Employment Agreement

Exhibit 4.1

Stock Option Agreement

Pursuant to an Employment Agreement dated as of January 30, 2004 between Gateway, Inc. and Wayne R. Inouye, Gateway Inc. hereby grants to Wayne R. Inouye (“Optionee”) a non-qualified stock option to allow Optionee to purchase shares of the Company’s Common Stock up to the number of shares shown by Option Shares, above, on the terms described herein. 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 set forth in the Agreement.

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

1.1    Board means the Board of Directors of the Company.

1.2    Cause shall mean any of the following: (A) Optionee’s engaging in (1) any material acts of fraud, theft, embezzlement, or (2) any other acts or omissions that would constitute violations of any applicable securities law, the Foreign Corrupt Practices Act, or any similar law, ordinance, rule, regulation, decree or order of any Governmental Entity (as defined in the Employment Agreement), that cause or result in material harm or injury to the Company and its affiliates taken as a whole; (B) the Company having four (4) consecutive quarters of negative EBITDA at any time after the 2005 calendar year; (C) Optionee’s willful misconduct in connection with his responsibilities as an employee, director, or other representative of the Company; (D) Optionee’s unreasonable neglect or refusal to perform some or all of the material duties assigned to him pursuant to this Agreement and/or otherwise appropriate to Optionee’s position; (E) Optionee’s conviction for any felony, including any plea of guilty or nolo contendere or placement in a pretrial diversion program; and/or (F) Optionee’s material breach of any of the terms of the Employment Agreement or any other agreement that he now has or later has with the Company and/or any of its affiliates.

1.3    Change of Control of the Company shall mean the following:

Any Person is or becomes the beneficial owner (within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934), directly or indirectly, of securities of the Company representing a percentage of the combined voting power of the Company’s then outstanding securities that is at least equal to the greater of (x) 30% and (y) the percentage of such combined voting power then owned by Theodore Waitt and his affiliates and associates; or

the following individuals cease for any reason to constitute a majority of the number of directors then serving: individuals who, on the date hereof, constitute the Board and any new director (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the election of directors of the Company) whose appointment or election by the Board or nomination for election by the Company’s stockholders was approved or recommended by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors on the date hereof or whose appointment, election or nomination for election was previously so approved or recommended; or

there is consummated a merger or consolidation of the Company or any direct or indirect subsidiary of the Company with any other corporation, other than (A) a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof) at least 50% of the combined voting power of the securities of the Company or such surviving entity or any parent thereof outstanding immediately after such merger or consolidation, or (B) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no Person is or becomes the beneficial owner, directly or indirectly, of securities of the Company representing a percentage of the combined voting power of the Company’s then outstanding securities that is at least equal to the greater of (x) 30% and (y) the percentage of such combined voting power then owned by Theodore Waitt and his affiliates and associates; or

the stockholders of the Company approve a plan of complete liquidation or dissolution of the Company or there is consummated an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets, other than a sale or disposition by the Company of all or substantially all of the Company’s assets to an entity, at least 50% of the combined voting power of the voting securities of which are owned by stockholders of the Company in substantially the same proportions as their ownership of the Company immediately prior to such sale.

1.4    Code means the Internal Revenue Code of 1986, as amended.

1.5    Committee means the Compensation Committee of the Board.

1.6    Common Stock means the Company’s Common Stock, par value $.01 per share.

1.7    Company means Gateway, Inc., a Delaware corporation.

1.8    Disability shall mean for purposes of this Agreement, that an Optionee shall be deemed to have a Disability if, for physical or mental reasons, Optionee is, with or without reasonable accommodation, unable to perform the essential functions of his job duties for a period of not less than ninety (90) calendar days during any twelve-month period, and is entitled to disability benefits under the Company’s then-existing long-term disability plan.

1.9    Employment Agreement shall mean the Employment Agreement dated as of January 30, 2004 between Gateway, Inc. and Wayne R. Inouye.

1.10  Exchange Act means the Securities Exchange Act of 1934, as amended.

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

1.12  Exercise Price means the Exercise Price shown above, which is the closing price per share of the Common Stock as reported in The Wall Street Journal or similar readily available public source for the Grant Date.

1.13  Good Reason shall mean Optionee gives notice of his voluntary resignation of his employment after the occurrence of any of the following, without Optionee’s written consent: (A) a material reduction of Optionee’s duties, position or responsibilities as CEO relative to Optionee’s duties, position, or responsibilities as CEO in effect immediately prior to such reduction including by virtue of the Company being acquired and made part of a larger entity (as, for example, when the Chief Executive Officer of a company remains as such following a Change of Control of the Company but is not made the Chief Executive Officer of the acquiring company); (B) a material breach of this Agreement by the Company; (C) a material reduction in Optionee’s Base Salary (as defined in the Employment Agreement); (D) the failure to be nominated for re-elect