CONNING CORP, S-1, 1997-09-19

CONNING CORP
S-1, 1997-09-19

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<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 19, 1997

REGISTRATION NO. 333-
--------
===============================================================================

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549
------------------------------------

FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------------------

CONNING CORPORATION

(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

<TABLE>
<S> <C> <C>
MISSOURI 6282 43-1719355
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL
INCORPORATION OR CLASSIFICATION (I.R.S. EMPLOYER
ORGANIZATION) CODE NUMBER) IDENTIFICATION NUMBER)
</TABLE>

700 MARKET STREET
ST. LOUIS, MO 63101
(314) 444-0498

(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
---------------------------------------------------

LEONARD M. RUBENSTEIN
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
CONNING CORPORATION
700 MARKET STREET
ST. LOUIS, MO 63101
(314) 444-0498

(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
---------------------------------------------------

COPIES TO:

<TABLE>
<S> <C>
JAMES L. NOUSS, JR., ESQ. GARY I. HOROWITZ, ESQ.
R. RANDALL WANG, ESQ. ROBERT M. KANER, ESQ.
BRYAN CAVE LLP SIMPSON THACHER & BARTLETT
211 NORTH BROADWAY, SUITE 3600 425 LEXINGTON AVENUE
ST. LOUIS, MO 63102 NEW YORK, NY 10017
(314) 259-2000 (212) 455-2000
FAX: (314) 259-2020 FAX: (212) 455-2502
</TABLE>

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

Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this Registration Statement.

If any of the securities registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. / /

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

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

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

<TABLE>
CALCULATION OF REGISTRATION FEE
==========================================================================================================================
<CAPTION>
PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED OFFERING PRICE <F1> REGISTRATION FEE
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Common Stock, par value $.01 per share................... $43,125,000 $13,069
- --------------------------------------------------------------------------------------------------------------------------

<FN>
<F1> The proposed maximum aggregate offering price has been estimated solely
for the purpose of calculating the registration fee pursuant to Rule 457
under the Securities Act of 1933.
</TABLE>

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

===============================================================================

<PAGE> 2

SUBJECT TO COMPLETION, DATED SEPTEMBER 19, 1997

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

PROSPECTUS
, 1997

CONNING CORPORATION
LOGO
2,500,000 SHARES

CONNING CORPORATION

COMMON STOCK

All of the 2,500,000 shares of Common Stock offered hereby are being sold by
Conning Corporation (the "Company" or "Conning").

After completion of the offering, General American Life Insurance Company
("General American") will beneficially own approximately 65% of the Company's
Common Stock (approximately 63% if the Underwriters' over-allotment option is
exercised in full). See "Risk Factors--Dependence on Principal Shareholder"
and "--Potential Conflicts of Interest."

Prior to this offering, there has been no public market for the Common
Stock. It is currently estimated that the initial public offering price will be
between $ ----- and $ ----- per share. See "Underwriting" for a discussion of
the factors to be considered in determining the initial public offering price.
The Company intends to apply for inclusion of its Common Stock on the Nasdaq
National Market under the proposed symbol "CNNG," subject to official notice of
issuance.

SEE "RISK FACTORS" BEGINNING ON PAGE 8 FOR CERTAIN INFORMATION THAT
SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRE-
SENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

<TABLE>
<CAPTION>
PRICE UNDERWRITING
TO THE DISCOUNTS AND PROCEEDS TO THE
PUBLIC COMMISSIONS<F1> COMPANY<F2>
<S> <C> <C> <C>
Per Share....................................... $ $ $

Total <F2><F3>.................................. $ $ $

<FN>

<F1> The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended (the "Securities Act"). See "Underwriting."

<F2> Before deducting offering expenses estimated at $ ----------, payable by
the Company.

<F3> The Company has granted to the Underwriters a 30-day option to purchase up
to 375,000 additional shares of Common Stock on the same terms and
conditions as set forth above solely to cover over-allotments, if any. If
such option is exercised in full, the total Price to the Public,
Underwriting Discounts and Commissions and Proceeds to the Company will be
$ ---------------, $--------------- and $---------------, respectively.
See "Underwriting."
</TABLE>

The shares of Common Stock are being offered by the several Underwriters,
subject to prior sale, when, as and if delivered to and accepted by them and
subject to various prior conditions, including their right to reject any order
in whole or in part. It is expected that delivery of the certificates for such
shares will be made against payment therefor in New York, New York on or about
, 1997.

DONALDSON, LUFKIN & JENRETTE A.G. EDWARDS & SONS, INC.
SECURITIES CORPORATION

<PAGE> 3

[LOGO] CONNING

[REPRESENTATION OF FLOW CHART]

PRODUCTS &
SERVICES

CORE ASSET
COMPETENCIES RECURRING MANAGEMENT
REVENUE
INVESTMENT SPECIALIZED
EXPERTISE MARKET ABILITY TO ASSETS
-----> LEADER DIFFERENTIATE ------>
INSURANCE INVESTMENT
INDUSTRY ADVISORY
KNOWLEDGE &
REPUTATION INVESTMENT
ACCOUNTING
CLIENT & REPORTING
SERVICE HIGH VALUE
FOCUS ADDED PRIVATE
EQUITY

INSURANCE
RESEARCH
SERVICES

"Conning" and the related logo are service marks of the Company.

CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK.
SPECIFICALLY, THE UNDERWRITERS MAY OVERALLOT IN CONNECTION WITH THE OFFERING,
AND MAY BID FOR, AND PURCHASE, SHARES OF THE COMMON STOCK IN THE OPEN MARKET.
IN ADDITION, CERTAIN UNDERWRITERS AND SELLING GROUP MEMBERS MAY ENGAGE IN
PASSIVE MARKET MAKING. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE
"UNDERWRITING."

<PAGE> 4
PROSPECTUS SUMMARY

The following summary is qualified in its entirety by, and should be read
in conjunction with, the more detailed information and the Consolidated
Financial Statements, including the Notes thereto, appearing elsewhere in this
Prospectus. Unless otherwise indicated, all information in this Prospectus: (i)
reflects the conversion of all outstanding shares of Series A Convertible
Preferred Stock into an aggregate of 3,190,000 shares of Common Stock, the
conversion of all outstanding shares of Series B Convertible Preferred Stock
into an aggregate of 365,000 shares of Common Stock for additional
consideration to the Company of $1.67 per share, and the conversion of all
outstanding shares of Non-Voting Common Stock into an aggregate of 110,000
shares of Common Stock, upon or prior to the completion of this offering (the
"Capital Stock Conversions") and (ii) assumes that the over-allotment option
granted to the Underwriters by the Company will not be exercised. Throughout
this Prospectus, the terms the "Company" and "Conning" refer to Conning
Corporation and its direct and indirect subsidiaries: Conning, Inc., Conning
Asset Management Company and Conning & Company. See "Glossary" for
definitions of certain terms used in this Prospectus.

The Company is the successor to the business conducted by Conning, Inc. and
its operating subsidiary, Conning & Company ("Conning, Inc."), an 85-year old
Hartford, Connecticut based insurance specialty asset management firm which
provided asset management services and research for the insurance industry, and
Conning Asset Management Company, formerly known as General American Investment
Management Company ("GAIMCO"), a registered investment adviser which provided
investment advisory services primarily to its parent, General American Life
Insurance Company ("General American"), and its affiliates, pursuant to a
merger (the "Strategic Merger") effected in August 1995. The parties effected
the Strategic Merger in order to combine complementary businesses, each with
specialties in the insurance industry, to build a platform from which to
leverage additional growth. See "Certain Relationships and Related
Transactions--The Strategic Merger." Other than historical financial
statements and data, information herein concerning the Company regarding
periods prior to the date of the Strategic Merger, including without limitation
with respect to assets under management and private equity funds, includes the
Company and its predecessors unless the context indicates otherwise.

THE COMPANY

GENERAL

Conning is a nationally recognized asset management company providing
services to the insurance industry and is also a leading provider of insurance
research. As of June 30, 1997, the Company had approximately $23.1 billion of
assets under discretionary management and, in total, provided services with
respect to approximately $58.0 billion of assets for insurance company clients.
The Company believes it is well positioned to take advantage of the continued
growth in insurance industry assets and a trend among insurance companies to
seek external investment management expertise. During the period from 1992
through 1996, assets under discretionary management of the Company increased by
an average of 24% per year, on a pro forma basis after giving effect to the
Strategic Merger and the inclusion of assets of General American for all years.
In 1996, its first full year of operations following the Strategic Merger, the
Company had revenues of approximately $53.7 million, net earnings of
approximately $6.2 million and earnings before interest, taxes, depreciation
and amortization ("EBITDA") of approximately $15.3 million. In the six months
ended June 30, 1997, the Company had revenues of approximately $30.9 million,
net earnings of approximately $4.1 million and EBITDA of approximately $9.1
million.

The Company believes that it possesses competitive strengths in insurance
asset management which may support its prospects for growth:

INSURANCE INDUSTRY FOCUS AND KNOWLEDGE. The Company believes that its focus
on the insurance industry allows it to provide substantially all of the
services and products that an insurance company seeks from an asset manager. By
utilizing its specialized knowledge of insurance company investment
considerations, the Company believes it offers a more comprehensive set of
asset management services than many of its competitors, including asset
allocation, asset and liability matching, cash forecasts, tax modeling and
accounting & reporting. The Company offers expertise in asset classes that many
insurance companies traditionally utilize, including commercial mortgage loans,
investment real estate and private placements.

<PAGE> 5
NAME RECOGNITION WITHIN THE INSURANCE INDUSTRY. The Company believes that
the established reputation of Conning within the insurance industry provides
the Company with a marketing advantage. According to a 1996 survey by Eager &
Associates of 848 domestic, non-captive insurance companies with assets over
$30 million (the "Eager Study"), the Company ranks among the top two
insurance asset management firms in terms of name recognition among survey
respondents. The Company's in-depth insurance industry research has been
targeted to senior executives in the insurance industry for more than 20 years,
and its Strategic Studies Series is subscribed to by 82 of the 100 largest U.S.
insurance companies (based on 1996 premiums as reported by industry sources).

CLIENT SERVICE AND PERFORMANCE FOCUS. The Company attempts to differentiate
itself from competitors through its insurance-specific capabilities, investment
performance and frequent, responsive client communication. During the period
from 1992 through 1996, the Company retained an average of approximately 95% of
unaffiliated clients on an annual basis.

EXPERIENCED MANAGEMENT WITH SIGNIFICANT STOCK OWNERSHIP. The Company
employs an experienced management team, the members of which have an average of
approximately 15 years of experience in the investment or insurance business.
In total, the employees of the Company will own in the aggregate approximately
23% of the Common Stock on a fully diluted basis after the offering.

COMPANY OPERATIONS

The Company's business is asset management for insurance companies, which
is supplemented by its in-depth research focused on the insurance industry. The
Company's asset management services consist of three components: (i)
discretionary asset management services, (ii) investment advisory services and
(iii) investment accounting & reporting services. In connection with its
discretionary asset management services, the Company originates and services
commercial mortgages and manages investments in real estate assets. The Company
also sponsors and manages private equity funds investing in insurance and
insurance-related companies.

ASSET MANAGEMENT. The Company's insurance asset management services are
designed to optimize investment returns for clients within the guidelines
imposed by insurance regulatory, accounting, tax and asset/liability management
considerations. As of June 30, 1997, the Company provided services with respect
to approximately $58.0 billion in assets, of which approximately (i) $23.1
billion represented assets under discretionary management, (ii) $20.5 billion
represented assets serviced under investment advisory agreements and (iii)
$14.4 billion represented assets receiving investment accounting & reporting
services on a stand-alone basis. As part of its discretionary asset management
services, as of June 30, 1997, the Company managed approximately $2.6 billion
of commercial mortgage loans and investment real estate.

The Company manages private equity funds which invest in insurance and
insurance-related companies. Since 1985, the Company has sponsored five private
equity funds, raising approximately $360 million in committed capital and
investing more than $187 million of these proceeds in 38 portfolio company
investments in connection with financings aggregating to more than $1.0
billion.

INSURANCE RESEARCH. The Company believes that Conning & Company is one of
the leading insurance industry research firms in the United States. The Company
publishes in-depth insurance industry research covering major insurance
industry trends, products, markets and business segments. The Company also
publishes stock research on a broad group of publicly-traded insurance
companies for some of the largest United States institutional money managers as
well as pension funds, banks, mutual funds, and insurance companies. Conning &
Company also from time to time participates in the underwriting of public
offerings of equity securities for insurance or insurance-related companies.

The Company's principal executive offices are currently located at 700
Market Street, St. Louis, Missouri 63101 (telephone number: (314) 444-0498) and
at CityPlace II, 185 Asylum Street, Hartford, Connecticut 06103 (telephone
number: (860) 527-1131).

<PAGE> 6
DEVELOPING TRENDS IN THE INSURANCE INDUSTRY

Certain key insurance industry trends that also affect the management of
insurance company assets are as follows:

GROWING INSURANCE COMPANY ASSETS. Insurance company assets have grown over
several decades and during the period from 1986 to 1996 grew at an average rate
of approximately 9% per year, from approximately $1.3 trillion, to
approximately $3.1 trillion, according to a standard industry source.

ACCEPTANCE OF OUTSOURCING. The Company believes that many insurance
companies are utilizing non-affiliated asset managers in order to respond to
competitive product requirements and the pressure to achieve higher returns on
investments while maintaining an acceptable level of risk. According to the
Eager Study, assets under management by external, non-affiliated managers
increased at a rate of 17% per year from $300 billion in 1994 to $415 billion
in 1996, which represented approximately 15% of industry assets.

STRATEGY

The Company's primary operating strategy is to grow recurring, fee-based
asset management-related revenues, cash flow and profits through the following:

LEVERAGE ESTABLISHED ASSET MANAGEMENT PLATFORM TO GENERATE GROWTH AND
PROFITABILITY. The Company believes that it has established a platform, made up
of core investment professionals, product expertise and systems, to support
future growth in fee-based asset management revenues. Opportunities for asset
management growth are expected to come from new and existing clients, strategic
acquisitions and alliances and through General American and its affiliates.

GENERATE GROWTH FROM NEW AND EXISTING CLIENTS. The Company intends to take
advantage of the growth in insurance industry assets and a trend among
insurance companies to seek external investment management expertise. The
Company will pursue growth in assets under management from new clients by
increasing the Company's sales and marketing efforts and by leveraging the
Company's strong name recognition. Additionally, the Company will continue to
pursue growth in assets under management from existing clients by seeking to
increase its share of its clients' assets and from underlying growth in
existing assets.

PURSUE STRATEGIC ACQUISITIONS AND ALLIANCES TO EXPAND MARKET PENETRATION.
The Company regularly evaluates strategic acquisitions, joint ventures and
marketing alliances as a means of increasing assets under management, expanding
the range of its product offerings and increasing its sales and marketing
capabilities.

LEVERAGE STRATEGIC ALLIANCE WITH GROWING PARTNER. The Company's
relationship with General American, the Company's principal shareholder,
provides opportunities for distribution of the Company's products and services
to General American and its affiliates. The Company has benefited from the
internal growth and acquisition activity of General American and its
affiliates, with assets under management of General American and its affiliates
increasing at an average rate of approximately 14% per year, from approximately
$5.6 billion as of December 31, 1991 to approximately $10.6 billion as of
December 31, 1996. At June 30, 1997, such affiliated assets under management
totaled approximately $12.6 billion.

RISK FACTORS

No assurances can be given that the Company's objectives or strategies will
be achieved. Prospective investors should consider carefully the factors
discussed in detail elsewhere in this Prospectus under the captions
"Cautionary Statement Regarding Forward-Looking Statements" and "Risk
Factors."

<PAGE> 7
<TABLE>
THE OFFERING
<CAPTION>

<S> <C>
Common Stock offered by the 2,500,000 shares
Company.....................

Common Stock outstanding after 12,875,000 shares<F1>
the offering................

Dividend Policy............... The Company currently intends to pay quarterly cash dividends of
approximately $0.04 per share of Common Stock ($0.16 annually),
commencing in the first quarter of 1998. However, any dividends will
be (i) dependent upon the Company's earnings, capital requirements,
operating and financial condition and other relevant factors, (ii)
subject to declaration by the Company's Board of Directors, and (iii)
subject to certain regulatory constraints. See "Risk Fac-
tors--Regulation" and "Dividend Policy."

Use of Proceeds............... For general corporate purposes, including possible strategic acqui-
sitions or alliances. See "Use of Proceeds."

Proposed Nasdaq National "CNNG"
Market symbol...............

<FN>
- --------

<F1> Assumes no exercise of outstanding stock options. As of the date of this
Prospectus, there were outstanding options to purchase 1,237,500 shares of
Common Stock at a weighted average price of $5.65 per share and options to
purchase an additional ------------- shares of Common Stock at the initial
public offering price. Does not include an aggregate of --------------
shares of Common Stock reserved for issuance under the Company's employee
stock plans. See "Management--Employee Stock Plans" and Note 12 of Notes
to the Company's Consolidated Financial Statements.
</TABLE>

<PAGE> 8

<TABLE>
SUMMARY CONSOLIDATED FINANCIAL DATA
<CAPTION>
YEARS ENDED SIX MONTHS ENDED
YEARS ENDED DECEMBER 31,<F1> DECEMBER 31,<F2> JUNE 30,
--------------------------------------- ------------------ ------------------
1992 1993 1994 1995 1995 1996 1996 1997

PRO FORMA
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Revenues:

Asset management and related
fees......................... $1,716 $2,446 $3,484 $24,050 $30,675 $40,456 $19,109 $24,079

Research services.............. 0 0 0 4,090 9,480 12,148 6,515 6,465

Other income................... 51 36 57 663 996 1,062 602 378
------ ------ ------ ------- ------- ------- ------- -------

Total revenues............. 1,767 2,482 3,541 28,803 41,151 53,666 26,226 30,922
------ ------ ------ ------- ------- ------- ------- -------

Operating income................... 832 1,341 2,112 6,292 7,389 11,792 5,946 7,379

Interest expense............... 0 0 0 521 1,365 729 412 162
------ ------ ------ ------- ------- ------- ------- -------

Income before provision for income
taxes............................ 832 1,341 2,112 5,771 6,025 11,063 5,534 7,217

Provision for income taxes......... 311 507 827 2,359 2,739 4,851 2,431 3,119
------ ------ ------ ------- ------- ------- ------- -------

Net income................. $ 521 $ 834 $1,285 $ 3,412 $ 3,286 $ 6,212 $ 3,104 $ 4,098
====== ====== ====== ======= ======= ======= ======= =======

Preferred stock dividends.......... 0 0 0 351 906 906 446 503
------ ------ ------ ------- ------- ------- ------- -------

Net earnings available to common
shareholders..................... $ 521 $ 834 $1,285 $ 3,061 $ 2,380 $ 5,306 $ 2,658 $ 3,595
====== ====== ====== ======= ======= ======= ======= =======

Pro forma net income per
common share and common
share equivalents <F3>... $ 0.59 $ 0.37
======= =======
</TABLE>

<TABLE>
<CAPTION>
AS OF JUNE 30,
-------------------------
1997 1997
AS ADJUSTED<F4>

<S> <C>
BALANCE SHEET DATA:

Total assets.................................................................... $49,959

Long-term debt.................................................................. 0

Convertible preferred stock..................................................... 34,075

Total common shareholders' equity............................................... 68

Number of common shares outstanding end of period............................... 6,820
</TABLE>

<TABLE>
<CAPTION>
--------------------------------------------------- AS OF
1992 1993 1994 1995 1996 6/30/97
(IN BILLIONS, EXCEPT AS NOTED)
<S> <C> <C> <C> <C> <C> <C>
OTHER OPERATING DATA:

Average assets under discretionary management<F5>:

Unaffiliated............................................ $ 3.3 $ 5.4 $ 6.2 $ 7.8 $ 9.5 $ 10.5

General American & affiliates........................... 5.5 6.0 6.6 7.8 9.6 12.6
------- ------- ------- ------- ------- -------

Total............................................... 8.8 11.4 12.8 15.6 19.1 23.1

Average assets under advisory services...................... 5.2 10.0 14.7 15.3 18.3 20.5

Average assets under accounting & reporting services........ 0.0 1.2 2.6 4.8 9.2 14.4
------- ------- ------- ------- ------- -------

Total assets serviced........................... $ 14.0 $ 22.6 $ 30.1 $ 35.7 $ 46.6 $ 58.0
======= ======= ======= ======= ======= =======

Pro forma revenues (in thousands)<F6>....................... $23,656 $31,567 $30,787 $41,151 $53,666 $30,922

EBITDA (in thousands)<F7>................................... $ 832 $ 1,341 $ 2,112 $ 7,751 $15,331 $ 9,139

<FN>
- ---------

<F1> The years 1992 to 1994 reflect the results of GAIMCO only. The year 1995
reflects the results of the consolidated activity, from August 1, 1995 to
December 31, 1995 and the results of GAIMCO only from January 1, 1995 to
July 31, 1995. See Note 1 to the Company's Consolidated Financial
Statements.

<F2> Pro forma 1995 reflects the consolidated activity for the year assuming
the Strategic Merger took place on January 1, 1995. The year 1996 reflects
actual consolidated results. See Note 2 to the Company's Consolidated
Financial Statements.

<F3> Pro forma earnings per share is computed by dividing net income by the
weighted average number of shares of common stock and common stock
equivalents considered outstanding during the period after giving effect
to all dilutive common stock and common stock equivalents shares issued
within twelve months of the public offering of the Company's common stock.

<F4> Gives effect to the Capital Stock Conversions and the sale of 2,500,000
shares of Common Stock offered hereby at an assumed initial public
offering price of $ ----------- per share and the receipt of the estimated
net proceeds therefrom.

<F5> Since January 1, 1995, the assets of the general account of General
American have been under contract with GAIMCO (now known as Conning Asset
Management Company). General account assets prior to January 1, 1995 were
managed by the investment division of General American, a predecessor of
GAIMCO, and are included in assets under management for 1992, 1993 and
1994. Data for 1995 and prior periods is presented on a pro forma basis to
include both Conning and GAIMCO assets under management.

<F6> Pro forma revenues include revenues as if the Strategic Merger had
occurred January 1, 1992 and assumes that the general account assets of
General American prior to January 1, 1995 were managed by the Company
during such periods, under the fee schedule that was in place at the time
of the Strategic Merger and further assumes that the mortgage loans funded
by General American prior to January 1, 1995 earned a 1% origination fee.
The Company does not believe that the amount of pro forma revenues for any
such prior period are indicative of the profitability of any such revenues
during such period. Amount shown as of June 30, 1997 is for the six month
period ended June 30, 1997.

<F7> EBITDA is computed by adding operating income and "amortization of
goodwill and other" from the statements of income and "depreciation and
amortization" from the statements of cash flows. Amount shown as of
June 30, 1997 is for the six month period ended June 30, 1997.
</TABLE>

<PAGE> 9
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

Certain statements contained herein, including, without limitation, under
the captions "Prospectus Summary," "Risk Factors," "Business--General,"
"--Company Operations--Overview," "--Industry Background and Trends,"
"--Strategy" and "--Legal Proceedings" and "Management's Discussion and
Analysis of Financial Condition and Results of Operations," as well as
possible or assumed future results of operations of the Company, and other
statements contained herein or therein regarding matters that are not
historical facts, are or may constitute forward-looking statements (as such
term is defined in the Private Securities Litigation Reform Act of 1995),
including, without limitation, statements relating to the Company's financial
position, plans to increase revenues, competitive strengths, business
objectives or strategies, insurance industry trends and expectations regarding
General American's assets or activities. Because such statements are subject to
risks and uncertainties, actual results may differ materially from those
expressed or implied by such forward-looking statements. Factors that could
cause actual results to differ materially ("the "Cautionary Statements")
include, but are not limited to, those discussed under "Risk Factors." All
subsequent written and oral forward-looking statements attributable to the
Company or persons acting on its behalf are expressly qualified in their
entirety by the Cautionary Statements. Investors are cautioned not to place
undue reliance on such statements, which speak only as of the date hereof. The
Company undertakes no obligation to release publicly any revisions to these
forward-looking statements to reflect events or circumstances after the date
hereof or to reflect the occurrence of unanticipated events.

RISK FACTORS

In addition to the other information in this Prospectus, the following risk
factors should be considered carefully by prospective investors in evaluating
the Company before purchasing the Common Stock offered hereby.

RISKS ASSOCIATED WITH INSURANCE INDUSTRY FOCUS

Because the Company focuses on providing asset management services to the
insurance industry, its business may be materially adversely affected by events
impacting the insurance industry. In particular, the insurance industry has
been experiencing consolidation as companies merge or are acquired. In the
event such consolidation activity continues and the Company's current or
prospective clients are acquired, their assets may subsequently be managed by
the combined company's internal staff or by another external manager. In such
event, the Company's business, financial condition, results of operations and
business prospects could be materially adversely affected. Further, as a
greater percentage of insurance company assets have shifted to external
management, additional opportunities to capture externally managed assets may
be limited. In addition, changes affecting the insurance industry, including
any changes in federal or state laws or regulations relating thereto,
including, without limitation, any change adversely affecting insurance
products, may have a materially adverse effect on the Company's business,
financial condition, results of operations and business prospects.

DEPENDENCE ON PRINCIPAL SHAREHOLDER

The Company's business, financial condition, results of operations and
business prospects are significantly dependent on its relationship with its
principal shareholder, General American, an indirect wholly-owned subsidiary of
General American Life Mutual Holding Company. As of June 30, 1997, General
American and its affiliates accounted for approximately $12.6 billion of the
approximately $23.1 billion in assets which the Company had under discretionary
management. The advisory agreements between General American or one of its
affiliates and the Company are subject to termination upon 30 to 90 days'
notice without penalty. There can be no assurance that General American and its
affiliates will maintain or not seek to renegotiate their existing investment
advisory relationships with the Company in the future, and the renegotiation of
such relationships could have, and the termination of such relationships would
have, a materially adverse effect on the Company's business, financial
condition, results of operations and business prospects. Additionally, General
American presently leases to the Company all of the Company's office space in
St. Louis and provides to the Company certain administrative services. There
can be no assurance that such arrangements will continue or that the Company
would be able to procure replacement office space or services on similar or
otherwise favorable terms. See "Business--Asset Management,"
"Business--Facilities," "Certain Relationships and Related Transactions"
and Note 11 of Notes to the Company's Consolidated Financial Statements.

<PAGE> 10
POTENTIAL CONFLICTS OF INTEREST

General American will beneficially own approximately 65% of the Common
Stock after the consummation of the offering (approximately 63% if the
Underwriters' over-allotment option is exercised in full). The Company's Board
of Directors consists of five directors, three of whom are officers of the
Company or General American, and two of whom are not otherwise affiliated with
the Company or General American (the "Independent Directors"). After the
offering, General American will have the power to elect the Board of Directors
and to approve certain actions requiring shareholder approval, including
adopting amendments to the Company's articles of incorporation, and to control
certain other actions requiring shareholder approval, including mergers or
sales of substantially all of the assets of the Company or its subsidiaries.
For financial reporting purposes, General American will include its share of
the Company's net income or loss in its consolidated financial statements. The
Company's Board of Directors, including members who also are affiliated with
General American, may consider not only the short-term and long-term impact of
operating decisions on the Company but also the impact of such decisions on
General American. See "--Certain Other Anti-Takeover Provisions,"
"Management" and "Certain Relationships and Related Transactions."

The Company is a party to investment advisory, administrative services, and
other agreements with General American and certain of its affiliates. Certain
officers of the Company were also officers of General American when such
agreements were entered into. Although the Company believes that the terms of
such agreements are at least as favorable to the Company as those it could
negotiate with unrelated parties, these agreements may be modified or
renegotiated in the future and additional agreements or transactions may be
entered into between the Company, on the one hand, and General American or its
affiliates, on the other hand. Conflicts of interest could arise between
General American and its affiliates with respect to any of the foregoing, or
any future agreements or arrangements between them. See "Certain Relationships
and Related Transactions."

Executive officers, directors and employees of the Company from time to
time receive a profit interest in, and in the future may invest in, investment
funds in which the Company, or an affiliate of the Company, is a sponsor or an
investor or for which the Company performs asset management services, publishes
research or acts as a market-maker. In addition, the Company may in the future
organize businesses in which employees of the Company acquire minority
interests. There is a risk that, as a result of any such profit or investment
interest, a director, officer or employee may take actions which could conflict
with the best interests of the Company. See "Certain Relationships and Related
Transactions."

DEPENDENCE ON KEY PERSONNEL

The Company's future performance depends to a significant degree upon the
continued contributions of its officers and key management personnel. In
connection with the Strategic Merger in August 1995, the Company entered into
three-year employment agreements with all of the then shareholders and option
holders, which agreements are terminable at any time by written notice, subject
to certain conditions. The Company, however, does not have employment
agreements with its senior management members who were hired after August 1995.
See "Management--Directors, Executive Officers and Certain Significant
Officers" and "Management--Employment Agreements and Other Compensation
Arrangements." In addition, the Company's business is dependent on the highly
skilled, and often highly specialized, individuals it employs. Retention of
asset management, investment advisory, private equity, research, sales and
trading and administrative professionals is particularly important to the
Company's business, financial condition, results of operations and business
prospects. There can be no assurance that losses of key personnel will not
occur in the future, which could materially and adversely affect the Company's
business, financial condition, results of operations and business prospects.

The Company expects further growth in the number of its personnel.
Competition for employees with the qualifications desired by the Company is
intense, especially with respect to asset management and research professionals
with expertise in the insurance industry, and the Company expects that
continuing competition will cause its compensation costs to continue to
increase. There can be no assurance that the Company will be able to recruit a
sufficient number of new employees with the desired qualifications in a timely
manner. The failure to recruit new employees could materially and adversely
affect the Company's business, financial condition, results of operations and
business prospects.

<PAGE> 11
SIGNIFICANT INDUSTRY COMPETITION

All of the Company's businesses are conducted in highly competitive
markets. The Company competes with a large number of other asset management
firms, as well as broker-dealers, insurance companies, commercial banks and
others in the business. The Company's asset management business competes for
assets under discretionary management with a large number of other specialty
and diversified investment advisory firms and divisions. The asset management
industry is characterized by relatively low cost of entry, and new entities may
be formed which may compete with the Company. The Company's focus on the
insurance industry makes it particularly subject to direct competition from
firms or divisions that specialize in providing services to the insurance
sector. Additionally, other insurance companies may determine to spin out their
investment management divisions, which might then become competitors. The
Company's asset management, real estate, private equity and investment
accounting & reporting services are also subject to intense competition, and
are characterized by limited capital requirements and low barriers to entry.
There can be no assurance that the Company will be able to compete successfully
against current and future competitors or that competitive pressures faced by
the Company will not materially and adversely affect the Company's business,
financial condition, results of operations and business prospects.

Many of the Company's current and potential competitors are larger and have
access to greater resources than the Company, which resources could be used to
compete effectively against the Company. Such competition could have a material
adverse effect on the Company's business, financial condition, results of
operations and business prospects, as well as its ability to attract and retain
highly skilled individuals as employees. See "Business--
Competition."

RISKS ASSOCIATED WITH ACQUISITIONS

As part of its business strategy, the Company intends to consider
acquisitions of similar or complementary businesses. No assurance can be given
that the Company will be successful in identifying attractive acquisition
candidates or completing acquisitions on favorable terms. In addition, any
future acquisitions will be accompanied by the risks commonly associated with
acquisitions. These risks include potential exposure to unknown liabilities of
acquired companies or to acquisition costs and expenses, the difficulty and
expense of integrating the operations and personnel of the acquired companies,
the potential disruption to the business of the combined company and potential
diversion of management's time and attention, the impairment of relationships
with and the possible loss of key employees and clients as a result of the
changes in management, the incurrence of amortization expenses if an
acquisition is accounted for as a purchase and dilution to the shareholders of
the combined company if the acquisition is made for stock of the combined
company. There can be no assurance that products, technologies or businesses of
acquired companies will be effectively assimilated into the business or product
offerings of the combined company or will have a positive effect on the
combined company's revenues or earnings. Further, the combined company may
incur significant expense to complete acquisitions and to support the acquired
products and businesses. Any such acquisitions may be funded with cash, debt or
equity, which could have the effect of diluting or otherwise adversely
affecting the holdings or the rights of existing shareholders of the Company,
including investors acquiring Common Stock in this offering.

CHANGES IN ECONOMIC OR MARKET CONDITIONS AFFECTING FEE LEVELS

Changes in economic and market conditions may adversely affect the
profitability and performance of and demand for the Company's services. A
significant portion of the Company's revenue is derived from asset management
fees, which are generally based on the value of assets under management.
Consequently, significant fluctuations in the values of securities (e.g., as
the result of substantial changes in the equity and fixed income markets
resulting from changes in interest rates, inflation rates or other economic
factors) may affect materially the amount of assets under management and thus
the Company's revenues and profitability. Additionally, the Company from time
to time serves as an underwriter of publicly offered securities. Underwriting
revenues, as well as brokerage commissions, are highly volatile, depending on a
variety of factors, including market conditions and transaction activity;
accordingly, no assurance can be given as to the amount of such revenues, if
any, that may arise in future periods. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and
"Business--Asset Management."

<PAGE> 12
REGULATION

The securities industry and the business of the Company are subject to
extensive regulation by the Securities and Exchange Commission (the "SEC" or
the "Commission"), state securities regulators and other governmental
regulatory authorities. The business of the Company also is regulated by the
National Association of Securities Dealers, Inc. (the "NASD"). Conning &
Company and Conning Asset Management Company, both subsidiaries of the Company,
are registered as investment advisers with the SEC. As registered investment
advisers, each is subject to the requirements of the Investment Advisers Act of
1940, as amended (the "Advisers Act"), and the SEC's regulations thereunder.
Conning Asset Management Company acts as an investment adviser to certain
registered investment companies, and therefore is also subject to regulation
under the Investment Company Act of 1940, as amended (the "Investment Company
Act"). Conning & Company is registered as a broker-dealer under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and various state
broker-dealer registration laws. Conning Asset Management Company is a
fiduciary under the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), and regulations thereunder with respect to the investments of its
discretionary asset management clients which are employee benefit plans subject
to ERISA and with respect to the investments of portfolios managed by the
Company that contain assets of plans subject to ERISA. In addition, the
Company's mortgage origination activities are subject to the licensing
requirements of certain states. Furthermore, Conning & Company is exposed to
liability under federal and state securities laws and court decisions,
including decisions with respect to underwriters' liability and limitations on
indemnification of underwriters by issuers. Violations of federal or state laws
or regulations or rules of industry self-regulatory organizations ("SROs"),
such as the NASD, could subject the Company, its subsidiaries and/or its
employees to disciplinary proceedings or civil or criminal liability, including
revocation of licenses, censures, fines or temporary suspension or permanent
bar from the conduct of their business. Any such proceeding or liability could
have a material adverse effect upon the Company's business, financial
condition, results of operations and business prospects. See "Regulation."

RISK OF PENALTIES DUE TO NONCOMPLIANCE

Compliance with many of the regulations applicable to the Company involves
a number of risks, particularly because applicable regulations in a number of
areas, such as those governing affiliated transactions involving clients, may
be subject to varying interpretation. Regulators make periodic examinations and
review annual, monthly and other reports on the Company's operations and
financial condition. In the event of non-compliance by the Company with any
applicable law or regulation, governmental regulators and SROs may institute
administrative or judicial proceedings that may result in censure, fine, civil
penalties (including treble damages in the case of insider trading violations),
criminal penalties, the issuance of cease-and-desist orders, the deregistration
or suspension of the non-compliant broker-dealer or investment adviser, the
suspension or disqualification of the broker-dealer's or investment adviser's
officers or employees, the removal of the Company from its role as fiduciary
with respect to the investment of assets subject to ERISA, and other adverse
consequences. The Company has not experienced any such penalties to date. Such
violations or noncompliance could also subject the Company and/or its employees
to civil actions by private parties. In connection with the Company's private
equity activities, Conning & Company, its affiliates and the private equity
funds which they manage are relying on exemptions from registration under the
Investment Company Act, the Securities Act and state securities laws. Failure
to meet the requirements of any such exemptions could have a material adverse
effect on the Company's business, financial condition, results of operations
and business prospects and the manner in which the Company, its affiliates and
the private equity funds they manage carry out their investment activities and
on the compensation received by Conning & Company and its affiliates from the
private equity funds.

RISKS ASSOCIATED WITH CHANGING REGULATORY ENVIRONMENT

<PAGE> 13
RISK OF CHANGES IN OTHER BUSINESS REGULATIONS

The Company's businesses may be materially affected not only by securities
regulations but also by regulations of general application. For example, the
volume of the Company's asset management revenue in a given time period could
be affected by, among other things, existing and proposed tax legislation and
other governmental regulations and policies (including, without limitation, the
interest rate policies of the Federal Reserve Board) and changes in the
interpretation or enforcement of existing laws and rules that affect the
business and financial communities. The level of business and financing
activity in the insurance industry can be affected not only by such legislation
or regulations of general applicability, but also by industry-specific
legislation or regulations.

POTENTIAL LIMITS ON OPERATIONS AND DIVIDENDS DUE TO NET CAPITAL REQUIREMENTS

As a registered broker-dealer and member of the NASD, Conning & Company is
subject to the net capital rules of the SEC, various states and the NASD. These
rules specify minimum net capital requirements for registered broker-dealers
and NASD members, are designed to assure that broker-dealers maintain adequate
regulatory capital in relation to their liabilities and the size of their
customer business, and have the effect of requiring that a substantial portion
of a broker-dealer's assets be kept in cash or highly liquid investments. Such
net capital requirements could have a materially adverse effect on the
Company's ability to distribute any declared dividends to its shareholders. The
Company is a holding company, the principal assets of which consist of the
common stock of Conning, Inc. Conning, Inc. owns all of the common stock of
Conning & Company. The primary source of funds for the Company to make dividend
distributions, if any, will be dividends paid to the Company by Conning, Inc.
Conning, Inc.'s principal source of funds is dividends received from Conning &
Company, which may be restricted in its distribution of any such dividends by
such net capital rules. See "Regulation--Net Capital Requirements."

TERMINATION PROVISIONS OF INVESTMENT ADVISORY AGREEMENTS AND OTHER CONSEQUENCES
OF A CHANGE OF CONTROL; LIMITATIONS ON VOTING RIGHTS

A large portion of the Company's revenues are derived from investment
advisory agreements with insurance companies, particularly General American and
its affiliates, and institutional clients, which agreements are generally
terminable upon 30 to 90 days' notice without penalty. The termination of any
of these agreements representing a material portion of assets under management
could have a material adverse effect on the Company's business, financial
condition, results of operations and business prospects. Under the Advisers
Act, advisory agreements are voidable upon assignment unless the client
consents to such assignment. Under the Investment Company Act, advisory
agreements terminate upon assignment. Under both Acts, an investment advisory
agreement is deemed to have been assigned when there is a direct or indirect
transfer of the agreement, including a direct assignment or a transfer of a
"controlling block" of the firm's voting securities or, under certain
circumstances, upon the transfer of a "controlling block" of the voting
securities of its parent corporation. Under Section 15(f) of the Investment
Company Act, during the two-year period after a change of control of an
investment adviser of a registered investment company, there may not be imposed
an "unfair burden" on such company as a result of a change in control.
Section 15(f) could be interpreted to restrict increases in investment advisory
fees during such two-year period and, accordingly, may discourage potential
purchasers from acquiring any interest in the Company that might constitute a
change of control under the Investment Company Act. See "Regulation."

Following the completion of the offering, sales of Common Stock by General
American or other shareholders of the Company or issuances of Common Stock by
the Company, among other things, could result in a deemed assignment of the
Company's investment advisory agreements under the Advisers Act and the
Investment Company Act. Any assignment of the Company's investment advisory
agreements would require, as to any registered investment company client, the
prior approval by a majority of its shareholders, and as to the Company's other
clients, the prior consent of such clients. There can be no assurance that the
Company's clients would consent to the assignment of investment advisory
agreements or approve new investment advisory agreements with the Company in
such an event. The Company's Amended and Restated Articles of Incorporation
(the "Articles") provide that no person or group deemed to be a beneficial
owner (as defined therein) of the Common Stock may vote more than 20% of the
total number of shares of Common Stock outstanding. This provision of the
Articles does not apply to General American, subsidiaries or affiliates of
General American, direct or indirect subsidiaries of the Company and certain
employee plans established or to be established by the Company. The Company's
Board of Directors may approve the exemption of other persons or groups from
the provisions described above. While this voting limitation is in place

<PAGE> 14
to reduce the likelihood, under certain circumstances, of inadvertent
terminations of the Company's advisory agreements as a result of
"assignments" of the Company's investment advisory contracts, there can be no
guarantees that this limitation will prevent such a termination from occurring.
In addition, such limitation could be deemed to have an anti-takeover effect
and to make changes in management more difficult. See "Regulation,"
"Description of Capital Stock--Common Stock" and "Certain Charter and Bylaw
Provisions."

CERTAIN OTHER ANTI-TAKEOVER PROVISIONS

In addition to the provision in the Articles described in the preceding
paragraph, certain other provisions of Missouri law, the Articles and the
Company's Bylaws (the "Bylaws") could have the effect of making it more
difficult for a third party to acquire, or of discouraging a third party from
attempting to acquire, control of the Company, including, without limitation,
the business combination provisions of the Missouri General and Business
Corporation Law. See "Certain Charter and Bylaw Provisions." Such provisions
could also limit or depress the price that certain investors might be willing
to pay in the future for shares of the Common Stock. The Company is also
authorized to issue preferred stock with rights senior to, and that may
adversely affect, the Common Stock, without the necessity of shareholder
approval and with such rights, preferences and privileges as the Company's
Board of Directors may determine. The Company, however, has no present plans to
issue any shares of preferred stock. See "Principal Shareholders" and
"Description of Capital Stock."

NO PRIOR PUBLIC MARKET FOR COMMON STOCK

Prior to this offering, there has been no public market for the Common
Stock, and there can be no assurance that an active public market will develop
or be sustained after this offering or that investors will be able to sell the
Common Stock should they desire to do so. The initial public offering price
will be determined by negotiations between the Company and the Underwriters and
may bear no relationship to the price at which the Common Stock will trade upon
completion of this offering. See "Underwriting" for a discussion of the
factors to be considered in determining the initial public offering price.

SHARES ELIGIBLE FOR FUTURE SALE; POSSIBLE ADVERSE EFFECT ON FUTURE MARKET
PRICES

Following the completion of the offering, sales of substantial numbers of
additional shares of Common Stock in the public market, or the perception that
such sales could occur, could adversely affect the market price of the Common
Stock and make it more difficult for the Company to raise funds through future
equity offerings. General American will beneficially own approximately 65% of
the Common Stock after the consummation of the offering (approximately 63% if
the Underwriters' over-allotment option is exercised in full) and a sale of
such shares could adversely affect the market price of the Common Stock. The
Company's directors and executive officers and other shareholders holding all
of the 10,375,000 shares outstanding on the date hereof have entered into
lock-up agreements under which they have agreed, other than with the consent of
Donaldson, Lufkin & Jenrette Securities Corporation, not to sell such shares
for a period of -- days following the completion of the offering. The Company
believes that, following the lock-up period, up to 1,453,856 shares held by
existing shareholders could be eligible for sale without restriction and up to
8,921,144 "affiliate" shares held by executive officers, directors and other
affiliates could be eligible for sale, subject to certain volume and other
limitations of Rule 144; all such shares, however, may be subject to additional
holding periods under Rule 144 based on, among other things, particular
interpretative considerations, facts and circumstances relating to such
shareholders. Following effectiveness of the registration statement covering the
shares offered hereby, the Company will register on Form S-8 under the
Securities Act an aggregate of --------shares of Common Stock issuable under
employee stock plans, which registrations are expected to become effective upon
filing. There are options to purchase 1,237,500 shares of Common Stock
outstanding on the date hereof, 400,000 of which are currently exercisable, an
additional 600,000 of which will be exercisable upon completion of the offering
and the remaining 237,500 of which will become exercisable over a five-year
vesting period commencing November 1997. Upon the first anniversary of the date
hereof, General American and the other shareholders of the Company have certain
rights to require the Company to register 8,780,005 of their 10,375,000 shares
of Common Stock for sale under the Securities Act. See "Management--Employee
Stock Plans," "Certain Relationships and Related Transactions," "Description of
Capital Stock" and "Shares Eligible for Future Sale."

<PAGE> 15
POSSIBLE VOLATILITY OF STOCK PRICE

The market price of the shares of Common Stock could be subject to wide
fluctuations in response to factors such as actual or anticipated variations in
the Company's operating results, changes in financial estimates by securities
analysts, conditions and trends in the asset management or insurance
industries, adoption of new accounting standards affecting the investment
advisory or insurance industries, general market conditions and other factors.
Further, the stock market in general has experienced extreme price and volume
fluctuations that often have been unrelated or disproportionate to the
operating performance of such companies. These market fluctuations, as well as
general economic, political and market conditions, may adversely affect the
market price of the Common Stock. In the past, following periods of volatility
in the market price of a company's securities, securities class action
litigation has often been instituted against such company. Such litigation, if
instituted, could result in substantial costs and a diversion of management
attention and resources, which would have a material adverse effect on the
Company's business, financial condition, results of operations and business
prospects.

DILUTION

Purchasers of the Common Stock offered hereby will experience immediate and
significant dilution in the net tangible book value of their shares from the
initial public offering price. To the extent outstanding options to purchase
Common Stock are exercised, there will be further dilution. See "Dilution."

DISCRETIONARY USE OF PROCEEDS

Although the Company has not yet identified specific uses for the net
proceeds to be received by it from this offering, such proceeds are expected to
be used for general corporate purposes, including possible acquisitions of
related businesses or investments in strategic or joint venture relationships.
The Company has no present understandings, agreements or commitments with
respect to any such acquisitions or investments, and no assurance can be given
that any such acquisition or investment will take place. Pending application to
such purposes, the net proceeds will be invested in short-term, investment
grade, interest-bearing securities. The Company's management will have
discretion over the use and investment of such net proceeds. Accordingly, there
can be no assurance regarding the utilization or timing of the utilization of
the remaining net proceeds of this offering. See "Use of Proceeds."

RISK OF SYSTEMS FAILURE; DEPENDENCE ON VENDORS

The Company's business is highly dependent on communications and
information systems and certain third-party vendors for securities pricing
information and updates on certain software. There can be no assurance that the
Company will not suffer a systems failure or interruption, whether caused by an
earthquake, fire, other natural disaster, power or telecommunications failure,
act of God, act of war or otherwise, or that the Company's back-up procedures
and capabilities in the event of any such failure or interruption will be
adequate. Significant portions of the Company's business are dependent on the
Company's ability to protect its computer equipment and the information stored
in its data processing centers against damage that may be caused by fire, power
loss, telecommunications failures, unauthorized access and other events. The
Company's data processing centers are located in Hartford, Connecticut and St.
Louis, Missouri. Software and related data files are expected to be backed-up
regularly and stored off-site. The Company has contracted with an outside
service to provide disaster recovery services. There can be no assurance that
these measures are sufficient to eliminate the risk of extended interruption in
the Company's operations. Further, there can be no assurance that the Company
will continue to be able to obtain timely and accurate securities pricing
information from third-party vendors on an ongoing basis, which is vital to the
Company's ability to provide investment accounting & reporting services because
it enables the Company to value its clients' portfolios. Any delays or
inaccuracies in securities pricing information could give rise to claims
against the Company, which could have a material adverse effect on the
Company's business, financial condition, results of operations and business
prospects.

Under a software license agreement with SS&C Technologies, Inc. ("SS&C"),
effective as of January 27, 1996 (the "License Agreement"), the Company has a
perpetual non-exclusive license to use, maintain and modify its investment
accounting & reporting software, including both CAMRA(TM) and FILMS(TM), in
both source code and object code (the "Software"). SS&C Technologies, Inc.
represents that it is the owner of the trademarks CAMRA(TM) and FILMS(TM). The
License Agreement permits the Software to be used by the Company for accounting,
reporting and

<PAGE> 16
similar purposes in the asset management business and for outsourcing to
customers in the insurance industry and by General American and its subsidiaries
in certain circumstances. The Company is obligated to make annual payments under
the License Agreement until the year 2000. Additional license fees may be due as
a result of an increase of assets under management or advisement only if the
assets under management or advisement increase as the result of certain business
combinations involving the Company. SS&C may terminate the License Agreement in
the event of, among other things, a breach by the Company which is not cured
after written notice, certain bankruptcy, insolvency or similar events affecting
the Company or certain other transactions such as the acquisition of a
controlling interest in the Company by, or the entering into of certain
transactions between the Company and, an entity that competes with SS&C. While
the Company has contracted to receive certain updates to its software, there can
be no assurance that it will obtain updated software in a timely manner. Any
failure or interruption of the Company's systems or a failure to receive timely
and accurate securities pricing information or updates to software could have a
material adverse effect on the Company's business, financial condition, results
of operations and business prospects. See "Business--Asset
Management--Investment Accounting & Reporting."

YEAR 2000 COMPLIANCE

As the year 2000 approaches, a critical business issue has emerged
regarding how existing application software programs and operating systems can
accommodate this date value. In brief, many existing application software
products in the marketplace were designed to only accommodate a two digit date
position which represents the year (e.g., '95 is stored on the system and
represents the year 1995). As a result, the year 1999 (i.e., '99) could be the
maximum date value these systems will be able to accurately process. Management
is in the process of working with its software vendors to assure that the
Company is prepared for the year 2000. Based on information currently
available, management does not anticipate that the Company will incur
significant operating expenses or be required to invest heavily in computer
system improvements to be year 2000 compliant, however the Company is still in
the preliminary stages of analyzing its systems and requirements.

USE OF PROCEEDS

The net proceeds to the Company from the sale of the 2,500,000 shares of
Common Stock offered by the Company hereby are estimated to be approximately
$ million, assuming an initial public offering price of $ per share
----- -----
and after deducting the underwriting discounts and commissions and estimated
offering expenses payable by the Company.

The principal purposes of this offering are to increase the Company's
equity capital and to create a public market for the Common Stock, which will
facilitate the Company's future access to the public equity markets and enhance
the ability of the Company to use its Common Stock as consideration for
acquisitions and as a means of attracting and retaining key employees.

The net proceeds of this offering will be used for general corporate
purposes. The Company's business strategy contemplates that it will seek to
complement internal growth with strategic investments and acquisitions.
Accordingly, a portion of the net proceeds may also be used for acquiring
related businesses or investing in strategic or joint venture relationships.
The Company has no present understandings, agreements or commitments with
respect to any such acquisition or investment, and no assurance can be given
that any such acquisition or investment will take place. Pending application to
the uses described above, the Company intends to invest the net proceeds of
this offering in short-term, investment-grade, interest-bearing securities.

DIVIDEND POLICY

The Company initially intends to establish a policy after this offering of
declaring quarterly dividends, commencing in the first quarter of 1998, at the
rate of approximately $0.04 per share ($0.16 annually) on the Common Stock. The
declaration and payment of dividends to holders of Common Stock will be at the
discretion of the Company's Board of Directors and will depend upon the
Company's capital requirements and operating and financial condition, as well
as the legal and regulatory restrictions from net capital rules of various
regulatory bodies applicable to Conning & Company and such other factors as the
Board of Directors may deem relevant. See "Regulation."

<PAGE> 17
CAPITALIZATION

The following table sets forth the long-term borrowings and capitalization
of the Company at June 30, 1997 on a historical basis, and as adjusted to give
effect to the Capital Stock Conversions and the sale by the Company of
2,500,000 shares of Common Stock offered in the offering (assuming the
Underwriters' over-allotment option is not exercised) at an assumed initial
public offering price of $ per share, less the underwriting discounts,
-----
commissions and estimated offering expenses and applying the estimated net
proceeds therefrom. See "Use of Proceeds". This table should be read in
conjunction with the Company's Consolidated Financial Statements and the Notes
thereto included elsewhere in this Prospectus.

<TABLE>
<CAPTION>
AS OF JUNE 30, 1997
-------------------------
ACTUAL AS ADJUSTED
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Long-term debt............................................................................ $ -0- $ -0-

Series A Convertible Preferred Stock, $.01 par value: 3,190,000 shares authorized, issued
and outstanding; no as adjusted shares issued and outstanding<F1>....................... 30,977 -0-

Series B Convertible Preferred Stock, $.01 par value: 600,000 shares authorized, 365,000
shares issued and outstanding; no as adjusted shares issued and outstanding<F1>......... 3,098 -0-

Non-Voting Common Stock, $.01 par value: 20,000,000 shares authorized; 110,000 shares
issued and outstanding; no as adjusted shares issued and outstanding<F1>................ 1 -0-

Common Stock, $.01 par value: 50,000,000 shares authorized; 6,710,000 actual shares issued
and outstanding; 12,875,000 as adjusted shares issued and outstanding<F1><F2>........... 67

Additional paid-in capital................................................................ -0-

Retained earnings......................................................................... -0- -0-
------- --------

Total common shareholders' equity................................................. 68
------- --------

Total capitalization.......................................................... $34,143 $
======= ========

<FN>
- --------

<F1> Gives effect to changes in the Company's capitalization effected in June
1997, including the increase in the numbers of authorized shares of Common
Stock and authorized but undesignated shares of preferred stock. Upon the
completion of this offering, the Company intends to file an amendment to
its Articles to eliminate the Series A and Series B Convertible Preferred
Stock and the Non-Voting Common Stock. See "Description of Capital
Stock."

<F2> Assumes no exercise of outstanding stock options. As of the date of this
Prospectus, there were outstanding options to purchase 1,237,500 shares of
Common Stock at a weighted average exercise price of $5.65 per share, and
options to purchase an additional shares of Common Stock at
-------------
the initial public offering price. An additional shares are
-------------
currently reserved for future grants under the Company's employee benefit
plans. See "Management--Employee Stock Plans" and Note 12 of Notes to
the Company's Consolidated Financial Statements.
</TABLE>

<PAGE> 18
DILUTION

The adjusted net tangible book value of the Company as of June 30, 1997,
was approximately $12.2 million, or $1.18 per share of Common Stock. Adjusted
net tangible book value per share is equal to the Company's total tangible
assets less total liabilities, divided by the number of shares of Common Stock
outstanding, after giving effect to the Capital Stock Conversions. After giving
effect to the sale by the Company of 2,500,000 shares of Common Stock offered
hereby at an assumed initial public offering price of $ per share and the
-----
application of the estimated net proceeds therefrom (see "Use of Proceeds"), the
pro forma adjusted net tangible book value of the Company at June 30, 1997 would
have been approximately $ million, or $ per share. This represents
----- -----
an immediate increase in adjusted net tangible book value of $ per share
-----
to existing shareholders and an immediate dilution of $ per share to new
-----
investors purchasing shares in the offering. The following table illustrates
this per share dilution:

<TABLE>
<S> <C> <C>
Assumed initial public offering price per share<F1>............................. $

Adjusted net tangible book value per share as of June 30, 1997.............. $1.18

Increase in adjusted net tangible book value per share attributable to new
investors..................................................................

Pro forma adjusted net tangible book value per share after the offering.........
-------

Dilution in adjusted net tangible book value per share to new investors......... $
=======

<FN>
- --------

<F1> Before deducting estimated underwriting discounts and commissions and
estimated expenses of the offering payable by the Company.
</TABLE>

The following table summarizes on a pro forma basis, at June 30, 1997, the
difference between existing shareholders and new investors with respect to the
number of shares of Common Stock purchased from the Company (assuming no
exercise of the Underwriters' over-allotment option), the approximate total
consideration paid, and the average price per share paid, by existing holders
of Common Stock and by the investors purchasing shares of Common Stock in this
offering before deduction of underwriting discounts and commissions and
estimated offering expenses and assuming an initial public offering price of
$ per share.
-----

<TABLE>
<CAPTION>
SHARES PURCHASED TOTAL CONSIDERATION<F1>
------------------------ ------------------------ AVERAGE PRICE
NUMBER PERCENT AMOUNT PERCENT PER SHARE

<S> <C> <C> <C> <C> <C>
Existing shareholders................... 10,375,000 81.0% $32,793,917 $3.16

New investors........................... 2,500,000 19.0% %
---------- ----- ----------- -----

Total<F1>........................... 12,875,000 100.0% $ 100.0%

<FN>
- --------

<F1> A portion of the total consideration with respect to existing shareholders
other than General American is calculated based on values established in
connection with the Strategic Merger, and in the case of General American
reflects book value of assets contributed pursuant to the Strategic Merger
plus subsequent purchases.
</TABLE>

The above computations assume no exercise of outstanding stock options. As
of the date of this Prospectus, there were outstanding options to purchase
1,237,500 shares of Common Stock at a weighted average exercise price of $5.65
per share and options to purchase an additional
- -------- shares of Common Stock at the initial public offering price. An
additional -------- shares are currently reserved for future grants under the
Company's employee benefit plans. To the extent these options are exercised,
there will be further dilution to new investors. See "Management--Employee Stock
Plans" and Note 12 of Notes to the Company's Consolidated Financial Statements.

<PAGE> 19
BUSINESS

GENERAL

Conning is a nationally recognized asset management company providing
services to the insurance industry, and is also a leading provider of insurance
research. As of June 30, 1997, the Company had approximately $23.1 billion of
assets under discretionary management and, in total, provided services with
respect to approximately $58.0 billion of assets for insurance company clients.
The Company believes it is well positioned to take advantage of the continued
growth in insurance industry assets and a trend among insurance companies to
seek external investment management expertise. The Company believes that many
insurance companies are responding to increasing competitive, financial and
regulatory pressures by engaging outside asset managers for (i) sophisticated
asset management, (ii) access to specialized asset classes supported by a
comprehensive analytical methodology, and (iii) comprehensive investment
accounting & reporting services. During the period from 1992 through 1996,
assets under discretionary management of the Company increased by an average of
24% per year, on a pro forma basis after giving effect to the Strategic Merger
and the inclusion of assets of General American for all years. In 1996, its
first full year of operations following the Strategic Merger, the Company had
revenues of approximately $53.7 million, net earnings of approximately $6.2
million and earnings before interest, taxes, depreciation and amortization
("EBITDA") of approximately $15.3 million. In the six months ended June 30,
1997, the Company had revenues of approximately $30.9 million, net earnings of
approximately $4.1 million and EBITDA of approximately $9.1 million.

The Company believes that it possesses competitive strengths in insurance
asset management which may support its prospects for growth:

NAME RECOGNITION WITHIN THE INSURANCE INDUSTRY. The Company believes that
the established reputation of Conning within the insurance industry provides
the Company with a marketing advantage. According to the Eager Study, the
Company ranks among the top two insurance asset management firms in terms of
name recognition among domestic, non-captive insurance companies with assets
over $30 million which responded to the survey. The Company's in-depth
insurance industry research has been targeted to senior executives in the
insurance industry for more than 40 years, and its Strategic Studies Series is
subscribed to by 82 of the 100 largest U.S. insurance companies (based on 1996
premiums as reported by industry sources).

* Capabilities--The Company utilizes a team approach to managing each
client's portfolios, combining the talents of investment, insurance,
actuarial, tax and accounting specialists. The Company utilizes a set of
insurance-related research products, including property/casualty and
life/health profitability models, a loss ratio and loss reserve analysis
service and a tax optimization model.

* Performance--The Company tailors its asset management services to the
specific needs and objectives of each client's investment portfolio and
seeks to achieve favorable results based upon risk and return parameters
established for each client's portfolio.

* Responsiveness--The Company communicates frequently with its clients to
pursue the clients' investment objectives in light of changing business
and market conditions. The Company believes such responsiveness is
critical to strong client relationships and client satisfaction. The
Company believes that its comprehensive investment accounting & reporting
services are integral to client communications.

<PAGE> 20
EXPERIENCED MANAGEMENT WITH SIGNIFICANT STOCK OWNERSHIP. The Company
employs an experienced management team, the members of which have an average of
approximately 20 years of experience in the investment or insurance business.
In total, the employees of the Company will own in the aggregate approximately
23% of the Common Stock on a fully diluted basis after the offering.

COMPANY OPERATIONS--OVERVIEW

INSURANCE RESEARCH. The Company believes that Conning & Company is one of
the leading insurance industry investment research firms in the United States.
The Company publishes in-depth insurance industry research covering major
insurance industry trends, products, markets and business segments. The Company
also publishes stock research on a broad group of publicly-traded insurance
companies for some of the largest United States institutional money managers as
well as pension funds, banks, mutual funds, and insurance companies. Conning &
Company also from time to time participates in the underwriting of public
offerings of equity securities for insurance or insurance-related companies.

INDUSTRY BACKGROUND AND TRENDS

Due to the unique financial characteristics and the regulatory environment
governing the various segments of the insurance industry, effective management
of insurance company assets requires specialized industry knowledge. In
addition to an in-depth understanding of an insurance company's business and
products, the Company believes that insurance companies expect that their
assets should be carefully tailored to meet the company's specific regulatory
and tax requirements and profitability objectives, and that the asset manager
would manage investment risk to reflect the underlying income and cash flow
characteristics of the insurance products which the investments support.

INSURANCE INDUSTRY OVERVIEW

Dynamics of Insurance. The insurance industry reduces the risk of
significant financial loss for individuals, families and businesses resulting
from the loss of life or ability to lead a productive life or from a property
or casualty-related loss. The dynamics of the insurance industry are
significantly influenced on a broad level by changes in economic or market
conditions, regulations, natural disasters and by individual factors such as
personal health and longevity, accidents and personal misfortune.

Unique Financial Characteristics. Insurance companies must carefully
monitor cash flow patterns with respect to premium collections and claims
payments in order to ensure that invested assets are adequate to cover the
payment of potential future claims. Cash flow patterns vary depending on the
type of insurance (i.e., life/health and property/casualty). For example, life
insurance policies typically have either an up-front premium or steady premiums

<PAGE> 21
collected over the life of the policy, and claims are typically paid in a lump
sum or a stream of payments many years after the policy's inception. Many life
insurance products combine a tax-efficient savings component with the insurance
component. Health insurance premiums, on the other hand, are generally
collected in a steady stream and closely match the projected stream of medical
claims payments. Property insurance premiums are typically collected over the
life of the policy and claims are typically paid within the life of the policy
or shortly after the policy term expires. Casualty insurance premiums are
typically paid over the life of the policy and if claims are made, usually
after litigation, typically many years after the policy period.

Regulatory Environment. Insurance companies are heavily regulated by state
laws and regulatory agencies, which require, among other things, that insurance
companies comply with risk-based capital requirements. Additionally, insurance
company portfolios are constrained in the asset classes and allocations they
can hold and are typically heavily weighted toward fixed income securities of
investment grade or higher. Property/casualty companies typically hold limited
amounts of real estate investments, while life insurance companies invest more
heavily in real estate. Further, insurance companies must submit to state
regulators statutory financial statements which conform to regulatory
requirements.

The Company believes that its understanding of the dynamics of the
insurance industry, the unique financial characteristics of different insurance
products, and the insurance industry's regulatory environment enables it to
provide comprehensive asset management services to insurance companies.

DEVELOPING TRENDS IN THE INSURANCE INDUSTRY

Certain key insurance industry trends that also affect the management of
insurance company assets are as follows:

Growing Insurance Company Assets. Insurance company assets have grown over
several decades and during the period from 1986 to 1996 grew at an average rate
of approximately 9% per year, from approximately $1.3 trillion to approximately
$3.1 trillion, according to a standard industry source, as shown in the
following table:

INSURANCE COMPANY ASSETS
(IN BILLIONS)

[GRAPH]

<TABLE>
<CAPTION>
1986 1987 1988 1989 1990 1991
- -------------- -------------- -------------- -------------- -------------- --------------
<C> <C> <C> <C> <C> <C>
$1,305,366,000 $1,460,108,000 $1,634,187,000 $1,811,072,000 $1,946,859,000 $2,105,149,000

Continuing Trend Towards Increased Savings. As the "baby-boom" generation
continues to age, the Company believes that the demographics of the population
of the United States should favor wealth accumulation. Thus, the Company
anticipates that the growth of asset accumulation products (e.g., annuities)
will outpace the growth of mortality based products (e.g., term life
insurance). The Company believes this trend will cause insurance companies to
focus increasingly on the importance of investment management to support
competition in investment-oriented products.

Acceptance of Outsourcing. The Company believes that many insurance
companies are utilizing non-affiliated asset managers in order to respond to
competitive product requirements and the pressure to achieve higher returns on
investments while maintaining an acceptable level of risk. According to the
Eager Study, assets under management by external, non-affiliated managers
increased at a rate of 17% per year from $300 billion in 1994 to $415 billion
in 1996, which represented approximately 15% of industry assets.

<PAGE> 22
The Company believes that outsourcing can provide insurance companies the
opportunity to access the specialized expertise, scale and technology needed to
manage assets more effectively. The Company also believes outsourcing has
become an accepted business approach in the insurance industry.

The Company believes many insurance companies and other financial service
providers, including banks and investment managers, will be driven by increased
competition, regulatory considerations and increased capital needs to divest
themselves of non-core businesses and to seek to acquire, merge with or
otherwise strategically align themselves with complementary businesses in order
to achieve economies of scale. The Company also believes that such merger or
consolidation activity in the insurance industry may create additional
outsourcing opportunities as the remaining companies seek ways to achieve
increased efficiencies. See "Risk Factors--Risks Associated with Insurance
Industry Focus."

STRATEGY

The Company's growth is built on a foundation of recurring, fee-based
revenues. Fee-based revenues represented approximately 80% of the Company's
total revenues both in 1996 and for the first six months of 1997. The Company's
primary operating strategy is to grow recurring, fee-based asset management
related revenues through the following strategies:

LEVERAGE ESTABLISHED ASSET MANAGEMENT PLATFORM TO GENERATE GROWTH AND
PROFITABILITY

The Company believes that it has established a platform, made up of core
investment professionals, product expertise and systems, to support future
growth in fee-based asset management revenues. Opportunities for asset
management growth are expected to come from new and existing clients, strategic
acquisitions and alliances and from General American and its affiliates.

GENERATE GROWTH FROM NEW AND EXISTING CLIENTS

The Company intends to take advantage of the growth in insurance industry
assets and a trend among insurance companies to seek external investment
management expertise. The Company will pursue growth in assets under management
from new clients by increasing the Company's sales and marketing efforts and by
leveraging the Company's strong name recognition. Additionally, the Company
will continue to pursue growth in assets under management from existing clients
by seeking to increase its share of its clients' assets and from underlying
growth in existing assets.

PURSUE STRATEGIC ACQUISITIONS AND ALLIANCES TO EXPAND MARKET PENETRATION

The Company regularly evaluates strategic acquisitions, joint ventures and
marketing alliances as a means of increasing assets under management, expanding
the range of its product offerings and increasing its sales and marketing
capabilities.

LEVERAGE STRATEGIC ALLIANCE WITH GROWING PARTNER

The Company's relationship with General American, the Company's principal
shareholder, provides opportunities for distribution of the Company's products
and services to General American and its affiliates. The Company has benefited
from the internal growth and acquisition activity of General American and its
subsidiaries, with assets under management of General American and its
affiliates increasing at an average rate of approximately 14% per year, from
approximately $5.6 billion as of December 31, 1991 to approximately $10.6
billion as of December 31, 1996. At June 30, 1997, such affiliated assets under
management totaled approximately $12.6 billion.

No assurance can be given that the Company's objectives or strategies will
be achieved. See "Cautionary Statement Regarding Forward-Looking Statements"
and "Risk Factors."

ASSET MANAGEMENT

<PAGE> 23
reporting services. In connection with its discretionary asset management
services, the Company originates and services commercial mortgages and manages
investments in real estate assets. The Company also sponsors and manages private
equity funds investing in insurance and insurance-related companies.

As of June 30, 1997, the Company provided services with respect to
approximately $58.0 billion in assets, of which approximately (i) $23.1 billion
represented assets under discretionary management, (ii) $20.5 billion
represented assets serviced under investment advisory agreements and (iii)
$14.4 billion represented assets receiving investment accounting & reporting
services on a stand-alone basis. This array of services allows the Company to
provide a fully integrated product offering, with some clients utilizing all of
the asset management services the Company offers, and others utilizing only
selected services. Assets serviced by the Company have increased at a compound
annual rate of approximately 35% from December 31, 1991 to December 31, 1996, as
shown in the following table:

<TABLE>
ASSETS SERVICED BY THE COMPANY<F1>
(IN BILLIONS)

<CAPTION>
AVERAGE ASSETS
AS OF ---------------------------------------- AS OF AS OF
12/31/91 1992 1993 1994 1995 1996 12/31/96 6/30/97
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Assets under discretionary
management

Unaffiliated.................................. $ 1.5 $ 3.3 $ 5.4 $ 6.2 $ 7.8 $ 9.5 $10.1 $10.5

Affiliated.................................... 5.6 5.5 6.0 6.6 7.8 9.6 10.6 12.6
----- ----- ----- ----- ----- ----- ----- -----
Total..................................... 7.1 8.8 11.4 12.8 15.6 19.1 20.7 23.1
----- ----- ----- ----- ----- ----- ----- -----
Investment advisory............................... 4.9 5.2 10.0 14.7 15.3 18.3 20.8 20.5

Investment accounting & reporting................. -- -- 1.2 2.6 4.8 9.2 11.7 14.4
----- ----- ----- ----- ----- ----- ----- -----
Total................................. $12.0 $14.0 $22.6 $30.1 $35.7 $46.6 $53.2 $58.0
===== ===== ===== ===== ===== ===== ===== =====

<FN>
- --------

<F1> Since January 1, 1995, the assets of the general account of General
American have been under contract with GAIMCO (now known as Conning Asset
Management Company). General account assets prior to January 1, 1995 were
managed by the investment division of General American, a predecessor of
GAIMCO, and are included in assets under management for years prior to
1995. Data for 1995 and prior periods are presented on a pro forma basis
to include both Conning and GAIMCO assets under management.
</TABLE>

<PAGE> 24
Discretionary Asset Management & Investment Advisory Services. The
Company's assets under discretionary management have increased at a compounded
annualized rate of approximately 24% from December 31, 1991 through December
31, 1996, with assets of General American-related (affiliated) accounts
increasing approximately 14% and assets of other clients (unaffiliated)
increasing approximately 46% over the period. The Company's insurance asset
management services are designed to optimize investment returns for clients
within the constraints imposed by insurance regulatory, accounting, tax and
asset/liability management considerations. The Company utilizes a team-based,
client-oriented approach, drawing upon a variety of insurance specialists,
including researchers, actuaries and investment, financial and tax
professionals, with specific industry expertise, investment class knowledge,
insurance product knowledge, risk analysis, portfolio management and client
relationship skills. The Company supports a variety of asset classes, as shown
in the following table:

<TABLE>
ASSETS UNDER DISCRETIONARY MANAGEMENT
(IN BILLIONS)
<CAPTION>
AS OF
ASSET CLASSES JUNE 30, 1997
<S> <C>
Corporate bonds................................... $ 6.0
Asset-backed securities........................... 4.9
Mortgage loans.................................... 2.4
Municipal bonds................................... 2.2
Government bonds.................................. 1.9
Private placements................................ 2.0
Indexed equity.................................... 1.7
Short-term obligations............................ 1.0
Equity............................................ 0.8
Real estate....................................... 0.2
-----
Total..................................... $23.1
=====
</TABLE>

The Company works with each client individually to conduct an in-depth
analysis of its insurance operations and investment objectives. This broad
strategic approach is designed to address each client's core needs to model
asset and liability durations and manage risk and maximize returns. In
particular, the Company analyzes the client's strategic objectives, operational
forecasts, business needs, cash flows, regulatory and rating agency concerns,
and accounting and tax issues. The Company utilizes a "top down" investment
methodology, beginning with an analysis of macro-economic and capital market
conditions. Additionally, the Company considers the client's current portfolio
characteristics, management's risk tolerance, investment guidelines,
performance benchmarks and desired asset allocation. The Company undertakes
quantitative analyses, including (i) asset/liability analyses, (ii) analyses of
cash flows, interest rate risk and surplus adequacy, (iii) peer group
comparisons and (iv) asset allocation modeling. The Company also utilizes its
insurance related research products, including property/casualty and
life/health profitability models, a loss ratio and loss reserve analysis
service, and a tax optimization model.

The Company assists its clients in the development of new insurance
products by advising them as to investment strategies required to meet the
profitability goals set for such products. The Company is integral to the
product management, administration and distribution of one of General
American's stable value insurance products.

The Company also serves as the investment adviser to several registered
investment companies and unit investment trusts sponsored by General American.
Investment advisory agreements with registered investment companies and unit
investment trusts may be terminated at any time by the entity upon specified
notice, terminate automatically in the event of their assignment, and are
subject to annual renewal by the board of the entity.

The Company also provides stand-alone investment advisory services to
clients who are seeking only business analysis and asset allocation or
diversification advice. Such advice typically includes a review of the
portfolio from the standpoint of liability structure, capital adequacy, return
on equity, asset allocation, regulatory and rating agency implications, and
income and cash flow requirements. As of June 30, 1997, the Company had
approximately $20.5 billion in assets under investment advisory contracts on a
stand-alone basis.

<PAGE> 25
The Company's asset management accounts are each managed pursuant to a
written investment management agreement with the client. Such agreements are
terminable upon relatively short notice (typically 30-90 days) by either party.
In providing discretionary asset management services, the Company generally is
compensated on the basis of fees calculated as a percentage of assets under
management. Fees generally are billed and are payable quarterly and typically
are calculated on the asset value of an account at the beginning or end of a
quarter. The fee schedules typically provide lower incremental fees above
certain levels of managed assets. The Company's investment advisory accounts
are managed pursuant to a written agreement for a specified term, generally one
to three years, pursuant to which the Company generally receives a fixed
periodic fee.

Mortgage Origination and Service of Real Estate. The Company has developed
expertise in the origination and servicing of commercial mortgage loans and the
management of real estate, asset classes which are frequently utilized by life
insurance companies. As of June 30, 1997, the Company managed approximately
$2.5 billion in commercial mortgage loans and approximately $143 million in
investment real estate. The Company has originated more than $2.1 billion of
mortgage loans for its clients since January 1, 1994, most of which were on
behalf of General American and its affiliates. In addition, the Company is
developing opportunities for placements for other insurance company clients and
pension funds. The Company believes it has the capacity, under favorable market
conditions, to generate approximately $900 million in commercial mortgage loans
annually. During the first six months of 1997, the Company originated
approximately $325 million of new mortgage loans. The following chart shows the
growth of the amount of new mortgage loans that the Company has originated
during the period from 1992 through 1996.

NEW MORTGAGE LOAN FUNDINGS
(IN MILLIONS)

[GRAPH]

<TABLE>
<CAPTION>
1992 1993 1994 1995 1996
---- ---- ---- ---- ----

The Company has traditionally focused on originating commercial mortgage
loans generally ranging in size from $2 million to $15 million, with varying
maturities of five to twenty years, secured by office, industrial or retail
properties. The Company also provides development, advisory and management
services with respect to real estate investment properties. The Company
originates, actively monitors and manages its commercial mortgage loan and real
estate portfolios through its St. Louis home office location and eleven field
offices located in Arizona, California <F2>, Colorado <F2>, Florida, Georgia,
Illinois, Missouri, Texas and Washington, D.C. The Company performs a full
array of mortgage loan origination and portfolio management services including
lease analysis, property valuation, economic and financial reviews, tenant
analysis and oversight of default and bankruptcy proceedings. All properties
are inspected each year and evaluated periodically based on internal quality
ratings for purposes of loan loss reserve and internal management.

The Company also provides ongoing servicing, generally as part of an
integrated mortgage loan origination program and in several cases on a
stand-alone basis. As of June 30, 1997, the Company provided mortgage loan
servicing for approximately $2.6 billion of mortgage loans, primarily for
General American and its affiliates. The Company is rated as a master servicer
by Fitch Investors Service, L.P. ("Fitch") and Standard & Poor's, and a
special servicer by Fitch for purposes of servicing securitized loan
portfolios. The Company also provides a wide range of mortgage loan and real
estate accounting services, including reconciliation reports, mortgage loan and
real estate

<PAGE> 26
reporting for regulatory agencies, management and outside clients, and tax
analysis and support. See "--Investment Accounting & Reporting." The Company
established a relationship with an investment banking firm to originate
mortgage loans. In 1995 the Company originated loans for a securitized offering
by such investment banking firm in an amount of $273 million, and the Company
retained the master servicing of the loan portfolio. During the first quarter
of 1997, the Company originated approximately $200 million of mortgage loans
for such firm. Additionally, the Company is expanding efforts to market its
mortgage loan origination and servicing and accounting capabilities to other
life insurance companies.

The Company generally receives a fee associated with loan origination,
which is usually approximately 1% of the loan balance. The Company also
receives ongoing servicing fees and management fees with respect to mortgage
loans in portfolios managed by the Company.

Private Placement Investing. The Company believes it has considerable
expertise in evaluating private placement securities. As of June 30, 1997, the
Company managed approximately $2.0 billion in private placement securities,
most of which were purchased on behalf of General American and its affiliates.
Private placement securities are acquired pursuant to negotiated transactions
between investors and issuers pursuant to exemptions from registration with the
SEC. While less liquid than public securities, private placements often contain
investment characteristics favorable to investors such as more stringent
financial covenants, prepayment protection, collateral or higher yields than
similar public securities. The Company purchases both fixed and floating rate,
U.S. dollar denominated private securities on behalf of its client accounts,
primarily of investment grade quality and primarily according to a "buy and
hold" strategy. Such an investment in a private placement is generally between
$5 million and $15 million.

The Company conducts in-depth reviews of each private placement security's
credit, structure, terms and proposed pricing prior to making a commitment to
purchase a private placement on behalf of a client. The Company considers
credit analysis to be critical to its success in private placement investing
and such credit analysis consists of an evaluation of all aspects of a
borrowing, including analysis of financial statements and ratios, cash flow,
industry and competitive position, operating trends and any collateral securing
the loan.

Investment Accounting & Reporting. As of June 30, 1997, the Company's
investment accounting & reporting services provided stand-alone investment
accounting for approximately $14.4 billion in assets. All $58.0 billion in
assets serviced by the Company are supported by the Company's investment
accounting & reporting system. The Company's investment accounting & reporting
services include management and regulatory reporting on invested assets,
operating income and capital gains and losses. These services have been
designed to address the needs of clients for timely and accurate reporting for
management purposes, as well as the increased information required in filings
with state and federal regulatory authorities regarding assets and liabilities
as well as risk-based capital allocations, including Schedules B and D of the
standard insurance industry annual statutory financial report.

The Company's accounting & reporting system utilizes the Complete Asset
Management, Reporting and Accounting software system (known as CAMRA(TM)) and
the Fully Integrated Loan Management Information Software System (known as
FILMS(TM)) under a software license agreement with SS&C Technologies, Inc.
("SS&C"), effective as of January 27, 1996 (the "License Agreement"). SS&C
represents that it is the owner of the trademarks CAMRA(TM) and FILMS(TM). In
connection with insurance investment accounting, the Company obtains pertinent
client information through frequent and ongoing contact with the client,
portfolio manager, brokers and custodians, in addition to standard industry
sources. The Company utilizes detailed portfolio information as the foundation
for asset allocation and portfolio management as well as to support its
clients' operational and information needs. By utilizing CAMRA(TM), the Company
is able to provide a number of services, such as: (i) portfolio management and
market analyses, including a comprehensive securities database supporting
on-line daily, monthly, quarterly and on-demand calculation of a range of
information, including book and market value, yields, duration, average life
and various user-selected scenarios; (ii) comprehensive accounting and
reporting capabilities, including four accounting bases--
GAAP, statutory, management and tax--exporting data directly to spreadsheets,
word processors and databases for ease of delivery and presentation; (iii)
multi-currency processing, calculating transaction and translation values in
accordance with applicable accounting and insurance industry rules; and (iv)
regulatory compliance, providing performance measurement calculations. The
Company utilizes FILMS(TM) to enable its mortgage professionals to process,
analyze and report on a comprehensive basis information regarding their loan
portfolios. CAMRA(TM) and FILMS(TM) allow for detailed and timely reporting to
the Company's clients, providing them with valuable management tools. Such
reporting is an integral component of the Company's focus on client service.

<PAGE>27
Under the License Agreement, the Company has a perpetual non-exclusive
license to use, maintain and modify its investment accounting & reporting
software, including both CAMRA(TM) and FILMS(TM), in both source code and
object code (the "Software"). The License Agreement permits the Software to
be used by the Company and General American and its subsidiaries for
accounting, reporting and similar purposes in the asset management business and
for outsourcing to customers in the insurance industry. See "Risk
Factors--Risk of System Failure; Dependence on Vendors."

Investment accounting & reporting services are typically provided in
conjunction with insurance asset management services and are therefore subject
to the terms of an overall management agreement. See "--Discretionary Asset
Management & Investment Advisory Services." In a number of cases, however,
clients have retained the Company to provide such services on a stand-alone
basis. In those cases, the services are subject to the terms of a separate
agreement and the Company is generally compensated on the basis of fees
calculated as a percentage of assets serviced.

Private Equity Funds. The Company believes it is a leader in facilitating
the provision of private equity capital to the insurance and insurance-related
industries. Since 1985, the Company has organized five funds that have raised
approximately $360 million in committed capital. The private equity funds have
invested more than $187 million of these proceeds in 38 portfolio company
investments, in connection with financings aggregating to more than $1.0
billion. The Company or a subsidiary acts as the general partner of the funds
and maintains a 1% general partner capital interest. The Company may also
invest as a limited partner in future funds it may organize. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
"Certain Relationships and Related Transactions."

Management believes that limited partners invest in the Company's private
equity funds to obtain the opportunity for potential private equity returns on
investments in insurance or insurance-related enterprises. Investors also
receive exposure to new business strategies and entrepreneurial developments in
the insurance industry. More than 70 limited partners have invested in the
Company's private equity funds since 1985, including financial companies,
banks, pension funds and some of the largest insurance companies in the world.
A number of limited partners have invested in multiple private equity funds
over time.

The following table shows the average private equity committed capital over
the past five years.

<TABLE>
PRIVATE EQUITY COMMITTED CAPITAL
(IN MILLIONS)
<CAPTION>

AVERAGE COMMITTED CAPITAL
---------------------------------------------- AS OF
1992 1993 1994 1995 1996 8/31/97

<S> <C> <C> <C> <C> <C> <C>
Fund I.............. $ 50.5 $ 42.5 $ 28.5 $ 19.0 $ 7.7 $ -0-

Fund II............. 67.7 67.7 67.7 67.7 67.7 67.7

Fund III............ -- 21.2 49.5 56.6 56.6 56.6

Fund IV............. -- -- -- 18.7 38.9 40.4

Fund V.............. -- -- -- -- -- 146.5
------ ------ ------ ------ ------ ------
Total....... $118.2 $131.4 $145.7 $162.0 $170.9 $311.2
====== ====== ====== ====== ====== ======
</TABLE>

These funds have invested in a wide range of insurance, healthcare and
insurance service company segments, including specialty property-casualty,
life, health, managed care, agency, software, and service companies. The
portfolio companies have been in various stages of development, including
start-ups, expansion rounds, buy-outs and recapitalizations.

The Company seeks to develop a working relationship with senior management
of the portfolio companies to jointly maximize shareholder value. An employee
of the Company generally serves as a representative on the board of directors
of the portfolio companies. By providing guidance through board of director
participation, the Company seeks to assist senior management in developing
business strategies, raising capital in the public and private markets and
acquiring new or complementary businesses. Investors in the funds have become
co-investors, joint venture partners, reinsurers or customers to over half of
the funds' portfolio companies.

<PAGE>28
Subject to the ability to raise capital, the Company currently plans to
maintain several funds at any point in time, reflecting the approximate ten
year life cycle of the funds. The objective of the funds is to liquidate their
investments through public offerings, sale of the portfolio company or the
fund's investment, redemption or otherwise. Since inception, approximately 15
portfolio companies have emerged as public entities. The Company receives
annual management fees from the private equity funds of approximately 2% of
committed funds and a specified interest in the cumulative net profit. Certain
of the Company's professionals share in the Company's share of any profit
participation. See "Certain Relationships and Related Transactions--
Participation in Private Equity Funds."

INSURANCE RESEARCH

Name recognition associated with the Company's insurance research business
is an integral component of the marketing strategy for the Company's insurance
asset management services. The Company believes that Conning & Company is
viewed as one of the leading insurance industry investment research firms in
the United States. The Company publishes in-depth insurance industry research
covering major insurance industry trends, products, markets and business
segments. The Company also publishes stock research on a broad group of
publicly-traded insurance companies for some of the largest United States
institutional money managers as well as pension funds, banks, mutual funds, and
insurance companies. The Company's in-depth insurance industry research has
been targeted to senior executives in the insurance industry for more than 40
years, and its Strategic Studies Series is subscribed to by 82 of the 100
largest U.S. insurance companies (based on 1996 premiums as reported by
industry sources). During 1996 and the first six months of 1997, the Company
published the following studies:

LIFE/HEALTH/ASSET ACCUMULATION

The High Net Worth Market for Financial Services--Leveraging Customer
Specialization to Achieve Sustainable Competitive Advantage
The Pension/Retirement Assets Business--Sleeping With the Enemy
The Rise of Multiple Life Distribution Channels--Covering All Bases
Individual Annuities--Rising Tide Will Not Lift All Carriers

FINANCIAL

Alternative Markets--Evolving to a New Layer
Lloyd's of London--A New World of Capital. Is the Genie Out of the Bottle?
Mergers & Acquisitions and Public Equity Offerings--Sink, Swim Fast or be
Swallowed
Technology I--Electronic Commerce and the Internet
Banking--New Opportunities for Banks in Insurance

HEALTHCARE

Medicare and Medicaid--The Private Sector Steps to the Plate
Reinvesting Individual Disability Income Insurance--The Long Road Back
The Health Care Marketplace--The Move Toward Managed Care Accelerates

PROPERTY/CASUALTY

The Property-Casualty Underwriting Cycle--Lifting the Veil of Abnormal
Losses
Insurance Fraud--The Quiet Catastrophe
Property-Casualty Expenses--Building Muscles While Losing Fat
Personal Auto Insurance--Winning Strategies for the Year 2000
The Independent P/C Agent--The Squeeze Is Still On
Strategic Customer Specialization--The Patchwork Quilt of Minority Owned
Businesses

REINSURANCE

Outlook for the Reinsurance Industry--A New Definition of Quality
Life and Health Reinsurance--Pockets of Opportunity

<PAGE> 29
In addition, the Company from time to time participates in the underwriting
of public offerings of equity securities for insurance and insurance-related
companies. Since 1993, the Company has participated in syndicates for
approximately 120 insurance-related underwritings for both initial and
follow-on public offerings. Payment for the Company's research services is
primarily in the form of commissions derived from securities transactions
effected by the Company and, to a lesser extent, subscription fees for research
publications. In addition, the research services revenues received by the
Company reflect underwriting fees with participation in public offerings of
insurance and insurance-related companies.

ACCOUNTING, ADMINISTRATION AND OPERATIONS

The Company's accounting, administration and operations personnel are
responsible for financial controls, internal and external financial reporting,
compliance with regulatory and legal requirements, office and personnel
services, the Company's management information and telecommunications systems,
and the processing of the Company's securities transactions. General American
provides certain of these functions pursuant to an Administrative Services
Agreement. See "Certain Relationships and Related Transactions--Transactions
with General American." The Company contracts with outside services for
securities pricing information in connection with its asset management and
investment accounting & reporting services. See "Risk Factors--Risk of Systems
Failure; Dependence on Vendors."

COMPETITION

All of the Company's businesses are conducted in highly competitive
markets. The Company competes with a large number of other asset management
firms as well as broker-dealers, insurance companies, commercial banks and
others in the business. Conning Asset Management Company competes for assets
under discretionary management with a large number of specialty and diversified
investment advisory firms and divisions, many of whom are larger and have
access to greater resources than the Company. The asset management industry is
characterized by relatively low cost of entry, and new investment advisory
entities may be formed which may compete with the Company. The Company's focus
on the insurance industry makes it particularly subject to direct competition
from firms or divisions which specialize in providing services to the insurance
industry. Additionally, other insurance companies may determine to spin out
their investment management divisions, which might then become significant
competitors. The Company believes that the most important factors affecting
competition for investment management clients are the knowledge and reputations
of investment managers, customer service, performance records and pricing
policies.

The Company's mortgage origination and servicing business faces competition
from local and national mortgage brokerage firms, other direct institutional
lenders and services, lending programs from investment banking firms and other
financial institutions, many of whom are larger and have access to greater
resources than the Company. The Company believes that the most important
factors affecting competition for the origination of commercial mortgage loans
are price, loan quality and service. For most customers, the Company's
investment accounting & reporting services face competition from certain other
asset management firms as well as software companies, including SS&C. The
Company believes the most important factors affecting competition for
investment accounting & reporting services are the quality and performance of
the Company's software and service, and to a lesser extent price. The Company's
private equity business faces competition for raising capital and making equity
investments from securities firms, venture capitalists, commercial banks,
investment banks and insurance companies, many of whom are larger and have
access to greater resources than the Company. The Company believes that the
most important factors affecting competition for the sponsorship and management
of such funds are performance records and the reputations and expertise of
sponsors. The Company's insurance research business faces competition from
traditional securities firms and investment banks in providing research on
publicly-traded insurance industry related companies and research on the
insurance industry. The Company believes that the most important factors
affecting competition are the quality and number of the insurance research
professionals, the breadth of coverage and the number of topics covered.

There can be no assurance that the Company will be able to compete
successfully against current and future competitors or that competitive
pressures faced by the Company will not materially and adversely affect the
Company's business, financial condition, results of operations and business
prospects. See "Risk Factors--Significant Industry Competition."

<PAGE> 30
FACILITIES

The Company's headquarters and certain of its executive offices are located
in an approximately 25,000 square foot office space located at 700 Market
Street, St. Louis, Missouri 63101 pursuant to a lease from General American.
The Company anticipates leasing up to an additional 10,000 square feet at this
location during 1997 on substantially the same terms and conditions. See
"Certain Relationships and Related Transactions--Transactions with General
American." The Company also maintains executive offices in a 49,500 square
foot office space located at 185 Asylum Street, Hartford, Connecticut pursuant
to a lease expiring in 2005 with annual base rental expense of approximately
$1.0 million until 1999 and a base rental expense of approximately $1.2 million
from 1999 until 2004, subject to increases for taxes, insurance and operating
expenses. The Company also leases from third parties, or subleases from General
American, each of eleven other office sites for its various mortgage loan and
real estate offices located in Arizona, California (2), Colorado (2), Florida,
Georgia, Illinois, Missouri, Texas and Washington, D.C.

The Company's principal offices in St. Louis and all but one of the remote
office spaces described above are rented pursuant to written leases and a
sublease between the Company and General American. See "Certain Relationships
and Related Transactions--Transactions with General American." The terms of
such leases and the sublease (collectively, the "Leases"), were designed to
approximate the cost to General American of owning or leasing such spaces. The
Company believes that the prices and other terms under the Leases are at least
as favorable as those prices and terms being offered generally in the same
marketplaces by unrelated parties for comparable spaces.

The Company believes its facilities have been generally well maintained,
are in good operating condition, and, upon lease of the additional space
described above, will be adequate for its current requirements.

EMPLOYEES

As of June 30, 1997, the Company employed approximately 250 employees. None
of the Company's employees is subject to a collective bargaining agreement. The
Company believes that its relations with its employees are good.

LEGAL PROCEEDINGS

On November 14, 1994, the Insurance Commissioner of the Commonwealth of
Pennsylvania, in its capacity as statutory liquidator of Rockwood Insurance
Company ("Rockwood"), initiated an action in the Commonwealth Court of
Pennsylvania against Conning & Company and certain of the officers of Conning &
Company styled Maleski v. Conning & Company, et al., No. 94-7507 (subsequently
amended to Linda S. Kaiser v. Conning). The action arises out of the
Commissioner's previous retention of Conning & Company as placement agent for
the sale of one of Rockwood's subsidiaries. The complaint alleges breach of
fiduciary duty, breach of contract, professional negligence, bad faith and
conspiracy, and seeks compensatory damages for approximately $6.5 million and
unspecified punitive damages, costs and interest. Conning & Company is
defending the action vigorously and the Company believes that Conning & Company
has meritorious defenses to all claims. Although the matter is subject to
uncertainty, as it remains in the preliminary stages and discovery has not been
completed, the Company believes that the probable outcome should not have a
material adverse effect upon the Company.

<PAGE> 31
SELECTED CONSOLIDATED FINANCIAL DATA

The selected consolidated financial data presented below should be read in
conjunction with the Company's Consolidated Financial Statements and the Notes
thereto included elsewhere in this Prospectus. The income statement and
balance sheet data for, and as of the end of, each of the years in the
three-year period ended December 31, 1996 are derived from the financial
statements of the Company, which financial statements have been audited by
KPMG Peat Marwick LLP, independent certified public accountants. The
consolidated financial statements for each of the years in the three-year
period ended December 31, 1996, and the report thereon, are included elsewhere
in this Prospectus. The selected financial data presented below for the years
ended December 31, 1992 and 1993 and as of December 31, 1992, 1993 and 1994
are derived from audited financial statements not included in this Prospectus.
The selected consolidated financial data for the six months ended June 30,
1997 and the six months ended June 30, 1996 have been derived from the
unaudited consolidated financial statements of the Company, which have been
prepared on the same basis as the audited consolidated financial statements of
the Company and, in the opinion of management, reflect all normal recurring
adjustments necessary for a fair presentation of the financial position and
results of operations as of the end of and for such periods. The information
set forth below should be read in conjunction with "Management's Discussion
and Analysis of Financial Condition and Results of Operations," the Company's
Consolidated Financial Statements and the Notes thereto included elsewhere in
this Prospectus. Also set forth below is certain operating and financial
information.

<TABLE>
<CAPTION>
YEARS ENDED
DECEMBER 31,<F2> SIX MONTHS ENDED
YEARS ENDED DECEMBER 31,<F1> JUNE 30,
-------------------------------------- ------------------ ----------------
1992 1993 1994 1995 1995 1996 1996 1997
PRO FORMA
(IN THOUSANDS, EXCEPT PER SHARE DATA)
INCOME STATEMENT DATA:
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues:
Asset management and related
fees......................... $1,716 $2,446 $3,484 $24,050 $30,675 $40,456 $19,109 $24,079
Research services.............. 0 0 0 4,090 9,480 12,148 6,515 6,465
Other income................... 51 36 57 663 996 1,062 602 378
------ ------ ------ ------- ------- ------- ------- -------
Total revenues............. 1,767 2,482 3,541 28,803 41,151 53,666 26,226 30,922
------ ------ ------ ------- ------- ------- ------- -------
Expenses:
Employee compensation and
benefits..................... 0 0 0 12,027 18,336 26,002 11,927 15,091
Amortization of goodwill and
other........................ 0 0 0 1,289 2,911 2,721 1,391 1,318
All other expenses............. 935 1,141 1,429 9,195 12,515 13,151 6,962 7,134
------ ------ ------ ------- ------- ------- ------- -------
Total expenses............. 935 1,141 1,429 22,511 33,762 41,874 20,280 23,543
------ ------ ------ ------- ------- ------- ------- -------
Operating income................... 832 1,341 2,112 6,292 7,389 11,792 5,946 7,379
Interest expense............... 0 0 0 521 1,365 729 412 162
------ ------ ------ ------- ------- ------- ------- -------
Income before provision for income
taxes............................ 832 1,341 2,112 5,771 6,025 11,063 5,534 7,217
Provision for income taxes......... 311 507 827 2,359 2,739 4,851 2,431 3,119
------ ------ ------ ------- ------- ------- ------- -------
Net income................. $ 521 $ 834 $1,285 $ 3,412 $ 3,286 $ 6,212 $ 3,104 $ 4,098
====== ====== ====== ======= ======= ======= ======= =======
Preferred stock dividends.......... 0 0 0 351 906 906 446 503
------ ------ ------ ------- ------- ------- ------- -------
Net earnings available to common
shareholder...................... $ 521 $ 834 $1,285 $ 3,061 $ 2,380 $ 5,306 $ 2,658 $ 3,595
====== ====== ====== ======= ======= ======= ======= =======
Pro forma net income per common
share and common share
equivalents<F3>.............. $ 0.59 $ 0.37
======= =======

<FN>
- --------
Footnotes on next page.

<PAGE> 32

<CAPTION>
AS OF DECEMBER 31, AS OF JUNE 30,
-------------------------------------------------- ---------------------
1992 1993 1994 1995 1996 1997 1997
AS
ADJUSTED<F4>
(IN THOUSANDS)
BALANCE SHEET DATA:
<S> <C> <C> <C> <C> <C> <C> <C>
Total assets....................... $1,395 $1,386 $1,683 $46,177 $50,020 $49,959 $
Long term debt..................... 0 0 0 9,000 2,000 0
Total liabilities.................. 437 594 356 24,552 20,870 15,816
Convertible preferred stock........ 0 0 0 17,003 24,782 34,075
Total common shareholder's
equity........................... 958 792 1,327 4,623 4,368 68
Number of common shares outstanding
end of period.................... 0.1 0.1 0.1 6,710 6,710 6,820

<CAPTION>
Set forth below is certain operating and financial information.

--------------------------------------------------- AS OF
1992 1993 1994 1995 1996 6/30/97
(IN BILLIONS, EXCEPT AS NOTED)
<S> <C> <C> <C> <C> <C> <C>
OTHER OPERATING DATA:
Average assets under discretionary management<F5>:
Unaffiliated.................................. $ 3.3 $ 5.4 $ 6.2 $ 7.8 $ 9.5 $ 10.5
General American & affiliates................. 5.5 6.0 6.6 7.8 9.6 12.6
------- ------- ------- ------- ------- -------
Total..................................... 8.8 11.4 12.8 15.6 19.1 23.1
Average assets under advisory services............ 5.2 10.0 14.7 15.3 18.3 20.5
Average assets under accounting & reporting
services........................................ 0.0 1.2 2.6 4.8 9.2 14.4
------- ------- ------- ------- ------- -------
Total assets serviced..................... $ 14.0 $ 22.6 $ 30.1 $ 35.7 $ 46.6 $ 58.0
======= ======= ======= ======= ======= =======
Pro forma revenues (in thousands)<F6>............. $23,656 $31,567 $30,787 $41,151 $53,666 $30,922
EBITDA (in thousands)<F7>......................... $ 832 $ 1,341 $ 2,112 $ 7,751 $15,331 $ 9,139

<FN>
- --------

<F4> Gives effect to the Capital Stock Conversions and the sale of 2,500,000
shares of Common Stock offered hereby at an assumed initial public
offering price of $ ---------- per share and the receipt of the estimated
net proceeds therefrom.

<F5> Since January 1, 1995, the assets of the general account of General
American have been under contract with GAIMCO (now known as Conning Asset
Management Company). General account assets prior to January 1, 1995 were
managed by the investment division of General American, a predecessor or
GAIMCO, and are included in assets under management for 1992, 1993 and
1994. Data for 1995 and prior periods is presented on a pro forma basis to
include both Conning and GAIMCO assets under management.

<PAGE> 33
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

The Company's revenues consist of asset management and related fees,
research service fees and other income.

The Company's asset management and related revenues derive from three
sources: asset management fees, private equity fund management fees and fees
related to the Company's mortgage and real estate activities. Asset management
fees primarily reflect fees for discretionary asset management services
provided to insurance company clients, including General American and its
affiliates. Asset management fees are generally a function of the overall fee
rate charged to each account and the level of assets under management. A
portion of revenues are generated when the Company provides investment advisory
services as well as when the Company provides investment accounting and
reporting services on a stand-alone basis. Assets under management are affected
by the addition of new client accounts or client contributions to existing
accounts, withdrawals of assets from or terminations of client accounts and
investment performance, which may depend on general market conditions.

The Company's private equity fund management fees represent annual
management fees based on a percentage of committed capital and a participation
in specified net gains of the funds. The Company's commercial mortgage fees
primarily reflect fees associated with loan originations, which usually
approximate 1% of the loan balance, as well as fees associated with ongoing
servicing and management fees with respect to loans in portfolios managed by
the Company. In addition to loans for General American and its affiliates, the
Company has originated mortgage loans in a securitized offering for an
investment banking firm.

Payment for the Company's research services is primarily in the form of
commissions derived from securities transactions effected by the Company and,
to a lesser extent, subscription fees for research publications. In addition,
the research services revenues received by the Company reflect underwriting
fees with participation in public offerings of insurance and insurance-related
companies.

Because amortization and depreciation do not require the use of cash, for
purposes of the following discussion, management believes earnings before
interest, taxes, depreciation and amortization ("EBITDA") to be an additional
important measure of the Company's performance. EBITDA is commonly referred to
as a non-GAAP measure and therefore may not be comparable to similarly titled
measures reported by other companies. The Company's EBITDA is computed by
adding operating income and "amortization of goodwill and other" from the
statements of income and "depreciation and amortization" from the statements
of cash flows.

EFFECTS OF THE STRATEGIC MERGER

The Company was formed on August 11, 1995 as a holding company to effect
the Strategic Merger. See "Certain Relationships and Related Transactions"
and Note 1 of Notes to the Company's Consolidated Financial Statements. Upon
consummation of the Strategic Merger, General American owned 100% of the
outstanding Common Stock. If all of the outstanding shares of convertible
preferred stock were converted as of the date of the Strategic Merger, General
American would have owned approximately 65% of the outstanding Common Stock,
without giving effect to outstanding stock options. Under generally accepted
accounting principles, the GAIMCO contribution was recorded at historical book
value as a combination of entities under common control. The Conning & Company
contribution was recorded utilizing the purchase accounting method. The
historical financial statements include the operations and financial position
of GAIMCO through July 31, 1995, and consolidated operations thereafter and
consolidated financial position at December 31, 1995 and December 31, 1996. The
excess of purchase price over the fair value of net assets acquired resulted in
goodwill of $20.3 million.

As a result of the required accounting presentation and the inherent
difficulties of analyzing the historical financial statements for periods prior
to 1996 and comparing them to the 1996 results, also included is financial
information on a pro forma basis as if the Strategic Merger occurred on January
1, 1995. The following discussion begins with a comparison of the historical
financial statements and follows with a discussion of results based on the pro
forma financial information which is found in Note 2 of Notes to the Company's
Consolidated Financial Statements. See also "Selected Consolidated Financial
Data."

32
<PAGE> 34
RESULTS OF OPERATIONS

HISTORICAL FINANCIAL STATEMENTS

Statement of Income for the six months ended June 30, 1997 compared to the
six months ended June 30, 1996

Total revenues increased 18% from $26.2 million for the first six months of
1996 to $30.9 million for the first six months of 1997, primarily as the result
of the addition of new clients and growth in assets of existing clients. Assets
under discretionary management increased from approximately $19.0 billion at
June 30, 1996 to approximately $23.1 billion at June 30, 1997. Asset management
and related fees increased 26% from $19.1 million for the six month period
ended June 30, 1996 to $24.1 million for the six month period ended June 30,
1997. Fees for research services remained relatively constant at $6.5 million
for the first six months of 1996 and for the first six months of 1997. During
the second quarter of 1996, Conning & Company was a co-manager of a public
offering which produced revenues of $1.4 million. Excluding the effect on
revenues from this transaction, fees for research services would have increased
27% from the first six months of 1996 to the first six months of 1997. Other
income decreased by approximately $0.2 million from $0.6 million for the first
six months of 1996 to $0.4 million for the first six months of 1997 due to the
$0.3 million non-recurring realized gain from the sale of securities that
occurred in the first quarter of 1996.

Total expenses increased 16% from $20.3 million for the first six months of
1996 to $23.5 million for the first six months of 1997, due primarily to
increased employee compensation and benefits. Employee compensation and
benefits increased 27% from $11.9 million for the six months ended June 30,
1996 to $15.1 million for the six months ended June 30, 1997, primarily due to
additional staffing to keep pace with increased revenue activity and additional
incentive compensation accruals as a result of the increased operating income.

EBITDA increased 18% from $7.7 million in the first six months of 1996 to
$9.1 million in the first six months of 1997 from the increased activity
described above.

Interest expense decreased by more than half from $0.4 million for the six
months ended June 30, 1996 to $0.2 million for the six months ended June 30,
1997 due to the continuing reduction of principal on long term debt payable to
affiliates. The final principal payment was made in February, 1997.

Provision for income taxes increased 29% from $2.4 million for the first
six months of 1996 to $3.1 million for the first six months of 1997 as a direct
result of the increase in income before provision for income taxes. The
effective federal and state income tax rates remained relatively constant for
the six month periods ended June 30, 1997 and June 30, 1996 and were 43.9% and
43.2%, respectively.

As a result of all of the above, net income increased 32% from $3.1 million
for the first six months of 1996 to $4.1 million for the first six months of
1997.

Statement of Income for 1996 compared to 1995

All consolidated revenue and expense categories are greater in 1996 than
1995 because each consolidated revenue and expense category includes the full
year's results of Conning & Company in 1996 and only five months of Conning &
Company results in 1995. The effective federal and state tax rate increased
from 40.9% in 1995 to 43.8% in 1996. The higher state tax rate from Conning &
Company's operations is included for the full year in 1996 and for only five
months in 1995.

Goodwill arising from the Strategic Merger in the amount of $20.3 million
is being amortized on a straight-line basis over 20 years. This resulted in
amortization expense of $0.4 million in 1995 and $1.0 million in 1996.

Statement of Income for 1995 compared to 1994

All revenue and expense categories increased substantially from 1994 to
1995 principally due to the following: (i) 1995 includes the results of Conning
& Company for the five months ended December 31, 1995 and there are no Conning
& Company results included in 1994; and (ii) the contract to manage the general
account assets of General American by GAIMCO was entered into effective January
1, 1995. The effective federal and state income tax rate increased from 39.2%
in 1994 to 40.9% in 1995 due to the inclusion of goodwill in 1995 and the
higher state tax rate applied to Conning & Company's results for the five
months ended December 31, 1995.

33
<PAGE> 35

PRO FORMA FINANCIAL INFORMATION

Statement of Income for 1996 compared to Pro Forma 1995

Asset Management and Related Fees. Asset management and related fees
increased 32% from $30.7 million in 1995 to $40.5 million in 1996 primarily due
to the addition of new clients and growth in assets of existing clients, and to
a lesser extent as a result of a resurgence in the real estate market and
growth in mortgage assets from new and existing clients. Assets under
management increased 18% from $17.6 billion at December 31, 1995 to $20.7
billion at December 31, 1996, 6% because of additions of new clients and 12%
because of growth of assets of existing clients. Private equity fund management
and related fees increased 21% from $3.9 million in 1995 to $4.7 million in
1996 due primarily to the March 1996 completion of Fund IV with committed
capital of $40 million. See "Business--Private Equity Funds."

Research Fees. Research services revenues increased 28% from $9.5 million
in 1995 to $12.1 million in 1996 due primarily to the increased capital markets
activity in the insurance industry and the increase in core research revenues
in 1996. Conning is often a member of underwriting syndicates of insurance
company offerings and twice during 1996 acted as co-manager of a secondary
offering. In the aggregate, the Company generated revenues from underwriting
activities of $4.0 million in 1996, as compared to $1.2 million in 1995.
Underwriting revenues are highly volatile, depending on a variety of factors,
including market conditions and transaction activity; accordingly, no assurance
can be given as to the amount of such revenues, if any, that may arise in
future periods.

Other Income. Other income remained virtually unchanged at $1.1 million,
primarily reflecting miscellaneous non-recurring revenues.

Expenses. Employee compensation and benefits increased 42% from $18.3
million in 1995 to $26.0 million in 1996 primarily due to the higher incentive
compensation as a result of the large increase in operating results from 1995
to 1996, as well as additions to staff during 1996. The Company's incentive
compensation practice is based on the level of and growth in the Company's
operating profits. Other operating expenses increased 6% from $12.5 million in
1995 to $13.2 million in 1996, reflecting additional ancillary costs from
increased hiring and increased marketing expenses. Goodwill of $20.3 million
resulting from the Strategic Merger is being amortized on a straight-line basis
over 20 years. Amortization of goodwill and other charges totaling $2.9 million
in 1995 and $2.7 million in 1996 are noncash expenses and do not affect cash
available for other operating or capital needs.

EBITDA increased 46% from $10.5 million in 1995 to $15.3 million in 1996
from the increased activity described above.

Interest Expense. Interest expense decreased 47% from $1.4 million in 1995
to $0.7 million in 1996 due primarily to prepayments of debt during 1996. Debt
outstanding was $9.0 million and $2.0 million at December 31, 1995 and 1996,
respectively. Such debt arose from the Strategic Merger and was payable to
General American. See "Certain Relationships and Related Transactions."

Income Taxes. The provision for income taxes increased $2.1 million from
$2.7 million in 1995 to $4.8 million in 1996 due to the increase in pre-tax
earnings of the Company.

Net Income. As a result of all of the above, net income increased $2.9
million from $3.3 million in 1995 to $6.2 million in 1996.

Statement of Income for 1995 compared to 1994

The investment management contract between GAIMCO and General American
relating to the General American--General Account assets of $5.2 billion was
entered into effective January 1, 1995. As such, the Company believes
comparisons between 1995 and 1994, even on a pro forma basis after giving
effect to the Strategic Merger, are not useful.

LIQUIDITY AND CAPITAL RESOURCES

For purposes of this discussion, see Note 1 of Notes to the Company's
Consolidated Financial Statements for the principal operating entities that are
included as part of the Company.

The Company's business is not capital intensive. Working capital
requirements for the Company have historically been provided almost exclusively
by operating cash flow. It is expected that such cash flows will continue to
serve as the principal source of working capital for the Company for the near
future.

<PAGE> 36
At June 30, 1997, the Company's capital structure included 6,710,000 shares
of Common Stock, 110,000 shares of Non-Voting Common Stock, 3,190,000 shares of
Series A Convertible Preferred Stock and 365,000 shares of Series B Convertible
Preferred Stock. The Series A Convertible Stock is entitled to quarterly
dividends, equal to the 90 day United States Treasury Bill rate as in effect
from time to time. Such dividends amounted to approximately $446,600 for the
period commencing on January 1, 1997 and ending on June 30, 1997. The Series B
Convertible Preferred Stock which was issued commencing in November 1996 is
entitled to quarterly dividends of 5% per annum, or $56,280 in the aggregate,
through June 30, 1997. Upon the completion of this offering, it is anticipated
that all of the Non-Voting Common Stock and Series A and Series B Convertible
Preferred Stock will have been converted to Common Stock and the Company will
no longer have any preferred stock outstanding.

Conning & Company is subject to the net capital requirements imposed on
registered broker-dealers by the Exchange Act. See "Regulation." At December
31, 1996, Conning & Company had net capital (as defined by the Exchange Act) of
approximately $2.4 million, which was approximately $1.8 million in excess of
the regulatory minimum, and at June 30, 1997, Conning & Company had net capital
of approximately $3.5 million, which was approximately $2.9 million in excess
of the regulatory minimum. Conning & Company has in place a revolving
subordinated loan facility with a commercial bank for $2.0 million that, when
utilized, qualifies as capital for purposes of the Exchange Act's net capital
rules. The agreement expires on December 31, 1997 and management believes that
such line will be renewed at the end of its current term. Any amounts drawn
under such facility would bear interest based on a fixed rate at the then
prevailing rate plus a specified amount per annum.

As of June 30, 1997, the Company had no outstanding long-term debt. The
Company had total outstanding long-term debt at December 31, 1996 in the
principal amount of $2.0 million. Such debt arose from the Strategic Merger and
was payable to General American in the initial principal amount of $13.0
million bearing interest at an annual rate of 7.0%. See "Certain Relationships
and Related Transactions." The remaining debt was paid in full in February
1997.

The Company or a subsidiary acts as the general partner of certain private
equity funds and maintains a 1% general partner capital interest in such funds.
The Company may also invest as a limited partner in future funds it may
organize. See "Certain Relationships and Related Transactions." Interests in
such private equity funds are generally illiquid.

The $ ----- in estimated net proceeds of this offering will be used for
general corporate purposes. The Company's business strategy contemplates that it
will seek to complement internal growth with strategic investments and
acquisitions. Accordingly, a portion of the net proceeds may also be used for
acquiring related businesses or investing in strategic or joint venture
relationships. The Company has no present understandings, agreements or
commitments with respect to any such acquisition, and no assurance can be given
that any such acquisition will take place. Pending application to the uses
described above, the Company intends to invest the net proceeds of this offering
in short-term, investment-grade, interest-bearing securities.

NEW ACCOUNTING PRONOUNCEMENT

In February 1997, the Financial Accounting Standards Board issued SFAS No.
128, "Earnings Per Share." SFAS No. 128 specifies new standards designed to
improve the earnings per share ("EPS") information provided in financial
statements by simplifying the existing computational guidelines, reviewing the
disclosure requirements and increasing the comparability of EPS data on an
international basis. Some of the changes made to simplify the EPS computations
include: (a) eliminating the presentation of primary EPS and replacing it with
basic EPS, with the principal difference being that common stock equivalents
are not considered in computing basic EPS, (b) eliminating the modified
treasury stock method and the three percent materiality provision and (c)
revising the contingent share provisions and the supplemental EPS data
requirements. SFAS No. 128 also makes a number of changes to existing
disclosure requirements. SFAS No. 128 is effective for financial statements
issued for periods ending after December 15, 1997, including interim periods.
The Company has not yet determined impact of the implementation of SFAS No.
128.

IMPACT OF INFLATION

The Company does not believe that inflation has had a significant impact on
the Company's consolidated operations.

<PAGE> 37
REGULATION

The Company's business and the investment management industry in general
are subject to extensive regulation in the United States at both the federal
and state level, as well as by SROs. A number of federal regulatory agencies
are charged with safeguarding the integrity of the securities and other
financial markets and with protecting the interests of customers participating
in those markets. The SEC is the federal agency that is primarily responsible
for the regulation of investment advisers and broker-dealers doing business in
the United States, and the Board of Governors of the Federal Reserve System
promulgates regulations applicable to securities credit transactions involving
broker-dealers and certain other United States institutions. Investment
advisers and broker-dealers are subject to registration and regulation by state
securities regulators in those states in which they conduct business. Industry
SROs, each of which has authority over the firms that are its members, include
the NASD and national securities exchanges.

Conning & Company and Conning Asset Management Company are registered as
investment advisers with the SEC. As investment advisers, each is subject to
the requirements of the Advisers Act and the SEC's regulations thereunder.
They, and their employees engaged in advisory services, are also subject to
certain state securities laws and regulations, and to state laws regarding
fiduciaries. Federal and state regulations provide, among other things,
limitations on the ability of investment advisers to charge performance-based
or non-refundable fees to clients, record-keeping and reporting requirements,
disclosure requirements, limitations on principal transactions between an
adviser or its affiliates and advisory clients, requirements as to fees paid to
solicitors, restrictions on commission and fee arrangements with
broker-dealers, and advertising restrictions, as well as general anti-fraud
prohibitions. The state securities law requirements applicable to employees of
investment advisers include certain qualification requirements as to advisory
employees. In addition, Conning Asset Management Company, as investment adviser
to two mutual funds registered under the Investment Company Act, is subject to
requirements under the Investment Company Act and the SEC's regulations
thereunder. The Company's mortgage origination and servicing activities are
subject to the licensing requirements of certain states. Such requirements
include, among other things, record-keeping and reporting requirements,
procedures for handling funds, and requirements that certain employees obtain
and maintain appropriate licenses.

In connection with the Company's private equity activities, Conning &
Company, its affiliates and the private equity funds which they manage are
relying on exemptions from registration under the Investment Company Act, the
Securities Act and state securities laws. Failure to meet the requirements of
any such exemptions could have a material adverse effect on the Company, its
affiliates and the private equity funds they manage, including, without
limitation, with respect to the manner in which they carry out their investment
activities and on the compensation received by Conning & Company and its
affiliates from the private equity funds.

Conning & Company is registered as a broker-dealer with the SEC and in
Connecticut, New York and Texas, and is a member of, and subject to regulation
by, the NASD.

As a result of federal and state broker-dealer registration and SRO
memberships, Conning & Company is subject to overlapping schemes of regulation
which cover many aspects of its securities business. Such regulations cover
matters including capital requirements, the use and safekeeping of customers'
funds and securities, record keeping and reporting requirements, supervisory
and organizational procedures intended to assure compliance with securities
laws and to prevent the improper trading on material nonpublic information,
employee-related matters, including qualification and licensing of supervisory
and sales personnel, limitations on extensions of credit in securities
transactions, clearance and settlement procedures, requirements for the
registration, underwriting, sale and distribution of securities and rules of
the SROs designed to promote high standards of commercial honor and just and
equitable principles of trade. A particular focus of the applicable regulations
concerns the relationship between broker-dealers and their customers. As a
result, many aspects of the broker-dealer customer relationship are subject to
regulation, including in some instances "suitability" determinations as to
certain customer transactions, limitations in the amounts that may be charged
to customers, timing of proprietary trading in relation to customers' trades
and disclosures to customers.

Conning Asset Management Company is a fiduciary under ERISA and the
Internal Revenue Code of 1986, as amended (the "Code"), and regulations
thereunder with respect to the investments of its discretionary asset
management clients which are employee benefit plans subject to ERISA and with
respect to the investments of portfolios managed by the Company that contain
assets of plans subject to ERISA. ERISA and the Code impose

<PAGE> 38
certain duties on persons who are fiduciaries of a plan and prohibit certain
transactions involving the assets of a plan and its fiduciaries or other
interested parties. Under ERISA and the Code, any person who exercises any
authority or control over the management or disposition of the assets of a plan
is generally considered to be a fiduciary of the plan. Under ERISA or the Code,
in situations where the Company and its affiliates are providing investment
management or other services to a plan, (i) the Company's actions would be
governed by prudence and other fiduciary responsibility standards and (ii)
certain transactions in which the Company might seek to engage could constitute
"prohibited transactions." If a prohibited transaction occurs for which no
exemption is available, the Company and any other party in interest that has
engaged in the prohibited transaction could be required, among other things,
(i) to restore to the plan any profit realized on the transaction, (ii) to
reimburse the plan for any losses suffered as a result of the transaction,
(iii) to pay an excise tax equal to 10% of the amount involved in the
prohibited transaction for each year the transaction continues and (iv) unless
the transaction is corrected within statutorily required periods, to pay an
additional tax equal to 100% of the amount involved in the transaction. Plan
fiduciaries who participate in transactions with the Company could, under
certain circumstances, be liable for prohibited transactions or other
violations as a result of an investment or as co-fiduciaries for actions taken
by or on behalf of the plan by the Company.

Compliance with many of the regulations applicable to the Company involves
a number of risks, particularly because applicable regulations in a number of
areas, such as those governing affiliated transactions involving clients, may
be subject to varying interpretation. Regulators make periodic examinations and
review annual, monthly and other reports on the Company's operations and
financial condition. In the event of a violation of or non-compliance with any
applicable law or regulation, governmental regulators and SROs may institute
administrative or judicial proceedings that may result in censure, fine, civil
penalties (including treble damages in the case of insider trading violations),
criminal penalties, the issuance of cease-and-desist orders, the deregistration
or suspension of the non-compliant broker-dealer or investment adviser, the
suspension or disqualification of the broker-dealer's or investment adviser's
officers or employees, the removal of the Company from its role as a fiduciary
with respect to the investments of assets subject to ERISA and other adverse
consequences. The Company has not experienced any such penalties to date. Such
violations or non-compliance could also subject the Company, and/or its
employees to civil actions by private persons. As an underwriter from time to
time, Conning & Company is exposed to liability under federal and state
securities laws and court decisions, including decisions with respect to
underwriters' liability and limitations on indemnification of underwriters by
issuers. For example, a firm that acts as an underwriter may be held liable for
material misstatements or omissions of fact in a prospectus used in connection
with the securities being offered or for statements made by its securities
analysts or other personnel. Any governmental, SRO or private proceeding
alleging violation of or non-compliance with laws or regulations could have a
material adverse effect upon the Company's business, financial condition,
results of operations and business prospects.

The regulatory environment in which the Company operates is subject to
change. The Company may be adversely affected as a result of new or revised
legislation or regulations imposed by the SEC, other United States, state or
foreign governmental regulatory authorities or SROs. The Company also may be
adversely affected by changes in the interpretation or enforcement of existing
laws and rules by these governmental authorities and SROs. The Company's
businesses may be materially affected not only by securities regulations but
also by regulations of general application. For example, the volume of the
Company's principal investment advisory businesses in a given time period could
be affected by, among other things, existing and proposed tax legislation and
other governmental regulations and policies (including the interest rate
policies of the Federal Reserve Board) and changes in the interpretation or
enforcement of existing laws and rules that affect the business and financial
communities. The level of business and financing activity in the insurance
industry can be affected not only by such legislation or regulations of general
applicability, but also by industry-specific legislation or regulations.

Under the Advisers Act, every investment advisory agreement with its
clients must expressly provide that it may not be assigned by the investment
adviser without the consent of the client. Under the Investment Company Act,
every investment adviser's agreement with a registered investment company must
provide for the agreement's automatic termination on the event of its
assignment. Under both Acts, an investment advisory agreement is deemed to have
been assigned when there is a direct or indirect transfer of the agreement,
including a direct assignment or a transfer of a "controlling block" of the
firm's voting securities or, under certain circumstances, upon the transfer of
a "controlling block" of the voting securities of its parent corporation. A
transaction is not, however, an assignment

<PAGE> 39
under the Advisers Act or the Investment Company Act if it does not result in a
change of actual control or management of the investment adviser. Any
assignment of the Company's investment advisory agreements would require, as to
any registered investment company client, the prior approval by a majority of
its shareholders, and as to the Company's other clients, the prior consent of
such clients to such assignments. Following completion of the offering, sales
by General American or other shareholders or issuances of Common Stock by the
Company, among other things, could result in a deemed assignment of the
Company's investment advisory agreements under such statutes. The Company's
Articles provide that no person or group deemed to be a beneficial owner (as
defined therein) of the Common Stock may vote more than 20% of the total number
of shares of Common Stock outstanding. These provisions of the Articles do not
apply to General American, subsidiaries or affiliates of General American,
direct or indirect subsidiaries of the Company and certain employee plans
established or to be established by the Company. The Company's Board of
Directors may approve the exemption of other persons or groups from the
provisions described above. While this voting limitation is in place to reduce
the likelihood, under certain circumstances, of inadvertent terminations of the
Company's advisory agreements as a result of "assignments" of the Company's
investment advisory contracts, there can be no guarantees that this limitation
will prevent such a termination from occurring. In addition, such limitation
could be deemed to have an anti-takeover effect and to make changes in
management more difficult. See "Risk Factors--Regulation," "Risk
Factors--Termination Provisions of Investment Advisory Agreements and Other
Consequences of a Change of Control; Limitations on Voting Rights,"
"Description of Capital Stock--Common Stock" and "Certain Charter and Bylaw
Provisions."

The officers, directors and employees of the Company's investment
management subsidiaries may from time to time own securities which are also
owned by one or more of their clients. Each subsidiary has internal policies
with respect to individual investments and requires reporting of securities
transactions and restricts certain transactions so as to reduce the possibility
of conflicts of interest.

NET CAPITAL REQUIREMENTS

As a broker-dealer registered with the SEC and various states and a member
firm of the NASD, Conning & Company is subject to the capital requirements of
the SEC, the states, and the NASD. These capital requirements specify minimum
levels of capital, computed in accordance with regulatory requirements ("net
capital"), that such firm is required to maintain and also limit the amount of
leverage that such firm is able to obtain in its respective business. A failure
of a broker-dealer to maintain its minimum required capital would require it to
cease executing customer transactions until it returned to capital compliance,
and could cause it to lose its membership on an exchange, or in an SRO, to lose
its registration with the SEC or a state, or require its liquidation. Further,
the decline in a broker-dealer's net capital below certain "early warning
levels," even though above minimum capital requirements, could cause material
adverse consequences to the broker-dealer. For example, the SEC's capital
regulations prohibit payment of dividends, redemption of stock and the
prepayment of subordinated indebtedness if a broker-dealer's net capital
thereafter would be less than 5% of aggregate debit items. These regulations
also prohibit principal payments in respect of subordinated indebtedness if a
broker-dealer's net capital thereafter would be less than 5% of aggregate debit
items.

Compliance with regulatory capital requirements could limit the operations
of Conning & Company or Conning Asset Management Company that require the
intensive use of capital, such as underwriting and trading activities, and
financing of customer account balances, and also could restrict the Company's
ability to withdraw capital from Conning & Company and Conning Asset Management
Company, which in turn could limit its ability to pay dividends, repay debt and
redeem or purchase shares of its outstanding capital stock.

At June 30, 1997, Conning & Company was required to maintain minimum net
capital, in accordance with SEC rules, of approximately $600,000 and had total
net capital of approximately $3.5 million, or approximately $2.9 million in
excess of the amount required.

<PAGE> 40
MANAGEMENT

DIRECTORS, EXECUTIVE OFFICERS AND CERTAIN SIGNIFICANT OFFICERS

Directors and Executive Officers

The directors and executive officers of the Company are as follows:

<TABLE>
<CAPTION>
NAME AGE POSITION
<S> <C> <C>
Leonard M. Rubenstein................... 51 Chairman and Chief Executive Officer
Maurice W. Slayton...................... 59 President and Director
John A. Fibiger......................... 65 Director
Richard A. Liddy........................ 61 Director
John C. Shaw............................ 63 Director
Mark E. Hansen.......................... 48 Executive Vice President
Fred M. Schpero......................... 43 Senior Vice President and Chief Financial Officer
</TABLE>

Following is certain additional information concerning each director and
executive officer of the Company. Each such individual has served in his
present capacity of his principal occupation for the last five years, unless
otherwise indicated.

LEONARD M. RUBENSTEIN, C.F.A., is in the Office of the Chairman and has
been Chairman and Chief Executive Officer of the Company since 1995 and also
serves as Chairman, Chief Executive Officer and Chief Investment Officer of
Conning Asset Management Company. Mr. Rubenstein has 25 years of investment
experience. Prior to his position with Conning, Mr. Rubenstein spent 23 years
in the investment operations of General American, where he held various
positions, including Executive Vice President of Investments. Mr. Rubenstein is
a director of a number of General American subsidiaries, including Reinsurance
Group of America, Incorporated. From 1984 to 1991, he served as Vice President
of General American. He is a past president of the St. Louis Society of
Financial Analysts. Mr. Rubenstein and the Company entered into an Employment
Agreement in August 1995. See "--Employment Agreements and Other Compensation
Arrangements."

MAURICE W. SLAYTON is in the Office of the Chairman and has been the
President of the Company since 1995 and also serves as President and Chief
Executive Officer of Conning & Company. Mr. Slayton joined Conning in 1973.
Prior thereto, he had 12 years of experience with Hartford Steam Boiler
Inspection and Insurance Company and National Life of Vermont in a number of
insurance and investment positions. He is currently a director of several
insurance related entities including PennCorp Financial Group, Inc. Mr. Slayton
is a member and past president of The Hartford Society of Financial Analysts.
Mr. Slayton and the Company entered into an Employment Agreement in August
1995. See "--Employment Agreements and Other Compensation Arrangements."

JOHN A. FIBIGER has been a director of the Company since June 1997. Until
April 1997, he was Chairman of the Board of Transamerica Occidental Life
Insurance Company as well as a director of four of its wholly owned life
insurance subsidiaries. He remains a director of two of such
subsidiaries--Transamerica Life Company of Canada and Transamerica Life Company
of New York. Mr. Fibiger joined Transamerica Life Companies as chief financial
officer in 1991. He was named president of Transamerica Occidental Life
Insurance Company, one of the seven Transamerica Life Companies, in December
1994. A 38-year veteran of the life insurance industry, Mr. Fibiger was vice
chairman, president and chief operating officer of New England Mutual Life
Insurance Company in Boston. Prior to that, he held positions with Bankers Life
Nebraska (now Ameritas) and Lincoln National Life. A past board member of the
Society of Actuaries, Mr. Fibiger was the first chairman of the Interim
Actuarial Standards Board and served as president of the American Academy of
Actuaries. He is a past member of the Council of the International Actuarial
Association.

RICHARD A. LIDDY has been a director of the Company since November 1996. He
is President, Chief Executive Officer and Chairman of the Board of General
American Life Insurance Company, and President and Chairman of GenAmerica
Corporation and General American Life Mutual Holding Company. From 1982 through
1988 he was Senior Vice President and Executive Vice President of Continental
Corporation, and President, Financial Services

<PAGE> 41
Group of Continental Insurance Company. He is also Chairman of the Board of
General American Capital Company and The Walnut Street Funds, Inc., each a
registered investment company, Chairman of Paragon Life Insurance Company,
Chairman of Reinsurance Group of America, Incorporated, Chairman of Security
Equity Life Insurance Company, Chairman of Security Mutual Life Insurance
Company of New York and a director of Brown Group, Inc., Ralston Purina Company
and Union Electric Company.

JOHN C. SHAW has been a director of the Company since June 1997. He is the
founding partner of the Shaw Group LLC, a management consulting firm
specializing in transformation management. From 1994 to 1997, he served in the
Office of Chairman of Well Point Health Network, Inc., a large, publicly-traded
managed healthcare company. From 1966 to 1994, he was a partner of Deloitte &
Touche, most recently serving as Vice Chairman. Previously he has served as
national director for Strategic Planning, Partner-In-Charge of the New York
office and a member of the Board of Directors and Board of Governors for Touche
Ross. Mr. Shaw has taught at Stanford Business School and the Wharton School,
lectured at several national seminars and authored several books and articles
on modern business techniques.

MARK E. HANSEN, C.F.A., has been the Executive Vice President of the
Company since 1995, Executive Vice President of Conning & Company since 1993
and Executive Vice President of Conning Asset Management Company since August
1996. Mr. Hansen also served as a director of the Company from August 1995
until March 1997. Mr. Hansen has over 25 years of investment experience, having
joined Conning in 1984 from the Bank of Boston-Connecticut. Mr. Hansen and the
Company entered into an Employment Agreement in August 1995. See "--Employment
Agreements and Other Compensation Arrangements."

FRED M. SCHPERO, C.P.A., has been a Senior Vice President and Chief
Financial Officer of the Company since January 1997. Prior to that time, Mr.
Schpero was Vice President and Chief Financial Officer of Conning & Company
from 1985 through 1996 and at Conning Asset Management Company from August 1996
through December 1996. Prior to joining Conning, he was 2nd Vice
President--Finance with Security Connecticut Life Insurance Company and a
senior accountant at the public accounting firm of Coopers & Lybrand LLP. Mr.
Schpero and the Company entered into an Employment Agreement in August 1995.
See "--Employment Agreements and Other Compensation Arrangements."

Classified Board of Directors

All of the current directors were elected pursuant to action of the
Company's shareholders in June 1997 and have been divided into three classes
with terms expiring, respectively, at the annual meetings of shareholders in
1998 (Mr. Fibiger), 1999 (Messrs. Liddy and Shaw) and 2000 (Messrs. Rubenstein
and Slayton). Commencing with the next annual meeting of shareholders in 1998,
directors then standing for election will be elected for three-year terms, with
one class of directors being elected at each annual meeting of shareholders
thereafter. See "Certain Charter and Bylaw Provisions." Officers are elected
annually and serve at the discretion of the Board of Directors, subject to the
terms of applicable employment agreements. See "--Employment Agreements and
Other Compensation Arrangements."

<PAGE> 42
Certain Other Significant Officers

Certain other significant officers of the Company or its subsidiaries who
are not directors or executive officers (the "Other Significant Officers")
are as follows:

<TABLE>
<CAPTION>
NAME AGE POSITION DIVISION
<S> <C> <C> <C>
Bruce B. Brodie............... 43 Senior Vice President<F*> Corporate
Thomas A. Byrne............... 39 Senior Vice President Research
Stephan L. Christiansen....... 47 Senior Vice President Private Equity
John B. Clinton............... 42 Senior Vice President Private Equity
Paul S. Goulekas.............. 41 Senior Vice President Research
Charles P. Kapp............... 37 Senior Vice President Mortgage Loans and Real Estate
Glen D. Keller................ 44 Senior Vice President Asset Management
Douglas R. Koester............ 43 Senior Vice President Asset Management
Donald L. McDonald............ 35 Senior Vice President Asset Management
Michael D. McLellan........... 41 Senior Vice President Mortgage Loans and Real Estate
Steven F. Piaker.............. 34 Senior Vice President Private Equity
Stephen R. Pivacek............ 54 Senior Vice President Research
Gordon G. Pratt............... 35 Senior Vice President Private Equity
Gary K. Ransom................ 44 Senior Vice President Research
David N. Reid................. 36 Senior Vice President Asset Management
Thomas D. Sargent............. 39 Senior Vice President Research
William C. Shenton............ 43 Senior Vice President Asset Management
J. Terri Tanaka............... 35 Senior Vice President Asset Management
John W. Zimmerman............. 34 Senior Vice President Asset Management

<FN>
- --------
<F*> Mr. Brodie also serves as Chief Administrative Officer of the Company.
</TABLE>

Following is certain information concerning the Other Significant
Officers. Each such individual has served in his or her present capacity of his
or her principal occupation for the last five years, unless otherwise
indicated.

BRUCE B. BRODIE has been Senior Vice President and Chief Administrative
Officer since January 1997. Prior to joining the Company, Mr. Brodie spent 15
years with Continental Insurance Company ("Continental") and the CNA
Insurance Company ("CNA") working in various positions, including Chief of
Staff in the Financial Services Division, Chief Financial Officer in the
Specialty Operations Division and most recently as the Chief Information
Officer for Continental and then CNA.

THOMAS A. BYRNE has been a Senior Vice President of the Company since 1993
and has been with the Company since 1984. Before joining the Company, Mr. Byrne
had prior experience at Travelers Insurance Companies.

STEPHAN L. CHRISTIANSEN, F.C.A.S., M.A.A.A., has been a Senior Vice
President of the Company since 1989. Prior to joining the Company in 1986, Mr.
Christiansen had 16 years of insurance industry experience with Colonial Penn
Insurance and Insurance Company of North America.

JOHN B. CLINTON, C.P.C.U., C.P.A., has been a Senior Vice President of the
Company since 1992. Mr. Clinton's previous experience has been with KCP Holding
Company and its subsidiary, National American Insurance Company of California,
where he was CFO and Director. Prior to this, he was a Vice President of Dillon
Read & Co., Inc. and a founding partner of Concord Partners, a private equity
fund. He previously worked for New Court Securities and KPMG Peat Marwick LLP.

PAUL S. GOULEKAS has been a Senior Vice President of the Company since
1994. Mr. Goulekas joined the firm after 12 years experience at Aetna Life &
Casualty, most recently as operations controller/treasurer of Aetna Health
Plans, and prior to that worked as an economist at The Hartford Insurance
Group.

<PAGE> 43
CHARLES P. KAPP joined the Company as Senior Vice President in July 1997.
For seven years prior to joining the Company, Mr. Kapp held various positions
with Mark Twain Bancshares in Chicago, Illinois, most recently as Senior Vice
President in the area of institutional bond sales.

GLEN D. KELLER, F. S. A., has been a Senior Vice President at the Company
since 1996. Mr. Keller has over 20 years of experience in the life insurance
industry. Prior to joining the Company, he managed the Canadian Pension and
Annuity business for Metropolitan Life. Prior to that, he was the investment
actuary for National Life of Vermont.

DOUGLAS R. KOESTER, C.F.A., is Senior Vice President and has been with the
Company since 1986. Prior to his current position, Mr. Koester spent 14 years
with GAIMCO and in the investment operations division of General American. He
served as a director of the Company from August 1995 until April 1997 and has
been an executive officer of Conning Asset Management Company and its
predecessor GAIMCO from 1988 to present.

DONALD L. MCDONALD has been a Senior Vice President at the Company since
1993. Mr. McDonald joined the Company in 1992 from Daiwa Securities of America
and his prior investment experience includes Roosevelt & Cross and Salomon
Brothers.

MICHAEL D. MCLELLAN is a Senior Vice President and has been with the
Company since 1995. Mr. McLellan served as a director of the Company from
August 1995 until April 1997. Prior to his position with the Company, Mr.
McLellan spent 13 years with GAIMCO and General American where he held various
positions including Vice President of Mortgage Loans and Real Estate. Mr.
McLellan is an M.A.I. candidate (Member Appraisal Institute).

STEVEN F. PIAKER, C.F.A., has been a Senior Vice President for the Company
since January 1997. Prior to joining the Company, Mr. Piaker was a Senior Vice
President of Conseco, Inc., where he worked on the company's acquisitions and
private equity-linked investments. His previous experience was with G.E.
Capital as Vice President of the Corporate Finance Group.

STEPHEN R. PIVACEK has been a Senior Vice President of the Company since
1993. Mr. Pivacek joined the Company in 1986 from Aetna Life & Casualty where
he was employed as a Director in the trading department.

GORDON G. PRATT has been a Senior Vice President of the Company since 1994.
Prior to joining the Company in 1992 he was Vice President and Product Manager
in the Insurance M&A and Insurance Leveraged Acquisitions areas of The Chase
Manhattan Bank, N.A. Prior to that, he was with the Consulting Division of The
First National Bank of Chicago.

GARY K. RANSOM, F.C.A.S., M.A.A.A., has been a Senior Vice President since
1989. Prior to joining the Company in 1979, Mr. Ransom worked at Travelers
Insurance Companies in various actuarial positions.

DAVID N. REID has been a Senior Vice President of the Company since 1996.
Mr. Reid has over 13 years of investment accounting, operations, reporting and
systems experience. Prior to joining the Company in 1991, Mr. Reid spent four
years with SS&C Technologies, Inc. (formerly known as Securities Software &
Consulting, Inc.) where he directed the development and marketing of LAN based
investment management and accounting system, and five years with The Hartford
Insurance Group.

THOMAS D. SARGENT, C.F.A., has been a Senior Vice President of the Company
since 1993. Prior to joining the Company in 1986, Mr. Sargent was in the
commercial lending area at Connecticut Bank & Trust Company. He also completed
an internship with Willis Faber, a London-based insurance broker.

WILLIAM C. SHENTON has been a Senior Vice President of the Company since
1993. Prior to joining the Company in 1990, he held numerous management
positions with Control Data, including domestic and international assignments
concentrating on the financial services industry, most recently involving the
international insurance investment community.

J. TERRI TANAKA, C.F.A., has been a Senior Vice President of the Company
since 1995. Ms. Tanaka also served as a director of the Company from August
1995 until April 1997. Prior to her current position, Ms. Tanaka spent eight
years with GAIMCO and in the investment operations division of General
American. She has been an executive officer of Conning Asset Management Company
and its predecessor GAIMCO from 1995 to present.

<PAGE> 44
JOHN W. ZIMMERMAN, C.F.A., joined the Company as a Senior Vice President in
April 1997. Prior to joining the Company, Mr. Zimmerman worked for NationsBank
Private Investments (formerly Boatmen's Trust Company), where he held various
positions since 1987, most recently as Vice President, Manager of Fundamental
Research.

DIRECTORS' COMPENSATION

The Board pays each director who is not employed by the Company or General
American a $10,000 annual retainer and a $1,000 fee for each Board meeting
attended, plus expenses, and may also award stock options. Officers of the
Company do not receive any additional compensation for serving the Company as
members of the Board of Directors or any of its Committees. Messrs. McClellan
and Koester and Ms. Tanaka, who served as directors until June 1997, and Mr.
Liddy have also received stock options and purchased shares of Series B
Convertible Preferred Stock of the Company as described in "Certain
Relationships and Related Transactions."

EXECUTIVE COMPENSATION

Compensation Summary. The following table sets forth the compensation paid
to the Chief Executive Officer and the three other executive officers of the
Company.

<TABLE>
SUMMARY COMPENSATION TABLE

ANNUAL COMPENSATION<F1>
<CAPTION>
LONG-TERM
COMPENSATION<F4>
-------------------
SECURITIES
NAME AND FISCAL UNDERLYING OPTIONS ALL OTHER
PRINCIPAL POSITION YEAR SALARY<F2> BONUS<F3> (#SHS)<F5> COMPENSATION<F6>
<S> <C> <C> <C> <C> <C>
Leonard M. Rubenstein................... 1996 $270,000 $325,000<F7> 20,000 $32,913
Chairman and Chief
Executive Officer
Maurice W. Slayton...................... 1996 $260,000 $325,000 -- $12,300
President
Mark E. Hansen.......................... 1996 $235,000 $275,000 -- $12,300
Executive Vice President
Fred M. Schpero......................... 1996 $120,000 $120,000 10,000 $11,604
Senior Vice President and
Chief Financial Officer

<FN>
- --------

<F1> Perquisites and other personal benefits are not included, as they do not
exceed the lesser of $50,000 and 10% of total of salary and bonus for any
named executive officer.

<F2> Includes amounts deferred at the election of the officer under the General
American Life Insurance Company Executive Deferred Savings Plan (a defined
contribution plan), with respect to Mr. Rubenstein, and the Conning &
Company Profit Sharing and 401(k) Savings Plan, with respect to Messrs.
Slayton, Hansen and Schpero.

<F3> Bonuses are for services performed during 1996.

<F4> Does not include award of or distributions with respect to participation
interests in private investment funds sponsored by the Company. See
"Certain Relationships and Related Transactions--Participation in Private
Equity Funds."

<F5> See "Option Grants in Last Fiscal Year."

<F6> For Mr. Rubenstein, amount represents contributions by the Company to the
General American Executive Deferred Savings Plan and Augmented Progress
Sharing Plan (defined contribution plans). For Messrs. Slayton, Hansen and
Schpero, amounts represent contributions by the Company to the Conning &
Company Profit Sharing and 401(k) Savings Plan.

<F7> Mr. Rubenstein continues to accrue certain pension and post-retirement
health benefits under General American benefit plans. See
"Management--Employee Agreements and Other Compensation Arrangements."
Although the cost of such benefits for 1996 was deducted from Mr.
Rubenstein's bonus, such cost has not been deducted from the bonus shown
above. The actual bonus paid to Mr. Rubenstein for 1996 was $292,100.
</TABLE>

<PAGE> 45
Stock Option Awards. The following tables show information regarding
awards of stock options in 1996 and the number and value of unexercised options
held by the named executive officers at the end of fiscal 1996. The value of
unexercised options is based on a value of $
- ----- per share for the Company's Common Stock, which is the assumed initial
public offering price. No stock options were exercised by the named executive
officers in fiscal 1996.

<TABLE>
OPTION GRANTS IN LAST FISCAL YEAR
<CAPTION>
POTENTIAL REALIZABLE
NUMBER OF % OF TOTAL VALUE AT ASSUMED
SHARES OPTIONS ANNUAL RATES OF STOCK
UNDERLYING GRANTED TO PRICE APPRECIATION FOR
OPTIONS EMPLOYEES EXERCISE OR OPTION TERM<F3>
GRANTED IN BASE PRICE EXPIRATION ------------------------------
NAME (#)<F1> FISCAL YEAR ($/SH) DATE<F2> 5% ($) 10% ($)
<S> <C> <C> <C> <C> <C> <C>
Leonard M. Rubenstein......... 20,000 8.70% $7.00 11/21/06 $88,000 $223,200
Maurice W. Slayton............ -- -- -- -- -- --
Mark E. Hansen................ -- -- -- -- -- --
Fred M. Schpero............... 10,000 4.35% $7.00 11/21/06 $44,000 $111,600

<FN>
- --------

<F1> Options granted in 1996 are exercisable with respect to 20% of the option
shares on the first anniversary of the grant date and with respect to an
additional 20% on each of the four succeeding anniversary dates. Options
are intended to qualify as incentive stock options under the Internal
Revenue Code. Each option is forfeitable if not exercised within a
specified time after the holder's death, disability or termination for any
reason. See "Management--Employee Stock Plans."

<F2> The options have terms of 10 years, subject to earlier termination in
certain events related to termination of employment.

<F3> Amounts represent the potential realizable value of each grant of options
at the time of grant, assuming that the price of the underlying shares
appreciates in value from the date of grant to the end of the term, at
annualized rates of 5% and 10%, respectively.
</TABLE>

AGGREGATED OPTIONS AND FISCAL YEAR-END OPTION VALUES

<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS AT FISCAL YEAR-END AT FISCAL YEAR-END<F1>
--------------------------- ---------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
<S> <C> <C>
Leonard M. Rubenstein......... 24,000 116,000<F2>
Maurice M. Slayton............ 24,000 96,000<F3>
Mark E. Hansen................ 24,000 96,000<F3>
Fred M. Schpero............... 2,000 18,000<F4>

<FN>
- --------

<F1> Represents the estimated fair value of the shares of Common Stock subject
to outstanding options, based on the assumed initial offering price of
$----------- per share, less the aggregate exercise price of the options.

<F2> Includes options to purchase 96,000 shares that will become exercisable
upon closing of the offering.

<F3> All such options will become exercisable upon closing of the offering.

<F4> Includes options to purchase 8,000 shares that will become exercisable
upon closing of the offering.
</TABLE>

All options have been issued as incentive stock options under the Internal
Revenue Code; the Company intends to compensate the individual for the
additional federal income taxes that accrue to such optionholder in excess of
then applicable federal income tax on capital gain transactions as a result of
the recharacterization as other than incentive stock options. In such an event,
the Company would be entitled to a tax deduction for any compensation
recognized by the option holder.

EMPLOYEE STOCK PLANS

The Board of Directors and shareholders of the Company approved the 1997
Flexible Stock Plan in ----, 1997 (the "1997 Plan"). The 1997 Plan provides for
the award of benefits (collectively, "Benefits") of various types, including
stock options, stock appreciation rights ("SARs"), restricted stock,
performance shares, cash awards and other stock-based awards. Set forth below
is a description of the principal features of the 1997 Plan. This description
is

<PAGE> 46
subject to and qualified in its entirety by the full text of the 1997 Plan,
which is filed as an exhibit to the Registration Statement of which this
Prospectus is a part.

The Company has adopted the 1997 Plan to attract, retain, motivate, and
reward officers, employees and other individuals, to encourage ownership of
Common Stock by officers, employees and other individuals, and to promote and
further the best interests of the Company. The number of shares of Common Stock
which may be issued in connection with Benefits is -------- shares.

The 1997 Plan will be administered by a committee (the "Committee")
consisting of two or more members of the Board who are not Employees and not
eligible to participate in the 1997 Plan. The Board may amend the 1997 Plan at
any time, provided that the Board may not amend the 1997 Plan without
shareholder approval if such amendment would (i) cause options that are
intended to qualify as incentive stock options to fail to qualify as such, (ii)
cause the Plan to fail to meet the requirements of Rule 16b-3 under the
Exchange Act, or (iii) violate applicable law. The 1997 Plan has no fixed
termination date and will continue in effect until terminated by the Board.

Under the 1997 Plan, the Committee may grant Benefits at such times, in
such amounts, and to such recipients as the Committee may determine. Benefits
may be awarded only to employees of the Company and its subsidiaries, employees
and owners of non-affiliated entities and entities with which the Company or
its affiliates have business relationships, and persons providing services to
the Company or a subsidiary or affiliate.

Incentive stock options and non-qualified stock options may be granted
under the 1997 Plan. In the case of non-qualified stock options, the option
price shall be no less than the fair market value of the shares of Common Stock
on the date the option is granted, and, in the case of incentive stock options,
the price will be determined by the Committee but shall be not less than the
fair market value of the shares of Common Stock on the date the option is
granted. The other terms of options will be determined by the Committee. The
maximum number of shares subject to options which may be granted to a
participant in any year is --------.

The 1997 Plan also permits the award of SARs, restricted stock, performance
shares, cash awards and other stock-based awards. The maximum number of SARs
which may be granted to a participant in any year is --------. The aggregate
maximum cash award that an individual who is subject to Section 16 of the
Exchange Act may receive in any calendar year is the greater of $100,000 and
50% of such individual's compensation (excluding any cash award) for such year.
The Committee may also grant other awards valued in whole or in part by
reference to, or otherwise based on, the Common Stock.

In the event of a Change in Control, as defined below, the Committee may
provide such protection as it deems necessary to maintain a participant's
rights. Without in any way limiting the generality of the foregoing sentence or
requiring any specific protection, the Committee may: (i) provide for the
acceleration of the exercise or realization of any Benefit; (ii) provide for
the purchase of a Benefit upon the participant's request for an amount in cash
equal to the amount which could have been attained upon the exercise or
realization of the Benefit had it been currently exercisable or payable; (iii)
make such adjustment to the outstanding Benefits as the Committee deems
appropriate; and/or (iv) cause the outstanding Benefits to be assumed, or new
Benefits substituted therefor, by the surviving corporation. "Change in
Control" means: (i) the acquisition after the adoption of the 1997 Plan,
without the approval of the Board, by any person, other than the Company and
certain related entities, of beneficial ownership (as defined in Rule 13d-3
under the Exchange Act) of more than 20% of the combined voting power in the
election of directors of the then outstanding shares of the Company's voting
securities; (ii) the liquidation or dissolution of the Company following a sale
or other disposition of all or substantially all of its assets; (iii) a merger
or consolidation involving the Company as a result of which persons who were
shareholders of the Company immediately prior to the effective date of the
merger or consolidation shall have beneficial ownership of less than 50% of the
combined combined voting power in the election of directors of the surviving
corporation following the effective date of such merger or consolidation; or
(iv) a change in the majority of the members of the Board during any two-year
period which is not approved by at least two-thirds of the members of the Board
who were members at the beginning of the two-year period.

Awards may be granted by the Committee in tandem. However, no Benefit may
be granted in tandem with an incentive stock option except an SAR. Upon the
exercise of any option or in the case of any other Benefit that requires a
payment to the Company, payment may be made either (i) in cash, or (ii) with
the consent of the Committee, (a) by the tender to the Company of shares of
Non-Voting Common Stock having an aggregate fair market value equal to the
amount due the Company, (b) in other property, or (c) by any combination of the
foregoing. At the time any Benefit is distributed under the Plan, the Company
may withhold, in cash or in shares of

<PAGE> 47
Common Stock, from such distribution any amount necessary to satisfy income
withholding requirements applicable to such distribution.

Any Benefit granted to an individual who is subject to Section 16 of the
Exchange Act will not be transferable other than by will or the laws of descent
and distribution and will be exercisable during his lifetime only by him. The
Committee may impose restrictions upon the transferability of any Benefit.

The Board has approved two other plans, the 1996 Flexible Stock Plan in
November, 1996 (the "1996 Plan") and the 1995 Flexible Stock Plan in August,
1995 (the "1995 Plan") that are substantially similar to the 1997 Plan,
except that such plans also permit the award of stock appreciation rights,
restricted stock, performance shares and cash awards. They authorize the award
of 2,100,000 shares for each Plan and options for a total of 1,237,500 shares
have been granted. As a result of the approval of the 1997 Plan, the Company
has determined not to award any additional benefits pursuant to the 1995 Plan
or the 1996 Plan.

Options to purchase a total of -------- shares at the initial public
offering price have been granted to -------- of the Company's employees,
including options to purchase --------, -------- and --------shares to Messrs.
- --------, -------- and --------, respectively. All of the options are subject to
the same terms. Each award becomes exercisable with respect to --% of the shares
it covers ratably over -- years, beginning on the first anniversary of the date
hereof. Such options may only be exercised if the individual is an employee of
the Company at the time of exercise, subject to certain exceptions in the case
of death, disability or a Change of Control.

EMPLOYMENT AGREEMENTS AND OTHER COMPENSATION ARRANGEMENTS

Concurrently with the Strategic Merger in August, 1995, the Company entered
into employment agreements (the "Employment Agreements") with all of its then
executive officers and certain other employees, each with a term of three
years. Under each Employment Agreement, the employee (the "Employee")
receives an annual base salary, in the case of Messrs. Rubenstein, Slayton,
Hansen and Schpero, of $257,500, $250,000, $225,000 and $115,000, respectively,
subject to increases pursuant to periodic salary reviews consistent with the
Company's corporate policies. In addition, each Employee is eligible, in the
sole discretion of the Board of Directors, to participate as a limited partner
in Conning Investment Partners LP III or in the Company's Venture Capital
Carried Interest Allocation Plan and the Company's Bonus Plan, as modified to
reflect the Strategic Merger.

The Employee's employment may be terminated without cause: (i) at any time
upon the mutual written agreement of the parties; (ii) immediately upon the
Employee's death or total disability; or (iii) upon not less than 30 days'
advance written notice by either party. The Employee's employment may be
terminated by the Company upon written notice to the Employee at any time for
any of the following reasons, each of which shall constitute "termination for
cause": (i) any material breach of the agreement by the Employee which is not
cured within 20 days after written notice by the Company; (ii) the Employee's
fraud, embezzlement, dishonesty or unlawful acts in connection with the
business of the Company or its affiliates; (iii) the Employee's conviction for
any felony; or (iv) the Employee's substantial and continuing willful failure
to perform, or grossly negligent performance of, the duties of the Employee's
position.

Upon termination of employment, the Company has no obligation to the
Employee except for compensation due the Employee under the agreement through
the termination date; provided that, in the event of a termination by the
Company other than for cause (as defined above) (excluding terminations by
agreement or on account of death or disability), the Company is required to pay
the Employee an amount equal to 150% of the annual base salary for each year
(or portion thereof, pro rated) for the balance of the term of the agreement
and provide all insurance, welfare, sick leave and other benefits described in
the agreement through the balance of the term.

Upon execution of the applicable Employment Agreement, Messrs. Slayton,
Hansen and Schpero were paid a signing bonus in cash (the "Signing Bonus"),
subject to the forfeiture described below, equal to $195,000, $95,000 and
$35,000, respectively. Certain other employees also received signing bonuses.
See "Certain Relationships and Related Transactions--The Strategic Merger."
Upon termination of the agreement for cause (as defined above) or because such
employee has resigned, the employee is required to repay the specified
percentage of the Signing Bonus indicated in parentheses, depending upon the
year in which such termination occurs: Year 1 (100%), Year 2 (66.6%), and Year
3 (33.3%).

Each Employee is prohibited from disclosing, directly or indirectly, to any
other firm or person any of the Company's or its affiliates' confidential
information, including customer lists, trade secrets, and know-how relating to
its or their businesses. Additionally, each Employee has agreed that until
August, 1998, regardless of whether the

<PAGE> 48
Employee remains employed by the Company and regardless of whether the
Employee's termination, if any, is with or without cause, neither the Employee
nor any entity controlling, controlled by or under common control with the
Employee will (i) engage in, or have any direct or indirect interest in any
other person, firm, corporation, or other entity engaged in any business
activities competitive with the business activities of the Company and the
subsidiaries it controls, or (ii) become an employee, director, adviser,
consultant, independent contractor, or agent of any such person, firm,
corporation, or other entity, except with the Company's prior written consent.

Mr. Slayton's Employment Agreement provides that for the term of the
Agreement Mr. Slayton will be employed as President of the Company and have
responsibility for (i) marketing for the Company, (ii) managing the Company's
Hartford office, (iii) participating in identifying and negotiating
acquisitions, and (iv) participating in the development and execution of any
initial public offering of the Common Stock. Pursuant to an Amended and
Restated Shareholders' Agreement among the Company and its shareholders and
optionholders and General American, as amended (the "Shareholders
Agreement"), the Company has agreed to place Mr. Slayton on the Board of
Directors until the earlier of August 11, 2000 or the consummation of an
initial public offering of the Common Stock. See "Certain Relationships and
Related Transactions--The Strategic Merger."

The Company does not have a defined benefit plan. Mr. Rubenstein, as a
result of his 25 years of service with General American, is eligible to
continue to participate in the General American Life Insurance Company Pension
Plan and Trust, a qualified defined benefit plan, and the General American
Augmented Plan, a non-qualified defined benefit plan as well as General
American's post-retirement medical plan (collectively, the "GA Retirement
Plans"). Retirement benefits under the GA Retirement Plans are based on a
participant's final average compensation and credited years of service. Mr.
Rubenstein's final average compensation has been predetermined and represents
his estimated final average salary and bonus as if he were to remain an officer
of General American from December 31, 1995 (the date on which his benefits
under the qualified plan were frozen) through his retirement at age 65. Mr.
Rubenstein will receive credit for years of service under the GA Retirement
Plans while serving as Chief Executive Officer of the Company and has agreed to
pay for the cost of the additional retirement benefits, which has been
determined to be approximately 10% of Mr. Rubenstein's assumed annual General
American salary and bonus in any year. The amount of any bonus paid to Mr.
Rubenstein by the Company will be reduced by this cost. Such amount was $32,900
in 1996. Based on Mr. Rubenstein's predetermined final average compensation,
the annual pension benefit payable to Mr. Rubenstein upon his retirement from
the Company at age 65 would be $367,000.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The members of the Compensation Committee of the Board of Directors
currently are Messrs. Rubenstein and Slayton. See "Certain Relationships and
Related Transactions" for a description of certain transactions involving
Messrs. Rubenstein and Slayton.

INDEMNIFICATION

As permitted by The General and Business Corporation Law of Missouri (the
"GBCL"), the Articles of Incorporation of the Company provide (i) that the
Company is required to indemnify its directors and officers to the fullest
extent permitted by Missouri law, (ii) the Company is permitted to indemnify
employees or agents as set forth in the GBCL, (iii) to the fullest extent
permitted by the GBCL, the Company is required to advance expenses, as
incurred, to its directors and officers in connection with a legal proceeding
(subject to certain exceptions), (iv) the rights conferred in the GBCL are not
exclusive, and (v) the Company is authorized to enter into indemnification
agreements with its directors, officers, employees and agents without further
approval of the shareholders.

Directors or officers of the Company who are directors or officers of
General American may also be entitled to indemnification under the provisions
of General American's Articles of Incorporation, which provide indemnification
to them since they serve, at General American's request, as directors or
officers of the Company. Such individuals are also covered by General
American's director's and officer's liability insurance policy.

General American Life Mutual Holding Company maintains a policy of
insurance under which the directors and officers of the Company are insured,
subject to the limits of the policy, against certain losses, as defined in the
policy, arising from claims made against such directors and officers by reason
of any wrongful acts, as defined in the policy, in their respective capacities
as directors or officers of the Company.

<PAGE> 49
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

THE STRATEGIC MERGER

The Company was formed in July 1995 as a holding company for all of the
operations of the Company following the Strategic Merger. The parties effected
the Strategic Merger in order to combine complementary businesses, each with
specialties in the insurance industry, to build a platform from which to
leverage additional growth. The Strategic Merger was effected in August 1995
when (i) General American Holding Company contributed to the Company all of the
issued and outstanding common stock of GAIMCO (now known as Conning Asset
Management Company), a registered investment adviser which provided investment
advisory services to General American and its affiliates (including General
American Capital Company's family of mutual funds), endowment funds, corporate
non-qualified assets, and pension/profit sharing funds of other entities in
exchange for 6,710,000 shares of Company Common Stock; and (ii) each of the
shareholders of Conning, Inc., other than three non-employee directors and two
institutional shareholders (the "Non-Contributing Shareholders"), contributed
all of the common stock then owned by such shareholders to the Company and each
holder of options to acquire Conning, Inc. common stock canceled all of such
options in exchange for $4,505,000 in cash and 3,190,000 shares of the
Company's Series A Convertible Preferred Stock, with Messrs. Slayton, Hansen
and Schpero receiving cash payments of $898,708, $438,661, and $40,164,
respectively, and 636,376, 310,616, and 28,441 shares of Series A Convertible
Preferred Stock, respectively; and the Other Significant Officers, as a group,
and officers of the Company who are not Executive Officers or Other Significant
Officers (the "Other Officers"), as a group, receiving cash payments of
$2,736,122 and $391,345, respectively, and 1,937,455 and 277,112 shares of
Series A Convertible Preferred Stock, respectively. By agreement among the
former shareholders of Conning, Inc., the shares of Conning, Inc. owned by the
Non-Contributing Shareholders were acquired in exchange for cash payments in
the aggregate of $7,495,000. See Note 1 of Notes to the Company's Consolidated
Financial Statements.

The Series A Convertible Preferred Stock pays a quarterly dividend equal to
the 90 day United States Treasury Bill rate as in effect from time to time.
Pursuant to the terms of the Series A Convertible Preferred Stock, upon the
consummation of the sale of the Common Stock offered hereby, the Series A
Convertible Preferred Stock will convert automatically on a one-for-one basis
into shares of Common Stock. Pursuant to the Shareholders Agreement, in June
1997 General American exercised a right in connection with the amendment and
restatement of such agreement (the "call right"), to purchase 1,594,995
shares of Series A Convertible Preferred Stock for the per share price of
$11.25, with Messrs. Slayton, Hansen and Schpero receiving cash payments of
$3,579,615, $1,747,215, and $159,975, respectively; and Other Significant
Officers, as a group, and Other Officers, as a group, receiving cash payments
of $10,898,156 and $1,558,733, respectively. See "Principal Shareholders."

The Shareholders Agreement also restricts the transfer of shares of the
Company by any shareholder (other than General American), except pursuant to a
right of first refusal in favor of General American with respect to shares
acquired in connection with the Strategic Merger or pursuant to a right of
first refusal in favor of the Company in the case of shares acquired subsequent
to the Strategic Merger (and with respect to all shares, in favor of the other
shareholders if General American or the Company does not purchase such shares).
The Shareholders Agreement further provides for the rights of shareholders to
require General American, or in some cases the Company, to purchase their
shares in certain situations including death, disability and termination of
employment with the Company and, in certain other situations, provides General
American, or in some cases the Company, with the right to purchase such shares.
The Shareholders Agreement also provides that, until August, 1998, (i) the
Company will maintain the general approach and methodology regarding cash
compensation and private equity carried interest allocations, (ii) the Company
will have a Board of Directors comprised of no more than seven members, at
least two of whom will be members of management (including Mr. Slayton or his
successor), (iii) the Company will have a Compensation Committee of the Board
of which the President will be a member, (iv) Mr. Slayton will serve as
President of the Company and Conning Asset Management Company and as President
and CEO of Conning, Inc. and Conning & Company and Mr. Rubenstein will serve as
Chairman and CEO of the Company and Conning Asset Management Company, and (v)
Mr. Slayton will serve as a senior member of management of the Company with
certain specified responsibilities. Upon consummation of this offering, the
Shareholders Agreement will terminate, except for certain provisions requiring
the Company to maintain certain compensation approaches as described in clause
(i) of the preceding sentence.

Each Employee who entered into an employment agreement in connection with
the Strategic Merger received a signing bonus that is subject to forfeiture in
the event that such Employee's employment is terminated under certain
circumstances during the first three years after the Strategic Merger. As of
the date hereof, of the $195,000, $95,000

<PAGE> 50
and $35,000 of signing bonus paid to Messrs. Slayton, Hansen and Schpero,
respectively, $65,000, $31,667 and $11,667 are subject to forfeiture; of the
$465,000 and $80,000 of signing bonuses paid to the Other Significant Officers
and Other Officers, respectively, $155,000 and $26,667 are subject to
forfeiture, which forfeiture obligations expire on August 11, 1998. See
"Management--Employment Agreements and Other Compensation Arrangements."

In connection with the Strategic Merger certain employees of the Company
entered into option cancellation agreements and received payments from the
Company, which, based upon an understanding among the selling shareholders, are
subject to forfeiture in the event that any such employee's employment is
terminated under certain circumstances during the first three years after the
Strategic Merger. As of the date hereof, of the $1,176,196, $804,491 and
$55,237 of the payments paid in connection with the option cancellation
agreements to Messrs. Slayton, Hansen and Schpero, respectively, $265,988,
$129,829 and $11,887 are subject to forfeiture; of the $4,353,082 and $605,119
of payments to the Other Significant Officers and Other Officers, respectively,
$809,803 and $201,707 are subject to forfeiture, which forfeiture obligations
expire on August 11, 1998.

In connection with the Strategic Merger, the parties agreed to indemnify
each other for breaches of representations and warranties, certain tax matters
and certain litigation matters. Most of these indemnification obligations
expired by their own terms on February 11, 1997. The indemnification
obligations of the former shareholders and optionholders of Conning, Inc. that
survived beyond that date have been released, which benefited all of the former
shareholders and optionholders of Conning, Inc., including Messrs. Slayton,
Hansen and Schpero. General American's and the Company's obligations to
indemnify the former shareholders and optionholders of Conning, Inc. remains in
force with respect to certain potential tax liabilities of the Company and
certain potential tax liabilities of the former shareholders and optionholders.

Also in connection with the Strategic Merger, the Company granted certain
employees of the Company options ("1995 Options") to purchase in the
aggregate 1,000,000 shares of the Company's Class B Non-Voting Common Stock
("Non-Voting Common Stock") at a price of $5.33 per share, with Messrs.
Rubenstein, Slayton, Hansen, and Schpero receiving options to purchase 120,000,
120,000, 120,000, and 10,000 shares, respectively; with the Other Significant
Officers and Other Officers receiving options to purchase 460,000 and 170,000
shares, respectively, which includes Messrs. Koester and McLellan and Ms.
Tanaka each receiving options to purchase 70,000 shares. These options vest
annually in equal portions over the five years between August 11, 1995 and
August 11, 2000, but upon the consummation of this offering all of these
options will become fully vested. Also upon the consummation of this offering,
the Company's Non-Voting Common Stock will convert automatically on a
one-for-one basis into shares of Common Stock. Thus, the 1995 Options will
become exercisable for shares of Common Stock at a price of $5.33 per share.
All 1995 Options were issued as Incentive Stock Options.

In connection with the Strategic Merger, General American loaned the
Company $13,000,000 on an unsecured basis bearing interest at the rate of 7%
per annum, payable as follows: (a) commencing January 1, 1996, semi-annual
interest payments until September 1, 2002, (b) on September 1, 2003 and
September 1, 2004, principal payments of $4,333,333, together with all interest
accrued through such dates, and (c) on September 1, 2005, the final payment of
principal in the amount of $4,333,334, together with all interest accrued
through such date. As of December 31, 1996, the outstanding principal balance
on this loan was $2,000,000 and this remaining principal was paid in February
1997. Also in connection with the Strategic Merger, General American made a
$2,500,000 short term loan to the Company on an unsecured basis bearing
interest at 6.75% per annum. This loan was due August 31, 1996 and was fully
paid by June, 1996.

RECENT EMPLOYEE INCENTIVE OFFERING

Commencing in November 1996, in conjunction with an employee incentive
program, the Company has sold shares of its Series B Convertible Preferred
Stock to certain employees of the Company at a price of $5.33 per share. To
date, 475,000 shares of Series B Convertible Preferred Stock have been sold in
connection with such program, with Messrs. Rubenstein, Liddy and Schpero
acquiring 40,000, 50,000 and 20,000 shares, respectively; with Other
Significant Officers and Other Officers acquiring 190,000 and 175,000 shares,
respectively (which includes Messrs. Koester and McLellan and Ms. Tanaka each
acquiring 20,000 shares). The Series B Convertible Preferred Stock is
convertible upon demand on a one-for-one basis into shares of Non-Voting Common
Stock at a conversion price of $1.67 per share, subject to anti-dilution
adjustments, and pays a quarterly dividend of 5% per annum. As noted above,
upon the consummation of this offering, the Company's Non-Voting Common Stock
will convert automatically on a one-for-one basis into shares of Common Stock.
Thus, shares of Series B Convertible Preferred Stock effectively will become
convertible into shares of Common Stock upon payment of the conversion price of
$1.67 per share (i.e., for a total

<PAGE> 51
purchase price of $7.00 per share). Pursuant to the Shareholders Agreement,
which was amended in connection with the sale of the Series B Convertible
Preferred Stock, subject to the consummation of this offering, the Company has
the right to redeem the Series B Convertible Preferred Stock for the price of
$5.33 per share plus accrued dividends.

In connection with the Company's private offering of Series B Convertible
Preferred Stock to certain employees and directors of the Company in 1996 and
January 1997, General American holds unsecured recourse demand notes from
certain shareholders totaling $2,265,250, including $213,200 due from Mr.
Rubenstein and $106,600 due from Mr. Schpero, respectively, and $1,012,700 and
$932,750 from the Other Significant Officers, as a group including $106,600
each from Mr. Koester, Mr. McLellan and Ms. Tanaka, and the Other Officers, as
a group, respectively. Interest on such notes accrues at 6% per annum and is
payable semi-annually beginning in July, 1997. Principal payments on such notes
are due annually beginning January, 1998 in the amount of 25% of the gross
bonus earned by the obligor in the immediately preceding year. General American
has issued or will issue loans to certain shareholders to finance the
conversion of Series B Convertible Preferred Stock on terms similar to those
described above and in the aggregate amount of $642,950, including $66,800 for
Mr. Rubenstein, $33,400 for Mr. Schpero, $258,850 for the Other Significant
Officers (including $33,400 for each of Mr. Koester, Mr. McLellan and Ms.
Tanaka) and $283,900 for the Other Officers.

Also commencing in November 1996, the Company has granted certain of its
employees options ("1996 Options") to purchase in the aggregate 237,500
shares of the Company's Non-Voting Common Stock for the price of $7.00 per
share. See "Management--Executive Compensation." The Company granted options
to Messrs. Rubenstein, Liddy and Schpero to purchase 20,000, 25,000 and 10,000
shares, respectively; options to purchase 95,000 shares to the Other
Significant Officers, as a group (including 10,000 shares each to Mr. McLellan,
Mr. Koester and Ms. Tanaka); and options to purchase 87,500 shares to the Other
Officers, as a group. These options vest annually in equal portions over the
five-year period commencing on the date of grant. The consummation of the sale
of Common Stock offered hereby will not affect the vesting of the 1996 Options.
As noted above, upon the consummation of this offering, the Company's
Non-Voting Common Stock will convert automatically on a one-for-one basis into
shares of Common Stock. Thus, the 1996 Options effectively will become
exercisable for shares of Common Stock at a price of $7.00 per share.

TRANSACTIONS WITH GENERAL AMERICAN

General American currently is the principal shareholder of the Company.
After completion of the offering, General American will beneficially own
approximately 65% of the Company's outstanding Common Stock (approximately 63%
if the Underwriters' over-allotment option is exercised in full). General
American is a Missouri state life insurance company which began operations as a
stock company in 1933 and was converted to a mutual company in a process that
ended in 1946. General American is principally engaged in issuing individual
and group life and health insurance policies and annuity contracts. The
principal offices of General American are located at 700 Market Street, St.
Louis, Missouri 63101. See "Risk Factors--Dependence on Principal
Shareholder," "--Potential Conflicts of Interest," "--Termination
Provisions of Investment Advisory Agreements and Other Consequences of a Change
in Control; Limitations on Voting Rights" and "--Certain Other Anti-Takeover
Provisions," "Management," and "Principal Shareholders."

The Company, through its subsidiary Conning Asset Management Company, acts
as the investment adviser for the general and separate accounts of General
American and certain of its affiliates, including the General American Capital
Company funds, COVA Corporation and its subsidiaries ("COVA"), Reinsurance
Group of America, Incorporated and certain of its subsidiaries, Paragon Life
Insurance Company, General Life Insurance Company, General Life Insurance
Company of America, Security Equity Life Insurance Company and the General
American Life Insurance Company Pension Plan Trust. Such agreements are
generally terminable upon 30 to 90 days' notice without penalty. The Company is
generally compensated on the basis of fees calculated at a percentage of the
market value of the assets under management. The fees are billed and are
payable quarterly in arrears. Investment management fees from these affiliated
entities for the years ended December 31, 1995 and 1996 amounted to $12,573,489
and $14,300,367, respectively. Effective January 1, 1995, General American and
Conning Asset Management Company entered into an investment advisory agreement
pursuant to which the Company would manage all of the general account assets of
General American. As of December 31, 1994, such assets totaled approximately
$5.2 billion. While investment management contracts were not in place during
1994 for General American's general account and COVA, investment management
fees earned from the other affiliated entities for the year ended December 31,
1994 totaled $2,618,635. See Note 11 of Notes to the Company's Consolidated
Financial Statements.

<PAGE> 52
After the ---day period during which General American has agreed not to
offer for sale, sell, or otherwise dispose of, directly or indirectly, any
shares of Common Stock without the prior written consent of Donaldson, Lufkin &
Jenrette Securities Corporation (see "Underwriting"), it is possible that
General American will, from time to time depending on future conditions, further
reduce or increase its beneficial ownership of the Common Stock. Additionally,
the Company has granted General American certain rights with respect to the
registration of shares of Common Stock that will be owned by General American
upon completion of the offering. See "Shares Eligible for Future Sale."

Pursuant to an Administrative Services Agreement, General American provides
the Company with certain management and administrative services at the
Company's request. Such services include legal, employee benefit, payroll,
personnel, facilities and information services. As consideration for these
services, the Company pays General American a monthly fee based on General
American's cost, computed in accordance with General American's current cost
accounting system. The Company paid to General American $871,221, $12,308,103
and $14,611,221 for administrative services rendered for the years ended
December 31, 1994, 1995 and 1996, respectively, of which a substantial portion
reflects reimbursement of salaries and employee-related costs. Until January 1,
1997, certain employees of the historical operations of GAIMCO who were
employees of General American and costs associated with such employees were
allocated and charged to the Company pursuant to such Agreement. The
Administrative Services Agreement is terminable by either party on 90 days'
written notice. General American, however, has agreed not to terminate the
Agreement prior to July 19, 1998. See Note 11 of Notes to the Company's
Consolidated Financial Statements.

Effective July 31, 1996, Conning Asset Management Company entered into an
agreement with General American for the lease of approximately 25,000 square
feet of office space located at 700 Market Street, St. Louis, Missouri. Such
lease has a five-year term, is terminable by the Company upon 30 days' notice
and calls for annual lease payments of approximately $600,000. The Company
anticipates leasing up to an additional 10,000 square feet at this location
during 1997 on substantially the same terms and conditions. The Company also
subleases from General American, pursuant to a written sublease, three of its
eleven office sites for its various mortgage loan and real estate offices. The
three offices are located in Arizona, California and Missouri. The sublease
terminates with respect to a particular location immediately prior to
termination of the applicable lease. The underlying leases have terms of
varying lengths ranging from month-to-month to a fixed term ending in 2002.
Either party may terminate the sublease with respect to one or more locations
on 90 days' written notice. The Company's total annual base rent for 1997 under
the sublease totals approximately $81,000. The terms of all of the foregoing
leases and the sublease (collectively, the "Leases") were designed to
approximate the cost to General American of owning or leasing such spaces. The
Company made rental payments to General American of approximately $300,000,
$624,000 and $613,000 in 1994, 1995 and 1996, respectively. The Company
believes that the prices and other terms under the Leases are at least as
favorable as those prices and terms being offered generally in the same
marketplaces by unrelated parties for comparable spaces. See Note 11 of Notes
to the Company's Consolidated Financial Statements.

The Company and General American have entered into a Tax Allocation and Tax
Sharing Agreement dated as of June 12, 1997 (the "Tax Agreement"). The Tax
Allocation Agreement provides, among other things, that the tax liability of
the General American federal consolidated tax return group (the "General
American Tax Group") during the period that the Company is a member of such
group (i.e., from June 12, 1997 to the closing of this offering) will be
allocated among the members of the group in proportion to their separately
calculated tax liabilities. The Tax Agreement also provides that any savings
resulting from the tax benefits of a particular member will be paid to that
member, rather than accruing to the benefit of the other members, and requires,
among other things, that certain payments be made between the Company and
General American in the event there is a change in the pre-offering tax
liabilities of the Company. In addition, under the Tax Agreement, General
American will indemnify the Company against any tax liabilities of the General
American Tax Group that are not attributable to the Company, and the Company
will indemnify General American against any tax liabilities of the Company.
From August 11, 1995 (the date of the Strategic Merger) to June 12, 1997, the
Company was not a member of the General American Tax Group but was a party to a
Tax Sharing Agreement with General American providing for indemnification
rights and tax sharing liabilities in a manner similar to the current Tax
Agreement for the period during which Conning Asset Management Company was a
member of such group. The tax liabilities of the members of the General
American Tax Group prior to the Strategic Merger, which included Conning Asset
Management Company, are allocated under a Tax Allocation Agreement dated as of
October 30, 1992, in a manner similar to the Tax Agreement.

Mr. Liddy is also an executive officer and director of General American and
certain of its affiliates. His son has been employed by the Company since 1995.
Mr. Rubenstein is also a director of certain of General American's affiliates.
See "Management--Directors, Executive Officers and Certain Significant
Officers."

<PAGE> 53
The Company's mortgage origination and real estate brokerage activities
have been historically operated pursuant to informal agreements through General
American.

The existing and proposed agreements between the Company, on the one hand,
and General American and its affiliates, on the other hand, may be modified or
renegotiated in the future and additional transactions or agreements may be
entered into between the Company and General American and its affiliates. See
"Risk Factors--Potential Conflicts of Interest."

PARTICIPATION IN PRIVATE EQUITY FUNDS

The Company, directly or indirectly through intermediary partnerships, is
the general partner of the following private equity funds with a 1% general
partner capital interest: Conning Insurance Capital Limited Partnership II and
Conning Insurance Capital International Partners II (together, "Fund II"),
Conning Insurance Capital Limited Partnership III and Conning Insurance Capital
International Partners III (together, "Fund III"), Conning Connecticut
Insurance Fund, L.P. ("Fund IV") and Conning Insurance Capital Limited
Partnership V ("Fund V"). At August 31, 1997, the Company's commitment to
fund future required capital contributions was approximately $2.2 million. The
Company had established similar relationships with respect to Conning Insurance
Capital Limited Partnership and Conning Insurance Capital International
Partners (together, "Fund I"), which terminated pursuant to their terms on
December 31, 1995. Collectively, Fund I, Fund II, Fund III, Fund IV and Fund V
are referred to as the "Funds". Each Fund has a term of eight to ten years,
subject to certain extensions for liquidation purposes. Fund I commenced
December, 1986, Fund II commenced December, 1988, Fund III commenced December,
1993, Fund IV commenced December, 1995 and Fund V commenced August, 1997. The
Company and its predecessors received investment management fees from the
Funds, in the aggregate, of approximately $3.2 million, $3.2 million, $4.0
million and $1.9 million for 1994, 1995, 1996 and the first six months of 1997,
respectively. The Company through its subsidiary has committed to Conning
Connecticut Investors, L.L.C., a limited liability company of which the Company
is the general partner and managing member, up to approximately $4,040,000 for
purposes of capitalizing the general partner. The amount is payable only in the
event of insolvency on the part of the Conning Connecticut Investors, L.L.C.
See Note 15 of Notes to the Company's Consolidated Financial Statements.

The Company is also entitled to a carried interest, or performance fee, in
each Fund representing up to approximately 20% of specified gains of the Fund,
as determined in accordance with the applicable partnership agreement. Certain
officers and directors of the Company and its subsidiaries receive
participation percentages annually over a five-year period, in a portion of the
Company's carried interest, which participations are subject to a climbing
vesting schedule varying by Fund, generally over a period of up to seven years
from the date of receipt of the participation percentage. At the end of the
five year period, the Company's percentage of the carried interest ranges from
25% to 40% of the original amount, depending on the Fund. At June 30, 1997, the
percentage interests in Fund IV held by Messrs. Rubenstein, Slayton, Hansen and
Schpero were 0.50%, 2.80%, 1.40% and 0.45%, respectively; the percentage
interests held by Messrs. Koester and McLellan and Ms. Tanaka were 0.15% each;
and ranged from 0.15% to 3.40% for each of the Other Significant Officers; and
ranged from 0.10% to 2.10% for each of the Other Officers; the percentage
interests in Fund III held by Messrs. Rubenstein, Slayton, Hansen and Schpero
were 0.50%, 6.07%, 3.19% and 0.57%, respectively, the percentage interests held
by Messrs. Koester and McLellan and Ms. Tanaka were 0.15% each, and ranged from
0.15% to 6.86% for each of the Other Significant Officers and ranged from 0.10%
to 4.17% for each of the Other Officers; and the percentage interests in Funds
I and II held by Messrs. Slayton, Hansen and Schpero were 8.54%, 5.86% and
0.84%, respectively, and the percentage interests held by each of the Other
Significant Officers ranged from 1.48% to 6.75%; and the percentage interests
held by each of the Other Officers ranged from 0.13% to 2.80%. Participation
percentages are complete for Funds I and II; Fund III has approximately one
year remaining for completion of the determination of participation
percentages; Fund IV has approximately three years remaining for completion of
the determination of participation percentages. Participation percentages have
not yet been determined for Fund V. With the exception of Fund I, none of the
Funds has generated a carried interest as of June 30, 1997, and the value, if
any, of such participations cannot be readily determined. Distributions to date
of the carried interest from Fund I were made during 1996 and 1997 to Messrs.
Slayton, Hansen and Schpero in the amounts of $678,669, $466,025 and $67,092,
respectively, and ranged from $117,252 to $536,496 for each of the Other
Significant Officers and ranged from $3,975 to $222,659 for each of the Other
Officers.

General American and its affiliates other than the Company have committed
or invested a total of $30.0 million in four of the Funds. A subsidiary of
Transamerica Occidental Life Insurance Company ("Transamerica"), of which Mr.
Fibiger was Chairman of the Board, has invested a total of $4.0 million in two
of such funds. General American and its affiliates may participate in the
distributions from the private equity funds on a pro rata basis with other
limited partners in the private equity funds. General American and certain of
its affiliates, which may include the Company, may invest in new private equity
funds in the future as limited partners.

<PAGE> 54
PRINCIPAL SHAREHOLDERS

The following table sets forth certain information regarding the beneficial
ownership of the Common Stock as of September 19, 1997, giving effect to the
Capital Stock Conversions and the vesting of certain options upon the closing
of the offering and as adjusted to reflect the sale of shares offered hereby,
for (i) each person known to the Company to own beneficially 5% or more of the
outstanding shares of Common Stock, (ii) the Company's directors and named
executive officers, and (iii) all the Company's directors and executive
officers as a group. Except as otherwise noted in the footnotes to this table,
the named beneficial owner has sole voting and investment power. As of
September 19, 1997, there were 43 shareholders of record.

<TABLE>
<CAPTION>
PERCENTAGE OF
SHARES
BENEFICIALLY
NUMBER OF OWNED<F1><F2>
SHARES ------------------
BENEFICIALLY BEFORE AFTER
NAME OF BENEFICIAL OWNER OWNED<F1> OFFERING OFFERING
------------------------ --------- -------- --------
<S> <C> <C> <C>
General American Life Insurance Company<F3>............. 8,304,995 80.0% 64.5%
Leonard M. Rubenstein<F4>............................... 164,000 1.6 1.3
Maurice W. Slayton<F5>.................................. 438,188 4.2 3.4
Mark E. Hansen<F5>...................................... 275,308 2.6 2.1
Fred M. Schpero<F6>..................................... 46,221 <F*> <F*>
John A. Fibiger......................................... -- -- --
Richard A. Liddy<F7>.................................... 55,000 <F*> <F*>
John C. Shaw............................................ -- -- --
All Directors and Executive Officers as a group
(7 persons)<F8>....................................... 978,717 9.1 7.4
Other Significant Officers as a group (19
persons)<F9>.......................................... 1,637,730 15.1 12.3
Other Officers as a group (22 persons)<F10>............. 501,058 4.7 3.8

<FN>
- --------
<F*> Less than 1%

<F1> Except for shares owned by General American, which represent 6,710,000
shares of Common Stock and 1,594,995 shares of Series A Convertible
Preferred Stock, all shares owned prior to the offering represent shares
of Series A Convertible Preferred Stock, shares of Series B Convertible
Preferred Stock, shares of Non-Voting Common Stock and shares of
Non-Voting Common Stock subject to outstanding stock options that are
exercisable within 60 days, including the vesting of certain options upon
the closing of the offering. All shares, other than shares of Common
Stock, are currently non-voting. The Series A Convertible Preferred Stock
and Non-Voting Common Stock will automatically convert into an equal
number of shares of Common Stock upon completion of the offering and the
holders of Series B Convertible Preferred Stock have agreed to convert
such shares into an equal number of shares of Common Stock for additional
consideration of $1.67 per share, upon completion of the offering. See
"Description of Capital Stock."

<F2> Assumes no exercise of the Underwriters' over-allotment option.

<F3> Includes shares owned by General American Holding Company, a wholly-owned
subsidiary of General American. The address of General American is 700
Market Street, St. Louis, Missouri 63101. General American is a
wholly-owned subsidiary of GenAmerica Corporation, which is a
wholly-owned subsidiary of General American Life Mutual Holding Company.

<F4> Includes 52,000 shares which may be acquired pursuant to currently
exercisable options and 72,000 shares which may be acquired pursuant to
options that will become exercisable upon the closing of the offering.

<F5> Includes 48,000 shares which may be acquired pursuant to currently
exercisable options and 72,000 shares which may be acquired pursuant to
options that will become exercisable upon the closing of the offering.

<F6> Includes 6,000 shares which may be acquired pursuant to currently
exercisable options and 6,000 shares which may be acquired pursuant to
options that will become exercisable upon the closing of the offering.

<F7> Includes 5,000 shares which may be acquired pursuant to currently
exercisable options. Mr. Liddy, a director of the Company, is also
Chairman and Chief Executive Officer of General American. Mr. Liddy
disclaims beneficial ownership of the shares owned by General American.

<F8> Includes 154,000 shares which may be acquired pursuant to currently
exercisable options and 222,000 shares which may be acquired pursuant to
options that will become exercisable upon the closing of the offering.

<F9> Consists of the 19 persons listed under the caption
"Management--Directors, Executive Officers and Certain Significant
Officers--Certain Significant Officers." Includes 203,000 shares which
may be acquired pursuant to currently exercisable options and 276,000
shares which may be acquired pursuant to options that will become
exercisable upon the closing of the offering.

<F10> Consists of 22 persons who are neither Executive Officers nor Other
Significant Officers. Includes 85,500 shares which may be acquired
pursuant to currently exercisable options and 102,000 shares which may be
acquired pursuant to options that will become exercisable upon the
closing of the offering.
</TABLE>

<PAGE> 55
SHARES ELIGIBLE FOR FUTURE SALE

Prior to this offering, there has been no public market for the Common
Stock of the Company. Future sales of substantial amounts of Common Stock in
the public market, or the perception that such sales could occur, could
adversely affect market prices prevailing from time to time and the ability of
the Company to raise equity capital in the future.

RESTRICTION ON SALES

Upon completion of this offering and assuming no exercise of outstanding
options, the Company will have outstanding 12,875,000 shares of Common Stock
(13,250,000 shares if the Underwriters' over allotment option is exercised in
full). Of these shares, the 2,500,000 shares sold in the offering will be
immediately eligible for resale in the public market without restriction under
the Securities Act, except for any shares purchased by an "Affiliate" (as
that term is defined under the Securities Act) of the Company, which shares
will be subject to the resale limitations of Rule 144 under the Securities Act.
The remaining 10,375,000 shares outstanding following this offering (the
"Previously Issued Shares") were issued by the Company in private
transactions not involving a public offering and are thus treated as
"restricted securities" within the meaning of Rule 144 under the Securities
Act. Subject to the Lock-up Agreements described below, the Previously Issued
Shares may be sold in the public market only if registered or pursuant to an
exemption from registration such as those afforded by Rules 144, 144A, 701 and
Regulation S under the Securities Act of 1933.

The holders of the Previously Issued Shares of Common Stock have entered
into agreements with the Company ("Lock-up Agreements") pursuant to which
they have agreed that, during the ---day period after the date of this
prospectus, they will not, except with the prior consent of Donaldson, Lufkin &
Jenrette Securities Corporation or in certain limited circumstances, offer,
sell, contract to sell or grant an option to purchase any of such Previously
Issued Shares. In addition, the Company has agreed that during such period it
will not, without the prior consent of Donaldson, Lufkin & Jenrette Securities
Corporation or in certain limited circumstances, offer, sell, contract to sell
or grant an option to purchase any shares of Common Stock. See "Underwriting."
The Company believes that, following the lock-up period, up to 1,453,856 shares
held by existing shareholders could be eligible for sale without restriction and
up to 8,921,144 "affiliate" shares held by executive officers, directors, and
other affiliates could be eligible for sale, subject to certain volume and other
limitations of Rule 144 as described below; all such shares, however, may be
subject to additional holding periods under Rule 144 based on, among other
things, particular interpretative considerations, facts and circumstances
relating to such shareholders. Outstanding options to purchase 1,000,000 shares
of Common Stock will be exercisable upon completion of the offering. Upon the
first anniversary of the date hereof, General American and the holders of
shares issuable upon the Capital Stock Conversions have the right to require
the Company in certain circumstances to register their shares of Common Stock
for sale under the Securities Act. See "--Registration Rights" below and
"Certain Relationships and Related Transactions."

In general, under Rule 144 as currently in effect, beginning 90 days after
the date of this Prospectus, an Affiliate of the Company or other person (or
persons whose shares are aggregated) who has beneficially owned Previously
Issued Shares for at least one year will be entitled to sell in any three-month
period a number of shares that does not exceed the greater of (i) 1% of the
then outstanding shares of the Company's Common Stock (approximately 132,500
shares immediately after the offering, if the Underwriters' over-allotment
option is exercised in full) or (ii) the average weekly trading volume of the
Company's Common Stock on the Nasdaq National Market during the four calendar
weeks immediately preceding the date on which notice of the sale is filed with
the Securities and Exchange Commission. Sales pursuant to Rule 144 are subject
to certain requirements relating to manner of sale, notice and availability of
current public information about the Company. A person (or persons whose shares
are aggregated) who is not deemed to have been an Affiliate of the Company at
any time during the 90 days immediately preceding the sale and who has
beneficially owned Restricted Shares for at least two years is entitled to sell
such shares pursuant to Rule 144(k) without regard to the limitations described
above.

Previously Issued Shares may also be resold (1) to a person whom the seller
reasonably believes is a qualified institutional buyer within the meaning of
Rule 144A under the Securities Act purchasing for its own account or for the
account of a qualified institutional buyer in a transaction meeting the
requirements of Rule 144A and (2) in an off-shore transaction complying with
Rules 903 or 904 of Regulation S under the Securities Act.

<PAGE> 56
An employee of the Company who purchased shares or was awarded options to
purchase shares pursuant to a written compensatory plan or contract meeting the
requirements of Rule 701 under the Securities Act is entitled to rely on the
resale provisions of Rule 701 under the Securities Act which permits Affiliates
and non-Affiliates to sell their Rule 701 shares without having to comply with
the holding period restrictions of Rule 144, in each case commencing 90 days
after the date of this Prospectus. In addition, non-Affiliates may sell Rule
701 shares without complying with the public information, volume and notice
provisions of Rule 144.

Following the effectiveness of the registration statement covering the
shares of Common Stock offered hereby, the Company will register under the
Securities Act the shares of Common Stock reserved for issuance under the
Company's employee stock plans covering -------- shares. The Company expects
that these registrations will automatically become effective upon filing.
Accordingly, shares registered under such registration statements and acquired
pursuant to such Plans will be available for sale in the open market upon the
expiration of the public sale restrictions described below (see "Underwriting"),
subject to Rule 144 volume limitations applicable to Affiliates.

REGISTRATION RIGHTS

The Company has granted certain rights with respect to the registration of
6,710,000 of the 8,304,995 shares of Common Stock that will be owned by General
American upon completion of the offering (the "Registrable Securities").
Subject to certain limitations, General American and permitted assignees have
the right at any time after the first anniversary of the date hereof to require
the Company to register the sale of such shares under the Securities Act (a
"demand registration"). The number of demand registrations is limited to two.
A demand registration must be requested by holders of Registrable Securities
representing at least 10% of the outstanding Common Stock and must include at
least 10% of such Registrable Securities. The Company is not required to effect
more than one demand registration in any twelve-month period. The holders of
Registrable Securities are also entitled to include such shares in a registered
offering of securities by the Company for its own account or the account of any
other security holder (a "piggy-back registration"), subject to certain
conditions and restrictions. A piggy-back registration is counted as one of the
demand registrations if the holder sold at least 80% of the Registrable
Securities it requested be registered. In addition to the demand and piggy-back
registration rights described above after the first anniversary of the date
hereof, the holders of Registrable Securities representing at least 10% of the
outstanding Common Stock may require the Company to file up to two registration
statements relating to such Registrable Securities on Form S-3 under the
Securities Act when such form is available to the Company. A demand
registration on Form S-3 will count as a Form S-3 registration. A registration
on Form S-3 must relate to the offering of securities, including the
Registrable Securities, at an aggregate price to the public of at least
$5,000,000. The Company is not required to effect more than one such
registration on Form S-3 (including any demand registrations registered on Form
S-3) in any twelve-month period. The registration expenses of holders of
Registrable Securities (other than underwriting discounts and commissions) will
be paid by the Company. The registration rights expire for any Holder owning
Registrable Securities representing less than 1% of the outstanding Common
Stock on the date such Holder is able to dispose of all of its shares in any
90-day period pursuant to Rule 144, and, in any event, on the date such
Holder's Registrable Securities can be sold pursuant to Rule 144(k) under the
Securities Act. The registration rights are not assignable by General American
other than to General American Holding Company, a direct or indirect subsidiary
of General American or General American Holding Company, a parent of General
American or General American Holding Company, or a direct or indirect
subsidiary of such parent entity.

The Company has granted the holders of the 2,070,005 shares of Common Stock
issued upon the Capital Stock Conversions the right to require the Company to
file a registration statement on Form S-3 on or about the first anniversary of
the date hereof covering the resale of such shares, provided that such Form S-3
is available to the Company; provided further, that (i) the Company would be
under no obligation to maintain the effectiveness of such registration
statement for more than twelve months and (ii) the holders of such stock enter
into a registration rights agreement at that time containing such limitations
and conditions as the Company deems appropriate.

<PAGE> 57
DESCRIPTION OF CAPITAL STOCK

AUTHORIZED CAPITAL STOCK

Under the Company's Amended and Restated Articles of Incorporation
(previously defined as the "Articles"), the Company's authorized capital
stock consists of 50,000,000 shares of Common Stock, par value $.01 per share,
20,000,000 shares of Non-Voting Common Stock, par value $.01 per share and
20,000,000 shares of preferred stock, par value $.01 per share (the "Preferred
Stock"). The Company will have outstanding, immediately prior to the issuance
and sale of shares of Common Stock pursuant to the offering 10,375,000 shares
of Common Stock, after giving effect to the Capital Stock Conversions. Upon the
closing of this offering, assuming no exercise of the Underwriters'
over-allotment option and no exercise of outstanding stock options, the Company
will have outstanding 12,875,000 shares of Common Stock and no shares of
Preferred Stock. Upon the closing of this offering, the Company intends to file
an amendment to its Articles to eliminate the Non-Voting Common Stock.

COMMON STOCK

All of the outstanding shares of Common Stock are, and the shares offered
hereby will be, fully paid and nonassessable. Each holder of Common Stock is
entitled to one vote for each share held of record on all matters presented to
a vote of shareholders, including the election of directors, except that, as
provided in the Articles, no person or group other than General American,
certain affiliates of General American, certain savings, profit sharing, stock
bonus and employee stock ownership plans established by the Company or certain
subsidiaries of the Company and other persons approved in advance by the Board
of Directors of the Company, shall have the right to vote more than 20% of the
combined voting power of the Company's Voting Stock (as defined in the
Articles). See "Certain Charter and Bylaw Provisions--Limitations on Voting of
Shares in Certain Circumstances" for a more detailed description of this 20%
voting limitation. Accordingly, assuming such 20% voting restriction does not
apply, holders of a majority of the shares of Common Stock entitled to vote in
any election of directors may elect all of the directors standing for election.
Subject to the prior rights of the holders of any shares of Preferred Stock
which subsequently may be issued and outstanding, the holders of Common Stock
are entitled to receive dividends as and when declared by the Board of
Directors out of funds legally available therefor, and, in the event of
liquidation, dissolution, or winding up of the Company, to share ratably in all
assets remaining after payment of liabilities. Holders of Common Stock do not
have cumulative voting rights in the election of directors or preemptive rights
to purchase or subscribe for any stock or other securities and there are no
conversion rights or redemption or sinking fund provisions with respect to such
stock. Additional shares of authorized Common Stock may be issued without
shareholder approval.

As of August 31, 1997, there were outstanding 110,000 shares of Non-Voting
Common Stock. Such shares of Non-Voting Common Stock have no voting or dividend
rights. Upon the closing of this offering, all issued and outstanding shares of
Non-Voting Common Stock will be converted into an aggregate of 110,000 shares
of Common Stock.

PREFERRED STOCK

As of August 31, 1997, there were outstanding 3,190,000 shares of Series A
Convertible Preferred Stock and 365,000 shares of Series B Convertible
Preferred Stock. Upon or prior to the closing of this offering, all issued and
outstanding shares of Series A Convertible Preferred Stock will be converted
into an aggregate of 3,190,000 shares of Common Stock, and all outstanding
shares of Series B Convertible Preferred Stock will be converted into an
aggregate of 365,000 shares of Common Stock for additional consideration to the
Company of $1.67 per share. Upon the closing of this offering, the Company
intends to file an amendment to its Articles to eliminate the series
designations of the Series A and B Convertible Preferred Stock.

Following the closing of this offering, the Board will have the authority
to issue up to an aggregate of 20,000,000 shares of Preferred Stock from time
to time in one or more series without shareholder approval. The Board of
Directors has the authority to prescribe for each series of Preferred Stock it
establishes the number of shares in that series, the dividend rate, and the
voting rights, conversion privileges, redemption and liquidation rights, if
any, and any other rights, preferences and limitations of the particular
series. Depending upon the rights of such Preferred Stock, the issuance of
Preferred Stock could have an adverse effect on the holders of Common Stock by
delaying or preventing a change of control of the Company, making removal of
the present management of the Company more

<PAGE> 58
difficult, or resulting in restrictions upon the payment of dividends and other
distributions to the holders of Common Stock. The Company has no plans to issue
any Preferred Stock.

CERTAIN EFFECTS OF AUTHORIZED BUT UNISSUED STOCK

Upon the completion of this offering, there will be 35,887,500 shares of
Common Stock and 20,000,000 shares of Preferred Stock available for future
issuance without shareholder approval, taking into consideration the 1,237,500
shares of Common Stock reserved for issuance upon exercise of outstanding
options. These additional shares may be issued for a variety of proper
corporate purposes, including raising additional capital, corporate
acquisitions, and implementing employee benefit plans. Except as contemplated
by the Company's existing and other possible employee benefit or stock purchase
plans, the Company does not currently have any plans to issue additional shares
of Common Stock or preferred stock. See "Management--Employee Stock Plans."

One of the effects of the existence of unissued and unreserved Common Stock
and Preferred Stock may be to enable the Board of Directors to issue shares to
persons friendly to current management, which could render more difficult or
discourage an attempt to obtain control of the Company by means of a merger,
tender offer, proxy contest, or otherwise, and thereby protect the continuity
of the Company's management and possibly deprive the shareholders of
opportunities to sell their shares of Common Stock at prices higher than the
prevailing market prices. Such additional shares also could be used to dilute
the stock ownership of persons seeking to obtain control of the Company. See
also "Certain Charter and Bylaw Provisions."

TRANSFER AGENT

The transfer agent and registrar for the Common Stock is ----------.

<PAGE> 59
CERTAIN CHARTER AND BYLAW PROVISIONS

The Company's Articles and Bylaws (i) contain certain limitations on the
voting power of certain shareholders, (ii) provide for a classified Board of
Directors, (iii) limit the right of shareholders to remove directors or change
the size of the Board of Directors, to fill vacancies on the Board of
Directors, to act by written consent and to call a special meeting of
shareholders, and (iv) require a higher percentage of shareholders than would
otherwise be required to amend, alter, change, or repeal the provisions of the
Articles and Bylaws discussed in this section, as well as those described above
under "Management--Indemnification." The Articles also provide that the
Bylaws may be amended only by the majority vote of the Board of Directors; thus
shareholders will not be able to amend the Bylaws without first amending the
Articles. These provisions, which are summarized below, may have the effect of
discouraging certain types of transactions that involve an actual or threatened
change of control of the Company. Reference is made to the full text of the
Articles and Bylaws, which are included as exhibits to the Registration
Statement of which this Prospectus is a part. The following summary is
qualified in its entirety by such reference.

LIMITATIONS ON VOTING OF SHARES IN CERTAIN CIRCUMSTANCES

In order to limit the likelihood under certain circumstances of a deemed
assignment, under the Advisers Act or the Investment Company Act, of the
investment advisory contracts that the Company's subsidiaries have with their
clients (see "Business--Regulation"), the Articles include provisions
limiting the voting power of shares of Common Stock in certain circumstances.
The Investment Company Act and the Advisers Act define the term "assignment"
to include any "direct or indirect transfer" of "a controlling block of the
voting securities" of the issuer's outstanding voting securities. The
Investment Company Act presumes that any person holding 25% of the voting stock
of the Company "controls" the Company. The Articles provide that a person or
"group" (which includes affiliates and associates of a person, as defined in
the Articles) that owns (as defined in the Articles) more than 20% of the
voting shares of the Company's issued and outstanding capital stock ("Voting
Stock") shall have the right to vote not more than 20% of the outstanding
shares of Voting Stock entitled to vote. The remaining shares of Voting Stock
owned by such person or group ("Excludable Shares") shall have no voting
rights and shall not be counted for quorum or shareholder approval purposes.
These provisions do not apply to General American, affiliates of General
American, direct or indirect subsidiaries of the Company and certain employee
plans established or to be established by the Company. The Company's Board of
Directors may approve the exemption of other persons or groups from the
provisions described above. The foregoing limitation is intended to have the
effect of decreasing the chance of any assignment occurring for purposes of the
Advisers Act and the Investment Company Act, including in connection with
future issuances or sales of Common Stock. However, no assurances can be given
that such an "assignment" will not occur under these or other circumstances.
The Company has the right to inquire of any owner of Voting Stock, or person
who purports to exercise voting rights with respect to such stock, and the
owner will have the obligation to provide such information to the Company as
the Company may reasonably request, as to the number of shares owned, whether
such shares are owned by any other person and the identity of such person,
whether affiliates or associates of such person own any shares, whether such
person is a member of a "group" owning such shares or whether such person, or
any of such person's affiliates or associates, has any agreement, arrangement
or understanding with any other person with respect to the Voting Stock.

The limitation on voting may be viewed as having the effect of making more
difficult or of discouraging, absent the support of General American, a proxy
contest, a merger or other combination involving the Company, a tender offer,
an open-market purchase program or other purchase of Common Stock that could
give shareholders an opportunity to realize a premium over the then-prevailing
market price for their shares. However, given the authority that General
American will exercise over the affairs of the Company following the completion
of the offering in any event, the Company does not consider the likely effect
of this limitation to be significant.

SIZE OF BOARD, ELECTION OF DIRECTORS, CLASSIFIED BOARD, REMOVAL OF DIRECTORS
AND FILLING VACANCIES

The Articles provide that the number of directors to constitute the board
of directors initially shall be five and thereafter the number of directors
shall be fixed from time to time as provided in the Bylaws. The Bylaws provide
for a Board of Directors of five directors, but in no event less than three,
and permit the Board of Directors to change the number of directors with a
majority vote. The Articles further provide that the Bylaws may be amended only
by majority vote of the Board of Directors.

In order for a shareholder to nominate a candidate for director, the Bylaws
require that timely notice be given to the Company in advance of the meeting.
Ordinarily, such notice must be given not less than 60 days nor more than 90

<PAGE> 60
days before the first anniversary of the preceding year's annual meeting, or
not less than 60 days nor more than 90 days before May 12, 1998, in the case of
the next annual meeting; provided, however, that if the date of the annual
meeting is advanced by more than 30 days or delayed by more than 60 days from
such anniversary date, then the shareholder must give such notice not earlier
than 90 days nor later than 60 days prior to such meeting or 10 days after
notice of the meeting is mailed or other public disclosure of the meeting is
made. In certain cases, notice may be delivered later if the number of
directors to be elected is increased. The shareholder filing the notice of
nomination must describe various matters regarding the nominee, including,
without limitation, such information as name, address, occupation, and shares
held. The Articles do not permit cumulative voting in the election of
directors, and the Bylaws provide that the majority of the votes cast in the
election of directors shall elect those directors. Accordingly, the holders of
a majority of the then outstanding shares of voting stock can elect all the
directors then being elected at that meeting of shareholders.

The Articles and Bylaws provide that the Board shall be divided into three
classes, with the classes to be as nearly equal in number as possible, and that
one class shall be elected each year and serve for a three-year term.

Missouri law provides that, unless a corporation's articles of
incorporation provide otherwise, the holders of a majority of the corporation's
voting stock may remove any director from office. The Articles provide that,
except as described below, a director may be removed by shareholders only "for
cause" and with the approval of the holders of 85% of the Company's voting
stock.

Missouri law further provides that, unless a corporation's articles of
incorporation or bylaws provide otherwise, all vacancies on a corporation's
board of directors, including any vacancies resulting from an increase in the
number of directors, may be filled by the vote of a majority of the remaining
directors even if that number is less than a quorum. The Articles provide that,
subject to the rights, if any, of the holders of any class of preferred stock
then outstanding and except as described below, vacancies may be filled only by
the vote of a majority of the remaining directors.

The classification of directors, the inability to vote shares cumulatively,
the advance notice requirements for nominations, and the provisions in the
Articles that limit the ability of shareholders to increase the size of the
Board or to remove directors and that permit the remaining directors to fill
any vacancies on the Board will have the effect of making it more difficult for
shareholders to change the composition of the Board. As a result, at least two
annual meetings of shareholders may be required for the shareholders to change
a majority of the directors, whether or not a change in the Board would be
beneficial to the Company and its shareholders and whether or not a majority of
the Company's shareholders believes that such change would be desirable.

LIMITATIONS ON SHAREHOLDER ACTION BY WRITTEN CONSENT; LIMITATIONS ON CALLING
SHAREHOLDER MEETINGS

As required by Missouri law, the Bylaws provide that any action by written
consent of shareholders in lieu of a meeting must be unanimous. Under the
Bylaws, except as described below, shareholders are not permitted to call
special meetings of shareholders or to require the Board to call a special
meeting of shareholders and a special meeting of shareholders may be called
only by a majority of the entire Board of Directors, the Chairman of the Board,
or the President. In order for a shareholder to bring a proposal before a
shareholder meeting, the Bylaws require that timely notice be given to the
Company in advance of the meeting. Ordinarily, such notice must be given not
less than 60 days nor more than 90 days before the first anniversary of the
preceding year's annual meeting, or not less than 60 days nor more than 90 days
before May 12, 1998 in the case of the next annual meeting; provided, however,
that if the date of the annual meeting is advanced by more than 30 days or
delayed by more than 60 days from such anniversary date, then the shareholder
must give such notice not earlier than 90 days nor later than 60 days prior to
such meeting or 10 days after notice of the meeting is mailed or other public
disclosure of the meeting is made. Such notice must include a description of
the proposal, the reasons therefor, and other specified matters. The Board may
reject any such proposals that are not made in accordance with these procedures
or that are not a proper subject for shareholder action in accordance with the
provisions of applicable law.

The provision of the Bylaws requiring unanimity for shareholder action by
written consent gives all the shareholders of the Company entitled to vote on a
proposed action the opportunity to participate in such action and will prevent
the holders of a majority of the voting power of the Company from using the
written consent procedure to take shareholder action. Moreover, a shareholder
cannot force a shareholder consideration of a proposal over the opposition of
the Board of Directors by calling a special meeting of shareholders or forcing
consideration of such a proposal.

<PAGE> 61
These provisions are designed in part to make it more difficult and
time-consuming to obtain majority control of the Board of Directors of the
Company or otherwise to bring a matter before the shareholders without the
Board's consent, and thus to reduce the vulnerability of the Company to an
unsolicited takeover proposal. These provisions are designed to enable the
Company to develop its business in a manner which will foster its long-term
growth, with the threat of a takeover not deemed by the Board to be in the best
interests of the Company and its shareholders and the potential disruption
entailed by such a threat reduced to the extent practicable. On the other hand,
these provisions may have an adverse effect on the ability of shareholders to
influence the governance of the Company and the possibility of shareholders
receiving a premium above the prevailing market price for their securities from
a potential acquiror who is unfriendly to management.

CERTAIN MISSOURI STATUTORY PROVISIONS

The GBCL has a control share acquisition statute. A "control share
acquisition" is defined as the acquisition, directly or indirectly, of either
ownership or the power to direct the exercise of voting power with respect to
"control shares," which are defined as shares which, when added to all other
shares of the issuing corporation owned by the acquiring person, would entitle
such person to exercise certain degrees of voting power with respect to stock
of the issuing corporation. Under the Missouri control share acquisition
statute (which is only applicable to certain corporations that have 100 or more
shareholders), shareholders who acquire enough shares to give them (1)
one-fifth or more to less than one-third, (2) one-third or more to less than a
majority, or (3) a majority or more of the outstanding stock of the Company
will not be able to vote those excess shares unless certain disclosure
requirements are satisfied and the retention of voting rights by the acquiror
is approved by at least a majority of shares entitled to vote and a majority of
all non-interested shares entitled to vote. A corporation's articles of
incorporation or bylaws may provide that a corporation will not be subject to
Missouri's control share acquisition statute. The Articles contain a provision
exempting the Company from Missouri's control share acquisition statute.

The GBCL prohibits a "business combination" (defined to include generally
a merger or consolidation, a sale, exchange or other dispositions of 10% or
more of the aggregate market value of all assets or stock of the corporation,
or certain other transactions which have the effect of disproportionately
increasing the share ownership) with an "interested stockholder" (defined
generally as the beneficial owner or at least 20% of the corporation's voting
stock) for five years following the stock acquisition date (i.e., the date the
person became an interested stockholder), unless the board of directors
approves the business combination or the purchase of stock by the interested
stockholder before the stock acquisition date. Business combinations with an
interested stockholder are permitted only if (i) the board of directors
approved the business combination or acquisition of the stock prior to the
stock acquisition date, (ii) the business combination is approved by a majority
of the outstanding voting stock not beneficially owned by the interested
stockholder no earlier than five years after the stock acquisition date, or
(iii) the consideration to be received by stockholders meets certain
requirements of the statute with respect to form and amount. The Articles
contain a provision electing to subject the Company to the business combination
statute of the GBCL; such provision has the effect, among other things, of
rendering the statute inapplicable to transactions with "interested
shareholders," such as General American, that acquired their status prior to
the effective date of such provision. The Articles further provide that General
American and its affiliates are expressly deemed not to constitute "interested
shareholders."

Missouri law contains certain requirements concerning disclosures which
must be made in connection with "take-over bids." Take-over bids are defined
as the acquisition of or offer to acquire any equity security of a domestic
target company, if after acquisition thereof the offeror would, directly or
indirectly, be a beneficial owner of more than five percent of any class of the
issued and outstanding equity securities of such target company. A take-over
bid does not include an offer to acquire such equity security solely in
exchange for other securities, or the acquisition of such equity security
pursuant to such offer, for the sole account of the offeror, in good faith and
not to avoid Missouri's statutory regulation of take-over bids, and not
involving any public offering within the meaning of the Securities Act. Unless
the offeror, prior to making a take-over bid, files with the Commissioner of
Securities and delivers to the target company certain materials, including
copies of all offering information, certain information regarding the offeror,
the source of funds financing the offer, the number of shares to be acquired
and whether the offeror intends to sell the assets of the company, the offeror
will be subject to civil monetary and criminal penalties.

<PAGE> 62
UNDERWRITING

Subject to certain terms and conditions contained in the Underwriting
Agreement, the syndicate of Underwriters named below, for whom Donaldson,
Lufkin & Jenrette Securities Corporation and A.G. Edwards & Sons, Inc. are
acting as representatives (the "Representatives"), have severally agreed to
purchase from the Company an aggregate of 2,500,000 shares of Common Stock. The
number of shares of Common Stock that each Underwriter has agreed to purchase
is set forth opposite its name below:

<TABLE>
UNDERWRITERS NUMBER OF SHARES
<CAPTION>

<S> <C>
Donaldson, Lufkin & Jenrette Securities Corporation................................

A.G. Edwards & Sons, Inc...........................................................

---------

Total.......................................................................... 2,500,000
=========
</TABLE>

The Underwriting Agreement provides that the obligations of the several
Underwriters to purchase shares of Common Stock are subject to the approval of
certain legal matters by counsel and to certain other conditions. If any of the
shares of Common Stock are purchased by the Underwriters pursuant to the
Underwriting Agreement, all such shares of Common Stock (other than the shares
of Common Stock covered by the over-allotment option described below) must be
so purchased.

Prior to the offering, there has been no established trading market for the
Common Stock. The initial price to the public for the Common Stock offered
hereby will be determined by negotiation between the Company and the
Representatives. The factors to be considered in determining the initial price
to the public include the history of and the prospects for the industry in
which the Company competes, the ability of the Company's management, the past
and present operations of the Company, the historical results of operations of
the Company, the prospects for future earnings of the Company, the present
state of the Company's development, the general condition of the securities
markets at the time of the offering and the recent market prices of and the
demand for publicly traded common stock of generally comparable companies.

The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act, or to contribute
to payments that the Underwriters may be required to make in respect thereof.

The Company has been advised by the Representatives that the Underwriters
propose to offer the Common Stock to the public initially at the price set
forth on the cover page of this Prospectus and to certain dealers (who may
include the Underwriters) at such price less a concession not to exceed
$---------- per share. The Underwriters may allow, and such dealers may reallow,
discounts not in excess of $ ---------- per share to any other Underwriter and
certain other dealers.

The Underwriters have reserved approximately 125,000 shares of the Common
Stock for sale, at the initial public offering price, to directors, officers
and employees of the Company, their business affiliates and related parties, in
each case as such persons have expressed an interest in purchasing such shares
of Common Stock in the offering. The number of shares of Common Stock available
for sale to the general public will be reduced to the extent such persons
purchase such reserved shares of Common Stock. Any reserved shares of the
Common Stock not so purchased will be offered by the Underwriters to the
general public on the same basis as the shares of the Common Stock offered
pursuant to the offering.

The Company has granted to the Underwriters an option to purchase up to
375,000 additional shares of Common Stock, at the initial public offering price
less underwriting discounts and commissions, solely to cover over-allotments.
Such option may be exercised at any time until 30 days after the effective date
of the Registration Statement of which this Prospectus is part. To the extent
that the Underwriters exercise such option each of the Underwriters will be
committed, subject to certain conditions, to purchase a number of option shares
proportionate to such Underwriter's initial commitment as indicated in the
preceding table.

All shareholders of the Company have agreed that they will not directly or
indirectly offer, sell, contract to sell, or otherwise dispose of or transfer
any shares of Common Stock of the Company owned by them without the prior
written consent of Donaldson, Lufkin & Jenrette Securities Corporation, for a
period of ---- days after the date of

<PAGE> 63
this Prospectus except in certain non-public transactions in which the acquiror
or acquirors of such shares agree(s) to such restrictions. In addition, the
Company has agreed that for a period of ---- days after the date of this
Prospectus it will not, without the prior written consent of Donaldson, Lufkin &
Jenrette Securities Corporation, offer, sell, contract to sell, grant any option
to purchase or otherwise dispose of any shares of Common Stock or any securities
convertible into or exercisable or exchangeable for such Common Stock or in any
other manner transfer all or a portion of the economic consequences associated
with such Common Stock, except for (i) shares of Common Stock offered hereby,
(ii) shares of Common Stock issued pursuant to the exercise of options
outstanding on the date of this Prospectus, (iii) options granted after the date
of this Prospectus pursuant to the Company's employee stock plans and other
plans and (iv) shares on options issued in acquisitions in which the acquiror or
acquirors of such shares agree(s) to such restrictions. See "Shares Eligible for
Future Sale."

In connection with the offering, the Underwriters may engage in
transactions that stabilize, maintain or otherwise affect the price of the
Common Stock. Specifically, the Underwriters may overallot the offering,
creating a syndicate short position. In addition, the Underwriters may bid for,
and purchase, shares of Common Stock in the open market to cover syndicate
shorts or to stabilize the price of the Common Stock. Finally, the underwriting
syndicate may reclaim selling concessions allowed for distributing the Common
Stock in the offering, if the syndicate repurchases previously distributed
Common Stock in syndicate covering transactions, in stabilization transactions
or otherwise. Any of these activities may stabilize or maintain the market
price of the Common Stock above independent market levels. The Underwriters are
not required to engage in these activities, and may end any of these activities
at any time.

The Underwriters and dealers may engage in passive market making
transactions in the Common Stock in accordance with Rule 103 of Regulation M
promulgated by the Securities and Exchange Commission. In general, a passive
market maker may not bid for, or purchase, the Common Stock at a price that
exceeds the highest independent bid. In addition, the net daily purchases made
by any passive market maker generally may not exceed 30% of its average daily
trading volume in the Common Stock during a specified two month prior period,
or 200 shares, whichever is greater. A passive market maker must identify
passive market making bids as such on the Nasdaq electronic inter-dealer
reporting system. Passive market making may stabilize or maintain the market
price of the Common Stock above independent market levels. Underwriters and
dealers are not required to engage in passive market making and may end passive
market making activities at any time.

The Representatives have informed the Company that the Underwriters do not
intend to confirm sales of shares of Common Stock offered hereby to accounts
over which they exercise discretionary authority.

<PAGE> 64
LEGAL MATTERS

The validity of the shares of Common Stock offered hereby has been passed
upon for the Company by Bryan Cave LLP, St. Louis, Missouri. Certain legal
matters will be passed upon for the Company by Matthew P. McCauley, Esq.,
Secretary of the Company, General Counsel of Conning Asset Management Company
and Vice President and Associate General Counsel of General American Life
Insurance Company, and for the Underwriters by Simpson Thacher & Bartlett (a
partnership which includes professional corporations), New York, New York. The
Honorable John C. Danforth, a partner of Bryan Cave LLP, is a director of
General American Life Insurance Company, GenAmerica Corporation and General
American Life Mutual Holding Company. Bryan Cave LLP from time to time serves
as legal counsel to General American and certain of its affiliates.

EXPERTS

The consolidated financial statements and schedule of the Company as of
December 31, 1995 and 1996, and for each of the years in the three-year period
ended December 31, 1996, have been included herein and in the Registration
Statement in reliance upon the report of KPMG Peat Marwick LLP, independent
certified public accountants, appearing elsewhere herein, and upon the
authority of said firm as experts in accounting and auditing.

The Consolidated Financial Statements and related schedules of Conning Inc.
and subsidiaries for the year ended December 31, 1994, appearing in this
Prospectus and elsewhere in the Registration Statement have been included
herein and elsewhere in the Registration Statement have been audited by Price
Waterhouse LLP, independent certified public accountants, as stated in their
report appearing herein.

ADDITIONAL INFORMATION

The Company has filed with the Securities and Exchange Commission,
Washington, D.C. (the "Commission"), a Registration Statement (the
"Registration Statement") on Form S-1 under the Securities Act, with respect
to the Common Stock offered hereby. This Prospectus, which constitutes part of
the Registration Statement, omits certain of the information contained in the
Registration Statement and the exhibits and schedules thereto on file with the
Commission pursuant to the Act and the rules and regulations of the Commission
thereunder. The Registration Statement, including exhibits and schedules
thereto, may be inspected at the principal offices of the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549, and at its regional offices at
Citicorp Center, 500 W. Madison Street, Suite 1400, Chicago, Illinois 60661,
and at Seven World Trade Center, Suite 1300, New York, New York 10048, and
copies may be obtained at the prescribed rates from the Public Reference
Section of the Commission at its principal office in Washington, D.C. The
Commission maintains an Internet Web site (http://www.sec.gov.) that contains
such documents filed electronically by the Company with the Commission through
its Electronic Data Gathering, Analysis and Retrieval System (EDGAR) filing
system. Statements contained in this Prospectus as to the contents of any
contract, agreement or other document referred to herein are not necessarily
complete and in each instance reference is made to the copy of such contract,
agreement or other document filed as an exhibit to the Registration Statement,
each such statement being qualified in all respects by such reference.

<PAGE> 65
<TABLE>
INDEX TO FINANCIAL STATEMENTS

<CAPTION>
PAGE
<S> <C>
UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS OF CONNING CORPORATION AND SUBSIDIARIES

Consolidated Balance Sheets as of December 31, 1996 and June 30, 1997 (unaudited)................... F-2

Consolidated Statements of Income for the six month periods ended June 30, 1996 and 1997
(unaudited)....................................................................................... F-3

Consolidated Statements of Common Shareholders' Equity for the six month period ended June 30, 1997
(unaudited)....................................................................................... F-4

Consolidated Statements of Cash Flows for the six month periods ended June 30, 1996 and 1997
(unaudited)....................................................................................... F-5

Notes to Unaudited Consolidated Financial Statements................................................ F-6

CONSOLIDATED FINANCIAL STATEMENTS OF CONNING CORPORATION AND SUBSIDIARIES

Independent Auditors' Report........................................................................ F-7

Consolidated Balance Sheets as of December 31, 1995 and 1996........................................ F-8

Consolidated Statements of Income for the years ended December 31, 1994, 1995 and 1996.............. F-9

Consolidated Statements of Common Shareholder's Equity for the years ended December 31, 1994,
1995 and 1996..................................................................................... F-10

Consolidated Statements of Cash Flows for the years ended December 31, 1994, 1995 and 1996.......... F-11

Notes to Consolidated Financial Statements.......................................................... F-12

SCHEDULE I--FINANCIAL STATEMENTS OF CONNING CORPORATION (PARENT COMPANY ONLY)<F*>

Condensed Balance Sheets as of December 31, 1995 and 1996........................................... F-24

Condensed Statements of Income for the years ended December 31, 1995 and 1996....................... F-25

Condensed Statements of Cash Flows for the years ended December 31, 1995 and 1996................... F-26

Notes to Condensed Financial Statements............................................................. F-27

UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS OF CONNING INC. & SUBSIDIARIES

Consolidated Balance Sheet as of June 30, 1995 (unaudited).......................................... F-28

Consolidated Statement of Income for the six month period ended June 30, 1995 (unaudited)........... F-29

Consolidated Statement of Common Shareholders' Equity for the six month period ended June 30, 1995
(unaudited)....................................................................................... F-30

Consolidated Statement of Cash Flows for the six month period ended June 30, 1995 (unaudited)....... F-31

Notes to Unaudited Consolidated Financial Statements................................................ F-32

CONSOLIDATED FINANCIAL STATEMENTS OF CONNING INC. & SUBSIDIARIES

Report of Independent Accountants................................................................... F-33

Consolidated Statement of Financial Condition as of December 31, 1994............................... F-34

Consolidated Statement of Operations for the year ended December 31, 1994........................... F-35

Consolidated Statement of Shareholders' Equity for the year ended December 31, 1994................. F-36

Consolidated Statement of Cash Flows for the year ended December 31, 1994........................... F-37

Notes to Consolidated Financial Statements.......................................................... F-36

<FN>
- --------
<F*>The 1994 Parent Company only Financial Statements are not required as 25%
of the net assets of the Company were not in restricted subsidiaries.
</TABLE>

F-1

<PAGE> 66
<TABLE>
CONNING CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
(UNAUDITED)

<CAPTION>
DECEMBER 31, JUNE 30,
1996 1997
------------ --------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents.............................................. $ 9,816,568 $ 7,189,023
Short-term investments................................................. 7,901,637 8,479,521
Accounts receivable, net............................................... 5,297,660 7,085,364
Marketable equity securities........................................... 45,625 --
Income taxes receivable................................................ 11,447 2,109,611
Prepaid expenses and other current assets.............................. 162,622 291,835
----------- -----------
Total current assets........................................... 23,235,559 25,155,354
Non-marketable investments at value........................................ 1,756,931 1,837,739
Equipment and leasehold improvements, at cost, less accumulated
depreciation and amortization of $562,812 and $775,002................... 815,112 1,063,648
Deferred income taxes...................................................... 1,572,859 750,868
Goodwill................................................................... 18,825,870 18,319,346
Other assets............................................................... 3,813,608 2,831,943
----------- -----------
Total assets................................................... $50,019,939 $49,958,898
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Compensation payable................................................... $ 8,422,199 $ 4,470,645
Deferred revenue....................................................... 1,533,290 1,516,570
Due to affiliates...................................................... 1,473,811 1,325,473
Accounts payable and other accrued expenses............................ 2,707,872 4,153,074
Preferred dividends payable............................................ 235,815 71,423
----------- -----------
Total current liabilities...................................... 14,372,987 11,537,185
Accrued rent liability..................................................... 3,643,996 3,500,602
Long term debt payable to affiliate........................................ 2,000,000 --
Other payables............................................................. 853,521 778,224
----------- -----------
Total liabilities.............................................. 20,870,504 15,816,011
----------- -----------
Series A convertible preferred stock, $.01 par value: 3,190,000 shares
authorized, issued and outstanding....................................... 22,330,004 30,976,988
Series B convertible preferred stock, $.01 par value: 600,000 shares
authorized, 460,000 and 365,000 shares issued and outstanding............ 2,451,800 3,097,699
----------- -----------
Total convertible preferred stock.............................. 24,781,804 34,074,687
----------- -----------
Non-Voting Common Stock, $.01 par value: 20,000,000 shares authorized;
110,000 shares issued and outstanding.................................... -- 1,100
Common stock, $.01 par value: 20,000,000 and 50,000,000 shares authorized;
6,710,000 shares issued and outstanding.................................. 67,100 67,100
Additional paid in capital................................................. 2,944,647 --
Retained earnings.......................................................... 1,355,884 --
----------- -----------
Total common shareholders' equity.............................. 4,367,631 68,200
----------- -----------
Total liabilities and shareholders' equity..................... $50,019,939 $49,958,898
=========== ===========

</TABLE>
See accompanying notes to unaudited consolidated financial statements.

F-2

<PAGE> 67
<TABLE>
CONNING CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME
FOR THE SIX MONTH PERIODS ENDED JUNE 30, 1996 AND 1997
(UNAUDITED)

<CAPTION>
1996 1997
<S> <C> <C>
Revenues:
Asset management and related fees............................ $19,109,449 $24,078,612
Research services............................................ 6,514,849 6,465,286
Other income................................................. 602,338 377,725
----------- -----------
Total revenues....................................... 26,226,636 30,921,623
----------- -----------

Expenses:
Employee compensation and benefits........................... 11,927,474 15,091,209
Occupancy and equipment costs................................ 1,178,517 1,367,716
Marketing and production costs............................... 2,545,680 3,035,920
Professional services........................................ 1,128,819 577,835
Amortization of goodwill and other........................... 1,390,691 1,318,190
Other operating costs........................................ 2,108,875 2,152,134
----------- -----------
Total expenses....................................... 20,280,056 23,543,004
----------- -----------
Operating income............................................. 5,946,580 7,378,619
Interest expense............................................. 411,907 161,804
----------- -----------
Income before provision for income taxes..................... 5,534,673 7,216,815
Provision for income taxes................................... 2,430,961 3,118,918
----------- -----------
Net income................................................... $ 3,103,712 $ 4,097,897
=========== ===========
Preferred stock dividends.................................... 445,781 502,880
----------- -----------
Net earnings available to common shareholder................. $ 2,657,931 $ 3,595,017
=========== ===========
Pro forma weighted average common shares and equivalents
outstanding................................................ -- 11,145,422
Pro forma earnings per common share and common share
equivalents................................................ $ 0.37
</TABLE>

See accompanying notes to unaudited consolidated financial statements.

F-3

<PAGE> 68
<TABLE>
CONNING CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMMON SHAREHOLDERS' EQUITY
FOR SIX MONTH PERIOD ENDED JUNE 30, 1997
(UNAUDITED)

<CAPTION>
NON-
VOTING ADDITIONAL TOTAL COMMON
COMMON COMMON PAID IN RETAINED SHAREHOLDERS'
STOCK STOCK CAPITAL EARNINGS EQUITY

<S> <C> <C> <C> <C> <C>
Balance, December 31, 1996........................ $ $67,100 $ 2,944,647 $ 1,355,884 $ 4,367,631

Conversion of 110,000 shares of Series B preferred
stock........................................... 1,100 768,900 770,000

Tax benefit--employee compensation (Note 2)....... 1,134,785 1,134,785

Accretion on preferred stock...................... (4,848,332) (4,950,901) (9,799,233)

Net income........................................ 4,097,897 4,097,897

Dividends on preferred stock...................... (502,880) (502,880)
------ ------- ----------- ----------- -----------

Balance, June 30, 1997............................ $1,100 $67,100 $ -- $ -- $ 68,200
====== ======= =========== =========== ===========
</TABLE>

See accompanying notes to unaudited consolidated financial statements.

F-4

<PAGE> 69
<TABLE>
CONNING CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTH PERIODS ENDED JUNE 30, 1996 AND 1997
(UNAUDITED)

<CAPTION>
1996 1997

<S> <C> <C>
Operating activities:

Net income................................................... $ 3,103,712 $ 4,097,897

Adjustment for items not affecting cash:

Depreciation and amortization............................ 340,034 442,100

Amortization of goodwill and other....................... 1,390,691 1,318,190

Deferred income tax provision............................ (2,267,490) (835,276)

Net unrealized appreciation on non-marketable
securities............................................. 33,118 --

Net sales of marketable securities....................... 80,250 45,625

Accretion of discounts on short-term investments......... (43,055) (131,551)

Changes in:

Accounts receivables................................. 3,502,966 (1,787,704)

Prepaid expenses and other assets.................... 1,654,865 1,528,054

Accounts payables and other accrued expenses......... (1,516,597) 1,285,514

Income taxes receivable.............................. 959,861 (963,379)

Due to affiliates.................................... (474,100) (148,338)

Deferred revenue..................................... 753,003 (16,720)

Accrued rent liability............................... (132,403) (143,394)

Compensation payable................................. (2,024,962) (3,951,554)
------------ ------------
Net cash provided by operating activities........ 5,359,893 739,464
------------ ------------

Investing activities:

Sale of marketable securities................................ 1,160,000 --

Purchases of non-marketable securities....................... (44,949) (80,808)

Proceeds from non-marketable partnership investments......... 384,450 --

Purchases of equipment and other assets, net................. (1,191,077) (600,636)

Purchases of short-term investments.......................... (12,182,613) (30,841,503)

Maturities of short-term investments......................... 9,600,000 30,395,168
------------ ------------
Net cash used in investing activities............ (2,274,189) (1,127,779)
------------ ------------

Financing activities:

Repayments on long term debt................................. (3,000,000) (2,000,000)

Repayments on short term debt................................ (500,000) --

Other payments............................................... -- --

Issuance of Series B preferred stock......................... -- 79,950

Conversion of Series B preferred stock....................... -- 183,700

Dividends on preferred stock................................. (445,781) (502,880)
------------ ------------
Net cash used in financing activities............ (3,945,781) (2,239,230)
------------ ------------

Net decrease in cash and cash equivalents........................ (860,077) (2,627,545)

Cash and cash equivalents, beginning of year..................... 5,995,260 9,816,568
------------ ------------
Cash and cash equivalents, end of period......................... $ 5,135,183 $ 7,189,023
============ ============
</TABLE>

See accompanying notes to unaudited consolidated financial statements.

F-5

<PAGE> 70
CONNING CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1--BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements should be read
in conjunction with the financial statements and notes for the year ended
December 31, 1996. In the opinion of management, the financial information
reflects all adjustments which are necessary for a fair presentation of
financial position, results of operations and cash flows for the interim
periods. The results of operations for interim periods are not necessarily
indicative of the results to be expected for the entire year.

NOTE 2--EQUITY

In April, 1997, certain shareholders converted 110,000 shares of Series B
Preferred Stock to Non-Voting Common Stock. The resulting transaction increased
additional paid in capital by $768,900 and increased common equity by $1,100.

In June, 1997, General American, pursuant to a call right, purchased
1,594,995 shares of the Company's Series A Preferred Stock from existing
shareholders for $11.25 per share. In connection with such purchase, certain
restrictions were eliminated on the Series A Preferred Stock which generated an
additional tax benefit of $1,134,785 recorded directly to additional paid in
capital.

In June, 1997, the authorized number of shares of Series A Voting Common
Stock increased from 20,000,000 to 50,000,000. The authorized number of shares
of Class B Non-Voting Common Stock remains at 20,000,000.

The carrying value of the Convertible Preferred Stock is at original issue
price plus accretion relating to any increase in the redemption value of the
stock during the period. During the six months ended June 30, 1996 and June 30,
1997, such accretion was $0 and $9,799,233, respectively.

F-6

<PAGE> 71
INDEPENDENT AUDITORS' REPORT

The Board of Directors and Shareholders
Conning Corporation:

We have audited the accompanying consolidated balance sheets of Conning
Corporation and subsidiaries as of December 31, 1995 and 1996, and the related
consolidated statements of income, common shareholder's equity, and cash flows
for the three-year period ended December 31, 1996. In connection with our
audits of the consolidated financial statements, we have audited the
accompanying financial statement schedule. These consolidated financial
statements and financial statement schedule are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
consolidated financial statements and financial statement schedule based on our
audits.

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

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Conning
Corporation and subsidiaries as of December 31, 1995 and 1996, and the results
of their operations and their cash flows for each of the years in the
three-year period ended December 31, 1996, in conformity with generally
accepted accounting principles. Also in our opinion, the related financial
statement schedule, when considered in relation to the basic consolidated
financial statements taken as a whole, presents fairly, in all material
respects, the information set forth herein.

/s/ KPMG Peat Marwick LLP

St. Louis, Missouri
March 21, 1997, except as to note 21
which is as of September 19, 1997

F-7

<PAGE> 72
<TABLE>
CONNING CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

<CAPTION>
DECEMBER 31,
---------------------------
1995 1996
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents.............................................. $ 5,995,260 $ 9,816,568
Short-term investments................................................. 3,598,594 7,901,637
Accounts receivable, net (note 11)..................................... 6,382,572 5,297,660
Marketable equity securities........................................... 1,241,250 45,625
Income taxes receivable................................................ 507,498 11,447
Prepaid expenses and other current assets.............................. 133,955 162,622
----------- -----------
Total current assets........................................... 17,859,129 23,235,559
Non-marketable investments at value........................................ 1,775,613 1,756,931
Equipment and leasehold improvements, at cost, less accumulated
depreciation and amortization of $170,600 and $562,812................... 964,132 815,112
Deferred income taxes...................................................... 1,606,469 1,572,859
Goodwill................................................................... 19,838,917 18,825,870
Other assets............................................................... 4,133,194 3,813,608
----------- -----------
Total assets................................................... $46,177,454 $50,019,939
=========== ===========
LIABILITIES AND SHAREHOLDER'S EQUITY
Current liabilities:
Short term debt........................................................ $ 500,000 $ --
Compensation payable................................................... 3,729,971 8,422,199
Deferred revenue....................................................... 2,401,527 1,533,290
Due to affiliates...................................................... 836,233 1,473,811
Accounts payable and other accrued expenses............................ 3,541,019 2,707,872
Preferred dividends payable............................................ 223,300 235,815
----------- -----------
Total current liabilities...................................... 11,232,050 14,372,987
Accrued rent liability..................................................... 3,914,196 3,643,996
Long term debt payable to affiliates....................................... 9,000,000 2,000,000
Other payables............................................................. 405,789 853,521
----------- -----------
Total liabilities.............................................. 24,552,035 20,870,504
----------- -----------
Series A convertible preferred stock, $.01 par value: 3,190,000 shares
authorized, issued and outstanding....................................... 17,002,704 22,330,004
Series B convertible preferred stock, $.01 par value: 600,000 shares
authorized, 460,000 issued and outstanding............................... -- 2,451,800
----------- -----------
Total convertible preferred stock.............................. 17,002,704 24,781,804
----------- -----------
Common stock, $.01 par value: 20,000,000 shares authorized; 6,710,000
shares issued and outstanding............................................ 67,100 67,100
Additional paid in capital................................................. 2,944,647 2,944,647
Retained earnings.......................................................... 1,376,668 1,355,884
Unrealized appreciation on investments, net of deferred income taxes....... 234,300 --
----------- -----------
Total common shareholder's equity.............................. 4,622,715 4,367,631
----------- -----------
Total liabilities and shareholder's equity..................... $46,177,454 $50,019,939
=========== ===========
</TABLE>

See accompanying notes to consolidated financial statements.

F-8

<PAGE> 73
<TABLE>
CONNING CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME
FOR THE YEARS ENDED DECEMBER 31, 1994, 1995 AND 1996

<CAPTION>
1994 1995 1996
<S> <C> <C> <C>
Revenues:
Asset management and related fees (note 11).................. $3,484,115 $24,049,683 $40,456,343
Research services............................................ -- 4,089,571 12,148,164
Other income................................................. 57,277 663,767 1,061,855
---------- ----------- -----------
Total revenues....................................... 3,541,392 28,803,021 53,666,362
---------- ----------- -----------

Expenses:
Employee compensation and benefits........................... -- 12,027,224 26,001,771
Occupancy and equipment costs................................ -- 1,498,641 2,584,544
Marketing and production costs............................... -- 2,393,281 5,281,667
Professional services........................................ 323,248 3,555,052 1,537,220
Amortization of goodwill and other........................... -- 1,288,911 2,720,969
Other operating expenses..................................... 1,106,147 1,748,349 3,747,838
---------- ----------- -----------
Total expenses....................................... 1,429,395 22,511,458 41,874,009
---------- ----------- -----------
Operating income............................................. 2,111,997 6,291,563 11,792,353
Interest expense............................................. -- 520,523 729,088
---------- ----------- -----------
Income before provision for income taxes..................... 2,111,997 5,771,040 11,063,265
Provision for income taxes................................... 827,165 2,358,889 4,851,034
---------- ----------- -----------
Net income................................................... $1,284,832 $ 3,412,151 $ 6,212,231
========== =========== ===========
Preferred stock dividends.................................... -- 350,900 905,715
---------- ----------- -----------
Net earnings available to common shareholder................. $1,284,832 $ 3,061,251 $ 5,306,516
========== =========== ===========
Pro forma weighted average common shares and
equivalents outstanding.................................... 10,610,552
Pro forma earnings per common share and common share
equivalents................................................ $ 0.59
</TABLE>

See accompanying notes to consolidated financial statements.

F-9

<PAGE> 74
<TABLE>
CONNING CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMMON SHAREHOLDER'S EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1994, 1995 AND 1996

<CAPTION>
UNREALIZED
APPRECIA-
TION
(DEPRECIA-
ADDITIONAL TION) ON TOTAL COMMON
COMMON PAID IN RETAINED INVESTMENTS, SHAREHOLDER'S
STOCK CAPITAL EARNINGS NET EQUITY

<S> <C> <C> <C> <C> <C>
Balance, December 31, 1993........................ $ -- $ 55,000 $ 737,332 $ -- $ 792,332

Net income........................................ 1,284,832 1,284,832

Dividend on common stock.......................... (750,000) (750,000)
------- ---------- ----------- --------- -----------

Balance, December 31, 1994........................ -- 55,000 1,272,164 -- 1,327,164

Issuance of 6,710,000 shares of common stock for
contribution of GAIMCO.......................... 67,100 2,889,647 (2,956,747) --

Change in unrealized appreciation (depreciation)
of investment, net of deferred income taxes..... 234,300 234,300

Net income........................................ 3,412,151 3,412,151

Dividends on preferred stock...................... (350,900) (350,900)
------- ---------- ----------- --------- -----------

Balance, December 31, 1995........................ 67,100 2,944,647 1,376,668 234,300 4,622,715

Change in unrealized appreciation (depreciation)
of investment, net of deferred income taxes..... (234,300) (234,300)

Accretion on Series A preferred stock............. (5,327,300) (5,327,300)

Net income........................................ 6,212,231 6,212,231

Dividends on preferred stock...................... (905,715) (905,715)
------- ---------- ----------- --------- -----------

Balance, December 31, 1996........................ $67,100 $2,944,647 $ 1,355,884 $ -- $ 4,367,631
======= ========== =========== ========= ===========
</TABLE>

See accompanying notes to consolidated financial statements.

F-10

<PAGE> 75
<TABLE>
CONNING CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1994, 1995 AND 1996

<CAPTION>
1994 1995 1996

<S> <C> <C> <C>
Operating activities:
Net income................................................... $1,284,832 $ 3,412,151 $ 6,212,231
Adjustment for items not affecting cash:
Depreciation and amortization............................ -- 170,600 817,422
Amortization of goodwill and other....................... -- 1,288,911 2,720,969
Allowance for doubtful accounts.......................... -- 50,000 (97,750)
Deferred income tax provision............................ -- (1,053,875) (1,457,941)
Net unrealized appreciation on non-marketable
securities............................................. -- (191,426) (125,654)
Net sales of securities held for market making........... -- 34,537 35,625
Gain on sale of marketable securities.................... -- -- (400,000)
Accretion of discounts on short-term investments......... -- (70,161) (235,711)
Changes in:
Accounts receivable.................................. (214,040) 3,000,376 1,182,662
Prepaid expenses and other assets.................... 24,117 2,194,688 1,569,898
Accounts payable and other accrued expenses.......... -- 1,065,845 (833,147)
Income taxes receivable.............................. (326,669) 734,930 496,051
Due to affiliates.................................... 60,135 (3,180,835) 637,578
Deferred revenue..................................... -- 2,093,952 (868,237)
Accrued rent liability............................... -- (104,867) (270,200)
Compensation payable................................. -- (2,839,348) 4,692,228
---------- ------------ ------------
Net cash provided by operating activities....... 828,375 6,605,478 14,076,024
---------- ------------ ------------
Investing activities:
Sale of marketable securities................................ -- -- 1,160,000
Purchases of non-marketable securities....................... -- (242,415) (273,233)
Proceeds from non-marketable partnership investments......... -- -- 417,568
Purchases of equipment and other assets, net................. -- (44,439) (1,238,050)
Purchases of short-term investments.......................... -- (7,769,655) (46,567,333)
Maturities of short-term investments......................... -- 6,900,000 42,500,000
Contribution of GAIMCO cash.................................. -- 5,077,492 --
Acquisition of Conning, net of cash acquired................. -- (12,207,581) --
---------- ------------ ------------
Net cash used in investing activities........... -- (8,286,598) (4,001,048)
---------- ------------ ------------
Financing activities:
Borrowings on long term debt................................. -- 13,000,000 --
Repayments on long term debt................................. -- (4,000,000) (7,000,000)
Repayments on short term debt................................ -- (2,000,000) (500,000)
Other payments............................................... -- (163,220) (312,268)
Issuance of Series B preferred stock......................... -- -- 2,451,800
Dividends on common stock.................................... (750,000) -- --
Dividends on preferred stock................................. -- (127,600) (893,200)
---------- ------------ ------------
Net cash provided by (used in) financing
activities.................................... (750,000) 6,709,180 (6,253,668)
---------- ------------ ------------
Net increase in cash and cash equivalents........................ 78,375 5,028,060 3,821,308
Cash and cash equivalents, beginning of year..................... 888,825 967,200 5,995,260
---------- ------------ ------------
Cash and cash equivalents, end of year........................... $ 967,200 $ 5,995,260 $ 9,816,568
========== ============ ============

Supplemental disclosure of cash flow information:

Cash paid for:
Interest..................................................... -- $ 391,921 $ 446,531
Income taxes................................................. $1,153,834 $ 1,761,076 $ 4,546,603

Supplemental disclosure of non-cash information:
Preferred stock issued in Conning acquisition................ -- $ 17,002,704 --
Common stock issued in GAIMCO contribution................... -- $ 3,011,747 --
Accretion on Series A preferred stock........................ -- -- $ 5,327,300
</TABLE>

See accompanying notes to consolidated financial statements.

F-11

<PAGE> 76
CONNING CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1--ORGANIZATION

Conning Corporation (the "Company"), formed in 1995 as a Missouri
corporation, is a holding company organized to hold the operating subsidiaries
in the Conning group, Conning Asset Management Company ("CAM", formerly known
as General American Investment Management Company, "GAIMCO") and Conning &
Company ("C&C"). The Company provides asset management and research services
focused upon the insurance industry. Both CAM and C&C are registered investment
advisers with the Securities and Exchange Commission (the "SEC") under the
Investment Advisers Act of 1940.

All the outstanding voting common stock of the Company is held by a
wholly-owned holding company subsidiary of General American Life Insurance
Company (together "General American"). If all of the outstanding convertible
preferred stock (see Note 9) was converted on December 31, 1996, General
American would own approximately 65% of the resulting outstanding common stock.

On August 11, 1995, the shareholders of the holding company of C&C
contributed all of their common stock to Conning Corporation in a Section 351
merger transaction (the "Strategic Merger") in exchange for cash and
convertible preferred stock of the Company. General American contributed all of
the outstanding common stock of GAIMCO as part of the Strategic Merger in
exchange for common shares of the Company. The GAIMCO contribution was recorded
at historical book value. The Conning portion of the Strategic Merger was
accounted for using the purchase method. The purchase price consisting of cash
of $12.0 million and $17.0 million of Series A Convertible Preferred Stock was
allocated to assets acquired based on their estimated fair values. The excess
of purchase price over the fair value of net assets acquired resulted in $20.3
million of goodwill which is being amortized on a straight line basis over 20
years.

The accompanying consolidated financial statements include the accounts of
Conning Corporation, Conning Inc. (the holding company parent of C&C), Conning
& Company and Conning Asset Management Company. The historical financial
statement includes the operations and financial position of GAIMCO through July
31, 1995, and consolidated operations thereafter, and consolidated financial
position as of December 31, 1995 and 1996.

F-12

<PAGE> 77
CONNING CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 2--PRO FORMA RESULTS (UNAUDITED)

The table below contains unaudited pro forma summary financial information
for the year ended December 31, 1995, and for comparative purposes, summary
financial information condensed from the audited financial statements for the
year ended December 31, 1996. The pro forma 1995 information was derived from
the historical financial statements for Conning Corporation, GAIMCO and Conning
Inc. and gives effect to (i) the Strategic Merger, (ii) the issuance of $13.0
million of debt by the Company and (iii) certain transactions effected by
Conning Inc. in anticipation of the Strategic Merger. The pro forma information
has been prepared assuming these transactions and arrangements were effected on
January 1, 1995.

<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31,
1995 1996
------------ ------------
PRO FORMA
(UNAUDITED) ACTUAL
<S> <C> <C>
Revenues:
Asset management and related fees....................... $30,674,994 $40,456,343
Research services....................................... 9,480,364 12,148,164
Other income............................................ 995,605 1,061,855
----------- -----------
Total revenues.................................. 41,150,963 53,666,362
----------- -----------
Expenses:
Employee compensation and benefits...................... 18,336,044 26,001,771
Amortization of goodwill and other...................... 2,911,384 2,720,969
Other operating expenses................................ 12,514,187 13,151,269
----------- -----------
Operating income........................................ 7,389,348 11,792,353
Interest expense........................................ 1,364,547 729,088
----------- -----------
Income before provision for income taxes................ 6,024,801 11,063,265
Provision for income taxes.............................. 2,738,954 4,851,034
----------- -----------
Net income.............................................. $ 3,285,847 $ 6,212,231
=========== ===========
Preferred stock dividends............................... 905,715 905,715
----------- -----------
Net earnings available to common shareholder............ $ 2,380,132 $ 5,306,516
=========== ===========
Pro forma earnings per common share and common share
equivalents........................................... $ 0.31 $ 0.59
</TABLE>

Pro forma earnings per share is computed by dividing net income by the
weighted average number of shares of common stock and common stock equivalents
considered outstanding during the period after giving effect to all dilutive
common stock and common stock equivalent shares issued within twelve months of
the public offering of the Company's common stock.

F-13

<PAGE> 78
CONNING CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

The table below contains unaudited pro forma summary financial information
for the year ended December 31, 1994 and was derived from the historical
financial statements for Conning Corporation, GAIMCO and Conning Inc. and gives
effect to (i) the Strategic Merger, (ii) the issuance of $13.0 million of debt
by the Company and (iii) certain transactions effected by Conning Inc. in
anticipation of the Strategic Merger. The pro forma information has been
prepared assuming these transactions and arrangements were effected on January
1, 1994.

<TABLE>
<CAPTION>
DECEMBER 31,
1994
------------
PRO FORMA
(UNAUDITED)
<S> <C>
Revenues.......................................... $22,016,698
-----------
Expenses:
Operating expenses............................ 16,689,461
Amortization of goodwill and other............ 2,911,384
-----------
Operating income.............................. 2,415,853
Interest expense.............................. 1,395,528
-----------
Income before provision for income taxes...... 1,020,325
Provision for income taxes.................... 919,014
-----------
Net income.................................... $ 101,311
===========
Preferred stock dividends..................... 905,715
-----------
Net loss attributable to common
shareholders................................ $ (804,404)
===========
</TABLE>

The pro forma information presented in the previous two tables is not
necessarily indicative of the results that would have been obtained had the
transactions and arrangements taken effect on the assumed date, nor is the
information intended to be a projection for any future period.

NOTE 3--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accompanying consolidated financial statements of the Company have been
prepared in conformity with generally accepted accounting principles. For
accounting purposes the Strategic Merger was effective at the close of business
July 31, 1995. The contribution of GAIMCO to the Company as a result of the
Strategic Merger is treated as a combination of entities under common control,
using historical cost basis accounting.

Principles of Consolidation--The consolidated financial statements include
the accounts of the Company and its subsidiaries after elimination of
intercompany balances and transactions.

Revenue Recognition--Asset management fees are determined based on
contractual provisions and are earned at varying percentages of the assets
under management. Such fees are accrued into income in the period in which the
service is provided. Research fees, primarily in the form of commissions
derived from securities transactions effected by the Company and, to a lesser
extent, subscription fees for research publications, are recorded in income
when services are provided or earned. Mortgage loan fee income, included in
Asset Management and Related Fees, is earned through the origination of
mortgage loans for General American, its affiliates and outside parties. The
fees earned are based on agreements with the borrowers and is recognized at the
closing of the mortgage commitment. Deferred mortgage loan origination fees
represent moneys received for loan commitments that will be earned upon loan
funding and are included in deferred revenue on the consolidated balance sheet.

F-14

<PAGE> 79
CONNING CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Cash and Cash Equivalents--Cash and cash equivalents represent cash and
highly liquid investments with original maturities of three months or less. The
Company had funds on deposit with General American amounting to $5,386,747 and
$6,449,642 at December 31, 1995 and 1996, which were readily convertible to
cash and earns interest at the short-term money market rates. For purposes of
the financial statements, such funds are considered cash equivalents.

Short-Term Investments--Short-term investments are comprised of U.S.
Government Securities and investment grade commercial paper having a maturity
of one year or less and are carried at amortized cost, which approximates fair
value.

Investments--Marketable equity securities classified as trading securities
are presented at fair value with corresponding unrealized gains or losses
included in current period income. Marketable equity securities classified as
available-for-sale are presented at fair value with corresponding unrealized
gains or losses included as a separate component of shareholder's equity, net
of deferred income taxes. Non-marketable investments held by the broker dealer
subsidiary are recorded at fair value with corresponding unrealized
gains/losses included in current period income.

Equipment and Leasehold Improvements--Equipment is stated at cost, less
accumulated depreciation provided on an accelerated method over periods not
exceeding eight years. Leasehold improvements are stated at cost less,
accumulated amortization provided on a straight-line basis over the term of the
lease.

Income Taxes--Income tax expense is based on income reported in the
financial statements. Deferred federal and state income taxes are provided
based on an asset and liability approach which requires the recognition of
deferred income tax assets and liabilities for the expected future tax
consequences of temporary differences between the financial statement carrying
amounts and the tax basis of assets and liabilities. The Company files
consolidated federal income tax returns with its subsidiaries.

Goodwill--Goodwill arising from the Strategic Merger is being amortized on
a straight-line basis over a period of 20 years. Accumulated amortization was
$422,105 and $1,435,156 as of December 31, 1995 and 1996, respectively.
Goodwill is periodically reviewed to determine recoverability based on the
discounted operating cash flows of the underlying business. At December 31,
1995 and 1996, no impairment was indicated.

Other Assets--Included in other assets are costs associated with the
purchase of a software license agreement (the "License Agreement") effective
as of January 27, 1996. The total cost of the license is being amortized over
the life of the License Agreement. As of December 31, 1996, $1,388,333 remains
to be amortized over the four remaining years of the License Agreement. Total
amortization of $311,667 is included in the consolidated statements of income
for the year ended December 31, 1996. Also included in other assets is the
unamortized cost of compensation relating to the Strategic Merger that is being
amortized over a three year period ending August 11, 1998. Amortization of
$866,806 and $1,707,918 is included in the consolidated statements of income
for the years ended December 31, 1995 and 1996, respectively. The unamortized
amount of $4,133,194 and $2,425,276 is included in other assets as of December
31, 1995 and 1996, respectively.

Compensation Payable--Compensation payable represents amounts payable to
employees as a result of the Company's incentive compensation programs during
the normal course of operations. Amounts are accrued in the period earned.

Accrued Rent Liability--The Company has recorded as a liability the present
value of the difference between a market rate lease and the contract rate in
the lease for the Company's office space in Hartford, Connecticut as part of
the fair value adjustments relating to the Strategic Merger. This difference is
being amortized as a reduction of rent expense over the remaining lease period.

Preferred Stock--The carrying value of the convertible preferred stock is
at original issue price plus accretion relating to any increase in the
redemption value of the stock during the period. During 1995 and 1996, such
accretion was $0 and $5,327,300, respectively.

F-15

<PAGE> 80
CONNING CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Other Income--Other income is comprised of investment income and other
miscellaneous revenues.

Non-cash employee compensation--The Company uses the intrinsic value method
to account for stock option plans as prescribed by the Accounting Principles
Board Opinion No. 25, "Accounting for Stock Issued to Employees" ("APB
25"). Under this method, compensation expense is recognized for awards of
options to purchase shares of stock to employees under compensatory plans only
if the fair market value of the stock at the option grant date (or other
measurement date, if later) is greater than the amount the employee must pay to
acquire the stock. In October 1995, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standards No. 123, "Accounting for
Stock-Based Compensation" ("FAS 123"). FAS 123 permits companies to adopt a
new fair value based method to account for stock option plans or to continue
using the intrinsic value method. The Company intends to continue using the
intrinsic value method and provides the pro forma disclosures in Note 12, as
required by FAS 123.

Use of estimates--Management of the Company has made a number of estimates
and assumptions relating to the reporting of assets and liabilities in the
preparation of the financial statements. Actual results could differ from these
estimates.

Reclassifications--Certain amounts have been reclassified in prior years to
conform to 1996 presentation.

NOTE 4--ACCOUNTS RECEIVABLE

Accounts receivable include primarily amounts due for management fees,
selling concessions due from underwriters and amounts due from other business
activities of the Company. At December 31, 1995 and 1996, an allowance for
doubtful accounts of $262,750 and $165,000 was applied as a reduction of
accounts receivable, respectively. The change in the allowance in the current
period was the result of management's assessment of the collectibility of the
underlying receivables.

NOTE 5--INVESTMENTS

At December 31, 1995 and 1996, the estimated fair value of marketable and
non-marketable investments were as follows:

<TABLE>
<CAPTION>
1995 1996
<S> <C> <C>
Marketable equity securities--trading (cost
$83,600 and $46,250)............................ $ 81,250 $ 45,625
Marketable equity securities--Available-for-sale
(cost $760,000)................................. 1,160,000 --
---------- ----------
Total marketable securities................... $1,241,250 $ 45,625
========== ==========
Non-marketable equity securities (cost $5,000).... $ 9,250 $ 10,945
Non-marketable partnership investments (cost
$1,554,524 and $1,448,968)...................... 1,766,363 1,745,986
---------- ----------
Total non-marketable investments.............. $1,775,613 $1,756,931
========== ==========
</TABLE>

The Company is a 1% general partner in various private equity funds. The
value of the non-marketable partnership investments is updated periodically
based upon estimates of fair value. Additionally, the Company had no derivative
investments as of December 31, 1995 and 1996.

F-16

<PAGE> 81
CONNING CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 6--EQUIPMENT AND LEASEHOLD IMPROVEMENTS

At December 31, 1995 and 1996, equipment and leasehold improvements
comprised the following:

<TABLE>
<CAPTION>
1995 1996
<S> <C> <C>
Office equipment.................................. $ 436,519 $ 641,421
Computer equipment................................ 442,685 468,950
Leasehold improvements............................ 255,528 267,553
---------- ----------
1,134,732 1,377,924
Less accumulated depreciation and amortization.... 170,600 562,812
---------- ----------
$ 964,132 $ 815,112
========== ==========
</TABLE>

Depreciation expense of $0, $170,600 and $447,070 on the above is included
in the consolidated statements of income for the years ended December 31, 1994,
1995 and 1996, respectively. The Company owned no equipment or leasehold
improvements during 1994.

The Company occupies premises and rents certain office equipment under
leases that are accounted for as operating leases and that have expiration
dates through 2005. At December 31, 1996, the minimum net rental commitments of
the Company for the periods indicated under the terms of these operating leases
in excess of one year were approximately $6,342,000 as follows: $927,000 in
1997; $811,000 in 1998; $658,000 per year from 1999 to 2005.

NOTE 7--INCOME TAXES

Prior to the Strategic Merger, GAIMCO was included in the consolidated
Federal income tax returns of General American and its provisions for income
taxes have been computed as if GAIMCO had filed a separate return. The
provision for Federal and state income tax for the years ended December 31,
1994, 1995 and 1996, is as follows:

<TABLE>
<CAPTION>
1994 1995 1996
<S> <C> <C> <C>
Current income tax provision............ $827,165 $1,755,497 $4,651,708
Deferred income tax provision........... -- 603,392 199,326
-------- ---------- ----------
Total income tax provision.............. $827,165 $2,358,889 $4,851,034
======== ========== ==========
</TABLE>

The differences between the expected United States Federal income tax
provision at the statutory rate of 35% for 1994, 1995 and 1996 and the
Company's actual Federal income tax rate are as follows:

<TABLE>
<CAPTION>
1994 1995 1996
<S> <C> <C> <C>
Income before income taxes.............. $2,111,997 $5,771,040 $11,063,265
Federal income taxes at statutory
rate.................................. 739,198 2,019,864 3,872,143
Increases in income taxes resulting
from:
State tax, net of Federal........... 85,221 219,974 619,251
Amortization of goodwill............ -- 147,737 354,568
Other, net.......................... 2,746 (28,686) 5,072
---------- ---------- -----------
Federal income tax provision............ $ 827,165 $2,358,889 $ 4,851,034
========== ========== ===========
</TABLE>

F-17

<PAGE> 82
CONNING CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

The components of deferred income taxes for the years ended December 31,
1995 and 1996 are as follows:

<TABLE>
<CAPTION>
1995 1996
<S> <C> <C>
Accrued rent liability.................. $ 43,441 $ 82,612
Employee costs.......................... 54,759 (706,227)
Partnership investments................. 97,821 168,972
Accrued expense reserves................ 421,657 252,396
Other, net.............................. (14,286) 401,573
-------- ---------
Total deferred income tax provision..... $603,392 $ 199,326
======== =========
</TABLE>

The Company's net deferred income tax assets represent the estimated future
tax effects attributable to future taxable or deductible temporary difference
between amounts recognized in the financial statements and income tax returns.
At December 31, 1995 and 1996, the net deferred income tax asset is as follows:

<TABLE>
<CAPTION>
1995 1996
<S> <C> <C>
Accrued rent liability.................. $1,621,496 $1,538,884
Employee costs.......................... 160,420 203,228
Other, net.............................. 641,531 389,135
---------- ----------
Gross deferred income tax assets........ 2,423,447 2,131,247
Valuation allowance..................... -- --
---------- ----------
Deferred income tax assets, net of
valuation allowance................... 2,423,447 2,131,247
---------- ----------
Depreciation............................ (152,162) (192,324)
Unrealized appreciation on
investments........................... (314,830) --
Employee costs.......................... (285,315) (132,421)
Partnership investments................. (64,671) (233,643)
---------- ----------
Gross deferred income tax liabilities... (816,978) (558,388)
---------- ----------
Net deferred income tax assets.......... $1,606,469 $1,572,859
========== ==========
</TABLE>

A valuation allowance is provided when it is more likely than not that some
portion of the deferred tax assets will not be realized. Management believes
the deferred tax assets will be fully realized in the future based upon
consideration of the reversal of existing temporary differences, anticipated
future earnings, and all other available evidence. Accordingly, no valuation
allowance is established.

NOTE 8--DEBT

Long term:

On August 11, 1995, the Company borrowed $13,000,000 from General American
to fund certain payments made in connection with the Strategic Merger. Interest
is payable on January 1 and September 1 at an annual rate of 7.0%. Principal
payments are due in three equal annual installments of $4,333,333 commencing
September 1, 2003. The Company prepaid $4,000,000 and $7,000,000 of principal
plus accrued interest of $323,750 and $412,805 in 1995 and 1996, respectively.
Management estimates the carring value of long term debt approximates fair
value.

On February 26, 1997, the Company paid the remaining $2,000,000 outstanding
on its long term debt along with accrued interest expense of $27,222.

Short term:

On August 11, 1995, the Company borrowed $2,500,000 from General American
to fund certain payments made in connection with the Strategic Merger. Interest
is payable on January 1 and August 1 at an annual rate of 6.75%.

F-18

<PAGE> 83
CONNING CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Principal is due on August 11, 1996. The Company prepaid $2,000,000 and
$500,000 of principal plus accrued interest of $58,688 and $14,250 during 1995
and 1996, respectively, which is included in the consolidated statements of
income.

Lines of credit:

At December 31, 1995 the Company had a line of credit with a commercial
bank for $1,200,000. During 1996, the Company terminated the line of credit.
There were no outstanding borrowings during 1995.

At December 31, 1995 and 1996, the Company had a Revolving Subordinated
Loan Agreement (the "Agreement") with a commercial bank for $2,000,000. The
interest rate is agreed upon by the lender and the Company at the time of an
advance. The Agreement expires on December 31, 1997. During 1996, the Company
borrowed $2,000,000 for less than one week. There were no borrowings during
1995.

NOTE 9--PREFERRED STOCK

The preferred stock of the Company consists of (i) Series A Convertible
Preferred Stock, par value $.01 per share and (ii) Series B Convertible
Preferred Stock, par value $.01 per share.

At December 31, 1995, 3,190,000 shares of Series A Convertible Preferred
Stock (the "Series A Preferred Stock") were authorized, issued and
outstanding. The Series A Preferred Stock pays dividends quarterly based on the
90 day United States Treasury Bill rate in effect on the previous payment date.
Such dividends are cumulative. The Company declared dividends on the Series A
Preferred Stock of $0.11 and $0.28 for the years ended December 31, 1995 and
1996, respectively. Declared but unpaid dividends are shown as a liability on
the consolidated balance sheet. The Series A Preferred Stock carries no voting
rights. Each share of Series A Preferred Stock is convertible into one share of
Non-Voting Common Stock at the holder's election, or Voting Common Stock upon
an initial public offering.

On November 8, 1996, the Company commenced a private offering to certain
employees and directors. This offering was for a new class of preferred stock
designated Series B Convertible Preferred Stock (the "Series B Preferred
Stock"). A total of 460,000 shares were sold at $5.33 per share adding
$2,451,800 to preferred stock. In order to exercise the conversion, payment to
the Company of an additional $1.67 per share is required.

At December 31, 1996, 600,000 shares of Series B Preferred Stock were
authorized and 460,000 shares were issued and outstanding. The Series B
Preferred Stock pays dividends quarterly at a rate of 5% per annum and such
dividends are cumulative. Unpaid dividends are included in Preferred Dividends
Payble on the consolidated balance sheet. The Series B Preferred Stock carries
no voting rights. Each share of Series B Preferred Stock is convertible into
one share of Non-Voting Common Stock at the holder's election and upon payment
of the additional $1.67 per share to the Company.

During January 1997, the Company issued an additional 15,000 shares of
Series B Preferred Stock at $5.33 per share.

NOTE 10--SHAREHOLDER'S EQUITY

The board of directors of the Company is authorized to issue up to
20,000,000 shares of Class A Voting Common Stock and Class B Non-Voting Common
Stock, each with a par value of $.01 per share.

NOTE 11--OTHER RELATED PARTY ACTIVITIES

CAM acts as an investment adviser for the general and separate accounts of
General American and its insurance subsidiaries as well as the General American
Capital Company family of funds. Investment management fees earned from these
affiliated entities for the years ended December 31, 1994, 1995 and 1996
amounted $2,618,635, $12,573,489 and $14,300,267 respectively. The total
investment management fees receivable from these affiliated entities at
December 31, 1995 and 1996 amounted to $825,924 and $1,042,294, respectively.
Certain officers and directors of the Company are also officers of General
American and officers and/or directors of other General American affiliates.

F-19

<PAGE> 84
CONNING CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

The Company is directly or indirectly, through intermediary partnerships,
the managing general partner of certain private equity funds with an equity
ownership interest of 1% in each fund. In total, the Company managed zero,
seven and five funds during 1994, 1995 and 1996, respectively. Fees for
managing these funds were $0, $1,295,330 and $4,006,038 for the years ended
December 31, 1994, 1995 and 1996, respectively.

The Company received underwriting fees and concessions in connection with
the offering of shares of two companies which were partially owned by certain
private equity funds managed by the Company. Such fees and concession are
included in research services and related fees and amounted to $0, $0 and
$2,177,269 for the years ended December 31, 1994, 1995 and 1996.

In connection with the November 8, 1996 private offering of Series B
Preferred Stock, General American holds demand recourse notes from certain
employees totaling $2,185,300. The notes bear interest of 6% which is payable
semi-annually beginning July 1997.

General American provides administrative services on request of the Company
including disbursements, tax, facility management and other administrative
support to the Company pursuant to an administrative services agreement. The
following table list the expenses recorded by the Company for significant
services provided by General American for the years ended December 31, 1995 and
1996:

<TABLE>
<CAPTION>
1995 1996
<S> <C> <C>
Employee costs................ $ 6,341,164 $ 7,103,724
Computer services............. 50,591 118,008
Rent.......................... 624,414 612,822
All other..................... 5,291,934 6,776,667
----------- -----------
$12,308,103 $14,611,221
=========== ===========
</TABLE>

Costs for the year ended December 31, 1994 were not broken out in the
components listed above, but rather were charged as one administrative fee and
amounted to $871,221.

NOTE 12--STOCK OPTIONS

On August 11, 1995, the stockholders approved the Company's 1995 Flexible
Stock Plan which provides for the grant of options to purchase up to 2,100,000
shares of the Company's Class B Non-Voting Common Stock to officers and other
key employees of the Company and its affiliates. Terms and conditions
(including price, exercise date and number of shares) are determined by the
Board of Directors, which administers the plan. In the event of a initial
public offering the options become 100% vested. All options were granted at
fair value.

On November 22, 1996, the stockholders approved the Company's 1996 Flexible
Stock Plan which provides for the grant of options to purchase up to 2,100,000
shares of the Company's Non-Voting Common Stock to officers and other key
employees of the Company and its affiliates. Terms and conditions (including
price, exercise date and number of shares) are determined by the Board of
Directors, which administers the plan.

<TABLE>
<CAPTION>
WEIGHTED AVERAGE
NUMBER OF SHARES EXERCISE PRICE
---------------------- --------------------
DEC. 31, DEC. 31, DEC. 31, DEC. 31,
1995 1996 1995 1996

<S> <C> <C> <C> <C>
Outstanding, beginning of year.......... -- 1,000,000 $ -- $5.33
Granted................................. 1,000,000 230,000 5.33 7.00
Exercised............................... -- -- -- --
Canceled................................ -- -- -- --
--------- --------- ----- -----
Outstanding, end of year................ 1,000,000 1,230,000 5.33 $5.64
========= ========= ===== =====
Exercisable, end of year................ -- 200,000 -- $5.33
========= ========= ===== =====
</TABLE>

F-20

<PAGE> 85
CONNING CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

The Company applies APB Opinion No. 25, "Accounting for Stock Issued to
Employees, ("APB 25"), in accounting for both the 1996 and 1995 Flexible
Stock Plans and, accordingly, no compensation cost has been recognized for its
stock options in the financial statements. The weighted-average grant-date fair
value of stock options granted during the year and the weighted-average
significant assumptions used to determine those fair values, using a modified
Black-Scholes option pricing model, and the pro forma effect on earnings of the
fair value accounting for stock options under FAS 123 are as follows:

<TABLE>
<CAPTION>
1995 1996

<S> <C> <C>
Grant-date fair value per share............................. $ 0.91 $ 1.13

Significant assumptions:

Risk-free interest rate at grant date................... 6.05% 5.70%

Expected dividend payout................................ $ 0 $ 0

Expected stock price volatility......................... n/a n/a

Expected life to exercise (years)....................... 2.5 2.5

Net Income.............................. As reported....... $3,412,151 $6,212,231

Pro forma......... $3,336,484 $6,026,307

Pro forma earnings per common share..... As reported....... $ 0.59

Pro forma......... $ 0.57
</TABLE>

NOTE 13--EMPLOYEE BENEFITS

The Company has two retirement savings plans, a 401(k) Savings Plan (the
"401(k) Plan") and the General American Life Insurance Company Progress
Sharing Plan and Trust (the "Progress Sharing Plan"). The 401(k) Plan is
available to substantially all Conning employees who were employed by Conning
prior to the Strategic Merger. The Progress Sharing Plan is available to all
employees employed by GAIMCO prior to the Strategic Merger and all employees
employed subsequent to the Strategic Merger. The Company contributed $0,
$286,170 and $547,127 on behalf of eligible employees for the years ended
December 31, 1994, 1995 and 1996, respectively. Direct charges to the Company
from General American for the Progress Sharing Plan were approximately $22,000,
$359,000 and $310,000 for the years ended December 31, 1994, 1995 and 1996
which is included in the charges for administrative services from General
American. One of the investment vehicles offered in the 401(k) Plan is managed
by Conning.

Pension Plan--Substantially all personnel who were employees of GAIMCO
prior to the Strategic Merger were eligible for a defined benefit plan
sponsored by General American through December 31, 1996. All costs are born and
retained by General American. The plan is over funded as of December 31, 1995
and 1996. Therefore, no charges were made by General American to GAIMCO.

NOTE 14--LITIGATION

One legal claim has arisen during the normal course of the Company's
non-securities and non-investment advisory serves businesses. Although the
matter is subject to uncertainty, as it remains in the preliminary stages and
discovery has not been completed, the Company believes that Conning & Company
has meritorious defenses to all claims and that the probable outcome should not
have a material adverse effect upon the Company.

NOTE 15--COMMITMENTS AND CONTINGENCIES

The Company through its subsidiary is, directly or through intermediary
partnerships, a 1% general partner in certain private equity funds that the
Company also manages. Capital contributions by the partners are called as
needed for investments by the funds. At December 31, 1996, the Company's future
commitment to fund such required capital contributions was approximately
$273,000.

F-21

<PAGE> 86
CONNING CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

The Company through its subsidiary has committed to Conning Connecticut
Investors, L.L.C. (the "L.L.C."), a limited liability company of which the
Company is the general partner and managing member, up to approximately
$4,040,000 for purposes of capitalizing the general partner. The amount is
payable only in the event of insolvency on the part of the L.L.C.

NOTE 16--NET CAPITAL REQUIREMENTS

C&C is a registered broker-dealer and a member of the National Association
of Securities Dealers, Inc. and therefore is subject to a requirement of the
SEC's Uniform Net Capital Rule, requiring the maintenance of certain minimal
capital levels. At December 31, 1996, C&C had net capital, as defined by the
Uniform Net Capital Rule, of $2,428,221 which was $1,824,367 in excess of the
required net capital. CAM is also subject to minimum net capital requirements
which are determined by state regulations in each of the states in which CAM is
licensed to do business. As of December 31, 1996 and 1995, CAM was in
compliance with all minimum state requirements.

NOTE 17--CONCENTRATION OF CREDIT RISK

Financial instruments which potentially subject the Company to
concentration of credit risk consist principally of trade account receivables
and short term investments. Short term investments consist of investment grade
commercial paper and approximate fair value because of the short maturity of
these items. With the exception of trade receivables from General American and
its affiliates, credit risk with respect to trade accounts receivable is
limited due to the large number of customers and their dispersion across
geographical areas. Investment management fees receivable from General American
and their affiliated entities at December 31, 1995 and 1996 amounted to
$825,924 and $1,042,294 respectively.

NOTE 18--PRO FORMA EARNINGS PER SHARE

Pro forma earnings per share for the year ended December 31, 1996 is
computed by dividing net income by the weighted average number of shares of
common stock and dilutive common stock equivalents. For the purpose of this
calculation, outstanding shares of Series A and Series B Convertible Preferred
Stock and stock options are considered common stock equivalent shares for all
periods presented. Pursuant to Securities and Exchange Commission Staff
Accounting Bulletin No. 83, common and common equivalent shares issued during
the twelve month period prior to the date of the initial filing of the
Company's Registration Statement have been included in the calculation, using
the treasury stock method, as if they were outstanding for all periods
presented. The assumed initial public offering price for the purposes of this
calculation only was $15.00 per share.

Historical earnings per share have not been presented as they would not be
meaningful.

NOTE 19--INDUSTRY SEGMENT

The Company is primarily engaged in a single line of business as a provider
of investment management services, which comprises several types of services,
such as discretionary asset management, investment accounting and reporting
services, mortgage origination and servicing, private equity investments and
institutional investment research. These activities constitute a single
business segment.

NOTE 20--NEW ACCOUNTING PRONOUNCEMENT

In February 1997, the Financial Accounting Standards Board issued SFAS No.
128, "Earnings Per Share". SFAS No. 128 specifies new standards designed to
improve the earnings per share ("EPS") information provided in financial
statements by simplifying the existing computational guidelines, reviewing the
disclosure requirements and increasing the comparability of EPS data on an
international basis. Some of the changes made to simplify the EPS computations
include: (a) eliminating the presentation of primary EPS and replacing it with
basic EPS, with the principal difference being that common stock equivalents
are not considered in computing basic EPS, (b) eliminating the modified

F-22

<PAGE> 87
CONNING CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

treasury stock method and the three percent materiality provision and (c)
revising the contingent share provisions and the supplemental EPS data
requirements. SFAS No. 128 also makes a number of changes to existing
disclosure requirements. SFAS No. 128 is effective for financial statements
issued for periods ending after December 15, 1997, including interim periods.
The Company has not yet determined the impact of the implementation of SFAS No.
128.

NOTE 21--SUBSEQUENT EVENTS

In June, 1997, General American, pursuant to a call right, purchased
1,594,995 shares of the Company's Series A Preferred Stock from existing
shareholders for $11.25 per share.

In September, 1997, the Company filed a preliminary registration statement
with the SEC to register 2,500,000 shares of Common Stock (excluding the
over-allotment option) to be sold by the Company in an initial public offering.

F-23

<PAGE> 88
<TABLE>
SCHEDULE I

CONNING CORPORATION
(PARENT COMPANY ONLY)

CONDENSED BALANCE SHEETS
<CAPTION>
DECEMBER 31,
---------------------------
1995 1996
<S> <C> <C>
ASSETS
Cash and cash equivalents.................................................. $ -- $ 424,263
Investments in subsidiaries................................................ 31,079,378 31,230,081
Due from affiliates........................................................ 30,150 --
Capitalized software, less accumulated depreciation of $0 and $311,667..... -- 1,388,333
Prepaid expenses and other assets.......................................... 94,400 4,418
----------- -----------
Total assets................................................... $31,203,928 $33,047,095
=========== ===========
LIABILITIES AND SHAREHOLDER'S EQUITY
Book overdraft............................................................. $ 349,959 $ --
Accrued expenses........................................................... 228,550 241,648
Due to affiliates.......................................................... -- 848,282
Long term debt............................................................. 9,000,000 2,000,000
Other payable.............................................................. -- 640,000
Deferred liabilities....................................................... -- 167,730
----------- -----------
Total liabilities.............................................. 9,578,509 3,897,660
----------- -----------
Series A convertible preferred stock, $.01 par value: 3,190,000 shares
authorized, issued and outstanding....................................... 17,002,704 22,330,004
Series B convertible preferred stock, $.01 par value: 600,000 shares
authorized, 460,000 issued and outstanding............................... -- 2,451,800
----------- -----------
Total convertible preferred stock.............................. 17,002,704 24,781,804
----------- -----------
Common stock, $.01 par value: 20,000,000 shares authorized; 6,710,000
shares issued and outstanding............................................ 67,100 67,100
Additional paid in capital................................................. 2,944,647 2,944,647
Retained earnings.......................................................... 1,376,668 1,355,884
Unrealized appreciation on investments, net of deferred income taxes....... 234,300 --
----------- -----------
Total common shareholder's equity.............................. 4,622,715 4,367,631
----------- -----------
Total liabilities and shareholder's equity..................... $31,203,928 $33,047,095
=========== ===========
</TABLE>

See accompanying notes to condensed financial statements.

F-24

<PAGE> 89
<TABLE>
CONNING CORPORATION
(PARENT COMPANY ONLY)

CONDENSED STATEMENTS OF INCOME
FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1996

<CAPTION>
1995 1996
<S> <C> <C>
Revenues:
Dividend from subsidiary..................................... $4,546,667 $5,925,000
Management advisory fees..................................... -- 300,000
Other income................................................. 5,291 5,644
---------- ----------
Total revenues....................................... 4,551,958 6,230,644
---------- ----------

Expenses:
Other expenses............................................... 18,317 67,899
Interest expense............................................. 329,000 413,389
---------- ----------
Total expenses....................................... 347,317 481,288
---------- ----------
Income before benefit from income taxes...................... 4,204,641 5,749,356
Benefit from income taxes.................................... 130,399 77,871
---------- ----------
Income before equity in undistributed earnings of
subsidiaries, net of taxes................................. 4,335,040 5,827,227
Equity in undistributed earnings (loss) of subsidiaries, net
of taxes................................................... (922,889) 385,004
---------- ----------
Net income................................................... 3,412,151 6,212,231
Preferred stock dividends.................................... 350,900 905,715
---------- ----------
Net earnings available to common shareholders................ $3,061,251 $5,306,516
========== ==========
</TABLE>

See accompanying notes to condensed financial statements.

F-25
<PAGE> 90
CONNING CORPORATION
(PARENT COMPANY ONLY)

CONDENSED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1996

<TABLE>
<CAPTION>
1995 1996
<S> <C> <C>
Operating activities:
Net income.................................... $ 3,412,151 $ 6,212,231
Adjustment for items not affecting cash:
Amortization of capitalized software...... -- 311,667
Changes in:
Investment in subsidiaries............ (4,854,296) (6,310,003)
Due to/from affiliates................ (30,150) 878,432
Prepaid expenses and other assets..... (94,400) 89,982
Accrued expenses...................... 228,550 13,098
Deferred liabilities.................. -- 167,730
------------ -----------
Net cash provided by (used in)
operating activities........... (1,338,145) 1,363,137
------------ -----------
Investing activities:
Purchase of software.......................... -- (940,000)
Dividends received from subsidiaries.......... 4,546,667 5,925,000
------------ -----------
Net cash provided by investing
activities..................... 4,546,667 4,985,000
------------ -----------
Financing activities:
Borrowings on long term debt.................. 13,000,000 --
Repayments on long term debt.................. (4,000,000) (7,000,000)
Repayments on other payables.................. -- (120,000)
Acquisition of Conning, net of cash
acquired.................................... (12,207,581) --
Issuance of Series B preferred stock.......... -- 2,451,800
Dividends on preferred stock.................. (350,900) (905,715)
------------ -----------
Net cash provided by (used in)
financing activities........... (3,558,481) (5,573,915)
------------ -----------
Net change in cash and cash equivalents........... (349,959) 774,222
Book overdraft, beginning of year................. -- (349,959)
------------ -----------
Cash and cash equivalents (book overdraft), end of
year............................................ $ (349,959) $ 424,263
============ ===========
Supplemental disclosure of cash flow information:
Cash paid for:
Interest.................................. $ 323,750 $ 412,806
Income taxes.............................. -- --
Supplemental disclosure of non-cash
information:
Contribution of GAIMCO.................... $ 1,327,164 --
Accretion on Series A Preferred Stock..... -- $ 5,327,300
</TABLE>

See accompanying notes to condensed financial statements.

F-26

<PAGE> 91
CONNING CORPORATION
(PARENT COMPANY ONLY)

NOTES TO CONDENSED FINANCIAL STATEMENTS
DECEMBER 31, 1995 AND 1996

NOTE 1--ORGANIZATION

The condensed financial statements of Conning Corporation (the "Company")
should be read in conjunction with the consolidated financial statements of
Conning Corporation and Subsidiaries and the notes thereto. Investment in
subsidiary is accounted for under the equity method.

NOTE 2--RELATED PARTY TRANSACTIONS

During 1996, the Company provided the use of its software to its
subsidiaries through administrative services agreements. Charges were $312,000
during 1996 which approximated the amortization of the software during the
period.

The amount of cash dividends paid to the Company by consolidated
subsidiaries of the Company amounted to approximately $4,547,000 and $5,925,000
for the years ended December 31, 1995 and 1996, respectively. There are no
restrictions on the payment of dividends, except for those stipulated by
certain regulatory authorities applicable to Conning & Company. Conning &
Company's ability to pay dividends is limited to capital in excess of a defined
minimum requirement as set forth in Securities and Exchange Commission Rule
15c3-1.

NOTE 3--CAPITAL TRANSACTIONS

The board of directors of the Company is authorized to issue up to
20,000,000 shares of Common Stock with a par value of $0.01 per share. There
are 6,710,000 shares issued and outstanding at December 31, 1995 and 1996.

The preferred stock of the Company consists of (i) Series A Convertible
Preferred Stock, par value $0.01 per share and (ii) Series B Convertible
Preferred Stock, par value $0.01 per share.

On November 8, 1996, the Company commenced a private offering to certain
employees and directors. This offering was for a new class of non-voting
preferred stock designated Series B Convertible Preferred Stock (the "Series B
Preferred Stock"). A total of 460,000 shares were sold at $5.33 per share
adding $2,451,800 to preferred stock. At December 31, 1996, 600,000 shares of
Series B Preferred Stock were authorized and 460,000 shares were issued and
outstanding. The Series B Preferred Stock pays dividends quarterly at a rate of
5% per annum and such dividends are cumulative. The Series B Preferred Stock
carries no voting rights and each share is convertible into one share of
Non-Voting Common Stock at the holder's election and upon payment of an
additional $1.67 per share to the Company.

During January 1997, the Company issued an additional 15,000 shares of
Series B Preferred Stock at $5.33 per share.

The carrying value of the convertible preferred stock is at original issue
price plus accretion relating to any increase in the redemption value of the
stock during the period. During 1995 and 1996, such accretion was $0 and
$5,327,300, respectively.

F-27

<PAGE> 92
CONNING INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET
JUNE 30, 1995
(UNAUDITED)

<TABLE>
<S> <C>
ASSETS

Current assets:

Cash and cash equivalents..................... $ 3,408,483

Short-term investments........................ 4,487,422

Accounts receivable, net...................... 3,270,269

Marketable equity securities.................. 1,043,290

Prepaid expenses and other current assets..... 422,752
-----------

Total current assets.................. 12,632,216

Non-marketable investments at value............... 1,341,771

Equipment and leasehold improvements, at cost,
less accumulated depreciation and amortization
of $2,330,478................................... 1,120,484

Deferred income taxes............................. 908,740
-----------

Total assets.......................... $16,003,211
===========

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:

Compensation payable.......................... 1,436,526

Deferred revenue.............................. 288,959

Accounts payable and other accrued expenses... 2,948,303

Income taxes payable.......................... 39,153
-----------

Total current liabilities............. 4,712,941

Accrued rent liability............................ 2,214,525
-----------

Total liabilities..................... 6,927,466
-----------

8% Cumulative senior preferred stock, $0.01 par
value: 1,000,000 shares authorized;
160,000 issued and outstanding at stated value
of $22.82 per share............................. 3,650,000
-----------

Total preferred stock................. 3,650,000
-----------

Non-voting common stock, $0.01 par value: 100,000
shares authorized; 24,350 shares issued and
outstanding..................................... 244

Common stock, $.01 par value: 1,000,000 shares
authorized; 83,204 shares issued and
outstanding..................................... 832

Additional paid in capital........................ 1,428,796

Retained earnings................................. 4,954,707

Unrealized appreciation on investments, net of
deferred income taxes........................... 158,020

Treasury stock, at cost (22,633 common shares).... (1,116,854)
-----------

Total common shareholder's equity..... 5,425,745
-----------

Total liabilities and shareholder's
equity.............................. $16,003,211
===========
</TABLE>

See accompanying notes to unaudited consolidated financial statements.

F-28

<PAGE> 93
CONNING INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF INCOME
FOR THE SIX MONTH PERIOD ENDED JUNE 30, 1995
(UNAUDITED)

<TABLE>
<S> <C>
Revenues:

Asset management and related fees............. $ 5,661,690

Research services............................. 4,563,802

Other income.................................. 275,122
-----------

Total revenues........................ 10,500,614
-----------

Expenses:

Employee compensation and benefits............ 5,322,480

Occupancy and equipment costs................. 715,532

Marketing and production costs................ 1,176,887

Professional services......................... 548,325

Other operating expenses...................... 645,931
-----------

Total expenses........................ 8,409,155
-----------

Income before provision for income taxes...... 2,091,459

Provision for income taxes.................... 808,838
-----------

Net income.................................... $ 1,282,621
===========

Preferred stock dividends..................... 160,000
-----------

Net earnings available to common
shareholders................................ $ 1,122,621
===========
</TABLE>

See accompanying notes to unaudited consolidated financial statements.

F-29

<PAGE> 94

<TABLE>
CONNING INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMMON SHAREHOLDERS' EQUITY
FOR THE SIX MONTH PERIOD ENDED JUNE 30, 1995
(UNAUDITED)

<CAPTION>
UNREALIZED
APPRECIATION TOTAL
ADDITIONAL ON COMMON
COMMON PAID IN RETAINED INVESTMENTS, TREASURY SHAREHOLDERS'
STOCK CAPITAL EARNINGS NET STOCK EQUITY

<S> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1994..................... $1,065 $1,357,382 $3,832,086 $ 46,728 $(1,051,327) $4,185,934

Exercise of 1,100 stock options................ 11 71,414 71,425

Purchase of 1,735 shares of treasury stock..... (65,527) (65,527)

Change in unrealized appreciation of
investment, net of
deferred income taxes........................ 111,292 111,292

Dividend on Preferred Stock.................... (160,000) (160,000)

Net income..................................... 1,282,621 1,282,621
------ ---------- ---------- -------- ----------- ----------

Balance, June 30, 1995......................... $1,076 $1,428,796 $4,954,707 $158,020 $(1,116,854) $5,425,745
====== ========== ========== ======== =========== ==========
</TABLE>

See accompanying notes to unaudited consolidated financial statements.

F-30

CONNING INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTH PERIOD ENDED JUNE 30, 1995
(UNAUDITED)

<S> <C>
Operating activities:

Net income.................................... $1,282,621

Adjustment for items not affecting cash:

Depreciation.............................. 191,134

Net unrealized appreciation on
non-marketable securities............... (2,672)

Accretion of discounts on short-term
investments............................. (130,886)

Net purchases of securities held for
market making........................... (247,040)

Net unrealized appreciation on marketable
securities.............................. (78,708)

Changes in:

Accounts receivable................... (18,602)

Prepaid expenses and other assets..... (633,648)

Accounts payable and other accrued
expenses............................ 1,088,156

Deferred revenue...................... 23,304

Accrued rent liability................ (49,010)

Compensation payable.................. (488,297)
----------

Net cash provided by operating
activities..................... 936,352
----------

Investing activities:

Purchases of non-marketable securities........ (28,283)

Purchases of short-term investments........... (4,368,256)

Maturities of short-term investments.......... 4,600,000

Purchases of equipment, net................... (285,310)
----------

Net cash used in investing
activities..................... (81,849)
----------

Financing activities:

Dividend on 8% Cumulative Senior Preferred
Stock....................................... (160,000)

Purchase of treasury stock.................... (65,527)

Exercise of stock options..................... 71,425
----------

Net cash used in financing
activities..................... (154,102)
----------

Net increase in cash and cash equivalents......... 700,401

Cash and cash equivalents, beginning of period.... 2,708,082
----------

Cash and cash equivalents, end of period.......... $3,408,483
==========
</TABLE>

See accompanying notes to unaudited consolidated financial statements.

F-31

<PAGE> 96
CONNING INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1995

NOTE 1--ORGANIZATION

Conning Inc. and Subsidiaries (the "Corporation", formerly known as
Conning Corporation), a Delaware corporation, is a holding company whose
wholly-owned subsidiary, Conning & Company ("Conning"), is a registered
investment adviser with the Securities and Exchange Commission under the
Investment Advisers Act and is primarily an asset management and research
services company concentrating on the insurance industry. Conning is also a
registered broker dealer and a member of the National Association of Securities
Dealers, Inc.

NOTE 2--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The unaudited consolidated financial statements of the Corporation have
been prepared in accordance with generally accepted accounting principles for
interim financial information. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all
adjustments considered necessary for a fair presentation have been included.
These interim unaudited financial statements should be read in connection with
the December 31, 1994 audited consolidated financial statements.

NOTE 3--RELATED PARTY TRANSACTIONS

The Corporation provided investment management services to the holder of
the non-voting common stock. Investment management fees of approximately
$346,000 were earned for the six months ended June 30, 1995.

NOTE 4--COMMITMENTS AND CONTINGENCIES

Two legal claims have arisen during the normal course of the Corporation's
non-securities and non-investment advisory services businesses. While the
Corporation believe it has meritorious defenses against the suits, the ultimate
resolution of the matters and the related impact on these financial statements
is based upon estimates of the likely outcome. Management of the Corporation,
after consultation with legal counsel, believes its aggregate accrual relating
to litigation is appropriate as of June 30, 1995. Subsequent to June 30, 1995,
one of the two claims was resolved with no material impact to the financial
statements.

Conning is a 1% general partner in certain private equity funds that the
subsidiary also manages. At June 30, 1995, Conning's future commitment to fund
such required capital contributions was approximately $390,000.

F-32

<PAGE> 97
REPORT OF INDEPENDENT ACCOUNTANTS

February 21, 1995, except for Note 12, as to which the date is September 19,
1997

To the Board of Directors and
Shareholders of Conning Inc.

In our opinion, the accompanying consolidated statements of financial
condition and the related consolidated statements of operations, of changes in
shareholders' equity and of cash flows present fairly, in all material
respects, the financial position of Conning Inc. & Subsidiaries (formerly known
as Conning Corporation) at December 31, 1994, and the results of its operations
and its cash flows for the year then ended in conformity with generally
accepted accounting principles. These financial statements are the
responsibility of the Company's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these statements in accordance with generally accepted auditing
standards which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.

As discussed in Note 2 to the financial statements, the Company changed its
method for accounting for equity investments in 1994.

/s/ Price Waterhouse LLP

F-33

<PAGE> 98
<TABLE>
CONNING INC. & SUBSIDIARIES

CONSOLIDATED STATEMENT OF FINANCIAL CONDITION
DECEMBER 31, 1994

<S> <C>
ASSETS

Cash and cash equivalents......................... $ 2,708,082
Short-term investments............................ 4,588,279
Underwriting fees and commissions receivable...... 657,130
Accounts receivable............................... 2,205,076
Affiliate receivables............................. 389,464
Investments....................................... 1,917,066
Equipment and leasehold improvements, at cost,
less accumulated depreciation and amortization
of $2,180,005................................... 985,616
Prepaid expenses and deferred charges............. 308,668
Other assets...................................... 469,021
-----------
Total assets.................................. $14,228,402
===========

LIABILITIES AND SHAREHOLDERS' EQUITY

Amounts and notes payable to former
shareholders.................................... $ 569,009
Compensation payable.............................. 1,924,823
Deferred revenue.................................. 265,656
Accrued rent expense.............................. 2,263,537
Accounts payable and other accrued expenses....... 1,369,443
-----------
Total liabilities............................. 6,392,468
-----------
8% Cumulative senior preferred stock, $.01 par
value: 1,000,000 share authorized; 160,000
issued and outstanding at stated value of
$22.82 per share................................ 3,650,000
-----------
Non voting common stock, $.01 par value: 100,000
shares authorized; 24,350 shares issued and
outstanding..................................... 244
Common stock, $.01 par value: 1,000,000 shares
authorized; 82,104 and 68,329 shares issued and
outstanding..................................... 821
Capital in excess of par value.................... 1,357,382
Retained earnings................................. 3,832,086
Unrealized appreciation on investments, net of
deferred income taxes........................... 46,728
Treasury stock, at cost (20,898 shares)........... (1,051,327)
-----------
Total common shareholders' equity............. 4,185,934
-----------
Total shareholders' equity.................... 7,835,934
-----------
Total liabilities and shareholders' equity.... $14,228,402
===========
</TABLE>

F-34

<PAGE> 99

<TABLE>
CONNING INC. & SUBSIDIARIES

CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1994

<S> <C>
Revenue
Asset management and related fees............. $ 9,839,771
Research services............................. 8,164,765
Other......................................... 472,211
-----------
Total revenue............................. 18,476,747
-----------

Expenses
Employee compensation and benefits............ 10,195,854
Occupancy and equipment costs................. 1,450,080
Marketing and production costs................ 2,029,390
Professional fees............................. 784,507
Other operating expenses...................... 1,265,603
-----------
Total expenses............................ 15,725,434
-----------
Income before provision for income taxes...... 2,751,313
Provision for income taxes.................... 1,243,822
-----------
Net income.................................... $ 1,507,491
===========
</TABLE>

See accompanying notes to consolidated financial statements.

F-35

<PAGE> 100
<TABLE>
CONNING INC. & SUBSIDIARIES

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
FOR THE YEAR ENDED DECEMBER 31, 1994

<CAPTION>
COMMON SHAREHOLDERS' EQUITY
--------------------------------------------------------------------
CAPITAL IN UNREALIZED
PREFERRED COMMON EXCESS OF RETAINED STOCK TREASURY
STOCK STOCK PAR VALUE EARNINGS APPRECIATION STOCK

<S> <C> <C> <C> <C> <C> <C>
Balance, December 31,
1993................... $3,650,000 $ 927 $ 486,706 $2,644,595 $ (579,871)
Issuance of 13,775 shares
of common stock........ 138 870,676
Purchase of treasury
stock, 7,830 shares.... (471,456)
Unrealized appreciation
of investments, net of
deferred income
taxes.................. $46,728
Dividend on 8% Cumulative
Senior Preferred
Stock.................. (320,000)
Net Income............... 1,507,491
---------- ------ ---------- ---------- ------- -----------
Balance, December 31,
1994................... $3,650,000 $1,065 $1,357,382 $3,832,086 $46,728 $(1,051,327)
========== ====== ========== ========== ======= ===========
</TABLE>

See accompanying notes to consolidated financial statements.

F-36

<PAGE> 101
<TABLE>
CONNING INC. & SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 1994

<S> <C>
Operating activities:
Net income.................................... $ 1,507,491
Adjustment for items not affecting cash
Depreciation and amortization............. 441,930
Deferred income tax provision............. 49,272
Net unrealized appreciation on
non-marketable securities................. (39,639)
Net purchases of securities held for
market making............................. (23,000)
Accretion of discounts on short-term
investments............................... (82,709)
Changes in:
Receivables........................... 572,924
Prepaid expenses, deferred charges and
other assets......................... (3,780)
Payables.............................. (613,395)
Deferred revenue...................... (98,256)
Accrued rent expense.................. (9,521)
Compensation payable.................. 1,664,625
-----------
Net cash provided by operating
activities...................... 3,365,942
-----------
Investing activities:
Purchases of non-marketable securities.... (76,650)
Distribution from non-marketable
partnership investments................... 127,431
Purchases of equipment, net............... (29,094)
Purchases of short-term investments....... (6,005,570)
Maturities of short-term investments...... 1,500,000
-----------
Net cash (used for) provided by
investing activities............ (4,483,883)
-----------
Financing activities:
Dividend on 8% Cumulative Senior Preferred
Stock..................................... (320,000)
Issuance of common stock, net of issuance
cost...................................... 870,814
Issuance of employee loans................ (324,081)
Repayments of employee loans.............. 143,036
Payments to former shareholders........... (66,900)
Purchase of treasury stock................ (26,845)
-----------
Net cash provided by (used for)
financing activities................. 276,024
-----------
Non-cash financing activities:
Notes and amounts payable to former
shareholders.............................. 444,611
Purchase of treasury stock................ (444,611)
-----------
Net non-cash financing activities................. --
-----------
Net change in cash and cash equivalents........... (841,917)
Cash and cash equivalents, beginning of year...... 3,549,999
-----------
Cash and cash equivalents, end of year............ $ 2,708,082
===========
Cash paid for:
Interest...................................... $ --
Income taxes.................................. $ 1,719,889
</TABLE>

See accompanying notes to consolidated financial statements.

F-37

<PAGE> 102
CONNING INC. & SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1--ORGANIZATION

Conning Inc. (the "Corporation", formerly known as Conning Corporation),
a Delaware corporation, is a holding company whose wholly-owned subsidiary,
Conning & Company ("Conning"), is a registered investment adviser with the
Securities and Exchange Commission under the Investment Advisers Act and is
primarily an asset management and research company concentrating on the
insurance industry. Conning is also a registered broker dealer and a member of
the National Association of Securities Dealers, Inc.

NOTE 2--SUMMARY OF ACCOUNTING POLICIES

The accompanying consolidated financial statements have been prepared in
conformity with generally accepted accounting principles. The significant
accounting policies followed by the Corporation and its subsidiaries are
summarized below.

Accounting Changes--Effective January 1, 1994, the Corporation adopted the
provisions of Statement of Financial Accounting Standards No. 115, "Accounting
for Certain Investments in Debt and Equity Securities" (FAS 115) which
requires that investments be classified in one of three categories:
held-to-maturity, available-for-sale or trading. The Corporation classified
equity investments held for market making activities as trading securities and
all other marketable equity securities as available-for-sale. At January 1,
1994, there was no effect on the financial position of the Corporation upon
implementation of FAS 115 as investments held for market making activities were
previously carried at fair value with corresponding gains or losses recorded
through income. No other marketable equity securities were held at January 1,
1994.

Principles of Consolidation--The consolidated financial statements include
the accounts of the Corporation and its subsidiaries after elimination of
intercompany balances and transactions.

Revenue Recognition--Asset management fees, institutional research fees and
financial advisory fees are recorded in income when services are provided.
Consulting fees are recorded as income at the completion of the contract or at
the time of receipt in the case of non-refundable fees earned. Fee income for
industry research publications is recorded as income ratably over the
subscription period, which is generally one year. Related expenses are recorded
as incurred.

Cash and Cash Equivalents--Cash and cash equivalents represent cash and
highly liquid investments with original maturities of three months or less.

Short-Term Investments--Short-term investments are comprised of U.S.
Government Securities and are carried at amortized cost, which approximates
fair value.

Non-marketable securities are valued at fair value as determined in good
faith by the management of the Corporation. The changes in the resulting
difference between cost and market (or fair value) are included in the
consolidated statement of operations.

Equipment and Leasehold Improvements--Equipment is stated at cost, less
accumulated depreciation provided on an accelerated method over periods not
exceeding eight years. Leasehold improvements are stated at cost, less
accumulated amortization provided on a straight line basis over the term of the
lease.

F-38

<PAGE> 103
CONNING INC. & SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

federal and combined state income tax returns with its subsidiaries. Net
deferred income taxes are included in other assets. The Corporation records a
valuation allowance against the deferred income tax asset for that portion of
the asset that may not be realized.

Deferred Charges--Deferred charges represent costs incurred to establish
certain private equity funds. These costs are being amortized on a straight
line method over an estimated useful life of eight years. Amortization of
$81,386 was charged against revenue during 1994.

Rent Expense--The Corporation received financial incentives as well as a
stepped rental rate structure regarding its lease at the Corporation's main
premises. The Corporation is recording all incentives and rental rates in its
results of operations as if they occurred evenly throughout the term of the
lease. In connection with such incentives, the Corporation issued a $350,000
letter of credit to the landlord in the event of default under the lease. The
letter of credit was outstanding at December 31, 1994.

Other revenue--Realized and unrealized gains on investments, interest
income and other miscellaneous revenues are also included.

NOTE 3--UNDERWRITINGS, COMMISSIONS AND ACCOUNTS RECEIVABLE

Accounts receivable include amounts due for management fees, consulting
engagements and other business activities of the Corporation. Underwriting fees
and commissions receivable are amounts due from customers for securities
transactions and selling concessions due from underwriters. At December 31,
1994, an allowance for doubtful accounts of $212,750 was applied as a reduction
of accounts receivable.

NOTE 4--INVESTMENTS

At December 31, 1994 the estimated fair value of marketable and
non-marketable investments were as follows:

<TABLE>
<S> <C>
Marketable Equity Securities--Trading
(cost $37,150)........................ $ 36,250
Marketable Equity Securities--
Available-for-sale (cost $490,000)...... 570,000
Non-marketable equity securities (cost
$16,625).............................. 18,310
Non-marketable partnership investments
(cost $1,272,200)..................... 1,292,506
----------
Total................................... $1,917,066
==========
</TABLE>

The Corporation owns one security classified as available-for-sale with an
original cost of $400,000 and a carrying value at the date of adopting FAS 115
of $490,000. The Corporation is directly, or indirectly through intermediary
partnerships, the managing general partner for six private equity funds with an
equity ownership interest of 1% in each fund. Fees for managing the six funds
were $3,191,855 for the year ended December 31, 1994. The Corporation owns a
42.5% share in the joint venture. During 1994, the Corporation recorded
$270,000 in revenue relating to this joint venture.

NOTE 5--EQUIPMENT AND LEASEHOLD IMPROVEMENTS

Equipment and leasehold improvements comprised the following:

<TABLE>
<S> <C>
Office equipment.............. $1,191,233
Data processing equipment..... 1,604,349
Leasehold improvements........ 370,039
----------
3,165,621

Less accumulated depreciation
and amortization............ 2,180,005
----------
$ 985,616
==========
</TABLE>

F-39

<PAGE> 104
CONNING INC. & SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Depreciation expense for the year ended December 31, 1994 was $360,544. The
Corporation occupies premises and rents certain office equipment under leases
that are accounted for as operating leases and that have expiration dates
through 2005. Rentals under these leases aggregated $1,069,139 for the year
ended December 31, 1994, after reduction for rent received from subleases of
$150,041.

At December 31, 1994, the minimum net rental commitments of the Corporation
for the periods indicated under the terms of the operating leases in excess of
one year were approximately $7,737,000 as follows: $834,000 in 1995; $819,000
in 1996; $769,000 in 1997; $740,000 in 1998; $732,000 per year from 1999 to
2004 and $183,000 in 2005. At December 31, 1994, the minimum due under a
sublease agreement in excess of one year is approximately $100,000 as follows:
$63,000 in 1995, and $37,000 in 1996. The commitments include future repayments
of approximately $2,264,000 in rent expense accrued and rent incentives
recorded at December 31, 1994.

NOTE 6--INCOME TAXES

The provision for federal and state income taxes for the year ended
December 31, 1994 are as follows:

<TABLE>
<S> <C>
Current income tax provision............ $1,194,550
Deferred income tax provision........... 49,272
----------
Total income tax provision.............. $1,243,822
==========
</TABLE>

The components of deferred income taxes for the year ended December 31,
1994 are as follows:

<TABLE>
<S> <C>
Accrued rent............................ $ 3,237
Realization of loss carryforwards....... 111,520
Change in valuation allowance........... 64,074
Accrued expense reserves................ (127,500)
Other, net.............................. (2,059)
----------
Total deferred income tax provisions.... $ 49,272
==========
</TABLE>

Under the provisions of FAS 109, the Corporation's net deferred income tax
assets represent the estimated future tax effects attributable to future
taxable or deductible temporary difference between amounts recognized in the
financial statements and income tax returns. At December 31, 1994 the net
deferred income tax assets are as follows:

<TABLE>
<S> <C>
Accrued rent............................ $ 769,603
State income tax, net................... 176,447
Other, net.............................. 231,479
----------
Gross deferred income tax assets........ 1,177,529
----------
Depreciation............................ (145,897)
Unrealized appreciation on
investments........................... (57,800)
Investments in affiliates............... (6,973)
----------
Gross deferred income tax liabilities... (210,670)
----------
Net deferred income tax assets before
valuation allowance................... 966,859
Valuation allowance..................... (778,172)
----------
Net deferred income tax assets.......... $ 188,687
==========
</TABLE>

F-40

<PAGE> 105
CONNING INC. & SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

The Corporation's effective federal income tax rate was 36.8% for the year
ended December 31, 1994. The differences between the hypothetical United States
federal income tax provision at the statutory rate of 34% and the Corporation's
actual federal income tax rate are as follows:

<TABLE>
<S> <C>
Income before income taxes.............. $2,751,313
State income tax provision.............. (364,510)
----------
Income before federal income taxes...... $2,386,803
==========
Federal income taxes at statutory
rates................................. 811,513
Changes in valuation allowance.......... 23,215
Other, net.............................. 44,584
----------
Federal income tax provision............ $ 879,312
==========
</TABLE>

NOTE 7--SHORT-TERM BORROWINGS

At December 31, 1994 the Corporation had a line of credit with a commercial
bank for $1,650,000. The interest rate is based on LIBOR plus 150 basis points.
The line of credit reduces to $1,200,000 on April 1, 1995, $650,000 on April 1,
1996 and expires on April 1, 1997. There were no outstanding borrowings at
December 31, 1994.

NOTE 8--SHAREHOLDERS' EQUITY

The board of directors of the Corporation is authorized to issue up to
1,000,000 shares of common stock, 100,000 shares of non-voting common stock and
1,000,000 shares of preferred stock. All shares have a par value of $.01 per
share. The board of directors is authorized to set the terms, limitations,
preferences and series of preferred stock.

On February 25, 1993, PennCorp Financial ("PennCorp") purchased all of
the then outstanding Corporation's Non-Voting Series A Preferred Stock, which
were subject to mandatory redemption, from the previous shareholders. On the
same date, the Corporation entered into an agreement with PennCorp to exchange
the shares of Non-Voting Series A Preferred Stock for 160,000 shares of 8%
Cumulative Senior Preferred Stock ("Senior Preferred Stock") valued at
$22.8125 per share ($3,650,000 aggregate), all of the 24,350 shares of
non-voting common stock valued at $36.50 per share ($888,775 aggregate) and
cash of $261,225. The Senior Preferred Stock was issued at a discount from a
face value of $4,000,000. The holders of the Senior Preferred Stock have voting
rights only with respect to certain matters, including an election of two
members of the board of directors representing less than a majority of the
board, and are entitled to receive cumulative dividends at the annual rate of
$2.00 per share payable semi-annually.

The Senior Preferred Stock, plus any accrued and unpaid dividends, may be
redeemed by the Corporation on or after March 31, 1994 with the approval of the
Corporation's Board of Directors. No redemptions occurred during 1994. The
Preferred Stock is redeemable at $24.0625 per share ($3,850,000 aggregate) if
redeemed between March 31, 1994 through March 30, 1997; and at $25.00 per share
($4,000,000 aggregate) if redeemed on or after March 31, 1997. In connection
with the exchanges as described above, the Corporation has issued warrants to
subsidiaries of PennCorp to purchase 31% of the Corporation's fully diluted
common shares, at a price determined by the common stock book value per share,
if the Senior Preferred Stock is not fully redeemed by February 25, 1999.

The voting shares of common stock are entitled to vote on all matters
requiring shareholder action. All voting common shares issued by the
Corporation are subject to a Shareholder's Agreement. Under this agreement, no
transfer of shares is permitted except with the consent of the Corporation's
Board of Directors. Upon termination of employment, or other event as described
in the agreement, all voting common stock shares of the Corporation held must
be sold back to the Corporation at a price determined in accordance with the
agreement.

The Corporation did not declare any dividends on common stock shares
outstanding during 1994 and it is anticipated that there will be no dividends
declared in the near future. The Corporation is also restricted as to the
amount of dividends that can be declared since Conning is a registered
broker-dealer who is required to maintain a

F-41

<PAGE> 106
CONNING INC. & SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

minimum net capital balance of approximately $225,572 at December 31, 1994
pursuant to the Securities and Exchange Commission's Uniform Net Capital Rule
(Rule 15c3-1).

On September 13, 1994, the Corporation held a private offering to certain
employees which closed on September 28, 1994. A total of 7,575 shares were sold
at $65.85 per share adding $498,814 to shareholders' equity. As of December 31,
1994, the Corporation was owed $211,041 from certain employees for their
purchases of common stock.

During 1994, the Corporation purchased 7,830 shares of common stock for
treasury at a total cost of $471,456.

NOTE 9--OTHER RELATED PARTY ACTIVITIES

The Corporation is the holder of notes receivable for the principal sum of
$200,000 bearing interest at the rate of 8.0% per annum from Tennant Risk
Services, Inc. ("Tennant"), a Connecticut corporation of which the
Corporation owns a nominal interest. Members of the board of directors of the
Corporation who are also members of senior management serve as Board members of
Tennant. The notes are due in installments of $125,000 and $75,000 on September
1, 1995 and August 1, 1997 respectively. Interest is due semi-annually and
interest income of $16,000 is included in the statement of operations for the
year ended December 31, 1994.

The Corporation provided investment management services to PennCorp.
Investment management fees of $638,142 were earned for the year ended December
31, 1994.

NOTE 10--STOCK OPTIONS AND EMPLOYEE BENEFITS

The Corporation has a Stock Option Plan (the "Plan") that allows the
Board of Directors to grant incentive and/or non-qualified stock options to key
employees and directors of the Corporation and its affiliates. The options are
exercisable in equal installments over a period of two years from the date of
grant and no later than ten years from the date of grant. A total of 83,876
shares of the Corporation's common stock have been reserved for issuance
pursuant to the Plan. Transactions under the stock option plan are summarized
as follows:

<TABLE>
<CAPTION>
AVERAGE
NUMBER OF EXERCISE
SHARES PRICE

<S> <C> <C>
Outstanding, beginning of year.......... 35,866 $24.32
Granted................................. 9,225 62.52
Exercised............................... -- --
Canceled................................ (10,556) 19.76
------- ------
Outstanding, end of year................ 34,535 $35.92
======= ======
Exercisable, end of year................ 24,136 $28.81
======= ======
</TABLE>

401(k) Savings Plan--Conning has a 401(k) savings plan ("the 401(k)
Plan") for which substantially all employees are eligible. In addition to
employee contributions, Conning contributed $351,286 on behalf of the eligible
employees for the year ended December 31, 1994. The 401(k) Plan offers six
investment vehicles in addition to a self-directed option. One of the
investment vehicles is managed by Conning.

NOTE 11--NET CAPITAL REQUIREMENTS

The Corporation's principal subsidiary, Conning, is subject to a
requirement of the SEC's Uniform Net Capital Rule, requiring the maintenance of
certain minimal capital levels. At December 31, 1994, Conning had net capital,
as defined by the Uniform Net Capital Rule, of $5,324,070 which was $5,098,498
in excess of the required net capital.

F-42

<PAGE> 107
CONNING INC. & SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 12--SUBSEQUENT EVENTS

On August 11, 1995, all of the outstanding common stock of the Corporation
was acquired by Conning Corporation, formerly known as Conning Asset Management
Company--name change effective July 31, 1996. Conning Corporation is owned by
General American Holding Company, a wholly owned subsidiary of General American
Life Insurance Company.

In September 1997, Conning Corporation filed a preliminary registration
statement with the Securities and Exchange Commission to register 2,500,000
shares of Common Stock (excluding the over-allotment option) to be sold by
Conning Corporation in an initial public offering.

F-43

<PAGE> 108
GLOSSARY

"ASSET" typically refers to anything having a commercial or exchange
value that is owned by a business, institution or individual. In this context
`asset' refers to the financial holdings of the Company's clients, primarily
insurance companies.

"ASSET BACKED SECURITIES" are bonds or notes typically backed by loan
paper or accounts receivable originated by banks, credit card companies or
other providers of credit.

"ASSET LIABILITY MATCHING" refers to the quantitative analytic techniques
applied to the estimation of the time frame in which a client's liabilities
will become payable and the program designed to appropriately match the
duration of the investment portfolio to that time frame.

"ASSET MANAGEMENT" refers to the services offered by the Company which
include the allocation of the clients funds to basic security classes and the
active buying, trading and selling that accompanies the investment function.

"CORPORATE BONDS" are debt instruments issued by a private corporation as
distinct from a government agency or a municipality.

"DISCRETIONARY ASSET MANAGEMENT" refers to the active management of an
investment portfolio including the asset allocation and purchasing, trading and
selling activities.

"EQUITIES" are securities representing the ownership interest in a
corporation.

"GOVERNMENTS" are securities issued by the U.S. government, such as
Treasury Bills, bonds, notes and savings bonds, as well as debt issues of
federal agencies which are not directly backed by the U.S. government.

"INDEXED EQUITIES" are pools of funds which are invested in a portfolio
which seeks to match that of a broad-based securities index. This may include
the Standard & Poor's 500 index, indexes of mid- and small-capitalization
stocks, foreign stock indexes and bond indexes.

"INVESTMENT ADVISORY SERVICES" are services which support the analysis
and needs of clients and result in advice pertaining to the general structure
of the client's portfolio, but do not include advice relative to specific
investments.

"MASTER SERVICER" is an entity which provides administrative services to
securitized pools of mortgage-backed securities.

"MORTGAGE LOANS" are debt instruments by which the borrower, either
corporate or individual, grants the lender a lien on property as security for
the repayment of the loan.

"MUNICIPAL BONDS" are debt obligations of a state or local government
entity.

"PRIVATE EQUITY FUNDS" refer to the funds for which the Company has
raised capital from institutional investors for the purpose of investing in
privately held companies.

"PRIVATE PLACEMENTS" refer to stocks, bonds or other investments which
are sold directly to an institutional investor, and which are typically
restricted as to resale.

"REAL ESTATE" refers to a piece of land and all the physical property
relating to it, and may include the air and subsurface rights.

"RECURRING FEE BASED REVENUE" refers to the on going fees the Company
collects, in the ordinary course of its business, from its clients on business
including discretionary asset management, investment advisory, investment
accounting & reporting, real estate, research, and private equity management.

"SCHEDULE B" refers to the detail schedule of mortgages included in the
standard insurance department regulatory statutory annual statement.

"SCHEDULE D" refers to the detail schedule of investments included in the
standard insurance department regulatory statutory annual statement.

"SHORT-TERM OBLIGATIONS" typically refer to investments which have a
maturity of one year or less.

"SPECIAL SERVICER" means an entity which provides asset management and
resolution services for non-performing or under-performing loans within a pool
of performing loans or mortgages.

G-1

<PAGE> 109
================================================================================

NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THIS OFFERING
OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY OR ANY OF THE UNDERWRITERS. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE
SECURITIES OFFERED HEREBY BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR
SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR
SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANY PERSON TO WHOM IT IS UNLAWFUL
TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR
ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION
THAT THE INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE
HEREOF OR THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE
SUCH DATE.

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

<TABLE>
TABLE OF CONTENTS
<CAPTION>
PAGE
----
<S> <C>

Prospectus Summary.............................................................. 3
Cautionary Statement Regarding Forward-Looking Statements....................... 8
Risk Factors.................................................................... 8
Use of Proceeds................................................................. 15
Dividend Policy................................................................. 15
Capitalization.................................................................. 16
Dilution........................................................................ 17
Business........................................................................ 18
Selected Consolidated Financial Data............................................ 30
Management's Discussion and Analysis of Financial Condition and Results of
Operation..................................................................... 32
Regulation...................................................................... 36
Management...................................................................... 39
Certain Relationships and Related Transactions.................................. 48
Principal Shareholders.......................................................... 53
Shares Eligible for Future Sale................................................. 54
Description of Capital Stock.................................................... 56
Certain Charter and Bylaw Provisions............................................ 58
Underwriting.................................................................... 61
Legal Matters................................................................... 63
Experts......................................................................... 63
Additional Information.......................................................... 63
Index to Financial Statements................................................... F-1
Glossary........................................................................ G-1
</TABLE>

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

UNTIL , 1997 (25 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL
DEALERS EFFECTING TRANSACTIONS IN THE COMMON STOCK, WHETHER OR NOT
PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS.
THIS IS IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS WHEN
ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR
SUBSCRIPTIONS.

================================================================================

2,500,000 SHARES

CONNING
LOGO

CONNING CORPORATION

COMMON STOCK

----------

PROSPECTUS

----------

DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION

A.G. EDWARDS & SONS, INC.

---------- --, 1997

================================================================================

<PAGE> 110
PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The following table sets forth all expenses, other than underwriting
discounts and commissions, all of which are payable by the Company, in
connection with the issuance and distribution of the securities being
registered. All amounts are estimates except the registration fee.

<TABLE>
<S> <C>
SEC Registration Fee.............................. $13,069
NASD Filing Fee................................... 4,813
Nasdaq National Market Listing Fee................
-------
Printing and Engraving Expenses................... <F*>
Blue Sky Fees and Expenses........................ <F*>
Registrar and Transfer Agent Fees................. <F*>
Legal Fees and Expenses........................... <F*>
Accounting Fees and Expenses...................... <F*>
D&O Insurance..................................... <F*>
Miscellaneous..................................... <F*>
-------
Total..................................... $ <F*>
=======

<FN>
- --------

<F*> To be provided by amendment
</TABLE>

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS

Section 351.355(1) of the Revised Statutes of Missouri provides that a
corporation may indemnify a director, officer, employee or agent of the
corporation in any action, suit or proceeding other than an action by or in the
right of the corporation, against expenses (including attorney's fees),
judgments, fines and settlement amounts actually and reasonably incurred by him
in connection with such action, suit or proceeding if he acted in good faith
and in a manner he reasonably believed to be in or not opposed to the best
interests of the corporation and, with respect to any criminal action, had no
reasonable cause to believe his conduct was unlawful. Section 351.355(2)
provides that the corporation may indemnify any such person in any action or
suit by or in the right of the corporation against expenses (including
attorneys' fees) and settlement amounts actually and reasonably incurred by him
in connection with the defense or settlement of the action or suit if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation, except that he may not be indemnified in
respect of any matter in which he has been adjudged liable for negligence or
misconduct in the performance of his duty to the corporation, unless authorized
by the court. Section 351.355(3) provides that a corporation shall indemnify
any such person against expenses (including attorney's fees) actually and
reasonably incurred by him in connection with the action, suit or proceeding if
he has been successful in defense of such action, suit or proceeding and if
such action, suit or proceeding is one for which the corporation may indemnify
him under Section 351.355(1) or (2). Section 351.355(7) provides that a
corporation shall have the power to give any further indemnity to any such
person, in addition to the indemnity otherwise authorized under Section
351.355, provided such further indemnity is either (i) authorized, directed or
provided for in the articles of incorporation of the corporation or any duly
adopted amendment thereof or (ii) is authorized, directed or provided for in
any by-law or agreement of the corporation which has been adopted by a vote of
the shareholders of the corporation, provided that no such indemnity shall
indemnify any person from or on account of such person's conduct which was
finally adjudged to have been knowingly fraudulent, deliberately dishonest or
willful misconduct.

The Amended and Restated Articles of Incorporation of the Company filed as
Exhibit 3.1 to this Registration Statement contain provisions indemnifying its
directors and officers to the extent authorized specifically by Sections
351.355(1), (2), (3) and (7).

II-1

<PAGE> 111
Directors or officers of the Company who are directors or officers of
General American may also be entitled to indemnification under the provisions
of General American's Articles of Incorporation, which provide indemnification
to them since they serve, at General American's request, as directors or
officers of the Company. Such individuals are also covered by General
American's director's and officer's liability insurance policy.

The form of Underwriting Agreement filed as Exhibit 1.1 to this
Registration Statement provides for the mutual indemnification of the Company
and any Underwriters, their respective controlling persons, directors and
certain of their officers, against certain liabilities, including liabilities
under the Securities Act of 1933, as amended.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES

In August 1995, the Company issued certain securities in connection with
its formation (the "Strategic Merger"), as follows: (i) General American
Holding Company contributed all of the issued and outstanding common stock of
GAIMCO (now known as Conning Asset Management Company) to the Company in
exchange for 6,710,000 shares of Company Common Stock; and (ii) each of the 21
shareholders and option holders of Conning, Inc., other than three non-employee
directors and two institutional shareholders (the "Non-Contributing
Shareholders"), contributed all of the common stock of Conning, Inc. then
owned by such shareholders to the Company and canceled all of their options to
purchase Conning, Inc. Common Stock in exchange for $4,505,002 in cash and
3,190,000 shares of the Company's Series A Convertible Preferred Stock. The
shares of Conning, Inc. owned by the Non-Contributing Shareholders were
acquired in exchange for cash payments. In connection with this transaction,
the Company relied on the exemption from registration contained in Section 4(2)
of the Securities Act and Rule 506 of Regulation D promulgated thereunder.

In connection with the Strategic Merger, the Company awarded employee stock
options exercisable for 1,000,000 shares of Class B Non-Voting Common Stock to
25 employees of the Company; none of the options have been exercised. In
connection with this transaction, the Company relied on exemptions from
registration contained in Section 4(2) of the Securities Act and Rule 506 of
Regulation D promulgated thereunder and Rule 701 of the Securities Act.

In November 1996 through June 1997, the Company issued 475,000 shares of
Series B Convertible Preferred Stock and awarded employee stock options
exercisable for 237,500 shares of Class B Non-Voting Common Stock to 28
employees of the Company pursuant to a 1996 employee stock purchase and option
grant program and amended and restated certain provisions of a shareholder's
agreement; none of the options have been exercised. In April 1997, the Company
issued 110,000 shares of Class B Non-Voting Common Stock to three executive
officers or directors of the Company upon conversion of an equal number of
shares of Series B Convertible Preferred Stock. In connection with these
transactions, the Company relied on exemptions from registration contained in
Section 4(2) and Regulation D promulgated thereunder and Rule 701 of the
Securities Act.

Concurrent with the closing of this offering, the 3,190,000 issued and
outstanding shares of Series A Convertible Preferred Stock will be converted
into an equal number of shares of Common Stock of the Company and outstanding
stock options to purchase Class B Non-Voting Common Stock will become options
to purchase Common Stock. In connection with this transaction, the Company
intends to rely on the exemption from registration contained in Section 3(a)(9)
of the Securities Act. Concurrent with or prior to the closing of this
offering, the 365,000 issued and outstanding shares of Series B Convertible
Preferred Stock will be converted into an equal number of shares of Common
Stock of the Company at $1.67 per share. In connection with this transaction,
the Company intends to rely on the exemption from registration contained in
Section 4(2) of the Securities Act and Regulation D promulgated thereunder and
Rule 701 of the Securities Act.

II-2

<PAGE> 112
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

The exhibits and financial statement schedules filed as part of this
Registration Statement are as follows:

(a) Exhibits.

See Index to Exhibits.

(b) Financial Statement Schedules.

See Index to Financial Statements for Schedule I. Other Financial
Statement Schedules have been omitted for the reason that they are not
required, are not applicable or that the equivalent information has
been included in the consolidated financial statements, and notes
thereto, or elsewhere herein.

ITEM 17. UNDERTAKINGS

(a) The undersigned registrant hereby undertakes to provide to the
Underwriters at the closing specified in the Underwriting Agreement,
certificates in such denominations and registered in such names as required by
the Underwriters to permit prompt delivery to each purchaser.

(b) Insofar as indemnification for liabilities under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions of Item 14, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities
Act of 1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question of
whether such indemnification by it is against public policy as expressed in the
Act and will be governed by the final adjudication of such issue.

(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this Registration Statement in reliance on Rule 430A and contained in
the form of prospectus filed by the registrant pursuant to Rule 424(b)(1)
or (4) or 497(h) under the Securities Act shall be deemed to be part of
this Registration Statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.

II-3

<PAGE> 113
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of St. Louis, State of
Missouri, on this 19th day of September, 1997.

CONNING CORPORATION

By: /s/ LEONARD M. RUBENSTEIN
----------------------------------
Leonard M. Rubenstein
Chairman and Chief Executive Officer

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below hereby constitutes and appoints Leonard M. Rubenstein, Fred M. Schpero
and Maurice W. Slayton, and each of them, his or her true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him or her and in his or her name, place and stead, and in
any and all capacities to sign any and all amendments (including post-effective
amendments) to this registration statement and all amendments and supplements
to any prospectus relating thereto and an other documents and instruments
incidental thereto, and any registration statement filed pursuant to Rule 462
under the Securities Act of 1933, as amended, and to file the same with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite or necessary or advisable to be done in and about
the premises, as full to all intents and purposes as he or she might or could
do in person, hereby ratifying and confirming that each said attorneys-in-fact
and agents and/or any of them, or his substitute or substitutes, may lawfully
do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.

<TABLE>
<CAPTION>
NAME TITLE DATE

<S> <C> <C>
/s/ JOHN A. FIBIGER Director September 19, 1997
- -------------------------------
John A. Fibiger

/s/ RICHARD A. LIDDY Director September 19, 1997
- -------------------------------
Richard A. Liddy

/s/ LEONARD M. RUBENSTEIN Chairman and Chief Executive September 19, 1997
- ------------------------------- Officer (Principal Executive
Leonard M. Rubenstein Officer)

/s/ FRED M. SCHPERO Senior Vice President and September 19, 1997
- ------------------------------- Chief Financial Officer
Fred M. Schpero (Principal Financial and
Accounting Officer)

/s/ JOHN C. SHAW Director September 19, 1997
- -------------------------------
John C. Shaw

/s/ MAURICE W. SLAYTON President and Director September 19, 1997
- -------------------------------
Maurice W. Slayton
</TABLE>

II-4

<PAGE> 114
<TABLE>
CONNING CORPORATION

EXHIBIT INDEX

<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
<S> <C>

1.1<F*> Form of Underwriting Agreement among Conning Corporation (the "Company") and Donaldson, Lufkin &
Jenrette Securities Corporation and A.G. Edwards & Sons, Inc., as Representatives of the Several
Underwriters

2.1 Contribution Agreement dated July 24, 1995 by and among the Company (formerly Conning Asset
Management Company), General American Life Insurance Company ("General American"), General
American Holding Company, Conning Asset Management Company (formerly General American Investment
Management Company) ("CAM"), Conning & Company, Conning, Inc. (formerly Conning Corporation) and
the Shareholders and Option Holders of the Company<FDAG>

3.1 Restated Articles of Incorporation of the Company

3.2 Form of Amendment to Restated Articles of Incorporation of the Company (to be filed subsequent to
completion of this offering)

3.3 Bylaws of the Company

4.1 See Exhibits 3.1 and 3.2

4.2 See Exhibit 3.3

5.1<F*> Opinion of Legal Counsel

10.1 Investment Advisory Agreement dated as of May 1, 1995 between General American and CAM relating to
General American's general account

10.2 Investment Advisory Agreement dated as of July 2, 1990 between General American and CAM relating to
General American's separate accounts

10.3 Investment Advisory Agreement dated as of July 23, 1997 between General American Capital Company and
CAM

10.4<F*> Lease Agreement dated July 31, 1996 between General American and CAM<FDAG>

10.5<F*> Sublease dated July 19, 1995 between General American and CAM

10.6<F*> Administrative Services Agreement effective as of July 19, 1995 between CAM and General American

10.7<F*> Tax Sharing Agreement effective as of August 11, 1995 between the Company, CAM and General American

10.8 Amended and Restated Shareholders' Agreement effective as of November 22, 1996 among the Company,
General American, General American Holding Company, and the Shareholders and Option Holders of the
Company

10.9<F*> Registration Rights Agreement dated as of September --, 1997 among the Company and certain of its
Shareholders

10.10<F*> Tax Allocation and Tax Sharing Agreement effective as of June 12, 1997 between the Company, Conning,
Inc., Conning & Company, CAM and General American

10.11 Form of Employment Agreement dated August 11, 1995 between the Company (formerly Conning Asset
Management Company), Conning & Company and Employee, including Messrs. Hansen and Schpero

10.12<F*> Employment Agreement dated August 11, 1995 between the Company and Leonard M. Rubenstein

10.13 Employment Agreement dated August 11, 1995 between the Company (formerly Conning Asset Management
Company), Conning & Company and Maurice W. Slayton

II-5

<PAGE> 115
<CAPTION>
EXHIBIT INDEX (CONTINUED)

EXHIBIT
NUMBER DESCRIPTION

<S> <C>

10.14<FDDAG> Software License Agreement effective as of January 27, 1996 among CAM, General American and SS&C
Technologies, Inc. (formerly Securities, Software & Consulting Inc.)

10.15 1995 Flexible Stock Plan

10.16 1996 Flexible Stock Plan

10.17<F*> 1997 Flexible Stock Plan

10.18<F*> Form of Incentive Stock Option Award and Terms and Conditions under 1995 Flexible Stock Plan

10.19<F*> Form of Incentive Stock Option Award and Terms and Conditions under 1996 Flexible Stock Plan

10.20<F*> Form of Non-Qualified Stock Option Award and Terms and Conditions under 1997 Flexible Stock Plan

10.21<F*> Office Lease dated August 22, 1989 among Hartford CityPlace L.L.C., the Company and Conning &
Company, as amended as of June 30, 1997

10.22<F*> Venture Capital Carried Interest Allocation Plan

10.23<F*> Limited Partnership Agreement of Conning Investment Partners Limited Partnership III

10.24<F*> Membership Agreement of Conning Connecticut Investors, LLC

10.25<F*> Registration Rights Agreement dated as of June 12, 1997 among the Company, General American and
General American Holding Company

21.1 Subsidiaries of the Company

23.1 Consent of KPMG Peat Marwick LLP

23.2 Consent of Price Waterhouse LLP

23.3 Consent of Legal Counsel (included in Exhibit 5.1)

24.1 Power of Attorney (included on Signature Page)

27.1 Financial Data Schedule

27.2 Financial Data Schedule

<FN>
- --------

<F*> To be filed by amendment

<FDAG> Schedules omitted pursuant to Regulation S-K, Item 601(b)(2) of the Commission.
The registrant hereby undertakes to furnish such schedules to the Commission
supplementally upon request.

<FDDAG> Incorporated by reference from Exhibit No. 10.15 to the Registration Statement
on Form S-1 (No. 333-3094) filed by SS&C Technologies, Inc. Confidential
treatment will be requested with respect to certain portions of this exhibit.
Omitted portions will be filed separately with the Commission.
</TABLE>

II-6

<PAGE> 116

APPENDIX

Pages 20 and 24 contain bar graphs. The information contained in the
graphs are presented in a tabular format that may be processed by the EDGAR
system.

<PAGE> 1

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

CONTRIBUTION AGREEMENT

by and among

CONNING ASSET MANAGEMENT COMPANY,

GENERAL AMERICAN LIFE INSURANCE COMPANY,

GENERAL AMERICAN HOLDING COMPANY,

GENERAL AMERICAN INVESTMENT MANAGEMENT COMPANY,

CONNING & COMPANY,

CONNING CORPORATION

and

THE SHAREHOLDERS AND OPTION HOLDERS OF CONNING CORPORATION

Dated July 24, 1995

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

<PAGE> 2

<TABLE>

TABLE OF CONTENTS
-----------------

<CAPTION>
Page
----
<S> <C>
RECITALS

ARTICLE I
CONTRIBUTIONS TO CAM; CLOSING............................................. 1
1.1 Contributions of the Parties...................................... 1
1.2 Option Holder Exchange............................................ 2
1.3 General American Loans............................................ 3
1.4 The Closing....................................................... 3
1.5 Deliveries of GAHC at the Closing................................. 3
1.6 Deliveries of the Shareholders at the Closing..................... 3
1.7 Deliveries of the Option Holders at Closing....................... 4
1.8 Deliveries of CAM at the Closing.................................. 4
1.9 Legended Certificates............................................. 5
1.10 Escrow............................................................ 6

ARTICLE II
REPRESENTATIONS AND WARRANTIES
OF THE EQUITY HOLDERS, CONNING CORP. AND CONNING........................ 6
2.1 Enforceable Agreement; Existence and Qualification................ 7
2.2 Capitalization and Related Matters................................ 8
2.3 Subsidiaries...................................................... 9
2.4 Property.......................................................... 9
2.5 Financial Statements.............................................. 9
2.6 Books and Records................................................. 10
2.7 No Undisclosed Liabilities........................................ 10
2.8 Taxes............................................................. 10
2.9 Accounts Receivable............................................... 13
2.10 Regulatory Matters; Permits and Licenses.......................... 14
2.11 Real Property..................................................... 14
2.12 Assets............................................................ 15
2.13 Absence of Certain Changes........................................ 15
2.14 No Breach of Law or Governing Document............................ 16
2.15 Litigation........................................................ 17
2.16 Environmental Matters............................................. 17
2.17 Contracts......................................................... 18
2.18 Intellectual Property............................................. 18
2.19 Insurance......................................................... 19
2.20 Officers, Directors, Employees, and Consultants................... 20
2.21 Bank Accounts of Conning Corp. ................................... 20
2.22 Transactions with Related Persons................................. 20
2.23 Labor Matters..................................................... 20
2.24 Employee Benefit Matters.......................................... 21
2.25 Discrimination and Occupational Safety and Health................. 23
2.26 Alien Employment Eligibility...................................... 23
2.27 Governmental Approvals and Filings................................ 23
2.28 Brokers, Finders.................................................. 23

i
<PAGE> 3
2.29 Outside Financial Interests....................................... 24
2.30 Guarantees........................................................ 24
2,31 Foreign Operations and Export Control............................. 24
2.32 Disclosure........................................................ 25
2.33 Qualified Investors............................................... 25
2.34 Purchase for Investment........................................... 25

ARTICLE III
REPRESENTATIONS AND WARRANTIES OF
GENERAL AMERICAN, GAHC, GAIMCO AND CAM.................................. 26
3.1 Enforceable Agreement; Existence and Qualification................ 26
3.2 Capitalization and Related Matters................................ 27
3.3 The CAM Preferred Stock and CAM Options........................... 28
3.4 Subsidiaries...................................................... 28
3.5 Property.......................................................... 28
3.6 Financial Statements.............................................. 29
3.7 Books and Records................................................. 29
3.8 No Undisclosed Liabilities........................................ 29
3.9 Taxes............................................................. 29
3.10 Accounts Receivable............................................... 32
3.11 Regulatory Matters; Permits and Licenses.......................... 32
3.12 Real Property..................................................... 33
3.13 Assets............................................................ 33
3.14 Absence of Certain Changes........................................ 34
3.15 No Breach of Law or Governing Document............................ 35
3.16 Litigation........................................................ 35
3.17 Environmental Matters............................................. 35
3.18 Contracts......................................................... 36
3.19 Intellectual Property............................................. 36
3.20 Insurance......................................................... 37
3.21 Officers, Directors, Employees, and Consultants................... 38
3.22 Bank Accounts of GAIMCO and CAM................................... 38
3.23 Transactions with Related Persons................................. 38
3.24 Labor Matters..................................................... 38
3.25 Employee Benefit Matters.......................................... 39
3.26 Discrimination and Occupational Safety and Health................. 41
3.27 Alien Employment Eligibility...................................... 41
3.28 Governmental Approvals and Filings................................ 41
3.29 Brokers, Finders.................................................. 41
3.30 Outside Financial Interests....................................... 42
3.31 Guarantees........................................................ 42
3.32 Foreign Operations and Export Control............................. 42
3.33 Disclosure........................................................ 43

ARTICLE IV
ADDITIONAL COVENANTS OF THE PARTIES....................................... 43
4.1 Conduct of Business............................................... 43
4.2 Access to Records................................................. 44
4.3 Preservation of Business.......................................... 44
4.4 Insurance and Maintenance of Property............................. 45
4.5 Books, Records and Financial Statements........................... 45

ii
<PAGE> 4
4.6 Other Governmental Filings........................................ 45
4.7 Notification of Certain Matters................................... 45
4.8 No Solicitation................................................... 45
4.9 Offering Memorandum............................................... 46
4.10 Approval of Parachute Payments.................................... 47
4.11 Notice to Customers............................................... 47
4.12 Filing of Certificate of Designation.............................. 47

ARTICLE V
CONDITIONS TO THE OBLIGATIONS
GENERAL AMERICAN, GAHC, GAIMCO AND CAM.................................. 47
5.1 Representations and Warranties.................................... 47
5.2 Performance of Agreement.......................................... 47
5.3 Certificate....................................................... 47
5.4 Approvals......................................................... 48
5.5 No Adverse Proceeding............................................. 48
5.6 Opinions of Counsel............................................... 48
5.7 Employment Agreements............................................. 48
5.8 Adverse Change.................................................... 48
5.9 Shareholders' Agreement........................................... 48
5.10 Investor Questionnaires........................................... 48
5.11 Approval of Parachute Payments.................................... 48
5.12 Redemption of Preferred Stock..................................... 48

ARTICLE VI
CONDITIONS TO THE OBLIGATIONS OF THE
EQUITY HOLDERS, CONNING CORP. AND CONNING............................... 49
6.1 Representations and Warranties.................................... 49
6.2 Performance of Agreement.......................................... 49
6.3 Certificate....................................................... 49
6.4 Approvals......................................................... 49
6.5 No Adverse Proceeding............................................. 49
6.6 Adverse Change.................................................... 49
6.7 Opinions of Counsel............................................... 50
6.8 Investor Questionnaire............................................ 50
6.9 Employment Agreements............................................. 50
6.10 Shareholders' Agreement........................................... 50
6.11 Option Agreements................................................. 50

ARTICLE VII
INDEMNIFICATION........................................................... 50
7.1 Survival of Representations and Warranties........................ 50
7.2 Indemnification of General American, GAHC, GAIMCO and CAM......... 51
7.3 Indemnification of Equity Holders................................. 52
7.4 Limitations on Indemnity.......................................... 53
7.5 Notice of Claim................................................... 54
7.6 Right to Contest Claims of Third Persons.......................... 55
7.7 Return or Cancellation of Legended Shares; Escrow Withdrawals..... 56
7.8 Exclusive Remedy.................................................. 57

iii
<PAGE> 5

ARTICLE VIII
MISCELLANEOUS PROVISIONS.................................................. 57
8.1 Notice............................................................ 57
8.2 Appointment of Representative..................................... 59
8.3 Termination of Shareholder Agreement.............................. 60
8.4 Entire Agreement.................................................. 60
8.5 Assignment; Binding Agreement..................................... 60
8.6 Counterparts...................................................... 61
8.7 Headings; Interpretation.......................................... 61
8.8 Expenses.......................................................... 61
8.9 Termination of the Agreement...................................... 61
8.10 Governing Law..................................................... 61
8.11 Confidentiality................................................... 62
8.12 Further Assurances................................................ 62

TABLE OF DEFINITIONS

TABLE OF EXHIBITS
</TABLE>

iv
<PAGE> 6

CONTRIBUTION AGREEMENT
----------------------

THIS CONTRIBUTION AGREEMENT (the "Agreement") is made and
entered into as of July 24, 1995, by and among Conning Asset Management
Company, a Missouri corporation ("CAM"), General American Life Insurance
Company, a Missouri mutual life insurance company ("General American"),
General American Holding Company, a Missouri corporation ("GAHC"), General
American Investment Management Company, a Missouri corporation ("GAIMCO"),
Conning & Company, a Connecticut corporation ("Conning"), Conning
Corporation, a Delaware corporation ("Conning Corp."), and the shareholders
(the "Shareholders") and option holders (the "Option Holders") of Conning
Corp.

RECITALS
--------

A. General American is the owner of all of the issued and
outstanding capital stock of GAHC, which in turn is the owner of all the
issued and outstanding capital stock of GAIMCO.

A. GAHC has incorporated CAM for purposes of the transactions
contemplated hereby.

B. The Shareholders are the owners of all of the issued and
outstanding capital stock of Conning Corp., which in turn is the owner of
all of the issued and outstanding capital stock of Conning.

C. GAHC and the Shareholders desire to make contributions to
CAM in exchange for equity interests therein and/or cash on the terms and
conditions set forth herein.

D. Following the closing of the transactions effected
pursuant to this Agreement, the Option Holders desire to cancel their
options to purchase voting common stock, par value $.01 per share (the
"Conning Common Stock"), of Conning Corp. (the "Conning Options") for equity
interests in CAM and cash.

NOW, THEREFORE, in consideration of the recitals and the mutual
covenants, representations, warranties, conditions and agreements
hereinafter expressed, the parties agree as follows:

ARTICLE I
CONTRIBUTIONS TO CAM; CLOSING
-----------------------------

1.1 Contributions of the Parties. At the Closing (as
----------------------------
hereinafter defined), subject to the terms and conditions set forth herein,
GAHC and the Shareholders shall make the following contributions to and
receive the following consideration from CAM:

(a) GAHC shall contribute all of the issued and
outstanding common stock, no par value per share (the "GAIMCO

<PAGE> 7
Common Stock"), of GAIMCO in exchange for 6,710,000 shares of the voting
common stock of CAM, par value $.01 per share (the "CAM Common Stock"),
which will constitute all of the issued and outstanding CAM Common Stock.

(b) Each Shareholder (excluding the Specified
Shareholders (as hereinafter defined) shall contribute all of the Conning
Common Stock and all of the non-voting common stock of Conning Corp., par
value $.01 per share (the "Conning Non-Voting Common Stock"), owned by such
Shareholder in exchange for the portion set forth on such Shareholder's
signature page hereof under the headings "Cash Received for Stock" and "CAM
Preferred Stock Received for Stock" of the following aggregate
consideration: (i) $3,039,829 in cash and (ii) 2,152,509 shares of the
Series A Convertible Preferred Stock, par value $.01 per share (the "CAM
Preferred Stock"), of CAM. The terms of the CAM Preferred Stock are set
forth in the Certificate of Designation attached hereto as Exhibit A (the
"Certificate of Designation"). ---------

(c) Joseph Sargent, George Kelly, David Clark,
Pennsylvania Life Insurance Company, a Pennsylvania corporation, and
Occidental Life Insurance Company of North Carolina, a North Carolina
corporation (the "Specified Shareholders"), shall each contribute all of the
Conning Common Stock and all of the Conning Non-Voting Common Stock owned by
such Specified Shareholder in exchange for $222.3918 in cash and no shares
of CAM Preferred Stock per share of Conning Common Stock or Conning
Non-Voting Common Stock contributed by each such Specified Shareholder.

1.2 Option Holder Exchange.
----------------------

(a) At the Closing, immediately following the
contributions of GAHC and the Shareholders described above and after CAM has
acquired control of Conning Corp., each Option Holder (excluding the
Specified Shareholders) shall cancel all of the Conning Options held by such
Option Holder in exchange for the portion set forth on such Option Holder's
signature page hereof under the headings "Cash Received for Options" and
"CAM Preferred Stock Received for Options" of the following aggregate
consideration: (i) $1,465,173 in cash and (ii) 1,037,491 shares of CAM
Preferred Stock.

(b) At the Closing, immediately following the
contributions of GAHC and the Shareholders described above and after CAM has
acquired control of Conning Corp., each Specified Shareholder shall cancel
all of the Conning Options held by such Specified Shareholder in exchange
for $222.3918 in cash per share of Conning Common Stock covered by a
canceled Conning Option held by each such Specified Shareholder, less the
exercise price for such share under such Conning Option.

2
<PAGE> 8

1.3 General American Loans. At the Closing, in order to fund
----------------------
the payment of cash to the Shareholders and the Option Holders as described
above in Sections 1.1 and 1.2 and to fund certain capital needs of Conning
Corp., General American will lend CAM up to $13,000,000 and will lend
Conning Corp. $2,500,000. Such loans shall be evidenced by promissory notes
in the forms attached hereto as Exhibit B (the "CAM Note" and the "Conning
---------
Corp. Note," respectively). At the Closing, General American shall deliver
to CAM $13,000,000 and to Conning Corp. $2,500,000 by wire transfer of
immediately available funds, and, in consideration thereof, CAM and Conning
Corp. shall deliver to General American the CAM Note and the Conning Corp.
Note, duly executed by CAM and Conning Corp., respectively.

1.4 The Closing. The consummation of the transactions
-----------
contemplated hereby (the "Closing") shall take place at the offices of Bryan
Cave LLP, One Metropolitan Square, 211 North Broadway, Suite 3600, St.
Louis, Missouri at 10:00 a.m. on August 15, 1995 (the "Closing Date").

1.5 Deliveries of GAHC at the Closing. Subject to the
---------------------------------
conditions to GAHC's obligations set forth in Article V hereof, at the
Closing, GAHC shall deliver:

(a) to CAM, certificates evidencing all of the issued and
outstanding GAIMCO Common Stock, free and clear of all security interests,
claims and restrictions, duly endorsed to CAM; and

(b) to CAM and each of the Shareholders and Option
Holders (collectively, the "Equity Holders"), excluding the Specified
Shareholders, the Shareholders's Agreement in the form attached hereto as
Exhibit C (the "Shareholders' Agreement"), duly executed by GAHC.
- ---------

1.6 Deliveries of the Shareholders at the Closing. Subject to
---------------------------------------------
the conditions to the Equity Holders' obligations set forth in Article VI
hereof, at the Closing, each Shareholder shall deliver:

(a) to CAM, certificates evidencing the shares of Conning
Common Stock owned by such Shareholder, free and clear of all security
interests, claims and restrictions, duly endorsed to CAM;

(b) to CAM, GAHC and each of the other Equity Holders
(excluding the Specified Shareholders), the Shareholders' Agreement, duly
executed by such Shareholder (excluding the Specified Shareholders); and

3
<PAGE> 9

(c) to CAM and the Escrow Agent (as hereinafter
defined), the Escrow Agreement (as hereinafter defined), duly executed by
each Specified Shareholder (excluding Pennsylvania Life Insurance Company, a
Pennsylvania corporation, and Occidental Life Insurance Company of North
Carolina, a North Carolina corporation (collectively, "Penn. Corp.")).

1.7 Deliveries of the Option Holders at Closing. Subject to
-------------------------------------------
the conditions to the Equity Holders' obligations set forth in Article VI
hereof, at the Closing, each Option Holder shall deliver:

(a) to Conning Corp., an Option Cancellation Agreement in
the form of Exhibit D (the "Option Cancellation Agreements"), duly executed
---------
by such Option Holder; and

(b) to CAM, GAHC and each of the other Equity Holders
(excluding the Specified Shareholders), the Shareholders' Agreement, duly
executed by such Option Holder (excluding the Specified Shareholders that
hold Conning Options).

1.8 Deliveries of CAM at the Closing. Subject to the
--------------------------------
conditions to CAM's obligations set forth in Article V hereof, at the
Closing, CAM shall deliver:

(a) to GAHC, a certificate evidencing 6,710,000 shares of
CAM Common Stock, free and clear of all security interests, claims and
restrictions;

(b) to each Shareholder by CAM check or wire transfer,
the amount of cash set forth opposite such Shareholder's name under the
heading "Closing Cash" on each such respective Equity Holder's signature
page hereof;

(c) upon CAM's acquisition of control of Conning Corp.,
to each Option Holder by CAM check, the amount of cash set forth opposite
such Option Holder's name under the heading "Closing Cash" on each such
respective Equity Holder's signature page hereof;

(d) to each Shareholder (excluding the Specified
Shareholders), a certificate evidencing the number of shares of CAM
Preferred Stock set forth opposite such Shareholder's name under the heading
"Total Shares" on each such respective Equity Holder's signature page
hereof, free and clear of all security interests, claims and restrictions
other than those contemplated hereby;

(e) upon CAM's acquisition of control of Conning Corp.,
to each Option Holder (excluding the Specified Shareholders), a certificate
evidencing the number of shares of

4
<PAGE> 10
CAM Preferred Stock set forth opposite such Option Holder's name under the
heading "Total Shares" on each such respective Equity Holder's signature
page hereof, free and clear of all security interests, claims and
restrictions other than those contemplated hereby;

(f) to each Option Holder, an Option Cancellation
Agreement, duly executed by Conning Corp.;

(g) to GAHC and each of the Equity Holders (excluding the
Specified Shareholders), the Shareholders' Agreement, duly executed by CAM;

(h) to each of the optionees listed on Exhibit E (the
---------
"CAM Optionees"), an Option Agreement in the form of Exhibit F (the "Option
---------
Agreements") granting each such CAM Optionee the option to purchase, at a
per share exercise price of $5.33 (subject to adjustment as provided in such
Option Agreements), the number of shares of the non-voting common stock, par
value $.01 per share (the "CAM Non-Voting Common Stock"), set forth on each
such respective Option Holder's signature page hereof under the heading
"Option Shares," duly executed by CAM;

(i) to each of the key employees listed on Exhibit G
---------
(the "Key Employees"), an Employment Agreement in the form of Exhibit H (the
"Employment Agreements"), duly executed by CAM; ---------

(j) to GAHC, the CAM Note, duly executed by CAM; and

(k) to each of the Specified Shareholders (excluding
Penn. Corp.) and the Escrow Agent, the Escrow Agreement duly executed by
CAM.

1.9 Legended Certificates. Certificates evidencing in the
---------------------
aggregate 375,294 of the aggregate shares of CAM Preferred Stock issuable to
the Option Holders and certificates evidencing in the aggregate 702,813 of
the aggregate shares of CAM Preferred Stock issuable to the Shareholders and
Option Holders will be legended with the legend set forth on Exhibit I (the
---------
"Legend"). The number of shares of CAM Preferred Stock issuable to each
Option Holder and Shareholder to which the Legend shall apply is set forth
on each such Equity Holder's signature page hereof under the headings
"Prorata Share of Section 7.2(a) Indemnity" and "Prorata Share of Section
7.2(b) Indemnity." Upon tender of such legended certificates to CAM at the
following times, such certificates shall be exchanged for certificates not
bearing the Legend: (a) in the case of the Option Holders, with respect to
shares received in exchange for Conning Options, 375,294 legended shares in
the aggregate will be delegended on or after the third

5
<PAGE> 11
anniversary of the Closing or, if earlier, the date on which the 1995
Conning tax year is closed, and (b) in the case of the Option Holders and
the Shareholders, 702,813 legended shares in the aggregate issued to the
Option Holders and all legended shares issued to Shareholders will be
delegended on the later to occur of (i) the end of the eighteenth month
after the Closing, or (ii) the final, non-appealable resolution by agreement
or by a court of competent jurisdiction of the Pending Litigation (as
hereinafter defined). The certificates evidencing the CAM Preferred Stock
shall also bear such legends as are prescribed by Section 2.34, the
Shareholders' Agreement, and as are otherwise customary under the
circumstances or required by law.

1.10 Escrow. In connection with the Closing, the Specified
------
Shareholders (excluding Penn. Corp.), CAM and Boatmen's Trust Company, as
escrow agent (the "Escrow Agent"), shall enter into an Escrow Agreement in
the form of Exhibit J (the "Escrow Agreement") pursuant to which each of the
---------
Specified Shareholders (excluding Penn. Corp.) shall deposit 16.739% of the
cash consideration to be received by such Specified Shareholder hereunder
($348,131 in the aggregate) (the "Escrow Funds") to be held by the Escrow
Agent pursuant to the terms of the Escrow Agreement. Subject to the terms
of the Escrow Agreement and this Agreement, the Escrow Funds shall be
available to satisfy any claims a CAM Indemnified Person (as hereinafter
defined) may have for indemnification from such Specified Shareholders
pursuant to Article VII of this Agreement. Upon termination of the Escrow
Agreement, the Escrow Agent shall distribute any remaining balance of the
Escrow Funds as provided in the Escrow Agreement. As an alternative to the
Escrow Agreement, any of the Specified Shareholders (excluding Penn. Corp.)
may at the Closing deliver an irrevocable letter of credit to secure his
obligations hereunder, provided that the terms and form of such letter of
credit and any related documentation is satisfactory to GAHC.

ARTICLE II
REPRESENTATIONS AND WARRANTIES
------------------------------
OF THE EQUITY HOLDERS, CONNING CORP. AND CONNING
------------------------------------------------

The Equity Holders, Conning Corp. and Conning hereby severally
and not jointly make the following representations and warranties to General
American, GAHC, GAIMCO and CAM, each of which is true and correct on the
date hereof and will be true and correct on the Closing Date and each of
which shall survive the Closing as specified in Section 7.1 hereof. Unless
otherwise specifically provided herein, each reference to Conning Corp. or
Conning in this Agreement shall be deemed a reference to such entity and to
each of Conning Corp., Conning & Company and Conning International, Inc.,
such that each representation, warranty or covenant with respect to Conning
Corp. or Conning,

6
<PAGE> 12
whether contained in this Article II or elsewhere in this Agreement, shall
also be a representation, warranty, or covenant with respect to each of
Conning Corp., Conning & Company and Conning International, Inc.
Notwithstanding the foregoing, Penn. Corp. shall only make the
representations and warranties set forth in Section 2.1(a) and the last
sentence of Section 2.2(a) and only as to itself and shall have no
liability for any other representation or warranty in this Article II.

2.1 Enforceable Agreement; Existence and Qualification.
--------------------------------------------------

(a) The Equity Holders have the power, authority and
capacity to execute and deliver this Agreement, to perform their obligations
hereunder, and to consummate the transactions contemplated hereby. This
Agreement constitutes the valid and binding obligation of the Equity
Holders, enforceable against each of them in accordance with its terms.

(b) Conning Corp. (excluding Conning and Conning
International, Inc.) and Conning (excluding Conning Corp. and Conning
International, Inc.) each have full power and authority to enter into this
Agreement and to consummate the transactions contemplated hereby. The
execution, delivery and performance of this Agreement by Conning Corp.
(excluding Conning and Conning International, Inc.) and Conning (excluding
Conning Corp. and Conning International, Inc.) have been duly authorized by
all requisite corporate action. This Agreement constitutes the valid and
binding obligation of Conning Corp. (excluding Conning and Conning
International, Inc.) and Conning (excluding Conning Corp. and Conning
International, Inc.), enforceable in accordance with its terms.

(c) Conning Corp. (excluding Conning and Conning
International, Inc.) is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware, and each of
Conning and Conning International, Inc. is a corporation duly organized,
validly existing and in good standing under the laws of its state, country
or other jurisdiction of incorporation, as listed on Schedule 2.3. Conning
------------
Corp. has all requisite corporate power and authority to own, lease, and use
its assets and properties and to conduct the business in which it is
engaged. Conning Corp. is duly licensed or qualified to do business as a
foreign corporation and is in good standing in the state(s), countries or
other jurisdictions listed on Schedule 2.1(c) (or Schedule 2.3 with respect
--------------- ------------
to the entities listed on such Schedule) and is not required to be
registered, licensed or qualified to do business in any other jurisdiction
in which the failure to so qualify would result in losses to Conning Corp.
in excess of $25,000. Conning Corp. has delivered to General American true,
complete and correct copies

7
<PAGE> 13
of the constituent documents, as currently in effect, of Conning Corp.

(d) Except as set forth on Schedule 2.1(d), Conning
Corp. is not a party to, subject to or bound by any note, bond, mortgage,
indenture, deed of trust, agreement, lien, contract or other instrument or
obligation or any statute, law, rule, regulation, judgment, order, writ,
injunction, or decree of any court, administrative or regulatory body,
governmental agency, arbitrator, mediator or similar body, franchise or
license, which is material to its business and which would (i) conflict with
or be breached or violated or the obligations thereunder accelerated or
increased (whether or not with notice or lapse of time or both) by the
execution, delivery or performance by Conning Corp. of this Agreement or
(ii) prevent the carrying out of the transactions contemplated hereby.
Except as set forth on Schedule 2.1(d) and except for compliance with the
---------------
provisions of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended (the "H-S-R Act"), none of Conning Corp. or the Equity Holders is
required to obtain any waiver or consent of any third person or governmental
authority for the execution of this Agreement or the consummation of the
transactions contemplated hereby. The execution of this Agreement and the
consummation of the transactions contemplated hereby will not result in the
creation of any material lien, claim, encumbrance, security interest,
charge, pledge, or other material restriction or material adverse claim of
whatever nature against Conning Corp. or any of its properties or assets.

2.2 Capitalization and Related Matters.
----------------------------------

(a) Capital Stock. The entire authorized capital
-------------
stock of Conning Corp. (excluding Conning and Conning International, Inc.)
consists solely of (i) 1,000,000 shares of Conning Common Stock, of which
60,571 shares are issued and outstanding, (ii) 100,000 shares of Conning
Non-Voting Common Stock, of which 24,350 shares are issued and outstanding,
and (iii) 1,000,000 shares of Conning Preferred Stock, of which no shares
are issued and outstanding (after giving effect to the redemption of all
Conning Preferred Stock held by the Specified Shareholders). No other
capital stock of Conning Corp. (excluding Conning and Conning International,
Inc.) is authorized or issued. Schedule 2.2(a) sets forth the names,
---------------
addresses and holdings of the record holders of all of the capital stock of
Conning Corp. (excluding Conning and Conning International, Inc.). Except
as set forth on Schedule 2.2(a), all of the issued and outstanding shares of
---------------
the capital stock of Conning Corp. are duly authorized, validly issued,
fully paid, non-assessable and free of preemptive rights, without
restriction on the transfer thereof other than pursuant to applicable
federal and state securities laws, and all of such shares have been so
issued in

8
<PAGE> 14
full compliance with all applicable federal and state securities laws.
Except as set forth on Schedule 2.2(a), the Shareholders own the Conning
---------------
Common Stock free and clear of any lien, claim, encumbrance, security
interest, charge, pledge, or other material restriction or material adverse
claim of whatever nature (collectively, "Liens").

(b) Options and Other Securities. Schedule 2.2(b) sets
---------------------------- ---------------
forth the names and addresses of all holders of Conning Options. Prior to
Closing, Conning Corp. will have delivered to General American true,
complete and correct copies of all agreements and plans relating to the
Conning Options. Except as set forth on Schedule 2.2(b), there are no
---------------
outstanding subscriptions, rights, options, warrants, conversion privileges
or agreements of any kind entitling any person or entity to acquire from
Conning Corp. any shares of the capital stock of Conning Corp. or any other
type of security of Conning Corp. All of the Conning Options have been
issued in full compliance with all applicable federal and state securities
laws.

2.3 Subsidiaries. Except as listed on Schedule 2.3, Conning
------------ ------------
Corp. does not own or have the right to acquire 10% or more of the voting
securities or other equity interest in, or directly or indirectly control,
any other corporation, partnership, joint venture or other entity (excluding
all securities and equity interests held by any of Conning Insurance Capital
Limited Partnership, Conning Insurance Capital International Partners,
Conning Insurance Capital Limited Partnership II, Conning Insurance Capital
International Partners II, Conning Insurance Capital Limited Partnership III
and Conning Insurance Capital International Partners III (collectively, the
"Conning Funds")). Conning Corp. owns all right, title and interest in and
to all capital stock or other equity interests described on Schedule 2.3 and
------------
all rights with respect thereto. The capitalization and the state, country
or other jurisdiction of incorporation of each entity listed on Schedule 2.3
is accurately described and identified on Schedule 2.3. ------------
------------

2.4 Property. Except as set forth on Schedule 2.4, Conning
-------- ------------
Corp. is the sole owner of all right, title, and interest in and to all
material assets reflected on the Conning Balance Sheet (defined below) and
owns or has the valid right to lease all property, real and personal,
tangible and intangible, used by it in, or necessary for it to transact, the
business in which it is engaged, and there exists no material restriction on
the use or transfer of such assets or property. The assets owned or leased
by Conning Corp. constitute all of the property and property rights used or
necessary for the conduct of the business of Conning Corp. in the manner and
to the extent presently conducted by Conning Corp. No such assets or
property are in the

9
<PAGE> 15
possession of others and Conning Corp. holds no property on consignment.

2.5 Financial Statements.
--------------------

(a) Set forth on Schedule 2.5 are (i) the audited
------------
consolidated balance sheets of Conning Corp. as of December 31, 1992, 1993,
and 1994, and the related statements of earnings, shareholders' equity and
changes in financial position or cash flow for the fiscal years then ended,
and all notes and schedules thereto, and (ii) the unaudited consolidated
balance sheet of Conning Corp. as of June 30, 1995 (the "Conning Balance
Sheet") and the related statements of earnings and changes in financial
position for the period then ended, together with any notes or schedules
thereto ((i) and (ii) together, the "Conning Financial Statements").

(b) The Conning Financial Statements (i) are true,
complete, and correct, (ii) present fairly the financial position, results
of operations, and cash flows of Conning Corp. at the dates and for the
periods indicated, and (iii) have been prepared in accordance with generally
accepted accounting principles ("GAAP") applied on a consistent basis
(except that unaudited financial statements do not contain footnotes and are
subject to year-end audit adjustments, which will not be material in the
aggregate).

2.6 Books and Records. The books of account, corporate record
-----------------
books, minute books, bank accounts, and other records of Conning Corp. are
true, correct, and complete in all material respects, have been maintained
in accordance with good business practices, and the matters contained
therein are accurately reflected in the Conning Financial Statements to the
extent appropriate.

2.7 No Undisclosed Liabilities. Conning Corp. does not have
--------------------------
any liabilities or obligations whatsoever, known or unknown, accrued,
absolute, contingent, or other, except (a) as set forth on the Conning
Balance Sheet or Schedule 2.7, or (b) those incurred in the ordinary course
------------
of the business of Conning Corp., consistent with past practice, since the
date of the Conning Balance Sheet, none of which will, or could, have an
adverse effect upon the business or condition (financial or otherwise) or
operations of Conning Corp.

2.8 Taxes.
-----

(a) Conning Corp. and each of its Tax Affiliates (as
hereinafter defined) has timely filed or caused to be filed with the
appropriate Government (as hereinafter defined) entity all Tax Returns (as
hereinafter defined) ("Conning Tax Returns"),

10
<PAGE> 16
and, except as specified in a letter to General American's counsel dated the
date hereof (the "Article II Tax Disclosure Letter"), no Conning Tax Returns
for any open tax years have been amended. All Conning Tax Returns are true,
correct, and complete. There are no grounds for assertion of any
understatement penalty under Section 6661 of the Code (prior to repeal) or
Section 6662 of the Internal Revenue Code of 1986, as amended (the "Code").

(b) Except as set forth in the Article II Tax Disclosure
Letter, all Taxes (as hereinafter defined) due and payable by Conning Corp.
or any of its Tax Affiliates with respect to all periods ending on or prior
to the date hereof have been timely and fully paid, and there are no grounds
for the assertion or assessment of any additional Taxes against Conning
Corp. or any of its Tax Affiliates or their respective assets with respect
to such periods. There are no audits of any Returns of Conning Corp. or any
of its Tax Affiliates pending or threatened. There is no waiver of any
statute of limitations in effect with respect to any Conning Tax Returns.

(c) All unpaid Taxes for all periods up to and including
the Closing Date are properly accrued on the books of Conning Corp. and its
Tax Affiliates. All unpaid Taxes for all periods up to the date of the
Conning Balance Sheet are properly accrued on the Conning Financial
Statements. The Article II Tax Disclosure Letter lists all Conning Tax
Returns for periods up to and including the Closing Date (whether the period
ends on such date) which have not been filed on or before the Closing Date.

(d) There are no Liens for Taxes upon any assets of
Conning Corp. or its Tax Affiliates, except Liens for Taxes not yet due and
payable.

(e) Except as set forth on the Article II Tax Disclosure
Letter, true, correct and complete copies of all Conning income Tax Returns,
tax examination reports and statements of deficiencies assessed against, or
agreed to with respect to Conning Corp. or any of its Tax Affiliates with
respect to the last four (4) years with the Internal Revenue Service or any
taxing authority have been delivered to General American.

(f) Except as set forth on the Article II Tax Disclosure
Letter, neither Conning Corp. nor any of its Tax Affiliates is or ever has
been a member of an "affiliated group" within the meaning of Section 1504 of
the Code, except for the affiliated group of which Conning Corp. is the
common parent.

(g) Conning Corp. and each of its Tax Affiliates has
complied with all Law (as hereinafter defined) relating to

11
<PAGE> 17
the withholding of Taxes and the payment thereof (including, without
limitation, withholding of Taxes under Section 1441 and 1442 of the Code, or
any similar provision under foreign Law), and has timely and properly
withheld from employee wages and paid over to the proper Government all
amounts required to be withheld and paid over under applicable Law.

(h) Neither Conning Corp. nor any of its Tax Affiliates
is a party to any safe harbor lease within the meaning of section 168(f)(8)
of the Code, as in effect prior to amendment by the Tax Equity and Fiscal
Responsibility Act of 1982. None of Conning Corp.'s or its Tax Affiliates'
property or assets has been financed with or directly or indirectly secures
any industrial revenue bonds or debt the interest on which is tax-exempt
under Section 103(a) of the Code. Neither Conning Corp. nor any of its Tax
Affiliates is a borrower or guarantor of any outstanding industrial revenue
bonds, and none of such parties is a tenant, principal user or related
person to any principal user (within the meaning of section 144(a) of the
Code) of any property which has been financed or improved with the proceeds
of any industrial revenue bonds.

(i) Conning Corp. is not and has not been a real
property holding company within the meaning of Section 897(c) of the Code,
and Conning Corp. shall so certify upon General American's request.

(j) Conning Corp. is not required to include in income
any adjustment under Section 481(a) of the Code by reason of a change in
accounting method initiated by Conning Corp. and the Internal Revenue
Service has not proposed any such adjustment or change in accounting method.
Conning Corp. has no pending private letter ruling request with the Internal
Revenue Service.

(k) None of the property owned by Conning Corp. or any
of its Tax Affiliates is tax-exempt use property within the meaning of
section 168(h) of the Code.

(l) No consent has been filed relating to Conning Corp.
pursuant to section 341(f) of the Code.

(m) Except as set forth on the Article II Tax Disclosure
Letter, neither Conning Corp. nor any of its Tax Affiliates is a partner in
any joint venture, partnership or other arrangement or contract that could
be treated as a partnership for federal income tax purposes.

(n) Neither Conning Corp. nor any of its Tax Affiliates
is a party to or bound by any affiliated group consolidated return tax
allocation agreement, tax sharing agreement or tax indemnification
agreement.

12
<PAGE> 18
(o) Except as set forth on the Article II Tax Disclosure
Letter, Conning Corp. is not liable for Taxes to any foreign taxing
authority and does not have and has not had a permanent establishment in any
foreign country, as defined in any applicable tax treaty or convention
between the United States and such foreign country.

(p) All material elections with respect to Taxes
affecting Conning Corp. or any of its Tax Affiliates as of the date hereof
are set forth in the Article II Tax Disclosure Letter. No new elections
with respect to Taxes, or any changes in current elections with respect to
Taxes of Conning Corp. or any of its Tax Affiliates or affecting any of such
parties shall be made after the date of this Agreement without the prior
written consent of General American.

(q) Except for this Agreement and the transactions
contemplated hereby, Conning Corp. and each of its Tax Affiliates are not a
party to any agreement, contract, arrangement or plan that has resulted or
would result, separately or in the aggregate, in the payment of any "excess
parachute payments" within the meaning of section 280G of the Code.

(r) Conning Corp. and each of its Tax Affiliates have
not participated in an international boycott within the meaning of section
999 of the Code.

(s) As used in this Agreement, "Taxes" means all taxes,
charges, fees, levies, or other like assessments, including without
limitation income, gross receipts, ad valorem, value added, premium, excise,
real property, personal property, windfall profit, sales, use, transfer,
license, withholding, employment, payroll, and franchise taxes imposed by:
the United States or any other nation, state, or bilateral or multilateral
governmental authority, any local governmental unit or subdivision thereof,
or any branch, agency, or judicial body thereof ("Government"); and shall
include any interest, fines, penalties, assessments, or additions to tax
resulting from, attributable to, or incurred in connection with any such
Taxes or any contest or dispute thereof. As used in this Agreement,
"Return" means, with respect to Conning Corp., the federal income tax return
of Conning Corp., Conning and Conning Corp.'s Tax Affiliates, and, with
respect to GAIMCO, the federal income tax return of GAIMCO prepared as if it
were an unaffiliated corporation, and, in each case, any state and local
income tax return, excise tax return, franchise tax return, information
return, or report, and any and all other filings required by any taxing
authority, including all amendments thereto with respect to any Tax. As
used in this Agreement, "Tax Affiliate" shall mean, with respect to a
company, any member of an affiliated

13
<PAGE> 19
group as defined in section 1504 of the Code or any member of a combined or
unitary group of which such company is or was a member (other than such
company).

2.9 Accounts Receivable. Set forth on Schedule 2.9 is a list
------------------- ------------
of all the accounts receivable of Conning Corp. as of June 30, 1995. Such
accounts receivable and any accounts receivable arising between such date
and the Closing Date (the "Conning Accounts Receivable") arose or will have
arisen in the ordinary and usual course of the business of Conning Corp.
Except as set forth on Schedule 2.9, the Conning Accounts Receivable are not
------------
and will not be on the Closing Date subject to any counterclaim, set-off,
defense, security interest, claim, or other encumbrance. Except to the
extent of any reserve therefor on the Conning Balance Sheet or paid in full
prior to Closing, the Conning Accounts Receivable are and will be current
and collectible and will be paid in full, net of reserves, on or before 90
days after the Closing Date.

2.10 Regulatory Matters; Permits and Licenses.
----------------------------------------

(a) Conning is registered with the Securities and
Exchange Commission as a broker-dealer under the Securities Exchange Act of
1934 and as an investment adviser under the Investment Advisers Act of 1940.
Conning is licensed as a broker-dealer in securities under the laws relating
to the conduct of a securities business in the jurisdictions set forth on
Schedule 2.10. Conning is a member in good standing of the National
- -------------
Association of Securities Dealers, Inc. ("NASD"), the Securities Investor
Protection Corporation ("SIPC") and an associate member of the American
Stock Exchange, Inc. ("ASE"). No litigation, proceeding or investigation is
pending or, to the knowledge of Conning, threatened, which might result in
the termination or the suspension of the registration or licensing of
Conning or any of its approved persons, principals or registered
representatives, or in any other disciplinary action against it or any of
them under any applicable statute, rule or regulation or in the termination
or suspension or other disciplinary action affecting Conning's rights as a
member of the NASD, SIPC or ASE.

(b) Set forth on Schedule 2.10 is a list or description
-------------
of each material license or permit required for the conduct of the business
of Conning, together with the name of the governmental agency or entity
issuing each such license and permit. To the knowledge of Conning Corp.,
each of such licenses and permits is valid and in full force and effect.
Except as noted on Schedule 2.10, none of such licenses and permits will be
-------------
rescinded solely as a result of a change in control of Conning.

2.11 Real Property. Conning Corp. does not own any real
-------------
property. Schedule 2.11 lists and provides descriptions of
-------------

14
<PAGE> 20
all real property leased or subleased to Conning Corp. and all other real
property which is used by Conning Corp. and not owned by Conning Corp.
(the "Conning Leased Real Property"). Except as otherwise described on
Schedule 2.11: (a) there are no leases, subleases, licenses, concessions or
- -------------
other agreements, written or oral, granting to any person or entity the
right to use or occupy any portion of the Conning Leased Real Property which
are not listed on Schedule 2.17; (b) no person or entity (other than Conning
-------------
Corp. or Conning) is in possession of any of the Conning Leased Real
Property; (c) neither the current use of the Conning Leased Real Property
nor the operation of Conning Corp.'s business violates any agreement
affecting the Conning Leased Real Property or any applicable legal
requirements; and (d) all certificates of occupancy, permits, licenses,
approvals and other authorizations required in connection with the past,
present and proposed operation of its business on the Conning Leased Real
Property have been lawfully issued to Conning Corp. and are, as of the date
hereof, and will be following the consummation of the transactions
contemplated hereby, in full force and effect.

2.12 Assets. Conning Corp. has good and marketable title to,
------
or a valid leasehold interest in, all material properties and assets used by
it, located on its premises or shown on the Conning Balance Sheet or
acquired after the date thereof, free and clear of all Liens, except for
Liens disclosed on the Conning Balance Sheet or Schedule 2.11 (as to real
-------------
property) or Schedule 2.12 (as to all other properties and assets) and
-------------
except for properties and assets disposed of for fair consideration in the
ordinary course of business since the date of the Conning Balance Sheet.
Conning Corp. owns or leases or has the valid and enforceable right to use
all material assets, tangible or intangible, necessary for the conduct of
its business as presently conducted and as proposed to be conducted, and,
upon the Closing, Conning Corp. will continue to have the same rights with
respect to such assets. All of the material tangible assets of Conning
Corp. are in good operating condition and repair as required for their use
as presently conducted or planned by Conning Corp. and conform to all
applicable Laws, and no notice of any violation of any Law relating to any
of such property or assets has been received by Conning Corp. except such as
have been fully complied with.

2.13 Absence of Certain Changes. Since March 31, 1995, except
--------------------------
as set forth in the Conning Financial Statements or Schedule 2.13 or as
-------------
explicitly provided for under this Agreement, there has not been:

(a) Any material adverse change in (i) the business or
condition (financial or otherwise) or operations of Conning Corp., or (ii)
the condition of the assets and property,

15
<PAGE> 21
real and personal, tangible and intangible, of Conning Corp. (the "Conning
Property");

(b) Any loss or notice of the expected loss of any of
Conning's customers or any material decrease in or change in the terms of
such customers' business relationships or dealings with Conning;

(c) Any declaration, setting aside, or payment of any
dividend or any distribution (in cash or in kind) to any shareholder of
Conning Corp. on account of or with respect to any securities of or
interests in Conning Corp., or any direct or indirect redemption, purchase,
repurchase or other acquisition by Conning Corp. of any securities of or
interests in Conning Corp.;

(d) Any increase in compensation or other remuneration
payable to or for the benefit of or committed to be paid to or for the
benefit of any partner, director, officer, agent, or employee of Conning
Corp., or in any benefits granted under any Plan (defined below) with or for
the benefit of any such partner, director, officer, agent, or employee,
except for regularly scheduled raises consistent with past practices in
timing and amount;

(e) Any transaction entered into or carried out by
Conning Corp. other than in the ordinary course of business;

(f) Any borrowing or incurrence of any other
indebtedness (including letter of credit and foreign exchange obligations),
contingent or otherwise, by or on behalf of Conning Corp.; or any
endorsement, assumption, or guarantee of payment or performance of any loan
or obligation of any other person or entity by Conning Corp.;

(g) Any change made by Conning Corp. in its methods of
doing business or of accounting;

(h) Any grant by Conning Corp. of any mortgage, security
interest, or other encumbrance with respect to the Conning Property;

(i) Any sale, lease, or disposition of, or any agreement
to sell, lease, or dispose of, any of the Conning Property other than
arm's-length sales in the ordinary course of business of Conning Corp.;

(j) Any modification or termination of any Conning
Contract (defined below) or any material term thereof other than in the
ordinary course of business;

(k) Any purchase by Conning Corp. of capital

16
<PAGE> 22

assets with a value individually or in the aggregate in excess of $50,000;

(l) Any loan or advance made by Conning Corp. to any
person or entity; or

(m) Any binding commitment or agreement by a Shareholder
or Conning Corp. to do any of the foregoing items (b) through (k).

2.14 No Breach of Law or Governing Document. Conning Corp. is
--------------------------------------
not in material default under or in material breach or material violation of
any applicable statute, law, ordinance, decree, order, injunction, rule,
directive, or regulation of any Government ("Law") or the provisions of any
Government permit, franchise, or license, or any provision of its
constituent documents. Neither the execution of this Agreement nor the
Closing do or will constitute or result in any such default or violation.

2.15 Litigation. Except as set forth on Schedule 2.15, (a)
---------- -------------
there is no suit, claim, litigation, proceeding (administrative, judicial,
or in arbitration, mediation or alternative dispute resolution), Government
or grand jury investigation, or other action (any of the foregoing,
"Action") pending or, to the knowledge of any Shareholder or Conning Corp.,
threatened against Conning Corp. or involving its business, any of the
Conning Property, or, in connection with its business, any of its partners,
directors, officers, agents, or other personnel, including, without
limitation, any Action challenging, enjoining, or preventing this Agreement
or the consummation of the transactions contemplated hereby; and (b) Conning
Corp. is not subject to any order, writ, injunction, or decree of any court
or other Government entity ("Order") other than Orders of general
applicability. There is no Action pending or, to the knowledge of Conning
Corp., threatened against Conning Corp. or any of the Shareholders or Option
Holders challenging, enjoining, or preventing this Agreement or the
consummation of the transactions contemplated hereby.

2.16 Environmental Matters.
---------------------

(a) Except as set forth on Schedule 2.16 Conning Corp.
-------------
complies, and has at all times complied with, and does not cause, has not
caused, and will not cause liability to be incurred by Conning Corp. under,
any and all current or prior Law relating to the protection of health or the
environment, including, without limitation: the Clean Air Act, the Federal
Water Pollution Control Act, the Resource Conservation and Recovery Act, the
Comprehensive Environmental Response, Compensation and Liability Act, the
Toxic Substance Control Act,

17
<PAGE> 23
and the common law, including the law of nuisance and strict liability
(collectively, "Environmental Law"). Except as set forth on Schedule 2.16,
-------------
Conning Corp. is not in violation of and has not violated any Environmental
Law.

(b) Except as set forth on Schedule 2.16, Conning Corp.
-------------
possesses and is in compliance with all necessary permits, registrations,
approvals, and licenses, and has properly made all filings with and
submissions to any Government or other authority required by any
Environmental Law. No deficiencies have been asserted by any such
Government or authority with respect to such items.

(c) Except as set forth on Schedule 2.16, there has been
-------------
no spill, discharge, leak, leaching, emission, migration, injection,
disposal, escape, dumping, or release of any kind on, beneath, above, or
into any and all property which Conning Corp. currently or previously owned,
leased, occupied or used or into the environment surrounding such property
of any pollutants, contaminants, hazardous substances, hazardous chemicals,
toxic substances, hazardous wastes, infectious wastes, radioactive
materials, petroleum including crude oil or any fraction thereof, asbestos
fibers, or solid wastes (collectively, "Hazardous Materials"), including,
without limitation, those defined in any Environmental Law.

(d) Set forth on Schedule 2.16 is a list of all reports,
-------------
surveys and other written materials commissioned or developed by or on
behalf of Conning Corp. since 1985 with respect to environmental matters
relating to Conning Corp.

2.17 Contracts.
---------

(a) Set forth on Schedule 2.17 is a list of each written
-------------
or oral contract, agreement, lease, indenture, and evidence of indebtedness
(including letter of credit and foreign exchange obligations and purchase
orders for either the purchase of materials or the sale of a product) to
which Conning Corp. is a party or of which it is a beneficiary which
involves an outstanding, contingent, or continuing liability or obligation
of or to Conning Corp. (a "Conning Contract") and which (i) is material to
the business, financial condition or operations of Conning Corp., (ii)
involves (A) a guaranty, indemnity, or power of attorney, (B) a sharing of
payments or joint venture, (C) a sales agency, representation,
distributorship or franchise arrangement, (D) restrictions on competition or
confidentiality agreements, or (E) an obligation in excess of $50,000, (iii)
has resulted or will result in a loss to Conning Corp., or (iv) is not in
the ordinary course of business of Conning Corp. Conning Corp. does not
provide investment advisory services to any registered investment company.

18
<PAGE> 24

(b) Except as indicated on Schedule 2.17, neither
-------------
Conning Corp. nor, to the knowledge of Conning Corp., any other party to a
Conning Contract is in default under or in breach or violation of any
Conning Contract, and, to the knowledge of Conning Corp., no event has
occurred that, through the passage of time or the giving of notice, or both,
would constitute, and neither the execution of this Agreement nor the
Closing hereunder do or will constitute or result in, such a default, breach
or violation, cause the acceleration of any obligation of any party thereto
or the creation of a lien or encumbrance upon any Property or the Conning
Common Stock, or require any consent thereunder to the transactions
contemplated herein.

2.18 Intellectual Property.
---------------------

(a) Schedule 2.18 contains a true, complete and accurate list
-------------
of all patents, trademarks, service marks, copyrights, applications for
patents and for registration of trademarks, service marks and copyrights and
software licenses which are material to the business of Conning Corp.
Schedule 2.18 accurately identifies, where appropriate, one or more of the
- -------------
following for each item of such intellectual property: filing date, issue
date, classification of invention or goods covered, country of origin,
licensor, license date and licensed subject matter. Schedule 2.18 contains
-------------
a complete and accurate list of all licenses and other rights granted by
Conning Corp. to any third party with respect to any item of the Conning
Intellectual Property (as hereinafter defined).

(b) Conning Corp. represents and warrants as follows: (i) the
Conning Intellectual Property is valid and enforceable and encompasses all
proprietary rights material to the operation of its business as presently
conducted or proposed to be conducted (in each case free and clear of all
Liens); (ii) to the knowledge of Conning Corp., it has taken all actions
necessary to maintain and protect the Conning Intellectual Property; (iii)
there has been no claim made against Conning Corp. asserting the invalidity,
misuse or unenforceability of any of the Conning Intellectual Property or
challenging Conning Corp.'s right to use or ownership of any of the Conning
Intellectual Property; (iv) Conning Corp. is not aware of any infringement
or misappropriation of any of the Conning Intellectual Property or of any
facts raising a likelihood of infringement or misappropriate; (v) to the
knowledge of Conning Corp., the conduct of its business has not infringed or
misappropriated, and does not infringe or misappropriate, any intellectual
property or proprietary right of any other entity; (vii) no loss of any of
the Conning Intellectual Property is known by Conning Corp. to be
threatened, pending or reasonably foreseeable; and (viii) the consummation
of the transactions contemplated by this Agreement

19
<PAGE> 25
will not materially alter, impair or extinguish any of the Conning
Intellectual Property.

(c) For purposes of this Agreement, "Conning Intellectual
Property" shall mean all of the following (in whatever form or medium) which
are owned by or licensed to Conning Corp.: (i) patents, trademarks, service
marks and copyrights, (ii) applications for patents and for registration of
trademarks, service marks and copyrights, (iii) trade secrets and trade
names, and (iv) all other items of proprietary know-how or intellectual
property.

2.19 Insurance. Conning Corp. has during the past five years
---------
maintained: (i) general comprehensive liability insurance against such
risks as are customarily insured against by businesses similar to Conning
Corp. and in at least such amounts as are usually carried by persons or
entities engaged in the same or a similar business, and (ii) insurance as
required by law or under any agreement to which Conning Corp. is or has been
a party, including, without limitation, unemployment and workers'
compensation coverage. A list of each such currently effective insurance
policy is set forth on Schedule 2.19.
-------------

2.20 Officers, Directors, Employees, and Consultants. Set
-----------------------------------------------
forth on Schedule 2.20 is a list of: (a) all current directors of Conning
-------------
Corp., (b) all current officers (with office held) of Conning Corp., (c) all
employees (active or other) of Conning Corp., (d) all current paid
consultants to Conning Corp., and (e) all retirees and terminated employees
of Conning Corp. for which Conning Corp. has any benefits responsibility or
other continuing or contingent obligation, together, in each case, with the
current rate of compensation (if any) payable to each. Conning Corp. is not
indebted to any partner, director, officer, employee or agent of Conning
Corp., except for amounts due as (x) normal salaries, wages and bonuses, (y)
as disclosed on Schedule 2.20, or (z) in reimbursement of ordinary expenses
-------------
on a current basis.

2.21 Bank Accounts of Conning Corp. Set forth on Schedule 2.21
------------------------------ -------------
hereto is a list of the locations and numbers of all bank accounts and safe
deposit boxes maintained by Conning Corp., together with the names of all
persons who are authorized signatories or have access thereto.

2.22 Transactions with Related Persons. Except as set forth on
---------------------------------
Schedule 2.22, Conning Corp. has no obligations, contractual or otherwise,
- -------------
owed to or owing from, directly or indirectly, any officer, director or
Equity Holder or any affiliate of any of them or of Conning Corp.

2.23 Labor Matters. Set forth on Schedule 2.23 is each
------------- -------------

20
<PAGE> 26
collective bargaining, works council, union representation or similar
agreement or arrangement to which Conning Corp. is or has been a party or by
which it is or has been bound. Except as set forth on Schedule 2.23:
-------------

(a) Conning Corp. is not and has not engaged in any
unfair labor practice;

(b) There is no labor strike, dispute, slowdown, or
stoppage pending or, to the knowledge of any Shareholder or Conning Corp.,
threatened against Conning Corp.;

(d) No collective bargaining agreement is currently
being negotiated and no organizing effort is currently being made with
respect to Conning Corp.'s employees; and

(e) No current or former employee of Conning Corp. has
any claim against Conning Corp. on account of or for (i) overtime pay, other
than overtime pay for the current payroll period, (ii) wages or salary
(excluding current bonus, accruals and amounts accruing under pension and
profit sharing and other employee benefit plans) for any period other than
the current payroll period, (iii) vacation, time off or pay in lieu of
vacation or time off, other than that earned in respect of the current
fiscal year, or (iv) any violation of any Law relating to minimum wages or
maximum hours of work.

2.24 Employee Benefit Matters.
------------------------

(a) Except as set forth on Schedule 2.24, Conning Corp.
-------------
does not have outstanding and is not a party to or subject to liability
under: (i) any agreement, arrangement, plan or policy, whether or not
considered legally binding, that involves (A) any pension, retirement,
profit sharing, deferred compensation, bonus, stock option, stock purchase,
health, welfare, or incentive plan; or (B) any welfare or "fringe" benefits,
including, without limitation, vacation, severance, disability, medical,
hospitalization, dental, life and other insurance, tuition, company car,
club dues, sick leave, maternity, paternity or family leave, or other
benefits; or (ii) any employment, consulting, engagement, or retainer
agreement or arrangement whereby Conning Corp. employs, retains or engages
any individual or other entity as an employee, consultant or independent
contractor to Conning Corp. ((i) and (ii) together, the "Conning Plans," and
each item thereunder, a "Conning Plan"). True, correct, and complete copies
of all documents creating or evidencing any Conning Plan listed on Schedule 2.24
have been delivered to General American. There are -------------

21
<PAGE> 27
no negotiations, demands or proposals which are pending or threatened or
which have been made since December 31, 1992 which concern matters now
covered, or that would be covered, by the foregoing types of agreement,
arrangement, plan, or policy.

(b) Each Conning Plan complies with and has been
administered, operated, and maintained in compliance with, and, except as
set forth on Schedule 2.24, Conning Corp. has no direct or indirect
-------------
liability under, the Code or the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), as the case may be, or any other Law applicable
to any Conning Plan, and no Conning Plan is subject to Title IV of ERISA.

(c) No "reportable event" (as defined in ERISA) or
"prohibited transaction" (as defined in the Code or ERISA) has occurred, and
Conning Corp. has no knowledge of a situation which would give rise to a
reportable event or prohibited transaction, with respect to any Conning
Plan.

(d) All contributions for all periods ending prior to
the Closing Date which are required to be made prior to the Closing Date
(including periods from the first day of the current plan year to the
Closing Date) will be made prior to the Closing Date by Conning and all
members of the controlled group in accordance with past practice. All
insurance premiums due have been paid in full, subject only to normal
retrospective adjustments in the ordinary course, with regard to the Conning
Plans for policy years or other applicable policy periods ending on or
before the Closing Date.
Corp. has not made any contribution to any multi-employer plan (as defined
in ERISA), Conning Corp. has never been a member of a controlled group which
contributed to any such plan, and Conning Corp. has never been under common
control with an employer which contributed to any such plans.

(e) The statements of assets and liabilities of the
Conning Plans as of the end of the fiscal year ending December 31, 1993, and
the statements of changes in fund balances, financial position and net
assets available for benefits under such Conning Plans for such fiscal year,
copies of which have been furnished to General American, fairly present the
financial condition of such Conning Plans as of such date and the results of
operations thereof for the year ended on such date, all in accordance with
GAAP applied on a consistent basis.

(f) All of the Conning Plans, to the extent applicable,
are in compliance with the continuation of health benefit provisions
contained in the Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended ("COBRA"), and with Section 1862(b)(4)(A)(i) of the Social Security
Act, and Conning

22
<PAGE> 28
Corp. does not have any liability for any excise tax imposed by Code Section
5000. Except as set forth on Schedule 2.24, Conning Corp. has no liability
-------------
or obligation to provide life, medical or other welfare benefits to former
or retired employees, other than under COBRA.

(g) Also set forth on Schedule 2.24 are all employee
-------------
benefit plans which Conning Corp. has terminated or taken action to
terminate since January 1, 1991. Such terminations have been carried out in
accordance with all provisions of Law, including, without limitation, all
applicable reporting and other provisions of the Code and ERISA. Except as
described on Schedule 2.24 hereto, Conning Corp. has no liability to, and
-------------
has not received notice alleging such liability from, any person or entity,
including, without limitation, the PBGC, any other Government agency or any
participant in or beneficiary of any such plan, nor is Conning Corp. liable
for any excise, income or other tax or penalty as a result of or in
connection with such termination. Conning Corp. has obtained a favorable
determination letter from the Internal Revenue Service with respect to the
termination of each of such plans, true, complete and correct copies of
which have been delivered to General American. The favorable determination
letters were received after full and accurate disclosure by Conning Corp. of
all material facts to the appropriate Government agencies.

(h) To the extent applicable with respect to each
Conning Plan, true, correct and complete copies of the most recent (i)
determination letter and any outstanding request for a determination letter;
(ii) Form 5500 and attached Schedule B; (iii) Form 5310 and any related
filings with the PBGC; (iv) ruling letter and any outstanding request for a
ruling letter with respect to the tax-exempt status of any voluntary
employees' beneficiary association ("VEBA") which is implementing such
Conning Plan; and (v) general notification to employees of their rights
under Code Section 4980B and form of letter(s) distributed upon the
occurrence of a qualifying event described in Code Section 4980B, in the
case of a Conning Plan that is a "group health plan" as defined in Code
Section 162(i) have been delivered to General American.

2.25 Discrimination and Occupational Safety and Health.
-------------------------------------------------
Except as set forth on Schedule 2.25, no person has any claim or basis for
-------------
any Action against Conning Corp. arising out of any Law relating to
discrimination in employment or employment practices or occupational safety
and health standards. Since December 31, 1992, Conning Corp. has not
received any notice from any person alleging a violation of such law or
occupational safety or health standards.

23
<PAGE> 29

2.26 Alien Employment Eligibility. With respect to each person
----------------------------
employed by Conning Corp. on or after May 1, 1987, and who actually
commenced such employment on or after November 6, 1986: (a) Conning Corp.
hired such person in compliance with the Immigration Reform and Control Act
of 1986 and the rules and regulations thereunder ("IRCA"); and (b) Conning
Corp. has complied with all record-keeping and other regulatory requirements
under IRCA.

2.27 Governmental Approvals and Filings. Except for compliance
----------------------------------
with the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended
(the "H-S-R Act") and except as set forth on Schedule 2.27, none of the
-------------
Shareholders or Conning Corp. is required to obtain any approval, consent,
or authorization of, or to make any declaration or filing with, any
Government for the valid execution and delivery of this Agreement or any
other agreement to be delivered hereunder or the performance or consummation
of the transactions contemplated hereby or thereby.

2.28 Brokers, Finders. Except as set forth on Schedule 2.28,
---------------- -------------
no finder, broker, agent, or other intermediary acting on behalf of any
Equity Holder or Conning Corp. is entitled to a commission, fee, or other
compensation or obligation in connection with the negotiation or
consummation of this Agreement or any of the transactions contemplated
hereby.

2.29 Outside Financial Interests. Except as identified on
---------------------------
Schedule 2.29, no director (excluding David Stone, Stephen Fickes, David
- -------------
Clark, George Kelly and Joseph D. Sargent), officer, Equity Holder or any
affiliate of any of them or of Conning Corp. has any direct or indirect
financial interest in any competitor with or supplier or customer of, or any
other person or entity that has any transactions or other business
relationship with, Conning Corp.; provided, however, that for this purpose
ownership of corporate securities having no more than 5% of the outstanding
voting power of any competitor, supplier, customer or other person or
entity, which securities are listed on any national securities exchange or
authorized for quotation on the Automated Quotations System of the National
Association of Securities Dealers, Inc., shall not be deemed to be such a
financial interest, provided such person has no other connection or
relationship with such competitor, supplier, customer or other person or
entity.

2.30 Guarantees. Except as set forth on Schedule 2.30, Conning
---------- -------------
Corp. is not a guarantor, indemnitor, surety or accommodation party or
otherwise liable for any indebtedness of any other person or entity except
as endorser of checks received and deposited in the ordinary course of
business.

24
<PAGE> 30
2.31 Foreign Operations and Export Control. Conning Corp. has
-------------------------------------
at all times acted:

(a) pursuant to valid qualifications to do business in
all jurisdictions outside the United States where such qualification is
required by local law and the failure to do so would have a material adverse
effect on the business, operations or condition (financial or otherwise) of
Conning Corp.;

(b) in material compliance with all applicable foreign
laws, including without limitation laws relating to foreign investment,
foreign exchange control, immigration, employment and taxation;

(c) without notice of material violation of and in
material compliance with all relevant anti-boycott legislation, including
without limitation the Tax Reform Act of 1976, as amended, the Export
Administration Act of 1979, as amended, and regulations thereunder,
including all reporting requirements;

(d) without material violation of and pursuant to any
material, required export licenses granted under the Export Administration
Act of 1979, as amended, and regulations thereunder, which licenses are
described on Schedule 2.31; and
-------------

(e) without violation of the Foreign Corrupt Practices
Act of 1977, as amended.

2.32 Disclosure. Each Schedule and each document attached as a
----------
Schedule is true, correct, and complete in all material respects. No
representation or warranty by Conning Corp., Conning or the Equity Holders
in this Agreement or any Schedule referred to herein or in any agreement to
be delivered hereunder contains any untrue statement of a material fact or
any omission of a material fact necessary to make the statements contained
herein and therein, in light of the circumstances under which the statements
were made, not misleading.

2.33 Qualified Investors. The Equity Holders listed on
-------------------
Schedule 2.33 are each "accredited investors" within the meaning of Rule 501
- -------------
of Regulation D ("Regulation D") promulgated under the Securities Act of
1933, as amended (the "1933 Act"). The remaining 20 Equity Holders either
alone or with their "purchaser representative" (as such term is defined for
purposes of Rule 501 of Regulation D), have such knowledge and experience in
financial and business matters that they are capable of evaluating the
merits and risks of the transactions provided for in this Agreement.
Conning has delivered to General American true, complete and correct copies
of investor questionnaires

25
<PAGE> 31
establishing the status of each Equity Holder, and his or her purchaser
representative, where applicable, duly executed by each such Equity Holder
and purchaser representative, where applicable. Conning Corp. has no reason
to believe that CAM should not rely on such investor questionnaires.

2.34 Purchase for Investment.
-----------------------

(a) Each Equity Holder is acquiring the shares of CAM
Preferred Stock issuable hereunder for his own account and not with a view
to, or for sale in connection with, any "distribution," as such term is used
in Section 2(11) of the 1933 Act, of any shares of CAM Preferred Stock in
violation of the 1933 Act.

(b) Each Equity Holder understands that (i) the shares
of CAM issued pursuant to this Agreement will be restricted securities
within the meaning of Rule 144 of the 1933 Act ("Rule 144"); (ii) such
securities are not registered; (iii) such securities must be held
indefinitely and that no transfer of such securities may be made by the
Equity Holder unless (A) the sale of such securities has been registered
under the 1933 Act and any applicable state securities laws, or (B) an
exemption from registration is available under applicable state securities
laws and the 1933 Act, including in accordance with the terms and conditions
of Rule 144; and (iv) in any event, the exemption from registration under
Rule 144 will not be available unless such securities have been beneficially
owned for at least two years.

(c) Each Equity Holder understands that the certificates
representing the shares of CAM Preferred Stock issued pursuant to this
Agreement shall bear a legend substantially as follows:

"The sale, transfer or encumbrance of this certificate is subject to
an Agreement between the Corporation and all of its Shareholders. A
copy of this Agreement is on file in the office of the Secretary of
the Corporation. The Agreement provides, among other things, for
certain obligations to sell and to purchase the Shares evidenced by
this certificate, for a designated purchase price. By accepting the
Shares evidenced by this certificate, the holder agrees to be bound by
said Agreement."

"The shares represented by this certificate have not been registered
under the Securities Act of 1933 or any applicable state law. They
may not be offered for sale, sold, transferred or pledged without (1)
registration under the Securities Act of 1933 and any applicable state
law, or (2) at holder's expense, an opinion

26
<PAGE> 32
(satisfactory to the Company) that registration is not required."

ARTICLE III
REPRESENTATIONS AND WARRANTIES OF
---------------------------------
GENERAL AMERICAN, GAHC, GAIMCO AND CAM
--------------------------------------

General American, GAHC, GAIMCO and CAM hereby make the following
representations and warranties to each of Conning Corp., Conning and the
Equity Holders, each of which is true and correct on the date hereof and
will be true and correct as of the Closing Date and each of which shall
survive the Closing as specified in Section 7.1 hereof.

3.1 Enforceable Agreement; Existence and Qualification.
--------------------------------------------------

(a) General American, GAHC, GAIMCO and CAM each have
full power and authority to enter into this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery and performance
of this Agreement by General American, GAHC, GAIMCO and CAM have been duly
authorized by all requisite corporate action. This Agreement constitutes
the valid and binding obligation of General American, GAHC, GAIMCO and CAM,
enforceable in accordance with its terms.

(b) General American, GAIMCO and CAM are each
corporations duly organized, validly existing and in good standing under the
laws of the State of Missouri. Each of General American, GAIMCO and CAM has
all requisite corporate power and authority to own, lease and use its assets
and properties and to conduct the business in which it is engaged. Each of
GAIMCO and CAM is duly licensed or qualified to do business as a foreign
corporation and is in good standing in the state(s), countries or other
jurisdictions listed on Schedule 3.1(b), and is not required to be
---------------
registered, licensed or qualified to do business in any other jurisdiction
in which the failure to so qualify would result in losses to GAIMCO or CAM
in excess of $25,000. GAIMCO has delivered to Conning Corp. true, complete
and correct copies of the constituent documents, as currently in effect, of
GAIMCO and CAM.

(c) Neither GAIMCO nor CAM is a party to, subject to or
bound by any note, bond, mortgage, indenture, deed of trust, agreement,
lien, contract or other instrument or obligation or any statute, law, rule,
regulation, judgment, order, writ, injunction, or decree of any court,
administrative or regulatory body, governmental agency, arbitrator, mediator
or similar body, franchise or license, which is material to its business and
which would (i) conflict with or be breached or

27
<PAGE> 33
violated or the obligations thereunder accelerated or increased (whether or
not with notice or lapse of time or both) by the execution, delivery or
performance by GAIMCO and CAM of this Agreement or (ii) prevent the carrying
out of the transactions contemplated hereby. Except as set forth on
Schedule 3.1(c) and except for compliance with the provisions of the H-S-R
- ---------------
Act, none of General American, GAHC, GAIMCO or CAM is required to obtain any
waiver or consent of any third person or governmental authority for the
execution of this Agreement or the consummation of the transactions
contemplated hereby. The execution of this Agreement and the consummation
of the transactions contemplated hereby will not result in the creation of
any material Lien against GAIMCO or CAM or any of their respective
properties or assets.

3.2 Capitalization and Related Matters.
----------------------------------

(a) Capital Stock. The entire authorized capital
-------------
stock of GAIMCO consists solely of 100 shares of GAIMCO Common Stock, of
which 10 shares are issued and outstanding. No other capital stock of
GAIMCO is authorized or issued. The entire authorized capital stock of CAM
consists solely of (i) 20,000,000 shares of CAM Common Stock, of which 0
shares are issued and outstanding, and (ii) 20,000,000 shares of CAM
Non-Voting Common Stock, of which 0 shares are issued and outstanding, and
(iii) 20,000,000 shares of preferred stock (all of which will be designated
as CAM Preferred Stock upon filing of the Certificate of Designation with
the Secretary of State of Missouri), of which 0 shares are issued and
outstanding. No other capital stock of GAIMCO or CAM is authorized or
issued. GAHC is the record and beneficial owner of all of the outstanding
capital stock of GAIMCO and CAM. All of the issued and outstanding shares
of the capital stock of GAIMCO are duly authorized, validly issued, fully
paid, non-assessable and free of preemptive rights, without restriction on
the transfer thereof other than pursuant to applicable federal and state
securities laws, and all of such shares have been so issued in full
compliance with all applicable federal and state securities laws.

(b) Other Securities. There are no outstanding
----------------
subscriptions, rights, options, warrants, conversion privileges or
agreements of any kind entitling any person or entity to acquire from GAIMCO
or CAM any shares of the capital stock of GAIMCO or CAM or any other type of
security of GAIMCO or CAM.

3.3 The CAM Preferred Stock and CAM Options. The shares of
---------------------------------------
CAM Preferred Stock to be issued to the Equity Holders hereunder, when
delivered hereunder, will be duly authorized, validly issued, fully paid,
nonassessable, and free of preemptive rights, without restriction on the
transfer thereof other than pursuant to applicable federal and state
securities laws and as

28
<PAGE> 34
contemplated by this Agreement and the Shareholders' Agreement. At and
after Closing, CAM will reserve for issuance under the CAM Options a
sufficient number of shares of CAM Non-Voting Common Stock, which will be,
when issued, duly authorized, validly issued, fully paid, nonassessable, and
free of preemptive rights, without restriction on the transfer thereof other
transfer thereof other than pursuant to applicable federal and state
securities laws and as contemplated by this Agreement.

3.4 Subsidiaries. Neither GAIMCO nor CAM, directly or
------------
indirectly, owns or has the right to acquire 10% or more of the voting
securities or other equity interest in, or directly or indirectly control,
any other corporation, partnership, joint venture or other entity.

3.5 Property. Except as set forth on Schedule 3.5, GAIMCO is
-------- ------------
the sole owner of all right, title, and interest in and to all material
assets reflected on the GAIMCO Balance Sheet (defined below) and owns or has
the valid right to lease all property, real and personal, tangible and
intangible, used by it in, or necessary for it to transact, the business in
which it is engaged, and there exists no material restriction on the use or
transfer of such assets or property. Except as noted on Schedule 3.5, the
------------
assets owned or leased by GAIMCO constitute all of the property and property
rights used or necessary for the conduct of the business of GAIMCO in the
manner and to the extent presently conducted by GAIMCO. No such assets or
property are in the possession of others and GAIMCO holds no property on
consignment.

3.6 Financial Statements.
--------------------

(a) Set forth on Schedule 3.6 are (i) the audited
------------
balance sheet of GAIMCO as of December 31, 1994, 1993 and 1992, and the
related statements of earnings, shareholders' equity and changes in
financial position or cash flow for the fiscal years then ended and all
notes and schedules thereto, and (ii) the unaudited balance sheet of GAIMCO
as of June 30, 1995 (the "GAIMCO Balance Sheet") and the related statements
of earnings and changes in financial position for the period then ended,
together with any notes or schedules thereto ((i) and (ii) together, the
"GAIMCO Financial Statements").

(b) Also set forth on Schedule 3.6 are the audited
------------
balance sheet of General American as of December 31, 1994, and the related
statements of earnings, shareholders' equity and changes in financial
position or cash flow for the fiscal year then ended and all notes and
schedules thereto (the "General American Financial Statements").

29
<PAGE> 35
General American Financial Statements (i) are true, complete, and correct,
(ii) present fairly the financial position, results of operations, and cash
flows of GAIMCO and General American, respectively, at the dates and for the
periods indicated, and (iii) have been prepared in accordance with GAAP
applied on a consistent basis (except that unaudited financial statements do
not contain footnotes and are subject to year-end audit adjustments, which
will not be material in the aggregate).

3.7 Books and Records. The books of account, corporate record
-----------------
books, minute books, bank accounts, and other records of GAIMCO and CAM are
true, correct, and complete in all material respects, have been maintained
in accordance with good business practices, and the matters contained
therein are accurately reflected in the GAIMCO Financial Statements to the
extent appropriate.

3.8 No Undisclosed Liabilities. Neither GAIMCO nor CAM has
--------------------------
any liabilities or obligations whatsoever, known or unknown, accrued,
absolute, contingent, or other, except (a) as set forth on the GAIMCO
Balance Sheet or Schedule 3.8, or (b) those incurred in the ordinary course
------------
of the business of GAIMCO and CAM, consistent with past practice, since the
date of the GAIMCO Balance Sheet, none of which will, or could, have an
adverse effect upon the business or condition (financial or otherwise) or
operations of GAIMCO or CAM.

3.9 Taxes.
-----

(a) GAIMCO and each of its Tax Affiliates has timely
filed or caused to be filed with the appropriate Government entity all Tax
Returns (the returns applicable to GAIMCO are hereinafter referred to as the
"GAIMCO Tax Returns"), and no GAIMCO Tax Returns for any open tax year have
been amended. All GAIMCO Tax Returns are true, correct, and complete. There
are no grounds for assertion of any understatement penalty under Section
6661 of the Code (prior to repeal) or Section 6662 of the Code.

(b) All Taxes due and payable by GAIMCO or any of its
Tax Affiliates with respect to all periods ending on or prior to the date
hereof have been timely and fully paid, and there are no grounds for the
assertion or assessment of any additional Taxes against GAIMCO or any of its
Tax Affiliates or their respective assets with respect to such periods.
Except as specified in a letter to Conning Corp.'s counsel dated the date
hereof (the "Article III Tax Disclosure Letter"), there are no audits of any
GAIMCO Tax Returns of GAIMCO or any of its Tax Affiliates pending or
threatened. Except as specified on the Article III Tax Disclosure Letter,
there is no waiver of any

30
<PAGE> 36
statute of limitations in effect with respect to any GAIMCO Tax Returns.

(c) All unpaid Taxes for all periods up to and including
the Closing Date are properly accrued on the books of GAIMCO and its Tax
Affiliates. All unpaid Taxes for all periods up to the date of the GAIMCO
Balance Sheet are properly accrued on the GAIMCO Financial Statements. The
Article III Tax Disclosure Letter lists all GAIMCO Tax Returns for periods
up to and including the Closing Date (whether the period ends on such date)
which have not been filed on or before the Closing Date.

(d) There are no Liens for Taxes upon any assets of
GAIMCO or its Tax Affiliates, except Liens for Taxes not yet due and
payable.

(e) Except as specified on the Article III Tax
Disclosure Letter, true, correct and complete copies of all GAIMCO income
Tax Returns, tax examination reports and statements of deficiencies assessed
against, or agreed to with respect to GAIMCO or any of its Tax Affiliates
with respect to the last four (4) years with the Internal Revenue Service or
any taxing authority have been delivered to Conning Corp.

(f) Except as set forth on the Article III Tax
Disclosure Letter, neither GAIMCO nor any of its Tax Affiliates is or ever
has been a member of an "affiliated group" within the meaning of Section
1504 of the Code, except for the affiliated group of which General American
is the common parent.

(g) GAIMCO and each of its Tax Affiliates has complied
with all Law relating to the withholding of Taxes and the payment thereof
(including, without limitation, withholding of Taxes under Section 1441 and
1442 of the Code, or any similar provision under foreign Law), and has
timely and properly withheld from employee wages and paid over to the proper
Government all amounts required to be withheld and paid over under
applicable Law.

(h) Neither GAIMCO nor any of its Tax Affiliates is a
party to any safe harbor lease within the meaning of section 168(f)(8) of
the Code, as in effect prior to amendment by the Tax Equity and Fiscal
Responsibility Act of 1982. None of GAIMCO's or its Tax Affiliates'
property or assets has been financed with or directly or indirectly secures
any industrial revenue bonds or debt the interest on which is tax-exempt
under Section 103(a) of the Code. Neither GAIMCO nor any of its Tax
Affiliates is a borrower or guarantor of any outstanding industrial revenue
bonds, and none of such parties is a tenant, principal user or related
person to any principal user (within the meaning of section 144(a) of the
Code) of any property which

31
<PAGE> 37
has been financed or improved with the proceeds of any industrial revenue
bonds.

(i) GAIMCO is not and has not been a real property
holding company within the meaning of Section 897(c) of the Code, and GAIMCO
shall so certify upon Conning Corp.'s request.

(j) GAIMCO is not required to include in income any
adjustment under Section 481(a) of the Code by reason of a change in
accounting method initiated by GAIMCO and the Internal Revenue Service has
not proposed any such adjustment or change in accounting method. GAIMCO has
no pending private letter ruling request with the Internal Revenue Service.

(k) None of the property owned by GAIMCO or any of its
Tax Affiliates is tax-exempt use property within the meaning of section
168(h) of the Code.

(l) No consent has been filed relating to GAIMCO
pursuant to section 341(f) of the Code.

(m) GAIMCO is not a partner in any joint venture,
partnership or other arrangement or contract that could be treated as a
partnership for federal income tax purposes.

(n) Except as set forth on the Article III Tax
Disclosure Letter, neither GAIMCO nor any of its Tax Affiliates is a party
to or bound by any affiliated group consolidated return tax allocation
agreement, tax sharing agreement or tax indemnification agreement.

(o) Except as set forth on the Article III Tax
Disclosure Letter, GAIMCO is not liable for Taxes to any foreign taxing
authority and does not have and has not had a permanent establishment in any
foreign country, as defined in any applicable tax treaty or convention
between the United States and such foreign country.

(p) All material elections with respect to Taxes
affecting GAIMCO as of the date hereof are set forth in the Article III Tax
Disclosure Letter. No new elections with respect to Taxes, or any changes
in current elections with respect to Taxes of GAIMCO or any of its Tax
Affiliates or affecting any of such parties shall be made after the date of
this Agreement without the prior written consent of Conning Corp.

(q) GAIMCO is not a party to any agreement, contract,
arrangement or plan that has resulted or would result, separately or in the
aggregate, in the payment of any "excess

32
<PAGE> 38
parachute payments" within the meaning of section 280G of the Code.

(r) GAIMCO and each of its Tax Affiliates have not
participated in an international boycott within the meaning of section 999
of the Code.

3.10 Accounts Receivable. Set forth on Schedule 3.10 is a list
------------------- -------------
of all the accounts receivable of GAIMCO as of March 31, 1995. Such
accounts receivable and any accounts receivable arising between such date
and the Closing Date (the "GAIMCO Accounts Receivable") arose or will have
arisen in the ordinary and usual course of the business of GAIMCO. Except
as set forth on Schedule 3.10, the GAIMCO Accounts Receivable are not and
-------------
will not be on the Closing Date subject to any counterclaim, set-off,
defense, security interest, claim, or other encumbrance. Except to the
extent of any reserve therefor on the GAIMCO Balance Sheet or paid in full
prior to Closing, the GAIMCO Accounts Receivable are and will be current and
collectible and will be paid in full, net of reserves, on or before 90 days
after the Closing Date.

3.11 Regulatory Matters; Permits and Licenses.
----------------------------------------

(a) GAIMCO is registered with the Securities and
Exchange Commission as an investment adviser under the Investment Advisers
Act of 1940. GAIMCO is licensed under the laws relating to the conduct of a
securities business in the jurisdictions set forth on Schedule 3.11. No
-------------
litigation, proceeding or investigation is pending or, to the knowledge of
GAIMCO, threatened, which might result in the termination or the suspension
of the registration or licensing of GAIMCO or any of its approved persons,
principals or registered representatives, or in any other disciplinary
action against it or any of them under any applicable statute, rule or
regulation.

(b) Set forth on Schedule 3.11 is a list or description
-------------
of each material license or permit required for the conduct of the business
of GAIMCO, together with the name of the governmental agency or entity
issuing each such license and permit. To the knowledge of GAIMCO, each of
such licenses and permits is valid and in full force and effect. Except as
noted on Schedule 3.11, none of such licenses and permits will be rescinded
-------------
solely as a result of a change in control of GAIMCO.

3.12 Real Property. Neither GAIMCO nor CAM owns any real
-------------
property. Schedule 3.12 lists and provides descriptions of all real
-------------
property leased or subleased to GAIMCO or CAM and all other real property
which is used by GAIMCO or CAM and not owned by GAIMCO or CAM (the "GAIMCO
Leased Real Property"). Except as otherwise described on Schedule 3.12:
-------------
(a) there are no leases,

33
<PAGE> 39
subleases, licenses, concessions or other agreements, written or oral,
granting to any person or entity the right to use or occupy any portion of
the GAIMCO Leased Real Property which are not listed on Schedule 3.18; (b)
-------------
no person or entity (other than GAIMCO) is in possession of any of the
GAIMCO Leased Real Property; (c) neither the current use of the GAIMCO
Leased Real Property nor the operation of GAIMCO's business violates any
agreement affecting the GAIMCO Leased Real Property or any applicable legal
requirements; and (d) all certificates of occupancy, permits, licenses,
approvals and other authorizations required in connection with the past,
present and proposed operation of its business on the GAIMCO Leased Real
Property have been lawfully issued to GAIMCO and are, as of the date hereof,
and will be following the consummation of the transactions
contemplated hereby, in full force and effect.

3.13 Assets. GAIMCO has good and marketable title to, or a
------
valid leasehold interest in, all material properties and assets used by it,
located on its premises or shown on the GAIMCO Balance Sheet or acquired
after the date thereof, free and clear of all Liens, except for Liens
disclosed on the GAIMCO Balance Sheet or Schedule 3.12 (as to real property)
-------------
or Schedule 3.13 (as to all other properties and assets) and except for
-------------
properties and assets disposed of for fair consideration in the ordinary
course of business since the date of the GAIMCO Balance Sheet. Except as
set forth on Schedule 3.12 or 3.13, GAIMCO owns or leases or has the valid
------------- ----
and enforceable right to use all material assets, tangible or intangible,
necessary for the conduct of its business as presently conducted and as
proposed to be conducted, and, upon the Closing, GAIMCO will continue to
have the same rights with respect to such assets. All of the material
tangible assets of GAIMCO are in good operating condition and repair as
required for their use as presently conducted or planned by GAIMCO and
conform to all applicable Laws, and no notice of any violation of any Law
relating to any of such property or assets has been received by GAIMCO
except such as have been fully complied with.

3.14 Absence of Certain Changes. Since March 31, 1995, except
--------------------------
as set forth in the GAIMCO Financial Statements or Schedule 3.14 hereto or
-------------
as explicitly provided for under this Agreement, there has not been:

(a) Any material adverse change in (i) the business or
condition (financial or otherwise) or operations of GAIMCO or CAM, or (ii)
the condition of the assets and property, real and personal, tangible and
intangible, of GAIMCO and CAM (the "GAIMCO Property");

(b) Any declaration, setting aside, or payment of any
dividend or any distribution (in cash or in kind) to any shareholder of
GAIMCO or CAM on account of or with respect to any

34
<PAGE> 40
securities of or interests in GAIMCO or CAM, or any direct or indirect
redemption, purchase, repurchase or other acquisition by GAIMCO or CAM of
any securities of or interests in GAIMCO or CAM;

(c) Any increase in compensation or other remuneration
payable to or for the benefit of or committed to be paid to or for the
benefit of any partner, director, officer, agent, or employee of GAIMCO or
CAM, or in any benefits granted under any GAIMCO Plan (defined below) with
or for the benefit of any such partner, director, officer, agent, or
employee, except for regularly scheduled raises consistent with past
practices in timing and amount;

(d) Any transaction entered into or carried out by
GAIMCO or CAM other than in the ordinary course of business;

(e) Any borrowing or incurrence of any other
indebtedness (including letter of credit and foreign exchange obligations),
contingent or otherwise, by or on behalf of GAIMCO or CAM; or any
endorsement, assumption, or guarantee of payment or performance of any loan
or obligation of any other person or entity by GAIMCO or CAM;

(f) Any change made by GAIMCO or CAM in its methods of
doing business or of accounting;

(g) Any grant by GAIMCO or CAM of any mortgage, security
interest, or other encumbrance with respect to the GAIMCO Property;

(h) Any sale, lease, or disposition of, or any agreement
to sell, lease, or dispose of, any of the GAIMCO Property other than
arm's-length sales in the ordinary course of business of GAIMCO and CAM;

(i) Any modification or termination of any GAIMCO
Contract (defined below) or any material term thereof other than in the
ordinary course of business;

(j) Any purchase by GAIMCO or CAM of capital assets with
a value individually or in the aggregate in excess of $50,000;

(k) Any loan or advance made by GAIMCO or CAM to any
person or entity;

(l) Any binding commitment or agreement by a GAIMCO or
CAM to do any of the foregoing items (b) through (k); or

35
<PAGE> 41
(m) Any material adverse change in the business or
financial condition of General American.

3.15 No Breach of Law or Governing Document. Neither GAIMCO
--------------------------------------
nor CAM is in material default under or in material breach or material
violation of any applicable Law or the provisions of any Government permit,
franchise, or license, or any provision of its constituent documents.
Neither the execution of this Agreement nor the Closing do or will
constitute or result in any such default or violation.

3.16 Litigation. Except as set forth on Schedule 3.16, (a)
---------- -------------
there is no Action pending or, to the knowledge of GAIMCO, threatened
against GAIMCO or CAM or involving their businesses, any of the GAIMCO
Property, or, in connection with their businesses, any of their partners,
directors, officers, agents, or other personnel, including, without
limitation, any Action challenging, enjoining, or preventing this Agreement
or the consummation of the transactions contemplated hereby; and (b) neither
GAIMCO nor CAM is subject to any Order other than Orders of general
applicability. There is no Action pending or, to the knowledge of GAIMCO,
threatened against GAIMCO or CAM challenging, enjoining, or preventing this
Agreement or the consummation of the transactions contemplated hereby.

3.17 Environmental Matters.
---------------------

(a) Except as set forth on Schedule 3.17, GAIMCO and CAM
-------------
comply, and have at all times complied with, and do not cause, have not
caused, and will not cause liability to be incurred by GAIMCO or CAM under,
any and all current or prior Environmental Law. Except as set forth on
Schedule 3.17, neither GAIMCO nor CAM is in violation of or has violated any
- -------------
Environmental Law.

(b) Except as set forth on Schedule 3.17, GAIMCO and CAM
-------------
possess and are in compliance with all necessary permits, registrations,
approvals, and licenses, and has properly made all filings with and
submissions to any Government or other authority required by any
Environmental Law. No deficiencies have been asserted by any such
Government or authority with respect to such items.

(c) Except as set forth on Schedule 3.17, there has been
-------------
no spill, discharge, leak, leaching, emission, migration, injection,
disposal, escape, dumping, or release of any kind on, beneath, above, or
into any and all property which GAIMCO or CAM currently or previously owned,
leased, occupied or used or into the environment surrounding such property
of any Hazardous Materials, including, without limitation, those defined in
any Environmental Law.

36
<PAGE> 42

(d) Set forth on Schedule 3.17 is a list of all reports,
-------------
surveys and other written materials commissioned or developed by or on
behalf of GAIMCO or CAM since 1985 with respect to environmental matters
relating to GAIMCO or the GAIMCO Environmental Property.

3.18 Contracts.
---------

(a) Set forth on Schedule 3.18 is a list of each written
-------------
or oral contract, agreement, lease, indenture, and evidence of indebtedness
(including letter of credit and foreign exchange obligations and purchase
orders for either the purchase of materials or the sale of a product) to
which GAIMCO or CAM is a party or of which it is a beneficiary which
involves an outstanding, contingent, or continuing liability or obligation
of or to GAIMCO or CAM (a "GAIMCO Contract") and which (i) is material to
the business, financial condition or operations of GAIMCO and CAM, (ii)
involves (A) a guaranty, indemnity, or power of attorney, (B) a sharing of
payments or joint venture, (C) a sales agency, representation,
distributorship or franchise arrangement, (D) restrictions on competition or
confidentiality agreements, or (E) an obligation in excess of $50,000, (iii)
has resulted or will result in a loss to GAIMCO or CAM, or (iv) is not in
the ordinary course of business of GAIMCO or CAM.

(b) Except as indicated on Schedule 3.18, neither GAIMCO
-------------
nor CAM nor, to the knowledge of GAIMCO, any other party to a GAIMCO
Contract is in default under or in breach or violation of any GAIMCO
Contract, and, to the knowledge of GAIMCO, no event has occurred that,
through the passage of time or the giving of notice, or both, would
constitute, and neither the execution of this Agreement nor the Closing
hereunder do or will constitute or result in, such a default, breach or
violation, cause the acceleration of any obligation of any party thereto or
the creation of a lien or encumbrance upon any GAIMCO Property or the GAIMCO
Common Stock or the CAM capital stock, or require any consent thereunder to
the transactions contemplated herein.

3.19 Intellectual Property.
---------------------

(a) Schedule 3.19 contains a true, complete and accurate list
-------------
of all patents, trademarks, service marks, copyrights, applications for
patents and for registration of trademarks, service marks and copyrights and
software licenses which are material to the business of GAIMCO or CAM.
Schedule 3.19 accurately identifies, where appropriate, one or more of the
- -------------
following for each item of such intellectual property: filing date, issue
date, classification of invention or goods covered, country of origin,
licensor, license date and licensed subject

37
<PAGE> 43
matter. Schedule 3.19 contains a complete and accurate list of all licenses
-------------
and other rights granted by GAIMCO or CAM to any third party with respect to
any item of the GAIMCO Intellectual Property (as hereinafter defined).

(b) (i) the GAIMCO Intellectual Property is valid and
enforceable and encompasses all proprietary rights material to the operation
of GAIMCO's and CAM's businesses as presently conducted or proposed to be
conducted (in each case free and clear of all Liens); (ii) to the knowledge
of GAIMCO, GAIMCO and CAM have taken all actions necessary to maintain and
protect the GAIMCO Intellectual Property; (iii) there has been no claim made
against GAIMCO or CAM asserting the invalidity, misuse or unenforceability
of any of the GAIMCO Intellectual Property or challenging GAIMCO's or CAM's
right to use or ownership of any of the GAIMCO Intellectual Property; (iv)
GAIMCO is not aware of any infringement or misappropriation of any of the
GAIMCO Intellectual Property or of any facts raising a likelihood of
infringement or misappropriate; (v) to the knowledge of GAIMCO, the conduct
of GAIMCO's and CAM's businesses has not infringed or misappropriated, and
does not infringe or misappropriate, any intellectual property or
proprietary right of any other entity; (vi) no loss of any of the GAIMCO
Intellectual Property is known to by GAIMCO to be threatened, pending or
reasonably foreseeable; and (vii) the consummation of the transactions
contemplated by this Agreement will not materially alter, impair or
extinguish any of the GAIMCO Intellectual Property.

(c) For purposes of this Agreement, "GAIMCO Intellectual
Property" shall mean all of the following (in whatever form or medium) which
are owned by or licensed to GAIMCO or CAM: (i) patents, trademarks, service
marks and copyrights, (ii) applications for patents and for registration of
trademarks, service marks and copyrights, (iii) trade secrets and trade
names, and (iv) all other items of proprietary know-how or intellectual
property.

3.20 Insurance. GAIMCO and CAM have during the past five years
---------
maintained: (i) general comprehensive liability insurance against such
risks as are customarily insured against by businesses similar to GAIMCO and
CAM and in at least such amounts as are usually carried by persons or
entities engaged in the same or a similar business, and (ii) insurance as
required by law or under any agreement to which GAIMCO or CAM is or has been
a party, including, without limitation, unemployment and workers'
compensation coverage. A list of each such currently effective insurance
policy is set forth on Schedule 3.20.
-------------

3.21 Officers, Directors, Employees, and Consultants. Set
-----------------------------------------------
forth on Schedule 3.21 is a list of: (a) all current directors of GAIMCO
-------------
and CAM, (b) all current officers (with

38
<PAGE> 44
office held) of GAIMCO and CAM, (c) all employees (active or other) of
GAIMCO and CAM, (d) all current paid consultants to GAIMCO and CAM, and (e)
all retirees and terminated employees of GAIMCO and CAM for which GAIMCO or
CAM has any benefits responsibility or other continuing or contingent
obligation, together, in each case, with the current rate of compensation
(if any) payable to each. Neither GAIMCO nor CAM is indebted to any
partner, director, officer, employee or agent of GAIMCO or CAM, except for
amounts due as (x) normal salaries, wages and bonuses, (y) as disclosed on
Schedule 3.21, or (z) in reimbursement of ordinary expenses on a current
- -------------
basis.

3.22 Bank Accounts of GAIMCO and CAM. Set forth on Schedule 3.22
------------------------------- -------------
hereto is a list of the locations and numbers of all bank accounts and
safe deposit boxes maintained by GAIMCO and CAM, together with the names of
all persons who are authorized signatories or have access thereto.

3.23 Transactions with Related Persons. Except as set forth on
---------------------------------
Schedule 3.23 hereto, neither GAIMCO nor CAM has any obligations,
- -------------
contractual or otherwise, owed to or owing from, directly or indirectly, any
officer or director or any affiliate thereof or of GAIMCO or CAM.

3.24 Labor Matters. Set forth on Schedule 3.24 is each
------------- -------------
collective bargaining, works council, union representation or similar
agreement or arrangement to which GAIMCO or CAM is or has been a party or by
which it is or has been bound. Except as set forth on Schedule 3.24:
-------------

(a) Neither GAIMCO nor CAM is or has been engaged in any
unfair labor practice;

(b) There is no labor strike, dispute, slowdown, or
stoppage pending or, to the knowledge of GAIMCO, threatened against GAIMCO
or CAM;

(d) No collective bargaining agreement is currently
being negotiated and no organizing effort is currently being made with
respect to GAIMCO's or CAM's employees; and

(e) No current or former employee of GAIMCO or CAM has
any claim against GAIMCO or CAM on account of or for (i) overtime pay, other
than overtime pay for the current payroll period, (ii) wages or salary
(excluding current bonus, accruals and amounts accruing under pension and
profit sharing and other employee benefit plans) for any period other than
the current payroll period, (iii) vacation, time off or pay in lieu of

39
<PAGE> 45
vacation or time off, other than that earned in respect of the current
fiscal year, or (iv) any violation of any Law relating to minimum wages or
maximum hours of work.

3.25 Employee Benefit Matters.
------------------------

(a) Except as set forth on Schedule 3.25, neither GAIMCO
-------------
nor CAM has outstanding or is a party to or subject to liability under: (i)
any agreement, arrangement, plan or policy, whether or not considered
legally binding, that involves (A) any pension, retirement, profit sharing,
deferred compensation, bonus, stock option, stock purchase, health, welfare,
or incentive plan; or (B) any welfare or "fringe" benefits, including,
without limitation, vacation, severance, disability, medical,
hospitalization, dental, life and other insurance, tuition, company car,
club dues, sick leave, maternity, paternity or family leave, or other
benefits; or (ii) any employment, consulting, engagement, or retainer
agreement or arrangement whereby GAIMCO or CAM employs, retains or engages
any individual or other entity as an employee, consultant or independent
contractor to GAIMCO or CAM ((i) and (ii) together, the "GAIMCO Plans," and
each item thereunder, a "GAIMCO Plan"). True, correct, and complete copies
of all documents creating or evidencing any GAIMCO Plan listed on Schedule 3.25
-------------
have been delivered to Conning Corp. Except as set forth on Schedule 3.25,
-------------
there are no negotiations, demands or proposals which are pending or
threatened or which have been made since December 31, 1992 which concern
matters now covered, or that would be covered, by the foregoing types of
agreement, arrangement, plan, or policy.

(b) Each GAIMCO Plan complies with and has been
administered, operated, and maintained in compliance with, and, except as
set forth on Schedule 3.25, neither GAIMCO nor CAM has any direct or
-------------
indirect liability under, the Code or ERISA, as the case may be, or any
other Law applicable to any GAIMCO Plan, and no GAIMCO Plan is subject to
Title IV of ERISA.

(c) No "reportable event" (as defined in ERISA) or
"prohibited transaction" (as defined in the Code or ERISA) has occurred, and
GAHC has no knowledge of a situation which would give rise to a reportable
event or prohibited transaction, with respect to any GAIMCO Plan.

(d) All contributions for all periods ending prior to
the Closing Date which are required to be made prior to the Closing Date
will be made prior to the Closing Date by GAIMCO or CAM and all members of
the controlled group in accordance with past practice. All insurance
premiums due have been paid in full, subject only to normal retrospective
adjustments in the ordinary course, with regard to the GAIMCO Plans for
policy years or other applicable policy periods ending on or before the

40
<PAGE> 46
Closing Date.

(e) Neither GAIMCO nor CAM has made any contributions to
any multi-employer plan (as defined in ERISA), neither GAIMCO nor CAM has
ever been a member of a controlled group which contributed to any such plan,
and neither GAIMCO nor CAM has ever been under common control with an
employer which contributed to any such plans.

(f) The statements of assets and liabilities of the
GAIMCO Plans as of the end of the fiscal year ending December 31, 1993, and
the statements of changes in fund balances, financial position and net
assets available for benefits under such GAIMCO Plans for such fiscal year,
copies of which have been furnished to Conning Corp., fairly present the
financial condition of such GAIMCO Plans as of such date and the results of
operations thereof for the year ended on such date, all in accordance with
GAAP applied on a consistent basis, and the actuarial assumptions used for
funding purposes have not been changed since the last written report of
actuaries on such GAIMCO Plans, which written reports have been furnished to
Conning Corp.

(g) All of the GAIMCO Plans, to the extent applicable,
are in compliance with the continuation of health benefit provisions
contained in COBRA, and with Section 1862(b)(4)(A)(i) of the Social Security
Act, and GAIMCO does not have any liability for any excise tax imposed by
Code Section 5000. Neither GAIMCO nor CAM has any liability or obligation
to provide life, medical or other welfare benefits to former or retired
employees, other than under COBRA.

(h) Also set forth on Schedule 3.25 are all employee
-------------
benefit plans which GAIMCO or CAM has terminated or taken action to
terminate since January 1, 1991. Such terminations have been carried out in
accordance with all provisions of Law, including, without limitation, all
applicable reporting and other provisions of the Code and ERISA and with
respect to the PBGC. Except as described on Schedule 3.25 hereto, neither
-------------
GAIMCO nor CAM has any liability to, and has not received notice alleging
such liability from, any person or entity, including, without limitation,
the PBGC, any other Government agency or any participant in or beneficiary
of any such plan, nor is GAIMCO or CAM liable for any excise, income or
other tax or penalty as a result of or in connection with such termination.
GAIMCO or CAM, as the case may be, has obtained a favorable determination
letter from the Internal Revenue Service with respect to the termination of
each of such plans, true, complete and correct copies of which have been
delivered to Conning Corp. The favorable determination letters were
received after full and accurate disclosure by GAIMCO and CAM of all
material facts to the appropriate Government agencies.

41
<PAGE> 47

(i) To the extent applicable with respect to each GAIMCO
Plan, true, correct and complete copies of the most recent (i) determination
letter and any outstanding request for a determination letter; (ii) Form
5500 and attached Schedule B; (iii) Form 5310 and any related filings with
the PBGC; (iv) ruling letter and any outstanding request for a ruling letter
with respect to the tax-exempt status of any voluntary employees'
beneficiary association ("VEBA") which is implementing such GAIMCO Plan; and
(v) general notification to employees of their rights under Code Section
4980B and form of letter(s) distributed upon the occurrence of a qualifying
event described in Code Section 4980B, in the case of a GAIMCO Plan that is
a "group health plan" as defined in Code Section 162(i) have been delivered
to General American.

3.26 Discrimination and Occupational Safety and Health.
-------------------------------------------------
Except as set forth on Schedule 3.26, no person has any claim or basis for
-------------
any Action against GAIMCO or CAM arising out of any Law relating to
discrimination in employment or employment practices or occupational safety
and health standards. Since December 31, 1992, neither GAIMCO nor CAM has
received any notice from any person alleging a violation of such law or
occupational safety or health standards.

3.27 Alien Employment Eligibility. With respect to each person
----------------------------
employed by GAIMCO or CAM on or after May 1, 1987, and who actually
commenced such employment on or after November 6, 1986: (a) GAIMCO or CAM
hired such person in compliance with the IRCA; and (b) GAIMCO or CAM has
complied with all record-keeping and other regulatory requirements under
IRCA.

3.28 Governmental Approvals and Filings. Except for compliance
----------------------------------
with the H-S-R Act and except as set forth on Schedule 3.28, none of General
-------------
American, GAHC, GAIMCO and CAM is required to obtain any approval, consent,
or authorization of, or to make any declaration or filing with, any
Government for the valid execution and delivery of this Agreement or any
other agreement to be delivered hereunder or the performance or consummation
of the transactions contemplated hereby or thereby.

3.29 Brokers, Finders. Except as set forth on Schedule 3.29,
---------------- -------------
no finder, broker, agent, or other intermediary acting on behalf of General
American, GAHC, GAIMCO or CAM is entitled to a commission, fee, or other
compensation or obligation in connection with the negotiation or
consummation of this Agreement or any of the transactions contemplated
hereby.

3.30 Outside Financial Interests. Except as identified on
---------------------------
Schedule 3.30, no director, officer or shareholder of GAIMCO has any direct
- -------------
or indirect financial interest in any competitor

42
<PAGE> 48
with or supplier or customer of, or any other person or entity that has any
transactions or other business relationship with, GAIMCO or CAM; provided,
however, that for this purpose ownership of corporate securities having no
more than 5% of the outstanding voting power of any competitor, supplier,
customer or other person or entity, which securities are listed on any
national securities exchange or authorized for quotation on the Automated
Quotations System of the National Association of Securities Dealers, Inc.,
shall not be deemed to be such a financial interest, provided such person
has no other connection or relationship with such competitor, supplier,
customer or other person or entity.

3.31 Guarantees. Except as set forth on Schedule 3.31, neither
---------- -------------
GAIMCO nor CAM is a guarantor, indemnitor, surety or accommodation party or
otherwise liable for any indebtedness of any other person or entity except
as endorser of checks received and deposited in the ordinary course of
business.

3.32 Foreign Operations and Export Control. GAIMCO and CAM
-------------------------------------
have at all times acted:

(a) pursuant to valid qualifications to do business in
all jurisdictions outside the United States where such qualification is
required by local law and the failure to do so would have a material adverse
effect on the business, operations, or condition (financial or otherwise) of
GAIMCO or CAM;

(b) in material compliance with all applicable foreign
laws, including without limitation laws relating to foreign investment,
foreign exchange control, immigration, employment and taxation;

(e) without violation of the Foreign Corrupt Practices
Act of 1977, as amended.

3.33 Disclosure. Each Schedule and each document attached as a
----------
Schedule is true, correct, and complete in all

43
<PAGE> 49
material respects. No representation or warranty by General American, GAHC,
GAIMCO or CAM in this Agreement or any Schedule referred to herein or in any
agreement to be delivered hereunder contains any untrue statement of a
material fact or any omission of a material fact necessary to make the
statements contained herein and therein, in light of the circumstances under
which the statements were made, not misleading.

ARTICLE IV
ADDITIONAL COVENANTS OF THE PARTIES
-----------------------------------

4.1 Conduct of Business. Prior to Closing, without the prior
-------------------
written consent of General American, neither Conning Corp. nor Conning will
or will agree to, and, without the prior written consent of Conning Corp.,
GAIMCO will not and will not agree to:

(a) Grant any increase in the rate of pay of any of its
employees, grant any increase in the salaries of any officer, employee or
agent, enter into or increase the benefits provided under any bonus,
profit-sharing, incentive compensation, pension, retirement, medical,
hospitalization, life insurance or other insurance plan or plans, or other
contracts or commitments, or in any other way increase in any amount the
benefits or compensation of any such officer, employee or agent, except,
however, ordinary increases in compensation not unusual in character or
amount made in the ordinary course of business to employees who are not
directors or officers; provided, however, that Conning Corp. may pay bonuses
to its employees prior to Closing in an aggregate amount not to exceed
$3,300,000 (which amount is independent from Conning's standard employee
bonus plan which remains in effect);

(b) Enter into (i) any employment contract or (ii) any
collective bargaining agreement;

(c) Enter into any contract or commitment or engage in
any transaction which is not in the usual and ordinary course of business or
which is inconsistent with past practices;

(d) Sell or dispose of or encumber any material amount
of assets (except pursuant to existing Contracts disclosed herein);

(e) Make, or enter into any contract for, any material
capital expenditure or enter into any material lease of equipment or real
estate (except pursuant to existing Contracts disclosed herein);

(f) Enter into any contract or commitment, whether for
the purchase or sale of inventory, supplies, other

44
<PAGE> 50
products or services or otherwise, whether in the ordinary course of
business or otherwise, involving more than $50,000, or enter into any series
of such contracts with one party or affiliated group of parties involving
more than $100,000 in the aggregate;

(g) Create, assume, incur or guarantee any indebtedness
other than (i) in the usual and ordinary course of business and with a
maturity date of less than one year or (ii) that incurred pursuant to
existing Contracts disclosed herein;

(h) Declare or pay any dividend on, issue or make any
sale of, or distribution in respect of, its capital stock or directly or
indirectly redeem, purchase or otherwise acquire any of its capital stock
except as may be required under the Conning Corporation Shareholders'
Agreement dated February 25, 1993;

(i) Conduct or transact business other than in a manner
consistent with its past practices or change any accounting procedures or
practices or its financial structure;

(j) Make any amendments to or changes in its Articles or
Certificate of Incorporation or By-Laws, or, with respect to the
Subsidiaries, any of their respective constituent documents; or

(k) Perform any act, or attempt to do any act, or permit
any act or omission to act, which will or may reasonably be expected to
cause a breach by such party of any Contract to which it is a party,
including this Agreement.

4.2 Access to Records. Until the Closing, GAIMCO shall afford
-----------------
to authorized representatives of Conning Corp. reasonable access during
normal business hours to all premises, properties, books, records, personnel
and data of GAIMCO. Until the Closing, Conning Corp. and Conning shall
afford to authorized representatives of General American, reasonable access
during normal business hours to all premises, properties, books, records,
personnel and data of Conning Corp. and Conning. No such access, and no
other investigation or discovery of facts shall affect the discovering
party's right to recover for any breach of any representation or warranty
hereunder.

4.3 Preservation of Business. Each of Conning Corp., Conning
------------------------
and GAIMCO shall conduct their respective activities substantially in the
same manner as heretofore conducted and shall use its best efforts to keep
its business organization intact, including its present employees and
present relationships with customers and others having business relations
with it.

45
<PAGE> 51

4.4 Insurance and Maintenance of Property. Each of Conning
-------------------------------------
Corp., Conning and GAIMCO will maintain their respective existing insurance
policies on property owned or leased by it in full force and effect and will
operate, maintain and repair all of such property in a manner consistent
with past practice.

4.5 Books, Records and Financial Statements. From the date
---------------------------------------
hereof until Closing, each of Conning Corp., Conning and GAIMCO will
maintain their respective books and financial records in accordance with
GAAP consistently applied. Said books and financial records shall fairly
and accurately reflect the operations, results and condition, financial and
otherwise, of each such party. Each such party shall furnish to the others
promptly, as available, financial statements and operating reports
applicable to it since March 31, 1995, all of which shall be prepared in
accordance with GAAP consistently applied and shall present fairly the
consolidated financial position and results of operations of such party at
the dates and for the periods indicated.

4.6 Other Governmental Filings. The Equity Holders, Conning
--------------------------
Corp., Conning, General American, GAHC, GAIMCO and CAM will cooperate with
each other in making, as soon as practicable following the execution hereof,
all filings required by any governmental agency in connection with the
transactions contemplated by this Agreement, including, without limitation,
all filings required pursuant to the H-S-R Act and all appropriate federal
and state securities or "blue sky" filings with respect to the shares of CAM
Preferred Stock to be issued pursuant to this Agreement. All information
provided by the Equity Holders, Conning Corp., Conning, General American,
GAHC, GAIMCO and CAM in connection with such filings will be true, accurate
and complete in all material respects and will comply in all material
respects with all applicable laws and regulations.

4.7 Notification of Certain Matters. Between the date of this
-------------------------------
Agreement and the Closing, each of the parties hereto shall give prompt
notice to the others of (i) the occurrence, or failure to occur, of any
event which occurrence or failure would be likely to cause any
representation or warranty of such party contained in this Agreement to be
untrue or inaccurate in any respect any time from the date hereof to the
Closing Date and (ii) any failure of such party to comply with or satisfy
any covenant, condition or agreement to be complied with or satisfied by it
hereunder; provided, however, that such disclosure shall not be deemed to
-------- -------
cure any breach of a representation, warranty, covenant or agreement or to
satisfy any condition.

46
<PAGE> 52

4.8 No Solicitation.
---------------

(a) From the date hereof until the termination hereof,
Conning Corp., Conning and the Equity Holders agree not to, and will not
authorize any of Conning Corp.'s or Conning's officers, directors, employees
or other agents to, directly or indirectly, (i) take any action to seek,
initiate or encourage any offer from any person, entity or group (other than
General American or its subsidiaries) to acquire any shares of capital
stock, options or other securities of Conning Corp. or Conning, to merge or
consolidate with Conning Corp. or Conning, or to otherwise acquire any
significant portion of Conning Corp.'s or Conning's assets (a "Third Party
Offer"), or (ii) engage in negotiations concerning or disclose non-public
financial information relating to Conning Corp. or Conning, or any
confidential or proprietary trade or business information relating to the
businesses of Conning Corp. or Conning, or afford access to the properties,
books or records of Conning Corp. or Conning (except as required by Law), to
any third party that may be considering a Third Party Offer. Since June 14,
1995, none of the Equity Holders and none of Conning Corp. or Conning or
their respective officers, directors, employees or other agents has engaged
in any activities, discussions or negotiations with any parties with respect
to any of the foregoing.

(b) Conning Corp., Conning or the Equity Holders, as the
case may be, will orally notify General American immediately, followed by
prompt written notice (identifying the offeror and describing, in reasonable
detail, the terms of the offer or the request for information), of any Third
Party Offer from any person, entity or group (other than from General
American or its subsidiaries) or of any request for information with respect
to a Third Party Offer or any indication from any person, entity or group
that it or another person, entity or group is considering making a Third
Party Offer.

4.9 Offering Memorandum. In connection with the execution of
-------------------
this Agreement, General American, GAHC, GAIMCO, CAM, Conning Corp. and
Conning have cooperated to prepare and distribute to the Equity Holders an
offering memorandum of CAM (the "Offering Memorandum") relating to the
transactions contemplated hereby. General American, GAHC, GAIMCO and CAM
agree to indemnify and hold harmless Conning Corp. and Conning and their
respective directors, officers, control persons, employees, agents,
attorneys, accountants and other representatives from and against any
liability (including attorneys' fees) relating to or arising out of
information provided by them or on their behalf in writing for inclusion in
the Offering Memorandum or any state filing. Conning Corp. and Conning agree
to indemnify and hold harmless General American, GAHC, GAIMCO and CAM and
their respective directors, officers,

47
<PAGE> 53
control persons, employees, agents, attorneys, accountants and other
representatives from and against any liability (including attorneys' fees)
relating to or arising out of information provided by them or on their
behalf in writing for inclusion in the Offering Memorandum or any state
filing. The covenants contained in this Section shall survive the Closing
without limitation and are intended to benefit the indemnified parties and
shall be enforceable by such persons.

4.10 Approval of Parachute Payments. With respect to potential
------------------------------
"parachute payments" that may arise other than under the Employment
Agreements, prior to the Closing, Conning Corp. will take such action as is
necessary to cause such items to fall within an exemption under Section
280G(b)(5) of the Code.

4.11 Notice to Customers. Prior to Closing, Conning will send
-------------------
a notice and request for consent to the transactions contemplated hereby, in
a form reasonably acceptable to GAHC, to each of its customers.

4.12 Filing of Certificate of Designation. Prior to Closing,
------------------------------------
CAM shall file the Certificate of Designation with the Secretary of State of
Missouri.

ARTICLE V
CONDITIONS TO THE OBLIGATIONS
-----------------------------
GENERAL AMERICAN, GAHC, GAIMCO AND CAM
--------------------------------------

The obligations of General American, GAHC, GAIMCO and CAM at
Closing shall be subject to the satisfaction at Closing of each of the
following conditions, subject to the right of such parties to waive any one
or more of such conditions:

5.1 Representations and Warranties. The Equity Holders',
------------------------------
Conning Corp.'s and Conning's representations and warranties set forth in
Article II shall have been true and correct in all material respects when
made and shall be true and correct in all material respects on the Closing
Date, as though such representations and warranties were made at and as of
such date.

5.2 Performance of Agreement. The Equity Holders, Conning
------------------------
Corp. and Conning shall have performed and complied in all material respects
with all covenants, conditions, and other obligations under this Agreement
to be performed or complied with by them at or prior to Closing.

5.3 Certificate. Conning Corp., Conning and the Shareholders
-----------
shall have delivered to GAHC at Closing a certificate executed by each of
them, dated the Closing Date, to

48
<PAGE> 54
the effect that the conditions set forth in Sections 5.1 and 5.2 have been
satisfied, which, in the case of Penn. Corp. shall only certify as to the
representations and warranties made by it in Article II hereof. Such
certificate shall be deemed an additional representation and warranty of
Conning Corp., Conning and the Shareholders hereunder.

5.4 Approvals. All required consents and approvals from
---------
Governments and from JMB/Urban CityPlace Limited Partnership shall have been
obtained and all waiting periods required by Law, including, without
limitation, those required under the H-S-R Act, shall have expired.

5.5 No Adverse Proceeding. No Action shall have been overtly
---------------------
threatened or pending (a) for the purpose of enjoining or preventing the
consummation of this Agreement or any of the transactions contemplated
hereby or (b) which claims that this Agreement, such transactions, or their
consummation, is illegal or in violation of any agreement applicable to
Conning Corp., Conning or any Equity Holder.

5.6 Opinions of Counsel. Conning Corp. shall have delivered
-------------------
to GAHC at Closing opinions of Conning Corp.'s, Conning's and the Equity
Holders' counsel, in the forms attached hereto as Exhibit K.
---------

5.7 Employment Agreements. The Employment Agreements shall
---------------------
have been executed and delivered to CAM by the Key Employees at Closing.

5.8 Adverse Change. There shall have been no material adverse
--------------
change, actual or overtly threatened, in the business or condition,
financial or otherwise, assets, liabilities or prospects of Conning and
Conning Corp.

5.9 Shareholders' Agreement. The Shareholders' Agreement
-----------------------
shall have been executed and delivered by the Equity Holders (excluding the
Specified Shareholders) to CAM and GAHC at Closing.

5.10 Investor Questionnaires. An investor questionnaire and
-----------------------
such other documentation reasonably acceptable to General American shall
have been executed and delivered to General American and CAM by each
Shareholder and Option Holder receiving Preferred Stock hereunder. Such
documentation shall be sufficient in the sole discretion of General American
and its counsel to ensure compliance with the requirements of the Securities
Act of 1933, as amended, and any other Laws applicable to the issuance of
the CAM Preferred Stock hereunder and the conversion thereof.

49
<PAGE> 55

5.11 Approval of Parachute Payments. With respect to potential
------------------------------
"parachute payments" that may arise under the Employment Agreements, prior
to the Closing, Conning Corp. shall have taken such action as is necessary
to cause such items to fall within an exemption under Section 280G(b)(5) of
the Code.

5.12 Redemption of Preferred Stock. Conning Corp. shall have
-----------------------------
redeemed all shares of its Preferred Stock for an aggregate purchase price
of no more than $3.85 million, plus accrued and unpaid dividends.

ARTICLE VI
CONDITIONS TO THE OBLIGATIONS OF THE
------------------------------------
EQUITY HOLDERS, CONNING CORP. AND CONNING
-----------------------------------------

The obligations of Conning Corp., Conning and the Equity Holders
at Closing shall be subject to the satisfaction at the Closing of the
following conditions, subject to the right of such parties to waive any one
or more of such conditions:

6.1 Representations and Warranties. The representations and
------------------------------
warranties of General American, GAHC, GAIMCO and CAM set forth in Article
III shall have been true and correct in all material respects when made and
shall be true and correct in all material respects on the Closing Date as
though such representations and warranties were made at and as of such date
and time.

6.2 Performance of Agreement. General American, GAHC, GAIMCO
------------------------
and CAM shall have performed and complied in all material respects with all
covenants, conditions, and other obligations under this Agreement to be
performed or complied with by them at or prior to the Closing.

6.3 Certificate. General American, GAHC, GAIMCO and CAM shall
-----------
have delivered to the Equity Holders, Conning Corp. and Conning at the
Closing a certificate of General American, GAHC, GAIMCO and CAM executed by
each of them, dated the Closing Date, to the effect that the conditions set
forth in Sections 6.1 and 6.2 have been satisfied. Such certificate shall
be deemed an additional representation and warranty of General American,
GAHC, GAIMCO and CAM hereunder.

6.4 Approvals. All required consents and approvals from
---------
Governments and from third parties under Contracts shall have been obtained
and all waiting periods required by Law, including, without limitation,
those required under the H-S-R Act, shall have expired.

6.5 No Adverse Proceeding. No Action shall have been
---------------------
threatened or pending (a) for the purpose of enjoining or

50
<PAGE> 56
preventing the consummation of this Agreement or any of the transactions
contemplated hereby or (b) which claims that this Agreement, such
transactions, or their consummation, is illegal or in violation of any
agreement applicable to General American, GAHC, GAIMCO or CAM.

6.6 Adverse Change. There shall have been no material adverse
--------------
change, actual or overtly threatened, in the business or condition,
financial or otherwise, assets, liabilities or prospects of GAIMCO or CAM.

6.7 Opinions of Counsel. GAHC shall have delivered to Conning
-------------------
Corp. at Closing opinions of General American's, GAHC's, GAIMCO's and CAM's
counsel, in the forms attached hereto as Exhibit L.
---------

6.8 Investor Questionnaire. GAHC shall have executed and
----------------------
delivered to CAM an investor questionnaire and such other documentation
reasonably acceptable to Conning Corp. to ensure compliance with the
requirements of the Securities Act of 1933, as amended, and any other Laws
applicable to the issuance of the CAM Common Stock hereunder.

6.9 Employment Agreements. The Employment Agreement shall
---------------------
have been executed and delivered to the Key Employees by CAM at Closing.

6.10 Shareholders' Agreement. The Shareholders' Agreement
-----------------------
shall have been executed and delivered to the Equity Holders (excluding the
Specified Shareholders) by CAM and GAHC at Closing.

6.11 Option Agreements. The Option Agreements shall have been
-----------------
executed and delivered to each of the New Optionees by CAM at Closing.

ARTICLE VII
INDEMNIFICATION
---------------

7.1 Survival of Representations and Warranties. All
------------------------------------------
representations and warranties of the parties made in this Agreement or in
any exhibit, Schedule, certificate, instrument or any document delivered
pursuant hereto (excluding the Offering Memorandum, which is provided for in
Section 4.9) shall survive the Closing and shall remain in effect for a
period of eighteen months after the Closing Date but thereafter shall expire
and no party shall be entitled to make a claim for indemnification with
respect to such representations and warranties unless a claim with respect
thereto shall have been made in writing against the party responsible for
indemnification hereunder prior to the expiration of such eighteen month
period; provided, that the

51
<PAGE> 57
foregoing limitation shall not apply to the representations and warranties
made in Sections 2.8 and 3.9, which shall survive until the expiration of
all applicable statutes of limitation. All representations and warranties
hereunder shall be deemed to be material and relied upon by the parties with
or to whom the same were made, notwithstanding any investigation or
inspection made by or on behalf of such party or parties.

7.2 Indemnification of General American, GAHC, GAIMCO and CAM.
---------------------------------------------------------

(a) The Shareholders and the Option Holders (except
Penn. Corp., which shall be liable hereunder only pursuant to paragraph (i)
hereof in the case of a breach of a representation and warranty made by
Penn. Corp. with resect to itself and pursuant to paragraph (iv) hereof for
its pro rata share of all liability thereunder, in accordance with the
percentages set forth on Penn. Corp.'s signature page hereof), severally and
not jointly, shall hold General American, GAHC, GAIMCO, CAM, Conning Corp.
and Conning and their respective affiliates and the shareholders, directors,
officers, partners, successors, assigns, and agents of each of them (the
"CAM Indemnified Persons"), harmless and indemnify each of them from and
against, and waives any claim for contribution or indemnity from any CAM
Indemnified Person with respect to, any and all claims, losses, damages,
liabilities, penalties, fines, expenses or costs ("Losses"), plus reasonable
attorneys' fees and expenses incurred in connection with Losses and/or
enforcement of this Agreement, plus interest from the date incurred through
the date of payment at the prime lending rate of Boatmen's Bank of St.
Louis, N.A. from time to time prevailing (in all, "Indemnified Losses")
incurred or to be incurred by any CAM Indemnified Person resulting from or
arising out of:

(i) Any inaccuracy in or incompleteness or
incorrectness of Conning's, Conning Corp.'s and the Equity Holders'
representations or warranties set forth in this Agreement or any
certificate, instrument or other document delivered hereunder;

(ii) Any breach or violation of Conning's, Conning
Corp.'s and the Equity Holders' covenants or agreements contained in
this Agreement, including the provisions of this Article VII;

(iii) Any liability of Conning Corp. or any of its
Tax Affiliates for Taxes for any taxable period ending on or before the
Closing Date, except to the extent provided for as a tax liability in
the Conning Balance Sheet or unless such liability arises from matters
disclosed in the Article II Tax Disclosure Letter; or

52
<PAGE> 58

(iv) the pending litigation (the "Pending
Litigation") styled (i) Lionheart Group, Inc., et al. v. Conning &
Company, (the "Lionheart Litigation") and (ii) Cynthia Maleski,
----------------
Insurance Commissioner of the Commonwealth of Pennsylvania, in her
------------------------------------------------------------------
capacity as Liquidator of Rockwood Insurance Company(In Liquidation)
--------------------------------------------------------------------
and as assignee of Rockwood Casualty Insurance Company vs. Conning &
--------------------------------------------------------------------
Company, et al., to the extent Indemnified Losses arising out of such
---------------
litigation exceed applicable insurance deductibles, the costs not
reimbursed by insurance incurred by Conning after the Closing Date in
defending such litigation and applicable insurance proceeds, if any,
received by Conning on account of such litigation.

(b) In addition, the Option Holders, severally and not
jointly, shall hold the CAM Indemnified Persons harmless and indemnify each
of them from and against any and all Taxes for pre-Closing periods on any
recognized gain (without regard to offsetting deductions) to Conning Corp.
or Conning resulting from the transfer of CAM Preferred Stock in
consideration for the cancellation of the Conning Options pursuant to the
terms of this Agreement and the Option Cancellation Agreements; provided,
however, that neither CAM nor Conning Corp. nor Conning shall be permitted
to settle or compromise any claim for which the Option Holders are obligated
to indemnify CAM Indemnified Persons under this Section 7.2(b) without the
consent of the Representative (as hereinafter defined), which consent shall
not be unreasonably withheld.

7.3 Indemnification of Equity Holders.
---------------------------------

(a) General American and CAM shall hold the Equity
Holders and their permitted assigns and agents (the "Shareholder Indemnified
Persons") harmless and indemnify each of them from and against, and waives
any claim for contribution or indemnity from any Shareholder Indemnified
Person, any and all Indemnified Losses incurred or to be incurred by any of
them resulting from or arising out of:

(i) Any inaccuracy in or incompleteness or
incorrectness of General American's, GAHC's, GAIMCO's and CAM's
representations or warranties set forth in this Agreement or any
certificate, instrument or other document delivered hereunder;

(ii) Any breach or violation of General American's,
GAHC's, GAIMCO's and CAM's covenants or agreements contained in this
Agreement, including the provisions of this Article VII; or

53
<PAGE> 59
(iii) Any liability of GAIMCO or any of its Tax
Affiliates for Taxes for any taxable period ending on or before the
Closing Date, except to the extent provided for as a tax liability in
the GAIMCO Balance Sheet or unless such liability arises from matters
disclosed in the Article III Tax Disclosure Letter.

(b) In addition, subject to the limitations contained in
Section 7.4(g) of this Agreement, subsequent to the closing of the
transactions contemplated by this Agreement, General American and CAM shall
cause Conning to hold the Equity Holders and their permitted assigns
harmless and indemnify them from and against any liability for federal and
state income taxes (including any interest or penalties attributable
thereto) resulting directly from (i) a determination by the Internal Revenue
Service ("IRS") or state taxing authority that any portion of the fair
market value of the CAM Preferred Stock and/or cash received by the Equity
Holders under the terms of this Agreement constitutes compensation for
services, and (ii) the receipt of any indemnity payment pursuant to this
Section 7.3(b); provided, however, that at the request of General American,
-------- -------
CAM, or Conning, as the case may be, such indemnifying party shall have the
right, with respect to this issue, to participate in the audit,
investigation or other proceeding (including being timely provided with
relevant correspondence) leading to such a determination by the IRS or state
taxing authority and approve any settlement, which approval shall not be
unreasonably withheld.

7.4 Limitations on Indemnity.
------------------------

(a) The Shareholders' and Option Holders' obligation to
indemnify CAM Indemnified Persons pursuant to Section 7.2(a)(iii) and the
Option Holders' obligation to indemnify CAM Indemnified Persons pursuant to
Section 7.2(b) shall terminate upon the expiration of the applicable
statutes of limitation unless a claim with respect thereto shall have been
made in writing against the Shareholders and/or the Option Holders, as the
case may be, prior to the expiration of such statutes of limitation.

(b) The Shareholders' and Option Holders' obligation to
indemnify CAM Indemnified Persons pursuant to Section 7.2(a)(iv) shall
terminate upon the final, non-appealable resolution by agreement or by a
court of competent jurisdiction of the Pending Litigation unless a claim
with respect thereto shall have been made in writing against the
Shareholders and the Option Holders prior to such resolution.

(c) The Shareholders and the Option Holders shall have
no obligation to indemnify the CAM Indemnified Persons pursuant to Section
7.2(a) unless Indemnified Losses under such

54
<PAGE> 60
Section exceed $200,000 in the aggregate, but if so to the full extent of
Indemnified Losses in excess of $200,000 in the aggregate.

(d) The Shareholders and the Option Holders shall have
no obligation to indemnify the CAM Indemnified Persons pursuant to Section
7.2(a) in excess of $4,000,000 in the aggregate; provided, however, that to
the extent Indemnified Losses include any payments on account of the
Lionheart Litigation and Indemnified Losses exceed in the aggregate
$4,000,000, the Shareholders' and Option Holders' indemnification shall
continue for up to an additional $1,000,000, provided that such additional
$1,000,000 indemnification obligation shall not exceed the aggregate amount
of Indemnified Losses arising out of or resulting from the Lionheart
Litigation.

(e) General American and CAM shall have no obligation to
indemnify the Shareholder Indemnified Persons pursuant to Section 7.3 unless
Indemnified Losses under such Section exceed $200,000 in the aggregate, but
if so to the full extent of Indemnified Losses in excess of $200,000 in the
aggregate. General American and CAM shall have no obligation to indemnify
the Shareholder Indemnified Persons pursuant to Section 7.3 in excess of
$4,000,000 in the aggregate.

(f) The obligations of the Shareholders and the Option
Holders pursuant to Section 7.2 are several and each Shareholder and Option
Holder shall be liable only for his, her or its pro rata amount of the
indemnification obligation in accordance with the percentages set forth on
each such Equity Holder's signature page hereof.

(g) The obligation of General American and CAM to cause
Conning to indemnify the Equity Holders for income tax liabilities under
Section 7.3(b) of this Agreement shall be limited to the amount of the
corresponding tax benefits received by Conning, CAM, or General American, as
the case may be, which result from deductions, losses, or other tax benefits
actually realized with respect to its income tax returns corresponding to
that portion of the fair market value of the CAM Preferred Stock and/or cash
which is treated as compensation for services pursuant to such a
determination; provided, that in the event of such an adverse determination
--------
by the IRS or state taxing authority affecting an Equity Holder, then
Conning, CAM, or General American, as the case may be, shall use reasonable
good faith efforts and take all reasonably appropriate actions to maximize
such corresponding tax benefits consistent with achieving a final overall
settlement with the applicable taxing authority on all tax issues which is
optimal from Conning's or CAM's (as the case may be) perspective as a
taxpayer; provided further, the indemnifying party shall not be obligated to
-------- -------
make

55
<PAGE> 61
any indemnity payments until the tax liability of Conning or CAM, as
the case may be, for the year or years in question is finally agreed with
the taxing authority or otherwise finally determined; and provided further,
-------- -------
that an Equity Holder claiming hereunder shall give prompt notice to the
indemnifying party of a proposed tax adjustment within the meaning of
Section 7.3(b), provided that the failure to give such notice shall not
affect such Equity Holder's entitlement to indemnity except to the extent
the indemnifying party is in fact prejudiced thereby.

7.5 Notice of Claim. In the event that any party hereto seeks
---------------
indemnification hereunder on behalf of itself or himself or another
indemnified person, such party (the "Indemnified Party") shall give written
notice to the party or parties obligated to indemnify such party (the
"Indemnifying Party") specifying the facts constituting the basis for such
claim and the amount, if known, of the claim asserted. The failure of the
Indemnifying Party, within a period of thirty (30) days after the giving of
such notice by the Indemnified Party, to give written notice to the
Indemnified Party of the intention to contest such claim shall be deemed an
agreement that the claim is a valid claim and at such time as it is known,
the amount thereof shall be paid promptly by the Indemnifying Party.

7.6 Right to Contest Claims of Third Persons. If an
----------------------------------------
Indemnified Party asserts a claim for indemnification hereunder because of a
claim made by any claimant not a party, the Indemnified Party shall give the
Indemnifying Party reasonably prompt notice thereof, but in no event more
than ten (10) business days after said assertion is actually known to the
Indemnified Party; provided, however, that the right of a person to be
indemnified hereunder in respect of claims made by a third party shall not
be adversely affected by a failure to give such notice unless, and then only
to the extent that, an Indemnifying Party is prejudiced thereby. The
Indemnifying Party shall have the right, upon written notice to the
Indemnified Party, and using counsel reasonably satisfactory to the
Indemnified Party, to investigate, secure, contest or settle the claim
alleged by such third person (hereinafter called a "Third-Person Claim"),
provided that the Indemnified Party may participate voluntarily, at its own
expense, in any such Third-Person Claim through representatives and counsel
of its own choice, and, provided further, that the Indemnifying Party
unconditionally acknowledges to the Indemnified Party in writing his or its
obligation to indemnify the persons to be indemnified hereunder with respect
to all elements of such Third-Person Claim. Unless and until the
Indemnifying Party elects to defend the Third-Person Claim, the Indemnified
Party shall have the full right, at its option, to do so and to look to the
Indemnifying Party under the provisions of this Agreement for the amount of
the costs, if any, of defense. The failure of the Indemnifying Party to
respond in writing to

56
<PAGE> 62
the aforesaid notice of the Indemnified Party with respect to such
Third-Person Claim within twenty (20) days after receipt thereof shall be
deemed an election not to defend the same. Notwithstanding the foregoing,
an Indemnifying Party shall only be responsible for the fees and expenses of
one counsel for all Indemnified Parties with respect to any Third-Person
Claim. If the Indemnifying Party does not assume the defense of
any such Third-Person Claim, including any litigation resulting
therefrom, (a) the Indemnified Party may defend against such claim or
litigation, in such manner as it may deem appropriate, including, but not
limited to, settling such claim or litigation, after giving notice of the
same to the Indemnifying Party, on such terms as the Indemnified Party may
deem appropriate, and (b) the Indemnifying Party shall be entitled to
participate in (but not to control) the defense of such action, with its own
counsel at its own expense. If the Indemnifying Party thereafter seeks to
question the manner in which the Indemnified Party defended such
Third-Person Claim or the amount or nature of any such settlement, the
Indemnifying Party shall have the burden to prove by clear and convincing
evidence that the Indemnified Party did not defend or settle such
Third-Person Claim in a reasonably prudent manner. The Parties shall make
available to each other all relevant information in their possession
relating to any such Third-Person Claim and shall cooperate in the defense
thereof. Notwithstanding the provisions of this Section, CAM shall control
the defense and settlement or resolution of the Pending Litigation, provided
that the consent of the Representative, which may not be unreasonably
withheld, must be obtained prior to the settlement of such litigation in
excess of applicable insurance proceeds.

7.7 Return or Cancellation of Legended Shares; Escrow
-------------------------------------------------
Withdrawals.
- -----------

(a) In order to secure the Equity Holders'
indemnification obligations hereunder, certain of the certificates
evidencing the shares of CAM Preferred Stock issuable to the Equity Holders
(the "Certificates") have been legended as provided in Section 1.9. If
payment is not made in accordance with Section 7.7(b), satisfaction of the
Shareholders' and the Option Holders' indemnification obligations pursuant
to Section 7.2(a) shall be effected through (a) the cancellation of
Certificates evidencing shares of CAM Preferred Stock registered in the
names of such holders with an aggregate value equal to the unsatisfied
indemnification obligations, based on a per share value calculated in
accordance with Section 11.3(a) of the Shareholders' Agreement, and
allocated among the Shareholders and Option Holders in accordance with their
relative percentages set forth on their respective signature pages, and (b)
the withdrawal from the Escrow Funds of a portion of the Escrow Funds with
an aggregate value equal to the unsatisfied indemnification obligations,
allocated among the Specified Shareholders

57
<PAGE> 63
(excluding Penn. Corp.) in accordance with the percentages set forth on
their respective signature pages. If payment is not made in accordance with
Section 7.7(b), satisfaction of the Option Holders' indemnification
obligations pursuant to Section 7.2(b) shall be effected through the
cancellation of Certificates evidencing shares of CAM Preferred Stock with
an aggregate value equal to the Indemnified Losses, based on a per share
value calculated in accordance with Section 11.3(a) of the Shareholders'
Agreement and allocated among the Option Holders in accordance with the
percentages set forth on their respective signature pages. The portion of
Indemnified Losses for which an Option Holder or Shareholder is responsible,
as set forth on their respective signature pages, is referred to herein as
that Equity Holder's "Adjusted Ratable Share."

(b) In the event a CAM Indemnified Person is entitled to
indemnification for an Indemnified Loss, each Shareholder or Option Holder,
as the case may be, shall deliver to the Representative either (i) a
Certificate or Certificates sufficient to satisfy such Shareholder's or
Option Holder's Adjusted Ratable Share of such Indemnified Losses, or (ii) a
cashier's or certified check equal to such Equity Holder's Adjusted Ratable
Share of such Indemnified Losses. The Representative shall, upon receipt of
such Certificates and/or checks, deliver such Certificates and/or checks to
CAM, which will cancel the surrendered Certificates and issue to the
Representative Certificates for each Equity Holder who has delivered
Certificates to the Representative evidencing the number of shares of CAM
Preferred Stock owned by such Equity Holder after deduction of such Equity
Holder's Adjusted Ratable Share of the Indemnified Losses. In the event a
Shareholder or Equity Holder does not deliver his or her Certificate or a
check as provided above, CAM shall be permitted to (i) cancel the
Certificate(s) held by such Equity Holder and shall issue to such Equity
Holder a new Certificate evidencing the number of shares of CAM Preferred
Stock owned by such Equity Holder after deduction of such Equity Holder's
Adjusted Ratable Share of the Indemnified Losses, or (ii) if such Equity
Holder does not hold any Certificates, pursue any and all of its legal or
equitable remedies against such Equity Holder in order to recover such
Equity Holder's Adjusted Ratable Share of the Indemnified Losses.

7.8 Exclusive Remedy. The provisions of this Article VII and
----------------
the documents and agreements to be entered into pursuant hereto shall
constitute the exclusive remedy of the parties with respect to any claims or
Indemnified Losses resulting from or arising out of the provisions of this
Agreement or the transactions contemplated hereby which may be asserted
after the Closing; provided, that the foregoing shall not preclude any claim
for injunctive or other non-monetary equitable

58
<PAGE> 64
relief or any claim based on fraud or intentional misrepresentation.

ARTICLE VIII
MISCELLANEOUS PROVISIONS
------------------------

8.1 Notice. All notices, requests, demands, and other
------
communications required or permitted under this Agreement shall be in
writing and shall be deemed to have been duly given and made upon being
delivered either by courier or fax delivery to the party for whom it is
intended, provided that a copy thereof is deposited, postage prepaid,
certified or registered mail, return receipt requested, in the United States
mail, bearing the address shown in this Section 8.1 for, or such other
address as may be designated in writing hereafter by, such party:

If to General American, GAHC, GAIMCO or CAM:

Leonard M. Rubenstein
Executive Vice President--Investments
General American Life Insurance Company
700 Market Street
St. Louis, Missouri 63101
Fax: (314) 444-0726

With a copy to:

James L. Nouss, Jr., Esq.
Bryan Cave LLP
211 North Broadway, Suite 3600
One Metropolitan Square
St. Louis, Missouri 63102
Fax: (314) 259-2020

If to Conning Corp.:

Maurice W. Slayton
President and CEO
Conning & Company
CityPlace II
185 Asylum Street
Hartford, CT 06103
Fax: (203) 520-1269

With a copy to:

Thomas L. Fairfield, Esq.
LeBoeuf, Lamb, Greene & MacRae LLP
Goodwin Square

59
<PAGE> 65
225 Asylum Street
Hartford, CT 06103
Fax: (203) 293-3555
If to the Shareholders and/or the Specified Shareholders and/or
the Option Holders, in care of the Representative:

Maurice W. Slayton
President and CEO
Conning & Company
CityPlace II
185 Asylum Street
Hartford, CT 06103
Fax: (203) 520-1269

8.2 Appointment of Representative.
-----------------------------

(a) By execution hereof, the Shareholders, the Option
Holders and the Specified Shareholders hereby designate Maurice W. Slayton
as the "Representative." The Representative shall have full power to act on
behalf of the Shareholders, the Option Holders and the Specified
Shareholders in the manner specified herein and in connection with all
matters with respect to which action by the Representative is contemplated
by this Agreement, except that no amendment adversely affecting Penn.
Corp.'s rights hereunder or altering the amount, type or nature of
consideration payable to the Equity Holders hereunder shall be valid unless
approved in writing by Penn Corp.

(b) The Representative shall take all actions required
to be taken by the Representative under this Agreement and may take any
action contemplated by this Agreement on behalf of the Shareholders, the
Option Holders and the Specified Shareholders. By giving notice to the
Representative in the manner provided by Section 8.1, General American,
GAHC, GAIMCO or CAM, as the case may be, shall be deemed to have given
notice to all of the Shareholders and Option Holders and the Specified
Shareholder.

(c) In the event that a CAM Indemnified Person gives
notice to the Representative of a Third-Person Claim for which
indemnification may be sought, the Representative shall have the authority
to determine, in his sole judgment and in accordance with Section 7.6,
whether to retain counsel (and to select that counsel) to protect the
Shareholder's, the Option Holders', and the Specified Shareholders'
interests, whether to assume the defense of or otherwise to control the
handling of the Third-Person Claim, and to make all other decisions required
to be made by the Shareholders, the Option Holders or the Specified
Shareholders pursuant to Article VII of this Agreement, including, without
limitation, whether to consent or withhold his

60
<PAGE> 66
consent to any settlement or compromise of a Third-Person Claim. The
Representative is hereby also authorized (but not required) to seek approval
of any proposed action or decision affecting the interests of the
Shareholders, Option Holders or Specified Shareholders hereunder and in such
event shall be authorized to act in accordance with the approval of such
holders whose aggregate percentages as set forth on their respective
signature pages constitute 51% or more of the indemnification obligations of
such holders, provided that the Representative shall not have the authority
to consent to the settlement of the Pending Litigation without the approval
of Penn. Corp., which will not be unreasonably withheld.

(d) In the event that the Representative shall resign or
otherwise cease to act as the Representative, the Representative shall be
authorized to select a replacement Representative, subject to the written
approval of Shareholders, Option Holders and Specified Shareholders who hold
in the aggregate 51% or more of the total percentages set forth on the
Equity Holders' signature pages (a "Majority of Interested Shareholders"),
or, if the Representative shall not have selected a replacement who shall
have been approved by a Majority of Interested Shareholders as aforesaid by
the date the Representative ceases to act in such capacity, then a Majority
of Interested Shareholders shall be authorized to select a replacement
Representative by written consent.

(e) The Representative shall have no liability to the
Shareholders, the Option Holders or the Specified Shareholders with respect
to any action taken or not taken by him under this Agreement except for his
own gross negligence or willful misconduct. The Representative may act in
reliance upon the advice of counsel satisfactory to him in reference to any
matter in connection with this Agreement and shall not incur any liability
for any action taken in good faith in accordance with such advice.

(f) Any action taken by the Representative may be
considered by General American, GAHC, GAIMCO and CAM to be the action of
each Shareholder, Option Holder and/or the Specified Shareholder for whom
such action was taken for all purposes of this Agreement.

8.3 Termination of Shareholder Agreement. Conning Corp. and
------------------------------------
each Equity Holder agree that the Shareholders' Agreement dated February 25,
1993 and each and every other agreement restricting the transfer of Conning
Corp. capital stock or options for Conning Corp. capital stock shall
terminate on the Closing Date and all provisions thereof are hereby waived
with respect to the transactions contemplated hereby.

61
<PAGE> 67

8.4 Entire Agreement. This Agreement and the Schedules and
----------------
Exhibits hereto embody the entire agreement and understanding of the parties
hereto with respect to the subject matter hereof, and supersede all prior
and contemporaneous agreements and understandings relative to such subject
matter.

8.5 Assignment; Binding Agreement. This Agreement and various
-----------------------------
rights and obligations arising hereunder shall inure to the benefit of and
be binding upon the parties, their successors, and assigns and their legal
representatives, and permitted assigns. Neither this Agreement nor any of
the rights, interests, or obligations hereunder shall be transferred,
delegated, or assigned by Conning, Conning Corp., the Specified
Shareholders, any Shareholder or any Option Holder without the prior written
consent of General American, or by General American, GAHC, GAIMCO or CAM
without the prior written consent of Conning Corp.

8.6 Counterparts. This Agreement may be executed
------------
simultaneously in multiple counterparts, each of which shall be deemed an
original, but all of which taken together shall constitute one and the same
instrument.

8.7 Headings; Interpretation. The article and section
------------------------
headings contained in this Agreement are inserted for convenience only and
shall not affect in any way the meaning or interpretation of the Agreement.
Each reference in this Agreement to an Article, Section, Schedule or
Exhibit, unless otherwise indicated, shall mean an Article or a Section of
this Agreement or a Schedule or Exhibit attached to this Agreement,
respectively. References herein to "days," unless otherwise indicated, are
to consecutive calendar days. The term "person" includes any Government.
Gender-specific references such as "its," "his," and "her" shall include all
other genders.

8.8 Expenses. Regardless of whether the transactions
--------
contemplated hereby are consummated, General American shall pay its own and
GAIMCO's, GAHC's and CAM's legal and accounting fees, costs and expenses in
connection with such transactions and the Shareholders and Option Holders
shall be permitted to cause Conning to pay their and Conning Corp.'s and
Conning's reasonable legal, investment banking and accounting fees, costs
and expenses in connection with such transactions.

8.9 Termination of the Agreement. This Agreement may be
----------------------------
terminated by a party hereto without further liability or obligation if (a)
such party is not in breach or violation hereof and (b) the conditions to
such party's obligations at Closing have not been satisfied on or before
August 31, 1995. In the event of such termination, nothing in this Section
or elsewhere in this Agreement shall impair or restrict the rights of the
terminating party to any and all remedies at law or in equity in the event
of a breach of or default under this Agreement by another party.

62
<PAGE> 68

8.10 Governing Law. This Agreement shall in all respects be
-------------
construed in accordance with and governed by the substantive laws of the
State of Missouri, without reference to its choice of law rules.

8.11 Confidentiality. No party to this Agreement shall make
---------------
any public disclosure of the terms hereof or the transactions contemplated
hereby without the prior written consent of the other parties, except as
required by law.

8.12 Further Assurances. From and after the Closing, the
------------------
parties shall do such acts and execute such documents and instruments as may
be reasonably required to make effective the transactions contemplated
hereby.

63
<PAGE> 69

IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed as of the date first above written.

GENERAL AMERICAN LIFE INSURANCE COMPANY

By /s/ Richard A. Liddy
--------------------------------
Richard A. Liddy
Chairman, President and
Chief Executive Officer

GENERAL AMERICAN HOLDING COMPANY

By /s/ Richard A. Liddy
--------------------------------
Richard A. Liddy
Chairman and President

GENERAL AMERICAN INVESTMENT MANAGEMENT
COMPANY

By /s/ Leonard M. Rubenstein
--------------------------------
Leonard M. Rubenstein
President

CONNING ASSET MANAGEMENT COMPANY

By /s/ Leonard M. Rubenstein
--------------------------------
Name:
Title:

CONNING & COMPANY

By /s/ Maurice W. Slayton
--------------------------------
Maurice W. Slayton
Chairman of the Board, President
and Chief Executive Officer

CONNING CORPORATION

By /s/ Maurice W. Slayton
--------------------------------
Maurice W. Slayton
Chairman of the Board, President
and Chief Executive Officer

EQUITY HOLDER

/s/ M. W. Slayton
-----------------------------------

/s/ Mark E. Hansen
-----------------------------------

/s/ Thomas D. Sargent
-----------------------------------

/s/ William C. Shenton
-----------------------------------

/s/ Stephan L. Christiansen
-----------------------------------

/s/ Gordon G. Pratt
-----------------------------------

/s/ John Clinton
-----------------------------------

/s/ Donald L. McDonald
-----------------------------------

/s/ Thomas A. Byrne
-----------------------------------

/s/ Scott E. Daniels
-----------------------------------

/s/ Paul Goulekas
-----------------------------------

/s/ John A. Corroon, Jr.
-----------------------------------

/s/ David N. Reid
-----------------------------------

/s/ Paul J. Sellier
-----------------------------------

/s/ Daniel J. Mainolfi
-----------------------------------

/s/ John B. Kleiman
-----------------------------------

/s/ Fred M. Schpero
-----------------------------------

/s/ Steven F. Piaker
-----------------------------------

/s/ Seth C. Miller
-----------------------------------

/s/ Gerard Vecchio
-----------------------------------

/s/ Joseph D. Sargent
-----------------------------------

/s/ G. Kelly, Jr.
-----------------------------------

/s/ David W. Clark
-----------------------------------

/s/ Gary Ransom
-----------------------------------
<PAGE> 70

<TABLE>
TABLE OF DEFINITIONS
--------------------
<S> <C>
"Certificate of Designation".......................... 2
1933 Act.............................................. 25
Accounts Receivable................................... 13
Action................................................ 17
Adjusted Ratable Share................................ 56
Agreement............................................. 1
Article II Tax Disclosure Letter...................... 10
Article III Tax Disclosure Letter..................... 30
Buyer Indemnified Persons............................. 51
CAM................................................... 1
CAM Common Stock...................................... 2
CAM Indemnified Persons............................... 51
CAM Non-Voting Common Stock........................... 5
CAM Note.............................................. 3
CAM Optionees......................................... 5
CAM Preferred Stock................................... 2
Certificates.......................................... 56
Closing............................................... 3
Closing Date.......................................... 3
COBRA................................................. 22
Code.................................................. 10
Conning............................................... 1
Conning Accounts Receivable........................... 13
Conning Balance Sheet................................. 10
Conning Common Stock.................................. 1
Conning Contract...................................... 18
Conning Corp. ........................................ 1
Conning Corp. Note.................................... 3
Conning Financial Statements.......................... 10
Conning Funds......................................... 9
Conning Intellectual Property......................... 19
Conning Leased Real Property.......................... 14
Conning Non-Voting Common Stock....................... 2
Conning Options....................................... 1
Conning Plan.......................................... 21
Conning Plans......................................... 21
Conning Property...................................... 15
Conning Tax Returns................................... 10
Contract.............................................. 18
Days.................................................. 61
Employment Agreements................................. 5
Environmental Law..................................... 17
Equity Holders........................................ 3
ERISA................................................. 21
Escrow Agent.......................................... 6
Escrow Agreement...................................... 6
Escrow Deposit........................................ 6
Escrow Funds.......................................... 6
Financial Statements.................................. 10
GAAP.................................................. 10
GAHC.................................................. 1

<PAGE> 71
GAIMCO................................................ 1
GAIMCO Accounts Receivable............................ 32
GAIMCO Balance Sheet.................................. 29
GAIMCO Common Stock................................... 1
GAIMCO Contract....................................... 36
GAIMCO Financial Statements........................... 29
GAIMCO Intellectual Property.......................... 37
GAIMCO Leased Real Property........................... 33
GAIMCO Plan........................................... 39
GAIMCO Plans.......................................... 39
GAIMCO Property....................................... 34
GAIMCO Tax Returns.................................... 30
General American...................................... 1
General American Financial Statements................. 29
Government............................................ 13
H-S-R Act............................................. 8
Hazardous Materials................................... 18
Indemnified Losses.................................... 51
Indemnified Party..................................... 55
Indemnifying Party.................................... 53
Intellectual Property................................. 19
IRCA.................................................. 23
Key Employees......................................... 5
Law................................................... 16
Leased Real Property.................................. 33
Legend................................................ 5
Liens................................................. 8
Lionheart Litigation.................................. 51
Losses................................................ 51
Offering Memorandum................................... 46
Option Agreements..................................... 5
Option Cancellation Agreements........................ 4
Option Holders........................................ 1
Option Shares......................................... 5
Order................................................. 17
Pending Litigation.................................... 51
Penn. Corp............................................ 4
Person................................................ 61
Plan.................................................. 21
Plans................................................. 21
Property.............................................. 15
Regulation D.......................................... 25
Representative........................................ 59
Return................................................ 13
Rule 144.............................................. 25
Shareholder Indemnified Persons....................... 52
Shareholders.......................................... 1
Shareholders' Agreement............................... 3
Specified Shareholders................................ 2
Tax Affiliate......................................... 13
Tax Returns........................................... 10
Taxes................................................. 13
Third Party Offer..................................... 46

<PAGE> 72
Third-Person Claim.................................... 55
</TABLE>

<PAGE> 73
<TABLE>
LIST OF SCHEDULES

<CAPTION>
Schedule Number Description of Schedule
- --------------- -----------------------
<C> <S>
Schedule 2.1(c) Licenses
Schedule 2.1(d) Third Party Authority
Schedule 2.2(a) Ownership of Capital Stock of Conning Corporation, a Delaware
Corporation
Schedule 2.2(b) Options and Other Securities
Schedule 2.3 Conning Subsidiaries
Schedule 2.4 Property
Schedule 2.5 Financial Statements
Schedule 2.7 Undisclosed Liabilities
Schedule 2.8 Article II Disclosure Letter
Schedule 2.9 Accounts Receivable
Schedule 2.10 Regulatory Matters: Permits and Licenses
Schedule 2.11 Property (Leased)
Schedule 2.12 Assets
Schedule 2.13 Absence of Changes
Schedule 2.15 Litigation
Schedule 2.15 Supplement to Litigation
Schedule 2.16 Environmental Matters
Schedule 2.17 Contracts
Exhibit 2.17a Insurance Asset Management, Advisory and Accounting Contracts
Exhibit 2.17b Consulting / Financial Advisory Contracts
Schedule 2.18 Intellectual Property
Schedule 2.18a Registered Copyrights
Schedule 2.19 Insurance
Schedule 2.20 Officers, Directors Employees and Consultants
Schedule 2.20 Supplemental Disclosure: Officers, Directors Employees and
Consultants
Schedule 2.21 Bank Accounts
Schedule 2.22 Transaction with Related Parties
Schedule 2.23 Labor Matters
Schedule 2.24 Employee Benefits
Schedule 2.25 Discrimination and Occupational Safety and Health
Schedule 2.27 Governmental Approvals and Filings
Schedule 2.28 Broker & Finder Fees
Schedule 2.29 Outside Financial Interest
Schedule 2.30 Guarantees
Schedule 2.31 Foreign Operations and Export Control
Schedule 2.33 Qualified Investors
Schedule 3.1(b) Existence and Qualifications
Schedule 3.1(c) Existence and Qualifications

<PAGE> 74

Schedule 3.5 Property
Schedule 3.6 Financial Statements
Schedule 3.8 Undisclosed Liabilities
Schedule 3.10 Accounts Receivable
Schedule 3.11 Regulatory Matters
Schedule 3.12 Real Property
Schedule 3.13 Assets
Schedule 3.14 Absence of Changes
Schedule 3.16 Litigation
Schedule 3.17 Environmental
Schedule 3.18 Contracts
Schedule 3.19 Intellectual Property
Schedule 3.20 Insurance
Schedule 3.21 Officers, Directors, et al
Schedule 3.22 Bank Accounts
Schedule 3.23 Related Persons
Schedule 3.24 Labor
Schedule 3.25 ERISA
Schedule 3.26 OSHA
Schedule 3.28 Approvals
Schedule 3.29 Brokers
Schedule 3.30 Outside Interests
Schedule 3.31 Guarantees
Exhibit A Certificate of Designation
Exhibit B CAM and Conning Corp. Notes
Exhibit C Shareholders' Agreement
Exhibit D Option Cancellation Agreement
Exhibit E CAM Optionees
Exhibit F Option Agreement
Exhibit G Key Employees
Exhibit H Employment Agreements
Exhibit I Legend
Exhibit J Escrow Agreement
Exhibit K Opinions of Conning Corp.'s, Conning's and the Equity Holders'
Counsel
Exhibit L Opinions of General American's, GAHC's, GAIMCO's and
CAM's Counsel

Separate schedule for each individual equity holder, listing the name and
address of the equity holder, number of shares of Conning, Inc. (formerly
Conning Corporation) common stock contributed by the equity holder, number
of shares of the Company (formerly Conning Asset Management Company) preferred
stock received by the equity holder for such Conning, Inc. common stock, amount
of cash received for such Conning, Inc. common stock, number of options to
purchase Conning, Inc. common stock held by the equity holder canceled, number
of shares of Company preferred stock received by the equity holder for such
canceled options, amount of cash received by the equity holder for such
canceled options and the pro rata (by number and percentage) shares of
indemnity applicable to the equity holder pursuant to Sections 7.2(a),
7.2(a)(iv), 7.2(a) excluding 7.2(a)(iv) and 7.2(b) of the Contribution
Agreement.
</TABLE>

<PAGE> 1
RESTATED
ARTICLES OF INCORPORATION
OF
CONNING CORPORATION

ARTICLE ONE - NAME

The name of the corporation (hereinafter referred to as the
"Corporation") is: Conning Corporation.

ARTICLE TWO - REGISTERED OFFICE

The address of the Corporation's registered office in the State
of Missouri is 700 Market Street, St. Louis, Missouri 63101 and the name of
its registered agent at such address is Matthew P. McCauley.

ARTICLE THREE - AUTHORIZED SHARES

The aggregate number, class and par value of shares which the
Corporation shall have authority to issue is ninety-three million seven
hundred ninety thousand (93,790,000) shares of stock, all of which shall have
a par value of One Cent ($0.01) per share, divided into (a) fifty million
(50,000,000) shares of Class A Voting Common Stock, (b) twenty million
(20,000,000) shares of Class B Non-Voting Common Stock and (c) twenty-three
million seven hundred ninety thousand (23,790,000) shares of Preferred Stock.

The preferences, qualifications, limitations, restrictions, and
the special or relative rights, including convertible rights, if any, in
respect of the shares of each class are as follows:

A. Preferred Stock.

1. Subject to the requirements of the General and Business
Corporation Law of Missouri (the "GBCL") and the provisions of these Articles
of Incorporation, the Preferred Stock may be issued from time to time by the
Board of Directors as shares of one or more series. The description of
shares of each series of Preferred Stock, including any preferences,
conversion and other rights, voting powers, restrictions, limitations as to
dividends, qualifications, and terms and conditions of redemption shall be as
set forth in these Articles of Incorporation or any amendment hereto or in a
resolution or resolutions adopted by the Board of Directors and, to the
extent set forth in any such resolution or resolutions, such information
shall be certified to the Secretary of State of Missouri filed as required by
law from time to time prior to the issuance of any shares of such series.

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<PAGE> 2

by law, by filing certification thereto with the Secretary of State of Missouri,
to set or change the number of shares to be included in each series of Preferred
Stock and to set or change in any one or more respects the designations,
preferences, conversion or other rights, voting powers, restrictions,
limitations as to dividends, qualifications, or terms and conditions of
redemption relating to the shares of each such series. Notwithstanding the
foregoing, the Board of Directors shall not be authorized to change the right
of the Class A Voting Common Stock of the Corporation to vote one vote per
share on all matters submitted for stockholder action. The authority of the
Board of Directors with respect to each series of Preferred Stock shall
include, but not be limited to, setting or changing the following:

(a) the distinctive serial designation of such series
and the number of shares constituting such series (provided that the
aggregate number of shares constituting all series of Preferred
Stock shall not exceed twenty-three million seven hundred ninety
thousand (23,790,000) shares).

(b) the annual dividend rate, if any, on shares of such
series, whether and the extent to which dividends shall be
cumulative or non-cumulative, the relative rights of priority, if
any, of payment of any dividends, and the time at which, and the
terms and conditions on which, any dividends shall be paid;

(c) whether the shares of such series shall be
redeemable or purchasable and, if so, the terms and conditions of
such redemption or purchase, including the date or dates upon and
after which such shares shall be redeemable or purchasable, and the
amount per share payable in case of redemption or purchase, which
amount may vary under different conditions and at different
redemption or purchase dates;

(d) the obligation, if any, of the Corporation to retire
shares of such series pursuant to a sinking fund and the terms and
conditions of any such sinking fund;

(e) whether shares of such series shall be convertible
into, or exchangeable for, shares of stock of any other class or
classes and, if so, the terms and conditions of such conversion or
exchange, including the price or prices or the rate or rates of
conversion or exchange and the terms of adjustment, if any;

(f) whether the shares of such series shall have voting
rights, in addition to the voting rights provided by law, and, if
so, the terms of such voting rights;

(g) the rights of the holders of shares of such series
in the event of voluntary or involuntary liquidation, dissolution or
winding up of the Corporation, and the relative rights of priority,
if any, of such holders with respect thereto; and

(h) any other relative rights, powers, preferences,
qualifications, limitations or restrictions thereof relating to such
series.

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<PAGE> 3

3. The shares of Preferred Stock of any one series shall be
identical with each other in all respects except as to the dates from and
after which dividends thereon shall cumulate, if cumulative.

B. Series A Convertible Preferred Stock.

A total of 3,190,000 shares of the Company's Preferred Stock, par
value One Cent ($.01) per share, designated as "Series A Convertible
Preferred Stock" ("Series A Preferred Stock"), are hereby authorized for
issuance with the voting powers, preferences and other special rights, and
qualifications, limitations and restrictions thereof set forth below.

1. Designation and Amount. The number of shares of Series A
----------------------
Preferred Stock to be authorized for issuance shall be 3,190,000.

2. Dividends and Distributions. The holders of shares of
---------------------------
Series A Preferred Stock shall be entitled to receive out of funds legally
available for the purpose, quarterly dividends payable in cash on the first
business day of January, April, July and October in each year (each such date
being referred to herein as a "Quarterly Dividend Payment Date"), commencing
on the first Quarterly Dividend Payment Date after the issuance of the Series
A Preferred Stock, in an amount per share (rounded to the nearest cent) equal
to the Applicable Dividend Rate multiplied by the Liquidation Value. The
Applicable Dividend Rate shall be the ninety (90) day United States Treasury
Bill rate (as published in The Wall Street Journal in the "Ask Yield" column)
-----------------------
in effect on the previous Quarterly Dividend Payment Date. Such dividends
shall be cumulative and shall accrue from the relevant date of issue whether
or not there are any funds of the Company legally available for the payment
of dividends.

3. Voting Rights. The Series A Preferred Stock shall carry no
-------------
voting rights.

4. Conversion.
----------

a. Conversion Events.
-----------------

(1) At any time and from time to time, any holder
of Series A Preferred Stock may convert all or any portion of the
Series A Preferred Stock (including any fraction of a share) held
by such holder into the number of shares of the Company's
non-voting common stock, par value $.01 per share (the "Non-Voting
Common Stock"), computed by dividing the number of shares of Series
A Preferred Stock to be converted by the Conversion Rate (as
defined below) then in effect.

(2) If during the three-year period ending on the
third anniversary of the issuance of the Series A Preferred Stock,
the Company sells any capital stock pursuant to an initial public
offering (an "IPO") of any class of the Company's capital stock in
which the common stock equivalent per share price at which such
stock is sold is equal to or greater than the Liquidation Value
multiplied by the Conversion Rate (a "Qualified IPO"), then each
share of the Series A Preferred Stock shall, immediately prior

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<PAGE> 4

to the consummation of such Qualified IPO, automatically convert to a
number (or fraction) of shares of the Company's voting common
stock, par value $.01 per share (the "Voting Common Stock"), equal
to one (1) divided by the Conversion Rate then in effect.

b. Conversion Rate. The Conversion Rate shall equal one
---------------
(1) divided by the number of shares of Non-Voting Common Stock or Voting
Common Stock (the "Conversion Stock") into which each share of Series A
Preferred Stock is convertible. The initial Conversion Rate shall be one
(1), entitling a holder of Series A Preferred Stock to one share of
Non-Voting Common Stock or Voting Common Stock, as the case may be, for each
share of Series A Preferred Stock. In order to prevent certain types of
dilution of the conversion rights granted under this Section 4, the
Conversion Rate shall be subject to adjustment from time to time as follows:

(1) In the event that there is any change in the
number of shares of Conversion Stock outstanding by reason of an
Extraordinary Conversion Stock Event (defined below), the Conversion
Rate in effect immediately prior thereto shall be adjusted so that
the holder of a share of Series A Preferred Stock surrendered for
conversion after the record date fixing stockholders to be affected
by such event shall be entitled to receive, upon conversion, the
number of shares of Conversion Stock which such holder would have
owned or have been entitled to receive after the happening of such
event had such share of Series A Preferred Stock been converted
immediately prior to the record or other effective date of such
change in the Company's capitalization. An "Extraordinary Conversion
Stock Event" shall mean (i) the issue of additional shares of
Conversion Stock as a dividend or other non-cash distribution on
outstanding shares of Conversion Stock, (ii) a subdivision of
outstanding shares of Conversion Stock into a greater number of
shares of Conversion Stock, or (iii) a combination or reverse stock
split of outstanding shares of Conversion Stock into a smaller number
of shares of Conversion Stock.

(2) In the event of an issuance of Conversion
Stock by the Company (whether such sale is in consideration for cash
or securities) to General American Holding Company ("GAHC") or an
affiliate of GAHC at a price per share less than the Liquidation
Value multiplied by the Conversion Rate then in effect, unless
approved by the holders of 75% of the Series A Preferred Stock
outstanding, the Conversion Rate shall be adjusted so as to provide
that each holder of Series A Preferred Stock will maintain, upon
conversion of such Series A Preferred Stock, the same percentage
equity interest in the Company on a fully diluted basis as such
holder had prior to such issuance of Conversion Stock to GAHC or an
affiliate of GAHC.

(3) If the Conversion Stock shall be changed into
the same or different number of shares of any class or classes of
capital stock, whether by capital reorganization, recapitalization,
reclassification or otherwise (other than a subdivision or
combination of shares or stock dividend provided for elsewhere in
this Section 4(b)) or in the event of a merger or consolidation of
the Company with or into another corporation or the sale of
substantially all of the Company's assets to any other person, then
and in each such event the holders of the Series A Preferred Stock
shall have the right thereafter to

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<PAGE> 5

convert such shares into the kind and amount of shares of capital stock
and other securities and property receivable upon such reorganization,
recapitalization, reclassification, merger, consolidation, sale or other
change by the holders of the number of shares of Conversion Stock into
which such shares of Series A Preferred Stock might have been converted
immediately prior to such reorganization, recapitalization,
reclassification, merger, consolidation, sale or change.

c. Conversion Procedure.
--------------------

(1) Each optional conversion of Series A Preferred
Stock shall be deemed to have been effected as of the close of
business on the date on which the certificate or certificates
representing the Series A Preferred Stock to be converted are
surrendered at the principal office of the Company. At such time
as such conversion has been effected, the rights of the holder of
such Series A Preferred Stock as such holder with respect to such
shares of Series A Preferred Stock shall cease and such holder
shall be deemed to have become the holder of record of the shares
of Conversion Stock represented thereby; provided, however, that if
such holder is entitled to accrued dividends with respect to the
shares of Series A Preferred Stock converted that have not been
paid prior to such conversion, such holder's entitlement thereto
shall not be affected by such conversion and the Company shall pay
such dividends to the converting holder as soon thereafter as funds
of the Company are legally available for such payment.

(2) Upon the occurrence of the conversion event
occasioned by the occurrence of a Qualified IPO, (i) the holders of
the Series A Preferred Stock shall, upon notice from the Company,
surrender the certificates representing such shares at the office
of the Company or of its transfer agent. Thereupon, there shall be
issued and delivered to such holder a certificate or certificates
for the number of shares of Conversion Stock into which the shares
of Series A Preferred Stock so surrendered were convertible on the
date on which such conversion occurred. The Company shall not be
obligated to issue such certificates unless certificates evidencing
the shares of Series A Preferred Stock being converted are either
delivered to the Company or any such transfer agent, or the holder
notifies the Company that such certificates have been lost, stolen
or destroyed and executes an agreement satisfactory to the Company
to indemnify the Company from any loss incurred by it in connection
therewith.

(3) As soon as possible after a conversion has been
effected (but in any event within five business days after the
surrender of the shares of Series A Preferred Stock to be
converted), the Company shall deliver to the converting holder a
certificate or certificates representing the number of shares of
Conversion Stock issuable by reason of such conversion.

(4) The issuance of certificates for shares of
Conversion Stock upon conversion of Series A Preferred Stock shall
be made without charge to the holders of such Series A Preferred
Stock for any issuance tax in respect thereof or other cost
incurred by the Company in connection with such conversion and the
related issuance of shares of

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<PAGE> 6
Conversion Stock. Upon conversion of each share of Series A Preferred
Stock, the Company shall take all such actions as are necessary in order
to insure that the Conversion Stock issuable with respect to such
conversion shall be validly issued, fully paid and nonassessable.

5. Preemptive Rights.
-----------------

a. If the Company issues, sells, transfers or otherwise
disposes of any shares of the capital stock of the Company of any class or
series (collectively, the "Equity Securities") for cash in a transaction not
described in Section 4(b)(2) (a "Third Party Sale"), each holder of Series A
Preferred Stock (an "Eligible Investor") shall have an option to purchase, on
the terms and conditions (including price) of the Third Party Sale, up to
that amount of the Equity Securities sold in such Third Party Sale as would
maintain such Eligible Investor's percentage equity interest in the Company
on a fully diluted basis.

b. No less than twenty (20) days prior to the consummation
of a Third Party Sale, the Company shall notify each Eligible Investor of the
Third Party Sale and the terms and conditions thereof. Within fifteen (15)
days after receipt of such notice, each Eligible Investor shall notify the
Company as to the amount of the Equity Securities such Eligible Investor
desires to purchase. If an Eligible Investor gives the Company timely notice
that the Eligible Investor desires to purchase any of the Equity Securities
offered by the Company, then payment for the Equity Securities shall be by
bank cashier's or certified check or wire transfer against delivery of the
securities at the executive offices of the Company at the time of the
scheduled closing therefor. Each Eligible Investor shall cooperate with the
Company in taking such actions as may be necessary or desirable in order to
ensure that the sale of Equity Securities to such Eligible Investor complies
with all applicable federal and state securities laws. In no event will the
Company be required to sell Equity Securities to an Eligible Investor if, in
the Company's reasonable opinion, such sale would violate federal or state
securities or any other applicable law, rule or regulation.

6. Certain Restrictions.
--------------------

a. The Company shall not, without the prior written consent
of the holders of a majority of the Series A Preferred Stock, increase the
authorized number of shares of Series A Preferred Stock or issue any
securities of the Company ranking on a parity with or senior in priority to
the Series A Preferred Stock.

b. Whenever quarterly dividends or other dividends or
distributions payable on the Series A Preferred Stock as provided in Section
2 are in arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series A Preferred Stock
outstanding shall have been paid in full, the Company shall not:

(1) declare or pay dividends on or make any other
distributions on any shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the
Series A Preferred Stock; or

<PAGE> 7

(2) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity (either
as to dividends or upon liquidation, dissolution or winding up)
with the Series A Preferred Stock, except dividends paid ratably
on the Series A Preferred Stock and all such parity stock on
which dividends are payable or in arrears in proportion to the
total amounts to which the holders of all such shares are then
entitled.

c. In the event that in any given quarter the Board of
Directors of the Company shall declare a dividend payable upon the then
outstanding shares of stock ranking junior to the Series A Preferred Stock
("Junior Securities") (other than a stock dividend on the Conversion Stock
distributed in the form of additional shares of Conversion Stock) in an
amount which exceeds the amount per share on an as converted basis of
dividends required pursuant to Section 2 hereof to be paid in such quarter
with respect to the Preferred Stock (such amount being the "Excess
Dividend"), each holder of shares of Series A Preferred Stock shall be
entitled to participate in such Excess Dividend in an amount equal to the
amount of dividends as would be declared payable on the largest number of
whole shares of Conversion Stock into which the shares of Series A Preferred
Stock held by such holder could be converted pursuant hereto, such number
determined as of the record date for the determination of holders of stock
ranking junior to the Series A Preferred Stock entitled to receive such
Excess Dividend.

d. The Company agrees not to enter, or permit any of its
subsidiaries to enter, into any transaction, including, without limitation,
any loan or extension of credit, guarantee, management contract or royalty
agreement, deferred or contingent compensation agreement, consulting or other
agreement with any affiliate except in the ordinary course of and pursuant to
the reasonable requirements of the Company's or such subsidiary's business
and upon fair and reasonable terms no less favorable to the Company or such
subsidiary than would obtain in a comparable arm's length transaction with a
person not an affiliate. The promissory notes dated August 11, 1995 made
payable to General American Life Insurance Company by the Company and Conning
Corporation shall not be deemed to violate the provisions of this paragraph.

e. The Company agrees at all times that it will not, by
any amendment of the Company's articles of incorporation, or through any
consolidation, merger, reorganization, transfer of assets, dissolution, issue
or sale of securities or any other voluntary action, seek to avoid the
observance or performance hereof, but will at all times take such actions as
are necessary or appropriate in order to protect the rights of the holders of
the Series A Preferred Stock hereunder against impairment.

f. Nothing contained herein shall be deemed to prohibit
the Company from issuing shares of its capital stock in exchange for non-cash
consideration, and such issuance shall not trigger the preemptive rights
provided in Section 5 hereof.

7. Reacquired Shares. Any shares of Series A Preferred Stock
-----------------
purchased or otherwise acquired by the Company in any manner whatsoever shall
be retired and canceled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued shares of
Preferred Stock and may be reissued as part of a new series of

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<PAGE> 8

Preferred Stock to be created by resolution or resolutions of the Board of
Directors, subject to the conditions and restrictions on issuance set forth
herein.

8. Liquidation, Dissolution, or Winding Up. Upon any
---------------------------------------
liquidation, dissolution or winding up of the Company, each holder of Series
A Preferred Stock shall be entitled to be paid per share of Series A
Preferred Stock, before any distribution or payment is made upon any Junior
Securities, $5.33 plus accrued but unpaid dividends (the "Liquidation
Value"), and the holders of Series A Preferred Stock shall not be entitled to
any further payment. If upon any such liquidation, dissolution or winding up
of the Company, the Company's assets to be distributed among the holders of
the Series A Preferred Stock are insufficient to permit payment to such
holders of the aggregate amount which they are entitled to be paid, then the
entire assets to be distributed shall be distributed ratably among such
holders based upon the aggregate Liquidation Value of the Series A Preferred
Stock held by each such holder. Neither the consolidation or merger of the
Company into or with any other entity or entities, nor the sale or transfer
by the Company of all or any part of its assets, nor the reduction of the
capital stock of the Company, shall be deemed to be a liquidation,
dissolution or winding up of the Company within the meaning of this Section.

9. Registration of Transfer. The Company shall keep at its
------------------------
principal office a register for the registration of Series A Preferred Stock.
Upon the surrender of any certificate representing Series A Preferred Stock
at such place, the Company shall, at the request of the record holder of such
certificate, execute and deliver (at the Company's expense) a new certificate
or certificates in exchange therefor representing in the aggregate the number
of shares of Series A Preferred Stock represented by the surrendered
certificate. Each such new certificate shall be registered in such name and
shall represent such number of shares of Series A Preferred Stock as is
requested by the holder of the surrendered certificate and shall be
substantially identical in form to the surrendered certificate, and dividends
shall accrue on the Series A Preferred Stock represented by such new
certificate from the date to which dividends have been fully paid on such
Series A Preferred Stock represented by the surrendered certificate.

10. Replacement.
-----------

Upon receipt of evidence reasonably satisfactory to the
Company (an affidavit of the registered holder shall be satisfactory) of the
ownership and the loss, theft, destruction or mutilation of any certificate
evidencing shares of Series A Preferred Stock, and in the case of any such
loss, theft or destruction, upon receipt of indemnity reasonably satisfactory
to the Company, or, in the case of any such mutilation, upon surrender of
such certificate, the Company shall (at its expense) execute and deliver in
lieu of such certificate a new certificate of like kind representing the
number of shares of such class represented by such lost, stolen, destroyed or
mutilated certificate and dated the date of such lost, stolen, destroyed or
mutilated certificate, and dividends shall accrue on the Series A Preferred
Stock represented by such new certificate from the date to which dividends
have been fully paid on such lost, stolen, destroyed or mutilated
certificate.

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<PAGE> 9

C. Series B Convertible Preferred Stock.

A total of 600,000 shares of the Company's Preferred Stock, par
value One Cent ($.01) per share, designated as "Series B Convertible
Preferred Stock" ("Series B Preferred Stock"), are hereby authorized for
issuance with the voting powers, preferences and other special rights, and
qualifications, limitations and restrictions thereof set forth below.

1. Designation; Amount and Rank.
----------------------------

a. The number of shares of Series B Preferred Stock to
be authorized for issuance shall be 600,000.

b. The Series B Preferred Stock, with respect to
dividend rights and rights upon liquidation, dissolution or winding up of the
Company, shall rank senior to the Company's non-voting common stock, par
value $.01 per share (the "Non-Voting Common Stock") and the Company's voting
common stock, par value $.01 per share (the "Voting Common Stock"), and to
all other classes and series of equity securities of the Company, except for
the Series A Convertible Preferred Stock, par value $.01 per share ("Series A
Preferred Stock"), with which the Series B Preferred Stock shall be of equal
rank.

2. Dividends and Distributions. The holders of shares of
---------------------------
Series B Preferred Stock shall be entitled to receive out of funds legally
available for the purpose, quarterly dividends payable in cash on the first
business day of January, April, July and October in each year (each such date
being referred to herein as a "Quarterly Dividend Payment Date"), commencing
on the first Quarterly Dividend Payment Date after the issuance of the Series
B Preferred Stock, in an amount per share (rounded to the nearest cent) equal
to five percent (5%) per annum multiplied by the Liquidation Value. Such
dividends shall be cumulative and shall accrue from the relevant date of
issue whether or not there are any funds of the Company legally available for
the payment of dividends.

3. Voting Rights. The Series B Preferred Stock shall carry no
-------------
voting rights.

4. Conversion.
----------

a. Conversion Right. At any time and from time to time,
----------------
any holder of Series B Preferred Stock may convert all or any portion of the
Series B Preferred Stock (including any fraction of a share) held by such
holder into a number of shares of the Company's Non-Voting Common Stock
computed by dividing the number of shares of Series B Preferred Stock to be
converted by the Conversion Rate (as defined below) then in effect. To
convert shares of Series B Preferred Stock pursuant to this Section 4(a), the
holder of such shares shall pay the Company an amount equal to the applicable
Conversion Price (as defined below) multiplied by the number of shares of
Series B Preferred Stock to be converted.

b. Conversion Rate. The Conversion Rate shall equal one
---------------
(1) divided by the number of shares of Non-Voting Common Stock (the
"Conversion Stock") into which each

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<PAGE> 10

share of Series B Preferred Stock is convertible. The initial Conversion Rate
shall be one (1), entitling a holder of Series B Preferred Stock to one share of
Non-Voting Common Stock for each share of Series B Preferred Stock. In order to
prevent certain types of dilution of the conversion rights granted under this
Section 4, the Conversion Rate shall be subject to adjustment from time to time
as follows:

(1) In the event that there is any change in
the number of shares of Conversion Stock outstanding by reason of
an Extraordinary Conversion Stock Event (defined below), the
Conversion Rate in effect immediately prior thereto shall be
adjusted so that the holder of a share of Series B Preferred Stock
surrendered for conversion after the record date fixing
stockholders to be affected by such event shall be entitled to
receive, upon conversion, the number of shares of Conversion Stock
which such holder would have owned or have been entitled to
receive after the happening of such event had such share of Series
B Preferred Stock been converted immediately prior to the record
or other effective date of such change in the Company's
capitalization. An "Extraordinary Conversion Stock Event" shall
mean (i) the issue of additional shares of Conversion Stock as a
dividend or other non-cash distribution on outstanding shares of
Conversion Stock, (ii) a subdivision of outstanding shares of
Conversion Stock into a greater number of shares of Conversion
Stock, or (iii) a combination or reverse stock split of
outstanding shares of Conversion Stock into a smaller number of
shares of Conversion Stock.

(2) If the Conversion Stock shall be changed
into the same or different number of shares of any class or
classes of capital stock, whether by capital reorganization,
recapitalization, reclassification or otherwise (other than a
subdivision or combination of shares or stock dividend provided
for elsewhere in this Section 4(b)) or in the event of a merger or
consolidation of the Company with or into another corporation or
the sale of substantially all of the Company's assets to any other
person, then and in each such event the holders of the Series B
Preferred Stock shall have the right thereafter to convert such
shares into the kind and amount of shares of capital stock and
other securities and property receivable upon such reorganization,
recapitalization, reclassification, merger, consolidation, sale or
other change by the holders of the number of shares of Conversion
Stock into which such shares of Series B Preferred Stock might
have been converted immediately prior to such reorganization,
recapitalization, reclassification, merger, consolidation, sale or
change.

c. Conversion Procedure.
--------------------

(1) Each conversion of Series B Preferred
Stock shall be deemed to have been effected as of the close of
business on the date on which the certificate or certificates
representing the Series B Preferred Stock to be converted are
surrendered at the principal office of the Company, together with
payment of the Conversion Price therefor. At such time as such
conversion has been effected, the rights of the holder of such
Series B Preferred Stock as such holder with respect to such
shares of Series B Preferred Stock shall cease and such holder
shall be deemed to have become the holder of record of the shares
of Conversion Stock represented thereby; provided, however, that
if such holder is entitled to

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<PAGE> 11

accrued dividends with respect to the shares of Series B Preferred Stock
converted that have not been paid prior to such conversion, such holder's
entitlement thereto shall not be affected by such conversion and the
Company shall pay such dividends to the converting holder as soon
thereafter as funds of the Company are legally available for such
payment.

(2) As soon as possible after a conversion has
been effected (but in any event within five business days after
the surrender of the shares of Series B Preferred Stock to be
converted and payment of the Conversion Price therefor), the
Company shall deliver to the converting holder a certificate or
certificates representing the number of shares of Conversion Stock
issuable by reason of such conversion.

(3) The issuance of certificates for shares of
Conversion Stock upon conversion of Series B Preferred Stock shall
be made without charge to the holders of such Series B Preferred
Stock for any issuance tax in respect thereof or other cost
incurred by the Company in connection with such conversion and the
related issuance of shares of Conversion Stock. Upon conversion
of each share of Series B Preferred Stock, the Company shall take
all such actions as are necessary in order to insure that the
Conversion Stock issuable with respect to such conversion shall be
validly issued, fully paid and nonassessable.

d. Conversion Price. The Conversion Price shall be
----------------
$1.67 per share of Series B Preferred Stock; provided, however, that in the
event of an initial public offering of any class of the Company's capital
stock (an "IPO"), if the price per share (less underwriting discounts and
commissions) at which the Company stock is sold in the IPO (the "IPO Price")
is less than $7.00 per share, then the Conversion Price shall equal the IPO
Price less $5.33. In the event the Conversion Rate is adjusted pursuant to
Section 4(b), the Conversion Price and this Section 4(d) shall also be
adjusted accordingly.

5. Certain Restrictions.
--------------------

e. The Company shall not, without the prior written
consent of the holders of a majority of the Series B Preferred Stock,
increase the authorized number of shares of Series B Preferred Stock or issue
any securities of the Company ranking on a parity with or senior in priority
to the Series B Preferred Stock.

f. Whenever quarterly dividends or other dividends or
distributions payable on the Series B Preferred Stock as provided in Section
2 are in arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series B Preferred Stock
outstanding shall have been paid in full, the Company shall not:

(1) declare or pay dividends on or make any
other distributions on any shares of stock ranking junior (either
as to dividends or upon liquidation, dissolution or winding up) to
the Series B Preferred Stock; or

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<PAGE> 12

(2) declare or pay dividends on or make any
other distributions on any shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or
winding up) with the Series B Preferred Stock, except dividends
paid ratably on the Series B Preferred Stock and all such parity
stock on which dividends are payable or in arrears in proportion
to the total amounts to which the holders of all such shares are
then entitled.

g. In the event that in any given quarter the Board of
Directors of the Company shall declare a dividend payable upon the then
outstanding shares of stock ranking junior to the Series B Preferred Stock
("Junior Securities") (other than a stock dividend on the Conversion Stock
distributed in the form of additional shares of Conversion Stock) in an
amount which exceeds the amount per share on an as converted basis of
dividends required pursuant to Section 2 hereof to be paid in such quarter
with respect to the Series B Preferred Stock (such amount being the "Excess
Dividend"), each holder of shares of Series B Preferred Stock shall be
entitled to participate in such Excess Dividend in an amount equal to the
amount of dividends as would be declared payable on the largest number of
whole shares of Conversion Stock into which the shares of Series B Preferred
Stock held by such holder could be converted pursuant hereto, such number
determined as of the record date for the determination of holders of stock
ranking junior to the Series B Preferred Stock entitled to receive such
Excess Dividend.

h. The Company agrees not to enter, or permit any of its
subsidiaries to enter, into any transaction, including, without limitation,
any loan or extension of credit, guarantee, management contract or royalty
agreement, deferred or contingent compensation agreement, consulting or other
agreement with any affiliate except in the ordinary course of and pursuant to
the reasonable requirements of the Company's or such subsidiary's business
and upon fair and reasonable terms no less favorable to the Company or such
subsidiary than would obtain in a comparable arm's length transaction with a
person not an affiliate.

i. The Company agrees at all times that it will not, by
any amendment of the Company's articles of incorporation, or through any
consolidation, merger, reorganization, transfer of assets, dissolution, issue
or sale of securities or any other voluntary action, seek to avoid the
observance or performance hereof, but will at all times take such actions as
are necessary or appropriate in order to protect the rights of the holders of
the Series B Preferred Stock hereunder against impairment.

j. Nothing contained herein shall be deemed to prohibit
the Company from issuing shares of its capital stock in exchange for non-cash
consideration.

6. Reacquired Shares. Any shares of Series B Preferred Stock
-----------------
purchased or otherwise acquired by the Company in any manner whatsoever shall
be retired and canceled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued shares of
Preferred Stock and may be reissued as part of a new series of Preferred
Stock to be created by resolution or resolutions of the Board of Directors,
subject to the conditions and restrictions on issuance set forth herein.

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<PAGE> 13

7. Liquidation, Dissolution, or Winding Up. Upon any
---------------------------------------
liquidation, dissolution or winding up of the Company, each holder of Series
B Preferred Stock shall be entitled to be paid per share of Series B
Preferred Stock, before any distribution or payment is made upon any Junior
Securities, $5.33 plus accrued but unpaid dividends (the "Liquidation
Value"), and the holders of Series B Preferred Stock shall not be entitled to
any further payment. If upon any such liquidation, dissolution or winding up
of the Company, the Company's assets to be distributed among the holders of
the Company's Series A Preferred Stock and the Series B Preferred Stock are
insufficient to permit payment to such holders of the aggregate amount which
they are entitled to be paid, then the entire assets to be distributed shall
be distributed ratably among such holders in accordance with the respective
amounts which they are entitled to be paid. Neither the consolidation or
merger of the Company into or with any other entity or entities, nor the sale
or transfer by the Company of all or any part of its assets, nor the
reduction of the capital stock of the Company, shall be deemed to be a
liquidation, dissolution or winding up of the Company within the meaning of
this Section.

8. Registration of Transfer. The Company shall keep at its
------------------------
principal office a register for the registration of Series B Preferred Stock.
Upon the surrender of any certificate representing Series B Preferred Stock
at such place, the Company shall, at the request of the record holder of such
certificate, execute and deliver (at the Company's expense) a new certificate
or certificates in exchange therefor representing in the aggregate the number
of shares of Series B Preferred Stock represented by the surrendered
certificate. Each such new certificate shall be registered in such name and
shall represent such number of shares of Series B Preferred Stock as is
requested by the holder of the surrendered certificate and shall be
substantially identical in form to the surrendered certificate, and dividends
shall accrue on the Series B Preferred Stock represented by such new
certificate from the date to which dividends have been fully paid on such
Series B Preferred Stock represented by the surrendered certificate.

9. Replacement. Upon receipt of evidence reasonably
-----------
satisfactory to the Company (an affidavit of the registered holder shall be
satisfactory) of the ownership and the loss, theft, destruction or mutilation
of any certificate evidencing shares of Series B Preferred Stock, and in the
case of any such loss, theft or destruction, upon receipt of indemnity
reasonably satisfactory to the Company, or, in the case of any such
mutilation, upon surrender of such certificate, the Company shall (at its
expense) execute and deliver in lieu of such certificate a new certificate of
like kind representing the number of shares of such class represented by such
lost, stolen, destroyed or mutilated certificate and dated the date of such
lost, stolen, destroyed or mutilated certificate, and dividends shall accrue
on the Series B Preferred Stock represented by such new certificate from the
date to which dividends have been fully paid on such lost, stolen, destroyed
or mutilated certificate.

D. Common Stock.

1. Subject to Article Four hereof or as otherwise provided by
the GBCL, each holder of the Class A Voting Common Stock shall be entitled to
one vote per share of Class A Voting Common Stock on all matters to be voted
on by the shareholders. The Class A Voting Common Stock and the Class B
Non-Voting Common Stock shall be identical in all respects except that the
holders of Class B Non-Voting Common Stock shall have no voting power for any
purpose whatsoever unless and until (a) the occurrence of a Qualified IPO (as
such term is defined

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<PAGE> 14

pursuant to the terms of the Corporation's Series A Convertible Preferred
Stock), in which event each of the then outstanding shares of the Class B
Non-Voting Common Stock shall become one share of Class A Voting Common Stock,
or (b) a holder of Class B Non-Voting Common Stock chooses to sell such holder's
shares of Class B Non-Voting Common Stock and the Corporation elects not to
purchase such shares pursuant to a right of first refusal granted the
Corporation in any then-existing agreement among the shareholders of the
Corporation, in which event each of the shares proposed to be sold by such
holder that is actually sold shall become one share of Class A Voting Common
Stock.

2. Except as specifically provided herein, all preemptive
rights of shareholders are hereby denied, so that no stock or other security
of the Corporation shall carry with it and no holder or owner of any share or
shares of stock or other security or securities of the Corporation shall have
any preferential or preemptive right to acquire additional shares of stock or
of any other security of the Corporation.

3. All cumulative voting rights are hereby denied, so that no
stock or other security of the Corporation shall carry with it and no holder
or owner of any share or shares of such stock or security shall have any
right to cumulative voting in the election of directors or for any other
purpose.

4. The foregoing provisions are not intended to modify or
prohibit any provisions of any voting trust or agreement between or among
holders or owners of shares of stock or other securities of the Corporation.

ARTICLE FOUR - RESTRICTIONS ON VOTING STOCK

The following restrictions apply to the Voting Stock (as such
term is defined below) of the Corporation:

A. Certain Definitions.

For purposes of this Section, the following words have the
meanings indicated:

1. "Affiliate" means, with respect to any Person, any other
Person that directly, or indirectly through one or more intermediaries,
controls, or is controlled by or is under common control with, such Person.
The term "control" (including the terms "controlling," "controlled by" and
"under common control with") means the possession, directly or indirectly, of
the power to direct or cause the direction of the management and policies of
a Person, whether through the ownership of voting securities, by contract or
otherwise.

2. "Associate" means, with respect to any Person, (i) any
other Person (other than the Corporation or a Subsidiary of which a majority
of each class of equity securities is owned by the Corporation) of which such
Person is an officer, director, trustee or partner or is directly or
indirectly the beneficial owner of ten percent (10%) or more of any class of
equity securities; (ii) any trust or other estate in which such Person serves
as a trustee or in a similar fiduciary capacity;

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<PAGE> 15

(iii) any relative or spouse of such Person, or any relative of such spouse, who
has the same home as such Person; or (iv) any investment company registered
under the Investment Company Act of 1940, as amended, for which such Person or
any Affiliate of such Person serves as investment adviser.

3. A Person shall be deemed to "own" any shares of Voting
Stock:

(i) that such Person beneficially owns directly or
indirectly, whether or not of record; or

(ii) that such Person has the right to acquire pursuant
to any agreement, arrangement or understanding or upon exercise of
conversion rights, warrants or options or otherwise, whether or not
conditional; or

(iii) that are beneficially owned, directly or
indirectly (including shares deemed to be owned through application
of clause (ii) above), whether or not of record, by an Affiliate or
Associate of such Person; or

(iv) that are beneficially owned, directly or
indirectly, whether or not of record, by any other Person (including
any shares which such other Person has the right to acquire pursuant
to any agreement, arrangement or understanding or upon exercise of
conversion rights, warrants or options or otherwise, whether or not
conditional) with whom such Person has any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting or
disposing of Voting Stock; provided, however, that (A) directors,
-------- -------
officers and employees of the Corporation shall not be deemed to
have any such agreement, arrangement or understanding solely on the
basis of their status, or actions taken in their capacities, as
directors, officers or employees of the Corporation or any
Affiliates of the Corporation, and (B) a Person shall not be deemed
the owner of or to own any shares of Voting Stock solely because (x)
such shares of Voting Stock have been tendered pursuant to a tender
or exchange offer made by such Person or any of such Person's
Affiliates or Associates until such tendered shares of Voting Stock
are accepted for payment or exchange or (y) such Person or any of
such Person's Affiliates or Associates has or shares the power to
vote or direct the voting of such shares of Voting Stock pursuant to
a revocable proxy given in response to a public proxy or consent
solicitation made to more than ten (10) holders of shares of Voting
Stock and pursuant to, and in accordance with, applicable rules and
regulations under the Exchange Act, except if such power (or
arrangements relating thereto) is then reportable under Item 6 of
Schedule 13D under the Exchange Act (or any similar provision of a
comparable or successor report).

The outstanding shares of capital stock of the Corporation shall
include those shares deemed owned through the application of clauses (ii) and
(iii) above, but shall not include any other shares that may be issuable
pursuant to any agreement, arrangement or understanding or upon exercise of
conversion rights, warrants, options or otherwise, whether or not
conditional.

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<PAGE> 16

For all purposes hereof "beneficial" ownership, with respect to
any securities, shall include, without limitation, (i) the power to vote, or
direct the voting of, such securities or (ii) the power to exercise
investment discretion over such securities, including the power to dispose,
or to direct the disposition, of such securities. Furthermore, a Person
shall be deemed to own "beneficially" any securities that such Person owns
beneficially for purposes of Sections 13(d) of the Exchange Act or any rules
and regulations promulgated thereunder, as in effect from time to time (or
any similar successor provisions of law).

4. "Exchange Act" means the Securities Exchange Act of 1934,
as amended, or any successor statute thereto.

5. "Group", with respect to any Person, shall include:

(i) such Person;

(ii) any Affiliates and Associates of such Person; and

(iii) those additional Persons that, together with
such Person, jointly file a statement of beneficial ownership with
respect to securities of the Corporation pursuant to Section 13(d)
of the Exchange Act or any successor provision, irrespective of
any disclaimers of beneficial ownership.

6. "Person" means any individual, corporation, association,
partnership, joint venture, trust, organization, business, government or any
government agency or political subdivision thereof or any other entity.

7. "Voting Stock" means all outstanding shares of capital
stock of the Corporation entitled to vote in the election of directors; and
each reference to a portion of shares of Voting Stock shall refer to such
proportion of the votes entitled to be cast by such shares.

8. "Subsidiary" means any Person of which a majority of any
class of equity security is owned, directly or indirectly, by the
Corporation; provided, however, that for the purposes of Section D of this
-------- -------
Article Four, the term "Subsidiary" shall mean only a Person of which a
majority of each class of equity security is owned, directly or indirectly,
by the Corporation.

B. Limitation on Entitlement to Vote Applicable to Certain
Stockholders.

With respect to any matter submitted to a vote of the holders of
the Voting Stock at any meeting of such holders or any matter upon which the
holders of Voting Stock propose or purport to take action by written consent
without a meeting: (i) no Person that owns Voting Stock may vote that number
of such shares that constitutes the Excludable Shares, if any, owned by such
Person (provided, however, that if such Person is a member of a Group, such
-------- -------
Person shall be subject to clause (ii) below rather than to this clause (i));
(ii) no Person that is a member of a Group of Persons owning Voting Shares
may vote that number of shares owned by such Person that constitutes the
Allocable Excludable Shares, if any, owned by such Person; and (iii) that
number of

16
<PAGE> 17

shares having the status of Excludable Shares (adjusted as necessary to give
effect to the provisos to the definition set forth below of Allocable Excludable
Shares) shall be excluded and deducted from the total number of shares of Voting
Stock deemed to be outstanding for purposes of determining the number of shares
of Voting Stock necessary to constitute a quorum at any such meeting or to
approve a matter submitted for shareholder approval at any such meeting or by
means of any such written consent. For purposes of this Article Four:

(a) the term "Excludable Shares" means, with respect to any
Person or Group, that number of shares of Voting Stock owned by such Person
or Group, as the case may be, that would result in such Person or Group, as
the case may be, owning more than twenty percent (20%) of the combined voting
power of the outstanding shares of Voting Stock (with the determination of
the voting power of each Person and Group owning Voting Stock being
calculated and recalculated for this purpose as often as is necessary to give
effect to the exclusion from voting and the determination of shares deemed to
be outstanding for purposes related thereto of Excludable Shares held by
other Persons or Groups); and

(b) the term "Allocable Excludable Shares" means, with
respect to each Person that is a member of a Group which owns Excludable
Shares, a number of shares owned by such Person equal to such Person's pro
rata share (based upon the number of shares of Voting Stock owned by such
Person) within such Group of the total amount of Excludable Shares owned by
such Group; provided, however, that shares that are deemed owned by two or
-------- -------
more Persons who are members of such Group as a result of attributions in
accordance with Section A.3. of this Article Four hereof shall for this
purpose be deemed to be owned by such one of such Persons which most directly
owns such shares; and provided, further, that, with respect to any Person
-------- -------
that is a member of more than one such Group, "Allocable Excludable Shares"
means the greatest number of Excludable Shares so allocated with respect to
such Person with respect to any single Group.

C. Right of Inquiry of the Corporation.

The Corporation shall have the right but not the obligation to
inquire of any Person whom the Corporation believes may own Voting Stock or
any other Person who purports to exercise voting rights with respect to any
Voting Stock, and each such Person shall have the obligation to provide such
information to the Corporation as the Corporation may reasonably request,
with respect to any matters pertinent to the operation or implementation of
this Article Four, including, without limitation, (i) the number of shares
owned by such Person, (ii) whether shares owned of record by such Person are
owned by other Persons and the identity of such other Persons and the nature
of their ownership interest, (iii) whether any Affiliates or Associates of
such Person own any Voting Stock, (iv) whether such Person is a member of a
Group of Persons owning Voting Stock, or (v) whether such Person or any of
such Person's Affiliates or Associates has any agreement, arrangement or
understanding with any other Person with respect to any Voting Stock.

D. Persons to Whom This Article Does Not Apply.

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<PAGE> 18

The provisions of Section B of this Article Four shall not apply
to (i) General American Life Insurance Company, a Missouri mutual insurance
company ("General American"), General American Holding Company, a Missouri
corporation ("Holding Company"), any Affiliate of General American or
Holding Company, or any Subsidiary, (ii) any savings, profit-sharing, stock
bonus or employee stock ownership plan or plans established by the
Corporation or a Subsidiary and qualified under Section 401(a) of the
Internal Revenue Code of 1986, as amended, or any successor provision, which
holds shares of Voting Stock on behalf of participating employees and their
beneficiaries with the right to instruct the trustee how to vote such shares
of Voting Stock with respect to all matters submitted to shareholders for
voting, or (iii) participating employees and beneficiaries under the plans
referred to in the immediately preceding clause (ii) because of their
participation in such savings, profit-sharing, stock bonus or employee
ownership plans. In addition, the provisions of Section B of this Article
Four shall not be applicable with respect to any Person or Group if the
conditions specified in either Section D.1. or D.2 below are met:

1. Approval in Advance by the Board of Directors. The board
of directors of the Corporation (the "Board of Directors") (i) has expressly
approved in advance either (A) the acquisition of outstanding shares of
Voting Stock by such Person or Group that caused such Person or Group to
become the owner of Excludable Shares, or (B) the issue or sale by the
Corporation of shares of Voting Stock to such Person or Group that caused
such effect, and (ii) in advance of such acquisition or issue or sale have
expressly determined that such provisions shall not be applicable to such
Person or Group.

2. Approval by Board of Directors. The Board of Directors has
determined that such provision shall not apply to such Person or Group.

E. Powers of the Board of Directors.

The Board of Directors shall have the power, but not the
obligation, to determine, for the purposes of this Article Four, on the basis
of information actually known to it or, in its discretion, after reasonable
inquiry, all facts necessary to determine compliance with or implementation
of this Article Four, including, without limitation, (i) the number of shares
of Voting Stock owned by any Person or Group or a member of any Group
(including, without limitation, in accordance with the first proviso to the
definitions of Excludable Shares and Allocable Excludable Shares set forth in
Section B of this Article Four), (ii) whether two or more Persons constitute
a Group, (iii) whether a Person is an Affiliate or Associate of another
Person or a member of any Group, (iv) whether a Person has an agreement,
arrangement or understanding with another Person, (v) the calculation
(including the manner of calculation) of the amount of Excludable Shares held
by any Person or Group or the Allocable Excludable Shares held by any Person
(including, without limitation, in accordance with the first proviso to the
definitions of Excludable Shares and Allocable Excludable Shares set forth in
Section B of this Article Four hereof), and (vi) any other facts which the
Board of Directors determines to be relevant. Any determinations made by the
Board of Directors pursuant to this Article Four in good faith and on the
basis of such information as was actually known by the Board of Directors and
advice as was then actually provided to the Board of Directors for such
purpose shall be conclusive and binding upon the Corporation and its
shareholders.

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<PAGE> 19

ARTICLE FIVE - INCORPORATOR

The name and place of residence of the incorporator of the
Corporation is:

Name Address
---- -------

Connie B. Walsh 454 Tree Top Lane
St. Louis, MO 63122

ARTICLE SIX - DIRECTORS

A. Number and Classification.

The number of Directors to constitute the Board of Directors is
five. Hereafter, the number of Directors shall be fixed by or in the manner
provided in the Bylaws of the Corporation, but in no event shall there be
fewer than three (3) Directors. The Directors shall be divided into three
classes, as nearly equal in number as reasonably possible, with the mode of
such classification to be provided for in the Bylaws of the Corporation.
Directors other than certain Directors constituting the existing Board of
Directors at the time of the adoption of this provision shall be elected to
hold office for a term of three years, with the term of office of one class
expiring each year. Notwithstanding the foregoing, whenever the holders of
any one or more classes or series of stock of the Corporation, other than
shares of Common Stock, shall have the right, voting separately by class or
series, to elect Directors, the election, term of office, filling of
vacancies and other features of such directorship shall be governed by the
terms of the Articles of Incorporation of the Corporation or any Certificate
of Designation thereunder applicable thereto; and such directors so elected
shall not be divided into classes pursuant to this Article Six unless
expressly provided by such terms. As used in these Articles of
Incorporation, the term "entire Board of Directors" or the "entire Board"
means the total number of Directors fixed by, or in accordance with, these
Articles of Incorporation and the Bylaws of the Corporation.

B. Removal of Directors.

Subject to the rights, if any, of the holders of any class of
capital stock of the Corporation (other than the Common Stock) then
outstanding or any limitation imposed by law, (1) any Director, or the entire
Board of Directors, may be removed from office at any time prior to the
expiration of his, her or their term of office only for cause and only by the
affirmative vote of the holders of record of outstanding shares representing
at least 85% of all of the then outstanding shares of capital stock of the
Corporation then entitled to vote generally in the election of Directors,
voting together as a single class at a special meeting of shareholders called
expressly for that purpose (such vote being in addition to any required class
or other vote); and (2) any Director may be removed from office by the
affirmative vote of a majority of the entire Board of Directors at any time
prior to the expiration of his or her term of office, as provided by law, in
the event that the Director fails to meet any qualifications stated in the
Bylaws for election as a Director or in the

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<PAGE> 20

event that the Director is in breach of any agreement between the Director and
the Corporation relating to the Director's service as a Director or employee of
the Corporation.

C. Vacancies.

Subject to the rights, if any, of the holders of any class of
capital stock of the Corporation (other than the Common Stock) then
outstanding, any vacancies in the Board of Directors which occur for any
reason prior to the expiration of the respective term of office of the class
in which the vacancy occurs, including vacancies which occur by reason of an
increase in the number of Directors or the removal of a Director, shall be
filled only by the Board of Directors, acting by the affirmative vote of a
majority of the remaining Directors then in office (although less than a
quorum).

ARTICLE SEVEN - DURATION

The duration of the Corporation is perpetual.

ARTICLE EIGHT - PURPOSES

The Corporation is formed to engage in any lawful act or activity
for which a corporation now or hereafter may be organized under the laws of
the State of Missouri.

ARTICLE NINE - AMENDMENT OF BYLAWS

The Bylaws of the Corporation may be amended, altered, changed or
repealed, and a provision or provisions inconsistent with the provisions of
the Bylaws as they may exist from time to time may be adopted, only by a
majority of the entire Board of Directors.

ARTICLE TEN - INDEMNIFICATION

A. Actions Involving Directors and Officers.

The Corporation shall indemnify each person (other than a party
plaintiff suing on his or her own behalf or in the right of the Corporation)
who at any time is serving or has served as a Director or officer of the
Corporation against any claim, liability or expense incurred as a result of
such service, or as a result of any other service on behalf of the
Corporation, or service at the request of the Corporation as a director,
officer, employee, member, or agent of another corporation, partnership,
joint venture, trust, trade or industry association, or other enterprise
(whether incorporated or unincorporated, for-profit or not-for-profit), to
the maximum extent permitted by law. Without limiting the generality of the
foregoing, the Corporation shall indemnify any such person who was or is a
party (other than a party plaintiff suing on his or her behalf or in the
right of the Corporation), or is threatened to be made a party, to any
threatened, pending or

20
<PAGE> 21

completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (including, but not limited to, an action by or in the right of
the Corporation) by reason of such service against expenses (including, without
limitation, attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him or her in connection with such action,
suit or proceeding.

B. Actions Involving Employees or Agents.

1. Permissive Indemnification. The Corporation may, if it
deems appropriate and as may be permitted by this Article Ten, indemnify any
person (other than a party plaintiff suing on his or her own behalf or in the
right of the Corporation) who at any time is serving or has served as an
employee or agent of the Corporation against any claim, liability or expense
incurred as a result of such service, or as a result of any other service on
behalf of the Corporation, or service at the request of the Corporation as a
director, officer, employee, member, or agent of another corporation,
partnership, joint venture, trust, trade or industry association, or other
enterprise (whether incorporated or unincorporated, for-profit or not-for-
profit), to the maximum extent permitted by law or to such lesser extent as
the Corporation, in its discretion, may deem appropriate. Without limiting
the generality of the foregoing, the Corporation may indemnify any such
person who was or is a party (other than a party plaintiff suing on his or
her own behalf or in the right of the Corporation), or is threatened to be
made a party, to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative
(including, but not limited to, an action by or in the right of the
Corporation) by reason of such service, against expenses (including, without
limitation, attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him or her in connection with such
action, suit or proceeding.

2. Mandatory Indemnification. To the extent that an employee
or agent of the Corporation has been successful on the merits or otherwise in
defense of any action, suit or proceeding referred to in Section B.1 of this
Article Ten, or in defense of any claim, issue or matter therein, he or she
shall be indemnified against expenses (including attorneys' fees) actually
and reasonably incurred by him or her in connection with the action, suit or
preceding.

C. Determination of Right to Indemnification in Certain
Circumstances.

Any indemnification required under Section A of this Article Ten
or authorized by the Corporation in a specific case pursuant to Section B of
this Article Ten (unless ordered by a court) shall be made by the Corporation
unless a determination is made reasonably and promptly that indemnification
of the Director, officer, employee or agent is not proper under the
circumstances because he or she has not met the applicable standard of
conduct set forth in or established pursuant to this Article Ten. Such
determination shall be made (1) by the Board of Directors by a majority vote
of a quorum consisting of Directors who were not parties to such action, suit
or proceeding, or (2) if such a quorum is not obtainable, or even if
obtainable a quorum of disinterested Directors so directs, by independent
legal counsel in a written opinion, or (3) by majority vote of the
shareholders; provided that no such determination shall preclude an action
brought in an appropriate court to challenge such determination.

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<PAGE> 22

D. Advance Payment of Expenses.

Expenses incurred by a person who is or was a Director or officer
of the Corporation in defending a civil or criminal action, suit or
proceeding shall be paid by the Corporation in advance of the final
disposition of an action, suit or proceeding, and expenses incurred by a
person who is or was an employee or agent of the Corporation in defending a
civil or criminal action, suit or proceeding may be paid by the Corporation
in advance of the final disposition of such action, suit or proceeding as
authorized by the Board of Directors, in either case upon receipt of an
undertaking by or on behalf of the Director, officer, employee or agent to
repay such amount if it shall ultimately be determined that he or she is not
entitled to be indemnified by the Corporation as authorized in or pursuant to
this Article Ten.

E. Article Ten Provisions Not Exclusive Right.

The indemnification provided by this Article Ten shall not be
deemed exclusive of any other rights to which those seeking indemnification
may be entitled, whether under the Bylaws of the Corporation or any statute,
agreement, vote of shareholders or disinterested Directors or otherwise, both
as to action in an official capacity and as to action in another capacity
while holding such office.

F. Indemnification Agreements Authorized.

Without limiting the other provisions of this Article Ten, the
Corporation is authorized from time to time, without further action by the
shareholders of the Corporation, to enter into agreements with any Director,
officer, employee or agent of the Corporation providing such rights of
indemnification as the Corporation may deem appropriate, up to the maximum
extent permitted by law. Any agreement entered into by the Corporation with
a Director may be authorized by the other Directors, and such authorization
shall not be invalid on the basis that different or similar agreements may
have been or may thereafter be entered into with other Directors.

G. Standard of Conduct.

Except as may otherwise be permitted by law, no person shall be
indemnified pursuant to this Article Ten (including without limitation
pursuant to any agreement entered into pursuant to Section F of this Article
Ten) from or on account of such person's conduct which is finally adjudged to
have been knowingly fraudulent, deliberately dishonest or willful misconduct.
The Corporation may (but need not) adopt a more restrictive standard of
conduct with respect to the indemnification of any employee or agent of the
Corporation.

H. Insurance.

The Corporation may purchase and maintain insurance on behalf of
any person who is or was a Director, officer, employee or agent of the
Corporation, or who is or was otherwise serving on behalf or at the request
of the Corporation in any capacity against any claim, liability or

22
<PAGE> 23

expense asserted against him or her and incurred by him or her in any such
capacity, or arising out of his or her status as such, whether or not the
Corporation would have the power to indemnify him or her against such liability
under the provisions of this Article Ten.

I. Certain Definitions.

For the purposes of this Article Ten:

1. Service in Representative Capacity. Any Director or
officer of the Corporation who shall serve as a director, officer or employee
of any other corporation, partnership, joint venture, trust or other
enterprise of which the Corporation, directly or indirectly, is or was the
owner of 20% or more of either the outstanding equity interests or the
outstanding voting stock (or comparable interests), shall be deemed to be so
serving at the request of the Corporation, unless the Board of Directors of
the Corporation shall determine otherwise. In all other instances where any
person shall serve as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise of which
the Corporation is or was a stockholder or creditor, or in which it is or was
otherwise interested, if it is not otherwise established that such person is
or was serving as a director, officer, employee or agent at the request of
the Corporation, the Board of Directors of the Corporation may determine
whether such service is or was at the request of the Corporation, and it
shall not be necessary to show any actual or prior request for such service.

2. Predecessor Corporations. References to a corporation
include all constituent corporations absorbed in a consolidation or merger as
well as the resulting or surviving corporation so that any person who is or
was a director, officer, employee or agent of a constituent corporation or is
or was serving at the request of a constituent corporation as a director,
officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise shall stand in the same position under the
provisions of this Article Ten with respect to the resulting or surviving
corporation as he or she would if he or she had served the resulting or
surviving corporation in the same capacity.

3. Service for Employee Benefit Plan. The term "other
enterprise" shall include, without limitation, employee benefit plans and
voting or taking action with respect to stock or other assets therein; the
term "serving at the request of the Corporation" shall include, without
limitation, any service as a director, officer, employee or agent of a
corporation which imposes duties on, or involves services by, a director,
officer, employee or agent with respect to any employee benefit plan, its
participants, or beneficiaries; and a person who acted in good faith and in a
manner he or she reasonably believed to be in the interest of the
participants and beneficiaries of an employee benefit plan shall be deemed to
have satisfied any standard of care required by or pursuant to this Article
Ten in connection with such plan; the term "fines" shall include, without
limitation, any excise taxes assessed on a person with respect to an employee
benefit plan and shall also include any damages (including treble damages)
and any other civil penalties.

23
<PAGE> 24

J. Survival.

Any indemnification rights provided pursuant to this Article Ten
shall continue as to a person who has ceased to be a Director, officer,
employee or agent and shall inure to the benefit of the heirs, executors and
administrators of such a person. Notwithstanding any other provisions in
these Articles of Incorporation, any indemnification rights arising under or
granted pursuant to this Article Ten shall survive amendment or repeal of
this Article Ten with respect to any acts or omissions occurring prior to the
effective time of such amendment or repeal and persons to whom such
indemnification rights are given shall be entitled to rely upon such
indemnification rights with respect to such acts or omissions as a binding
contract with the Corporation.

K. Liability of the Directors.

It is the intention of the Corporation to limit the personal
liability of the Directors of the Corporation, in their capacity as such,
whether to the Corporation, its shareholders or otherwise, to the fullest
extent permitted by law. Consequently, should the GBCL or any other
applicable law be amended or adopted hereafter so as to permit the
elimination or limitation of such liability, the liability of the Directors
of the Corporation shall be so eliminated or limited without the need for
amendment of these Articles or further action on the part of the shareholders
of the Corporation.

ARTICLE ELEVEN - AMENDMENT OF ARTICLES OF INCORPORATION

The Corporation reserves the right to amend, alter, change or
repeal any provision contained in these Articles of Incorporation in the
manner now or hereafter prescribed by law, and all rights and powers
conferred herein on the shareholders, Directors and officers of the
Corporation are subject to this reserved power; provided, that (in addition
to any required class or other vote) the affirmative vote of the holders of
record of outstanding shares representing at least 85% of all of the
outstanding shares of capital stock of the Corporation then entitled to vote
generally in the election of Directors, voting together as a single class,
shall be required to amend, alter, change or repeal, or adopt any provision
or provisions inconsistent with, Articles Four, Six, Nine, Ten, Twelve,
Thirteen or this Article Eleven of these Articles of Incorporation.

ARTICLE TWELVE - BUSINESS COMBINATIONS

The Corporation hereby subjects itself to and accepts the
provisions of Section 351.459 of the GBCL, provided that General American or
Holding Company or any Affiliate of General American or Holding Company or
any Subsidiary (as each of such terms is defined in Article Four hereof)
shall not be deemed to constitute "interested shareholders" for purposes of
Section 351.459.

ARTICLE THIRTEEN - CONTROL SHARE ACQUISITIONS

Section 351.407 of the GBCL shall not apply to control share
acquisitions (as defined therein) of shares of the Corporation.

<PAGE> 1

ARTICLE THREE - AUTHORIZED SHARES

A. Classes and Number of Shares

The aggregate number of shares of capital stock which the Corporation
is authorized to issue is 70,000,000 shares, consisting of 50,000,000 shares
of Common Stock, par value $0.01 per share ("Common Stock"), and 20,000,000
shares of preferred stock, par value $0.01 per share ("Preferred Stock").

The preferences, qualifications, limitations, restrictions, and the
special or relative rights, including convertible rights, if any, in respect
of the shares of each class are as follows:

B. Preferred Stock

1. Subject to the requirements of the General and Business Corporation
Law of Missouri (the "GBCL") and the provisions of these Articles of
Incorporation, the Preferred Stock may be issued from time to time by the Board
of Directors as shares of one or more series. The description of shares of each
series of Preferred Stock, including any preferences, conversion and other
rights, voting powers, restrictions, limitations as to dividends,
qualifications, and terms and conditions of redemption shall be as set forth in
these Articles of Incorporation or any amendment hereto, or in a resolution or
resolutions adopted by the Board of Directors and, to the extent set forth in
any such resolution or resolutions, such information shall be certified to the
Secretary of State of Missouri filed as required by law from time to time prior
to the issuance of any shares of such series.

2. The Board of Directors is expressly authorized, prior to issuance,
by adopting resolutions providing for the issuance of, or providing for a
change in the number of, shares of any particular series of Preferred Stock and,
if and to the extent from time to time required by law, by filing certification
thereto with the Secretary of State of Missouri, to set or change the number of
shares to be included in each series of Preferred Stock and to set or change in
any one or more respects the designations, preferences, conversion or other
rights, voting powers, restrictions, limitations as to dividends,
qualifications, or terms and conditions of redemption relating to the shares
of each such series. The authority of the Board of Directors with respect to
each series of Preferred Stock shall include, but not be limited to, setting
or changing the following:

(a) the distinctive serial designation of such series and the
number of shares constituting such series (provided that the aggregate
number of shares constituting all series of Preferred Stock shall not
exceed twenty million (20,000,000) shares).

(b) the annual dividend rate, if any, on shares of such series,
whether and the extent to which dividends shall be cumulative or
non-cumulative, the relative rights of priority, if any, of payment of
any dividends, and the time at which, and the terms and conditions on
which, any dividends shall be paid;

<PAGE> 2

(c) whether the shares of such series shall be redeemable or
purchasable and, if so, the terms and conditions of such redemption or
purchase, including the date or dates upon and after which such shares
shall be redeemable or purchasable, and the amount per share payable in
case of redemption or purchase, which amount may vary under different
conditions and at different redemption or purchase dates;

(d) the obligation, if any, of the Corporation to retire shares
of such series pursuant to a sinking fund and the terms and conditions of
any such sinking fund;

(e) whether shares of such series shall be convertible into, or
exchangeable for, shares of stock of any other class or classes and, if
so, the terms and conditions of such conversion or exchange, including
the price or prices or the rate or rates of conversion or exchange and
the terms of adjustment, if any;

(f) whether the shares of such series shall have voting rights,
in addition to the voting rights provided by law, and, if so, the terms
of such voting rights;

(g) the rights of the holders of shares of such series in the
event of voluntary or involuntary liquidation, dissolution or winding up
of the Corporation, and the relative rights of priority, if any, of such
holders with respect thereto; and

(h) any other relative rights, powers, preferences,
qualifications, limitations or restrictions thereof relating to such
series.

C. Common Stock

1. Subject to the provisions of Article Four hereof or as otherwise
provided by the GBCL, each holder of the Common Stock shall be entitled to
one vote per share of Common Stock on all matters to be voted on by the
shareholders.

2. All preemptive rights of shareholders are hereby denied, so that
no stock or other security of the Corporation shall carry with it and no holder
or owner of any share or shares of stock or other security or securities of
the Corporation shall have any preferential or preemptive right to acquire
additional shares of stock or of any other security of the Corporation.

3. All cumulative voting rights are hereby denied, so that no stock
or other security of the Corporation shall carry with it and no holder or owner
of any share or shares of such stock or security shall have any right to
cumulative voting in the election of directors or for any other purpose.

4. The foregoing provisions are not intended to modify or prohibit
any provisions of any voting trust or agreement between or among holders or
owners of shares of stock or other securities of the Corporation.

<PAGE> 1
BYLAWS

CONNING CORPORATION

Effective June 12, 1997

<PAGE> 2

BYLAWS

CONNING CORPORATION

<TABLE>
INDEX
-----
<CAPTION>
Page
----
<S> <C>
ARTICLE ONE OFFICES; DEFINITIONS.......................................... 1
Section 1.1 Registered Office........................................ 1
Section 1.2 Other Offices............................................ 1
Section 1.3 Definitions.............................................. 1

ARTICLE TWO SHAREHOLDERS' MEETINGS........................................ 1
Section 2.1 Place of Meetings........................................ 1
Section 2.2 Annual Meetings.......................................... 1
Section 2.3 Special Meeting.......................................... 2
Section 2.4 Notice of Meetings....................................... 2
Section 2.5 List of Shareholders Entitled to Vote.................... 2
Section 2.6 Quorum; Adjournment; Postponement........................ 2
Section 2.7 Voting................................................... 3
Section 2.8 Action by Consent........................................ 4
Section 2.9 Advance Notice of Nominations and Shareholder Proposals.. 4

ARTICLE THREE BOARD OF DIRECTORS.......................................... 7
Section 3.1 Number, Election and Term................................ 7
Section 3.2 Powers................................................... 7
Section 3.3 Meetings; Quorum......................................... 7
Section 3.4 Action by Consent........................................ 8
Section 3.5 Resignation of Directors................................. 8
Section 3.6 Compensation of Directors................................ 8
Section 3.7 Committees; General Rules................................ 8
Section 3.8 Qualifications........................................... 9

ARTICLE FOUR OFFICERS..................................................... 9
Section 4.1 Number, Election and Term................................ 9
Section 4.2 Chairman of the Board.................................... 10
Section 4.3 President................................................ 10
Section 4.4 Vice Presidents.......................................... 10
Section 4.5 Secretary and Assistant Secretaries...................... 10

i
<PAGE> 3

<S> <C>
Section 4.6 Treasurer and Assistant Treasurers....................... 10
Section 4.7 Controller and Assistant Controllers..................... 11
Section 4.8 Appointed Officers....................................... 11

ARTICLE FIVE CAPITAL STOCK................................................ 11
Section 5.1 Stock Certificates....................................... 11
Section 5.2 Transfer of Stock........................................ 12
Section 5.3 Closing of Transfer Books and Fixing of Record Date...... 12
Section 5.4 Lost or Destroyed Certificates........................... 13
Section 5.5 Transfer Agents and Registrars........................... 13

ARTICLE SIX CORPORATE SEAL................................................ 13

ARTICLE SEVEN FISCAL YEAR................................................. 13
</TABLE>

ii
<PAGE> 4

BYLAWS

CONNING CORPORATION

ARTICLE ONE

OFFICES; DEFINITIONS

Section 1.1 Registered Office. The registered office of the
-----------------
Corporation in Missouri shall be located at 700 Market Street, St. Louis,
Missouri, or at such other address within the State of Missouri as the Board
of Directors may from time to time authorize by duly adopted resolution.

Section 1.2 Other Offices. The Corporation may maintain such
-------------
other offices both within and without the State of Missouri as the business
of the Corporation may from time to time require or as the Board of Directors
may determine.

Section 1.3 Definitions. Unless the context otherwise requires,
-----------
defined terms herein shall have the meaning ascribed thereto in the Articles
of Incorporation (the "Articles").

ARTICLE TWO

SHAREHOLDERS' MEETINGS

Section 2.1 Place of Meetings. All meetings of the shareholders
-----------------
shall be held at such place within or without the State of Missouri as may
be, from time to time, fixed or determined by the Board.

Section 2.2 Annual Meetings. The annual meeting of shareholders
---------------
for the election of Directors and for the transaction of such other business
as properly may come before such meeting shall be held on the second Tuesday
in May in each year if not a legal holiday or, if a legal holiday, on the
next succeeding business day not a legal holiday, commencing with May 12,
1998; provided, however, the day fixed for such meeting in any year may be
changed, by resolution of the Board of Directors, to such other day in April,
May, June, July or August which is not a legal holiday, as the Board of
Directors may deem to be desirable or appropriate, subject to any applicable
limitations of law. Every meeting of the shareholders shall be convened at
the hour stated in the notice for the meeting and continue until declared
adjourned by a vote of the shareholders present or declared adjourned by the
presiding officer.

Section 2.3 Special Meeting. Special meetings of the
---------------
shareholders or of the holders of any special class of stock of the
Corporation, unless otherwise prescribed by statute or by

<PAGE> 5

the Articles of Incorporation, may be called only by the affirmative vote of a
majority of the entire Board of Directors or by the Chairman of the Board of
Directors or the President by request of such a meeting in writing. Such
request shall be delivered to the Secretary of the Corporation and shall state
the purpose or purposes of the proposed meeting. Upon such direction or
request, subject to any requirements or limitations imposed by the Corporation's
Articles of Incorporation, by these Bylaws or by law, it shall be the duty of
the Secretary to call a special meeting of the shareholders to be held at such
time as is specified in the request.

Section 2.4 Notice of Meetings. Written or printed notice of
------------------
each meeting of shareholders, stating the place, day and hour of the meeting
and, in case of a special meeting, the purpose or purposes for which the
meeting is called, shall be delivered or given not less than 10 nor more than
70 days before the date of the meeting, either personally or by mail, by or
at the direction of the Secretary to each shareholder of record entitled to
vote at such meeting. Attendance of a shareholder at any meeting shall
constitute a waiver of notice of such meeting except where such shareholder
attends the meeting for the sole and express purpose of objecting to the
transaction of any business because the meeting is not lawfully called or
convened. Any notice of a shareholders' meeting sent by mail shall be deemed
to be delivered when deposited in the United States mail with first class
postage thereon prepaid, addressed to the shareholder at such shareholder's
address as it appears on the records of the Corporation.

Section 2.5 List of Shareholders Entitled to Vote. At least ten
-------------------------------------
(10) days before each meeting of the shareholders, a complete list of the
shareholders entitled to vote at such meeting shall be prepared and arranged
in alphabetical order with the address of each shareholder and the number of
shares held by each, which list, for a period of ten (10) days prior to such
meeting, shall be kept on file at the registered office of the Corporation
and shall be subject to inspection by any shareholder at any time during
usual business hours. Such list shall also be produced and kept open at the
time and place of the meeting, and shall be subject to the inspection of any
shareholder during the whole time of the meeting. The original share ledger
or transfer book, or a duplicate thereof kept in the State of Missouri, shall
be prima facie evidence as to who are the shareholders entitled to examine
such list or share ledger or transfer book or to vote at any meeting of the
shareholders. Failure to comply with the above requirements in respect of
lists of shareholders shall not affect the validity of any action taken at
such meeting.

Section 2.6 Quorum; Adjournment; Postponement. The holders of a
---------------------------------
majority of the outstanding shares entitled to vote at any meeting,
represented in person or by proxy, shall be requisite and shall constitute a
quorum at a meeting of shareholders, except as otherwise provided by law, the
Articles or these Bylaws. The shareholders present at a meeting at which a
quorum is present may continue to transact business until adjournment,
notwithstanding the withdrawal of such number of shareholders as to reduce
the remaining shareholders to less than a quorum. Whether or not a quorum is
present, the chairman of the meeting or a majority of the shareholders
entitled to vote thereat, present in person or by proxy, shall have power,
except as otherwise provided by statute, successively to adjourn the meeting
to such time and place as they may determine, to a date not longer than
ninety (90) days after each such adjournment, and no notice of any such
adjournment need be given to shareholders if the time and place of the
adjourned meeting are announced at the meeting at which the adjournment is
taken. At any adjourned meeting at

2
<PAGE> 6

which a quorum shall be present or represented, any business may be transacted
which might have been transacted at the meeting as originally called.

A shareholder's meeting may be successively postponed by
resolution of the board of directors to a specified date up to a date ninety
days after such postponement or to another place, provided public notice of
such postponement is given prior to the date previously scheduled for the
meeting. Such notice shall state the new date and place of such postponed
meeting.

For purposes of this Section 2.6, "adjournment" means a delay in
the date, which may also be combined with a change in the place, of a meeting
after the meeting has been convened; "postponement" means a delay in the
date, which may be combined with a change in the place, of the meeting before
it has been convened, but after the time and place thereof have been set
forth in a notice delivered or given to shareholders; and public notice shall
be deemed to have been given if a public announcement is made by press
release reported by a national news service or in a publicly available
document filed with the United States Securities and Exchange Commission.

Section 2.7 Voting. Subject to the rights of any holders of
------
preferred stock and to the provisions of the Articles of Incorporation, each
outstanding share entitled to vote under the provisions of the Articles of
Incorporation shall be entitled to one vote on each matter submitted to a
vote at a meeting of shareholders and, if a quorum is present, the
affirmative vote of a majority of the shares represented at the meeting shall
be the act of the shareholders unless the vote of a greater number of shares
is required by the Articles, by these Bylaws or by law. No person shall be
admitted to vote on any shares belonging or hypothecated to the Corporation.
A shareholder may vote either in person or by proxy, but no proxy shall be
voted after eleven (11) months from the date of its execution unless
otherwise provided in the proxy. Without limiting the manner in which a
shareholder may authorize a person to act for the shareholder as proxy, the
following shall constitute a valid means by which a shareholder may grant
such authority:
(1) A shareholder or the shareholder's duly
authorized attorney in fact may execute a writing authorizing
another person to act for the shareholder as proxy. Execution may
be accomplished by the shareholder or duly authorized attorney in
fact signing such writing or causing the shareholder's signature to
be affixed to such writing by any reasonable means, including, but
not limited to, facsimile signature;

(2) A shareholder may authorize another person to act
for the shareholder as proxy by transmitting or authorizing
transmission of a telegram, cablegram, facsimile or other means of
electronic transmission to the person who will be the holder of the
proxy or to a proxy solicitation firm, proxy support service
organization or like agent duly authorized by the person who will
be the holder of the proxy to receive such transmission, provided
that any such telegram, cablegram, facsimile or other means of
electronic transmission shall either set forth or be submitted with
information from which it can be determined that the telegram,
cablegram, facsimile or other electronic transmission was
authorized by the shareholder. If it is determined that such
telegrams, cablegrams, facsimiles or other electronic transmissions
are valid, the inspectors or, if there are no

3
<PAGE> 7

inspectors, such other persons making such determination shall specify
the information upon which they relied.

Section 2.8 Action by Consent. Unless otherwise prescribed by
-----------------
the Articles of Incorporation, any action required or permitted to be taken
by the shareholders of the Corporation may, if otherwise allowed by law, be
taken without a meeting of shareholders only if consents in writing, setting
forth the action so taken, are signed by all of the shareholders entitled to
vote with respect to the subject matter thereof.

Section 2.9 Advance Notice of Nominations and Shareholder
---------------------------------------------
Proposals. All nominations of individuals for election to the Board and
- ---------
proposals of business to be considered at any meeting of the shareholders
shall be made as set forth in this Section 2.9 of Article Two.

(a) Annual Meeting of Shareholders. (1) Nominations of
------------------------------
individuals for election to the Board and the proposal of business to be
considered by the shareholders may be made at an annual meeting of
shareholders (i) pursuant to the Corporation's notice of meeting, (ii) by or
at the direction of the Directors or (iii) by any shareholder of the
Corporation who was a shareholder of record at the time of giving of notice
provided for in this Section 2.9(a) of Article Two, who is entitled to vote
at the meeting and who complied with the notice procedures set forth in this
Section 2.9(a) of Article Two.

(2) For nominations or other business to be
properly brought before an annual meeting by a shareholder pursuant to clause
(iii) of paragraph (a)(1) of this Section 2.9 of Article Two, the shareholder
must have given timely notice thereof in writing to the Secretary. To be
timely, a shareholder's notice shall be delivered to the Secretary at the
principal executive offices of the Corporation not less than 60 days nor more
than 90 days prior to the first anniversary of the preceding year's annual
meeting or not less than 60 days nor more than 90 days prior to May 12, 1998,
in the case of the next annual meeting; provided, however, that in the event
that the date of the annual meeting is advanced by more than 30 days or
delayed by more than 60 days from such anniversary date, notice by the
shareholder to be timely must be so delivered not earlier than the 90th day
prior to such annual meeting and not later than the close of business on the
later of the 60th day prior to such annual meeting or the tenth day following
the day on which public announcement of the date of such meeting is first
made. Such shareholder's notice shall set forth (i) as to each person whom
the shareholder proposes to nominate for election or reelection as a Director
(a) the name, age, business and residential addresses, and principal
occupation or employment of each proposed nominee, (b) the class and number
of shares of capital stock that are beneficially owned by such nominee on the
date of such notice, (c) a description of all arrangements or understandings
between the shareholder and each nominee and the name of any other person or
persons pursuant to which the nomination or nominations are to be made by the
shareholder, (d) all other information relating to such person that is
required to be disclosed in solicitations of proxies for election of
Directors, or is otherwise required, in each case pursuant to Regulation 14A
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
and (e) the written consent of each proposed nominee to being named as a
nominee in the proxy statement and to serve as a Director of the Corporation
if so elected; (ii) as to any other business that the shareholder proposes to
bring before the meeting, a brief description of the business desired

4
<PAGE> 8

to be brought before the meeting, the reasons for conducting such business at
the meeting and any material interest in such business of such shareholder and
of the beneficial owner, if any, on whose behalf the proposal is made; and (iii)
as to the shareholder giving the notice and the beneficial owner, if any, on
whose behalf the nomination or proposal is made, (x) the name and address of
such shareholder, as they appear on the Corporation's books, and of such
beneficial owner, (y) the class and number of shares of stock of the
Corporation which are owned beneficially and of record by such shareholder
and such beneficial owner, and (z) a representation that the shareholder
intends to appear in person or by proxy at the meeting to nominate the person
or persons specified in the notice or to propose such other business. The
Corporation may require any proposed nominee to furnish any information, in
addition to that furnished pursuant to clause (i) above, it may reasonably
require to determine the eligibility of the proposed nominee to serve as a
Director of the Corporation.

(3) Notwithstanding anything in the second sentence
of paragraph (a)(2) of this Section 2.9 of Article Two to the contrary, in
the event that the number of Directors to be elected to the Board is
increased and there is no public announcement naming all of the nominees for
Director or specifying the size of the increased Board made by the
Corporation at least 70 days prior to the first anniversary of the preceding
year's annual meeting, a shareholder's notice required by this Section 2.9(a)
of Article Two shall also be considered timely, but only with respect to
nominees for any new positions created by such increase, if it shall be
delivered to the Secretary at the principal executive offices of the
Corporation not later than the close of business on the tenth day following
the day on which such public announcement is first made by the Corporation.

(b) Special Meetings of Shareholders. Only such business
--------------------------------
shall be conducted, and only such proposals shall be acted upon, at a special
meeting of shareholders as shall have been brought before a meeting pursuant
to the Corporation's notice of meeting. Nominations of persons for election
to the Board may be made at a special meeting of shareholders at which
Directors are to be elected (i) pursuant to the Corporation's notice of
meeting, (ii) by or at the direction of the Board, or (iii) provided that the
Board has determined that Directors shall be elected at such special meeting,
by any shareholder of the Corporation who is a shareholder of record at the
time of giving of notice provided for in this Section 2.9 of Article Two, who
is entitled to vote at the meeting and who complied with the notice
procedures set forth in this Section 2.9(b) of Article Two. In the event the
Corporation calls a special meeting of shareholders for the purpose of
electing one or more Directors to the Board, any such shareholder may
nominate a person or persons (as the case may be) for election to such
position as specified in the Corporation's notice of meeting, if the
shareholder's notice required by paragraph (a)(2) of this Section 2.9 of
Article Two shall be delivered to the Secretary at the principal executive
offices of the Corporation not earlier than the 90th day prior to such
special meeting and not later than the close of business on the later of the
60th day prior to such special meeting or the tenth day following the day on
which public announcement is first made of the date of the special meeting
and of the nominees proposed by the Board to be elected at such meeting. No
other proposals of business by a shareholder other than the nomination of
persons for election to the Board requested by a shareholder, as provided in
this Section 2.9(b), may be considered at a special meeting of the
shareholders.

5
<PAGE> 9

(c) General. (1) Only such persons who are nominated in
-------
accordance with the procedures set forth in this Section 2.9 of Article Two
shall be eligible to serve as Directors and only such business shall be
conducted at a meeting of shareholders as shall have been brought before the
meeting in accordance with the procedures set forth in this Section 2.9 of
Article Two. The Board of Directors may reject any nomination or shareholder
proposal submitted for consideration at any meeting of shareholders which is
not made in accordance with the terms of this Section 2.9 of Article Two or
which is not a proper subject for shareholder action in accordance with
provisions of applicable law. Alternatively, if the Board of Directors fails
to consider the validity of any nomination or shareholder proposal, the
presiding officer of the meeting shall have the power and duty to determine
whether a nomination or any business proposed to be brought before the
meeting was made in accordance with the procedures set forth in this Section
2.9 of Article Two and, if any proposed nomination or business is not in
compliance with this Section 2.9 of Article Two, to declare that such
defective nomination or proposal be disregarded. This provision shall not
prevent the consideration and approval or disapproval at the meeting of
reports of officers, Directors and committees of the Board of Directors, but,
in connection with such reports, no new business shall be acted upon at the
meeting unless stated, filed and received as herein provided.

(2) For purposes of this Section 2.9 of Article Two, "public
announcement" shall mean disclosure in a press release reported by the Dow
Jones News Service, Associated Press, Reuters or comparable news service or
in a document publicly filed by the Company with the Securities and Exchange
Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act.

(3) Notwithstanding the foregoing provisions of this
Section 2.9 of Article Two, a shareholder shall also comply with all
applicable requirements of state law and of the Exchange Act and the rules
and regulations thereunder with respect to the matters set forth in this
Section 2.9 of Article Two. Nothing in this Section 2.9 of Article Two shall
be deemed to affect any rights of shareholders to request inclusion of
proposals in the Company's proxy statement pursuant to Rule 14a-8 under the
Exchange Act.

ARTICLE THREE

BOARD OF DIRECTORS

Section 3.1 Number, Election and Term.
-------------------------

(a) The Board of Directors shall consist of five persons;
provided, however, that in no event shall the number of Directors be less
than three (3); provided, further, that except as otherwise provided in the
Articles of Incorporation, the number of Directors provided herein may be
amended from time to time only by the affirmative vote of a majority of the
Board of Directors; and provided, further, that any change in the number of
Directors shall be reported to the Secretary of State of the State of
Missouri within 30 calendar days of such change.

6
<PAGE> 10

(b) The Board of Directors shall be divided into three classes,
as nearly equal in number as possible. In the event of any increase in the
number of Directors, any additional Directors shall be added to such classes
as may be necessary so that all classes shall be as nearly equal in number as
possible. In the event of any decrease in the number of Directors, all
classes of Directors shall be decreased as nearly equally as may be possible.
No reduction in the number of Directors shall affect the term of office of
any incumbent Director. Subject to the foregoing, the Board of Directors
shall determine the class or classes to which any additional Directors shall
be added and the class or classes which shall be decreased in the event of
any decrease in the number of Directors.

(c) With respect to the current Board of Directors of the
Corporation, the first class of Directors shall hold office until the first
annual meeting of shareholders in 1998, the second class of Directors shall
hold office until the second annual meeting of shareholders in 1999 and the
third class of Directors shall hold office until the third annual meeting of
shareholders in 2000, or in each case, until his or her successor is elected
and qualified. Thereafter, Directors shall be elected to hold office for a
term of three years or, in each case, until his or her successor is elected
and qualified, and at each annual meeting of shareholders, the successors to
the class of Directors whose terms shall then expire shall be elected for a
term expiring at the third succeeding annual meeting after that election.

Section 3.2 Powers. The property and business of the
------
Corporation shall be managed and controlled by or under the direction of the
Board of Directors, which shall exercise or direct the exercise of all of the
powers of the Corporation and do or cause to be done all acts and things as
are not, by the Articles, by these Bylaws or by law, directed or required to
be done or exercised by the shareholders.

Section 3.3 Meetings; Quorum. Regular meetings of the Board of
----------------
Directors shall be held at such places, within or without the State of
Missouri, and on such days and at such times as shall be fixed from time to
time by the Board of Directors. Rules of procedure for the conduct of such
meetings may be adopted by resolution of the Board of Directors. Notice of
such regular meetings need not be given. A majority of members of the Board
of Directors shall constitute a quorum for the transaction of business at any
meeting of the Board of Directors, but a lesser number may adjourn a meeting
to another time or day if a quorum is not present. The act of the majority
of the Directors present at a meeting at which a quorum is present shall be
the act of the Board of Directors, unless the act of a greater number is
required by the Articles, by these Bylaws or by law. Special meetings of the
Board of Directors may be held at any time and place, within or without the
State of Missouri, upon the call of the Chairman of the Board of Directors,
the President or Secretary of the Corporation by oral, written, telefax or
telegraphic notice duly given, sent or mailed to each Director, at such
Director's last known address, not less than twenty-four hours before such
meeting; provided, however, that any Director may, at any time, in writing or
by telegram, waive notice of any meeting at which he or she may not be or may
not have been present. Attendance of a Director at any meeting shall
constitute a waiver of notice of the meeting except where a Director attends
a meeting for the sole and express purpose of objecting to the transaction of
any business because the meeting is not lawfully called or convened.

7
<PAGE> 11

Members of the Board of Directors or of any committee designated
by the Board of Directors may participate in a meeting of the Board of
Directors or committee by means of conference telephone or similar
communications equipment whereby all persons participating in the meeting can
hear each other, and participation in a meeting in this manner shall
constitute presence in person at the meeting.

Section 3.4 Action by Consent. Any action which is required to
-----------------
be or may be taken at a meeting of the Directors may be taken without a
meeting if consents in writing, setting forth the action so taken, are signed
by all the Directors. Any action which is required to be or may be taken at
a meeting of a committee of Directors may be taken without a meeting if
consents in writing, setting forth the action so taken, are signed by all the
members of the committee.

Section 3.5 Resignation of Directors. Any Director of the
------------------------
Corporation may resign at any time by giving written notice of such
resignation to the Board of Directors, the Chairman of the Board of
Directors, the President, or the Secretary of the Corporation. Any such
resignation shall take effect at the time specified therein or, if no time be
specified, upon receipt thereof by the Board of Directors or one of the
above-named Officers; and, unless specified therein, the acceptance of such
resignation shall not be necessary to make it effective.

Section 3.6 Compensation of Directors. Directors, as such, may
-------------------------
receive such compensation and be reimbursed for expenses of attendance at any
meeting of the Board of Directors as shall be determined by resolution of the
Board of Directors. Nothing herein contained shall be construed to preclude
any Director from serving the Corporation in any other capacity and receiving
compensation therefor.

Section 3.7 Committees; General Rules. The Board of Directors,
-------------------------
by resolution adopted by a majority of the entire Board of Directors, may
designate two or more Directors to constitute a committee. Each committee,
to the extent provided in such resolution, shall have and may exercise the
authority of the Board of Directors, as so delegated in the resolution, in
the management of the Corporation. Each committee of the Board of Directors
shall keep regular minutes of its proceedings and report the same to the
Board of Directors when required. Vacancies in the membership of each
committee shall be filled by the Board of Directors at any regular or special
meeting of the Board of Directors. At all meetings of a committee, a
majority of the committee members then in office shall constitute a quorum
for the purpose of transacting business, and the acts of a majority of the
committee members present at any meeting at which there is a quorum shall be
the acts of the committee. A Director who may be disqualified, by reason of
personal interest, from voting on any particular matter before a meeting of a
committee may nevertheless be counted for the purpose of constituting a
quorum of the committee.

Section 3.8 Qualifications. No person shall be eligible for
--------------
election as a Director if such person's 70th birthday shall fall on a date
prior to the commencement of the term for which such person is to be elected
or appointed. No person shall be qualified to be elected and to hold office
as a Director if such person is determined by a majority of the entire Board
of Directors to have acted in a manner contrary to the best interests of the
Corporation, including, but not limited to, the violation of either Federal
or State law, maintenance of interests not properly authorized and

8
<PAGE> 12

in conflict with the interests of the Corporation, or breach of any agreement
between that Director and the Corporation relating to his or her services as
a Director, employee or agent of the Corporation. A Director need not be a
shareholder.

ARTICLE FOUR

OFFICERS

Section 4.1 Number, Election and Term. The officers of the
-------------------------
Corporation shall be a Chairman of the Board, a President and a Secretary who
shall be chosen by the Board of Directors at its first meeting after each
annual meeting of shareholders. The Board of Directors may also choose one
or more Vice Presidents, a Treasurer, one or more Assistant Secretaries and
Assistant Treasurers and such other officers as the Board of Directors may
deem appropriate. Any two or more offices, except those of President and
Vice President or President and Secretary, may be held by the same person.
Officers of the Corporation may be given distinctive designations such as
Executive Vice President, Group Vice President, Senior Vice President, Chief
Operating Officer, Chief Administrative Officer and Chief Financial Officer.
All officers, unless sooner removed, shall hold their respective offices
until the first meeting of the Board of Directors after the next succeeding
election of the Board of Directors and until their successors shall have been
duly elected and qualified.

Any officer or agent elected or appointed by the Board of
Directors may be removed by the Board of Directors with or without cause
whenever, in its judgment, the best interests of the Corporation will be
served thereby, but such removal shall be without prejudice to the contract
rights, if any, of the person so removed. Any vacancy occurring in any such
office of the Corporation may be filled only by the Board of Directors.

Section 4.2 Chairman of the Board. The Chairman shall be the
---------------------
Chief Executive Officer of the Corporation. In addition to his duties as
Chairman and Chief Executive Officer, he or she shall be responsible for the
general and active management of the business and affairs of the Corporation,
subject only to the control of the Board of Directors, shall have full
authority in respect to the signing and execution of deeds, bonds, mortgages,
contracts and other instruments of the Corporation; and, in the absence or
disability of the President, shall exercise all of the powers and discharge
all of the duties of the President. Unless otherwise determined by the Board
of Directors, he or she shall also be, ex officio, a member of all standing
Committees of the Board of Directors, shall preside at all meetings of the
shareholders and Directors at which he or she is present and shall perform
any other duties prescribed by the Board of Directors or these Bylaws.

Section 4.3 President. In the absence of the Chairman of the
---------
Board of Directors, the President shall preside at all meetings of the
shareholders and Directors at which he or she is present. He or she shall
perform any duties prescribed by the Chairman or the Board of Directors and
shall see that all orders and resolutions of the Board of Directors are
carried into effect.

The President shall have equal authority with the Chairman to
execute bonds, mortgages and other contracts requiring a seal, under the seal
of the Corporation, except where

9
<PAGE> 13

permitted by law to be otherwise signed and executed and except
where the signing and execution thereof shall be expressly
delegated by the Board of Directors to some other officer or
agent of the Corporation.

Section 4.4 Vice Presidents. The Vice Presidents, if any,
---------------
in the order of their seniority shall, in the absence or
disability of the President, perform the duties and exercise the
powers of the President, and shall perform any other duties
prescribed by the Chairman, the President or the Board of
Directors.

Section 4.5 Secretary and Assistant Secretaries. The
-----------------------------------
Secretary shall keep or cause to be kept a record of all meetings
of the shareholders and the Board of Directors and record all
votes and the minutes of all proceedings in a book to be kept for
that purpose. He or she shall give, or cause to be given,
notice of all meetings of the shareholders and special meetings
of the Board of Directors, and shall perform any other duties
prescribed by the Board of Directors or the President, under
whose supervision he or she shall be. He or she shall keep in
safe custody the seal of the Corporation and shall affix the same
to any instrument requiring it.

The Assistant Secretaries, if any, in order of their
seniority shall, in the absence or disability of the Secretary,
perform the duties and exercise the powers of the Secretary and
shall perform any other duties prescribed by the Chairman, the
President or the Board of Directors.

Section 4.6 Treasurer and Assistant Treasurers. The
----------------------------------
Treasurer, if any, shall have the custody of the corporate funds
and securities, shall keep full and accurate accounts of receipts
and disbursements in books belonging to the Corporation, shall
deposit all moneys and other valuable effects in the name and to
the credit of the Corporation in such depositories as may be
designated by the Board of Directors and shall perform any other
duties prescribed by the Chairman, the President or the Board of
Directors.

The Treasurer shall disburse the funds of the Corporation as
may be ordered by the Board of Directors, taking proper vouchers
for such disbursements, and shall render to the President and
Directors, at the regular meetings of the Board of Directors, or
whenever they may require it, an account of all his or her
transactions as Treasurer and of the financial condition of the
Corporation.

If required by the Board of Directors, the Treasurer shall
give the Corporation a bond in such sum and with such surety or
sureties as shall be satisfactory to the Board of Directors for
the faithful performance of the duties of his or her office and
for the restoration to the Corporation, in case of his or her
death, resignation, retirement or removal from office, of all
books, papers, vouchers, money and other property of whatever
kind in his or her possession or under his or her control
belonging to the Corporation.

The Assistant Treasurers, if any, in the order of their
seniority shall, in the absence or disability of the Treasurer,
perform the duties and exercise the powers of the Treasurer and
shall perform any other duties prescribed by the Board of
Directors.

Section 4.7 Controller and Assistant Controllers. The
------------------------------------
Controller, if one is elected by the Board of Directors, shall
have charge of the accounting records of the Corporation,

10
<PAGE> 14
shall maintain appropriate internal control and auditing of the
Corporation, and shall perform such other duties as directed by
the Board of Directors, the Chairman or other senior officers.
The Assistant Controllers, if any, in order of their seniority
shall, in the absence or disability of the Controller, perform
the duties and exercise the powers of the Controller and shall
have any other duties prescribed by the Board of Directors.

Section 4.8 Appointed Officers. In addition to the
------------------
corporate officers elected by the Board of Directors, the
Chairman may, from time to time, appoint one or more other
persons as appointed officers who shall not be deemed to be
corporate officers, but may, respectively, be designated with
such titles as the Chairman may deem appropriate. The Chairman
may prescribe the powers to be exercised and the duties to be
performed by each such appointed officer, may designate the term
for which each such appointment is made, and may, from time to
time, terminate any or all of such appointments with or without
cause. Such appointments and termination of appointments shall
be reported periodically to the Board of Directors.

ARTICLE FIVE

CAPITAL STOCK

Section 5.1 Stock Certificates. Every holder of stock in the
------------------
Corporation shall be entitled to have a certificate, in any form
approved by the Board of Directors, certifying the number and
class of shares owned by the shareholder in the Corporation,
signed by the Chairman, the President or a Vice President and by
the Secretary or Treasurer or an Assistant Secretary or Assistant
Treasurer of the Corporation and sealed with the seal of the
Corporation. If the certificate is countersigned by a transfer
agent other than the Corporation or its employee, or by a
registrar other than the Corporation or its employee, any other
signature on the certificate may be a facsimile signature, or may
be engraved or printed. In case any officer, transfer agent or
registrar who has signed or whose facsimile signature has been
placed on the certificate shall have ceased to be an officer,
transfer agent or registrar before the certificate is issued, the
certificate may nevertheless be issued by the Corporation with
the same effect as if such person were an officer, transfer agent
or registrar at the date of issue.

Section 5.2 Transfer of Stock. The shares of stock of the
-----------------
Corporation shall be transferable only upon its books by the
holders thereof in person or by their duly authorized attorneys
or legal representatives. Upon transfer, the old certificates
shall be surrendered to the Corporation by the delivery thereof
to the person in charge of the stock and transfer books and
ledgers, or to such other persons as the Board of Directors may
designate, by whom they shall be cancelled and new certificates
shall thereupon be issued. Except as otherwise expressly
provided by the statutes of the State of Missouri, the
Corporation shall be entitled to treat the holder of record of
any share or shares of stock as the absolute owner thereof for
all purposes and, accordingly, shall not be bound to recognize
any legal, equitable or other claim to or interest in such share
or shares on the part of any other person whether or not it or
they shall have express or other notice thereof.

Section 5.3 Closing of Transfer Books and Fixing of Record Date.
---------------------------------------------------
The Board of Directors shall have the power to close the transfer books of
the Corporation for a period not

11
<PAGE> 15

exceeding 70 days prior to the date of any meeting of shareholders,
or the date for payment of any dividend, or the date for the allotment
of rights, or the date when any change or conversion or exchange of
shares shall go into effect. In lieu of so closing the transfer
books, the Board of Directors may fix in advance a record date for
the determination of the shareholders entitled to notice of and to
vote at any meeting and any adjournment thereof, or entitled to
receive payment of any dividend or any allotment of rights, or
entitled to exercise the rights in respect of any change, conversion
or exchange of shares, up to 70 days prior to the date of any meeting
of shareholders, or the date for the payment of any dividend, or the
date for the allotment of rights, or the date when any change or
conversion or exchange of shares shall go into effect. In such case
only the shareholders who are shareholders of record on the record
date so fixed shall be entitled to receive notice of and to vote at
such meeting and any adjournment thereof, or to receive payment of
such dividend, or to receive such allotment of rights, or to exercise
such rights as the case may be, notwithstanding any transfer of any
shares on the books of the Corporation after the date of closing of
the transfer books or the record date fixed as aforesaid. If the
Board of Directors does not close the transfer books or set a
record date for the determination of the shareholders entitled to
notice of and to vote at any meeting of shareholders, only the
shareholders who are shareholders of record at the close of
business on the 20th day preceding the date of the meeting shall
be entitled to notice of and to vote at the meeting and upon any
adjournment of the meeting, except that if prior to the meeting
written waivers of notice of the meeting are signed and delivered
to the Corporation by all of the shareholders of record at the
time the meeting is convened, only the shareholders who are
shareholders of record at the time the meeting is convened shall
be entitled to vote at the meeting and any adjournment of the
meeting.

Section 5.4 Lost or Destroyed Certificates. The holder of
------------------------------
any shares of stock of the Corporation shall immediately notify
the Corporation and its transfer agents and registrars, if any,
of any loss or destruction of the certificates representing the
same. The Corporation may issue a new certificate in place of
any certificate theretofore issued by it which is alleged to have
been lost or destroyed and the Board of Directors may require the
owner of the lost or destroyed certificate or the owner's legal
representative to give the Corporation a bond in a sum and in a
form approved by the Board of Directors, and with a surety or
sureties which the Board of Directors finds satisfactory, to
indemnify the Corporation and its transfer agents and registrars,
if any, against any claim or liability that may be asserted
against or incurred by it or any transfer agent or registrar on
account of the alleged loss or destruction of any certificate or
the issuance of a new certificate. A new certificate may be
issued without requiring any bond when, in the judgment of the
Board of Directors, it is proper so to do. The Board of
Directors may delegate to any Officer or Officers of the
Corporation any of the powers and authorities contained in this
section.

Section 5.5 Transfer Agents and Registrars. The Board of
------------------------------
Directors may appoint one or more transfer agents or transfer
clerks and one or more registrars which may be banks, trust
companies or other financial institutions located within or
without the State of Missouri; may define the authority of such
transfer agents and registrars of transfers; may require all
stock certificates to bear the signature of a transfer agent or a
registrar of transfers, or both; and may change or remove any
such transfer agent or registrar of transfers.

12
<PAGE> 16

ARTICLE SIX

CORPORATE SEAL

The corporate seal shall be circular in form and shall bear
the name of the Corporation, the year of its incorporation and
the words "Corporate Seal" and "Missouri" and otherwise shall be
such form as shall be approved from time to time by the Board of
Directors.

ARTICLE SEVEN

FISCAL YEAR

The fiscal year of the Corporation shall end the last day of
December in each year.

<PAGE> 1

INVESTMENT ADVISORY AGREEMENT

THIS AGREEMENT, made and entered into as of 1 May 1995 by and between
General American Life Insurance Company, a Missouri insurance company
("Client"), and General American Investment Management Company ("Advisor");

WITNESSETH THAT;

WHEREAS, Client desires that Advisor serve as investment advisor with respect
to the investment portfolio maintained by Client in connection with Client's
business as an insurer; and

WHEREAS, Advisor hereby represents and warrants that it is duly registered as
an investment advisor under the Investment Advisers Act of 1940 and
experienced in the management of insurance portfolios;

NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein contained, the parties covenant and agree as follows.

1. Appointment of Investment Advisor. Client hereby appoints Advisor as
---------------------------------
investment advisor with respect to its general account (herein referred to as
"the Account," as constituted on the date hereof and as it may be changed,
accreted, or diminished pursuant hereto). The Account is to be invested so
as to accommodate Client's mix of liabilities in accordance with the
investment laws for insurance companies in Missouri, Client's state of
domicile.

2. Investment Authority. Client shall retain fiduciary responsibility,
--------------------
authority, and control with respect to management and investment of the
securities in the Account. Client shall supervise operations of Advisor with
respect to the Account. Advisor shall be free to buy, sell, exchange,
convert, or otherwise trade assets in the Account in the exercise of its sole
discretion, provided Advisor acts in a manner consistent with general
directions received from Client.

3. Assignment. Neither party to this Agreement may assign its rights or
----------
responsibilities under this Agreement without the prior written consent of
the other party.

4. Client Obligations. Client agrees to give Advisor any information in
------------------
its possession which Client deems relevant to the suitability of the
investment strategy implemented by Advisor, including information on Client's
liabilities, whether this information becomes known before or after the
adoption of the strategy. Client agrees to pay or have paid all fees and
charges within thirty days of receipt of a bill stating what such fees and
charges are.

<PAGE> 2

5. Advisor Obligations.
-------------------

a) Advisor does not warrant any rate of return on all or any segment
of the Account. Advisor will try to select the most favorable prices and
timing of asset purchases and sales. Advisor will select brokers and dealers
on a basis which is favorable to Client, taking into account research
services provided, ability to execute orders promptly and correctly, fees
charged, and any other factors which Advisor deems relevant. Advisor will
pass along to Client the cost of any and all brokers' fees, commissions,
taxes, and other custodial charges related to management of the Account.

b) It is understood and agreed that Advisor does not provide its
services exclusively for Client. Advisor shall remain free to provide
services to other clients or for its own account, pursuant to objectives
which may or may not be similar to the strategy adopted for Client.

c) Advisor shall make reports to Client as requested, including, but
not limited to:

i) delivery on the sixth working day of each month of all
investment accounting data for the previous month, in an electronic format
suitable for use in updating Client's computerized accounting records;

ii) delivery by January 30 of each year of all
investment-related exhibits and schedules for Client's statutory annual
statement, in a printed format suitable for inclusion in Client's statutory
annual statement without modification;

6. Custodian. The Advisor shall not have custody of any of the assets in
---------
the Account. Custody of assets of the Account shall at all times be
maintained by one or more custodians selected by the Client. All
transactions authorized by this Agreement shall be carried out through such
custodians. The Advisor shall not be responsible for any act or omission of
such custodians.

7. Fees.
----

a) Fees are payable quarterly in arrears and are based on the market
value of the Account as determined by Advisor on the last day of the quarter.
The fee schedule is attached as Appendix A. Payments for less than a full
calendar quarter shall be pro-rated. Client agrees that Advisor may direct
custodians of the Account to make direct payment of fees due hereunder.

2
<PAGE> 3

b) Calculation of fees shall be in accordance with the requirements
of regulation 275.205-3 issued under the Investment Advisor Act of 1940 by
the Securities and Exchange Commission, which requires among other things
that Client be notified that it is theoretically possible that a fee based in
part on the growth of a Client's funds could create an incentive for an
advisor to make investments that are riskier or more speculative than it
would make without a performance-based fee.

c) Client shall have the right to audit the Account during normal
business hours with or without notice.

c) The fee may be modified from time to time with the written assent
of both parties.

8. Confidentiality. Advisor shall keep any information it obtains about
---------------
Client's business or investment objectives and results in confidence.

9. Term. This Agreement shall remain in effect until 1 May 1998 unless
----
Client, in its sole discretion, elects to end this Agreement at an earlier
time by giving ninety (90) days written notice to Advisor. After the initial
three-year term this Agreement shall renew automatically for successive
one-year terms unless the Parties amend it in writing to provide otherwise.
Ninety days written notice of termination shall be required of either party,
but Advisor agrees not to terminate during the initial three-year term.

10. Governing Law. This agreement shall be governed by and construed and
-------------
enforced in accordance with the laws of Missouri.

11. Notice. All notices provided for in this Agreement shall be deemed to
------
have been duly given when delivered by hand to an office of the other party
or when deposited with the U.S. Postal Service as first class certified or
registered mail, postage prepaid, or when delivered to an overnight courier,
a telex, or a telecopy machine addressed as follows:

a) To Client:
General American Life Insurance Company
700 Market Street
St. Louis, Missour 63101
Attn: John W. Barber

b) To Advisor:
General American Investment Management Company
700 Market Street
St. Louis, MO 63101
Attn: J. Terri Tanaka

3
<PAGE> 4

or to such other persons or places as each party may from time to time
designate by written notice such as specified.

GENERAL AMERICAN INVESTMENT GENERAL AMERICAN LIFE
MANAGEMENT COMPANY INSURANCE COMPANY

By: /s/ Leonard M. Rubenstein By: /s/ Richard A. Liddy
---------------------------- --------------------------
Leonard M. Rubenstein Richard A. Liddy
President President

4
<PAGE> 5

Appendix A to

Investment Advisory Agreement
by and between

General American Life Insurance Company
and
General American Investment Management Company

and dated

1 May 1995

For Investment Advice:

An annual fee based on the market value of the amount under management,
payable quarterly as per the following schedule:

Commercial Mortgages 0.22%
Securities 0.10%
Real Estate 0.78%

<PAGE> 1

INVESTMENT ADVISORY AGREEMENT
-----------------------------

THIS AGREEMENT, made and entered into as of 2 July, 1990, by and
between General American Life Insurance Company ("Client") and General
American Investment Management Company ("Advisor");
WITNESSETH THAT:
WHEREAS, Client desires that Advisor serve as investment advisor with
respect to separate accounts established by Client to hold funds deposited by
variable life customers; and
WHEREAS, Advisor hereby represents and warrants that it is duly
registered as an investment advisor under the Investment Advisers Act of
1940.
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, it is covenanted and agreed as follows:
1. APPOINTMENT OF INVESTMENT ADVISOR. Client hereby appoints Advisor
---------------------------------
as investment advisor with respect to those assets identified by Client as
subject to this Agreement (herein collectively referred to as "the Accounts",
as constituted on the date hereof and as they may be changed, accreted, or
diminished pursuant hereto), to be invested in accordance with investment
objectives given to Advisor by Client.
2. INVESTMENT AUTHORITY. Client shall retain fiduciary
--------------------
responsibility, authority, and control with respect to management and
investment of the securities in each Account. Client shall supervise
operations of Advisor with respect to the Fund. Advisor shall be free to
buy, sell, exchange, convert, or otherwise trade assets in an Account in the
exercise of its sole discretion and in a manner consistent with general
directions received from Client.

<PAGE> 2

3. ASSIGNMENT. Neither party to this Agreement may assign its rights
----------
or responsibilities under this Agreement without the prior written consent of
the other party.

4. CLIENT OBLIGATIONS. Client agrees to give Advisor any information
------------------
in its possession which would have an effect on the strategy agreed upon,
whether this information becomes known before or after the adoption of the
strategy. Client agrees to pay or have paid all fees and charges within
thirty days of receipt.
5. ADVISOR OBLIGATIONS.
-------------------
a. Advisor shall not warrant any rate of return on all or any
segment of an Account, but will manage each Account in a manner
consistent with the objectives agreed upon with Client.
Advisor will try to select the most favorable prices and timing
of asset purchases and sales. Advisor will select brokers and
dealers on a basis which is favorable to client, taking into
account research services provided, ability to execute orders
promptly and correctly, fees charged, and any other factors
which Advisor deems relevant. Advisor will pass along to
Client the cost any and all brokers' fees, commissions, taxes,
and other custodial charges related to management of each
Account.
b. It is understood and agreed that Advisor's services are not
exclusively for Client or for any Account. Advisor shall
remain free to provide services to other Accounts or for its
own account, pursuant to objectives which may or may not be
similar to the strategy agreed to by Client with respect to
any particular account.

<PAGE> 3

c. Advisor shall make reports to Client as requested.
6. CANCELLATION. This Agreement may be ended by either party on
------------
thirty days written notice.
7. FEES. Client will pay the Advisor a fee for its services under
----
this agreement calculated in accordance with the Fee Schedule attached
hereto. The schedule may be modified from time to time with the written
assent of both parties.
In witness of this Agreement the parties have caused it to be executed
by their duly authorized officers as of the day and year first above written.

GENERAL AMERICAN INVESTMENT GENERAL AMERICAN LIFE
MANAGEMENT COMPANY INSURANCE COMPANY

("Advisor") ("Client")

By: /s/ Douglas R. Koester By: /s/ Leonard M. Rubenstein
------------------------------- -------------------------------------
Douglas Koester, Vice President Leonard M. Rubenstein, Vice President

Attest: /s/ Helen Couranz Attest: /s/ Helen Couranz
--------------------------- -----------------------------
Secretary Secretary

3
<PAGE> 4

FEE SCHEDULE

l. The annual fees charged under the Investment Advising Agreement
between General American Life Insurance Company and General American
Investment Management Company dated July 2, l990 will be as follows, until
changed by mutual agreement of the parties
(A) PRINCIPAL FEE, stated as an annual percentage of the
average daily value of the net assets in an account:
for a stock index account .25%
for a money market account .l25%
for a bond account .375%
for a managed stock account .50%
(B) NO ACCEPTANCE CHARGE
(C) NO TERMINATION CHARGE
All fees are payable quarterly in arrears and shall be based upon the size of
the Separate Account valued at fair market value on the last day of the
quarter. Payments for less than a full calendar quarter shall be pro-rated.
Client agrees that Advisor may direct custodians of an Account to make direct
payment of fees due hereunder.
2. Calculation of fees shall be in accordance with the requirements of
regulation 275.205-3 issued under the Investment Advisers Act of l940 by the
Securities and Exchange Commission, which requires among other things that
Client be notified that it is theoretically possible that a fee based in part
on the growth of a Client's funds could create an incentive for an advisor to
make investments that are riskier or more speculative than it would make
without a performance-based fee.

4
<PAGE> 5
3. DEFINITIONS
-----------
GROSS INCOME: Includes dividends, interest, and realized and
------------
unrealized capital gains or losses computed as required by the Investment
Adviser's Act of l940.
PRINCIPAL VALUATION: The value of an Account will be determined
-------------------
for assets which are listed on a stock exchange at the closing sale price on
the exchange on which such security is principally traded. If no sale took
place, the latest available bid price on the exchange is used. A security
not listed on a stock exchange for which a closing sale price is available is
valued at such price. Securities traded in over-the-counter market for which
closing sale prices are not available are valued at the latest available bid
price.
Debt instruments with maturities of 60 days or less are valued on an
amortized cost basis. This procedure values a purchased instrument at cost
on the date of purchase or, in the case of securities purchased more than 60
days prior to maturity, the market value on the 6lst day before maturity. It
thereafter assumes a constant rate of amortization of any discount or premium
and of accrual of interest income, regardless of any intervening change in
general interest rates or the market value of the instrument. Other debt
instruments are valued at market value, provided market quotations are
readily available.
All other assets are valued at their fair value as determined by
Advisor in good faith, unless a special agreement for some other procedure
has been made with Client.

<PAGE> 1

INVESTMENT ADVISORY AGREEMENT
-----------------------------

INVESTMENT ADVISORY AGREEMENT made as of the twenty-third day of July,
1997, by and between GENERAL AMERICAN CAPITAL COMPANY ("Company"), a Maryland
corporation, and CONNING ASSET MANAGEMENT COMPANY ("Adviser"), a Missouri
corporation which is registered as an investment adviser under the Investment
Advisers Act of 1940, whereby the Adviser will act as investment adviser to the
Company as follows:

ARTICLE I

Advisory Services
-----------------

The Company is an open-end, diversified management investment company,
incorporated under the laws of the State of Maryland on November 15, 1985.
The Company hereby employs the Adviser to act as the investment adviser to
and manager of the Company, and, subject to the supervision of the Board of
Directors of the Company ("Board"), to manage the investment and reinvestment
of the assets of the funds currently offered for sale by the Company
("Funds") for the period and on the terms and conditions set forth in this
Agreement. The Adviser hereby accepts such employment and agrees during such
period, at its own expense, to render the services and to assume the
obligations herein set forth for the compensation provided for herein. The
Adviser shall for all purposes herein be deemed to be an independent
contractor and shall, unless otherwise expressly provided or authorized
herein, have no authority to act for or represent the Company in any way or
otherwise be deemed an agent of the

<PAGE> 2
Company. The Adviser shall, for purposes of this Agreement, have and exercise
full investment discretion and authority to act as agent for the Company in
buying, selling or otherwise disposing or managing the Company's investments,
subject to the supervision of the Board.

A. Duties of Adviser. In carrying out its obligations to
-----------------
manage the investment and reinvestment of the assets of the Company, the
Adviser shall, as appropriate and consistent with the limitations set forth
in Section C hereof:

(a) perform research and obtain and evaluate pertinent
economic, statistical, and financial data relevant to the investment
policies of each Fund of the Company as set forth in the prospectus for
the Company, as amended from time to time;

(b) consult with the Board and furnish to the Board
recommendations with respect to an overall investment strategy for each
Fund of the Company for approval, modification, or rejection by the
Board;

(c) seek out specific investment opportunities and take
such steps as are necessary to implement any overall investment
strategies approved by the Board, including making and carrying out
day-to-day decisions to acquire or dispose of permissible investments,
management of investments and any other property of the Company, and
providing or obtaining such services as may be necessary in managing,
acquiring or disposing of investments;

(d) regularly report to the Board with respect to the
implementation of any approved overall investment strategy and any
other activities in connection with management of the assets of the
Company; and

2
<PAGE> 3
(e) furnish to regulatory authorities having jurisdiction
such information as may be requested in order for such authorities to
ascertain that variable insurance operations are being conducted in
accordance with applicable laws and regulations.

B. Employment of Sub-Adviser(s). The Adviser shall have the
----------------------------
authority to employ, at its expense, one or more sub-advisers. Where
applicable, reference herein to the Adviser shall include any sub-advisers
employed by the Adviser. Any agreement between the Adviser and any
sub-adviser shall be subject to the terms for approval, renewal, termination
and amendment as provided herein with respect to the Adviser, and such
sub-adviser shall at all times be subject to the direction of the Adviser and
the Board, and any duly constituted committee thereof, or any officer of the
Company acting pursuant to like authority.

C. Limitations on Advisory Services. The Adviser shall
--------------------------------
perform the services under this Agreement subject to the supervision and
review of the Board and in a manner consistent with the investment
objectives, policies, and restrictions of each Fund of the Company as stated
in its Registration Statement, as amended from time to time, filed with the
Securities and Exchange Commission, its Articles of Incorporation and
By-Laws, as amended from time to time, the provisions of the Investment
Company Act of 1940, as amended (the "Investment Company Act") and the
applicable requirements of the Internal Revenue Code of 1986, as amended.

The Company has furnished or will furnish the Adviser with copies of the
Company's Prospectus, Articles of Incorporation, and By-Laws as currently in
effect and agrees during the continuance of the Agreement to furnish the
Adviser with copies of

3
<PAGE> 4
any amendments or supplements thereto before or at the time the amendments or
supplements become effective. The Adviser will be entitled to rely on all
documents furnished by the Company.

ARTICLE II

Compensation of the Adviser
---------------------------

A. Investment Advisory Fee. As compensation for its services
-----------------------
to the Company, the Adviser shall receive monthly compensation based on an
annual percentage of the average daily value of the net assets of the Funds
of the Company as shown below:

<TABLE>
<S> <C>
S&P 500 Index Fund .25 Percent
Money Market Fund .125 Percent
Bond Index Fund .25 Percent
Asset Allocation Fund .50 Percent
Small-Cap Equity Fund .25 Percent

Managed Equity Fund Assets
--------------------------

First $10 million .40%
Next $20 million .30%
Balance over $30 million .25%

International Index Fund Assets
-------------------------------------

First $10 million .50%
Next $10 million .40%
Balance over $30 million .30%

Mid-Cap Equity Fund Assets
---------------------------------

First $10 million .55%
Next $10 million .45%
Balance over $30 million .40%
</TABLE>

4
<PAGE> 5

B. Allocation of Expenses. The Adviser shall be responsible
----------------------
for payment of all expenses it may incur in performing the services set forth
in Article I hereunder. Except for expenses specifically assumed by the
Adviser as stated above, the Company shall be responsible for all expenses
associated with the operations of the Company.

The Board shall determine the manner in which expenses are
allocated to the Funds of the Company, and the determination of the Board
shall be final and binding.

ARTICLE III

Fund Transactions and Brokerage
-------------------------------

The Adviser agrees to determine the securities to be purchased or sold
by each Fund of the Company, subject to the provisions of Article I, and to
place orders pursuant to its determinations either directly with the issuer,
with any broker-dealer or underwriter that specializes in the securities for
which the order is made, or with any other broker or dealer selected by the
Adviser, subject to the following limitations.

The Adviser is authorized to select the brokers or dealers that will
execute the purchases and sales of portfolio securities for each Fund of the
Company and will use its best efforts to obtain the most favorable price and
efficient execution of the Company's orders, taking into account all
appropriate factors, including: price; dealer spread or commission, if any;
size and difficulty of the transaction; the nature of the market for the
security; the reliability, financial condition and general execution and

5
<PAGE> 6
operational capabilities of the broker-dealer; and the research, statistical,
and economic data furnished by the broker-dealer to the Company.

Subject to the above requirements, nothing shall prohibit the Adviser
from selecting brokers or dealers with which it or the Company are affiliated
and from selecting brokers or dealers by virtue of sales of insurance
policies of General American Life Insurance Company or its affiliates by such
broker-dealers or their affiliates.

ARTICLE IV

Activities of the Adviser
-------------------------

The services of the Adviser to the Company under this Agreement are not
to be deemed exclusive and the Adviser will be free to render similar
services to others so long as its services under this Agreement are not
impaired. It is understood that directors, officers, employees and
shareholders of the Company are or may become interested in the Adviser, as
directors, officers, employees or shareholders or otherwise, and that
directors, officers, employees or shareholders of the Adviser are or may
become similarly interested in the Company.

It is agreed that the Adviser may use any supplemental investment
research obtained for the benefit of the Company in providing investment
advice to its other investment advisory accounts. The Adviser or its
subsidiaries may use such information in managing their own accounts.

Conversely, such supplemental information obtained by the placement of
business for the Adviser or other entities advised by the Adviser will be
considered by and may be useful to the Adviser in carrying out its
obligations to the Company.

6
<PAGE> 7

Securities held by a Fund may also be held by separate investment
accounts or other investment companies for which the Adviser may act as an
adviser or by the Adviser or its affiliates. Because of different investment
objectives or other factors, a particular security may be bought by the
Adviser or its affiliates or for one or more clients when one or more clients
are selling the same security. If purchases or sales of securities for the
Company or other entities for which the Adviser or its affiliates act as
investment adviser or for their advisory clients arise for consideration at
or about the same time, the Company agrees that the Adviser may make
transactions in such securities, insofar as feasible, for the respective
entities and clients in a manner deemed equitable to all. To the extent that
transactions on behalf of more than one client of the Adviser during the same
period may increase the demand for securities being purchased or the supply
of securities being sold, the Company recognizes that there may be an adverse
effect on price.

It is agreed that, on occasions when the Adviser deems the purchase or
sale of a security to be in the best interests of the Company as well as
other accounts or companies, it may, to the extent permitted by applicable
laws and regulations, but will not be obligated to, aggregate the securities
to be so sold or purchased for the Company with those to be sold or purchased
for other accounts or companies in order to obtain favorable execution and
lower brokerage commissions. In that event, allocation of the securities
purchased or sold, as well as the expenses incurred in the transaction, will
be made by the Adviser in the manner it considers to be most equitable and
consistent with its fiduciary obligations to the Company and to such other
accounts

7
<PAGE> 8
or companies. The Company recognizes that in some cases this procedure may
adversely affect the size of the position obtainable for a Fund of the Company.

ARTICLE V

Effectiveness of the Agreement
------------------------------

This Agreement shall not become effective unless and until it is
approved by the Company's Board (including a majority of directors who are
not parties to this Agreement or interested persons of any such party to this
Agreement), and by the Company's shareholders, and this Agreement shall come
into full force and effect on the date on which it is so approved, provided
that it shall not become effective as to any subsequently created Fund until
it has been approved by the Board specifically for such Fund, and that
implementation of any changes from prior Agreements may be delayed until the
start of the next month after a change is approved by the shareholders.

ARTICLE VI

Term of the Agreement
---------------------

As to each Fund of the Company, this Agreement shall continue in effect
from year to year so long as its continuance is approved annually by a
majority of the votes cast by those persons having voting rights in respect
of the Fund or by a vote by a majority of the members of the Board, but in
either event by the vote of a majority of the Board who are not "interested
persons" (as defined in the Investment Company Act) of any party to this
Agreement, cast in person at a meeting called for the purpose of voting such
approval.

8
<PAGE> 9

As to each Fund of the Company, this Agreement:

(1) may be terminated without the payment of any penalty upon
60 days' written notice to the Adviser either by the Board or by a majority
vote of those persons having voting rights in respect of the affected Fund(s)
of the Company:

(2) shall automatically terminate if it is assigned (within the
meaning of the Investment Company Act) by the Adviser;

(3) may be terminated by the Adviser without payment of any
penalty upon 60 days' written notice to the Secretary of the Board of the
Company; and

(4) may be amended, changed, waived, discharged or terminated
only by an instrument in writing signed by the party against which
enforcement of the change, waiver, discharge or termination is sought. An
amendment of this Agreement shall not be effective until approved by (a) vote
of the holders of a majority of the outstanding voting securities of the Fund
or Funds affected; and (b) a majority of those directors of the Company who
are not parties to this Agreement or interested persons of such a party, cast
in person at a meeting called for the purpose of voting on such approval.

ARTICLE VII

Recordkeeping
-------------

The Adviser agrees to preserve for the period prescribed by the rules
and regulations of the Securities and Exchange Commission all records the
Adviser maintains for the Company as are required to be maintained pursuant
to said rules. The Adviser agrees that all such records shall be the
property of the Company and shall be made available, within five (5) business
days of the request, to the Company's

9
<PAGE> 10
accountants or auditors during regular business hours at the Adviser's offices
upon such prior written notice. In the event of termination for any reason, all
such records shall be returned promptly to the Company, free from any claim or
retention of rights by the Adviser. In addition, the Adviser will provide any
materials, reasonably related to the investment advisory services provided
hereunder, as may be reasonably requested in writing by the directors or
officers of the Company or as may be required by any governmental agency having
jurisdiction. Adviser will keep any information obtained in the course of
performing under this Agreement in confidence, and will not use such information
for its own benefit nor disclose it except as authorized by Company or as
required by regulatory authorities having jurisdiction.

10
<PAGE> 11

ARTICLE VIII

Liability of the Adviser
------------------------

In the absence of willful misfeasance, bad faith, gross negligence or
reckless disregard of obligations or duties on the part of the Adviser (or
its officers, directors, agents, employees, controlling persons,
shareholders, and any other person or entity affiliated with the Adviser or
retained by it to perform or assist in the performance of its obligations
under this Agreement), neither the Adviser nor any of its officers,
directors, employees or agents shall be subject to liability to the Company
or to any shareholder or to any other person with a beneficial interest in
the Company for any act or omission in the course of, or connected with,
rendering advisory services hereunder, including without limitation any error
or judgment or mistake of law or for any loss suffered by the Company or any
shareholder or other person in connection with the matters to which this
Agreement relates, except to the extent specified in Section 36(b) of the
Investment Company Act concerning loss resulting from a breach of fiduciary
duty with respect to the receipt of compensation for services. The
provisions of this Article VIII shall not apply to services other than those
relating solely to the provision of investment advice rendered by the Adviser
pursuant to this Agreement.

ARTICLE IX

Governing Law
-------------

While this Agreement is intended by the parties to be governed by
Missouri law as to matters of state law, this Investment Advisory Agreement
is also subject to the provisions of the Investment Company Act, as amended,
and the rules and regulations

11
<PAGE> 12
of the Securities and Exchange Commission thereunder, including such exemptions
therefrom as the Securities and Exchange Commission may grant. Words and
phrases used herein shall be interpreted in accordance with that Act and those
rules and regulations. As used with respect to the Company and the holders of
voting shares of any class of the Company's Capital Stock, the term "majority of
the outstanding voting shares" means the lesser of (i) 67% or more of the voting
shares represented at a meeting at which the holders of more than 50% of the
outstanding voting shares are represented or (ii) more than 50% of the
outstanding voting shares.

IN WITNESS WHEREOF, the parties have caused this Investment Advisory
Agreement to be signed by their respective officials duly authorized, as of
the day and year first above written.

Attest: GENERAL AMERICAN CAPITAL COMPANY

/s/ Matthew P. McCauley By: /s/ Richard A. Liddy
- ------------------------------ --------------------------------------
Matthew P. McCauley, Secretary Richard A. Liddy, President

CONNING ASSET MANAGEMENT
Attest: COMPANY

/s/ Fred M. Schpero By: /s/ Leonard M. Rubenstein
- ------------------------------ --------------------------------------
Fred M. Schpero, Secretary Leonard M. Rubenstein, Chief Executive
Officer and Chief Investment Officer

<PAGE> 1
AMENDED AND RESTATED
SHAREHOLDERS' AGREEMENT

THIS AMENDED AND RESTATED SHAREHOLDERS' AGREEMENT is made effective as
of the 22nd day of November, 1996, by and among Conning Corporation, a
Missouri corporation formerly known as Conning Asset Management Company (the
"Corporation"), General American Life Insurance Company, a Missouri
corporation ("General American"), General American Holding Company, a
Missouri corporation which is a wholly owned subsidiary of General American
("GAHC"), and the other persons who are parties to this Agreement or may
become parties to this Agreement, as indicated by their signatures below or
on an additional signature page hereto (the "Other Parties"). GAHC and the
Other Parties are hereinafter sometimes referred to collectively as
"Shareholders" or individually as a "Shareholder."

RECITALS
--------

A. The capital stock of the Corporation consists of (i) Class A Voting
Common Stock, par value $.01 per share (the "Voting Common Stock"), (ii)
Class B Non-Voting Common Stock, par value $.01 per share (the "Non-Voting
Common Stock"), (iii) Series A Convertible Preferred Stock, par value $.01
per share (the "Series A Preferred Stock"); and (iv) Series B Convertible
Preferred Stock, par value $.01 per share (the "Series B Preferred Stock").
In addition, the Corporation has outstanding options to purchase shares of
Non-Voting Common Stock which were granted pursuant to the Corporation's 1995
Flexible Stock Plan (the "1995 Options") and pursuant to the Corporation's
1996 Flexible Stock Plan (the "1996 Options"). The Series A Preferred Stock,
the shares of Non-Voting Common Stock issued upon conversion of the Series A
Preferred Stock and the shares of Voting Common Stock issued upon conversion
of such Non-Voting Common Stock are referred to collectively as the "Series A
Shares". The Series B Preferred Stock, the shares of Non-Voting Common Stock
issued upon conversion of the Series B Preferred Stock and the shares of
Voting Common Stock issued upon conversion of such Non-Voting Common Stock
are referred to collectively as the "Series B Shares." The Series A
Preferred Stock and the Series B Preferred Stock are referred to collectively
as the "Preferred Stock." The shares of Non-Voting Common Stock issuable
upon exercise of the 1995 Options and the 1996 Options are referred to as the
"1995 Option Shares" and the "1996 Option Shares," respectively, and the
"Option Shares," collectively. The 1995 Options and the 1996 Options are
referred to collectively as the "Options".

B. The parties hereto desire to amend and restate the provisions of
this Agreement as set forth herein.

C. The Shareholders own all of the outstanding shares of the capital
stock (the "Shares") of the Corporation and/or hold all of the outstanding
Options.

D. The parties hereto desire to insure that the Shares remain closely
held by persons knowledgeable about the Corporation's business and to provide
for continuity and harmony in the management of the Corporation.

1
<PAGE> 2
E. The parties hereto desire to provide for the orderly disposition of
the Shares in certain events, including the death or disability of any of the
Shareholders or the termination of a Shareholder's employment with the
Corporation.

AGREEMENTS
----------

1. General Restrictions on Transfer.
--------------------------------

(a) From and after the date hereof until the termination of this
Agreement, no Shareholder will in any manner, whether directly or indirectly,
voluntarily, involuntarily or by operation of law, sell, assign, convey,
pledge, give, mortgage, hypothecate, create any security interest in, or
otherwise encumber, dispose of or otherwise transfer, any interest in any
Shares of Non-Voting Common Stock or Preferred Stock (together with any
securities issued upon exchange or conversion of Shares of Non-Voting Common
Stock or Preferred Stock or upon any reclassification, recapitalization or
exchange thereof, the "Restricted Shares") except pursuant to the provisions
of this Agreement. This Agreement shall apply to all transfers of Restricted
Shares (now owned or hereafter acquired) by the Shareholders, whether
voluntary, involuntary or by operation of law, resulting from death or
otherwise.

(b) Notwithstanding the foregoing, a Shareholder may transfer
Restricted Shares pursuant to applicable laws of descent and distribution
(excluding community property laws) or to such Shareholder's spouse and
descendants (whether natural or adopted) or to any trust solely for the
benefit of either that Shareholder and/or his or her spouse and/or
descendants, provided that: (i) the restrictions and rights contained in
this Agreement will continue to be applicable to the Restricted Shares after
any such transfer, and (ii) the transferee(s) of such Restricted Shares
agrees in writing to be bound by the provisions of this Agreement.

2. Put Option/Purchase Obligation Upon Death, Total Disability or
-------------------------------------------------------------
Termination of Employee Shareholders.
- ------------------------------------

(a) Upon the death, Total Disability (as hereinafter defined) or
termination of employment for any reason prior to August 11, 1998 of a
Shareholder who, at such time, is an employee of the Corporation or a
subsidiary of the Corporation or General American (an "Employer") and
provided that there has not been a Qualified IPO (as defined in Section 16.3)
by such time, such Shareholder's estate or such disabled or terminated
Shareholder shall have an option to sell all, but not less than all, of the
Series A Shares which the deceased, disabled or terminated Shareholder owned at
his death, disability or termination to General American, or at General
American's sole election to any affiliate other than the Corporation, for the
price established in Section 11.2.

(b) Upon the death, Total Disability or termination of employment for
any reason prior to November 22, 2001 of a Shareholder who, at such time, is
an employee of an Employer or a director of the Corporation and provided
there has been no Qualified IPO by such time, the Corporation shall have the
obligation, assignable in the Corporation's sole discretion to an affiliate
of the Corporation, to purchase, and such Shareholder's estate or such
disabled or terminated Shareholder shall be obligated to sell to the
Corporation or its designee, all but not

2
<PAGE> 3
less than all of the Series B Shares which the deceased, disabled or terminated
Shareholder owned at his death, disability or termination for the price
established in Section 11.2. With respect to any Shareholder who is both an
employee of an Employer and a director of the Corporation, "termination of
employment" for purposes of this paragraph shall mean the later of the
termination of such employment or the termination of such directorship.

(c) The option described in Section 2(a) shall be exercisable at any
time after the date of death, disability or termination of the Shareholder.
The option set forth in Section 2(a) shall remain exercisable,
notwithstanding any transfers proposed pursuant to Section 3, and shall
supersede any purchase options arising upon involuntary transfers pursuant to
Section 4.

(d) Total Disability means having a physical or mental condition which
renders the Shareholder incapable of performing his duties and responsibilities
with an Employer for a period of six months. Determination of Total Disability
will be made by a physician selected by the Corporation. If the determination
of such physician differs from the opinion as to disability of the
Shareholder's physician, the two physicians shall select a third physician,
whose determination shall be binding on both parties.

3. Purchase Option Upon Voluntary Transfer of Restricted Shares.
------------------------------------------------------------
Except as otherwise provided herein and except in conjunction with an IPO (as
defined in Section 16.3) of Shares, a Shareholder may transfer Restricted
Shares to another person or entity only in a bona fide sales transaction and
only in accordance with the following procedure:

3.1 Notice of Transfer. If a Shareholder proposes to transfer
------------------
Restricted Shares of which he/she is either the beneficial or legal owner to
any person(s) or entity, he/she shall give a written notice of transfer to
the Corporation and each other Shareholder specifying: (i) the Shareholder's
intention to transfer Restricted Shares; (ii) the number of Restricted Shares
proposed to be transferred; (iii) the name, business and residence address of
the proposed transferee(s); and (iv) the amount of the consideration and the
other terms of sale.

3.2 General American's Option to Purchase; Purchase Price. For a
-----------------------------------------------------
period of thirty (30) days from the receipt of the notice of transfer,
General American (or at General American's sole election, any affiliate other
than the Corporation) shall have the option to purchase some or all of the
Series A Shares proposed to be sold. Any such sale shall be for such
consideration and under such terms as contemplated by the notice of transfer.

3.3 Corporation's Option to Purchase; Purchase Price. For a period of
------------------------------------------------
thirty (30) days from the receipt of the notice of transfer, the Corporation
(or at the Corporation's sole election, an affiliate of the Corporation)
shall have the option to purchase some or all of the Series B Shares proposed
to be sold, if any. Any such sale shall be for such consideration and under
such terms as contemplated by the notice of transfer.

3.4 Shareholders' Option to Purchase; Purchase Price. In the event
------------------------------------------------
all of the Restricted Shares subject to the purchase options described in
Sections 3.2 and 3.3 are not purchased, the non-transferring Shareholders
shall each have the option to purchase up to his/her

3
<PAGE> 4
Pro Rata Share (as hereinafter defined) of the remaining unpurchased Restricted
Shares at the price and on the terms specified in the notice of transfer by
delivering written notice of such election to the transferring Shareholder and
the Corporation within thirty (30) days after the expiration of the purchase
options described in Sections 3.2 and 3.3. A Shareholder's "Pro Rata Share"
shall mean a number of Restricted Shares equal to the total number of
unpurchased Restricted Shares multiplied by a fraction, the numerator of
which is the number of Restricted Shares owned by that Shareholder and the
denominator of which is the number of Restricted Shares owned by all
non-transferring Shareholders.

4. Purchase Option Upon Involuntary Transfer. If at any time
-----------------------------------------
Restricted Shares are transferred by operation of law to any person or entity
(such as, but not limited to, pursuant to a will or the laws of descent and
distribution, a property division in conjunction with a divorce proceeding, a
Shareholder's trustee in bankruptcy, or a purchaser at any creditor's or
court sale), the Corporation, within sixty (60) days of the Corporation's
receipt of actual notice of the transfer, may exercise an option to purchase
some or all of the Restricted Shares so transferred for the price established
in Section 11.2.

5. Put Option Relating to Series A Shares. If there has been no
--------------------------------------
Qualified IPO on or before August 11, 1998, each Shareholder who holds Series
A Shares and who was a shareholder or option holder of Conning, Inc. (f/k/a
Conning Corporation) prior to August 11, 1995 shall have an option to sell to
General American (or at General American's sole election any affiliate other
than the Corporation), and General American shall have the obligation to
purchase, all, but not less than all, of his/her Series A Shares for the
price established in Section 11.2. The option described in this Section
shall be exercisable at any time after August 11, 1998.

6. Purchase Options Relating to Series A Shares.
--------------------------------------------

6.1 Purchase Option If No Qualified IPO by August 11, 2002. If there
------------------------------------------------------
has been no Qualified IPO on or before August 11, 2002, General American
shall have the option, assignable in General American's discretion to any
affiliate other than the Corporation, to purchase some or all of the
outstanding Series A Preferred Stock for the price established in Section
11.2. The option described in this Section shall be exercisable at any time
after August 11, 2002 but is subject to each Series A Preferred Stockholder's
right to convert the Series A Preferred Stock to Non-Voting Common Stock.
The option set forth in this Section shall remain exercisable,
notwithstanding any transfers proposed or accomplished pursuant to Section 3.

6.2 Purchase Option If No Qualified IPO by August 11, 2005. If
------------------------------------------------------
there has been no Qualified IPO on or before August 11, 2005, General American
shall have the option, assignable in General American's discretion to any
affiliate other than the Corporation, to purchase some or all of the
outstanding Series A Shares for the price established in Section 11.2. The
option described in this Section shall be exercisable at any time after
August 11, 2005. The option set forth in this Section shall remain
exercisable, notwithstanding any transfers proposed or accomplished pursuant
to Section 3.

4
<PAGE> 5
7. Put Option Relating to Series B Shares If No Qualified IPO by
------------------------------------------------------------
November 22, 2001. If there has been no Qualified IPO on or before November
- -----------------
22, 2001, each Shareholder who holds Series B Shares and who is, at such
time, an employee of Conning & Company or an affiliate thereof or a director
of the Corporation, shall have an option to sell to the Corporation (or at
the Corporation's sole election any affiliate of the Corporation), and the
Corporation shall have the obligation to purchase, all, but not less than
all, of his/her Series B Shares for the price established in Section 11.2.
The option described in this Section shall be exercisable at any time after
November 22, 2001.

8. Purchase Option With Respect to Conning Assets or Stock.
-------------------------------------------------------

8.1 Notice of Transfer. If at any time prior to a Qualified IPO the
------------------
Corporation proposes to sell all or substantially all of the capital stock of
Conning & Company or a material portion of the assets of Conning & Company
(including, without limitation, the Conning name), the Corporation shall give
a written notice of transfer to all Shareholders who were employees of
Conning Corporation or Conning & Company prior to August 11, 1995 and who own
Series A Shares, 1995 Options and/or 1995 Option Shares specifying: (i) the
Corporation's intention to make such sale, (ii) the name and business address
of the proposed transferee(s); and (iii) the amount of the consideration and
the other material terms of sale.

8.2 Shareholders' Option to Purchase; Purchase Price. For a period of
------------------------------------------------
sixty (60) days from the receipt of the notice of transfer set forth in
Section 8.1, Shareholders who were employees of Conning Corporation or
Conning & Company prior to August 11, 1995 and who own Series A Shares, 1995
Options and/or 1995 Option Shares, shall have the option to purchase all, but
not less than all, of the capital stock or assets proposed to be sold
pursuant to the notice of transfer. For purposes of this Section 8, all
eligible Shareholders who deliver notice to the Corporation during such sixty
day period stating his or her desire to exercise the option granted in this
Section 8 shall be deemed to have exercised the option granted in this
Section 8 as a group and shall thereafter appoint an authorized
representative to act on such group's behalf. Any sale to such group of
Shareholders shall be for such consideration and under such terms as
contemplated by the notice of transfer, provided that the Corporation shall
not be required to allocate the stock or assets proposed to be sold among the
Shareholders comprising the group that has exercised the option granted in
this Section 8 and shall only be obligated to sell such stock or assets to
the group comprised of such Shareholders as a single entity.

9. Purchase Options.
----------------

9.1 General American's Purchase Option. General American (or at
----------------------------------
General American's sole election, any of its affiliates, other than the
Corporation) shall have the option to purchase 50% of the Series A Shares
(excluding fractional shares) and the Shareholders shall have the obligation
to sell such stock for the price established in Section 11.1. The option
described in this Section 9.1 shall be exercisable concurrently with the
proposals to amend this Agreement by adding this Section 9.1. All Shareholders
required to participate in said purchase option shall participate on a basis
which is pro rata among them based upon the percentage of

5
<PAGE> 6
Series A Shares then held by such Shareholder divided by the aggregate of
the number of all Series A Shares held by all such Shareholders.

9.2 Corporation's Purchase Option. If at any time there is a
-----------------------------
Qualified IPO on or after March 31, 1998, the Corporation (or at the
Corporation's sole election, any affiliate of the Corporation) shall have the
option to purchase and each Shareholder shall have the obligation to sell to
the Corporation all, but not less than all, of his/her Series B Preferred
Stock for the price established in Section 11.1, subject to the right of such
Shareholder to convert such Series B Preferred Stock. The option described
in this Section 9.2 shall be exercisable during the thirty day period
preceding closing of the Qualified IPO, subject to the occurrence of such
closing. In the Shareholder's discretion, the conversion of the Series B
Preferred Stock may be made contingent upon the consummation of the IPO.

10. Exercise of Options and Effect of Non-Exercise of Options.
---------------------------------------------------------

10.1 Exercise of Options. In order to exercise any option(s) granted
-------------------
pursuant to this Agreement, a party shall do so by delivering written notice
of exercise of the option within the time provided in the applicable Section
hereof to the transferring Shareholder, the Corporation or the transferee, as
the case may be. Copies of all such documents shall be delivered to the
Corporation.

10.2 Forfeiture, Waiver or Noncompliance.
-----------------------------------

(a) If an option granted hereunder is forfeited, waived or not
exercised in compliance with Section 3, the Restricted Shares may be
transferred, within thirty (30) days after the expiration of the option
period granted to the other Shareholders, to the transferee named in the
notice required by Section 3, for such consideration and upon such terms
therein stated, which Restricted Shares when so transferred shall be subject
to the terms of this Agreement. No Section 3 transfer shall be valid if the
transfer is not made within the aforesaid thirty (30) day period or is not
for the consideration and upon the terms or to the transferee stated in the
notice required of the transferring Shareholder by Section 3.

(b) If an option is forfeited, waived or not exercised in compliance
with Section 4, the Restricted Shares shall, in the hands of the transferee,
be subject to the terms, conditions and restrictions of this Agreement.

(c) If an option is forfeited, waived or not exercised in compliance
with Section 8, the capital stock or assets may be transferred, within one
hundred twenty (120) days after the expiration of the option period granted
to the Shareholders, to the transferee named in the notice required by
Section 8, for such consideration and upon such terms therein stated. No
Section 8 transfer shall be valid if the transfer is not made within the
aforesaid one hundred twenty (120) day period or is not for the consideration
and upon the terms or to the transferee stated in the notice required of the
Corporation by Section 8.

11. Purchase Price.
--------------

6
<PAGE> 7
11.1 Purchase Price on Put/Purchase Option Pursuant to Purchase Options.
------------------------------------------------------------------
The price for each Series A Share to be purchased pursuant to the option
granted in Section 9.1 shall be $11.25. The price for each Share of Series B
Preferred Stock to be purchased pursuant to the option granted in Section 9.2
shall be $5.33, plus accrued but unpaid dividends.

11.2 Purchase Price on Other Events. The price of each Share to be
-------------------------------
purchased pursuant to Section 2, 4, 5, 6 or 7 shall be equal to:

(a) in the case of Shares of Series A Preferred Stock, a price
per share equal to the Fair Market Value (as defined in Section 16.3) of
each share of Non-Voting Common Stock into which such Preferred Stock is
then convertible;

(b) in the case of Shares of Series B Preferred Stock, a price
per share equal to the Fair Market Value of each share of Non-Voting
Common Stock into which such Preferred Stock is then convertible,
less the per share amount required to be paid on conversion of such
Preferred Stock; and

11.3 Payment of the Purchase Price. The purchase price for Shares
-----------------------------
purchased pursuant to this Agreement shall be paid in full by check at the
closing of such purchase.

11.4 Obligations of General American Unconditional. General American
---------------------------------------------
hereby absolutely and unconditionally agrees to purchase all Shares which any
Shareholder elects to sell pursuant to Section 2(a) or Section 5 hereof at
the price established in Section 11.2. The purchase obligations of General
American under this Agreement shall be absolute and unconditional and shall
remain in full force and effect until all payments and obligations of General
American under this Agreement shall have been fully and finally paid and
performed. Notwithstanding any assignment by General American to any
affiliate of any of its obligations hereunder, the Shareholders shall have
the right to proceed first and directly against General American under this
Agreement without proceeding against any other party or exhausting any other
remedies which such Shareholder may have.

12. The Closing.
-----------

12.1 Time of Closing. (a) In the case of the purchase of Shares under
---------------
Section 2, the closing shall occur on the date which is no later than the
earlier of thirty (30) days after the exercise of the option or the
triggering of the purchase obligation provided therein or one hundred twenty
(120) days after the deceased Shareholder's death or the date of the
determination of disability or termination, as the case may be.

(b) In the case of a purchase of Shares or assets, as the case may be,
under Section 3, Section 8 or Section 9.1, the closing shall be on the date
which is set forth in the notice provided for in such Sections.

7
<PAGE> 8
(c) In the case of a purchase of Shares under Section 4, 5, 6 or 7,
the closing shall occur on the thirtieth day after the exercise of the option
provided therein.

(d) In the case of a purchase of Shares under Section 9.2, the closing
shall be effective concurrently with or, in the purchaser's discretion,
immediately after the closing of the Qualified IPO.

(e) The parties agree to promptly take such further actions and to
execute and deliver such documents, instruments or agreements as may be
reasonably required to effect the transfer of title to the Shares pursuant to
this Agreement.

12.2 Absence of Liens. All Shares (or other property transferred
----------------
pursuant to Section 8) shall be delivered to the Corporation or purchasing
Shareholder(s) free and clear of all liens, claims and encumbrances excepting
only those for which provision is expressly made in this Agreement or the
terms of such sale, and said Shares shall be transferred on the books of the
Corporation to the purchaser.

13. Legend on Certificates.
----------------------

(a) All Shares now or hereafter owned by the Shareholders of the
Corporation shall be subject to the provisions of this Agreement and the
certificates representing Shares, including Shares in the hands of permitted
transferees, shall bear the following legend:

"The sale, transfer or encumbrance of this certificate is subject to an
Agreement between the Corporation and all of its Shareholders. A
copy of this Agreement is on file in the office of the Secretary of
the Corporation. The Agreement provides, among other things, for
certain obligations to sell and to purchase the Shares evidenced by
this certificate, for a designated purchase price. By accepting the
Shares evidenced by this certificate, the holder agrees to be bound
by said Agreement."

(b) Each Shareholder understands that the certificates representing
Shares, including Shares in the hands of permitted transferees, shall also
bear the following legend:

14. Termination.
-----------

14.1 Complete Termination. This Agreement and all restrictions on the
--------------------
Restricted Shares created hereby shall terminate on the occurrence of any of
the following events:

8
<PAGE> 9
(a) A single Shareholder becoming the owner of all of the Shares
of the Corporation which are then subject to this Agreement.

(b) The execution of a written instrument by the Corporation and
all of the Shareholders who then own Shares or Options subject to
this Agreement which terminates the same.

14.2 Effect. The termination of this Agreement for any reason (i)
------
shall not affect any right or remedy existing hereunder prior to the
effective date of its termination, and (ii) shall not terminate the
provisions of Section 15, which shall survive such termination according to
its terms.

15. Management and Board of the Corporation.
---------------------------------------

15.1 Compensation. For the three years after August 11, 1995, the
-------------
Corporation will maintain the general approach and methodology to cash
compensation (bonus and salary) of employees and venture capital carried
interest allocations as are currently in effect at Conning, Inc. (f/k/a
Conning Corporation). Prior to the end of 1996, the Corporation will
complete a compensation study with the goal of creating comparable
compensation plans for the operating subsidiaries of the Corporation
characterized by market pricing and performance incentives.

15.2 Composition of the Board. The Corporation shall have a Board of
-------------------------
Directors comprised of not more than seven members. There will be a minimum
of 2 members of the management of Conning, Inc. (f/k/a Conning Corporation)
(including Maurice W. Slayton or his successor) on the Board of Directors of
the Corporation during the period ending upon the earlier of: (i) August 11,
2000 or (ii) the occurrence of a Qualified IPO. The president of Conning,
Inc. (f/k/a Conning Corporation) will serve on the Compensation Committee of
the Board of Directors of the Corporation, and will participate in the
compensation study referred to in Section 15.1 above and in formulating
recommendations regarding compensation. This Section 15.2 shall terminate
upon the earlier to occur of August 11, 2000 or a Qualified IPO.

15.3 Management of the Corporation. (a) Maurice W. Slayton shall serve
------------------------------
as President of the Corporation, President of Conning Asset Management
Company (f/k/a GAIMCO) and as President and CEO of Conning, Inc. (f/k/a
Conning Corporation), which will survive as an operating subsidiary of the
Corporation. Leonard Rubenstein will serve as Chairman and CEO of the
Corporation and as Chairman and CEO of Conning Asset Management Company,
which will survive as an operating subsidiary of the Corporation.

(b) Maurice W. Slayton will serve as a senior member of management of
the Corporation with responsibility for (i) marketing for the Corporation and
its subsidiaries, (ii) manager of the Corporation's Hartford office, (iii)
participation in identifying and negotiating acquisitions, and (iv)
participation in the development and execution of an initial public offering
of the Shares of the Corporation.

9
<PAGE> 10
(c) Maurice W. Slayton will be consulted on the following: (i)
business plan development for combining subsidiary operations and (ii) titles
and roles for senior management of Conning, Inc.

(d) In the event Maurice W. Slayton ceases to be President of the
Corporation and President and CEO of Conning, Inc., General American shall
select a senior member of the Corporation's or Conning, Inc.'s management who
is a former shareholder of Conning, Inc. to assume the responsibilities
prescribed for Mr. Slayton in clauses 15.3(b)(iv) and 15.3(c)(i) above. This
Section 15.3 shall terminate upon the earlier to occur of August 11, 1998 or
a Qualified IPO.

16. General Provisions.
------------------

16.1 Governing Law. This Agreement shall in all respects be construed
-------------
in accordance with and governed by the substantive laws of the State of
Missouri, without reference to its choice of law rules.

16.2 Conflict with Articles or Bylaws. It is expressly agreed that
--------------------------------
whether or not the Articles or Bylaws of the Corporation fully incorporate
the provisions hereof, or any of them, the parties' rights and obligations
shall be governed by this Agreement which shall prevail in the event of any
ambiguity or any inconsistency between this Agreement and the Articles and
Bylaws.

16.3 Definitions. (a) Unless the context otherwise requires, the words
-----------
"Shareholder" and "Shareholders" shall for all purposes of this Agreement
mean and include: (1) all of the individual parties hereto; (2) all persons
to whom any Shares may hereafter be transferred; and (3) all employees and
directors who may acquire any Shares of the Corporation which may hereafter
be issued. Similarly, the term "Shares" applies to any class of Shares which
the Corporation now or hereafter is authorized to issue.

(b) The words "IPO," "Qualified IPO" and "Conversion Rate" shall for
all purposes of this Agreement have the meanings ascribed thereto in the
Corporation's Articles of Incorporation as in effect on the date of execution
hereof.

(c) The term "Fair Market Value" shall mean: On any date specified
herein, the amount per share of the Voting Common Stock (as if the Non-Voting
Common Stock had been converted to Voting Common Stock), equal to the fair
value thereof determined by an Independent Financial Expert. The following
procedures shall be utilized in determining fair value.

(i) The value of the Voting Common Stock shall be determined by
an Independent Financial Expert (to be selected as provided in
Section 16.3(d) below) using one or more valuation methods that the
Independent Financial Expert in its professional judgment determines
to be most appropriate but without giving effect to the discount for
any lack of liquidity of the Voting Common Stock or to the fact that
the Corporation may have no class of securities registered under the
Securities Exchange Act of 1934. In

10
<PAGE> 11
performing its analysis, the Independent Financial Expert shall, among
other things, consider public market valuations of companies which it
deems comparable to the Corporation. The Independent Financial Expert
shall deliver, promptly upon completion, to the Corporation and to each
of the parties who will be a party to any transaction resulting from the
exercise of an option pursuant to the notice referred to in Section
10.1 (the "Interested Parties"), a report stating the method of
valuation considered or used and the fair value of said Voting Common
Stock as of the date of the exercise notice referred to in Section
10.1 and containing a statement as to the nature and scope of the
examination or investigation upon which the determination of value
was made (the "Value Report").

The Independent Financial Expert shall consult with management of
the Corporation in order to allow management to provide information
and data relevant to, and comment on the proposed value of, such
Independent Financial Expert's Value Report.

(ii) Within five business days of delivery of any notice by a
party of the exercise of an option which requires a determination of
Fair Market Value, the Corporation shall give written notice to each
Shareholder who will be a party to the transactions resulting from
the exercise of such options (the "Holders") of the Corporation's
choice of an Independent Financial Expert to prepare the Value
Report. Within five business days after the date of this notice,
Holders owning a majority of the shares identified in any notice of
option exercise or in any series of notices delivered within the same
10 business day period shall notify the Corporation in writing (the
"Holders' IFE Notice") of their approval or disapproval of the
Corporation's initial choice of Independent Financial Expert and, in
the event of disapproval, such Holders shall propose an alternative
firm as Independent Financial Expert. Failure to deliver written
notice of approval or disapproval within such 10 business day period
shall be deemed approval of such initial choice of the Corporation.
Within two business days after its receipt of the Holders' IFE
Notice, the Corporation shall notify the Holders of its approval or
disapproval of their selection. If the Corporation does not accept
the Independent Financial Expert chosen by the Holders, then the two
Independent Financial Experts previously selected pursuant to this
section shall promptly be requested by the Corporation and Holders to
jointly select a firm to act as Independent Financial Expert to
prepare the Value Report. Their joint selection, which shall be made
within five business days, shall be final and binding upon the
Interested Parties.

(iii) The Corporation shall consult and cooperate with the
selected Independent Financial Expert to facilitate the final
delivery of its Value Report no later than forty-five (45) calendar
days after the date of the notice of option exercise, unless the
parties to such transaction agree to a different time or delivery.
The Value Report shall be final and binding upon the Interested
Parties.

(d) The term "Independent Financial Expert" means a nationally
recognized investment banking firm, ranking in the top twenty (as determined
by the Securities Industry

11
<PAGE> 12
Association, Inc. or a similar securities information data company) lead
managers for primary common stock offerings in the year prior to the year in
which it is called upon to give independent financial advice to the Corporation
as described herein and that does not (and whose directors, officers and
Affiliates do not) have a material direct or indirect financial interest in the
Corporation or any of its Affiliates and that does not provide any advice or
opinions to the Corporation or any of its Affiliates except as an Independent
Financial Expert. The Corporation will bear the expense of compensation of the
Independent Financial Expert for services or opinions it may provide in that
capacity.

16.4 Remedies for Breach. The Shares are unique chattels and each
-------------------
party to this Agreement shall have the remedies which are available to him or
it for the violation of any of the terms of this Agreement, including, but
not limited to, the equitable remedies for specific performance and
injunctive relief.

16.5 Notices. All notices provided for by this Agreement shall be made
-------
in writing (1) either by actual delivery or (2) by the mailing of the notice
in the United States mail to the last known address of the party entitled
thereto, registered or certified mail, return receipt requested. Copies of
such notices shall be mailed to:

James L. Nouss, Jr., Esq.
Bryan Cave LLP
One Metropolitan Square
211 North Broadway, Suite 3600
St. Louis, MO 63102-2750

Matthew P. McCauley
Vice President and Assistant General Counsel
General American Life Insurance Company
700 Market Street
St. Louis, MO 63101

Thomas L. Fairfield, Esq.
LeBoeuf, Lamb, Greene & MacRae, LLP
Goodwin Square
225 Asylum Street
Hartford, CT 06103

16.6 Amendment. This Agreement may be amended or altered at any time
---------
if the amendment or alteration is both ratified by the Board of Directors of
the Corporation and consented to in writing by all other parties hereto.

16.7 Descriptive Headings. Titles to Sections are for information
--------------------
purposes only.

12
<PAGE> 13
16.8 Binding Effect. This Agreement is binding upon and inures to the
--------------
benefit of the Corporation, its successors, assigns, and transferees, and to
the Shareholders and their respective heirs, personal representatives,
successors and permitted assigns and transferees.

17. Second Flight of Options. The Corporation hereby acknowledges and
------------------------
agrees that coincident with an IPO, at least 100,000 employee or director
stock options with a strike price equal to the Common Stock equivalent per
share price of stock sold by the Corporation in said IPO will be granted to
certain directors or key employees of the Corporation and its subsidiaries,
subject to concurrence by the managing underwriter of the Corporation's IPO;
provided, that the Corporation shall retain discretion with respect to the
allocation of options among directors and employees.

18. Inapplicability of Restrictions to General American. None of
---------------------------------------------------
Sections 1, 2, 3, 4, 5 or 6 hereof, including, without limitation, the
restriction on transfer and other provisions thereof, shall apply to any
Shares of Non-Voting Common Stock or Preferred Stock (or Restricted Shares
issued upon conversion or exchange of Shares of Non-Voting Common Stock or
Preferred Stock or upon any reclassification, recapitalization or exchange
thereof) held by General American, any parent of General American, any
subsidiary of General American, or any subsidiary of any parent of General
American (collectively, the "General American Entities") or any assignee or
transferee of any of the General American Entities.

13
<PAGE> 14

IN WITNESS WHEREOF, the parties have executed this Agreement June 11,
1997.

CONNING CORPORATION

By: /s/ Leonard M. Rubenstein
-----------------------------------------
Name: Leonard M. Rubenstein
Title: Chairman and Chief Executive

GENERAL AMERICAN LIFE INSURANCE
COMPANY

By: /s/ Richard A. Liddy
-----------------------------------------
Name: Richard A. Liddy
Title: Chairman, President and Chief
Executive Officer

GENERAL AMERICAN HOLDING COMPANY

By: /s/ Richard A. Liddy
-----------------------------------------
Name: Richard A. Liddy
Title: President

[Signature Page Continued On Following Two Pages]

<PAGE> 15

COUNTERPART SIGNATURE PAGE TO AMENDED AND RESTATED SHAREHOLDERS' AGREEMENT
--------------------------------------------------------------------------

/s/ Maurice W. Slayton
- ---------------------------------
Maurice W. Slayton
Dated: 5/28/97

/s/ Thomas A. Byrne
- ----------------------------------
Thomas A. Byrne
Dated: May 17, 1997

/s/ Mark E. Hansen
- ----------------------------------
Mark E. Hansen
Dated: 6/3/97

/s/ Scott E. Daniels
- ----------------------------------
Scott E. Daniels
Dated: 5/24/97

/s/ Paul J. Sellier
- ----------------------------------
Paul J. Sellier
Dated: 6/11/97

/s/ Gerard Vecchio
- ----------------------------------
Gerard Vecchio
Dated: June 3, 1997

/s/ Seth C. Miller
- ----------------------------------
Seth C. Miller
Dated: 5-19-97

/s/ Fred M. Schpero
- ----------------------------------
Fred M. Schpero
Dated: 5/14/97

/s/ Gary K. Ransom
- ----------------------------------
Gary K. Ransom
Dated: 5/27/97

/s/ John A. Corroon
- ----------------------------------
John A. Corroon
Dated: June 11, 1997

/s/ David N. Reid
- ----------------------------------
David N. Reid
Dated: 6-5-97

/s/ Thomas D. Sargent
- ----------------------------------
Thomas D. Sargent
Dated: 6-5-97

/s/ Daniel J. Mainolfi
- ----------------------------------
Daniel J. Mainolfi
Dated: 6/5/97

/s/ John B. Clinton
- ----------------------------------
John B. Clinton
Dated: 5/30/97

/s/ Steven F. Piaker
- ----------------------------------
Steven F. Piaker
Dated: 6/1/97

/s/ Gordon G. Pratt
- ----------------------------------
Gordon G. Pratt
Dated: June 5, 1997

/s/ William C. Shenton
- ----------------------------------
William C. Shenton
Dated: 6-5-97

/s/ Donald L. McDonald
- ----------------------------------
Donald L. McDonald
Dated: 6/1/97

/s/ John B. Kleiman
- ----------------------------------
John B. Kleiman
Dated: June 5, 1997

/s/ Leonard M. Rubenstein
- ----------------------------------
Leonard M. Rubenstein
Dated: 5/27/97

/s/ Stephan L. Christiansen
- ----------------------------------
Stephan L. Christiansen
Dated: 6/6/97

/s/ Laura R. Caro
- ----------------------------------
Laura R. Caro
Dated: 5/23/97

<PAGE> 16

COUNTERPART SIGNATURE PAGE (Continued)
- --------------------------

/s/ Stephen R. Pivacek
- ----------------------------------
Stephen R. Pivacek
Dated: 6-3-97

/s/ David A. Kaslow
- ----------------------------------
David A. Kaslow
Dated: 5/19/97

/s/ Michael D. McLellan
- ----------------------------------
Michael D. McLellan
Dated: 5-29-97

/s/ Joann T. Tanaka
- ----------------------------------
Joann T. Tanaka
Dated: 5/27/97

/s/ William Bennett
- ----------------------------------
William Bennett
Dated: 5/20/97

/s/ John W. Marske
- ----------------------------------
John W. Marske
Dated: 5/21/97

/s/ William L. Frields
- ----------------------------------
William L. Frields
Dated: May 20, 1997

/s/ Mark A. Blassie
- ----------------------------------
Mark A. Blassie
Dated: 5-20-97

/s/ David B. Vignolo
- ----------------------------------
David B. Vignolo
Dated: 5/20/97

/s/ Douglas R. Koester
- ----------------------------------
Douglas R. Koester
Dated: 5/21/97

/s/ Scott Sparks
- ----------------------------------
Scott Sparks
Dated: May 19, 1997

/s/ Robert St. Cyr
- ----------------------------------
Robert St. Cyr
Dated: 5-16-97

/s/ W. Michael Cody
- ----------------------------------
W. Michael Cody
Dated: 5/13/97

/s/ William E. Rotatori
- ----------------------------------
William E. Rotatori
Dated: June 4, 1997

/s/ Claude A. Fongemie
- ----------------------------------
Claude A. Fongemie
Dated: 6-4-97

/s/ Sabra R. Brinkmann
- ----------------------------------
Sabra R. Brinkmann
Dated: 6/3/97

/s/ Frank D. Campbell
- ----------------------------------
Frank D. Campbell
Dated: 5/27/97

/s/ Allen A. Mossien
- ---------------------------------
Allen A. Mossien
Dated: 5/19/97

/s/ Paul Goulekas
- ----------------------------------
Paul S. Goulekas
Dated: 6/5/97

/s/ Richard A. Liddy
- ----------------------------------
Richard A. Liddy
Dated: June 11, 1997

/s/ Bruce B. Brodie
- ----------------------------------
Bruce B. Brodie
Dated: 6-3-97

<PAGE> 1

EMPLOYMENT AGREEMENT
--------------------

THIS EMPLOYMENT AGREEMENT is made and entered into as
of August 11, 1995 by and between Conning & Company,
a Connecticut corporation (the "Company"), Conning Asset
Management Company, a Missouri corporation ("CAM"), and <<name>>
("Employee").

WHEREAS, the Company and Employee are parties to that
certain Contribution Agreement (the "Contribution Agreement"),
made and entered into as of July 24, 1995, by and among Conning
Asset Management Company, a Missouri corporation, General
American Life Insurance Company, a Missouri corporation, General
American Holding Company, a Missouri corporation which is a
wholly owned subsidiary of General American, General American
Investment Management Company, a Missouri corporation, the
Company, Conning Corporation, a Delaware corporation, and the
shareholders and option holders of Conning Corporation, including
Employee.

WHEREAS, Employee possesses skills and experience which
Company believes are of value to the success of Company's
business operations;

WHEREAS, Company wishes to employ Employee subject to
the terms and conditions of this Agreement, and Employee wishes
to accept such employment subject to the terms and conditions of
this Agreement;

WHEREAS, the Company and its Affiliates are in the
business of rendering investment advice, with a special expertise
in advising insurance companies in the United States, and have
accumulated valuable, confidential information including trade
secrets and know-how relating to portfolio construction and
management, technology, formulas, marketing plans, business
strategies, and other business records; and

WHEREAS, the giving of the covenants contained herein
is a condition precedent to the employment of Employee, and
Employee acknowledges that the execution of this Agreement and
the entering into of these covenants is an express condition of
his or her employment and that said covenants are given in
consideration for such employment and the other benefits
conferred upon him by this Agreement.

NOW, THEREFORE, in consideration of the mutual
promises, covenants, and agreements herein set forth, the parties
hereto agree as follows:

1. Employment and Duties. Company hereby agrees to
---------------------

-1-
<PAGE> 2

employ Employee, and Employee agrees to enter the employ of
Company for the Term herein specified. During the Term, Employee
shall perform such duties as the Board of Directors or officers
of Company may reasonably assign to Employee, and shall devote
his or her full time, attention, and effort to the business and
affairs of Company.

2. Term. The term of this Agreement shall be for the
----
period commencing on date hereof and ending three years after the
date hereof (the "Term"), unless terminated prior thereto as
provided in Section 4.

3. Compensation and Benefits.
-------------------------

a. In consideration of his or her services,
Employee shall receive during the Term hereof a base salary at
the rate of not less than $<<salary>> per year ("Annual Base
Salary"), payable in substantially equal installments in
accordance with Company's usual paying practices, but not less
frequently than monthly. Employee shall be eligible to receive
increases in Employee's Annual Base Salary pursuant to periodic
salary reviews consistent with the Company's corporate policies;
it being understood such increases are not guaranteed, but are
subject to evaluation of Employee's job performance. In addition
to the foregoing compensation, Employee will be eligible, in the
sole discretion of the Board of Directors of the Company, to
participate as a limited partner in Conning Investment Partners
LP III or in the Company's Venture Capital Carried Interest
Allocation Plan and the Company's Bonus Plan as modified to
reflect the combination of the Company with GAIMCO.

b. As further consideration for the covenants
contained herein, the Company will provide Employee with such
insurance, welfare, sick leave, and other benefits as may be
established by the Company from time to time with respect to its
employees and will reimburse Employee for authorized business
expenses in accordance with policies established by the Company
from time to time. Employee shall be entitled to vacation in an
amount equal to the amount of vacation to which such Employee
would have been entitled under the Company's vacation policy in
effect as of June 30, 1995 for employees with service and
position equal to the length of Employee's service and position
with the Company.

c. Upon execution of this Agreement, Employee
shall be paid a signing bonus in cash equal to $<<bonus>> (the
"Signing Bonus"), subject to the forfeiture provisions provided
in Section 4(d)(3) hereof. In order to secure such forfeiture
provisions, Employee agrees that a certificate (the
"Certificate") evidencing <<shares>> shares of the Series A
Convertible Preferred Stock, par value $.01 per share ("Preferred
Stock"), of the Company issued to Employee in connection with the

-2-
<PAGE> 3

cancellation of certain stock options held by Employee shall be
pledged to the Company, which encumbrance shall be evidenced by a
legend on such Certificate until such time as such risk of
forfeiture shall have expired.

4. Termination
-----------

a. Termination Without Cause. Employee's
-------------------------
employment may be terminated without cause:

(1) At any time upon the mutual written
agreement of the parties hereto;

(2) Immediately upon Employee's death;

(3) Immediately upon Employee's Total
Disability (as defined in Section 4(f));

(4) Upon not less than 30 days' advance
written notice from Employee of Employee's desire to
terminate this Agreement, provided, however, that, following
such notice, the Company shall have the right to terminate
Employee's employment immediately, provided that the Company
pays Employee the compensation due him or her as if the
Termination Date occurred 30 days from the date of such
notice; or

(5) Upon not less than 30 days' advance
written notice from the Company of the Company's desire to
terminate this Agreement.

b. Termination For Cause. Employee's employment
---------------------
may be terminated by the Company upon written notice to Employee
at any time for any of the following reasons, each of which shall
constitute "termination for cause":

(1) Any material breach of this
Agreement by Employee which is not cured within 20 days
after written notice by the Company;

(2) Employee's fraud, embezzlement,
dishonesty or unlawful acts in connection with the business
of the Company or its Affiliates;

(3) Employee's conviction for any
felony; or

(4) Employee's substantial and
continuing willful failure to perform, or grossly negligent
performance of, the duties of Employee's position.

c. Termination Date Employee's last day of
----------------

-3-
<PAGE> 4

employment with the Company (if such date occurs prior to the
third anniversary of this Agreement) shall be referred to in this
Agreement as the "Termination Date" and shall constitute the end
of the Term of this Agreement.

d. Effect of Termination.
---------------------

(1) Upon any termination of the employment
pursuant to this Section 4, this Agreement shall terminate and
the Company shall have no obligation of any kind whatsoever to
Employee except to pay Employee the compensation due him or her
through the Termination Date, the amount of such compensation due
Employee under Section 3(a) hereof being apportioned for the
portion of the fiscal period Employee was actually employed, and
any deferred compensation then due to Employee hereunder. The
obligations under Section 6 and 7 shall survive the end of the
Term of this Agreement according to their terms.

(2) In addition, upon termination pursuant
to Section 4(a)(5), the Company shall (i) pay Employee an amount
equal to 150% of the Annual Base Salary for each year (or portion
thereof, pro rated) through the balance of the Term and (ii)
provide all benefits described in Section 3(b) through the
balance of the Term. Payment pursuant to this Section 4(d)(2)
shall not apply to any termination other than one pursuant to
Section 4(a)(5).

(3) Upon termination of this Agreement
pursuant to Section 4(a)(4) or Section 4(b), Employee agrees to
repay to the Company the percentage of the Signing Bonus
indicated below, depending upon the year in which such
termination occurs.

<TABLE>
<CAPTION>
During Year Percentage Forfeited
----------- --------------------
<S> <C>
1 100%
2 66.6%
3 33.3%
</TABLE>

Immediately upon such termination, Employee shall either pay the
Company the forfeited portion of the Signing Bonus in cash or
tender to the Company the Certificate, which the Company shall
cancel and reissue to the Employee for a number of shares of
Preferred Stock equal to the original number of shares evidenced
by the Certificate less a number of shares, valued in accordance
with Section 11.3 of the Company's Shareholders Agreement, equal
to the forfeited portion of the Signing Bonus. If Employee
neither pays cash nor tenders the Certificate, the Company shall
be entitled to unilaterally cancel the Certificate on its stock
books and reissue Employee a new certificate as provided in the
preceding sentence.

-4-
<PAGE> 5

e. Release. In the event Employee becomes
-------
entitled to payments pursuant to Section 4(d)(2) hereof, Employee
shall, as a condition to such payments being made, execute and
deliver to the Company, and any Affiliates of the Company
designated by the Company, a release of all Employee's claims for
employment, employment-related compensation or employee benefits
or any form of damages as a result of termination of employment
in such form as is reasonably satisfactory to the Company, which
document shall include a covenant not to bring any claim, action
or suit with respect to the matters which are the subject of such
release.

f. Definition of Total Disability. "Total
------------------------------
Disability" means having a physical or mental condition which
renders Employee incapable of performing his duties and
responsibilities with the Company for a period of six months.
Determination of Total Disability will be made by a physician
selected by the Company. If the determination of such physician
differs from the opinion as to disability of the Employee's
physician, the two physicians shall select a third physician,
whose determination shall be binding on both parties.

5. Company Policies. Employee agrees to abide by the
----------------
policies, rules, regulations, and usages applicable to Employee
as they are established by the Company from time to time
("Company Policies"), and to perform the duties assigned to him
faithfully and loyally.

6. Non-Disclosure. Employee agrees that he will
--------------
never disclose, directly or indirectly, to any other firm or
person any of Company's or Company's Affiliates' confidential or
proprietary information including customer lists, trade secrets,
and know-how relating to its or their business. Confidential or
proprietary information shall not include any information which
is or hereafter comes in the public domain or is or becomes
generally known or available in the industry through no act of
Employee prohibited by this Agreement.

7. Non-Compete Agreement.
---------------------

a. Covenant. Employee recognizes that (i) CAM
--------
and the subsidiaries of which it controls a majority of the
voting stock ("Controlled Subsidiaries") have spent substantial
money, time and effort over the years in developing and
solidifying their relationships with their customers and in
developing their confidential information; (ii) long-term
customer relationships often can be difficult to develop and
require a significant investment of time, effort, and expense;
(iii) the Company pays its employees to, among other things,
develop and preserve business information, customer goodwill and
customer loyalty for and on behalf of the Company; and (iv) the

-5-
<PAGE> 6

Company is hereby agreeing to employ and pay Employee based upon
Employee's assurances and promises contained herein not to divert
the Company's customers' goodwill and not to put himself or
herself in a position during or following Employee's employment
with the Company in which the confidentiality of the Company's
proprietary information might somehow be compromised.
Accordingly, Employee covenants and agrees that for a period of
three years following the date hereof, regardless of whether
Employee remains employed by the Company and regardless of
whether Employee's termination, if any, is with or without cause,
neither Employee nor any entity controlling, controlled by or
under common control with Employee shall (i) engage in, or have
any direct or indirect interest in any other person, firm,
corporation, or other entity engaged in any business activities
competitive with the business activities of CAM and the
Controlled Subsidiaries, or (ii) become an employee, director,
advisor, consultant, independent contractor, or agent of any such
person, firm, corporation, or other entity, except with CAM's
prior written consent.

b. Acknowledgement Regarding Restrictions.
--------------------------------------
Employee recognizes and agrees that the restraints contained in
Section 7(a) are reasonable and enforceable in view of the
legitimate interests of CAM and the Controlled Subsidiaries in
protecting their confidential information and customer goodwill,
and that the limitations contained therein on the duration and
geographic scope of, and activities prohibited by, such
restraints are reasonable and binding upon Employee.

c. Enforceability.
--------------

(1) The covenants contained in this
Section 7 shall be deemed to be a series of separate covenants,
one for each aspect of CAM's or the Controlled Subsidiaries'
businesses and locations. Each separate covenant shall
hereinafter be referred to as a "Separate Covenant."

(2) If any court or tribunal of competent
jurisdiction shall refuse to enforce one or more of the Separate
Covenants because the time limit applicable thereto is deemed
unreasonable, it is expressly understood and agreed that such
Separate Covenant or Separate Covenants shall not be void but
that for the purpose of such proceedings such time limitation
shall be deemed to be reduced to the extent necessary to permit
the enforcement of such Separate Covenant or Separate Covenants.

-6-
<PAGE> 7

Separate Covenants shall not be void but that for the purpose of
such proceedings the restrictions contained therein (whether as
to geographic area, scope of business, or otherwise) shall be
deemed to be reduced to the extent necessary to permit the
enforcement of such Separate Covenant or Separate Covenants.

d. Ownership of Securities. Nothing contained
-----------------------
herein shall restrict Employee from owning 2% or less of the
corporate securities of any entity in competition with CAM's or
the Controlled Subsidiaries' businesses, which securities are
listed on any national securities exchange or authorized for
listing on the Nasdaq National Market, if Employee has no other
connection or relationship, direct or indirect, with the issuer
of such securities.

8. Non-Waiver of Rights. The Company's failure to
--------------------
enforce at any time any of the provisions of this Agreement or to
require at any time performance by Employee of any of the
provisions hereof shall in no way be construed to be a waiver of
such provisions or to affect either the validity of this
Agreement, or any part hereof, or the right of Company thereafter
to enforce each and every provision in accordance with the terms
of this Agreement.

9. The Company's Right to Injunctive Relief. In the
----------------------------------------
event of a breach or threatened breach of any of Employee's
duties and obligations under the terms and provisions of Sections
6 or 7 hereof, the Company shall be entitled, in addition to any
other legal or equitable remedies it may have (including any
right to damages that it may suffer), to temporary, preliminary,
and permanent injunctive relief restraining such breach or
threatened breach. Employee hereby expressly acknowledges that
the harm which might result to the Company's business as a result
of any noncompliance by Employee with any of the provisions of
Sections 6 or 7 would be largely irreparable. Employee
specifically agrees that if there is a question as to the
enforceability of any of the provisions of Sections 6 or 7
hereof, Employee will not engage in any conduct inconsistent with
or contrary to such Sections until after the question has been
resolved by a final judgment of a court of competent
jurisdiction.

10. Employee Representations. Employee represents
------------------------
that the execution and delivery of this Agreement and Employee's
employment with the Company do not violate any previous
employment agreement or other contractual obligation of Employee.
Employee also represents and agrees that Employee has not
disclosed, and will not disclose, to the Company any information,
whether confidential, proprietary, or otherwise, which Employee
has in Employee's possession and which Employee is not legally
free to disclose.

-7-
<PAGE> 8

11. The Company's Right to Recover Costs and Fees.
---------------------------------------------
Employee and the Company each undertakes and agrees that if such
party breaches this Agreement, such party shall be liable for any
attorneys' fees and costs incurred by the other party in
enforcing its rights hereunder.

12. Definition of Affiliate. "Affiliate" shall for
-----------------------
purposes of this Agreement mean any person or entity (the
"Specified Person") (a) who directly or indirectly controls, is
controlled by, or is under common control with the Company, (b)
who owns or controls thirty percent (30%) or more of the
Company's outstanding voting securities or percentage interests;
(c) in whom the Company owns or controls thirty percent (30%) or
more of the outstanding voting securities or percentage
interests; (d) who is a director, partner, manager, executive
officer or trustee of the Company; (e) in whom the Company is a
partner; or (f) who has any relationship with the Specified
Person by blood, marriage or adoption, not more remote than first
cousin, and shall include, without limitation, Conning Asset
Management Company, General American Life Insurance Company,
General American Holding Company, General American Investment
Management Company, and Conning Corporation.

13. Miscellaneous. Neither this Agreement nor any
-------------
rights hereunder shall be assignable by either party hereto.

This agreement contains the entire agreement between
the parties with respect to the terms of Employee's employment by
Company, free of any other representation, promise, or
understanding. This Agreement may be modified or amended only by
a written agreement executed by both parties to this Agreement.

Nothing in this Agreement shall be construed as
creating a joint venture or partnership between Employee and the
Company or any of its affiliates.

Section headings are provided in this Agreement for
convenience only and shall not be deemed to alter the content of
such sections.

PLEASE NOTE: BY SIGNING THIS EMPLOYMENT AGREEMENT, EMPLOYEE IS
- -----------
HEREBY CERTIFYING THAT EMPLOYEE (A) HAS RECEIVED A COPY OF THIS
AGREEMENT FOR REVIEW AND STUDY BEFORE EXECUTING IT; (B) HAS READ
THIS AGREEMENT CAREFULLY BEFORE SIGNING IT; (C) HAS HAD
SUFFICIENT OPPORTUNITY BEFORE SIGNING THE AGREEMENT TO ASK ANY
QUESTIONS EMPLOYEE HAS ABOUT THE AGREEMENT AND HAS RECEIVED
SATISFACTORY ANSWERS TO ALL SUCH QUESTIONS; AND (D) UNDERSTANDS
EMPLOYEE'S RIGHTS AND OBLIGATIONS UNDER THE AGREEMENT.

This Agreement shall be construed and interpreted under
the laws of Missouri.

-8-
<PAGE> 9

IN WITNESS WHEREOF, the parties have executed this
agreement on the date first set out above.

CONNING ASSET MANAGEMENT COMPANY

By:-----------------------------
Name:---------------------------
Title:--------------------------

CONNING & COMPANY

By:-----------------------------
Name:---------------------------
Title:--------------------------

EMPLOYEE

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

Name: <<name>>
Address:------------------------
------------------------

-9-

<PAGE> 1

EMPLOYMENT AGREEMENT
--------------------

WHEREAS, Employee possesses skills and experience which
Company believes are of value to the success of Company's
business operations;

WHEREAS, Company wishes to employ Employee subject to
the terms and conditions of this Agreement, and Employee wishes
to accept such employment subject to the terms and conditions of
this Agreement;

NOW, THEREFORE, in consideration of the mutual
promises, covenants, and agreements herein set forth, the parties
hereto agree as follows:

1. Employment and Duties. Company hereby agrees to
---------------------
employ Employee, and Employee agrees to enter the employ of

1
<PAGE> 2

Company for the Term herein specified. During the Term,
Employee shall serve and be employed as President of CAM and as President
and CEO of the Company with responsibility for (i) marketing for
CAM and its subsidiaries, (ii) managing the Hartford office of
CAM and its subsidiaries, (iii) participating in identifying and
negotiating acquisitions, and (iv) participating in the
development and execution of an initial public offering of the
stock of CAM. Employee shall also perform such other duties as
the Board of Directors or officers of Company may reasonably
assign to Employee, and shall devote his or her full time,
attention, and effort to the business and affairs of Company.

3. Compensation and Benefits.
-------------------------

a. In consideration of his or her services,
Employee shall receive during the Term hereof a base salary at
the rate of not less than $250,000 per year ("Annual Base
Salary"), payable in substantially equal installments in
accordance with Company's usual paying practices, but not less
frequently than monthly. Employee shall be eligible to receive
increases in Employee's Annual Base Salary pursuant to periodic
salary reviews consistent with the Company's corporate policies;
it being understood such increases are not guaranteed, but are
subject to evaluation of Employee's job performance. In addition
to the foregoing compensation, Employee will be eligible, in the
sole discretion of the Board of Directors of the Company, to
participate as a limited partner in Conning Investment Partners
LP III or in the Company's Venture Capital Carried Interest
Allocation Plan and the Company's Bonus Plan as modified to
reflect the combination of the Company with GAIMCO.

c. Upon execution of this Agreement, Employee
shall be paid a signing bonus in cash equal to $195,000 (the
"Signing Bonus"), subject to the forfeiture provisions provided
in Section 4(d)(3) hereof. In order to secure such forfeiture
provisions, Employee agrees that a certificate (the
"Certificate") evidencing 36,585 shares of the Series A

2
<PAGE> 3

Convertible Preferred Stock, par value $.01 per share ("Preferred
Stock"), of the Company issued to Employee in connection with the
cancellation of certain stock options held by Employee shall be
pledged to the Company, which encumbrance shall be evidenced by a
legend on such Certificate until such time as such risk of
forfeiture shall have expired.

4. Termination.
-----------

a. Termination Without Cause. Employee's
-------------------------
employment may be terminated without cause:

(1) At any time upon the mutual written
agreement of the parties hereto;

(2) Immediately upon Employee's death;

(3) Immediately upon Employee's Total
Disability (as defined in Section 4(f));

(5) Upon not less than 30 days' advance
written notice from the Company of the Company's desire to
terminate this Agreement.

(1) Any material breach of this
Agreement by Employee which is not cured within 20 days
after written notice by the Company;

(2) Employee's fraud, embezzlement,
dishonesty or unlawful acts in connection with the business
of the Company or its Affiliates;

(3) Employee's conviction for any
felony; or

(4) Employee's substantial and
continuing willful failure to perform, or grossly negligent
performance of, the duties of Employee's position.

3
<PAGE> 4

c. Termination Date. Employee's last day of
----------------

d. Effect of Termination.
---------------------

<TABLE>
<CAPTION>
During Year Percentage Forfeited
----------- --------------------
<S> <C>
1 100%
2 66.6%
3 33.3%
</TABLE>

4
<PAGE> 5

7. Non-Compete Agreement.
---------------------

5
<PAGE> 6

the Company's customers' goodwill and not to put himself or
herself in a position during or following Employee's employment
with the Company in which the confidentiality of the Company's
proprietary information might somehow be compromised.
Accordingly, Employee covenants and agrees that for a period of
three years following the date hereof, regardless of whether
Employee remains employed by the Company and regardless of
whether Employee's termination, if any, is with or without cause,
neither Employee nor any entity controlling, controlled by or
under common control with Employee shall (i) engage in, or have
any direct or indirect interest in any other person, firm,
corporation, or other entity engaged in any business activities
competitive with the business activities of CAM and the
Controlled Subsidiaries, or (ii) become an employee, director,
advisor, consultant, independent contractor, or agent of any such
person, firm, corporation, or other entity, except with CAM's
prior written consent.

c. Enforceability.
--------------

(3) If any court or tribunal of competent
jurisdiction shall refuse to enforce any or all of the Separate
Covenants because, taken together, they are more extensive
(whether as to geographic area, scope of business, or otherwise)
than is deemed to be reasonable, it is expressly understood and
agreed between the parties that such Separate Covenant or
Separate Covenants shall not be void but that for the purpose of
such proceedings the restrictions contained therein (whether as
to geographic area, scope of business, or otherwise) shall be

6
<PAGE> 7

deemed to be reduced to the extent necessary to permit the
enforcement of such Separate Covenant or Separate Covenants.

7
<PAGE> 8

attorneys' fees and costs incurred by the other party in
enforcing its rights hereunder.

13. Miscellaneous. Neither this Agreement nor any
-------------
rights hereunder shall be assignable by either party hereto.

Nothing in this Agreement shall be construed as
creating a joint venture or partnership between Employee and the
Company or any of its affiliates.

Section headings are provided in this Agreement for
convenience only and shall not be deemed to alter the content of
such sections.

This Agreement shall be construed and interpreted under
the laws of Missouri.

IN WITNESS WHEREOF, the parties have executed this
agreement on the date first set out above.

8
<PAGE> 9

CONNING ASSET MANAGEMENT COMPANY

By: /s/ Leonard M. Rubenstein
-------------------------------
Name: L.M. Rubenstein
-----------------------------
Title: CEO
----------------------------

CONNING & COMPANY

By: /s/ Maurice W. Slayton
-------------------------------
Name: M.W. Slayton
-----------------------------
Title: Chairman, President & CEO
----------------------------

EMPLOYEE

/s/ Maurice W. Slayton
-----------------------------------
Name: Maurice W. Slayton
------------------------------
Address: 178 Rever Knolls
---------------------------
Avon, CT 06001
---------------------------

<PAGE> 1
CONNING ASSET MANAGEMENT COMPANY

1995 FLEXIBLE STOCK PLAN

<PAGE> 2

CONNING ASSET MANAGEMENT COMPANY
1995 FLEXIBLE STOCK PLAN

<TABLE>
TABLE OF CONTENTS
<CAPTION>
Page
----
<S> <C>
ARTICLE 1 - NAME AND PURPOSE 1
1.1 Name . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Purpose. . . . . . . . . . . . . . . . . . . . . . . . 1

ARTICLE II - DEFINITIONS OF TERMS AND RULES OF CONSTRUCTION
2.1 General Definitions. . . . . . . . . . . . . . . . . . 1
(a) Affiliate . . . . . . . . . . . . . . . . . . . . 1
(b) Agreement . . . . . . . . . . . . . . . . . . . . 1
(c) Benefit . . . . . . . . . . . . . . . . . . . . . 1
(d) Board . . . . . . . . . . . . . . . . . . . . . . 1
(e) Cash Award. . . . . . . . . . . . . . . . . . . . 1
(f) Change of Control . . . . . . . . . . . . . . . . 1
(g) Code. . . . . . . . . . . . . . . . . . . . . . . 1
(h) Company . . . . . . . . . . . . . . . . . . . . . 2
(i) Committee . . . . . . . . . . . . . . . . . . . . 2
(j) Common Stock. . . . . . . . . . . . . . . . . . . 2
(k) Effective Date. . . . . . . . . . . . . . . . . . 2
(l) Employee. . . . . . . . . . . . . . . . . . . . . 2
(m) Employer. . . . . . . . . . . . . . . . . . . . . 2
(n) Exchange Act. . . . . . . . . . . . . . . . . . . 2
(o) Fair Market Value . . . . . . . . . . . . . . . . 2
(p) Fiscal Year . . . . . . . . . . . . . . . . . . . 2
(q) ISO . . . . . . . . . . . . . . . . . . . . . . . 2
(r) NQSO. . . . . . . . . . . . . . . . . . . . . . . 2
(s) Option. . . . . . . . . . . . . . . . . . . . . . 2
(t) Other Stock Based Award . . . . . . . . . . . . . 2
(u) Parent. . . . . . . . . . . . . . . . . . . . . . 2
(v) Participant . . . . . . . . . . . . . . . . . . . 2
(w) Performance Share . . . . . . . . . . . . . . . . 3
(x) Plan. . . . . . . . . . . . . . . . . . . . . . . 3
(y) Restricted Stock. . . . . . . . . . . . . . . . . 3
(z) Rule 16b-3. . . . . . . . . . . . . . . . . . . . 3
(aa) SEC . . . . . . . . . . . . . . . . . . . . . . . 3
(bb) Share . . . . . . . . . . . . . . . . . . . . . . 3
(cc) SAR . . . . . . . . . . . . . . . . . . . . . . . 3
(dd) Subsidiary. . . . . . . . . . . . . . . . . . . . 3
2.2 Other Definitions. . . . . . . . . . . . . . . . . . . 3
2.3 Conflicts in Plan. . . . . . . . . . . . . . . . . . . 3

ARTICLE III - COMMON STOCK
3.1 Number of Shares . . . . . . . . . . . . . . . . . . . 3
3.2 Reusage. . . . . . . . . . . . . . . . . . . . . . . . 3

-i-
<PAGE> 3

3.3 Adjustments. . . . . . . . . . . . . . . . . . . . . . 4

ARTICLE IV - ELIGIBILITY
4.1 Determined By Committee. . . . . . . . . . . . . . . . 4

ARTICLE V - ADMINISTRATION
5.1 Committee. . . . . . . . . . . . . . . . . . . . . . . 4
5.2 Authority. . . . . . . . . . . . . . . . . . . . . . . 4
5.3 Delegation . . . . . . . . . . . . . . . . . . . . . . 5
5.4 Adjudication of Claims . . . . . . . . . . . . . . . . 5

ARTICLE VI - AMENDMENT
6.1 Power of Board . . . . . . . . . . . . . . . . . . . . 5
6.2 Limitation . . . . . . . . . . . . . . . . . . . . . . 5

ARTICLE VII - TERM AND TERMINATION
7.1 Term . . . . . . . . . . . . . . . . . . . . . . . . . 6
7.2 Termination. . . . . . . . . . . . . . . . . . . . . . 6

ARTICLE VIII - MODIFICATION OR TERMINATION OF BENEFITS
8.1 General. . . . . . . . . . . . . . . . . . . . . . . . 6
8.2 Committee's Right. . . . . . . . . . . . . . . . . . . 6

ARTICLE IX - CHANGE OF CONTROL
9.1 Right of Committee . . . . . . . . . . . . . . . . . . 6

ARTICLE X - AGREEMENTS AND CERTAIN BENEFITS
10.1 Grant Evidenced by Agreement . . . . . . . . . . . . . 7
10.2 Provisions of Agreement. . . . . . . . . . . . . . . . 7
10.3 Certain Benefits . . . . . . . . . . . . . . . . . . . 7

ARTICLE XI - REPLACEMENT AND TANDEM AWARDS
11.1 Replacement. . . . . . . . . . . . . . . . . . . . . . 7
11.2 Tandem Awards. . . . . . . . . . . . . . . . . . . . . 7

ARTICLE XII - PAYMENT, DIVIDENDS, DEFERRAL AND WITHHOLDING
12.1 Payment. . . . . . . . . . . . . . . . . . . . . . . . 7
12.2 Dividend Equivalents . . . . . . . . . . . . . . . . 8
12.3 Deferral . . . . . . . . . . . . . . . . . . . . . . 8
12.4 Withholding. . . . . . . . . . . . . . . . . . . . . 8

-ii-
<PAGE> 4

ARTICLE XIII - OPTIONS
13.1 Types of Options . . . . . . . . . . . . . . . . . . 8
13.2 Shares for ISOs. . . . . . . . . . . . . . . . . . . 8
13.3 Grant of ISOs and Option Price . . . . . . . . . . . 8
13.4 Other Requirements for ISOs. . . . . . . . . . . . . 9
13.5 NQSOs. . . . . . . . . . . . . . . . . . . . . . . . 9
13.6 Limitation Shares Covered by Options . . . . . . . . 9
13.7 Determination by Committee . . . . . . . . . . . . . 9

ARTICLE XIV - SARS
14.1 Grant and Payment. . . . . . . . . . . . . . . . . . 9
14.2 Grant of Tandem Award. . . . . . . . . . . . . . . . 9
14.3 ISO Tandem Award . . . . . . . . . . . . . . . . . . 9
14.4 Payment of Award . . . . . . . . . . . . . . . . . . 9
14.5 Limitation on SARs . . . . . . . . . . . . . . . . . 9

ARTICLE XV - RESTRICTED STOCK
15.1 Description. . . . . . . . . . . . . . . . . . . . . 10
15.2 Cost of Restricted Stock . . . . . . . . . . . . . . 10
15.3 Non-Transferability. . . . . . . . . . . . . . . . . 10

ARTICLE XVI - PERFORMANCE SHARES
16.1 Description. . . . . . . . . . . . . . . . . . . . . 10
16.2 Grant. . . . . . . . . . . . . . . . . . . . . . . . 10

ARTICLE XVII - CASH AWARDS
17.1 Grant. . . . . . . . . . . . . . . . . . . . . . . . 10
17.2 Rule 16b-3 . . . . . . . . . . . . . . . . . . . . . 10
17.3 Restrictions . . . . . . . . . . . . . . . . . . . . 10

ARTICLE XVIII - OTHER STOCK BASED AWARDS AND OTHER BENEFITS
18.1 Other Stock Based Awards . . . . . . . . . . . . . . 11
18.2 Other Benefits . . . . . . . . . . . . . . . . . . . 11

ARTICLE XIX - MISCELLANEOUS PROVISIONS
19.1 Underscored References . . . . . . . . . . . . . . . 11
19.2 Number and Gender. . . . . . . . . . . . . . . . . . 11
19.3 Governing Law. . . . . . . . . . . . . . . . . . . . 11
19.4 Purchase for Investment. . . . . . . . . . . . . . . 11
19.5 No Employment Contract . . . . . . . . . . . . . . . 11
19.6 No Effect on Other Benefits. . . . . . . . . . . . . 11
19.7 Section 16 Fail-Safe Provision . . . . . . . . . . . 11
19.8 Section 162(m) Fail-Safe Provision . . . . . . . . . 12
</TABLE>

-iii-
<PAGE> 5

CONNING ASSET MANAGEMENT COMPANY
1995 FLEXIBLE STOCK PLAN

ARTICLE I
---------
NAME AND PURPOSE
----------------

1.1 Name. The name of this Plan is the "Conning Asset
----
Management Company 1995 Flexible Stock Plan."

1.2 Purpose. The Company has established this Plan to
-------
attract, retain, motivate and reward Employees and other
individuals, to encourage ownership of the Company's Common Stock
by Employees and other individuals, and to promote and further the
best interests of the Company by granting cash and other awards.

ARTICLE II
----------

DEFINITIONS OF TERMS AND RULES OF CONSTRUCTION
----------------------------------------------

2.1 General Definitions. The following words and phrases,
-------------------
when used in the Plan, unless otherwise specifically defined or
unless the context clearly otherwise requires, shall have the
following respective meanings:

(a) Affiliate. A Parent or Subsidiary of the Company.
---------

(b) Agreement. The document which evidences the
---------
grant of any Benefit under the Plan and which sets forth the
Benefit and the terms, conditions and provisions of, and
restrictions relating to, such Benefit.

(d) Board. The Board of Directors of the Company.
-----

(e) Cash Award. A Benefit payable in the form of cash.
----------

(f) Change of Control. The acquisition, without the
-----------------
approval of the Board, by any person or entity, other than the
Company or a Related Entity, of more than 20% of the
outstanding shares of the Company's voting common stock
through a tender offer, exchange offer or otherwise; the
liquidation or dissolution of the Company following a sale or
other disposition of all or substantially all of its assets;
a merger or consolidation involving the Company which results
in the Company not being the surviving parent corporation; or
any time during any two-year period in which individuals who
constituted the Board at the start of such period (or whose
election was approved by at least two-thirds of the then
members of the Board who were members at the start of the
two-year period) do not constitute at least 50% of the Board
for any reason. A Related Entity is the Parent, a Subsidiary
or any employee benefit plan (including a trust forming a part
of such a plan) maintained by the Parent, the Company or a
Subsidiary.

(g) Code. The Internal Revenue Code of 1986, as
----
amended. Any reference to the Code includes the regulations
promulgated pursuant to the Code.

<PAGE> 6

(h) Company. Conning Asset Management Company.
-------

(i) Committee. The Committee described in
---------
Section 5.1.

(j) Common Stock. The Company's Class B Non-Voting
------------
Common Stock which presently has a par value of $.01 per Share.

(k) Effective Date. The date that the Plan is
--------------
approved by the shareholders of the Company which must occur
within one year before or after approval by the Board. Any
grants of Benefits prior to the approval by the shareholders
of the Company shall be void if such approval is not obtained.

(l) Employee. Any person employed by the Employer.
--------

(m) Employer. The Company and all Affiliates.
-------

(n) Exchange Act. The Securities Exchange Act of
------------
1934, as amended.

(o) Fair Market Value. The value of a Share as
-----------------
determined pursuant to Section 11.3 of the Shareholders'
Agreement among the Company and its shareholders and option
holders.

(p) Fiscal Year. The taxable year of the Company
-----------
which is the calendar year.

(q) ISO. An Incentive Stock Option as defined in
---
Section 422 of the Code.

(r) NQSO. A Non-Qualified Stock Option, which is an
----
Option that does not qualify as an ISO.

(s) Option. An option to purchase Shares granted
------
under the Plan.

(t) Other Stock Based Award. An award under ARTICLE
-----------------------
XVIII that is valued in whole or in part by reference to, or
is otherwise based on, Common Stock.

(u) Parent. Any corporation (other than the Company
------
or a Subsidiary) in an unbroken chain of corporations ending
with the Company, if, at the time of the grant of an Option or
other Benefit, each of the corporations (other than the
Company or a Subsidiary) owns stock possessing 50% or more of
the total combined voting power of all classes of stock in one
of the other corporations in such chain.

(v) Participant. An individual who is granted a
-----------
Benefit under the Plan. Benefits may be granted only to
Employees, employees and owners of entities which are not
Affiliates but which have a direct or indirect ownership
interest in an Employer or in which an Employer has a direct
or indirect ownership interest, individuals who, and employees
and owners of entities which, are customers and suppliers of
an Employer, individuals who, and employees and owners of
entities which, render services to an Employer, and

-2-
<PAGE> 7

individuals who, and employees and owners of entities, which
have ownership or business affiliations with any individual or
entity previously described.

(w) Performance Share. A Share awarded to a
-----------------
Participant under ARTICLE XVI of the Plan.

(x) Plan. The Conning Asset Management Company 1995
----
Flexible Stock Plan and all amendments and supplements to it.

(y) Restricted Stock. Shares issued under ARTICLE XV
----------------
of the Plan.

(z) Rule 16b-3. Rule 16b-3 promulgated by the SEC,
----------
as amended, or any successor rule in effect from time to time.

(aa) SEC. The Securities and Exchange Commission.
---

(bb) Share. A share of Common Stock.
-----

(cc) SAR. A stock appreciation right, which is the
---
right to receive an amount equal to the appreciation, if any,
in the Fair Market Value of a Share from the date of the grant
of the right to the date of its payment.

(dd) Subsidiary. Any corporation, other than the
----------
Company, in an unbroken chain of corporations beginning with
the Company if, at the time of grant of an Option or other
Benefit, each of the corporations, other than the last
corporation in the unbroken chain, owns stock possessing 50%
or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain.

2.2 Other Definitions. In addition to the above
-----------------
definitions, certain words and phrases used in the Plan and any
Agreement may be defined in other portions of the Plan or in such
Agreement.

2.3 Conflicts in Plan. In the case of any conflict in the
-----------------
terms of the Plan relating to a Benefit, the provisions in the
ARTICLE of the Plan which specifically grants such Benefit shall
control those in a different ARTICLE.

ARTICLE III
-----------

COMMON STOCK
------------

3.1 Number of Shares. The number of Shares which may be
----------------
issued or sold or for which Options, SARs or Performance Shares may
be granted under the Plan shall be 2,100,000 Shares.

3.2 Reusage. If an Option or SAR expires or is terminated,
-------
surrendered, or cancelled without having been fully exercised, if
Restricted Shares or Performance Shares are forfeited, or if any
other grant results in any Shares not being issued, the Shares
covered by such Option or SAR, grant of Restricted Shares,
Performance Shares or other grant, as the case may be, shall again
be available for use under the Plan.

-3-
<PAGE> 8

3.3 Adjustments. If there is any change in the Common
-----------
Stock of the Company by reason of any stock dividend, spin-off,
split-up, spin-out, recapitalization, merger, consolidation,
reorganization, combination or exchange of shares, the number of
SARs and number and class of shares available for Options and
grants of Restricted Stock, Performance Shares and Other Stock
Based Awards and the number of Shares subject to outstanding
Options, SARs, grants of Restricted Stock and Performance Shares
which are not vested, and Other Stock Based Awards, and the price
thereof, as applicable, shall be appropriately adjusted by the
Committee.

ARTICLE IV
----------

ELIGIBILITY
-----------

4.1 Determined By Committee. The Participants and the
-----------------------
Benefits they receive under the Plan shall be determined solely by
the Committee. In making its determinations, the Committee shall
consider past, present and expected future contributions of
Participants and potential Participants to the Employer, including,
without limitation, the performance of, or the refraining from the
performance of, services.

ARTICLE V
---------

ADMINISTRATION
--------------

5.1 Committee. The Plan shall be administered by the
---------
Committee. The Committee shall consist of three or more members of
the Board. The members of the Committee shall be appointed by and
shall serve at the pleasure of the Board, which may from time to
time appoint members in substitution for members previously
appointed and fill vacancies, however caused, in the Committee.
The Committee may select one of its members as its Chairman and
shall hold its meetings at such times and places as it may
determine. A majority of its members shall constitute a quorum.
All determinations of the Committee shall be made by a majority of
its members. Any decision or determination reduced to writing and
signed by a majority of the members shall be fully as effective as
if it had been made by a majority vote at a meeting duly called and
held.

5.2 Authority. Subject to the terms of the Plan, the
---------
Committee shall have discretionary authority to:

(a) determine the individuals to whom Benefits are
granted, the type and amounts of Benefits to be granted and
the time of all such grants;

(b) determine the terms, conditions and provisions
of, and restrictions relating to, each Benefit granted;

(d) prescribe, amend and rescind rules and
regulations relating to the Plan;

(e) determine the content and form of all Agreements;

(f) determine all questions relating to Benefits
under the Plan;

-4-
<PAGE> 9

(g) maintain accounts, records and ledgers relating
to Benefits;

(h) maintain records concerning its decisions and
proceedings;

(i) employ agents, attorneys, accountants or other
persons for such purposes as the Committee considers necessary
or desirable;

(j) take, at anytime, any action permitted by Section
9.1 irrespective of whether any Change of Control has occurred
or is imminent; and

(k) do and perform all acts which it may deem
necessary or appropriate for the administration of the Plan
and carry out the purposes of the Plan.

5.3 Delegation. Except as required by Rule 16b-3 with
----------
respect to grants of Options, Stock Appreciation Awards,
Performance Shares, Other Stock Based Awards, or other Benefits to
individuals who are subject to Section 16 of the Exchange Act or as
otherwise required for compliance with Rule 16b-3 or other
applicable law, the Committee may delegate all or any part of its
authority under the Plan to any Employee, Employees or committee.

5.4 Adjudication of Claims. The Committee shall have
----------------------
discretionary authority to make all determinations as to the right
to Benefits under the Plan. In the event that a Participant
believes he has not received the Benefits to which he is entitled
under the Plan, a claim shall be made in writing to the Committee.
The claim shall be reviewed by the Committee. If the claim is
approved or denied, in full or in part, the Committee shall provide
a written notice of approval or denial within 90 days with, in the
case of a denial, the specific reasons for the denial and specific
reference to the provisions of the Plan and/or Agreement upon which
the denial is based. A claim shall be deemed denied if the
Committee does not take any action within the aforesaid 90 day
period. If a claim is denied or deemed denied and a review is
desired, the Participant shall notify the Committee in writing
within 60 days of the receipt of notice of denial or the date on
which the claim is deemed to be denied, as the case may be. In
requesting a review, the Participant may review the Plan or any
document relating to it and submit any written issues and comments
he may deem appropriate. The Committee shall then review the claim
and provide a written decision within 60 days. This decision, if
adverse to the Participant, shall state the specific reasons for
the decision and shall include reference to specific provisions of
the Plan and/or Agreement on which the decision is based. The
Committee's decision on review shall be final.

ARTICLE VI
----------

AMENDMENT
---------

6.1 Power of Board. Except as hereinafter provided, the
--------------
Board shall have the sole right and power to amend the Plan at any
time and from time to time.

6.2 Limitation. The Board may not amend the Plan, without
----------
approval of the shareholders of the Company:

(a) in a manner which would cause Options which are
intended to qualify as ISOs to fail to qualify;

-5-
<PAGE> 10

(b) in a manner which would cause the Plan to fail to meet
the requirements of Rule 16b-3; or

ARTICLE VII
-----------

TERM AND TERMINATION
--------------------

7.1 Term. The Plan shall commence as of the Effective Date
----
and, subject to the terms of the Plan, including those requiring
approval by the shareholders of the Company and those limiting the
period over which ISOs or any other Benefits may be granted, shall
continue in full force and effect until terminated.

7.2 Termination. The Plan may be terminated at any time by
-----------
the Board.

ARTICLE VIII
------------

MODIFICATION OR TERMINATION OF BENEFITS
---------------------------------------

8.1 General. Subject to the provisions of Section 8.2, the
-------
amendment or termination of the Plan shall not adversely affect a
Participant's right to any Benefit granted prior to such amendment
or termination.

8.2 Committee's Right. Any Benefit granted may be
-----------------
converted, modified, forfeited or cancelled, in whole or in part,
by the Committee if and to the extent permitted in the Plan or
applicable Agreement or with the consent of the Participant to whom
such Benefit was granted.

ARTICLE IX
----------

CHANGE OF CONTROL
-----------------

9.1 Right of Committee. In order to maintain a
------------------
Participant's rights in the event of a Change in Control, the
Committee, in its sole discretion, may, in any Agreement evidencing
a Benefit, or at any time prior to, or simultaneously with or after
a Change in Control, provide such protection as it may deem
necessary. Without, in any way, limiting the generality of the
foregoing sentence or requiring any specific protection, the
Committee may:

(a) provide for the acceleration of any time periods
relating to the exercise or realization of such Benefit so
that such Benefit may be exercised or realized in full on or
before a date fixed by the Committee;

(b) provide for the purchase of such Benefit, upon
the Participant's request, for an amount of cash equal to the
amount which could have been attained upon the exercise or
realization of such Benefit had such Benefit been currently
exercisable or payable;

(c) make such adjustment to the Benefits then
outstanding as the Committee deems appropriate to reflect such
transaction or change; and/or

-6-
<PAGE> 11

(d) cause the Benefits then outstanding to be
assumed, or new Benefits substituted therefor, by the
surviving corporation in such change.

ARTICLE X
---------

AGREEMENTS AND CERTAIN BENEFITS
-------------------------------

10.1 Grant Evidenced by Agreement. The grant of any
----------------------------
Benefit under the Plan may be evidenced by an Agreement which shall
describe the specific Benefit granted and the terms and conditions
of the Benefit. The granting of any Benefit shall be subject to,
and conditioned upon, the recipient's execution of any Agreement
required by the Committee. Except as otherwise provided in an
Agreement, all capitalized terms used in the Agreement shall have
the same meaning as in the Plan, and the Agreement shall be subject
to all of the terms of the Plan.

10.2 Provisions of Agreement. Each Agreement shall contain
-----------------------
such provisions that the Committee shall determine to be necessary,
desirable and appropriate for the Benefit granted which may
include, but not be limited to, the following with respect to any
Benefit: description of the type of Benefit; the Benefit's
duration; its transferability; if an Option, the exercise price,
the exercise period and the person or persons who may exercise the
Option; the effect upon such Benefit of the Participant's death or
termination of employment; the Benefit's conditions; when, if, and
how any Benefit may be forfeited, converted into another Benefit,
modified, exchanged for another Benefit, or replaced; and the
restrictions on any Shares purchased or granted under the Plan.

10.3 Certain Benefits. Any Benefit granted to an
----------------
individual who is subject to Section 16 of the Exchange Act shall
be not transferable other than by will or the laws of descent and
distribution and shall be exercisable during his lifetime only by
him, his guardian or his legal representative.

ARTICLE XI
----------

REPLACEMENT AND TANDEM AWARDS
-----------------------------

11.1 Replacement. The Committee may permit a Participant to
-----------
elect to surrender a Benefit in exchange for a new Benefit.

11.2 Tandem Awards. Awards may be granted by the Committee
-------------
in tandem. However, no Benefit may be granted in tandem with an
ISO except SARs.

ARTICLE XII
-----------

PAYMENT, DIVIDENDS, DEFERRAL AND WITHHOLDING
--------------------------------------------

12.1 Payment. Upon the exercise of an Option or in the case
-------
of any other Benefit that requires a payment to the Company, the
amount due the Company is to be paid:

(a) in cash;

-7-
<PAGE> 12

(b) by the tender to the Company of Shares owned by
the optionee and registered in his name having a Fair Market
Value equal to the amount due to the Company;

(d) in cash, but by means of a so-called "cashless
exercise" of an Option; and/or

(e) by any combination of the payment methods
specified in (a), (b), (c) and (d) above.

Notwithstanding, the foregoing, any method of payment other than
(a) may be used only with the consent of the Committee or if and to
the extent so provided in an Agreement. The proceeds of the sale
of Common Stock purchased pursuant to an Option and any payment to
the Company for other Benefits shall be added to the general funds
of the Company or to the Shares held in treasury, as the case may
be, and used for the corporate purposes of the Company as the Board
shall determine.

12.2 Dividend Equivalents. Grants of Benefits in Shares or
--------------------
Share equivalents may include dividend equivalent payments or
dividend credit rights.

12.3 Deferral. The right to receive any Benefit under the
--------
Plan may, at the request of the Participant, be deferred for such
period and upon such terms as the Committee shall determine, which
may include crediting of interest on deferrals of cash and
crediting of dividends on deferrals denominated in Shares.

12.4 Withholding. The Company may, at the time any
-----------
distribution is made under the Plan, whether in cash or in Shares,
or at the time any Option is exercised, withhold from such
distribution or Shares issuable upon the exercise of an Option, any
amount necessary to satisfy federal, state and local income and/or
other tax withholding requirements with respect to such
distribution or exercise of such Options. The Committee or the
Company may require a participant to tender to the Company cash in
the amount necessary to comply with any such withholding
requirements.

ARTICLE XIII
------------

OPTIONS
-------

13.1 Types of Options. It is intended that both ISOs and
----------------
NQSOs may be granted by the Committee under the Plan.

13.2 Shares for ISOs. The number of Shares for which ISOs
---------------
may be granted on or after the Effective Date shall not exceed
2,100,000 Shares.

13.3 Grant of ISOs and Option Price. Each ISO must be
------------------------------
granted to an Employee and granted within ten years from the
earlier of the date of adoption by the Board or the Effective Date.

-8-
<PAGE> 13

The purchase price for Shares under any ISO shall be no less than
the Fair Market Value of the Shares at the time the Option is
granted.

13.4 Other Requirements for ISOs. The terms of each Option
---------------------------
which is intended to qualify as an ISO shall meet all requirements
of Section 422 of the Code.

13.5 NQSOs. The terms of each NQSO shall provide that such
-----
Option will not be treated as an ISO. The purchase price for
Shares under any NQSO shall be the Fair Market Value of the Shares
at the time the Option is granted.

13.6 Limitation Shares Covered by Options. The maximum
------------------------------------
number of Shares with respect to which (a) ISOs plus (b) NQSOs
where the purchase price for Shares upon exercise of the NQSO is no
less than the Fair Market Value of the Shares at the time of grant
which may be granted to any Participant in any one year period
shall not exceed 250,000 Shares. For purposes of the preceding
sentence, the Shares covered by an Option that is cancelled shall
count against the maximum number of Shares, and, if the exercise
price under an Option is reduced, the transaction shall be treated
as a cancellation of the Option and a grant of a new Option.

13.7 Determination by Committee. Except as otherwise
--------------------------
provided in Section 13.2 through Section 13.6, the terms of all
Options shall be determined by the Committee.

ARTICLE XIV
-----------

SARS
----

14.1 Grant and Payment. The Committee may grant SARs. Upon
-----------------
electing to receive payment of a SAR, a Participant shall receive
payment in cash, in Common Stock, or in any combination of cash and
Common Stock, as the Committee shall determine.

14.2 Grant of Tandem Award. The Committee may grant SARs in
---------------------
tandem with an Option, in which case: the exercise of the Option
shall cause a correlative reduction in SARs standing to a
Participant's credit which were granted in tandem with the Option;
and the payment of SARs shall cause a correlative reduction of the
Shares under such Option.

14.3 ISO Tandem Award. When SARs are granted in tandem with
----------------
an ISO, the SARs shall have such terms and conditions as shall be
required for the ISO to qualify as an ISO.

14.4 Payment of Award. SARs shall be paid, to the extent
----------------
payment is elected by the Participant (and is otherwise due and
payable), as soon as practicable after the date on which such
election is made.

14.5 Limitation on SARs. The maximum number of SARs which
------------------
may be granted to any Participant in any one year period shall not
exceed 250,000 SARs. For purposes of the preceding sentence, the
SARs covered by a grant of SARs that is cancelled shall count
against the maximum number of SARs, and, if the Fair Market Value
of a Share on which the appreciation under a grant of SARs will be
calculated is reduced, the transaction will be treated as a
cancellation of the SARs and the grant of a new grant of SARs.

-9-
<PAGE> 14

ARTICLE XV
----------

RESTRICTED STOCK
----------------

15.1 Description. The Committee may grant Benefits in
-----------
Shares available under ARTICLE III of the Plan as Restricted Stock.
Shares of Restricted Stock shall be issued and delivered at the
time of the grant but shall be subject to forfeiture until provided
otherwise in the applicable Agreement or the Plan. Each
certificate representing Shares of Restricted Stock shall bear a
legend referring to the Plan and the risk of forfeiture of the
Shares and stating that such Shares are nontransferable until all
restrictions have been satisfied and the legend has been removed.
The grantee shall be entitled to full voting and dividend rights
with respect to all shares of Restricted Stock from the date of
grant.

15.2 Cost of Restricted Stock. Grants of Shares of
------------------------
Restricted Stock shall be made at a per Share cost to the
Participant equal to par value.

15.3 Non-Transferability. Shares of Restricted Stock shall
-------------------
not be transferable until after the removal of the legend with
respect to such Shares.

ARTICLE XVI
-----------

PERFORMANCE SHARES
------------------

16.1 Description. Performance Shares are the right of an
-----------
individual to whom a grant of such Shares is made to receive Shares
or cash equal to the Fair Market Value of such Shares at a future
date in accordance with the terms of such grant. Generally, such
right shall be based upon the attainment of targeted profit and/or
performance objectives.

16.2 Grant. The Committee may grant an award of Performance
-----
Shares. The number of Performance Shares and the terms and
conditions of the grant shall be set forth in the applicable
Agreement.

ARTICLE XVII
------------

CASH AWARDS
-----------

17.1 Grant. The Committee may grant Cash Awards at such
-----
times and (subject to Section 17.2) in such amounts as it deems
appropriate.

17.2 Rule 16b-3. The Amount of any Cash Award in any Fiscal
----------
Year to any Participant who is subject to Section 16 of the
Exchange Act shall not exceed the greater of $100,000 or 50% of his
cash compensation (excluding any Cash Award under this ARTICLE
XVII) for such Fiscal Year.

17.3 Restrictions. Cash Awards may be subject or not
------------
subject to conditions (such as an investment requirement),
restricted or nonrestricted, vested or subject to forfeiture and
may be payable currently or in the future or both.

-10-
<PAGE> 15

ARTICLE XVIII
-------------

OTHER STOCK BASED AWARDS AND OTHER BENEFITS
-------------------------------------------

18.1 Other Stock Based Awards. The Committee shall have the
------------------------
right to grant Other Stock Based Awards which may include, without
limitation, the grant of Shares based on certain conditions, the
payment of cash based on the performance of the Common Stock, and
the grant of securities convertible into Shares.

18.2 Other Benefits. The Committee shall have the right to
--------------
provide types of Benefits under the Plan in addition to those
specifically listed, if the Committee believes that such Benefits
would further the purposes for which the Plan was established.

ARTICLE XIX
-----------

MISCELLANEOUS PROVISIONS
------------------------

19.1 Underscored References. The underscored references
----------------------
contained in the Plan are included only for convenience, and they
shall not be construed as a part of the Plan or in any respect
affecting or modifying its provisions.

19.2 Number and Gender. The masculine and neuter, wherever
-----------------
used in the Plan, shall refer to either the masculine, neuter or
feminine; and, unless the context otherwise requires, the singular
shall include the plural and the plural the singular.

19.3 Governing Law. This Plan shall be construed and
-------------
administered in accordance with the laws of the State of Missouri.

19.4 Purchase for Investment. The Committee may require
-----------------------
each person purchasing Shares pursuant to an Option or other award
under the Plan to represent to and agree with the Company in
writing that such person is acquiring the Shares for investment and
without a view to distribution or resale. The certificates for
such Shares may include any legend which the Committee deems
appropriate to reflect any restrictions on transfer. All
certificates for Shares delivered under the Plan shall be subject
to such stock-transfer orders and other restrictions as the
Committee may deem advisable under all applicable laws, rules and
regulations, and the Committee may cause a legend or legends to be
put on any such certificates to make appropriate references to such
restrictions.

19.5 No Employment Contract. The adoption of the Plan shall
----------------------
not confer upon any Employee any right to continued employment nor
shall it interfere in any way with the right of the Employer to
terminate the employment of any of its Employees at any time.

19.6 No Effect on Other Benefits. The receipt of Benefits
---------------------------
under the Plan shall have no effect on any benefits to which a
Participant may be entitled from the Employer, under another plan
or otherwise, or preclude a Participant from receiving any such
benefits.

-11-
<PAGE> 16

of Rule 16b-3. If and to the extent any provision of the Plan or action by
the Board, Committee, or the Committee's designee fails to so comply, it shall
be deemed null and void.

19.8 Section 162(m) Fail-Safe Provision. If Code Section
----------------------------------
162(m) is applicable to the Company and to a Participant, ISOs,
NQSOs where the exercise price is no less than fair market value at
the time of grant, and SARs granted to any such Participant are
intended to meet the requirements of other performance-based
compensation under Section 162(m)(4)(C), so that any remuneration
resulting from the grant of any such Benefit to such Participant
will not be considered "applicable employee remuneration" within
the meaning of Code Section 162(m)(4). If and to the extent any
provision of the Plan or action by the Board, Committee, or the
Committee's designee is contrary to such intention, it shall be
deemed null and void.

-12-

<PAGE> 1
CONNING CORPORATION

1996 FLEXIBLE STOCK PLAN

<PAGE> 2
CONNING CORPORATION
1996 FLEXIBLE STOCK PLAN

<TABLE>
TABLE OF CONTENTS

<CAPTION>
Page
----
<S> <C>
ARTICLE I - NAME AND PURPOSE
1.1 Name . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Purpose. . . . . . . . . . . . . . . . . . . . . . . 1

ARTICLE II - DEFINITIONS OF TERMS AND RULES OF CONSTRUCTION
2.1 General Definitions. . . . . . . . . . . . . . . . . 1
(a) Affiliate . . . . . . . . . . . . . . . . . . . 1
(b) Agreement . . . . . . . . . . . . . . . . . . . 1
(c) Benefit . . . . . . . . . . . . . . . . . . . . 1
(d) Board . . . . . . . . . . . . . . . . . . . . . 1
(e) Cash Award. . . . . . . . . . . . . . . . . . . 1
(f) Change of Control . . . . . . . . . . . . . . . 1
(g) Code. . . . . . . . . . . . . . . . . . . . . . 2
(h) Company . . . . . . . . . . . . . . . . . . . . 2
(i) Committee . . . . . . . . . . . . . . . . . . . 2
(j) Common Stock. . . . . . . . . . . . . . . . . . 2
(k) Effective Date. . . . . . . . . . . . . . . . . 2
(l) Employee. . . . . . . . . . . . . . . . . . . . 2
(m) Employer. . . . . . . . . . . . . . . . . . . . 2
(n) Exchange Act. . . . . . . . . . . . . . . . . . 2
(o) Fair Market Value . . . . . . . . . . . . . . . 2
(p) Fiscal Year . . . . . . . . . . . . . . . . . . 2
(q) ISO . . . . . . . . . . . . . . . . . . . . . . 2
(r) NQSO. . . . . . . . . . . . . . . . . . . . . . 2
(s) Option. . . . . . . . . . . . . . . . . . . . . 2
(t) Other Stock Based Award . . . . . . . . . . . . 2
(u) Parent. . . . . . . . . . . . . . . . . . . . . 2
(v) Participant . . . . . . . . . . . . . . . . . . 3
(w) Performance Share . . . . . . . . . . . . . . . 3
(x) Plan. . . . . . . . . . . . . . . . . . . . . . 3
(y) Restricted Stock. . . . . . . . . . . . . . . . 3
(z) Rule 16b-3. . . . . . . . . . . . . . . . . . . 3
(aa) SEC . . . . . . . . . . . . . . . . . . . . . . 3
(bb) Share . . . . . . . . . . . . . . . . . . . . . 3
(cc) SAR . . . . . . . . . . . . . . . . . . . . . . 3
(dd) Subsidiary. . . . . . . . . . . . . . . . . . . 3
2.2 Other Definitions. . . . . . . . . . . . . . . . . . 3

-i-
<PAGE> 3
2.3 Conflicts in Plan. . . . . . . . . . . . . . . . . . 3

ARTICLE III - COMMON STOCK
3.1 Number of Shares . . . . . . . . . . . . . . . . . . 4
3.2 Reusage. . . . . . . . . . . . . . . . . . . . . . . 4
3.3 Adjustments. . . . . . . . . . . . . . . . . . . . . 4

ARTICLE IV - ELIGIBILITY
4.1 Determined By Committee or Board . . . . . . . . . . 4

ARTICLE V - ADMINISTRATION
5.1 Committee or Board . . . . . . . . . . . . . . . . . 4
5.2 Authority. . . . . . . . . . . . . . . . . . . . . . 5
5.3 Delegation . . . . . . . . . . . . . . . . . . . . . 5
5.4 Adjudication of Claims . . . . . . . . . . . . . . . 5

ARTICLE VI - AMENDMENT
6.1 Power of Board . . . . . . . . . . . . . . . . . . . 6
6.2 Limitation . . . . . . . . . . . . . . . . . . . . . 6

ARTICLE VII - TERM AND TERMINATION
7.1 Term . . . . . . . . . . . . . . . . . . . . . . . . 6
7.2 Termination. . . . . . . . . . . . . . . . . . . . . 6

ARTICLE VIII - MODIFICATION OR TERMINATION OF BENEFITS
8.1 General. . . . . . . . . . . . . . . . . . . . . . . 7
8.2 Right to Modify. . . . . . . . . . . . . . . . . . . 7

ARTICLE IX - CHANGE OF CONTROL
9.1 Right of Committee or Board. . . . . . . . . . . . . 7

ARTICLE X - AGREEMENTS AND CERTAIN BENEFITS
10.1 Grant Evidenced by Agreement . . . . . . . . . . . . 7
10.2 Provisions of Agreement. . . . . . . . . . . . . . . 8
10.3 Certain Benefits . . . . . . . . . . . . . . . . . . 8

ARTICLE XI - REPLACEMENT AND TANDEM AWARDS
11.1 Replacement. . . . . . . . . . . . . . . . . . . . . 8
11.2 Tandem Awards. . . . . . . . . . . . . . . . . . . . 8

ARTICLE XII - PAYMENT, DIVIDENDS, DEFERRAL AND WITHHOLDING
12.1 Payment. . . . . . . . . . . . . . . . . . . . . . . 8
12.2 Dividend Equivalents . . . . . . . . . . . . . . . . 9

-ii-
<PAGE> 4
12.3 Deferral . . . . . . . . . . . . . . . . . . . . . . 9
12.4 Withholding. . . . . . . . . . . . . . . . . . . . . 9

ARTICLE XIII - OPTIONS
13.1 Types of Options . . . . . . . . . . . . . . . . . . 9
13.2 Shares for ISOs. . . . . . . . . . . . . . . . . . . 9
13.3 Grant of ISOs and Option Price . . . . . . . . . . . 9
13.4 Other Requirements for ISOs. . . . . . . . . . . . . 10
13.5 NQSOs. . . . . . . . . . . . . . . . . . . . . . . . 10
13.6 Limitation Shares Covered by Options . . . . . . . . 10
13.7 Determination by Committee . . . . . . . . . . . . . 10

ARTICLE XIV - SARS
14.1 Grant and Payment. . . . . . . . . . . . . . . . . . 10
14.2 Grant of Tandem Award. . . . . . . . . . . . . . . . 10
14.3 ISO Tandem Award . . . . . . . . . . . . . . . . . . 10
14.4 Payment of Award . . . . . . . . . . . . . . . . . . 10
14.5 Limitation on SARs . . . . . . . . . . . . . . . . . 10

ARTICLE XV - RESTRICTED STOCK
15.1 Description. . . . . . . . . . . . . . . . . . . . . 11
15.2 Cost of Restricted Stock . . . . . . . . . . . . . . 11
15.3 Non-Transferability. . . . . . . . . . . . . . . . . 11

ARTICLE XVI - PERFORMANCE SHARES
16.1 Description. . . . . . . . . . . . . . . . . . . . . 11
16.2 Grant. . . . . . . . . . . . . . . . . . . . . . . . 11

ARTICLE XVII - CASH AWARDS
17.1 Grant. . . . . . . . . . . . . . . . . . . . . . . . 11
17.2 Limitation on Amount . . . . . . . . . . . . . . . . 12
17.3 Restrictions . . . . . . . . . . . . . . . . . . . . 12

ARTICLE XVIII - OTHER STOCK BASED AWARDS AND OTHER BENEFITS
18.1 Other Stock Based Awards . . . . . . . . . . . . . . 12
18.2 Other Benefits . . . . . . . . . . . . . . . . . . . 12

ARTICLE XIX - MISCELLANEOUS PROVISIONS
19.1 Underscored References . . . . . . . . . . . . . . . 12
19.2 Number and Gender. . . . . . . . . . . . . . . . . . 12
19.3 Governing Law. . . . . . . . . . . . . . . . . . . . 12
19.4 Purchase for Investment. . . . . . . . . . . . . . . 12
19.5 No Employment Contract . . . . . . . . . . . . . . . 13

-iii-
<PAGE> 5
19.6 No Effect on Other Benefits. . . . . . . . . . . . . 13
19.7 Section 16 Fail-Safe Provision . . . . . . . . . . . 13
19.8 Section 162(m) Fail-Safe Provision . . . . . . . . . 13
</TABLE>

-iv-
<PAGE> 6
CONNING CORPORATION
1996 FLEXIBLE STOCK PLAN

ARTICLE I
---------

NAME AND PURPOSE
----------------

1.1 Name. The name of this Plan is the "Conning
----
Corporation 1996 Flexible Stock Plan."

1.2 Purpose. The Company has established this Plan
-------
to attract, retain, motivate and reward Employees and other
individuals, to encourage ownership of the Company's Common Stock
by Employees and other individuals, and to promote and further the
best interests of the Company by granting cash and other awards.

ARTICLE II
----------

DEFINITIONS OF TERMS AND RULES OF CONSTRUCTION
----------------------------------------------

2.1 General Definitions. The following words and
-------------------
phrases, when used in the Plan, unless otherwise specifically
defined or unless the context clearly otherwise requires, shall
have the following respective meanings:

(a) Affiliate. A Parent or Subsidiary of the
---------
Company.

(b) Agreement. The document which evidences
---------
the grant of any Benefit under the Plan and which sets forth
the Benefit and the terms, conditions and provisions of, and
restrictions relating to, such Benefit.

(d) Board. The Board of Directors of the
-----
Company.

(e) Cash Award. A Benefit payable in the form
----------
of cash.

(f) Change of Control. The acquisition,
-----------------
without the approval of the Board, by any person or entity,
other than the Company or a Related Entity, of more than 20%
of the outstanding shares of the Company's voting common stock
through a tender offer, exchange offer or otherwise; the
liquidation or dissolution of the Company following a sale or
other disposition of all or substantially all of its assets;
a merger or consolidation involving the Company which results
in the Company not being the surviving parent corporation; or
any time during any two-year period in which individuals who
constituted the Board at the start of such period (or whose
election was approved by at least two-thirds of the then
members of the Board who were members at the start of the
two-year period) do not constitute at least 50% of the Board
for any reason. A Related Entity is the Parent, a Subsidiary
or any employee benefit plan (including a trust forming a part
of such a plan) maintained by the Parent, the Company or a
Subsidiary.

<PAGE> 7
(g) Code. The Internal Revenue Code of 1986,
----
as amended. Any reference to the Code includes the
regulations promulgated pursuant to the Code.

(h) Company. Conning Corporation, a Missouri
-------
corporation.

(i) Committee. The Committee described in
---------
Section 5.1.

(j) Common Stock. The Company's Class B Non-
------------
Voting Common Stock which presently has a par value of $.01
per Share.

(l) Employee. Any person employed by the
--------
Employer.

(m) Employer. The Company and all Affiliates.
--------

(n) Exchange Act. The Securities Exchange Act
------------
of 1934, as amended.

(o) Fair Market Value. The value of a Share as
-----------------
determined by the Board of Directors or the Committee.

(p) Fiscal Year. The taxable year of the
-----------
Company which is the calendar year.

(q) ISO. An Incentive Stock Option as defined
---
in Section 422 of the Code.

(r) NQSO. A Non-Qualified Stock Option, which
----
is an Option that does not qualify as an ISO.

(s) Option. An option to purchase Shares
------
granted under the Plan.

(t) Other Stock Based Award. An award under
-----------------------
ARTICLE XVIII that is valued in whole or in part by reference
to, or is otherwise based on, Common Stock.

(u) Parent. Any corporation (other than the
------
Company or a Subsidiary) in an unbroken chain of corporations
ending with the Company, if, at the time of the grant of an
Option or other Benefit, each of the corporations (other than
the Company or a Subsidiary) owns stock possessing 50% or more
of the total combined voting power of all classes of stock in
one of the other corporations in such chain.

-2-
<PAGE> 8
(v) Participant. An individual who is granted
-----------
a Benefit under the Plan. Benefits may be granted only to
Employees, employees and owners of entities which are not
Affiliates but which have a direct or indirect ownership
interest in an Employer or in which an Employer has a direct
or indirect ownership interest, individuals who, and employees
and owners of entities which, are customers and suppliers of
an Employer, individuals who, and employees and owners of
entities which, render services to an Employer, and
individuals who, and employees and owners of entities, which
have ownership or business affiliations with any individual or
entity previously described.

(w) Performance Share. A Share awarded to a
-----------------
Participant under ARTICLE XVI of the Plan.

(x) Plan. The Conning Corporation 1996
----
Flexible Stock Plan and all amendments and supplements to it.

(y) Restricted Stock. Shares issued under
----------------
ARTICLE XV of the Plan.

(z) Rule 16b-3. Rule 16b-3 promulgated by the
----------
SEC, as amended, or any successor rule in effect from time to
time.

(aa) SEC. The Securities and Exchange
---
Commission.

(bb) Share. A share of Common Stock.
-----

(cc) SAR A stock appreciation right, which is
---
the right to receive an amount equal to the appreciation, if
any, in the Fair Market Value of a Share from the date of the
grant of the right to the date of its payment.

(dd) Subsidiary. Any corporation, other than
----------
the Company, in an unbroken chain of corporations beginning
with the Company if, at the time of grant of an Option or
other Benefit, each of the corporations, other than the last
corporation in the unbroken chain, owns stock possessing 50%
or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain.

2.3 Conflicts in Plan. In the case of any conflict
-----------------
in the terms of the Plan relating to a Benefit, the provisions in
the ARTICLE of the Plan which specifically grants such Benefit
shall control those in a different ARTICLE.

-3-
<PAGE> 9
ARTICLE III
-----------

COMMON STOCK
------------

3.1 Number of Shares. The number of Shares which
----------------
may be issued or sold or for which Options, SARs or Performance
Shares may be granted under the Plan shall be 2,100,000 Shares.

3.2 Reusage. If an Option or SAR expires or is
-------
terminated, surrendered, or cancelled without having been fully
exercised, if Restricted Shares or Performance Shares are
forfeited, or if any other grant results in any Shares not being
issued, the Shares covered by such Option or SAR, grant of
Restricted Shares, Performance Shares or other grant, as the case
may be, shall again be available for use under the Plan.

3.3 Adjustments. If there is any change in the
-----------
Common Stock of the Company by reason of any stock dividend,
spin-off, split-up, spin-out, recapitalization, merger,
consolidation, reorganization, combination or exchange of shares,
the number of SARs and number and class of shares available for
Options and grants of Restricted Stock, Performance Shares and
Other Stock Based Awards and the number of Shares subject to
outstanding Options, SARs, grants of Restricted Stock and
Performance Shares which are not vested, and Other Stock Based
Awards, and the price thereof, as applicable, shall be
appropriately adjusted by the Committee.

-4-
<PAGE> 10
ARTICLE IV
----------

ELIGIBILITY
-----------

4.1 Determined By Committee or Board. The
--------------------------------
Participants and the Benefits they receive under the Plan shall be
determined by the Board or, subject to Section 5.3, the Committee.
In making determinations, the Committee or Board shall consider
past, present and expected future contributions of Participants and
potential Participants to the Employer, including, without
limitation, the performance of, or the refraining from the
performance of, services.

ARTICLE V
---------

ADMINISTRATION
--------------

5.1 Committee or Board. The Plan shall be
------------------
administered by the Board or the Committee. The Committee shall
consist of two or more members of the Board. The members of the
Committee shall be appointed by and shall serve at the pleasure of
the Board, which may from time to time appoint members in
substitution for members previously appointed and fill vacancies,
however caused, in the Committee. The Committee may select one of
its members as its Chairman and shall hold its meetings at such
times and places as it may determine. A majority of its members
shall constitute a quorum. All determinations of the Committee
shall be made by a majority of its members. Any decision or
determination reduced to writing and signed by a majority of the
members shall be fully as effective as if it had been made by a
majority vote at a meeting duly called and held.

5.2 Authority. Subject to the terms of the Plan,
---------
the Board and, subject to Section 5.3, the Committee shall have
discretionary authority to:

(a) determine the individuals to whom Benefits are
granted, the type and amounts of Benefits to be granted and
the time of all such grants;

(b) determine the terms, conditions and provisions
of, and restrictions relating to, each Benefit granted;

(d) prescribe, amend and rescind rules and
regulations relating to the Plan;

(e) determine the content and form of all
Agreements;

(f) determine all questions relating to Benefits
under the Plan;

(g) maintain accounts, records and ledgers relating
to Benefits;

-5-
<PAGE> 11
(h) maintain records concerning its decisions and
proceedings;

(i) employ agents, attorneys, accountants or other
persons for such purposes as the Committee considers necessary
or desirable;

(j) take, at anytime, any action permitted by
Section 9.1 irrespective of whether any Change of Control has
occurred or is imminent; and

(k) do and perform all acts which it may deem
necessary or appropriate for the administration of the Plan
and carry out the purposes of the Plan.

5.3 Delegation. Except as required by Rule 16b-3
----------
with respect to grants of Options, Stock Appreciation Awards,
Performance Shares, Other Stock Based Awards, or other Benefits to
individuals who are subject to Section 16 of the Exchange Act or as
otherwise required for compliance with Rule 16b-3 or other
applicable law, the Board may delegate all or any part of its
authority under the Plan to the Committee, and the Committee may
delegate all or any part of its authority under the Plan to any
Employee, Employees or committee.

5.4 Adjudication of Claims. The Committee shall
----------------------
have discretionary authority to make all determinations as to the
right to Benefits under the Plan. In the event that a Participant
believes he has not received the Benefits to which he is entitled
under the Plan, a claim shall be made in writing to the Committee.
The claim shall be reviewed by the Committee. If the claim is
approved or denied, in full or in part, the Committee shall provide
a written notice of approval or denial within 90 days with, in the
case of a denial, the specific reasons for the denial and specific
reference to the provisions of the Plan and/or Agreement upon which
the denial is based. A claim shall be deemed denied if the
Committee does not take any action within the aforesaid 90 day
period. If a claim is denied or deemed denied and a review is
desired, the Participant shall notify the Committee in writing
within 60 days of the receipt of notice of denial or the date on
which the claim is deemed to be denied, as the case may be. In
requesting a review, the Participant may review the Plan or any
document relating to it and submit any written issues and comments
he may deem appropriate. The Committee shall then review the claim
and provide a written decision within 60 days. This decision, if
adverse to the Participant, shall state the specific reasons for
the decision and shall include reference to specific provisions of
the Plan and/or Agreement on which the decision is based. The
Committee's decision on review shall be final.

ARTICLE VI
----------

AMENDMENT
---------

6.1 Power of Board. Except as hereinafter provided,
--------------
the Board shall have the sole right and power to amend the Plan at
any time and from time to time.

-6-
<PAGE> 12
6.2 Limitation. The Board may not amend the Plan,
----------
without approval of the shareholders of the Company:

(a) in a manner which would cause Options which are
intended to qualify as ISOs to fail to qualify;

(b) in a manner which would cause the Plan to fail
to meet the requirements of Rule 16b-3; or

ARTICLE VII
-----------

TERM AND TERMINATION
--------------------

7.1 Term. The Plan shall commence as of the
----
Effective Date and, subject to the terms of the Plan, including
those requiring approval by the shareholders of the Company and
those limiting the period over which ISOs or any other Benefits may
be granted, shall continue in full force and effect until
terminated.

7.2 Termination. The Plan may be terminated at any
-----------
time by the Board.

ARTICLE VIII
------------

MODIFICATION OR TERMINATION OF BENEFITS
---------------------------------------

8.1 General. Subject to the provisions of
-------
Section 8.2, the amendment or termination of the Plan shall not
adversely affect a Participant's right to any Benefit granted prior
to such amendment or termination.

8.2 Right to Modify. Any Benefit granted may be
---------------
converted, modified, forfeited or cancelled, in whole or in part,
by the Board or the Committee if and to the extent permitted in the
Plan or applicable Agreement or with the consent of the Participant
to whom such Benefit was granted.

ARTICLE IX
----------

CHANGE OF CONTROL
-----------------

9.1 Right of Committee or Board. In order to
---------------------------
maintain a Participant's rights in the event of a Change in
Control, the Board or the Committee, in its sole discretion, may,
in any Agreement evidencing a Benefit, or at any time prior to, or
simultaneously with or after a Change in Control, provide such
protection as it may deem necessary. Without, in any way, limiting the

-7-
<PAGE> 13
generality of the foregoing sentence or requiring any specific
protection, the Board or Committee may:

(a) provide for the acceleration of any time
periods relating to the exercise or realization of such
Benefit so that such Benefit may be exercised or realized in
full on or before a date fixed by the Committee;

(c) make such adjustment to the Benefits then
outstanding as the Committee deems appropriate to reflect such
transaction or change; and/or

(d) cause the Benefits then outstanding to be
assumed, or new Benefits substituted therefor, by the
surviving corporation in such change.

ARTICLE X
---------

AGREEMENTS AND CERTAIN BENEFITS
-------------------------------

10.1 Grant Evidenced by Agreement. The grant of any
----------------------------
Benefit under the Plan may be evidenced by an Agreement which shall
describe the specific Benefit granted and the terms and conditions
of the Benefit. The granting of any Benefit shall be subject to,
and conditioned upon, the recipient's execution of any Agreement
required by the Board or the Committee. Except as otherwise
provided in an Agreement, all capitalized terms used in the
Agreement shall have the same meaning as in the Plan, and the
Agreement shall be subject to all of the terms of the Plan.

10.2 Provisions of Agreement. Each Agreement shall
-----------------------
contain such provisions that the Committee shall determine to be
necessary, desirable and appropriate for the Benefit granted which
may include, but not be limited to, the following with respect to
any Benefit: description of the type of Benefit; the Benefit's
duration; its transferability; if an Option, the exercise price,
the exercise period and the person or persons who may exercise the
Option; the effect upon such Benefit of the Participant's death or
termination of employment; the Benefit's conditions; when, if, and
how any Benefit may be forfeited, converted into another Benefit,
modified, exchanged for another Benefit, or replaced; and the
restrictions on any Shares purchased or granted under the Plan.

-8-
<PAGE> 14
ARTICLE XI
----------

REPLACEMENT AND TANDEM AWARDS
-----------------------------

11.1 Replacement. The Board or Committee may permit
-----------
a Participant to elect to surrender a Benefit in exchange for a new
Benefit.

11.2 Tandem Awards. Awards may be granted by the
-------------
Board or the Committee in tandem. However, no Benefit may be
granted in tandem with an ISO except SARs.

ARTICLE XII
-----------

PAYMENT, DIVIDENDS, DEFERRAL AND WITHHOLDING
--------------------------------------------

12.1 Payment. Upon the exercise of an Option or in
-------
the case of any other Benefit that requires a payment to the
Company, the amount due the Company is to be paid:

(a) in cash;

(b) by the tender to the Company of Shares owned by
the optionee and registered in his name having a Fair Market
Value equal to the amount due to the Company;

(d) in cash, but by means of a so-called "cashless
exercise" of an Option; and/or

(e) by any combination of the payment methods
specified in (a), (b), (c) and (d) above.

Notwithstanding, the foregoing, any method of payment other than
(a) may be used only with the consent of the Board or the Committee
or if and to the extent so provided in an Agreement. The proceeds
of the sale of Common Stock purchased pursuant to an Option and any
payment to the Company for other Benefits shall be added to the
general funds of the Company or to the Shares held in treasury, as
the case may be, and used for the corporate purposes of the Company
as the Board shall determine.

12.2 Dividend Equivalents. Grants of Benefits in
--------------------
Shares or Share equivalents may include dividend equivalent
payments or dividend credit rights.

12.3 Deferral. The right to receive any Benefit
--------
under the Plan may, at the request of the Participant, be deferred
for such period and upon such terms as the Committee shall

-9-
<PAGE> 15
determine, which may include crediting of interest on deferrals of
cash and crediting of dividends on deferrals denominated in Shares.

ARTICLE XIII
------------

OPTIONS
-------

13.1 Types of Options. It is intended that both ISOs
----------------
and NQSOs may be granted by the Committee under the Plan.

13.2 Shares for ISOs. The number of Shares for which
---------------
ISOs may be granted on or after the Effective Date shall not exceed
2,100,000 Shares.

13.3 Grant of ISOs and Option Price. Each ISO must
------------------------------
be granted to an Employee and granted within ten years from the
earlier of the date of adoption by the Board or the Effective Date.
The purchase price for Shares under any ISO shall be no less than
the Fair Market Value of the Shares at the time the Option is
granted.

13.4 Other Requirements for ISOs. The terms of each
---------------------------
Option which is intended to qualify as an ISO shall meet all
requirements of Section 422 of the Code.

13.5 NQSOs. The terms of each NQSO shall provide
-----
that such Option will not be treated as an ISO. The purchase price
for Shares under any NQSO shall be the Fair Market Value of the
Shares at the time the Option is granted.

13.6 Limitation on Shares Covered by Options. The
---------------------------------------
maximum number of Shares with respect to which (a) ISOs plus
(b) NQSOs where the purchase price for Shares upon exercise of the
NQSO is no less than the Fair Market Value of the Shares at the
time of grant which may be granted to any Participant in any one
year period shall not exceed 250,000 Shares. For purposes of the
preceding sentence, the Shares covered by an Option that is
cancelled shall count against the maximum number of Shares, and, if
the exercise price under an Option is reduced, the transaction
shall be treated as a cancellation of the Option and a grant of a
new Option.

-10-
<PAGE> 16
13.7 Determination by Board or the Committee. Except
---------------------------------------
as otherwise provided in Section 13.2 through Section 13.6, the
terms of all Options shall be determined by the Board or the
Committee.

ARTICLE XIV
-----------

SARS
----

14.1 Grant and Payment. The Committee may grant
-----------------
SARs. Upon electing to receive payment of a SAR, a Participant
shall receive payment in cash, in Common Stock, or in any
combination of cash and Common Stock, as the Committee shall
determine.

14.2 Grant of Tandem Award. The Committee may grant
---------------------
SARs in tandem with an Option, in which case: the exercise of the
Option shall cause a correlative reduction in SARs standing to a
Participant's credit which were granted in tandem with the Option;
and the payment of SARs shall cause a correlative reduction of the
Shares under such Option.

14.3 ISO Tandem Award. When SARs are granted in
----------------
tandem with an ISO, the SARs shall have such terms and conditions
as shall be required for the ISO to qualify as an ISO.

14.4 Payment of Award. SARs shall be paid, to the
----------------
extent payment is elected by the Participant (and is otherwise due
and payable), as soon as practicable after the date on which such
election is made.

14.5 Limitation on SARs. The maximum number of SARs
------------------
which may be granted to any Participant in any one year period
shall not exceed 250,000 SARs. For purposes of the preceding
sentence, the SARs covered by a grant of SARs that is cancelled
shall count against the maximum number of SARs, and, if the Fair
Market Value of a Share on which the appreciation under a grant of
SARs will be calculated is reduced, the transaction will be treated
as a cancellation of the SARs and the grant of a new grant of SARs.

-11-
<PAGE> 17

ARTICLE XV
----------

RESTRICTED STOCK
----------------

15.1 Description. The Committee may grant Benefits
-----------
in Shares available under ARTICLE III of the Plan as Restricted
Stock. Shares of Restricted Stock shall be issued and delivered at
the time of the grant but shall be subject to forfeiture until
provided otherwise in the applicable Agreement or the Plan. Each
certificate representing Shares of Restricted Stock shall bear a
legend referring to the Plan and the risk of forfeiture of the
Shares and stating that such Shares are nontransferable until all
restrictions have been satisfied and the legend has been removed.
The grantee shall be entitled to full voting and dividend rights
with respect to all shares of Restricted Stock from the date of
grant.

15.2 Cost of Restricted Stock. Grants of Shares of
------------------------
Restricted Stock shall be made at a per Share cost to the
Participant equal to par value.

15.3 Non-Transferability. Shares of Restricted Stock
-------------------
shall not be transferable until after the removal of the legend
with respect to such Shares.

ARTICLE XVI
-----------

PERFORMANCE SHARES
------------------

16.1 Description. Performance Shares are the right
-----------
of an individual to whom a grant of such Shares is made to receive
Shares or cash equal to the Fair Market Value of such Shares at a
future date in accordance with the terms of such grant. Generally,
such right shall be based upon the attainment of targeted profit
and/or performance objectives.

16.2 Grant. The Committee may grant an award of
-----
Performance Shares. The number of Performance Shares and the terms
and conditions of the grant shall be set forth in the applicable
Agreement.

ARTICLE XVII
------------

CASH AWARDS
-----------

17.1 Grant. The Committee may grant Cash Awards at
-----
such times and (subject to Section 17.2) in such amounts as it
deems appropriate.

17.2 Limitation on Amount. The Amount of any Cash
--------------------
Award in any Fiscal Year to any Participant who is subject to
Section 16 of the Exchange Act shall not exceed the greater of
$100,000 or 50% of his cash compensation (excluding any Cash Award
under this ARTICLE XVII) for such Fiscal Year.

-12-
<PAGE> 18
17.3 Restrictions. Cash Awards may be subject or not
------------
subject to conditions (such as an investment requirement),
restricted or nonrestricted, vested or subject to forfeiture and
may be payable currently or in the future or both.

ARTICLE XVIII
-------------

OTHER STOCK BASED AWARDS AND OTHER BENEFITS
-------------------------------------------

18.1 Other Stock Based Awards. The Committee or
------------------------
Board shall have the right to grant Other Stock Based Awards which
may include, without limitation, the grant of Shares based on
certain conditions, the payment of cash based on the performance of
the Common Stock, and the grant of securities convertible into
Shares.

18.2 Other Benefits. The Committee or Board shall
--------------
have the right to provide types of Benefits under the Plan in
addition to those specifically listed, if it believes that such
Benefits would further the purposes for which the Plan was
established.

ARTICLE XIX
-----------

MISCELLANEOUS PROVISIONS
------------------------

19.1 Underscored References. The underscored
----------------------
references contained in the Plan are included only for convenience,
and they shall not be construed as a part of the Plan or in any
respect affecting or modifying its provisions.

19.2 Number and Gender. The masculine and neuter,
-----------------
wherever used in the Plan, shall refer to either the masculine,
neuter or feminine; and, unless the context otherwise requires, the
singular shall include the plural and the plural the singular.

19.3 Governing Law. This Plan shall be construed and
-------------
administered in accordance with the laws of the State of Missouri.

19.4 Purchase for Investment. The Committee or Board
-----------------------
may require each person purchasing Shares pursuant to an Option or
other award under the Plan to represent to and agree with the
Company in writing that such person is acquiring the Shares for
investment and without a view to distribution or resale. The
certificates for such Shares may include any legend which the
Committee or Board deems appropriate to reflect any restrictions on
transfer. All certificates for Shares delivered under the Plan
shall be subject to such stock-transfer orders and other
restrictions as the Committee or Board may deem advisable under all
applicable laws, rules and regulations, and the Committee or Board
may cause a legend or legends to be put on any such certificates to
make appropriate references to such restrictions.

-13-
<PAGE> 19
19.5 No Employment Contract. The adoption of the
----------------------
Plan shall not confer upon any Employee any right to continued
employment nor shall it interfere in any way with the right of the
Employer to terminate the employment of any of its Employees at any
time.

19.6 No Effect on Other Benefits. The receipt of
---------------------------
Benefits under the Plan shall have no effect on any benefits to
which a Participant may be entitled from the Employer, under
another plan or otherwise, or preclude a Participant from receiving
any such benefits.

19.7 Section 16 Fail-Safe Provision. With respect to
------------------------------
Participants subject to Section 16 of the Exchange Act,
transactions under the Plan are intended to comply with all
applicable conditions of Rule 16b-3. If and to the extent any
provision of the Plan or action by the Board, Committee, or the
Committee's designee fails to so comply, it shall be deemed null
and void.

19.8 Section 162(m) Fail-Safe Provision. If Code
----------------------------------
Section 162(m) is applicable to the Company and to a Participant,
ISOs, NQSOs where the exercise price is no less than fair market
value at the time of grant, and SARs granted to any such
Participant are intended to meet the requirements of other
performance-based compensation under Section 162(m)(4)(C), so that
any remuneration resulting from the grant of any such Benefit to
such Participant will not be considered "applicable employee
remuneration" within the meaning of Code Section 162(m)(4). If and
to the extent any provision of the Plan or action by the Board,
Committee, or the Committee's designee is contrary to such
intention, it shall be deemed null and void.

-14-

<PAGE> 1

Exhibit 21.1

Subsidiaries of Conning Corporation

Conning, Inc., a Delaware corporation and wholly-owned subsidiary of the Company

Conning & Company, a Connecticut corporation and wholly-owned subsidiary of
Conning, Inc.

Conning Asset Management Company, a Missouri corporation and wholly-owned
subsidiary of Conning & Company

<PAGE> 1

INDEPENDENT AUDITORS' CONSENT

The Board of Directors and Shareholders
Conning Corporation:

We consent to the use of our reports included herein and to the
references to our firm under the headings, "Selected Consolidated
Financial Data" and "Experts" in the prospectus.

/s/ KPMG Peat Marwick LLP

St. Louis, Missouri
September 19, 1997

<PAGE> 1

CONSENT OF INDEPENDENT ACCOUNTANTS
----------------------------------

We hereby consent to the use in the Prospectus constituting part of this
Registration Statement on Form S-1 of our report dated February 21, 1995,
except for Note 12, as to which the date is September 19, 1997, relating to the
financial statements of Conning, Inc. & Subsidiaries, which appears in such
Prospectus. We also consent to the reference to us under the heading "Experts"
in such Prospectus.

/s/ Price Waterhouse LLP

Hartford, Connecticut
September 19, 1997

<ARTICLE> 5

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 17,718,205
<SECURITIES> 45,625
<RECEIVABLES> 5,462,660
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<CURRENT-ASSETS> 23,235,559
<PP&E> 1,377,924
<DEPRECIATION> 562,812
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<BONDS> 2,000,000
<COMMON> 67,100
24,781,804
0
<OTHER-SE> 4,300,531
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<EXTRAORDINARY> 0
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<NET-INCOME> 6,212,231
<EPS-PRIMARY> 0
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</TABLE>

<ARTICLE> 5

<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 15,668,544
<SECURITIES> 0
<RECEIVABLES> 7,250,364
<ALLOWANCES> 165,000
<INVENTORY> 0
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34,074,687
0
<OTHER-SE> 0
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</TABLE>