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                                                                    Exhibit 10.4


                              EMPLOYMENT AGREEMENT

         This EMPLOYMENT AGREEMENT (the "Agreement") is entered into as of this
2nd day of April, 2001 by and between Instinet Group LLC, a Delaware limited
liability company (the "Company"), and Peter Fenichel ("Executive").

                                  WITNESSETH:

         WHEREAS, Executive is currently employed by the Company as its
Executive Vice President -- Fixed Income Markets;

         WHEREAS, the Company desires to continue the employment of Executive;

         WHEREAS, the Company and Executive desire to set forth the terms and
conditions of Executive's continued employment with the Company and Executive
desires to accept such employment on the terms and conditions set forth herein;

         WHEREAS, this form of Executive Employment Agreement has been approved
by the Compensation Committee of the Company on March 2, 2001;

         WHEREAS, each of the Company and Executive agrees that Executive has
had and will continue to have a prominent role in the management of the
business, and the development of the goodwill, of the Company and its
Affiliates, and has established and developed and will continue to establish and
develop relations and contacts with the principal customers and suppliers of the
Company and its Affiliates in United Kingdom/Europe (collectively, the
"Restricted Territory"), all of which constitute valuable goodwill of, and could
be used by Executive to compete unfairly with, the Company and its Affiliates;
and

         WHEREAS, (i) in the course of his employment with the Company,
Executive has obtained and will continue to obtain confidential and proprietary
information and trade secrets concerning the business and operations of the
Company and its Affiliates in the Restricted Territory that could be used to
compete unfairly with the Company and its Affiliates; (ii) Executive has and
will continue to create and develop certain work products, inventions and other
intellectual property which constitute an essential portion of the property of
the Company and its Affiliates, (iii) the covenants and restrictions contained
in Sections 8 through 14, inclusive, are intended to protect the legitimate
interests of the Company and its Affiliates in their respective goodwill, trade
secrets and other confidential and proprietary information and intellectual
property; and (iv) Executive desires to be bound by such covenants and
restrictions.

         NOW, THEREFORE, in consideration of the premises and the mutual
covenants and promises contained herein and for other good and valuable
consideration, the Company and Executive hereby agree as follows:

         1. Agreement to Continue Employment. Upon the terms and subject to the
conditions of this Agreement, the Company hereby continues the employment of
Executive, and Executive hereby accepts such continued employment with the
Company.
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         2. Term; Position and Responsibilities.

         (a) Term of Employment. Unless Executive's employment shall sooner
terminate pursuant to Section 7, the Company shall employ Executive on the terms
and subject to the conditions of this Agreement for a term commencing on the
date hereof (the "Commencement Date") and ending on the three year anniversary
of the Commencement Date (the "Initial Term"). Effective upon the expiration of
the Initial Term and of each Additional Term (as defined below), Executive's
employment hereunder shall be deemed to be automatically extended, upon the same
terms and conditions, for an additional period of one year (each, an "Additional
Term"), in each such case, commencing upon the expiration of the Initial Term or
the then current Additional Term, as the case may be, unless the Company, at
least 6 months prior to the expiration of the Initial Term or such Additional
Term, shall give written notice to Executive of its intention not to extend the
Employment Period (as defined below) hereunder. The period during which
Executive is employed by the Company pursuant to this Agreement shall be
referred to as the "Employment Period."


         (b) Position and Responsibilities. During the Employment Period,
Executive shall serve as Executive Vice President -- Fixed Income Markets of the
Company and shall have such duties and responsibilities as are customarily
assigned to individuals serving in such position and such other duties
consistent with Executive's title and position as the Board of Directors of the
Company (the "Board") specifies from time to time. Executive shall devote all of
his skill, knowledge, commercial efforts and working time to the conscientious
and faithful performance of his duties and responsibilities for the Company
(except for (i) vacation time as provided by Company policy and absence for
sickness or similar disability and (ii) to the extent that it does not interfere
with the performance of Executive's duties hereunder, (A) such reasonable time
as may be devoted to the fulfillment of Executive's civic responsibilities and,
subject to the prior written approval of the Board and to compliance with the
provisions of Sections 8 through 14, inclusive, service on boards of directors
of other corporations and entities and (B) such reasonable time as may be
necessary from time to time for personal financial matters).


         3. Base Salary. As compensation for the services to be performed by
Executive during the Employment Period, the Company shall pay Executive a base
salary at an annualized rate of $350,000, payable in installments on the
Company's regular payroll dates. The Company shall review Executive's base
salary annually during the period of his employment hereunder and, in its sole
discretion, may adjust such base salary from time to time based upon such
factors as the Compensation Committee of the Board (the "Compensation
Committee") shall consider relevant. The annual base salary payable to Executive
under this Section 3 shall hereinafter be referred to as the "Base Salary".

         4. Incentive Compensation Arrangements.

         (a) Annual Incentive Bonus. During the Employment Period and subject to
the review and approval of the Compensation Committee, Executive shall be
eligible to participate in the annual bonus program maintained by the Company
for its senior executives. Provided that, except to the extent expressly
provided otherwise in Section 7(f), Executive's employment has not terminated
prior to the last day of the fiscal year of the Company in respect


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of which any bonus is payable, Executive shall have the opportunity to receive
an annual bonus under such program (the "Bonus"), which may be in cash,
restricted stock, options or other non-cash compensation, in an amount to be
determined by the Compensation Committee based on the achievement by the Company
and Executive of such performance objectives as may be established from time to
time by the Compensation Committee or other committee of the Board.

         (b) Option Grants. During the Employment Period, Executive shall be
eligible to participate in the Instinet 2000 Stock Option Plan (as the same may
be amended and in effect from time to time, the "2000 Option Plan") and any
subsequent stock option plan maintained by the Company for its senior
executives, subject to the review and approval of the Compensation Committee.
The terms and conditions of all options to purchase shares of common stock
granted to Executive under the 2000 Option Plan or under any prior or subsequent
stock option plan maintained by the Company or its Affiliates (including any
options granted to Executive prior to the Commencement Date) (collectively, the
"Options"), including the grant, vesting, exercise, payment and all other terms
of such Options, shall be governed by the terms of the stock option plan under
which such Options were granted, as such plan or plans may be amended and in
effect from time to time.

         5. Employee Benefits. During the Employment Period, Executive shall be
eligible to participate in the employee benefit plans and programs maintained by
the Company from time to time in which senior executives of the Company are
eligible to participate, including to the extent maintained by the Company life,
medical, dental, accidental and disability insurance plans and profit sharing,
pension, retirement, deferred compensation and savings plans, in accordance with
the terms and conditions thereof as in effect from time to time. The benefits
referred to in this Section 5 shall be provided to Executive on a basis that is
commensurate with Executive's position and duties with the Company.

         6. Perquisites and Expenses.

         (a) General. During the Employment Period, Executive shall be eligible
to participate in all special benefit or perquisite programs of the Company
generally available from time to time to senior executives of the Company, on
the terms and conditions thereof as in effect from time to time.

         (b) Business Travel, Lodging, etc. During the Employment Period, the
Company shall reimburse Executive for reasonable travel, lodging, meal and other
reasonable expenses incurred by him in connection with the performance of his
duties and responsibilities hereunder upon submission of evidence, satisfactory
to the Company, of the incurrence and purpose of each such expense and otherwise
in accordance with terms and conditions of the Company's business expense
reimbursement policy applicable to its senior executives as in effect from time
to time.

         (c) Vacation. During the Employment Period, Executive shall be entitled
to paid vacation on an annualized basis in the amount provided by Company
policy, without carryover accumulation.


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         7. Termination of Employment.

         (a) Termination Due to Death or Disability. Executive's employment may
be terminated by the Company due to Executive's Disability (as defined in the
Company's Human Resources policies). In the event that Executive's employment
hereunder terminates due to his death or is terminated by the Company due to
Executive's Disability, no termination benefits shall be payable to or in
respect of Executive except as provided in Section 7(f)(ii).

         (b) Termination by the Company for Cause. Executive's employment may be
terminated by the Company for Cause (as defined in the 2000 Option Plan). In the
event of a termination of Executive's employment by the Company for Cause, no
termination benefits shall be payable to or in respect of Executive except as
provided in Section 7(f)(ii).

         (c) Termination Without Cause. Executive's employment may be terminated
by the Company Without Cause (as defined below). In the event of a termination
of Executive's employment by the Company Without Cause, no termination benefits
shall be payable to or in respect of Executive except as provided in Section
7(f)(i). For purposes of this Agreement and the Options, a termination "Without
Cause" shall mean a termination of Executive's employment by the Company other
than due to Executive's death or Disability as described in Section 7(a) and
other than for Cause as described in Section 7(b).


         (d) Termination by Executive. Executive may terminate his employment
for any reason, including for Good Reason (as defined below). In the event of a
termination of Executive's employment by Executive other than for Good Reason,
no termination benefits shall be payable to or in respect of Executive except as
provided in Section 7(f)(ii) and in the event of a termination of Executive's
employment by Executive for Good Reason, no termination benefits shall be
payable to or in respect of Executive except as provided in Section 7(f)(i). For
purposes of this Agreement, a termination of employment by Executive for "Good
Reason" shall mean a termination by Executive of his employment with the Company
within 30 days following the occurrence, without Executive's consent, of any of
the following events: (i) a material diminution in the Executive duties,
authority, position or responsibilities; (ii) a material decrease in the
Executive's base pay, fees, incentive compensation opportunities, and/or
employee benefits and prerequisites; or (iii) a requirement that the Executive
relocate his or her primary place of employment or service by more than 30
miles; provided that the Executive shall have given the Company or the relevant
Affiliate of the Company notice of the event or events constituting Good Reason
and the Company or such Subsidiary shall have failed to cure such event or
events within 10 business days after receipt of such notice.


         (e) Notice of Termination; Date of Termination.

         (i) Notice of Termination. Any termination by the Company pursuant to
Section 7(a), 7(b) or 7(c), or by Executive pursuant to Section 7(d), shall be
communicated by a written Notice of Termination addressed to the other party to
this Agreement. A "Notice of Termination" shall mean a notice stating that
Executive or the Company, as the case may be, is electing to terminate
Executive's employment with the Company, stating the proposed effective date of
such termination, indicating the specific provision of this Section 7 under
which such


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termination is being effected and, if applicable, setting forth in reasonable
detail the circumstances claimed to provide the basis for such termination.

         (ii) Date of Termination. The term "Date of Termination" shall mean (i)
if Executive's employment is terminated by his death, the date of his death,
(ii) if Executive's employment is terminated by the Company for Cause, the date
on which Notice of Termination is given or, if later, the effective date of
termination specified in such Notice of Termination, and (iii) if Executive's
employment is terminated by the Company Without Cause, due to Executive's
Disability or by Executive for any reason, the date specified in the applicable
Notice of Termination provided that such date shall not be less than 30 days nor
more than 60 days after the date on which Notice of Termination is given.

         (f) Payments Upon Certain Terminations.

         (i) In the event of a termination of Executive's employment by the
Company Without Cause or a termination by Executive of his employment for Good
Reason during the Employment Period, the Company shall pay to Executive (or,
following his death, to Executive's estate) within 30 days of the Date of
Termination his (x) full Base Salary through the Date of Termination, (y)
reimbursement for any unreimbursed business expenses incurred by Executive prior
to the Date of Termination that are subject to reimbursement pursuant to Section
6(b) and (z) payment for vacation time accrued as of the Date of Termination but
unused (such amounts under clauses (x), (y) and (z), collectively the "Accrued
Obligations"). In addition, in the event of any such termination of Executive's
employment, provided Executive executes and delivers to the Company a Release
and Discharge of Claims in a form acceptable to the Company, Executive (or,
following his death, Executive's estate) shall be entitled to the following
payments and benefits, as liquidated damages:

                  (A) continued payments of the Base Salary, payable in
         installments in accordance with the Company's regular payroll policies,
         for the period beginning on the Date of Termination and ending on the
         second anniversary of the Date of Termination (the "Severance Period");

                  (B) a portion of Executive's Bonus for the fiscal year of the
         Company that includes the Date of Termination, such portion to equal
         the product (such product, the "Pro Rata Bonus") of (1) the Bonus that
         would have been payable to Executive for such year had he remained
         employed for the entire fiscal year and had Executive and the Company
         each achieved (but not exceeded) the target performance objectives for
         such year established by the Board or a committee thereof, multiplied
         by (2) a fraction, the numerator of which is equal to the number of
         days in such fiscal year that precede the Date of Termination and the
         denominator of which is equal to 365, such amount to be payable to
         Executive within five business days following the date (the "Bonus
         Payment Date") annual bonuses for such fiscal year are actually paid by
         the Company to its active executives;

                  (C) payment of an amount equal to 200% of the Average Bonus
         (as defined below), such amount to be paid in two equal installments,
         the first such installment to be paid within five business days
         following the Bonus Payment Date for the fiscal year of


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         the Company that includes the Date of Termination and the second such
         installment to be paid within five business days following the Bonus
         Payment Date for the next succeeding fiscal year of the Company;

                  (D) continued coverage during the Severance Period under the
         Company's medical and health insurance plans referred to in Section 5
         (the "Continued Benefits") for Executive and his eligible dependents
         participating in such plans immediately prior to the Date of
         Termination, subject to timely payment by Executive of all premiums,
         contributions and other co-payments required to be paid by senior
         executives of the Company under the terms of such plans as in effect
         from time to time.

         The term "Average Annual Bonus" means the average of the annual cash
bonuses plus the value at the time of award of any non-cash bonuses paid to
Executive for each of the three complete fiscal years of the Company ending
immediately prior to the Date of Termination during which Executive was employed
by the Company or, if Executive has been employed by the Company for an
aggregate period of less than three fiscal years, the average of the annual
bonuses paid to Executive by the Company for Executive's period of employment.

         (i) Executive shall not have a duty to mitigate the costs to the
Company under this Section 7 (f) (i), nor shall any payments from Company to
Executive of Base Salary, Average Annual Bonus and Pro Rata Bonus be reduced,
offset or canceled by any compensation or fees earned by (whether or not paid
currently) or offered to Executive during the Severance Period by a subsequent
employer or other Person (as defined below) for which Executive performs
services, including but not limited to consulting services. The foregoing
notwithstanding, should Executive receive benefits coverage by a subsequent
employer during the Severance Period, all health and medical benefits coverage
provided by the Company to Executive shall immediately terminate.

         (ii) If Executive's employment shall terminate upon his death or
Disability or if the Company shall terminate Executive's employment for Cause or
Executive shall terminate his employment without Good Reason in any such case
during the Employment Period, the Company shall pay to Executive (or, in the
event of Executive's death, to his estate) the Accrued Obligations within 30
days following the Date of Termination. In addition, if Executive's employment
shall terminate upon his death or Disability during the Employment Period, the
Company shall pay to Executive (or, in the event of Executive's death, to his
estate) the Pro Rata Bonus, if any, in one lump sum within five business days
following the Bonus Payment Date for the fiscal year of the Company that
includes the Date of Termination.

         (iii) Except as specifically set forth in this Section 7(f), no
benefits payable to Executive under any otherwise applicable plan, policy,
program or practice of the Company or its Affiliates in which Executive was a
participant during his employment with the Company or its Affiliates shall be
limited by this Section 7(f), provided that Executive shall not be entitled to
receive any payments or benefits under any such plan, policy, program or
practice providing any bonus or incentive compensation or severance compensation
or benefits (and the provisions of this Section 7(f) shall supersede the
provisions of any such plan, policy, program or practice).


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         (g) Resignation upon Termination. Effective as of any Date of
Termination under this Section 7 or otherwise as of the date of Executive's
termination of employment with the Company, Executive shall resign, in writing,
from all Board memberships and other positions then held by him with the Company
and its Affiliates.

         8. Unauthorized Disclosure. During the period of Executive's employment
with the Company and following any termination of such employment, without the
prior written consent of the Board or its authorized representative, except to
the extent required by an order of a court having jurisdiction or under subpoena
from an appropriate government agency, in which event, Executive shall use his
best efforts to consult with the Board prior to responding to any such order or
subpoena, and except as required in the appropriate performance of his duties
hereunder, Executive shall not disclose any confidential or proprietary trade
secrets, customer lists, drawings, designs, programs, software, protocols,
information regarding product development, marketing plans, sales plans,
manufacturing plans, management organization information (including but not
limited to data and other information relating to members of the Board of
Directors of the Company or any of its Affiliates or to management of the
Company or any of its Affiliates), operating policies or manuals, business
plans, financial records, packaging design or other financial, commercial,
business or technical information (a) relating to the Company or any of its
Affiliates or (b) that the Company or any of its Affiliates may receive
belonging to suppliers, customers or others who do business with the Company or
any of its Affiliates (collectively, "Confidential Information") to any third
person unless such Confidential Information has been previously disclosed to the
public or is in the public domain (other than by reason of Executive's breach of
this Section 8).


         9. Non-Competition. During the period of Executive's employment with
the Company and, following any termination thereof, the period ending on the
later of (a) six months after the Date of Termination and (b) the last day of
the Severance Period (such periods, collectively, the "Restriction Period"),
Executive shall not, directly or indirectly, become employed by, engage in
business with, serve as an agent or consultant to, or become a partner, member,
principal, stockholder or other owner (other than a holder of less than 1% of
the outstanding voting shares of any publicly held company) of, any Person that
competes or has a reasonable potential for competing, anywhere in the Restricted
Territory, with the Business (as defined below).


         10. Non-Solicitation of Employees. During the Restriction Period,
Executive shall not, directly or indirectly, for his own account or for the
account of any other Person, anywhere in the Restricted Territory, (i) solicit
for employment, employ or otherwise interfere with the relationship of the
Company or any of its Affiliates with any natural person throughout the world
who is or was employed by or otherwise engaged to perform services for the
Company or any of its Affiliates at any time during which Executive was employed
by the Company or (in the case of any such activity during the period of
Executive's employment with the Company) or during the six-month period
preceding such solicitation, employment or interference (in the case of any such
activity after the date of Executive's termination of employment), other than
any such solicitation or employment on behalf of the Company or its Affiliates
during Executive's employment with the Company, or (ii) induce any employee of
the Company or its Affiliates who is a member of management to engage in any
activity which Executive is prohibited from engaging in under any of Sections 8,
9, 10 or 11 or to terminate his employment with the


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Company. For purposes of this Section 10 and Section 11, the terms "solicit"
and "solicitation" mean any communication of any kind whatsoever, regardless of
by whom initiated, inviting, encouraging or requesting any person or entity to
take or refrain from taking any action.

         11. Non-Solicitation of Customers. During the Restriction Period,
Executive shall not, directly or indirectly, for his own account or for the
account of any other Person, anywhere in the Restricted Territory, solicit or
otherwise attempt to establish any business relationship of a nature that is
competitive with the business or relationship of the Company or any of its
Affiliates with any Person which is or was a customer, client or distributor of
the Company or any of its Affiliates at any time during which Executive was
employed by the Company (in the case of any such activity during the period of
Executive's employment with the Company) or during the twelve-month period
preceding the Date of Termination (in the case of any such activity after the
date of Executive's termination of employment), other than any such solicitation
on behalf of the Company or any of its Affiliates during Executive's employment
with the Company.

         12. Return of Documents. In the event of the termination of Executive's
employment for any reason, Executive shall deliver to the Company all of the
property of the Company and its Affiliates and the non-personal documents and
data of any nature and in whatever medium of each of the Company and its
Affiliates, and he shall not take with him any such property, documents or data
or any reproduction thereof, or any documents containing or pertaining to any
Confidential Information.

         13. Work Product. Executive agrees to disclose in confidence to the
Company any and all inventions, improvements, designs, original works of
authorship, formulas, processes, computer software programs, databases and trade
secrets (including, but not limited to, market information and marketing
designs, proposals and concepts) (all taken together, the "Developments") that
Executive makes, conceives, first reduces to practice, or creates, either alone
or jointly with others while Executive is employed by the Company and that: (a)
result from any work performed by Executive for the Company, whether or not in
the normal course of Executive's duties or during normal business hours; (b)
reasonably relate to the actual or anticipated business, services, products,
research or development of Executive; or (c) are developed with the use of the
Company time, equipment, supplies or facilities. Executive must promptly
disclose Developments to the Company whether or not such Developments are
patentable, copyrightable or protectible as trade secrets. Executive understands
and agrees that all Developments shall be the sole and exclusive property of the
Company and shall constitute "work made for hire" (as that term is defined under
Section 101 of the U.S. Copyright Act, 17 U.S.C. Section 101) with the Company
being the person for whom the work was prepared and that all intellectual
property rights therein shall be the sole and exclusive property of the Company,
and that in the event that any such Development is deemed not to be a "work made
for hire," Executive hereby irrevocably assigns, transfers and conveys to the
Company, exclusively and perpetually, all right, title and interest which
Executive may have or acquire in and to such Development throughout the world,
including without limitation any copyrights and patents, and the right to secure
registrations, renewals, reissues, and extensions thereof. Executive agrees to
sign any documents and to do all things necessary, without additional
compensation, whether during Executive's employment or after, to assist the
Company to register, perfect, maintain


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and/or enforce the Company's rights in any Development, including without
limitation any patent, copyright, trade secret or other right or interest.


         14. Injunctive Relief with Respect to Covenants; Forum, Venue and
Jurisdiction. Executive acknowledges and agrees that the covenants, obligations
and agreements of Executive contained in Sections 8, 9, 10, 11, 12, 13 and 14
relate to special, unique and extraordinary matters and that a violation of any
of the terms of such covenants, obligations or agreements will cause the Company
irreparable injury for which adequate remedies are not available at law.
Therefore, Executive agrees that the Company shall be entitled to an injunction,
restraining order or such other equitable relief (without the requirement to
post bond) as a court of competent jurisdiction may deem necessary or
appropriate to restrain Executive from committing any violation of such
covenants, obligations or agreements. These injunctive remedies are cumulative
and in addition to any other rights and remedies the Company may have. The
Company and Executive hereby irrevocably submit to the exclusive jurisdiction of
the courts of New York, and the Federal courts of the United States of America,
in each case located in New York City in respect of the injunctive remedies set
forth in this Section 14 and the interpretation and enforcement of Sections 8,
9, 10, 11, 12, 13 and 14 insofar as such interpretation and enforcement relate
to any request or application for injunctive relief in accordance with the
provisions of this Section 14, and the parties hereto hereby irrevocably agree
that (a) the sole and exclusive appropriate venue for any suit or proceeding
relating solely to such injunctive relief shall be in such a court, (b) all
claims with respect to any request or application for such injunctive relief
shall be heard and determined exclusively in such a court, (c) any such court
shall have exclusive jurisdiction over the person of such parties and over the
subject matter of any dispute relating to any request or application for such
injunctive relief, and (d) each hereby waives any and all objections and
defenses based on forum, venue or personal or subject matter jurisdiction as
they may relate to an application for such injunctive relief in a suit or
proceeding brought before such a court in accordance with the provisions of this
Section 14. All disputes not relating to any request or application for
injunctive relief in accordance with this Section 14 shall be resolved by
arbitration in accordance with Section 17 (b).


         Notwithstanding any other provision hereof, the Company's obligations
to pay Executive any amount or provide Executive with any benefit or right
pursuant to Section 7(f) is subject to Executive's compliance with his
obligations under Sections 8 through 14, inclusive.

         15. Assumption of Agreement. The Company shall require any Successor
thereto, by agreement in form and substance reasonably satisfactory to
Executive, to expressly assume and agree to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform it
if no such succession had taken place. Failure of the Company to obtain such
agreement prior to the effectiveness of any such succession shall be a breach of
this Agreement and shall entitle Executive to compensation from the Company in
the same amount and on the same terms as Executive would be entitled hereunder
if the Company had terminated Executive's employment Without Cause as described
in Section 7, except that for purposes of implementing the foregoing, the date
on which any such succession becomes effective shall be deemed the Date of
Termination.

         16. Entire Agreement. This Agreement (including the Exhibit hereto
constitutes the entire agreement among the parties hereto with respect to the
subject matter


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hereof. All prior correspondence and proposals (including but not limited to
summaries of proposed terms) and all prior promises, representations,
understandings, arrangements and agreements relating to such subject matter
(including but not limited to those made to or with Executive by any other
Person and those contained in any prior employment, consulting or similar
agreement entered into by Executive and the Company or any predecessor thereto
or Affiliate thereof) are merged herein and superseded hereby.

         17. Miscellaneous.

         (a) Binding Effect; Assignment. This Agreement shall be binding on and
inure to the benefit of the Company and its successors and permitted assigns.
This Agreement shall also be binding on and inure to the benefit of Executive
and his heirs, executors, administrators and legal representatives. This
Agreement shall not be assignable by any party hereto without the prior written
consent of the other parties hereto, except as provided pursuant to this Section
17(a). The Company may effect such an assignment without prior written approval
of Executive upon the transfer of all or substantially all of its business
and/or assets (by whatever means), provided that the Successor to the Company
shall expressly assume and agree to perform this Agreement in accordance with
the provisions of Section 15.

         (b) Arbitration. Any dispute or controversy arising under or in
connection with this Agreement (except in connection with any request or
application for injunctive relief in accordance with Section 14) shall be
resolved by binding arbitration. The arbitration shall be held in New York City
and, except to the extent inconsistent with this Agreement, shall be conducted
in accordance with the Commercial Arbitration Rules of the American Arbitration
Association then in effect at the time of the arbitration, and otherwise in
accordance with principles which would be applied by a court of law or equity.
The arbitrator shall be acceptable to both the Company and Executive. If the
parties cannot agree on an acceptable arbitrator, the dispute shall be heard by
a panel of three arbitrators, one appointed by the Company, one appointed by
Executive, and the third appointed by the other two arbitrators. All expenses of
arbitration shall be borne by the party who incurs the expense, or, in the case
of joint expenses, by both parties in equal portions.

         (c) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York without reference to
principles of conflicts of laws.

         (d) Taxes. The Company may withhold from any payments made under this
Agreement all applicable taxes, including but not limited to income, employment
and social insurance taxes, as shall be required by law.


         (e) Amendments. No provision of this Agreement may be modified, waived
or discharged unless such modification, waiver or discharge is approved by the
Board or a Person authorized thereby and is agreed to in writing by Executive.
No waiver by any party hereto at any time of any breach by any other party
hereto of, or compliance with, any condition or provision of this Agreement to
be performed by such other party shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same or at any prior or subsequent
time. No waiver of any provision of this Agreement shall be implied from any
course of dealing between



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or among the parties hereto or from any failure by any party hereto to assert
its rights hereunder on any occasion or series of occasions.

         (f) Severability. In the event that any one or more of the provisions
of this Agreement shall be or become invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein shall not be affected thereby.

         (g) Notices. Any notice or other communication required or permitted to
be delivered under this Agreement shall be (i) in writing, (ii) delivered
personally, by courier service or by certified or registered mail, first-class
postage prepaid and return receipt requested, (iii) deemed to have been received
on the date of delivery or, if so mailed, on the third business day after the
mailing thereof, and (iv) addressed as follows (or to such other address as the
party entitled to notice shall hereafter designate in accordance with the terms
hereof):

         (A) If to the Company, to it at:


             Office of the General Counsel
             Instinet Corporation
             Three Times Square
             New York, New York 10036


         (B) if to Executive, to him at his residential address as currently on
             file with the Company.

         (h) Voluntary Agreement; No Conflicts. Executive represents that he is
entering into this Agreement voluntarily and that Executive's employment
hereunder and compliance with the terms and conditions of this Agreement will
not conflict with or result in the breach by Executive of any agreement to which
he is a party or by which he or his properties or assets may be bound.

         (i) Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed an original and all of which together shall constitute
one and the same instrument.

         (j) Headings. The section and other headings contained in this
Agreement are for the convenience of the parties only and are not intended to be
a part hereof or to affect the meaning or interpretation hereof.

         (k) Certain Definitions.

         "Affiliate": with respect to any Person, means any other Person that,
directly or indirectly through one or more intermediaries, Controls, is
Controlled by, or is under common Control with the first Person, including but
not limited to a Subsidiary of the first Person, a Person of which the first
Person is a Subsidiary, or another Subsidiary of a Person of which the first
Person is also a Subsidiary.

         "Business": means the creation and delivery of transactional products
and products related to the financial services sector and brokerage services
related thereto delivered


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<PAGE>   12
largely, but not exclusively, through advanced technology, that permit or aid
the Company's customers to invest in, purchase and sell securities (whether
fixed income or equity, both during normal market hours and after hours), and
any and all other businesses that after the date hereof, and from time to time
during the Employment Period, are material with respect to the Company's and
its Affiliates' businesses.

     "Control": with respect to any Person, means the possession, directly or
indirectly, severally or jointly, of the power to direct or cause the direction
of the management policies of such Person, whether through the ownership of
voting securities, by contract or credit arrangement, as trustee or executor,
or otherwise.

     "Person": any natural person, firm, partnership, limited liability
company, association, corporation, company, trust, business trust, governmental
authority or other entity.

     "Subsidiary": with respect to any Person, each corporation or other Person
which the first Person owns or Controls, directly or indirectly, capital stock
or other ownership interests representing 50% or more of the combined voting
power of the outstanding voting stock or other ownership interests of such
corporation or other Person.

     "Successor": of a Person means a Person that succeeds to the first
Person's assets and liabilities by merger, liquidation, dissolution or
otherwise by operation of law, or a Person to which all or substantially all
the assets and/or business of the first Person are transferred.

     IT WITNESS WHEREOF, the Company has duly executed this Agreement by its
authorized representatives, and Executive has hereunto set his hand, in each
case effective as of the date first above written.


                                        INSTINET GROUP LLC


                                        By: /s/ Kenneth Marshall
                                            ------------------------------
                                            Name: Kenneth Marshall
                                            Title: Chief Operating Officer


                                        Executive: /s/ Peter Fenichel
                                                   -----------------------
                                                   Name: Peter Fenichel



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