<PAGE>
GENERAL AMERICAN INVESTORS
COMPANY, INC.
FIRST QUARTER REPORT
MARCH 31, 1998
A Closed-End Investment Company
listed on the New York Stock Exchange
450 LEXINGTON AVENUE
NEW YORK, N.Y. 10017
212-916-8400 1-800-436-8401
<PAGE>
TO THE STOCKHOLDERS
- --------------------------------------------------------------------------------
For the three months ended March 31, 1998, the total return (assuming
reinvestment of all dividends) on the net asset value per share of General
American Investors Company was 12.5%. By comparison, the rate of return
(including income) for the Standard & Poor's 500 Stock Index was 14%. For the
twelve months ended March 31, 1998, the return for the Company was 46.3%; this
compares to a return of 47.9% for the S&P 500.
The net assets of the Company as of March 31, 1998, as set forth in the
accompanying financial statements (unaudited), were $776,990,594, equal to
$32.53 per share of Common Stock.
The increase in net assets resulting from operations for the three months ended
March 31, 1998 was $85,329,187. During this period, net realized gain on
securities sold was $14,428,578 ($.60 per share) and the increase in unrealized
appreciation was $68,426,263. Net investment income for the three months was
$2,474,346.
During the three months, 218,700 shares of the Company's Common Stock were
repurchased for $5,887,365 at an average discount from net asset value of 11.2%.
We are pleased to report that, on March 11, 1998, at the Company's annual
meeting, the Stockholders (1) elected thirteen directors, (2) ratified the
selection of Ernst & Young LLP as auditors of the Company for the year 1998 and
(3) approved the proposal to amend the Company's Restated Certificate of
Incorporation to authorize the issuance of preferred stock.
On March 20, 1998, the Company filed with the U.S. Securities and Exchange
Commission a registration statement for an offering of cumulative preferred
stock. The actual amount of capital to be raised, the dividend rate and the
timing of the offering have not been determined and will be announced at a later
date. Any offering will be made only by means of a prospectus.
By Order of the Board of Directors,
GENERAL AMERICAN INVESTORS COMPANY, INC.
Spencer Davidson
President and Chief Executive Officer
<PAGE>
2 STATEMENT OF ASSETS AND LIABILITIES March 31, 1998 (Unaudited)
- --------------------------------------------------------------------------------
General American Investors
<TABLE>
<CAPTION>
ASSETS
- -------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENTS, AT VALUE ( NOTE 1a )
Common stocks (cost $268,562,379) ................... $656,845,123
Convertible corporate note (cost $3,447,500) ....... 9,996,875
Corporate discount notes (cost $111,392,625) ........ 111,392,625
------------
Total investments (cost $383,402,504) 778,234,623
CASH, RECEIVABLES AND OTHER ASSETS
Cash ................................................ $ 45,507
Receivable for securities sold ...................... 1,020,604
Dividends, interest and other receivables ........... 1,365,020
Prepaid expenses .................................... 3,676,112
Other ............................................... 687,258 6,794,501
----------- -----------
TOTAL ASSETS .......................................... 785,029,124
LIABILITIES
- -------------------------------------------------------------------------------------
Payable for securities purchased ................... 3,897,328
Accrued expenses and other liabilities ............. 4,141,202
-----------
TOTAL LIABILITIES ..................................... 8,038,530
------------
NET ASSETS ............................................ $776,990,594
============
NET ASSETS
- -------------------------------------------------------------------------------------
Cumulative Preferred Stock, $1 par value (note 2) -
Authorized 10,000,000 shares; outstanding - none
Common Stock, $1 par value (note 2)-
Authorized 30,000,000 shares; outstanding
23,885,978 shares (exclusive of 262,000
shares in Treasury) ............................. $ 23,885,978
Paid-In Capital ( note 2 ) ......................... 342,306,878
Undistributed realized gain on securities sold ..... 14,085,006
Undistributed net income ........................... 1,880,613
Unrealized appreciation on investments (including
aggregate gross unrealized appreciation of
$407,374,357) ................................... 394,832,119
------------
TOTAL NET ASSETS ...................................... $776,990,594
============
NET ASSET VALUE PER SHARE ............................. $ 32.53
============
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Three Months
Ended Year Ended
March 31, 1998 December 31,
OPERATIONS (Unaudited) 1997
- --------------------------------------------------------------------------------
<S> <C> <C>
Net investment income ..................... $ 2,474,346 $ 5,149,987
Net realized gain on sales of securities .. 14,428,578 66,640,521
Net increase in unrealized appreciation ... 68,426,263 99,421,665
------------- -------------
INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS ................. 85,329,187 171,212,173
------------- -------------
DISTRIBUTIONS TO STOCKHOLDERS
- --------------------------------------------------------------------------------
From net income, including
short-term capital gain ................. (240,392) (5,925,735)
From long-term capital gain ............... (4,807,836) (72,383,436)
------------- -------------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS .... (5,048,228) (78,309,171)
------------- -------------
CAPITAL SHARE TRANSACTIONS
- --------------------------------------------------------------------------------
Value of Common Shares issued in payment
of dividends (note 2) ................... -- 49,404,107
Cost of Common Shares purchased (note 2) .. (5,887,365) (37,306,802)
------------- -------------
INCREASE (DECREASE) IN NET ASSETS -
CAPITAL TRANSACTIONS ...................... (5,887,365) 12,097,305
------------- -------------
NET INCREASE IN NET ASSETS ................... 74,393,594 105,000,307
NET ASSETS
- --------------------------------------------------------------------------------
BEGINNING OF PERIOD .......................... 702,597,000 597,596,693
-------------- -------------
END OF PERIOD (including undistributed net
income of $1,880,613 and distributions
in excess of net income of $353,341,
respectively) ............................. $ 776,990,594 $ 702,597,000
============= ==============
<FN>
( see notes to financial statements )
</FN>
</TABLE>
<PAGE>
3 STATEMENT OF OPERATIONS Three Months Ended March 31, 1998 (Unaudited)
- --------------------------------------------------------------------------------
General American Investors
<TABLE>
<CAPTION>
INCOME
- --------------------------------------------------------------------------------
<S> <C> <C>
Dividends (net of foreign withholding taxes
of $68,987) ................................. $ 2,642,391
Interest ...................................... 1,464,262
Investment advisory fees (note 1c) ............ 25,058 $ 4,131,711
-----------
EXPENSES
- --------------------------------------------------------------------------------
Investment research ........................... 781,277
Administration and operations ................. 477,912
Office space and general ...................... 132,619
Transfer agent, custodian and registrar
fees and expenses ........................... 100,840
Stockholders' meeting and reports ............. 59,038
Directors' fees and expenses .................. 56,879
Auditing and legal fees ....................... 27,000
Miscellaneous taxes (note 1b) ................. 21,800 1,657,365
--------- ---------
NET INVESTMENT INCOME ............................ 2,474,346
REALIZED GAIN AND CHANGE IN UNREALIZED APPRECIATION ON INVESTMENTS (NOTES 1d AND 4)
- -----------------------------------------------------------------------------------
Net realized gain on sales of securities
(long-term except for $22,195) ............... 14,428,578
Net increase in unrealized appreciation ........ 68,426,263
------------
NET GAIN ON INVESTMENTS ......................... 82,854,841
------------
INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS ..................... $85,329,187
============
</TABLE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The following table shows per share operating performance data, total investment
return, ratios and supplemental data for the three months ended March 31, 1998
and the year ended December 31, 1997. This information has been derived from
information contained in the financial statements and market price data for the
Company's shares.
<TABLE>
<CAPTION>
Three Months
Ended Year Ended
March 31, 1998 December 31,
(Unaudited) 1997
--------- ------------
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period ............ $ 29.15 $ 25.24
-------- --------
Net investment income ....................... .10 .21
Net gain on securities -
realized and unrealized .................. 3.49 7.15
-------- --------
Total from investment operations ................ 3.59 7.36
-------- --------
Less distributions:
Dividends from investment income ............ (.01) (.26)*
Distributions from capital gains ............ (.20) (3.19)
-------- --------
Total distributions ............................. (.21) (3.45)
-------- --------
Net asset value, end of period .................. $ 32.53 $ 29.15
======== ========
Per share market value, end of period ........... $ 29.19 $ 26.19
======== ========
TOTAL INVESTMENT RETURN - Stockholder
Return, based on market price per share ..... 12.38%** 42.58%
RATIOS AND SUPPLEMENTAL DATA
Total net assets, end of period (000's omitted) . $776,991 $702,597
Ratio of expenses to average net assets ......... 0.23%** 0.98%
Ratio of net income to average net assets ....... 0.34%** 0.80%
Portfolio turnover rate ......................... 6.70%** 32.45%
Average commission rate paid per share .......... $ .0500 $ .0504
Shares outstanding, end of period (000's omitted) 23,886 24,105
<FN>
* Includes short-term capital gain in the amount of $.05 per share.
** Not annualized.
(see notes to financial statements)
</FN>
</TABLE>
<PAGE>
4 STATEMENT OF INVESTMENTS March 31, 1998 (Unaudited)
- -------------------------------------------------------------------------------
General American Investors
<TABLE>
<CAPTION>
SHARES OR VALUE
COMMON STOCKS PRINCIPAL AMOUNT (NOTE 1a)
<S> <C> <C>
COMMUNICATIONS AND INFORMATION SERVICES (5.5%)
Axiom Inc.+ ....................................... 152,500 $ 953,125
Comcast UK Cable Partners Limited Class A + ....... 304,500 4,072,687
Cox Communications, Inc. Class A + ................ 330,000 13,860,000
NTL Incorporated + ................................ 232,000 10,034,000
Reuters Group plc-ADR ............................. 94,000 6,068,875
Wolters Kluwer NV-ADR ............................. 55,500 7,942,050
----------
(COST $19,908,495) -- 42,930,737
----------
COMPUTER SOFTWARE AND SYSTEMS (4.5%)
Broderbund Software, Inc.+ ........................ 160,000 2,920,000
Cisco Systems, Inc.+ .............................. 192,000 13,128,000
Dialogic Corporation + ............................ 36,000 1,536,750
Hewlett-Packard Company ........................... 60,000 3,802,500
MetaCreations Corporation + ....................... 200,000 1,462,500
Platinum Software Corporation + ................... 125,000 2,906,250
Seagate Technology, Inc.+ ......................... 375,000 9,468,750
----------
(COST $20,751,379) -- 35,224,750
----------
CONSUMER PRODUCTS AND SERVICES (10.4%)
Buffets, Inc.+ .................................... 968,500 13,316,875
Chrysler Corporation .............................. 385,000 16,025,625
Ford Motor Company ................................ 420,000 27,221,250
PepsiCo, Inc. ..................................... 225,000 9,604,688
Philip Morris Companies Inc. ...................... 350,000 14,590,625
----------
(COST $50,997,488) -- 80,759,063
----------
ENVIRONMENTAL CONTROL
(INCLUDING SERVICES) (2.6%)
USA Waste Services, Inc.+ ......................... 453,000 20,186,813
----------
(COST $6,639,086)
FINANCE AND INSURANCE (25.0%)
AmerUs Life Holdings, Inc. Class A ................ 162,500 5,281,250
American International Group, Inc. ................ 105,000 13,223,438
Annaly Mortgage Management, Inc. ................. 375,000 4,195,312
Banco Popular Espanol, S.A. ....................... 64,000 6,220,160
CCB Financial Corp. ............................... 108,500 11,996,031
Crestar Financial Corp. ........................... 300,000 17,737,500
Everest Reinsurance Holdings, Inc. ................ 190,000 7,813,750
First Empire State Corporation .................... 50,000 24,993,750
First Midwest Bancorp, Inc. ....................... 237,500 10,331,250
General Re Corporation ............................ 90,000 19,856,250
Golden West Financial Corporation ................. 168,500 16,144,406
Life Re Corporation ............................... 275,000 20,281,250
NAC Re Corporation ................................ 156,000 8,180,250
TIG Holdings, Inc. ................................ 150,000 3,946,875
Transatlantic Holdings, Inc. ...................... 202,500 15,314,062
U.S. Bancorp ...................................... 70,000 8,732,500
-----------
(COST $67,521,905) -- 194,248,034
-----------
HEALTH CARE (15.9%)
PHARMACEUTICALS (12.4%)
AB Astra Class A .................................. 582,500 12,034,450
AB Astra Class B .................................. 800,000 15,928,000
IDEC Pharmaceuticals Corporation + ................ 250,000 11,062,500
Magainin Pharmaceuticals Inc. + ................... 230,000 1,279,375
Merck & Co., Inc. ................................. 54,500 6,986,217
Pfizer Inc. ....................................... 365,000 36,385,938
R.P. Scherer Corporation + ........................ 187,000 12,622,500
----------
(COST $31,743,865) -- 96,298,980
----------
MEDICAL INSTRUMENTS AND DEVICES (1.9%)
Medtronic, Inc. ................................... 280,000 14,525,000
-----------
(COST $2,037,232)
</TABLE>
<PAGE>
5 STATEMENT OF INVESTMENTS March 31, 1998 (Unaudited)
- --------------------------------------------------------------------------------
General American Investors
<TABLE>
<CAPTION>
SHARES OR VALUE
COMMON STOCKS (continued) PRINCIPAL AMOUNT (NOTE 1a)
<S> <C> <C>
HEALTH CARE SERVICES (1.6%)
Aetna, Inc. ....................................... 50,000 $ 4,171,875
BioReliance Corporation + ......................... 317,258 5,234,757
Huntingdon Life Sciences Group plc-ADR + .......... 669,500 2,426,938
MedPartners, Inc.+ ................................ 98,500 1,009,625
-----------
(COST $14,013,359) -- 12,843,195
-----------
(COST $47,794,456) -- 123,667,175
-----------
MISCELLANEOUS (2.2%)
Other ............................................. 16,818,813
----------
(COST $17,025,554)
OIL & NATURAL GAS (INCLUDING SERVICES) (3.1%)
Repsol, S.A.-ADR .................................. 260,000 13,227,500
Texaco Inc. ....................................... 179,000 10,784,750
----------
(COST $15,335,173) -- 24,012,250
----------
RETAIL TRADE (14.1%)
PETsMART, Inc.+ ................................... 800,000 8,550,000
The Home Depot, Inc. .............................. 990,000 66,948,750
Wal-Mart Stores, Inc. ............................. 670,000 34,044,375
-----------
(COST $11,025,135) -- 109,543,125
-----------
SEMICONDUCTORS (1.2%)
Lam Research Corporation + ........................ 332,500 9,351,563
---------
(COST $9,782,674)
SPECIAL HOLDINGS #+ (NOTE 6) (0.0%)
Sequoia Capital IV ................................ ++ 95,600
Welsh, Carson, Anderson & Stowe III ............... ++ 7,200
---------
(COST $1,781,034) -- 102,800*
---------
TOTAL COMMON STOCKS (84.5%) (COST $268,562,379) 656,845,123
------------
CONVERTIBLE CORPORATE NOTE (1.3%)
MedImmune, Inc., 7% due 7/1/2003 .................. $3,500,000 9,996,875
---------
(COST $3,447,500)
SHORT-TERM SECURITIES AND OTHER ASSETS
- --------------------------------------------------------------------------------
Ford Motor Credit Company notes
due 4/9-5/4/98; 5.52%-5.53% .................... $30,800,000 30,608,151
General Electric Capital Corp. notes
due 4/2-4/29/98; 5.47%-5.53% .................. 27,500,000 27,326,630
General Motors Acceptance Corp. notes
due 4/1-5/11/98; 5.45%-5.54% ................... 23,800,000 23,670,576
Sears Roebuck Acceptance Corp. notes
due 4/27-5/8/98; 5.51%-5.54% ................... 30,000,000 29,787,268
------------
(COST $111,392,625) 111,392,625
Liabilities in excess of cash, receivables,
prepaid expenses and other assets .......... (1,244,029)
------------
TOTAL SHORT-TERM SECURITIES AND OTHER
ASSETS, NET (14.2%) (COST $110,148,596) 110,148,596
------------
NET ASSETS (COST $382,158,475) $776,990,594
============
<FN>
+Non-income producing security. # Restricted security.
++ A limited partnership interest. * Fair value of each holding in the opinion of the
(see notes to financial statements) Directors.
</FN>
</TABLE>
<PAGE>
6 NOTES TO FINANCIAL STATEMENTS (Unaudited)
- --------------------------------------------------------------------------------
General American Investors
1. SIGNIFICANT ACCOUNTING POLICIES
General American Investors Company, Inc. (the "Company"), established in 1927,
is registered under the Investment Company Act of 1940 as a closed-end,
diversified management investment company. It is internally managed by its
officers under the direction of the Board of Directors. The Company is also
registered under the Investment Advisers Act of 1940 as an investment adviser.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.
a. SECURITY VALUATION Securities traded on securities exchanges or on the NASDAQ
National Market System are valued at the last reported sales price on the last
business day of the period. Listed and NASDAQ securities for which no sales are
reported on that day and other securities traded in the over-the-counter market
are valued at the last bid price on the valuation date. Corporate discount notes
are valued at amortized cost, which approximates market value. Special holdings
are valued at fair value in the opinion of the Directors. In determining fair
value, in the case of restricted shares, consideration is given to cost,
operating and other financial data and, where applicable, subsequent private
offerings or market price of the issuer's unrestricted shares (to which a 30
percent discount is applied); for limited partnership interests, fair value is
based upon an evaluation of the partnership's net assets.
b. FEDERAL INCOME TAXES The Company's policy is to fulfill the requirements of
the Internal Revenue Code applicable to regulated investment companies and to
distribute substantially all taxable income to its stockholders. Accordingly, no
provision for Federal income taxes is required.
c. INVESTMENT ADVISORY FEES Income from fees (charged, generally, at the annual
rate of 1/2% of assets under management, computed quarterly) is recorded as the
related advisory services are performed by the Company.
d. OTHER As customary in the investment company industry, securities
transactions are recorded as of the trade date. Dividend income and
distributions to stockholders are recorded as of the ex-dividend dates.
2. CAPITAL STOCK AND DIVIDEND DISTRIBUTIONS
On March 11, 1998, stockholders approved an amendment to the Restated
Certificate of Incorporation which added 10,000,000 shares of preferred stock to
the Company's authorized capitalization. On March 20, 1998, the Company filed
with the U.S. Securities and Exchange Commission a registration statement for an
offering of cumulative preferred stock. The actual amount of capital to be
raised, the dividend rate and the timing of the offering have not been
determined and will be announced at a later date.
Transactions in Common Stock during the three months ended March 31, 1998 and
the year ended December 31, 1997 were as follows:
<TABLE>
<CAPTION>
SHARES AMOUNT
----------------------- ----------------------------
1998 1997 1998 1997
----------------------- ----------------------------
<S> <C> <C> <C> <C>
Shares issued in payment of dividends ................... -- 2,015,188 $ -- $ 2,015,188
Increase in paid-in capital ............................. -- 47,388,919
------------ ------------
Total increase .................................... -- 49,404,107
------------ ------------
Shares purchased (at an average discount from net asset
value of 11.2% and 15.1%, respectively) ............... 218,700 1,589,200 (218,700) (1,589,200)
Decrease in paid-in capital ............................. (5,668,665) (35,717,602)
------------ ------------
Total decrease .................................... (5,887,365) (37,306,802)
------------ ------------
Net increase (decrease) ................................. ($5,887,365) $12,097,305
============ ============
</TABLE>
The cost of the 262,000 shares of Common Stock held in Treasury at March 31,
1998 amounted to $6,984,362.
Dividends in excess of net income for financial statement purposes result
primarily from transactions where tax treatment differs from book treatment.
3. OFFICERS' COMPENSATION AND RETIREMENT AND THRIFT PLANS
The aggregate compensation paid by the Company during the three months ended
March 31, 1998 to its officers amounted to $584,500.
The Company has non-contributory retirement plans and a contributory thrift plan
which cover substantially all employees. The costs to the Company and the assets
and liabilities of the plans are not material. Costs of the plans are funded
currently.
4. PURCHASES AND SALES OF SECURITIES
Purchases and sales of securities (other than short-term securities) during the
three months ended March 31, 1998 were $41,902,108 and $59,691,556,
respectively. At March 31, 1998, the cost of investments for Federal income tax
purposes was the same as the cost for financial reporting purposes.
5. GENERAL INFORMATION
Brokerage commissions during the three months ended March 31, 1998 were $76,960,
including $10,085 paid to Goldman, Sachs & Co. The Chairman Emeritus of the
Company is a limited partner of The Goldman Sachs Group, L.P. which is an
affiliate of Goldman, Sachs & Co.
6. RESTRICTED SECURITIES
<TABLE>
<CAPTION>
DATE VALUE
ACQUIRED COST (NOTE 1a)
-------- ---------- ----------
<S> <C> <C> <C>
Sequoia Capital IV* ............................... 1/31/84 $1,019,600 $ 95,600
Welsh, Carson, Anderson & Stowe III* .............. 3/10/83 261,136 7,200
Other ............................................. 500,300 --
---------- ----------
Total ............................................. $1,781,036 $ 102,800
========== ==========
<FN>
* The amounts shown are net of distributions from these limited partnership
interests which, in the aggregate, amounted to $4,673,211, and $3,617,418,
respectively. The initial investment in each limited partnership was
$2,000,000.
</FN>
</TABLE>
<PAGE>
7 NOTES TO FINANCIAL STATEMENTS (Unaudited)
- --------------------------------------------------------------------------------
General American Investors
7. OPERATING LEASE COMMITMENT
In July 1992, the Company entered into an operating lease agreement for new
office space which expires in 2007 and provides for future rental payments in
the aggregate amount of approximately $5.6 million. The lease agreement contains
a clause whereby the Company received twenty months of free rent beginning in
December 1992 and escalation clauses relating to operating costs and real
property taxes.
Rental expense approximated $66,000 for the three months ended March 31, 1998.
Minimum rental commitments under the operating lease are approximately $403,000
per annum in 1998 through 2002 and $504,000 per annum in 2003 through 2007.
In March 1996, the Company entered into a sublease agreement which expires in
2003 and provides for future rental receipts. Minimum rental receipts under the
sublease are approximately $203,000 per annum in 1998 through 2002 and $64,000
in 2003. The Company will also receive its proportionate share of operating
expenses and real property taxes under the sublease.
MAJOR STOCK CHANGES* Three Months Ended March 31, 1998 (UNAUDITED)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES OR PRINCIPAL
SHARES OR AMOUNT HELD
INCREASES PRINCIPAL AMOUNT MARCH 31, 1998
- --------------------------------------------------------------------------------------------------------
NEW POSITION
<S> <C> <C>
MetaCreations Corporation 200,000 200,000
ADDITIONS
Annaly Mortgage Management, Inc. 25,000 375,000
Everest Reinsurance Holdings, Inc. 64,500 190,000
Lam Research Corporation 132,500 332,500
Philip Morris Companies Inc. 85,000 350,000
Seagate Technology, Inc. 265,000 375,000(a)
DECREASES
- --------------------------------------------------------------------------------------------------------
ELIMINATIONS
AAPC Ltd. 1,144,951 --
Chips and Technologies, Inc. 75,000 --
Pinnacle Systems, Inc. 87,500 --
Ribi ImmunoChem Research, Inc. 309,500 --
Union Pacific Resources Group Inc. 177,500 --
REDUCTIONS
AB Astra Class A 50,000 582,500
Aetna, Inc. 40,000 50,000
American International Group, Inc. 5,000 105,000
Axiom Inc. 47,500 152,500
Buffets, Inc. 10,000 968,500
Chrysler Corporation 20,000 385,000
Comcast UK Cable Partners Limited Class A 135,000 304,500
Cox Communications, Inc. Class A 10,000 330,000
The Home Depot, Inc. 73,500 990,000
MedImmune, Inc. 7% Convertible Corporate Note
due 7/1/2003 $ 500,000 $3,500,000
MedPartners, Inc. 205,000 98,500
NTL Incorporated 20,000 232,000
PepsiCo, Inc. 50,000 225,000
PETsMART, Inc. 200,000 800,000
Pfizer Inc. 45,000 365,000
Platinum Software Corporation 125,000 125,000
Reuters Group plc-ADR 466 94,000(b)
TIG Holdings, Inc. 50,000 150,000
USA Waste Services, Inc. 20,000 453,000
U.S. Bancorp 10,000 70,000
<FN>
* Excludes transactions in Stocks - Miscellaneous - Other.
(a) Includes shares purchased in prior period and previously carried under Stocks - Miscellaneous - Other.
(b) Includes a reduction in shares in conjunction with a reorganization.
</FN>
</TABLE>
- --------------------------------------------------------------------------------
In addition to purchases of the Company's Common Stock as set forth in Note 2 on
page 6, purchases of Common Stock may be made at such times, at such prices, in
such amounts and in such manner as the Board of Directors may deem advisable.
<PAGE>
DIRECTORS
- --------------------------------------------------------------------------------
Lawrence B. Buttenwieser, Chairman
Arthur G. Altschul, Jr.
Lewis B. Cullman
Spencer Davidson
Gerald M. Edelman
Anthony M. Frank
John D. Gordan, III
Bill Green
Victoria Hamilton
Sidney R. Knafel
Richard R. Pivirotto
Joseph T. Stewart, Jr.
Raymond S. Troubh
Arthur G. Altschul, Chairman Emeritus
William O. Baker, Director Emeritus
William T. Golden, Director Emeritus
OFFICERS
- --------------------------------------------------------------------------------
Spencer Davidson, President & Chief Executive Officer
Victoria Hamilton, Executive Vice-President & Chief Operating Officer
Andrew V. Vindigni, Vice-President
Eugene L. DeStaebler, Jr., Vice-President, Administration
Peter P. Donnelly, Vice-President & Trader
Diane G. Radosti, Treasurer
Carole Anne Clementi, Secretary
SERVICE COMPANIES
- --------------------------------------------------------------------------------
COUNSEL
Sullivan & Cromwell
INDEPENDENT AUDITORS
Ernst & Young LLP
CUSTODIAN
Bankers Trust Company
TRANSFER AGENT AND REGISTRAR
ChaseMellon Shareholder Services, L.L.C.
Overpeck Centre
85 Challenger Road
Ridgefield Park, NJ 07660
1-800-413-5499
www.chasemellon.com
RESULTS OF THE ANNUAL MEETING
OF STOCKHOLDERS
- --------------------------------------------------------------------------------
The votes cast by Stockholders at the Company's annual meeting held on March 11,
1998 were as follows:
Election of Directors:
<TABLE>
<CAPTION>
FOR WITHHELD
<S> <C> <C>
Arthur G. Altschul, Jr. 21,154,606 360,842
Lawrence B. Buttenwieser 21,149,009 366,439
Lewis B. Cullman 21,045,664 469,784
Spencer Davidson 21,156,257 359,191
Gerard M. Edelman 21,083,996 431,452
Anthony M. Frank 21,139,350 376,098
John D. Gordan, III 21,156,995 358,453
Bill Green 21,085,086 430,362
Victoria Hamilton 21,066,193 449,255
Sidney R. Knafel 21,145,701 369,747
Richard R. Pivirotto 21,086,891 428,557
Joseph T. Stewart, Jr. 21,145,480 369,968
Raymond S. Troubh 21,089,965 425,483
</TABLE>
Ratification of the selection of Ernst & Young LLP as auditors of the Company
for the year 1998:
For - 21,175,141; Against - 176,692; Abstain - 163,615
Proposal relating to the amendment of the Company's Restated Certificate of
Incorporation to authorize the issuance of preferred stock:
For - 13,052,179; Against - 2,648,689; Abstain - 641,836
