AMERITRADE HOLDING CORP, S-1/A, 1997-01-21

AMERITRADE HOLDING CORP
S-1/A, 1997-01-21
SECURITY BROKERS, DEALERS & FLOTATION COMPANIES

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<PAGE>

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 21, 1997

REGISTRATION NO. 333-17495

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

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------

AMENDMENT NO. 1
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. / /
--------------------------

CALCULATION OF REGISTRATION FEE

<TABLE>
<CAPTION>
PROPOSED MAXIMUM
AGGREGATE OFFERING AMOUNT OF REGISTRATION FEE
TITLE OF EACH CLASS OF SECURITIES TO BE REGISTERED PRICE(1)(2) (3)
<S> <C> <C>
Class A Common Stock, $.01 par value...................... $50,000,000 $15,151.52
</TABLE>

(1) Includes shares of Class A Common Stock issuable upon exercise of an
over-allotment option granted to the underwriters.

(2) Estimated solely for purposes of determining the registration fee.

(3) Previously paid.

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

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 JANUARY 21, 1997.

AmeriTrade Holding Corporation

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, SHARES ARE BEING SOLD BY AMERITRADE HOLDING
CORPORATION (THE "COMPANY") AND 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 $
AND $ 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 AND HIS
AFFILIATES WILL OWN APPROXIMATELY % OF THE CLASS A STOCK AND ALL OF
THE CLASS B STOCK, WHICH WILL CONSTITUTE APPROXIMATELY % OF THE
OUTSTANDING COMMON STOCK ( % 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."

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 9
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 $ .

(2) THE COMPANY HAS GRANTED THE UNDERWRITERS AN OPTION, EXERCISABLE FOR 30 DAYS
FROM THE DATE OF THIS PROSPECTUS, TO PURCHASE A MAXIMUM OF 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
COMPANY 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]

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>
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]

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.

POWER
CONTROL
STABILITY
SERVICE
GROWTH
EFFICIENCY
ACCESS
LEADERSHIP
<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.

[PICTURES]

EXPERIENCE
CONFIDENCE
SECURITY
INTEGRITY
TECHNOLOGY
PERFORMANCE

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.
--------------

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 $ 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
ENTIRE TEXT OF THIS PROSPECTUS AND DEMONSTRATIONS OF CERTAIN OF THE COMPANY'S
PRODUCTS AND SERVICES ARE AVAILABLE ON THE CD-ROM ATTACHED TO THE INSIDE BACK
COVER PAGE OF THIS PROSPECTUS.

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. Average daily
trading volume during the month of December 1996 was approximately 5,200
executed transactions, compared to an average daily trading volume of
approximately 3,700 executed transactions during fiscal 1996. This increase in
account activity is a result of a strategic acquisition made in November 1995 as
well as an increase in the Company's advertising and promotional expenditures.

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 leverage the
use of technology 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 segment

3
<PAGE>
the marketplace, which enables it 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 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 in most cases still substantially lower than those charged by
full-commission or traditional discount brokerage firms for similar
transactions. 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.

BUSINESS STRATEGY

The Company believes based on management experience and research reports
that four significant trends currently drive growth in the discount brokerage
industry. First, the unbundling of brokerage services from other financial and
information services has permitted investors to pick and choose among various
financial and information service providers for specified services. Second,
consumers have expanded access to powerful technology, which they are using with
increasing frequency. Third, investors are becoming more self-reliant and
value-conscious with respect to their financial matters. Finally, the growth in
financial assets held by these individuals is accelerating, due to the largest
absolute transference of wealth in history. See "Business--Industry." Based on
its success to date, the Company believes that its focus on innovative
technology and cost effective services permits it to take advantage of these
trends. The Company seeks to capitalize on the changing financial services
industry and to increase its market share by pursuing the following strategies:

4
<PAGE>

- CREATE TECHNOLOGICALLY INNOVATIVE SOLUTIONS TO INVESTOR NEEDS. 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. The Company is actively
pursuing additional technologies to service the rapidly evolving financial
services industry. See "Business--Strategic Relationships" and
"Business--Product Development."

- PROVIDE THE BEST TRANSACTION VALUES TO INVESTORS. The Company strives to
offer investors the best transaction values 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. 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.

- EXPAND CLEARING AND EXECUTION SERVICES TO CORRESPONDENTS. The Company
intends to continue 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 "Business--Clearing and
Execution Services."

For more detailed information regarding the Company's business strategy, 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.

5
<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................. $ 0.18 $ 0.48 $ 0.60 $ 0.88 $ 1.39 $ 0.33
----------- ----------- ----------- ----------- ----------- ---------
----------- ----------- ----------- ----------- ----------- ---------

Weighted average shares outstanding....... 9,125 8,573 8,035 8,009 8,009 8,009

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

<CAPTION>
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....... 8,009
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...........
Receivable from customers and
correspondents..........................
Total assets..............................
Payable to customers and correspondents...
Notes payable.............................
Stockholders' equity......................
</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 shares of Class A Stock offered
by the Company hereby at an assumed initial public offering price of $
per share and the receipt and application of the estimated net proceeds
therefrom to the Company. See "Use of Proceeds" and "Capitalization."

6
<PAGE>
THE OFFERING

<TABLE>
<S> <C>
Class A Stock offered by:
The Company..................... shares
The Selling Stockholders........ shares
Total......................... shares
Common Stock to be Outstanding
after the Offering:
Class A Stock................... shares
Class B Stock................... 852,750 shares
Total......................... 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 and his affiliates will own approximately % of
the Class A Stock and all of the Class B Stock, which
will constitute approximately % of the outstanding
Common Stock ( % 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>

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<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>

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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."

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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

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

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<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. The
Company has never experienced a systems failure that has resulted in a material
loss to the Company. However, 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. 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 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."

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<PAGE>
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 AFFILIATES

Upon completion of the Offering, J. Joe Ricketts, Marlene M. Ricketts, and
trusts held for the benefit of their children, grandchildren and their spouses
(collectively, the "Ricketts Family") will own approximately % of the Class A
Stock and all of the Class B Stock, which will constitute approximately % of
the Common Stock ( % if the Underwriters' over-allotment option is exercised in
full). See "Principal and Selling Stockholders." 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 the Ricketts Family and its 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 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

12
<PAGE>

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
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

13
<PAGE>

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, 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.

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<PAGE>

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

Upon completion of the Offering, the Company will have approximately
shares of Common Stock outstanding, including shares of Class A Stock
offered hereby and 7,700,150 "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 of 1933, as amended (the
"Securities 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 7,700,150
restricted shares, 7,568,743 shares of Common Stock are currently eligible for
sale under Rule 144, and 131,407 shares of Common Stock will be eligible for
sale under Rule 144 beginning in November 1998. Certain employees of the Company
purchased 59,462 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 1998, 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

15
<PAGE>

Company intends to register under the Securities Act 550,000 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 $ per share. See "Dilution."

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USE OF PROCEEDS

The net proceeds to the Company from the Offering are estimated to be
approximately $ million ($ million if the Underwriters' over-allotment
option is exercised in full) assuming an initial public offering price of
$ 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."

17
<PAGE>
DILUTION

The net tangible book value of the Common Stock at December 31, 1996 was
approximately $24.0 million, or $3.00 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 $ 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 $ million,
or $ per share. This represents an immediate increase in the net tangible
book value of $ per share to existing stockholders and an immediate
dilution of $ per share to new investors purchasing shares at an assumed
initial public offering price of $ 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....................... $
Net tangible book value per share at December 31, 1996.............. $ 3.00
Increase per share attributable to new investors....................
Pro forma net tangible book value per share at December 31, 1996 after
giving effect to the Offering.......................................
---------
Net tangible book value dilution per share to new investors........... $
---------
---------
</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 to the Company 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 $ 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........................... 8,008,650 % $ 1,101,668 % $ 0.14
New investors................................... $
---------- ----- ------------ -----
Total....................................... 100% 100%
---------- ----- ------------ -----
---------- ----- ------------ -----
</TABLE>

The foregoing computations exclude 2,500 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." The award of such shares will cause further dilution to new
investors.

18
<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 $ 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, 7,155,900 shares
issued and outstanding................................................................ 72
Class B Stock, par value $.01 per share, 2,000,000 shares authorized, 852,750 shares
issued and outstanding................................................................ 9 9
Additional paid-in-capital.............................................................. 857
Retained earnings....................................................................... 29,649
--------- ---
Total stockholders' equity............................................................ 30,587
--------- ---
Total capitalization................................................................ $ 36,324 $
--------- ---
--------- ---
</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.

19
<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....................... $0.18 $0.48 $0.60 $0.88 $1.39
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
Weighted average shares outstanding............. 9,125 8,573 8,035 8,009 8,009

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....................... $0.33 $(0.01)
--------- --------
--------- --------
Weighted average shares outstanding............. 8,009 8,009
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).

20
<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.

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.

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

21
<PAGE>
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 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." Second, technology

22
<PAGE>

has increased in importance as delivery channels such as the Internet have
become more prevalent. See "Business--Industry." 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.

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 with its previous clearing firm incurred 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

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 segment the
marketplace, which enables it 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.

29
<PAGE>

discount brokerage services have steadily decreased over the past several years;
however, the Company believes based on published reports that its brokerage
commissions are in most cases still substantially lower than those charged by
full-commission or traditional discount brokerage firms for similar
transactions. 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 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

30
<PAGE>

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 pursuing the following strategies:

- MARKET DISTINCT BRANDS TO SPECIFIC GROUPS OF DISCOUNT BROKERAGE
CUSTOMERS. The Company markets 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 research
conducted with focus groups 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 trading 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.

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

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<PAGE>
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.

- EXPAND CLEARING AND EXECUTION SERVICES TO CORRESPONDENTS. The Company
intends to continue 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 by allowing the Company to reach
investors outside of its targeted retail brokerage markets. 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. In addition, the Company's
clearing and execution services diversify the Company's revenues. See
"--Clearing and Execution Services."

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>

32
<PAGE>
[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.

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
create and execute program trades. 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. A demonstration of Accutrade FOR WINDOWS is available on the CD-ROM
attached to the inside back cover page of this Prospectus.

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.

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<PAGE>
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.

[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 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.

[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 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

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<PAGE>

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, 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 serves investors who are comfortable with the Internet and prefer to
trade exclusively through electronic communications in exchange for low priced
trade executions. Customers 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,

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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.

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]

Data Broadcasting Corporation ("DBC") is a company that provides financial
information to individual investors. The Company has reached an arrangement with
DBC to have Accutrade, Aufhauser and Ceres included on DBC's Web site. The
Company will create co-branded Web sites, which will feature both DBC's and the
broker's logos and will grant DBC's 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."

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<PAGE>
PRODUCT DEVELOPMENT

The Company currently offers its customers a broad range of products and
services designed to address their individual needs. Demonstrations of certain
of the Company's products and services are available on the CD-ROM attached to
the inside back cover page of this Prospectus. 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 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]

[LOGO] Quote.com, Inc.

[LOGO] Thomson Financial Services

[LOGO]

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<PAGE>
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 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

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<PAGE>
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 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

39
<PAGE>

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 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

40
<PAGE>

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 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."

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<PAGE>
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
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

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<PAGE>

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 of price, technology, financial strength and customer service. Based on
research conducted with focus groups 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

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<PAGE>

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. See "Risk
Factors--Dependence on 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
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.

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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. 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>

45
<PAGE>
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. 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.

46
<PAGE>
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 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 conditon or operating
results.

After the Company's purchase of Aufhauser from Mr. Keith Aufhauser in July
1995, Aufhauser filed a trademark application with the U.S. Patent and Trademark
Office to register the names "K. Aufhauser & Co., Inc." and "Aufhauser." To
obtain a trademark incorporating a person's surname, the consent of that person
is required. Mr. Aufhauser has refused to give this consent. As required by the
Securities Purchase Agreement dated as of July 10, 1995 between the Company and
Mr. Aufhauser, on December 26, 1996, the Company filed a demand for arbitration
in New York, New York under the rules of the American Arbitration Association
regarding the ownership of the rights to the names "K. Aufhauser & Co., Inc."
and "Aufhauser." The Company believes based on consultations with legal counsel
that it has meritorious claims to the trademarks and is pursuing the arbitration
vigorously. The Company does not believe that the outcome of this arbitration
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.

47
<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 54 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 D. 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.

48
<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.

49
<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.

50
<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.

51
<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 Incentive Plan. Pursuant to the
Directors Plan, upon election to the Board for the first term, each such
director will receive 500 restricted shares of Class A Stock and options to
purchase 1,000 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 a number of shares of Class A
Stock based on the financial performance of the Company during the prior fiscal
year. 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 vested after completing six years of service with the Company.
Generally, distributions from the Profit

52
<PAGE>
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, 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. Upon completion of the
Offering, the Profit Sharing Plan will own approximately % 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 which may be awarded
under the Incentive Plan shall not exceed 500,000 shares in the aggregate, no
more than 100,000 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 will authorize 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 shall be administered by a committee of the Board
consisting of two or more non-employee directors appointed to administer the
Incentive Plan (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, 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 number of units and the
performance measures and periods shall be established by the Committee at the
time such award is made.

53
<PAGE>
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 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.

54
<PAGE>
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."

55
<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 -------------------------
OF PERCENT NUMBER OF NUMBER PERCENT
NAME OF STOCKHOLDER SHARES(1) OF SHARES SHARES OFFERED OF SHARES OF SHARES
- ------------------------------------------------- ----------- ------------- --------------- ---------- -------------

<S> <C> <C> <C> <C> <C>
J. Joe Ricketts (2).............................. 5,479,713 68.4% 96,000 5,383,713 %

Marlene M. Ricketts (3).......................... 2,739,856 34.2 96,000 2,643,856

Ricketts Grandchildren Trust (4)................. 990,000 12.4 990,000

AmeriTrade Holding Corporation Profit
Sharing Plan (5)............................... 870,780 10.9 870,780

Lee M. and Mary Jean Volkmer, as joint tenants... 255,750 3.2 50,000 205,750

Gerald E. and Patricia Gress, as joint tenants... 120,000 1.5 50,000 70,000 *

Laurine Volkmer.................................. 103,500 1.3 19,000 84,500 *

Joseph A. Konen (6).............................. 5,555 * -- 5,555 *

Robert T. Slezak (7)............................. 2,222 * -- 2,222 *

Thomas J. Pleiss (8)............................. 444 * -- 444 *

P. Richard Sirbu, Jr............................. 277 * -- 277 *

Gene L. Finn..................................... 500 * -- 500 *

Thomas Y. Hartley................................ 500 * -- 500 *

Charles L. Marinaccio............................ 500 * -- 500 *

Mark L. Mitchell................................. 500 * -- 500 *

John W. Ward..................................... 500 * -- 500 *

All directors and executive officers
as a group (20 in group)....................... 5,579,271 69.7 96,000 5,483,271
</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 2,296,186 shares of Class A Stock owned by Marlene M. Ricketts,
17,310 shares of Class A Stock in J. Ricketts IRA, 17,310 shares of Class A
Stock in M. Ricketts IRA, 426,390 shares of Class B Stock owned by the Joe
Ricketts Dynasty Trust, and 426,360 shares of Class B Stock owned by the
Marlene Ricketts Dynasty Trust. Mr. Ricketts' address is c/o AmeriTrade
Holding Corporation, 4211 South 102nd Street, Omaha, Nebraska 68127.

(3) Includes 17,310 shares of Class A Stock in M. Ricketts IRA and 426,360
shares of Class B Stock owned by the Marlene Ricketts Dynasty Trust. Ms.
Ricketts' address is c/o AmeriTrade Holding Corporation, 4211 South 102nd
Street, Omaha, Nebraska 68127.

56
<PAGE>
(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 7,155,900 shares of Class A Stock outstanding, 852,750
shares of Class B Stock outstanding and no shares of Preferred Stock were
outstanding. After the Offering, there will be shares of Class A Stock
outstanding ( shares if the Underwriters' over-allotment option is exercised in
full), 852,750 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
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

57
<PAGE>
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 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

58
<PAGE>
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 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

59
<PAGE>
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
shares of Common Stock outstanding ( shares if the Underwriters' over-allotment
option is exercisable in full), including shares of Class A Stock offered
hereby and 7,700,150 "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 6,844,900 shares of Class A Stock that were outstanding before the
Offering but are not being sold pursuant to the Offering and all 852,750
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 two years, 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 7,700,150 restricted
shares, 7,568,743 shares of Common Stock are currently eligible for sale under
Rule 144 and 131,407 shares of Common Stock will be eligible for sale under Rule
144 beginning in November 1998. Certain employees of the Company purchased
59,462 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
1998, 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 550,000 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."

60
<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..................................................................
-----------------
-----------------
</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.

The Company has 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 additional
outstanding shares of Class A Stock from the Company 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 $
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.

The Representatives have informed the Company that they do not expect
discretionary sales by the Underwriters to exceed 5% of the shares of Class A
Stock being offered hereby.

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 % of the shares offered hereby, to directors,

61
<PAGE>
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. 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.

62
<PAGE>
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.

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.

63
<PAGE>
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.

64
<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

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 8,311,530 shares
issued in 1995; 25,000,000 shares authorized and 7,155,900
shares issued and outstanding at September 27 and December
31, 1996................................................... 83,115 71,559 71,559
Class B--30,000,000 shares authorized and 1,559,250 shares
issued in 1995; 2,000,000 shares authorized and 852,750
shares issued and outstanding at September 27 and December
31, 1996................................................... 15,593 8,528 8,528
------------- ------------- --------------
Total common stock......................................... 98,708 80,087 80,087
Additional paid in capital......................................... 1,002,960 857,716 857,716
Retained earnings.................................................. 19,839,450 29,724,261 29,648,895
Treasury stock--at cost:
1,832,130 Class A shares in 1995............................... (1,398,034) -- --
30,000 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)

<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>
Revenues:
Commissions and clearing fees (including
amounts from a related party of $0,
$1,480,349, and $7,758,836 in 1994, 1995
and 1996, respectively, and $1,545,155,
and $2,036,390 in fiscal quarters ended
December 31, 1995 and 1996,
respectively)............................ $ 20,386,228 $ 23,977,481 $ 36,469,561 $ 8,269,684 $ 10,439,302
Interest revenue............................ 9,856,108 16,296,871 22,517,655 5,369,680 7,007,205
Equity income (loss) from investments....... (575,250) 542,515 3,358,871 627,228 788,249
Gain from sale of partnership interest...... -- 584,293 -- -- --
Other....................................... 1,693,861 1,480,730 3,032,443 547,591 806,950
------------- ------------- ------------- ------------- -------------
Total revenues............................ 31,360,947 42,881,890 65,378,530 14,814,183 19,041,706
Interest expense............................ 3,911,674 7,862,287 11,039,777 2,765,605 3,690,010
------------- ------------- ------------- ------------- -------------
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..................... $ 0.60 $ 0.88 $ 1.39 $ 0.33 $ (0.01)
------------- ------------- ------------- ------------- -------------
------------- ------------- ------------- ------------- -------------
Weighted average shares outstanding........... 8,034,969 8,008,650 8,008,650 8,008,650 8,008,650
------------- ------------- ------------- ------------- -------------
------------- ------------- ------------- ------------- -------------
</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 $ 83,115 $ 15,593 $ 98,708 $ 1,002,960 $ 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 83,115 15,593 98,708 1,002,960 12,808,303 (1,437,399)
Net income....................... 7,031,147 -- -- -- -- 7,031,147 --
------------ --------- --------- --------- ----------- ------------ -----------
Balance, September 29, 1995...... 19,503,719 83,115 15,593 98,708 1,002,960 19,839,450 (1,437,399)
Net income....................... 11,158,345 -- -- -- -- 11,158,345 --
Retirement of treasury stock..... -- (11,556) (7,065) (18,621) (145,244) (1,273,534) 1,437,399
------------ --------- --------- --------- ----------- ------------ -----------
Balance, September 27, 1996...... 30,662,064 71,559 8,528 80,087 857,716 29,724,261 --
Net loss (unaudited)............. (75,366) -- -- -- -- (75,366) --
------------ --------- --------- --------- ----------- ------------ -----------
Balance, December 31, 1996
(unaudited)..................... $ 30,586,698 $ 71,559 $ 8,528 $ 80,087 $ 857,716 $ 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 1,999,534 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.

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 consolidated financial statements and the reported amounts of revenue and
expenses during the reporting period. Actual results could differ from those
estimates.

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)

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.

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.

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)

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.

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>

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

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.

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

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)

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>

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-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

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-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

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.

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>

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

8. COMMITMENTS AND CONTINGENCIES (CONTINUED)

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 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

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 (CONTINUED)

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
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.

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

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 $ 16,583 $ 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.................................. $ 0.33 $ 0.40 $ 0.39 $ 0.28 $ (0.01)
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
</TABLE>

F-16
<PAGE>

APPENDIX A

SCRIPT OF ITEMS ON CD-ROM ATTACHED TO INSIDE BACK COVER PAGE OF PROSPECTUS

ACCUTRADE FOR WINDOWS DEMONSTRATION

Voice-over for the INTRO section:

Welcome to this edition of "Window on the World of Investing," an
interactive presentation on PC and online investing technology -- and how that
power can work for you.

It's no secret that the world of trading and investment has undergone
dramatic changes in recent years.

Trading volumes are at all-time highs. Global markets have opened at
breathtaking speed. Mutual funds have proliferated at an even more astonishing
rate.

And a new cadre of individual investors has emerged, eager to capitalize on
the opportunities created in this exciting new world.

They are active investors, who monitor the market on a daily or weekly
basis.

They are independent investors, constantly in search of information, intent
on developing their own investment strategies and ideas.

They are cost-conscious investors, determined to control trading expenses -
and thereby lift total returns.

And they are technologically adept investors, well aware that the major
trading firms have used computers and telecommunications to astounding effect -
and eager to have access to that same power.

Now a growing number of these individuals are capitalizing on the potential
of online investing.

Through a PC-based investment tool that gives you, as an individual
investor, the ability to trade on your own ideas -- and on your own time.

That provides access to the same timely information that professional
traders use every day.

That offers you, for the first time in history, the ability to execute your
own program trades -- with the same core technology that major investment firms
employ.

And that provides the one thing individual investors need the most to
succeed in the game of investing today.

A level playing field.

In this interactive news presentation, you'll have the opportunity to
explore this breakthrough new investment tool, called Accutrade FOR WINDOWS.

Click on "Heard On Wall Street" to hear what other investors - and Wall
Street expert Elaine Garzarelli - have to say about the benefits of online
investing.

Click on "The Accutrade Advantage" to see how Accutrade FOR WINDOWS compares
with conventional online investment systems.

Click on "The Tour" to explore the program's most powerful features and
tools.

Click on "How To Get Started" to learn more about Accutrade brokerage
services, and to open your Accutrade account.

A-1
<PAGE>

Click on "One Minute With Joe Ricketts" to meet the Chairman of Accutrade,
and to hear about some of our plans for the future of online investing.

And remember - you're always in control. If you want to move to another part
of the presentation, just click the appropriate button. Or, you can pause and
play, go to the next or to the previous segment, or click this button to exit at
any time.

HEARD ON WALL STREET

Voice-over for the HEARD ON WALL STREET section:

When most independent investors first consider the idea of online investing,
three critical questions come to mind.

"Why invest online? What advantages are available to online investors that
aren't easily available through other channels?"

"What are the trends driving investors to trade online? And is this really
the future of investing?"

Finally, "What do you need, in terms of computers, peripherals, and other
resources, to invest efficiently online?"

To answer these questions, let's take a closer look at the online trading
experience, through the eyes of three independent investors and from the
perspective of Elaine Garzarelli - one of the nation's leading market
forecasters and a member of the Institutional Investor First Team All Stars for
11 consecutive years.

To hear what these experts have to say, just click on any question, then
click on one of the individual's photographs. When you're finished, click
another question. If you want to move to another part of the presentation, just
click any of the buttons at the bottom of the screen.

Visual

Elaine Garzarelli highlights and animates.

Elaine Garzarelli

Why Invest Online?

I think the investor that has Accutrade will probably become more of a
trader than a long-term investor. I think there are so many capabilities now
without having to do a lot of running around by foot to the library, making
telephone calls to the companies, listening to the brokerage calls every morning
that you can just find out in the middle of the day that you can become more
sophisticated and more of a trader. I love the idea that I could every 15
minutes just have stocks that I own show up on the screen compared to the price
where it was 15 minutes ago or the price where I bought it and the ability if I
want to sell a stock to look at my holdings over the last 10 years in that stock
and for tax purposes, know exactly when I should sell it or for the best tax
treatment.

What Are The Trends?

The best value for your commission dollar is to I think probably trade
through a discount broker. I think that trading through a discount broker is...
you know, a lot of what you pay for is research. I think since the stock market
crash and the individual investor became aware of the stock market there's been
much more interest in futures and options and spreads and how to protect your
money with puts and calls and things like that. So, it's unbelievable, pre-1987
and post-1987.

A-2
<PAGE>

What's Needed?

To be an active trader I would say first of all you should not take the
advice of major brokerage firms because their advice generally goes out to the
institutional investor first and they can act very quickly on it. I think that
what an individual investor should do is make a list of stocks, find out how
much they've declined from where they were in the past and get one or two very
highly rated newsletters and pick the industries that are recommended and then
the individual investor can pick his own stock and not the ones that are
recommended by the brokerage firms that have already been discounted.

Visual

Investor #1 highlights and animates.

Investor #1

Why do I trade online? That's easy. I trade lots of positions on a daily
basis--and very often a few minutes delay in placing a buy or sell order can
mean the difference between profit and loss.

Visuals

Screen animation of trading execution on Accutrade.

Investor #1

When I trade online with Accutrade, I know I have a direct connection to the
trading desk. That means I've got a better chance of getting my trade executed
when I want--at the price I want.

Visual

Screen sequence of Confirms appearing on screen.

Investor #1

And I get Confirms back straight to my PC automatically. That's something
traditional trading channels just don't provide.

Visual

Investor #2 highlights and animates.

Investor #2

Equities and mutual funds are only one part of my trading strategy. To
generate the returns I'm looking for, and to control risk, I need access to more
sophisticated vehicles.

Visual

Screen shots of Futures, Options, Buy Writes, Spreads and Straddles.

Investor #2

I trade options. I use Buy Writes, Spreads and Straddles. If I didn't have
access to the vehicles I need, I wouldn't be trading online. But with Accutrade,
there are no compromises.

Visual

Investor #3 highlights and animates.

A-3
<PAGE>

Investor #3

For me, automation is the key advantage of trading online. You see, I'm a
market timer by style-- which means I often buy or sell multiple positions based
on overall market factors.

Visual

Screen animation of program trading.

Investor #3

With the technology in Accutrade FOR WINDOWS, I've got the ability to set up
my own program trades, based on the characteristics I specify. If the Dow hits a
peak, my program trade executes and I'm out of the market and into cash. And if
some strong stocks take a sudden plunge? Accutrade FOR WINDOWS kicks in again,
and I've got the opportunity to do some bottom fishing.

Visual

Investor #1 highlights and animates for question #2: What are the trends
driving investors to trade online?

Investor #1

I started with a full-service broker. But I didn't see returns to justify
the expense. In my opinion, the urge to lower costs is a big part of the trend
toward investing online. Eliminating broker intervention means less room for
error, and less cost as well. Trading online gives me the ability to trade more
actively-- which suits my personal style.

Visual

Investor #2 highlights and animates for question #2: What are the trends
driving investors to trade online?

Investor #2

The markets are all about competition. Competition for information and
opportunities. My competitors in the market have the ability to gather data from
around the world. They have the ability to act on that data in seconds. If I
don't have the same tools, my portfolio suffers. With Accutrade FOR WINDOWS, I
know that, while the game may be faster than ever, it's now a fair game.

Visual

Investor #3 highlights and animates for question #2: What trends are driving
investors to trade online?

Investor #3

I very rarely have time to call my broker during work hours. And I certainly
don't have the time to wait on hold. With Accutrade FOR WINDOWS, I've got access
to my account, and to the markets, when it's most convenient for me. So I can
stay on top of my financial life--without spending my entire life doing it.

Visual

Investor #1 highlights and animates for question #3: What do you need to
trade online?

A-4
<PAGE>

Investor #1

At first, I thought I'd need a power-users workstation to take advantage of
the power of Accutrade FOR WINDOWS. But the computer and modem that I already
have is more than enough. The software installs in a matter of minutes. And
because it's built for Windows, I've learned to use all the features that matter
to me--without even cracking the manual.

Visual

Investor #2 highlights and animates for question #3: What do you need to
invest online?

Investor #2

I think it's easier to explain that you don't need to trade with Accutrade
FOR WINDOWS. You don't need a degree in computer science, because Accutrade FOR
WINDOWS is as simple as you'd expect a Windows program to be. And you don't need
to be an Internet wizard or online expert, because help from Accutrade is never
more than a phone call away.

Visual

Investor #3 highlights and animates for question #3: What you need to run
Accutrade FOR WINDOWS.

Investor #3

All you need besides your computer setup is an account with Accutrade.
That's easy to establish--and after trading with them for more than a decade, I
can tell you it's a relationship that's been a pleasure to maintain as well.

THE ACCUTRADE ADVANTAGE

Voice-over for the Accutrade Advantage section:

Accutrade FOR WINDOWS was designed for active investors: People who have the
knowledge and skill to capitalize on the opportunities that today's fast moving
markets provide.

And active investors have two criteria when choosing an investment program.

Button Fades In: Greater Power

Does the program give me all the power I need to perform at my best?

Button Fades In: Lower Costs

And does the program help me to lower my transaction costs?

In this section, we'll see how Accutrade FOR WINDOWS offers more, and costs
less, than programs like Street Smart from Charles Schwab--a typical
consumer-based investment program. Click on the buttons on this screen to learn
more.

Click On Greater Power

At Accutrade, we know that active investors need the broadest possible range
of trading capabilities.

That's why Accutrade FOR WINDOWS gives you full options
capabilities--including the ability to execute Buy Writes, and Spreads and
Straddles.

A-5
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Consumer-based investment programs like Street Smart are focused mostly on
buying and selling equities. And while Street Smart gives you access to the
options market, it doesn't give you the more sophisticated capabilities that
Accutrade FOR WINDOWS provides--and that professional traders often employ.

Which raises the question: If you can't trade options by the same rules as
the professionals, is it really in your best interests to trade options at all?

Perhaps the most revolutionary feature in Accutrade FOR WINDOWS is its
program trading capability-- which allows you to program the system to buy or
sell any security, based on conditions that you define.

You can even program Accutrade FOR WINDOWS to alert your pager when market
conditions are changing--so you can stay in touch with the markets, no matter
where you might be.

The closest that programs like Street Smart can come to this capability is
an alert function, which causes your computer to beep when a stock or index
reaches a predefined price. But the system won't do anything based on that
event. Which means if you want to be in the markets, you'll need to be in front
of your computer as well.

Another Accutrade power tool is the Baskets function, which allows you to
track a selected set of securities, and to buy and sell that basket with a
single command.

For instance, suppose you want to track a basket of stocks in a particular
industry--and the entire group is trending upward.

With Accutrade FOR WINDOWS you can get in on the action with a single
electronic order--in a matter of moments.

With programs like Street Smart, by comparison, you'd have to place an
individual order for each and every stock in the group. And in the time it takes
to place all those orders, the market may have already moved, eliminating your
investment opportunity.

And what does the greater power of Accutrade FOR WINDOWS mean for you?
Greater simplicity and greater speed. The two advantages the active investor
needs to compete effectively in the markets today.

Click on Lower Costs

Active investors are always seeking new ways to lower their transaction
costs. After all, every dollar you don't spend on commissions is a dollar you
get to keep.

With Accutrade, you can count on a commission schedule among the lowest in
the industry.

For example, consider the savings Accutrade offers over these other popular
brokers.

Best of all, Accutrade FOR WINDOWS combines these attractive rates--with the
most powerful trading program on the market today. This means you can achieve
the savings you want, and get more power and simplicity than you ever imagined.

THE TOUR

Voice-over for The Tour section:

Accutrade FOR WINDOWS is designed to make trading fast, easy and trouble
free.

Setting up the program is simple.

Just click the UPDATE button to import your existing portfolio and
automatically download your current account data to show all your positions and
balances.

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<PAGE>

If you want to move to another part of the presentation click on the buttons
on this screen to learn more.

The Quote function provides complete delayed or real-time information on
stocks, options, mutual funds and listed bonds.

Quote information includes the security's last price, bid and ask prices,
total daily volume and the size of the last trade in the stock.

You can view quote information in one of two ways--as a table, or as a
scrolling ticker.

With a single click, you can get extended information on any quoted stock,
including dividend amounts and yields, the 52-week high and low, and the tick
end (uptick or downtick).

Accutrade FOR WINDOWS also gives you access to the most popular information
services--Reuters Money Network, Telescan Investor's Platform, Ford Research
Data, Market Guide, and Signal--to help you keep pace with late-breaking company
news.

These services provide a variety of fundamental and technical information,
including detailed graphs and charts of stock and bond performance, to help you
plan your trading strategies.

(Note that Information Services charge separate access fees. Contact your
Accutrade representative for more details.)

When you're ready to trade, just click on the ORDER button, and place your
order.

Accutrade FOR WINDOWS supports a broad range of transactions, including
equities, mutual funds, and options.

The program gives you the ability to place orders with a broad range of
special conditions, including All or None, Do Not Reduce, Fill or Kill, and
Immediate or Cancel.

Accutrade is unique for the options trading features it provides as well,
including Buy Writes, and Spreads and Straddles.

Despite this power, the Order Status window makes it easy to track all your
transactions and to see instantly when an order has been filled.

The tool that sets Accutrade apart from conventional online trading systems
is its program trading capability--which allows you to program your computer to
execute a buy or sell order, even when you aren't in front of your computer.

This is the same kind of tool major brokerage firms have used for years, to
react as quickly as possible to emerging opportunities, and now the very same
power is in your hands as an individual investor.

Let's see what this means in the real world.

Suppose you know that you're going to want to buy a particular stock
(perhaps Microsoft) if the market begins to rise, but your schedule won't allow
you to monitor the Dow on a regular basis. With Accutrade FOR WINDOWS, you can
set up a program, or script, to watch the Dow and automatically place a buy
order when it reaches a given level.

Throughout the day, Accutrade FOR WINDOWS can be programmed to automatically
go online to check the Dow. When the index hits the level you specified, the
program will automatically place the order you defined.

And you can program Accutrade FOR WINDOWS to update your information, so
that when you come home that evening, you can see that your trade has been
submitted and filled.

A-7
<PAGE>

You can also use the power of Accutrade's Basket features to track and trade
an entire industry, or any combination of stocks you choose.

If, for instance, you've been following the technology industry, and have
identified a number of companies that you want to follow closely. With the
Baskets feature, you can create a Basket that contains all these technology
stocks.

To "weight" your sector Basket, simply select a larger share amount for the
companies that you think are most important in the Basket, and lesser amounts
for less influential companies.

Now, you can track the performance of the Basket the same way you would
monitor any individual stock.

You can use Accutrade's trading capabilities with Baskets too, to monitor
the price of your Basket, and to sell it (or buy it) when the Basket price
reaches a level you define.

You can tell the system to check in on the markets at regular intervals--as
often as every five minutes--and when your basket hits the level you specified,
Accutrade FOR WINDOWS will automatically place the order. (Please note that
Basket trades are treated as individual transactions for the purpose of
calculating commissions).

That means you can be in the markets--without being tied to your PC.

With a portfolio this complex, most investors would face a complicated task
at tax time. But Accutrade FOR WINDOWS provides automated tax lot accounting, to
keep track of your gains and losses on each transaction you execute, as well as
an integrated Schedule D, which can be incorporated directly into your tax
return.

Other sophisticated reporting features include an interim statement that
allows you to review your portfolio balances and other key data on demand, and a
detailed review of your portfolio's unrealized gains and losses.

If you're an investor who has yet to venture into the more advanced arenas
of margin and option trading, Accutrade for Windows offers extra support and
information.

That includes detailed guidance on the rules for margin accounts--and a
built in function for calculating your margin positions.

As well as an efficient introduction to the ins and outs of options trading.

From start to finish, Accutrade provides a secure, self-contained trading
environment that gives you the sophisticated tools--and dedicated support--you
need to perform at your best.

HOW TO GET STARTED

Voice-over for the HOW TO GET STARTED section:

When you sign on with Accutrade FOR WINDOWS, you'll be signing up with
Accutrade, Inc. one of the nation's best respected deep discount brokerage firms
and the industry's leader in the use of the online investment technology.

Click on either of the buttons on this screen to learn more about trading
with Accutrade, or to fill out an Accutrade Account Application.

Button 1: Trading at Accutrade

When you trade with Accutrade, you can rest easy in the knowledge that your
funds and account are being administered by one of the premier deep-discount
brokerages in the nation...

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<PAGE>

...with skilled brokers on call throughout market hours...

...a support team that's ready to provide fast, efficient responses by
telephone to your questions and concerns...

...and a customer service operation that has received top marks from
independent investors for years.

The firm is a member of the National Association of Securities Dealers,
registered with the Securities and Exchange Commission, and licensed to do
business in all 50 states and the District of Columbia.

Every Accutrade account enjoys protection up to $10.5 million (SIPC
protection of $500,000 ($100,000 cash) plus an additional $10 million of
protection for securities, provided by an independent insurance firm).

And whether you execute your trades with a broker, through our touchtone
system, personal computer, personal data assistant, or other electronic
devices...

...your account will have dual-level password protection to ensure the
highest level of security.

You'll also find that your Accutrade statements and confirmations are
designed for clarity, and simplicity--which means you can tell in an instant,
where your account stands.

And with Accutrade, this level of service comes with a broad array of
trading options--including margin accounts, options trading, and more.

For more information on Accutrade or Accutrade FOR WINDOWS, call
1.800.882.4887 today and open a whole new window on the world of investing.

Button 2: Opening Your Account

As an active investor, you'll want to set up your account and start trading
as soon as possible. With Accutrade, you can open your account in a matter of
minutes--and in many cases start trading the same day.

This is the Accutrade Account Application. Click PRINT to print the
application, or you can use the preprinted form that accompanied this
presentation. Be sure to sign the application when you have completed it.

If you need assistance with your Account Application, please call
1.800.882.4887. Then click on the method you wish to use to open the account.

Open By Mail

To open your Accutrade account by mail, send your completed and signed
application, along with your initial deposit--a minimum of $5,000 in cash or
securities--to the address on this screen.

Open By Wire

The fastest way to formally open your Accutrade account, is to fax your
application and to wire your initial deposit--a minimum of $5,000 in cash or
securities.

Be sure to include your return fax number with your application and we will
fax back to you an account number and wiring instructions to activate your
account.

Also, be sure to mail us the original application--signed and completed. The
original is necessary by law to properly open your account.

A-9
<PAGE>

ONE MINUTE WITH JOE RICKETTS

Voice-Over. For the section ONE MINUTE WITH JOE RICKETTS.

Visual

He stops for a close-up. At the end of his sentence his name and title
appear next to his image. This image "freezes" as the next section starts,

Joe Ricketts

Hello, I'm Joe Ricketts, the founder and Chief Executive of AccuTrade.

I started the discount brokerage in 1975 to offer individual investors more
convenience at a lower cost in their trading.

Visual

Wide shot of Joe Ricketts next to the computer in the lobby of the Accutrade
building, alternate to close-ups to the person trading at the computer and Joe.

Visual

At the end of the above sentence, the Accutrade logo appears next to the
image.

JOE RICKETTS

In 1975, we were the first broker to offer a trade of 100 shares for $25,
quite revolutionary at the time.

In 1988, Accutrade was the first to offer trading by use of a touch tone
telephone, and in 1995 we introduced trading services on the Sharp Zaurus
handheld computer.

Visual

Joe's face is shown through a small window just like Charles in the 'HEARD
ON WALL STREET' section.

Visual

Transition to a screen with original Accutrade product, in DOS.

Visual

DISSOLVE FROM Accutrade DOS window to Accutrade FOR WINDOWS window.

Joe Ricketts

And now, with Accutrade FOR WINDOWS, we're breaking ground one more time,
because for the first time in history, this revolutionary service offers
individual investors the same aspects of program trading and basket trading used
by institutions...

Visual

DISSOLVE TO screen shots of Accutrade power tools.

Joe Ricketts

...and at the same time making online trading easier and far more convenient
than ever before.

A-10
<PAGE>

Visual

Joe is now shown through a larger window placed in center of the screen.
Different camera angles and various close-ups will alternate. As Joe speaks, the
first of four images appears in front of him. This image shows a high-technology
environment. Desks and monitors abound. The realization dawns on us that this is
a development environment--a development environment for trading mechanisms.

Joe Ricketts

And there's still more to come. In the months and years ahead, you'll see
Accutrade pushing the envelope on many fronts.

Visual

Joe turns his head to look at the second image--a workstation where two
people are discussing something about what they see on screen.

Joe Ricketts

Capitalizing on interactive tools and the global reach of Internet...

Visual

Joe turns his head again to look at the third image--(or is it a trader?) is
speaking softly into a microphone connected to his PC.

Joe Ricketts

...we'll be implementing powerful new applications of voice recognition
technology and interactive TV...

Visual

Joe turns his head to look at the fourth image--a glass-enclosed conference
room, where a whiteboard meeting is under way. We can just barely make out a few
elements in the diagram that the leader of the meeting is sketching on-screen.

Joe Ricketts

...and developing a completely integrated approach to financial planning and
financial management.

Visual

DISSOLVE TO BLACK.

In the center insert Joe is walking toward his desk.

Visual

Close-up on Joe speaking. Different camera angles and views will alternate
during this speech.

Joe Ricketts

Through all of the technical development and change, our mission remains
simple and clear.

A-11
<PAGE>

Joe Ricketts

We're here to give the individual investor the most powerful tools, the most
current information, and the most convenient system at the lowest possible price
that we can achieve. We've done that for thousands of investors nationwide.

Visual

Joe turns to the PC at his credenza, and touches a key.

Joe Ricketts

And we're ready to do the same for you.

Visual

We cut to what appears to be the screen of Joe's PC--the Accutrade logo
appears.

Visual

We fade to black.

AMERITRADE TRADING SYSTEMS DEMONSTRATION

Visual

Open on: Joe Ricketts boxed frame left, Ameritrade Holding Corp. logo frame
right. Scene is over financial montage background (Note: background remains the
same throughout the Demo)
Cut to:
Graphic of each of the 8 trading methods.

Audio

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.

Visual

Cut to: Joe Ricketts (Same as previous On-camera scene)

Audio

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

Cut to:

Mary Fay boxed frame left,

Super: Name & Title

Boxed frame right is a visual of a trader on the phone

Super: Touchtone Phone Trading

A-12
<PAGE>

Audio

(Mary Fay Voice Over)

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

Cut to:

Boxed video of trader using touchtone phone

(Note: This is existing footage from Vision of the Future Visual. If this will
not work, we will re-shoot this scene)

Audio

(Re-enacted trade from Vision of the Future Visual)

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

Cut to:

Mike Anderson boxed frame left,

Super: Name & Title

Boxed frame right is a visual of a trader at his PC

Super: Accutrade FOR WINDOWS

Audio

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

Cut to:

Graphic of Program Trading Button on toolbar.

Super: Program Trading Program Trading button is activated

Audio

(Mike Anderson Voice Over)

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

Cut to:

Full screen shots of Program Trading functions explained in the audio track

A-13
<PAGE>

Audio

(Mike Anderson Voice Over)

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.

Visual

Cut to:

Graphic of Basket Trading Button on toolbar

Super: Basket Trading

Basket Trading button is activated

Audio

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

Visual

Cut to:

Full Screen shots of Basket Trading functions explained in the audio track

Audio

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

Audio

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

Cut to:

Full Screen shots of Account screen,

Tax lot Accounting screen

Audio

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

Cut to:

Bill Glasz boxed frame left,

A-14
<PAGE>

Super: Name & Title

Frame right is the graphic of a PC unit

Super: Trade by PC

Audio

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

Visual

Cut to:

Full screen shots of

Trades ...

Quotes ...

Positions ...

Balances ...

Audio

(Bill Glasz Voice Over)

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

Cut to: Bill Wood boxed frame left,

Super: Name & Title

Boxed frame right is an Internet graphic

Super: Internet Trading

Audio

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

Visual

Cut to:

Full screen shots of positions, balances transaction history, order status,
quote, order and confirmation

Audio

(Bill Wood Voice Over)

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

Cut to:

Mike Anderson boxed frame left,

Super: Name & Title

Boxed frame right is a Graphic of the Sharp Zaurus PDA

Super: Trade with the Sharp Zaurus

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<PAGE>

Audio

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

Visual

Cut to:

Full Screen shots of Order ticket screen as transaction is entered

Audio

(Mike Anderson Voice Over)

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

Cut to:

Full screen shot of the quote screen

Cut to:

Full screen shot of the account balance

Audio

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

Cut to: Mike Anderson boxed frame left,

Super: Name & Title Frame right is a graphic of the Motorola Two-Way Pagewriter

Super: Trade by Motorola Pagewriter

Audio

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

Cut to:

Trade being executed by pager

Visual

Cut to: Mary Fay

boxed frame left.

Boxed frame right is a registered rep.

Super: Trade with a Registered Representative

Cut to:

Investor boxed frame left, and registered rep frame right continue action
through trade sequence.

A-16
<PAGE>

Audio

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 my Johnson, how can I help you?"

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

Visual

action continues

Audio

"Ok 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

Cut to: Mike Anderson boxed frame left.

Boxed frame right is a graphic of a fax machine

Super: Trade by Fax

Audio

For added convenience you may also place orders by fax.

Visual

Cut to: Boxed frame of investor filling out fax form

Audio

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

Visual

Cut to:

Boxed frame of form in fax machine

Audio

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

Visual

Cut to:

Bill Glasz boxed frame left,

Super: Name & Title

Frame right is a graphic Financial Research Sources

A-17
<PAGE>

Audio

We also offer investors access to several financial research sources.

Visual

Cut to: Full screen shots of each research source.

Audio

(Bill Glasz Voice Over)

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

Visual

Cut to: Dick Sirbu

boxed frame left,

Frame right is a graphic of AmeriTrade OnLine logo

Audio

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

Cut to:

Full screen shots of:

AmeriTrade OnLine Products and Services page

Audio

(Dick Sirbu Voice Over)

Visual

Cut to:

Education Segment

Audio

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

Visual

Cut to:

Financial Segment

Audio

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

A-18
<PAGE>

Visual

Cut to:

Sales Segment

Visual

Cut to:

Tax Segment

Audio

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

Visual

Cut to:

Compliance Segment

Audio

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

Visual

Cut to:

Brokerage Segment

Audio

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

Visual

Cut to:

Retirement Segment

Audio

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

Visual

Cut to:

Insurance Segment

Audio

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

Visual

Cut to:

Annuities Segment

A-19
<PAGE>

Audio

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

Visual

Cut to:

Quotes Segment

Audio

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

Visual

Cut to:

Research Segment

Audio

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

Visual

Cut to:

Mortgage Segment

Audio

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

Cut to:

News Segment

Audio

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

Cut to:

Banking Segment

Audio

The Banking segment supplies detailed balance sheets, complete income
statements, and professional investment information.

A-20
<PAGE>

Audio

Wrap accounts are mutual fund portfolios that are developed and based on an
individual investor's requirements.

Visual

Cut to:

Charting Segment

Audio

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

Visual

Cut to:

Joe Konen boxed frame left,

AmeriTrade Holding Corp. frame right

Audio

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.

Audio

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.

A-21
<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.............................................................. 9
Use of Proceeds........................................................... 17
Dividend Policy........................................................... 17
Dilution.................................................................. 18
Capitalization............................................................ 19
Selected Consolidated Financial Data...................................... 20
Management's Discussion and Analysis of Financial Condition and Results of
Operations.............................................................. 21
Business.................................................................. 29
Management................................................................ 48
Certain Transactions...................................................... 55
Principal and Selling Stockholders........................................ 56
Description of Capital Stock.............................................. 57
Shares Eligible for Future Sale........................................... 60
Underwriting.............................................................. 61
Notice to Canadian Residents.............................................. 63
Validity of Class A Stock................................................. 63
Experts................................................................... 64
Additional Information.................................................... 64
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.

AmeriTrade Holding Corporation

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....................................................... *
Legal fees and expenses............................................................ 275,000
Accounting fees and expenses....................................................... *
Nasdaq National Market listing fee................................................. *
Transfer Agent and Registrar fees and expenses..................................... *
Insurance for Directors and Officers............................................... *
Miscellaneous...................................................................... *
---------

Total.......................................................................... $ *
---------
---------
</TABLE>

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

* To be completed by amendment.

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.

II-1
<PAGE>
(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.

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 January 21, 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 January 21, 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

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

<PAGE>

POWER OF ATTORNEY

Each person whose signature appears below constitutes and appoints Joseph A.
Konen and Robert T. Slezak, or either of them, such person's true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, to sign any and all amendments (including post-effective
amendments) to this Registration Statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission.

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

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

<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).....
</TABLE>

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

* Previously filed.

** To be filed by amendment.

+ Confidential treatment has been requested pursuant to Rule 406 promulgated
under the Securities Act.

<PAGE>

Number Shares
AT AMERITRADE
Holding Corporation CUSIP 03072H 10 9

See reverse for certain definitions

INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE

This Certifies that ____________________________________________________

________________________________________________________________________

is the record holder of _________________________________________________

FULLY PAID AND NONASSESSABLE SHARES OF CLASS A
COMMON STOCK PAR VALUE $.01 PER SHARE OF

AmeriTrade Holding Corporation transferable on the books of the Corporation
by the holder hereof in person or by duly authorized attorney upon the
surrender of this Certificate properly endorsed. This Certificate is not
valid unless countersigned by the Transfer Agent and registered by the
Registrar.

Witness the facsimile seal of the Corporation and the facsimile signatures
of its duly authorized officers.

COUNTERSIGNED AND REGISTERED:
THE BANK OF NEW YORK
TRANSFER AGENT AND REGISTRAR
By
AUTHORIZED SIGNATURE
Dated:

/s/ J. Peter Ricketts [SEAL] /s/ Joseph A. Konen
-------------------- -------------------
SECRETARY PRESIDENT AND
CHIEF OPERATING OFFICER

<PAGE>

The Corporation will, upon request and without charge, furnish any
stockholder information regarding the powers, designations, preferences and
relative participating, optional or other special rights of each class of
stock or series thereof and the qualifications, limitations or restrictions
of such preferences and/or rights.

The following abbreviations, when used in the inscription on the face of
this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM -- as tenants in common UNIF GIFT MIN ACT -- ______Custodian _____
TEN ENT -- as tenants by (Cust) (Minor)
the entireties under Uniform Gifts
JT TEN -- as joint tenants with to Minors Act________
right of survivorship (State)
and not as tenants in
common

Additional abbreviations may also be used though not in the above list.

For value received, the undersigned hereby sells, assigns and transfers unto

PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE

______________________________________

____________________________________________________________________________
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE OF ASSIGNEE)
____________________________________________________________________________

____________________________________________________________________________

___________________________________________________________________ Shares
of the Class A Common Stock represented by this Certificate, and does
hereby irrevocably constitute and appoint

____________________________________________________________________________

to transfer such shares on the books of the within-named Corporation with
full power of substitution in the premises.

Dated __________________________

_____________________________________________________
NOTICE: THE SIGNATURE(S) TO THIS ASSIGNMENT MUST CORRESPOND
WITH THE NAME AS WRITTEN UPON THE FACE OF THIS
CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION OR
ENLARGEMENT OR ANY CHANGE WHATSOEVER.

SIGNATURE(S) GUARANTEED: _______________________________________________
THE SIGNATURE(S) TO THIS ASSIGNMENT SHOULD BE
GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION
(BANKS, STOCKBROKERS, SAVINGS AND LOAN
ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP
IN AN APPROVED SIGNATURE GUARANTEE MEDALLION
PROGRAM) PURSUANT TO S.E.C. RULE 17Ad-15.

<PAGE>

AMERITRADE HOLDING CORPORATION
1996 LONG-TERM INCENTIVE PLAN

<PAGE>
AMERITRADE HOLDING CORPORATION

CERTIFICATE

I, ________________ , ___________________ of Ameritrade Holding
Corporation, having in my custody and possession the corporate records of said
corporation, do hereby certify that attached hereto is a true and correct copy
of the Ameritrade Holding Corporation 1996 Long-Term Incentive Plan as in effect
as of _________________, 1996.

WITNESS my hand this ___ day of ______________, 1996.

______________________________________
As Aforesaid

<PAGE>
AMERITRADE HOLDING CORPORATION
1996 LONG-TERM INCENTIVE PLAN

1. PURPOSE. The purpose of this Ameritrade Holding Corporation 1996 Long-
Term Incentive Plan (the "Plan") is to increase stockholder value and to advance
the interests of Ameritrade Holding Corporation ("Ameritrade") and its
subsidiaries (collectively, the "Company") by awarding equity and performance
based incentives designed to attract, retain and motivate employees. As used in
the Plan, the term "subsidiary" means any business, whether or not incorporated,
in which Ameritrade has an ownership interest.

2. ADMINISTRATION.

2.1. ADMINISTRATION BY BOARD OR COMMITTEE. The Plan shall be
administered by the entire Board of Directors of Ameritrade (the "Board") or a
Committee of the Board (the "Committee") consisting of two or more non-employee
directors within the meaning of Rule 16b-3 promulgated under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"); provided, however, that
with respect to the grant or administration of Awards (as defined in Section 3)
made to or held by persons who, at the time of the exercise of such authority,
are not subject to section 16(a) of the Exchange Act, the Board or the Committee
may delegate to the Chairman of the Board or, except as to the issuance of
stock, to any other officer of Ameritrade, any or all authority otherwise
delegated to the Board or the Committee under the terms of the Plan.
Notwithstanding the foregoing provisions of this subsection 2.1 or any other
provision of the Plan, the grant or award of any Option (as defined in Section
6) or Stock Appreciation Right (as defined in Section 7) to a "Covered Employee"
(within the meaning of section 162(m) of the Internal Revenue Code of 1986, as
amended (the "Code"), and the regulations thereunder) shall be granted by a
committee of the Board consisting of two or more outside directors within the
meaning of Treas. Reg. Section 1.162-27(e)(3) which, for such purposes, shall be
considered to be the "Committee" hereunder.

2.2. AUTHORITY. Subject to the provisions of the Plan, the Board or
the Committee shall have the authority to (a) manage and control the operation
of the Plan, (b) interpret and construe the provisions of the Plan, and
prescribe, amend and rescind rules and regulations relating to the Plan, (c)
make Awards under the Plan, in such forms and amounts and subject to such
restrictions, limitations and conditions as it deems appropriate, including,
without limitation, Awards which are made in combination with or in tandem with
other Awards (whether or not contemporaneously granted) or compensation or in
lieu of current or deferred compensation, (d) modify the terms of, cancel and

<PAGE>

reissue, or repurchase outstanding Awards, (e) prescribe the form of agreement,
certificate or other instrument evidencing any Award under the Plan, (f) correct
any defect or omission and reconcile any inconsistency in the Plan or in any
Award hereunder, and (g) make all other determinations and take all other
actions as it deems necessary or desirable for the implementation and
administration of the Plan; provided, however, that in no event shall the Board
or the Committee cancel or modify any outstanding Option for the purpose of
reissuing an additional option to the option holder at a lower exercise price.
The determination of the Board or the Committee on matters within its authority
shall be conclusive and binding on the Company and all other persons.

3. PARTICIPATION. Subject to the terms and conditions of the Plan, the
Board or the Committee shall determine and designate, from time to time, from
among the employees of the Company who are key executives or managerial
employees those persons who will be granted one or more Awards under the Plan,
and thereby become "Participants" in the Plan; provided, however, that only the
Chief Executive Officer, Chief Financial Officer and Chief Operating Officer of
Ameritrade shall be eligible for the award of Options under the Plan. In the
discretion of the Board or the Committee, and subject to the terms of the Plan,
a Participant may be granted any Award permitted under the provisions of the
Plan, and more than one Award may be granted to a Participant. Except as
otherwise agreed by the Board or the Committee and the Participant, or except as
otherwise provided in the Plan, an Award under the Plan shall not affect any
previous Award under the Plan or an award under any other plan maintained by the
Company. For purposes of the Plan, the term "Award" shall mean any award or
benefit granted to any Participant under the Plan.

4. DEFINITION OF FAIR MARKET VALUE. For purposes of the Plan, the "Fair
Market Value" of a share of common stock of Ameritrade ("Stock") as of any date
shall be the closing market composite price for such Stock as reported on NASDAQ
on that date or, if Stock is not traded on that date, on the next preceding date
on which Stock was traded.

5. SHARES SUBJECT TO THE PLAN.

5.1. NUMBER OF SHARES RESERVED. The shares of Stock with respect to which
Awards may be made under the Plan shall be shares currently authorized but
unissued or currently held or subsequently acquired by Ameritrade as treasury
shares, including shares purchased in the open market or in private
transactions. Subject to the provisions of subsection 5.4, the number of shares
of Stock which may be issued with respect to Awards under the Plan shall not
exceed 500,000 shares in the aggregate.

- 2 -
<PAGE>

5.2. INDIVIDUAL LIMITS ON AWARDS. Notwithstanding any other provision of
the Plan to the contrary, the maximum aggregate number of shares of Stock that
may be granted or awarded to any Participant under the Plan for any calendar
year shall be 100,000 and the maximum aggregate cash payout with respect to
grants or awards under the Plan in any calendar year to any Covered Employee
shall be $2,500,000. The determination made under the foregoing provisions of
this subsection 5.2 shall be based on the shares subject to the Awards at the
time of grant, regardless of when the Awards become exercisable.

5.3. REUSAGE OF SHARES.

(a) In the event of the exercise or termination (by reason of forfeiture,
expiration, cancellation, surrender or otherwise) of any Award under
the Plan, that number of shares of Stock that was subject to the Award
but not delivered shall again be available for Awards under the Plan.

(b) In the event that shares of Stock are delivered under the Plan as a
Stock Award (as defined in Section 8) and are thereafter forfeited or
reacquired by the Company pursuant to rights reserved upon the award
thereof, such forfeited or reacquired shares shall again be available
for awards under the Plan.

(c) Notwithstanding the provisions of paragraphs (a) or (b), the following
shares shall not be available for reissuance under the Plan: (i)
shares with respect to which the Participant has received the benefits
of ownership (other than voting rights), either in the form of
dividends or otherwise; (ii) shares which are withheld from any award
or payment under the Plan to satisfy tax withholding obligations (as
described in subsection 11.4) (iii) shares which are surrendered to
fulfill tax obligations (as described in subsection 11.4); and (iv)
shares which are surrendered in payment of the Option Price (as
defined in subsection 6.3) upon the exercise of an Option.

5.4. ADJUSTMENTS TO SHARES RESERVED. In the event of any merger,
consolidation, reorganization, recapitalization, spinoff, stock dividend, stock
split, reverse stock split, exchange or other distribution with respect to
shares of Stock or other change in the corporate structure or capitalization
affecting the Stock, the type and number of shares of stock which are or may be
subject to awards under the Plan and the terms of any outstanding awards
(including the price at which shares of stock may be issued pursuant to an
outstanding award) shall be equitably adjusted by the Board or the Committee, in
its sole discretion,

- 3 -
<PAGE>

to preserve the value of benefits awarded or to be awarded to Participants under
the Plan.

6. OPTIONS.

6.1. DEFINITIONS. The grant of an "Option" under this Section 6 entitles
the Participant to purchase shares of Stock at the Option Price (determined
under subsection 6.3), subject to the terms of this Section 6. Options granted
under this Section 6 may be either Incentive Stock Options or Non-Qualified
Stock Options, as determined in the discretion of the Board or the Committee.
An "Incentive Stock Option" is an Option that is intended to satisfy the
requirements applicable to an "incentive stock option" described in section
422(b) of the Code. A "Non-Qualified Option" is an Option that is not intended
to be an "incentive stock option" as that term is described in section 422(b) of
the Code.

6.2. RESTRICTIONS RELATING TO INCENTIVE STOCK OPTIONS. To the extent that
the aggregate fair market value of Stock with respect to which Incentive Stock
Options are exercisable for the first time by any individual during any calendar
year (under all plans of the Company) exceeds $100,000, such options shall be
treated as Non-Qualified Stock Options, to the extent required by section 422 of
the Code.

6.3. OPTION PRICE. The price at which shares of Stock may be purchased
upon the exercise of an Option (the "Option Price") shall be established by the
Board or the Committee or shall be determined by a method established by the
Board or the Committee at the time the Option is granted; provided, however,
that in no event shall such price be less than the greater of: (i) 100% of the
Fair Market Value (as defined in Section 4) of a share of Stock as of the date
on which the Option is granted; or (ii) the par value of a share of Stock on
such date.

6.4. EXERCISE. Except as otherwise expressly provided in the Plan, an
Option may be exercised, in whole or in part, in accordance with terms and
conditions established by the Board or the Committee at the time of grant;
provided, however, that no Option shall be exercisable after the Expiration Date
(as defined in Section 11) applicable to that Option. The full Option Price of
each share of Stock purchased upon the exercise of any Option shall be paid at
the time of such exercise (except that, in the case of a cashless exercise
arrangement approved by the Committee, payment may be made as soon as
practicable after the exercise) and, as soon as practicable thereafter, a
certificate representing the shares so purchased shall be delivered to the
person entitled thereto. The Option Price shall be payable in cash or in shares
of Stock (valued at Fair Market Value as of the day of exercise), or in any
combination thereof, as determined by

- 4 -
<PAGE>

the Board or the Committee and, to the extent provided by the Committee, a
Participant may elect to pay the Option Price upon the exercise of an Option
through a cashless exercise arrangement. The exercise of an Option will result
in the surrender of the corresponding rights under a tandem Stock Appreciation
Right, if any.

6.5. POST-EXERCISE LIMITATIONS. The Board or the Committee, in its
discretion, may impose such restrictions on shares of Stock acquired pursuant to
the exercise of an Option (including stock acquired pursuant to the exercise of
a tandem Stock Appreciation Right) as it determines to be desirable, including,
without limitation, restrictions relating to disposition of the shares and
forfeiture restrictions based on service, performance, Stock ownership by the
Participant, and such other factors as the Board or the Committee determines to
be appropriate.

6.6. RELOAD PROVISION. In the event the Participant exercises an Option
and pays all or a portion of the Option Price in Stock, in the manner permitted
by subsection 6.4, such Participant (either pursuant to the terms of the Option
Award, or pursuant to the exercise of Committee discretion at the time the
Option is exercised) may be issued a new Option to purchase additional shares of
Stock equal to the number of shares of Stock surrendered to the Company in such
payment. Such new Option shall have an exercise price equal to the Fair Market
Value per share on the date such new Option is granted, shall first be
exercisable six months from the date of grant of the new Option and shall have
an Expiration Date on the same date as the Expiration Date of the original
Option so exercised by payment of the Option Price in shares of Stock.

7. STOCK APPRECIATION RIGHTS

7.1. DEFINITION. Subject to the terms of this Section 7, a "Stock
Appreciation Right" granted under the Plan entitles the Participant to receive,
in cash or Stock, value equal to all or a portion of the excess of: (a) the Fair
Market Value of a specified number of shares of Stock at the time of exercise;
over (b) a specified price which shall not be less than 100% of the Fair Market
Value of the Stock at the time the Stock Appreciation Right is granted, or, if
granted in tandem with an Option, the exercise price with respect to shares
under the tandem Option.

7.2. EXERCISE. If a Stock Appreciation Right is not in tandem with an
Option, then the Stock Appreciation Right shall be exercisable in accordance
with the terms established by the Board or the Committee in connection with such
rights after the Expiration Date applicable to that Stock Appreciation Right.
If a Stock Appreciation Right is in tandem with an Option, then the

- 5 -
<PAGE>

Stock Appreciation Right shall be exercisable at the time the tandem Option is
exercisable. The exercise of a Stock Appreciation Right will result in the
surrender of the corresponding rights under the tandem Option.

7.3. SETTLEMENT OF AWARD. Upon the exercise of a Stock Appreciation
Right, the value to be distributed to the Participant, in accordance with
subsection 7.1, shall be distributed in shares of Stock (valued at their Fair
Market Value at the time of exercise), in cash, or in a combination thereof, in
the discretion of the Board or the Committee.

7.4. POST-EXERCISE LIMITATIONS. The Board or the Committee, in its
discretion, may impose such restrictions on shares of Stock acquired pursuant to
the exercise of a Stock Appreciation Right as it determines to be desirable,
including, without limitation, restrictions relating to disposition of the
shares and forfeiture restrictions based on service, performance, ownership of
Stock by the Participant, and such other factors as the Board or the Committee
determines to be appropriate.

8. STOCK AWARDS.

8.1. DEFINITION. Subject to the terms of this Section 4, a "Stock Award"
under the Plan is a grant of shares of Stock to a Participant, the earning,
vesting or distribution of which is subject to one or more conditions
established by the Board or the Committee. Such conditions may relate to events
(such as performance or continued employment) occurring before or after the date
the Stock Award is granted, or the date the Stock is earned by, vested in or
delivered to the Participant. If the vesting of Stock Awards is subject to
conditions occurring after the date of grant, the period beginning on the date
of grant of a Stock Award and ending on the vesting or forfeiture of such Stock
(as applicable) is referred to as the "Restricted Period". Stock Awards may
provide for delivery of the shares of Stock at the time of grant, or may provide
for a deferred delivery date.

8.2. TERMS AND CONDITIONS OF AWARDS. Beginning on the date of grant (or,
if later, the date of distribution) of shares of Stock comprising a Stock Award,
and including any applicable Restricted Period, the Participant, as owner of
such shares, shall have the right to vote such shares; provided, however, that
payment of dividends with respect to Stock Awards shall be subject to the
following:

(a) On and after date that a Participant has a fully earned and vested
right to the shares comprising a Stock Award, and the shares have been
distributed to the Participant, the Participant shall have all
dividend

- 6 -
<PAGE>

rights (and other rights) of a stockholder with respect to such
shares.

(b) Prior to the date that a Participant has a fully earned and vested
right to the shares comprising a Stock Award, the Board or the
Committee, in its sole discretion, may award Dividend Rights (as
defined below) with respect to such shares.

(c) On and after the date that a Participant has a fully earned and vested
right to the shares comprising a Stock Award, but before the shares
have been distributed to the Participant, the Participant shall be
entitled to Dividend Rights with respect to such shares, at the time
and in the form determined by the Board or the Committee.

A "Dividend Right" with respect to shares comprising a Stock Award shall entitle
the Participant, as of each dividend payment date, to an amount equal to the
dividends payable with respect to a share of Stock multiplied by the number of
such shares. Dividend Rights shall be settled in cash or in shares of Stock, as
determined by the Board or the Committee, shall be payable at the time and in
the form determined by the Board or the Committee, and shall be subject to such
other terms and conditions as the Board or the Committee may determine.

9. PERFORMANCE UNITS.

9.1. DEFINITION. Subject to the terms of this Section 9, the Award of
"Performance Units" under the Plan entitles the Participant to receive value for
the units at the end of a Performance Period to the extent provided under the
Award. The number of units earned, and the value received for them, will be
contingent on the degree to which the performance measures established at the
time of grant of the Award are met. For purposes of the Plan, the "Performance
Period" with respect to the award of any Performance Units shall be the period
over which the applicable performance is to be measured.

9.2. TERMS AND CONDITIONS OF AWARDS. For each Participant, the Board or
the Committee will determine the value of units, which may be stated either in
cash or in units representing shares of Stock; the performance measures used for
determining whether the Performance Units are earned; the Performance Period
during which the performance measures will apply; the relationship between the
level of achievement of the performance measures and the degree to which
Performance Units are earned; whether, during or after the Performance Period,
any revision to the performance measures or Performance Period should be made to
reflect significant events or changes that occur during the

- 7 -
<PAGE>

Performance Period; and the number of earned Performance Units that will be paid
in cash and the number of earned Performance Units to be paid in shares of
Stock.

9.3. SETTLEMENT. Settlement of Performance Units shall be subject to the
following:

(a) The Board or the Committee will compare the actual performance to the
performance measures established for the Performance Period and
determine the number of units as to which settlement is to be made,
and the value of such units.

(b) Settlement of units earned shall be wholly in cash, wholly in Stock or
in a combination of the two, to be distributed in a lump sum or
installments, as determined by the Board or the Committee.

(i) For Performance Units stated in units representing shares of
Stock when granted, one share of Stock will be distributed for
each unit earned, or cash will be distributed for each unit
earned equal to either (A) the Fair Market Value of a share of
Stock at the end of the Performance Period or (B) the average
Stock value over a period determined by the Board or the
Committee.

(ii) For Performance Units stated in cash when granted, the value of
each unit earned will be distributed in its initial cash value,
or shares of Stock will be distributed based on the cash value of
the units earned divided by (A) the Fair Market Value of a share
of Stock at the end of the Performance Period or (B) the average
Stock value over a period determined by the Board or the
Committee.

(c) Shares of Stock distributed in settlement of the units shall be
subject to such vesting requirements and other conditions, if any, as
the Board or the Committee shall determine.

9.4. TERMINATION DURING PERFORMANCE PERIOD. If a Participant's
termination of employment with the Company occurs during a Performance Period
with respect to any Performance Units granted to him, the Board or the Committee
may determine that the Participant will be entitled to settlement of all or any
portion of the Performance Units as to which he would otherwise be eligible, and
may accelerate the determination of the value and settlement of such Performance
Units or make such other adjustments as the Board or the Committee, in its sole
discretion, deems desirable.

- 8 -
<PAGE>

10. EXPIRATION OF AWARDS. The "Expiration Date" with respect to an Award
under the Plan means the date established as the Expiration Date by the Board or
the Committee at the time of the grant; provided, however, that the Expiration
Date with respect to any Award shall not be later than the earliest to occur of:

(a) the ten-year anniversary of the date on which the Award is granted;

(b) if the Participant's termination of employment with the Company occurs
on account of disability, the one-year anniversary of such termination
of employment;

(c) if the Participant's termination of employment with the Company occurs
by reason of retirement, the three-year anniversary of such
termination of employment;

(d) the three-month anniversary of the Participant's death, either while
employed or thereafter; or

(e) if the Participant's termination of employment with the Company occurs
for reasons other than retirement or disability, the three-month
anniversary of such termination of employment.

If a Stock Appreciation Right is in tandem with an Option, then the "Expiration
Date" for the Stock Appreciation Right shall be the Expiration Date for the
related Option.

11. MISCELLANEOUS.

11.1. EFFECTIVE DATE. The Plan shall be effective as of October 1, 1996.
The Plan shall be unlimited in duration and, in the event of Plan termination,
shall remain in effect as long as any Awards under it are outstanding; provided,
however, that no Incentive Stock Options may be granted under the Plan on a date
that is more than ten years from the date the Plan is adopted or, if earlier,
the date the Plan is approved by shareholders.

11.2. LIMIT ON DISTRIBUTION. Distribution of shares of Stock or other
amounts under the Plan shall be subject to the following:

(a) Notwithstanding any other provision of the Plan, Ameritrade shall have
no liability to deliver any shares of Stock under the Plan or make any
other distribution of benefits under the Plan unless such delivery or
distribution would comply with all applicable laws and the applicable
requirements of any securities exchange or similar entity.

- 9 -
<PAGE>

(b) In the case of a Participant who is subject to Section 16(a) and 16(b)
of the Exchange Act, the Board or the Committee may, at any time, add
such conditions and limitations to any Award to such Participant, or
any feature of any such Award, as the Board or the Committee, in its
sole discretion, deems necessary or desirable to comply with Section
16(a) or 16(b) and the rules and regulations thereunder or to obtain
any exemption therefrom.

(c) To the extent that the Plan provides for issuance of certificates to
reflect the transfer of shares of Stock, the transfer of such shares
may be effected on a non-certificated basis, to the extent not
prohibited by applicable law or the rules of any stock exchange.

11.3. PERFORMANCE-BASED COMPENSATION. To the extent that the Board or the
Committee determines that it is necessary or desirable to conform any Awards
under the Plan with the requirements applicable to "Performance-Based
Compensation", as that term is used in section 162(m)(4)(C) of the Code, it may,
at or prior to the time an Award is granted, take such steps and impose such
restrictions with respect to such Award as it determines to be necessary or
desirable.

11.4. WITHHOLDING. All Awards and other payments under the Plan are
subject to withholding of all applicable taxes, which withholding obligations
may be satisfied, with the consent of the Board or the Committee, through the
surrender of shares of Stock which the Participant already owns, or to which a
Participant is otherwise entitled under the Plan.

11.5. TRANSFERABILITY. Awards under the Plan are not transferable except
as designated by a Participant by will or by the laws of descent and
distribution. To the extent that the Participant who receives an Award under
the Plan has the right to exercise such Award, the Award may be exercised during
the lifetime of the Participant only by the Participant.

11.6. NOTICES. Any notice or document required to be filed with the Board
or the Committee under the Plan will be properly filed if delivered or mailed by
registered mail, postage prepaid, to the Board or the Committee, in care of
Ameritrade, at its principal executive offices. The Board or the Committee may,
by advance written notice to affected persons, revise such notice procedure from
time to time. Any notice required under the Plan (other than a notice of
election) may be waived by the person entitled to notice.

11.7. FORM AND TIME OF ELECTIONS. Unless otherwise specified herein, each
election required or permitted to be made

- 10 -
<PAGE>

by any Participant or other person entitled to benefits under the Plan, and any
permitted modification or revocation thereof, shall be in writing filed with the
Board or the Committee at such times, in such form, and subject to such
restrictions and limitations, not inconsistent with the terms of the Plan, as
the Board or the Committee shall require.

11.8. AGREEMENT WITH AMERITRADE. At the time of an Award to a Participant
under the Plan, the Board or the Committee may require a Participant to enter
into an agreement with Ameritrade (the "Agreement") in a form specified by the
Board or the Committee, agreeing to the terms and conditions of the Plan and to
such additional terms and conditions, not inconsistent with the Plan, as the
Board or the Committee may, in its sole discretion, prescribe.

11.9. LIMITATION OF IMPLIED RIGHTS.

(a) Neither a Participant nor any other person shall, by reason of the
Plan, acquire any right in or title to any assets, funds or property
of the Company whatsoever, including, without limitation, any specific
funds, assets, or other property which the Company, in its sole
discretion, may set aside in anticipation of a liability under the
Plan. A Participant shall have only a contractual right to the
amounts, if any, payable under the Plan, unsecured by any assets of
the Company. Nothing contained in the Plan shall constitute a
guarantee by the Company that the assets of such companies shall be
sufficient to pay any benefits to any person.

(b) The Plan does not constitute a contract of employment, and selection
as a Participant will not give any employee the right to be retained
in the employ of the Company, nor any right or claim to any benefit
under the Plan, unless such right or claim has specifically accrued
under the terms of the Plan. Except as otherwise provided in the
Plan, no Award under the Plan shall confer upon the holder thereof any
right as a shareholder of Ameritrade prior to the date on which he
fulfills all service requirements and other conditions for receipt of
such rights.

11.10. EVIDENCE. Evidence required of anyone under the Plan may be by
certificate, affidavit, document or other information which the person acting on
it considers pertinent and reliable, and signed, made or presented by the proper
party or parties.

- 11 -
<PAGE>

11.11. GENDER AND NUMBER. Where the context admits, words in one gender
shall include the other gender, words in the singular shall include the plural
and the plural shall include the singular.

12. CHANGE IN CONTROL.

12.1. ACCELERATION. Subject to the provisions of Section 5, and except as
otherwise provided in the Plan or the Agreement reflecting the applicable Award,
upon the occurrence of a Change in Control:

(a) All outstanding Options (regardless of whether in tandem with Stock
Appreciation Rights) and Stock Appreciation Rights (regardless of
whether in tandem with Options) shall become fully exercisable.

(b) All Stock Awards shall become fully vested.

For purposes of the Plan, the term "Change in Control" means a change in the
beneficial ownership of Ameritrade's voting stock or a change in the composition
of the Board which occurs as follows:

(1) Any "person" (as such term is used in Section 13(d) and 14(d)(2) of
the Exchange Act) is or becomes a beneficial owner, directly or
indirectly, of stock of Ameritrade representing 30 percent or more of
the total voting power of Ameritrade's then outstanding stock.

(2) A tender offer (for which a filing has been made with the Securities
Exchange Commission ("SEC") which purports to comply with the
requirements of Section 14(d) of the Exchange Act and the
corresponding SEC rules) is made for the stock of Ameritrade, which
has not been negotiated and approved by the Board. In case of a
tender offer described in this paragraph (ii), the Change in Control
will be deemed to have occurred upon the first to occur of (A) any
time during the offer when the person (using the definition in (i)
above) making the offer owns or has accepted for payment stock of
Ameritrade with 25 percent or more of the total voting power of
Ameritrade's stock or (B) three business days before the offer is to
terminate unless the offer is withdrawn first, if the person making
the offer could own, by the terms of the offer plus any shares owned
by this person, stock with 50 percent or

- 12 -
<PAGE>

more of the total voting power of Ameritrade's stock when the offer
terminates.

(3) Individuals who were the Board's nominees for election as directors of
Ameritrade immediately prior to a meeting of the shareholders of
Ameritrade involving a contest for the election of directors shall not
constitute a majority of the Board following the election.

13. AMENDMENT AND TERMINATION.

The Board may, at any time, amend or terminate the Plan, provided that,
subject to subsection 5.4 (relating to certain adjustments to shares), no
amendment or termination may materially adversely affect the rights of any
Participant or beneficiary under any Award made under the Plan prior to the date
such amendment is adopted by the Board.

- 13 -

<PAGE>

FOURTH AMENDMENT TO LOAN AGREEMENT

This Agreement, made as of the 31st day of January, 1997, by and among
First National Bank of Omaha ("BANK"), a national banking association with
principal offices in Omaha, Nebraska; TransTerra Co. ("BORROWER"), a Nebraska
corporation with principal offices in Omaha, Nebraska; and AmeriTrade, Inc.
("AMERITRADE"), a Nebraska corporation with principal offices in Omaha,
Nebraska;

Whereas, BANK and BORROWER executed a written Loan Agreement dated
December 22, 1994, which was subsequently amended July 7, 1995, September 14,
1995, and January 31, 1996 (the Loan Agreement together with all amendments is
referred to herein as "LOAN AGREEMENT").

Whereas, the parties recognize the name change of TransTerra Co. to
Ameritrade Holding Corporation, a Delaware corporation; BORROWER is now known
as Ameritrade Holding Corporation.

Whereas, the parties recognize the name change of AmeriTrade, Inc. to
AmeriTrade Clearing, Inc. AMERITRADE is now known as AmeriTrade Clearing, Inc.

Whereas, this amendment is executed contemporaneously with the renewal of
a revolving promissory note in the amount of $4,000,000.00 ("REVOLVING NOTE")
in the form attached hereto as Exhibit A. A term promissory note in the amount
of $1,900,000.00 ("TERM NOTE") will be paid and cancelled. A term promissory
note in the amount of $6,000,000.00 ("TERM NOTE B") in the form attached
hereto as Exhibit C, was previously executed pursuant to the LOAN AGREEMENT.
REVOLVING NOTE and TERM NOTE B, together with any renewals, extensions, or
modifications thereof are collectively called "NOTES." As collateral for the
NOTES, BORROWER has pledged a security interest in 7,559 shares of AmeriTrade,
Inc. capital stock as evidenced by a pledge agreement in the form attached
hereto as Exhibit D.

Now, Therefore, in consideration for the NOTES, and their mutual promises
made herein, the parties agree as follows:

1. All terms and conditions of the LOAN AGREEMENT shall remain in full force
and effect except as expressly amended herein. All capitalized terms herein
shall have the meanings described in the LOAN AGREEMENT.

2. Paragraph 10 of the LOAN AGREEMENT is hereby amended to read, effective
immediately:

10. COMMITMENT FEE.

BORROWER shall pay to BANK on a quarterly basis a fee computed daily
at rate of three-eighths percent (3/8%) of the difference between the maximum
borrowing available under the REVOLVING NOTE and paid for the actual days
elapsed.

<PAGE>

In witness whereof the parties set their hands as of this _____ day of
___________________, 1997.

Ameritrade Holding Corp. AmeriTrade Clearing, Inc.

by /s/ John Joe Ricketts by /s/ John Joe Ricketts
------------------------------ -------------------------------

Its Chairman & CEO Its CEO & Chairman
------------------------------ -------------------------------

First National Bank of Omaha

by /s/ JP Bonham
------------------------------

Its Vice President
------------------------------

<PAGE>

MAKER
[LOGO]
AMERITRADE HOLDING CORPORATION f/k/a PROMISSORY
TRANSTERRA CORP. NOTE

ADDRESS

4211 S. 102 St.
Omaha, NE 68127

- --------------------------------------------------------------------------------
PRINCIPAL AMOUNT INTEREST RATE NOTE DATE MATURITY DATE OBLIGOR # NOTE #
- --------------------------------------------------------------------------------
$4,000,000.00 VARIABLE 01/31/97 01/31/98 2000000367 C#4 L#4
NAT BASE
- --------------------------------------------------------------------------------

Maker promises to pay to the order of First National Bank of Omaha ("Bank")
at any of its offices, the principal sum hereof, which shall be: (Revolving)
the lesser of FOUR MILLION AND NO/100 Dollars or so much thereof as may have
been advanced by Bank. The Maker may borrow, repay without penalty, and
reborrow from Note Date until Maturity Date, either the full amount of this
loan or any lesser sum.

Interest shall accrue on the outstanding principal amount from and including
the Note Date above to the Maturity Date at the rate of: The rate in effect
from time to time and designated by Bank as its National Base Rate ("Base
Rate").

Interest shall be computed on the basis of actual days elapsed and a year of
360 days. The unpaid principal and interest due on this Note at maturity
(whether the Note matures by demand, acceleration, lapse of time or otherwise)
shall bear interest at the lesser of 6% per annum above the interest rate
stated above, or the highest rate allowed by law.

Principal and interest shall be paid as follows: Principal due on Maturity
Date, interest due MONTHLY beginning FEBRUARY 28, 1997 and on the same day of
each MONTH thereafter.

Related Documents: Maker has signed the following documents in connection with
this Note: Security Agreement(s) dated 04/24/92 & 01/31/97 (S&PI) covering
stock.

Loan Agreement dated 12/22/94 and all amendments thereof.

- --------------------------------------------------------------------------------
THIS NOTE IS SUBJECT TO THE TERMS AND CONDITIONS PRINTED ON THE REVERSE SIDE,
AND ANY APPLICABLE LOAN AGREEMENT.
- --------------------------------------------------------------------------------

A credit agreement must be in writing to be enforceable under Nebraska law.
To protect you and us from any misunderstandings or disappointments, any
contract, promise, undertaking, or offer to forebear repayment of money or to
make any other financial accommodation in connection with this loan of money
or grant or extension of credit, or any amendment of, cancellation of, waiver
of, or substitution for any or all of the terms or provisions of any
instrument or document executed in connection with this loan of money or
grant or extension of credit, must be in writing to be effective.

AmeriTrade Holding Corporation f/k/a
Witnessed By: TransTerra Corp.

/s/ Robert T. Slezak By: /s/ John Joe Ricketts Title: Chairman and CEO
- ---------------------- --------------------- ----------------

<PAGE>

[LOGO] SECURITY AGREEMENT
(STOCK & PARTNERSHIP INTERESTS)
Date: January 31, 1997

1. The undersigned, AmeriTrade Holding Corporation f/k/a/ TransTerra Co.
(herein called "PLEDGOR"), for value received, the receipt and sufficiency
of which is hereby acknowledged, by these presents hereby Conveys,
Assigns, Transfers and Delivers and Grants a Security Interest to and/or
confirms that PLEDGOR has Conveyed, Assigned, Transferred and Delivered
and Granted a Security Interest to First National Bank of Omaha, a national
banking association, with offices at One First National Center, Omaha,
Nebraska (herein called "BANK"), in the following property (herein called
the "COLLATERAL"), vis:

(a) The PLEDGOR's interest in AmeriTrade, Inc. represented by certificate
#18 for 6,595, #19 for 964 shares, and any securities substituted
therefore, together with all dividends, proceeds, splits, and property
rights exchanged therefore.

(herein called the "SECURITIES"); as to shares of stock which are
described above, the stock powers executed in blank and attached to
the SECURITIES, and the income and dividends thereon, including cash
and stock dividends, stock splits and rights to subscribe, and any
exchange of any of the SECURITIES for other property upon
reorganization, recapitalization or other readjustment of the issuer
thereof; in the event that PLEDGOR receives any such property, PLEDGOR
will immediately deliver same to BANK to be held by BANK in the same
manner as property originally deposited as COLLATERAL;

(b) The proceeds of any and all property described in subparagraph (a)
above.

2. This assignment and security interest is granted to BANK to secure the
prompt and unconditional payment and performance when due of the following
(all of which is herein called the "INDEBTEDNESS"):

(a) any and all indebtedness, obligations and liabilities of PLEDGOR to
BANK (including all claims of every nature and description of BANK
against PLEDGOR), now or hereafter existing or arising, absolute or
contingent, direct or indirect, secured or unsecured, due or to
become due, whether originally contracted with BANK or acquired in any
manner (including by way of participation) by BANK;

(b) all amounts which might be advanced by BANK to satisfy amounts
required to be paid by PLEDGOR under this Security Agreement or under
any other instrument at any time executed in connection with or as
security for the payment of any part of the INDEBTEDNESS or any amount
secured hereby or to pay any taxes, insurance premiums, liens, claims
and charges against any or all of the COLLATERAL, or any properties
covered by any instrument executed or to be executed by PLEDGOR to
secure any part of the INDEBTEDNESS or any amount secured hereby,
together with interest thereon to the extent provided;

(c) all advances, charges, costs and expenses (including reasonable
attorneys' fees and legal expenses) incurred by BANK in connection
with the transaction which gives rise to this Security Agreement, in
connection with any of the INDEBTEDNESS or any amount secured hereby
and in exercising any right, power or remedy conferred by this
Security Agreement or by law (including, but not limited to,
attorneys' fees and legal expenses incurred by BANK in the collection
of instruments deposited with or purchased by BANK and amounts
incurred in connection with the operation, maintenance or foreclosure
of any or all of the COLLATERAL);

(d) all of PLEDGOR's obligations in this Security Agreement or any other
document or agreement now or hereafter executed in connection with or
as security for any part of the INDEBTEDNESS or any amount secured
hereby; and

(e) any and all INDEBTEDNESS, obligations and liabilities of AmeriTrade
Holding Corporation f/k/a TransTerra Co. to BANK (including all claims
of every nature and description of BANK against such person), now or
hereafter existing or arising, absolute or contingent, direct or
indirect, secured or unsecured, due or to become due, whether
originally contracted with BANK or acquired in any manner (including
by way of participation) by BANK and any and all renewals, extensions
for any period, and rearrangements thereof.

PLEDGOR represents, warrants, covenants and agrees as follows:

3. As to any SECURITIES which are stock or other interest in corporations,
the SECURITIES are duly authorized, are validly issued and are validly
outstanding, are fully paid and are nonassessable, and were not issued in
violation of the preemptive rights of any person or entity or of any
agreement by which PLEDGOR or any issuer of the SECURITIES is bound. As to
any SECURITIES which are interest in partnerships, such interests are
valid, nonassessable interests in the partnerships indicated.

4. All information supplied and statements made by PLEDGOR in any financial,
credit or accounting statement or application for credit prior to,
contemporaneously with or subsequent to the execution of this Security
Agreement are and shall be true, correct, complete, valid and genuine.

5. Except for the security interest of BANK and unless otherwise agreed in
writing, PLEDGOR owns (and at the time of transfer or delivery of the
COLLATERAL to BANK owned or will own) good and indefeasible title to the
COLLATERAL free and clear of any other security interests, liens, adverse
claims or options; PLEDGOR has (and at the time of transfer or delivery of
the COLLATERAL to BANK had or will have) full right, power and authority to
convey, assign, transfer and deliver the COLLATERAL and to grant a security
interest in the COLLATERAL to BANK in the manner provided herein and free
and clear of any other security interests, liens, adverse claims and
options; no security interest or lien has been created by PLEDGOR or is
known by PLEDGOR to exist with respect to any COLLATERAL; and, to the best
of PLEDGOR's information and belief, no financing statement or other
security instrument is on file in any jurisdiction covering any
COLLATERAL.

6. The SECURITIES which evidence interests in corporations were properly
issued, drawn, made and/or accepted and are genuine; the issuer, drawer,
maker, and/or acceptor thereof has no defenses (including defenses of any
party which would be available in an action on a simple contract and the
defenses of want or failure of consideration, non-performance of any
condition precedent, non-delivery, or delivery for a special purpose),
right of set off or claims to the securities; PLEDGOR has no knowledge that
the signature of the issuer, drawer, maker and/or acceptor is unauthorized;
none of the SECURITIES has been materially altered; all signatures on each
of the SECURITIES are genuine or authorized; no defense of any party is
good against PLEDGOR; PLEDGOR has no knowledge of any insolvency
proceedings instituted with respect to the issuer, maker and/or acceptor of
the SECURITIES; PLEDGOR's transfer of the SECURITIES to BANK is effective
and rightful; and PLEDGOR knows of no fact which might impair the validity
of the SECURITIES.

7. PLEDGOR agrees to pay prior to any delinquency all taxes, charges, liens
and assessments against the COLLATERAL, and upon the failure of PLEDGOR to
do so, BANK at its option may pay any of them and shall be the sole judge
of the legality or validity thereof and the amount necessary to discharge
the same.

8. PLEDGOR will at all times maintain with BANK COLLATERAL of a character and
value satisfactory to BANK. If at any time any of the COLLATERAL shall
depreciate in character or value or otherwise be unsatisfactory to BANK,
BANK in its discretion may demand such further COLLATERAL or such payment
on account of the INDEBTEDNESS as will be satisfactory to BANK.

<PAGE>

9. BANK shall be deemed to have possession of any of the COLLATERAL in transit
to it or set apart for it.

10. PLEDGOR will sign, execute, deliver and file, alone or with BANK, any
financing statement, security agreements or other documents or procure any
document as may be requested by BANK from time to time to confirm, perfect
and preserve the security interest created hereby, and in addition, PLEDGOR
hereby authorizes BANK to execute and deliver on behalf of PLEDGOR and to
file such financing statements, security agreements and other documents
without the signature of PLEDGOR. PLEDGOR shall do all such additional and
further acts, things, deeds, give such assurances and execute such
instruments as BANK requires to vest more completely in and assure to BANK
its rights under this Security Agreement. At the option of BANK, a carbon,
photographic or other reproduction of this Security Agreement or of a
financing statement covering the COLLATERAL shall be sufficient as a
financing statement and may be filed as a financing statement.

11. PLEDGOR will transmit to BANK promptly all information that PLEDGOR may
have or receive (i) with respect to the COLLATERAL or (ii) with respect to
obligors of the COLLATERAL which might in any way affect the value of the
COLLATERAL or BANK's rights or remedies with respect thereto.

12. Unless otherwise agreed in writing, PLEDGOR will not pledge, mortgage,
otherwise encumber, create or suffer a security interest to exist in, any
of the COLLATERAL (other than in favor of BANK) or sell, assign or
otherwise transfer any of the COLLATERAL, to or in favor of anyone other
than BANK, and PLEDGOR will not file or permit to be filed any financing
statement or other security instrument with respect to the COLLATERAL other
than in favor of BANK.

13. PLEDGOR will not adjust, settle or compromise any of the COLLATERAL without
the prior written consent of BANK.

14. PLEDGOR agrees to pay to BANK at BANK's banking quarters, all advances,
charges, costs and expenses (including reasonable attorneys' fees and legal
expenses) incurred by BANK in connection with the transaction which gives
rise to this Security Agreement, in connection with confirming, perfecting
and preserving the security interest created under this Security Agreement,
in connection with protecting BANK against the claims or interests of any
third person against the COLLATERAL, and in exercising any right, power or
remedy conferred to this Security Agreement or by law (including, but not
limited to, attorney's fees and legal expenses incurred by BANK in the
collection of instruments deposited with or purchased by BANK and amounts
incurred in connection with the operation, maintenance of foreclosure of
any or all of the COLLATERAL). The amount of all such advances, charges,
costs and expenses shall be due and payable by PLEDGOR to BANK upon demand
together with interest thereon from the date of demand at the maximum rate
specified in any document evidencing INDEBTEDNESS.

15. The term "COLLATERAL" shall include the property described or referred
to in Paragraph 1 above and the balance of every deposit account of
PLEDGOR with BANK and any other claim of PLEDGOR against BANK, now or
hereafter existing, and all money, instruments, securities, documents,
chattel paper, credits, claims, demands and any other property, rights and
interests of PLEDGOR which are now or at any time shall come into the
possession or custody or under the control of the BANK, for any purpose,
and shall include the proceeds of any thereof.

RIGHTS AND REMEDIES

16. BANK is hereby fully authorized and empowered (without the necessity of
any further consent or authorization from PLEDGOR) and the right is
expressly granted to BANK, and PLEDGOR hereby constitutes, appoints and
makes BANK as PLEDGOR's true and lawful Attorney and Agent-in-Fact for
PLEDGOR and in PLEDGOR's name, place and stead with full power of
substitution, in BANK's name or PLEDGOR's name or otherwise, for BANK's
sole use and benefit, but at PLEDGOR's cost and expense, to exercise,
without notice, all or any of the following powers at any time with
respect to all or any of the COLLATERAL (regardless of whether any of
the INDEBTEDNESS is due or not):

(a) notify account debtors or the obligors on the COLLATERAL to make
and deliver payment to BANK;

(b) receive, endorse, collect by legal proceedings or otherwise, and
demand payment directly from the makers, drawers, acceptors, issures
and/or obligors of the COLLATERAL and receipt for all sums and
amounts now or hereafter payable on or with respect to the
COLLATERAL, provided that all such sums so paid to and received
by BANK shall be applied on the INDEBTEDNESS as provided herein;

(c) from time to time extend the time of payment, arrange for payment
in installments or otherwise modify the terms of or enter into any
other agreement in any wise relating to or affecting the COLLATERAL,
and in connection therewith may deposit or surrender control of any
security held therefor, accept other property in exchange for any
security held therefor and take such action as it may deem proper,
and any money or property received in exchange for any security
held therefor shall be applied on the INDEBTEDNESS or thereafter
held by BANK pursuant to the provisions hereof;

(d) make any compromise or settlement BANK deems desirable with respect
to the COLLATERAL;

(e) insure, process and preserve the COLLATERAL;

(f) exercise and enforce all of the other rights, powers and remedies
of the holder and owner of the COLLATERAL and the liens, if any,
securing the payment thereof, including (but not by way of
limitation) the right to demand payment of the COLLATERAL in the
event of any default thereunder and provided further that BANK is
and shall be fully subrogated to all rights and liens existing unto
and in favor of PLEDGOR under the provisions of the instrument or
instruments securing the COLLATERAL and in the event of default in
the payment or performance of COLLATERAL, or default or failure
in the performance of any of the covenants or agreements contained
in said instruments, or any one of them, BANK shall be entitled to
foreclose said rights and liens and have the properties covered by
said instruments sold, in whole or in part, in the manner and under
the terms and conditions provided in said instruments. The proceeds
from any and all such sales shall be applied to the payment of the
INDEBTEDNESS as herein provided, and any excess shall be paid to
PLEDGOR or deposited to the account of PLEDGOR, with BANK;

(g) transfer to or register in the name of BANK or any nominee of BANK
any of the COLLATERAL, and whether or not so transferred or
registered, to receive the income, interest and/or dividends thereon,
including cash and (in the case of interests in corporations) stock
dividends, stock splits and rights to subscribe, and to hold the same
as part of the COLLATERAL and/or apply the same as hereinafter
provided, but BANK may not exercise voting rights or direct the voting
of the SECURITIES until after the INDEBTEDNESS becomes due and payable
as specified in paragraph 17; and to exchange any of the COLLATERAL
for other property upon reorganization, recapitalization or other
readjustment and in connection therewith to deposit any of the
COLLATERAL with any committee or depository upon such terms as the
BANK may determine; all without notice and without liability except
to account for property actually received by BANK; and

(h) demand, sue for, collect, receive, receipt for, compound and give
acquittance for any and all amounts, money or property at any time
payable or receivable on account of or in exchange for, any of the
COLLATERAL,

provided, however, BANK shall be under no obligation or duty to exercise
any of the powers hereby conferred upon it and shall be without liability
for any act or failure to act in connection with the collection of, or
the preservation of any rights under, any COLLATERAL,

17. At the option of BANK and without necessity of demand or notice, all or
any part of the INDEBTEDNESS shall immediately become due and payable
irrespective of any agreed maturity or period of grace (provided, however,
such consideration that constitutes interest under applicable law may
never include more than the maximum amount allowed by applicable law,
and excess interest, if any, shall be automatically cancelled as of the
date of such acceleration and if theretofore paid, shall be credited on
the INDEBTEDNESS) and/or any obligation of BANK for further financial
accommodation shall terminate upon the happening of any of the following
events:

(a) any breach of this Security Agreement or any other agreement
between BANK and PLEDGOR or any other party primarily or secondarily
liable for all or any part of the INDEBTEDNESS (herein collectively
and individually called "OTHER LIABLE PARTY");
<PAGE>

(b) default in the payment of any of the INDEBTEDNESS when due;

(c) any deterioration, impairment or decline in character or value of
any part of the COLLATERAL or any other collateral subject to a
security interest in favor of BANK as security for the INDEBTEDNESS
(whether actual or reasonably anticipated) that causes the
COLLATERAL or any such other COLLATERAL in the judgment of BANK to
become unsatisfactory as to character or value;

(d) the entry of a judgment, issuance of an injunction or order of
attachment, or any other process against PLEDGOR, or any of the
COLLATERAL, or OTHER LIABLE PARTY;

(e) the application for the appoint of, or the appointment of, a
receiver, trustee, liquidator, conservator, rehabilitator, or similar
individual, officer or committee of, or for any property of, PLEDGOR
or OTHER LIABLE PARTY;

(f) the death, incapacity, insolvency, dissolution, commission of an
act of bankruptcy, assignment for the benefit of creditors, calling
of a meeting of any creditors, appointment of a committee of any
creditors or a liquidating agent, offering to or receiving from any
creditors a composition or extension of any of the indebtedness of
any of them, making a bulk transfer, granting a security interest
in any property, the whole or partial suspension, discontinuance or
liquidation of usual business or failure in business of or by PLEDGOR
or OTHER LIABLE PARTY, including the imminent or threatened
occurrence of any of the foregoing events;

(g) the commencement of any proceeding, suit or action under any
provisions of the Bankruptcy Code, as amended, or any similar
statute, for adjudication as a bankrupt, reorganization,
composition, extension, arrangement, wage earner's plan,
receivership, liquidation or dissolution by or against PLEDGOR
or OTHER LIABLE PARTY;

(h) the admission in writing by PLEDGOR or OTHER LIABLE PARTY of
inability to pay its debts as they become due;

(i) failure of the PLEDGOR, OTHER LIABLE PARTY or the COLLATERAL to
comply with Regulations U or X of the Board of Governors of the
Federal Reserve System, as amended;

(j) failure by PLEDGOR or OTHER LIABLE PARTY, after demand, to furnish
any financial information to BANK or to permit BANK to inspect
books or records of account, making any mispresentation to BANK
for the purpose of obtaining credit, failure to pay when due any
obligations, failure to pay any tax or failure to withhold,
collect or remit any tax or tax deficiency when assessed or due;

(k) failure by PLEDGOR, upon demand from BANK to furnish such further
COLLATERAL or make such payment on account of the INDEBTEDNESS as
will be satisfactory to BANK; or

(l) if in the reasonable exercise of its judgment, BANK determines that
the financial responsibility of PLEDGOR or OTHER LIABLE PARTY has
become otherwise unsatisfactory.

18. If all or any part of the INDEBTEDNESS shall become due and payable as
specified in paragraph 17, BANK may then, or at any time thereafter,
apply, set-off, collect, sell in one or more sales, lease, or otherwise
dispose of, any or all of the COLLATERAL, in its then condition or
following any commercially reasonable preparation or processing, in
such order as BANK may elect, and any such sale may be made either at
public or private sale at its place of business or elsewhere, or at
any brokers' board or securities exchange, either for cash or upon
credit or for future delivery, at such price as BANK may deem fair,
and BANK may be the purchaser of any or all COLLATERAL so sold and may
hold the same thereafter in its own right free from any claim of
PLEDGOR or right of redemption. No such purchase or holding by BANK
shall be deemed a retention by BANK in satisfaction of the INDEBTEDNESS.
All demands, notices and advertisements, and the presentment of
property at sale are hereby waived. If, notwithstanding the foregoing
provisions, any applicable provision of the Uniform Commercial Code or
other law requires BANK to give reasonable notice of any such sale or
disposition or other action, five days' prior written notice shall
constitute reasonable notice. BANK may require PLEDGOR to assemble
the COLLATERAL and make it available to BANK at a place designated by
BANK in Douglas County, Nebraska which is reasonably convenient to BANK
and PLEDGOR. Any sale hereunder may be conducted by an auctioneer or
any officer or agent of BANK.

19. Prior to all or any part of the INDEBTEDNESS becoming due and payable as
specified in paragraph 17, all cash sums paid to and received by BANK on
account of the COLLATERAL shall be promptly applied by BANK on the
INDEBTEDNESS whether or not such INDEBTEDNESS shall have by its terms
matured, such application to be made first to interest and then to
principal or exclusively to principal as BANK may determine; provided,
however, BANK need not apply or give credit for any item included in
such sums until BANK has received final payment thereof at its banking
quarters or solvent credits accepted as such by BANK. After all or any
part of the INDEBTEDNESS becomes due and payable as specified in
paragraph 17, the proceeds of any sale or other disposition of the
COLLATERAL and all sums received or collected by BANK from or on account
of the COLLATERAL shall be applied by BANK in the manner set forth
in Section 9.504 of the Nebraska Uniform Commercial Code as presently
in effect. PLEDGOR shall remain liable to BANK for any INDEBTEDNESS,
advances, costs, charges and expenses, together with interest thereon
remaining unpaid and shall pay the same immediately to BANK at BANK's
banking quarters.

20. BANK shall be under no duty whatsoever to make or give any presentment,
demand for performance, notice of nonperformance, protest, notice of
protest, notice of dishonor, or other notice or demand in connection
with any COLLATERAL or the INDEBTEDNESS, or to take any steps necessary
to preserve any rights against prior parties. BANK shall not be liable
for failure to collect or realize upon any or all of the INDEBTEDNESS or
COLLATERAL, or for any delay in so doing, nor shall BANK be under any
duty to take any action whatsoever with regard thereto. BANK shall use
reasonable care in the custody and preservation of any COLLATERAL in
its possession but need not take any steps to keep the COLLATERAL
identifiable. BANK shall have no duty to comply with any recording,
filing, or other legal requirements necessary to establish or maintain
the validity, priority or enforceability of, or BANK's rights in or to,
any of the COLLATERAL.

21. PLEDGOR waives any right to require BANK to proceed against any person,
exhaust any COLLATERAL or pursue any other remedy in BANK's power; waives
any and all notice of acceptance of this Security Agreement or of
creation, modification, renewal or extension for any period of any of
the INDEBTEDNESS from time to time; and waives any defense arising by
reason of any disability or other defense of any OTHER LIABLE PARTY, or
by reason of the cessation from any cause whatsoever of the liability
of any OTHER LIABLE PARTY. All dealings between PLEDGOR and BANK,
whether or not resulting in the creation of INDEBTEDNESS, shall
conclusively be presumed to have been had or consummated in reliance
upon this Security Agreement. Until all the INDEBTEDNESS shall have been
paid in full, PLEDGOR shall have no right to subrogation, and PLEDGOR
waives any right to enforce any remedy which BANK now has or may
hereafter have against PLEDGOR or OTHER LIABLE PARTY and waives
any benefit of and any right to participate in any COLLATERAL or
security whatsoever now or hereafter held by BANK. PLEDGOR authorizes
BANK, without notice or demand and without any reservation of rights
against PLEDGOR and without affecting PLEDGOR's liability hereunder
or on the INDEBTEDNESS, from time to time to (a) renew, extend for
any period, accelerate, modify, compromise, settle or release the
obligation of PLEDGOR or any OTHER LIABLE PARTY with respect to any
or all of the INDEBTEDNESS or COLLATERAL, (b) take and hold any other
property as collateral, other than the COLLATERAL, for the payment of
any or all of the INDEBTEDNESS, and exchange, enforce, waive and
release any or all of the COLLATERAL or such other property; (c) apply
the COLLATERAL or such other property and direct the order or manner
of sale thereof as BANK in its discretion may determine; and (d) release
or substitute PLEDGOR or any OTHER LIABLE PARTY.

22. BANK may transfer any or all of the INDEBTEDNESS, and upon any such
transfer BANK may transfer any or all of the COLLATERAL and shall be
fully discharged thereafter from all liability with respect to the
COLLATERAL so transferred, and the transferee shall be vested with all
rights, powers and remedies of BANK hereunder with respect to COLLATERAL
so transferred; but with respect to any COLLATERAL not so transferred
BANK shall retain all rights, powers and remedies hereby given. BANK
may at any time deliver any or all of the COLLATERAL to PLEDGOR whose
receipt shall be a complete and full acquittance for the COLLATERAL so
delivered, and BANK shall thereafter be discharged from any liability
therefor.

23. The execution and delivery of this Security Agreement in no manner shall
impair or affect any other security (by endorsement or otherwise) for the
payment of the INDEBTEDNESS. No security taken hereafter as security for
payment of the INDEBTEDNESS shall impair in any manner or affect this
Security Agreement. All such present and future additional security is to
be considered as cumulative security.
<PAGE>

24. This is a continuing agreement and the conveyance hereunder shall remain
in full force and effect and all the rights, powers and remedies of BANK
hereunder shall continue to exist until the INDEBTEDNESS is paid in full as
the same becomes due and payable; until BANK has no further obligation to
advance monies to PLEDGOR, or any OTHER LIABLE PARTY; and until BANK, upon
request of PLEDGOR has executed a written termination statement,
reassigned to PLEDGOR without recourse, the COLLATERAL and all rights and
liens conveyed hereby and returned possession of the COLLATERAL to
PLEDGOR. Furthermore, it is contemplated by the parties hereto that there
may be times when no INDEBTEDNESS is owing; but notwithstanding such
occurrence, this Security Agreement shall remain valid and shall be in
full force and effect as to subsequent INDEBTEDNESS provided that BANK
has not executed a written termination statement and returned possession
of the COLLATERAL to PLEDGOR. Otherwise this Security Agreement shall
continue irrespective of the fact that the liability of OTHER LIABLE
PARTY may have ceased, and notwithstanding the death or incapacity of
PLEDGOR or the death, incapacity or bankruptcy of OTHER LIABLE PARTY, or
any other event or proceeding affecting PLEDGOR and/or OTHER LIABLE PARTY.

25. The rights, powers and remedies of BANK hereunder shall be in addition
to all rights, powers and remedies given by statute or rule of law and
are cumulative. The exercise of any one or more of the rights, powers
and remedies provided herein shall not be construed as a waiver of any
other rights, powers and remedies of BANK. Furthermore, regardless of
whether or not the Uniform Commercial Code is in effect in the jurisdiction
where such rights, powers and remedies are asserted, BANK shall have the
rights, powers and remedies of a secured party under the Nebraska
Uniform Commercial Code, as amended. BANK may exercise its bankers' lien
or right of set-off with respect to the INDEBTEDNESS in the same manner
as if the INDEBTEDNESS were unsecured. Time shall be of the essence for
the performance of any act under this Security Agreement or the
INDEBTEDNESS by PLEDGOR or OTHER LIABLE PARTY, but neither BANK's
acceptance of partial or delinquent payments nor any forbearance, failure
or delay by BANK in exercising any right, power or remedy shall be
deemed a waiver of any obligation of PLEDGOR or OTHER LIABLE PARTY or of
any right, power or remedy of BANK or preclude any other or further
exercise thereof; and no single or partial exercise of any right, power
or remedy shall preclude any other or further exercise thereof, or the
exercise of any other right, power or remedy.

26. BANK may remedy any default and may waive any default without waiving
the default remedied or waiving any prior or subsequent default.

GENERAL.

27. The term "PLEDGOR," as used throughout this Security Agreement shall
(regardless of use of the singular form) mean PLEDGOR individually
and/or collectively and shall include the respective successors, legal
representatives, heirs and assigns of PLEDGOR. The obligations and
agreements of PLEDGOR hereunder are joint and several. The PLEDGOR is
and shall be deemed to be a "Debtor" within the meaning of that term as
defined in the Uniform Commercial Code.

28. Neither this Security Agreement nor the exercise by BANK of (or the
failure to so exercise) any right, power or remedy conferred herein or
by law shall be construed as relieving any person liable on the
INDEBTEDNESS from full liability on the INDEBTEDNESS and for any
deficiency thereon.

29. Any notice or demand to PLEDGOR under this Security Agreement or in
connection with the Security Agreement may be given and shall
conclusively be deemed and considered to have been given and received
upon the deposit thereof, in writing, duly stamped and addressed to
PLEDGOR at the address of PLEDGOR appearing on the records of the BANK,
in the U.S. Mail, but actual notice, however given or received, shall
always be effective.

30. This Security Agreement has been made in and the conveyance, assignment,
transfer and delivery has been made in and the security interest granted
hereby is granted in and each shall be governed by the laws of the
State of Nebraska in all respects, including matters of construction,
validity, enforcement and performance. This Security Agreement may not be
amended (nor may any of its terms be waived) except in writing duly
signed by an authorized officer of BANK and by PLEDGOR. Except as the
context may otherwise require, any term used herein that is defined in
the Nebraska Uniform Commercial Code shall have the meaning given
therein. If any provision of this Security Agreement is rendered or
declared illegal or unenforceable by reason of any existing or
subsequently enacted legislation or by a judicial decision which shall
have become final, PLEDGOR and BANK shall promptly meet and negotiate
substitute provisions for those rendered illegal or unenforceable, but
all of the remaining provisions shall remain in full force and effect.

31. The covenants, representations, warranties and agreements herein set
forth shall be binding upon PLEDGOR and shall inure to the benefit of
BANK, its successors and assigns.

33. BANK MAY ENFORCE ITS RIGHTS HEREUNDER WITHOUT PRIOR JUDICIAL PROCESS OR
JUDICIAL HEARING, AND PLEDGOR EXPRESSLY WAIVES, RENOUNCES AND KNOWINGLY
RELINQUISHES ANY AND ALL LEGAL RIGHTS WHICH MIGHT OTHERWISE REQUIRE BANK
TO ENFORCE ITS RIGHTS BY JUDICIAL PROCESS. IN SO PROVIDING FOR NONJUDICIAL
REMEDIES, PLEDGOR RECOGNIZES AND CONCEDES THAT SUCH REMEDIES ARE CONSISTENT
WITH THE USAGE OF THE TRADE, ARE RESPONSIVE TO COMMERCIAL NECESSITY, AND
ARE THE RESULT OF BARGAIN AT ARM'S LENGTH. NOTHING HEREIN IS INTENDED TO
PREVENT BANK OR PLEDGOR FROM RESORTING TO JUDICIAL PROCESS AT EITHER
PARTY'S OPTION.

IN WITNESS WHEREOF the PLEDGOR has executed this Agreement this the 15th
day of January, 1997.

PLEDGOR: AmeriTrade Holding Corporation f/k/a
TransTerra Co.

By: /s/ J. Joe Ricketts Chairman & CEO
----------------------------------------

Address:

4211 S. 102nd St.
----------------------------------------
Omaha, NE 68127
----------------------------------------

<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.

/s/ Deloitte & Touche LLP

DELOITTE & TOUCHE LLP

Omaha, Nebraska
January 21, 1997