KNIGHT TRIMARK GROUP INC, PRE 14A, 2000-04-05

KNIGHT TRIMARK GROUP INC
PRE 14A, 2000-04-05
SECURITY BROKERS, DEALERS & FLOTATION COMPANIES

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )

Filed by the Registrant [x]

Filed by a Party other than the Registrant [_]

Check the appropriate box:

[x] Preliminary Proxy Statement

[_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))

[_] Definitive Proxy Statement

[_] Definitive Additional Materials

[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12

Knight/Trimark Group, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)

- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

[x] No fee required.

[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

(1) Title of each class of securities to which transaction applies:

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(2) Aggregate number of securities to which transaction applies:

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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):

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(4) Proposed maximum aggregate value of transaction:

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(5) Total fee paid:

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[_] Fee paid previously with preliminary materials.

[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.

(1) Amount Previously Paid:

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(2) Form, Schedule or Registration Statement No.:

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(3) Filing Party:

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(4) Date Filed:

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Notes:

Reg. (S) 240.14a-101.

SEC 1913 (3-99)

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KNIGHT/TRIMARK GROUP, INC.
Newport Tower, 23rd Floor
525 Washington Boulevard
Jersey City, New Jersey 07310
(201) 222-9400

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

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

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

To the Stockholders of Knight/Trimark Group, Inc.:

NOTICE IS HEREBY GIVEN that an Annual Meeting of Stockholders (including
any adjournments or postponements thereof, the "Annual Meeting") of
Knight/Trimark Group, Inc., a Delaware corporation ("Knight/Trimark" or the
"Company"), will be held at The Waldorf=Astoria, 301 Park Avenue, New York,
New York 10022 on Wednesday, May 17, 2000 at 1:00 p.m., for the following
purposes, which are more fully described in the accompanying Proxy Statement:

1. To approve the change of the Company's name to Knight Trading Group,
Inc.;

2. To amend the Company's Certificate of Incorporation to increase the
Company's authorized Class A common stock, par value $.01 per share (the
"Class A Common Stock"), from 200 million shares to 500 million shares;

3. To elect 15 members of the Company's Board of Directors to serve until
the Company's next annual meeting and until such directors' successors
are duly elected and shall have qualified;

4. To approve an amendment to the Company's 1998 Long-Term Incentive Plan
to increase the number of shares of the Company's Class A Common Stock
authorized for issuance thereunder from 14,291,000 to 24,291,000;

5. To ratify the selection of PricewaterhouseCoopers LLP as the Company's
independent auditors for 2000; and

6. To transact such other business as may properly come before the Annual
Meeting or any adjournment thereof.

A proxy statement describing the matters to be considered at the Annual
Meeting is attached to this notice. Only holders of record of shares of
Knight/Trimark Class A Common Stock at the close of business on April 5, 2000
are entitled to notice of, and to vote at, the Annual Meeting. On that day,
[122,155,620] million shares of Knight/Trimark Class A Common Stock were
outstanding. A complete list of stockholders entitled to vote at the Annual
Meeting will be available for examination, for proper purposes, during
ordinary business hours at Knight/Trimark's corporate offices, Newport Tower,
23rd Floor, 525 Washington Boulevard, Jersey City, New Jersey 07310, and at
ChaseMellon Shareholder Services, L.L.C., 44 Wall Street, 6th Floor, New York,
New York 10005, during the 10 days before the Annual Meeting.

Your vote is very important regardless of how many shares of Knight/Trimark
Class A Common Stock you own. Regardless of whether you plan to attend the
Annual Meeting, you are requested to sign, date and return the enclosed proxy
without delay in the enclosed postage-paid envelope. You may revoke your proxy
at any time before its exercise by: (1) attending and voting in person at the
Annual Meeting; (2) giving notice of revocation of the proxy at the Annual
Meeting; or (3) delivering to the Secretary of Knight/Trimark (a) a written
notice of revocation or (b) a duly executed proxy relating to the same shares
and matters to be considered at the Annual Meeting, bearing a date later than
the proxy previously executed.

By order of the Board of Directors,

/s/ Steven L. Steinman
Steven L. Steinman
Chairman

April [18], 2000

PLEASE SIGN AND DATE THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED
POSTAGE-PAID ENVELOPE.
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KNIGHT/TRIMARK GROUP, INC.

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ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 17, 2000

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PROXY STATEMENT

This Proxy Statement (the "Proxy Statement") is being furnished to
stockholders of Knight/Trimark Group, Inc., a Delaware corporation (together
with its subsidiaries, except where the context otherwise requires,
"Knight/Trimark" or the "Company"), in connection with the solicitation of
proxies by the Board of Directors of the Company (the "Board of Directors" or
the "Board") for use at the Annual Meeting of Stockholders, which will be held
at The Waldorf-Astoria, 301 Park Avenue, New York, New York 10022 on May 17,
2000 at 1:00 p.m. (the "Annual Meeting"). This Proxy Statement, the
accompanying form of proxy (the "Proxy") and the other enclosed documents are
first being mailed to stockholders on or about April [18], 2000.

At the Annual Meeting, the Knight/Trimark stockholders will be asked to
consider and vote on proposals to: (i) approve the change of the Company's
name to Knight Trading Group, Inc.; (ii) amend the Company's Certificate of
Incorporation to increase the Company's authorized Class A Common Stock from
200 million shares to 500 million shares; (iii) elect 15 members of the
Company's Board of Directors to serve until the Company's next annual meeting
and until such directors' successors are duly elected and shall have
qualified; (iv) amend the Company's 1998 Long-Term Incentive Plan to increase
the number of shares of the Company's Class A Common Stock authorized for
issuance thereunder from 14,291,000 to 24,291,000; (v) ratify the selection of
PricewaterhouseCoopers LLP as the Company's independent auditors for 2000; and
(vi) transact such other business as may properly come before the Annual
Meeting or any adjournment thereof.

Beneficial owners of stock held by banks, brokers or investment plans (in
"street name") will need proof of ownership to be admitted to the meeting. A
recent brokerage statement or letter from your broker or bank are examples of
proof of ownership.

The principal executive offices of the Company are located at Newport Tower,
23rd Floor, 525 Washington Boulevard, Jersey City, New Jersey 07310, and the
telephone number is (201) 222-9400.

Solicitation and Voting of Proxies; Revocation

As described in more detail below, you may vote in any of the four following
ways: (1) by attending the 2000 Annual Meeting; (2) by calling the toll-free
telephone number listed on the proxy card (only for shares held in street
name); (3) by voting on the Internet at the address listed on the proxy card
(only for shares held in street name); or (4) by marking, signing, dating and
mailing your proxy card in the postage-paid envelope provided.

If your shares are held in street name, you will be able to vote by
telephone or on the Internet by following the instructions on the proxy form
you receive from your bank or broker. If your bank or brokerage firm provides
this service, your voting form will provide instructions. If your voting form
does not provide for voting via the Internet or by telephone, please complete
and return the paper Proxy in the self-addressed postage paid envelope
provided.

Shares of Knight/Trimark Class A Common Stock that are entitled to vote and
are represented by a Proxy properly signed and received at or before the
Annual Meeting, unless subsequently properly revoked, will be voted in
accordance with the instructions indicated thereon. If a Proxy is signed and
returned without indicating any voting instructions, shares of Knight/Trimark
Class A Common Stock represented by such Proxy will be voted as follows:

FOR the proposal to change the Company's name to Knight Trading Group,
Inc.;

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FOR the proposal to amend the Company's Certificate of Incorporation to
increase the Company's authorized Class A Common Stock from 200 million
shares to 500 million shares;

FOR the election of each of the 15 nominees to the Company's Board of
Directors;

FOR the proposal to amend the Company's 1998 Long-Term Incentive Plan to
increase the number of shares of the Company's Class A Common Stock
authorized for issuance thereunder from 14,291,000 to 24,291,000; and

FOR the ratification of the selection of PricewaterhouseCoopers LLP as the
Company's independent auditors for 2000.

The Board of Directors is not currently aware of any business to be acted
upon at the Annual Meeting other than as described herein. If, however, other
matters are properly brought before the Annual Meeting or any adjournments or
postponements thereof, the persons appointed as proxies will have the
discretion to vote or act thereon in accordance with their best judgment,
unless authority to do so is withheld in the Proxy.

Any Proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before the shares represented by such Proxy are voted at
the Annual Meeting by: (i) attending and voting in person at the Annual
Meeting; (ii) giving notice of revocation of the Proxy at the Annual Meeting;
or (iii) delivering to the Secretary of Knight/Trimark (a) a written notice of
revocation or (b) a duly executed Proxy relating to the same shares and
matters to be considered at the Annual Meeting, bearing a date later than the
Proxy previously executed. Attendance at the Annual Meeting will not in and of
itself constitute a revocation of a Proxy. All written notices of revocation
and other communications with respect to revocation of proxies should be
addressed as follows: Knight/Trimark Group, Inc., Newport Tower, 23rd Floor,
525 Washington Boulevard, Jersey City, New Jersey 07310, Attention: Secretary,
and must be received before the taking of the votes at the Annual Meeting.

The Company will bear the entire cost of the solicitation of Proxies and the
cost of printing and mailing this Proxy Statement. The Company has retained
the services of ChaseMellon Shareholder Services, L.L.C. ("ChaseMellon") to
assist in the solicitation of Proxies. ChaseMellon will receive a fee from the
Company for services rendered of approximately $8,000, plus out-of-pocket
expenses. In addition to solicitation by mail, the directors, officers and
employees of the Company may solicit Proxies from stockholders of the Company
by telephone, telegram or by personal interview. Such directors, officers and
employees will not be additionally compensated for any such solicitation but
may be reimbursed for reasonable out-of-pocket expenses in connection
therewith. Arrangements will also be made with brokerage houses and other
custodians, nominees and fiduciaries for the forwarding of solicitation
material to the beneficial owners of shares held of record by such persons and
the Company will reimburse such custodians, nominees and fiduciaries for their
reasonable out-of-pocket expenses in connection therewith.

Record Date; Outstanding Shares; Voting at the Annual Meeting

Only holders of Knight/Trimark Class A Common Stock at the close of business
on April 5, 2000 will be entitled to receive notice of and to vote at the
Annual Meeting. At the close of business on April 5, 2000, the Company had
outstanding and entitled to vote [122,155,620] shares of Knight/Trimark Class
A Common Stock. All share numbers contained herein reflect the two-for-one
stock split effective May 1999. Shares of Knight/Trimark Class A Common Stock
represented by Proxies which are marked "abstain" or which are not marked as
to any particular matter or matters will be counted as shares present for
purposes of determining the presence of a quorum on all matters, but will not
be counted as votes cast in favor of the matters brought before the
stockholders at the Annual Meeting. Proxies relating to street name shares
that are voted by brokers will be counted as shares present for purposes of
determining the presence of a quorum on all matters, but will not be treated
as shares having voted at the Annual Meeting as to any proposal as to which
authority to vote is withheld by the broker.

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The presence, in person or by proxy, at the Annual Meeting of the holders of
at least a majority of the votes entitled to be cast at the Annual Meeting is
necessary to constitute a quorum for the transaction of business. Because the
change of corporate name, the increase in authorized Class A Common Stock, the
amendment to the 1998 Long-Term Incentive Plan, and the ratification of
PricewaterhouseCoopers LLP require the approval of a majority of the votes
entitled to be cast by the stockholders of the outstanding shares of
Knight/Trimark Class A Common Stock, abstentions and broker non-votes will
have the same effect as a negative vote on these proposals. However,
abstentions from voting on the election of directors (including broker non-
votes) will have no effect on the outcome of the vote.

PROPOSAL 1--CHANGE OF CORPORATE NAME

The Board of Directors has unanimously adopted resolutions approving,
declaring advisable and recommending adoption by the stockholders of an
amendment to the Company's Certificate of Incorporation to change the name of
the Company from Knight/Trimark Group, Inc. to Knight Trading Group, Inc. The
Board of Directors believes that the change in name will assist in the
marketing of the Company's brand, "Knight", and the proposed name more
accurately reflects the Company's business line and serves to emphasize the
Company's vision of enabling investors to trade all types of equity securities
and equity options at any time from anywhere in the world. Accordingly, the
Company has already changed the name of its broker-dealer subsidiaries
(Trimark Securities, Inc. to Knight Capital Markets, Inc.; Arbitrade LLC to
Knight Financial Products LLC) that did not include the Knight name, to
prepare for its branding campaign.

If this proposal is approved, Article First of the Company's Certificate of
Incorporation will be amended to read as follows: "The name of the Corporation
is Knight Trading Group, Inc. (hereinafter called the "Corporation")." Current
Company stock certificates will remain valid and no exchange of certificates
will be required, unless and until the securities are sold or transferred.
Under Delaware law, the amendment to the Certificate of Incorporation would
become effective upon stockholder approval and the filing of the amendment
with the Secretary of State of the State of Delaware. The amendment to the
Certificate of Incorporation will be filed as soon as reasonably practicable
after the approval of this proposal by the stockholders. Under applicable
Delaware law, the affirmative vote of the holders of a majority of the Class A
Common Stock outstanding on the record date is required to adopt the proposed
amendment to the Certificate of Incorporation. As a result, abstentions and
broker non-votes are effectively equivalent to votes against this proposal.
Unless otherwise instructed, properly executed Proxies that are timely
received and not subsequently revoked, but not marked, will be voted in favor
of the proposed amendment to the Certificate of Incorporation.

THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE PROPOSAL TO
CHANGE THE NAME OF THE COMPANY TO KNIGHT TRADING GROUP, INC.

PROPOSAL 2--TO INCREASE AUTHORIZED CLASS A COMMON STOCK

The Board of Directors of the Company has unanimously adopted resolutions
approving, declaring advisable and recommending adoption by the stockholders
of an amendment to the Company's Certificate of Incorporation to increase the
authorized shares of the Company's Class A Common Stock from 200,000,000
shares to 500,000,000 shares.

As of April 5, 2000, the Company had [122,155,620] shares of Class A Common
Stock issued and outstanding. Also on that date, the Company had [13,184,835]
shares of Class A Common Stock subject to outstanding options under the
Company's 1998 Long-Term Incentive Plan. The Company effected a 2-for-1 stock
split by means of a 100% stock dividend as of the close of business on May 14,
1999 and on January 12, 2000 issued 10,505,001 shares of Class A Common Stock
pursuant to its acquisition of Arbitrade Holdings LLC. Accordingly, the
Company has issued or reserved for issuance a majority of the authorized Class
A Common Stock, and, thus, a limited number of shares would be available to
the Company for use in connection with any future corporate needs.

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The lack of authorized Class A Common Stock available for issuance would
limit the Company's ability to effectuate future stock splits or dividends.
The Company would also be unnecessarily restricted in its ability to pursue
opportunities for future acquisitions, mergers, financings and other corporate
transactions. The Board of Directors believes that the increase in the
authorized shares of Class A Common Stock is necessary to provide the Company
with the flexibility to pursue the types of opportunities described above
without the added delay and expense of obtaining stockholder approval each
time an opportunity requiring the issuance of shares may arise.

This proposal could have an anti-takeover effect, although that is not its
intention. For example, if the Company were the subject of a hostile takeover
attempt, it could try to impede the takeover by issuing shares of Class A
Common Stock, thereby diluting the voting power of the other outstanding
shares and increasing the potential cost of the takeover. The availability of
this defensive strategy to the Company could discourage unsolicited takeover
attempts, thereby limiting the opportunity for the stockholders to realize a
higher price for their shares than is generally available in the public
markets. The Board of Directors is not aware of any attempt, or contemplated
attempt, to acquire control of the Company and this proposal is not being
presented with the intent that it be utilized as a type of anti-takeover
device.

The additional shares of Class A Common Stock to be authorized by adoption
of the amendment to the Certificate of Incorporation would have rights
identical to the current outstanding shares of Class A Common Stock of the
Company. Adoption of the proposed amendment to the Certificate of
Incorporation would not affect the rights of the holders of current
outstanding shares of Class A Common Stock.

Under applicable Delaware law, the affirmative vote of the holders of a
majority of the Class A Common Stock outstanding on the record date is
required to adopt the proposed amendment to the Certificate of Incorporation.
As a result, abstentions and broker non-votes are effectively equivalent to
votes against this proposal. Unless otherwise instructed, properly executed
Proxies that are timely received and not subsequently revoked, but not marked,
will be voted in favor of the proposed amendment to the Certificate of
Incorporation. If the proposal is approved, the Company intends to file an
amendment to the Certificate of Incorporation shortly after the meeting. The
amendment to the Certificate of Incorporation will be effective immediately
upon acceptance of filing by the Secretary of State of the State of Delaware.
The Board of Directors would then be free to issue the newly issued authorized
shares of Class A Common Stock without further action on the part of the
stockholders, subject to transactions requiring stockholder approval pursuant
to the Company's Certificate of Incorporation or Delaware law.

THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE PROPOSAL TO
INCREASE THE AUTHORIZED CLASS A COMMON STOCK.

PROPOSAL 3--ELECTION OF DIRECTORS

Directors of the Company will be elected by a plurality vote of the
outstanding shares of Knight/Trimark Class A Common Stock present in person or
represented by proxy at the Annual Meeting. Under applicable Delaware law, in
tabulating the votes, abstentions from voting on the election of Directors
(including broker non-votes) will be disregarded and have no effect on the
outcome of the vote.

Knight/Trimark currently has fourteen directors on its Board of Directors,
thirteen of whom have been nominated for election this year and have agreed to
serve if elected. Each of the thirteen current directors nominated for
election this year was elected by the stockholders at the 1999 Annual Meeting
of Stockholders, with the exception of Peter S. Hajas who was appointed as a
director in January 2000 to fill the vacancy created by the resignation of
Charles A. Zabatta in September 1999. Martin Averbuch resigned as a director
in January 2000 and his vacancy has not been filled.

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Steven L. Steinman, who currently serves as Chairman of the Board of
Directors, is retiring from the Board of Directors upon the expiration of his
current term and, therefore, will not stand for re-election. Mr. Steinman was
a co-founder of the Company's predecessor, Roundtable Partners, L.L.C. (the
"LLC"), along with Messrs. Pasternak, Raquet and Lazarowitz, and served as the
Chairman of the LLC until the Company's initial public offering and has served
as Chairman of the Company since then. Mr. Steinman was also the Founder and
Chief Executive Officer of Knight Capital Markets, Inc. ("Knight Capital
Markets"). The Board of Directors and management, on behalf of our
stockholders, thank him for his efforts.

The Board of Directors has been informed that all persons listed below are
willing to serve as Directors, but if any of them should decline or be unable
to act as a Director, the individuals named in the proxies will vote for the
election of such other person or persons as they, in their discretion, may
choose. The Board of Directors has no reason to believe that any such nominees
will be unable or unwilling to serve.

THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE ELECTION OF
EACH OF THE NOMINEES LISTED HEREIN FOR DIRECTOR.

Nominees for Election as Directors

The name, age (as of March 31, 2000), principal occupation for the last five
years, selected biographical information and period of service as a Director
of the Company of each of the nominees for Director are set forth hereafter.

Kenneth D. Pasternak (46), President, Chief Executive Officer and Director
of the Company, has over 20 years of experience in the securities industry.
For the past four years, Mr. Pasternak has been the President, Chief Executive
Officer and a trading room supervisor for the Company's wholly-owned
subsidiary Knight Securities, L.P. ("Knight Securities"). Before co-founding
the LLC and Knight Securities, Mr. Pasternak served as Senior Vice President,
Limited Partner and Trading Room Manager for Spear Leeds & Kellogg/Troster
Singer, a trading firm, from July 1979 to July 1994. Mr. Pasternak received
his B.A. degree from the State University of New York at New Paltz in 1976.

Walter F. Raquet (55), Executive Vice President and Director of the Company,
has over 30 years of experience in the securities industry. For the past four
years, Mr. Raquet has been the Chief Operating Officer of Knight Securities.
Mr. Raquet was one of the co-founders of the LLC and Knight Securities. From
1992 to 1994, he was a Senior Vice President with Spear, Leeds &
Kellogg/Troster Singer managing their technology and marketing functions. From
1982 to 1992, Mr. Raquet was a Partner at Herzog Heine & Geduld, Inc., a
trading firm, where he directed the firm's technology and marketing efforts.
Mr. Raquet was also Corporate Controller for PaineWebber Incorporated between
1980 and 1982. He was Executive Vice President of Cantor Fitzgerald from 1977
to 1980 and Controller for Weeden & Co. from 1968 to 1976. He is a CPA and
practiced at the accounting firm of Price Waterhouse. Mr. Raquet received a
B.S. degree in Accounting from New York University in 1966.

Robert I. Turner (47), Executive Vice President, Chief Financial Officer,
Treasurer and Director of the Company and Chief Financial Officer of Knight
Securities, has over 20 years of experience in the securities and financial
services industries. For the past four years, Mr. Turner has served as the
Chief Financial Officer for Knight Securities and in April 1996 he was elected
to the advisory board of the LLC on which he served until the Company's
initial public offering, at which time he joined the Board of Directors of the
Company. From 1988 to 1995, Mr. Turner was a Corporate Vice President at
PaineWebber Incorporated, serving in a variety of financial management
positions in the fixed income, financial services, merchant banking and
commodities trading divisions. From 1982 to 1987, Mr. Turner worked for
Citicorp in the treasury and investment banking divisions. From 1979 to 1981,
Mr. Turner practiced at the accounting firm of Price Waterhouse where he
became a CPA. Mr. Turner received his B.A. from the State University of New
York at Binghamton in 1973 and his M.S.B.A. from the University of
Massachusetts at Amherst in 1976.

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Robert M. Lazarowitz (43), Executive Vice President and Director of the
Company and Chief Operating Officer of Knight Capital Markets (formerly
Trimark Securities, Inc.), has over 20 years of experience in the securities
and financial services industries. For the past 11 years, Mr. Lazarowitz
served first as Chief Financial Officer and then as Chief Operating Officer of
Knight Capital Markets. Mr. Lazarowitz was also a co-founder of the LLC. From
1985 to 1987, he served as Chief Financial Officer of Bach
Management/Investment Banking and, from 1984 to 1985, as Chief Operating
Officer of Traubner Bach Co. Inc. He has been a member of the NASD's
Intermarket Trading System Committee for the past three years. Mr. Lazarowitz
received his B.S. in Accounting from the University of South Florida in 1978.

Anthony M. Sanfilippo (43), Executive Vice President and Director of the
Company and President of Knight Capital Markets, has over 22 years of
experience in the securities industry. For the past two years, he has been the
President of Knight Capital Markets. From 1993 to 1997, Mr. Sanfilippo was
President and Chief Executive Officer of Tradetech Securities, a market maker
in the Third Market which he founded in 1993. From 1988 to 1993, he served as
Executive Vice President at Mesirow Financial, managing the Institutional
Equity Division and Regional Exchange Specialist Operations. From 1980 to
1986, he was Vice President of Jefferies & Co., an investment bank, where he
co-managed the firm's capital commitments in listed securities. Mr. Sanfilippo
is a member of the National Organization of Investment Professionals. He has
also served as President of the Security Traders Association in Chicago and is
currently serving on the NASDR Business District Conduct Committee. Mr.
Sanfilippo attended DePaul University.

Peter S. Hajas (39), Director of the Company and Chief Executive Officer of
Knight Financial Products LLC ("Knight Financial Products"), has 18 years
experience in the securities industry. For the past two years, Mr. Hajas has
served first as a member and then as Chief Executive Officer of Knight
Financial Products. From 1990 to 1998, Mr. Hajas was Managing Director of
Global Fixed Income and Derivatives for Swiss Bank Corporation. From 1989
through October 1990, Mr. Hajas was a partner at O'Connor & Associates in
charge of fixed income trading. Mr. Hajas was the Chairman and Head of Trading
for Arbitech AB from 1987 to 1989. Before that, he was employed at O'Connor &
Associates from 1983 to 1987. Mr. Hajas received a B.S. degree in Physics,
Mathematics and Computer Science from Loyola University in Chicago in 1982.

John G. Hewitt (49), President of Knight Securities, has over 20 years
experience in the securities industry. Since June 1999, Mr. Hewitt has served
as President of Knight Securities. From 1987 to 1999, Mr. Hewitt worked at
Goldman, Sachs & Company, where he most recently was Vice President of
Electronic Trading & Arbitrage Administration. Before that, he was a Senior
Vice President and Chief Operating Officer of the New York Futures Exchange at
the New York Stock Exchange from 1978 to 1987. Mr. Hewitt received his B.A.
from the University of Rochester in 1973, his J.D. from Boston University Law
School in 1978 and his LL.M. from New York University in 1984.

Charles V. Doherty (66), Director of the Company, has served on the Board of
the Company since the Company's initial public offering, and before that, as
an advisory board member of the LLC since March 1995. He has been a Managing
Director of Madison Asset Group, an investment advisory firm, since 1993. From
1986 to 1992, Mr. Doherty was President and Chief Operating Officer of the
Chicago Stock Exchange specializing in information technology, marketing,
floor operations and compliance. He is a CPA and founder of Doherty, Zable &
Company, an accounting firm, where he served as President between 1974 and
1985. Mr. Doherty received his B.A. in Accounting, magna cum laude, from the
University of Notre Dame in 1955 and his M.B.A. from the University of Chicago
in 1967.

Gene L. Finn (67), Director of the Company, has served on the Board of the
Company since the Company's initial public offering and, before that, as an
advisory board member of the LLC since March 1995. He served as Vice President
and Chief Economist of the NASD from 1983 to 1995 and as Chief Economist and
Senior Economic 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 has been a Director
of Ameritrade Holding Corporation since December 1996. Mr. Finn holds a Ph.D.
in Economics from the University of Wisconsin.

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Gary R. Griffith (60), Director of the Company, has served on the Board of
the Company since the Company's initial public offering and, before that, as
an advisory board member of the LLC since March 1995. He has been an
independent financial consultant since 1990 and has worked in investment
banking and financial consulting since 1980. Before 1980, Mr. Griffith was
with CBS, Inc. and Price Waterhouse. Mr. Griffith is a CPA. Mr. Griffith
received a B.S. in Business Administration from Ohio State University in 1963.

Bruce R. McMaken (40), Director of the Company, has served on the Board of
the Company since the Company's initial public offering and, before that, as
an advisory board member of the LLC since March 1995. He also has been
employed by Sanders Morris Harris Inc. ("SMH"), an investment banking firm,
since 1992, and is currently serving as a Managing Director of Corporate
Finance. Mr. McMaken serves as one of the managers of Environmental
Opportunities Fund, Ltd. and Environmental Opportunities Funds II, two private
equity funds managed by affiliates of SMH. Before joining SMH, Mr. McMaken
provided independent corporate finance and venture capital advisory services
to clients primarily in the environmental services, biotechnology and real
estate development industries. He is also a director of IESI Corporation, a
private solid waste collection and disposal company. He received his B.A.
degree from Cornell University in 1981.

J. Joe Ricketts (58), Director of the Company, has served on the Board of
the Company since the Company's initial public offering. Mr. Ricketts is
Chairman and Founder of Ameritrade Holding Corporation, an original member of
the LLC. Previously, Mr. Ricketts was an investment advisor with Ricketts &
Co., a registered representative with Dean Witter, and a branch manager at Dun
& Bradstreet. Mr. Ricketts was also one of the founding members of CSS
Management, Inc. of Denver, Colorado, a securities industry software
developer. He is a director of Net.B@nk, Inc., the Securities Industry
Association and Epoch Capital Partners (a new investment bank). Mr. Ricketts
is also a member of the Board of Trustees of Creighton University. In 1968, he
received his B.A. degree in economics from Creighton University in Omaha,
Nebraska.

Rodger O. Riney (54), Director of the Company, has served on the Board of
the Company since the Company's initial public offering and, before that, as
an advisory board member of the LLC since March 1995. He is the President of
Scottsdale Securities, Inc., a discount brokerage firm he founded in 1980. In
1969, he joined Edward Jones & Co., a brokerage firm, and in 1975 became a
General Partner of that firm. Mr. Riney received a B.S. degree in Civil
Engineering in 1968 and an M.B.A. in 1969, both from the University of
Missouri-Columbia.

V. Eric Roach (37), Director of the Company, has served on the Board of the
Company since the Company's initial public offering and, before that, as an
advisory board member of the LLC since 1995. He founded Lombard Brokerage, a
brokerage firm, in 1992 and was Chairman and Chief Executive Officer until
Dean Witter, Discover & Co. acquired the company in 1997. Until July 1998, he
was President of Discover Brokerage Direct, Inc., a wholly-owned subsidiary of
Morgan Stanley, Dean Witter & Co., managing the company's strategy, marketing
and public relations areas. From July 1998 to December 1999, he was in the
direct business group of Morgan Stanley Dean Witter. He attended Brigham Young
University and also attended the Executive M.B.A. program of Pepperdine
University.

Robert Greifeld (42), has been a Senior Vice President of SunGard Data
Systems ("SunGard") since February 2000. He is also the Chief Executive
Officer of SunGard's Trading System division. From August 1999 to February
2000, Mr. Greifeld was Vice President of SunGard, and from May 1999 to August
1999, he was Chief Executive Officer of the SunGard Brokerage Systems Group.
From 1993 to 1999, Mr. Greifeld was President of Automated Securities
Clearance, Ltd., which was acquired by SunGard in March 1999. Mr. Greifeld is
chairman of the advisory committee of the BRUT Utility LLC. Mr. Greifeld holds
a B.A. from Iona College and an M.B.A. from New York University.

7
<PAGE>

Board of Directors and its Committees

During 1999, the Company's Board of Directors met five times and took
actions by unanimous written consent on other occasions.

The Company has, as standing committees, a Finance and Audit Committee, a
Compensation Committee and a Nominating Committee.

All members of the Board of Directors, other than outgoing Chairman Steinman
and Mr. Doherty, attended at least 75% of its meetings and the meetings of any
Committees of the Board of Directors of which they were members in 1999. Mr.
Doherty attended over 75% of the Board of Director meetings and 67% (2 out of
3) of the Finance and Audit Committee meetings after his appointment to that
Committee in October 1999.

The current members of the Finance and Audit Committee are Messrs. Griffith,
McMaken and Doherty. The Finance and Audit Committee provides assistance to
the Board of Directors in fulfilling its legal and fiduciary obligations with
respect to monitoring: (1) the integrity of the financial statements and the
risk and control environment of the Company; (2) the compliance by the Company
with legal and regulatory requirements; and (3) the independence and
performance of the Company's independent auditors. The Finance and Audit
Committee also reviews and makes recommendations to the Board regarding: (i)
all proposed new capital formation plans, including planned issuances of
equity securities and debt instruments; and (ii) certain acquisitions,
investments and divestitures proposed by the management of the Company.

The current members of the Compensation Committee are Messrs. Doherty, Finn
and Riney. Mr. Riney replaced Mr. Averbuch on the Compensation Committee in
April 2000. The Compensation Committee provides assistance to the Board of
Directors to ensure that the Company's officers, key executives and Directors
are compensated in accordance with the Company's total compensation objectives
and executive compensation policies, strategies and pay levels necessary to
support organizational objectives.

The current members of the Nominating Committee are Messrs. Pasternak,
Doherty, Finn and Sanfilippo. The Nominating Committee makes recommendations
to the Board of Directors as to whom to nominate as Directors of the Company.
The Nominating Committee also considers nominee recommendations from
stockholders of the Company.

In 1999, the Finance and Audit Committee and Compensation Committee met for
regularly scheduled meetings and each also took actions by unanimous written
consent. The Nominating Committee acted by unanimous written consent.

Compensation of Directors

Messrs. Pasternak, Raquet, Lazarowitz, Sanfilippo, Hajas, and Turner,
officers of the Company, receive no remuneration for serving on the Board of
Directors. Each of the independent Directors receive an annual fee of $18,000
and a meeting fee of $1,000 for each of the Board of Directors or Committee
meetings attended. Committee chairpersons received an additional fee of $3,000
per year. All directors are reimbursed for out-of-pocket expenses. Each newly
elected independent director is granted an option to purchase 16,000 shares of
Class A Common Stock. In addition, on the first business day following each
annual meeting of our stockholders, each continuing independent director will
be granted an option to purchase 8,000 shares of Class A Common Stock. For the
fiscal year ended December 31, 1999, directors of the Company who were not
officers received the above-described directors' fees from the Company in the
amount of $233,000.

8
<PAGE>

Executive Officers

The executive officers serve at the discretion of the Board of Directors.
The following table sets forth certain information concerning the executive
officers of the Company as of March 31, 2000 (none of whom has a family
relationship with another executive officer):

<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<C> <C> <S>
Kenneth D. Pasternak... 46 President, Chief Executive Officer and Director
Walter F. Raquet....... 55 Executive Vice President and Director
Executive Vice President, Chief Financial Officer,
Robert I. Turner....... 47 Treasurer and Director
Robert M. Lazarowitz... 43 Executive Vice President and Director
Executive Vice President and Director, President,
Anthony M. Sanfilippo.. 43 Knight Capital Markets
Director, Chief Executive Officer, Knight
Peter S. Hajas......... 39 Financial Products
David Shpilberg........ 49 Executive Vice President, Chief Operating Officer
and Chief Technology Officer
John G. Hewitt......... 49 President, Knight Securities
Senior Vice President, General Counsel and
Michael T. Dorsey...... 44 Secretary
</TABLE>

For selected biographical information with respect to certain of the
executive officers, please see "Nominees For Election as Directors" beginning
on page 5. Selected biographical information with respect to all other
executive officers is set forth hereafter.

David Shpilberg (49), Executive Vice President, Chief Operating Officer and
Chief Technology Officer of the Company, recently joined the Company in April
2000. From 1991 to 2000, Dr. Shpilberg was a partner in the Management
Consulting Services Division of Ernst & Young. Dr. Shpilberg most recently
served as Vice Chairman and Chief Technology Officer of this worldwide
division. Before that, he was Vice President of Information Technology in the
Equities and Asset Management Divisions at Goldman, Sachs & Company from 1989
to 1991. From 1983 to 1989, Dr. Shpilberg was a partner in the Management
Consulting Services division of Coopers & Lybrand. Dr. Shpilberg received his
B.S. in Aeronautics and Astronautics in 1972, his M.S. in Operations Research
in 1973, and his Ph.D. in Management Science in 1976, all from the
Massachusetts Institute of Technology.

Michael T. Dorsey (44), Senior Vice President, General Counsel and
Secretary, has been with the Company since March 1998. From June 1994 to March
1998, Mr. Dorsey served as the Chief Legal Officer to Prudential Investment
Management Services LLC and its predecessor, in the institutional money
management unit of The Prudential Insurance Company of America. From 1986
until June 1994, Mr. Dorsey served as an attorney in the SEC's Division of
Market Regulation, holding various posts including Special Counsel to the
Assistant Director and then Branch Chief of the Office of Compliance
Inspections and Oversight. Mr. Dorsey received a B.S.B.A. in Finance from the
St. Louis University in 1981, a J.D. from the University of Missouri-Columbia
in 1984 and an LL.M. in Securities Regulations from Georgetown University Law
Center in 1989. Mr. Dorsey is admitted to the Missouri and Illinois state
bars.

9
<PAGE>

Executive Compensation

The following table sets forth information regarding compensation paid for
each of the last three completed fiscal years for Kenneth D. Pasternak, the
Company's Chief Executive Officer, and the company's five other most highly
paid executive officers (together with the Chief Executive Officer, the Named
Executive Officers):

Summary Compensation Table

<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation
---------------------------------------------- ------------
Securities
All Other Underlying
Name and Principal Year Salary Bonus(1) Compensation(2) Options(3)
------------------ ---- -------- ----------- -------------- ------------
<S> <C> <C> <C> <C> <C>
Kenneth D. Pasternak... 1999 $250,000 $19,155,017(4) $ 24,244 --
President and Chief
Executive Officer 1998 250,000 5,081,905(4) 3,714,990 2,000,000
1997 250,000 3,084,742(4) 5,421,289 --

Walter F. Raquet....... 1999 250,000 6,859,466 6,269 --
Executive Vice
President 1998 250,000 1,829,588 3,714,990 750,000
1997 250,000 1,219,788 5,421,289 --

Robert I. Turner....... 1999 200,000 2,610,947 4,871,710 --
Executive Vice
President, Chief
Financial 1998 195,422 766,587 5,000 550,000
Officer and Treasurer 1997 140,576 379,708 4,750 --

Robert M. Lazarowitz... 1999 250,000 1,200,155 8,683 --
Executive Vice
President 1998 250,000 878,752 3,714,990 350,000
1997 250,000 872,038 5,421,289 --

Anthony M. Sanfilippo.. 1999 250,000 1,200,152 5,533 --
Executive Vice
President 1998 250,000 496,399 385,457 350,000
1997(5) 33,753 40,972 -- --

John G. Hewitt ........ 1999(5) 127,885 2,218,606 7,379 300,000
President, Knight
Securities 1998 -- -- -- --
1997 -- -- -- --
</TABLE>
- --------
(1) Includes discretionary incentive cash bonuses paid pursuant to the
Incentive Plan described below. Also includes amounts which may have been
deferred under the Company's Nonqualified Deferred Compensation Plan.
(2) Includes self-employment earnings reported for the LLC, contributions by
the Company on behalf of each of the executive officers by the Company
under the Company's 401(k) defined contribution plan, taxable income from
the exercise of nonqualified employee stock options and taxable fringe
benefits.
(3) The number of shares covered by options to purchase the Company's Class A
Common Stock granted during the applicable year, adjusted for the
Company's two-for-one stock split during May 1999. See further discussion
below.
(4) Includes $4,238,732, $1,273,709 and $60,025 paid as trading compensation
to Mr. Pasternak for the years ended December 31, 1999, 1998 and 1997,
respectively.
(5) Executive Officer was only an employee with the Company for part of that
year.

10
<PAGE>

Option Grants During Fiscal 1999

The following table sets forth grants of stock options to each of the named
executive officers during the year ended December 31, 1999.

<TABLE>
<CAPTION>
Individual Grants
----------------------------------------------
Potential Realizable
Value at
Percent of Assumed Annual Rates
Total of
Number of Options Stock Price
Securities Granted Appreciation for
Underlying to Employees Exercise or Option Term(1)
Options in Base Price Expiration ----------------------
Name Granted Fiscal Year Per Share Date 5% 10%
---- ---------- ------------ ----------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
John G. Hewitt.......... 300,000 28.3% $52.63 06/28/09 $9,929,617 $25,163,600
President, Knight
Securities
</TABLE>
- --------
(1) Amounts that may be realized upon exercise of the options immediately
before the expiration of their term, assuming the specified compound rates
of appreciation (5% and 10%) on the market value of the Class A Common
Stock on the date of option grant over the term of the options. These
numbers are calculated based on rules promulgated by the SEC and do not
reflect the Company's estimate of future stock price growth. Actual gains,
if any, on stock option exercises and common stock holdings are dependent
on the timing of exercise and the future performance of the common stock.
There can be no assurance that the rates of appreciation assumed in this
table can be achieved or that the amounts reflected will be received by
the individuals.

Year-End Option Values

The following table sets forth information concerning stock options
exercised and the number and value of unexercised options held by each of the
named executive officers on December 31, 1999. All share and per share amounts
have been adjusted for the Company's two-for-one stock split during May 1999.

Aggregated Options Exercised in 1999 and Option Values at December 31, 1999

<TABLE>
<CAPTION>
Number of Shares
Underlying Value of Unexercised
Unexercised Options at In-the-Money Options at
December 31, 1999 December 31, 1999(2)
Shares Acquired Value ------------------------- -------------------------
Name on Exercise Realized(1) Exercisable Unexercisable Exercisable Unexercisable
---- --------------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Kenneth D. Pasternak.... -- -- 500,000 2,000,000 $19,375,000 $77,500,000
Walter F. Raquet........ -- -- 187,500 750,000 7,265,625 29,062,500
Robert I. Turner........ 137,500 $4,862,498 -- 412,500 -- 15,984,375
Robert M. Lazarowitz.... -- -- 87,500 350,000 3,390,625 13,562,500
Anthony M. Sanfilippo... -- -- 87,500 350,000 3,390,625 13,562,500
John G. Hewitt.......... -- -- -- 300,000 -- --
</TABLE>
- --------
(1) Upon exercising the stock options, the named officer sold the shares
acquired. "Value realized" computed as the excess of the sales price over
the option price. This may not represent the amount actually realized by
the named officer.
(2) Computed by subtracting the option exercise price from the closing price
per share of the Company's Class A Common Stock of $46.00 as reported by
the National Market System of The Nasdaq Stock Market and multiplying this
amount by the number of exercisable and unexercisable options. This may
not represent the amounts that will actually be realized by the named
officers.

11
<PAGE>

Management Contracts and Change in Control Agreements

Shortly before the Company's initial public offering, the Company entered
into a new employment agreement substantially the same as the prior LLC
employment agreement with Mr. Pasternak and amended the LLC agreements of
Messrs. Raquet, Steinman and Lazarowitz, as well as the prior employment
agreement with Mr. Sanfilippo (collectively, the Executives). The term of Mr.
Pasternak's agreement (the New Agreement) is four years, beginning on the date
of the consummation of the Company's initial public offering, with annual,
automatic one-year extensions beginning on the fourth anniversary of such date
unless either party gives notice of nonrenewal at least 60 days before such
anniversary. The term of the amended agreements of the remaining Executives
(the Amended Agreements) ended on March 23, 2000, and such agreements were not
renewed.

Mr. Pasternak's New Agreement provides that he is President and Chief
Executive Officer of the Company and President and Chief Executive Officer of
Knight Securities. Mr. Pasternak receives an annual salary of $250,000, which
may be, from time to time, increased by the Board of Directors.

The New Agreement and each of the Amended Agreements provides, or provided,
for the payment of an annual bonus pursuant to the Company's 1998 Incentive
Plan and for participation in current and future employee benefit plans. In
addition, the New Agreement of Mr. Pasternak provides, and the Amended
Agreement of Mr. Sanfilippo provided, for the payment of profit sharing equal
to a percentage (in the case of Mr. Pasternak, 35%; in the case of Mr.
Sanfilippo, a percentage consistent with the Company's other traders) of the
net, before-tax trading profits of the Executive's personal trading account,
and the respective Amended Agreements of Messrs. Steinman and Lazarowitz
provided for the payment of an additional amount bonus until March 20, 2000,
equal in each case to 5% of the before tax earnings of Knight Capital Markets.

COMPENSATION COMMITTEE
REPORT ON EXECUTIVE COMPENSATION

The Compensation Committee was formed in April 1998. Set forth below is a
description of the policies and practices that the Compensation Committee will
implement with respect to future compensation determinations.

Compensation Philosophy. The Company's compensation program is designed to
attract, reward and retain highly qualified executives and to encourage the
achievement of business objectives and superior corporate performance. The
program ensures the Board of Directors and stockholders that: (1) the
achievement of the overall goals and objectives of the Company can be
supported by adopting an appropriate executive compensation policy and
implementing it through an effective total compensation program; and (2) the
total compensation program and practices of the Company are designed with full
consideration of all accounting, tax, securities law and other regulatory
requirements and are of the highest quality.

The Company's executive compensation program consists of two key elements:
(1) an annual compensation component composed of base salary and bonus; and
(2) a long-term compensation component composed of equity-based awards
pursuant to the 1998 Long-Term Incentive Plan.

Annual Compensation. Base salaries will be determined by evaluating the
responsibilities associated with the position being evaluated and the
individual's overall level of experience. In addition, the compensation of the
Chief Executive Officer determined by the Compensation Committee is subject to
the terms of his existing employment agreement. Annual salary adjustments will
be determined by giving consideration to the Company's performance and the
individual's contribution to that performance.

The Company has established a profit-pool incentive plan (the Incentive
Plan), currently consisting of four sub-profit pools, one for the Company
(disregarding its subsidiary companies) (the Company Sub-Pool), one for Knight
Securities (the Knight Securities Sub-Pool), one for Knight Capital Markets
(the Knight Capital Markets Sub-Pool) and one for Knight Financial Products
(the Knight Financial Products Sub-Pool). The Incentive Plan

12
<PAGE>

also provides for the creation of a new sub-pool at the time of each future
formation or acquisition of a new Company subsidiary, to be allocated by such
person or persons as determined by a committee of the Board of Directors
consisting of its executive officers (the Executive Board).

The annual Company Sub-Pool equals 15% of the before-tax profits of the
Company (on an unconsolidated basis) earned by the Company during each fiscal
quarter (not taking into account amounts paid out pursuant to the Incentive
Plan) and will be allocated on a quarterly basis by the Chief Executive
Officer of the Company. The annual Knight Securities Sub-Pool equals 15% of
the before-tax profits earned by Knight Securities during each fiscal quarter
(not taking into account amounts paid out pursuant to the Incentive Plan), and
is allocated on a quarterly basis by the Chief Executive Officer of Knight
Securities. The annual Knight Capital Markets Sub-Pool equals 15% of the
before-tax profits earned by Knight Capital Markets during each fiscal quarter
(not taking into account amounts paid out pursuant to the Incentive Plan), and
is allocated on a quarterly basis by the Chief Executive Officer and President
of Knight Capital Markets. The annual Knight Financial Products Sub-Pool
equals 15% of the before-tax profits earned by Knight Financial Products
during each fiscal quarter (not taking into account amounts paid out pursuant
to the Incentive Plan), and is allocated on a quarterly basis by the Chief
Executive Officer of Knight Financial Products. Such officers may not
themselves receive an allocation from any sub-profit pool in any year unless
the entire Company, on a consolidated basis, earns a before-tax profit. All
allocations will be subject to the approval of the Chief Executive Officer of
the Company.

Mr. Pasternak is the only Company named executive officer currently under an
employment contract. See "Management Contracts and Change in Control
Agreements." Increases in the base salaries of the named executive officers
and the bonus portion of their annual compensation will be based upon the
considerations noted above.

Long-term Compensation. To align stockholder and executive officer
interests, the long-term component of the Company's executive compensation
program utilizes equity-based awards whose value is directly related to the
value of the Knight/Trimark Class A Common Stock. These equity-based awards
will be granted by the Compensation Committee pursuant to the 1998 Long-Term
Incentive Plan. Individuals to whom equity-based awards are to be granted and
the amount of Knight/Trimark Class A Common Stock related to equity-based
awards will be determined at the discretion of the Board of Directors. Because
individual equity-based award levels will be based on a subjective evaluation
of each individual's overall past and expected future contribution, no
specific formula is used to determine such awards for any executive.

Compensation of Chief Executive Officer. In 1999, Mr. Pasternak's
compensation consisted of three components: (1) his base salary under his New
Agreement ($250,000); (2) 35% of profits from his personal trading account in
calendar 1999, as provided by his New Agreement ($4,328,732); and (3) his
share of the Knight Securities Sub-Pool for calendar 1999 ($14,824,285). The
Knight Securities Sub-Pool was allocated by Mr. Pasternak, as Chief Executive
Officer of Knight Securities. No bonuses were paid out of the Company Sub-Pool
in 1999. Mr. Pasternak received no compensation in 1999 that was within the
discretion of the Board of Directors or the Compensation Committee.

Compensation Committee
Charles V. Doherty
Gene L. Finn
Rodger O. Riney

13
<PAGE>

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

During 1997, and before the formation of the Compensation Committee,
decisions concerning the compensation of executive officers were made by the
entire Board of Directors. Since the Company's initial public offering,
decisions concerning executive compensation have been made by the Compensation
Committee. The Compensation Committee currently consists of Messrs. Doherty,
Finn, and Riney, none of whom has ever been an officer or employee of the
Company. No executive officer of the Company serves as a member of the board
of directors or compensation committee of any entity that has one or more
executive officers serving as a member of the Company's Board of Directors or
Compensation Committee. Certain members of the Company's Board of Directors
are parties to transactions with the Company.

14
<PAGE>

COMPARATIVE STOCK PERFORMANCE GRAPH

The graph below compares the total cumulative return of the Knight/Trimark
Class A Common Stock from July 8, 1998 (the date trading of the Knight/Trimark
Class A Common Stock commenced) through December 31, 1999, to the Standard &
Poor's 500 Index, the SNL All Broker/Dealer Index and an industry peer group.
The graph assumes that dividends were reinvested and is based on an investment
of $100 on July 8, 1998.

Total Return Performance

[LINE GRAPH]

<TABLE>
<CAPTION>
Period Ending
---------------------------------------------------
Index 7/8/98 12/31/98 03/31/99 06/30/99 09/30/99 12/31/99
----- ------ -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Knight/Trimark Group,
Inc...................... 100.00 150.79 422.05 759.84 373.23 579.53
S&P 500................... 100.00 106.11 111.40 119.25 111.80 128.44
SNL All Broker/Dealer
Index.................... 100.00 83.73 122.14 136.91 104.92 141.55
Industry Peer Group....... 100.00 101.27 162.96 177.91 120.95 142.82
</TABLE>

The Company included the following companies in its industry peer group:
Ameritrade Holding Corporation
E*TRADE Group, Inc.
Merrill Lynch & Co. Inc.
The Charles Schwab Corporation
National Discount Brokers Group

15
<PAGE>

Section 16(a) Beneficial Ownership Reporting Compliance

The Company's executive officers, directors and ten percent stockholders are
required under Section 16(a) of the Securities Exchange Act of 1934, to file
reports of ownership and changes in ownership on Forms 3, 4 and 5 with the
Commission and the The Nasdaq Stock Market. Copies of these reports must also
be furnished to the Company. Based solely upon its review of copies of such
reports furnished to the Company through the date hereof, or written
representations that no reports were required to be filed, the Company
believes that during the fiscal year ended December 31, 1999, all filing
requirements applicable to its officers, directors and ten percent
stockholders were complied with in a timely manner.

PROPOSAL 4--TO AMEND THE 1998 LONG-TERM INCENTIVE PLAN

The Board of Directors of the Company has unanimously approved and
recommends that the stockholders approve an amendment (the "Plan Amendment")
to the Company's 1998 Long-Term Incentive Plan (the "1998 Plan") to increase
the number of shares of the Company's Class A Common Stock authorized for
issuance thereunder from 14,291,000 shares to 24,291,000 shares. The Board
adopted the Plan Amendment because the number of shares currently available
under the 1998 Plan is insufficient to satisfy the Company's anticipated
incentive compensation needs for current and future employees. The Board
believes that the adoption of the Plan Amendment would, among other things,
enhance the long-term stockholder value of the Company by offering
opportunities to the Company's employees, directors, officers, and other
service providers to participate in the Company's growth and success, and to
encourage them to remain in the service of the Company and its subsidiaries
and to acquire and maintain stock ownership in the Company. The Board believes
that existing option grants and stock awards have contributed substantially to
the successful achievement of the Company and that the granting of stock
options and stock awards for these purposes is comparable with the practices
of other high-technology and financial services companies. In addition, the
lack of a Plan Amendment would unnecessarily restrict the Company's ability to
pursue opportunities for future acquisitions, mergers, and other corporate
transactions. The Board of Directors believes that the Plan Amendment is
necessary to provide the Company with the flexibility to pursue the types of
opportunities described above without the added delay and expense of obtaining
stockholder approval each time an opportunity requiring the issuance of shares
under the Plan may arise. If the Plan Amendment is approved, the Company will
have additional authorized shares of Class A Common Stock available for future
grants, including grants in connection with any acquisitions by the Company.

SUMMARY OF PLAN

The Company adopted the 1998 Plan, and it took effect, immediately before
its initial public offering. Currently, a maximum of 14,291,000 shares of
Class A Common Stock are reserved for issuance under the 1998 Plan, subject to
equitable adjustment in the event of a change in the Company's capitalization.

The 1998 Plan is administered by a committee established by the Board of
Directors, the composition of which will at all times satisfy the provisions
of Rule 16b-3 of the Securities Exchange Act of 1934, as in effect from time
to time, including any successor thereof. This committee has full authority,
subject to the provisions of the 1998 Plan, to determine, among other things,
the persons to whom awards under the 1998 Plan will be made, the size of these
awards, and the specific terms and conditions applicable to awards, including,
but not limited to, the duration, vesting and exercise or other realization
periods, the circumstances for forfeiture and the form and timing of payment.
The 1998 Plan limits the number of shares of Class A Common Stock that may be
the subject of awards to any grantee in any calendar year to one million
shares.

16
<PAGE>

Awards, including stock options, restricted stock and restricted stock units
may be made under the 1998 Plan to selected employees and independent
contractors of the Company and its present or future subsidiaries and
affiliates, in the discretion of the committee. Substantially all of the
Company's employees are eligible to receive awards under the 1998 Plan.
Currently, approximately 925 employees and independent contractors of the
Company and its subsidiaries are eligible to receive awards under the 1998
Plan. Stock options may be either "incentive stock options," as that term is
defined in Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code"), or nonqualified stock options. The exercise price of an option will
not be less than the fair market value per share of Class A Common Stock on
the date of grant. The exercise price of an option may be paid in cash or
Class A Common Stock or by way of a "broker's cashless exercise" or other
similar arrangement approved by the committee. Options that have a term of not
more than 10 years will become exercisable at that time and upon such terms as
the committee may determine, and may be exercised following termination of
employment as determined by the committee in the document evidencing the
award.

Restricted stock is Class A Common Stock transferred to the grantee,
generally without payment to the Company, which shares are subject to certain
restrictions and to a risk of forfeiture. A restricted stock unit is a right
to receive shares of Class A Common Stock or cash at the end of a specified
period, subject to a risk of forfeiture. The vesting of restricted stock and
restricted stock units may be conditioned upon the satisfaction of specified
performance criteria. Currently, the maximum number of shares of Class A
Common Stock that may be awarded as restricted stock under the 1998 Plan is
one million.

In the event of a "change of control," as defined in the 1998 Plan, (1) any
award carrying a right to exercise that was not previously exercisable and
vested will become fully exercisable and vested, (2) the restrictions,
deferral limitations, payment conditions and forfeiture conditions applicable
to any other award granted under the 1998 Plan will lapse and that award will
fully vest and (3) any performance conditions imposed with respect to awards
will have been deemed met.

The 1998 Plan may, at any time and from time to time, be altered, amended
suspended, or terminated by the Board of Directors, in whole or in part,
provided that no amendment that, in the opinion of counsel, requires
stockholder approval will be effective unless such amendment has received the
requisite approval of stockholders. In addition, no amendment may be made that
adversely affects any of the rights of a grantee under any award theretofore
granted, without such grantee's consent.

Set forth below is a brief discussion of certain federal income tax
consequences relating to awards that may be granted pursuant to the 1998 Plan.

Nonqualified Stock Options. In the case of a nonqualified stock option, an
option holder generally will not be taxed upon the grant of the option.
Rather, at the time of exercise of that nonqualified stock option, the option
holder will generally recognize ordinary income for federal income tax
purposes in an amount equal to the excess of the then fair market value of the
shares purchased over the option price, which is referred to as the spread.
The Company will generally be entitled to a tax deduction at the time and in
the amount that the holder recognizes ordinary income.

Incentive Stock Options. In the case of an incentive stock option, the tax
recognition event will generally occur upon the disposition of the shares
acquired upon exercise of the incentive stock option, rather than upon the
grant of the incentive stock option or upon its exercise within the
employment-related period prescribed by the Code for this purpose, which is
referred to as timely exercise. The spread will, however, be an item of tax
adjustment for purposes of the "alternative minimum tax" imposed by Section 55
of the Code. If, upon disposition of the shares acquired upon exercise, the
special holding period requirements prescribed in the Code with respect to
incentive stock options have been satisfied, which is referred to as a
qualifying disposition, any taxable income will constitute capital gain in an
amount equal to the excess of the sale proceeds over the exercise price. The
Company will not be entitled to a tax deduction with respect to the timely
exercise of an incentive stock option or the subsequent qualifying disposition
of shares so acquired. The tax consequences of any untimely exercise of an
incentive stock option or non-qualifying disposition of acquired shares will
be

17
<PAGE>

determined in accordance with the rules applicable to nonqualified stock
options, as described in the preceding paragraph, except that, in the case of
a non-qualified disposition, the tax recognition event will occur upon that
disposition.

Exercise with Shares. An option holder who pays the option price upon
exercise of an option, in whole or in part, by delivering already-owned shares
of stock will generally not recognize gain or loss on the shares surrendered
at the time of such delivery, except under certain circumstances. Rather,
recognition of that gain or loss will generally occur upon disposition of the
shares acquired in substitution for the shares surrendered.

Restricted Stock. Generally, the grant of restricted stock has no federal
income tax consequences at the time of grant. Rather, at the time the shares
are no longer subject to a substantial risk of forfeiture (as defined in the
Code), the holder will recognize ordinary income in an amount equal to the
fair market value of those shares. A holder may, however, elect to be taxed at
the time of the grant. The Company generally will be entitled to a deduction
at the time and in the amount that the holder recognizes ordinary income.

Restricted Stock Units. In the case of restricted stock units, a holder
generally will not be taxed upon the grant of such units or upon the lapse of
restrictions on such units but, rather, will recognize ordinary income in an
amount equal to the value of the shares and cash received at the time of such
receipt. The Company will be entitled to a deduction at the time and in the
amount that the holder recognizes ordinary income.

The foregoing summary constitutes a brief overview of the principal federal
income tax consequences relating to the above-described awards based upon
current federal income tax laws. This summary is not intended to be exhaustive
and does not describe state, local or foreign tax consequences. Participants
in the 1998 Plan should consult their personal tax advisors to determine the
specific tax consequences to them of awards and other transactions relating
thereto.

THE BOARD OF DIRECTORS BELIEVES THAT THE APPROVAL OF THE PLAN AMENDMENT IS
IN THE BEST INTERESTS OF THE COMPANY AND ITS STOCKHOLDERS AND RECOMMENDS A
VOTE FOR THIS PROPOSAL

PROPOSAL 5--RATIFICATION OF SELECTION OF AUDITORS

The Finance and Audit Committee and the Board of Directors of the Company
has appointed PricewaterhouseCoopers LLP as the Company's independent auditors
for the fiscal year ending December 31, 2000. Although stockholder action on
this matter is not required, this appointment is being recommended to the
stockholders for ratification. Pursuant to applicable Delaware law, the
ratification of the selection of PricewaterhouseCoopers LLP requires the
affirmative vote of the holders of a majority of the votes cast at the Annual
Meeting, in person or by proxy, and entitled to vote. Abstentions and broker
non-votes will be counted and will have the same effect as a vote against the
proposal.

PricewaterhouseCoopers LLP representatives will be present at the Annual
Meeting and will have an opportunity to make a statement if they desire to do
so and will be available to respond to appropriate questions.

THE COMPANY RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE RATIFICATION OF THE
SELECTION OF PRICEWATERHOUSECOOPERS LLP AS THE COMPANY'S INDEPENDENT AUDITORS
FOR 2000.

18
<PAGE>

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL HOLDERS

The following table sets forth, as of March 31, 2000, certain information
regarding the beneficial ownership of Knight/Trimark Common Stock by: (i) each
of the Company's executive officers; (ii) each Director of the Company; (iii)
each nominee for election as a Director of the Company; (iv) each person who
is known to the Company to own beneficially more than 5% of the Common Stock;
and (v) all officers and Directors of the Company as a group. Such information
is based, in part, upon information provided by certain stockholders of the
Company. In the case of persons other than the officers and Directors of the
Company, such information is based solely on a review of Schedules 13D and 13G
filed with the SEC. As of March 31, 2000 there were [426] holders of record of
Knight/Trimark Class A Common Stock.

<TABLE>
<CAPTION>
Number of
Shares Percentage
Beneficially of Shares
Owned Beneficially
Name and Address of Beneficial Owner (1)(2) Owned(1)
- ------------------------------------ ------------ ------------
<S> <C> <C>
Steven L. Steinman(3)............................... 7,959,398 6.52%
Kenneth D. Pasternak................................ 7,209,288 5.90
Walter F. Raquet(4)................................. 7,389,106 6.05
Robert I. Turner.................................... -- --
Robert M. Lazarowitz(5)............................. 7,348,888 6.02
Anthony M. Sanfilippo............................... 551,942 *
Peter S. Hajas...................................... 2,783,825 2.28
David Shpilberg..................................... -- --
John G. Hewitt...................................... -- --
Michael T. Dorsey................................... 12,000 *
Charles V. Doherty.................................. 7,000 *
Gene L. Finn........................................ 18,000 *
Gary R. Griffith.................................... 16,800 *
Bruce R. McMaken.................................... 3,000 *
J. Joe Ricketts..................................... -- --
Rodger O. Riney(7).................................. 1,631,212 1.34
V. Eric Roach....................................... -- --
Ameritrade Holding Corporation(6)................... 7,907,350 6.47
All executive officers and directors as a group (17
persons)........................................... 34,930,459 28.60%
</TABLE>
- --------
* Less than 1%.
(1) Beneficial ownership is determined in accordance with the rules of the SEC
and includes voting or investment power with respect to the shares.
(2) Unless otherwise indicated, the address for each beneficial owner is c/o
Knight/Trimark Group, Inc. Newport Tower, 23rd Floor, 525 Washington
Boulevard, Jersey City, New Jersey 07310.
(3) Mr. Steinman, outgoing Chairman, owns a nominal amount of the Company's
Class A Common Stock, and the remainder of the shares attributed to him
are owned by Steinman Family Associates, L.P., a Delaware limited
partnership, in which he is the general partner and the limited partners
are his wife and a trust for the benefit of certain members of his
immediate family.
(4) Two million of the shares listed in the table above as being owned by Mr.
Raquet are subject to a zero-cost collar arrangement.
(5) Mr. Lazarowitz owns a nominal amount of the Company's Class A Common
Stock, and the remainder of the shares attributed to him are owned by
Lazarowitz Family Associates, L.P., a Delaware limited partnership, in
which he is the general partner and the limited partners are his wife and
a trust for the benefit of certain members of his immediate family.
(6) The address of Ameritrade Holding Corporation is Fourteen Wall Street, New
York, NY 10005-2176.
(7) The shares attributed to Mr. Riney are owned by four trusts for the
benefit of Mr. Riney and his immediate family. Mr. Riney has voting power
over all of these shares.

19
<PAGE>

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Ameritrade. At March 31, 2000, Ameritrade Holding Corporation owned
7,907,350 shares of our Class A Common Stock. Mr. J. Joe Ricketts, the
chairman of Ameritrade, is a director of Knight/Trimark. For the year ended
December 31, 1999, Ameritrade was the source of 10.5% of our order flow.
During the same period, aggregate payments by us to Ameritrade for order flow
equaled $15.2 million.

Discover Brokerage Direct. At March 31, 2000, Discover Brokerage Direct,
Inc. did not own any shares of our Class A Common Stock. Mr. V. Eric Roach,
the former president of Discover, is a director of Knight/Trimark. For the
year ended December 31, 1999, Discover was the source of 1.36% of our order
flow. During the same period, aggregate payments by us to Discover for order
flow equaled $3.9 million.

Sanders Morris Harris. At March 31, 2000, Sanders Morris Harris Inc. did not
own any shares of our Class A Common Stock. Mr. Bruce R. McMaken, a managing
director of Sanders Morris Harris, is a director of Knight/Trimark. For the
year ended December 31, 1999, Sanders Morris Harris was the source of less
than 1% of our order flow. During the same period, aggregate payments by us to
Sanders Morris Harris for order flow equaled $2,100.

Scottsdale Securities. At March 31, 2000, employees and affiliates of
Scottsdale Securities, Inc. owned 1,652,470 shares of our Class A Common
Stock. Mr. Rodger O. Riney, the president of Scottsdale, is a director of
Knight/Trimark, and has beneficial ownership of 1,631,212 of such shares. For
the year ended December 31, 1999, Scottsdale was the source of 2.0% of our
order flow. During the same period, aggregate payments by us to Scottsdale for
order flow equaled $3.3 million.

Adirondack Trading Partners. We hold a minority stake in Adirondack Trading
Partners LLC, the funding vehicle for the International Securities Exchange
which will be the first entirely electronic options market maker in the United
States. Martin Averbuch, a former member of Knight/Trimark's board of
directors who resigned in January 2000, is president and chief executive
officer of Adirondack Trading Partners.

ADDITIONAL INFORMATION

The Company will make available a copy of its Annual Report on Form 10-K for
the fiscal year ended December 31, 1999 and any Quarterly Reports on Form 10-Q
filed thereafter, without charge, upon written request to the Secretary,
Knight/Trimark Group, Inc. Newport Tower, 23rd Floor, 525 Washington
Boulevard, Jersey City, New Jersey 07310. Each such request must set forth a
good faith representation that, as of the Record Date, April 5, 2000, the
person making the request was a beneficial owner of Common Stock entitled to
vote.

To ensure timely delivery of such documents before the Annual Meeting, any
request should be received by the Company promptly.

STOCKHOLDER PROPOSALS

Stockholder proposals intended to be presented at the Company's 2000 Annual
Meeting must be received by the Company not later than December 15, 2000 for
inclusion in the proxy materials for such meeting. Such proposals should be
sent by Certified Mail--Return Receipt Requested to the attention of the
Secretary of the Company, Knight/Trimark Group, Inc. Newport Tower, 23rd
Floor, 525 Washington Boulevard, Jersey City, New Jersey 07310.

OTHER BUSINESS

Management of the Company knows of no other matters that may properly be, or
which are likely to be, brought before the Annual Meeting. However, if any
other matters are properly brought before such Annual Meeting, the persons
named in the enclosed Proxy or their substitutes intend to vote the Proxies in
accordance with their judgment with respect to such matters, unless authority
to do so is withheld in the Proxy.