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Employment Agreement - E*Trade Group inc. and Kathy Levinson

                             EMPLOYMENT AGREEMENT

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


          Executive is serving as President and Chief Operating Officer of
Company. The parties desire to enter into a formal 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 Agreements. Any prior agreement shall
terminate and be of no further force and effect as of the date of this

          2.   Employment. Executive agrees to serve as President and Chief
Operating Officer of Company for the term of this Agreement, subject to the
terms set forth in this Agreement and the provisions of the Bylaws of Company.
During her employment, Executive shall devote her effort and attention, on a
full-time basis, to the performance of the duties required of her as an
executive of Company. Notwithstanding the foregoing, Executive shall be entitled
to serve as a director on the governing boards of no more than three (3) 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 her duties under this Agreement, and only with prior written
approval by the Company Chairman and Chief Executive Officer.

          3.   Compensation. As compensation for her 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

               (a)  An annual salary of $425,000 ('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 her level in Company.

          (b)  Participation in Company's TQI bonus plan up to a maximum
potential bonus of 200% of 80% of 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)  Reimbursement for financial counseling not to exceed $20,000 per
year and for annual physical examinations not to exceed $10,000 per year.

          (e)  It is acknowledged that Executive has received option grants in
accordance with the enclosed schedule. 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.

          (f)  Lease of automobile for company use, of a mutually agreeable make
and model of a value not to exceed $50,000, and reimbursement of reasonable
operating expense.

          (g)  Reimbursement of all reasonable business-related expenses,
including without limitation expenses related to travel conducted pursuant to
Company's travel policies.

          (h)  Reimbursement for the reasonable maintenance costs of a
comprehensive security and monitoring system installed in the Executive's
primary residence.

     4.   Term. The term of this Agreement and the termination rights are as

          (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, 2003 (the 'Initial Term').

          (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 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 5 below.

     5.   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 4 above, a payment in cash equal to
subsection (a) of this Section 5, and shall for the period or at the time
specified provide the other benefits described in subsection (b) of this Section
5 if 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 (d) of this Section 5, or at the request of or pursuant to an
agreement with a third party who has taken steps

                                     Page 2

reasonably calculated to effect a Change in Control, or otherwise in connection
with or in anticipation of a Change in Control.

          (a)  The payment shall be equal to eighteen (18) months of Executive's
current Total Annual Compensation as defined in subsection (d) of this Section

          (b)  In addition to the amount payable to Executive under subsection
(a) of this Section 5, upon termination of Executive for any reason the health
care (including medical and dental) and life insurance benefits coverage
benefits provided to Executive at her date of termination shall be continued at
the same level and in the same manner as if her 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 (d), (f)
and (g) of Section 3 beginning on the date of such termination and ending on the
later of: (a) the end of the term of this Agreement or (b) the date eighteen
(18) months following the date of the Executive's 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.

          (c)  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 (d)(vi) of this Section 5. Upon the
effective date of a termination for Disability, the Company shall pay to the
Executive the payment provided under subsection (a) of this Section 5. 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.

          (d)  For purposes of this Agreement, the following definitions shall

               (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

                                     Page 3

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

                         (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)  'Current Total Annual Compensation' shall be the
greater of (i) Executive's Base Salary for the calendar year in which her
employment terminates or (ii) such salary for the calendar year prior to the
year of such termination.

                    (v)   '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 her 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).

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

                    (vii) '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 her 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 her 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 her 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 her duties under this Agreement and which remains uncured
following thirty days after written notice of such alleged Cause by either the
Board of Directors, or Company's chairman and Chief Executive Officer.

               (e)  In addition to the benefits payable under subsection (a) or
(b) of this Section 5, 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 5, will place Executive in the same after-tax

                                     Page 4

position as if the excise tax penalty of Section 4999 of the Internal Revenue
Code of 1986, as amended (the 'Code'), or any successor statute of similar
import, did not apply to any of the amounts payable under this Section 5
including any amounts paid under this subsection (e). 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) of this Section 5.

          6.   Non-Competition. Executive agrees that during the Initial Term
Executive shall not, directly or indirectly, engage in any business or activity
or render any services or provide any advice, whether as an employee,
consultant, partner, principal, agent, or representative or in any other
individual, corporate or representative capacity, to any business, entity or
person engaged in the brokerage business, including without limitation any
business, entity or person engaged in the electronic brokerage business, in any
geographic area in which Company engages in its business or reasonably
contemplates engaging in its business during the Executive's employment with
Company. Notwithstanding the foregoing, Executive may own, directly or
indirectly, up to one percent (1%) of any class of 'publicly-traded securities'
of any business or entity engaged in the brokerage business. For the purposes of
this Section 6, 'publicly-traded securities' shall mean securities that are
traded on a national securities exchange or listed on the Nasdaq National

          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 her and
shall not be assignable by Executive, except with the prior written consent of

               (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 of 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:    Ms. Kathy Levinson
                              c/o E*Trade Group, Inc.
                              4500 Bohannon Drive
                              Menlo Park, California 94025

                                     Page 5

          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 5 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.

          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

                                     Page 6

          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]^^


                                   /s/ Kathy Levinson
                                   Kathy Levinson


                                   /s/ [ILLEGIBLE]^^


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