Employment Agreement - E*Trade Group Inc. and Christos M. Cotsakos

                             EMPLOYMENT AGREEMENT

          This Agreement is made effective this 1/st/ day of June, 1999 (the
'Effective Date'), by and between E*TRADE GROUP, INC., a Delaware corporation
('Company'), and CHRISTOS M. COTSAKOS, ('Executive').

                                  BACKGROUND

          Executive is serving as Chairman of the Board and Chief Executive
Officer of Company pursuant to an Employment Agreement dated March 15, 1996
('Prior Agreement'). The parties desire to enter into an amended employment
agreement with respect to the continued employment of Executive by Company,
which shall automatically become effective as of the Effective Date.

                             TERMS AND CONDITIONS

          In consideration of the premises and the mutual covenants and
agreements set forth below, the parties agree as follows:

          1.   Termination of Prior Agreement. The Prior Agreement shall
terminate and be of no further force and effect as of the date of this
Agreement.

          2.   Employment. Executive agrees to serve as Chief Executive Officer
of Company, and as Chairman of the Company's Board of Directors, for the term of
this Agreement, subject to the terms set forth in this Agreement and the
provisions of the Bylaws of Company. During his employment, Executive shall
devote his effort and attention, on a full-time basis, to the performance of the
duties required of him as an executive of Company. Notwithstanding the
foregoing, Executive shall be entitled to serve as director (including service
as the Board chairman) on the governing boards of other for-profit or not-for-
profit entities and to retain any compensation and benefits resulting from such
service, so long as such service does not unduly interfere with his duties under
this Agreement.

          3.   Compensation. As compensation for his services during the term of
this Agreement, Executive shall receive the amounts and benefits set forth in
this Section 3 all effective as of the Effective Date unless otherwise
specified:

               (a)  An annual salary of $575,000 ('Base Salary') prorated for
any partial year of employment. As soon as reasonably practicable after the
close of Company's current fiscal year and the close of each fiscal year
thereafter, the Base Salary shall be subject to review by the Compensation
Committee of the Company's Board of Directors for increases in light of the size
and performance of Company. The Base Salary, as adjusted in accordance with this
subsection (a), shall remain in effect unless and until it is increased in
accordance with this subsection (a). Executive's salary shall be payable
semimonthly or in accordance with Company's regular payroll practices in effect
from time to time for officers of his level in Company.

 
               (b)  Participation in Company's Management Bonus Plan up to a
maximum potential bonus of 300% of the then-current Base Salary.

               (c)  Participation in the employee benefit plans maintained by
Company and in other benefits provided by Company to senior executives,
including retirement and 401(k) plans, deferred compensation medical and dental,
annual vacation, paid holidays, sick leave, and similar benefits, which are
subject to change from time to time at the reasonable discretion of Company.

               (d)  Participation in any Company sponsored incentive
arrangements, including participation as a partner in any venture arrangements
originated or sponsored by Company.

               (e)  Reimbursement of membership dues and related ongoing costs
of appropriate club and professional organizations; and dues, costs and expenses
for appropriate, continuing professional education, financial and legal
counseling, planning and administration (including any reasonable legal
insurance costs).

               (f)  It is acknowledged that Executive has received option grants
in accordance with the enclosed schedule with specific terms and conditions
provided therein. Company agrees that there will be no change made in any Stock
Option during the term of Executive's employment hereunder which adversely
affects Executive's rights as established by the foregoing documents, without
the prior written consent of Executive. With respect to the stock option grant
dated April 22, 1999 and with respect to any subsequent stock options granted to
Executive, regardless of any other terms to the contrary, in no event with the
expiration date for exercise be less than 10 years from date of grant. In the
event of death or disability, all time-based vesting restrictions applicable to
all stock options, current and hereinafter granted, and outstanding to Executive
at the time of his death or disability shall accelerate as of such time and
thereafter not restrict the exercisability of any such options held by Executive
or his estate. In the event of an involuntary termination of Executive
associated with a Change in Control, as defined in Section 5(f)(iii), all time-
based vesting restrictions applicable to all stock options, current and
hereinafter granted, and outstanding to Executive at the time the Change in
Control shall accelerate as of such time and thereafter not restrict the
exercisability of any such options held by Executive.

               (g)  Lease of automobile for company use and reimbursement of
reasonable operating expense.

               (h)  Reimbursement of all reasonable business-related expenses,
including without limitation first-class air travel or chartered aircraft. At
the discretion of Executive, immediate family members are permitted to accompany
Executive.

               (i)  Reimbursement of tuition, fees, books, ancillary expenses
including the cost of research assistants, travel, hotel and meal expenses
relating to completion of Ph.D. program, or other executive projects such as
speech writing, publishing and similar endeavors.

               (j)  Reimbursement for the cost of a comprehensive security,
executive protection and monitoring system that may be installed in Executive's
vehicles and/or aircraft

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and at Executive's residences (and the residences and vehicles of immediate
family members), including (but not limited to) structural costs and related
equipment. Included in this area are reimbursement for the cost of equipment,
labor or other costs associated with the installation of technology and
communication equipment in Executive's residences integrated with the equipment
and transmission and reception capabilities in Executive's corporate office.

               (k)  Reimbursement for the use of aircraft owned or controlled by
Executive (and/or by his affiliates), all in accordance with the policies to be
determined in conjunction with Company.

               (l)  'Gross-up' payments to cover taxes due in the event any of
the benefits described in subsections (e), (g) (h), (i), (j), (k) and (l) above,
or in Section 5(c), are taxable to Executive.

          4.   In addition to any other compensation paid to Executive pursuant
to this agreement or otherwise awarded to Executive by the Compensation
Committee of the Company's Board of Directors, Executive will receive the
Special Enterprise Enhancement Payment award provided by this section. The award
will be paid within 30 days after the closing of a 'qualified event'. For this
purpose, a 'qualified event' is an event consummated prior to January 3, 2000,
and defined in Section 6(f)(iii) entitled 'Change in Control' hereinafter
provided. The amount of the award will be based on the increase of the
Enterprise Value (i.e. of the Company as hereinbefore defined) from August 12,
1999, to the qualified event (based on the respective closing market prices as
represented on the established exchange on which the company's shares are
regularly traded. If, however, a greater per share price is stated in any
document creating, upon closing, a 'qualified event' then that price shall be
utilized herein.) The Enterprise Value shall be the market capitalization to be
calculated inclusive of all fully diluted shares as represented on the financial
statements of the Company on which the company's independent accountants render
an opinion thereon. For this purpose only, the initial value will use the share
information as of August 12, 1999 with the appropriate market price as of the
same date for the effective date of this measurement. To the extent there has
been an increased value as of the 'qualified event', the Executive will receive
an award of eighteen thousands of one percent (0.018%) multiplied by such
increase.

          5.   Term. The term of this Agreement and the termination rights are
as follows:

               (a)  This Agreement and Executive's employment under this
Agreement shall be effective as of the Effective Date and shall continue for a
term ending on May 31, 2002 (the 'Initial Term'). This Agreement and Executive's
employment shall automatically continue for successive one-year periods at the
end of the Initial Term, unless either party gives written notice to the other
of its intent to terminate this Agreement and Executive's employment not less
than 180 days prior to the commencement of any such one-year renewal period. In
the event such notice to terminate is properly given, this Agreement and
Executive's employment shall terminate at the end of the Initial Term or the 
one-year renewal period during which the notice is given.

               (b)  This Agreement and Executive's employment may be terminated
by either party prior to the end of the Initial Term (or any renewal period)
upon 30 days' prior

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written notice to the other party, provided that, in the event of such
termination, Company shall be obligated to make the payments and provide the
benefits described in Section 6 below.

          6.   Termination Payments. Upon termination of Executive's employment,
Company shall pay to Executive, within three business days after the end of the
30-day notice period provided in Section 5 above, a payment in cash determined
under subsection (a) or (b) of this Section 6 and shall for the period or at the
time specified provide the other benefits described in subsections (c) and (e)
of this Section 6:

               (a)  The payment shall be equal to five full years of Executive's
'Current Total Annual Compensation' as defined in subsection (f) of this Section
6, if: (i) Executive's employment is terminated by Company, other than for
Cause, within three years after any 'Change in Control' of Company as defined in
subsection (f) of this Section 6, or at the request of or pursuant to an
agreement with a third party who has taken steps reasonably calculated to effect
a Change in Control, or otherwise in connection with or in anticipation of a
Change in Control; or (ii) Executive elects to terminate employment for Good
Reason within three years after any Change in Control of Company.

               (b)  The payment shall be equal to four full years of Executive's
Current Total Annual Compensation, if (i) Executive's employment is terminated
by Company, other than for Cause, and such termination is not described in (a)
above; or (ii) Executive elects to terminate his employment for 'Good Reason,'
as defined in subsection (f) of this Section 6, and such termination is not
described in (a) above.

               (c)  In addition to the amount payable to Executive under
subsection (a) or (b) of this Section 6, Executive shall be entitled to the
following upon termination for any reason:

                    (i)    The health care (including medical and dental) and
life insurance benefits coverage benefits provided to Executive at his date of
termination, shall be continued at the same level and in the same manner as if
his employment had not terminated (subject to the customary changes in such
coverages if Executive reaches age 65 or similar events), together with the
benefits described in subsections (g), (i) and (1) of Section 3 beginning on the
date of such termination and ending on the date forty-eight months from the date
of termination, followed by COBRA election rights. Any additional coverages
Executive had at termination, including dependent coverage, will also be
continued for such period on the same terms. Any costs Executive was paying for
such coverages at the time of termination shall continue to be paid by
Executive. If the terms of any benefit plan referred to in this section do not
permit continued participation by Executive, then Company will arrange for other
coverage providing substantially similar benefits at the same contribution level
of Executive.

                    (ii)   Reasonable relocation expenses for Executive and his
dependents to any location within the continental United States incurred for the
purpose of new employment on or within eighteen months of the effective
termination date of this Agreement. Such expenses shall include without
limitation first-class airfare and other travel for Executive and his family;
moving and storage expenses; real estate closing fees and costs upon the sale of
his resident and purchase of a new residence; all other expenses reasonably
incurred in relocating

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to a location other than Menlo Park, California or environs; and an amount equal
to Ten Percent (10%) of his Current Total Annual Compensation to cover all
incidental relocation expenses.

                    (iii)   Outplacement and financial and legal counseling
services selected by Executive, up to a maximum of $30,000 each (net of tax, if
any).

                    (iv)    A mutually acceptable office, together with
secretarial assistance and customary office facilities and services, located at
Company (or in lieu thereof reimbursement for same at another location), for up
to twelve months following the effective termination date of this Agreement, for
the purpose of facilitating Executive's search for new employment.

          (d)  The Employee's employment shall terminate in the event of death.
The Company shall pay to the Executive's surviving spouse or family trust (or
estate, if none), the payment provided under this Section 6 and shall continue
to pay the Base Salary plus most recent TQI bonus amount for the remaining term
of the contract. The Executive's rights under the benefit plans of the Company
shall be determined under the provisions of those plans.

          (e)  The Company may terminate the Employee's employment for
Disability by giving the Employee six months' advance notice in writing.
Disability is defined in subsection (f)(vi) of this Section 6. Upon the
effective date of a termination for Disability, the Company pay to the Executive
the payment provided under subsection (b) of this Section 6. In the event of
disability, the Executive's rights under the benefit plans of the Company shall
be determined under the provisions of those plans.

          (f)  For purposes of this Agreement, the following definitions shall
apply:

               (i)    The 'Board' shall mean the Board of Directors of Company.

               (ii)   The 'Incumbent Board' shall mean the members of the Board
as of the date of this Agreement and any person becoming a member of the Board
hereafter whose election, or nomination for election by Company's shareholders,
was approved by a vote of at least a majority of the directors then comprising
the Incumbent Board (other than an election or nomination of an individual whose
initial assumption of office is in connection with an actual or threatened
election contest relating to the election of the directors of Company).

               (iii)  'Change in Control' shall mean:

                      (A)  The acquisition (other than from Company) by any
person, entity or 'group,' within the meaning of Section 13(d)(3) or 14(d)(2) of
the Exchange Act (excluding, for this purpose, any employee benefit plan of
Company or its subsidiaries which acquires beneficial ownership of voting
securities of Company) of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 50% or more of either the then
outstanding shares of Common Stock or the combined voting power of Company's
then outstanding voting securities entitled to vote generally in the election of
directors; or

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                      (B)  The failure for any reason of individuals who
constitute the Incumbent Board to continue to constitute at least a majority of
the Board; or

                      (C)  Approval by the stockholders of Company of a
reorganization, merger, consolidation, in each case, with respect to which the
shares of Company voting stock outstanding immediately prior to such
reorganization, merger or consolidation do not constitute or become exchanged
for or converted into more than 50% of the combined voting power entitled to
vote generally in the election of directors of the reorganized, merged or
consolidated company's then outstanding voting securities, or a liquidation or
dissolution of Company or of the sale of all or substantially all of the assets
of Company.

               (iv)   'Good Reason' shall mean:

                      (A)  The assignment to Executive of any duties
inconsistent in any respect with Executive's position (including status,
offices, titles and reporting requirements), authority, duties or
responsibilities as contemplated by Section 2 above, or any other action by
Company which results in a diminution of such position, authority, duties or
responsibilities, excluding for this purpose any action taken with the consent
of Executive and any isolated, insubstantial and inadvertent action not taken in
bad faith and which is remedied by Company promptly after receipt of notice of
such action given by Executive;

                      (B)  A reduction in the overall level of Executive's
compensation or benefits as provided in Section 3;

                      (C)  Company's requiting Executive to be based at any
office or location other than Company's executive offices in Menlo Park,
California environs, except for travel reasonably required in the performance of
Executive's responsibilities;

                      (D)  Any purported termination by Company of Executive's
employment otherwise than as expressly permitted by this Agreement; or

                      (E)  Any failure by Company to comply with and satisfy
Section 7 below.

                      (F)  The nomination by the Board of a Chairman (or
person serving in a similar capacity) of a person other than Executive.

          For purposes of this Agreement, any good-faith determination of 'Good
Reason' made by Executive shall be conclusive.

               (v)    'Current Total Annual Compensation' shall be the total of
the following mounts: (A) the greater of (i) Executive's Base Salary for the
greater of the calendar or fiscal year (the 'Applicable Year') in which his
employment terminates or (ii) such salary for the Applicable Year prior to the
year of such termination; and (B) the greater of (i) any total that became
payable to Executive under the Bonus Plan during the Applicable Year prior to
the Applicable year in which his employment terminates and (ii) the maximum
total bonus amount to which Executive would be and had been paid for the
Applicable Year in which his employment terminates as if all Bonus Plan criteria
had been or are met, regardless of when such

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amounts are actually to be paid or had been paid. Any longer term Bonus Plan
payments are to be accelerated and included within the meaning of this
definition.

                    (vi)   'Disability' shall mean the total and permanent
inability of Executive due to illness, accident or other physical or mental
incapacity to perform the usual duties of his employment under this Agreement,
as determined by a physician selected by Company and acceptable to Executive or
Executive's legal representative (which agreement as to acceptability shall not
be unreasonably withheld).

                    (vii)  The 'Exchange Act' shall mean the Securities Exchange
Act of 1934, as amended.

                    (viii) 'Cause' shall be defined solely as (i) Executive's
defalcation or misappropriation of funds or property of the Company, or the
commission of any other illegal act in the course of his employment with Company
which, in the reasonable judgment of the Board of Directors, has a material
adverse financial effect on the Company or on Executive's ongoing abilities to
carry out his duties under this Agreement; (ii) Executive's conviction of a
felony or of any crime involving moral turpitude, and affirmance of such
conviction following the exhaustion of any appeals; (iii) refusal of Executive
to substantially perform all of his duties and responsibilities, or Executive's
persistent neglect of duty or chronic unapproved absenteeism (other than for a
temporary or permanent Disability), which remains uncured following thirty days
after written notice of such alleged Cause by the Board of Directors; or (iv)
any material and substantial breach by Executive of other terms and conditions
of this Agreement, which, in the reasonable judgment of the Board of Directors,
has a material adverse financial effect on the Company or on Executive's ongoing
abilities to carry out his duties under this Agreement and which remains uncured
following thirty days after written notice of such alleged Cause by the Board of
Directors.

               (g)  In addition to the amount payable under subsection (a), (b)
or (c) of this Section 6, Company shall pay Executive a tax equalization payment
in accordance with this subsection. The tax equalization payment shall be in an
amount which, when added to the other amounts payable to Executive under this
Section 6, will place Executive in the same after-tax position as if the excise
tax penalty of Section 4999 of the Internal Revenue Code of 1986, as amended
(the 'Code'), or any successor statue of similar import, did not apply to any of
the amounts payable under this Section 6 including any amounts paid under this
subsection (g). The amount of this tax equalization payment shall be determined
by Company's independent accountants and shall be payable to Executive at the
same time as the payment under subsection (a) or (b) of this Section 6.

          7.   Assignment; Successors. Any assignment of this Agreement shall be
in accordance with the following:

               (a)  The rights and benefits of Executive under this Agreement,
other than accrued and unpaid amounts due hereunder, are personal to him and
shall not be assignable by Executive, except with the prior written consent of
Company.

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               (b)  Subject to the provisions of subsection (c) of this Section
7, this Agreement shall not be assignable by Company, provided that with the
consent of Executive, Company may assign this Agreement to another corporation
wholly owned by it either directly or through one or more other corporations, or
to any corporate successor of Company or any such corporation.

               (c)  Any business entity succeeding to substantially all of the
business of Company, by purchase, merger, consolidation, sale of assets or
otherwise, shall be bound by and shall adopt and assume this Agreement, and
Company shall require the assumption of this Agreement by such successor as a
condition to such purchase, merger, consolidation, sale or assets or other
similar transaction.

          8.   Notices. Any notice or other communications under this Agreement
shall be  in writing, signed by the party making the same, and shall be
delivered personally or sent by certified or registered mail, postage prepaid,
addressed as follows:

          If to Executive;     Mr. Christos M. Cotsakos
                               c/o E*Trade Group, Inc.
                               4500 Bohannon Drive
                               Menlo Park, California 94025

          If to Company;       The Board of Directors
                               c/o E*Trade Group, Inc.
                               4500 Bohannon Drive
                               Menlo Park, California 94025

or such other address or agent as may hereafter be designated by either party
hereto. All such notices shall be deemed given on the date personally delivered
or mailed.

          9.   Full Settlement and Legal Expenses. Company's obligation to make
the payments provided for in this Agreement and otherwise to perform its
obligations hereunder shall not be affected by any set-off, counter-claim,
recoupment, defense or other claim, right or action which Company may have
against Executive or others. In no event shall Executive be obligated to seek
other employment or take any other action by way of mitigation of the amounts
payable to Executive under any of the provisions of this Agreement. The
prevailing party shall be entitled to recover all legal fees and expenses which
such party may reasonably incur as a result of any legal proceeding relating to
the validity, enforceability, or breach of, or liability under, any provision of
this Agreement or any guarantee of performance (including as a result of any
contest by Executive about the amount of any payment pursuant to Section 6 of
this Agreement), plus in each case interest at the applicable Federal Rate
provided for in Section 7872(f)(2) of the Code.

          10.  Governing Law. This Agreement shall be interpreted and enforced
in accordance with the laws of the State of California, except that any
arbitration shall be governed by the Federal Arbitration Act.

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          11.  Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid, but if any one
or more of the provisions contained in this Agreement shall be invalid, illegal
or unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provisions in every other respect and of the
remaining provisions of this Agreement shall not be in any way impaired.

          12.  Entire Agreement. This Agreement (including all Exhibits)
contains the entire agreement of the parties with respect to the subject matter
contained in this Agreement. There are no restrictions, promises, covenants, or
undertakings between Company and Executive, other than those expressly set forth
in this Agreement. This Agreement supersedes all prior agreements and
understandings between the parties. This Agreement may not be amended or
modified except in writing executed by the parties.

          13.  Arbitration. Any controversy or claim arising out of or relating
to this Agreement shall be settled by arbitration in accordance with the
American Arbitration Association's National Rules for the Resolution of
Employment Disputes, and judgment upon the award rendered by the arbitrator may
be entered in any court having jurisdiction. Any arbitration shall be held in
Santa Clara County, California, unless otherwise agreed in writing by the
parties.

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          In Witness Whereof, the undersigned directors of the Company, have
executed this Agreement as of the day and year first above written.

                                E*TRADE GROUP, INC.
                                
                                [CORPORATE SEAL]
                                
                                /s/ William  A. Porter
                                ----------------------------------------------- 
                                William A. Porter, Chairman Emeritus
                                
                                Attest: Secretary  /s/ [ILLEGIBLE]^^
                                                   ---------------------------- 
                                
                                
                                EXECUTIVE
                                
                                
                                /s/ Christos M. Cotsakos
                                ----------------------------------------------- 
                                Christos M. Cotsakos
                                
                                
                                Witnesseth:
                                
                                
ACKNOWLEDGEMENT:                /s/ [ILLEGIBLE]^^
                                ----------------------------------------------- 




/s/ Richard Braddock
------------------------------------
Richard Braddock
Chairman of Compensation Committee



/s/ William Ford
------------------------------------
William Ford
Chairman of Audit Committee

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