18. OTHER BENEFIT AND COMPENSATION PROGRAMS. Unless otherwise
specifically determined by the Compensation Committee, settlements of awards
received by participants under the Plan shall not be deemed a part of a
participant's regular, recurring compensation for purposes of calculating
payments or benefits from any Company benefit plan, severance program or the
severance pay law of any country. Further, the Company may adopt other
compensation programs, plans or arrangements as it deems appropriate or
necessary.

19. UNFUNDED PLAN. Unless otherwise determined by the Compensation
Committee, the Plan shall be unfunded and shall not create (or be construed to
create) a trust or a separate fund or funds. The Plan shall not establish any
fiduciary relationship between the Company and any participant or other person.
To the extent any person holds any rights by virtue of an award granted under
the Plan, such rights shall be no greater than the rights of an unsecured
general creditor of the Company.

20. USE OF PROCEEDS. The cash proceeds received by the Company from the
issuance of Shares pursuant to awards under the Plan shall constitute general
funds of the Company.

21. REGULATORY APPROVALS. The implementation of the Plan, the granting
of any award under the Plan, and the issuance of Shares upon the exercise or
settlement of any award shall be subject to the Company's procurement of all
approvals and permits required by regulatory authorities having jurisdiction
over the Plan, the awards granted under it or the Shares issued pursuant to it.

22. EMPLOYMENT RIGHTS. The Plan does not constitute a contract of
employment, and participation in the Plan will not give a participant the right
to continue in the employ of the Company on a full-time, part-time or any other
basis. Participation in the Plan will not give any participant any right or
claim to any benefit under the Plan, unless such right or claim has specifically
accrued under the terms of the Plan.

23. GOVERNING LAW. The validity, construction and effect of the Plan
and any actions taken or relating to the Plan shall be determined in accordance
with the laws of the State of South Dakota and applicable federal law.

24. SUCCESSORS AND ASSIGNS. The Plan shall be binding on all successors
and assigns of a participant, including, without limitation, the estate of such
participant and the executor, administrator or trustee of such estate, or any
receiver or trustee in bankruptcy or representative of the participant's
creditors.

[GRAPHIC OMITTED] LOGO GATEWAY 2000

OPTION AGREEMENT

Optionee
Grant Date
Vesting Start Date
Exercise Price
Option Shares

Gateway 2000, Inc. hereby grants the Optionee named above a
non-qualified stock option under the Company's 1996 Long-Term Incentive Equity
Plan. The Option allows Optionee to purchase shares of the Company's Common
Stock up to the number of shares shown by "Option Shares," above. The Option is
effective as of the Grant Date shown above. The Company will deliver to Optionee
certificates for shares purchased under the Option upon payment of the Exercise
Price, subject to the terms and conditions below.

1. Definitions. Stylized terms used herein have the following meanings:

1.1. "Allowed Termination" has the meaning provided in Section
3.2.

1.2. "Board" means the Board of Directors of the Company.

1.3. "Code" means the Internal Revenue Code of 1986, as
amended.

1.4. "Committee" means the Compensation Committee of the
Board.

1.5. "Common Stock" means the Company's Common Stock, par
value $.01 per share.

1.6. "Company" means Gateway 2000, Inc., a Delaware
corporation.

1.7. "Disability" means Optionee's inability, due to illness,
accident, injury, physical or mental incapacity or other disability, to carry
out effectively Optionee's duties and obligations to any Gateway Company or to
participate effectively and actively in the management of any Gateway Company
for at least 90 consecutive days or for shorter periods aggregating at least 120
days (whether or not consecutive) during any twelve-month period, as determined
by the Committee in its reasonable discretion.

1.8. "Exchange Act" means the Securities Exchange Act of 1934,
as amended.

1.9. "Exercise" of the Option means the purchase by Optionee
of Option Shares under Section 2.

1.10. "Exercise Price" means the Exercise Price shown above,
which is the closing price per share of the Common Stock on the NASDAQ National
Market on the Grant Date.

1.11. "Gateway Companies" means, collectively, the Company and
its subsidiaries. Individually, a "Gateway Company" means any of the Company and
its subsidiaries.

1.12. "Option" means the option to purchase Common Stock
granted Optionee by this Agreement.

1.13. "Option Shares" means all shares of Common Stock issued
or issuable upon Option exercise, as adjusted under Section 8.

1.14. "Plan" means the Company's 1996 Long-Term Incentive
Equity Plan.

1.15. "Requirements" has the meaning provided in Section 10.

1.16. "Securities Act" means the Securities Act of 1933, as
amended.

1.17. "Service" means continuous active service as a full-time
employee of the Company.

2. Exercise. Optionee may exercise the Option, in one or more
transactions, to the extent that it is vested and has not expired. Optionee
exercises the Option by giving (1) written notice to the Company's Corporate
Secretary substantially in the form of Exhibit A; together with (2) payment of
the Exercise Price multiplied by the number of Option Shares to be purchased.
Termination of Service or expiration of the Option cannot reverse any previous,
proper Option exercise hereunder.

3. Vesting.

3.1. Vesting of Service. Subject to Sections 3.2 and 4, the
Option will vest (1) for 25% of the Option Shares, rounding up for any
fractional shares, at midnight of the day before each of the first three
anniversary dates of the Vesting Start Date shown above; and (2) for the
remaining, unvested Option Shares at midnight of the day before the fourth
anniversary date of the Vesting Start Date.

3.2. Termination of Service. The Option can only vest when
Optionee is in Service. Vesting can only be reversed under Section 4. If
Optionee's service terminates because of Optionee's death or Disability or for
any other reason, including retirement, which is approved by the Committee
("Allowed Termination"), the Option will remain vested to the extent it was
vested on the date of such termination.

4. Expiration. When the Option expires, any vested portions become
unvested and can no longer be exercised.

4.1. Normal Expiration. The Option expires at midnight of the
day before the tenth anniversary date of the Grant Date or earlier (but not
later) under Section 4.2.

4.2. Termination of Service. The Option expires at midnight of
the day before any termination of Optionee's service other than an Allowed
Termination. Portions of the Option not vested at midnight of the day of an
Allowed Termination expire at that time. Portions of the Option vested at
midnight of the day of an Allowed Termination expire at midnight of (1) the day
before the first anniversary of Optionee's termination of Service as a result of
Optionee's death, Disability or Committee-approved retirement; and (2) the 90th
day after Optionee's termination of Service as a result of any other Allowed
Termination.

5. Conformity with Plan. The Option and this Agreement are intended to
conform to the Plan's provisions. The Plan's provisions will control in the
event of any inconsis tency between them and this Agreement.

6. Withholding of Taxes. The Committee may, as a condition of Option
exercise, require payment by Optionee of, or indemnification from Optionee for,
any withholding or other tax due upon Option exercise.

7. Payment. Payments by Optionee required under Sections 2 or 7 may be
made either in cash (including certified or cashier's check, or money order) or
by delivery of other shares of Common Stock already owned by Optionee for at
least six months and to which Optionee has good title, free and clear of all
liens and encumbrances.

8. Adjustments. In the event of any stock dividend, stock split,
recapitalization, reorganization, merger, consolidation, combination or
exchanges of shares, or any other similar change affecting the Common Stock, the
Committee, in its sole discretion and to the extent the Option is unexercised,
may adjust the Exercise Price and the number and type of Option Shares subject,
in each case, to compliance with the Plan and applicable law.

9. Transferability. The Option is personal to Optionee and is not
transferable by Optionee other than (1) by will or the laws of descent and
distribution; (2) by gift or other transfer to Optionee's spouse or other
immediate relative or to any trust or estate in which Optionee or Optionee's
spouse or other immediate relative has a substantial beneficial interest,
provided that (a) such transfer is permitted by Rule 16b-3 of the Exchange Act
as in effect when such transfer occurs, and (b) there is a Plan provision
permitting such transfer in full force and effect with respect to such transfer
when such transfer occurs; or (3) pursuant to a qualified domestic relations
order (as defined by the Code). Any transfer of the Option or Option Shares in
violation of this Agreement is void from inception.

10. Registration. The Company is not obligated to issue any shares of
Common Stock upon Option exercise unless (1) such shares have been registered
under the Securities Act or an exemption from such registration is available and
otherwise deemed appropriate by the Committee for such issuance; and (2) such
issuance is in compliance with applicable law and regulations and the
requirements of any stock exchange, quotation service or similar agency on which
the Common Stock may then be listed or quoted (such law, regulations and
requirements being collectively referred to herein as "Requirements"). The
Company has no obligation to so register shares of Common Stock or to so comply
with Requirements.

11. Remedies. Each party is entitled to enforce its rights under this
Agreement and to recover damages for breach. The parties agree that money
damages may not always be an adequate remedy for breach, and in such event the
wronged party may, in its sole discretion, request specific performance and/or
injunctive relief (without posting bond or other security) from any court of
competent jurisdiction to enforce or prevent any breach of this Agreement.

12. Miscellaneous. This Agreement is not an offer and is effective only
when fully signed. All required notices must be in writing and are deemed given
upon delivery if sent with return receipt via a reputable delivery service.
Deadline times herein refer to North Sioux City, South Dakota, USA time. No
failure or delay to enforce a provision will be deemed a waiver thereof. The
invalidity of any provision will not affect the validity of any other provision.
Descriptive headings are intended as a convenience and not as operative text.
This Agreement is governed by Delaware, USA law with respect to matters of
corporate law and governance and by the internal law of South Dakota, USA in all
other respects. This Agreement may be signed in counterparts, is the entire and
exclusive set of terms and conditions for transactions made under it and binds
and benefits the permitted successors and assigns of all parties. This Agreement
may only be modified by a writing signed by all parties, unless the modification
only enhances Optionee's rights, in which case it can become effective with only
the Company's signature.

13. Optionee Acknowledgment. Optionee agrees, represents and
acknowledges that (1) Optionee's exercise of the Option and purchase of Option
Shares will be for Optionee's own account or for the account of transferees
permitted under Section 10 and not on behalf of any others; (2) certain laws
govern and restrict Optionee's right to offer, sell or otherwise dispose of any
Option Shares, unless an exemption from such laws is available and otherwise
deemed appropriate by the Committee; (3) Optionee will not offer, sell or
otherwise dispose of any Option Shares in any way which would cause Optionee or
any Gateway Company to violate any Requirement or require any Gateway Company to
register such disposition under any Requirement; (4) Optionee may be required
upon Option exercise or upon subsequent transfer of Option Shares to furnish
representations and undertakings deemed appropriate by the Committee for
compliance with Require ments; (5) certificates evidencing Option Shares will
bear such legends, if any, deemed appropriate by the Committee for compliance
with Requirements; (6) Optionee will not offer, sell or otherwise dispose of any
Option Shares in violation of any policy of a Gateway Company; (7) the Option is
not intended to be an "incentive stock option" within the meaning of Section 422
of the Code; (8) nothing in this Agreement prevents the termination of
Optionee's employment, with or without cause, or change in compensation
therefor; (9) Optionee only has rights as a stockholder of Option Shares if and
to the extent that Optionee exercises the Option and retains ownership of Option
Shares; (10) Optionee has received and read a signed original of this Agreement,
together with the Plan and the prospectus for the Plan; (11) Optionee, by
signing below, accepts the Option; (12) Option ee will be bound by the
provisions of this Agreement and the Plan as of the Grant Date; and (13) all
transactions hereunder occurred in South Dakota, USA.

The parties, or their respective, authorized representatives, have
signed this Agreement effective as of the Grant Date:

OPTIONEE GATEWAY 2000, INC.

Signed:________________________ By:____________________________
Optionee Name

Exhibit A

[GRAPHIC OMITTED] LOGO GATEWAY 2000

OPTIONEE NOTICE OF EXERCISE

* Complete and return to the Corporate Secretary (mail stop 04).

* Call the Office of the Corporate Secretary (x28868) with any questions.

OPTIONEE NAME: Optionee Name
OPTIONEE SOCIAL SECURITY NUMBER OR
OTHER AUTHORIZED GOVERNMENT
IDENTIFICATION NUMBER:

STOCK OPTION PLAN: 1996 Long-Term Incentive Equity Plan
GRANT DATE: Grant Date
NUMBER OF SHARES FOR EXERCISE:
TOTAL EXERCISE PRICE PAID (ENTER $
AMOUNT AND CHECK ONE METHOD): |_| Attached check
|_| Paid through Company-approved
financing agent

By signing this Notice, I agree to the following:

1. I hereby notify Gateway 2000, Inc. (the "Company") of my intention
to exercise the option referenced above for the number of shares shown above
(the "Shares") and for the exercise price paid as shown above.

2. I acknowledge that I have received a prospectus covering the Shares.

3. I acknowledge that I have read and had ample opportunity to ask
questions of Company management regarding all financial and other information
provided me regarding the Company.

4. I agree to accept all financial and other information from the
Company that the Company believes necessary to enable me to make an informed
investment decision.

5. I represent to the Company that I am making neither this exercise
nor any subsequent sale of the Shares based on information that I know about the
Company or which concerns the Company that has not been publicly released for at
least three business days.

OPTIONEE

Signed:___________________
Date:_____________________

1996 NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN

1. PURPOSE. The purpose of the 1996 Non-Employee Directors Stock Option
Plan (the "Plan") is to attract and retain highly qualified people who are not
employees of Gateway 2000, Inc. (the "Company") or any of its subsidiaries to
serve as Non-Employee Directors of the Company, and to encourage Non-Employee
Directors to own shares of the Company's Common Stock, $.01 par value (the
"Common Stock").

2. ADMINISTRATION. Grants of Options under the Plan shall be automatic
as provided in Section 5.1 below. All questions of interpretation of the Plan or
of any options issued hereunder shall be determined by a committee (the
"Compensation Committee") consisting of two or more members appointed by the
Board of Directors of the Company (the "Board").

3. ELIGIBILITY. Only a member of the Board who is not an employee of
the Company or any of its subsidiaries (a "Non-Employee Director") shall be
eligible to participate in the Plan.

4. SHARES AVAILABLE FOR OPTIONS.

4.1. AVAILABLE SHARES. "Option" shall mean an option granted
under the provisions of Section 5 of this Plan to purchase Common
Stock. "Date of Grant" shall mean the date of grant of an Option. The
Company intends that Options shall constitute non-qualified stock
options [and not incentive stock options within the meaning of Section
422 of the Internal Revenue Code of 1986, as amended (the "Code")].
Subject to adjustment under Section 4.2 below, Options may be granted
under the Plan in respect of a maximum of 300,000 shares of Common
Stock. Shares subject to an Option that expires or terminates
unexercised shall again be available for Options hereunder to the
extent of such expiration or termination. Shares issued under the Plan
may consist in whole or in part of authorized but unissued shares or
treasury shares.

4.2. ADJUSTMENTS. In the event of any stock dividend, stock
split, recapitalization, reorganization, merger, consolidation,
combination or exchanges of shares, or any other similar change
affecting the Common Stock, an appropriate adjustment to reflect any
such change shall be made in the total number and class of shares for
which Options may be granted and the number and class of shares and the
price per share of any Option theretofore granted to the extent
unexercised. Such adjustment shall be as determined by the Compensation
Committee; provided that, any such computation shall be rounded to the
nearest whole share and no such modification shall require the issuance
of fractional shares.

5. STOCK OPTIONS. Each Option granted under the Plan shall be evidenced
by a written agreement in such form as the Compensation Committee shall approve
and shall be subject to Section 4 and the following terms and conditions:

5.1. AUTOMATIC AWARDS. Awards of Options shall be made
automatically to Non-Employee Directors as follows:

5.1.1. INITIAL AWARDS. Each individual who was a
Non-Employee Director on December 31, 1995 shall, on the
effective date, be granted an Option for the purchase of
24,000 shares of Common Stock. Each individual who was not a
Non-Employee Director on December 31, 1995 but who is a
Non-Employee Director on the day preceding the effective date
shall, on the effective date, be granted an Option for the
purchase of 12,000 shares of Common Stock.

5.1.2. ANNUAL AWARDS. Each Non-Employee Director
shall be granted an Option for the purchase of 6,000 shares of
Common Stock immediately following each annual meeting
following the effective date, provided the individual is a
Non-Employee Director on the Date of Grant.

5.2. APPORTIONMENT OF SHARES. The automatic awards specified
in Section 5.1 shall be made in the amounts specified in Section 5.1
only if the number of shares of Common Stock available to be issued,
transferred or exercised pursuant to awards under the Plan as
calculated in Section 4.1 is sufficient to make all automatic awards
required to be made by Section 5.1 on the respective Dates of Grant. If
the number of shares of Common Stock available to be issued or
transferred pursuant to awards under the Plan on any Date of Grant of
one or more automatic awards is insufficient to permit the grant of all
such awards, the Common Stock available under the Plan shall be
proportionally allocated between such awards, and the number of shares
so allocated to each award shall be the number of shares granted.

5.3. TERMS AND CONDITIONS OF AUTOMATIC AWARD. The following
terms and conditions shall apply to automatic awards made pursuant to
Section 5.1:

5.3.1. INITIAL AWARDS. With respect to Option awards
granted pursuant Section 5.1.1: (1) the exercise price for
each share of Common Stock subject to the Option shall be the
Fair Market Value of a share of Common Stock on the Date of
Grant of such Option; (2) the Option shall become 100% vested
and exercisable at midnight, Central Time, of the day before
the first anniversary of the Date of Grant of such Option so
long as the Non-Employee Director remains a director of the
Company after the Date of Grant through such time; and (3) the
Option shall terminate on the earliest of (i) midnight,
Central Time, of the day before the tenth anniversary of the
Date of Grant, (ii) midnight, Central Time, on the ninetieth
day after the date on which the Holder ceases to be a
Non-Employee Director for any reason other than the reasons
specified in the following clause (iii), or (iii) midnight,
Central Time, of the day before the first anniversary of the
date the Holder ceases to be a Non-Employee Director because
of death or permanent disability.

5.3.2. ANNUAL AWARDS. With respect to Option awards
granted pursuant to Section 5.1.2: (1) the exercise price for
each share of Common Stock subject to the Option shall be the
Fair Market Value of a share of Common Stock on the Date of
Grant of such Option; (2) the Option shall become vested and
exercisable with respect to one-third of the number of shares
subject thereto (provided, that any fractional share shall be
rounded up to a whole share) at midnight, Central Time, of the
day before each of the first three anniversaries of the Date
of Grant so long as the Non-Employee Director remains a
Non-Employee Director of the Company after the Date of Grant
through such times; and (3) the Option shall terminate on the
earliest of (i) midnight, Central Time, of the day before the
tenth anniversary of the Date of Grant, (ii) midnight, Central
Time, on the ninetieth day after the date on which the Holder
ceases to be a director for any reason other than the reasons
specified in the following clause (iii), or (iii) midnight,
Central Time, of the day before the first anniversary of the
date the Holder ceases to be a director because of death or
permanent disability.

5.4. EXERCISE OF OPTIONS. An option, or portion thereof, shall
be exercised by delivery of a written notice of exercise to the
Secretary of the Company and payment of the full purchase price (the
"Exercise Price") for the shares being purchased pursuant to the
Option. The Exercise Price may be paid in cash, in shares of Common
Stock already owned for at least six months (or for less than six
months if approved by the Chief Executive Officer of the Company) by
the Non-Employee Director who is granted an Option (including any other
person entitled to exercise the Option, the "Optionee") and to which
the Optionee has good title, free and clear of all liens and
encumbrances, or partly in cash and partly in such shares of Common
Stock; provided that, the method of paying the Exercise Price shall be
in compliance with Section 16 of the Securities Exchange Act of 1934,
as amended (the "Exchange Act") and the rules and regulations
thereunder. The value of shares delivered in payment of the Exercise
Price shall be their Fair Market Value as of the date of exercise of
the Option. Payments in cash may be made by the delivery of a check
payable to the order of the Company. Subject to Section 6, below, upon
receipt of notice and payment, the Company shall promptly issue and
deliver to the Optionee (or other person entitled to exercise the
Option) a certificate or certificates for the number of shares as to
which the exercise is made. An Option may not be exercised for
fractional shares of Common Stock.

5.5. TERMINATION OF SERVICE. Each Option terminates ten years
from the date of grant or, if earlier, (1) three years after the
initial grantee of the Option (the "Grantee") ceases service as a
Director for any reason other than death or disability, if the Grantee
served for six years or more; (2) 90 days after the Grantee ceases
service as a Director for any reason other than death or disability, if
the Grantee did not serve for six years or more; or (3) one year after
the Grantee ceases service as a Director as a result of death or
disability. The rights of the Grantee may be exercised by the Grantee's
guardian or legal representative in the case of disability or death.

5.6. FAIR MARKET VALUE. "Fair Market Value," for all purposes
under the Plan, shall mean the closing price of a share of Common Stock
as reported daily in The Wall Street Journal or similar, readily
available public source for the date in question. If no sales of shares
of Common Stock were made on such date, the closing price of a share of
Common Stock as reported for the preceding day on which a sale of
shares of Common Stock occurred shall be used.

6. TAX WITHHOLDING. The Company shall be entitled, if necessary or
desirable, to withhold from any Optionee from any amounts due and payable by the
Company to such Optionee (or secure payment from such Optionee in lieu of
withholding) the amount of any withholding or other tax due from the Optionee
with respect to any shares of Common Stock issuable under the Plan. The Optionee
may satisfy any withholding tax obligation by (1) a cash payment to the Company;
or (2) delivery of previously-owned shares of Common Stock which the Optionee
has held for at least six months (or less than six months with the permission of
the Chief Executive Officer) and to which the Optionee has good title, free and
clear of all liens and encumbrances.

7. TRANSFERABILITY AND EXERCISABILITY. Options granted under the Plan
shall not be transferable or assignable other than (1) by will or the laws of
descent and distribution; (2) by gift or other transfer to any trust or estate
in which the original option recipient or such recipient's spouse or other
immediate relative has a substantial beneficial interest, or to a spouse or
other immediate relative, provided that any such transfer is permitted by Rule
16b-3 of the Exchange Act as in effect when such transfer occurs and the Board
does not rescind this provision prior to such transfer; or (3) pursuant to a
qualified domestic relations order (as defined by the Code). However, any Option
so transferred shall continue to be subject to all the terms and conditions
contained in the instrument evidencing such Option.

If so permitted by the Compensation Committee, an Optionee may
designate a beneficiary or beneficiaries to exercise the rights of the Optionee
and receive any distribution under the Plan upon the death of the Optionee.

8. LEGAL REQUIREMENTS. Notwithstanding any other provision of the Plan,
the Company shall not be obligated to offer or sell any shares of Common Stock
upon exercise of an Option unless the shares to be issued upon such exercise are
at that time effectively registered or exempt from registration under the
Securities Act of 1933, as amended (the "Securities Act") and the offer and sale
of such shares are otherwise in compliance with all applicable federal and state
securities laws and the requirements of any stock exchange or similar agency on
which the Company's securities may then be listed or quoted. The Company shall
have no obligation to register the securities covered by this Plan under the
federal securities laws or take any other steps as may be necessary to enable
the securities covered by this Plan to be offered and sold under federal or
other securities laws. Upon exercising all or any portion of an Option, an
Optionee may be required to furnish representations or undertakings deemed
appropriate by the Company to enable the offer and sale of the shares of Common
Stock upon exercise of the Option or subsequent transfers of any interest in
such shares to comply with the Securities Act and other applicable securities
laws. Certificates evidencing shares of Common Stock issued pursuant to Options
shall bear any legend required by, or useful for the purposes of compliance
with, applicable securities laws, this Plan or the agreements evidencing the
Options.

It is the intention of the Company that the Plan comply in all respects
with Rule 16b-3 promulgated under Section 16(b) of the Exchange Act, that
eligible directors remain disinterested persons for purposes of administering
other employee benefit plans of the Company and that such other plans be exempt
from Section 16(b) of the Exchange Act. Therefore, if any Plan provision should
be found not to be in compliance with Rule 16b-3 or if any Plan provision would
disqualify eligible directors from remaining disinterested persons, that
provision shall be deemed null and void, and in all events the Plan shall be
construed in favor of its meeting the requirements of Rule 16b-3.

9. EFFECTIVE DATE; DURATION; SUSPENSION AND AMENDMENT. The Plan shall
become effective upon ratification and approval by the affirmative vote of the
holders of a majority of the securities of the Company present or represented,
and entitled to vote at, a meeting of stockholders of the Company. The Plan
shall terminate automatically on the tenth anniversary of the effective date
unless terminated earlier by the Board. The Board may suspend the Plan at any
time. The Board may amend the Plan at any time; provided that, no amendment may
be made without the approval of the stockholders of the Company (in the same
manner as initial approval of the Plan) if such amendment would (1) increase the
total number of shares for which Options may be granted; (2) change the manner
of determining the purchase price of shares of Common Stock under the Plan; (3)
change the class of persons eligible to receive Options under the Plan; (4)
change the provisions relating to the administration of the Plan; or (5) in any
other manner cause the Plan to fail to comply with Rule 16b-3 under the Exchange
Act or any other requirement of applicable law or regulation. Notwithstanding
any other provision of the Plan, in no event shall the provisions of this Plan
be amended more frequently than once every six months other than to comply with
changes in the Code or the rules thereunder. The Board may terminate the Plan at
any time, but such termination shall not affect Options already granted and such
Options shall remain in full force and effect as if the Plan had not been
terminated. No shares of Common Stock shall be issued or sold under this Plan
after the termination of the Plan, except upon exercise of Options granted
before termination. Any shares of Common Stock authorized under Section 4 of the
Plan (or any amendment thereof) with respect to which an Option is not granted
prior to termination of the Plan, or with respect to which an Option is
terminated, forfeited or canceled after termination of the Plan, shall
automatically be transferred to any subsequent stock option plan for
Non-Employee Directors of the Company.

10. LIMITATION OF RIGHTS. Neither the Plan nor the granting of any
Option hereunder shall constitute an agreement or understanding that the Company
will retain a Non-Employee Director for any period of time or at any particular
rate of compensation. The holder of an Option shall not thereby have any rights
as a stockholder until the holder receives shares of Common Stock upon exercise
of such Option.

11. UNFUNDED PLAN. Unless otherwise determined by the Compensation
Committee, the Plan shall be unfunded and shall not create (or be construed to
create) a trust or a separate fund or funds. The Plan shall not establish any
fiduciary relationship between the Company and any Optionee or other person. To
the extent any person holds any rights by virtue of an Option granted under the
Plan, such rights shall be no greater than the rights of an unsecured general
creditor of the Company.

12. GOVERNING LAW. The validity, construction and effect of the Plan
and any actions taken or relating to the Plan shall be determined in accordance
with the laws of the State of South Dakota and applicable federal law.

[GRAPHIC OMITTED] LOGO GATEWAY 2000

OPTION AGREEMENT

Optionee
Grant Date
Exercise Price
Option Shares

Gateway 2000, Inc. hereby grants the Optionee named above a
non-qualified stock option under the Company's 1996 Non-Employee Directors Stock
Option Plan. The Option allows Optionee to purchase shares of the Company's
Common Stock up to the number of shares shown by "Option Shares," above. The
Option is effective as of the Grant Date shown above. The Company will deliver
to Optionee certificates for shares purchased under the Option upon payment of
the Exercise Price, subject to the terms and conditions below.

1. Definitions. Stylized terms used herein have the following meanings:

1.1. "Board" means the Board of Directors of the Company.

1.2. "Code" means the Internal Revenue Code of 1986, as
amended.

1.3. "Committee" means the Compensation Committee of the
Board.

1.4. "Common Stock" means the Company's Common Stock, par
value $.01 per share.

1.5. "Company" means Gateway 2000, Inc., a Delaware
corporation.

1.6. "Disability" means Optionee's permanent inability, due to
illness, accident, injury, physical or mental incapacity or other disability, to
carry out effectively Optionee's duties and obligations as a director of the
Company or to participate effectively and actively in the management of the
Company by the Board.

1.7. "Exchange Act" means the Securities Exchange Act of 1934,
as amended.

1.8. "Exercise" of the Option means the purchase by Optionee
of Option Shares under Section 2.

1.9. "Exercise Price" means the Exercise Price shown above,
which is the closing price per share of the Common Stock on the NASDAQ National
Market on the Grant Date.

1.10. "Gateway Companies" means, collectively, the Company and
its subsidiaries. Individually, a "Gateway Company" means any of the Company and
its subsidiaries.

1.11. "Option" means the option to purchase Common Stock
granted Optionee by this Agreement.

1.12. "Option Shares" means all shares of Common Stock issued
or issuable upon Option exercise, as adjusted under Section 8.

1.13. "Plan" means the Company's 1996 Non-Employee Directors
Stock Option Plan.

1.14. "Requirements" has the meaning provided in Section 10.

1.15. "Securities Act" means the Securities Act of 1933, as
amended.

1.16. "Service" means Optionee's service as a director of the
Company.

3. Vesting. Subject to Section 4, and so long as Optionee is in
Service, the Option will vest for 100% of the Option Shares at midnight of the
day before the first anniversary date of the Grant Date.

4. Expiration. When the Option expires, any vested portions become
unvested and can no longer be exercised. The Option expires at the earliest to
occur of (1) midnight of the day before the tenth anniversary of the Grant Date;
(2) midnight of the day before the third anniversary of any termination of
Service for any reason other than death or Disability, if Optionee served for
six years or more; (3) midnight of the 90th day after any termination of Service
for any reason other than death or Disability, if Optionee did not serve for six
years or more; or (4) one year after Optionee ceases service as a director as a
result of death or Disability.

7. Payment. Payments by Optionee required under Sections 2 or 6 may be
made either in cash (including certified or cashier's check, or money order) or
by delivery of other shares of Common Stock already owned by Optionee for at
least six months and to which Optionee has good title, free and clear of all
liens and encumbrances.

13. Optionee Acknowledgment. Optionee agrees, represents and
acknowledges that (1) Optionee's exercise of the Option and purchase of Option
Shares will be for Optionee's own account or for the account of transferees
permitted under Section 9 and not on behalf of any others; (2) certain laws
govern and restrict Optionee's right to offer, sell or otherwise dispose of any
Option Shares, unless an exemption from such laws is available and otherwise
deemed appropriate by the Committee; (3) Optionee will not offer, sell or
otherwise dispose of any Option Shares in any way which would cause Optionee or
any Gateway Company to violate any Requirement or require any Gateway Company to
register such disposition under any Requirement; (4) Optionee may be required
upon Option exercise or upon subsequent transfer of Option Shares to furnish
representations and undertakings deemed appropriate by the Committee for
compliance with Require ments; (5) certificates evidencing Option Shares will
bear such legends, if any, deemed appropriate by the Committee for compliance
with Requirements; (6) Optionee will not offer, sell or otherwise dispose of any
Option Shares in violation of any policy of a Gateway Company; (7) the Option is
not intended to be an "incentive stock option" within the meaning of Section 422
of the Code; (8) nothing in this Agreement prevents Optionee's removal or change
in compensation as a director of the Company in accordance with the Company's
Certificate of Incorporation or Bylaws or with applicable law; (9) Optionee only
has rights as a stockholder of Option Shares if and to the extent that Optionee
exercises the Option and retains ownership of Option Shares; (10) Optionee has
received and read a signed original of this Agreement, together with the Plan
and the prospectus for the Plan; (11) Optionee, by signing below, accepts the
Option; (12) Optionee will be bound by the provisions of this Agreement and the
Plan as of the Grant Date; and (13) all transactions hereunder occurred in South
Dakota, USA.

The parties, or their respective, authorized representatives, have
signed this Agreement effective as of the Grant Date:

OPTIONEE GATEWAY 2000, INC.

Signed:____________________________ By:________________________________
Optionee Name

Exhibit A

[GRAPHIC OMITTED] LOGO GATEWAY 2000

OPTIONEE NOTICE OF EXERCISE

* Complete and return to the Corporate Secretary (mail stop 04).

* Call the Office of the Corporate Secretary (605-232-8868) with any questions.

OPTIONEE NAME: Optionee Name
OPTIONEE SOCIAL SECURITY NUMBER:
STOCK OPTION PLAN: 1996 Non-Employee Directors Stock
GRANT DATE: Option Plan Grant Date
NUMBER OF SHARES FOR EXERCISE:
TOTAL EXERCISE PRICE PAID (ENTER $
AMOUNT AND CHECK ONE OPTION): |_| Attached check
|_| Paid through Company-approved
financing agent

By signing this Notice, I agree to the following:

2. I acknowledge that I have received a prospectus covering the Shares.

3. I acknowledge that I have read and had ample opportunity to ask
questions of Company management regarding all financial and other information
provided me regarding the Company.

4. I agree to accept all financial and other information from the
Company that the Company believes necessary to enable me to make an informed
investment decision.

OPTIONEE

Signed: ______________________
Date: ________________________

[Winston & Strawn Letterhead]

July 25, 1996

Gateway 2000, Inc.
610 Gateway Drive
North Sioux City, SD 57049-2000

Re: Registration Statement on Form S-8 of Gateway
2000, Inc. (the "Registration Statement")

Ladies and Gentlemen:

We have acted as special counsel for Gateway 2000, Inc., a
Delaware corporation (the "Company"), in connection with the registration on
Form S-8 of the offer and sale of up to 6,700,000 shares (the "Shares") of the
Company's Common Stock, par value $.01 per share, issuable upon exercise of
certain stock options or other awards (collectively, the "Options") that may be
issued pursuant to the Gateway 2000, Inc. 1996 Long-Term Incentive Equity Plan
and the Gateway 2000, Inc. 1996 Non-Employee Directors Stock Option Plan
(collectively, the "Plans").

This opinion is delivered in accordance with the requirements
of Item 601(b)(5) of Regulation S-K under the Securities Act of 1933, as amended
(the "Act").

In connection with this opinion, we have examined and are
familiar with originals or copies, certified or otherwise identified to our
satisfaction, of: (i) the Registration Statement, as filed with the Securities
and Exchange Commission (the "Commission") under the Act; (ii) the Certificate
of Incorporation of the Company, as currently in effect; (iii) the Amended and
Restated By-Laws of the Company, as currently in effect; and (iv) resolutions of
the Board of Directors of the Company relating to, among other things, the
issuance of the Shares and the filing of the Registration Statement. We have
also examined such other documents as we have deemed necessary or appropriate as
a basis for the opinion set forth below.

In our examination, we have assumed the legal capacity of all
natural persons, the genuineness of all signatures, the authenticity of all
documents submitted to us as certified or photostatic of all documents submitted
to us as certified or photostatic copies, and the authenticity of the originals
of such latter documents. We have also assumed that the Company's Board of
Directors, or a duly authorized committee thereof, will have approved the
issuance of each Option prior to the issuance thereof. As to any facts material
to this opinion which we did not

Gateway 2000, Inc.
July 25, 1996
Page 2

independently establish or verify, we have relied upon oral or written
statements and representations of officers and other representatives of the
Company and others.

Based upon and subject to the foregoing, we are of the opinion
that all Shares issued pursuant to the Plans will be, upon payment of the
specified exercise price therefor (if applicable), legally issued, fully paid
and non-assessable.

We hereby consent to the filing of this opinion with the
Commission as an exhibit to the Registration Statement. In giving such consent,
we do not concede that we are experts within the meaning of the Act or the rules
and regulations thereunder or that this consent is required by Section 7 of the
Act.

Very truly yours,

/s/ Winston & Strawn

CONSENT OF INDEPENDENT ACCOUNTANTS

We consent to the incorporation by reference in this registration statement on
Form S-8 of our report dated February 2, 1996 on our audits of the financial
statements and financial statement schedules of Gateway 2000, Inc.

Coopers & Lybrand L.L.P.

Omaha, Nebraska
July 24, 1996