AMERITRADE HOLDING CORP, S-1/A, 1997-02-26

AMERITRADE HOLDING CORP
S-1/A, 1997-02-26
SECURITY BROKERS, DEALERS & FLOTATION COMPANIES

Previous: HEADLANDS MORTGAGE SECURITIES INC, 8-K, 1997-02-26

Next: AMERIPATH INC, S-1/A, 1997-02-26

<PAGE>

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 26, 1997

REGISTRATION NO. 333-17495
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

--------------------------

AMENDMENT NO. 3
TO
FORM S-1

REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

--------------------------

AMERITRADE HOLDING CORPORATION
(Exact name of registrant as specified in its charter)

<TABLE>
<S> <C> <C>
DELAWARE 6211 47-0642657
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of Classification Code Number) Identification
incorporation or organization) Number)
</TABLE>

4211 SOUTH 102ND STREET
OMAHA, NEBRASKA 68127
(402) 331-7856
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)

ROBERT T. SLEZAK
AMERITRADE HOLDING CORPORATION
4211 SOUTH 102ND STREET
OMAHA, NEBRASKA 68127
(402) 331-7856

(Name, address, including zip code, and telephone number,
including area code, of agent for service)

--------------------------

COPIES TO:

CAROL S. RIVERS, ESQ. WENDELL H. ADAIR, JR., P.C.
Mayer, Brown & Platt McDermott, Will & Emery
190 South LaSalle Street 227 West Monroe Street
Chicago, IL 60603 Chicago, IL 60606
(312) 782-0600 (312) 372-2000

--------------------------

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
AS SOON AS PRACTICABLE AFTER THIS REGISTRATION STATEMENT BECOMES EFFECTIVE.

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. / /

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act of 1933, please check the
following box and list the Securities Act of 1933 registration statement number
of the earlier effective registration statement for the same offering. / /

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act of 1933, check the following box and list the
Securities Act of 1933 registration statement number of the earlier effective
registration statement for the same offering. / /

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /

--------------------------

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>

SUBJECT TO COMPLETION PRELIMINARY PROSPECTUS DATED FEBRUARY 26, 1997.

2,350,000 Shares

[LOGO]
Class A Common Stock
($.01 par value)

Of the shares of Class A Common Stock, par value $.01 per share (the "Class A
Stock"), offered hereby, 1,700,000 shares are being sold by AmeriTrade Holding
Corporation (the "Company") and 650,000 shares are being sold by certain
stockholders of the Company named herein under Principal and Selling
Stockholders (the "Selling Stockholders"). The Company will not
receive any proceeds of the shares sold by the Selling
Stockholders. See "Principal and Selling Stockholders" and
"Underwriting."

Prior to the Offering, there has been no public market for the Class A Stock. It
is anticipated that the initial public offering price will be between $14.00
and $16.00 per share. For information relating to the factors considered
in determining the initial public offering price, see
"Underwriting."

The Company has two classes of Common Stock, the Class A Stock offered hereby
and Class B Common Stock, par value $.01 per share (the "Class B Stock" and,
together with the Class A Stock, the "Common Stock"). The Class B Stock is not
being offered hereby. The Class B Stock is entitled to elect a majority of the
directors of the Company and is convertible on a share for share basis into
Class A Stock. The Class A Stock offered hereby is entitled to elect the
remaining directors of the Company. The Company currently has eight
directors. Except with respect to the ability to elect directors and the
conversion rights, the Class A Stock and the Class B Stock are identical
in all respects. See "Description of Capital Stock." Upon completion of
the Offering, the Company's Chairman and Chief Executive Officer, his
family members and trusts held for their benefit will own approximately
69.4% of the Class A Stock and all of the Class B Stock, which will
constitute approximately 72.3% of the outstanding Common Stock (69.9%
if the Underwriters' over- allotment option is exercised in
full). See "Principal and Selling Stockholders."

Application has been made to list the Class A Stock on the Nasdaq National
Market under the symbol "AMTD."
The textual portion of this Prospectus and a demonstration of certain of the
Company's products and services, which demonstration is part of this
Prospectus, are available on the CD-ROM portion of this Prospectus
attached to the inside back cover page hereof. To view the demonstration
portion of this Prospectus, click on the hyper link located on the
cover page of the textual portion of the CD-ROM portion of this
Prospectus or exit the textual portion of the CD-ROM portion of
this Prospectus.

For a discussion of certain factors that should be considered in connection with
an investment in the Class A Stock, see "Risk Factors" beginning on page 8
herein.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

<TABLE>
<CAPTION>
Underwriting Proceeds to
Price to Discounts and Proceeds to Selling
Public Commissions Company(1) Stockholders
-------------------- -------------------- -------------------- --------------------
<S> <C> <C> <C> <C>
Per Share........................... $ $ $ $
Total(2)............................ $ $ $ $
</TABLE>

(1) Before deduction of expenses payable by the Company estimated at $920,000.

(2) Certain Selling Stockholders have granted the Underwriters an option,
exercisable for 30 days from the date of this Prospectus, to purchase a
maximum of 352,500 additional shares of the Class A Stock to cover over-
allotments of shares. If the option is exercised in full, the total Price to
Public will be $ , Underwriting Discounts and Commissions will be
$ and Proceeds to Selling Stockholders will be $ . See
"Underwriting."

The shares of Class A Stock offered hereby are offered by the several
Underwriters when, as and if issued by the Company, as applicable, delivered by
the Company and the Selling Stockholders to and accepted by the Underwriters and
subject to their right to reject orders in whole or in part. It is expected that
the shares of the Class A Stock will be ready for delivery on or about
, 1997, against payment in immediately available funds.

Credit Suisse First Boston Raymond James & Associates, Inc.

The date of this Prospectus is , 1997.
<PAGE>
UNIQUE BRANDING STRATEGY

By marketing a range of services and commission rates to targeted customers,
AmeriTrade believes that it appeals to a broader range of investors seeking
brokerage services at discount prices.

[PICTURES]
<PAGE>
LEVERAGING THE VISION

Providing clearing and execution services permits AmeriTrade to expand its
customer base by allowing AmeriTrade to reach investors outside of its targeted
retail brokerage markets.

[PICTURES]

IMPLEMENTING THE POWER OF TECHNOLOGY

1988 -- AmeriTrade is the first brokerage firm to implement automated touchtone
telephone trading.

1994 -- AmeriTrade is the first brokerage firm to offer Internet trading.

1995 -- AmeriTrade offers trading via the Sharp Zaurus personal digital
assistant.

1996 -- AmeriTrade launches Accutrade FOR WINDOWS, the first online investing
system that permits individual investors to engage in program investing
and basket trading.

<PAGE>
INTELLIGENT SOLUTIONS FOR THE NEW INVESTOR

Combining innovative technology and a range of delivery systems with over 21
years of experience, AmeriTrade is able to provide sophisticated financial
services and efficient transaction execution while offering commissions that are
among the lowest in the industry.

INNOVATION, QUALITY SERVICES AND VALUE

Through more efficient operations, an increasing number of transactions and
the use of advanced technology, AmeriTrade strives to minimize costs, which
allows it to offer some of the best transaction values in the industry.

[PICTURES]

The Company intends to furnish its stockholders annual reports containing
audited consolidated financial statements and quarterly reports containing
unaudited interim information for the first three quarters of each fiscal year.

This Prospectus includes product names and trademarks of the Company and
other entities.

Information contained in the Company's Web sites shall not be deemed to be
part of this Prospectus.

IN CONNECTION WITH THE OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE CLASS A STOCK
OF THE COMPANY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NASDAQ NATIONAL MARKET OR
OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

DURING THE OFFERING, CERTAIN PERSONS AFFILIATED WITH PERSONS PARTICIPATING
IN THE DISTRIBUTION MAY ENGAGE IN TRANSACTIONS FOR THEIR OWN ACCOUNTS OR FOR THE
ACCOUNTS OF OTHERS IN THE CLASS A STOCK PURSUANT TO EXEMPTIONS FROM RULES 10b-6
AND 10b-7 UNDER THE SECURITIES EXCHANGE ACT OF 1934.

2
<PAGE>
PROSPECTUS SUMMARY

THE INFORMATION IN THIS SUMMARY IS QUALIFIED BY REFERENCE TO THE MORE
DETAILED FINANCIAL AND OTHER INFORMATION INCLUDED ELSEWHERE IN THIS PROSPECTUS.
UNLESS INDICATED OTHERWISE, THE INFORMATION CONTAINED IN THIS PROSPECTUS ASSUMES
(I) AN INITIAL PUBLIC OFFERING PRICE OF $15.00 PER SHARE OF CLASS A STOCK (THE
MID-POINT OF THE ESTIMATED INITIAL PUBLIC OFFERING PRICE RANGE SET FORTH ON THE
COVER PAGE OF THIS PROSPECTUS) AND (II) NO EXERCISE OF THE UNDERWRITERS'
OVER-ALLOTMENT OPTION. ALL REFERENCES IN THIS PROSPECTUS TO THE "COMPANY" SHALL
REFER TO AMERITRADE HOLDING CORPORATION, A DELAWARE CORPORATION, ITS
SUBSIDIARIES AND ITS PREDECESSORS, UNLESS THE CONTEXT INDICATES OTHERWISE. THE
TEXTUAL PORTION OF THIS PROSPECTUS AND A DEMONSTRATION OF CERTAIN OF THE
COMPANY'S PRODUCTS AND SERVICES, WHICH DEMONSTRATION IS PART OF THIS PROSPECTUS,
ARE AVAILABLE ON THE CD-ROM PORTION OF THIS PROSPECTUS ATTACHED TO THE INSIDE
BACK COVER PAGE HEREOF.

THE COMPANY

The Company is a technology and service driven provider of discount
securities brokerage and related financial services. The Company provides retail
brokerage services to individual investors throughout the United States and
internationally through a variety of electronic mediums, including the Internet,
and through registered representatives. The Company offers trade execution for
stocks, mutual funds, options and bonds, as well as market data and research.
The Company also provides clearing and execution services to its own retail
brokerage operations, as well as to independent broker-dealers, depository
institutions, registered investment advisors and financial planners. The Company
had approximately 110,000 active accounts as of December 31, 1996, an increase
from approximately 90,000 active accounts as of December 31, 1995. Approximately
40% of this increase was the result of a strategic acquisition made in July
1995, and the remainder was due primarily to increases in the Company's
advertising expenditures. Average daily trading volume during the month of
December 1996 increased to approximately 5,200 executed transactions from
approximately 3,700 executed transactions during fiscal 1996.

The Company has experienced significant growth over the past five years
while expanding profitability. Trading volumes have increased at an average
annual rate of 45% from fiscal 1992 through fiscal 1996. Net revenues and net
income have grown at average annual rates of 43% and 61%, respectively, over the
same period. These increases, along with the Company's ability to decrease costs
through the use of new technologies and its aggressive marketing, have resulted
in an average return on equity over the same five-year period of 51% and an
operating margin that has increased from 21% in fiscal 1992 to 34% in fiscal
1996. Net revenues for the quarter ended December 31, 1996 increased 27% over
net revenues for the quarter ended December 31, 1995. As a result of
significantly increased advertising expenditures incurred in the quarter ended
December 31, 1996, the Company recorded a net loss of $0.1 million for such
quarter, compared to net income of $2.6 million for the quarter ended December
31, 1995. The advertising expenditures were increased in response to favorable
market conditions as part of the Company's ongoing marketing efforts. The
Company expects that account activity resulting from such increased advertising
expenditures will yield results for fiscal 1997 that are consistent with the
Company's prior financial history; however, there can be no assurances in this
regard. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations--Overview."

The Company's success in the discount brokerage industry is a result of its
creative approach to the delivery of retail brokerage and execution and clearing
services. Retail brokerage services are provided under four distinct brand
names, each of which offers a range of services and commission rates designed to
appeal to specific groups of investors within the discount brokerage market.
Accutrade, Inc. ("Accutrade") offers advanced technology delivery systems to
sophisticated investors. K. Aufhauser & Company, Inc. ("Aufhauser") provides
third-party research and investment analysis to experienced investors. Ceres
Securities, Inc. ("Ceres") offers execution services to customers who want
minimal transaction costs. eBroker, a division of the Company's subsidiary, All
American Brokers, Inc. ("All American"), provides execution services exclusively
through the Internet. This branding strategy allows the Company to align the
cost structures of its discount brokerage businesses with the level of services
desired by their customers. By providing clearing and execution services, the
Company is able to expand its customer base, provide synergies to the Company's
retail brokerage businesses and diversify its revenues.

3
<PAGE>
The Company offers its retail brokerage customers the opportunity to conduct
business through a diversity of electronic mediums, including the Internet,
automated touchtone telephone, personal computer, the Sharp Zaurus personal
digital assistant and facsimile machine. During the quarter ended December 31,
1996, approximately 39% of the Company's transactions were generated through
electronic mediums. The Company also maintains a staff of over 130 registered
representatives to service customers directly. By combining innovative
technology and a range of delivery systems with over 21 years of industry
expertise, the Company is able to provide sophisticated services and efficient
transaction execution while offering commissions that are among the lowest in
the discount brokerage industry. Commissions charged to customers of discount
brokerage services have steadily decreased over the past several years; however,
the Company believes based on published reports that its brokerage commissions
are still substantially lower than those charged by full-commission or
traditional discount brokerage firms and are in many cases lower than those
charged for similar transactions by other brokers that offer their services
through electronic mediums. See "Risk Factors--Volatile Nature of Securities
Business."

The Company also provides services to over 70 independent broker-dealers,
depository institutions, registered investment advisers and financial planners
through AmeriTrade Clearing, Inc. ("AmeriTrade Clearing") and AmeriVest, a
division of All American. AmeriTrade Clearing provides complete securities
transaction clearing and execution services to each of the Company's discount
brokerage businesses, as well as to independent broker-dealers, registered
investment advisors and financial planners. AmeriVest provides discount
brokerage services to depository institutions that do not operate their own
registered broker-dealers. Providing services to these correspondents allows the
Company to reach investors who rely on more traditional investment services,
such as investment advice, or who prefer to deal with local or regional
financial service providers. During the year ended September 27, 1996 and the
quarter ended December 31, 1996, the delivery of financial services to
unaffiliated correspondents accounted for approximately 11% and 9%,
respectively, of the Company's net revenues.

The Company seeks to capitalize on the changing financial services industry
and to increase its market share by continuing with an approach based on four
key strategies. First, the Company markets distinct brands with a range of
services and commission rates designed to appeal to specific groups of investors
within the discount brokerage market. Through this market segmentation approach,
the Company is able to deliver products and services tailored to the specific
needs of its customers in the most cost efficient manner. Second, the Company is
a technology leader in the retail brokerage and clearing and execution
businesses. The Company was the first broker to implement automated touchtone
trading technology and to offer trading services over the Internet. The
Company's proprietary product, Accutrade FOR WINDOWS, is the first online
investing system that permits individual investors to engage in program
investing and basket trading. Third, the Company strives to offer investors
transaction value by providing specified services at prices that are among the
lowest in the discount brokerage industry. eBroker offers a flat $12.00
commission on Internet-only trades for an equity order of any size, and Ceres
charges a flat $18.00 fee for an equity order of any size. Finally, the Company
intends to leverage the advanced technology offered to its retail brokerage
customers to increase its clearing and execution business with correspondents.
See "Business--Business Strategy."

RISK FACTORS

In determining whether to purchase shares of Class A Stock being offered
hereby, prospective investors should carefully consider the factors set forth
under "Risk Factors" in addition to the other information contained in this
Prospectus.

--------------

The Company was incorporated as a Nebraska corporation on December 16, 1981
and was reincorporated in the State of Delaware on October 2, 1996. The
Company's principal executive offices are located at 4211 South 102nd Street,
Omaha, Nebraska 68127, and its telephone number is (402) 331-7856.

4
<PAGE>
SUMMARY CONSOLIDATED FINANCIAL AND OPERATING DATA
(in thousands, except per share and operating data)

The summary consolidated financial data should be read in conjunction with
the Consolidated Financial Statements and the Notes thereto included elsewhere
in this Prospectus.
<TABLE>
<CAPTION>
QUARTER
YEAR ENDED ENDED
--------------------------------------------------------------- ---------
SEPT. 25, SEPT. 24, SEPT. 30, SEPT. 29, SEPT. 27, DEC. 31,
1992 1993 1994 1995 1996 1995
----------- ----------- ----------- ----------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
CONSOLIDATED STATEMENT OF INCOME DATA:
Revenues:
Commissions and clearing fees........... $ 10,246 $ 16,910 $ 20,386 $ 23,977 $ 36,470 $ 8,270
Interest revenue........................ 3,980 5,838 9,856 16,297 22,518 5,370
Investment income and other............. 773 791 1,119 2,608 6,391 1,174
----------- ----------- ----------- ----------- ----------- ---------
Total revenues........................ 14,999 23,539 31,361 42,882 65,379 14,814
Interest expense........................ 1,852 2,258 3,912 7,862 11,040 2,765
----------- ----------- ----------- ----------- ----------- ---------
Net revenues.......................... 13,147 21,281 27,449 35,020 54,339 12,049
Expenses excluding interest............... 10,420 15,017 19,999 24,190 35,922 7,580
----------- ----------- ----------- ----------- ----------- ---------
Income (loss) before provision for income
taxes................................... 2,727 6,264 7,450 10,830 18,417 4,469
Provision for income taxes................ 1,086 2,119 2,619 3,799 7,259 1,857
----------- ----------- ----------- ----------- ----------- ---------
Net income (loss)......................... $ 1,641 $ 4,145 $ 4,831 $ 7,031 $ 11,158 $ 2,612
----------- ----------- ----------- ----------- ----------- ---------
----------- ----------- ----------- ----------- ----------- ---------

Earnings (loss) per share................. $ 0.11 $ 0.30 $ 0.38 $ 0.55 $ 0.87 $ 0.20
----------- ----------- ----------- ----------- ----------- ---------
----------- ----------- ----------- ----------- ----------- ---------

Weighted average shares outstanding....... 14,599 13,716 12,856 12,814 12,814 12,814

OPERATING DATA:
Average customer trades per day........... 841 1,220 1,519 2,055 3,670 3,081
Assets in customer accounts (in
billions)............................... n/a $ 1.19 $ 1.66 $ 2.36 $ 3.99 $ 3.25
Number of active accounts (1)............. n/a n/a 61,665 81,171 105,565 89,671
Average net revenue per trade............. $ 62 $ 69 $ 70 $ 67 $ 59 $ 62
Operating margin (2)...................... 21% 29% 27% 31% 34% 37%
Return on average equity (3).............. 44% 69% 49% 47% 44% 50%

DEC. 31,
1996
---------
SEPT. 25, SEPT. 24, SEPT. 30, SEPT. 29, SEPT. 27,
1992 1993 1994 1995 1996 ACTUAL
----------- ----------- ----------- ----------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
CONSOLIDATED BALANCE SHEET DATA:
Cash and segregated investments........... $ 40,592 $ 53,787 $ 101,352 $ 125,456 $ 191,436 $ 258,883
Receivable from customers and
correspondents.......................... 47,892 86,281 99,627 130,187 166,075 200,594
Total assets.............................. 93,267 151,228 216,991 287,105 401,679 502,486
Payable to customers and correspondents... 85,299 138,958 198,539 251,862 356,943 454,159
Notes payable............................. -- -- -- 7,097 4,853 5,737
Stockholders' equity...................... 4,394 7,831 12,473 19,504 30,662 30,587

DEC. 31,
1996
-----------
<S> <C>
CONSOLIDATED STATEMENT OF INCOME DATA:
Revenues:
Commissions and clearing fees........... $ 10,439
Interest revenue........................ 7,007
Investment income and other............. 1,596
-----------
Total revenues........................ 19,042
Interest expense........................ 3,690
-----------
Net revenues.......................... 15,352
Expenses excluding interest............... 15,416
-----------
Income (loss) before provision for income
taxes................................... (64)
Provision for income taxes................ 11
-----------
Net income (loss)......................... $ (75)
-----------
-----------
Earnings (loss) per share................. $ (0.01)
-----------
-----------
Weighted average shares outstanding....... 12,814
OPERATING DATA:
Average customer trades per day........... 4,542
Assets in customer accounts (in
billions)............................... $ 4.49
Number of active accounts (1)............. 110,250
Average net revenue per trade............. $ 52
Operating margin (2)...................... 0%
Return on average equity (3).............. (1)%

AS
ADJUSTED
(4)
-----------
<S> <C>
CONSOLIDATED BALANCE SHEET DATA:
Cash and segregated investments........... $ 275,941
Receivable from customers and
correspondents.......................... 200,594
Total assets.............................. 519,544
Payable to customers and correspondents... 454,159
Notes payable............................. --
Stockholders' equity...................... 53,382
</TABLE>

- ------------------------------

(1) Active accounts consist of those accounts at period end with activity in the
last twelve months.

(2) Operating margin is computed by dividing income (loss) before provision for
income taxes by net revenues.

(3) Return on average equity is computed by dividing net income (loss) by
stockholders' equity averaged on a quarterly basis (annualized for fiscal
quarters ended December 31, 1995 and 1996).

(4) Adjusted to give effect to the sale of 1,700,000 shares of Class A Stock
offered by the Company hereby at an assumed initial public offering price of
$15.00 per share and the receipt and application of the estimated net
proceeds therefrom to the Company. See "Use of Proceeds" and
"Capitalization."

5
<PAGE>
THE OFFERING

<TABLE>
<S> <C>
Class A Stock offered by:
The Company..................... 1,700,000 shares
The Selling Stockholders........ 650,000 shares
Total......................... 2,350,000 shares
Common Stock to be Outstanding
after the Offering:
Class A Stock................... 13,153,423 shares
Class B Stock................... 1,364,400 shares
Total (1)..................... 14,517,823 shares

Voting Rights..................... Except as otherwise required by law and with respect to
the election of directors, the holders of Class A Stock
and the holders of Class B Stock have one vote per share
and vote as a single class with respect to all matters
submitted to a vote of the holders of Common Stock. The
Class B Stock is not being offered hereby. The Class B
Stock is entitled to elect a majority of directors of
the Company. The Class A Stock is entitled to elect the
remainder of the directors of the Company. The Company
currently has eight directors. Except with respect to
the ability to elect directors and the conversion rights
discussed below, the Class A Stock and the Class B Stock
are identical in all respects. If all shares of Class B
Stock are converted into Class A Stock or if no shares
of Class B Stock are otherwise outstanding, the holders
of Class A Stock will be entitled to elect all of the
directors of the Company, subject to the rights of the
holders of preferred stock, if any. Upon completion of
the Offering, the Company's Chairman and Chief Executive
Officer, his family members and trusts held for their
benefit will own approximately 69.4% of the Class A
Stock and all of the Class B Stock, which will
constitute approximately 72.3% of the outstanding Common
Stock (69.9% if the Underwriters' over-allotment option
is exercised in full). See "Principal and Selling
Stockholders" and "Description of Capital Stock--Common
Stock--Voting Rights."

Conversion of Class B Stock....... Each share of Class B Stock is convertible into one
share of Class A Stock at any time at the election of
the holder thereof. Each share of Class B Stock shall
automatically convert into one share of Class A Stock in
the event of a transfer of such share of Class B Stock
to any person other than J. Joe Ricketts, Marlene M.
Ricketts, the lineal descendants of J. Joe Ricketts and
Marlene M. Ricketts and their spouses or any trust or
other person or entity that holds Class B Stock for the
benefit of any of the foregoing (the "Control Group").
In addition, the Class B Stock shall automatically
convert on a share for share basis into Class A Stock if
the number of shares of outstanding Common Stock held by
the Control Group falls below 20% of the number of
shares of outstanding Common Stock. See "Description of
Capital Stock--Conversion Rights."
</TABLE>

6
<PAGE>

<TABLE>
<S> <C>
Use of Proceeds................... Approximately $5.7 million to retire the Company's
existing debt and the remainder to expand the Company's
customer base through marketing activities, for capital
expenditures and for other general corporate purposes.
See "Use of Proceeds."

Dividends......................... The Company has never declared or paid any cash
dividends on its capital stock and does not anticipate
paying any cash dividends to its stockholders in the
foreseeable future. See "Dividend Policy."

Listing........................... Application has been made to list the Class A Stock on
the Nasdaq National Market.

Proposed Nasdaq Symbol............ AMTD
</TABLE>

- ------------------------

(1)Includes 4,000 shares of Class A Stock to be awarded to non-employee
directors pursuant to the AmeriTrade Holding Corporation 1996 Directors
Incentive Plan (the "Directors Plan"). See "Management--Director
Compensation."

7
<PAGE>
RISK FACTORS

IN DETERMINING WHETHER TO PURCHASE THE SHARES OF CLASS A STOCK BEING OFFERED
HEREBY, PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER THE FOLLOWING FACTORS IN
ADDITION TO THE OTHER INFORMATION CONTAINED IN THIS PROSPECTUS.

VOLATILE NATURE OF SECURITIES BUSINESS

Substantially all of the Company's revenues are derived from discount
securities brokerage and clearing and execution services. The securities
business is volatile and is directly affected by national and international
economic conditions, broad trends in business and finance and fluctuations in
volume and price levels of securities transactions, all of which are beyond the
control of the Company. Reduced trading volume generally results in reduced
transaction revenues and decreased profitability. Severe market fluctuations in
the future could have a material adverse effect on the Company's business,
financial condition and operating results. The securities business is also
subject to various other risks, including customer default, employees'
misconduct, errors and omissions and litigation. Losses associated with these
risks could have a material adverse effect on the Company's business, financial
condition and operating results. The securities industry has undergone many
fundamental changes during the last two decades, including regulation and
deregulation at federal and state levels, the emergence of discount brokers, the
dominance of institutional investors and consolidation. Several current trends
are also affecting the securities industry, including increased use of
technology and greater self-reliance of individual investors. See
"Business--Industry." There can be no assurance that these trends or future
changes in the securities business will not have a material adverse effect on
the Company's business, financial condition and operating results. In addition,
commissions charged to customers of discount brokerage services have steadily
decreased over the past several years, and the Company expects such decreases to
continue. There can be no assurance that such decreases will not have a material
adverse effect on the Company's business, financial condition and operating
results. See "--Substantial Competition."

LOSS OF FUTURE ORDER FLOW PAYMENTS

The Company has arrangements with several execution agents to receive cash
payments in exchange for routing trade orders to these firms for execution. The
Company derives a significant portion of its revenues from these execution
agents for such order flow. The revenues generated by the Company under these
arrangements for the year ended September 27, 1996 and the quarter ended
December 31, 1996 amounted to approximately 15% of net revenues. Although this
practice of receiving payments for order flow is widespread in the securities
industry, it has come under increased scrutiny in recent years. The Securities
and Exchange Commission (the "SEC"), the National Association of Securities
Dealers, Inc. (the "NASD") and other self-regulatory organizations ("SROs")
recently have announced that this industry practice may be challenged.
Furthermore, competition between execution agents has narrowed the spread
between bid and ask prices, which has made it less profitable for execution
agents to offer order flow payments to broker-dealers. The Company expects such
payments to decrease as competition increases; however, the Company has taken
steps and intends to take further steps to mitigate the financial impact of the
loss of these revenues on the Company. In particular, the Company has invested
in market making firms that execute trades in listed and over-the-counter
("OTC") securities. See "Business-- Investments." To the extent that reduced
order flow payments by execution agents result in increased profits to such
agents, the Company expects to benefit through its equity interest in such
market making firms. The Company also has reduced its operating expenses per
trade through increased use of technology. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations-- Results of
Operations." Nevertheless, there can be no assurance that the loss of any
significant portion of these revenues will not have a material adverse effect on
the Company's business, financial condition and operating results. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--Overview."

8
<PAGE>
RAPIDLY EVOLVING MARKETS

During the quarter ended December 31, 1996, approximately 39% of the
Company's transactions were generated through electronic mediums, including the
Internet. The market for electronic discount brokerage services is at an early
stage of development and is rapidly evolving. As is typical for new and rapidly
evolving markets, demand and market acceptance for recently introduced services
and products are subject to a high level of uncertainty. The Company's services
over the Internet, automated touchtone telephone and personal computer involve
alternative approaches to securities transactions and, as a result, intensive
marketing and sales efforts may be necessary to educate prospective customers
regarding the uses and benefits of the Company's electronic discount brokerage
services and products. Consumers who already obtain brokerage services from more
traditional full-commission brokerage firms, or even discount brokers, may be
reluctant or slow to change to obtaining brokerage services over the Internet,
automated touchtone telephone and personal computer. Moreover, the security and
privacy concerns of existing and potential users of the Company's services may
inhibit the growth of electronic discount brokerage trading. There can be no
assurance that the market for electronic discount brokerage services will
continue to grow.

During the quarter ended December 31, 1996, approximately 19% of the
Company's transactions were generated over the Internet. Sales of some of the
Company's services and products will depend upon the broader adoption of the
Internet by consumers as a medium for commerce and communication. Use of the
Internet depends on the development of the necessary infrastructure and
complementary services and products, such as high speed modems and high speed
communication lines. As the number of users and amount of traffic on the
Internet continues to increase, there can be no assurance that the Internet
infrastructure will continue to be able to support the demands placed on it. In
addition, delays in the development or adoption of new standards and protocols
to handle increased levels of Internet activity or increased governmental
restrictions could impede further use of the Internet. Moreover, consumer
concerns about the Internet (including security, reliability, cost, ease of use,
accessibility and quality of service) remain unresolved and may negatively
affect the growth of Internet use. As a result, there can be no assurance that
the number of the Company's transactions generated over the Internet will
continue to increase.

RISKS ASSOCIATED WITH NEW PRODUCTS AND NEW MARKETS

The market for electronic discount brokerage services is characterized by
rapid technological change, changing customer requirements, frequent service and
product enhancements and introductions and emerging industry standards. The
introduction of services or products embodying new technologies and the
emergence of new industry standards can render existing services or products
obsolete and unmarketable. The Company's future success will depend, in part, on
its ability to develop and use new technologies, respond to technological
advances, enhance its existing services and products and develop new services
and products on a timely and cost-effective basis. There can be no assurance
that the Company will be successful in effectively developing or using new
technologies, responding to technological advances or developing, introducing or
marketing service and product enhancements or new services and products. In
addition, the Company may enter into new markets in connection with enhancing
its existing services and products and developing new services and products.
There can be no assurance that the Company will be successful in pursuing new
opportunities or will compete successfully in any new markets. See "--Risks
Associated with Strategic Acquisitions and Relationships" and "Business--Product
Development."

SUBSTANTIAL COMPETITION

9
<PAGE>
such discount brokerage firms as Charles Schwab & Co., Inc., Fidelity Brokerage
Services, Inc., Waterhouse Securities, Inc., Quick & Reilly, Inc. and E*Trade
Group, Inc. The Company also encounters competition from established
full-commission brokerage firms as well as financial institutions, mutual fund
sponsors and other organizations, some of which provide electronic brokerage
services. In addition, the Company derives revenues from clearing and execution
services. The clearing business is also highly competitive. The Company's
clearing broker subsidiary, AmeriTrade Clearing, competes with over 40 firms
that provide clearing and execution services to the securities industry.

A number of the Company's competitors have significantly greater financial,
technical, marketing and other resources than the Company. Some of the Company's
competitors also offer a wider range of services and financial products than the
Company and have greater name recognition and more extensive customer bases than
the Company. These competitors may be able to respond more quickly to new or
changing opportunities, technologies and customer requirements than the Company
and may be able to undertake more extensive promotional activities, offer more
attractive terms to customers and adopt more aggressive pricing policies than
the Company. Moreover, current and potential competitors have established or may
establish cooperative relationships among themselves or with third parties or
may consolidate to enhance their services and products. The Company expects that
new competitors or alliances among competitors will emerge and may acquire
significant market share.

The general financial success of companies within the securities industry
over the past several years has strengthened existing competitors. The Company
believes that such success will continue to attract new competitors to the
industry, such as depository institutions, software development companies,
insurance companies, providers of online financial and information services and
others. Commercial depository institutions and other financial institutions have
become a competitive factor in the securities industry by offering their
customers certain financial services traditionally provided by brokerage firms.
While it is not possible to predict the type and extent of competitive services
that commercial depository institutions and other financial institutions
ultimately may offer or whether regulatory or legislative barriers will be
repealed or modified, brokerage firms such as the Company may be adversely
affected by such competition.

There can be no assurance that the Company will be able to compete
effectively with current or future competitors or that the competitive pressures
faced by the Company will not have a material adverse effect on the Company's
business, financial condition and operating results. See
"Business--Competition."

DEPENDENCE ON COMPUTER SYSTEMS

The Company receives and processes trade orders through a variety of
electronic mediums, including the Internet, automated touchtone telephone,
personal computer and the Sharp Zaurus personal digital assistant. These methods
of trading are heavily dependent on the integrity of the electronic systems
supporting them. Extraordinary trading volumes could cause the Company's
computer systems to operate at an unacceptably low speed or even fail. Any
significant degradation or failure of the Company's computer systems or any
other systems in the trading process (e.g., online service providers, record
keeping and data processing functions performed by third parties and third-party
software such as Internet browsers) could cause customers to suffer delays in
trading. Such delays could cause substantial losses for customers and could
subject the Company to claims from customers for losses, including litigation
claiming fraud or negligence. The largest systems failure experienced by the
Company to date occurred in May 1996. During that month, the Company sustained
losses of approximately $250,000, which consisted primarily of reimbursements to
customers for losses incurred by them due to the inability to obtain timely
executions of securities transactions. There can be no assurance that the
Company's network structure will operate appropriately in the event of a
computer systems failure or that, in the event of a tornado, fire or any other
natural disaster, power or telecommunications failure, act of God or war, the
Company will be

10
<PAGE>
able to prevent an extended computer systems failure. Any computer systems
failure that causes interruptions in the Company's operations could have a
material adverse effect on the Company's business, financial condition and
operating results. See "Business--Systems."

DEPENDENCE ON KEY PERSONNEL

The Company's business is dependent upon a small number of key executive
officers, principally J. Joe Ricketts, the Company's Chairman and Chief
Executive Officer. The Company has employment agreements with J. Joe Ricketts,
Joseph A. Konen, President and Chief Operating Officer, and Robert T. Slezak,
Vice President, Chief Financial Officer and Treasurer. The Company does not
maintain any "key person" life insurance policy on any of its executives for the
benefit of the Company. Competition for key personnel and other highly qualified
technical and managerial personnel is intense. The loss of the services of any
of the key personnel or the inability to identify, hire, train and retain other
qualified personnel in the future could have a material adverse effect on the
Company's business, financial condition and operating results. See
"Business--Employees" and "Management--Executive Officer
Compensation--Employment Agreements."

OWNERSHIP AND CONTROL BY RICKETTS FAMILY

Upon completion of the Offering, the Company's Chairman and Chief Executive
Officer, his family members and trusts held for their benefit (collectively, the
"Ricketts Family") will own approximately 69.4% of the Class A Stock and all of
the Class B Stock, which will constitute approximately 72.3% of the Common Stock
(69.9% if the Underwriters' over-allotment option is exercised in full). See
"Principal and Selling Stockholders." In addition, upon completion of the
Offering, the Company's profit sharing plan will own approximately 10.6% of the
Class A Stock. The Company's Chairman and Chief Executive Officer and his wife
are the trustees of such plan. See "Management--Executive Officer
Compensation--Profit Sharing Plan." As a result, the Ricketts Family will have
the ability to control all fundamental matters affecting the Company, including
the election of the majority of the directors of the Company, the acquisition or
disposition of the Company's assets, the future issuance of Common Stock or
other securities of the Company and the declaration of any dividend payable on
the Common Stock. In addition, the Ricketts Family could convert a portion of
its Class B Stock into Class A Stock and subsequently dispose of such shares,
thereby substantially reducing its economic interest in the Company while
retaining the ability to elect the majority of the directors of the Company.
However, all the Class B Stock shall automatically convert into Class A Stock if
the number of shares of outstanding Common Stock held by the Control Group,
which includes certain members of the Ricketts Family and their lineal
descendants, falls below 20% of the total number of shares of outstanding Common
Stock. See "Description of Capital Stock--Conversion Rights."

RISKS ASSOCIATED WITH STRATEGIC ACQUISITIONS AND RELATIONSHIPS

The Company has pursued and may in the future pursue strategic acquisitions
of complementary businesses and technologies. Acquisitions entail numerous
risks, including difficulties in the assimilation of acquired operations and
products, diversion of management's attention to other business concerns,
amortization of acquired intangible assets and potential loss of key employees
of acquired companies. The Company has experienced favorable results in
connection with its strategic acquisitions. Nevertheless, there can be no
assurance that the Company will be able to integrate successfully any
operations, personnel, services or products that might be acquired in the future
or that any acquisition will enhance the Company's business, financial condition
or operating results. The Company also has established a number of strategic
relationships with online service providers and information service providers.
The Company's strategic relationships have been entered into only recently and
there can be no assurance that any such relationships will be maintained, that
if such relationships are maintained, they will be successful or

11
<PAGE>
profitable or that the Company will be successful in developing any new
strategic alliances. See "Business--Strategic Relationships."

RISKS ASSOCIATED WITH CLEARING OPERATIONS

AmeriTrade Clearing provides clearing and execution services to each of the
Company's discount brokerage businesses, as well as to independent
broker-dealers, depository institutions, registered investment advisors and
financial planners. Clearing services include the confirmation, receipt,
settlement and delivery functions involved in securities transactions. As a
clearing broker, AmeriTrade Clearing also assumes direct responsibility for the
possession and control of customer securities and other assets and the clearance
of customer securities transactions. Clearing brokers are subject to substantial
regulatory control and examination. Errors in performing clearing functions or
reporting could lead to civil penalties imposed by the SEC, NASD, SROs and other
regulatory bodies. Errors in the clearing process also may lead to civil
liability for actions in negligence brought by parties who are financially
harmed as a result of clerical errors related to the handling of customer funds
and securities. There can be no assurance that any of such errors will not have
a material adverse effect on the Company's business, financial condition and
operating results.

In connection with its clearing and execution services, the Company makes
margin loans to customers collateralized by customer securities and periodically
borrows securities to cover trades. By permitting customers to purchase
securities on margin, the Company is subject to risks inherent in extending
credit, especially during periods of rapidly declining markets in which the
value of the collateral held by the Company could fall below the amount of a
customer's indebtedness. In addition, under specific regulatory guidelines, the
Company collateralizes borrowings of securities by depositing cash or securities
with lending institutions. Failure to maintain cash deposit levels at all times
at least equal to the value of the related securities can subject the Company to
risk of loss should there be sharp changes in market values of substantial
amounts of securities and parties to the borrowing transactions fail to honor
their commitments. See "Business--Operations."

POSSIBLE SECURITY COMPROMISES

The secure transmission of confidential information over public networks is
a critical element of the Company's operations. The Company relies on encryption
and authentication technology, including public key cryptography technology
licensed from Netscape Communications, Inc., to provide the security and
authentication necessary to effect secure transmission of confidential
information over the Internet. The Company has never experienced any security
breaches in the transmission of confidential information. However, there can be
no assurance that advances in computer capabilities, new discoveries in the
field of cryptography or other events or developments will not result in a
compromise of the Netscape technology or other algorithms used by the Company to
protect customer transaction and other data. Any such compromise of the
Company's security could have a material adverse effect on the Company's
business, financial condition and operating results.

RELATED PARTY TRANSACTIONS AND POTENTIAL CONFLICTS

The Company has entered into a certain lease transaction with the Ricketts
Family and will continue to enter into similar transactions in the future. The
Company's intention is that all such transactions will be on terms at least as
favorable to the Company as would be obtainable in arm's-length dealings with
unrelated third persons. However, the ongoing relationship between the Company
and the Ricketts Family may result in conflicts of interest between the Company
and the Ricketts Family, which may result in action taken by the Company that
does not fully reflect the interests of all stockholders of the Company. In
order to minimize any conflict of interest, the fairness and reasonableness of
any compensation paid to the Ricketts Family or their affiliates by the Company
and any material transaction between the Ricketts Family or its affiliates and
the Company in the future will be subject to approval by a majority of the

12
<PAGE>
independent members of the Board of Directors of the Company (the "Board") or by
an independent firm selected by such members. See "Certain Transactions."

DEPENDENCE ON INTELLECTUAL PROPERTY RIGHTS

The Company's success and ability to compete are dependent to a significant
degree on its proprietary technology. The Company relies primarily on copyright,
trade secret and trademark law to protect its proprietary technology. The
Company has several registered and unregistered trademarks, various registered
and unregistered copyrights and certain licenses of technology with third
parties. The Company has no patents. The source code for the Company's
proprietary software is protected both as a trade secret and as a copyrighted
work. In addition, it is the Company's policy to enter into confidentiality and
noncompetition agreements with its associates and generally to control access to
and distribution of its proprietary technology. Notwithstanding the precautions
taken by the Company to protect its intellectual property rights, it is possible
that third parties may copy or otherwise obtain and use the Company's
proprietary technology without authorization or otherwise infringe on the
Company's proprietary rights. It is also possible that third parties may
independently develop technologies similar to those of the Company. Policing
unauthorized use of the Company's intellectual property rights may be difficult,
particularly because it is difficult to control the ultimate destination or
security of information transmitted over the Internet. In addition, the laws of
foreign countries may afford inadequate protection of intellectual property
rights. See "Business--Legal Proceedings."

GOVERNMENT REGULATION

The securities industry in the United States is subject to extensive
regulation under both federal and state laws. In addition, the SEC, the NASD,
other SROs, such as the various stock exchanges, and other regulatory bodies,
such as state securities commissions, require strict compliance with their rules
and regulations. As a matter of public policy, regulatory bodies are charged
with safeguarding the integrity of the securities and other financial markets
and with protecting the interests of customers participating in those markets,
and not with protecting the interests of the Company's stockholders.
Broker-dealers are subject to regulations covering all aspects of the securities
business, including sales methods, trade practices among broker-dealers, use and
safekeeping of customers' funds and securities, capital structure, record
keeping and the conduct of directors, officers and employees. AmeriTrade
Clearing also is required to comply with many complex laws and rules as a
clearing broker, including rules relating to possession and control of customer
funds and securities, margin lending and execution and settlement of
transactions. Failure to comply with any of these laws, rules or regulations
could result in censure, fine, the issuance of cease-and-desist orders or the
suspension or expulsion of a broker-dealer or any of its officers or employees,
any of which could have a material adverse effect on the Company's business,
financial condition and operating results.

The Company has recently initiated an aggressive marketing campaign designed
to bring greater brand name recognition to its product lines. All marketing
activities by the Company's subsidiaries are regulated by the NASD. The NASD can
impose certain penalties, including censure, fine, suspension of all
advertising, the issuance of cease-and-desist orders or the suspension or
expulsion of a broker-dealer and certain of its officers or employees for
violations of the NASD's advertising regulations. See "Business-- Government
Regulation."

The Company conducts a significant portion of its business through the
Internet and other electronic mediums and intends to expand its use of such
mediums. To date, the use of the Internet has been relatively free from
regulatory restraints. However, the SEC, certain SROs and certain states are
beginning to address the regulatory issues that may arise in connection with the
use of the Internet. Accordingly, new regulations or interpretations may be
adopted that constrain the Company's ability to transact business through the
Internet or other electronic mediums. Any additional regulation of the Company's
use of electronic mediums could render its business or operations more costly,
less efficient or even impossible,

13
<PAGE>
any of which could have a material adverse effect on the Company's business,
financial condition and operating results.

Although the Company has not yet developed its strategy for international
expansion, the Company intends in the future to expand its business in United
States securities to other countries. In order to expand its services
internationally, the Company would have to comply with regulatory controls of
each specific country in which it conducts business. The brokerage industry in
many foreign countries is heavily regulated. The varying compliance requirements
of these different regulatory jurisdictions and other factors may limit the
Company's ability to expand internationally.

EFFECT OF NET CAPITAL REQUIREMENTS

The SEC, the NASD and various other regulatory agencies have stringent rules
with respect to the maintenance of specific levels of net capital by securities
brokers, including the SEC's Uniform Net Capital Rule (the "Net Capital Rule"),
which governs each of the Company's subsidiaries. Failure to maintain the
required net capital may subject a firm to suspension or revocation of
registration by the SEC and suspension or expulsion by the NASD and other
regulatory bodies and ultimately could require the firm's liquidation. In
addition, a change in the net capital rules, the imposition of new rules or any
unusually large charge against net capital could limit those operations of the
Company that require the intensive use of capital, such as the financing of
customer account balances, and also could restrict the Company's ability to
withdraw capital from its brokerage subsidiaries, which in turn could limit the
Company's ability to pay dividends, repay debt and repurchase shares of its
outstanding stock. A significant operating loss or any unusually large charge
against net capital could adversely affect the ability of the Company to expand
or even maintain its present levels of business, which could have a material
adverse effect on the Company's business, financial condition and operating
results. See "Business--Government Regulation."

USE OF UNALLOCATED NET PROCEEDS

The Company has quantified only one use for the net proceeds from the sale
of Class A Stock offered hereby. The Company expects to use approximately $5.7
million of the net proceeds to retire existing debt and the remainder to expand
the Company's customer base through marketing activites, for capital
expenditures and for other general corporate purposes. Consequently, the Board
and management of the Company will have broad discretion in allocating a
significant portion of the net proceeds of the Offering. See "Use of Proceeds."

FUTURE CAPITAL NEEDS; UNCERTAINTY OF ADDITIONAL FINANCING

The Company currently anticipates based on management's experience and
current industry trends that its available cash resources and credit facilities,
combined with the net proceeds to the Company from the Offering, will be
sufficient to meet its presently anticipated working capital and capital
expenditure requirements for the next 12 months. However, if the Company needs
to raise additional funds in order to support more rapid expansion, develop new
or enhanced services and products, respond to competitive pressures, acquire
complementary businesses or technologies or respond to unanticipated
requirements, there can be no assurance that additional financing will be
available when needed on terms favorable to the Company. See "Management's
Discussion and Analysis of Financial Condition and Results of
Operations--Liquidity and Capital Resources."

SHARES ELIGIBLE FOR FUTURE SALE

14
<PAGE>

Act"), by persons other than "affiliates" of the Company within the meaning of
Rule 144 promulgated under the Securities Act. The holders of restricted shares
generally will be entitled to sell these shares in the public securities market
without registration under the Securities Act to the extent permitted by Rule
144 (or Rule 145, as applicable) promulgated under the Securities Act or any
exemption under the Securities Act. Of the 12,167,823 restricted shares,
11,957,588 shares of Common Stock are currently eligible for sale under Rule
144, and 210,235 shares of Common Stock will be eligible for sale under Rule 144
beginning in November 1997. Certain employees of the Company purchased 95,124
shares of Class A Stock from J. Joe Ricketts in November 1996. Although those
shares will be eligible for sale under Rule 144 beginning in November 1997, the
respective stock purchase agreements between such employees and Mr. Ricketts
prohibit the sale of such shares until May 1999, subject to certain limited
exceptions. In addition, the Company intends to register under the Securities
Act 880,000 shares of Class A Stock reserved for issuance under its director and
employee stock option plans. See "Management--Director Compensation" and
"Management--Executive Officer Compensation--1996 Long Term Incentive Plan."

Each of the Company, its directors and officers, the Selling Stockholders
and certain other stockholders has agreed that it will not offer, sell, contract
to sell, announce its intention to sell, pledge or otherwise dispose of,
directly or indirectly, or file with the SEC a registration statement under the
Securities Act relating to, any additional shares of the Class A Stock or
securities convertible into or exchangeable or exercisable for any shares of the
Class A Stock without the prior written consent of Credit Suisse First Boston
Corporation for a period of 180 days after the date of this Prospectus, except,
in the case of the Company, issuances pursuant to the exercise of employee stock
options granted under the Company's existing employee benefit plans and, in the
case of the directors and officers, Selling Stockholders and certain other
stockholders, gifts and pledges of shares where the donees or pledgees, as the
case may be, agree in writing to be bound by the terms of such agreement. See
"Shares Eligible for Future Sale" and "Underwriting."

Future sales of a substantial amount of Class A Stock in the public market,
or the perception that such sales may occur, could adversely affect the market
price of the Class A Stock prevailing from time to time in the public market.
See "Shares Eligible for Future Sale."

LACK OF PRIOR MARKET FOR CLASS A STOCK; POSSIBLE VOLATILITY OF STOCK PRICE

Prior to the Offering, there has been no public market for the Class A
Stock. The Company has applied for quotation of the Class A Stock on the Nasdaq
National Market under the trading symbol "AMTD." There can be no assurance that
an active public market will develop or be sustained for the Class A Stock. The
initial public offering price will be determined through negotiations between
the Company, the Selling Stockholders and the representatives of the
Underwriters and may not be indicative of the market price for the Class A Stock
after the completion of the Offering. The market price of the Class A Stock
after completion of the Offering could be subject to significant fluctuations in
response to quarterly variations in operating results, announcements of
technological innovations or new software, services or products by the Company
or its competitors, changes in financial estimates by securities analysts or
other events or factors, many of which are beyond the Company's control. In
addition, the stock market has experienced significant price and volume
fluctuations that have particularly affected the market prices of equity
securities of many technology companies and that often have been unrelated to
the operating performance of such companies. These broad market fluctuations may
adversely affect the market price of the Class A Stock. There can be no
assurance that purchasers of Class A Stock will be able to resell their Class A
Stock at prices equal to or greater than the initial public offering price. See
"Underwriting."

IMMEDIATE AND SUBSTANTIAL DILUTION

Purchasers in the Offering will experience immediate and substantial
dilution in the net tangible book value of their investment in the Class A Stock
of $11.78 per share. See "Dilution."

15
<PAGE>
USE OF PROCEEDS

The net proceeds to the Company from the Offering are estimated to be
approximately $22.8 million assuming an initial public offering price of $15.00
per share (the mid-point of the estimated initial public offering price range
set forth on the cover page of this Prospectus) and after deducting underwriting
discounts and commissions and estimated offering expenses. The Company will not
receive any proceeds from the sale of shares of Class A Stock by the Selling
Stockholders. Approximately $5.7 million of the net proceeds to the Company will
be used to repay borrowings under the Company's credit facility. These
borrowings mature through 1999 and bear interest at a variable rate, which at
December 31, 1996 was 9.25%. See "Management's Discussion and Analysis of
Financial Condition and Results of Operation-- Liquidity and Capital
Resources--Bank Loan Agreement." The remainder of the net proceeds will be used
to expand the Company's customer base through marketing activities, for the
development and acquisition of new forms of technology to be used in the
Company's business and for other general corporate purposes, which may include
the acquisition of complementary businesses and the increase of the net capital
of AmeriTrade Clearing. See "Risk Factors--Risks Associated with Strategic
Acquisitions and Relationships" and "Risk Factors--Use of Unallocated Net
Proceeds." The Company does not currently have any agreements with respect to
any such acquisitions. Prior to the application of the net proceeds to the
Company as described above, such funds will be invested in short-term investment
grade securities.

DIVIDEND POLICY

The Company has never declared or paid any cash dividends on its capital
stock and does not anticipate paying any cash dividends to its stockholders in
the foreseeable future. The Company currently intends to retain all future
earnings to finance the continued expansion and operation of its business. The
Company's Certificate of Incorporation provides that any cash dividend declared
must be paid equally on a per share basis on the Class A Stock and the Class B
Stock. See "Description of Capital Stock--Common Stock--Dividend Rights." Any
determination as to the payment of dividends will be made by the Board and will
depend upon the Company's future results of operations, financial condition,
capital requirements and such other factors as the Board considers appropriate.
See "Management's Discussion and Analysis of Financial Condition and Results of
Operations--Liquidity and Capital Resources." In addition, the Net Capital Rule
could limit the Company's ability to withdraw capital from its brokerage
subsidiaries, which could limit the Company's ability to pay dividends. See
"Business--Goverment Regulation."

16
<PAGE>
DILUTION

The net tangible book value of the Common Stock at December 31, 1996 was
approximately $24.0 million, or $1.87 per share. Net tangible book value per
share is determined by dividing the number of outstanding shares of Common Stock
into the net tangible book value of the Company. After giving effect to the
Offering assuming an initial public offering price of $15.00 per share (the
mid-point of the estimated initial public offering price range set forth on the
cover page of this Prospectus), the pro forma net tangible book value of the
Common Stock at December 31, 1996 would have been approximately $46.8 million,
or $3.22 per share. This represents an immediate increase in the net tangible
book value of $1.35 per share to existing stockholders and an immediate dilution
of $11.78 per share to new investors purchasing shares at an assumed initial
public offering price of $15.00 per share. The following table illustrates this
per share dilution in net tangible book value:

<TABLE>
<S> <C> <C>
Assumed initial public offering price per share...................... $ 15.00
Net tangible book value per share at December 31, 1996............. $ 1.87
Increase per share attributable to new investors................... 1.35
Pro forma net tangible book value per share at December 31, 1996
after giving effect to the Offering................................ 3.22
---------
Net tangible book value dilution per share to new investors.......... $ 11.78
---------
---------
</TABLE>

The following table summarizes, on a pro forma basis after giving effect to
the Offering, the number of shares of Common Stock purchased from the Company,
the total consideration paid and the average price paid per share by existing
stockholders and new investors purchasing shares of Class A Stock offered hereby
assuming an initial public offering price of $15.00 per share (the mid-point of
the estimated initial public offering price range set forth on the cover page of
this Prospectus):

<TABLE>
<CAPTION>
SHARES PURCHASED TOTAL CONSIDERATION
------------------------- -------------------------- AVERAGE PRICE
NUMBER PERCENTAGE AMOUNT PERCENTAGE PER SHARE
------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C>
Existing stockholders........................ 12,813,823 88.3% $ 1,101,668 4.1% $ 0.09
New investors................................ 1,700,000 11.7 25,500,000 95.9 15.00
------------ ----------- ------------- -----------
Total.................................... 14,513,823 100.0% $ 26,601,668 100.0%
------------ ----------- ------------- -----------
------------ ----------- ------------- -----------
</TABLE>

The foregoing computations exclude 4,000 shares of Class A Stock to be
awarded to non-employee directors pursuant to the Directors Plan. See
"Management--Director Compensation." The award of such shares will cause further
dilution to new investors.

17
<PAGE>
CAPITALIZATION

The following table sets forth the capitalization of the Company at December
31, 1996 and as adjusted to give effect to the Offering and the application of
the net proceeds therefrom to the Company assuming an initial public offering
price of $15.00 per share (the mid-point of the estimated initial public
offering price range set forth on the cover page of this Prospectus). See "Use
of Proceeds." This information should be read in conjunction with the
Consolidated Financial Statements and the Notes thereto and the other
information included elsewhere in this Prospectus.

<TABLE>
<CAPTION>
DECEMBER 31, 1996
----------------------
ACTUAL AS ADJUSTED
--------- -----------
(IN THOUSANDS)
<S> <C> <C>
Long-term debt:
Bank Loan Agreement (1)................................................................. $ 5,737 $ --
--------- -----------
Total debt........................................................................ 5,737 --
Stockholders' equity:
Class A Stock, par value $.01 per share, 25,000,000 shares authorized, 11,449,423 shares
issued and outstanding................................................................ 114 131
Class B Stock, par value $.01 per share, 2,000,000 shares authorized, 1,364,400 shares
issued and outstanding................................................................ 14 14
Additional paid-in-capital.............................................................. 810 23,588
Retained earnings....................................................................... 29,649 29,649
--------- -----------
Total stockholders' equity............................................................ 30,587 53,382
--------- -----------
Total capitalization................................................................ $ 36,324 $ 53,382
--------- -----------
--------- -----------
</TABLE>

- ------------------------

(1) For a description of the Bank Loan Agreement, see "Management's Discussion
and Analysis of Financial Condition and Results of Operations--Liquidity and
Capital Resources--Bank Loan Agreement" and Note 4 to the Consolidated
Financial Statements.

18
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA

The following table sets forth selected consolidated financial information
with respect to the Company as of and for the periods indicated. The
consolidated financial information as of and for the years ended September 25,
1992, September 24, 1993, September 30, 1994, September 29, 1995 and September
27, 1996 has been derived from the audited consolidated financial statements of
the Company. The consolidated financial information as of and for the quarters
ended December 31, 1995 and December 31, 1996 has been derived from unaudited
consolidated financial statements of the Company, which in the opinion of
management have been prepared on the same basis as the audited consolidated
financial statements and contain all adjustments, consisting only of normal
recurring adjustments, necessary for a fair presentation of the results of
operations for such periods. The results of operations for the quarter ended
December 31, 1996 are not necessarily indicative of results to be expected for
the full fiscal year. This selected consolidated financial information should be
read in conjunction with the Consolidated Financial Statements and Notes thereto
and the discussion under "Management's Discussion and Analysis of Financial
Condition and Results of Operations" included elsewhere in this Prospectus.
<TABLE>
<CAPTION>
YEAR ENDED
---------------------------------------------------------
SEPT. 25, SEPT. 24, SEPT. 30, SEPT. 29, SEPT. 27,
1992 1993 1994 1995 1996
--------- --------- --------- --------- ---------
(IN THOUSANDS, EXCEPT PER SHARE AND OPERATING DATA)
<S> <C> <C> <C> <C> <C>
CONSOLIDATED STATEMENT OF INCOME DATA:
Revenues:
Commissions and clearing fees................. $10,246 $16,910 $20,386 $23,977 $36,470
Interest revenue.............................. 3,980 5,838 9,856 16,297 22,518
Equity income (loss) from investments......... -- (240) (575) 543 3,359
Gain from sale of partnership interest........ -- -- -- 584 --
Other......................................... 773 1,031 1,694 1,481 3,032
--------- --------- --------- --------- ---------
Total revenues.............................. 14,999 23,539 31,361 42,882 65,379
Interest expense.............................. 1,852 2,258 3,912 7,862 11,040
--------- --------- --------- --------- ---------
Net revenues................................ 13,147 21,281 27,449 35,020 54,339
Expenses excluding interest:
Employee compensation and benefits............ 4,186 5,368 6,538 8,482 14,050
Commissions and clearance..................... 1,474 1,447 1,717 2,517 2,531
Communications................................ 890 1,289 1,892 2,353 3,686
Occupancy and equipment costs................. 650 970 1,412 1,627 2,890
Advertising and promotion..................... 2,091 3,928 5,987 4,842 7,537
Provision for losses.......................... 24 131 266 1,429 148
Amortization of goodwill...................... 7 7 7 94 363
Other......................................... 1,098 1,877 2,180 2,846 4,717
--------- --------- --------- --------- ---------
Total expenses excluding interest........... 10,420 15,017 19,999 24,190 35,922
--------- --------- --------- --------- ---------
Income (loss) before provision for income
taxes......................................... 2,727 6,264 7,450 10,830 18,417
Provision for income taxes...................... 1,086 2,119 2,619 3,799 7,259
--------- --------- --------- --------- ---------
Net income (loss)............................... $1,641 $4,145 $4,831 $7,031 $11,158
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
Earnings (loss) per share....................... $0.11 $0.30 $0.38 $0.55 $0.87
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
Weighted average shares outstanding............. 14,599 13,716 12,856 12,814 12,814

OPERATING DATA:
Average customer trades per day................. 841 1,220 1,519 2,055 3,670
Assets in customer accounts (in billions)....... n/a $1.19 $1.66 $2.36 $3.99
Number of active accounts (1)................... n/a n/a 61,665 81,171 105,565
Average net revenue per trade................... $62 $69 $70 $67 $59
Operating margin (2)............................ 21% 29% 27% 31% 34%
Return on average equity (3).................... 44% 69% 49% 47% 44%

<CAPTION>
QUARTER ENDED
--------------------
DEC. 31, DEC. 31,
1995 1996
--------- --------

<S> <C> <C>
CONSOLIDATED STATEMENT OF INCOME DATA:
Revenues:
Commissions and clearing fees................. $8,270 $10,439
Interest revenue.............................. 5,370 7,007
Equity income (loss) from investments......... 627 788
Gain from sale of partnership interest........ -- --
Other......................................... 547 808
--------- --------
Total revenues.............................. 14,814 19,042
Interest expense.............................. 2,765 3,690
--------- --------
Net revenues................................ 12,049 15,352
Expenses excluding interest:
Employee compensation and benefits............ 2,896 4,142
Commissions and clearance..................... 823 629
Communications................................ 736 1,222
Occupancy and equipment costs................. 501 1,112
Advertising and promotion..................... 1,484 6,630
Provision for losses.......................... 6 12
Amortization of goodwill...................... 91 91
Other......................................... 1,043 1,578
--------- --------
Total expenses excluding interest........... 7,580 15,416
--------- --------
Income (loss) before provision for income
taxes......................................... 4,469 (64)
Provision for income taxes...................... 1,857 11
--------- --------
Net income (loss)............................... $2,612 $(75)
--------- --------
--------- --------
Earnings (loss) per share....................... $0.20 $(0.01)
--------- --------
--------- --------
Weighted average shares outstanding............. 12,814 12,814
OPERATING DATA:
Average customer trades per day................. 3,081 4,542
Assets in customer accounts (in billions)....... $3.25 $4.49
Number of active accounts (1)................... 89,671 110,250
Average net revenue per trade................... $62 $52
Operating margin (2)............................ 37% 0%
Return on average equity (3).................... 50% (1)%
</TABLE>

<TABLE>
<CAPTION>
SEPT. 25, SEPT. 24, SEPT. 30, SEPT. 29, SEPT. 27, DEC. 31,
1992 1993 1994 1995 1996 1996
----------- ----------- ----------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
CONSOLIDATED BALANCE SHEET DATA:
Cash and segregated investments.................. $ 40,592 $ 53,787 $ 101,352 $ 125,456 $ 191,436 $258,883
Receivable from customers and correspondents..... 47,892 86,281 99,627 130,187 166,075 200,594
Total assets..................................... 93,267 151,228 216,991 287,105 401,679 502,486
Payable to customers and correspondents.......... 85,299 138,958 198,539 251,862 356,943 454,159
Notes payable.................................... -- -- -- 7,097 4,853 5,737
Stockholders' equity............................. 4,394 7,831 12,473 19,504 30,662 30,587
</TABLE>

- ------------------------------
(1) Active accounts consist of those accounts at period end with activity in the
last twelve months.
(2) Operating margin is computed by dividing income (loss) before provision for
income taxes by net revenues.
(3) Return on average equity is computed by dividing net income (loss) by
stockholders' equity averaged on a quarterly basis (annualized for fiscal
quarters ended December 31, 1995 and 1996).

19
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion of the financial condition and results of
operations of the Company should be read in conjunction with the Consolidated
Financial Statements and Notes thereto included elsewhere in this Prospectus.
This discussion contains forward-looking statements that involve risks and
uncertainties. The Company's actual results may differ materially from those
anticipated in these forward-looking statements as a result of certain factors,
including, but not limited to, those set forth under "Risk Factors" and
elsewhere in this Prospectus.

OVERVIEW

The Company was established in 1971 and has conducted its operations in the
discount brokerage industry since 1975. The Company's consolidated financial
statements include the accounts of AmeriTrade Holding Corporation and its wholly
owned discount brokerage subsidiaries, Accutrade, Aufhauser, Ceres and All
American, and its wholly owned securities clearing subsidiary, AmeriTrade
Clearing. The Company began to provide clearing and execution services for its
own broker-dealer subsidiaries and for independent correspondents in 1983.
Throughout the 1980s, the Company's discount securities brokerage and clearing
and execution businesses experienced significant growth, both in terms of number
of accounts and trading volume. In the 1990s, the Company has continued to grow
and has diversified its services through the formation of Ceres in 1994 and
eBroker in 1996. In July 1995, the Company acquired the net assets of Aufhauser
for approximately $7.6 million in cash. Of the total purchase price, $7.0
million was allocated to goodwill, which is being amortized over a 20 year
period. In October 1995, the Company acquired the net assets of All American for
approximately $0.2 million.

The Company's retail brokerage services are provided under four distinct
brand names, each of which offers a range of services and commission rates
designed to appeal to specific groups of investors within the discount brokerage
market. The Company developed this branding strategy in response to competitive
pressures in the discount brokerage market with respect to price, technology and
customer service. Ceres was established to satisfy demand for brokerage services
with the lowest possible transaction costs to individual investors. eBroker was
established to satisfy the growing demand for Internet-only brokerage services.
Aufhauser was acquired to offer superior customer service and research and
investment analysis. Accutrade has developed into a discount broker that offers
advanced technology delivery systems. During the year ended September 27, 1996
and the quarter ended December 31, 1996, each of these brands achieved
significant growth in average trades per day, number of active accounts and
total revenues with Ceres and eBroker constituting a growing proportion of the
Company's business.

The Company's revenues consist primarily of transaction revenues and
interest revenues. Transaction revenues include brokerage commissions,
securities transaction clearing fees and payments based on order flow. Interest
revenues are generated by charges to customers on debit balances maintained in
brokerage accounts and the investment of cash from operations and cash
segregated in compliance with federal regulations in short-term marketable
securities.

Interest expense consists of amounts paid or payable to customers based on
credit balances maintained in brokerage accounts, as well as costs related to
notes payable, letters of credit and a revolving line of credit with financial
institutions.

The Company's operating expenses include employee compensation and benefits,
commissions and clearing fees related to the processing of securities
transactions, telephone, postage and other communications costs, occupancy and
equipment costs, advertising and promotion costs, provision for losses related
to the processing of securities transactions, and amortization of goodwill
established in connection with the acquisitions discussed above.

20
<PAGE>
In addition, the Company incurs supply costs related to the processing of
customer confirmations, statements and other communications, as well as general
office supply costs, legal costs and regulatory costs. These costs have been
classified as other expenses on the Company's consolidated statements of income.

For the years ended September 30, 1994, September 29, 1995 and September 27,
1996 and the quarter ended December 31, 1996, 74%, 68%, 67% and 68%,
respectively, of the Company's net revenues were derived from commissions and
clearing fees. Clearing services include the confirmation, receipt, settlement,
delivery and recordkeeping functions involved in the processing of securities
transactions. Included as a part of the clearing function is the assumption of
responsibility for the possession and control of customer securities and other
assets. As a result, the Company records on its balance sheet amounts receivable
from customers that are a result of margin loans (loans made to customers that
are collateralized by securities held in customers' brokerage accounts at the
Company). In addition, the Company records on its balance sheet amounts payable
to its customers and correspondent broker-dealers related to cash balances
maintained by the Company on behalf of those customers and correspondents (free
credit balances).

The Company has arrangements with several execution agents to receive cash
payments in exchange for routing trade orders to these firms for execution. The
Company derives a significant portion of its revenues from these execution
agents for such order flow. The revenues generated by the Company under these
arrangements for the years ended September 30, 1994, September 29, 1995 and
September 27, 1996 and the quarter ended December 31, 1996 were 12%, 11%, 15%
and 15%, respectively, of net revenues. The majority of these revenues were
received from execution agents owned by Roundtable Partners, L.L.C.
("Roundtable"), an entity that was approximately 12.1% owned by the Company as
of December 31, 1996. Although this practice of receiving payments for order
flow is widespread in the securities industry, it has come under increased
scrutiny in recent years. The SEC, the NASD and other SROs recently have
announced that this industry practice may be challenged. Furthermore,
competition between execution agents has narrowed the spread between bid and ask
prices, which has made it less profitable for execution agents to offer order
flow payments to brokers such as the Company's subsidiaries. The Company expects
such payments to decrease as competition increases; however, the Company has
taken steps and intends to take further steps to mitigate the financial impact
of the loss of these revenues. In particular, to the extent that reduced order
flow payments by execution agents result in increased profits to such agents,
the Company expects to benefit through its investment in Roundtable. See
"Business--Investments." The Company also has reduced its operating expenses per
trade through increased use of technology. See "--Results of Operations."
Nevertheless, there can be no assurance that the loss of any significant portion
of these revenues will not have a material adverse effect on the Company's
business, financial condition and operating results. See "Risk Factors--Loss of
Future Order Flow Payments."

The Company operates in a new, rapidly evolving and intensely competitive
market. As a result, a significant portion of its operating costs are incurred
in connection with advertising and promotional activities. These expenditures
represented 22%, 14% and 14% of net revenues in the years ended September 30,
1994, September 29, 1995 and September 27, 1996, respectively. The Company's
primary advertising and promotional mediums include print, television, direct
mail, online services and various Internet sites. See "Business--Marketing." The
Company generally expenses all advertising and promotional costs as incurred.
The Company increased its advertising and promotional activities substantially
during the quarter ended December 31, 1996 and intends to maintain a high level
of such expenditures during the remainder of fiscal 1997. Advertising and
promotional expenses represented 43% of net revenues in the quarter ended
December 31, 1996 and the Company expects that they will constitute a
substantial percentage of net revenues for the remainder of fiscal 1997. The
Company expects that this percentage will be in line with historical trends and
will be below the 43% expended in the quarter ended December 31, 1996. As a
result of the significantly increased advertising expenditures incurred in the
quarter ended December 31, 1996, the Company recorded a net loss of $0.1 million
for such quarter compared to net income of $2.6 million for the quarter ended
December 31, 1995. The advertising expenditures were increased in response to
favorable

21
<PAGE>
market conditions as part of the Company's ongoing marketing efforts. The
Company expects that account activity resulting from such increased advertising
expenditures will yield results for fiscal 1997 that are consistent with the
Company's prior financial history; however, there can be no assurances in this
regard.

The Company derives over 85% of its revenues from the provision of discount
brokerage services. The Company believes that the discount brokerage market is
currently impacted by three significant trends that may affect its financial
condition and results of operations. First, commissions charged to customers of
discount brokerage services have steadily decreased over the past several years,
and the Company expects such decreases to continue. See "Risk Factors--Volatile
Nature of Securities Business." Although decreased commissions will have a
negative effect on the Company's commission and clearing fee revenue per trade,
the Company's experience to date indicates that decreased commissions result in
increased account activity and increased commission and clearing fee revenue in
the aggregate. Second, technology has increased in importance as delivery
channels such as the Internet have become more prevalent. See
"Business--Industry." During the quarter ended December 31, 1996, approximately
39% of the Company's transactions were generated through electronic mediums,
including approximately 19% over the Internet. The Company expects that
increased use of electronic mediums will proportionately increase the revenues
of Ceres and eBroker, which should decrease expenses per trade. Finally, the
effects of price competition and required investment in technology have resulted
in some consolidation in the market. See "Risk Factors--Substantial
Competition." Although no predictions can be made regarding the Company's future
financial performance, the Company believes that its experience, cost structure,
history of technological innovation and financial strength will permit it to
successfully respond to these trends.

22
<PAGE>
RESULTS OF OPERATIONS

The following table sets forth the percentage of net revenues and amounts
per trade represented by certain items included in the Company's consolidated
statements of income for the periods indicated:
<TABLE>
<CAPTION>
YEAR ENDED QUARTER ENDED
------------------------------------------------------------------------------- -------------------------
SEPTEMBER 30, 1994 SEPTEMBER 29, 1995 SEPTEMBER 27, 1996 DECEMBER 31, 1995
------------------------- ------------------------- ------------------------- -------------------------
% $ PER TRADE % $ PER TRADE % $ PER TRADE % $ PER TRADE
---------- ------------- ---------- ------------- ---------- ------------- ---------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues:
Commissions and
clearing
fees........... 74.3% $ 52.22 68.5% $ 45.93 67.1% $ 39.44 68.6% $ 42.61
Interest
revenue........ 35.9 25.25 46.5 31.23 41.4 24.35 44.6 27.67
Equity income
(loss) from
investments.... (2.1) (1.47) 1.5 1.04 6.2 3.63 5.2 3.23
Gain from sale
of partnership
interest....... 0.0 -- 1.7 1.12 0.0 -- 0.0 --
Other........... 6.2 4.34 4.3 2.84 5.6 3.28 4.6 2.82
----- ------ ----- ------ ----- ------ ----- ------
Total
revenues..... 114.3 80.34 122.5 82.16 120.3 70.70 123.0 76.33
Interest
expense........ 14.3 10.02 22.5 15.06 20.3 11.94 23.0 14.25
----- ------ ----- ------ ----- ------ ----- ------
Net revenues.. 100.0 70.32 100.0 67.10 100.0 58.76 100.0 62.08

Expenses excluding
interest:
Employee
compensation
and benefits... 23.8 16.75 24.2 16.25 25.9 15.19 24.0 14.92
Commissions and
clearance...... 6.3 4.40 7.2 4.82 4.7 2.74 6.8 4.24
Communications.. 6.9 4.85 6.7 4.51 6.8 3.99 6.1 3.79
Occupancy and
equipment
costs.......... 5.1 3.62 4.6 3.12 5.3 3.12 4.2 2.58
Advertising and
promotion...... 21.8 15.34 13.8 9.28 13.9 8.15 12.3 7.65
Provision for
losses......... 1.0 0.68 4.1 2.74 0.3 0.16 0.0 0.03
Amortization of
goodwill....... 0.0 0.02 0.3 0.18 0.7 0.39 0.8 0.47
Other........... 7.9 5.59 8.1 5.45 8.7 5.10 8.7 5.37
----- ------ ----- ------ ----- ------ ----- ------
Total expenses
excluding
interest..... 72.8 51.25 69.0 46.35 66.3 38.84 62.9 39.05
----- ------ ----- ------ ----- ------ ----- ------
Income (loss)
before provision
for income
taxes.......... 27.2 19.07 31.0 20.75 33.7 19.92 37.1 23.03
Provision for
income taxes.... 9.5 6.71 10.8 7.28 13.4 7.85 15.4 9.57
----- ------ ----- ------ ----- ------ ----- ------
Net income
(loss).......... 17.7% $ 12.36 20.2% $ 13.47 20.3% $ 12.07 21.7% $ 13.46
----- ------ ----- ------ ----- ------ ----- ------
----- ------ ----- ------ ----- ------ ----- ------

DECEMBER 31, 1996
--------------------------
% $ PER TRADE
----------- -------------
<S> <C> <C>
Revenues:
Commissions and
clearing
fees........... 68.0 % $ 35.36
Interest
revenue........ 45.6 23.73
Equity income
(loss) from
investments.... 5.1 2.67
Gain from sale
of partnership
interest....... 0.0 --
Other........... 5.3 2.74
----- ------
Total
revenues..... 124.0 64.50
Interest
expense........ 24.0 12.50
----- ------
Net revenues.. 100.0 52.00
Expenses excluding
interest:
Employee
compensation
and benefits... 27.0 14.03
Commissions and
clearance...... 4.1 2.13
Communications.. 8.0 4.14
Occupancy and
equipment
costs.......... 7.2 3.77
Advertising and
promotion...... 43.2 22.46
Provision for
losses......... 0.1 0.04
Amortization of
goodwill....... 0.6 0.31
Other........... 10.2 5.34
----- ------
Total expenses
excluding
interest..... 100.4 52.22
----- ------
Income (loss)
before provision
for income
taxes.......... (0.4) (0.22)
Provision for
income taxes.... 0.1 0.04
----- ------
Net income
(loss).......... (0.5)% $ (0.26)
----- ------
----- ------
</TABLE>

23
<PAGE>
QUARTERS ENDED DECEMBER 31, 1996 AND DECEMBER 31, 1995

NET REVENUES. Commissions and clearing fees increased 25% to $10.4 million
in the first quarter of fiscal 1997 from $8.3 million in the first quarter of
fiscal 1996. This increase was primarily attributable to an increase in the
number of securities transactions processed, as average trades per day increased
47% to 4,542 in the first quarter of fiscal 1997 from 3,081 in the first quarter
of fiscal 1996. The increase in transaction processing volume was primarily a
result of a significant increase in advertising expenditures by the Company's
discount brokerage businesses during the first quarter of fiscal 1997. The
increase in transactions processed was partially offset by a decrease in average
commission revenue per trade of 16% to $52 in the first quarter of fiscal 1997
from $62 in the first quarter of fiscal 1996, primarily as a result of an
increased proportion of trades generated by Ceres and eBroker.

Net interest revenue (interest revenue less interest expense) increased 27%
to $3.3 million in the first quarter of fiscal 1997 from $2.6 million in the
first quarter of fiscal 1996. This increase was due primarily to an increase of
171% in cash and cash equivalents segregated in compliance with federal
regulations, an increase of 10% in customer and correspondent broker-dealer
receivables and an increase of 64% in amounts payable to customers and
correspondent broker-dealers in the first quarter of fiscal 1997 from the first
quarter of fiscal 1996.

Equity in the income of the Company's investments increased 33% to $0.8
million in the first quarter of fiscal 1997 from $0.6 million in the first
quarter of fiscal 1996, due primarily to an increase in the Company's share in
the net income of Roundtable of 30% during the same period.

Other revenues increased 60% to $0.8 million in the first quarter of fiscal
1997 from $0.5 million in the first quarter of fiscal 1996, due primarily to an
increase in marketing and service fees paid to the Company by mutual funds.

EXPENSES EXCLUDING INTEREST. Employee compensation and benefits expense
increased 41% to $4.1 million in the first quarter of fiscal 1997 from $2.9
million in the first quarter of fiscal 1996, due primarily to a corresponding
increase in full-time employees during the same period.

Commissions and clearance costs decreased 25% to $0.6 million in the first
quarter of fiscal 1997 from $0.8 million in the first quarter of fiscal 1996,
due primarily to efforts that the Company has undertaken to reduce execution,
clearance, settlement and depository costs with outside entities.

Communications expense increased 71% to $1.2 million in the first quarter of
fiscal 1997 from $0.7 million in the first quarter of fiscal 1996, primarily as
a result of the 47% increase in transaction processing volume and the impact of
the Company's increased level of advertising and promotional activities in the
first quarter of fiscal 1997 versus the first quarter of fiscal 1996.

Occupancy and equipment costs increased 120% to $1.1 million in the first
quarter of fiscal 1997 from $0.5 million in the first quarter of fiscal 1996.
The significant increase was due primarily to the lease of equipment to
accommodate the employment growth during the latter stages of fiscal 1996 and
the lease of approximately 15,000 square feet of additional space to meet growth
needs, as well as the onset of depreciation of the Company's Accutrade FOR
WINDOWS software, which was released in March 1996.

Advertising and promotional expenses increased 340% to $6.6 million in the
first quarter of fiscal 1997 from $1.5 million in the first quarter of fiscal
1996 as the Company substantially increased its print, television and online
advertising expenditures.

Other operating expenses increased 60% to $1.6 million in the first quarter
of fiscal 1997 from $1.0 million in the first quarter of fiscal 1996, primarily
as a result of increased confirmation and statement processing costs associated
with the increase in transaction processing volume.

24
<PAGE>
Income tax expense was not material in the first quarter of fiscal 1997,
consistent with the minimal net loss recognized during the quarter. The net loss
was due primarily to the substantial advertising expenditures in the first
quarter of fiscal 1997.

FISCAL YEARS ENDED SEPTEMBER 27, 1996 AND SEPTEMBER 29, 1995

NET REVENUES. Commissions and clearing fees increased 52% to $36.5 million
for fiscal 1996 from $24.0 million in fiscal 1995. This increase was primarily
attributable to an increase in the number of securities transactions processed,
as average trades per day increased 79% to 3,670 in fiscal 1996 from 2,055 in
fiscal 1995. The effect of the first full year of operations of Aufhauser
resulted in 52% of the increase in transaction processing volume. The remainder
of this increase was a result of ongoing marketing efforts undertaken by the
Company's discount brokerage subsidiaries and the introduction and subsequent
marketing of the Accutrade FOR WINDOWS software in March 1996. The increase in
transactions processed was partially offset by a decrease in average commission
revenue per trade of 15% to $39 in fiscal 1996 from $46 in fiscal 1995,
primarily as a result of an increased proportion of trades generated by Ceres.

Net interest revenue increased 37% to $11.5 million in fiscal 1996 from $8.4
million in fiscal 1995. This increase was due primarily to an increase of 42% in
cash and investments segregated in compliance with federal regulations, an
increase of 28% in customer and correspondent broker-dealer receivables and an
increase of 42% in amounts payable to customers and correspondent broker-dealers
in fiscal 1996 over fiscal 1995.

Equity income from the Company's investments increased to $3.4 million in
fiscal 1996 from $0.5 million in fiscal 1995, due primarily to the Company's
investment in Roundtable in March 1995.

The Company recorded a fiscal 1995 gain of $0.6 million related to the sale
of its interest in Bond Express, L.P. in August 1995.

Other revenues increased 100% to $3.0 million for fiscal 1996 from $1.5
million for fiscal 1995, due primarily to an increase in marketing fees and
service fees paid to the Company by mutual funds.

EXPENSES EXCLUDING INTEREST. Employee compensation and benefits expense
increased 66% to $14.1 million in fiscal 1996 from $8.5 million in fiscal 1995,
due primarily to an increase in full-time employees to 334 as of September 27,
1996 from 184 as of September 29, 1995. The Company anticipates that employee
compensation and benefits expense will continue to increase in part due to
employment agreements with certain Company officers that became effective during
fiscal 1997. See "Management-- Executive Officer Compensation--Employment
Agreements."

Commissions and clearance costs were $2.5 million in both fiscal 1996 and
fiscal 1995. These costs returned to a normalized level in fiscal 1996 in
comparison with historical trends after a significant increase in fiscal 1995
related to the acquisition of Aufhauser.

Communications expense increased 54% to $3.7 million in fiscal 1996 from
$2.4 million in fiscal 1995, primarily as a result of the 79% increase in
transaction processing volume, offset in part by lower communication costs per
transaction during the same period.

Occupancy and equipment costs increased 81% to $2.9 million in fiscal 1996
from $1.6 million in fiscal 1995. The significant increase was due primarily to
the lease of additional space to accommodate the employment growth during fiscal
1996 and the onset of depreciation of the Company's Accutrade FOR WINDOWS
software, which was released in March 1996.

Advertising and promotion expenses increased 56% to $7.5 million in fiscal
1996 from $4.8 million in fiscal 1995 as the Company increased its advertising
and promotional expenditures in connection with the introduction and promotion
of its Accutrade FOR WINDOWS software in March 1996.

25
<PAGE>
Provision for losses, net of recoveries, was $1.4 million in fiscal 1995,
due primarily to the settlement of a complaint relating to alleged
responsibility for trading losses. See Note 8 to the Consolidated Financial
Statements.

Amortization of goodwill increased to $0.4 million in fiscal 1996 from $0.1
million in fiscal 1995 due to the July 1995 acquisition of Aufhauser.

Other operating expenses increased 68% to $4.7 million in fiscal 1996 from
$2.8 million in fiscal 1995, primarily as a result of increased confirmation and
statement processing costs associated with the increase in transaction
processing volume.

Income tax expense increased 92% to $7.3 million in fiscal 1996 from $3.8
million in fiscal 1995, consistent with the increase in net income before income
taxes during the same period.

FISCAL YEARS ENDED SEPTEMBER 29, 1995 AND SEPTEMBER 30, 1994

NET REVENUES. Commissions and clearing fees increased 18% to $24.0 million
for fiscal 1995 from $20.4 million in fiscal 1994. This increase was primarily
attributable to an increase in the number of securities transactions processed,
as average trades per day increased 35% to 2,055 in fiscal 1995 from 1,519 in
fiscal 1994. The increase in transaction processing volume was primarily a
result of the marketing efforts undertaken by the Company's discount brokerage
subsidiaries and the acquisition of Aufhauser in July 1995. The increase in
transactions processed was partially offset by a decrease in average commission
revenue per trade of 12% to $46 in fiscal 1995 from $52 in fiscal 1994,
primarily as a result of an increased proportion of trades generated by Ceres.
In addition, the acquisition of Aufhauser contributed significantly to the 32%
increase in the number of active accounts from 61,665 at September 30, 1994 to
81,171 at September 29, 1995.

Net interest revenue increased 42% to $8.4 million in fiscal 1995 from $5.9
million in fiscal 1994. This increase was due primarily to an increase of 24% in
cash and investments segregated in compliance with federal regulations, an
increase of 31% in customer and correspondent broker-dealer receivables and an
increase of 27% in amounts payable to customers and correspondent broker-dealers
in fiscal 1995 over fiscal 1994.

Equity income from the Company's investments increased to $0.5 million in
fiscal 1995 from a loss of $0.6 million in fiscal 1994, due primarily to the
Company's investment in Roundtable in March 1995, which generated income of $0.9
million.

The Company recorded a fiscal 1995 gain of $0.6 million related to the sale
of its interest in Bond Express, L.P. in August 1995.

Other revenues decreased 13% to $1.5 million for fiscal 1995 from $1.7
million for fiscal 1994, due primarily to a decrease in transfer and service
fees generated from correspondent broker-dealers.

EXPENSES EXCLUDING INTEREST. Employee compensation and benefits expense
increased 31% to $8.5 million in fiscal 1995 from $6.5 million in fiscal 1994,
due primarily to an increase in full-time employees to 184 as of September 29,
1995 from 147 as of September 30, 1994.

Commissions and clearance costs increased 47% to $2.5 million in fiscal 1995
from $1.7 million in fiscal 1994, due primarily to clearing charges incurred in
fiscal 1995 by Aufhauser for services provided by its previous clearing firm
after its acquisition by the Company but prior to the conversion of its clearing
function to AmeriTrade Clearing.

Communications expense increased 26% to $2.4 million in fiscal 1995 from
$1.9 million in fiscal 1994, primarily as a result of the 35% increase in
transaction processing volume in fiscal 1995 over fiscal 1994.

Occupancy and equipment costs increased 14% to $1.6 million in fiscal 1995
from $1.4 million in fiscal 1994, due primarily to the depreciation of
additional furniture and equipment purchased in fiscal 1995.

26
<PAGE>
Advertising and promotion expenses decreased 20% to $4.8 million in fiscal
1995 from $6.0 million in fiscal 1994 as the Company reduced its advertising and
promotional expenditures related to Accutrade prior to its development and
promotion of its Accutrade FOR WINDOWS software.

Provision for losses, net of recoveries, was $1.4 million in fiscal 1995 due
primarily to the settlement of a complaint relating to alleged responsibility
for trading losses. See Note 8 to the Consolidated Financial Statements.

Amortization of goodwill was $0.1 million in fiscal 1995 due to the July
1995 acquisition of Aufhauser.

Other operating expenses increased 27% to $2.8 million in fiscal 1995 from
$2.2 million in fiscal 1994, primarily as a result of increased confirmation and
statement processing costs associated with the increase in transaction
processing volume.

Income tax expense increased 45% to $3.8 million in fiscal 1995 from $2.6
million in fiscal 1994, consistent with the increase in net income before income
taxes during the same period.

LIQUIDITY AND CAPITAL RESOURCES

The Company has financed its growth primarily through the use of funds
generated from operations. As of December 31, 1996, the Company had $16.8
million in cash and cash equivalents, working capital of $4.0 million and $2.3
million available under its revolving line of credit. As of September 27, 1996,
the Company had $15.8 million in cash and cash equivalents, working capital of
$6.4 million and $4.0 million available under its revolving line of credit.

The Company is subject to the requirements of the SEC and the NASD relating
to liquidity, capital standards and the use of customer funds and securities.
The Company has historically operated in excess of the minimum net capital
requirements. See "Business--Government Regulation." The net proceeds from the
Offering will enhance the Company's net capital position, thereby enabling it to
more readily expand its brokerage and clearing businesses. The Company
anticipates based on management's experience and current industry trends that
its available cash resources and credit facilities, combined with the net
proceeds to the Company from the Offering, will be sufficient to meet its
presently anticipated working capital and capital expenditure requirements for
the next twelve months.

OPERATING CASH FLOW

The Company generated $0.1 million in cash from operations in the quarter
ended December 31, 1996, compared to $0.5 million in the quarter ended December
31, 1995. The decrease in the quarter ended December 31, 1996 was primarily
attributable to a significant increase in advertising expenditures, offset in
part by an increase in transaction volume related to growth in the Company's
discount brokerage operations. The Company generated $20.9 million in cash from
operations in fiscal 1996, compared to $7.4 million and $2.0 million in fiscal
1995 and 1994, respectively. The increase in fiscal 1996 was attributable
primarily to an increase in transaction volume related to growth in the discount
brokerage operations and the acquisition of Aufhauser.

Cash provided by investing activities was $0.1 million in the quarter ended
December 31, 1996, compared to a use of cash of $1.4 million in the quarter
ended December 31, 1995. The use of cash in the quarter ended December 31, 1995
was primarily a result of a $1.25 million investment in Telescan, Inc.
("Telescan"). Cash used in investing activities was $4.7 million in fiscal 1996,
down from $14.1 million in fiscal 1995 and up from $1.7 million in fiscal 1994.
The significant use of cash in fiscal 1995 related to the purchase of property
and equipment and the acquisition of ownership interests in Aufhauser and
Telescan, as well as increases in the ownership interests of the Company's
investments in Roundtable and Comprehensive Software Systems Ltd. ("CSS"). Uses
of cash in fiscal 1996 related primarily to purchases of property and equipment
and additional investments in Roundtable and CSS, offset by cash distributions
received from Roundtable. See "Business--Investments."

27
<PAGE>
Cash provided by financing activities was $0.9 million in the quarter ended
December 31, 1996, compared to $1.4 million in the quarter ended December 31,
1995. The decrease was attributable to an excess of bank borrowings over
repayments in the quarter ended December 31, 1995 over the quarter ended
December 31, 1996. Cash used in financing activities was $2.2 million in fiscal
1996, compared to cash provided by financing activities of $7.1 million in
fiscal 1995 and cash used of $0.2 million in fiscal 1994. The cash provided in
fiscal 1995 was due primarily to term notes payable issued in connection with
the Aufhauser acquisition, and the cash used in fiscal 1996 was due to payments
made on those term notes.

BANK LOAN AGREEMENT

The Company has entered into a Loan Agreement dated as of December 22, 1994
(as amended, the "Bank Loan Agreement") with the First National Bank of Omaha
(the "Bank"). Pursuant to the Bank Loan Agreement, the Company has borrowed a
term loan of $1.9 million payable in monthly installments of principal of
$79,000 beginning January 31, 1995 until January 31, 1997, and a term loan of
$6.0 million payable in monthly installments of principal of $125,000 beginning
August 31, 1995 until July 31, 1999, and may borrow, pay and reborrow up to $4.0
million in revolving loans until January 31, 1998. As of December 31, 1996, the
outstanding principal amount of the term loans was $4.0 million, and the
outstanding principal amount of the revolving loans was $1.7 million. All of the
loans bear interest at the rate designated by the Bank as its regional base
rate, which at December 31, 1996 was 9.25%. The Company has pledged all of the
outstanding stock of AmeriTrade Clearing to the Bank. The Company pays the Bank
an annual maintenance fee of 0.5% through January 31, 1997 and 0.375% thereafter
of the average daily unused amount of the revolving loans. The Bank Loan
Agreement contains various covenants, the more restrictive requirements being:
minimum net capital requirements, minimum net worth requirements, limitations on
incurring additional indebtedness and limitations on the sale or pledge of
capital stock of the Company's subsidiaries or a substantial part of the
Company's assets.

Letters of credit in an aggregate amount of $17.3 million as of December 31,
1996 have been issued on behalf of AmeriTrade Clearing by a financial
institution. These letters of credit, which are for the benefit of securities
clearinghouses, have been issued to support margin requirements. AmeriTrade
Clearing pays a maintenance fee of 0.5% of the committed amount for each letter
of credit. In addition, the same financial institution may make loans to
AmeriTrade Clearing if requested under a note. AmeriTrade Clearing has pledged
customer securities, the amount of which fluctuates from time to time, to secure
its obligations under the letters of credit and the note. As of December 31,
1996, no amounts were outstanding under the note.

CAPITAL EXPENDITURES

The Company's anticipated capital expenditures for fiscal 1997 approximate
$6.0 million, primarily for the purchase of office, computer and other operating
equipment. In addition, at September 27, 1996, the Company had lease commitments
for operating equipment and facilities of $2.1 million for fiscal 1997, with an
aggregate commitment of approximately $14.3 million through 2013.

28
<PAGE>
BUSINESS

THE TEXTUAL PORTION OF THIS PROSPECTUS AND A DEMONSTRATION OF CERTAIN OF THE
COMPANY'S PRODUCTS AND SERVICES, WHICH DEMONSTRATION IS PART OF THIS PROSPECTUS,
ARE AVAILABLE ON THE CD-ROM PORTION OF THIS PROSPECTUS ATTACHED TO THE INSIDE
BACK COVER PAGE HEREOF.

OVERVIEW

The Company's success in the discount brokerage industry is a result of its
creative approach to the delivery of retail brokerage and execution and clearing
services. Retail brokerage services are provided under four distinct brand
names, each of which offers a range of services and commission rates designed to
appeal to specific groups of investors within the discount brokerage market.
Accutrade offers advanced technology delivery systems to sophisticated
investors. Aufhauser provides third-party research and investment analysis to
experienced investors. Ceres offers execution services to customers who want
minimal transaction costs. eBroker provides execution services exclusively
through the Internet. This branding strategy allows the Company to align the
cost structures of its discount brokerage businesses with the level of services
desired by their customers. By providing clearing and execution services, the
Company is able to expand its customer base, provide synergies to the Company's
retail brokerage businesses and diversify its revenues.

The Company offers its retail brokerage customers the opportunity to conduct
business through a diversity of electronic mediums, including the Internet,
automated touchtone telephone, personal computer, the Sharp Zaurus personal
digital assistant and facsimile machine. During the quarter ended December 31,
1996, approximately 39% of the Company's transactions were generated through
electronic mediums. The

29
<PAGE>
Company also maintains a staff of over 130 registered representatives to service
customers directly. By combining innovative technology and a range of delivery
systems with over 21 years of industry expertise, the Company is able to provide
sophisticated services and efficient transaction execution while offering
commissions that are among the lowest in the discount brokerage industry.
Commissions charged to customers of discount brokerage services have steadily
decreased over the past several years; however, the Company believes based on
published reports that its brokerage commissions are still substantially lower
than those charged by full-commission or traditional discount brokerage firms
and are in many cases lower than those charged for similar transactions by other
brokers that offer their services through electronic mediums. See "Risk
Factors--Volatile Nature of Securities Business."

The Company also provides services to over 70 independent broker-dealers,
depository institutions, registered investment advisers and financial planners
through AmeriTrade Clearing and AmeriVest. AmeriTrade Clearing provides complete
securities transaction clearing and execution services to each of the Company's
discount brokerage businesses, as well as to independent broker-dealers,
registered investment advisors and financial planners. AmeriVest provides
discount brokerage services to depository institutions that do not operate their
own registered broker-dealers. Providing services to these correspondents allows
the Company to reach investors who rely on more traditional investment services,
such as investment advice, or who prefer to deal with local or regional
financial service providers. During the year ended September 27, 1996 and the
quarter ended December 31, 1996, the delivery of financial services to
unaffiliated correspondents accounted for approximately 11% and 9%,
respectively, of the Company's net revenues.

INDUSTRY

Before 1975, all stock exchanges required brokers to charge fixed minimum
commissions for trades of listed stocks. Under pressure from Congress, the
Department of Justice and the SEC, these policies were changed, which allowed
for negotiated commissions and the unbundling of investment services. These
developments brought about the advent of the discount brokerage firm, which
could separate financial advisory services from execution services, and could
execute trades at a lower cost than a full-commission broker. Although investors
have been able to use discount brokerage services for years, various emerging
trends make the modern investor more likely to use discount brokerage services,
particularly electronic brokerage services.

First, the unbundling of brokerage services from other financial services
has permitted investors to pick and choose among various financial service
providers for specified services. As a result, firms have emerged that provide
the services provided by a full-commission broker on an A LA CARTE basis. Firms
now specialize in investment advice, the provision of financial information and
financial planning. Other firms, like the Company, specialize in providing
discount securities brokerage services.

Second, consumers have expanded access to powerful, yet inexpensive
technology and are becoming more comfortable with and proficient in the use of
this technology. The use of this new technology to sort and deliver vast amounts
of information, to facilitate inexpensive communication of data and for the
completion of financial transactions has been growing at an accelerating rate.
Specifically, the Internet has produced thousands of new cyber-investors every
day, primarily through the World Wide Web. Forrester Research, Inc. estimates
the number of electronic brokerage accounts will approach 1.5 million by the end
of 1996. Forrester further predicts the number of such accounts will grow to 10
million, carrying $524 billion of assets, by the year 2001, a 46% annual growth
rate.

Third, investors are becoming more self-reliant and value conscious in the
pursuit of their financial goals. Investors are increasingly willing to acquire
the information about, and an understanding of, investment alternatives and have
become increasingly sophisticated and knowledgeable about investing. Access to a
broad range of financial information and advice has decreased the necessity for
full-service brokers. These investors make their own decisions about their
financial future and tend to seek greater value, often in the

30
<PAGE>
form of lower transaction costs. As a result, the use of discount brokers and
directly marketed no-load mutual funds have increased in market share at the
expense of traditional providers charging a higher commission or sales load.

Finally, the growth in financial assets held by an individual is
accelerating. Large numbers of "baby boomers" are beginning to invest for their
children's education and for their own retirement. Additionally, it is estimated
that these individuals, many of whom have greater education, technical
capabilities and investment choices than their parents, as well as greater
access to information, will inherit up to $10 trillion from the previous
generation during the next decade. This represents the largest absolute
transference of wealth in history.

The convergence of these trends is creating a new marketplace for financial
services. It is also creating a new investor, who is self-reliant, comfortable
with the use of technology and value oriented. The Company seeks to be the
leading provider of financial services to this new investor.

BUSINESS STRATEGY

The Company seeks to capitalize on the changing financial services industry
and to increase its market share by continuing with an approach based on four
key strategies:

- MARKET DISTINCT BRANDS TO SPECIFIC GROUPS OF DISCOUNT BROKERAGE
CUSTOMERS. The Company markets distinct brands with a range of services
and commission rates designed to appeal to specific groups of investors
within the discount brokerage market. By providing specified services to
targeted customers in the discount brokerage market, the Company believes
based on management's experience and focus group research that it appeals
to a broader range of investors seeking brokerage services at discount
prices. Accutrade provides more technologically advanced solutions than
the Company's other brands, including program investing and basket trading
available through Accutrade FOR WINDOWS. Aufhauser is marketed to
experienced investors seeking research and customer service. Aufhauser
also provides international investors interested in the U.S. securities
market with multi-lingual service and with toll-free telephone access from
36 countries. Ceres is directed at investors who are seeking simple and
efficient execution services at the lowest possible transaction cost.
eBroker serves investors who are comfortable with the Internet and prefer
to trade exclusively through electronic communication in exchange for
low-priced trade executions. Through this market segmentation approach,
the Company is able to deliver products and services tailored to the
specific needs of its customers in the most cost efficient manner. See
"--Discount Securities Brokerage Services."

- CREATE TECHNOLOGICALLY INNOVATIVE SOLUTIONS TO INVESTOR NEEDS. The
Company is a technology leader in the retail brokerage and clearing and
execution businesses:

- In 1988, the Company was the first broker to implement automated
touchtone trading technology, which allows customers to place trades
and obtain quotes electronically using the telephone.

- In 1994, the Company became the first brokerage firm to offer trading
services over the Internet.

- In 1995, the Company introduced a trading application for the Sharp
Zaurus personal digital assistant, which allows portable access to
trades, quotes, positions and balances.

- In 1996, the Company introduced Accutrade FOR WINDOWS, the first online
investing system that permits individual investors to engage in program
investing and basket trading.

- The Company recently completed the development and introduction of
AmeriTrade OnLine, a technologically advanced financial system for its
correspondents that integrates the products and services of some of the
world's foremost financial service vendors into one Internet-based
system.

31
<PAGE>
The Company is actively pursuing additional technologies to service the
rapidly evolving financial services industry. See "--Strategic
Relationships" and "--Product Development."

- PROVIDE TRANSACTION VALUE TO INVESTORS. The Company strives to offer
investors transaction value by providing specified services at prices that
are among the lowest in the discount brokerage industry. eBroker offers a
flat $12.00 commission on Internet-only trades for an equity order of any
size. For investors who want access to registered representatives as well
as the Internet to place trades, Ceres charges a flat $18.00 fee for an
equity order of any size. Investors desiring more services, such as
increased technology, more trading options or research, may use Aufhauser
or Accutrade. Through more efficient operations, an increasing number of
transactions and the use of advanced technology, the Company strives to
minimize costs, which allows it to offer some of the best transaction
values in the industry. See "--Discount Securities Brokerage Services."

- EXPAND CLEARING AND EXECUTION SERVICES TO CORRESPONDENTS. The Company
intends to leverage the advanced technology offered to its retail
brokerage customers to increase its clearing and execution business with
correspondents. Providing clearing and execution services permits the
Company to expand its customer base and diversify its revenues. Providing
clearing and execution services for its own broker-dealer subsidiaries
allows the Company to realize efficiencies and achieve strategic
flexibility as a result of its ability to control the delivery of these
services without relying on third parties. See "--Clearing and Execution
Services."

32
<PAGE>
DISCOUNT SECURITIES BROKERAGE SERVICES

The Company provides retail discount brokerage services under four distinct
brand names, each of which offers a range of services and commission rates
designed to appeal to specific groups of investors within the discount brokerage
market. The following chart summarizes by brand these services and the average
commission per trade charged to customers during the month ended December 31,
1996:

<TABLE>
<CAPTION>
ACCUTRADE AUFHAUSER CERES EBROKER
------------- ------------- ----- -----------
<S> <C> <C> <C> <C>
WAYS TO TRADE
Internet............................................................. - - - -
Touchtone telephone.................................................. - - -
Personal computer.................................................... - -
Windows-based software............................................... -
Zaurus............................................................... - -
Fax.................................................................. - -
Registered representative............................................ - - -
PRODUCTS
Stocks............................................................... - - - -
Mutual funds......................................................... - - -
Options.............................................................. - - - -
Bonds................................................................ - - -
American depositary receipts......................................... - - - -
Foreign securities................................................... - - -
Certificates of deposit.............................................. - -
Precious metals...................................................... - -
SERVICES OFFERED
Quotes............................................................... - - - -
Research............................................................. - -
IRAs................................................................. - - - -
Debit card........................................................... - -
Check writing........................................................ - -
News................................................................. - -
Tax lot accounting................................................... -
Program investing.................................................... -
Basket trading....................................................... -
AVERAGE COMMISSION PER TRADE CHARGED TO CUSTOMERS*....................... $ 51 $ 33 $ 19 $ 13
</TABLE>

- ------------------------------

* A postage, insurance and handling charge ("PIH") also is added to certain
transactions of Accutrade and Aufhauser. The average PIH at Accutrade is
less than $.50 per transaction and the average PIH at Aufhauser is
approximately $1.60 per transaction. No PIH is charged at Ceres or eBroker.

[LOGO]

Accutrade is a discount broker that offers advanced technology delivery
systems for sophisticated investors. Accutrade and its predecessors have been
providing value added brokerage services to customers since 1975. Accutrade
currently allows customers to access its services through personal computer, the
Internet, the Sharp Zaurus personal digital assistant, automated touchtone
telephone and facsimile, and through registered representatives. Through its
diverse mediums, Accutrade currently permits customers to trade in stocks,
mutual funds, options and bonds.

33
<PAGE>
Accutrade is a leader in innovative technology that gives customers
flexibility in account management at discount brokerage commissions. Accutrade
pioneered automated touchtone trading technology in 1988, which allows customers
to place trades and obtain quotes electronically using the telephone. In 1993,
Accutrade PC was introduced, which allows customers the ability to place trades
and retrieve quotes, positions and balances using a personal computer. In 1995,
the Company capitalized on evolving technologies by introducing a trading
application for the Sharp Zaurus personal digital assistant, which allows
portable access to trades, quotes, positions and balances.

Accutrade's Web site allows customers to enter orders for stocks, mutual
funds and options, to view their balances, positions, order status, quotes and
transaction history and to use research from Thomson Financial Services. The
research offered includes historical and intra-day charts, company reports,
earnings estimates, stock screening and general market information.

Accutrade FOR WINDOWS was introduced in March 1996 to provide individual
investors with an online investing system. Accutrade FOR WINDOWS is a powerful
Windows-based trading software package that gives customers the ability to
manage their financial assets. Customers using Accutrade FOR WINDOWS may place
orders for stocks, mutual funds, options and corporate bonds. Customers can also
review their balances, positions, transaction history and order status, and
obtain quotes. In addition, the program enables customers to track multiple
portfolios and tax lots and generates a variety of reports including a Schedule
D for income tax purposes. Customers can create quote lists of their favorite
stocks and keep price histories for them. Accutrade FOR WINDOWS also offers
symbol lookup and creates a report of all of the equity options for an
underlying stock. To provide additional helpful information to investors, the
program includes a margin and option help file and a margin calculator.

One of the advanced features of Accutrade FOR WINDOWS is the ability to make
program investments. This feature permits customers to create conditions under
which orders will be placed and then have their personal computer monitor the
market to automatically place the order. Customers can also design baskets of
stocks to track and trade. A price history of the basket can be tracked to
determine how the basket is performing, and a single order can buy or sell the
basket. Investors also can place spread, straddle and buy/ write orders using
Accutrade FOR WINDOWS, features no other competing software offers. In addition,
Accutrade FOR WINDOWS gives investors access to multiple news and research
services. Customers can access company highlights from Ford Equity Research or
detailed company reports and earnings estimates from Market Guide. Reuters Money
Network and Telescan Investor's Platform software are also included.

Accutrade offers a wide range of third-party research services to assist its
customers in selecting the best trading strategy. Stock research includes
professional reports on over 7,000 listed companies on the major exchanges,
qualitative and quantitative analyses on all major industry sectors and ranking
tables, including performance ratios for large, middle and small cap stocks.
Accutrade's stock alerts notify clients of earnings, announcements, dividend
reports, price changes of more than 3% and other significant events affecting
investments.

In addition to its trading department, which is staffed by registered
representatives, Accutrade provides complete customer service for both technical
and brokerage needs. Customer service representatives respond to inquiries about
the technical services offered by Accutrade, including the Accutrade FOR WINDOWS
system, the Accutrade Web site and Accutrade's Sharp Zaurus personal digital
assistant application and to all other inquiries, which usually relate to
securities transactions or other account activity. Active clients are assigned
to their own customer service representative in order to provide continuity of
service and to enhance the customer's relationship with Accutrade.

Accutrade generally charges a commission of $28.00 plus 2 cents a share for
an equity order and requires a minimum of $5,000 to open an account.

34
<PAGE>

[LOGO]

The Company acquired Aufhauser in July 1995 in connection with the Company's
business strategy to market distinct brands to different groups of investors in
the discount brokerage market. Founded in New York, New York in 1981, Aufhauser
is a discount brokerage firm that provides third-party research and investment
analysis to experienced investors. Aufhauser was the first brokerage firm to
offer trading services through the Internet via its WealthWEB site. Aufhauser
provides customers with a wide array of investment vehicles, including common
and preferred stocks, mutual funds, options, corporate and municipal bonds,
American depositary receipts, various treasury obligations, foreign securities,
certificates of deposit and precious metals. Additionally, Aufhauser offers cash
management services, including checkwriting, debit cards, electronic funds
transfers and cash machine access.

Aufhauser provides access to its services through the Internet, automated
touchtone telephone and personal computer and through registered
representatives. WealthWEB connects customers to quotes, research, portfolio
tracking and trade execution services. Furthermore, Aufhauser is positioned to
service the rapidly growing interest of foreign investors in the United States
securities market. Aufhauser provides multi-lingual service and toll-free access
to customers in 36 nations around the world.

Aufhauser strives to differentiate itself by providing a high level of
personalized customer service. Aufhauser obtains research reports and gathers
information on foreign securities upon request from customers. To assist
customers in their transactions, Aufhauser also provides the latest news and
information from a variety of outside sources that can be read over the phone or
faxed to customers upon request.

Aufhauser offers executions of equity trades for $24.99 for trades of up to
400 shares, $34.00 for trades of 400 shares up to 1,700 shares and two cents per
share for trades in excess of 1,700 shares, with a 10% discount provided for
electronic trades. Aufhauser does not require a minimum balance to open an
account but does charge a one-time $20 fee if the opening balance is less than
$10,000. Aufhauser also offers a special program whereby active traders can
receive a year of equity executions, subject to certain restrictions, for a flat
annual fee of $800. A minimum balance of $10,000 is required for flat fee
accounts.

[LOGO]

Ceres is a discount broker that provides execution services to customers who
want minimal transaction costs. Ceres began operations in 1994 in response to
customer demand for the provision of brokerage services with the lowest possible
transaction costs to individual investors. Ceres experienced an average increase
in its account base of 9.3% per month during fiscal 1996. Through its automated
systems and streamlined operations, Ceres is able to offer one of the lowest
standard fees in the industry, charging a flat rate of $18.00 for an equity
order of any size. Ceres requires a minimum of $5,000 to open an account.

Ceres provides customers with an efficient way to obtain high-quality
executions through automated touchtone telephone and registered representatives.
Ceres also operates a Web site on the Internet that gives customers easy access
to their accounts. This online access allows customers to place equity, mutual
fund and option orders, view account balances, positions, order status and
transaction histories and obtain quotes. The Ceres Web site also features a
daily column by distinguished business writer Andrew Tobias. In addition, Ceres
customers are able to take advantage of the Company's trading software for the
Sharp Zaurus personal digital assistant, which permits customers to place trades
as well as obtain quotes, positions,

35
<PAGE>
balances and confirmations electronically. Customers who have trade-related
problems are offered service by one of Ceres's registered representatives.
Registered representatives are available 16 hours every trading day to accept
trade orders for execution during market hours and to respond to trade-related
inquiries.

[LOGO]

eBroker commenced operations in May 1996 as the first Internet-only
brokerage firm. eBroker has increased its customer base and its average daily
transaction volume, on a month to month basis, each month from its inception to
date. eBroker provides Internet trading services throughout the United States
and internationally. eBroker's Web site permits customers to place equity and
option orders, view account balances, positions, order status and transaction
history and obtain quotes. Additionally, eBroker's Web site offers various types
of company information and a demonstration of eBroker's trading system. By not
maintaining expensive toll-free numbers or research staff, eBroker is able to
offer a flat rate of $12.00 commission for an equity order of any size. eBroker
requires a minimum of $10,000 to open an account.

eBroker serves investors who are comfortable with the Internet and prefer to
trade exclusively through electronic communications in exchange for low priced
trade executions. Customer inquiries are accepted via e-mail and representatives
are required to respond within 24 hours, although responses usually are sent by
return e-mail the same day they are received. Although eBroker does not maintain
toll-free telephone numbers for customer inquiry, it does provide local number
access for customer inquires which are time sensitive in nature. The Company
believes based on published reports that eBroker offers one of the lowest
commission rates in the industry.

CLEARING AND EXECUTION SERVICES

[LOGO]

AmeriTrade Clearing provides complete securities transaction clearing
services to each of the Company's discount brokerage businesses, as well as to
independent broker-dealers, depository institutions, registered investment
advisors and financial planners who serve their own retail customers. AmeriTrade
Clearing provides safekeeping for approximately $4.0 billion in customer assets.

AmeriTrade Clearing has recently completed the development and introduction
of AmeriTrade OnLine, a technologically advanced financial system that
integrates the products and services of some of the world's foremost financial
service vendors into one Internet-based system. AmeriTrade OnLine permits
correspondent broker-dealers, financial planners and registered representatives
to design and implement investment planning programs for their customers using
one integrated solution. Products available include equities, mutual funds,
bonds, certificates of deposit, life insurance, annuities, retirement programs,
wrap accounts and money market accounts. Services include estate planning,
financial planning, portfolio development, asset allocation, asset management,
personal accounting, tax analysis, news, quotes and research.

[LOGO]

AmeriVest is a wholesale provider of discount brokerage services to
depository institutions, including banks, savings and loans and credit unions.
AmeriVest acts as the discount brokerage arm of its customers, providing access
for the institution's retail customers to the equity and bond markets so that
the institution itself does not have to become a registered broker-dealer.
AmeriVest maintains a staff of registered representatives to service the retail
customers of its correspondent financial institutions.

36
<PAGE>
STRATEGIC RELATIONSHIPS

The Company is actively pursuing alliances with various companies to
increase trading volume and operational efficiencies and to further enhance its
brand name recognition.

[LOGO]

The Company currently has an agreement with USA Today Information Network
("USATIN"), which is a Web site created by the newspaper USA TODAY. Pursuant to
this agreement, all four of the Company's discount brokerage businesses will be
included in USATIN's Financial Marketplace section of USATIN. The agreement
calls for the creation of co-branded Web sites with USATIN and each of the
Company's discount brokerage businesses. These co-branded sites will have both
USATIN's and the broker's logos and will grant USATIN subscribers access to
marketing information provided by the broker and will permit subscribers to open
an account with the broker and place trades through the Internet.

[LOGO]

The Company also has an agreement with Prodigy Services Corporation
("Prodigy") to have Accutrade, Aufhauser and Ceres included in Prodigy Internet,
a new Prodigy product on the Internet. The Company will create co-branded Web
sites for each of the three brokers. These co-branded sites will have both
Prodigy Internet's and the broker's logos and will grant Prodigy Internet
subscribers access to marketing information provided by the broker and will
permit subscribers to open an account with the broker and place trades through
the Internet.

[LOGO]

AmeriTrade Clearing has formed a strategic alliance with Essex Corporation
("Essex"), a leading independent marketer of annuities, mutual funds and life
insurance through depository institutions. Essex and AmeriTrade Clearing have
co-developed EASIS (Essex AmeriTrade Securities and Insurance Systems), an
automated system that processes, tracks and reports both securities and
insurance products. EASIS makes it possible for depository institutions to offer
an array of securities and insurance products using a single-source, online
system. AmeriTrade Clearing and Essex have also entered into a cross-marketing
agreement, whereby Essex has agreed to refer certain of its banking clients and
prospects to AmeriTrade Clearing for securities clearing services and AmeriTrade
Clearing will refer certain of its clients and prospects to Essex for insurance
and annuity products, in each case for a referral fee.

The Company's strategic relationships have been entered into recently and do
not represent a material portion of the Company's accounts, trading volume or
revenues. See "Risk Factors--Risks Associated with Strategic Acquisitions and
Relationships."

PRODUCT DEVELOPMENT

The Company currently offers its customers a broad range of products and
services designed to address their individual needs. A demonstration of certain
of the Company's products and services, which demonstration is part of this
Prospectus, is available on the CD-ROM portion of this Prospectus attached to
the inside back cover page hereof. The Company also is actively pursuing
opportunities to improve and increase the products and services offered to its
customers.

The Company is developing a financial services mall on the Internet, called
OnMoney, which will allow its customers to obtain all the information and tools
needed to manage their personal finances. This Web-based application will be
open to use and ownership by any banks, brokers, investment advisors, mutual
fund companies, insurance companies and other financial institutions that wish
to provide a wide array of

37
<PAGE>
financial services. Customers will be able to choose from a variety of
institutions and will receive a single statement that includes all of their
financial information. They will also be able to access investment tools,
financial management advice, market research and educational material.

Accutrade is developing a brokerage application for the new Motorola
PageWriter two-way pager. This pager will use the SkyTel wireless network to
send messages back and forth between the customer's pager and Accutrade.
Customers will be able to place orders, receive quotes and review their
balances, positions and order status without needing access to a telephone or a
computer.

The Company has an agreement with Financial Internet Technologies ("FIT"), a
joint venture between Olivetti SpA, a European technology conglomerate, and
Sparekassernes Datacenter, a provider of banking systems in Denmark, whereby the
Company will evaluate FIT's personal computer banking software for the U.S.
market and FIT will evaluate the Company's electronic brokerage software for the
European market. If the evaluation is successful, the two companies may make an
arrangement to exchange technologies.

The Company is evaluating a trading application for the Philips Screen Phone
that would allow users to obtain quotes and trade securities. Philips
Electronics N.V. is a leading world supplier of products, systems and services
in the fields of lighting and electronics.

In addition, the Company regularly examines new ways to provide financial
and investment information to investors. Customers of the Company's brokerage
businesses and visitors to the Company's Web sites currently have access to
quotes; financial and market data; forecasts, research and analysis regarding
stocks, mutual funds and bonds; company and industry profiles; and business news
from one or more of the following providers:

[LOGO]

The Company is also considering the development or acquisition of technology
that would allow customers to place orders using speech recognition technology,
interactive television and artificial intelligence applications.

Pursuing these opportunities demonstrates the Company's commitment to
continue to offer its customers innovative products and services. The
development of these products and services has not required any material capital
expenditures to date and the Company does not anticipate that such development
will require any material capital expenditures in the foreseeable future. The
Company expenses all research and development costs as they are incurred. The
Company regularly monitors the costs and projected benefits of

38
<PAGE>
its product and service developments to determine their continued viability. The
Company does not believe that the failure of any of its current developments
would have a material adverse effect on the Company's business, financial
condition or operating results. See "Risk Factors--Rapidly Evolving Markets" and
"Risk Factors--Risks Associated with New Products and New Markets."

MARKETING

The Company seeks to increase its market share through direct-response
advertising, advertising on its own and other Web sites, a public relations
program and co-marketing. The Company has recently initiated an aggressive
marketing campaign designed to bring greater brand name recognition to the
Company's product lines. As a result, the Company intends to significantly
increase its spending on print, television, radio, direct mail, telemarketing
and online advertising during the current fiscal year. See "Management's
Discussion and Analysis of Financial Condition and Results of
Operations--Overview." From time to time, the Company may choose to increase
spending on advertising to target specific groups of investors or to decrease
advertising expenditures in response to market conditions.

The Company's marketing focuses on advertising its discount brokerage
services as a less expensive and more efficient way of initiating transactions,
building awareness of the Company's product lines and selling the benefits of
the Company's services. Print advertisements are placed in a broad range of
business, technology and financial publications, including THE WALL STREET
JOURNAL, BARRON'S, INVESTOR'S BUSINESS DAILY, FORBES, MONEY and WIRED. Online
advertising is conducted through America Online, CompuServe and popular Web
sites such as Yahoo!, Netscape, Wall Street Journal Interactive and Barron's
Online. The Company advertises regularly on CNBC, CNNFN and other major business
cable television networks. The Company also uses telemarketing and direct mail.
The Company's aggressive advertising program has been a significant contributor
to growth in new accounts. To monitor the efficacy of its various direct
response marketing efforts, the Company has installed sophisticated prospect
tracking and customer acquisition accounting systems.

At the Company's Web sites, prospective customers are able to obtain
detailed information on the Company's services, use an interactive demonstration
system, request additional information and complete an account application
online. Visitors to the Accutrade Web site can periodically participate in a
stock trading game to increase awareness of Accutrade services. The Company
intends to capitalize on the popularity of its Web sites by selling advertising
to third parties who are interested in targeted marketing. In addition, there
are links to home pages of the Company's product lines from more than 750 sites
on the Web. The Company believes based on the increased number of visits to the
Company's Web sites from such home pages that this is a significant factor in
increasing brand awareness and generating leads, as consumers increasingly look
to the Internet as a key source of information and commercial activity.

The Company pursues public relations opportunities to build brand awareness.
This campaign has resulted in appearances on CNN, CNBC and various local
television stations, in addition to profiles in BUSINESS WEEK and THE WALL
STREET JOURNAL. The Company also actively seeks speaking opportunities at
industry conferences and events. The Company has established a number of
co-marketing alliances to increase brand awareness. For example, the Company has
co-branded Web sites with USA TODAY and Prodigy, which will provide targeted
customers with business and market information. See "--Strategic Relationships."

The Company's customers are currently able to trade securities online from
anywhere in the world. Aufhauser provides multi-lingual customer service, and
toll-free access to Aufhauser is available in 36 countries. Although the Company
has not yet developed its strategy for international expansion, the Company
intends in the future to increase its marketing efforts to attract more
international customers. The Company has been discussing possible alliances with
local institutions in foreign countries, such as brokers and depository
institutions, to make the portfolio tracking, purchase and sale and funds
transfer processes easier for foreign investors, to facilitate the handling of
foreign securities and to ensure compliance with

39
<PAGE>
applicable international laws and regulations. In order to expand its services
internationally, the Company would have to comply with regulatory controls of
each specific country in which it conducts business. See "Risk
Factors--Government Regulation."

The Company markets its clearing and execution services primarily through
its direct sales staff. The Company also has booths at trade shows and
advertises in brokerage industry magazines and through AmeriTrade Clearing's Web
site. In addition, the Company has entered into a marketing alliance with Essex,
a leading provider of related financial products to depository institutions. See
"--Strategic Relationships."

All communications by the Company's subsidiaries with the public are
regulated by the NASD. See "-- Government Regulation."

CUSTOMER SERVICE

The Company strives to optimize the level of customer service provided to
its clients by (i) expanding its use of technology to handle most typical
inquiries generated in the course of customers' securities trading and related
activities, (ii) ensuring adequate staffing with properly trained and motivated
personnel in its customer service departments, enabling prompt response to
customer service calls and (iii) tailoring customer service to the particular
expectations of the clients of each of the Company's brokerage businesses.

The Company's software and Web sites provide basic information on how to use
the Company's services. For those inquiries that cannot be answered through one
of the Company's automated systems, customers are encouraged to use e-mail for
matters that are not time sensitive. The Company's operating standards require a
response within 24 hours of receipt of the e-mail for such matters; however, the
Company strives to respond within 60 minutes of the original message. The
Company also maintains electronic bulletin boards where customers and potential
customers can ask questions and exchange information about the Company's
services. For customers who choose to call or whose inquiries necessitate
calling one of the Company's customer service representatives, the Company is
currently installing advanced call handling capabilities. These systems will
provide automated answering, directing of calls to the proper department,
information about current wait times, summary market data while the customer
waits and the capability to exit the voice queue to leave a voice message for
later response or to transfer to an automated system. The new telephone systems
will also allow linkage between caller identification and the customer database
to give the customer service representative immediate access to the customer's
account data at the time the call is received. It is expected that these
telephone systems will increase call handling efficiency and enhance the
customers' experience when calling for service, particularly during periods of
heavy market activity.

The Company recognizes that many of its customers' inquiries require
handling by customer service representatives. The Company strives to provide the
best customer service in the industry as measured by (i) speed of response time
on telephone calls, (ii) turnaround time on resolving customer inquiries and
(iii) customer satisfaction with the account relationship. The Company develops
hiring plans by brand that reflect growth projections for each brand to ensure
that adequate personnel are hired and trained in advance of customer needs. As
of December 31, 1996, the Company employed in its discount brokerage businesses
over 150 associates assigned to handle customer service calls. Customer service
representatives receive training in brokerage operations, Company policies and
procedures and basic telephone and clerical skills to ensure quality and
accuracy. Each new representative is monitored closely by a lead representative,
who is supervised by experienced operations managers. All telephone calls are
recorded for purposes of training and supervision and to assist in the
resolution of customer disputes. Hours of service vary by brand, with all
businesses offering availability at least one hour before and after market
hours.

The Company monitors the speed of answering telephone calls from its
customers. While each of the Company's brokerage businesses establishes its own
target for maximum average wait time before answering, all of them strive to
answer all customer calls in less than one minute and none of the businesses has
encountered a material disruption in customer service as a result of excess
customer calling volume. The

40
<PAGE>
greatest delays were experienced by Ceres in May 1996, during which the average
customer response time was 5.25 minutes. During December 1996, the average
answering time at Accutrade, Aufhauser and Ceres was 24 seconds. The Company
also seeks to monitor the level of overall customer satisfaction through use of
customer response cards sent with trade confirmations or through periodic
surveys. Written comments, e-mails and electronic postings by customers are
regularly reviewed by the Company's senior officers. It is the Company's policy
to respond to all customer questions, comments or complaints, regardless of the
manner received.

OPERATIONS

ORDER PROCESSING

Order processing and the resulting trade executions are essential parts of
the delivery of the Company's services. The Company's order processing functions
are performed by AmeriTrade Clearing. AmeriTrade Clearing receives customer
trade orders generated by both its affiliated and independent correspondents
through numerous mediums, including automated touchtone telephone, telephone
calls with registered representatives, proprietary software provided to
customers (e.g., Accutrade FOR WINDOWS), the Internet, online services and
personal digital electronic devices.

Once received, customer orders are subjected to internally developed credit
algorithms to assess the presence of available funds, securities or credit in
the customers' trading accounts. Upon meeting these acceptability criteria,
customer orders are processed by electronically routing the buy or sell orders
to another broker-dealer who is making a market in the security or who
represents AmeriTrade Clearing on the floor of various national stock exchanges.
Over 95% of AmeriTrade Clearing's trades in listed securities are executed by
market making broker-dealers. AmeriTrade Clearing has established redundant
backup electronic links to its primary and secondary execution agents and
maintains flexible routing schedules with these execution agents to assure
timely and best possible execution for its customers.

All listed and OTC market orders without special qualifiers (subject to
certain size limitations based on the order size in the primary market) are
executed at no worse than the National Best Bid/Offer ("NBBO") at the time of
receipt by a market making firm or exchange. Eligible orders are exposed to the
marketplace for possible price improvement, but in no case are orders executed
at prices inferior to the NBBO. Limit orders are executed based on time priority
and indicated price. Qualifying limit orders in OTC securities between the
inside market in the Nasdaq quote will be reflected in the NBBO, creating a new
inside quote.

CLEARING

The Company provides clearing and execution services to each of its discount
brokerage businesses, as well as to independent broker dealers, depository
institutions, registered investment advisors and financial planners through its
subsidiary, AmeriTrade Clearing. The clearing function involves a sharing of
responsibilities between the clearing broker and the introducing broker. The
Company's correspondents, as introducing brokers, are responsible for all
customer contact, including opening customer accounts, responding to customer
inquiries and placing customer orders with the clearing broker. As a clearing
broker, AmeriTrade Clearing provides the following back office functions:
maintaining customer accounts; extending credit (in a margin account) to the
customer; settling security transactions with clearing houses (e.g., the
Depository Trust Company and the National Securities Clearing Corporation);
settling commissions and clearing fees; preparing customer trade confirmations
and statements; performing designated cashiering functions, including the
delivery and receipt of funds and securities to or from the customer;
safeguarding funds and securities in customer accounts; transmitting tax
accounting information to the customer and the applicable tax authority;
forwarding prospectuses, proxies and other shareholder information to customers;
preparing books and records in support of the above; and other related
transactions.

Included as a part of the clearing function is the assumption of
responsibility for the possession and control of customer securities and other
assets. As a result, the Company records on its balance sheet

41
<PAGE>
amounts receivable from customers that are a result of margin loans (loans made
to customers that are collateralized by securities held in customers' trading
accounts at the Company). In addition, the Company records on its balance sheet
amounts payable to its customers and correspondent broker-dealers related to
cash balances maintained by the Company on behalf of those customers and
correspondents (free credit balances). Clearing operations involve substantial
risks of losses due to errors in performing clearing functions or reporting and
clerical errors related to the handling of customer funds and securities. See
"Risk Factors--Risks Associated with Clearing Operations."

AmeriTrade Clearing borrows securities both to cover short sales and to
complete customer transactions in the event that a customer fails to deliver
securities by the required date. AmeriTrade Clearing collateralizes such
borrowings by depositing cash or securities with lending institutions.
Securities borrowing transactions are executed pursuant to written agreements
with counterparties that require that the securities borrowed be "marked to
market" on a daily basis and that excess collateral be refunded or that
additional collateral be furnished in the event of changes in the market value
of the securities. Failure to maintain cash deposit levels at all times at least
equal to the value of the related securities can subject the Company to risk of
loss. See "Risk Factors--Risks Associated with Clearing Operations."

MARGIN LENDING

The Company makes loans to customers collateralized by customer securities.
Margin lending by the Company is subject to the margin rules of the Board of
Governors of the Federal Reserve System, NASD margin requirements and the
Company's internal policies, which are more stringent than the Federal Reserve
and NASD requirements. By permitting customers to purchase on margin, the
Company takes the risk of a market decline that could reduce the value of the
collateral held by the Company to below the customers' indebtedness before the
collateral can be sold. See "Risk Factors--Risks Associated with Clearing
Operations." Under applicable NASD rules, in the event of a decline in the
market value of the securities in a margin account, the Company is obligated to
require the customer to deposit additional securities or cash in the account so
that at all times the customer's equity in the account is at least 25% of the
value of the securities in the account. The Company's current internal
requirement, however, is that the customer's equity not fall below 30% of the
value of the securities in the account. If it does, the customer will be
required to increase the account's equity to 35% of the value of the securities
in the account. These requirements can be and often are raised as the Company
deems necessary for certain accounts, groups of accounts, securities or groups
of securities. The Company is constantly monitoring customer accounts for these
purposes. Margin lending to customers constitutes the major portion of the basis
on which net capital requirements of the Company are determined under the SEC's
Net Capital Rule. To the extent these activities expand, the Company's net
capital requirements will increase. See "--Government Regulation-- Net Capital
Requirements; Liquidity."

EXECUTIVE COMMITTEES

The Company has established three executive committees that institute
policies and procedures regarding the Company's daily operations: the Risk
Committee, the Expense Committee and the Operations Committee. Each committee
includes J. Joe Ricketts, Chairman and Chief Executive Officer, Joseph A. Konen,
President and Chief Operating Officer, Robert T. Slezak, Vice President, Chief
Financial Officer and Treasurer, and assigned executives from each of the
Company's subsidiaries. The committees provide oversight and assist the
subsidiaries in achieving their goals. The committees may suggest the
establishment of, or changes to, policies and procedures of the subsidiaries to
strengthen controls in areas of risk, expense and operations. The committees,
however, do not take the place of the decision-making authority vested in each
of the subsidiaries.

The purpose of the Risk Committee is to help protect the Company in the
event a customer (retail customer or correspondent broker) defaults on a payment
obligation to the Company. In addition, the Risk Committee reviews AmeriTrade
Clearing's new and existing correspondents as well as its retail margin

42
<PAGE>
accounts. The Expense Committee is responsible for establishing policies and
procedures for cost control. The Expense Committee reviews each subsidiary's
expenditures to ensure they are in accordance with a pre-approved business plan.
The purpose of the Operations Committee is to design and document systems,
procedures and policies to make daily operations more efficient, and to ensure
that actual operating procedures conform to documented standards.

SYSTEMS

The Company uses a variety of systems to support investors and the Company's
correspondents. The Company maintains a sophisticated proprietary computer
network that links the various trading applications to the proprietary core
system, the AmeriTrade Operating System ("ATOS"). All of the customer trading
applications interface and feed data through standardized messaging and
formatting into ATOS. ATOS delivers quotes and information to the investor and
routes trades to the market. ATOS then updates account balances and positions
via multiple lines of communication. ATOS also supports other operations such as
clearing functions, account administration and recordkeeping.

The Company's technology relies on a distributed computer system with an IBM
RISC 6000 backbone. To enhance the reliability of the system and integrity of
data, the Company maintains multiple backup systems. A backup power supply
supports the operations facility. Tape backups are made nightly to prevent a
loss of data. See "Risk Factors--Dependence on Computer Systems."

The Company's technology is supported by an internal staff of programmers,
developers and operators 24 hours a day, seven days a week. The programming
staff is supplemented by a team of quality control analysts, Web page
developers, technical writers and design specialists who ensure the final
product is user-friendly and dependable. In addition to supporting the systems,
the staff continually enhances software and hardware and develops new services.
Software is designed to be versatile and easily adaptable to new and emerging
technologies.

COMPETITION

The Company derives over 85% of its revenues from the provision of discount
brokerage services. The market for discount brokerage services, particularly
electronic brokerage services, is new, rapidly evolving and intensely
competitive and has few barriers to entry. The Company expects competition to
continue and intensify in the future. The Company encounters direct competition
from approximately 100 other discount brokerage firms, many of which provide
electronic brokerage services. These competitors include such discount brokerage
firms as Charles Schwab & Co., Inc., Fidelity Brokerage Services, Inc.,
Waterhouse Securities, Inc., Quick & Reilly, Inc. and E*Trade Group, Inc. The
Company also encounters competition from established full-commission brokerage
firms as well as financial institutions, mutual fund sponsors and other
organizations, some of which provide electronic brokerage services. In addition,
the Company derives revenues from clearing and execution services. The clearing
business is also highly competitive. AmeriTrade Clearing competes with over 40
clearing firms that provide clearing and execution services to the securities
industry.

The Company believes that the principal competitive factors affecting the
market for its discount brokerage services are price, customer service, quality
of trade execution, delivery platform capabilities, ease of use, graphical user
interface, breadth of services and innovation. Clearing firms compete on the
elements

43
<PAGE>
of price, technology, financial strength and customer service. Based on
management's experience, focus group research and the success the Company has
enjoyed to date, the Company believes that it presently competes effectively
with respect to each of these factors.

The general financial success of companies within the securities industry
over the past several years has strengthened existing competitors. The Company
believes that such success will continue to attract new competitors to the
industry such as depository institutions, software development companies,
insurance companies, providers of online financial and information services and
others. Commercial depository institutions and other financial institutions have
become a competitive factor in the securities industry by offering their
customers certain financial services traditionally provided by brokerage firms.
While it is not possible to predict the type and extent of competitive services
that commercial depository institutions and other financial institutions
ultimately may offer or whether regulatory or legislative barriers will be
repealed or modified, brokerage firms such as the Company may be adversely
affected by such competition or legislation.

INTELLECTUAL PROPERTY RIGHTS

GOVERNMENT REGULATION

BROKER-DEALER REGULATION

The securities industry is subject to extensive regulation under federal and
state law. The SEC is the federal agency responsible for administering the
federal securities laws. In general, broker-dealers are required to register
with the SEC under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). Each of the Company's subsidiaries is a broker-dealer and is
registered with the SEC. Under the Exchange Act, every registered broker-dealer
that does business with the public is required to be a member of and is subject
to the rules of the NASD. The NASD has established Rules of Fair Practice, which
are subject to SEC approval, for all securities transactions among
broker-dealers and private investors, trading rules for the over-the-counter
markets, and operational rules for its member firms. The NASD conducts

44
<PAGE>
examinations of member firms, investigates possible violations of the federal
securities laws and its own rules, and conducts disciplinary proceedings
involving member firms and associated individuals. The NASD administers
qualification testing for all securities principals and registered
representatives for its own account and on behalf of the state securities
authorities.

The Company's subsidiaries also are subject to regulation under state law.
Each of the Company's subsidiaries is registered as a broker-dealer in all 50
states and the District of Columbia. A recent amendment to the federal
securities laws prohibits the states from imposing substantive requirements on
broker-dealers which exceed those imposed under federal law. The recent
amendment, however, does not preclude the states from imposing registration
requirements on broker-dealers that operate within their jurisdiction or from
sanctioning such broker-dealers for engaging in misconduct.

The Company has recently initiated an aggressive marketing campaign designed
to bring greater brand name recognition to the Company's product lines. All
marketing activities by the Company are regulated by the NASD, and all such
marketing materials are required by the NASD to be reviewed by the Company's
compliance officer prior to release. The Company does not currently solicit
orders from its customers or make investment recommendations. However, if the
Company were to engage in such activities, it would become subject to additional
rules and regulations governing, among other things, the suitability of
recommendations to customers and sales practices.

AmeriTrade Clearing is engaged primarily in clearing and settling
transactions effected by other broker-dealers (including the Company's other
subsidiaries). In its capacity as a clearing firm, AmeriTrade Clearing is a
member of the National Securities Clearing Corporation, the Depository Trust
Company and The Options Clearing Corporation, each of which is registered as a
clearing agency with the SEC. As a member of the clearing agencies, AmeriTrade
Clearing is required to comply with the rules of such clearing agencies,
including rules relating to possession and control of customer funds and
securities, margin lending and execution and settlement of transactions.
Participation of AmeriTrade Clearing in these clearing agencies also exposes
AmeriTrade Clearing to certain contingent liabilities. The primary function of
the clearing agencies is to guarantee the settlement of securities transactions
among its members. To ensure that they have the resources available to perform
this guarantee function, the clearing agencies are permitted under their rules
to assess their members on a pro-rata basis in the event of participant default.
In addition, under the rules of the clearing agencies, each member is
responsible for transactions cleared by such member on behalf of its customers.
Accordingly, AmeriTrade Clearing is responsible to the clearing agencies for the
obligations of its customers and must pay or deliver funds or securities to
satisfy its customers' obligations even if it has not received the necessary
funds or securities from its customers.

NET CAPITAL REQUIREMENTS; LIQUIDITY

As registered broker-dealers and members of the NASD, the Company's
subsidiaries are subject to the Net Capital Rule. The Net Capital Rule, which
specifies minimum net capital requirements for registered brokers-dealers, is
designed to measure the general financial integrity and liquidity of a
broker-dealer and requires that at least a minimum part of its assets be kept in
relatively liquid form. In general, net capital is defined as net worth (assets
minus liabilities), plus qualifying subordinated borrowings and certain
discretionary liabilities, and less certain mandatory deductions that result
from excluding assets that are not readily convertible into cash and from
valuing conservatively certain other assets. Among these deductions are
adjustments (called "haircuts"), which reflect the possibility of a decline in
the market value of an asset prior to disposition.

Failure to maintain the required net capital may subject a firm to
suspension or revocation of registration by the SEC and suspension or expulsion
by the NASD and other regulatory bodies and ultimately could require the firm's
liquidation. The Net Capital Rule prohibits payments of dividends, redemption of
stock, the prepayment of subordinated indebtedness and the making of any
unsecured advance or loan to a stockholder, employee or affiliate, if such
payment would reduce the firm's net capital below a certain level.

45
<PAGE>
The Net Capital Rule also provides that the SEC may restrict for up to 20
business days any withdrawal of equity capital, or unsecured loans or advances
to stockholders, employees or affiliates ("capital withdrawal") if such capital
withdrawal, together with all other net capital withdrawals during a 30-day
period, exceeds 30% of excess net capital and the SEC concludes that the capital
withdrawal may be detrimental to the financial integrity of the broker-dealer.
In addition, the Net Capital Rule provides that the total outstanding principal
amount of a broker-dealer's indebtedness under certain subordination agreements,
the proceeds of which are included in its net capital, may not exceed 70% of the
sum of the outstanding principal amount of all subordinated indebtedness
included in net capital, par or stated value of capital stock, paid in capital
in excess of par, retained earnings and other capital accounts for a period in
excess of 90 days.

A change in the Net Capital Rule, the imposition of new rules or any
unusually large charge against net capital could limit those operations of the
Company that require the intensive use of capital, such as the financing of
customer account balances, and also could restrict the Company's ability to
withdraw capital from its brokerage subsidiaries, which in turn could limit the
Company's ability to pay dividends, repay debt and repurchase shares of its
outstanding stock. A significant operating loss or any unusually large charge
against net capital could adversely affect the ability of the Company to expand
or even maintain its present levels of business, which could have a material
adverse effect on the Company's business, financial condition and operating
results.

Each of the subsidiaries is a member of Securities Investor Protection
Corporation ("SIPC"), which provides, in the event of the liquidation of a
broker-dealer, protection for customers' accounts held by each of them of up to
$500,000 for each customer account, subject to a limitation of $100,000 for
claims for cash balances. In addition, AmeriTrade Clearing has obtained
$10,000,000 of protection for the benefit of its own broker-dealers and
independent correspondents in excess of SIPC coverage for each account in the
form of an excess securities bond from a private insurance carrier.

INVESTMENTS

The Company had the following investments at December 31, 1996:

<TABLE>
<CAPTION>
OWNERSHIP INTEREST
-------------------
<S> <C>
Roundtable Partners, L.L.C........................................................... 12.1%
Comprehensive Software Systems Ltd................................................... 12.7%
Telescan, Inc........................................................................ 7.2%
</TABLE>

ROUNDTABLE PARTNERS, L.L.C.

The Company is a member of Roundtable, which owns a 99.99% interest in each
of Trimark, L.P. ("Trimark") and Knight Securities, L.P. ("Knight Securities").
Trimark is a third-market trading operation that makes markets in securities
listed on the New York Stock Exchange, Inc. ("NYSE") and the American Stock
Exchange, Inc. Knight Securities is an OTC trading operation that makes markets
in OTC securities, principally securities traded on the National Association of
Securities Dealers, Inc.'s Automated Quotation System ("NASDAQ"), including
Small Capitalization listings and securities listed on the NASD's OTC Bulletin
Board. The customer base of Trimark and Knight Securities consists primarily of
registered broker-dealers and financial institutions. J. Joe Ricketts, Chairman
and Chief Executive Officer of the Company, and Gene L. Finn, a director of the
Company, are representatives on the Advisory Committee of Roundtable.

Trimark currently executes third market trades for over 100 broker-dealers
throughout the United States. This client base encompasses a broad spectrum of
firms, ranging from small regional brokerages to major correspondent clearing
organizations, national discount brokerages and major NYSE member firms.

46
<PAGE>
Knight Securities currently ranks in the top ten of all brokers trading in
NASDAQ/OTC securities as reported by the AutEx Advertised Trade Volume Report.
Knight Securities makes markets in over 3,500 securities.

The Company derives significant revenues from Trimark and Knight Securities
in exchange for routing trade orders to them for execution. See "Management's
Discussion and Analysis of Financial Condition and Results of
Operations--Overview." Although this practice of receiving payments for order
flow is widespread in the securities industry, it has come under increased
scrutiny in recent years. The SEC, the NASD and other SROs recently have
announced that this industry practice may be challenged. Furthermore,
competition between execution agents has narrowed the spread between bid and ask
prices, which has made it less profitable for execution agents to offer order
flow payment to broker-dealers. See "Risk Factors-- Loss of Future Order Flow
Payments." The Company has taken steps and intends to take further steps to
mitigate the financial impact of the loss of these revenues on the Company. In
particular, to the extent that reduced order flow payments by execution agents
result in increased profits to such agents, the Company expects to benefit
through its investment in Roundtable. The Company also has reduced its operating
expenses per trade through increased use of technology. See "Management's
Discussion and Analysis of Financial Condition and Results of
Operations--Results of Operations."

COMPREHENSIVE SOFTWARE SYSTEMS LTD.

CSS is a limited partnership organized to provide consulting services and to
develop software for securities broker-dealers, depository institutions and
other financial institutions. The Company is a limited partner of CSS and a
stockholder in its general partner, CSS Management, Inc. ("CSS Management"). J.
Joe Ricketts is a member of the Executive Committee of CSS and a member of the
board of directors of CSS Management.

The Company has provided brokerage and technical assistance to CSS since its
inception in 1993. The Company is in the process of installing software
components developed by CSS in its core back office software system. The Company
believes that the CSS software is more functional and technologically advanced
than the other products currently used by the Company.

TELESCAN, INC.

The Company owns common stock of Telescan, which develops, markets and
operates online electronic database systems serving individual, corporate and
institutional customers. Telescan's products and services, which are based upon
its proprietary online operating system and user software, allow its customers
to electronically access and analyze information through the customers' personal
computers. Telescan's user software is a component of the Company's Accutrade
FOR WINDOWS product.

PROPERTIES

The Company's headquarters are located in Omaha, Nebraska and occupy
approximately 40,000 square feet of leased space. See "Certain Transactions." An
additional 35,000 square feet of space to be leased by the Company is currently
under construction and is expected to be completed in May 1997. The existing
lease expires in December 2013, and upon completion of the addition, the lease
will expire in December 2017. The Company also leases three other locations
totalling approximately 25,000 square feet of space under leases that expire
through August 2001.

EMPLOYEES

As of September 27, 1996, the Company employed a total of 334 full-time
associates and 23 part-time associates, of which 139 were registered
representatives. Approximately 85% of the Company's employees

47
<PAGE>
have earned at least a bachelor's degree. The Company believes that its future
success will depend on its continued ability to attract and retain highly
skilled and qualified employees. The Company believes that its relations with
its employees are good.

The Company's employment assessment process is a critical factor in
identifying candidates whose abilities and potential create the opportunity to
be a successful associate with the Company. The assessment process includes an
in-person interview, a work-related behavioral trait profile, a cognitive
reasoning assessment test, a telephone structured interview to identify life
themes predictive of success, and a data entry "keyboarding" or computer skills
test when appropriate. The Company believes based on its experience to date that
its employment assessment process has a positive impact on the Company's
success.

The Company regularly pays cash bonuses to its management and non-management
employees. Bonuses are based upon the success of the Company and the individual
job performance of the employee.

LEGAL PROCEEDINGS

On December 13, 1996, E*Trade Securities, Inc. filed a complaint against
Ceres in the United States District Court for the Northern District of
California alleging dilution, service mark infringement, false designation of
origin, false description and unfair competition under California law and
federal trademark law in connection with the use of the term "e-trading" by
Ceres in some of its advertisements. The complaint seeks an unspecified amount
of damages, costs and attorneys' fees and requests that damages be trebled. The
Company believes based on consultations with legal counsel that it has
meritorious defenses to the allegations and is contesting the suit vigorously.
The Company does not believe that the outcome of this litigation will have a
material adverse effect on its business, financial condition or operating
results.

The Company is not aware of any other material legal proceedings concerning
the Company. The Company is involved from time to time in various legal
proceedings and claims incident to the normal conduct of its business.

48
<PAGE>
MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

The Company's Certificate of Incorporation provides that the number of
directors shall be determined by the manner provided in the Company's Bylaws.
The Bylaws provide that the number of directors shall not be less than three,
with the precise number to be determined by resolution of the Board of Directors
of the Company. The number of directors of the Company currently is eight. See
"Description of Capital Stock." Each director is elected to serve until the next
annual meeting and until his or her successor has been elected and qualified or
until his or her earlier resignation or removal. Executive officers are elected
by the Board of Directors and serve until their successors have been elected and
qualified or until their earlier resignation or removal.

The Company's directors, executive officers and other significant employees
are as follows:

<TABLE>
<CAPTION>
NAME AGE POSITION
- ------------------------- --- -----------------------------------------------------------------------
<S> <C> <C>
J. Joe Ricketts 55 Chairman, Chief Executive Officer and Director

Joseph A. Konen 49 President, Chief Operating Officer and Director

Robert T. Slezak 39 Vice President, Chief Financial Officer, Treasurer and Director

Thomas J. Pleiss 55 Vice President, Regulation and Facilities Planning, and Assistant
Secretary

Susan M. Hohman 55 Vice President, Human Resources

Thomas C. Hushen 53 Vice President, Information Services

Larry W. Collett 40 Vice President, Internal Audit

J. Peter Ricketts 32 Director of Corporate Development and Secretary

Curt A. Conklin 30 Director of Internet Services

P. Richard Sirbu, Jr. 53 President of AmeriTrade Clearing

Kurt D. Halvorson 34 Vice President and General Manager of AmeriTrade Clearing

Michael J. Anderson 40 President of Accutrade

Mary K. Fay 33 President of Ceres

William Glasz 58 President of Aufhauser

William A. Wood 49 President of All American

Gene L. Finn 64 Director

Thomas Y. Hartley 63 Director

Charles L. Marinaccio 63 Director

Mark L. Mitchell 36 Director

John W. Ward 54 Director
</TABLE>

J. JOE RICKETTS, has served as a director and as Chairman and Chief
Executive Officer of the Company since 1981. From 1975 to 1981, Mr. Ricketts
served in various capacities with predecessors to the Company. Prior to 1975,
Mr. Ricketts was a registered representative with a national brokerage firm, an
investment advisor with Ricketts & Co., and a branch manager with Dun &
Bradstreet. Mr. Ricketts is a director of CSS Management and is on the Advisory
Committee of Roundtable. Mr. Ricketts currently serves as a member of the
District Committee for District 4 of the NASD. Mr. Ricketts is a member of the
Board of Trustees for Father Flanagan's Boys' Home ("Boys Town"). Mr. Ricketts
received his B.A. in economics from Creighton University.

49
<PAGE>
JOSEPH A. KONEN has served as President and Chief Operating Officer of the
Company since October 1994 and has served as a director since October 1996. From
October 1992 to April 1995, Mr. Konen served as President of AmeriTrade
Clearing. Mr. Konen served as Operations Manager of AmeriTrade Clearing from
February 1992 to October 1992. Mr. Konen was a principal in Joseph A. Konen &
Associates, a management consulting firm from June 1990 to February 1992. Mr.
Konen was President and Chief Executive Officer of Vital Learning Corporation, a
training industry firm, from January 1989 to June 1990 and was President and
Chief Executive Officer of its parent, Vital Resources, Inc., from October 1987
to June 1990. Mr. Konen held various executive management positions from 1970 to
1987 with responsibility for corporate finance, including acquisitions,
divestitures, and strategic planning. Mr. Konen was a member of the Clearing
Firms Committee of the Securities Industry Association from 1995 to 1996 and was
a member of its Membership Committee from 1993 to 1994. Mr. Konen holds a B.A.
in economics and an M.B.A. in finance from Indiana University.

ROBERT T. SLEZAK has served as Vice President, Chief Financial Officer and
Treasurer of the Company since January 1989 and has served as a director since
October 1996. Mr. Slezak joined the Company in March 1987 and served as
Operations Manager at AmeriTrade Clearing until January 1989. Prior to that
time, Mr. Slezak was a Senior Financial Analyst for Peter Kiewit Sons' Inc., an
international construction and mining company, from August 1985 to March 1987.
From January 1980 to August 1985, Mr. Slezak was on the audit staff of Deloitte
& Touche, a big six accounting firm. Mr. Slezak served as a member of the
District Committee for District 4 of the NASD from 1990 to 1992, and as a member
of its Nominating Committee from 1993 to 1994. Mr. Slezak is a Certified Public
Accountant. Mr. Slezak holds a B.S. in business from the University of Nebraska
at Omaha and an M.B.A. from Creighton University.

THOMAS J. PLEISS has served as Vice President, Regulation and Facilities
Planning of the Company since October 1992. From August 1987 to October 1992,
Mr. Pleiss served as President of AmeriTrade Clearing. Mr. Pleiss served as Vice
President of Jerry Leonard Inc., a major retail specialty corporation, from
October 1984 to July 1987. Mr. Pleiss served as Financial Manager of AmeriTrade
Clearing from October 1982 to October 1984. From July 1970 to October 1982, Mr.
Pleiss was Treasurer and Controller of Lozier Corporation, an international
manufacturer of store fixtures. From December 1963 to July 1970, Mr. Pleiss was
on the audit staff of Deloitte & Touche, a big six accounting firm. Mr. Pleiss
was a Director of Midwest Securities Trust Company from 1991 to 1994. Mr. Pleiss
also was a member of the Clearing Firms Committee of the Securities Industry
Association from 1990 to 1992, and was Vice Chairperson of the Central States
District of the Securities Industry Association from 1995 to 1996. Mr. Pleiss is
a Certified Public Accountant. Mr. Pleiss has a B.S. in business from Creighton
University.

SUSAN M. HOHMAN has served as Vice President, Human Resources, of the
Company since August 1986. Prior to that time, Mrs. Hohman served in human
resource management positions with various public and private organizations for
14 years. Mrs. Hohman was a member of the Human Resources Committee of the
Securities Industry Association in 1993. Mrs. Hohman received a B.S. in
management from Bellevue University.

THOMAS C. HUSHEN has served as Vice President, Information Services of the
Company since November 1996. Mr. Hushen served as Director of Information
Services of AmeriTrade Clearing from May 1995 to November 1996. Mr. Hushen
served as Technical Recruiter for Matrix Resources, Inc., a technical recruiting
firm, from February 1995 to May 1995, and as Vice President and Chief
Information Officer of Southwest Securities Group, Inc. from March 1994 to
January 1995. From July 1985 to February 1994, Mr. Hushen was Director,
Applications Development, for AMR Corp. Mr. Hushen received a B.A. in business
from the University of New Hampshire.

LARRY W. COLLETT has served as Vice President, Internal Audit for the
Company since April 1996. Mr. Collett served as Vice President, Systems
Integration at AmeriTrade Clearing from October 1992 to April 1996. Mr. Collett
served as Operations Manager at AmeriTrade Clearing from September 1988 to
October 1992. Mr. Collett worked in the Margin Department of AmeriTrade Clearing
from April 1983 to September 1988. Mr. Collett attended Metropolitan Technical
Community College.

50
<PAGE>
J. PETER RICKETTS has served as Secretary of the Company since November 1996
and as Director of Corporate Development of the Company since August 1996. From
April 1995 to August 1996, Mr. Ricketts served as Project Director for
Accutrade. From January 1995 to March 1995, Mr. Ricketts served as Vice
President of Ceres and from May 1994 to January 1995 as President of Ceres. Mr.
Ricketts was a customer service representative for Accutrade from December 1993
to May 1994. Mr. Ricketts worked as Manager, Business Development, for Woodward
Clyde Consultants, an environmental consulting firm, from October 1992 to
September 1993. Mr. Ricketts served as Account Representative for Union Pacific
Railroad from July 1991 to September 1992. Mr. Ricketts holds a B.A. in biology
and an M.B.A. from the University of Chicago. J. Peter Ricketts is the son of J.
Joe Ricketts.

CURT A. CONKLIN has served as Director of Internet Services of the Company
since July 1995. From February 1993 to July 1995, he was a systems designer with
Lettuce Entertain You Enterprises, a restaurant company based in Chicago. He
served as Analyst, Mergers and Acquisitions, for the North American Banking
Group of First Chicago NBD Corp. from June 1992 to February 1993. Mr. Conklin
was Associate Analyst, Research for Alex. Brown & Sons, Inc., an investment
banking firm, from January 1990 to December 1991. Mr. Conklin received a B.A. in
economics from the University of Chicago.

P. RICHARD SIRBU, JR. has served as the President of AmeriTrade Clearing
since April 1995. From June 1994 to April 1995, Mr. Sirbu served as General
Manager of AmeriTrade Clearing. From March 1992 to May 1994, Mr. Sirbu served as
President of SFI, a management consulting firm. Mr. Sirbu served as Director of
Tenex Corporation, a plastic manufacturer, from May 1986 to February 1992. Mr.
Sirbu was Branch Manager of Inter-Tel, a telecommunications company, from May
1985 to May 1986. Mr. Sirbu served as President and Chief Executive Officer of
Datawave, Inc., an office automation firm, from September 1980 to May 1985. Mr.
Sirbu received a B.S. in business from Youngstown State University.

KURT D. HALVORSON has served as Vice President and General Manager of
AmeriTrade Clearing since April 1996. Mr. Halvorson served as Vice President and
Controller of AmeriTrade Clearing from October 1992 to March 1996, and as
Controller of AmeriTrade Clearing from September 1987 to October 1992. Mr.
Halvorson was on the audit staff of Deloitte & Touche, a big six public
accounting firm, from 1984 to September 1987. Mr. Halvorson is a Certified
Public Accountant. Mr. Halvorson received a B.S. in business from the University
of Nebraska.

MICHAEL J. ANDERSON has served as President of Accutrade since May 1996. Mr.
Anderson served as General Manager of Accutrade from August 1994 to May 1996,
and served as Director of Marketing and Sales of AmeriTrade Clearing from
October 1992 until August 1994. Mr. Anderson was an account executive for Vital
Learning Corporation, a training industry firm, from January 1990 to October
1992. Mr. Anderson received a B.S. in marketing from Iowa State University.

MARY K. FAY has served as President of Ceres since July 1995. From November
1987 to July 1995, Ms. Fay served in various capacities with Accutrade,
including Vice President, Operations Manager and Manager, Customer Service. Ms.
Fay served as Manager of the Dividend and Reorganization departments of
AmeriTrade Clearing from May 1983 to November 1987. Ms. Fay received a B.S. in
management from Bellevue University.

WILLIAM GLASZ has served as President of Aufhauser since July 1995. Mr.
Glasz served as President of Ceres from January 1995 to July 1995. From November
1994 to December 1994, Mr. Glasz served as Vice President of Ceres. From
December 1989 to November 1994, Mr. Glasz was Vice President, Trading, for
AmeriTrade Clearing. Mr. Glasz was Vice President of Accutrade from December
1986 to December 1989, and was President of First National Futures, Inc., a
dissolved subsidiary of the Company, from 1983 to 1985. Mr. Glasz worked for
Prudential Bache Securities from 1981 to 1983 as a registered representative.
From 1960 to 1981, Mr. Glasz was an officer in the United States Air Force. Mr.
Glasz has a B.G.S. degree from the University of Nebraska at Omaha and an M.B.A.
from the University of Alaska.

WILLIAM A. WOOD has served as President of All American since November 1995.
Mr. Wood served as Vice President and Director of Operations of AmeriTrade
Clearing from April 1993 to November 1995.

51
<PAGE>
From November 1991 to April 1993, Mr. Wood was Director, Regional Sales, for the
AmeriVest division of All American. Prior to joining the Company, Mr. Wood had a
twenty year career in management and marketing positions in investment banking.
Mr. Wood received a B.S. in marketing and a J.D. from the University of South
Carolina. Mr. Wood also graduated from the Banking School of the South at
Louisiana State University.

GENE L. FINN has served as a director of the Company since December 1996.
Mr. Finn was Vice President and Chief Economist of the NASD from 1983 to 1995.
Mr. Finn was Chief Economist and Senior Adviser for the SEC from 1969 to 1982.
In such capacities, Mr. Finn provided policy advice on stock market and
investment company regulation and oversight. Mr. Finn is an independent
consultant and is on the Advisory Committee of Roundtable. Mr. Finn holds a
Ph.D. in economics from the University of Wisconsin.

THOMAS Y. HARTLEY has served as a director of the Company and as Chairman of
the Board's Audit Committee since December 1996. Mr. Hartley has been President
and Chief Operating Officer of Colbert Golf Design and Development and has acted
as Senior PGA tour agent for professional golfer Jim Colbert since 1991. From
1988 to 1991, Mr. Hartley was President and Chief Operating Officer of Jim
Colbert Golf Inc. Mr. Hartley was a partner in Deloitte & Touche, a big six
public accounting firm, from 1973 to 1988, and served in other positions with
Deloitte & Touche from 1959 to 1973. Mr. Hartley was an officer in the United
States Air Force from 1955 to 1961. Mr. Hartley has been a director of Rio Hotel
and Casino, Inc. since 1990, a director of Southwest Gas Corporation since 1991
and a director of Sierra Health Services since 1992. Mr. Hartley served as
Chairman of the University of Nevada at Las Vegas Foundation from 1994 to 1996.
Mr. Hartley is a Certified Public Accountant. Mr. Hartley has a B.S. in commerce
from Ohio University and earned certification in the Advanced Management Program
at Harvard University.

CHARLES L. MARINACCIO has served as a director of the Company since January
1997. Mr. Marinaccio has served on the Board of Directors for the SIPC since
1995. From 1985 through 1994, he was a partner with the law firm of Kelley, Drye
& Warren. He served as Commissioner of the SEC from 1984 to 1985. Mr. Marinaccio
was General Counsel to the U.S. Senate Committee on Banking, Housing and Urban
Affairs from 1975 to 1984, and previously served as an adviser and senior
attorney with the regulatory and legal divisions of the Federal Reserve Board.
He holds a J.D. from the George Washington University and received his B.A. from
the University of Connecticut.

MARK L. MITCHELL has served as a director of the Company since December
1996. Mr. Mitchell served as a member of the Company's Board of Advisors in
1993. Mr. Mitchell has been an Associate Professor of Finance at the University
of Chicago since 1994 and was an Assistant Professor of Finance from 1990 to
1993. Mr. Mitchell also has performed consulting services for a number of major
corporations, law firms and securities firms. Mr. Mitchell was a Senior
Financial Economist for the SEC from 1987 to 1990. Mr. Mitchell will be a
Visiting Associate Professor of Finance at the Harvard Business School for the
1997-1998 academic year. Mr. Mitchell has been a member of the Economic Advisory
Board of the NASD since 1995. Mr. Mitchell received his Ph.D. in applied
economics from Clemson University.

JOHN W. WARD has served as a director of the Company since January 1997. Mr.
Ward has been an independent consultant since 1991 and Chairman of Transition
International, Inc., management consultants in financial services and
international corporate strategy, since its formation in 1994. Mr. Ward was
Chief Executive Officer of Midland Montagu US Group, New York, a British bank,
from 1987 to 1990. Mr. Ward was a Managing Director, President and Chairman of
the International Banking Group of Merrill, Lynch & Co. Incorporated from 1981
to 1987. Prior to that time, he was a Vice President of the Merchant Banking
Group of Citibank, N.A. Mr. Ward holds a master's degree in chemistry from
Oxford University and a business degree from the Manchester Business School in
the United Kingdom.

52
<PAGE>
DIRECTOR COMPENSATION

The Company intends to provide restricted shares of Class A Stock, options
to purchase Class A Stock and cash compensation to its non-employee directors in
accordance with the Company's Directors Plan. Pursuant to the Directors Plan,
upon election to the Board for the first term, each such director will receive
800 restricted shares of Class A Stock and options to purchase 1,600 shares of
Class A Stock, which options will be exercisable at the fair market value on the
date of grant and vest over a period of three years. Upon each subsequent
election to the Board, each such director will receive cash compensation of
$10,000 and options to purchase between 200 and 1,000 shares of Class A Stock,
the actual number of which is based on the financial performance of the Company
during the prior fiscal year. The number of shares of Class A Stock reserved for
issuance under the Directors Plan is 80,000. The Company also reimburses
directors for reasonable expenses incurred in attending meetings.

EXECUTIVE OFFICER COMPENSATION

SUMMARY COMPENSATION TABLE

The following table sets the total annual compensation paid to or for the
account of the Chief Executive Officer of the Company and the four other most
highly compensated executive officers of the Company for the year ended
September 27, 1996:

<TABLE>
<CAPTION>
ANNUAL COMPENSATION
--------------------------------- ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION (1)
- ----------------------------------------------------- --------- ---------- ---------- ----------------
<S> <C> <C> <C> <C>
J. Joe Ricketts ..................................... 1996 $ 285,252 $ 178,000 $ 11,778
Chairman and
Chief Executive Officer

Joseph A. Konen ..................................... 1996 $ 200,004 $ 75,000 $ 11,940
President and
Chief Operating Officer

Robert T. Slezak .................................... 1996 $ 175,008 $ 50,000 $ 11,940
Vice President, Chief
Financial Officer and
Treasurer

P. Richard Sirbu, Jr. ............................... 1996 $ 115,590 $ 32,416 $ 8,352(2)
President of AmeriTrade Clearing

Thomas J. Pleiss .................................... 1996 $ 105,000 $ 38,835 $ 10,602
Vice President and
Assistant Secretary
</TABLE>

- ------------------------

(1) The amounts in this column represent employer contributions to the Company's
Profit Sharing Plan.

(2) Includes $279 in employer contributions to the Company's 401(k) Plan.

PROFIT SHARING PLAN

The Company maintains the AmeriTrade Holding Corporation Associates Profit
Sharing Plan and Trust (the "Profit Sharing Plan") for the benefit of eligible
employees of the Company and its subsidiaries. Generally, all employees who have
attained age 21 and have completed a year of service are eligible for
participation in the Profit Sharing Plan. For any plan year, the Company may
make a discretionary contribution to the Profit Sharing Plan, which is allocated
to participants employed on the last day of the year based on their compensation
for that year pursuant to a formula integrated with the Social Security taxable
wage base. Participants vest in their account balances in 20 percent increments,
and become fully

53
<PAGE>
vested after completing six years of service with the Company. Generally,
distributions from the Profit Sharing Plan are made following termination of
employment. Unless a participant elects periodic payments, during the first
calendar year following termination of employment the amount distributable is
the greater of one-half of the participant's vested account balance or $50,000,
but in no event more than the participant's account balance, with any remaining
portion of such account balance paid in the next following year. The assets of
the Profit Sharing Plan are invested primarily in Class A Stock. J. Joe Ricketts
and Marlene M. Ricketts are the trustees of the Profit Sharing Plan. Upon
completion of the Offering, the Profit Sharing Plan will own approximately 10.6%
of the Class A Stock.

1996 LONG TERM INCENTIVE PLAN

The Company has adopted the AmeriTrade Holding Corporation 1996 Long Term
Incentive Plan (the "Incentive Plan"). The number of shares that may be awarded
under the Incentive Plan shall not exceed 800,000 shares in the aggregate, no
more than 160,000 shares may be awarded to any one individual in any one-year
period and the aggregate cash payout with respect to awards under the Incentive
Plan in any calendar year for any one individual may not exceed $2.5 million.
Shares issued under the Incentive Plan may be authorized and unissued shares of
Class A Stock or treasury shares of Class A Stock. In the event of certain
transactions affecting the type or number of outstanding shares of Class A
Stock, the number of shares subject to the Incentive Plan, the number or type of
shares subject to outstanding awards and the exercise price thereof will be
appropriately adjusted. The Incentive Plan authorizes the award of options to
purchase Class A Stock, Class A Stock appreciation rights ("SARs"), awards of
Class A Stock (which may be subject to restrictions) and performance units.

The Incentive Plan is administered by a committee of the Board consisting of
two or more non-employee directors appointed by the Board (the "Committee"). The
Board has designated the Compensation Committee to act as the Committee. The
Committee will determine which employees of the Company shall be eligible to
receive awards under the Incentive Plan, and the amount, price, timing and other
terms and conditions applicable to such awards; provided, that only the Chief
Executive Officer, Chief Operating Officer and Chief Financial Officer are
eligible to receive stock option awards under the Incentive Plan.

Options awarded under the Incentive Plan may be either incentive stock
options which are intended to satisfy the requirements of Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code"), or nonqualified stock
options which are not intended to satisfy Section 422 of the Code. SARs may be
granted in tandem or otherwise in connection with options or may be granted as
free-standing awards. Exercise of an option will result in the corresponding
surrender of any tandem SAR. The exercise price of an option or SAR may not be
less than the fair market value of a share of Class A Stock on the date on which
the option or SAR is granted. Options and SARs will be exercisable in accordance
with the terms established by the Committee. Options and SARs will expire on the
date determined by the Committee, which shall not be later than the earliest to
occur of (i) the tenth anniversary of the grant date, (ii) the first anniversary
of the participant's termination of employment by reason of death or disability,
(iii) the third anniversary of the participant's termination of employment by
reason of retirement or (iv) the three-month anniversary of the participant's
termination of employment for any other reason. If an SAR is issued in tandem
with an option, the expiration date for the SAR shall be the expiration date for
the related option.

Under the Incentive Plan, the Committee may grant awards of Class A Stock to
participants, which shall be subject to such conditions and restrictions, if
any, as the Committee may determine. During the period a stock award is subject
to restrictions or limitations, the Committee may award the participant dividend
rights with respect to such shares.

The Committee may also award participants performance units, which entitle
the participant to receive value for the units at the end of a performance
period to the extent provided under the award. The

54
<PAGE>
number of units and the performance measures and periods shall be established by
the Committee at the time such award is made.

All awards under the Incentive Plan will accelerate and become fully vested
upon a change in control of the Company.

EXECUTIVE BONUS PLAN

Effective October 1, 1991, the Company adopted an Executive Bonus Plan (the
"Executive Bonus Plan") to allow designated executive participants the
opportunity to earn bonus awards with current and deferred components. The value
of each component is based on the annual increase (if any) in the book value per
share of Common Stock. Not later than October 31 of each plan year, which is the
same as the Company's fiscal year, the Board designates the executives who shall
be participants in the Executive Bonus Plan for such plan year and the
performance guidelines to be used to determine the number of Credits that may be
earned by such participant for such plan year.

On or before November 15 of each plan year, each participant designates
whether the Credits that may be earned for a particular plan year shall vest as
of the last day of such plan year ("Cash Bonus Credits"), the last day of the
fifth plan year commencing after such plan year ("5-Year Credits"), or the
earlier of the last day of the fifth plan year commencing after such plan year
or the participant's attainment of age 55 ("Age-55 Credits"); provided, that no
more than 50% of the Credits for a plan year may be designated as Cash Bonus
Credits. No later than December 31 following the end of each plan year, the
Company credits to each participant's applicable Cash Bonus Credit Account,
5-Year Credit Account or Age-55 Credit Account the number of Credits, if any,
earned for such plan year and allocated by the participant to that Account.

Upon vesting, each Credit entitles the participant to a cash payment equal
to the excess, if any, of the book value of a share of Common Stock on the last
day of the plan year in which Credit vests over the book value of a share of
Common Stock on the last day of the plan year immediately preceding the plan
year with respect to which the Credit was awarded. Such payment is made on or
before the first January 31 occurring after the end of the plan year in which
the Credit vests with respect to the participant. If a participant's employment
with the Company terminates for any reason other than death or disability prior
to the time the participant's Credits become vested, such Credits are forfeited.
Credits become fully vested in the event of the participant's death or
disability. Vesting may be accelerated for any reason in the sole discretion of
the Board.

The Company records all increases in the value of participant accounts in
the year of such increase for all current and deferred Credits. The Company has
recorded expenses in connection with the Executive Bonus Plan of $1,710,000,
$1,105,000 and $544,350 for the years ended September 27, 1996, September 29,
1995 and September 30, 1994, respectively.

EMPLOYMENT AGREEMENTS

The Company and Messrs. J. Joe Ricketts, Joseph A. Konen and Robert T.
Slezak have entered into employment agreements, dated as of December 3, 1996,
with an initial term ending December 3, 1997 (the "Employment Agreements"). The
Employment Agreements are subject to three successive, automatic one-year
extensions unless either party to the agreement gives written notice of
non-renewal to the other party at least 180 days prior to the then current
expiration date. Under the terms of the Employment Agreements, Mr. Ricketts will
serve as Chairman and Chief Executive Officer of the Company and is to receive a
base salary at an annual rate of $350,000, subject to adjustment, Mr. Konen will
serve as President and Chief Operating Officer of the Company and is to receive
a base salary at an annual rate of $300,000, subject to adjustment, and Mr.
Slezak will serve as Vice President, Chief Financial Officer and Treasurer of
the Company and is to receive a base salary at an annual rate of $250,000,
subject to

55
<PAGE>
adjustment. Each of the named officers are also entitled to incentive
compensation and other employee benefits under the various benefit plans and
programs maintained by the Company.

The Employment Agreements will terminate prior to the scheduled expiration
date in the event of the death or disability of any of the named officers. In
addition, either party may terminate any of the Employment Agreements with or
without cause (as defined therein). If any of the named officers are discharged
from his employment by the Company without cause, he will receive continued
payments of his base salary for a period commencing on the date of termination
and ending on a date as determined in the respective Employment Agreement. In
addition, the Employment Agreements contain confidentiality covenants on the
part of the named officers.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The current members of the Compensation Committee are Messrs. Mark L.
Mitchell and Thomas Y. Hartley. Prior to October 1996, there was no Compensation
Committee and the then existing Board participated in decisions regarding
executive officer compensation. During the year ended September 27, 1996, no
member of the Board served as a director or a member of the compensation
committee of any other company of which any executive officer served as a member
of the Board.

The Company paid $591,040 during each of fiscal 1994, 1995 and 1996 to J.
Joe Ricketts and Marlene M. Ricketts for lease of the Company's headquarters. J.
Joe Ricketts is Chairman and Chief Executive Officer of the Company.

On June 7, 1994, J. Joe Ricketts borrowed $430,000 from the Company, payable
in monthly installments, at an 8.75% interest rate. The remaining outstanding
principal balance of the loan was fully paid on May 7, 1996.

On September 5, 1995, J. Joe Ricketts borrowed $173,000 from the Company,
payable on demand, at a 7.25% interest rate. The remaining outstanding principal
balance of the loan was fully paid on November 19, 1996.

CERTAIN TRANSACTIONS

The Company has engaged in a certain lease transaction with the Ricketts
Family and will continue to engage in similar transactions in the future. The
Company believes that such lease transaction was on terms at least as favorable
to the Company as would have been obtainable in arms-length dealings with
unrelated third persons. The Company's intention is that all future transactions
will be on terms at least as favorable to the Company as would be obtainable in
arms-length dealings with unrelated third persons. In addition, the fairness and
reasonableness of any compensation paid to the Ricketts Family or their
affiliates by the Company and any material transaction between the Ricketts
Family or their affiliates and the Company in the future will be subject to
approval by a majority of the independent members of the Board or by an
independent firm selected by such members. See "Management--Compensation
Committee Interlocks and Insiders Participation."

56
<PAGE>
PRINCIPAL AND SELLING STOCKHOLDERS

The following table sets forth certain information regarding the beneficial
ownership of Common Stock by (i) each stockholder who is known by the Company to
own beneficially more than 5% of the outstanding shares of Common Stock, (ii)
each director, (iii) each executive officer named in the Summary Compensation
Table, (iv) all directors and executive officers as a group and (v) each Selling
Stockholder. Amounts shown assume the Underwriters' over-allotment option is not
exercised.

<TABLE>
<CAPTION>
PRIOR TO THE OFFERING AFTER THE OFFERING
--------------------------- -------------------------
NUMBER PERCENT NUMBER OF NUMBER PERCENT
NAME OF STOCKHOLDER OF SHARES(1) OF SHARES SHARES OFFERED OF SHARES OF SHARES
- ------------------------------------------------- ------------ ------------- -------------- ---------- -------------

<S> <C> <C> <C> <C> <C>
J. Joe Ricketts (2).............................. 10,160,788 79.3% 223,500 9,713,788 66.9%

Marlene M. Ricketts (3).......................... 5,777,017 45.1 223,500 5,553,517 38.3

Ricketts Grandchildren Trust (4)................. 1,584,000 12.4 1,584,000 10.9

AmeriTrade Holding Corporation Profit
Sharing Plan (5)............................... 1,393,248 10.9 1,393,248 9.6

Lee M. and Mary Jean Volkmer, as joint tenants... 409,200 3.2 85,000 324,200 2.2

Gerald E. and Patricia Gress, as joint tenants... 192,000 1.5 85,000 107,000 *

Laurine Volkmer.................................. 165,600 1.3 33,000 132,600 *

Joseph A. Konen (6).............................. 8,888 * -- 8,888 *

Robert T. Slezak (7)............................. 3,555 * -- 3,555 *

Thomas J. Pleiss (8)............................. 710 * -- 710 *

P. Richard Sirbu, Jr............................. 443 * -- 443 *

Gene L. Finn..................................... -- * -- 800 *

Thomas Y. Hartley................................ -- * -- 800 *

Charles L. Marinaccio............................ -- * -- 800 *

Mark L. Mitchell................................. -- * -- 800 *

John W. Ward..................................... -- * -- 800 *

All directors and executive officers
as a group (20 in group)....................... 10,316,073 80.5 223,500 9,873,073 68.0
</TABLE>

- ------------------------

* Less than 1% of the shares outstanding.

(1) Amounts of shares of Common Stock beneficially owned assumes that all of the
Class B Stock has been converted into Class A Stock.

(2) Includes 3,673,897 shares of Class A Stock owned by Marlene M. Ricketts,
27,696 shares of Class A Stock in J. Ricketts IRA, 27,696 shares of Class A
Stock in M. Ricketts IRA, 682,224 shares of Class B Stock owned by the Joe
Ricketts Dynasty Trust, 682,176 shares of Class B Stock owned by the Marlene
Ricketts Dynasty Trust and 1,393,248 shares of Class A Stock owned by the
AmeriTrade Holding Corporation Profit Sharing Plan. Mr. Ricketts' address is
c/o AmeriTrade Holding Corporation, 4211 South 102nd Street, Omaha, Nebraska
68127.

(3) Includes 27,696 shares of Class A Stock in M. Ricketts IRA, 682,176 shares
of Class B Stock owned by the Marlene Ricketts Dynasty Trust and 1,393,248
shares of Class A Stock owned by the AmeriTrade

57
<PAGE>
Holding Corporation Profit Sharing Plan. Ms. Ricketts' address is c/o
AmeriTrade Holding Corporation, 4211 South 102nd Street, Omaha, Nebraska
68127.

(4) The trustee of the Ricketts Grandchildren Trust is First National Bank of
Omaha, First National Center, 16th and Dodge Streets, Omaha, Nebraska 68102.

(5) The address of the Profit Sharing Plan is c/o AmeriTrade Holding
Corporation, 4211 South 102nd Street, Omaha, Nebraska 68127. For a
description of the Profit Sharing Plan, see "Management-- Executive Officer
Compensation--Profit Sharing Plan."

(6) Represents shares of Class A Stock owned by Joseph A. Konen IRA.

(7) Represents shares of Class A Stock held by Robert T. Slezak and Jane G.
Slezak, as trustees of the Robert T. Slezak and Jane G. Slezak Revocable
Trust.

(8) Represents shares of Class A Stock owned by Thomas J. and Michaele A.
Pleiss.

DESCRIPTION OF CAPITAL STOCK

The following description of the Company's authorized capital stock is
subject to the detailed provisions of the Company's Certificate of Incorporation
and Bylaws, copies of which have been filed as exhibits to the Registration
Statement of which this Prospectus is a part.

The authorized capital stock of the Company consists of 25,000,000 shares of
Class A Common Stock, $.01 par value (the "Class A Stock"), 2,000,000 shares of
Class B Common Stock, $.01 par value (the "Class B Stock"), and 3,000,000 shares
of preferred stock, $1.00 par value (the "Preferred Stock"). The Class A Stock
and the Class B Stock are referred to herein as the "Common Stock." At December
31, 1996, there were 11,449,423 shares of Class A Stock outstanding, 1,364,400
shares of Class B Stock outstanding and no shares of Preferred Stock were
outstanding. After the Offering, there will be 13,153,423 shares of Class A
Stock outstanding, 1,364,400 shares of Class B Stock outstanding and no shares
of Preferred Stock outstanding. The additional shares of Common Stock and
Preferred Stock may be utilized for a variety of corporate purposes, including
future public offerings and corporate acquisitions, and could be utilized, under
certain circumstances, to delay, prevent or make more difficult a takeover or
change in control of the Company.

COMMON STOCK

VOTING RIGHTS

Except as otherwise required by law and with respect to the election of
directors, the holders of Class A Stock and the holders of Class B Stock have
one vote per share and vote as a single class with respect to all matters
submitted to a vote of stockholders. Under the Delaware General Corporation Law
("DGCL"), any proposal to amend the Certificate of Incorporation to change the
rights, preferences and limitations of Class A Stock must be approved by the
holders of Class A Stock voting separately as a class. The number of directors
shall not be less than three, with the precise number to be determined by
resolution of the Board. The Company currently has eight directors. The Class B
Stock is entitled to elect a majority of the directors of the Company. The Class
A Stock is entitled to elect the remaining directors of the Company. Directors
may be removed and vacancies may generally be filled only by the holders of the
class of Common Stock that elected the removed director or that had previously
filled the vacancy. If all of the shares of Class B Stock are converted into
Class A Stock or otherwise cease to be outstanding, the holders of Class A Stock
will be entitled to elect all of the directors, subject to the rights of the
holders of Preferred Stock, if any. Shares of Class A Stock and Class B Stock do
not have cumulative voting rights.

The holders of Class B Stock generally will have the power to defeat any
attempt to acquire control of the Company even though such a change in control
may be favored by stockholders holding substantially more than a majority of the
Company's outstanding shares of Common Stock. This may have the effect of

58
<PAGE>
precluding holders of shares in the Company from receiving any premium above
market price for their shares which may be offered in connection with any such
attempt to acquire control. The holders of Class B Stock through their ability
to control the Board will also generally have the power to prevent certain
fundamental corporate changes, such as a sale of substantially all of the
Company's assets, a merger of the Company, or an amendment to the Company's
Certificate of Incorporation.

DIVIDEND RIGHTS

Each share of Class A Stock is entitled to dividends if, as and when
dividends are declared by the Board. Any dividend declared and payable in cash,
capital stock of the Company (other than Class A Stock or Class B Stock) or
other property must be paid equally on a share for share basis on Class A Stock
and Class B Stock. Dividends and distributions payable in shares of Class A
Stock may be paid only on shares of Class A Stock, and dividends and
distributions payable in shares of Class B Stock may be paid only on shares of
Class B Stock. If a dividend or distribution payable in Class A Stock is made on
Class A Stock, a simultaneous and equivalent dividend or distribution in Class B
Stock must be made on Class B Stock. If a dividend or distribution payable in
Class B Stock is made on Class B Stock, a simultaneous and equivalent dividend
or distribution in Class A Stock must be made on Class A Stock.

CONVERSION RIGHTS

The Class A Stock is not convertible. Each share of Class B Stock is
convertible into one share of Class A Stock at any time at the option of and
without cost to the holder thereof. Each share of Class B Stock shall
automatically convert into one share of Class A Stock in the event such share of
Class B Stock is sold or transferred to any person other than to a member of the
Control Group. In addition, the Class B Stock shall automatically convert on a
share for share basis into Class A Stock if the number of shares of outstanding
Common Stock held by the Control Group falls below 20% of the total number of
shares of outstanding Common Stock.

LIQUIDATION RIGHTS

The holders of the Class A Stock and the holders of the Class B Stock are
entitled to participate equally on a share for share basis in all distributions
to the holders of Common Stock in any liquidation, distribution or winding up of
the Company.

PREEMPTIVE RIGHTS

Neither the holders of Class A Stock nor the holders of Class B Stock have
preemptive rights to purchase shares of such stock or shares of stock of any
other class that the Company may issue.

PREFERRED STOCK

The Board of Directors of the Company is authorized to issue, by resolution
and without any action by stockholders, up to 3,000,000 shares of Preferred
Stock and may establish the designations, dividend rights, dividend rate,
conversion rights, voting rights, terms of redemption, liquidation preference,
sinking fund terms and all other preferences and rights of any series of
Preferred Stock, including rights that could adversely affect the voting power
of the holders of Class A Stock. The Company has no present intention to issue
any shares of Preferred Stock.

CERTAIN PROVISIONS OF THE CERTIFICATE OF INCORPORATION AND BYLAWS

The Company's Certificate of Incorporation incorporates certain provisions
permitted under the DGCL relating to the liability of directors. These
provisions eliminate the personal liability of its directors to the Company or
its stockholders for monetary damages for any breach of their fiduciary duties
in their capacity as directors, except for any breach of the duty of loyalty,
for acts or omissions not in good faith or

59
<PAGE>
which involve intentional misconduct or a knowing violation of law, for
liability under Section 174 of the DGCL (relating to certain unlawful dividends,
stock repurchases or stock redemptions), or for any transaction from which the
director derived any improper personal benefit. These provisions do not
eliminate a director's duty of care and do not affect the availability of
equitable remedies such as an action to enjoin or rescind a transaction
involving a breach of fiduciary duty. Moreover, these provisions do not apply to
claims against a director for violation of certain laws, including Federal
securities laws. The Company's Bylaws contain provisions to indemnify the
directors and officers to the fullest extent permitted by the DGCL. The Company
believes that these provisions will assist the Company in attracting and
retaining qualified individuals to serve as directors and officers.

The Company's Bylaws establishes procedures, including advance notice
procedures, regarding the nomination of candidates for election as directors and
stockholder proposals. For nominations of directors or other business to be
properly brought by a stockholder before an annual meeting of stockholders, a
stockholder must give notice to the Secretary of the Company of not less than
120 days nor more than 150 days prior to the date of the Company's proxy
statement regarding the preceding year's annual meeting. For nominations or
other business to be properly brought by a stockholder before a special meeting
of stockholders, a stockholder must give notice to the Secretary of not less
than 60 days nor more than 90 days prior to the date of such special meeting. A
special meeting of the stockholders may only be called by the Chief Executive
Officer, the President, the majority of the Board or the holders of not less
than 25% of the outstanding voting stock of the Company. A stockholder may
nominate a person to be a director only if such stockholder would be entitled to
vote for such person in the election for such director. In addition, the notice
of a stockholder nominating a person for director must provide all information
relating to such person as is required by Regulation 14A of the Exchange Act.

DELAWARE ANTI-TAKEOVER LAW

Section 203 of the DGCL ("Section 203") restricts certain transactions
between a corporation organized under Delaware law (or its majority-owned
subsidiaries) and any person holding 15% or more of the corporation's
outstanding voting stock, together with the affiliates or associates of such
person (an "Interested Stockholder"). Section 203 prevents, for a period of
three years following the date that a person becomes an Interested Stockholder,
the following types of transactions between the corporation and the Interested
Stockholder (unless certain conditions, described below, are met): (a) mergers
or consolidations, (b) sales, leases, exchanges or other transfers of 10% or
more of the aggregate assets of the corporation, (c) issuances or transfers by
the corporation of any stock of the corporation which would have the effect of
increasing the Interested Stockholder's proportionate share of the stock of any
class or series of the corporation, (d) any other transaction which has the
effect of increasing the proportionate share of the stock of any class or series
of the corporation which is owned by the Interested Stockholder and (e) receipt
by the Interested Stockholder of the benefit (except proportionately as a
stockholder) of loans, advances, guarantees, pledges or other financial benefits
provided by the corporation.

The three-year ban does not apply if either the proposed transaction or the
transaction by which the Interested Stockholder became an Interested Stockholder
is approved by the board of directors of the corporation prior to the time such
stockholder becomes an Interested Stockholder. Additionally, an Interested
Stockholder may avoid the statutory restriction if, upon the consummation of the
transaction whereby such stockholder becomes an Interested Stockholder, the
stockholder owns at least 85% of the outstanding voting stock of the corporation
without regard to those shares owned by the corporation's officers and directors
or certain employee stock plans. Business combinations are also permitted within
the three-year period if approved by the board of directors and authorized at an
annual or special meeting of stockholders by the holders of at least two-thirds
of the outstanding voting stock not owned by the Interested Stockholder. In
addition, any transaction is exempt from the statutory ban if it is proposed at
a time when the corporation has proposed, and a majority of certain continuing
directors of the corporation have approved, a transaction with a party who is
not an Interested Stockholder (or who becomes such with

60
<PAGE>
approval of the board of directors) if the proposed transaction involves (a)
certain mergers or consolida-tions involving the corporation, (b) a sale or
other transfer of over 50% of the aggregate assets of the corporation or (c) a
tender or exchange offer for 50% or more of the outstanding voting stock of the
corporation.

TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar for Class A Stock is The Bank of New York.

SHARES ELIGIBLE FOR FUTURE SALE

Prior to the Offering, there has been no market for Class A Stock of the
Company. Future sales of substantial amounts of Class A Stock in the public
market, or the perception that such sales may occur, could adversely affect the
market price of the Class A Stock prevailing from time to time in the public
market.

Upon completion of the Offering, the Company will have approximately
14,517,823 shares of Common Stock outstanding, including 2,350,000 shares of
Class A Stock offered hereby and 12,167,823 "restricted" shares of Common Stock.
The shares of Class A Stock offered hereby will be freely tradeable without
restriction or further registration under the Securities Act by persons other
than "affiliates" of the Company within the meaning of Rule 144 promulgated
under the Securities Act. All of the 10,799,423 shares of Class A Stock that
were outstanding before the Offering but are not being sold pursuant to the
Offering and all 1,364,400 outstanding shares of Class B Stock may not be sold
unless registered under the Securities Act or sold in accordance with an
exemption therefrom, such as Rule 144. In general, under Rule 144 as currently
in effect, a person (and persons whose shares are aggregated with those of such
person) who has owned restricted shares beneficially for at least one year,
including an affiliate for purposes of Rule 144, would be entitled to sell
within any three-month period a number of shares that does not exceed the
greater of (i) one percent of the then outstanding shares of Class A Stock or
(ii) the average weekly trading volume of the Class A Stock during the four
calendar weeks preceding the date on which notice of the sale is filed with the
SEC. Sales under Rule 144 are also subject to certain manner of sale provisions,
notice requirements and the availability of current public information about the
Company. Of the 12,167,823 restricted shares, 11,957,588 shares of Common Stock
are currently eligible for sale under Rule 144 and 210,235 shares of Common
Stock will be eligible for sale under Rule 144 beginning in November 1997.
Certain employees of the Company purchased 95,124 shares of Class A Stock from
J. Joe Ricketts in November 1996. Although those shares will be eligible for
sale under Rule 144 beginning in November 1997, the respective stock purchase
agreements between such employees and Mr. Ricketts prohibit the sale of such
shares until May 1999, subject to certain limited exceptions. In addition, the
Company intends to register under the Securities Act 880,000 shares of Class A
Stock under the Directors Plan and the Incentive Plan. See "Management--Director
Compensation" and "Management--Executive Compensation--1996 Long Term Incentive
Plan."

Each of the Company, its directors and officers, the Selling Stockholders
and certain other stockholders has agreed that it will not offer, sell, contract
to sell, announce its intention to sell, pledge or otherwise dispose of,
directly or indirectly, or file with the SEC a registration statement under the
Securities Act relating to, any additional shares of the Company's Class A Stock
or securities convertible into or exchangeable or exercisable for any shares of
the Company's Class A Stock without the prior written consent of Credit Suisse
First Boston Corporation for a period of 180 days after the date of this
Prospectus, except in the case of the Company, issuances pursuant to the
exercise of employee stock options granted under the Company's existing
incentive plans and, in the case of the directors and officers, Selling
Stockholders and certain other stockholders, gifts and pledges of shares where
the donees or pledgees, as the case may be, agree in writing to be bound by the
terms of such agreement. See "Underwriting."

61
<PAGE>
UNDERWRITING

Under the terms and subject to the conditions contained in an Underwriting
Agreement dated , 1997 (the "Underwriting Agreement"), the Underwriters
named below (the "Underwriters"), for whom Credit Suisse First Boston
Corporation and Raymond James & Associates, Inc. are acting as representatives
(the "Representatives"), have severally but not jointly agreed to purchase from
the Company and the Selling Stockholders the following respective numbers of
shares of Class A Stock:

<TABLE>
<CAPTION>
NUMBER OF SHARES
UNDERWRITER OF CLASS A STOCK
- --------------------------------------------------------------------------- -----------------

<S> <C>
Credit Suisse First Boston Corporation.....................................

Raymond James & Associates, Inc............................................

-----------------

Total.................................................................. 2,350,000
-----------------
-----------------
</TABLE>

The Underwriting Agreement provides that the obligations of the Underwriters
are subject to certain conditions precedent and that the Underwriters will be
obligated to purchase all of the shares of Class A Stock offered hereby (other
than those shares covered by the over-allotment option described below) if any
are purchased. The Underwriting Agreement provides that, in the event of a
default by an Underwriter, in certain circumstances the purchase commitments of
non-defaulting Underwriters may be increased or the Underwriting Agreement may
be terminated.

J. Joe Ricketts and Marlene M. Ricketts have granted to the Underwriters an
option, exercisable by Credit Suisse First Boston Corporation, expiring at the
close of business on the 30th day after the date of this Prospectus, to purchase
up to an aggregate of 352,500 additional outstanding shares of Class A Stock
from them at the initial public offering price less the underwriting discounts
and commissions, all as set forth on the cover page of this Prospectus. Such
option may be exercised only to cover over-allotments in the sale of the shares
of Class A Stock offered hereby. To the extent such option is exercised, each
Underwriter will become obligated, subject to certain conditions, to purchase
approximately the same percentage of such additional shares of Class A Stock as
it was obligated to purchase pursuant to the Underwriting Agreement.

The Company has been advised by the Representatives that the Underwriters
propose to offer the shares of Class A Stock to the public at the public
offering price set forth on the cover page of this Prospectus and, through the
Representatives, to certain dealers at such price less a concession of $

62
<PAGE>

per share, and the Underwriters and such dealers may allow a discount of $
per share on sales to certain other dealers. After the initial public offering,
the public offering price and concession and discount to dealers may be changed
by the Representatives.

Each of the Company, its directors and officers, the Selling Stockholders
and certain other stockholders has agreed that it will not offer, sell, contract
to sell, announce its intention to sell, pledge or otherwise dispose of,
directly or indirectly, or file with the SEC a registration statement under the
Securities Act relating to, any additional shares of the Company's Class A Stock
or securities convertible into or exchangeable or exercisable for any shares of
the Company's Class A Stock without the prior written consent of Credit Suisse
First Boston Corporation for a period of 180 days after the date of this
Prospectus, except in the case of the Company, issuances pursuant to the
exercise of employee stock options granted under the Company's existing
incentive plans and, in the case of the directors and officers, Selling
Stockholders and certain other stockholders, gifts and pledges of shares where
the donees or pledgees, as the case may be, agree in writing to be bound by the
terms of such agreement.

At the request of the Company, the Underwriters have reserved for sale, at
the initial public offering price less 60% of the underwriting discount
approximately 5% of the shares offered hereby, to directors, officers and
employees of the Company and its subsidiaries. The number of shares available
for sale to the general public will be reduced to the extent such persons
purchase such reserved shares. Any reserved shares not so purchased will be
offered by the Underwriters to the general public on the same terms as the other
shares offered hereby.

The Company and the Selling Stockholders have agreed to indemnify the
Underwriters against certain liabilities, including civil liabilities under the
Securities Act, or contribute to payments which the Underwriters may be required
to make in respect thereof.

Application has been made to list the shares of Class A Stock being offered
hereby on the NASDAQ National Market under the symbol "AMTD."

Prior to the Offering, there has been no established trading market for the
Class A Stock. The initial price to the public for the Class A Stock offered
hereby has been determined by negotiation among the Company, the Selling
Stockholders and the Representatives. The factors considered in determining the
initial price to the public include the history of and the prospects for the
industry in which the Company operates, the ability of the Company's management,
the past and present operations of the Company, the historical results of
operations of the Company, the prospects for future operating income and
earnings of the Company and the trends of such operating income and earnings,
the general condition of the securities markets at the time of the Offering and
the recent market prices of securities of generally comparable companies. There
can be no assurance, however, that the prices at which the Class A Stock will
sell in the public market after the Offering will not be lower than the price at
which they are sold by the Underwriters.

AmeriTrade Clearing is a member of the NASD and is a member of the selling
group for the Offering. The Offering, therefore, is being conducted in
accordance with the applicable provisions of Rule 2720 (previously Schedule E to
the by-laws of the NASD) of the Conduct Rules of the NASD. Rule 2720 requires
that the initial public offering price of the Class A Stock not be higher than
that recommended by a "qualified independent underwriter" meeting certain
standards. Accordingly, Credit Suisse First Boston Corporation is assuming the
responsibilities of acting as the qualified independent underwriter and
conducting due diligence without additional compensation. The initial public
offering price of the Class A Stock set forth on the cover page of this
Prospectus will be no higher than the price recommended by Credit Suisse First
Boston Corporation.

Raymond James & Associates, Inc. ("Raymond James"), one of the Underwriters,
together with the Company and certain other investors, is a limited partner of
CSS and a stockholder in its general partner, CSS Management. See
"Business--Investments." Raymond James owns approximately 12.7% of CSS.

63
<PAGE>
Thomas A. James, Chairman of the Board of Directors of Raymond James Financial,
Inc., the sole parent of Raymond James, is a member of the Executive Committee
of CSS and a member of the Board of Directors of CSS Management.

SUBSEQUENT RESTRICTIONS

Securities industry regulations prohibit an NASD member firm, after the
completion of a distribution of securities of its parent to the public, from
effecting any transaction (except on an unsolicited basis) for the account of
any customer in, or making any recommendation with respect to, any such
security. Thus, following the Offering, the Company's subsidiaries will not be
permitted to make recommendations regarding the purchase or sale of the Class A
Stock.

Under the Rules of the NASD, if any employee of any of the Company's
subsidiaries, any person associated (as defined in such Rules) with any of the
Company's subsidiaries, or any immediate family member of any such employee or
associated person purchases any of the shares of Class A Stock offered hereby,
such person may not sell, transfer, assign, pledge or hypothecate such shares
for a period of five months following the effective date of the Offering.

NOTICE TO CANADIAN RESIDENTS

RESALE RESTRICTIONS

The distribution of the Class A Stock in Canada is being made only on a
private placement basis exempt from the requirement that the Company prepare and
file a prospectus with the securities regulatory authorities in each province
where trades of Class A Stock are effected. Accordingly, any resale of the Class
A Stock in Canada must be made in accordance with applicable securities laws
which will vary depending on the relevant jurisdiction, and which may require
resales to be made in accordance with available statutory exemptions or pursuant
to a discretionary exemption granted by the applicable Canadian securities
regulatory authority. Purchasers are advised to seek legal advice prior to any
resale of the Class A Stock.

REPRESENTATIONS OF PURCHASERS

Each purchaser of Class A Stock in Canada who receives a purchase
confirmation will be deemed to represent to the Company, the Selling
Stockholders and the dealer from whom such purchase confirmation is received
that (i) such purchaser is entitled under applicable provincial securities laws
to purchase such Class A Stock without the benefit of a prospectus qualified
under such securities laws, (ii) where required by law, that such purchaser is
purchasing as principal and not as agent, and (iii) such purchaser has reviewed
the text above under "--Resale Restrictions."

RIGHTS OF ACTION AND ENFORCEMENT

The Class A Stock being offered are those of a foreign issuer and Ontario
purchasers will not receive the contractual right of action prescribed by
section 32 of the Regulation under the SECURITIES ACT (Ontario). As a result,
Ontario purchasers must rely on other remedies that may be available, including
common law rights of action for damages or rescission of rights of action under
the civil liability provisions of the U.S. federal securities law.

All of the Company's directors and officers as well as the experts named
herein may be located outside of Canada and, as a result, it may not be possible
for Ontario purchasers to effect service of process within Canada upon the
Company or such persons. All or a substantial portion of the assets of the
Company and such persons may be located outside of Canada and, as a result, it
may not be possible to satisfy a judgment against the Company or such persons in
Canada or to enforce a judgment obtained in Canadian courts against the Company
or persons outside of Canada.

64
<PAGE>
NOTICE TO BRITISH COLUMBIA RESIDENTS

A purchaser of Class A Stock to whom the SECURITIES ACT (British Columbia)
applies is advised that such purchaser is required to file with the British
Columbia Securities Commission a report within 10 days of the sale of any Class
A Stock acquired by such purchaser pursuant to this offering. Such report must
be in the form attached to British Columbia Securities Commission Blanket Order
BOR #95/17, a copy of which may be obtained from the Company. Only one such
report must be filed in respect of Class A Stock acquired on the same date and
under the same prospectus exemption.

VALIDITY OF CLASS A STOCK

The validity of the shares of Class A Stock offered hereby will be passed
upon for the Company by Mayer, Brown & Platt, Chicago, Illinois. The validity of
the shares of Class A Stock offered hereby will be passed upon for the
Underwriters by McDermott, Will & Emery, Chicago, Illinois.

EXPERTS

The consolidated financial statements of the Company as of September 29,
1995 and September 27, 1996 and for each of the three years in the period ended
September 27, 1996 included in this Prospectus and elsewhere in the Registration
Statement have been audited by Deloitte & Touche LLP, independent auditors, as
stated in their report appearing herein, and have been included in reliance upon
their authority as experts in accounting and auditing.

ADDITIONAL INFORMATION

The Company has filed a Registration Statement under the Securities Act with
respect to the shares of Class A Stock offered hereby. As permitted by the rules
and regulations of the SEC, this Prospectus does not contain all the information
set forth in the Registration Statement. For further information about the
Company and the Class A Stock, reference is made to the Registration Statement
and to the financial statements, exhibits and schedules filed therewith. The
statements contained in this Prospectus about the contents of any contract or
other document referred to are not necessarily complete, and in each instance,
reference is made to a copy of such contract or other document filed as an
exhibit to the Registration Statement, each such statement being qualified in
all respects by such reference. Copies of each such document may be obtained
from the SEC at its principal office in Washington, D.C. upon payment of the
charges prescribed by the SEC or, in the case of certain of such documents, by
accessing the SEC's World Wide Web site at http://www.sec.gov.

Upon completion of the Offering, the Company will be subject to the
informational requirements of the Exchange Act, and, in accordance therewith,
will be required to file reports, proxy statements and other information with
the SEC. Such reports, proxy statements and other information will be able to be
inspected and copied at the Public Reference Section of the SEC at Room 1024,
450 Fifth Street, N.W., Washington, D.C. 20549, and at the SEC's regional
offices at Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661 and 7 World Trade Center, Suite 1300, New York, New York 10048.
Copies of the reports, proxy statements and other information will be able to be
obtained from the Public Reference Section of the SEC, Washington, D.C. 20549,
upon payment of prescribed rates or, in certain cases, by accessing the SEC's
World Wide Web site at http://www.sec.gov. The Class A Stock of the Company will
be quoted on the Nasdaq National Market under the symbol "AMTD," and such
reports, proxy statements and other information concerning the Company will also
be able to be inspected at the offices of Nasdaq Operations, 1735 K Street,
N.W., Washington, D.C. 20006.

65
<PAGE>
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
------------
<S> <C>
Independent Auditors' Report........................................................................ F-2

Consolidated Balance Sheets......................................................................... F-3

Consolidated Statements of Income (Loss)............................................................ F-4

Consolidated Statements of Stockholders' Equity..................................................... F-5

Consolidated Statements of Cash Flows............................................................... F-6

Notes to Consolidated Financial Statements.......................................................... F-7
</TABLE>

F-1
<PAGE>
INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders of

AmeriTrade Holding Corporation and Subsidiaries

Omaha, Nebraska

We have audited the accompanying consolidated balance sheets of AmeriTrade
Holding Corporation (formerly, "TransTerra Co.") and its subsidiaries
(collectively, the "Company") as of September 29, 1995 and September 27, 1996,
and the related consolidated statements of income, stockholders' equity and cash
flows for each of the three years in the period ended September 27, 1996. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in
all material respects, the financial position of AmeriTrade Holding Corporation
and its subsidiaries as of September 29, 1995 and September 27, 1996, and the
results of their operations and their cash flows for each of the three years in
the period ended September 27, 1996 in conformity with generally accepted
accounting principles.

DELOITTE & TOUCHE LLP

Omaha, Nebraska

November 1, 1996 (January 23, 1997 as to Note 11)

F-2
<PAGE>
AMERITRADE HOLDING CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
SEPTEMBER 29, SEPTEMBER 27,
1995 1996
------------- ------------- DECEMBER 31,
1996
--------------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
Cash and cash equivalents.......................................... $ 1,765,643 $15,767,170 $ 16,804,926
Cash and investments segregated in compliance with federal
regulations....................................................... 123,690,798 175,668,497 242,078,414
Receivable from brokers, dealers, and clearing organizations....... 9,954,239 15,096,862 10,651,500
Receivable from customers and correspondents--net of allowance for
doubtful accounts: 1995--$58,124; 1996--$202,956; December 31,
1996--$214,066.................................................... 130,187,319 166,075,055 200,594,320
Furniture, equipment and leasehold improvements--net of accumulated
depreciation and amortization: 1995--$1,250,494; 1996--$2,139,323;
December 31, 1996--$2,486,390..................................... 3,690,746 3,746,178 3,613,213
Goodwill--net of accumulated amortization.......................... 6,945,767 6,709,765 6,619,010
Equity investments................................................. 4,178,555 7,157,783 7,669,123
Other investment................................................... 1,250,000 5,000,000 5,000,000
Deferred income taxes.............................................. 86,239 444,378 184,001
Other assets....................................................... 5,355,317 6,013,544 9,271,461
------------- ------------- --------------
Total assets............................................... $287,104,623 $401,679,232 $ 502,485,968
------------- ------------- --------------
------------- ------------- --------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Payable to brokers, dealers and clearing organizations........... $ 2,857,679 $ 1,193,479 $ 2,523,348
Payable to customers and correspondents.......................... 251,862,383 356,942,970 454,159,320
Accounts payable and accrued liabilities......................... 5,221,473 7,221,008 9,479,602
Notes payable to bank............................................ 7,097,000 4,853,000 5,737,000
Income taxes payable............................................. 562,369 806,711 --
------------- ------------- --------------
Total liabilities.......................................... 267,600,904 371,017,168 471,899,270
------------- ------------- --------------
Commitments and contingencies:
Stockholders' equity:
Preferred stock, $1 par value; authorized 3,000,000 shares,
none issued.................................................. -- -- --
Common stock, $0.01 par value:
Class A--30,000,000 shares authorized and 13,298,448 shares
issued in 1995; 25,000,000 shares authorized and 11,449,423
shares issued and outstanding at September 27 and December
31, 1996................................................... 132,984 114,494 114,494
Class B--30,000,000 shares authorized and 2,494,800 shares
issued in 1995; 2,000,000 shares authorized and 1,364,400
shares issued and outstanding at September 27 and December
31, 1996................................................... 24,948 13,644 13,644
------------- ------------- --------------
Total common stock......................................... 157,932 128,138 128,138
Additional paid in capital......................................... 943,736 809,665 809,665
Retained earnings.................................................. 19,839,450 29,724,261 29,648,895
Treasury stock--at cost:
2,931,408 Class A shares in 1995............................... (1,398,034) -- --
48,000 Class B shares in 1995.................................. (39,365) -- --
------------- ------------- --------------
Total treasury stock....................................... (1,437,399) -- --
------------- ------------- --------------
Total stockholders' equity................................. 19,503,719 30,662,064 30,586,698
------------- ------------- --------------
Total liabilities and stockholders' equity................. $287,104,623 $401,679,232 $ 502,485,968
------------- ------------- --------------
------------- ------------- --------------
</TABLE>

See notes to consolidated financial statements.

F-3
<PAGE>
AMERITRADE HOLDING CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (LOSS)

Net revenues................................ 27,449,273 35,019,603 54,338,753 12,048,578 15,351,696

Expenses excluding interest:

Employee compensation and benefits............ 6,537,771 8,481,977 14,049,642 2,896,369 4,142,424

Commissions and clearance..................... 1,716,625 2,516,796 2,530,642 822,949 628,552

Communications................................ 1,891,855 2,352,590 3,685,535 736,074 1,222,477

Occupancy and equipment costs (including
amounts to a related party of $591,040,
$591,040, and $591,040 in 1994, 1995 and
1996, respectively, and $147,760, and
$147,760 in fiscal quarters ended December
31, 1995 and 1996, respectively)............ 1,412,433 1,626,725 2,889,654 500,502 1,111,870

Advertising and promotion..................... 5,987,762 4,842,392 7,537,265 1,483,942 6,630,354

Provision for losses.......................... 266,000 1,428,663 148,014 6,000 12,000

Amortization of goodwill...................... 6,652 94,152 363,002 90,755 90,755

Other......................................... 2,180,413 2,846,280 4,717,406 1,042,670 1,577,654
------------- ------------- ------------- ------------ ------------

Total expenses excluding interest........... 19,999,511 24,189,575 35,921,160 7,579,261 15,416,086
------------- ------------- ------------- ------------ ------------

Income (loss) before provision for income
taxes.......................................... 7,449,762 10,830,028 18,417,593 4,469,317 (64,390)

Provision for income taxes...................... 2,618,933 3,798,881 7,259,248 1,857,444 10,976
------------- ------------- ------------- ------------ ------------

Net income (loss)............................... $ 4,830,829 $ 7,031,147 $11,158,345 $2,611,873 $ (75,366)
------------- ------------- ------------- ------------ ------------
------------- ------------- ------------- ------------ ------------

Earnings (loss) per share....................... $ 0.38 $ 0.55 $ 0.87 $ 0.20 $ (0.01)
------------- ------------- ------------- ------------ ------------
------------- ------------- ------------- ------------ ------------

Weighted average shares outstanding............. 12,855,950 12,813,823 12,813,823 12,813,823 12,813,823
------------- ------------- ------------- ------------ ------------
------------- ------------- ------------- ------------ ------------
</TABLE>

See notes to consolidated financial statements.

F-4
<PAGE>
AMERITRADE HOLDING CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
COMMON STOCK ADDITIONAL
------------------------------- PAID-IN RETAINED TREASURY
TOTAL CLASS A CLASS B TOTAL CAPITAL EARNINGS STOCK
------------ --------- --------- --------- ----------- ------------ -----------

<S> <C> <C> <C> <C> <C> <C> <C>
Balance, September 25, 1993.... $ 7,830,919 $ 132,984 $ 24,948 $ 157,932 $ 943,736 $ 7,977,474 $(1,248,223)

Net income..................... 4,830,829 -- -- -- -- 4,830,829 --

Purchase of treasury stock..... (189,176) -- -- -- -- -- (189,176)
------------ --------- --------- --------- ----------- ------------ -----------

Balance, September 30, 1994.... 12,472,572 132,984 24,948 157,932 943,736 12,808,303 (1,437,399)

Net income..................... 7,031,147 -- -- -- -- 7,031,147 --
------------ --------- --------- --------- ----------- ------------ -----------

Balance, September 29, 1995.... 19,503,719 132,984 24,948 157,932 943,736 19,839,450 (1,437,399)

Net income..................... 11,158,345 -- -- -- -- 11,158,345 --

Retirement of treasury stock... -- (18,490) (11,304) (29,794) (134,071) (1,273,534) 1,437,399
------------ --------- --------- --------- ----------- ------------ -----------

Balance, September 27, 1996.... 30,662,064 114,494 13,644 128,138 809,665 29,724,261 --

Net loss (unaudited)........... (75,366) -- -- -- -- (75,366) --
------------ --------- --------- --------- ----------- ------------ -----------

Balance, December 31, 1996
(unaudited)................... $ 30,586,698 $ 114,494 $ 13,644 $ 128,138 $ 809,665 $ 29,648,895 $ --
------------ --------- --------- --------- ----------- ------------ -----------
------------ --------- --------- --------- ----------- ------------ -----------
</TABLE>

See notes to consolidated financial statements.

F-5
<PAGE>
AMERITRADE HOLDING CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
YEAR ENDED QUARTER ENDED
------------------------------------------- --------------------------
SEPTEMBER 30, SEPTEMBER 29, SEPTEMBER 27, DECEMBER 31, DECEMBER 31,
1994 1995 1996 1995 1996
------------- ------------- ------------- ------------ ------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Cash flows from operating activities:
Net income (loss)......................... $ 4,830,829 $ 7,031,147 $11,158,345 $2,611,873 $ (75,366)
Adjustments to reconcile net income (loss)
to net cash from operating activities:
Depreciation and amortization........... 346,930 511,156 1,048,692 146,466 353,265
Provision for losses.................... 266,000 1,428,663 148,014 6,000 12,000
Deferred income taxes................... (83,142) (6,280) (358,139) (288,440) 260,377
Loss on disposal of furniture, equipment
and leasehold improvements............ 78,126 -- -- -- --
Equity (income) loss from investments... 575,250 (1,126,808) (3,358,871) (627,228) (788,249)
Amortization of goodwill................ 6,652 94,152 363,002 90,755 90,755
Changes in operating assets and
liabilities:
Cash and investments segregated in
compliance with federal
regulations......................... (47,550,033) (23,689,423) (51,977,699) 30,357,340 (66,409,917)
Receivable from brokers, dealers and
clearing organizations.............. (3,297,597) 1,792,810 (5,080,870) (6,342,565) 4,445,362
Receivable from customers and
correspondents...................... (13,612,289) (31,988,712) (36,035,750) (51,960,791) (34,531,265)
Refundable income taxes............... 412,400 -- -- -- --
Other assets.......................... (1,147,340) (2,551,644) (658,027) (1,780,146) (3,257,917)
Payable to brokers, dealers and
clearing organizations.............. 1,432,789 98,981 (1,664,200) 507,348 1,329,869
Payable to customers and
correspondents...................... 59,580,703 53,323,772 105,080,587 24,975,509 97,216,350
Accounts payable and accrued
liabilities......................... (74,718) 2,113,250 1,999,535 2,518,225 2,258,594
Income taxes payable.................. 185,806 376,563 244,342 264,837 (806,711)
------------- ------------- ------------- ------------ ------------
Net cash provided by operating
activities........................ 1,950,366 7,407,627 20,908,961 479,183 97,147
------------- ------------- ------------- ------------ ------------
Cash flows from investing activities:
Acquisition of subsidiary................. -- (7,582,337) (188,953) (188,953) --
Purchase of furniture, equipment and
leasehold improvements.................. (1,008,734) (2,609,544) (1,811,738) (681,269) (220,300)
Proceeds from sale of furniture, equipment
and leasehold improvements.............. -- -- 707,614 493,099 --
Purchase of equity and other
investments............................. (737,660) (4,687,650) (6,272,361) (1,333,156) (97,015)
Distributions received from equity
investments............................. -- 189,744 2,902,004 298,588 373,924
Proceeds from sale of partnership
interest................................ -- 600,000 -- -- --
------------- ------------- ------------- ------------ ------------
Net cash provided by (used in)
investing activities.............. (1,746,394) (14,089,787) (4,663,434) (1,411,691) 56,609
------------- ------------- ------------- ------------ ------------
Cash flows from financing activities:
Proceeds from notes payable to bank....... -- 7,900,000 -- 2,000,000 1,700,000
Principal payments on notes payable to
bank.................................... -- (803,000) (2,244,000) (612,000) (816,000)
Purchase of treasury stock................ (189,176) -- -- -- --
------------- ------------- ------------- ------------ ------------
Net cash provided by (used in)
financing activities.............. (189,176) 7,097,000 (2,244,000) 1,388,000 884,000
------------- ------------- ------------- ------------ ------------
Net increase in cash and cash equivalents... 14,796 414,840 14,001,527 455,492 1,037,756
Cash and cash equivalents at beginning of
period..................................... 1,336,007 1,350,803 1,765,643 1,765,643 15,767,170
------------- ------------- ------------- ------------ ------------
Cash and cash equivalents at end of
period..................................... $ 1,350,803 $ 1,765,643 $15,767,170 $2,221,135 $16,804,926
------------- ------------- ------------- ------------ ------------
------------- ------------- ------------- ------------ ------------
Supplemental cash flow information:
Interest paid............................. $ 3,586,945 $ 7,490,422 $11,025,779 $2,603,956 $3,296,668
------------- ------------- ------------- ------------ ------------
------------- ------------- ------------- ------------ ------------
Income taxes paid......................... $ 2,342,345 $ 3,587,169 $ 7,342,359 $1,730,000 $1,210,976
------------- ------------- ------------- ------------ ------------
------------- ------------- ------------- ------------ ------------
Noncash financing activities:
Retirement of treasury stock.............. $ -- $ -- $ 1,437,399 $ -- $ --
------------- ------------- ------------- ------------ ------------
------------- ------------- ------------- ------------ ------------
</TABLE>

See notes to consolidated financial statements.

F-6
<PAGE>
AMERITRADE HOLDING CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(INCLUDING NOTES APPLICABLE TO UNAUDITED PERIODS)

FOR THE YEARS ENDED SEPTEMBER 30, 1994,
SEPTEMBER 29, 1995 AND SEPTEMBER 27, 1996

1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION--The consolidated financial statements include the
accounts of AmeriTrade Holding Corporation (formerly TransTerra Co.) and its
wholly-owned subsidiaries (collectively, the "Company"), AmeriTrade Clearing,
Inc. (formerly, AmeriTrade, Inc.) ("AmeriTrade Clearing"), Accutrade, Inc.
("Accutrade"), Ceres Securities, Inc. ("Ceres"), K. Aufhauser & Company, Inc.
("Aufhauser"), and All American Brokers, Inc. ("All American"). All significant
intercompany balances and transactions have been eliminated.

On September 27, 1996, the Company's Board of Directors approved a
resolution to reincorporate in the State of Delaware and change its name from
TransTerra Co. to AmeriTrade Holding Corporation. The reincorporation was
accomplished by exchanging each share of Class A and Class B common stock of
TransTerra Co. for thirty shares of Class A and Class B common stock,
respectively of AmeriTrade Holding Corporation. All share data and per share
amounts have been restated to reflect this exchange. (See Note 11.)

NATURE OF OPERATIONS--AmeriTrade Clearing is a broker-dealer that provides
trade execution and clearing serivces to correspondent broker-dealers.
AmeriTrade Clearing is required to abide by all applicable rules and regulations
of the Securities and Exchange Commission, the Chicago Stock Exchange, Inc. and
the National Association of Securities Dealers. Accutrade, Ceres, Aufhauser and
All American, are broker-dealers that provide discount securities brokerage and
related financial services. Ceres brokerage operations commenced in October
1994. Each of these brokerage companies clears its securities transactions
through AmeriTrade Clearing.

The Company reports on a fifty-two/fifty-three week year. The fiscal year
ended 1994 was a fifty-three week year. The fiscal years ended 1995 and 1996
were each fifty-two week years.

CAPITAL STOCK--The authorized capital stock of the Company consists of Class
A common stock, Class B common stock and preferred stock. Each share of Class A
and Class B common stock is entitled to one vote on all matters, except that the
Class B common stock is entitled to elect a majority of the directors of the
Company and the Class A common stock is entitled to elect the remainder of the
directors. Each class of common stock is equally entitled to dividends if, as
and when declared by the board of directors. Shares of Class A common stock are
not convertible, while each share of Class B common stock is convertible into
one share of Class A common stock at the option of the Class B holder or upon
the occurrence of certain events. Class A and Class B common stock have equal
participation rights in the event of a liquidation of the Company.

Voting, dividend, conversion and liquidation rights of the preferred stock
would be established by the board of directors upon issuance of such preferred
stock.

USE OF ESTIMATES--The preparation of consolidated financial statements in
conformity with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amount of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the

F-7
<PAGE>
AMERITRADE HOLDING CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(INCLUDING NOTES APPLICABLE TO UNAUDITED PERIODS)

FOR THE YEARS ENDED SEPTEMBER 30, 1994,
SEPTEMBER 29, 1995 AND SEPTEMBER 27, 1996

1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
consolidated financial statements and the reported amounts of revenue and
expenses during the reporting period. Actual results could differ from those
estimates.

SECURITIES TRANSACTIONS--Securities transactions are recorded on a
settlement date basis with such transactions generally settling three business
days after trade date. Revenues and expenses related to securities transactions,
including revenues from execution agents, are also recorded on settlement date,
which is not materially different than trade date.

DEPRECIATION AND AMORTIZATION--Depreciation is provided on a straight-line
basis using estimated useful service lives of five to seven years. Leasehold
improvements are amortized over the lesser of the economic useful life of the
improvement or the term of the lease.

Goodwill is amortized on a straight-line basis generally over a twenty year
period. Accumulated amortization as of September 29, 1995, September 27, 1996
and December 31, 1996 was $154,020, $517,022 and $607,777, respectively.

EARNINGS PER SHARE--Per share data is determined based on the weighted
average number of common shares outstanding each year.

INCOME TAXES--The Company files a consolidated income tax return with its
subsidiaries on a calendar year basis. Deferred income taxes are provided for
temporary differences between financial statement and taxable income. The
principal temporary differences arise from depreciation, bad debts, prepaid
expenses, and certain accrued liabilities. Deferred tax liabilities and assets
are determined based on the differences between the financial statement carrying
amounts and tax bases of assets and liabilities using enacted tax rates in
effect in the years in which the differences are expected to reverse.

CASH AND CASH EQUIVALENTS--The Company considers temporary, highly liquid
investments with an original maturity of three months or less to be cash
equivalents.

SEGREGATED CASH AND INVESTMENTS--Cash and investments at AmeriTrade Clearing
of $123,690,789, $175,668,497 and $242,078,414 at September 29, 1995, September
27, 1996 and December 31, 1996, respectively, have been segregated in a special
reserve bank account for the benefit of customers under Rule 15c3-3 of the
Securities Exchange Act of 1934.

ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS--The Company considers the
amounts presented for financial instruments on the consolidated balance sheets
to be reasonable estimates of fair value. The fair value of the Company's
long-term borrowings, estimated based on current interest rates, does not differ
significantly from the amount recorded at September 29, 1995 and September 27,
1996. The estimated fair value amounts have been determined by the Company using
available market information and appropriate valuation methodologies.

F-8
<PAGE>
AMERITRADE HOLDING CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(INCLUDING NOTES APPLICABLE TO UNAUDITED PERIODS)

FOR THE YEARS ENDED SEPTEMBER 30, 1994,
SEPTEMBER 29, 1995 AND SEPTEMBER 27, 1996

1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
INVESTMENTS--Investments in other companies and partnerships are accounted
for under the equity method when the Company has the ability to exercise
significant influence over the investee's operating and financial policies or
when the investment is a corporate joint venture. The cost method is used for
other investments. All material intercompany balances and transactions are
eliminated in consolidation.

ADVERTISING AND PROMOTIONAL EXPENSES--The Company generally expenses all
advertising and promotional costs as incurred.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS--In March 1995, Statement of
Financial Accounting Standards No. 121, ACCOUNTING FOR IMPAIRMENT OF LONG-LIVED
ASSETS AND FOR LONG-LIVED ASSETS TO BE DISPOSED OF ("SFAS No. 121") was issued.
SFAS No. 121 establishes the accounting and reporting requirements for
recognizing and measuring impairment of long-lived assets to be either held and
used or held for disposal. The Company does not expect SFAS No. 121 to have a
material effect on its consolidated financial statements.

UNAUDITED INTERIM INFORMATION--The consolidated financial information as of
December 31, 1996 and for the fiscal quarters ended December 31, 1995 and 1996
is unaudited. In the opinion of management, such information contains all
adjustments, consisting only of normal recurring adjustments, necessary for a
fair presentation of the Company's financial position and operating results as
of and for the periods presented. The results of operations for the fiscal
quarter ended December 31, 1996 are not necessarily indicative of the results to
be expected for the full fiscal 1997 year.

RECLASSIFICATIONS--Certain items in prior years' consolidated financial
statements have been reclassified to conform to the fiscal 1996 presentation.

F-9
<PAGE>
AMERITRADE HOLDING CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(INCLUDING NOTES APPLICABLE TO UNAUDITED PERIODS)

FOR THE YEARS ENDED SEPTEMBER 30, 1994,
SEPTEMBER 29, 1995 AND SEPTEMBER 27, 1996

2. RECEIVABLE FROM AND PAYABLE TO BROKERS, DEALERS AND CLEARING ORGANIZATIONS

Amounts receivable from and payable to brokers, dealers and clearing
organizations are comprised of the following:

<TABLE>
<CAPTION>
SEPTEMBER 29, SEPTEMBER 27,
1995 1996
------------- ------------- DECEMBER 31,
1996
-------------
(UNAUDITED)
<S> <C> <C> <C>
Receivable:
Securities borrowed $ 5,421,100 $ 10,975,805 $ 8,455,700
Securities failed to deliver 4,524,924 3,903,960 1,836,440
Clearing organizations 8,215 217,097 359,360
------------- ------------- -------------
Total $ 9,954,239 $ 15,096,862 $ 10,651,500
------------- ------------- -------------
------------- ------------- -------------

Payable:
Securities failed to receive $ 1,983,046 $ 1,187,726 $ 2,523,348
Clearing organizations 874,633 5,753 --
------------- ------------- -------------
Total $ 2,857,679 $ 1,193,479 $ 2,523,348
------------- ------------- -------------
------------- ------------- -------------
</TABLE>

3. INVESTMENTS

EQUITY INVESTMENTS

ROUNDTABLE PARTNERS, L.L.C. ("ROUNDTABLE")--As of September 27, 1996, the
Company owned a 12.1% interest in Roundtable, a limited liability company formed
to hold equity interests in securities trading and market making companies. This
investment is accounted for using the equity method. As of September 27, 1996,
$1,654,292 of the Company's retained earnings represent undistributed earnings
of Roundtable.

The Company has executed a portion of its securities transactions through
subsidiaries of Roundtable since March 1995.

COMPREHENSIVE SOFTWARE SYSTEMS LTD. ("CSS")--As of September 27, 1996, the
Company owned a 12.7% limited partnership interest in CSS, a joint venture
formed for the purpose of developing software for securities broker-dealers,
banks and other financial institutions. This investment is accounted for using
the equity method.

F-10
<PAGE>
AMERITRADE HOLDING CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(INCLUDING NOTES APPLICABLE TO UNAUDITED PERIODS)

FOR THE YEARS ENDED SEPTEMBER 30, 1994,
SEPTEMBER 29, 1995 AND SEPTEMBER 27, 1996

3. INVESTMENTS (CONTINUED)
SUMMARIZED FINANCIAL INFORMATION--The following summarized unaudited
financial information represents an aggregation of financial information of
Roundtable and CSS:

<TABLE>
<CAPTION>
AS OF AS OF
DECEMBER 31, SEPTEMBER 30,
1995 1996
------------- -------------
<S> <C> <C>
Balance Sheet Data:
Current assets............................................... $ 57,766,755 $ 71,387,992
Noncurrent assets............................................ 19,710,164 21,025,326
Current liabilities.......................................... 25,872,354 30,547,586
Noncurrent liabilities....................................... 6,337,693 1,570,029
</TABLE>

<TABLE>
<CAPTION>
NINE MONTHS
YEAR ENDED YEAR ENDED ENDED
DECEMBER 31, DECEMBER 31, SEPTEMBER 30,
1994 1995 1996
------------- ------------- -------------
<S> <C> <C> <C>
Earnings Data:
Total revenues................................ $ -- $ 44,098,654 $ 82,837,705
Net earnings (loss)........................... (2,345,089) 9,679,293 24,965,680
</TABLE>

OTHER INVESTMENT

TELESCAN, INC. ("TELESCAN")--As of September 27, 1996, the Company owned
approximately 7.2% of the outstanding common stock of Telescan, a publicly
traded software/online services company. The Company's investment in Telescan is
subject to restrictions under Rule 144 of the Securities Act of 1933 and the
investment is, therefore, accounted for using the cost method.

The restrictions applicable to Telescan common stock with a cost of $2.5
million will expire during fiscal 1997. The fair value of such common stock does
not differ materially from its cost. Any decline in the fair value of the
Telescan common stock accounted for using the cost method that is other than
temporary would, if present, be accounted for as a realized loss.

4. NOTES PAYABLE TO BANK

The Company has the following notes payable under a bank loan agreement:

<TABLE>
<CAPTION>
SEPTEMBER 29, SEPTEMBER 27,
1995 1996
------------- ------------- DECEMBER 31,
1996
------------
(UNAUDITED)
<S> <C> <C> <C>
Term note........................................ $ 1,347,000 $ 478,000 $ 162,000
Term note B...................................... 5,750,000 4,375,000 3,875,000
Revolving note................................... -- -- 1,700,000
------------- ------------- ------------
Total.......................................... $ 7,097,000 $ 4,853,000 $5,737,000
------------- ------------- ------------
------------- ------------- ------------
</TABLE>

F-11
<PAGE>
AMERITRADE HOLDING CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(INCLUDING NOTES APPLICABLE TO UNAUDITED PERIODS)

FOR THE YEARS ENDED SEPTEMBER 30, 1994,
SEPTEMBER 29, 1995 AND SEPTEMBER 27, 1996

4. NOTES PAYABLE TO BANK (CONTINUED)
The term note, dated December 22, 1994 provides for monthly payments of
$79,000 plus interest through December 31, 1996; the remaining balance plus
interest is due on January 31, 1997. The term note B, dated July 7, 1995
provides for monthly payments of $125,000 plus interest through June 30, 1999;
the remaining balance plus interest is due on July 31, 1999. The variable
interest rate on the notes was 9.25% at September 27, 1996 and December 31,
1996.

The revolving note provides for borrowings up to $4,000,000 through January
31, 1998. The Company pays a maintenance fee of 0.5% of the unused borrowings on
the revolving note payable through January 31, 1997 and 0.375% thereafter.

Principal payments due under the term notes as of September 27, 1996 are as
follows:

Loans under the agreement are collateralized by all shares of AmeriTrade
Clearing common stock. In addition, the agreement requires the Company to
operate under the following restrictive covenants:

1. AmeriTrade Clearing shall maintain net capital in excess of $8,000,000
computed under the alternative method according to Rule 15c3-1 of the
Securities Exchange Act of 1934.

2. Net worth must be maintained in excess of $12,000,000 plus 50% of fiscal
year cumulative net income beginning with the fiscal year ending
September 27, 1996.

F-12
<PAGE>
AMERITRADE HOLDING CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(INCLUDING NOTES APPLICABLE TO UNAUDITED PERIODS)

FOR THE YEARS ENDED SEPTEMBER 30, 1994,
SEPTEMBER 29, 1995 AND SEPTEMBER 27, 1996

5. INCOME TAXES

Provision for income tax is comprised of the following for fiscal years
ended:

<TABLE>
<CAPTION>
1994 1995 1996
------------ ------------ ------------
<S> <C> <C> <C>
Current expense:
Federal........................................... $ 2,692,075 $ 3,680,161 $ 7,132,387
State............................................. 10,000 125,000 485,000
------------ ------------ ------------
2,702,075 3,805,161 7,617,387
Deferred credit:
Federal........................................... (74,828) (5,652) (306,777)
State............................................. (8,314) (628) (51,362)
------------ ------------ ------------
(83,142) (6,280) (358,139)
------------ ------------ ------------
Provision for income taxes.......................... $ 2,618,933 $ 3,798,881 $ 7,259,248
------------ ------------ ------------
------------ ------------ ------------
</TABLE>

A reconciliation of the federal statutory tax rate to the effective tax rate
applicable to income before provision for income taxes follows:

<TABLE>
<CAPTION>
1994 1995 1996
--------- --------- ---------
<S> <C> <C> <C>
Federal statutory rate...................................................... 34.00% 34.00% 35.00%
State taxes, net of federal tax effect...................................... 1.00 0.76 1.71
Amortization of goodwill.................................................... -- 0.28 0.75
Other....................................................................... 0.15 0.04 1.95
--------- --------- ---------
35.15% 35.08% 39.41%
--------- --------- ---------
--------- --------- ---------
</TABLE>

Deferred tax assets (liabilities) are comprised of the following:

<TABLE>
<CAPTION>
1995 1996
----------- -----------
<S> <C> <C>
Depreciation and amortization, net.................................. $ (167,898) $ (144,841)
Prepaid expenses.................................................... (373,030) (261,460)
----------- -----------
(540,928) (406,301)
Accrued liabilities................................................. 627,167 850,679
----------- -----------
Net deferred tax assets............................................. $ 86,239 $ 444,378
----------- -----------
----------- -----------
</TABLE>

F-13
<PAGE>
AMERITRADE HOLDING CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(INCLUDING NOTES APPLICABLE TO UNAUDITED PERIODS)

FOR THE YEARS ENDED SEPTEMBER 30, 1994,
SEPTEMBER 29, 1995 AND SEPTEMBER 27, 1996

6. NET CAPITAL

The Company's subsidiaries are subject to the Net Capital Rule under the
Securities Exchange Act of 1934 and are required to maintain a minimum net
capital. Net capital and the related net capital requirement may fluctuate on a
daily basis.

The Company's broker-dealer subsidiaries had net capital, in the aggregate,
of $9,764,862, $13,870,801 and $13,085,149 as of September 29, 1995, September
27, 1996 and December 31, 1996, respectively, which exceeded aggregate minimum
net capital requirements by $6,275,425, $9,397,960 and $7,965,110, respectively.
Subsidiary net capital in the amount of $4,472,841 and $5,120,039 as of
September 27, 1996 and December 31, 1996, respectively, is not available for
transfer to the Company.

7. EMPLOYEE BENEFIT PLANS

The Company has a profit sharing plan under which the annual contribution is
determined at the discretion of the Board of Directors. Profit sharing expense
was $210,933, $261,143 and $388,800 for the fiscal years ended 1994, 1995, and
1996, respectively.

The Company adopted a 401(k) plan covering all eligible employees on January
1, 1995. The plan provides for matching contributions at the discretion of the
Board of Directors. Contribution expense under this plan was $26,043 and $9,093
for the fiscal years ended 1995 and 1996, respectively.

The Company has an executive bonus plan which was designed to allow
designated executive participants the opportunity to earn bonus awards with
current and deferred components. The value of each component is based on the
annual increase (if any) in the book value per share of the common stock.
Executive bonus plan expense was $544,350, $1,105,000 and $1,710,000 for the
fiscal years ended 1994, 1995 and 1996, respectively.

In February 1997, the Company adopted a long term incentive plan. The long
term incentive plan authorizes the award of options to purchase Class A common
stock, Class A common stock appreciation rights, Class A common stock and
performance units. The number of shares that may be awarded under the long term
incentive plan may not exceed 800,000 shares in the aggregate.

F-14
<PAGE>
AMERITRADE HOLDING CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(INCLUDING NOTES APPLICABLE TO UNAUDITED PERIODS)

FOR THE YEARS ENDED SEPTEMBER 30, 1994,
SEPTEMBER 29, 1995 AND SEPTEMBER 27, 1996

8. COMMITMENTS AND CONTINGENCIES

LEASE COMMITMENTS--The Company and its subsidiaries have various
noncancellable leases on facilities and certain computer and office equipment
requiring annual payments as follows:

<TABLE>
<CAPTION>
FISCAL YEAR ENDING AMOUNT
- ------------------------------------------------------------------------------- -------------
<S> <C>
1997........................................................................... $ 2,061,711
1998........................................................................... 1,897,073
1999........................................................................... 1,419,969
2000........................................................................... 892,532
2001........................................................................... 749,834
Thereafter (to December 31, 2013).............................................. 7,240,239
-------------
Total........................................................................ $ 14,261,358
-------------
-------------
</TABLE>

The Company and certain of its subsidiaries lease office facilities from the
Chief Executive Officer of the Company and his wife. The lease expires on
December 31, 2013, and provides for annual rentals of $591,040. Additionally,
the Company and its subsidiaries lease certain computer equipment, office
equipment, and office facilities under various operating leases. Rental expense
was $834,299, $866,983 and $1,581,171 for fiscal years ended 1994, 1995 and
1996, respectively.

The Company has amended its lease for office facilities to provide for
additional space. The amended lease is for a term of twenty years, and will
provide for annual rentals of $1,288,000. This amended lease is expected to
become effective in 1997.

LETTERS OF CREDIT--Letters of credit in an aggregate amount of $16.3 million
and $17.3 million as of September 27, 1996 and December 31, 1996, respectively,
have been issued on behalf of AmeriTrade Clearing by a financial institution.
These letters of credit, which are for the benefit of securities clearinghouses,
have been issued to support margin requirements. AmeriTrade Clearing pays a
maintenance fee of 0.5% of the committed amount for each letter of credit. In
addition, the same financial institution may make loans to AmeriTrade Clearing
if requested under a note. AmeriTrade Clearing has pledged customer securities,
the amount of which fluctuates from time to time, to secure its obligations
under the letters of credit and the note. As of September 27, 1996 and December
31, 1996, respectively, no amounts were outstanding under the note.

LEGAL--In July 1994, a civil complaint was filed by an Ohio county in U.S.
District Court against Accutrade and AmeriTrade Clearing seeking to recover
approximately $6.5 million of alleged trading losses, plus interest. The
complaint alleged that the treasurer of the county unlawfully invested county
funds through a relative, who allegedly fraudulently caused certain county funds
to be wire transferred from the county to Accutrade and AmeriTrade Clearing into
an account owned by that relative. It was further alleged that the funds were
improperly invested in common stock and options resulting in the trading losses.
A customer account in the name of the county was never maintained at Accutrade
or

F-15
<PAGE>
AMERITRADE HOLDING CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(INCLUDING NOTES APPLICABLE TO UNAUDITED PERIODS)

FOR THE YEARS ENDED SEPTEMBER 30, 1994,
SEPTEMBER 29, 1995 AND SEPTEMBER 27, 1996

8. COMMITMENTS AND CONTINGENCIES (CONTINUED)
AmeriTrade Clearing. In December 1994, this complaint was settled with an out of
court payment of $1.5 million to the Ohio county.

The Company and its subsidiaries are part of a number of other legal matters
arising in the ordinary course of its business. In management's opinion, the
Company has adequate legal defenses respecting each of these actions and does
not believe that they will materially affect the Company's results of operations
or its financial position.

GENERAL CONTINGENCIES--In the general course of business, there are various
contingencies which are not reflected in the consolidated financial statements.
These include AmeriTrade Clearing's customer activities involving the execution,
settlement and financing of various customer securities transactions. These
activities may expose the Company to off-balance-sheet credit risk in the event
the customers are unable to fulfill their contracted obligations.

AmeriTrade Clearing's customer securities activities are transacted on
either a cash or margin basis. In margin transactions, AmeriTrade Clearing
extends credit to the customer, subject to various regulatory and internal
margin requirements, collateralized by cash and securities in the customer's
account. In connection with these activities, AmeriTrade Clearing executes and
clears customer transactions involving the sale of securities not yet purchased
("short sales"). Such transactions may expose AmeriTrade Clearing to off-
balance-sheet risk in the event margin requirements are not sufficient to fully
cover losses which customers may incur. In the event the customer fails to
satisfy its obligations, AmeriTrade Clearing may be required to purchase or sell
financial instruments at prevailing market prices in order to fulfill the
customer's obligations.

AmeriTrade Clearing seeks to control the risks associated with its customer
activities by requiring customers to maintain margin collateral in compliance
with various regulatory and internal guidelines. AmeriTrade Clearing monitors
required margin levels daily and, pursuant to such guidelines, requires the
customers to deposit additional collateral, or to reduce positions, when
necessary.

AmeriTrade Clearing borrows securities both to cover short sales and to
complete customer transactions in the event that a customer fails to deliver
securities by the required date. Such borrowings are collateralized by
depositing cash or pledging securities with lending institutions and are "marked
to market" on a daily basis. Failure to maintain levels of cash deposits or
pledged securities at all times at least equal to the value of the related
securities can subject AmeriTrade Clearing to risk of loss. AmeriTrade Clearing
seeks to control the risk of loss by monitoring the market value of securities
pledged and requiring adjustments of collateral levels where necessary.

9. ACQUISITIONS

AUFHAUSER--On July 10, 1995, the Company acquired the net assets of K.
Aufhauser & Company, Inc. for $7,582,337 in cash. $7,000,000 of the purchase
price has been allocated to goodwill, which is being amortized over a twenty
year period. The acquisition was accounted for under the purchase method of

F-16
<PAGE>
AMERITRADE HOLDING CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(INCLUDING NOTES APPLICABLE TO UNAUDITED PERIODS)

FOR THE YEARS ENDED SEPTEMBER 30, 1994,
SEPTEMBER 29, 1995 AND SEPTEMBER 27, 1996

9. ACQUISITIONS (CONTINUED)
accounting and the consolidated financial statements include the results of
operations from the date of acquisition.

ALL AMERICAN--On October 25, 1995, the Company acquired the net assets of
All American Brokers, Inc. for $188,953 in cash. $127,000 of the purchase price
has been allocated to goodwill, which is being amortized over a twenty year
period. The acquisition was accounted for under the purchase method of
accounting and the consolidated financial statements include the results of
operations from the date of acquisition.

The pro forma effects of these acquisitions on the Company's consolidated
financial statements as if they had occurred at the beginning of fiscal years
are not material.

10. QUARTERLY FINANCIAL DATA (UNAUDITED)

<TABLE>
<CAPTION>
FOR THE FISCAL YEAR ENDED
-----------------------------------------------------
1996 1997
------------------------------------------ ---------
FIRST SECOND THIRD FOURTH FIRST
QUARTER QUARTER QUARTER QUARTER QUARTER
--------- --------- --------- --------- ---------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
Revenues................................................... $ 14,814 $ 16,586 $ 18,641 $ 15,337 $ 19,042
Interest expense........................................... 2,765 2,603 2,814 2,857 3,690
--------- --------- --------- --------- ---------
Net revenues............................................. 12,049 13,983 15,827 12,480 15,352
Total expenses excluding interest.......................... 7,580 8,498 10,525 9,318 15,416
--------- --------- --------- --------- ---------
Income before provision for income taxes................... 4,469 5,485 5,302 3,162 (64)

Net income (loss).......................................... $ 2,612 $ 3,198 $ 3,091 $ 2,257 $ (75)
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------

Earnings (loss) per share.................................. $ 0.20 $ 0.25 $ 0.24 $ 0.18 $ (0.01)
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
</TABLE>

11. SUBSEQUENT EVENT

On January 23, 1997, the Company effected an eight-for-five stock split in
the form of a stock dividend. All share data and per share amounts have been
restated to reflect this stock split.

F-17
<PAGE>
SCRIPT OF AMERITRADE TRADING SYSTEMS DEMONSTRATION ON CD-ROM
PORTION OF THIS PROSPECTUS ATTACHED TO INSIDE BACK COVER PAGE HEREOF

This product demonstration is part of the Company's Prospectus dated
February , 1997.

VISUAL: J. JOE RICKETTS BOXED FRAME LEFT. AMERITRADE HOLDING CORPORATION
LOGO FRAME RIGHT. SCENE IS OVER FINANCIAL MONTAGE BACKGROUND. (NOTE: BACKGROUND
REMAINS THE SAME THROUGHOUT THE DEMO.) GRAPHIC OF EACH OF THE EIGHT TRADING
METHODS.

J. JOE RICKETTS

Hello, I'm Joe Ricketts, Co-founder, CEO and Chairman of AmeriTrade Holding
Corporation.
Now that you've had an opportunity to review our prospectus, we thought rather
than just explaining each of our trading systems, that it would be easier to
show you. So what you are about to see is a demo tour of the eight various
trading methods available to investors, plus our AmeriTrade OnLine operating
system for financial advisors. After you've seen each application, you may go
back and review any or all the methods as many times as you wish. Now on with
the demo.

VISUAL: MARY FAY BOXED FRAME LEFT. SUPER: NAME AND TITLE. BOXED FRAME RIGHT
IS A VISUAL OF A TRADER ON THE TELEPHONE. SUPER: TOUCHTONE TELEPHONE TRADING.

MARY FAY

If you want to trade by phone, orders may be placed 24 hours a day by our
automated touchtone system. The system will lead you through the order process
and will prompt you to make appropriate entries using your telephone keypad.

VISUAL: BOXED VIDEO OF TRADER USING TOUCHTONE PHONE.

PHONE RINGS

"Welcome to Accutrade. Please enter your security symbol and number of
shares you wish to purchase."

"Is this a market or limit order?"

"Your Accutrade order is to buy 1,000 shares of DEF at the market price ...
Please hold one moment for confirmation."

VISUAL: MIKE ANDERSON BOXED FRAME LEFT. SUPER: NAME AND TITLE. BOXED FRAME
RIGHT IS A VISUAL OF A TRADER AT HIS PC. SUPER: ACCUTRADE FOR WINDOWS.

Accutrade FOR WINDOWS is a PC-based tool that enables investors to place,
review and change orders. You can also obtain quotes, review your positions and
balances and generate reports to analyze your portfolio.

VISUAL: GRAPHIC OF PROGRAM TRADING BUTTON ON TOOLBAR. SUPER: PROGRAM TRADING
BUTTON IS ACTIVATED.

MIKE ANDERSON

Program investing and trading is a feature of Accutrade FOR WINDOWS that
lets you set up a trading strategy that will automatically trigger by market
conditions you select.

VISUAL: FULL SCREEN SHOTS OF PROGRAM TRADING FUNCTIONS EXPLAINED IN THE
AUDIO TRACK.

For example, say you want to buy Microsoft when the DOW hits 7000. Just
enter this information in the script name section, then select the type of
script you want, either time event, price event or filled order. Enter the
conditions under which your script will execute and indicate which accounts
should be updated as a result of this action. Activate the script and the
Accutrade FOR WINDOWS software will monitor the market for you and execute your
order the instant it's right.

A-1
<PAGE>
VISUAL: GRAPHIC OF BASKET TRADING BUTTON ON TOOLBAR. SUPER: BASKET TRADING
BUTTON IS ACTIVATED.

The basket trading feature enables you create, buy, sell and track groups of
securities in a particular industry sector.

VISUAL: FULL SCREEN SHOTS OF BASKET TRADING FUNCTIONS EXPLAINED IN THE AUDIO
TRACK.

First, enter a name for your security basket. Select the stock you wish to
include in the basket. Enter the number of shares you wish to include.

VISUAL: FULL SCREENS OF BASKET TRADING CONTINUES.

When you have completed a basket, you can add it to your quote list and
price the entire basket. To trade a basket, select the name from the drop-down
list on the order ticket and enter the number of baskets to trade.

VISUAL: FULL SCREEN SHOTS OF ACCOUNT SCREEN, TAX LOT ACCOUNTING SCREEN.

Accutrade FOR WINDOWS also gives you access to your portfolio at any time.
With the automated tax lot accounting feature you get an instant snapshot of how
your investments stand.

VISUAL: BILL GLASZ BOXED FRAME LEFT. SUPER: NAME AND TITLE. FRAME RIGHT IS
THE GRAPHIC OF A PC UNIT. SUPER: TRADE BY PC.

For investors who don't have Windows software, we offer PC trading for users
of IBM-compatible or Macintosh computers.

VISUAL: FULL SCREEN SHOTS OF TRADES, QUOTES, POSITIONS AND BALANCES.

BILL GLASZ

Once you have logged on to the system you have immediate access to four
integrated applications: placing trades, retrieving quotes and checking
positions and balances.

VISUAL: BILL WOOD BOXED FRAME LEFT. SUPER: NAME AND TITLE. BOXED FRAME RIGHT
IS AN INTERNET GRAPHIC. SUPER: INTERNET TRADING.

For investors who trade via the Internet, we offer access to placing orders,
getting quotes and checking your portfolio positions and balances.

VISUAL: FULL SCREEN SHOTS OF POSITIONS, BALANCES TRANSACTION HISTORY, ORDER
STATUS, QUOTE ORDER AND CONFIRMATION.

BILL WOOD

For example, once you have booted up, say you wanted to buy 250 shares of
IBM at the market. First, you can check your market positions, then your account
balances. Now a transaction history and order status. Get a final quote on the
stock and place the order. Finally, here's the confirmation.

VISUAL: MIKE ANDERSON BOXED FRAME LEFT. SUPER: NAME AND TITLE. BOXED FRAME
RIGHT IS A GRAPHIC OF THE SHARP ZAURUS PERSONAL DIGITAL ASSISTANT. SUPER: TRADE
WITH THE SHARP ZAURUS.

You may also have access to trading capabilities from virtually anywhere
with the Sharp Zaurus Personal Digital Assistant.

VISUAL: FULL SCREEN SHOTS OF ORDER TICKET SCREEN AS TRANSACTION IS ENTERED.

A-2
<PAGE>
MIKE ANDERSON

With this handheld computer, our customers may buy and sell stocks, options
and mutual funds. Just enter the symbol of the security you wish to buy or sell.
Enter the type of security and the type of action you wish to take. Then enter
the number of shares, the expiration deadline and any special conditions.

VISUAL: FULL SCREEN SHOT OF THE QUOTE SCREEN. CUT TO: FULL SCREEN SHOT OF
THE ACCOUNT BALANCE.

With the Zaurus you can get access to quotes on securities, plus the
portfolio management feature lets you retrieve account information and gives you
a snapshot of your balances.

VISUAL: MIKE ANDERSON BOXED FRAME LEFT. SUPER: NAME AND TITLE FRAME RIGHT IS
A GRAPHIC OF THE MOTOROLA TWO-WAY PAGEWRITER. SUPER: TRADE BY MOTOROLA
PAGEWRITER.

The same trading features are also available for our customers with the
Motorola Pagewriter two-way pager. With the Pagewriter you will be able to check
your positions and balances, retrieve quotes, and execute trades.

VISUAL: TRADE BEING EXECUTED BY PAGER.

VISUAL: MARY FAY BOXED FRAME LEFT. BOXED FRAME RIGHT IS A REGISTERED
REPRESENTATIVE. SUPER: TRADE WITH A REGISTERED REPRESENTATIVE. INVESTOR BOXED
FRAME LEFT, AND REGISTERED REPRESENTATIVE FRAME RIGHT CONTINUE ACTION THROUGH
TRADE SEQUENCE.

Because some of our customers feel more comfortable placing their orders
with a broker, we have a staff of experienced registered representatives
available during business hours.

"My account number is 46739"

"Yes, Mr. Johnson, how can I help you?"

"I would like to buy 500 shares of Hewlett-Packard, HWP, at the market.

VISUAL: ACTION CONTINUES.

"Okay, Mr. Johnson, I have an order to buy 500 shares of HWP Hewlett-Packard
at the market, is this correct?"

"Yes."

"All right, Mr. Johnson, please give your phone number for a verbal
confirmation of this trade."

VISUAL: MIKE ANDERSON BOXED FRAME LEFT. BOXED FRAME RIGHT IS A GRAPHIC OF A
FAX MACHINE. SUPER: TRADE BY FAX.

For added convenience you may also place orders by fax.

VISUAL: BOXED FRAME OF INVESTOR FILLING OUT FAX FORM.

Just fill out the trading form that includes your name, account number,
security symbol, share quantity, trading action and terms.

VISUAL: BOXED FRAME OF FORM IN FAX MACHINE.

Then fax it in. You will receive an immediate confirmation by phone or fax.

VISUAL: BILL GLASZ BOXED FRAME LEFT. SUPER: NAME AND TITLE. FRAME RIGHT IS A
GRAPHIC FINANCIAL RESEARCH SOURCES.

We also offer investors access to several financial research sources.

VISUAL: FULL SCREEN SHOTS OF EACH RESEARCH SOURCE.

A-3
<PAGE>
BILL GLASZ

Included are: Market Guide, Thomson Financial Services, Ford Research Data,
Reality Online and Telescan. Just click on the desired vendor's screen to
receive the financial information you desire.

VISUAL: DICK SIRBU BOXED FRAME LEFT. FRAME RIGHT IS A GRAPHIC OF AMERITRADE
ONLINE LOGO.

AmeriTrade OnLine was developed to provide today's financial advisors with a
network of products, services and systems from vendors of financial information,
into one Internet-based system. Here's how it works.

VISUAL: FULL SCREEN SHOTS OF AMERITRADE ONLINE PRODUCTS AND SERVICES PAGE.

VISUAL: EDUCATION SEGMENT.

RICHARD SIRBU

The education segment provides basic study and testing modules for
compliance purposes.

VISUAL: FINANCIAL SEGMENT.

The financial segment provides comprehensive financial planning programs
including estate planning and portfolio management.

VISUAL: SALES SEGMENT, TAX SEGMENT.

Tax analysis allows professionals to determine the tax impact of financial
planning models.

VISUAL: COMPLIANCE SEGMENT.

The compliance segment provides a database of federal and state compliance
issues.

VISUAL: BROKERAGE SEGMENT.

The brokerage segment supplies computerized transaction processing, data
communications and information services.

VISUAL: RETIREMENT SEGMENT.

The retirement segment databases information to handle day-to-day activities
of plan accounts such as 401ks, 403bs, Seps and IRAs.

VISUAL: INSURANCE SEGMENT.

The insurance segment provides insurance product information and
terminology, as well as direct online access for licensed insurance agents and
insurance.

VISUAL: ANNUITIES SEGMENT.

The mutual segment links advisors to leading mutual funds to gather
information and place customer trades.

VISUAL: QUOTES SEGMENT.

The quotes segment provides quotes on equities, options, commodities,
foreign exchange and currency analysis.

VISUAL: RESEARCH SEGMENT.

Research provides investment research, monitors economic trends and issues
recommendations on a universe of products.

VISUAL: MORTGAGE SEGMENT.

A-4
<PAGE>
The mortgage segment delivers services for mortgage-shopping, including a
monthly payment calculator, an income qualification calculator, and current
rates and terms from local lenders.

VISUAL: NEWS SEGMENT.

The news segment offers worldwide press release wires, a full text of
articles from U.S. newspapers and custom clips that allow individuals to receive
news and information on the companies they choose.

VISUAL: BANKING SEGMENT.

The banking segment supplies detailed balance sheets, complete income
statements and professional investment information. Wrap accounts are mutual
fund portfolios that are developed and based on an individual investor's
requirements.

VISUAL: CHARTING SEGMENT.

The charting segment provides fully integrated equity screening and charting
programs that offer statistical and textual information on thousands of
securities.

VISUAL: JOE KONEN BOXED FRAME LEFT. AMERITRADE HOLDING CORPORATION FRAME
RIGHT.

JOE KONEN

I hope this brief demo has given you a better insight into the trading and
operating systems offered by AmeriTrade Holding Corporation for individual
investors and financial advisors. As was mentioned at the beginning of this demo
tour, you may now go back and review any or all of the applications you've just
seen. On behalf of all the associates of AmeriTrade Holding Corporation, thank
you for your time and attention. You may now go back and review any or all of
the applications you've just seen.

VISUAL: FOR MORE INFORMATION ABOUT THE PRODUCTS PRESENTED IN THIS PROSPECTUS
CALL INVESTOR RELATIONS AT: 1-800-237-8692 EXT. 7755.

A-5
<PAGE>
DEFINING THE FUTURE OF TRADING

AmeriTrade pioneered online trading when it became the first brokerage firm
to offer brokerage services over the Internet. The Company continues to
contribute to the rapidly evolving future of trading through its leadership
position in technological innovation.

[PICTURES]

[CD-ROM SLEEVE]
<PAGE>
- --------------------------------------------------------------------------------

No dealer, salesperson or other person has been authorized to give any
information or to make any representation not contained in this Prospectus and,
if given or made, such information or representation must not be relied upon as
having been authorized by the Company, any Selling Stockholder or any
Underwriter. This Prospectus does not constitute an offer to sell or a
solicitation of an offer to buy any of the securities offered hereby in any
jurisdiction to any person to whom it is unlawful to make such offer in such
jurisdiction. Neither the delivery of this Prospectus nor any sale made
hereunder shall, under any circumstances, create any implication that the
information herein is correct as of any time subsequent to the date hereof or
that there has been no change in the affairs of the Company since such date.

--------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
----
<S> <C>
Prospectus Summary........................................................ 3
Risk Factors.............................................................. 8
Use of Proceeds........................................................... 16
Dividend Policy........................................................... 16
Dilution.................................................................. 17
Capitalization............................................................ 18
Selected Consolidated Financial Data...................................... 19
Management's Discussion and Analysis of Financial Condition and Results of
Operations.............................................................. 20
Business.................................................................. 29
Management................................................................ 49
Certain Transactions...................................................... 56
Principal and Selling Stockholders........................................ 57
Description of Capital Stock.............................................. 58
Shares Eligible for Future Sale........................................... 61
Underwriting.............................................................. 62
Notice to Canadian Residents.............................................. 64
Validity of Class A Stock................................................. 65
Experts................................................................... 65
Additional Information.................................................... 65
Index to Consolidated Financial Statements................................ F-1
Appendix A................................................................ A-1
</TABLE>

Until , 1997 (25 days after the date of this Prospectus), all
dealers effecting transactions in the Class A Stock, whether or not
participating in this distribution, may be required to deliver a Prospectus.
This delivery requirement is in addition to the obligation of dealers to deliver
a Prospectus when acting as Underwriters and with respect to their unsold
allotments or subscriptions.

[LOGO]

2,350,000 Shares

Class A Common Stock
($.01 par value)

PROSPECTUS

Credit Suisse First Boston
Raymond James &
Associates, Inc.

- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

Set forth below is an estimate (except for the SEC and NASD fees) of the
fees and expenses (other than underwriting discounts and commissions) payable by
the Company in connection with the issuance and distribution of the Class A
Stock. The Selling Stockholders will not pay any portion of such fees and
expenses.

<TABLE>
<CAPTION>
EXPENSE
- ----------------------------------------------------------------------------------
<S> <C>
Securities and Exchange Commission registration fee............................... $ 15,152
NASD filing fee................................................................... 5,500
Blue Sky qualification fees and expenses (including attorneys' fees).............. 1,000
Printing and engraving costs...................................................... 400,000
Legal fees and expenses........................................................... 275,000
Accounting fees and expenses...................................................... 60,000
Nasdaq National Market listing fee................................................ 50,000
Transfer Agent and Registrar fees and expenses.................................... 5,000
Insurance for Directors and Officers.............................................. 75,000
Miscellaneous..................................................................... 33,348
----------

Total......................................................................... $ 920,000
----------
----------
</TABLE>

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Pursuant to the provisions of the DGCL, the Company has adopted provisions
in its Certificate of Incorporation and Bylaws, which (i) require the Company to
indemnify its directors and officers to the fullest extent permitted by law and
(ii) eliminate the personal liability of its directors to the Company or its
stockholders for monetary damages for breach of their duty of due care, except
(a) for any breach of the duty of loyalty; (b) for acts or omissions not in good
faith or which involve intentional misconduct or knowing violations of law; (c)
for liability under Section 174 of the DGCL (relating to certain unlawful
dividends, stock repurchases or stock redemptions); or (d) for any transaction
from which the director derived any improper personal benefit.

The Company also maintains insurance on its directors and officers, which
covers liabilities under the federal securities laws.

The Underwriting Agreement provides for indemnification by the Underwriters
of the directors, officers and controlling persons of the Company against
certain liabilities, including liabilities under the Securities Act.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.

None.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a) Exhibits: A list of exhibits filed herewith is contained in the Exhibit
Index, which is incorporated herein by reference.

(b) Financial Statement Schedules: None.

Schedules have been omitted because they are not applicable or the required
information is shown in the financial statements or notes thereto.

II-1
<PAGE>
ITEM 17. UNDERTAKINGS.

The undersigned registrant hereby undertakes to provide to the underwriters,
at the closing specified in the underwriting agreement, certificates in such
denominations and registered in such names as required by the underwriters to
permit prompt delivery to each purchaser.

Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described under Item 14 above, or
otherwise, the registrant has been advised that in the opinion of the SEC such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by a registrant of expenses
incurred or paid by a director, officer or controlling person of such registrant
in the successful defense of any action, suit or proceeding) is asserted against
the registrant by such director, officer or controlling person in connection
with the securities being registered, the registrant will, unless in the opinion
of its counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Securities Act and will be
governed by the final adjudication of such issue.

The undersigned registrant hereby undertakes that:

(1) For the purpose of determining any liability under the Securities Act,
the information omitted from the form of Prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form of
Prospectus filed by such registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this Registration
Statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities Act,
each post-effective amendment that contains a form of prospectus shall be deemed
to be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial BONA FIDE offering thereof.

II-2
<PAGE>
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the
registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Omaha,
State of Nebraska, on February 24, 1997.

AMERITRADE HOLDING CORPORATION

By: /s/ J. JOE RICKETTS
-----------------------------------------
J. Joe Ricketts
CHAIRMAN AND CHIEF EXECUTIVE OFFICER

Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed by the following persons in the
capacities indicated on February 24, 1997.

/s/ J. JOE RICKETTS
- ------------------------------
J. Joe Ricketts
DIRECTOR, CHAIRMAN AND CHIEF
EXECUTIVE OFFICER
(PRINCIPAL EXECUTIVE OFFICER)

/s/ ROBERT T. SLEZAK
- ------------------------------
Robert T. Slezak
DIRECTOR, CHIEF FINANCIAL
OFFICER,
VICE PRESIDENT AND TREASURER
(PRINCIPAL FINANCIAL AND
ACCOUNTING OFFICER)

/s/ JOSEPH A. KONEN*
- ------------------------------
Joseph A. Konen
DIRECTOR, PRESIDENT AND
CHIEF OPERATING OFFICER

/s/ GENE L. FINN*
- ------------------------------
Gene L. Finn
DIRECTOR
/s/ THOMAS Y. HARTLEY*
- ------------------------------
Thomas Y. Hartley
DIRECTOR

/s/ MARK L. MITCHELL*
- ------------------------------
Mark L. Mitchell
DIRECTOR

/s/ CHARLES L. MARINACCIO*
- ------------------------------
Charles L. Marinaccio
DIRECTOR

/s/ JOHN W. WARD*
- ------------------------------
John W. Ward
DIRECTOR

*By: /s/ ROBERT T. SLEZAK
-------------------------
Robert T. Slezak
ATTORNEY-IN-FACT

<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

------------------------

EXHIBITS
AMENDMENT NO. 3

TO
FORM S-1

REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

------------------------

AMERITRADE HOLDING CORPORATION

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT
NUMBER
- ----------
<C> <S> <C>
1.1 Form of Underwriting Agreement.......................................................

*3.1 Certificate of Incorporation.........................................................

*3.2 Bylaws...............................................................................

*4.1 Form of Certificate for Class A Stock................................................

5.1 Opinion of Mayer, Brown & Platt......................................................

*10.1 Agreement of Limited Partnership, dated as of February 4, 1993, of Comprehensive
Software Systems Ltd...............................................................

*10.2 Amended and Restated Limited Liability Company Agreement, dated as of March 6, 1995,
of Roundtable Partners.............................................................

*10.3 Purchase Agreement, dated as of June 28, 1995, between Telescan, Inc. and TransTerra
Co.................................................................................

*10.4 Securities Purchase Agreement, dated as of July 10, 1995, between TransTerra Co. and
Keith Aufhauser....................................................................

*10.5 Stock Purchase Agreement, dated as of October 3, 1995, among and between TransTerra
Co., All American Brokers, Inc. and Shareholders of All American Brokers...........

*10.6 Note, dated as of June 7, 1994, made by John Joe Ricketts in favor of TransTerra
Co.................................................................................

*10.7 Note, dated as of September 5, 1995, made by John Joe Ricketts in favor of TransTerra
Co.................................................................................

*10.8 Loan Agreement, dated as of December 22, 1994, by and among First National Bank of
Omaha, TransTerra Co., AmeriTrade, Inc., and John Joe Ricketts.....................

*10.9 Note, dated as of December 22, 1994, made by TransTerra Co. in favor of First
National Bank of Omaha.............................................................

*10.10 Note, dated as of January 31, 1995, made by TransTerra Co. in favor of First National
Bank of Omaha......................................................................

*10.11 Security Agreement, dated as of April 24, 1992, made by TransTerra Co. in favor of
First National Bank of Omaha.......................................................

*10.12 Assignment of Life Insurance Policy, dated as of June 28, 1995, made by TransTerra
Co. in favor of First National Bank of Omaha.......................................

*10.13 Amendment to Loan Agreement, dated as of July 7, 1995, by and among First National
Bank of Omaha, TransTerra Co., AmeriTrade, Inc., and John Joe Ricketts.............

*10.14 Note, dated as of July 7, 1995, made by TransTerra Co. in favor of First National
Bank of Omaha......................................................................

*10.15 Second Amendment to Loan Agreement, dated as of September 14, 1995, by and among
First National Bank of Omaha, TransTerra Co., AmeriTrade, Inc., and John Joe
Ricketts...........................................................................

*10.16 Third Amendment to Loan Agreement, dated as of January 31, 1996, by and among First
National Bank of Omaha, TransTerra Co., AmeriTrade, Inc., and John Joe Ricketts....
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
EXHIBIT
NUMBER
- ----------
<C> <S> <C>
*10.17 Note, dated as of January 31, 1996, made by TransTerra Co. in favor of First National
Bank of Omaha......................................................................

*10.18 Broker Loan Pledge and Security Agreement, dated as of October 24, 1989, made by
AmeriTrade, Inc. in favor of the First National Bank of Chicago....................

*10.19 Master Broker Loan Note, dated as of October 24, 1989, made by AmeriTrade, Inc. in
favor of the First National Bank of Chicago........................................

*10.20 Lease, dated as of July 14, 1993, between John Joe and Marlene M. Ricketts and
TransTerra Co......................................................................

*10.21 Amendment to Lease, dated as of September 27, 1996, between John Joe and Marlene M.
Ricketts and TransTerra Co.........................................................

*10.22 Lease, dated as of October 5, 1995, between A.C. Nielsen Company and TransTerra
Co.................................................................................

*10.23 Amendment to Lease, dated as of August 23, 1996, between A.C. Nielsen Company and
TransTerra Co......................................................................

*10.24 Lease, dated as of March 10, 1996, between New York Executive Office Network and K.
Aufhauser & Company, Inc...........................................................

*10.25 Lease, dated as of June 20, 1996, between Christ Community Church and TransTerra
Co.................................................................................

*10.26 Employment Contract, dated as of December 3, 1996, between J. Joe Ricketts and
Ameritrade Holding Corporation.....................................................

*10.27 Employment Contract, dated as of December 3, 1996, between Joseph A. Konen and
Ameritrade Holding Corporation.....................................................

*10.28 Employment Contract, dated as of December 3, 1996, between Robert T. Slezak and
Ameritrade Holding Corporation.....................................................

*10.29 Form of Executive Bonus Plan.........................................................

*10.30 1996 Long-Term Incentive Plan........................................................

*10.31 1996 Directors Incentive Plan........................................................

*10.32 Note, dated as of September 14, 1995, made by TransTerra Co. in favor of First
National Bank of Omaha.............................................................

+10.33 Amendment to Agreement of Limited Partnership, dated as of September 1993, of
Comprehensive Software Systems Ltd.................................................

+10.34 Second Amendment to Agreement of Limited Partnership, dated as of December 1994, of
Comprehensive Software Systems Ltd.................................................

+10.35 Third Amendment to Agreement of Limited Partnership, dated as of December 31, 1995,
of Comprehensive Software Systems Ltd..............................................

*10.36 Fourth Amendment to Loan Agreement, dated as of January 31, 1997, by and among First
National Bank of Omaha, TransTerra Co., and AmeriTrade, Inc........................

*10.37 Note, dated as of January 31, 1997, made by AmeriTrade Holding Corporation in favor
of First National Bank of Omaha....................................................

*10.38 Security Agreement, dated as of January 31, 1997, made by AmeriTrade Holding
Corporation in favor of First National Bank of Omaha...............................

*21.1 Subsidiaries of the Registrant.......................................................

23.1 Consent of Deloitte & Touche LLP.....................................................
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
EXHIBIT
NUMBER
- ----------
<C> <S> <C>
23.2 Consent of Mayer, Brown & Platt (included in Exhibit 5.1)............................

*24.1 Powers of Attorney (appear on the signature page of this Registration Statement).....

27 Financial Data Schedule..............................................................
</TABLE>

- ------------------------

* Previously filed.

+ Confidential treatment for certain information contained in this Exhibit has
been granted pursuant to Rule 406 promulgated under the Securities Act.

<PAGE>

2,350,000 SHARES

AMERITRADE HOLDING CORPORATION

CLASS A COMMON STOCK

UNDERWRITING AGREEMENT

______________, 1997

CREDIT SUISSE FIRST BOSTON CORPORATION
RAYMOND JAMES & ASSOCIATES, INC.
As Representatives of the Several Underwriters,
c/o Credit Suisse First Boston Corporation,
Eleven Madison Avenue
New York, N.Y. 10010

Dear Sirs:

1. INTRODUCTORY. AmeriTrade Holding Corporation, a Delaware
corporation ("COMPANY"), proposes to issue and sell shares of its Class A
Common Stock, par value $.01 per share ("SECURITIES"), and the stockholders
listed in Schedule A hereto ("SELLING STOCKHOLDERS") propose severally to
sell an aggregate of 2,350,000 outstanding shares of the Securities (such
2,350,000 shares of Securities being hereinafter referred to as the "FIRM
SECURITIES"). J. Joe Rickets and Marlene M. Ricketts (collectively, the
"Controlling Selling Stockholders") also propose to issue and sell to the
Underwriters, at the option of the Underwriters, an aggregate of not more
than 352,500 additional shares of Securities as set forth below (such 352,500
additional shares being hereinafter referred to as the "OPTIONAL
SECURITIES"). The Firm Securities and the Optional Securities are herein
collectively called the "OFFERED SECURITIES". The Company and the Selling
Stockholders hereby agree with the several Underwriters named in Schedule B
hereto ("UNDERWRITERS") as follows:

- -----------------------
* Plus an option to acquire from the Company up to 352,500
additional shares to cover over-allotments.

<PAGE>

2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND CONTROLLING
SELLING STOCKHOLDERS. (a) The Company and the Controlling Selling
Stockholders represent and warrant to, and agrees with, the several
Underwriters that:

(i) A registration statement (No. 333-17495) relating to the Offered
Securities, including a form of prospectus, has been filed with the
Securities and Exchange Commission ("COMMISSION") and either (A) has been
declared effective under the Securities Act of 1933, as amended ("ACT"),
and is not proposed to be amended or (B) is proposed to be amended by
amendment or post-effective amendment. If such registration statement (the
"INITIAL REGISTRATION STATEMENT") has been declared effective, either (A)
an additional registration statement (the "ADDITIONAL REGISTRATION
STATEMENT") relating to the Offered Securities may have been filed with the
Commission pursuant to Rule 462(b) ("RULE 462(b)") under the Act and, if so
filed, has become effective upon filing pursuant to such Rule and the
Offered Securities shall have been duly registered under the Act pursuant
to the initial registration statement and, if applicable, the additional
registration statement or (B) such an additional registration statement is
proposed to be filed with the Commission pursuant to Rule 462(b) and will
become effective upon filing pursuant to such Rule and upon such filing the
Offered Securities will all have been duly registered under the Act
pursuant to the initial registration statement and such additional
registration statement. If the Company does not propose to amend the
initial registration statement or if an additional registration statement
has been filed and the Company does not propose to amend it, and if any
post-effective amendment to either such registration statement has been
filed with the Commission prior to the execution and delivery of this
Agreement, the most recent amendment (if any) to each such registration
statement has been declared effective by the Commission or has become
effective upon filing pursuant to Rule 462(c) ("RULE 462(c)") under the Act
or, in the case of the additional registration statement, Rule 462(b). For
purposes of this Agreement, "EFFECTIVE TIME" with respect to the initial
registration statement or, if filed prior to the execution and delivery of
this Agreement, the additional registration statement (A) if the Company
has advised the Representatives that it does not propose to amend such
registration statement, the date and time as of which such registration
statement, or the most recent post-effective amendment thereto (if any)
filed prior to the execution and delivery of this Agreement, was declared
effective by the Commission or has become effective upon filing pursuant to
Rule 462(c), or (B) if the Company has advised the Representatives that it
proposes to file an amendment or post-effective amendment to such
registration statement, the date and time as of which such registration
statement, as amended by such amendment or post-effective amendment, as the
case may be, is declared effective by the Commission. If an additional
registration statement has not been filed prior to the execution and
delivery of this Agreement but the Company has advised the Representatives
that it proposes to file one, "EFFECTIVE TIME" with respect

- 2 -

<PAGE>

to such additional registration statement means the date and time as of
which such registration statement is filed and becomes effective pursuant
to Rule 462(b). "EFFECTIVE DATE" with respect to the initial
registration statement or the additional registration statement (if any)
means the date of the Effective Time thereof. The initial registration
statement, as amended at its Effective Time, including all information
contained in the additional registration statement (if any) and deemed to
be a part of the initial registration statement as of the Effective Time
of the additional registration statement pursuant to the General
Instructions of the Form on which it is filed and including all
information (if any) deemed to be a part of the initial registration
statement as of its Effective Time pursuant to Rule 430A(b) ("RULE
430A(b)") under the Act, is hereinafter referred to is the "INITIAL
REGISTRATION STATEMENT". The additional registration statement, as
amended at its Effective Time, including the contents of the initial
registration statement incorporated by reference therein and including
all information (if any) deemed to be a part of the additional
registration statement as of its Effective Time pursuant to Rule 430A(b),
is hereinafter referred to as the "ADDITIONAL REGISTRATION STATEMENT".
The Initial Registration Statement and the Additional Registration
Statement are hereinafter referred to collectively as the "REGISTRATION
STATEMENTS" and individually as a "REGISTRATION STATEMENT". The form of
prospectus relating to the Offered Securities, as first filed with the
Commission pursuant to and in accordance with Rule 424(b) ("RULE 424(b)")
under the Act or (if no such filing is required) as included in a
Registration Statement, is hereinafter referred to as the "PROSPECTUS".
No document has been or will be prepared or distributed in reliance on
Rule 434 under the Act. The Commission has not issued any order
preventing or suspending the use of any preliminary prospectus, and each
preliminary prospectus has conformed in all material respects with the
requirements of the Act and the Rules and Regulations (as hereinafter
defined) and, as of its date, has not included any untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading.

(ii) If the Effective Time of the Initial Registration Statement is
prior to the execution and delivery of this Agreement: (A) on the Effective
Date of the Initial Registration Statement, the Initial Registration
Statement conformed in all material respects to the requirements of the Act
and the rules and regulations of the Commission ("RULES AND REGULATIONS")
and did not include any untrue statement of material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading, (B) on the Effective Date of the
Additional Registration Statement (if any), each Registration Statement
conformed or will conform in all material respects to the requirements of
the Act and the Rules and Regulations and did not include, or will not
include, any untrue statement of a material fact and did not omit, or will
not omit, to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, and (C) on the
date of this

- 3 -

<PAGE>

Agreement, the Initial Registration Statement and, if the Effective Time
of the Additional Registration Statement (if any) is prior to the
execution and delivery of this Agreement, the Additional Registration
Statement each conforms, and at the time of filing of the Prospectus
pursuant to Rule 424(b) or (if no such filing is required) at the
Effective Date of the Initial Registration Statement or the Additional
Registration Statement in which the Prospectus is included, each
Registration Statement and the Prospectus will conform, in all material
respects to the requirements of the Act and the Rules and Regulations,
and neither of such documents includes, or will include, any untrue
statement of a material fact or omits, or will omit, to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading. If the Effective Time of the Initial
Registration Statement is subsequent to the execution and delivery of
this Agreement, on the Effective Date of the Initial Registration
Statement the Initial Registration Statement and the Prospectus will
conform in all material respects to the requirements of the Act and the
Rules and Regulations, neither of such documents will include any untrue
statement of a material fact or will omit to state any material fact
required to be stated therein or necessary to make the statements therein
not misleading, and no Additional Registration Statement has been or will
be filed. The two preceding sentences do not apply to statements in or
omissions from a Registration Statement or the Prospectus based upon
written information furnished to the Company by any Underwriter through
the Representatives specifically for use therein, it being understood and
agreed that the only such information is that described as such in
Section 7(iii).

(iii) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Delaware, with
power and authority (corporate and other) to own its properties and conduct
its business as described in the Prospectus; and the Company is duly
qualified to do business as a foreign corporation in good standing in all
other jurisdictions in which its ownership or lease of property or the
conduct of its business requires such qualification, except where the
failure to be so qualified or to be in good standing would not have a
material adverse effect on the condition (financial or other), business or
results of operations of the Company and its subsidiaries taken as a whole,
and no proceeding of which the Company has knowledge has been instituted in
any such jurisdiction, revoking, limiting or curtailing, or seeking to
revoke, limit or curtail, such power and authority or qualification.

(iv) Each subsidiary of the Company has been duly incorporated and is
an existing corporation in good standing under the laws of the jurisdiction
of its incorporation, with power and authority (corporate and other) to own
its properties and conduct its business as described in the Prospectus; and
each subsidiary of the Company is duly qualified to do business as a
foreign corporation in good standing in all other jurisdictions in which
its ownership or lease of property or the conduct of its

- 4 -

<PAGE>

business requires such qualification, except where the failure to be so
qualified or to be in good standing would not have a material adverse
effect on the condition (financial or other), business or results of
operations of the Company and its subsidiaries taken as a whole, and no
proceeding of which the Company has knowledge has been instituted in any
such jurisdiction, revoking, limiting or curtailing, or seeking to
revoke, limit or curtail, such power and authority or qualification; all
of the issued and outstanding capital stock of each subsidiary of the
Company has been duly authorized and validly issued and is fully paid and
nonassessable; and the Company owns directly or indirectly 100% of the
issued and outstanding capital stock of each subsidiary free from liens,
encumbrances and defects.

(v) The Offered Securities and all other outstanding shares of
capital stock of the Company have been duly authorized; all outstanding
shares of capital stock of the Company are, and, when the Offered
Securities have been delivered and paid for in accordance with this
Agreement on each Closing Date (as defined below), such Offered Securities
will have been, validly issued, fully paid and nonassessable and will
conform to the description thereof contained in the Prospectus; and the
stockholders of the Company have no preemptive rights with respect to the
Securities.

(vi) Except as disclosed in the Prospectus, there are no contracts,
agreements or understandings between the Company and any person that would
give rise to a valid claim against the Company or any Underwriter for a
brokerage commission, finder's fee or other like payment.

(vii) There are no contracts, agreements or understandings between the
Company and any person granting such person the right to require the
Company to file a registration statement under the Act with respect to any
securities of the Company owned or to be owned by such person or to require
the Company to include such securities in the securities registered
pursuant to a Registration Statement or in any securities being registered
pursuant to any other registration statement filed by the Company under the
Act.

(viii) The Company has filed a registration statement pursuant to
Section 12(g) of Securities Exchange Act of 1934, as amended (the "EXCHANGE
ACT") to register the Class A Common Stock of the Company thereunder. The
Offered Securities have been approved for listing on The Nasdaq Stock
Market's National Market, subject to notice of issuance, under the symbol
"AMTD".

(ix) No consent, approval, authorization, or order of, or filing with,
any governmental agency or body or any court is required as of the
applicable Closing Date (as hereinafter defined) for the consummation of
the transactions contemplated by this

- 5 -

<PAGE>

Agreement in connection with the issuance and sale of the Offered
Securities by the Company, except such as have been obtained and made
under the Act and under applicable state securities laws.

(x) The execution, delivery and performance of this Agreement, and the
issuance and sale of the Offered Securities will not result in a breach or
violation of any of the terms and provisions of, or constitute a default
under, any statute, any rule, regulation or order of any governmental
agency or body or any court, domestic or foreign, having jurisdiction over
the Company or any subsidiary of the Company or any of their properties, or
any agreement or instrument to which the Company or any such subsidiary is
a party or by which the Company or any such subsidiary is bound or to which
any of the properties of the Company or any such subsidiary is subject, or
the charter or by-laws of the Company or any such subsidiary, and the
Company has full power and authority to authorize, issue and sell the
Offered Securities to be delivered by the Company as contemplated by this
Agreement.

(xi) This Agreement has been duly authorized, executed and
delivered by the Company.

(xii) Except as disclosed in the Prospectus, the Company and its
subsidiaries have good and marketable title to all real properties and all
other properties and assets owned by them, in each case free from liens,
encumbrances and defects that would materially affect the value thereof or
materially interfere with the use made or to be made thereof by them; and
except as disclosed in the Prospectus, the Company and its subsidiaries
hold any leased real or personal property under valid and enforceable
leases with no exceptions that would materially interfere with the use made
or to be made thereof by them.

(xiii) The Company and its subsidiaries possess certificates,
authorities or permits issued by appropriate governmental agencies or
bodies necessary to conduct the business now operated by them and have not
received any notice of proceedings relating to the revocation or
modification of any such certificate, authority or permit that, if
determined adversely to the Company or any of its subsidiaries, would
individually or in the aggregate have a material adverse effect on the
condition (financial or other), business or results of operations of the
Company and its subsidiaries taken as a whole.

(xiv) No labor dispute with the employees of the Company or any
subsidiary exists or, to the knowledge of the Company, is imminent that
might have a material adverse effect on the condition (financial or other),
business or results of operations of the Company and its subsidiaries taken
as a whole.

- 6 -

<PAGE>

(xv) The Company and its subsidiaries own and possess all right title
and interest in and to, or have duly licensed or otherwise lawfully
acquired from third parties, all trademarks, trade names and other rights
to inventions, know-how, patents, copyrights, confidential information and
other intellectual property (collectively, "INTELLECTUAL PROPERTY RIGHTS")
necessary to conduct the business now operated by them, or presently
employed by them, and have not received any notice of infringement of or
conflict with asserted rights of others with respect to any intellectual
property rights that, if determined adversely to the Company or any of its
subsidiaries, would individually or in the aggregate have a material
adverse effect on the condition (financial or other), business or results
of operations of the Company and its subsidiaries taken as a whole.

(xvi) Except as disclosed in the Prospectus, neither the Company
nor any of its subsidiaries is in violation of any statute, any rule,
regulation, decision or order of any governmental agency or body or any
court, domestic or foreign, relating to the use, disposal or release of
hazardous or toxic substances or relating to the protection or restoration
of the environment or human exposure to hazardous or toxic substances
(collectively, "ENVIRONMENTAL LAWS"), owns or operates any real property
contaminated with any substance that is subject to any environmental laws,
is liable for any off-site disposal or contamination pursuant to any
environmental laws, or is subject to any claim relating to any
environmental laws, which violation, contamination, liability or claim
would individually or in the aggregate have a material adverse effect on
the condition (financial or other), business or results of operations of
the Company and its subsidiaries taken as a whole; and the Company is not
aware of any pending investigation which might lead to such a claim.

(xvii) Except as disclosed in the Prospectus, there are no
pending actions, suits or proceedings against or affecting the
Company, any of its subsidiaries or any of their respective properties
that, if determined adversely to the Company or any of its
subsidiaries, would individually or in the aggregate have a material
adverse effect on the condition (financial or other), business or
results of operations of the of the Company and its subsidiaries taken
as a whole, or would materially and adversely affect the ability of
the Company to perform its obligations under this Agreement, or which
are otherwise material in the context of the sale of the Offered
Securities; and no such actions, suits or proceedings are threatened
or, to the Company's knowledge, contemplated.

(xviii) The accountants who have expressed their opinions with
respect to certain of the financial statements and schedules included
in the Registration Statement are independent accountants as required
by the Act.

- 7 -

<PAGE>

(xix) The financial statements included in each Registration Statement
and the Prospectus present fairly in all material respects the financial
position of the Company and its consolidated subsidiaries as of the dates
shown and their results of operations and cash flows for the periods shown,
and such financial statements have been prepared in conformity with the
generally accepted accounting principles in the United States applied on a
consistent basis; and the schedules (if any) included in each Registration
Statement present fairly the information required to be stated therein; the
financial information set forth in the Prospectus under "SUMMARY
CONSOLIDATED FINANCIAL AND OPERATING DATA" and "SELECTED CONSOLIDATED
FINANCIAL AND OPERATING DATA" presents fairly in all material respects, on
the basis stated in each Registration Statement and the Prospectus, the
information set forth therein.

(xx) Except as disclosed in the Prospectus, since the date of the
latest audited financial statements included in the Prospectus there has
been no material adverse change, nor any development or event involving a
prospective material adverse change, in the condition (financial or other),
business or results of operations of the Company and its subsidiaries taken
as a whole, and, except as disclosed in or contemplated by the Prospectus,
there has been no dividend or distribution of any kind declared, paid or
made by the Company on any class of its capital stock.

(xxi) The Company is not and, after giving effect to the offering and
sale of the Offered Securities and the application of the proceeds thereof
as described in the Prospectus, will not be an "INVESTMENT COMPANY" as
defined in the Investment Company Act of 1940.

(xxii) Neither the Company nor any subsidiary is in violation of
its charter or in default under any consent decree, or in default with
respect to any material provision of any lease, loan agreement,
franchise, license, permit or other contract obligation to which it is
a party; and, to the Company's knowledge, there does not exist any
state of facts which constitutes an event of default as defined in
such documents or which, with notice or lapse of time or both, would
constitute such an event of default, in each case, except for defaults
which neither singly nor in the aggregate are material to the Company
and its subsidiaries taken as a whole.

(xxiii) The Company has not taken and will not take, directly or
indirectly, any action designed to or which has constituted or which
might reasonably be expected to cause or result, under the Exchange
Act or otherwise, in stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the
Offered Securities.

- 8 -

<PAGE>

(xxiv) The conduct of the business of the Company and each of its
subsidiaries is in compliance in all respects with applicable federal,
state, local and foreign laws and regulations, except where the
failure to be in compliance would not have a material adverse effect
upon the condition (financial or otherwise), business or results of
operations of the Company and its subsidiaries taken as a whole.

(xxv) All offers and sales of the Company's capital stock prior
to the date hereof were at all relevant times exempt from the
registration requirements of the Act and were duly registered with or
the subject of an available exemption from the registration
requirements of the applicable state securities or blue sky laws.

(xxvi)The Company and each of its subsidiaries maintains
reasonably adequate insurance.

(xxvii)There are no outstanding subscriptions, rights, warrants,
options, calls, convertible securities, commitments of sale or liens
related to or entitling any person to purchase or otherwise to acquire
any shares of the capital stock of, or other ownership interest in,
the Company or any subsidiary thereof except as otherwise disclosed in
the Prospectus.

(xxviii) Except as disclosed in the Prospectus, there are no
business relationships or related party transactions required to be
disclosed therein by Item 404 of Regulation S-K of the Commission.

(xxix) The Company has filed all necessary federal and state
income and franchise tax returns and has paid all taxes shown as due
thereon, and there is no tax deficiency that has been, or to the
knowledge of the Company might be, asserted against the Company or any
of its properties or assets that would or could be expected to have a
material adverse affect upon the condition (financial or otherwise),
business or results of operations of the Company and its subsidiaries
taken as a whole, other than any such taxes as are being contested in
good faith and properly reserved for in accordance with generally
accepted accounting principles.

(b) Each Selling Stockholder represents and warrants to, and agrees with,
the Underwriters that:

(i) Such Selling Stockholder has and on each Closing Date hereinafter
mentioned will have valid and unencumbered title to the Offered Securities
to be

- 9 -

<PAGE>

delivered by such Selling Stockholder on such Closing Date and has and on
each Closing Date will have full right, power and authority to enter into
this Agreement and to sell, assign, transfer and deliver the Offered
Securities to be delivered by such Selling Stockholder on such Closing
Date hereunder; and upon the delivery of and payment for the Offered
Securities on each Closing Date hereunder the several Underwriters will
acquire valid and unencumbered title to the Offered Securities to be
delivered by such Selling Stockholder on such Closing Date.

(ii) This Agreement, the Custody Agreement (the "CUSTODY AGREEMENT")
and the Power of Attorney (the "POWER OF ATTORNEY") executed and delivered
by such Selling Stockholder have been duly authorized, executed and
delivered by such Selling Stockholder.

(iii) No consent, approval, authorization, or order of, or filing with,
any governmental agency or body or any court is required for the
consummation by such Selling Stockholder of the transactions contemplated
by this Agreement, the Custody Agreement and the Power of Attorney in
connection with the issuance and sale of the Offered Securities by such
Selling Stockholder, except such as have been obtained and made under the
Act and such as may be required under state securities laws.

(iv) The execution, delivery and performance of this Agreement, the
Custody Agreement and the Power of Attorney executed and delivered by such
Selling Stockholder and the issuance and sale of the Offered Securities
will not result in a breach or violation of any of the terms and provisions
of, or constitute a default under, any statute, any rule, regulation or
order of any governmental agency or body or any court, domestic or foreign,
having jurisdiction over such Selling Stockholder or any of such Selling
Stockholder's properties, or any agreement or instrument to which such
Selling Stockholder is a party or by which such Selling Stockholder is
bound or to which any of the properties of such Selling Stockholder is
subject, or the charter, by-laws or other organizational documents of any
Selling Stockholder which is not a natural person, and such Selling
Stockholder has full power and authority to authorize and sell the Offered
Securities as contemplated by this Agreement.

(v) If the Effective Time of the Initial Registration Statement is
prior to the execution and delivery of this Agreement: (A) on the
Effective Date of the Initial Registration Statement, the Initial
Registration Statement conformed in all material respects to the
requirements of the Act and the Rules and Regulations and did not include
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein
not misleading, (B) on the Effective Date of the Additional Registration
Statement (if any), each Registration Statement conformed, or will conform,
in all material respects to the

- 10 -

<PAGE>

requirements of the Act and the Rules and Regulations and did not
include, or will not include, any untrue statement of a material fact and
did not omit, or will not omit, to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading, and (C) on the date of this Agreement, the Initial
Registration Statement and, if the Effective Time of the Additional
Registration Statement (if any) is prior to the execution and delivery of
this Agreement, the Additional Registration Statement each conforms, and
at the time of filing of the Prospectus pursuant to Rule 424(b) or (if no
such filing is required) at the Effective Date of the Initial
Registration Statement or the Additional Registration Statement in which
the Prospectus is included, each Registration Statement and the
Prospectus will conform, in all material respects to the requirements of
the Act and the Rules and Regulations, and neither of such documents
includes, or will include, any untrue statement of a material fact or
omits, or will omit, to state any material fact required to be stated
therein or necessary to make the statements therein not misleading. If
the Effective Time of the Initial Registration Statement is subsequent to
the execution and delivery of this Agreement, on the Effective Date of
the Initial Registration Statement, the Initial Registration Statement
and the Prospectus will conform in all material respects to the
requirements of the Act and the Rules and Regulations, neither of such
documents will include any untrue statement of a material fact or will
omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading. With respect to
the Selling Stockholders (other than the Controlling Selling
Stockholders), the two preceding sentences only apply to statements in or
omissions from a Registration Statement or the Prospectus based upon
written information furnished to the Company by such Selling Stockholder.

3. PURCHASE, SALE AND DELIVERY OF OFFERED SECURITIES. On the basis of
the representations, warranties and agreements herein contained, but subject
to the terms and conditions herein set forth, the Company and each Selling
Stockholder agree, severally and not jointly, to sell to each Underwriter,
and each Underwriter agrees, severally and not jointly, to purchase from the
Company and each Selling Stockholder, at a purchase price of $ _________ per
share, that number of Firm Securities (rounded up or down, as determined by
Credit Suisse First Boston Corporation ("CSFB") in its discretion, in order
to avoid fractions) obtained by multiplying _______________ Firm Securities
in the case of the Company and the number of Firm Securities set forth
opposite the name of such Selling Stockholder in Schedule A hereto, in the
case of a Selling Stockholder, in each case by a fraction the numerator of
which is the number of Firm Securities set forth opposite the name of such
Underwriter in Schedule B hereto and the denominator of which is the total
number of Firm Securities.

Certificates in negotiable form for the Offered Securities to be sold by
the Selling Stockholders hereunder have been placed in custody, for delivery
under this Agreement, under Custody Agreements made with The Bank of New
York, as custodian ("CUSTODIAN"). Each

- 11 -

<PAGE>

Selling Stockholder agrees that the shares represented by the certificates
held in custody for the Selling Stockholders under such Custody Agreements
are subject to the interests of the Underwriters hereunder, that the
arrangements made by the Selling Stockholders for such custody are to that
extent irrevocable, and that the obligations of the Selling Stockholders
hereunder shall not be terminated by operation of law, whether by the death
of any individual Selling Stockholder or the occurrence of any other event,
or in the case of a trust, by the death of any trustee or trustees or the
termination of such trust. If any individual Selling Stockholder or any such
trustee or trustees should die, or if any other such event should occur, or
if any of such trusts should terminate, before the delivery of the Offered
Securities hereunder, certificates for such Offered Securities shall be
delivered by the Custodian in accordance with the terms and conditions of
this Agreement as if such death or other event or termination had not
occurred, regardless of whether or not the Custodian shall have received
notice of such death or other event or termination.

The Company and the Custodian will deliver the Firm Securities to the
Representatives for the accounts of the Underwriters at the office of Mayer,
Brown & Platt, against payment of the purchase price in funds available on
the same day by wire transfer to the account of the Company and the Custodian
at a bank designated by the Company and the Custodian, respectively, and in
each case reasonably acceptable to CSFB or by certified or cashier's bank
check (in Federal Reserve funds) drawn to the order of the Company and the
Custodian, as applicable, at the office of Mayer, Brown & Platt at 10:00 a.m.
New York time, on the fourth business day, if permitted under Rule 15c6-1
under the Exchange Act (or the third business day if required under Rule
15c6-1 under the Exchange Act or unless postponed in accordance with the
provisions of Section 9 hereof) following the date the Registration Statement
is declared effective by the Commission (or, if the Company has elected to
rely on Rule 430A, the fourth business day, if permitted under Rule 15c6-1
under the Exchange Act (or the third business day if required under Rule
15c6-1 under the Exchange Act) after execution of this Agreement) or at such
other time not later than seven full business days thereafter as CSFB and the
Company determine, such time being herein referred to as the "FIRST CLOSING
DATE". The certificates for the Firm Securities so to be delivered will be
in definitive form, in such denominations and registered in such names as
CSFB requests and will be made available for checking and packaging at the
office of CSFB at least 24 hours prior to the First Closing Date; provided
that CSFB shall use its reasonable best efforts to provide such denominations
and names at least 48 hours prior to the First Closing Date.

In addition, upon written notice from CSFB given to the Company and the
attorneys-in-fact set forth in the Power of Attorney of the Selling
Stockholders (the "Attorneys-in-Fact") from time to time not more than 30
days subsequent to the date of the Prospectus, the Underwriters may purchase
all or less than all of the Optional Securities at the purchase price per
Security to be paid for the Firm Securities. The Controlling Selling
Stockholders agree to sell to the Underwriters the number of Optional
Securities specified in such notice and the

- 12 -

<PAGE>

Underwriters agree, severally and not jointly, to purchase such Optional
Securities. Such Optional Securities shall be purchased from the Controlling
Selling Stockholders for the account of each Underwriter in the same
proportion as the number of Firm Securities set forth opposite such
Underwriter's name bears to the total number of Firm Securities (subject to
adjustment by CSFB to eliminate fractions) and may be purchased by the
Underwriters only for the purpose of covering over-allotments made in
connection with the sale of the Firm Securities. No Optional Securities
shall be sold or delivered unless the Firm Securities previously have been,
or simultaneously are, sold and delivered. The right to purchase the
Optional Securities or any portion thereof may be exercised from time to time
and to the extent not previously exercised may be surrendered and terminated
at any time upon notice by CSFB to the Attorneys-in-Fact.

Each time for the delivery of and payment for the Optional Securities,
being herein referred to as an "OPTIONAL CLOSING DATE", which may be the
First Closing Date (the First Closing Date and each Optional Closing Date, if
any, being sometimes referred to as a "CLOSING DATE"), shall be determined by
CSFB but shall be not later than five full business days after written notice
of election to purchase Optional Securities is given. The manner of payment
for and delivery of the Optional Securities shall be the same as the Firm
Securities as specified above. The certificates for the Optional Securities
being purchased on each Optional Closing Date will be in definitive form, in
such denominations and registered in such names as CSFB requests upon
reasonable notice prior to such Optional Closing Date and will be made
available for checking and packaging at the above office of CSFB at least 24
hours in advance of such Optional Closing Date; provided that CSFB shall use
its reasonable best efforts to provide such denominations and names at least
48 hours prior to the Optional Closing Date.

4. OFFERING BY UNDERWRITERS. It is understood that the several
Underwriters propose to offer the Offered Securities for sale to the public
as set forth in the Prospectus.

5. CERTAIN AGREEMENTS OF THE COMPANY AND THE SELLING STOCKHOLDERS. The
Company and the Selling Stockholders agree with the several Underwriters that:

(i) If the Effective Time of the Initial Registration Statement is
prior to the execution and delivery of this Agreement, the Company will
file the Prospectus with the Commission pursuant to, and in accordance with
subparagraph (1) (or, if applicable and if consented to by CSFB (which
consent shall not be unreasonably withheld), subparagraph (4)) of Rule
424(b) not later than the earlier of (A) the second business day following
the execution and delivery of this Agreement or (B) the fifteenth business
day after the Effective Date of the Initial Registration Statement.

The Company will advise CSFB promptly of any such filing pursuant to
Rule 424(b). If the Effective Time of the Initial Registration Statement
is prior to the

- 13 -

<PAGE>

execution and delivery of this Agreement and an additional registration
statement is necessary to register a portion of the Offered Securities
under the Act but the Effective Time thereof has not occurred as of such
execution and delivery, the Company will file the additional registration
statement or, if filed, will file a post-effective amendment thereto with
the Commission pursuant to and in accordance with Rule 462(b) on or prior
to 10:00 P.M., New York time, on the date of this Agreement, if possible,
or, if earlier, on or prior to the time the Prospectus is printed and
distributed to any Underwriter, or will make such filing at such later
date as shall have been consented to by CSFB.

(ii) The Company will advise CSFB promptly of any proposal to amend or
supplement the initial or any additional registration statement as filed or
the related prospectus or the Initial Registration Statement, the
Additional Registration Statement (if any) or the Prospectus and will not
effect such amendment or supplementation without CSFB's consent (which
consent shall not be unreasonably withheld), and the Company will also
advise CSFB promptly of the effectiveness of each Registration Statement
(if its Effective Time is subsequent to the execution and delivery of this
Agreement) and of any amendment or supplementation of a Registration
Statement or the Prospectus and of the institution by the Commission of any
stop order proceedings in respect of a Registration Statement and will use
its best efforts to prevent the issuance of any such stop order and to
obtain as soon as possible its lifting, if issued.

(iii) If, at any time when a prospectus relating to the Offered
Securities is required to be delivered under the Act in connection with
sales by any Underwriter or dealer, any event occurs as a result of which
the Prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to state any material fact necessary
to make the statements therein, in the light of the circumstances under
which they were made, not misleading, or if it is necessary at any time to
amend the Prospectus to comply with the Act, the Company will promptly
notify CSFB of such event and will promptly prepare and file with the
Commission, at its own expense, an amendment or supplement which will
correct such statement or omission or an amendment which will effect such
compliance. Neither CSFB's consent to, nor the Underwriters' delivery of,
any such amendment or supplement shall constitute a waiver of any of the
conditions set forth in Section 7.

(iv) As soon as practicable, but not later than the Availability Date
(as defined below), the Company will make generally available to its
security holders an earnings statement covering a period of at least 12
months beginning after the Effective Date of the Initial Registration
Statement (or, if later, the Effective Date of the Additional Registration
Statement) which will satisfy the provisions of Section 11 (a) of the Act.
For the purpose of the preceding sentence, "AVAILABILITY DATE" means the
45th day

- 14 -

<PAGE>

after the end of the fourth fiscal quarter following the fiscal quarter
that includes such Effective Date, except that, if such fourth fiscal
quarter is the last quarter of the Company's fiscal year, "AVAILABILITY
DATE" means the 90th day after the end of such fourth fiscal quarter.

(v) The Company will furnish to the Representatives copies of each
Registration Statement (three of which will be signed and will include all
exhibits), each related preliminary prospectus, and, so long as delivery of
a prospectus relating to the Offered Securities is required to be delivered
under the Act in connection with sales by any Underwriter or dealer, the
Prospectus and all amendments and supplements to such documents, in each
case in such quantities as CSFB reasonably requests. The Prospectus shall
be so furnished on or prior to 3:00 P.M., New York time, on the second
business day following the later of the execution and delivery of this
Agreement or the Effective Time of the Initial Registration Statement. All
other such documents shall be so furnished as soon as available. The
Company and the Selling Stockholders will pay the expenses of printing and
distributing to the Underwriters all such documents.

(vi) The Company will arrange for the qualification of the
Offered Securities for sale under the laws of such jurisdictions as
CSFB designates and will continue such qualifications in effect so
long as required for the distribution; provided that the Company will
not be required to qualify as a foreign corporation or take any action
that would subject it to general service of process in any
jurisdiction in which it is not currently so qualified or subject.

(vii) During the period of two years hereafter, the Company will
furnish to the Representatives and, upon request, to each of the other
Underwriters, as soon as practicable after the end of each fiscal year, a
copy of its annual report to stockholders for such year, and the Company
will furnish to the Representatives (A) as soon as available, a copy of
each report and any definitive proxy statement of the Company filed with
the Commission under the Exchange Act or mailed to stockholders, [and (B)
from time to time, such other information concerning the Company as CSFB
may reasonably request].

(viii)The Company will pay all expenses incident to the performance of
its obligations under this Agreement and will reimburse the Underwriters
(if and to the extent incurred by them) for any filing fees and other
expenses (including reasonable fees and disbursements of counsel) incurred
by it in connection with qualification of the Offered Securities for sale
under the laws of such jurisdictions as CSFB designates and the printing of
memoranda relating thereto, for the filing fee incident to, the review by
the National Association of Securities Dealers, Inc. of the Offered
Securities, for any

- 15 -

<PAGE>

travel expenses of the Company's officers and employees (but not the
Representatives or the Underwriters) in connection with attending or
hosting meetings with prospective purchasers of the Offered Securities
and for expenses incurred in distributing preliminary prospectuses and
the Prospectus (including any amendments and supplements thereto) to the
Underwriters.

(ix) For a period of 180 days after the date of the Prospectus, the
Company will not offer, sell, contract to sell, pledge or otherwise dispose
of, directly or indirectly, or file with the Commission a registration
statement under the Act relating to, any additional shares of its
Securities or securities convertible into or exchangeable or exercisable
for any shares of its Securities, or publicly disclose the intention to
make any such offer, sale, pledge, disposal or filing, without the prior
written consent of CSFB, except grants of stock options and awards pursuant
to the terms of a director or employee plan as in effect on the date
hereof, issuances of Securities pursuant to the exercise of such options or
the exercise of any other stock options or awards outstanding on the date
hereof and except for registration statements under the Act relating to a
director or employee plan as in effect on the date hereof.

(x) Neither the Company nor any of its subsidiaries will acquire
any capital stock of the Company prior to the earlier of the Optional
Closing Date or termination or expiration of the related option nor
will the Company declare or pay any dividend or make any other
distribution upon the Class A Common Stock payable to stockholders of
record on a date prior to the earlier of the Optional Closing Date or
termination or expiration of the related option, except in either case
as contemplated by the Prospectus.

(xi) The Company will use the net proceeds received by it from
the sale of the Offered Securities being sold by it in the manner
specified in the Prospectus.

(xii) Each Selling Stockholder agrees to deliver to CSFB, attention:
Transactions Advisory Group on or prior to the First Closing Date a
properly completed and executed United States Treasury Department Form W-9
(or other applicable form or statement specified by Treasury Department
regulations in lieu thereof).

(xiii) Each Selling Stockholder agrees, for a period of 180 days after
the date of the Prospectus, not to offer, sell, contract to sell, pledge or
otherwise dispose of, directly or indirectly, any additional shares of the
Securities of the Company or securities convertible into or exchangeable or
exercisable for any shares of Securities, or publicly disclose the
intention to make any such offer, sale, pledge or disposal,

- 16 -

<PAGE>

without the prior written consent of CSFB, except gifts and pledges of
Securities where the donees or pledgees, as the case may be, agree in
writing to be bound by the terms of an agreement satisfactory to CSFB
containing terms identical to those set forth in this clause (xiv).

6. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS. The obligations of
the several Underwriters to purchase and pay for the Firm Securities on the
First Closing Date and the Optional Securities to be purchased on each
Optional Closing Date will be subject to the accuracy of the representations
and warranties on the part of the Company and the Selling Stockholders
(including the Controlling Selling Stockholders) herein, to the accuracy of
the statements of Company officers made pursuant to certifications made in
accordance with the provisions hereof, to the performance by the Company and
the Selling Stockholders of their obligations hereunder and to the following
additional conditions precedent:

(i) The Representatives shall have received a letter, dated the date
of delivery thereof (which, if the Effective Time of the Initial
Registration Statement is prior to the execution and delivery of this
Agreement, shall be on or prior to the date of this Agreement or, if the
Effective Time of the Initial Registration Statement is subsequent to the
execution and delivery of this Agreement, shall be prior to the filing of
the amendment or post-effective amendment to the registration statement to
be filed shortly prior to such Effective Time), of Deloitte & Touche LLP
confirming that they are independent public accountants within the meaning
of the Act and the applicable published Rules and Regulations thereunder
and stating to the effect that:

(A) in their opinion the financial statements and schedules (if
any) examined by them and included or incorporated by reference in the
Registration Statements comply as to form in all material respects
with the applicable accounting requirements of the Act and the related
published Rules and Regulations;

(B) they have performed the procedures specified by the American
Institute of Certified Public Accountants for a review of interim
financial information as described in Statement of Auditing Standards
No. 71, Interim Financial Information, on the unaudited financial
statements included in the Registration Statements;

(C) on the basis of the review referred to in clause (B) above, a
reading of the latest available interim financial statements of the
Company, inquiries of officials of the Company who have responsibility
for financial and accounting matters and other specified procedures,
nothing came to their attention that caused them to believe that:

- 17 -

<PAGE>

(1) the unaudited financial statements included in the
Registration Statements do not comply as to form in all material
respects with the applicable accounting requirements of the Act
and the related published Rules and Regulations or any material
modifications should be made to such unaudited financial
statements for them to be in conformity with generally accepted
accounting principles;

(2) at the date of the latest available balance sheet read
by such accountants, or at a subsequent specified date not more
than three days prior to the date of this Agreement, there was
any change in the capital stock or any increase in short-term
indebtedness or long-term debt of the Company and its
consolidated subsidiaries or, at the date of the latest available
balance sheet read by such accountants, there was any decrease in
consolidated net current assets or net assets, as compared with
amounts shown on the latest balance sheet included in the
Prospectus; or

(3) for the period from the closing date of the latest
income statement included in the Prospectus to the closing date
of the latest available income statement read by such accountants
there were any decreases, as compared with the corresponding
period of the previous year and with the period of corresponding
length ended the date of the latest income statement included in
the Prospectus, in consolidated total revenues or operating
income in the total or per share amounts of net income,

except in all cases set forth in clauses (2) and (3) above for changes,
increases or decreases which the Prospectus discloses have occurred or may
occur or which are described in such letter; and

(D) they have compared specified dollar amounts (or percentages
derived from such dollar amounts) and other financial information
contained in the Registration Statements (in each case to the extent
that such dollar amounts, percentages and other financial information
are derived from the general accounting records of the Company and its
subsidiaries subject to the internal controls of the Company's
accounting system or are derived directly from such records by
analysis or computation) with the results obtained from inquiries, a
reading of such general accounting records and other procedures
specified in such letter and have found such dollar amounts,
percentages and other financial information to be in agreement with
such results, except as otherwise specified in such letter.

- 18 -

<PAGE>

For purposes of this subsection, (x) if the Effective Time of the Initial
Registration Statement is subsequent to the execution and delivery of this
Agreement, "REGISTRATION STATEMENTS" shall mean the initial registration
statement as proposed to be amended by the amendment or post-effective
amendment to be filed shortly prior to its Effective Time, (y) if the
Effective Time of the Initial Registration Statement is prior to the
execution and delivery of this Agreement but the Effective Time of the
Additional Registration Statement is subsequent to such execution and
delivery, "REGISTRATION STATEMENTS" shall mean the Initial Registration
Statement and the additional registration statement as proposed to be filed
or as proposed to be amended by the post-effective amendment to be filed
shortly prior to its Effective Time, and (z) "PROSPECTUS" shall mean the
prospectus included in the Registration Statements.

(ii) If the Effective Time of the Initial Registration Statement is
not prior to the execution and delivery of this Agreement, such Effective
Time shall have occurred not later than 10:00 P.M., New York time, on the
date of this Agreement, if possible, or such later date as shall have been
consented to by CSFB. If the Effective Time of the Additional Registration
Statement (if any) is not prior to the execution and delivery of this
Agreement, such Effective Time shall have occurred not later than 10:00
P.M., New York time, on the date of this Agreement or, if earlier, the time
the Prospectus is printed and distributed to any Underwriter, or shall have
occurred at such later date as shall have been consented to by CSFB. If
the Effective Time of the Initial Registration Statement is prior to the
execution and delivery of this Agreement, the Prospectus shall have been
filed with the Commission in accordance with the Rules and Regulations and
Section 5(i) of this Agreement. Prior to such Closing Date, no stop order
suspending the effectiveness of a Registration Statement shall have been
issued and no proceedings for that purpose shall have been instituted or,
to the knowledge of the Company, the Selling Stockholders or the
Representatives, shall be contemplated by the Commission.

(iii) Subsequent to the execution and delivery of this Agreement,
there shall not have occurred (A) any change, or any development or event
involving a prospective change, in the condition (financial or other),
business, properties or results of operations of the Company or its
subsidiaries which, in the judgment of a majority in interest of the
Underwriters including the Representatives, is material and adverse and
makes it impractical or inadvisable to proceed with completion of the
public offering or the sale of and payment for the Offered Securities; (B)
any downgrading in the rating of any debt securities of the Company by any
"NATIONALLY RECOGNIZED STATISTICAL RATING ORGANIZATION" (as defined for
purposes of Rule 436(g) under the Act), or any public announcement that any
such organization has under surveillance or review its rating of any debt
securities of the Company (other than an announcement with positive
implications of a possible upgrading, and no implication of a possible
downgrading, of such rating); (C) any suspension or limitation of trading
in securities generally on the

- 19 -

<PAGE>

New York Stock Exchange, or any setting of minimum prices for trading on
such exchange or any suspension of trading of any securities of the
Company on any exchange or in the over-the-counter market; (D) any
banking moratorium declared by U.S. Federal or New York authorities; or
(E) any outbreak or escalation of major hostilities in which the United
States is involved, any declaration of war by Congress or any other
substantial national or international calamity or emergency if, in the
judgment of a majority in interest of the Underwriters including the
Representatives, the effect of any such outbreak, escalation,
declaration, calamity or emergency makes it impractical or inadvisable to
proceed with completion of the public offering or the sale of and payment
for the Offered Securities.

(iv) The Offered Securities shall have been qualified for sale
under the blue sky laws of such states as shall have been specified by
the Representatives.

(v) The legality and sufficiency of the authorization, issuance
and sale or transfer and sale of the Offered Securities hereunder, the
validity and form of the certificates representing the Offered
Securities, the execution and delivery of this Agreement, and all
corporate proceedings and other legal matters incident hereto and
thereto, and the form of the Registration Statement and the Prospectus
(except financial statements) shall have been approved by counsel for
the Underwriters exercising reasonable judgment.

(vi) The Representatives shall have received an opinion, dated such
Closing Date, of Mayer, Brown & Platt, counsel for the Company and the
Selling Stockholders, to the effect that:

(A) The Company has been duly incorporated and is an
existing corporation in good standing under the laws of the
State of Delaware, with corporate power and authority to own
its properties and conduct its business as described in the
Prospectus; and the Company is duly qualified to do business
as a foreign corporation in good standing in all other
jurisdictions in which its ownership or lease of property or
the conduct of its business requires such qualification,
except where the failure to be so qualified or to be in good
standing would not have a material adverse effect on the
condition (financial or other), business or results of
operations of the Company and its subsidiaries taken as a
whole;

(B)An opinion to the same general effect as clause (A)
in respect of each subsidiary of the Company;

- 20 -

<PAGE>

(C) All of the issued and outstanding capital stock of
each subsidiary of the Company has been duly authorized,
validly issued and, assuming receipt of the agreed
consideration therefor, is fully paid and nonassessable,
and, except as disclosed in the Registration Statement, the
Company owns directly or indirectly 100% of the outstanding
capital stock of each subsidiary, and to the knowledge of
such counsel, such stock is owned free and clear of any
claims, liens, encumbrances or security interests;

(D) The authorized capital stock of the Company, of
which there is outstanding the amount set forth in the
Registration Statement and Prospectus (except for subsequent
issuances, if any, pursuant to stock options or other rights
referred to in the Prospectus), conforms as to legal matters
in all material respects to the description thereof in the
Registration Statement and Prospectus;

(E) The certificates for the Offered Securities to be
delivered hereunder comply with the requirements of Delaware
General Corporations Law (the "DGCL"), and, with respect to
Offered Securities to be delivered by the Company, when duly
countersigned by the Company's transfer agent and when
delivered to you or upon your order against payment of the
agreed consideration therefor in accordance with the
provisions of this Agreement, the Offered Securities to be
delivered by the Company will be duly authorized and validly
issued, fully paid and nonassessable;

(F) The Offered Securities to be delivered by the
Selling Stockholders and all other outstanding shares of the
capital stock of the Company have been duly authorized and
validly issued, and assuming receipt of the agreed upon
consideration therefor, fully paid and nonassessable; and
the stockholders of the Company have no statutory or to the
best of such counsel's knowledge, other preemptive rights
with respect to the Securities;

(G) There are no contracts, agreements or
understandings known to such counsel between the Company and
any person granting such person the right to require the
Company to file a registration statement under the Act with
respect to any securities of the Company owned or to be
owned by such person or to

- 21 -

<PAGE>

require the Company to include such securities in the securities
registered pursuant to the Registration Statement or in any
securities being registered pursuant to any other registration
statement filed by the Company under the Act;

(H) The Company is not and, after giving effect to the
offering and sale of the Offered Securities and the
application of the proceeds thereof as described in the
Prospectus, will not be an "INVESTMENT COMPANY" as defined
in the Investment Company Act of 1940;

(I) No consent, approval, authorization or order of, or
filing with, any governmental agency or body or any court is
required as of such Closing Date for the consummation of the
transactions contemplated by this Agreement in connection
with the sale of the Offered Securities, except such as have
been obtained and made under the Act, and such as may be
required under state securities laws (as to which such
counsel need express no opinion);

(J) This Agreement has been duly authorized, executed
and delivered by the Company;

(K) This Agreement constitutes the legal, valid and
binding agreements of the Company enforceable against the
Company in accordance with its terms, except as
enforceability of the same may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights and by the exercise of judicial
discretion in accordance with general principles applicable
to equitable and similar remedies and except as to those
provisions relating to indemnities and contribution for
liabilities arising under the Act as to which no opinion
need be expressed;

(L) The execution, delivery and performance of this
Agreement and the issuance and sale of the Offered
Securities will not result in a breach or violation of any
of the terms and provisions of, or constitute a default
under, the DGCL, the federal laws of the United States and
any rules and regulations promulgated thereunder, the Act,
the Rules and Regulations or the rules and regulations of
the National Association of Securities

- 22 -

<PAGE>

Dealers, Inc. or order of any governmental agency or body or any
court having jurisdiction over the Company or any subsidiary of the
Company or any of their properties, or any agreement or instrument
to which the Company or any such subsidiary is a party or by which
the Company or any such subsidiary is bound or to which any of the
properties of the Company or any such subsidiary is subject and
which is listed on Exhibit A to such opinion or could otherwise be
reasonably expected to have a material adverse effect on the
condition (financial or other), business or results of operations of
the Company and its subsidiaries taken as a whole, or the charter or
by-laws of the Company or any such subsidiary, and the Company has
full power and authority to authorize, issue and sell the Offered
Securities as contemplated by this Agreement;

(M) The descriptions in the Registration Statement of laws,
regulations and rules, of legal and governmental proceedings and of
contracts, agreements, leases and other documents including, without
limitation, under the headings "Business - Government Regulation,"
"-Net Capital Requirements," "Management - 1996 Long Term Incentive
Plan," "-Profit Sharing Plan," "-Executive Bonus Plan," "-Employment
Agreements," "Certain Transactions," "Description of Capital Stock,"
"Delaware Anti-Takeover Law" and "Shares Eligible for Future Sale"
have been reviewed by such counsel and are accurate in all material
respects, and comply as to form in all material respects with the
applicable requirements of the Act and the Rules and Regulations;

[(N) To the best of such counsel's knowledge, all
offers and sales of the Company's capital stock prior to the
date hereof were at all relevant times exempt from the
registration requirements of the Act and were duly
registered or the subject of an available exemption from the
registration requirements of the applicable state securities
or blue sky laws;]

(O) After due inquiry, such counsel does not know of
any legal or governmental proceeding pending or threatened
to which the Company or any of its subsidiaries is a party
or to which any of their respective property is subject
which is required to be described in the Registration
Statement or the Prospectus and is

- 23 -

<PAGE>

not so described, or of any contract or other document which is
required to be described in the Registration Statement or the
Prospectus or is required to be filed as an exhibit to the
Registration Statement which is not described or filed as required;
and

(P) The Initial Registration Statement was declared
effective under the Act as of the date and time specified in
such opinion, the Additional Registration Statement (if any)
was filed and became effective under the Act as of the date
and time (if determinable) specified in such opinion, the
Prospectus either was filed with the Commission pursuant to
the subparagraph of Rule 424(b) specified in such opinion on
the date specified therein or was included in the Initial
Registration Statement or the Additional Registration
Statement (as the case may be), and, to the best of the
knowledge of such counsel, no stop order suspending the
effectiveness of a Registration Statement or any part
thereof has been issued and no proceedings for that purpose
have been instituted or are pending or contemplated under
the Act, and each Registration Statement and the Prospectus,
and each amendment or supplement thereto, as of their
respective effective or issue dates, complied as to form in
all material respects with the requirements of the Act and
the Rules and Regulations; such counsel shall also state
that no facts have come to the attention of such counsel
that would cause it to believe that a Registration Statement
or any amendment thereto, as of its effective date or as of
such Closing Date, contained any untrue statement of a
material fact or omitted to state any material fact required
to be stated therein or necessary to make the statements
therein not misleading; or that the Prospectus or any
amendment or supplement thereto, as of its issue date or as
of such Closing Date, contained any untrue statement of a
material fact or omitted to state any material fact
necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading; it being understood that such counsel need
express no opinion as to the financial statements or other
financial data contained in the Registration Statements or
the Prospectus.

(vii) The Representatives shall have received an opinion, dated such
Closing Date, of Kutak Rock, counsel for the Selling Stockholders, to the
effect that:

- 24 -

<PAGE>

(A) With respect to each Selling Stockholder, this
Agreement, the Custody Agreement and the Power of Attorney
has been duly authorized, executed and delivered by or on
behalf of such Selling Stockholder and the performance of
this Agreement, the Custody Agreement and the Power of
Attorney and the consummation of the transactions herein or
therein contemplated to be performed by such Selling
Stockholder will not result in a breach or violation of any
of the terms and provisions of, or constitute a default
under, any statute, any indenture, mortgage, deed of trust,
note agreement or other agreement or instrument known to
such counsel to which such Selling Stockholder is a party or
by which such Selling Stockholder is bound or to which any
of the property of such Selling Stockholder is subject, or
any order, rule or regulation known to such counsel of any
court or governmental agency or body having jurisdiction
over such Selling Stockholder or any of such Selling
Stockholder's properties;

(B) Each Selling Stockholder has full right, power and
authority to enter into this Agreement, the Custody
Agreement and the Power of Attorney; and

(C) This Agreement, the Custody Agreement and the Power
of Attorney is the legal, valid and binding agreement of
each Selling Stockholder party thereto enforceable against
such Selling Stockholder in accordance with its terms except
as enforceability of the same may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights and by the exercise of judicial
discretion in accordance with general principles applicable
to equitable and similar remedies and except with respect to
those provisions relating to indemnities for liabilities
arising under the Act, as to which no opinion need be
expressed.

(viii) The Representatives shall have received from McDermott, Will &
Emery, counsel for the Underwriters, such opinion or opinions, dated such
Closing Date, with respect to the incorporation of the Company, the
validity of the Offered Securities delivered on such Closing Date, the
Registration Statements, the Prospectus and other related matters as the
Representatives may require, and the Selling Stockholders and the Company
shall have furnished to such counsel such documents as they reasonably
request for the purpose of enabling them to pass upon such matters.

- 25 -

<PAGE>

(ix) The Representatives shall have received a certificate, dated such
Closing Date, of the President or any Vice-President and a principal
financial or accounting officer of the Company in which such officers, to
the best of their knowledge after reasonable investigation, shall state
that: the representations and warranties of the Company in this Agreement
are true and correct; the Company has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied hereunder
at or prior to such Closing Date; no stop order suspending the
effectiveness of any Registration Statement has been issued and no
proceedings for that purpose have been instituted or are contemplated by
the Commission; the Additional Registration Statement (if any) satisfying
the requirements of subparagraphs (1) and (3) of Rule 462(b) was filed
pursuant to Rule 462(b), including payment of the applicable filing fee in
accordance with Rule 111(a) or (b) under the Act, prior to the time the
Prospectus was printed and distributed to any Underwriter; and, subsequent
to the dates of the most recent financial statements in the Prospectus,
there has been no material adverse change, nor any development or event
involving a prospective material adverse change, in the condition
(financial or other), business or results of operations of the Company and
its subsidiaries taken as a whole except as set forth in or contemplated by
the Prospectus or is described in such certificate.

(x) The Representatives shall have received a letter, dated such
Closing Date, of Deloitte & Touche LLP which meets the requirements of
subsection (i) of this Section, except that the specified date referred to
in such subsection will be a date not more than three days prior to such
Closing Date for the purposes of this subsection.

(xi) On the First Closing Date a letter from each Selling
Stockholder, each holder of five percent (5%) or more of the Company's
outstanding Class A Stock and executive officer of the Company, in
which each such person agrees not to sell, contract to sell or
otherwise dispose of any Class A Common Stock or securities
convertible into Common Stock for a period of 180 days after the date
of such letter without the prior written consent of CSFB, except for
gifts and pledges of shares where the donees or pledgees, as the case
may be, agree in writing to be bound by the terms of such agreement
executed by such stockholder.

(xii) Such further information, certificates and documents as you may
reasonably request.

(xiii) A certificate of each Selling Stockholder dated such
Closing Date, as the case may be, to the effect that the
representations and warranties of such Selling Stockholder set forth
in Section 3 of this Agreement are true and correct as of such Closing
Date.

- 26 -

<PAGE>

The Selling Stockholders and the Company will furnish the Representatives
with such conformed copies of such opinions, certificates, letters and documents
as the Representatives reasonably requests. CSFB may in its sole discretion
waive on behalf of the Underwriters compliance with any conditions to the
obligations of the Underwriters hereunder, whether in respect of an Optional
Closing Date or otherwise.

7. INDEMNIFICATION AND CONTRIBUTION. (i) The Company will indemnify and
hold harmless each Underwriter against any losses, claims, damages or
liabilities, joint or several, to which such Underwriter may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
any Registration Statement, the Prospectus, or any amendment or supplement
thereto, or any related preliminary prospectus, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
and will reimburse each Underwriter for any legal or other expenses reasonably
incurred by such Underwriter in connection with investigating or defending any
such loss, claim, damage, liability or action as such expenses are incurred;
provided, that the Company will not be liable in any such case to the extent
that (A) any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement in or omission or alleged
omission from any of such documents in reliance upon and in conformity with
written information furnished to the Company by any Underwriter through the
Representatives specifically for use therein, it being understood and agreed
that the only such information furnished by any Underwriter consists of the
information described as such in subsection (iii) below or such statement or
omission was contained or made in any preliminary prospectus and corrected in
the Prospectus and (1) any such loss, claim, damage or liability suffered or
incurred by any such Underwriter resulted from an action, claim or suit by any
person who purchased Securities which are the subject thereof from such
Underwriter in the offering and (2) such Underwriter failed to deliver or
provide a copy of the preliminary prospectus or Prospectus (as so amended or
supplemented) to such person at or prior to the confirmation of sale of such
Securities in any case where such delivery is required by the Act; provided that
delivery of such preliminary prospectus or Prospectus (as so amended or
supplemented) would have cured the defect giving rise to such loss, claim,
damage or liability.

(ii) The Selling Stockholders, severally but not jointly, will indemnify
and hold harmless each Underwriter against any losses, claims, damages or
liabilities, joint or several, to which such Underwriter may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
any Registration Statement, the Prospectus, or any amendment or supplement
thereto, or any related preliminary prospectus, or arise out of or are based
upon the omission or alleged

- 27 -

<PAGE>

omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will reimburse
each Underwriter for any legal or other expenses reasonably incurred by such
Underwriter in connection with investigating or defending any such loss,
claim, damage, liability or action as such expenses are incurred; provided,
that (A) the Selling Stockholders will not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is
based upon an untrue statement or alleged untrue statement in or omission or
alleged omission from any of such documents in reliance upon and in
conformity with written information furnished to the Company by any
Underwriter through the Representatives specifically for use therein, it
being understood and agreed that the only such information furnished by any
Underwriter consists of the information described as such in subsection (iii)
below and (B) each Selling Stockholder (other than the Controlling Selling
Stockholders) shall be liable only for an amount not exceeding the proceeds
received by such Selling Stockholder from the sale of Securities hereunder.

(iii) Each Underwriter will severally and not jointly indemnify and hold
harmless the Company and each Selling Stockholder against any losses, claims,
damages or liabilities to which the Company or such Selling Stockholder may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of any material
fact contained in any Registration Statement, the Prospectus, or any
amendment or supplement thereto, or any related preliminary prospectus, or
arise out of or are based upon the omission or the alleged omission to state
therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, in each case to the extent, but only
to the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in conformity with
written information furnished to the Company by such Underwriter through the
Representatives specifically for use therein, and will reimburse any legal or
other expenses reasonably incurred by the Company and each Selling
Stockholder in connection with investigating or defending any such loss,
claim, damage, liability or action as such expenses are incurred, it being
understood and agreed that the only such information furnished by any
Underwriter consists of (A) the following information in the Prospectus
furnished on behalf of each Underwriter: the last paragraph at the bottom of
the cover page concerning the terms of the offering by the Underwriters, the
legend concerning over-allotments and stabilizing on the inside front cover
page and the concession and reallowance figures appearing in the _____
paragraph under the caption "Underwriting" and the information contained in
the ________ and ________ paragraphs under the caption "Underwriting".

(iv) Promptly after receipt by an indemnified party under this Section or
Section 8 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under subsection (i),(ii) or (iii) above or Section 8, notify the indemnifying
party of the commencement thereof; but the omission so to

- 28 -

<PAGE>

notify the indemnifying party will not relieve it from any liability which it
may have to any indemnified party otherwise than under subsection (i), (ii)
or (iii) above or Section 8. In case any such action is brought against any
indemnified party, the indemnifying party will be entitled to participate
therein and, to the extent that it may wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified party; provided, however,
if the defendants in any such action include both the indemnified party and
the indemnifying party and the indemnified party shall have reasonably
concluded that there may be legal defenses available to it and/or other
indemnified parties which are different from or additional to those available
to the indemnifying party, or the indemnified and indemnifying parties may
have conflicting interests which would make it inappropriate for the same
counsel to represent both of them, the indemnified party or parties shall
have the right to select separate counsel to assume such legal defense and
otherwise to participate in the defense of such action on behalf of such
indemnified party or parties and; provided further that the Underwriters
shall only be reimbursed for the legal fees and expenses of one counsel
selected by CSFB. After notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party under this
Section 7 or Section 8, as the case may be, for any legal or other expenses
subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation unless (A) the
indemnified party shall have employed such counsel in connection with the
assumption of legal defense in accordance with the proviso to the immediately
preceding sentence or (B) the indemnifying party shall not have employed
counsel reasonably satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of commencement of
the action. No indemnifying party shall, without the prior written consent
of the indemnified party, effect any settlement of any pending or threatened
action in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified
party unless such settlement includes an unconditional release of such
indemnified party from all liability on any claims that are the subject
matter of such action.

(v) If the indemnification provided for in this Section is unavailable or
insufficient to hold harmless an indemnified party under subsection (i), (ii) or
(iii) above, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party is a result of the losses, claims, damages or
liabilities referred to in subsection (i), (ii) or (iii) above (A) in such
proportion as is appropriate to reflect the relative benefits received by the
Company and the Selling Stockholders on the one hand and the Underwriters on the
other from the offering of the Securities or (B) if the allocation provided by
clause (A) above is not permitted by applicable law, in such proportion as
appropriate to reflect not only the relative benefits referred to in clause (A)
above but also the relative fault of the Company and the Selling Stockholders on
the one hand and the Underwriters on the other in connection with the statements
or omissions which resulted in such losses, claims, damages or liabilities as
well as

- 29 -

<PAGE>

any other relevant equitable considerations. The relative benefits received
by the Company and the Selling Stockholders on the one hand and the
Underwriters on the other shall be deemed to be in the same proportion as the
total net proceeds from the offering (before deducting expenses) received by
the Company and the Selling Stockholders bear to the total underwriting
discounts and commissions received by the Underwriters. The relative fault
shall be determined by reference to, among other things, whether the untrue
or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Company, the Selling Stockholders or the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct
or prevent such untrue statement or omission. The amount paid by an
indemnified party as a result of the losses, claims, damages or liabilities
referred to in the first sentence of this subsection (v) shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any action or claim which
is the subject of this subsection (v). Notwithstanding the provisions of this
subsection (v), no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the Securities
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages which such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations in this
subsection (v) to contribute are several in proportion to their respective
underwriting obligations and not joint.

(a) The obligations of the Company and the Selling Stockholders under this
Section and Section 8 shall be in addition to any liability which the Company
and any Selling Stockholder may otherwise have and shall extend, upon the same
terms and conditions, to each person, if any, who controls any Underwriter or
the QIU (as hereinafter defined) within the meaning of the Act; and the
obligations of the Underwriters under this Section shall be in addition to any
liability with the respective Underwriters may otherwise have and shall extend,
upon the same terms and conditions, to each director of the Company, to each
officer of the Company who has signed a Registration Statement and to each
person, if any, who controls the Company within the meaning of the Act.

8. QUALIFIED INDEPENDENT UNDERWRITER. The Company hereby confirms that
at its request CSFB has without compensation acted as "QUALIFIED INDEPENDENT
UNDERWRITER" (in such capacity, the "QIU") within the meaning of Conduct Rule
2720 of the National Association of Securities Dealers, Inc. in connection with
the offering of the Offered Securities. The Company will indemnify and hold
harmless the QIU against any losses, claims, damages or liabilities, joint or
several, to which the QIU may become subject, under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon the QIU's acting (or alleged failing to
act) as

- 30 -

<PAGE>

such "qualified independent underwriter" and will reimburse the QIU for
any legal or other expenses reasonably incurred by the QIU in connection with
investigating or defending any such loss, claim, damage, liability or action
as such expenses are incurred.

9. DEFAULT OF UNDERWRITERS. If any Underwriter or Underwriters default
in their obligations to purchase Offered Securities hereunder on either the
First or any Optional Closing Date and the aggregate number of shares of
Offered Securities that such defaulting Underwriter or Underwriters agreed
but failed to purchase does not exceed 10% of the total number of shares of
Offered Securities that the Underwriters are obligated to purchase on such
Closing Date, CSFB may make arrangements satisfactory to the Company and the
Selling Stockholders for the purchase of such Offered Securities by other
persons, including any of the Underwriters, but if no such arrangements are
made by such Closing Date, the non-defaulting Underwriters shall be obligated
severally, in proportion to their respective commitments hereunder, to
purchase the Offered Securities that such defaulting Underwriters agreed but
failed to purchase on such Closing Date. If any Underwriter or Underwriters
so default and the aggregate number of shares of Offered Securities with
respect to which such default or defaults occur exceeds 10% of the total
number of shares of Offered Securities that the Underwriters are obligated to
purchase on such Closing Date and arrangements satisfactory to CSFB, the
Company and the Selling Stockholders for the purchase of such Offered
Securities by other persons are not made within 36 hours after such default,
this Agreement will terminate without liability on the part of any
non-defaulting Underwriter, the Company or the Selling Stockholders, except
as provided in Section 10 (provided that if such default occurs with respect
to Optional Securities after the First Closing Date, this Agreement will not
terminate as to the Firm Securities or any Optional Securities purchased
prior to such termination). As used in this Agreement, the term
"UNDERWRITER" includes any person substituted for an Underwriter under this
Section. Nothing herein will relieve a defaulting Underwriter from liability
for its default.

10. SURVIVAL OF CERTAIN REPRESENTATIONS AND OBLIGATIONS. The respective
indemnities, agreements, representations, warranties and other statements of
the Selling Stockholders, of the Company or its officers and of the several
Underwriters set forth in or made pursuant to this Agreement will remain in
full force and effect, regardless of any investigation, or statement as to
the results thereof, made by or on behalf of any Underwriter, any Selling
Stockholder, the Company or any of their respective representatives, officers
or directors or any controlling person, and will survive delivery of and
payment for the Offered Securities. If this Agreement is terminated pursuant
to Section 9 or if for any reason the purchase of the Offered Securities by
the Underwriters is not consummated, the Company and the Selling Stockholders
shall remain responsible for the expenses to be paid or reimbursed by them
pursuant to Section 6 and the respective obligations of the Company and the
Underwriters and the obligations of the Company pursuant to Section 8 shall
remain in effect, and if any Offered Securities have been purchased hereunder
the representations and

- 31 -

<PAGE>

warranties in Section 2 and all obligations under Section 6 shall also remain
in effect if the purchase of the Offered Securities by the Underwriters is
not consummated for any reason other than solely because of the termination
of this Agreement pursuant to Section 9 or the occurrence of any event
specified in clause (B), (C), (D) or (E) of Section 6(iii), the Company will
reimburse the Underwriters for all out-of-pocket expenses (including fees and
disbursements of counsel) reasonably incurred by them in connection with the
offering of the Offered Securities.

11. NOTICES. All communications hereunder will be in writing and, if sent
to the Underwriters, will be mailed, delivered or telegraphed and confirmed to
the Representatives, c/o Credit Suisse First Boston Corporation, Eleven Madison
Avenue, New York, N.Y. 10010, Attention: Investment Banking Department -
Transactions Advisory Group, or, if sent to the Company or the Selling
Stockholders, will be mailed, delivered or telegraphed and confirmed to it at
4211 South 102nd Street, Omaha, Nebraska 68127 Attention: Chief Executive
Officer; provided, however, that any notice to an Underwriter pursuant to
Section 7 or Section 8 will be mailed, delivered or telegraphed and confirmed to
such Underwriter.

12. SUCCESSORS. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 8, and no other
person will have any right or obligation hereunder.

13. REPRESENTATION. The Representatives will act for the several
Underwriters in connection with this transaction, and any action under this
Agreement taken by the Representatives jointly or by CSFB will be binding upon
all the Underwriters.

14. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.

15. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES
OF CONFLICTS OF LAWS.

The Company hereby submits to the non-exclusive jurisdiction of the
Federal, state courts in the Borough of Manhattan in The City of New York in any
suit or proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby.

- 32 -

<PAGE>

If the foregoing is in accordance with the Representative's understanding of our
agreement, kindly sign and return to the Company one of the counterparts hereof,
whereupon it will become a binding agreement among the Selling Stockholders, the
Company, and the several Underwriters in accordance with its terms.

Very truly yours,

AMERITRADE HOLDING CORPORATION

By:
-----------------------------------------
Its: Chairman and Chief Executive Officer

J. JOE RICKETTS
MARLENE M. RICKETTS
LEE M. and MARY JEAN VOLKMER,
as joint tenants
GERALD E. and PATRICIA GRESS,
as joint tenants
LAURINE VOLKMER

--------------------------------------------
------------------------, Attorney-in-Fact

- 33 -

<PAGE>

The foregoing Underwriting Agreement
is hereby confirmed and accepted
as of the date first above written.

CREDIT SUISSE FIRST BOSTON CORPORATION
RAYMOND JAMES & ASSOCIATES, INC.
Acting on behalf of themselves and as the
Representatives of the several
Underwriters.

By: CREDIT SUISSE FIRST BOSTON CORPORATION

By:
-------------------------------------
Its:
-------------------------------------

- 34 -

<PAGE>

SCHEDULE A

Number of
Number of Optional
Firm Securities to be Securities to be
Selling Stockholder Sold Sold
- ------------------- ---------------------- ----------------

Total. . . . . . . .
------------- -----------

------------- -----------
------------- -----------

- 35 -

<PAGE>

SCHEDULE B

Number of
Firm
Securities
Underwriter to be Purchased
----------- ---------------

Credit Suisse First
Boston Corporation

Raymond James &
Associates, Inc.

Total. . . . . . . . . . . .
---------

---------
---------

- 36 -

<PAGE>

[LETTERHEAD]

February 21, 1997

AMERITRADE HOLDING CORPORATION
4211 South 102nd Street
Omaha, Nebraska 68127

Ladies and Gentlemen:

We have acted as your counsel in connection with the registration of
certain shares of Class A Common Stock, $.01 par value per share (the
"Shares") of Ameritrade Holding Corporation, a Delaware corporation (the
"Company"), to be sold by the Company and certain of its stockholders (the
"Selling Stockholders").

In rendering the opinions expressed herein, we have examined and relied
upon such documents, corporate records, certificates of public officials and
certificates as to factual matters executed by officers of the Company as we
have deemed necessary or appropriate. We have assumed the authenticity,
accuracy and completeness of all documents, records and certificates
submitted to us as originals, the conformity to the originals of all
documents, records and certificates submitted to us as copies and the
authenticity, accuracy and completeness of the originals of all documents,
records and certificates submitted to us as copies. We have also assumed the
legal capacity and genuineness of the signatures of persons signing all
documents in connection with which the opinions expressed herein are rendered.

Based upon and subject to the foregoing, we are of the opinion that:

(i) The Shares to be sold by the Company, when issued against
payment of the agreed consideration therefor, will be legally issued,
fully paid and non-assessable; and

(ii) The Shares to be sold by the Selling Stockholders, assuming
receipt of the agreed consideration therefor, have been legally issued
and are fully paid and non-assessable.

<PAGE>

AMERITRADE HOLDING CORPORATION
February 21, 1997
Page 2

We are admitted to practice law in the State of Illinois and we express
no opinions as to matters under or involving any laws other than the laws of
the State of Illinois, the federal laws of the United States of America and
the General Corporation Law of the State of Delaware.

We hereby consent to the filing of this opinion letter as an exhibit to
the registration statement covering the Shares and to the reference to this
firm under the caption "Validity of Class A Stock" contained therein.

Very truly yours,

/s/ Mayer, Brown & Platt
----------------------------
MAYER, BROWN & PLATT

<PAGE>

AMENDMENT TO
AGREEMENT OF LIMITED PARTNERSHIP OF
COMPREHENSIVE SOFTWARE SYSTEMS LTD.

THIS AMENDMENT is made this ____ day of September, 1993, by and between
CSS Management, Inc., a Colorado corporation as General Partner, and BHC
Securities, Inc., Comprehensive Securities Systems, Inc., Hanifen, Imhoff
Inc., Legg Mason, Inc., McDonald & Company Securities, Inc., Raymond James &
Associates, Inc., Southwest Securities, Inc. Stephens Inc. and TransTerra Co.
as Limited Partners.

WHEREAS, Comprehensive Software Systems Ltd. (the "Partnership") was
formed on February 4, 1993, by the General Partner and the Limited Partners
for the purpose of providing consulting services and to develop software for
securities broker-dealers, banks and other financial institutions utilizing
state of the art hardware and software techniques; and

WHEREAS, the General Partner would like to expand the purpose of the
Partnership to include the development of a Fund Server for the Mutual Fund
industry and to develop an imaging system to support current and future
development ventures (the "New Ventures"); and

WHEREAS, the research and development of the New Ventures will require
the infusion of additional capital into the Partnership;

NOW THEREFORE, in consideration for the mutual promises and conditions
set forth herein, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:

1. MONTHLY CONTRIBUTIONS OF PARTNERS. The Partners agree to make the
following monthly contributions in addition to the current
contributions being made by the Partners pursuant to Article 3.1
of the Partnership Agreement:

<TABLE>
<CAPTION>
Partner Amount Paid From Amount Paid From Amount Paid From
- ------ Oct. 93 - Mar. 94 Mar. 94 - Sept. 94 Oct. 94 - Jan. 96
----------------- ------------------ -----------------
<S> <C> <C> <C>
BHC Securities, Inc.

Hanifen, Imhoff Inc.

Legg Mason, Inc.

McDonald & Company
Securities, Inc.

<PAGE>

Raymond James &
Associates, Inc.

Southwest Securities, Inc.

Stephens Inc.

TransTerra $16,995.41 $5,949.81 $2,718.75

</TABLE>

3. SHARING RATIOS. The Initial and Subsequent Sharing Ratios described in
Article IV of the Partnership Agreement shall be unaffected. Certain
Partners are not required to contribute additional capital hereunder
(the "Non-Contributing Partners"). Each Non-Contributing Partner shall
be considered to have received a profits interest in the Partnership to
the extent that the additional capital contribution of other Partners
would have diminished the Sharing Ratios of such non-contributing
Partners. The profits interests shall be given effect for all
allocations of Net Profit or Net Loss and all Distributions other than
Distributions on the complete dissolution and termination of the
Partnership.

4. RIGHT TO USE NEW SYSTEM. Any technology developed by the Partnership
pursuant to the New Ventures shall be the exclusive property of the
Partnership. Except for Comprehensive Securities Systems, Inc., each
of the other Limited Partners, (the "Brokers") shall have a right
to use any marketable system which is developed pursuant to the New
Venture (the "New System") pursuant to a licensing agreement which
shall be substantially in the form of the License Agreement attached
as Exhibit A to the Shareholder Agreement dated February 4, 1993,
between the parties.

5. SURVIVAL OF THE PARTNERSHIP. In the event of any conflict between the
Partnership Agreement and this Amendment, the terms and conditions of
this Amendment shall control. All other terms and conditions of the
Partnership Agreement are hereby ratified and remain in full force
and effect.

DATED the day and year first written above.

CSS MANAGEMENT, INC. BHC SECURITIES, INC.

- ---------------------------- -------------------------------
By: William W. Simpson By:
------------------------ ----------------------------
Its: President Its:
------------------------ ---------------------------

<PAGE>

COMPREHENSIVE SECURITIES HANIFEN, IMHOFF INC.
SYSTEMS, INC.

- -------------------------------- -----------------------------------
By: William W. Simpson By:
---------------------------- -------------------------------
Its: President Its:
---------------------------- -------------------------------

LEGG MASON, INC. McDONALD & COMPANY
SECURITIES, INC.

- -------------------------------- -----------------------------------
By: By:
---------------------------- -------------------------------
Its: Its:
---------------------------- -------------------------------

RAYMOND JAMES & ASSOCIATES, INC. SOUTHWEST SECURITIES, INC.

STEPHENS INC. TRANSTERRA CO.

/s/ John Joe Ricketts
- -------------------------------- -----------------------------------
By: By: John Joe Ricketts
---------------------------- -------------------------------
Its: Its: President
---------------------------- -------------------------------

<PAGE>
SECOND AMENDMENT TO
AGREEMENT OF LIMITED PARTNERSHIP OF
COMPREHENSIVE SOFTWARE SYSTEMS LTD.

THIS SECOND AMENDMENT is made this _____________ day of ____, 1994,
by and between CSS Management, Inc., a Colorado corporation as "General
Partner"; BHC Securities, Inc., Comprehensive Securities Systems, Inc.,
Hanifen, Imhoff Inc., Legg Mason, Inc., McDonald & Company Securities, Inc.,
Raymond James & Associates, Inc., Southwest Securities, Inc. Stephens Inc.
and TransTerra Co. as "Limited Partners"; and Morgan Stanley Services, Inc.
as the New Limited Partner ("Morgan").

WHEREAS, the Partnership amended its Agreement of Limited Partnership on
__________________, 1993, to provide for the expansion of the purpose of the
Partnership to include the development of a Fund Server for the Mutual Fund
industry and to develop an imaging system to support current and future
development ventures (the "New Ventures"); and

WHEREAS, Morgan is interested in investing in the Partnership and
related entities in exchange for a non-exclusive license to use the Software
and the New Ventures; and

WHEREAS, Morgan is to have the same rights as the other limited partners
to share in the economic benefits of the partnership as more fully set forth
in the partnership agreement; and

WHEREAS, the parties have determined the amount of the capital
contributions to be made by Morgan as consideration for its interest in the
Partnership based upon their determination of the current value of the
assets of the Partnership, including the services performed and economic
risks taken in producing such assets;

NOW THEREFORE, in consideration for the mutual promises and conditions
set forth herein, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:

I. AMENDMENTS TO THE AGREEMENT OF LIMITED PARTNERSHIP. The General
Partner, Limited Partners and Morgan hereby agree add a new section 3.4 as
defined below and to delete Sections 1.4, 1.5, 2.11, 4.1, 4.2, 4.6, 10.3(d),
10.4, and 11.14 and replace them with the following:

<PAGE>

1.4 REGISTERED AGENT. The name and address of the registered agent of
the Partnership for service of process in the State of Colorado is Marc J.
Musyl, Freeborn & Peters, 600 Seventeenth Street, Suite 2100 South, Denver,
Colorado 80202.

1.5 ADDRESS OF GENERAL AND LIMITED PARTNERS.

(a) The name business address and facsimile numbers of the General
Partner is as follows:

CSS Management, Inc.
25178 Genesee Trail Road
Golden, Colorado 80401
Fax: (303) 526-9362

(b) The names, business addresses and facsimile numbers of the
Limited Partners are as follows:

BHC Securities, Inc. 100 N. 20th Street, 4th Floor
Philadelphia, PA 19103
(215) 557-7104

Comprehensive Securities Systems, Inc. 25178 Genesee Trail Road
Golden, Colorado 80401
(303) 526-9362

Hanifen, Imhoff Inc. 1125 17th Street, Suite 1600
Denver, CO 80202
(303) 526-9362

Legg Mason, Inc. P.O. Box 1476
Baltimore, MD 21203-1476
(410) 685-2365

McDonald & Company Securities, Inc. 800 Superior Avenue, Suite 2100
Cleveland, OH 44114
(216) 443-3838

Morgan Stanley Services, Inc. ______________________________
______________________________
( )___________________________

-2-

<PAGE>

Raymond James & Associates, Inc. P.O. Box 12749
St. Petersburg, FL 33716
(813) 573-8365

Southwest Securities, Inc. 1201 Elm Street, Suite 4300
Dallas, TX 75270
(214) 749-0810

Stephens, Inc. 111 Center Street
Little Rock, AK 72201
(501) 377-3483

TransTerra Co. 4211 South 102nd Street
Omaha, NE 68102
(402) 331-7856

2.11 LIMITED PARTNERS shall mean BHC Securities, Inc., Comprehensive
Securities Systems, Inc., Hanifen, Imhoff Inc., Legg Mason, Inc., McDonald &
Company Securities, Inc., Morgan Stanley Services, Inc., Raymond James &
Associates, Inc., Southwest Securities, Inc., Stephens Inc. and TransTerra
Co. and any Person who succeeds them as Limited Partners, but shall not
include a Special Limited Partner.

3.4 CAPITAL CONTRIBUTION OF THE NEW LIMITED PARTNER. Morgan shall make
an initial capital contribution to the Partnership of on the date of the
execution of this Agreement. Thereafter, Subsequent Monthly Capital
Contributions of shall be payable the first business day of each
month commencing September 1994 through January 1996.

4.1 SHARING RATIOS. The Initial and Subsequent Sharing Ratios of the
Partners shall be as follows:

NAME OF PARTICIPANT INITIAL SUBSEQUENT
SHARING SHARING
RATIOS RATIOS

BHC Securities, Inc.

Comprehensive Securities Systems, Inc.

CSS Management, Inc.

Hanifen, Imhoff Inc.

-3-

<PAGE>
- ------------------------------------------------------------------------------
Legg Mason, Inc.
- ------------------------------------------------------------------------------
McDonald & Company Securities, Inc.
- ------------------------------------------------------------------------------
Raymond James & Associates, Inc.
- ------------------------------------------------------------------------------
Southwest Securities, Inc.
- ------------------------------------------------------------------------------
Stephens Inc.
- ------------------------------------------------------------------------------
TransTerra Co. 10.89% 6.25%
- ------------------------------------------------------------------------------
Morgan Stanley Services, Inc.
- ------------------------------------------------------------------------------
TOTALS
- ------------------------------------------------------------------------------

The Initial Sharing Ratios shall apply to all allocations of Net Loss before
Project Completion; and the Subsequent Sharing Ratios shall apply for all
periods thereafter during which Project Completion remains attained in
accordance with the definition thereof contained in Section 2.18 hereof.
Distributions from operations or from a sale or other disposition of all, or
a substantial portion, of the assets of the Partnership shall be made in
proportion to Subsequent Sharing Ratios, in the same manner as the
distribution of proceeds of liquidation in Section 10.3(d) below, regardless
of the status of Project Completion.

4.2 ALLOCATION OF NET PROFIT AND NET LOSS. Subject to Sections 4.3, 4.4 and
4.5 hereof, Net Profit and Net Loss shall be allocated among the Partners as
follows:

(a) Net Loss shall be allocated among Partners in proportion to
their Initial or Subsequent Sharing Ratios, as the case may be,
provided, however, no amount of Net Loss shall be allocated to a Partner
with a negative balance in its Capital Account in excess of the amount
such Partner is obligated to restore to the Partnership, or deemed to
be obligated to restore to the Partnership pursuant to Treasury
Regulation Section 1.704. Any Net Loss that cannot be allocated to a
Partner because it has a negative balance in its Capital Account in
excess of the amount it is obligated, or deemed to be obligated, to
restore to the Partnership shall be allocated among the remaining
Partners without such excess amounts of negative balances in their
Capital Accounts in proportion to their applicable Initial or
Subsequent Sharing Ratios.

-4-

<PAGE>

(b) Net Income from operations shall be allocated among the
Partners in proportion to the amount of actual distributions of
Distributable Cash made in the current and all prior fiscal years,
to the extent of such actual distributions.

(c) Net Income from operations in excess of the amount of actual
distributions of Distributable Cash in the current and all prior
fiscal years shall be allocated in proportion to Subsequent Sharing
Ratios.

(d) Net Income from a sale or other disposition of all, or a
substantial portion, of the assets of the Partnership shall be allocated
among the Partners so as to cause the Capital Accounts of all Partners
to be in proportion to the Subsequent Sharing Ratios of the Partners.

4.6 DISTRIBUTIONS OF DISTRIBUTABLE CASH. Any Distributable Cash shall be
distributed to the Partners in accordance with the Subsequent Sharing Ratios
set forth in Section 4.1 at such times and in amounts as determined by the
Board of Directors of the General Partner, in its discretion; provided that
all Distributable Cash on hand shall be distributed at least annually within
one hundred twenty (120) days after the expiration of each fiscal year of the
Partnership. Notwithstanding any other provision hereof, if the Partnership
reports any taxable income for any fiscal year, the Partnership shall make a
good faith effort to distribute sufficient cash distributions to its Limited
Partners so that they would be able to pay federal, state, and local income
taxes with such distributions on such income at the highest effective rate
that any Limited Partner is subject to for such fiscal year. The Board of
Directors of the General Partner may from time to time also allow a Partner
to withdraw Distributable Cash from the Partnership, without concurrent
distributions to other Partners in accordance with the Sharing Ratios, if
agreed to in writing by all Partners. Such draws shall be repaid to the
Partnership from future distributions of Distributable Cash to the Partner.

10.3 (d) To the Partners in accordance with their Subsequent Sharing Ratios.

If at the time of liquidation the General Partner shall determine that an
immediate sale of part or all or the Partnership assets would cause undue
loss to the Partners, the General Partner may, in order to avoid loss, either
defer liquidation and retain the assets or distribute the assets to the
Partners in kind. In the event that the General Partner elects to distribute
such assets in kind, in determining the Partners' Subsequent Sharing Ratios
applicable to the distribution, the assets shall first be assigned a value
and the unrealized appreciation or depreciation in value of the assets shall
be allocated

-5-

<PAGE>

to the Partner's capital accounts, as if such assets had been sold and the
gain or loss allocated in the manner described in Article IV.

10.4 DEFICIT CAPITAL ACCOUNTS. It is understood and agreed that one purpose
of the provisions of Section 4.2, 4.3, 4.4, 4.5 and 4.7 is to ensure that
none of the Partners has a negative balance in their Capital Account upon
liquidation and to ensure that all allocations under this Partnership
Agreement will be respected by the Internal Revenue Service. The Partners and
the Partnership do not intend or expect that any Partner will have a negative
balance in its Capital Account upon liquidation, after all capital Account
adjustments for gain on sale or distribution, and the actual distribution of
proceeds, and the provisions of this Agreement shall be construed and
interpreted to give effect to such intention. No Partner shall have any
obligation upon dissolution of the Partnership or at any other time to
restore a negative balance in its Capital Account.

11.4 LIMITATION ON USE IN CASE OF DISTRIBUTION OF SOFTWARE. To the extent
that any of the Partners receive rights to any of the assets of the
Partnership by distribution in liquidation or otherwise, such Partners agree
that they will be subject to and shall comply with the limitations on the use
of Partnership software and the confidentiality provisions contained herein,
subject however to the terms of any other agreement the Partners may enter
into with the Partnership or among themselves which shall govern. The terms
of this Section 11.14 shall survive any termination of this Agreement. Each
Partner or Affiliate of the Partner shall have a worldwide, personal,
nontransferable, and nonexclusive right to reproduce, modify, translate, and
use the software. The software shall be used only for the processing of the
brokerage business of the Partner or an Affiliate of the Partner, including,
but not limited to, correspondent business on either a fully disclosed or
omnibus basis, and shall not be used in the operation of a service bureau or
sold or otherwise made available for use by a non-Affiliated entity without
the payment to the Partnership of additional consideration which is
commercially reasonable for the non-Affiliated services being provided. Such
compensation shall be mutually agreed upon by the user and the Partnership.
The software and any modifications, changes, enhancements, conversions,
upgrades or additions made to the software, made by the Partnership or a
third party on the Partnership's behalf, shall be the sole and exclusive
property of the Partnership, including all applicable rights to patents,
copyrights, trademarks and trade secrets inherent therein and appurtenant
thereto. Any modifications, changes, enhancements, conversions, upgrades or
additions made to the software by a Partner or an Affiliate of the Partner
or a third party on the Partner's or an Affiliate's behalf ("Permitted
Modifications") shall be the sole and exclusive property of such Partner or
Affiliate, including all applicable rights to patents, copyrights, trademarks
and trade secrets inherent therein and appurtenant thereto and the Partner
or its Affiliate shall have the right to use the Permitted Modifications

-6-

<PAGE>

without charge pursuant to the terms of the License Agreement.
Notwithstanding the above, nothing herein shall prevent the making of
modifications, changes, enhancements, upgrades or additions or developing any
new software products by a Partner which produce the same or similar results,
data, reports or information produced by the Permitted Modifications. Each
Partner shall not sell, transfer, publish, disclose, display or otherwise
make available to others (except for Affiliates) any source code, object
code, documentation or other material relating to the software. Each Partner
shall obtain agreements from its employees and the Affiliates' employees
maintaining confidentiality of, and prohibiting unauthorized use or
disclosure of, the source code or object code of the software or of any
portion of the software, or any of the algorithms or logic contained therein.
Without limitation of the foregoing, a Partner shall advise the other
Partners immediately in the event that the Partner learns or has reason to
believe that any person who has had access to the software, or any portion
thereof, has violated or intends to violate the terms of this Section; and
the Partner will (at such Partner's own expense), cooperate with the other
Partners in seeking injunctive or other equitable relief against such Person.

II. AMENDMENTS TO FIRST AMENDMENT TO AGREEMENT OF LIMITED PARTNERSHIP. The
General Partner, Limited Partners and Morgan hereby agree to amend and
restate the First Amendment to the Agreement of Limited Partnership as
follows:

1. MONTHLY CONTRIBUTIONS OF PARTNERS. The Limited Partners and
Morgan agree to make the following monthly contributions IN ADDITION to
the current contributions being made by the Limited Partners pursuant to
Article 3.1 and by Morgan pursuant to Article 3.4 of the Partnership
Agreement:

Partner Amount Paid/Mo. Amount Paid/Mo. Amount Paid/Mo.
- ------- from Oct. 93 - Mar. 94 from Apr. 94 - Sept. 94 Oct. 94 - End
---------------------- ----------------------- ---------------
<S> <C> <C> <C>
BHC Securities, Inc.

Hanifen, Imhoff Inc.

Legg Mason, Inc.

McDonald & Company
Securities, Inc.

Morgan Stanley Services, Inc.

Raymond James &
Associates, Inc.

Southwest Securities, Inc.

Stephens Inc.

-7-
<PAGE>

TransTerra Co. $16,995.41 $5,949.81 $2,718.75
</TABLE>

* Payments shall begin September 1, 1994.

3. SHARING RATIOS. The Initial and Subsequent Sharing Ratios
described in Article IV of the Partnership Agreement shall be unaffected
except as specifically stated in Section I above. The General Partner is not
required to contribute additional capital hereunder (the "Non-Contributing
Partner").

4. RIGHT TO USE NEW SYSTEM. Any technology developed by the Partnership
pursuant to the New Ventures shall be the exclusive property of the
Partnership. Except for Comprehensive Securities Systems, Inc., each of the
other Limited Partners and Morgan, (the "Brokers") shall have a right to use
any marketable system which is developed pursuant to the New Venture (the
"New System") pursuant to a licensing agreement which shall be substantially
in the form of the License Agreement attached as Exhibit B to the First
Amendment to the Participation and Shareholder Agreement dated on even date
herewith, between the parties.

III. AGREEMENT OF MORGAN TO ABIDE BY ALL TERMS AND CONDITIONS OF THE
AGREEMENT OF LIMITED PARTNERSHIP. By executing this Amendment below Morgan
represents, warrants and agrees that:

(a) Morgan has received an executed copy of the Agreement of Limited
Partnership and the First Amendment thereto, and along with the amendments
expressed herein, Morgan agrees to abide and be bound by the terms and
conditions contained therein;

(b) Morgan understands and agrees to be bound by the confidentiality
provisions contained in the Agreement of Limited Partnership; and

(c) Morgan knows of no reason why it cannot enter into this Agreement
and become a Limited Partner in Comprehensive Software Systems, Ltd. and that
doing so will not cause a breach of any agreements or create any liability
for the General Partner, Limited Partners or Morgan except those liabilities
expressed herein.

IV. CONSENT AND AGREEMENT OF THE GENERAL PARTNER AND LIMITED PARTNERS. The
General Partner and the Limited Partners hereby expressly agree to the
admission of Morgan as a Limited Partner in Comprehensive Software Systems,
Ltd. In addition, the General Partner and the Limited Partners hereby
understand, acknowledge and agree to the modifications in the Initial and
Subsequent Sharing Ratios as defined above. Except as expressly stated above,
the Capital Contributions of the General Partner, Limited Partners and Morgan
shall not be affected by this amendment.

V. SURVIVAL OF THE PARTNERSHIP. In the event of any conflict between the
Partnership Agreement, the First Amendment and this Second Amendment, the
terms and conditions of the First Amendment shall control over the
Partnership Agreement and the terms and conditions of

-8-

<PAGE>

the Second Amendment shall control over both the First Amendment and the
Second Amendment. All other terms and conditions of the Partnership Agreement
are hereby ratified and remain in full force and effect.

VI. SIGNATURES AND COUNTERPARTS. This Agreement may be signed in
counterpart, which when held together shall be deemed an original. Facsimile
signatures shall be treated as originals.

DATED the day and year first written above.

CSS MANAGEMENT, INC. BHC SECURITIES, INC.

- ----------------------------------- -------------------------------
By: William W. Simpson By:
------------------------------- ---------------------------
Its: President Its:
------------------------------- ---------------------------

COMPREHENSIVE SECURITIES HANIFEN, IMHOFF INC.
SYSTEMS, INC.

LEGG MASON, INC. McDONALD & COMPANY
SECURITIES, INC.

- ----------------------------------- -------------------------------
By: By:
------------------------------- ---------------------------
Its: Its:
------------------------------- ---------------------------

RAYMOND JAMES & ASSOCIATES, INC. SOUTHWEST SECURITIES, INC.

-9-

<PAGE>

STEPHENS INC. TRANSTERRA CO.

/s/ John Joe Ricketts
- ----------------------------------- -------------------------------
By: By: John Joe Ricketts
------------------------------- ---------------------------
Its: Its: Chairman
------------------------------- ---------------------------

MORGAN STANLEY SERVICES, INC.

- -----------------------------------
By:
------------------------------
Its:
------------------------------

-10-

<PAGE>

THIRD AMENDMENT TO
AGREEMENT OF LIMITED PARTNERSHIP OF
COMPREHENSIVE SOFTWARE SYSTEMS LTD.

THIS AMENDMENT IS MADE THIS 31st day of December 1995, by and between
CSS Management, Inc., a Colorado corporation as General Partner, and BHC
Securities, Inc., Comprehensive Securities Systems, Inc., Hanifen, Imhoff
Holdings, Inc., Legg Mason, Inc., McDonald & Company Securities, Inc.,
Raymond, James & Associates, Inc., Southwest Securities, Inc., Stephens Inc.,
Trans Terra Co. and Morgan Stanley Services, Inc. as Limited Partners.

WHEREAS, Comprehensive Software Systems, Ltd. (the "Partnership") was
formed on February 4, 1993, by the General Partner and the Limited Partners
for the purpose of providing consulting services and to develop software for
securities broker-dealers, banks and other financial institutions utilizing
state of the art hardware and software techniques; and

WHEREAS, on or about September 1993 the Agreement of Limited Partnership
("Partnership Agreement") was amended ("First Amendment") to, INTER ALIA, add
additional, partnership contributions; and

WHEREAS on or about December 1994 the Partnership Agreement was further
amended ("Second Amendment") to, INTER ALIA, add a new limited partner,
Morgan Stanley Services, Inc.; and

WHEREAS the parties desire to further amend the Agreement of Limited
Partnership to extend certain agreements, contracts and obligations as herein
provided.

NOW THEREFORE, in consideration for the mutual promises and conditions
set forth herein, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:

1. Article 3.1 of the Partnership Agreement, as amended by paragraph 1 of
the First Amendment, sets forth the monthly capital contributions of each
partner. Said contributions are restated and extended as set forth on
Schedule A, attached hereto and incorporated herein by this reference.

2. Article 1.4 of the Partnership Agreement is amended to change the
registered agent's address as follows: Marc J. Musyl, Suite 1000, 1200
Seventeenth Street, Denver, Colorado 80202 Phone: (303) 573-0988;
Fax (303) 572-6029.

3. Article 1.4 of the Partnership Agreement is amended to change the
addresses for the following Limited Partners: BHC Securities, One
Commerce Square, 2005 Market Street, Philadelphia, PA 19203-3212;
Legg Mason, Inc., 111 S. Calvert Street, P.O. Box 1476, Baltimore,
MD 21203-1476; Raymond James & Associates, Inc., 880

<PAGE>

Carillon Parkway, P.O. Box 12749, St. Petersburg, FL 33716; Hanifen
Imhoff Holdings, Inc. 1125 17th St. Suite 1810, Denver, CO 80202, P.O.
Box 5858 Denver, CO 80217-5858. In addition, TransTerra Co. has
undergone a name change and is now known as Ameritrade, Inc.

4. The Limited Partners hereby consent to the extension of the Employment
Agreements of William W. Simpson, Thomas F. Landy, Donald Crandall, Donna
Giammaria and Michael T. Landy for one year to expire February 4, 1997,
on the same terms and conditions as presently existing.

5. In the event of any conflict between the Partnership Agreement, the
First Amendment the Second Amendment and this Third Amendment, the terms
and conditions of the Third Amendment shall control over both the First
Amendment and the Second Amendment and The Partnership Agreement. All
other terms and conditions of the Partnership Agreement are hereby
ratified and remain in full force and effect.

6. This Amendment may be signed in counterpart, which when held together
shall be deemed an original. Facsimile signatures shall be treated as
originals.

DATED the day and year first written above.

CSS MANAGEMENT, INC. BHC SECURITIES, INC.

-------------------------------- --------------------------------
By: By:
---------------------------- ----------------------------
Its: Its:
--------------------------- ---------------------------

COMPREHENSIVE SECURITIES HANIFEN, IMHOFF HOLDINGS,
SYSTEMS, INC. INC.

-------------------------------- --------------------------------
By: By:
---------------------------- ----------------------------
Its: Its:
--------------------------- ---------------------------

LEGG MASON, INC. MCDONALD & COMPANY
SECURITIES, INC.

-------------------------------- --------------------------------
By: By:
---------------------------- ----------------------------
Its: Its:
--------------------------- ---------------------------

RAYMOND, JAMES & ASSOC., INC. SOUTHWEST SECURITIES, INC.

-------------------------------- --------------------------------
By: By:
---------------------------- ----------------------------
Its: Its:
--------------------------- ---------------------------

<PAGE>

STEPHENS, INC. TRANSTERRA CO.

/s/ John Joe Ricketts
-------------------------------- --------------------------------
By: By: John Joe Ricketts
---------------------------- ----------------------------
Its: Its: Chairman & CEO
--------------------------- ----------------------------

MORGAN STANLEY
SERVICES, INC.

--------------------------------
By:
----------------------------
Its:
---------------------------

<PAGE>

Schedule A
to Third Amendment to Agreement of Limited Partnership

<TABLE>

Initial Capital Monthly Capital Monthly Capital Monthly Capital
Contribution Contributions Contributions Contributions
(Total) 2/93-7/93 8/93-9/93 10/93-3/94
--------------- --------------- --------------- ----------------
<S> <C> <C> <C> <C>
GENERAL PARTNER
CSS Management, Inc. . . . . . .

LIMITED PARTNERS
BHC Securities, Inc. . . . . . .

Comprehensive Securities
Systems, Inc. . . . . . . . . .

Hanifen, Imhoff, Inc.. . . . . .

Legg Mason, Inc. . . . . . . . .

McDonald & Company
Securities, Inc.. . . . . . . .

Raymond, James & Assoc's, Inc. .

Southwest Securities, Inc. . . .

Stephens, Inc. . . . . . . . . .

TransTerra Company . . . . . . . 8,333.33 45,527.78 25,000.00 41,995.41

Morgan Stanley Services. . . . .

</TABLE>

<TABLE>
<CAPTION>
Monthly Capital Monthly Capital Monthly Capital Monthly Capital
Contributions Contributions Contributions Contributions
4/94-8/94 9/94 10/94-12/95 1/96-12/96
--------------- --------------- --------------- ----------------
<S> <C> <C> <C> <C>
GENERAL PARTNER
CSS Management, Inc. . . . . . .

LIMITED PARTNERS
BHC Securities, Inc. . . . . . .

Comprehensive Securities
Systems, Inc. . . . . . . . . .

Hanifen, Imhoff, Inc.. . . . . .

Legg Mason, Inc. . . . . . . . .

McDonald & Company
Securities, Inc.. . . . . . . .

Raymond, James & Assoc's, Inc. .

Southwest Securities, Inc. . . .

Stephens, Inc. . . . . . . . . .

TransTerra Company . . . . . . . 30,949.81 30,949.81 27,718.75 27,718.75

Morgan Stanley Services. . . . .

</TABLE>

<PAGE>

INDEPENDENT AUDITORS' CONSENT

We consent to the use in this Registration Statement of AmeriTrade Holding
Corporation on Form S-1 of our report dated November 1, 1996, appearing in
the Prospectus, which is part of this Registration Statement.

We also consent to the reference to us under the heading "Experts" in such
Prospectus.

DELOITTE & TOUCHE LLP

Omaha, Nebraska
February 24, 1996

<PAGE>
<ARTICLE> BD
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS INCLUDED IN THIS REGISTRATION STATEMENT FILING AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>

<S> <C> <C>
<PERIOD-TYPE> YEAR 3-MOS
<FISCAL-YEAR-END> SEP-27-1996 SEP-26-1997
<PERIOD-END> SEP-27-1996 DEC-31-1996
<CASH> 191,435,667 258,883,340
<RECEIVABLES> 170,196,112 202,790,120
<SECURITIES-RESALE> 0 0
<SECURITIES-BORROWED> 10,975,805 8,455,700
<INSTRUMENTS-OWNED> 0 0
<PP&E> 3,746,178 3,613,213
<TOTAL-ASSETS> 401,679,232 502,485,968
<SHORT-TERM> 0 1,700,000
<PAYABLES> 365,357,457 466,162,270
<REPOS-SOLD> 0 0
<SECURITIES-LOANED> 0 0
<INSTRUMENTS-SOLD> 0 0
<LONG-TERM> 4,853,000 4,037,000
0 0
0 0
<COMMON> 128,138 128,138
<OTHER-SE> 30,533,926 30,458,560
<TOTAL-LIABILITY-AND-EQUITY> 401,679,232 502,485,968
<TRADING-REVENUE> 0 0
<INTEREST-DIVIDENDS> 22,517,655 7,007,205
<COMMISSIONS> 36,469,561 10,439,302
<INVESTMENT-BANKING-REVENUES> 0 0
<FEE-REVENUE> 3,032,443 806,950
<INTEREST-EXPENSE> 11,039,777 3,690,010
<COMPENSATION> 14,049,642 4,142,424
<INCOME-PRETAX> 18,417,593 (64,390)
<INCOME-PRE-EXTRAORDINARY> 18,417,593 (64,390)
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 11,158,345 (75,366)
<EPS-PRIMARY> 0.871 (0.006)
<EPS-DILUTED> 0.871 (0.006)

</TABLE>