CONNING CORP, S-1/A, 1997-11-06

CONNING CORP
S-1/A, 1997-11-06
INVESTMENT ADVICE

Previous: CALIFORNIA MICRO DEVICES CORP, 10-Q, 1997-11-06

Next: CONNING CORP, 8-A12G/A, 1997-11-06

<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 6, 1997

REGISTRATION NO. 333-35993
===============================================================================

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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

AMENDMENT NO. 1

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

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

CONNING CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

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

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

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

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. / /

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 NOVEMBER 6, 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 has applied 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 9 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]

CORE STRATEGIC PRODUCTS &
COMPETENCIES CRITERIA SERVICES

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

INSURANCE
RESEARCH
SERVICES

Using its core competencies, Conning's business strategy is to apply one or
more of its strategic criteria to provide products and services to its clients.

"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.

The Company is the successor to the business conducted by Conning, Inc. and
its operating subsidiary, Conning & Company (collectively, "Conning, Inc."),
and Conning Asset Management Company, formerly known as General American
Investment Management Company ("GAIMCO"), pursuant to a merger (the
"Strategic Merger") effected in August 1995. Prior to the Strategic Merger,
Conning, Inc. and GAIMCO were unrelated business entities. Conning, Inc. was an
85-year old Hartford, Connecticut based insurance specialty asset management
firm which provided asset management services and research for the insurance
industry. GAIMCO was a registered investment adviser which provided investment
advisory services primarily to its parent, General American Life Insurance
Company ("General American"), and its affiliates. 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 is a holding company that conducts its business through three
subsidiaries: (i) Conning, Inc. is a wholly-owned subsidiary of the Company and
serves as an intermediate holding company; (ii) Conning & Company is a
wholly-owned subsidiary of Conning, Inc. and is a registered investment adviser
and broker-dealer; and (iii) Conning Asset Management Company is a wholly-owned
subsidiary of Conning & Company and is a registered investment adviser.
Throughout this Prospectus, the terms "Company" and "Conning" refer to
Conning Corporation and its subsidiaries. See "Glossary" for definitions of
certain terms used in this Prospectus.

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 September 30, 1997, the Company had approximately $26.4 billion
of assets under discretionary management and, in total, provided services with
respect to approximately $73.6 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 and net earnings of
approximately $6.2 million. During the nine months ended September 30, 1997,
the Company had revenues of approximately $46.9 million and net earnings of
approximately $6.4 million.

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

<PAGE> 5
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 investment 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.

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 44 of the 50 largest U.S.
property-casualty insurance companies and 42 of the 50 largest U.S. life-health
insurance companies (based on 1996 premiums as reported by OneSource
Information Services, Inc. as provided to it by third parties).

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 September 30, 1997, the Company provided services with
respect to approximately $73.6 billion in assets, of which approximately (i)
$26.4 billion represented assets under discretionary management, (ii) $21.0
billion represented assets serviced under investment advisory agreements and
(iii) $26.2 billion represented assets receiving investment accounting &
reporting services on a stand-alone basis. As part of its discretionary asset
management services, as of September 30, 1997, the Company managed
approximately $2.6 billion of commercial mortgage loans and investment real
estate.

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 and insurance-related companies.

<PAGE> 6

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).

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. Based upon
information provided by an industry source, insurance company assets increased
at a rate of approximately 9% per year, from $2.6 trillion in 1994 to $3.1
trillion in 1996.

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 September 30, 1997, such affiliated assets under
management totaled approximately $13.5 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
<S> <C>
Common Stock offered by the
Company..................... 2,500,000 shares

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

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 Factors--Regulation"
and "Dividend Policy."

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

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

<FN>
- --------
<F1> Assumes no exercise of outstanding stock options. As of the date of this
Prospectus, there are outstanding options to purchase 1,237,500 shares of
Common Stock at a weighted average price of $5.65 per share. In addition,
upon the closing of this offering the Company intends to grant 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 future 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 NINE MONTHS ENDED
YEARS ENDED DECEMBER 31,<F1> DECEMBER 31,<F2> SEPTEMBER 30,
--------------------------------------- ------------------ ------------------
1992 1993 1994 1995 1995 1996 1996 1997
PRO FORMA
INCOME STATEMENT DATA: (IN THOUSANDS, EXCEPT PER SHARE 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 $29,365 $36,018

Research services................ 0 0 0 4,090 9,480 12,148 9,582 10,278

Other income..................... 51 36 57 663 996 1,062 792 629
------ ------ ------ ------- ------- ------- ------- -------

Total revenues............... 1,767 2,482 3,541 28,803 41,151 53,666 39,739 46,925
------ ------ ------ ------- ------- ------- ------- -------

Operating income................... 832 1,341 2,112 6,292 7,389 11,792 9,093 10,972

Interest expense................. 0 0 0 521 1,365 729 592 233
------ ------ ------ ------- ------- ------- ------- -------

Income before provision for income
taxes............................ 832 1,341 2,112 5,771 6,025 11,063 8,501 10,739

Provision for income taxes......... 311 507 827 2,359 2,739 4,851 3,762 4,317
------ ------ ------ ------- ------- ------- ------- -------

Net income................... $ 521 $ 834 $1,285 $ 3,412 $ 3,286 $ 6,212 $ 4,739 $ 6,422
====== ====== ====== ======= ======= ======= ======= =======

Preferred stock dividends.......... 0 0 0 351 906 906 669 750
------ ------ ------ ------- ------- ------- ------- -------

Net earnings available to common
shareholders..................... $ 521 $ 834 $1,285 $ 3,061 $ 2,380 $ 5,306 $ 4,070 $ 5,672
====== ====== ====== ======= ======= ======= ======= =======

Pro forma net income per
common share and common
share equivalents <F3>..... $ 0.57 $ 0.58
======= =======

<CAPTION>
AS OF DECEMBER 31, AS OF SEPTEMBER 30,
-------------------------------------------------- --------------------
1992 1993 1994 1995 1996 1997 1997
AS
ADJUSTED
<F4>

<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA: (IN THOUSANDS)

Total assets....................... $1,395 $1,386 $1,683 $46,177 $50,020 $54,646 $

Long-term debt..................... 0 0 0 9,000 2,000 0

Convertible preferred stock........ 0 0 0 17,003 24,782 36,152

Total common shareholders'
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>
------------------------------------------------- AS OF
1992 1993 1994 1995 1996 9/30/97

OTHER OPERATING DATA: (IN BILLIONS, EXCEPT AS NOTED)
<S> <C> <C> <C> <C> <C> <C>

Average assets under discretionary management<F5>:

Unaffiliated.............................................. $ 3.3 $ 5.4 $ 6.2 $ 7.8 $ 9.5 $12.9

General American & affiliates............................. 5.5 6.0 6.6 7.8 9.6 13.5
----- ----- ----- ----- ----- -----

Total................................................. 8.8 11.4 12.8 15.6 19.1 26.4

Average assets under advisory services...................... 5.2 10.0 14.7 15.3 18.3 21.0

Average assets under accounting & reporting services........ 0.0 1.2 2.6 4.8 9.2 26.2
----- ----- ----- ----- ----- -----

Total assets serviced................................. $14.0 $22.6 $30.1 $35.7 $46.6 $73.6
===== ===== ===== ===== ===== =====

<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
and to the Capital Stock Conversions.

<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.
</TABLE>

<PAGE> 9
SUMMARY CONSOLIDATED FINANCIAL DATA (CONTINUED)

The following financial information represents certain financial data of
Conning, Inc. and its subsidiaries for the years ended December 31, 1992, 1993
and 1994, and for the six months ended June 30, 1995:

<TABLE>
<CAPTION>
SIX
MONTHS
ENDED
YEARS ENDED DECEMBER 31, JUNE 30,
------------------------------- --------
CONNING, INC. AND SUBSIDIARIES 1992 1993 1994 1995
<S> <C> <C> <C> <C>
(IN THOUSANDS)

INCOME STATEMENT DATA:

Revenues:

Asset management and related fees....................... $ 6,643 $ 8,107 $ 9,840 $ 5,662

Research services....................................... 9,487 13,473 8,165 4,564

Other income............................................ 132 1,282 472 275
------- ------- ------- -------

Total revenues...................................... 16,262 22,862 18,477 10,501
------- ------- ------- -------

Operating income............................................ 582 4,441 2,751 2,092

Interest expense........................................ 111 85 0 0
------- ------- ------- -------

Income before provision for income taxes and cumulative
effect of accounting change............................... 471 4,356 2,751 2,092

Provision for income taxes.................................. 66 947 1,244 809
------- ------- ------- -------

Income before cumulative effect of accounting change........ 405 3,409 1,507 1,283

Cumulative effect of accounting change...................... 0 131 0 0
------- ------- ------- -------

Net income.......................................... $ 405 $ 3,540 $ 1,507 $ 1,283
======= ======= ======= =======

Preferred stock dividends................................... 53 320 320 160
------- ------- ------- -------

Net earnings available to common shareholders............... $ 352 $ 3,220 $ 1,187 $ 1,123
======= ======= ======= =======
<CAPTION>
AS OF
AS OF DECEMBER 31, JUNE 30,
----------------------------- --------
1992 1993 1994 1995
(IN THOUSANDS)
<S> <C> <C> <C> <C>
BALANCE SHEET DATA:

Total assets................................................ $10,922 $11,274 $14,228 $16,003

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

Redeemable preferred stock.................................. 5,425 0 0 0

Cumulative preferred stock.................................. 0 3,650 3,650 3,650

Total common shareholders' equity (deficit)................. (2,682) 2,552 4,186 5,426

Number of common shares outstanding end of period........... 446 93 106 108
</TABLE>

<PAGE> 10
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 after the completion of this offering 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 or insurance company investments, 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 Mutual Holding Company. See "Principal Shareholders." As of
September 30, 1997, General American and its affiliates accounted for
approximately $13.5 billion of the approximately $26.4 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; General American is a
co-licensee with the Company to the Company's investment accounting & reporting
software. 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

<PAGE> 11

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.

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 listed in
the tables under the caption "Management--Directors, Executive Officers and
Certain Other Significant Officers." 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
employment agreements may not be specifically enforceable against the employees
as it is not possible to compel employees to work for the Company, and there
can be no assurance that the non-competition covenants in such agreements are
enforceable. Further, the Company does not have employment agreements with its
senior management members who were hired after August 1995. See
"Management--Directors, Executive Officers and Certain Other 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.

<PAGE> 12
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.

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 market 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

<PAGE> 13
assets under management and thus the Company's revenues and profitability. Due
to the Company's focus on insurance companies, which tend to invest more
predominantly in interest-sensitive securities, the Company's assets under
management are particularly sensitive to interest rate volatility. In addition
to the potential reduction in market value of assets under management, adverse
market conditions could also cause the Company's clients to reduce the amount
of new funds contributed to accounts under management, withdraw funds or reduce
the allocation of assets to particular types of investments, all of which could
reduce the Company's revenues.

The amount of assets under management is also affected by fluctuations in
the investment patterns of the Company's clients. Because the Company's clients
are predominantly in the insurance business, regulatory changes (such as
changes in insurance company investment regulations or adverse tax law changes)
could negatively impact the Company's revenues. See "--Risks Associated with
Insurance Industry Focus."

The Company's mortgage origination and mortgage and real estate servicing
business is dependent on local economic conditions. Although the Company has
mortgage activity in approximately 25 states, significant declines in the local
economies in a number of such states could reduce the availability of, and
increase competition for, high quality mortgages and real estate developments.
Economic and market conditions may also result in a decline in client demand
for mortgages.

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."

REGULATION

INTRODUCTION

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. See "Regulation."

GENERAL RISKS ASSOCIATED WITH REGULATION

Due to the extensive regulation to which the Company is subject, the
Company may be restricted in its activities, and the Company's management may
be required to devote substantial time and effort to regulatory compliance
issues. 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. See "Business--Legal Proceedings." Violations of federal or state
laws or regulations or rules of industry self-regulatory organizations
("SROs"), such as the NASD, including without limitation with respect to
fiduciary duties, 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."
12

<PAGE> 14
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 noncompliance 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. See "Regulation."

RISKS ASSOCIATED WITH CHANGING REGULATORY ENVIRONMENT

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. See "Regulation."

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

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

<PAGE> 15
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. See "Regulation."

CONSEQUENCES OF A CHANGE OF CONTROL ON INVESTMENT ADVISORY AGREEMENTS;
LIMITATIONS ON VOTING RIGHTS

Under the Advisers Act, investment advisory agreements are voidable upon
assignment unless the client consents to such assignment. Under the Investment
Company Act, investment 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 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 to reduce
the likelihood, under certain circumstances, of inadvertent terminations of the
Company's advisory agreements as a result of "assignments" of such contracts,
there can be no guarantees that this voting 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" and "Certain Charter and Bylaw Provisions
- --Limitations on Voting of Shares in Certain Circumstances."

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. Such provisions of Missouri law include, among others: (i)
Missouri's "business combination" statute which imposes restrictions and
conditions on certain transactions with an "interested shareholder"
(generally a shareholder owning more than 20% of the corporation's voting
stock) for five years following the date on which such shareholder became an
interested shareholder; and (ii) Missouri's "take-over bid disclosure"
statute which provides that prior to making a tender offer for certain Missouri
corporations the offeror must file certain disclosure materials. The Company's
Articles and Bylaws, among other things, (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, (iv) require a higher percentage of shareholders than would
otherwise be required to amend, alter, change or repeal certain provisions of
the Articles and Bylaws, and (v) provide that the Bylaws may be amended only by
the majority vote of the Board of Directors. 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

<PAGE> 16
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 180 days following the completion of the offering. The Company
believes that, following the lock-up period, up to 1,472,288 shares held by
existing shareholders could be eligible for sale without restriction and up to
8,902,712 "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 22, 1997. In addition, upon the closing of
this offering, the Company intends to grant options to purchase an additional
- -------- shares of Common Stock, which options will become exercisable over a
- --- year vesting period commencing on the first anniversary of the closing of
this offering. 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."

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

<PAGE> 17
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
dilution of $----- per share 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. The Company's investment
accounting & reporting services depend on the timeliness and accuracy of
reports furnished by the Company to its customers. Although the Company
believes it has adequate procedures in place to ensure the timeliness and
accuracy of the Company's services, any delays or inaccuracies in such
information may give rise to potential claims against the Company and could
materially adversely affect the Company's business, financial condition,
results of operations and business prospects. Further, 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 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

<PAGE> 18
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. To the extent
the Company's systems are not fully year 2000 compliant, there can be no
assurance that potential systems interruptions or the cost necessary to update
software would not have a material adverse effect on the Company's business,
financial condition, results of operations and business prospects.

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> 19
CAPITALIZATION

The following table sets forth the long-term borrowings and capitalization
of the Company at September 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 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 the application of 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 SEPTEMBER 30, 1997
-----------------------------
ACTUAL AS ADJUSTED
<S> <C> <C>
(DOLLARS IN THOUSANDS)

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

Series A Convertible Preferred Stock, $.01 par value, $5.33 liquidation value: 3,190,000
shares authorized, issued and outstanding; no as adjusted shares issued and
outstanding<F1>......................................................................... 32,894 -0-

Series B Convertible Preferred Stock, $.01 par value, $5.33 liquidation value: 600,000
shares authorized, 365,000 shares issued and outstanding; no as adjusted shares issued
and outstanding<F1>..................................................................... 3,257 -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 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.......................................................... $36,219 $
======= =======

<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 are outstanding options to purchase 1,237,500 shares of
Common Stock at a weighted average exercise price of $5.65 per share. In
addition, upon the closing of this offering, the Company intends to grant
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>
18

<PAGE> 20
DILUTION

The adjusted net tangible book value of the Company as of September 30,
1997 was approximately $14.4 million, or $1.39 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
September 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 September 30, 1997......... $1.39

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<F2>..... $
=====

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

<F2> The above computation assumes no exercise of outstanding stock options. As
of the date of this Prospectus, there are outstanding options to purchase
1,237,500 shares of Common Stock at a weighted average exercise price of
$5.65 per share which would result in total dilution in adjusted net
tangible book value per share to new investors of $-------------- if all
such options were exercised. In addition, upon the closing of this
offering, the Company intends to grant 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 may be further dilution to new investors. See
"Management--Employee Stock Plans" and Note 12 of Notes to the Company's
Consolidated Financial Statements.
</TABLE>

The following table summarizes on a pro forma basis, at September 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><F2>....................... 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.

<F2> The above computation assumes no exercise of outstanding stock options.
</TABLE>

<PAGE> 21
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 September 30, 1997, the Company had approximately $26.4 billion
of assets under discretionary management and, in total, provided services with
respect to approximately $73.6 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 and net earnings of approximately $6.2
million. During the nine months ended September 30, 1997, the Company had
revenues of approximately $46.9 million and net earnings of approximately $6.4
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. Based upon the Company's extensive
work with insurance companies, 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, based upon feedback from clients, that 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 investment 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.

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 20 years, and its Strategic Studies Series is
subscribed to by 44 of the 50 largest U.S. property-casualty insurance
companies and 42 of the 50 largest U.S. life-health insurance companies (based
on 1996 premiums as reported by OneSource Information Services, Inc. as
provided to it by third parties).

* 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> 22

COMPANY OPERATIONS--OVERVIEW

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. The
private equity funds have invested more than $193 million of these proceeds in
39 companies which constitute the investment portfolios of these funds. In most
cases, these invested proceeds serve to provide a portion of additional
equity-based financing or to partially capitalize a new company. The total
capitalizations and financings in which the private equity funds have
participated amounts to more than $1.1 billion.

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 and 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
should 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, and 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

<PAGE> 23
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
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

<PAGE> 24
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. Based upon information provided by an industry source,
insurance company assets increased at a rate of approximately 9% per year, from
$2.6 trillion in 1994 to $3.1 trillion in 1996.

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 nine 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 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 September 30, 1997, such affiliated assets under
management totaled approximately $13.5 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."

<PAGE> 25
ASSET MANAGEMENT

As of September 30, 1997, the Company provided services with respect to
approximately $73.6 billion in assets, of which approximately (i) $26.4 billion
represented assets under discretionary management, (ii) $21.0 billion
represented assets serviced under investment advisory agreements and (iii)
$26.2 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 9/30/97
<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 $12.9

Affiliated.................................... 5.6 5.5 6.0 6.6 7.8 9.6 10.6 13.5
----- ----- ----- ----- ----- ----- ----- -----
Total..................................... 7.1 8.8 11.4 12.8 15.6 19.1 20.7 26.4

Investment advisory............................... 4.9 5.2 10.0 14.7 15.3 18.3 20.8 21.0

Investment accounting & reporting................. -- -- 1.2 2.6 4.8 9.2 11.7 26.2
----- ----- ----- ----- ----- ----- ----- -----
Total................................. $12.0 $14.0 $22.6 $30.1 $35.7 $46.6 $53.2 $73.6
===== ===== ===== ===== ===== ===== ===== =====

<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> 26
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 SEPTEMBER 30, 1997
<S> <C>
Corporate bonds............................ $ 7.5

Asset-backed securities.................... 5.8

Mortgage loans............................. 2.4

Municipal bonds............................ 2.6

Government bonds........................... 2.0

Private placements......................... 2.2

Indexed equity............................. 1.4

Short-term obligations..................... 1.0

Equity..................................... 1.3

Real estate................................ 0.2
-----
Total.............................. $26.4
=====
</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 September 30, 1997, the Company had
approximately $21.0 billion in assets under investment advisory contracts on a
stand-alone basis.

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

<PAGE> 27
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 September 30, 1997, the Company managed
approximately $2.4 billion in commercial mortgage loans and approximately $200
million in investment real estate. The Company has originated more than $2.2
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 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]

During the first nine months of 1997, the Company originated approximately
$440 million of new mortgage loans. The Company believes it has the capacity,
under favorable market conditions, to generate approximately $900 million in
commercial mortgage loans annually.

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 (2), Colorado (2), 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 September 30, 1997, the Company provided mortgage loan
servicing for approximately $2.8 billion of mortgage loans, primarily for
General American and its affiliates. Of this amount, approximately $0.4 billion
was serviced on a stand-alone basis. 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 reporting for regulatory agencies, management and outside clients,
and tax analysis and support. See "--Investment Accounting & Reporting." The
Company

<PAGE> 28
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 September 30, 1997,
the Company managed approximately $2.2 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 September 30, 1997, the Company's
investment accounting & reporting services provided stand-alone investment
accounting for approximately $26.2 billion in assets. All $73.6 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.

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
27

<PAGE> 29
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 Systems 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 $193 million of these proceeds in 39 companies which
constitute the investment portfolios of these funds. In most cases, these
invested proceeds serve to provide a portion of additional equity-based
financing or to partially capitalize a new company. The total capitalizations
and financings in which the private equity funds have participated amounts to
more than $1.1 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 9/30/97
<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.

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
28

<PAGE> 30
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 20 years, and its Strategic
Studies Series is subscribed to by 44 of the 50 largest U.S. property-casualty
insurance companies and 42 of the 50 largest U.S. life-health insurance
companies (based on 1996 premiums as reported by OneSource Information Services,
Inc. as provided to it by third parties). During 1996 and the first nine 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

Social Security Reform--Private Market Opportunities?

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

Mergers & Acquisitions and Public Equity Offerings--Mid-Year 1997 Review
Insurance and Technology--Leveraging the Drivers of Competitive Advantage

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

From Medical Malpractice to Managed Care Liability--Fifty Ways to Meet the
Future

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

Strategic Customer Segmentation--Women Business Owners--Doing It Their Way

REINSURANCE

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

A Portrait of Reinsurance--Back to the Basics and Beyond

<PAGE> 31

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> 32
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 September 30, 1997, the Company employed approximately 275 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.

On July 8, 1997, a consolidated amended class-action complaint was filed
against SS&C Technologies, Inc. ("SS&C") in the United States District Court,
District of Connecticut, styled Marc A. Feiner, M.D., et al. v. SS&C
Technologies, Inc., et al. (Civil Action No. 397CV00656(JBA) consolidated with
Civil Action No. 397CV01077). The complaint names SS&C, the directors of SS&C
at the time of SS&C's initial public offering (including John B. Clinton, an
officer of the Company), and lead underwriters Alex. Brown & Sons Incorporated
and Hambrecht & Quist as defendants. The complaint alleges, among other things,
there were material misstatements in the prospectus used by SS&C in an initial
public offering in May 1996 and seeks, among other things, rescission and/or
money damages, equitable relief and costs and expenses. Conning & Company, a
subsidiary of the Company, was a participant of the underwriting syndicate in
connection with SS&C's initial public offering, and thus may share, to the
extent of its participation in the initial public offering, in any potential
liability of the lead underwriters. General American and Fund I were selling
shareholders in SS&C's initial public offering, and the lead underwriters have
demanded of the selling shareholders indemnity against any losses, claims,
damages or liabilities arising out of the action and reimbursement for legal or
other expenses incurred in connection with investigating or defending the
action. Although the matter is subject to uncertainty as, among other things,
the action is in the preliminary stages, the Company believes that the probable
outcome of the pending action should not have a material adverse effect upon
the Company.

<PAGE> 33
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 of the Company 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 nine months ended September 30, 1997 and
the nine months ended September 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 NINE MONTHS ENDED
YEARS ENDED DECEMBER 31,<F1> DECEMBER 31,<F2> SEPTEMBER 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 $29,365 $36,018

Research services.............. 0 0 0 4,090 9,480 12,148 9,582 10,278

Other income................... 51 36 57 663 996 1,062 792 629
------ ------ ------ ------- ------- ------- ------- -------
Total revenues............. 1,767 2,482 3,541 28,803 41,151 53,666 39,739 46,925
------ ------ ------ ------- ------- ------- ------- -------
Expenses:

Employee compensation and
benefits..................... 0 0 0 12,027 18,336 26,002 18,522 23,559

Amortization of goodwill and
other........................ 0 0 0 1,289 2,911 2,721 2,062 1,953

All other expenses............. 935 1,141 1,429 9,195 12,515 13,151 10,062 10,441
------ ------ ------ ------- ------- ------- ------- -------
Total expenses............. 935 1,141 1,429 22,511 33,762 41,874 30,646 35,953
------ ------ ------ ------- ------- ------- ------- -------
Operating income................... 832 1,341 2,112 6,292 7,389 11,792 9,093 10,972

Interest expense............... 0 0 0 521 1,365 729 592 233
------ ------ ------ ------- ------- ------- ------- -------
Income before provision for income
taxes............................ 832 1,341 2,112 5,771 6,025 11,063 8,501 10,739

Provision for income taxes......... 311 507 827 2,359 2,739 4,851 3,762 4,317
------ ------ ------ ------- ------- ------- ------- -------
Net income................. $ 521 $ 834 $1,285 $ 3,412 $ 3,286 $ 6,212 $ 4,739 $ 6,422
====== ====== ====== ======= ======= ======= ======= =======
Preferred stock dividends.......... 0 0 0 351 906 906 669 750
------ ------ ------ ------- ------- ------- ------- -------
Net earnings available to common
shareholder...................... $ 521 $ 834 $1,285 $ 3,061 $ 2,380 $ 5,306 $ 4,070 $ 5,672
====== ====== ====== ======= ======= ======= ======= =======
Pro forma net income per common
share and common share
equivalents<F3>.............. $ 0.57 $ 0.58
======= =======

<FN>
- --------
Footnotes on next page.
</TABLE>
32

<PAGE> 34

<TABLE>
<CAPTION>
AS OF DECEMBER 31, AS OF SEPTEMBER 30,
----------------------------------------------- -------------------
1992 1993 1994 1995 1996 1997 1997
AS
ADJUSTED<F4>
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Total assets....................... $1,395 $1,386 $1,683 $46,177 $50,020 $54,646 $
Long-term debt..................... 0 0 0 9,000 2,000 0
Total liabilities.................. 437 594 356 24,552 20,870 18,426
Convertible preferred stock........ 0 0 0 17,003 24,782 36,152
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
</TABLE>

Set forth below is certain operating and financial information.

<TABLE>
<CAPTION>
------------------------------------------------ AS OF
1992 1993 1994 1995 1996 9/30/97
(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 $12.9

General American & affiliates................. 5.5 6.0 6.6 7.8 9.6 13.5
----- ----- ----- ----- ----- -----
Total..................................... 8.8 11.4 12.8 15.6 19.1 26.4

Average assets under advisory services............ 5.2 10.0 14.7 15.3 18.3 21.0

Average assets under accounting & reporting
services........................................ 0.0 1.2 2.6 4.8 9.2 26.2
----- ----- ----- ----- ----- -----
Total assets serviced..................... $14.0 $22.6 $30.1 $35.7 $46.6 $73.6
===== ===== ===== ===== ===== =====
<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.

<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.
</TABLE>

<PAGE> 35
The following financial information represents financial data of Conning,
Inc. and its subsidiaries for the years ended December 31, 1992, 1993 and 1994,
and for the six months ended June 30, 1995 and should be read in conjunction
with Conning, Inc.'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, the year ended December 31, 1994 are derived
from the financial statements of Conning, Inc. and its subsidiaries, which
financial statements have been audited by Price Waterhouse LLP, independent
certified public accountants. The income statement and balance sheet data for,
and as of the end of, the six month period ended June 30, 1995 are derived from
the financial statements for the six month period ended June 30, 1995. The
consolidated financial statements for the year ended December 31, 1994 and the
report thereon, and the financial statements for the six month period ended
June 30, 1995 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 and 1993 are derived from audited financial statements not
included in this Prospectus.

<TABLE>
<CAPTION>
SIX
MONTHS
ENDED
YEARS ENDED DECEMBER 31, JUNE 30,
-------------------------- --------
CONNING, INC. AND SUBSIDIARIES 1992 1993 1994 1995
(IN THOUSANDS)
<S> <C> <C> <C> <C>
INCOME STATEMENT DATA:

Revenues:

Asset management and related fees....................... $ 6,643 $ 8,107 $ 9,840 $ 5,662

Research services....................................... 9,487 13,473 8,165 4,564

Other income............................................ 132 1,282 472 275
------- ------- ------- -------
Total revenues...................................... 16,262 22,862 18,477 10,501
------- ------- ------- -------
Expenses:

Employee compensation and benefits...................... 9,382 10,616 10,196 5,322

Amortization of goodwill and other...................... 0 0 0 0

All other expenses...................................... 6,298 7,805 5,530 3,087
------- ------- ------- -------
Total expenses...................................... 15,680 18,421 15,726 8,409
------- ------- ------- -------
Operating income............................................ 582 4,441 2,751 2,092

Interest expense........................................ 111 85 0 0
------- ------- ------- -------
Income before provision for income taxes and cumulative
effect of accounting change............................... 471 4,356 2,751 2,092

Provision for income taxes.................................. 66 947 1,244 809
------- ------- ------- -------
Income before cumulative effect of accounting change........ 405 3,409 1,507 1,283

Cumulative effect of accounting change...................... 0 131 0 0
------- ------- ------- -------
Net income.......................................... $ 405 $ 3,540 $ 1,507 $ 1,283
======= ======= ======= =======
Preferred stock dividends................................... 53 320 320 160
------- ------- ------- -------
Net earnings available to common shareholders............... $ 352 $ 3,220 $ 1,187 $ 1,123
======= ======= ======= =======

<CAPTION>
AS OF
AS OF DECEMBER 31, JUNE 30,
-------------------------- --------
1992 1993 1994 1995
(IN THOUSANDS)
<S> <C> <C> <C> <C>
BALANCE SHEET DATA:

Total assets................................................ $10,922 $11,274 $14,228 $16,003

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

Total liabilities........................................... 8,179 5,071 6,392 6,927

Redeemable preferred stock.................................. 5,425 0 0 0

Cumulative preferred stock.................................. 0 3,650 3,650 3,650

Total common shareholders' equity (deficit)................. (2,682) 2,552 4,186 5,426

Number of common shares outstanding end of period........... 446 93 106 108
</TABLE>

<PAGE> 36
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. A negotiated
commission is received on each listed equity transaction, and total commission
revenues depend on the value that clients place on the research services the
Company provides. In addition, the research services revenues received by the
Company reflect underwriting fees with participation in public offerings of
insurance and insurance-related companies.

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."

RESULTS OF OPERATIONS

HISTORICAL FINANCIAL STATEMENTS

Statement of Income for the nine months ended September 30, 1997 compared
to the nine months ended September 30, 1996

Total revenues increased 18% from $39.7 million for the first nine months
of 1996 to $46.9 million for the first nine months of 1997, primarily as the
result of the addition of new clients and growth in assets of existing clients.

<PAGE> 37
Assets under discretionary management increased from approximately $19.9
billion at September 30, 1996 to approximately $26.4 billion at September 30,
1997. Asset management and related fees increased 23% from $29.4 million for
the nine month period ended September 30, 1996 to $36.0 million for the nine
months ended September 30, 1997. Fees for research services increased slightly
from $9.6 million for the first nine months of 1996 to $10.3 million for the
first nine months of 1997. Conning & Company was a co-manager of four public
offerings which produced revenues of $2.0 million in 1996 and $1.1 million in
1997. Excluding the effect of revenues from these transactions, fees for
research services would have increased 21% from the first nine months of 1996
to the first nine months of 1997. 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 decreased by
approximately $0.2 million from $0.8 million for the first nine months of 1996
to $0.6 million for the first nine months of 1997, primarily due to the $0.3
million non-recurring realized gain from the sale of securities that occurred
in the first quarter of 1996.

Total expense increased 17% from $30.6 million for the first nine months of
1996 to $36.0 million for the first nine months of 1997, primarily due to
increased employee compensation and benefits. Employee compensation and
benefits increased 27% from $18.5 million for the first nine months ended
September 30, 1996 to $23.6 million for the nine months ended September 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. The Company's incentive compensation practice is
based on the level of and growth in the Company's operating profits.

Interest expense decreased significantly from $0.6 million for the nine
months ended September 30, 1996 to $0.2 million for the nine months ended
September 30, 1997 due to the continuing reduction of principal on long term
debt payable to affiliates, of which the final payment of principal and
interest was made in February, 1997.

Provision for income taxes increased 14% from $3.8 million for the first
nine months of 1996 to $4.3 million for the first nine months of 1997 as a
direct result of the increase in income before provision for income taxes.
However, the effective federal and state income tax rates decreased from 44.3%
for the nine month period ended September 30, 1996 to 40.2% for the nine month
period ended September 30, 1997 due to the Company being able to recognize
state net operating loss carryforwards in 1997.

As a result of all of the above, net income increased 36% from $4.7 million
for the first nine months of 1996 to $6.4 million for the first nine 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.

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

<PAGE> 38
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.

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.

At September 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 $669,900 for
the period commencing on January 1, 1997 and ending on September 30, 1997. The
Series B Convertible

<PAGE> 39
Preferred Stock which was issued commencing in November 1996 is entitled to
quarterly dividends of 5% per annum, or $80,600 in the aggregate, through
September 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 September 30, 1997, Conning & Company had net
capital of approximately $6.2 million, which was approximately $5.7 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 September 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> 40
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> 41
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 15% 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> 42
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," "Risk
Factors--Consequences of a Change of Control on Investment Advisory Agreements;
Limitations on Voting Rights," "Description of Capital Stock--Common Stock"
and "Certain Charter and Bylaw Provisions--Limitations on Voting of Shares in
Certain Circumstances."

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 September 30, 1997, Conning & Company was required to maintain minimum
net capital, in accordance with SEC rules, of approximately $525,000 and had
total net capital of approximately $6.2 million, or approximately $5.7 million
in excess of the amount required.

<PAGE> 43
MANAGEMENT

DIRECTORS, EXECUTIVE OFFICERS AND CERTAIN OTHER 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........................ 62 Director
John C. Shaw............................ 63 Director
Mark E. Hansen.......................... 48 Executive Vice President
Fred M. Schpero......................... 44 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, none of which is
registered with the Commission except 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, none of which is registered with the Commission
except 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 Mutual Holding Company. From 1982 through 1988
he was Senior

<PAGE> 44
Vice President and Executive Vice President of Continental Corporation, and
President, Financial Services 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."

Committees

The Board of Directors has an Audit Committee comprised of Messrs. Fibiger,
Liddy and Shaw, a Compensation Committee comprised of Messrs. Rubenstein and
Slayton and an Executive Compensation Committee comprised of Messrs. Fibiger
and Shaw.

<PAGE> 45
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>
Thomas A. Byrne............... 40 Senior Vice President Research
Stephan L. Christiansen....... 48 Senior Vice President Private Equity
John B. Clinton............... 42 Senior Vice President Private Equity
Paul S. Goulekas.............. 42 Senior Vice President Research
Charles P. Kapp............... 38 Senior Vice President Mortgage Loans and Real Estate
Glen D. Keller................ 45 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.............. 35 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................ 45 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
Christopher J. Swift.......... 37 Senior Vice President Asset Management
J. Terri Tanaka............... 35 Senior Vice President Asset Management
John W. Zimmerman............. 35 Senior Vice President Asset Management
</TABLE>

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

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.

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.

<PAGE> 46
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.

CHRISTOPHER J. SWIFT, C.P.A., has been a Senior Vice President of the
Company since October 1997. Prior to joining the Company, Mr. Swift was a
financial services partner of the St. Louis office of KPMG Peat Marwick LLP
specializing in the insurance and mutual fund industries and also served as the
market leader of the insurance practice for the St. Louis office.

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.

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.

<PAGE> 47
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 to directors. Upon
the closing of this offering, the Company intends to grant options to purchase
- -------- shares to each of Messrs. Fibiger, Liddy and Shaw. 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>
<CAPTION>
SUMMARY COMPENSATION TABLE

ANNUAL COMPENSATION<F1>

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 and Director
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> 48
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>

<TABLE>
AGGREGATED OPTIONS AND FISCAL YEAR-END OPTION VALUES
<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 36,000 shares that became exercisable after
December 31, 1996 and options to purchase 72,000 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 4,000 shares that became exercisable after
December 31, 1996 and options to purchase 6,000 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.

<PAGE> 49
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
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

<PAGE> 50
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
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 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.

Upon the closing of this offering, the Company intends to grant options to
purchase a total of -------- shares at the initial public offering price to
certain Company employees and directors, including options to purchase
- --------, -------- and -------- shares to Messrs. --------, -------- and
- --------, respectively. All of such options are subject to the same terms. Each
award will become exercisable in varying percentages of the shares it covers
over -- years, beginning on the first anniversary of the closing of this
offering. Such options may only be exercised if the individual is an employee or
director of the Company at the time of exercise, subject to certain exceptions
in the case of death, disability, retirement 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 Carried
Interests 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.

<PAGE> 51
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 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. Prior to October 1997, the Compensation
Committee of the Board was responsible for making all compensation decisions.
In October 1997, the Company established an Executive Compensation Committee
comprised of Messrs. Fibiger and Shaw. The Executive Compensation Committee is
responsible for making all stock-based compensation decisions regarding the
Company's executive officers. Neither Mr. Fibiger nor Mr. Shaw is a current or
former officer or employee of the Company or any of its affiliates.

INDEMNIFICATION

As permitted by The General and Business Corporation Law of Missouri (the
"GBCL"), the Articles provide (i) that the Company is required to indemnify
its directors and officers to the fullest extent permitted by Missouri law,
(ii)

<PAGE> 52
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 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.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

THE STRATEGIC MERGER

The Company was formed in August 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 having a value at the date of
issuance of $17,002,700, 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.

In connection with the Strategic Merger, the Company, General American and
its other shareholders and option holders entered into the Shareholders
Agreement, which 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

<PAGE> 53
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.

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, representing approximately 50%
of the outstanding Series A Convertible Preferred Stock, for the negotiated 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. Prior to the
amendment and restatement of the Shareholders Agreement in June, 1997, General
American had the right to purchase up to 50% of the Series A Convertible
Preferred Stock only upon the occurrence of an initial public offering of the
Company's Common Stock. See "Principal Shareholders."

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 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.

<PAGE> 54
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 purchase price of $7.00 per share). Pursuant
to the Shareholders Agreement, as amended and restated, 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, an indirect wholly owned subsidiary of General American
Mutual Holding Company, currently is the principal shareholder of the Company.
After completion of the offering, General American will

<PAGE> 55
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, was converted to a mutual company in a
process that ended in 1946 and became a stock company in 1997 in connection
with the formation of its mutual holding company parent. 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,"
"--Consequences of a Change of Control on Investment Advisory Agreements;
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 ("RGA"),
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. The Company also
acts as the investment adviser for Security Mutual Life Insurance Company of
New York, which has entered into a strategic alliance with General American.
Such advisory 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.

After the 180-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

<PAGE> 56
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 Mutual Holding Company have entered into a
Tax Allocation and Tax Sharing Agreement dated as of June 12, 1997 (the "Tax
Agreement"). The Tax Agreement provides, among other things, that the tax
liability of the General American Mutual Holding Company 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 Mutual Holding Company in the event
there is a change in the pre-offering tax liabilities of the Company. In
addition, under the Tax Agreement, General American Mutual Holding Company 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 Mutual Holding Company 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."

The Company's mortgage origination activities have been historically
operated pursuant to informal agreements through General American. Since
January 1, 1995, the Company has generally received a fee associated with loan
originations of 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. Such loans have been originated primarily
for General American and its affiliates. See "Business--Asset
Management--Mortgage Origination and Service of Real Estate" for information
regarding the amounts of mortgage loan originations.

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 September 30, 1997, the Company's commitment to
fund future required capital contributions was approximately $2.1 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

<PAGE> 57
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 $3.3 million for 1994, 1995, 1996 and the first nine
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 or limited
liability company 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 September 30, 1997, the percentage interests in Fund V held by
Messrs. Rubenstein, Slayton, Hansen and Schpero were 0.55%, 1.35%, 0.375% and
0.25%, respectively; and ranged from 0.05% to 1.65% for each of the Other
Significant Officers; and ranged from 0.1% to 1.1% for each of the Other
Officers; 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; and Fund V has approximately four years remaining for completion
of the determination of participation percentages. With the exception of Fund
I, none of the Funds has generated a carried interest as of September 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 the 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> 58
PRINCIPAL SHAREHOLDERS

The following table sets forth certain information regarding the beneficial
ownership of the Common Stock as of November 6, 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 November
6, 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>...... 1,621,230 14.9 12.1

Other Officers as a group (36 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 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 Other Significant
Officers--Certain Other Significant Officers." Includes 201,500 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 36 officers 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> 59
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 180-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 1,472,288 shares held by existing shareholders could be eligible for sale
without restriction and up to 8,902,712 "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> 60
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> 61
DESCRIPTION OF CAPITAL STOCK

AUTHORIZED CAPITAL STOCK

Under the Company's 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 23,790,000 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 and to reduce the number
of authorized shares of Preferred Stock to 20,000,000.

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 September 30, 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 September 30, 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> 62
difficult, or resulting in restrictions upon the payment of dividends and other
distributions to the holders of Common Stock. The Company has no present plans
to issue any Preferred Stock.

CERTAIN EFFECTS OF AUTHORIZED BUT UNISSUED STOCK

Upon the completion of this offering, there will be -------- 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 ChaseMellon
Shareholder Services, L.L.C., Overpeck, New Jersey.

<PAGE> 63
CERTAIN CHARTER AND BYLAW PROVISIONS

The Company's Articles and Bylaws, among other things, (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 "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.

<PAGE> 64
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
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> 65
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 restricts 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 shareholder" (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 shareholder), unless the board of directors
approves the business combination or the purchase of stock by the interested
shareholder before the stock acquisition date. Business combinations with an
interested shareholder 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
shareholder no earlier than five years after the stock acquisition date, or
(iii) the consideration to be received by shareholders 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> 66
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>
<CAPTION>
UNDERWRITERS NUMBER OF SHARES

<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
order to permit such persons to purchase 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 180 days after the date of this

<PAGE> 67
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 180 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> 68
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 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> 69

<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 September 30, 1997 (unaudited).............. F-2

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

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

Consolidated Statements of Cash Flows for the nine month periods ended September 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-38

<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> 70

<TABLE>
CONNING CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<CAPTION>

DECEMBER 31, SEPTEMBER 30,
1996 1997
------------ -------------
ASSETS

<S> <C> <C>
Current assets:
Cash and cash equivalents.............................................. $ 9,816,568 $ 8,536,722
Short-term investments................................................. 7,901,637 10,729,558
Accounts receivable, net............................................... 5,297,660 8,533,730
Marketable equity securities........................................... 45,625 --
Income taxes receivable................................................ 11,447 1,854,305
Prepaid expenses and other current assets.............................. 162,622 323,710
----------- -----------
Total current assets........................................... 23,235,559 29,978,025
Non-marketable investments at value........................................ 1,756,931 1,919,650
Equipment and leasehold improvements, at cost, less accumulated
depreciation and amortization of $562,812 and $1,281,545................. 815,112 996,426
Deferred income taxes...................................................... 1,572,859 1,320,657
Goodwill................................................................... 18,825,870 18,066,085
Other assets............................................................... 3,813,608 2,365,278
----------- -----------
Total assets................................................... $50,019,939 $54,646,121
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Compensation payable................................................... $ 8,422,199 $ 7,067,465
Deferred revenue....................................................... 1,533,290 1,504,213
Due to affiliates...................................................... 1,473,811 626,059
Accounts payable and other accrued expenses............................ 2,707,872 5,022,968
Preferred dividends payable............................................ 235,815 247,618
----------- -----------
Total current liabilities...................................... 14,372,987 14,468,323
Accrued rent liability..................................................... 3,643,996 3,438,008
Long term debt payable to affiliate........................................ 2,000,000 --
Other payables............................................................. 853,521 520,000
----------- -----------
Total liabilities.............................................. 20,870,504 18,426,331
----------- -----------
Series A convertible preferred stock, $.01 par value, $5.33 liquidation
value: 3,190,000 shares authorized, issued and outstanding............... 22,330,004 32,894,185
Series B convertible preferred stock, $.01 par value, $5.33 liquidation
value: 600,000 shares authorized, 460,000 and 365,000 shares issued and
outstanding.............................................................. 2,451,800 3,257,405
----------- -----------
Total convertible preferred stock.............................. 24,781,804 36,151,590
----------- -----------
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 $54,646,121
=========== ===========

See accompanying notes to unaudited consolidated financial statements.

</TABLE>
F-2

<PAGE> 71

<TABLE>
CONNING CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME
FOR THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 1996 AND 1997
(UNAUDITED)
<CAPTION>

1996 1997
<S> <C> <C>
Revenues:
Asset management and related fees............................ $29,365,205 $36,018,354
Research services............................................ 9,582,015 10,277,378
Other income................................................. 791,767 629,142
----------- -----------
Total revenues....................................... 39,738,987 46,924,874
----------- -----------

Expenses:
Employee compensation and benefits........................... 18,522,125 23,558,926
Occupancy and equipment costs................................ 1,816,693 2,509,470
Marketing and production costs............................... 3,985,613 3,998,660
Professional services........................................ 1,160,578 1,154,438
Amortization of goodwill and other........................... 2,061,870 1,953,119
Other operating costs........................................ 3,099,181 2,778,749
----------- -----------
Total expenses....................................... 30,646,060 35,953,362
----------- -----------
Operating income............................................. 9,092,927 10,971,512
Interest expense............................................. 591,605 232,760
----------- -----------
Income before provision for income taxes..................... 8,501,322 10,738,752
Provision for income taxes................................... 3,762,192 4,316,334
----------- -----------
Net income................................................... $ 4,739,130 $ 6,422,418
=========== ===========
Preferred stock dividends.................................... 669,080 750,500
----------- -----------
Net earnings available to common shareholder................. $ 4,070,050 $ 5,671,918
=========== ===========
Pro forma weighted average common shares and equivalents
outstanding................................................ -- 11,145,949
Pro forma earnings per common share and common share
equivalents................................................ $ 0.58

See accompanying notes to unaudited consolidated financial statements.

</TABLE>

F-3

<PAGE> 72

<TABLE>
CONNING CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMMON SHAREHOLDERS' EQUITY
FOR NINE MONTH PERIOD ENDED SEPTEMBER 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) (7,027,802) (11,876,134)

Net income........................................ 6,422,418 6,422,418

Dividends on preferred stock...................... (750,500) (750,500)
------ ------- ----------- ----------- ------------

Balance, September 30, 1997....................... $1,100 $67,100 $ -- $ -- $ 68,200
====== ======= =========== =========== ============

See accompanying notes to unaudited consolidated financial statements.

</TABLE>

F-4

<PAGE> 73

<TABLE>
CONNING CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 1996 AND 1997
(UNAUDITED)
<CAPTION>

1996 1997

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

Net income................................................... $ 4,739,130 $ 6,422,418
Adjustment for items not affecting cash:
Depreciation and amortization............................ 545,897 674,186
Amortization of goodwill and other....................... 2,061,869 1,953,115
Deferred income tax provision............................ (2,400,596) 1,386,987
Net unrealized appreciation on non-marketable
securities............................................. 33,118 --
Net sales of marketable securities....................... 10,375 45,625
Accretion of discounts on short-term investments......... (114,869) (177,764)
Changes in:
Accounts receivables................................. 4,397,775 (3,236,070)
Prepaid expenses and other assets.................... 1,672,223 (161,088)
Accounts payables and other accrued expenses......... (603,173) 2,113,379
Income taxes receivable.............................. 496,069 (1,842,858)
Due to affiliates.................................... 231,168 (847,752)
Deferred revenue..................................... 918,018 (29,077)
Accrued rent liability............................... (200,611) (205,988)
Compensation payable................................. (948,312) (1,354,734)
------------ ------------
Net cash provided by operating activities........ 10,838,081 4,740,379
------------ ------------
Investing activities:
Sale of marketable securities................................ 1,160,000 --
Purchases of non-marketable securities....................... (44,949) (162,719)
Proceeds from non-marketable partnership investments......... 384,450 --
Purchases of equipment and other assets, net................. (1,285,944) (720,500)
Purchases of short-term investments.......................... (23,383,662) (54,545,324)
Maturities of short-term investments......................... 19,600,000 51,895,168
------------ ------------
Net cash used in investing activities............ (3,570,105) (3,533,375)
------------ ------------

Financing activities:
Repayments on long term debt................................. (5,000,000) (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................................. (669,080) (750,500)
------------ ------------
Net cash used in financing activities............ (6,169,080) (2,486,850)
------------ ------------
Net decrease in cash and cash equivalents........................ 1,098,896 (1,279,848)
Cash and cash equivalents, beginning of year..................... 5,995,260 9,816,568
Cash and cash equivalents, end of period......................... $ 7,094,156 $ 8,536,722
============ ============

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

F-5

<PAGE> 74
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--PREFERRED STOCK AND SHAREHOLDERS' EQUITY

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

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 to the Company 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 nine months ended September 30, 1996 and
September 30, 1997, such accretion was $0 and $11,876,134, respectively.

F-6

<PAGE> 75
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> 76

<TABLE>
CONNING CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
<CAPTION>
DECEMBER 31,
------------------------------
1995 1996
ASSETS
<S> <C> <C>
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, $5.33 liquidation
value: 3,190,000 shares authorized, issued and outstanding............... 17,002,704 22,330,004
Series B convertible preferred stock, $.01 par value, $5.33 liquidation
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
=========== ===========

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

F-8

<PAGE> 77

<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.................................... 10,945,993
Pro forma earnings per common share and common share
equivalents................................................ $ 0.57

See accompanying notes to consolidated financial statements.

</TABLE>

F-9

<PAGE> 78

<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
======= ========== =========== ========= ===========

See accompanying notes to consolidated financial statements.

</TABLE>

F-10

<PAGE> 79

<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

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

F-11

<PAGE> 80
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> 81
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 at an interest rate of 7% per annum for the
purpose of providing the $12.0 million cash portion of purchase price and
payments of $1.0 million representing employment bonuses to certain employees,
(iii) the issuance of $17.0 million of Series A Convertible Preferred Stock and
(iv) the short term borrowing of $2.5 million from General American at an
interest rate of 6.75% per annum by Conning Inc. effective prior to, and in
anticipation of, the Strategic Merger for the purpose of redeeming and retiring
the 8% cumulative senior preferred stock. 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........................................... $ 0.30 $ 0.57
</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. For the purpose of this
calculation, outstanding shares of Series A and Series B Convertible Preferred
Stock are considered common stock equivalent shares.

F-13

<PAGE> 82
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 at an interest rate of 7% per annum for the purpose of providing
the $12.0 million cash portion of purchase price and payments of $1.0 million
representing employment bonuses to certain employees, (iii) the issuance of
$17.0 million of Series A Convertible Preferred Stock and (iv) the short term
borrowing of $2.5 million from General American at an interest rate of 6.75%
per annum by Conning Inc. effective prior to, and in anticipation of the
Strategic Merger for the purpose of redeeming and retiring the 8% cumulative
senior preferred stock. 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.

F-14

<PAGE> 83
CONNING CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

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.

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 in various private equity
funds are held by the Company's broker-dealer subsidiary in accordance with
generally accepted accounting principles for broker-dealers. Such investments
are recorded using the equity method basis of accounting (including unrealized
gains and losses). The changes in fair values are included in the consolidated
statements of 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 $1,435,152 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, $1,388,332 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.

F-15

<PAGE> 84
CONNING CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

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.

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 accounted for using the
equity method and updated periodically based upon changes in fair values and
recorded in the consolidated statements of income. Additionally, the Company
had no derivative investments during 1995 and 1996.

F-16

<PAGE> 85
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> 86
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 carrying 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> 87
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 is subject to the Shareholders Agreement
and 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 and 1996, 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 totaling $223,300 are
included in the Preferred Dividends Payable on the consolidated balance sheet
at December 31, 1995 and 1996. The Series A Preferred Stock carries no voting
rights and was issued as part of the Strategic Merger. 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
(IPO). Pursuant to the Shareholders Agreement, if no IPO has occurred prior to
August 11, 1998, the holders have a right to put their shares to General
American at any time thereafter at fair value.

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. Declared but unpaid dividends totaling $12,515 are
included in Preferred Dividends Payable on the consolidated balance sheet at
December 31, 1996. 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. If no IPO has occurred prior to
November 22, 2001, the holders of the Series B Preferred Stock have a right to
put their shares to the Company at any time thereafter at fair value.

NOTE 10--SHAREHOLDER'S EQUITY

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

F-19

<PAGE> 88
CONNING CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

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 to $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.

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 concessions 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

Administrative accounting
fees........................ 2,108,624 2,765,129

Marketing and production
costs....................... 753,091 1,076,195

Professional services......... 802,221 1,002,482

Rent.......................... 624,414 612,822

Computer services............. 50,591 118,008

All other operating costs..... 1,627,998 1,932,861
----------- -----------

$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 in
the amount of $871,221 and were included in other operating expenses.

The above administrative costs are predominantly based on direct
indentifiable costs incurred by General American on behalf of the Company and
at the Company's request and are charged back to the Company at General
American's cost. Where costs represent the result of allocations, such
allocations are based on customary methodology such as square footage for rent
and number of employees for payroll processing. The Company believes that such
allocation methodologies are reasonable and that the resulting expenses
incurred are not materially different from those that would have been incurred
on a stand-alone basis.

F-20

<PAGE> 89
CONNING CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 12--STOCK OPTIONS

On August 11, 1995, the shareholders 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 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 an initial public
offering the options become 100% vested. All options were granted at fair
value.

On November 8, 1996, the shareholders 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>

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....... $ 0.57

Pro forma......... $ 0.55
</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

F-21

<PAGE> 90
CONNING CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

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 against Conning & Company during the normal
course of the Company's non-securities and non-investment advisory services
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,
its liquidity or its operations.

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.

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

F-22

<PAGE> 91
CONNING CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

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, all 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. Specifically such common and common equivalent shares are comprised
of (i) 475,000 shares of Series B Convertible Preferred Stock issued during
such period (see Note 9), (ii) 230,000 options granted in 1996 (see Note 11)
and (iii) 7,500 options granted in January 1997. The assumed initial public
offering price for the purposes of this calculation only was $15.00 per share.

Given that only 1996 results include full consolidated operations (see Note
1), the Company believes that presentation of historical earnings per share
prior to 1996 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
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> 92

<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
=========== ===========

See accompanying notes to condensed financial statements.
</TABLE>

F-24

<PAGE> 93

<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
========== ==========

See accompanying notes to condensed financial statements.
</TABLE>

F-25

<PAGE> 94

<TABLE>
CONNING CORPORATION
(PARENT COMPANY ONLY)

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

<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

See accompanying notes to condensed financial statements.
</TABLE>

F-26

<PAGE> 95
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
were 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.

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 per share for the years ended December 31,
1995 and 1996, respectively.

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> 96
<TABLE>
CONNING INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET
JUNE 30, 1995
(UNAUDITED)
<CAPTION>
ASSETS

<S> <C>
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
===========

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

F-28

<PAGE> 97

<TABLE>
<CAPTION>
CONNING INC. AND SUBSIDIARIES

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

<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
===========

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

F-29

<PAGE> 98
<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
====== ========== ========== ======== =========== ==========

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

F-30

<PAGE> 99
<TABLE>
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
==========

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

F-31

<PAGE> 100
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> 101
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> 102
<TABLE>
CONNING INC. & SUBSIDIARIES

CONSOLIDATED STATEMENT OF FINANCIAL CONDITION
DECEMBER 31, 1994
<CAPTION>
ASSETS
<S> <C>
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 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
===========

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

F-34

<PAGE> 103
<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
===========

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

F-35

<PAGE> 104
<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)
========== ====== ========== ========== ======= ===========

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

F-36

<PAGE> 105

<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

See accompanying notes to consolidated financial statements.

</TABLE>

F-37

<PAGE> 106
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> 107
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> 108
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> 109
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> 110
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, and such amounts were repaid in January 1995.

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> 111
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> 112
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.

"NON-CAPTIVE INSURANCE COMPANY" refers to an insurance company that is
not formed primarily for the purpose of providing insurance to its parent and
affiliated entities.

"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> 113
================================================================================

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>
<CAPTION>
TABLE OF CONTENTS
PAGE
----
<S> <C>

Prospectus Summary.............................................................. 3
Cautionary Statement Regarding Forward-Looking Statements....................... 9
Risk Factors.................................................................... 9
Use of Proceeds................................................................. 17
Dividend Policy................................................................. 17
Capitalization.................................................................. 18
Dilution........................................................................ 19
Business........................................................................ 20
Selected Consolidated Financial Data............................................ 32
Management's Discussion and Analysis of Financial Condition and Results of
Operation..................................................................... 35
Regulation...................................................................... 39
Management...................................................................... 42
Certain Relationships and Related Transactions.................................. 51
Principal Shareholders.......................................................... 57
Shares Eligible for Future Sale................................................. 58
Description of Capital Stock.................................................... 60
Certain Charter and Bylaw Provisions............................................ 62
Underwriting.................................................................... 65
Legal Matters................................................................... 67
Experts......................................................................... 67
Additional Information.......................................................... 67
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 CORPORATION
LOGO

CONNING CORPORATION

COMMON STOCK

----------

PROSPECTUS

----------

DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION

A.G. EDWARDS & SONS, INC.

---------- --, 1997

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

<PAGE> 114
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................ 50,000

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> 115
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> 116
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> 117
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this amendment no. 1 to 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 6th day of November, 1997.

CONNING CORPORATION

By: /s/ LEONARD M. RUBENSTEIN
------------------------------------
Leonard M. Rubenstein
Chairman and Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, this amendment
no. 1 to 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>
<F*> Director November 6, 1997
- -----------------------------------
John A. Fibiger

<F*> Director November 6, 1997
- -----------------------------------
Richard A. Liddy

/s/ LEONARD M. RUBENSTEIN Chairman and Chief Executive November 6, 1997
- ----------------------------------- Officer (Principal Executive
Leonard M. Rubenstein Officer)

/s/ FRED M. SCHPERO Senior Vice President and November 6, 1997
- ----------------------------------- Chief Financial Officer
Fred M. Schpero (Principal Financial and
Accounting Officer)

<F*> Director November 6, 1997
- -----------------------------------
John C. Shaw

<F*> President and Director November 6, 1997
- -----------------------------------
Maurice W. Slayton

<FN>
<F*>By: /s/ LEONARD M. RUBENSTEIN
---------------------------
Leonard M. Rubenstein
Attorney-in-fact
</TABLE>

II-4

<PAGE> 118
<TABLE>
CONNING CORPORATION

EXHIBIT INDEX

<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
<C> <S>

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<F**> 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<F**> Restated Articles of Incorporation of the Company

3.2<F**> Form of Amendment to Restated Articles of Incorporation of the Company (to be filed subsequent to
completion of this offering)

3.3<F**> Bylaws of the Company

4.1<F**> See Exhibits 3.1 and 3.2

4.2<F**> See Exhibit 3.3

5.1<F*> Opinion of Legal Counsel

10.1<F**> Investment Advisory Agreement dated as of May 1, 1995 between General American and CAM relating to
General American's general account

10.2<F**> Investment Advisory Agreement dated as of July 2, 1990 between General American and CAM relating to
General American's separate accounts

10.3<F**> Investment Advisory Agreement dated as of July 23, 1997 between General American Capital Company and
CAM

10.4 Lease Agreement dated as of July 31, 1996 between General American and CAM<FDAG>

10.5 Sublease effective as of July 19, 1995 between General American and CAM

10.6 Administrative Services Agreement effective as of August 11, 1995 between the Company and General
American

10.7 Tax Sharing Agreement effective as of July 24, 1995 between the Company, CAM and General American

10.8<F**> 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 ----------------, 1997 among the Company and certain of
its Shareholders

10.10 Tax Allocation and Tax Sharing Agreement dated as of June 12, 1997 between the Company, Conning,
Inc., Conning & Company, CAM and General American Mutual Holding Company

10.11<F**> 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<F**> Employment Agreement dated August 11, 1995 between the Company (formerly Conning Asset Management
Company), Conning & Company and Maurice W. Slayton

II-5

<PAGE> 119
EXHIBIT INDEX (CONTINUED)

<CAPTION>
EXHIBIT
NUMBER DESCRIPTION

<C> <S>
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<F**> 1995 Flexible Stock Plan

10.16<F**> 1996 Flexible Stock Plan

10.17<F*> 1997 Flexible Stock Plan

10.18 Form of Incentive Stock Option Award and Terms and Conditions under 1995 Flexible Stock Plan

10.19 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 Office Lease dated August 22, 1989 among Hartford CityPlace L.L.C., Conning, Inc. and Conning &
Company, as amended as of June 30, 1997

10.22 Venture Carried Interests Allocation Plan, as amended

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*> Membership Agreement of Conning Investment Partners II, L.L.C., dated as of ----------, 1997

10.26<F*> Limited Liability Company Agreement of Conning Investment Partners V, L.L.C., dated as of October
31, 1997

10.27<F*> Registration Rights Agreement dated as of June 12, 1997 among the Company, General American and
General American Holding Company

11.1 Statement Re: Computation of Per Share Earnings

21.1<F**> 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)

23.4 Consent of Eager & Associates

23.5 Consent of OneSource Information Services, Inc.

24.1<F**> Power of Attorney

27.1<F**> Financial Data Schedule

27.2 Financial Data Schedule

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

<F*> To be filed by amendment

<F**> Previously filed

<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. Pursuant to Rule
406 under the Securities Act, confidential treatment has been requested with
respect to certain portions of this exhibit. Omitted portions will be filed
separately with the Commission.
</TABLE>

II-6

<PAGE> 120

APPENDIX

Pages 22 and 26 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

LEASE AGREEMENT

This Indenture, dated effective as of July 31, l996

WITNESSETH: that General American Life Insurance Company, a Missouri
corporation (Landlord), hereby leases unto Conning Asset Management Company,
a Missouri corporation (Tenant), and Tenant accepts from Landlord, the
premises being approximately 25,000 square feet of Office Area located on the
third and fourth floors, outlined in red on the floor plan attached hereto as
Exhibit "A" (the Premises) in the building located at 700 Market Street, St.
Louis, Missouri (the Building) (said Building, together with the land on
which it is located and all other improvements thereon being called the
Property), for the term, the rent and subject to the conditions and covenants
hereinafter provided. Provided further, Tenant shall have the option to add
approximately 9,000 square feet of additional Office Area located on the
third floor of the Building at a future date during the calendar year of 1997
at the rental rate of $24.00 per square foot on an annual basis, such future
date to be determined by mutual agreement of Landlord and Tenant.

The term of this lease shall commence on July 31, 1996 and shall end
on July 31, 2001 unless sooner terminated by Tenant pursuant to thirty (30)
days written notice or as otherwise provided herein, to be occupied and used
by the Tenant for general offices and for no other purpose whatsoever.

In Consideration thereof, the parties covenant and agree as follows:

1. RENT

(a) Tenant shall pay to Landlord as Rent, in lawful money of the
United States, at the Landlord's office at 700 Market Street, St. Louis,
Missouri 63101, Attn: Real Estate Department, or as directed from time to
time by Landlord's notice, the annual sum of $600,000.00 payable in equal
monthly payments of $50,000.00 promptly on the first day of every calendar
month of the term, except for the first month's rent which is due and payable
on execution, and pro rata, in advance for any partial month, without demand,
the same being hereby waived and without any set-off or deduction whatsoever.
Tenant shall pay a late charge of $500.00 per each month or 1% of monthly
rent when all rent payments are not made by the tenth (l0th) of the calendar
month.

(b) It is understood that the Rent may be adjusted by Landlord on an
annual basis to cover Tenant's pro rata share of increases in the cost of
operating the Property.

<PAGE> 2
(c) Upon receipt of Landlord's statement, Tenant does hereby covenant
and agree promptly to pay the increases in Rent pursuant to Paragraph (b) of
this Section as and when the same shall become due and payable, without
further demand therefor, and without any set-off or deduction whatsoever.
Failure to give such statement shall not constitute a waiver by Landlord of
its right to require an increase in Rent pursuant to the provisions hereof.

(d) Within thirty (30) days after receipt of such statement, Tenant or
its authorized employee shall have the right to inspect the books of Landlord
during the business hours of Landlord at Landlord's office in the Building
or, at Landlord's option, at such other location that Landlord may specify,
for the purpose of verifying information in such statement. Unless Tenant
asserts specific error(s) within thirty (30) days after delivery of such
statement, the statement shall be deemed to be correct.

2. SERVICES

As long as Tenant is not in default under any of the covenants or
provisions of this lease, Landlord shall maintain the Premises and the public
and common areas of the Property, such as lobbies, stairs, atriums,
landscaping, corridors and restrooms in good order and condition except for
damage occasioned by the act of Tenant, its employees, agents or invitees,
and Landlord shall also provide the following services during reasonable and
usual business hours for the term of this lease as follows:

(a) Electric power for lighting and operation of office machines,
together with any air conditioning and heating (from whatever source), as may
be required for normal purposes and comfortable occupancy of the Premises
between Monday and Friday from 8:00 a.m. to 6:00 p.m., and Saturday from 8:00
a.m. to 3:00 p.m., Sundays and holidays excepted. Electric power furnished
by Landlord is intended to be that consumed in normal office use for
lighting, heating, ventilating, air conditioning and small office machines.
Tenant agrees not to use any apparatus or device, in or upon or about the
Premises which in any way may increase the amount of such services usually
furnished or supplied to tenants in the Building, and Tenant further agrees
not to connect any apparatus or device with the conduits or pipes, or other
means by which such services are supplied, for the purpose of using
additional or unusual amounts of such services, without written consent of
Landlord.

(b) Water for drinking, lavatory and toilet purposes from the regular
Building supply (at the prevailing temperature) through fixtures installed by
Landlord, (or by Tenant with Landlord's written consent).

(c) Lighting replacement, public restroom supplies, window washing
with reasonable frequency, and janitor service to the Premises during the
times and in the manner that such janitor services are customarily furnished
in general office buildings in the area.

(d) Taxes and insurance on the Premises.

2
<PAGE> 3
(e) Landlord agrees to maintain the exterior and interior of the
Building and Property to include lawn and shrub care, snow removal,
maintenance of the structure, roof, mechanical and electrical equipment,
architectural finish, and so on, excluding only those items specifically
excepted elsewhere in the lease.

(f) Landlord may close the building at 6:00 p.m. Monday through
Friday, 4:00 p.m. on Saturday and all day Sunday and holidays, or at such
other hours as Landlord may from time to time reasonably determine; after
which hour admittance may be gained only under such regulations as may from
time to time be prescribed by Landlord.

(g) Passenger elevator service, if normally provided for Building,
daily from 8:00 a.m. to 6:00 p.m., and Saturday from 8:00 a.m. to 3:00 p.m.,
Sunday and holidays excepted. Automatic elevator service shall be deemed
"elevator services" within the meaning of this paragraph.

Landlord shall make all reasonable efforts to provide the foregoing
services, but if Landlord is unable to perform or Landlord is delayed in the
performance of any covenant to supply any service due to any cause beyond the
reasonable control of Landlord including "Acts of God", such nonperformance
or delay in performance shall not render Landlord liable in any respect for
damages to either person or property, shall not constitute a total or partial
eviction, constructive or otherwise, nor work an abatement of rent or relieve
Tenant from the fulfillment of any covenant or agreement contained in this
lease.

3. QUIET ENJOYMENT

So long as Tenant shall observe and perform the covenants and
agreements binding on it hereunder, Tenant shall, at all times during the
term herein granted, peacefully and quietly have and enjoy possession of the
Premises without any encumbrance or hindrance by, from or through Landlord.

4. CERTAIN RIGHTS RESERVED TO THE LANDLORD

Landlord reserves the following rights:

(a) To name the Building and to change the name or street address of
the Building.

(b) To install and maintain a sign or signs on the exterior or
interior of the Building.

(c) To designate, limit, restrict or prohibit all sources furnishing
sign painting and lettering, ice, drinking water, towels, toilet supplies,
shoe shining, vending machines, mobile vending service, catering, and like
services used on the Premises or in the Building.

(d) During the last ninety (90) days of the term, if during or prior
to that time Tenant vacates the Premises, to decorate, remodel, repair, alter
or otherwise prepare the Premises for reoccupancy, without affecting Tenant's
obligation to pay rental for the Premises.

3
<PAGE> 4
(e) To have pass keys to the Premises at all times.

(f) On reasonable prior notice to Tenant, to exhibit the Premises to
prospective tenants during the last twelve (12) months of the term, and to
any prospective purchaser, mortgagee, or assignee of any mortgage on the
Property and to others having a legitimate interest at any time during the
term.

(g) At any time in the event of an emergency, and otherwise at
reasonable times, to take any and all measures, including inspections,
repairs, alterations, additions and improvements to the Premises or to the
Building, as may be necessary or desirable for the safety, protection or
preservation of the Premises or the Building or Landlord's interests, or as
may be necessary or desirable in the operation or improvement of the Building
or in order to comply with all laws, orders and requirements of governmental
or other authority, including but not limited to the necessary removal of
vehicles from the parking lot.

The reservation of these rights by Landlord shall not render Landlord
liable for not performing any of the matters specified herein and Landlord
may enter upon the Premises for the purpose of exercising any or all of the
rights hereby reserved without being guilty of an eviction or disturbance of
Tenant's use or possession of the Premises and without being liable in any
manner to Tenant.

5. ESTOPPEL CERTIFICATES

The Tenant shall, within ten (l0) days after written request of
Landlord, execute, acknowledge, and deliver to the Landlord or to Landlord's
mortgagee, proposed mortgagee, Land Lessor or proposed purchaser of the
Property or any part thereof, any estoppel certificates requested by Landlord
from time to time, which estoppel certificates shall contain such information
as may be reasonably requested by Landlord. If Tenant fails to execute such
certificates, then Tenant hereby appoints Landlord as its attorney-in-fact,
with full power and authority to execute and deliver in Tenant's name all
such certificates.

6. INDEMNIFICATION AND WAIVER OF CERTAIN CLAIMS

(a) Tenant, to the extent permitted by law, waives all claims it may
have against Landlord, and against Landlord's agents and employees for damage
to person or property sustained by Tenant or by any occupant of the Premises,
or by any other person, resulting from any part of the Property or any
equipment or appurtenances becoming out of repair, or resulting from any
accident in or about the Property or resulting directly or indirectly from
any act or neglect of any tenant or occupant of any part of the Property or
of any other person, unless such damage is a result of the negligence of
Landlord, or Landlord's agents or employees, subject, however, to the
provisions of paragraph (b) below. If any damage results from any act or
neglect of Tenant, Landlord may, at Landlord's option, repair such damage and
Tenant shall thereupon pay to Landlord the total cost of such repair. All
personal property belonging to Tenant or any occupant of the Premises that is
in or on any part of the Property shall be there at the risk of Tenant or of
such other person only, and Landlord, its agents and employees shall not be
liable for any

4
<PAGE> 5
damage thereto or for the theft or misappropriation thereof. Tenant agrees to
hold Landlord harmless and indemnified against claims and liability for injuries
to all persons and for damage to or loss of property occurring in or about the
Property, due to any negligent act or failure to act by Tenant, its contractors,
agents or employees, or default by Tenant under this lease.

(b) Landlord shall not be liable for any damage or loss to fixtures,
equipment, merchandise or other personal property of Tenant located anywhere
in or on the leased Premises caused by theft, fire, water, explosion, sewer
backup or any other hazards, regardless of the cause thereof, and Tenant does
hereby expressly release Landlord of and from any and all liability for such
damages or loss. Landlord shall not be liable for any damage or loss
resulting from business interruption at the leased Premises and Tenant does
hereby expressly release Landlord of and from any and all liability for such
damages or loss. Tenant shall not be liable for any damages to the leased
Premises or any part thereof caused by fire or other insurable hazards,
regardless of the cause thereof, and Landlord does hereby expressly release
Tenant of and from any and all liability for such damages or loss. To the
extent that any of the risks or perils described in this paragraph (b) are in
fact covered by insurance, each party shall cause its insurance carriers to
waive all rights of subrogation against the other party.

7. HOLDING OVER

Unless otherwise agreed to in writing by Landlord and Tenant, if
Tenant retains possession of the Premises or any part thereof after the
termination of the term, Tenant shall pay Landlord Rent at double the monthly
rate in effect immediately prior to the termination of the term for the time
Tenant thus remains in possession and, in addition thereto, Tenant shall pay
the Landlord for all damages, consequential as well as direct, sustained by
reason of Tenant's retention of possession. The provisions of this Section
do not exclude Landlord's rights of re-entry or any other right hereunder.
No such holding over shall be deemed to constitute a renewal or extension of
the term hereof.

8. ASSIGNMENT AND SUBLETTING

Tenant shall not, without Landlord's prior written consent, which
consent shall not be unreasonably withheld, (a) assign, convey, mortgage,
pledge, encumber or otherwise transfer (whether voluntarily or otherwise)
this lease or any interest under it; (b) allow any transfer thereof by
operation of law; (c) sublet the Premises or any part thereof, or (d) permit
the use or occupancy of the Premises or any part thereof by anyone other than
Tenant.

If the assignment, transfer, or subletting is approved and rents under
the sublease are greater than the rents provided for herein, then Landlord
shall have the further option either (a) to convert the sublease into a prime
lease and receive all of the rents, in which case Tenant will be relieved of
further liability hereunder and under the proposed sublease, or (b) to
require Tenant to remain liable under this Lease, in which event Tenant shall
be entitled to retain such excess rents.

If this lease be assigned or if the Premises or any part thereof be
sublet or occupied by anybody other than Tenant, Landlord may, after default
by Tenant, collect rent from the assignee,

5
<PAGE> 6
subtenant or occupant, and apply the net amount collected to the Rent herein
reserved, but no such assignment, subletting, occupancy or collection shall be
deemed a waiver of any of the Tenant's covenants contained in this lease or the
acceptance of such assignee, subtenant or occupant as Tenant, or a release of
Tenant from further performance by tenant of covenants on the part of Tenant
herein contained.

9. CONDITION OF PREMISES

Except as otherwise agreed to in writing, Tenant's taking possession
of the Premises shall be conclusive evidence as against Tenant that the
Premises were in good order and satisfactory condition when Tenant took
possession. No promise of Landlord to alter, remodel, repair or improve the
Premises or the Building and no representation respecting the condition of
the Premises or the Building have been made by Landlord to Tenant, other than
as may be contained herein or in a separate agreement signed by Landlord and
Tenant. At the termination of this lease, Tenant shall return the Premises
broom-clean and in as good condition as when Tenant took possession, ordinary
wear and loss by fire or other casualty excepted, failing which Landlord may
restore the Premises to such condition and Tenant shall pay the cost thereof
on demand.

10. USE OF PREMISES

Tenant agrees to comply with the Rules and Regulations attached to
this Lease as Exhibit C, and as set out below, and with such reasonable
modifications thereof and additions thereto as Landlord may hereafter from
time to time make for the Building. Landlord shall not be responsible for
the nonobservance by any other tenant or any of said rules and regulations.

(a) Tenant will not make or permit to be made any use of the Premises
or any part thereof which would violate any of the covenants, agreements,
terms, provisions and conditions of this lease or which directly or
indirectly is forbidden by public law, ordinance or governmental regulation
or which may be dangerous to life, limb or property, or which may invalidate
or increase the premium cost of any policy of insurance carried on the
Building or covering its operation, or which will suffer or permit the
Premises or any part thereof to be used in any manner or anything to be
brought into or kept therein which, in the judgment of Landlord, shall in any
way impair or tend to impair the character, reputation or appearance of the
Property as a high quality office building, or which will impair or interfere
with any of the services performed by Landlord for the Property.

(b) Tenant shall not make any alterations, improvements or additions
to the Premises including, but not limited to, wall coverings and special
lighting installations, without Landlord's advance written consent in each
and every instance. In the event Tenant desires to make any alterations,
improvements or additions, Tenant shall first submit to Landlord Plans and
Specifications therefor and obtain Landlord's written approval thereof prior
to commencing any such work. All alterations, improvements or additions,
whether temporary or permanent in character, made by Landlord or Tenant in or
upon the Premises shall become Landlord's property and shall remain upon the
Premises at the termination of this lease without compensation to

6
<PAGE> 7
Tenant (except only Tenant's movable office furniture, trade fixtures, office
and professional equipment). Any damage caused by or resulting from the removal
of Tenant's office furniture, trade fixtures, and office and professional
equipment may be repaired by Landlord at Tenant's cost and expense.

(c) Tenant hereby agrees that it shall cooperate with Landlord in the
event Tenant intends to contract for any work or services to be performed at
the Premises in order to avoid material jurisdictional or labor disputes with
the Building employees or employees of contractors doing work or performing
services by or on behalf of Landlord.

In addition to all other liabilities for breach of any covenant of
this Lease, Tenant shall pay to Landlord an amount equal to any increase in
insurance premiums payable by Landlord or any other tenant in the Building,
caused by such breach. If Landlord permits a use by Tenant in the Building
or the Premises that would increase the insurance premiums payable by
Landlord, then, Tenant shall pay to Landlord an amount equal to such increase
as a condition for Landlord's approval of such use.

Tenant shall not cause or permit any Hazardous Substances (being
hazardous or toxic substances, materials, or wastes as defined or established
from time to time by applicable local, state or federal ordinances, statutes
or regulations) to be brought upon, or kept in or upon, or used in or about
the Premises, the Building/s or the center by Tenant, it agents, employees,
contractors, or invitees without first obtaining the written consent of
Landlord and justifying to Landlord that such Hazardous Substances are
necessary for Tenant's business.

11. REPAIRS

Tenant shall give to Landlord prompt written notice of any damage to,
or defective condition in any part or appurtenance of the Building's
plumbing, electrical, heating, air-conditioning or other systems serving,
located in, or passing through the Premises. Subject to the provisions of
Sections 2 and l2, Tenant shall, comply with all laws and ordinances and all
rules and regulations of all governmental authorities and of all insurance
bodies at any time in force, applicable to the Premises or to Tenant's use
thereof, except that Tenant shall not hereby be under any obligations to
comply with any law, ordinance, rule or regulation requiring any structural
alteration of or in connection with the Premises, unless such alteration is
required by reason of a condition which has been created by, or at the
instance of, Tenant, or is required by reason of a breach of any of Tenant's
covenants and agreements hereunder. Landlord shall not be required to repair
any injury or damage by fire or other cause, or to make any repairs or
replacements of any panels, decoration, office fixtures, railing, ceiling,
floor covering, partitions, or any other property installed in the Premises
by Tenant.

12. UNTENANTABILITY

If the Premises or the Building or any substantial part of either is
damaged or destroyed by fire or other casualty, cause or condition
whatsoever, such that the damage or destruction cannot be repaired within l20
days, Landlord may, by written notice to Tenant given within thirty (30)

7
<PAGE> 8
days after such damage, terminate this Lease as to all the Premises covered by
this Lease. If the Premises are damaged or the access or use thereof is
affected by the damage, otherwise said termination shall be effective thirty
(30) days after receipt of such notice by Tenant.

Likewise, if as a result of a fire or other casualty, cause or
condition whatsoever, the common areas in the Building are damaged to such an
extent as to substantially interfere with Tenant's use of the Premises or if
the Premises or a substantial part thereof are made untenantable, such that
the damage or destruction cannot be repaired within l20 days, then Tenant may
terminate this Lease by giving written notice to Landlord within thirty (30)
days after such damage, said termination to be effective as of the date of
such damage.

If neither party exercises its right to terminate after such damage,
or if damage shall be repairable in l20 days, Landlord shall proceed with due
diligence to restore, repair and replace the leased premises and said
Building to the same condition as they were in as of the commencement date
of this Lease and from and after the date of such damage to date of
completion of said repairs, replacements and restorations a just proportion
of the rent herein reserved shall abate according to the extent the full use
and enjoyment of the Premises are rendered impossible by reason of such
damage. Landlord shall be under no duty to restore any alterations,
improvements or additions made by Tenant. In all cases due allowance shall
be given to the Landlord for any reasonable delays caused by adjustment of
insurance loss, strikes, labor difficulties or any cause beyond Landlord's
control.

13. EMINENT DOMAIN

(a) In the event that title to the whole or any part of the Premises
shall be lawfully condemned or taken in any manner for any public or
quasi-public use, this lease and the term and estate hereby granted shall
forthwith cease and terminate as of the date of vesting of title and the
Landlord shall be entitled to receive the entire award, Tenant hereby
assigning to Landlord Tenant's interest therein, if any. However, nothing
herein shall be deemed to give Landlord any interest in or to require Tenant
to assign to Landlord any award made to Tenant for the taking of personal
property or fixtures belonging to Tenant or for the interruption of or damage
to Tenant's business or for Tenant's moving expenses.

(b) In the event that title to a part of the Building other than the
Premises shall be so condemned or taken, Landlord may terminate this lease
and the term and estate hereby granted by notifying Tenant of such
termination within sixty (60) days following the date of vesting of title,
and this lease and the term and estate hereby granted shall expire on the
date specified in the notice of termination, not less than sixty (60) days
after the giving of such notice, as fully and completely as if such date were
the date hereinbefore set for the expiration of the term of this lease, and
the Rent hereunder shall be apportioned as of such date.

l4. DEFAULT AND REMEDIES

(a) Events of Default. The occurrence of any one or more of the
-----------------
following events shall constitute a Default and a material breach of this
Lease by Tenant:

8
<PAGE> 9
(i) Failure of Tenant to pay any installment of Rent or other sum
payable to Landlord hereunder on the date that same is due and such
failure shall continue for a period of five (5) days; or

(ii) Failure of Tenant to comply with any term, condition or
covenant of this Lease, other than the payment of Rent or other sum
of money, and such failure shall not be cured within ten (10) days
after written notice thereof has been delivered by Landlord to
Tenant; or

(iii) The filing by or against Tenant or any guarantor of Tenant's
obligations hereunder of a petition in bankruptcy or for
liquidation, or adjudication as a bankrupt or insolvent; or the
appointment of a receiver or trustee for all or substantially all of
the assets of Tenant or any such guarantor; or insolvency, the
making of an assignment for the benefit of creditors, or the making
of a transfer in fraud of creditors by Tenant or any such guarantor;
or

(iv) Abandonment by Tenant of any substantial portion of the
Premises or cessation of use of the Premises for the purpose leased.

(b) Remedies. In the event of the occurrence of any Default, Landlord
--------
shall have the right, without further notice to or demand upon Tenant and
without being liable to Tenant for any damages or to any prosecution
therefor, to do any and all of the following:

(i) Re-enter and take exclusive possession of the Premises with or
without force or legal process, refuse to allow Tenant to enter the
same or have possession thereof, change the locks on the doors to
the Premises, take possession of any furniture or fixtures or other
property in or upon the Premises (Tenant hereby waiving the benefit
of all exemptions by law), sell the same at public or private sale
without notice and apply the proceeds thereof to the costs of sale,
payment of damages and payment of all sums owing under this Lease;
and/or

(ii) Relet the Premises as agent of Tenant for the balance of the
term of this Lease or for a shorter or longer term and receive the
rents therefor, applying them first to the payment of the expense of
such reletting, and second to the payment of damages suffered to the
Premises, and third to all sums due and to become due under this
Lease, Tenant remaining liable for and hereby agreeing to pay
Landlord any deficiency; and/or

(iii) Cancel and terminate the remaining term of this Lease, and
re-enter and take possession of the Premises free of this Lease.
Thereafter this Lease shall be null and void and the Rent in such
case shall be apportioned and paid on and up to the date of such
entry. Thereafter both parties shall be released and relieved from
and of any and all obligations thereafter to accrue hereunder.
Tenant shall be liable for all loss and damage resulting from such
breach or default; and/or

9
<PAGE> 10
(iv) Treat such default as an anticipatory breach of this Lease and,
as liquidated damages for such default, be entitled to the
difference, if any, between the sum which, at the time of such
termination for anticipatory breach represents the then present
worth (computed at ten percent (10%) per year) of the excess
aggregate rents and additional rents payable hereunder that would
have accrued over the balance of the Lease Term (including renewals)
had such term not been prematurely terminated, over the aggregate
market rental value of the Premises over the term (including
renewals) that the Lease would have run had it not been prematurely
terminated; and/or

(v) Recover from Tenant, Landlord's attorney's fees incurred in
enforcing its rights hereunder.

(c) All rights and remedies expressly provided in this Lease for
Landlord's protection shall be cumulative as to each other and of any other
rights and remedies provided hereunder or by law.

(d) A waiver by Landlord of a breach or default by Tenant under the
terms and conditions of this Lease shall not be construed to be a waiver of
any subsequent breach or default or of any other or the same term or
condition of this Lease, and the failure of Landlord to assert any breach or
to declare a default by Tenant shall not be construed to constitute a waiver
thereof so long as such breach or default continues unremedied.

15. SUBORDINATION OF LEASE

The rights of Tenant under this lease are and shall be subject and
subordinate to any and all mortgages or deeds of trust now existing upon or
that may be hereafter placed upon the Premises and the Property and to all
advances made or to be made thereon and all renewals, modifications,
consolidations, replacements or extensions thereof. This provision shall be
self-operative and no further instrument of subordination shall be necessary
to effectuate such subordination and the recording of any such mortgage or
deed of trust shall have preference and precedence and be superior and prior
in lien to this lease, irrespective of the date of recording. In
confirmation of such subordination, Tenant shall on request of Landlord or
the holder of any such mortgage or deed of trust execute and deliver to
Landlord within ten (l0) days any instrument that Landlord or such holder may
reasonably request. If Tenant fails to execute any such instrument as
requested, Tenant hereby appoints Landlord as its attorney-in-fact, with full
power and authority to execute and deliver in Tenant's name all such
instruments.

16. COMMENCEMENT OF POSSESSION

Landlord shall use its best efforts to tender possession of the
Premises to Tenant at the commencement of the Lease Term. Landlord shall not
be subject to any liability for any failure to tender possession of the
Premises to Tenant, provided that such failure occurred as a consequence of
any circumstance or cause beyond Landlord's reasonable control, including, but

10
<PAGE> 11
not limited to, any Act of God or the failure of a prior tenant to vacate
all or any portion of the Premises. If, with the consent of Landlord, Tenant
shall enter into occupancy of the Premises to do business therein prior to
the date of commencement of the term, all provisions of this lease, including
but not limited to the date for expiration of the term thereof, shall apply
and the rent shall accrue and be payable at the first rate specified in
Paragraph (a) of Section l from the date of occupancy. If no possession date
is stated in this lease, the parties hereto agree to restate the commencement
date set out herein as of the date of possession and rent will be payable
from such new commencement date.

17. NOTICES AND CONSENTS

All notices, demands, requests, consents or approvals which may or are
required to be given by either party to the other shall be in writing and
shall be deemed given when sent by United States Certified or Registered
Mail, postage prepaid, (a) if for Tenant, addressed to Tenant at the
Building, or at such other place as Tenant may from time to time designate by
notice to Landlord, or (b) if for Landlord, addressed to 700 Market Street,
St. Louis, Missouri 63101, Attn: Real Estate Department or at such other
place as Landlord may from time to time designate by notice to Tenant. All
consents and approvals provided for herein must be in writing to be valid.
If the term Tenant as used in this lease refers to more than one person, any
notice, consent, approval, request, bill, demand or statement, given as
aforesaid to any one of such persons shall be deemed to have been duly given
to Tenant.

Except as specifically provided in this lease, Tenant hereby expressly
waives the service of intention to terminate this lease or to re-enter the
Premises and waives the service of any demand for payment of Rent or for
possession and waives the service of any other notice or demand prescribed by
any statue or other law.

18. NO ESTATE IN LAND

This contract and lease shall create the relationship of landlord and
tenant between Landlord and Tenant; no estate shall pass out of Landlord; and
Tenant has only a usufruct which is not subject to levy and sale.

19. INVALIDITY OF PARTICULAR PROVISIONS

If any clause or provision of this lease is or becomes illegal,
invalid, or unenforceable, the intention of the parties hereto is that the
remaining parts of this lease shall not be affected thereby.

20. MISCELLANEOUS TAXES

Tenant shall pay prior to delinquency all taxes assessed against or
levied upon its occupancy of the Premises, or upon the fixtures, furnishings,
equipment and all other personal property of Tenant located in the Premises.

11
<PAGE> 12
21. SUBSTITUTE PREMISES

If the Premises contain an area of 2,000 square feet or less, Landlord
shall have the right at any time during the term hereof, upon giving Tenant
not less than sixty (60) days prior written notice, to provide and furnish
Tenant with space elsewhere in the Building of approximately the same size as
the Premises and remove and place Tenant in such space with Landlord to pay
all reasonable costs and expenses incurred as a result of such removal of
Tenant. Should Tenant refuse to permit Landlord to move Tenant to such new
space at the end of said sixty (60) day period, Landlord shall have the right
to cancel and terminate this lease effective ninety (90) days from the date
of original notification by Landlord. If Landlord moves Tenant to such new
space, this lease and each and all of its terms, covenants and conditions
shall remain in full force and effect and be deemed applicable to such new
space, and such new space shall thereafter be deemed to be the Premises as
though Landlord and Tenant had entered into an express written amendment of
this lease with respect thereto.

22. BROKERAGE

Tenant represents and warrants that it has dealt with no broker, agent
or other person in connection with this transaction and that no broker, agent
or other person brought about this transaction, and Tenant agrees to
indemnify and hold Landlord harmless from and against any claims by any other
broker, agent or other person claiming a commission or other form of
compensation by virtue of having dealt with Tenant with regard to this
leasing transaction. The provisions of this Section shall survive the
termination of this lease.

23. SPECIAL STIPULATIONS

(a) No receipt of money by Landlord from Tenant after the termination
of this lease or after the service of any notice or after the commencement of
any suit, or after final judgment for possession of the Premises shall
reinstate, continue or extend the term of this lease or affect any such
notice, demand or suit or imply consent for any action for which Landlord's
consent is required.

(b) No waiver of any default of Tenant hereunder shall be implied from
any omission by Landlord to take any action on account of such default if
such default persists or be repeated, and no express waiver shall affect any
default other than the default specified in the express waiver and that only
for the time and to the extent therein stated.

(c) The term "Landlord" as used in this lease, so far as covenants or
agreements on the part of Landlord are concerned, shall be limited to mean
and include only the owner or owners of Landlord's interest in this lease at
the time in question, and in the event of any transfer or transfers of such
interest Landlord herein named (and in case of any subsequent transfer, the
then transferor) shall be automatically freed and relieved from and after the
date of such transfer of all personal liability as respects the performance
of any covenants or agreements on the part of Landlord contained in this
lease thereafter to be performed.

12
<PAGE> 13
(d) It is understood that Landlord may occupy portions of the Building
in the conduct of Landlord's business. In such event, all references herein
to other tenants of the Building shall be deemed to include Landlord as an
occupant.

(e) The term "City" as used in this lease shall be understood to mean
the City and/or County in which the Property is located.

(f) All of the covenants of Tenant hereunder shall be deemed and
construed to be "conditions" as well as "covenants" as though the words
specifically expressing or importing covenants and conditions were used in
each separate instance.

(g) This lease shall not be recorded by either party without the
consent of the other.

(h) Neither party has made any representations or promises, except as
contained herein, or in some further writing signed by the party making such
representation or promise.

(i) Each provision hereof shall extend to and shall, as the case may
require, bind and inure to the benefit of Landlord and Tenant and their
respective heirs, legal representatives, successors, and assigns.

(j) If because of any act or omission of Tenant, its employees,
agents, contractors, or subcontractors, any mechanic's lien or other lien,
charge or order for the payment of money shall be filed against Landlord, or
against all or any portion of the Premises, or the Building of which the
Premises are a part, Tenant shall, as its own cost and expense, cause the
same to be discharged of record, within thirty (30) days after the filing
thereof, and Tenant shall indemnify and save harmless Landlord against and
from all costs, liabilities, suits, penalties, claims and demands, including
reasonable attorney's fees resulting therefrom.

(k) It is understood and agreed that this lease shall not be binding
until and unless all parties have signed it.

24. ATTORNEY'S FEES

If either party named herein brings an action to enforce the terms
hereof or declare rights hereunder, the prevailing party in any such action,
trial or appeal thereon, shall be entitled to its reasonable attorneys' fees
to be paid by the non-prevailing party as fixed by the court in the same or a
separate suit, and whether or not such action is pursued to decision or
judgment. If any action shall be brought by Landlord to recover any rental
under this Lease, or for or on account of any breach of or to enforce or
interpret any of the terms, covenants or conditions of this Lease, or for the
recovery of possession of the premises, Landlord shall be entitled to recover
from Tenant, as a part of Landlord's costs, a reasonable attorney fee, the
amount of which shall be fixed by the court and shall be made a part of any
judgment in favor of the Landlord.

13
<PAGE> 14
25. CONSTRUCTION OF LEASE

The language in all parts of this Lease shall in all cases be
construed as a whole according to its fair meaning and not strictly for or
against either Landlord or Tenant. Headings in this Lease are for
convenience only and are not to be construed as a part of this Lease or in
any way defining, limiting or amplifying the provisions hereof. Time is of
the essence of this Lease and of every term, covenant and condition hereof.
The words "Landlord" and "Tenant," as used herein, shall include the plural
as well as the singular. The neuter gender includes the masculine and
feminine. In the event there is more than one tenant, the obligations to be
performed shall be joint and several.

26. ENTIRE AGREEMENT

This Lease, together with any attached exhibits and any written
addenda contains the entire agreement between the parties.

27. INTERPRETATION AND ENFORCEMENT

This Lease shall be interpreted, governed and enforced in all respects
under the laws of the State of Missouri.

IN WITNESS WHEREOF, Landlord and Tenant have respectively signed and sealed
this lease as of the day and year first above written.

GENERAL AMERICAN LIFE INSURANCE COMPANY
---------------------------------------
Landlord

By: /s/ Matthew P. McCauley
-----------------------------------
Vice President

CONNING ASSET MANAGEMENT COMPANY
---------------------------------------
Tenant

By: /s/ Michael D. McLellan
-----------------------------------

By: /s/ Fred M. Schpero
-----------------------------------

<PAGE> 1
SUBLEASE
--------

THIS SUBLEASE (the "Sublease") is effective as of July 19, 1995
(the "Effective Date"), between General American Life Insurance Company, a
Missouri corporation ("Sublessor"), and General American Investment
Management Company ("GAIMCO"), a Missouri corporation ("Sublessee").

RECITALS
--------

A. Pursuant to certain leases (individually a "Master Lease"
and collectively the "Master Leases"), various landlords (each a "Master
Lessor" and collectively the "Master Lessors") leased to Sublessor certain
spaces (each a "Master Lease Space" and collectively the "Master Lease
Spaces").

B. Sublessee desires to sublease from Sublessor, and Sublessor
desires to sublet to Sublessee certain spaces (each a "Space" and
collectively the "Spaces") which constitute the Master Lease Spaces. The
Spaces are described on Exhibit A attached hereto.
---------

IN CONSIDERATION OF THE ABOVE, Sublessor and Sublessee agree as
follows:

1. Demise. Sublessor hereby subleases and demises to
------
Sublessee and Sublessee hereby takes and hires from Sublessor the Spaces,
subject to the provisions hereinafter set forth.

2. Term. The initial term of this Sublease (the "Initial
----
Term") shall commence on the Effective Date, and shall expire, with respect
to each particular Space listed on Exhibit A, at midnight on the day prior
---------
to the expiration date of the current term of the Master Lease, unless such
Master Lease is earlier terminated.

This Sublease may be terminated with respect to one or more
Spaces at any time by 90 days advance written notice by the Sublessee to the
Sublessor at the address for notices provided herein. Upon expiration of the
Initial Term of this Sublease and any extension or renewal thereof (the
"Expiration Date"), Sublessor and Sublessee shall be released from all
liabilities and obligations hereunder except as may be expressly provided
herein.

3. Condition and Use of Spaces. Sublessee accepts the
---------------------------
Spaces from Sublessor in their present condition and acknowledges that Sublessor
shall not be required to make any improvements or alterations to the Spaces.
Sublessor represents and warrants that it has asserted no claim of default on
the part of any Master Lessor under any Master Lease and that, to the best of
its knowledge, no default has occurred and is continuing on the part of any
Master Lessor under any Master Lease. Sublessor further represents and
warrants that it has received no notice alleging default by it from any
Master Lessor and that it has performed all of its obligations to be
performed by Sublessor under each Master Lease. Sublessor agrees that as

1
<PAGE> 2

between itself and Sublessee, Sublessee shall have the benefit of all claims
and warranties inuring to the benefit of Sublessor in respect of the Spaces,
if any.

4. Rent and Other Charges. During the Initial Term of this
----------------------
Sublease, Sublessee shall pay rent ("Rent") and all other amounts in
accordance with the terms of the Master Leases to Sublessor, at the address
for notices provided herein, in lawful money of the United States, in monthly
payments in advance on or before the first day of each month, as specified in
the Master Leases with respect to each Space listed on Exhibit A.
---------

5. Surrender of Spaces. Upon the Expiration Date or earlier
-------------------
termination of this Sublease, Sublessee shall (a) surrender the Spaces to
Sublessor in good condition and repair, broom-clean, ordinary wear and tear
and casualty loss or loss by condemnation excepted and otherwise in the
condition required by the Master Lease, and (b) to the extent required of
Sublessor or Sublessee under corresponding Master Leases, repair any damage
to the Spaces occasioned by the removal of Sublessee's trade fixtures,
furnishings, equipment and personal property which Sublessee may remove under
the terms of such Master Leases.

6. Subordination. Subject to the provisions of Paragraph 25
-------------
hereof, this Sublease is subject and subordinate to each Master Lease and to
all matters to which such Master Leases are subject and subordinate.

7. Indemnification. Sublessor shall defend, indemnify and
---------------
hold Sublessee harmless from and against any and all losses, liabilities,
claims, causes of action, damages, costs and expenses (including attorneys'
fees and expert witnesses' fees) arising or resulting from (i) any
intentional or negligent act or omission of Sublessor or Sublessor's
officers, agents, employees, contractors, invitees or licensees (collectively
"Sublessor's Agents"), occurring or accruing during the term of this Sublease
and/or (ii) any breach occurring or accruing on or after the Effective Date
by Sublessor or Sublessor's Agents of any term, condition or covenant under
this Sublease or any breach of any term, condition or covenant under the
Master Leases occurring or accruing during the term of this Sublease, except
to the extent incorporated herein as an obligation of Sublessee. In case any
action or proceeding is brought against Sublessee by reason of any such
claim, Sublessor, upon written notice from Sublessee, shall, at Sublessor's
expense, resist or defend such action or proceeding by counsel reasonably
approved by Sublessee. Sublessee shall defend, indemnify and hold Sublessor
harmless from and against any and all losses, liabilities, claims, causes of
action, damages, costs and expenses (including attorneys' fees and expert
witnesses' fees) arising or resulting from (i) any intentional or negligent
act or omission of Sublessee or Sublessee's officers, agents, employees,
contractors, invitees or licensees (collectively "Sublessee's Agents"),
occurring or accruing during the term of this Sublease, and/or (ii) any
breach occurring or accruing on or after the Effective Date by Sublessee or
Sublessee's Agents of any term, condition or covenant under this Sublease or
under the Master Leases to the extent incorporated herein as applying to
Sublessee, and/or (iii) any intentional or negligent act or omission of
Sublessee or Sublessee's Agents which constitutes a breach or creates an
obligation for reimbursement or indemnification on Sublessor's part to one or
more Master Lessors under the terms of the Master Leases. In case any action
or proceeding

2
<PAGE> 3

is brought against Sublessor by reason of any such claim, Sublessee, upon
written notice from Sublessor, shall, at Sublessee's expense, resist or defend
such action or proceeding by counsel reasonably approved by Sublessor. The
foregoing indemnities in this Paragraph 7 shall survive the expiration,
cancellation or termination of this Sublease.

8. Insurance. The Sublessee shall maintain at its expense
---------
throughout the term of this Sublease, insurance against loss or liability in
connection with bodily injury, death, property damage or destruction,
occurring within the Spaces or arising out of the use thereof by the
Sublessee or its agents, employees, officers, invitees, visitors and guests,
under one or more policies of general public liability insurance affording
Sublessor protection in an amount not less than the amount of such insurance
maintained by Sublessor pursuant to the terms of the Master Leases. Each
such policy shall (a) name as the insureds thereunder, as their interests may
appear, the Sublessor and the Sublessee, (b) by its terms, be cancelable or
materially altered only on at least thirty (30) days' prior written notice to
Sublessor, and (c) be issued by an insurer of recognized responsibility
licensed to issue such policy in the state in which the Spaces are located,
and rated at least A by Best's Key Rating Guide for Property Liability or
otherwise as may be acceptable to Sublessor. To the extent Master Lessor
under the Master Lease may require Sublessee separately to provide any
evidence of insurance benefiting or naming Master Lessor as a named or
additional insured, Sublessee shall promptly upon request of Sublessor cause
such evidence of insurance to be issued and delivered to Master Lessor. Any
waiver of subrogation rights provided in the Master Lease shall not apply
between the parties hereto. Notwithstanding anything to the contrary
contained in this Paragraph 8, Sublessee shall not be required to carry any
insurance in excess of the amount of insurance coverage required to be
maintained by Sublessor under the Master Leases.

Sublessee and Sublessor each hereby relieve the other, and waive
their entire right of recovery against the other for loss or damage arising
out of or incident to the perils insured against by either party to the
extent of insurance proceeds actually received, which perils occur in, on or
about the Spaces or the Master Lease Spaces, whether due to the negligence of
Sublessor or Sublessee or their agents, employees, contractors and/or
invitees. Sublessee and Sublessor shall give notice to their insurance
carrier or carriers that the foregoing mutual waiver of subrogation is
contained in this Sublease.

9. Other Provisions. Except for the paragraphs of the
----------------
Master Lease which relate to (i) the payment of rent, (ii) the term of the
Lease, (iii) any options to purchase the Master Lease Spaces, renew any Master
Lease or expand the Master Lease Spaces, (iv) any rights to assignment and
subletting, and (v) personal property or public liability insurance to be
carried by Sublessor covering the Master Lease Spaces, and to the extent not
otherwise consistent with the agreements and understandings expressed
elsewhere in this Sublease or applicable only to the original parties to the
Master Leases, the provisions of the Master Leases are hereby incorporated
herein by reference on the following understandings:

(a) The term "premises" (or other word of similar import)
as used therein shall refer to the Spaces.

3
<PAGE> 4

(b) The terms "tenant" or "lessee" (or other word of
similar import) as used therein shall refer to Sublessee.

(c) The terms "lessor", "landlord" or "owner" (or other
word of similar import) as used therein shall refer to Sublessor.

(d) Sublessee acknowledges that the applicable Master
Lessors and not Sublessor shall be responsible for any work, services,
repairs, utilities, common areas, repainting and restoration or the
performance of other obligations required of or imposed upon Master Lessor
under each Master Lease. Sublessor agrees to deliver to such Master Lessor
any request relating to such services if requested to do so by Sublessee, or
Sublessee may make such requests directly of such Master Lessor if Sublessee
so elects. Sublessee shall perform such maintenance and repairs with respect
to the Spaces as required to be performed by Sublessor under applicable
Master Leases. To the extent that each Master Lease permits any right of
self help, Sublessee may exercise such right of self-help with respect to the
corresponding Space.

(e) Except as otherwise provided in this Paragraph 9,
Sublessor and Sublessee shall perform and comply with the provisions of the
Master Leases incorporated herein with respect to the Spaces to be performed
by, respectively, the "landlord" and "tenant" (or like words of similar
import) thereunder. Accordingly, Sublessee hereby assumes and agrees to
perform all of the obligations of the "tenant" under the Master Leases
accruing or arising during the term of this Sublease in the manner and within
the time required under the Master Leases as if the Spaces were the only
space demised under the Master Leases. Sublessee and Sublessor each further
covenant that it will neither commit, nor permit to be committed by any third
party, any act or omission which would violate any material term or condition
of the Master Leases to be performed by it or on its behalf, nor be cause for
termination of any Master Lease by a Master Lessor. Sublessee's obligations
hereunder are to Sublessor and Sublessee shall have no duties or obligations
to any Master Lessors under the Master Leases, except as may otherwise be
agreed to between Sublessee and a Master Lessor or as specifically provided
in the Master Leases.

(f) In the event of a default by a Master Lessor under a
Master Lease, Sublessor agrees that Sublessee may at Sublessee's option
institute an action for enforcement of Sublessor's rights under such Master
Lease in the name, place and stead of Sublessor.

10. Sublessee's Sign. If any Master Lease contains
----------------
limitations on the number of signs that may be placed on the corresponding
Master Lease Space, such right shall be allocated between the parties on a
proportionate basis with respect to each party's relative square footage of use.
Notwithstanding the above, Sublessee's rights to install and maintain a sign
on the any Space shall be limited to the provisions of the corresponding
Master Lease and shall otherwise be conditioned upon receipt of prior written
consent of the applicable Master Lessor if so required under the terms of the
Master Lease.

4
<PAGE> 5

11. Assignment and Subletting. Subject to obtaining any
-------------------------
consents required under the Master Leases, Sublessee shall obtain Sublessor's
prior written consent to any assignment or subletting, which consent shall
not be unreasonably withheld or delayed. Notwithstanding the foregoing,
Sublessee shall not have the right to assign this Sublease or sublet all or
any portion of a Space without first obtaining the prior written consent of
the applicable Master Lessor where such consent is required under the terms
of the Master Lease. No assignment of this Sublease (whether or not
Sublessor's consent is required) shall relieve Sublessee of its obligations
hereunder.

Each assignee of this Sublease shall assume all obligations of
Sublessee under this Sublease and shall be and remain liable jointly and
severally with Sublessee for the payment of Rent, and for the performance of
all the terms, covenants, conditions and agreements herein contained on
Sublessee's part to be performed. No assignment shall be binding on
Sublessor unless the assignee or Sublessee shall deliver to Sublessor a
counterpart of the assignment and an instrument in recordable form that
contains a covenant of assumption by the assignee reasonably satisfactory in
substance and form to Sublessor, consistent with the requirements of this
paragraph, but the failure or refusal of the assignee to execute such
instrument of assumption shall not release or discharge the assignee from its
liability as set forth above.

12. Options to Renew. Sublessor shall have no obligation,
----------------
and Sublessee shall have no right or power, to exercise any option to renew or
extend the term of the Master Lease.

13. Notices. Any notice, demand, consent or approval,
-------
request or other communication or document to be provided pursuant to this
Sublease shall be in writing and shall be sent by registered or certified United
States mail, return receipt requested, or by personal delivery during normal
business hours with evidence of delivery requested, with all postage and fees
prepaid, to Sublessor or Sublessee, respectively, at the following addresses,
or at such other address as such party shall designate by written notice to
the other party. Such addresses are:

SUBLESSOR:

General American Life Insurance Company
700 Market Street
St. Louis, MO 63101
Attn: Real Estate Department

SUBLESSEE:

General American Investment Management Company
(at the address of the Space or at such other place as
Sublessee may from time to time designate by notice
to Sublessor)

5
<PAGE> 6

Such notices shall be deemed to have been received and to be effective for
all purposes upon receipt or refusal to accept delivery at such address as
indicated on the return receipt or other record of delivery.

14. No Oral Agreements. There are no oral agreements or
------------------
understandings between the parties hereto affecting this Sublease. This
Sublease cannot be changed or terminated orally but only by an agreement in
writing signed by the party against whom enforcement or any waiver, change,
modification or discharge is sought.

15. Governing Law. This Sublease shall be governed and
-------------
construed, as to each of the respective Spaces, in accordance with the laws
of the state in which each such Space is located.

16. Incorporation of Exhibit(s). The Exhibit(s) attached
---------------------------
hereto is (are) incorporated herein by this reference.

17. Consent. When consent or approval of either Sublessor or
-------
Sublessee is required by any provision of this Sublease or of the Master
Lease to the extent incorporated herein, such consent or approval shall not
be unreasonably withheld or delayed (unless otherwise expressly provided in
this Sublease or in the Master Leases as incorporated herein). Neither
Sublessor nor Sublessee shall take or omit to take any action requiring a
Master Lessor's consent under a Master Lease without first obtaining such
consent in accordance with the terms of the Master Lease. Upon request of
Sublessee, Sublessor will request a Master Lessor's consent to any action or
omission of Sublessee for which such consent is required.

18. Parties Not Relieved of Liability. No assignment of this
---------------------------------
Sublease or subletting of the Spaces, in whole or in part, as provided in
this Sublease, shall relieve either Sublessor or Sublessee of its obligations
under this Sublease.

19. Severability. If any provision of this Sublease is
------------
determined to be unenforceable for any reason, it shall be modified rather
than voided, if possible, in order to achieve the intent of Sublessor and
Sublessee to the extent possible. In any event, the remaining provisions
shall be deemed valid and enforceable to the maximum extent possible.

20. Notice of Default. Sublessor and Sublessee shall,
-----------------
respectively, promptly give written notice to the other of any notice of
default they may receive from the Master Lessor under any Master Lease.

21. Attorney's Fees. In the event of any legal action or
---------------
proceeding to enforce the terms of this Sublease, the prevailing party shall
be entitled to recover its reasonable attorney's fees, costs and expenses.

22. No Third Party Beneficiary. This Sublease is intended to
--------------------------
confer benefits on Sublessee, Sublessor and their respective successors and
permitted assigns only, and is not

6
<PAGE> 7

intended to result in any rights or benefits to any third party, including
without limitation, any Master Lessor. Nothing contained in this Sublease shall
be construed to create privity of estate or of contract between Sublessee and
any Master Lessor.

23. Effectiveness. This Sublease shall be binding against
-------------
Sublessor and Sublessee effective as of the Effective Date hereof. Sublessor
agrees to seek the consent of the Master Lessors to this Sublease were
required to do so by the terms of particular Master Leases. In the event
that subsequent to the Effective Date Sublessor delivers written notice to
Sublessee that Sublessor has been unable to obtain the consent of one or more
Master Lessors to this Sublease, this Sublease shall be null and void as to
the corresponding Spaces, and neither party shall have any obligation to the
other hereunder with respect to such Spaces, except that Sublessee shall
vacate and surrender such Spaces to Sublessor in the same condition delivered
to Sublessee, ordinary wear and tear excepted. Notwithstanding the
foregoing, Sublessor shall permit Sublessee to negotiate with any Master
Lessor regarding any changes to the form of consent agreement required by
such Master Lessor, provided such provisions do not modify or impair any
rights or duties of Sublessor under the applicable Master Lease or this
Sublease.

The effectiveness of this Sublease shall be further conditioned,
at Sublessee's option, on Sublessee's receipt from each Master Lessor,
concurrently with such Master Lessor's consent to this Sublease, of (i) an
estoppel letter verifying that the Lease provided separately by Sublessor to
Sublessee and identified by Sublessor as the Master Lease in effect with
respect to such Master Lessor is a true and complete copy of the applicable
Master Lease, and that no default has occurred and is continuing on the part
of Sublessor thereunder.

IN WITNESS WHEREOF, the parties have entered into this Agreement
as of the day and year first above written.

SUBLESSOR:

GENERAL AMERICAN LIFE INSURANCE COMPANY

By: /s/ Matthew P. McCauley
----------------------------------------------
Name: Matthew P. McCauley
--------------------------------------------
Title: Vice President
-------------------------------------------

SUBLESSEE:

By: /s/ Leonard M. Rubenstein
----------------------------------------------
Name: Leonard M. Rubenstein
--------------------------------------------
Title: Chief Executive Officer
-------------------------------------------

7
<PAGE> 8

EXHIBIT A

SPACE LOCATIONS

ADDRESS
- -------

315 E Robinson Street
Orlando, Florida, Suite 275

5400 LBJ Freeway
Dallas, Texas

17101 Preston Road
Dallas, Texas, Suite 230

39675 Cedar Boulevard
Newark, California, Suite 255

3295 River Exchange Drive
Norcross, Georgia, Suite 290

300 Park Boulevard
Itasca, Illinois, Suite 290

<PAGE> 1
ADMINISTRATIVE SERVICES AGREEMENT

This Administrative Services Agreement ("Agreement") is made effective as of
the 11th day of August, 1995, by and between General American Life Insurance
Company, a Missouri life insurance company ("Parent") and Conning
Corporation, a Missouri corporation ("Subsidiary").

WITNESSETH

WHEREAS, Subsidiary is a majority-owned subsidiary of General American
Holding Company, a Missouri corporation, which is, in turn, a wholly-owned
subsidiary of Parent; and

WHEREAS, the parties hereto desire to set forth their agreement regarding
certain administrative matters with respect to Subsidiary.

NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein contained, the parties hereto, intending to be legally bound hereby,
covenant and agree as follows:

1. Subsidiary may engage the services of Parent's staff to handle the
following functions, among others, in accordance with the general directives
set forth by Subsidiary's Board of Directors and/or management, and subject
at all times to Subsidiary's right to change any decision or policy:

a. Investment advice, including investment
analysis and due diligence investigation.
b. Investor relations, including relations with
financial analysts.
c. Legal analysis of securities proposed for
purchase or sale.
d. General legal advice, including assistance with
contract preparation and review.
e. Accounting and payroll functions.
f. Actuarial analysis and studies.
g. Banking, check issue, and related services.
h. Statistical analysis and record keeping.
i. Preparation and publication, as appropriate,
of financial and other reports.
j. Advertising and sales promotion.
k. Periodic filings required by law.
l. Employment, employee benefit advice,
and discharge of personnel.
m. Stock issue, transfer, and registration.
n. Payment of dividends declared.
o. Billing, collection, and application of payments.
p. Management services.
q. Planning services.
r. Data processing and word processing services.
s. Internal auditing services.
t. Communications services.
u. Printing and purchasing services.
v. Receiving, supplies, and mail services.

<PAGE> 2

2. Nothing herein shall be deemed to require Parent to make exclusive use
of its employees and its owned or leased facilities in the performance of its
obligations under this Agreement, and Subsidiary retains the right to
contract with any third party, affiliated or unaffiliated, for the
performance of any services available to Subsidiary pursuant to this
Agreement. Nothing herein, however, shall be deemed to authorize Parent to
assign this Agreement.

3. There are no contractual limitations on Subsidiary's ability to perform
activities on its own behalf that Parent could otherwise perform, nor on
Subsidiary's ability to utilize the staff and resources of Parent, provided
Subsidiary pays for such utilization as herein provided. Subsidiary shall be
responsible for determining what functions it wants to be performed under
this Agreement and for notifying Parent.

4. Subsidiary will pay Parent for the cost of any services rendered to
Subsidiary. The cost will be calculated by Parent's cost accounting staff in
accordance with Parent's customary accounting practices consistently applied,
and billed to Subsidiary monthly. It is understood, however, that the
parties may elect at any time to amend the Agreement by appending a fee
schedule which shall be applicable to all or any part of the services
rendered to Subsidiary, as may be specified in such fee schedule; provided,
however, that charges or fees for services rendered under this Agreement
shall at all times be fair and reasonable, and the books, accounts, and
records of Parent and Subsidiary shall be maintained so as to clearly and
accurately disclose the precise nature and details of the transactions.

5. Subsidiary will be responsible for payment of all of its obligations to
third parties not provided for in this Agreement, including, but not limited
to, examination fees and other governmental expenses, taxes, management fees,
costs of trade associations and bureaus, equipment purchases, rent, and fees
for accounting, legal, and consulting services. Subsidiary shall be free to
engage Parent's services as a paying agent.

6. Subsidiary shall have custody of, responsibility for, and control of
all of its general corporate documents and records, and records of its
business.

7. Nothing in this Agreement shall give Parent the right to decide any
business issue on behalf of Subsidiary, it being understood that Subsidiary,
through its Board of Directors and/or management, shall have the right to
conduct an independent business.

8. Unless otherwise agreed, Parent will credit to Subsidiary within 30
days any sums which it collects on Subsidiary's behalf. Subsidiary will
remit to Parent any funds collected on its behalf or otherwise due it within
30 days of receipt or as otherwise agreed. In dealing with funds belonging
to any other party, each party hereto will act with due care.

9. Subsidiary shall have the right to hire and fire its own employees and
management or other consultants.

10. The Agreement may be amended by a written instrument signed on behalf
of each party by a duly authorized officer.

2
<PAGE> 3

11. This Agreement shall have an initial term of three years. Thereafter,
if neither party notifies the other that renegotiation or termination of the
Agreement is desired, the Agreement will be renewed until terminated as
provided herein. In the event Subsidiary notifies Parent of its intent to
terminate Parent's services, Parent shall cease to act under this Agreement
within 90 days of receipt of such notice. Parent may terminate this
Agreement upon 180 day's prior written notice to Subsidiary; provided that
Parent agrees not to terminate the Agreement during the initial three-year
term.

12. No party to this Agreement may assign its rights or responsibilities
under this Agreement without the prior written consent of the other party.

13. This Agreement shall be governed by, and construed and enforced in
accordance with, the laws of the State of Missouri.

14. This Agreement may be executed in multiple counterparts, each of which
shall be deemed to be an original, but all of which together shall constitute
one and the same instrument.

IN WITNESS WHEREOF, the parties to this Agreement have caused it to be
signed by their duly authorized officers as of the day and year written
above.

GENERAL AMERICAN LIFE INSURANCE COMPANY

By: /s/ Richard A. Liddy
-------------------------------
Name: Richard A. Liddy
Title: Chairman, President and Chief Executive Officer

CONNING CORPORATION

By: /s/ Leonard M. Rubenstein
--------------------------------
Name: Leonard M. Rubenstein
Title: Chairman and Chief Executive Officer

<PAGE> 1

TAX SHARING AGREEMENT
---------------------

THIS AGREEMENT, entered into as of the 24th day of July, 1995, by and among
General American Life Insurance Company ("General American"), a Missouri
corporation, Conning Corporation (formerly known as Conning Asset Management
Company) ("Conning"), a Missouri corporation, and Conning Asset Management
Company (formerly known as General American Investment Management Company)
("CAM"), a Missouri corporation.

WITNESSETH THAT:

Whereas, General American is the common parent corporation and a member of an
affiliated group of corporations which files a consolidated Federal income
tax return (such affiliated group of corporations for any given taxable year
or period being hereinafter collectively referred to as the "General American
Group");

Whereas, CAM was formed by General American in 1982, and has been included in
consolidated Federal income tax returns as a part of the General American
Group.

Whereas, CAM entered into a Tax Allocation Agreement dated October 30, 1992,
with General American (the "Tax Allocation Agreement") in order to preserve,
to the extent possible, the economic benefits and detriments which would
accrue to the parties if they were to file separate income tax returns rather
than a consolidated return;

Whereas, Conning was formed by General American as a shell corporation and
will not file a consolidated tax return with General American;

Whereas, General American is contributing 100% of the stock of CAM to Conning
in exchange for stock of Conning, and Conning is issuing additional shares of
stock resulting in CAM's being ineligible for consolidation with the General
American Group; and

Whereas, the parties desire to set forth in writing their agreement as to the
manner in which the consolidated liability of the General American Group for
the period during which CAM was a member of the group, and any changes in
such liability, will be handled after CAM leaves the General American Group,
and other matters related to such departure.

NOW, THEREFORE, in consideration of the foregoing, and of the mutual
covenants and promises contained herein, the parties hereby agree as follows:

1. Definitions:

(a) The "Conning Group" means Conning, CAM, and any corporation with
which either of them files a consolidated Federal income tax return
after the Consolidation Period.

(b) The "GAXCAM Group" means the group which includes General
American and any corporation with which General American files a
consolidated Federal income tax return during or after the
Consolidation Period, excluding members of the Conning Group.

<PAGE> 2

(c) The "Consolidation Period" with respect to each member of the
GAXCAM Group and Conning Group shall consist of those taxable years
or periods of each such member which are reported in the General
American consolidated Federal income tax return or returns in which
CAM is included as a member of the General American Group.

2. Notwithstanding that the Tax Allocation Agreement expires by its terms
on the date that CAM is no longer eligible to file a consolidated Federal
income tax return with General American, the consolidated tax liability of
each member of the General American Group for the Consolidation Period shall
be determined in accordance with the Tax Allocation Agreement, and all
subsequent activity in relation to that liability, including but not limited
to payment of taxes, refunds and adjustments, shall be governed in accordance
therewith.

3. Any change in tax liabilities for the Consolidation Period, due to
audit adjustments or otherwise, shall be treated in the same manner as the
initial determination of tax liability under the Tax Allocation Agreement.
Any interest or penalties assessed by a tax authority in conjunction with any
such adjustment shall be borne by the member or members whose tax attributes
are adjusted. Likewise, any interest paid by a tax authority in conjunction
with any favorable adjustment shall be paid to the member or members whose
tax attributes are the source of such interest payment.

4. Except as otherwise provided herein, any attorneys' fees or other costs
incurred by General American in the course of defending, against any tax
authority, tax positions taken in General American's consolidated income tax
return or returns for the Consolidation Period shall be borne by General
American; and General American shall have total discretion and control
regarding the defense, compromise or concession of all such positions.

5. (a) Notwithstanding the preceding paragraph, if General American
desires to settle any proposed adjustment, and if such settlement
would increase the tax liability of a member of the Conning Group by
more than $50,000 for any tax year in the Consolidation Period, then
General American shall first furnish a notice to Conning (the
"Settlement Notice"). The Settlement Notice shall provide an
explanation of the proposed adjustment and the reasons General
American has decided to settle. It shall also include the terms of
the proposed settlement, and a computation of the estimated resulting
increase in the share of consolidated tax liability.

(b) Conning shall notify General American in writing of Conning's
approval or disapproval of the proposed settlement (the "Settlement
Response"). In order to effectively disapprove of the settlement, the
Settlement Response must:

(i) be sent within thirty days after Conning receives the
Settlement Notice;

(ii) contain an agreement by Conning to bear and promptly pay
all expenses incurred by General American in the continuing
defense of the proposed adjustment; and

(iii) be accompanied by an opinion of independent tax counsel, or
of a tax partner of an independent nationally recognized
accounting firm, that there is a

2
<PAGE> 3

reasonable basis to conclude that the affected Conning Group
member would prevail on the merits or obtain a more favorable
settlement than proposed by General American.

If the Settlement Response approves of the proposed settlement, or if
Conning fails to provide a Settlement Response which meets the
requirements of an effective disapproval, then Conning shall be
deemed to have conclusively and irrevocably consented to the
settlement proposed in the Settlement Notice.

(c) If Conning provides a Settlement Response which effectively
disapproves of the proposed settlement, and if continuing to resist
the proposed adjustment would not require General American to take a
position inconsistent with positions taken on other material issues
in defense of the consolidated return, then General American shall
not enter the proposed settlement, but shall continue to defend
against the proposed adjustment, at Conning's expense. In that event
Conning may also participate in such defense, including reviewing
General American's proposed arguments against the proposed adjustment
and suggesting additional arguments.

General American may bill Conning at monthly or greater intervals for
all expenses incurred in such representation, and such bills shall be
payable upon receipt.

6. If a member of the Conning Group generates a net operating loss ("NOL")
for a period subsequent to the Consolidation Period which is eligible to be
carried back to a prior General American consolidated return, and if Conning
requests that General American file an amended tax return for the
Consolidation Period utilizing such NOL, then General American shall file
such amended return, and shall pay any amounts realized from the NOL to the
affected Conning Group member in accordance with the provisions of the Tax
Allocation Agreement. Conning shall reimburse General American for all costs
resulting from such requests, including the cost of filing the return and
defending such tax position. Likewise, if it is subsequently determined that
the refund was improper, Conning shall pay General American the amount due
the IRS, including any interest and penalties.

7. General American shall indemnify and hold harmless each member of the
Conning Group, on an after-tax basis, against the tax liability of any member
of the GAXCAM Group, and against the cost of enforcing General American's
obligations under this Agreement.

8. Conning and CAM shall jointly and severally indemnify and hold
harmless each member of the GAXCAM Group, on an after-tax basis, against the
tax liability of any member of the Conning Group, and against the cost of
enforcing the obligations of Conning and CAM under this Agreement.

9. To the extent that an indemnification against tax liability is made
pursuant to this Agreement, the indemnifying party shall be entitled to any
refund of the tax indemnified against, and any interest paid as a part of
such refund.

10. If any party to this Agreement is required by this Agreement to
indemnify or reimburse a member of the Conning Group or the GAXCAM Group for
any purpose, including the defense of tax positions, such amounts shall
include a reasonable allocation for work performed in-house, in addition to
reimbursement for out-of-pocket expenses. Such allocation of in-house

3
<PAGE> 4

expenses shall be made in the same manner as the method then used by General
American in allocating personnel time and other expenses among various areas
of the company and shall be fair and reasonable to both parties. If an amount
is due, pursuant to this Agreement, from a party to this Agreement to a
member of the Conning Group or the GAXCAM Group, and if such payment is not
made within thirty days of its due date, the party shall also pay interest
from the due date to the date paid, at the short term Applicable Federal
Interest Rate in effect on the due date.

11. Notwithstanding any provision in this Agreement to the contrary, this
Agreement shall not affect any of the indemnification obligations contained
in the Contribution Agreement dated July 24, 1995, among General American,
Conning, and CAM, among others.

12. This agreement shall be effective as of the day and year first above
written.

13. This Agreement shall be binding upon, and shall inure to the benefit
of, the parties hereto and their successors and assigns, as well as any
entity with which any party shall merge.

14. Any provision of this Agreement which is prohibited or unenforceable in
any jurisdiction shall be ineffective only in such jurisdiction, and only to
the extent of such prohibition or unenforceability, without invalidating the
remaining provisions hereof.

15. This Agreement shall be governed by and construed in accordance with
the laws of the State of Missouri.

16. Except as otherwise provided herein, each party shall bear its own
costs and expenses incurred pursuant to this Agreement.

17. No failure or delay of any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof, nor shall any single
or partial exercise thereof preclude any other or further exercise thereof or
the exercise of any other right, power or privilege.

18. This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument.

19. No party may assign or otherwise transfer any of its rights or
obligations under this Agreement without the consent of the other parties
hereto.

IN WITNESS WHEREOF, the parties have caused their duly authorized
representatives to execute this Agreement in duplicate originals as of the
day and year first above written.

GENERAL AMERICAN LIFE INSURANCE COMPANY

By: /s/ Kent P. Zimmerman
---------------------------------------------
Kent P. Zimmerman
Second Vice President & Director of Tax

4
<PAGE> 5

CONNING CORPORATION

By: /s/ Leonard M. Rubenstein
----------------------------------------------
Leonard M. Rubenstein
Chairman & Chief Executive Officer

CONNING ASSET MANAGEMENT COMPANY

By: /s/ Leonard M. Rubenstein
----------------------------------------------
Leonard M. Rubenstein
Chairman & Chief Executive Officer

<PAGE> 1

TAX ALLOCATION AND
------------------
TAX SHARING AGREEMENT
---------------------

THIS AGREEMENT, entered into as of the 12th day of June, 1997, by and among
General American Mutual Holding Company ("GAMHC"), a Missouri corporation,
Conning Corporation ("Conning Corp."), a Missouri corporation, Conning, Inc.,
("Conning"), a Delaware corporation, Conning & Company ("Company"), a
Connecticut corporation, and Conning Asset Management Company ("CAM"), a
Missouri corporation.

WITNESSETH THAT:

Whereas, GAMHC is the common parent corporation and a member of an affiliated
group of corporations which files a consolidated Federal income tax return
(such affiliated group of corporations being hereinafter collectively
referred to as the "GAMHC Group");

Whereas, effective as of the day and year first above written, Conning Corp.,
Conning, Company, and CAM became eligible members of the GAMHC Group;

Whereas, the parties wish to preserve to the extent possible the economic
benefits and detriments which would accrue to a member of the GAMHC Group
resulting from its filing separate income tax returns;

Whereas, the parties desire to set forth in writing their mutual agreement
with and acceptance and ratification of a method for making intercompany
allocations of income tax liability and resulting earnings and profits
adjustments among the members of the GAMHC Group during the time period
Conning Corp., Conning, Company, and CAM are members of such group;

Whereas, Conning Corp. is contemplating issuing stock through a public
offering, which could result in Conning Corp., Conning, Company, and CAM
being ineligible for consolidation with the GAMHC Group thereafter; and

Whereas, the parties desire to set forth in writing their agreement as to the
manner in which the consolidated liability of the GAMHC Group for the period
during which Conning Corp., Conning, Company, and CAM are members of the
group, and any changes in such liability, will be handled after Conning
Corp., Conning, Company, and CAM leave the GAMHC Group, and other matters
related to such departure.

NOW, THEREFORE, in consideration of the promises and of the mutual covenants
herein contained, the parties agree as follows:

1. Definitions:

(a) The "Conning Group" means Conning Corp., Conning, Company, CAM,
and any corporation with which any of them files a consolidated
Federal income tax return after the Consolidation Period.

<PAGE> 2

(b) The "GAXCON Group" means GAMHC and any corporation with which
GAMHC files a consolidated Federal income tax return during or after
the Consolidation Period, exclusive of members of the Conning Group.

(c) The "Consolidation Period" with respect to each member of the
GAXCON Group and Conning Group shall consist of those taxable years
or periods of each such member which are reported in the GAMHC
consolidated Federal income tax return or returns in which Conning
Corp., Conning, Company, and CAM are included as members of the GAMHC
Group.

2. The Federal income tax liability of each member of the GAMHC Group
during the Consolidation Period will be determined as if each such member
filed a separate income tax return directly with the Internal Revenue
Service, except as modified herein.

3. The tax liability so computed, including liability for estimated taxes,
will be remitted by each member to GAMHC in the same amounts and on the same
dates (minus five working days) as the member would have been obligated to
make payment to the Internal Revenue Service had it filed directly with the
Internal Revenue Service. For this purpose any applications for extensions of
time to file or elections as to payments made by GAMHC shall be considered as
having been made by each of the members.

4. GAMHC, upon receipt of such payments, will make the required payment of
the consolidated income tax liability to the Internal Revenue Service.

5. During the Consolidation Period, each member will pay to GAMHC the
amount of any tax assessed by the Internal Revenue Service, upon audit, which
is attributable to such member at such time as the assessment is agreed to or
final, or is paid by GAMHC to the Internal Revenue Service, with applicable
interest and penalties.

6. During the Consolidation Period, refunds arising upon audit by the
Internal Revenue Service, or upon the filing of an amended return or claim
for refund or otherwise, which reduce the tax liability of a member, will be
paid by GAMHC to the member upon receipt, with any interest received.

7. During the Consolidation Period, GAMHC will pay members for any losses
or credits of such member used by the GAMHC Group in computing the GAMHC
Group's tax liability on the consolidated Federal income tax return filed by
GAMHC. Payment shall be made in such amounts, and at such times, as the GAMHC
Group realizes a tax benefit from such losses or credits calculated as
provided in Section 8 of this Agreement. Any tax losses or credits are to be
utilized first by the member generating the losses or credits to reduce the
tax liability of such member to the same extent as if such member filed a
separate Federal income tax return and, to the extent not utilized by such
member, the losses or credits will be available for use by the GAMHC Group.

8. During the Consolidation Period, the consolidated Federal income tax
liability shall be allocated among the members of the GAMHC Group in
accordance with the provisions of Section 1552(a)(2) of the Internal Revenue
Code of 1986, as amended, and Treasury Reg. Sec.1.1502-33(d)(3)(i), the
additional allocation percentage under the latter section to be One Hundred
Percent (100%). In general terms, allowing for various adjustments pursuant
to the

2
<PAGE> 3

cited sections, this method provides that the tax liability for the entire
consolidated group will be allocated among the members in proportion to the
tax liability which each member would have had if calculated separately from
the group. If one member's resulting liability is reduced by using a second
member's tax losses or other tax attributes, then the first member's share of
consolidated tax liability is increased by the amount of such savings, and
the savings are paid to the second member as compensation for the use of its
tax losses or other tax attributes. If a determination is made that some
other method of allocation of tax liability is required by law, then such
required allocation method shall be used in lieu of the method described
above.

9. During the Consolidation Period, any state or local tax returns made on
a consolidated or combined basis among some or all members of the GAMHC Group
shall be governed by principles similar to those reflected by this Agreement,
to the extent appropriate under the tax laws of the jurisdictions involved.

10. Notwithstanding the fact that Conning Corp., Conning, Company, and CAM,
as a result of a public offering of the stock of Conning Corp. or upon the
occurrence of some other event, become ineligible to file a consolidated
Federal income tax return with GAMHC, the consolidated tax liability of each
member of the GAMHC Group for the Consolidation Period shall be determined in
accordance with Sections 1 through 9 as set forth above, and all subsequent
activity in relation to that liability, including but not limited to payment
of taxes, refunds and adjustments, shall be governed in accordance therewith.

11. After the Consolidation Period, any change in tax liabilities for the
Consolidation Period, due to audit adjustments or otherwise, shall be treated
in the same manner as the initial determination of tax liability. Any
interest or penalties assessed by a tax authority in conjunction with any
such adjustment shall be borne by the member or members whose tax attributes
are adjusted. Likewise, any interest paid by a tax authority in conjunction
with any favorable adjustment shall be paid to the member or members whose
tax attributes are the source of such interest payment.

12. Except as otherwise provided herein, any attorneys fees or other costs
incurred by GAMHC in the course of defending, against any tax authority, tax
positions taken in GAMHC's consolidated income tax return or returns for the
Consolidation Period shall be borne by GAMHC; and GAMHC shall have total
discretion and control regarding the defense, compromise or concession of all
such positions.

13. (a) Notwithstanding the preceding paragraph, if GAMHC desires to
settle any proposed adjustment, and if such settlement would increase
the tax liability of a member of the Conning Group by more than
$50,000 for any tax year in the Consolidation Period, then GAMHC
shall first furnish a notice to Conning Corp. (the "Settlement
Notice"). The Settlement Notice shall provide an explanation of the
proposed adjustment and the reasons GAMHC has decided to settle. It
shall also include the terms of the proposed settlement, and a
computation of the estimated resulting increase in the share of
consolidated tax liability.

(b) Conning Corp. shall notify GAMHC in writing of the member's
approval or disapproval of the proposed settlement (the "Settlement
Response"). In order to effectively disapprove of the settlement, the
Settlement Response must:

3
<PAGE> 4

(i) be sent within thirty days after Conning Corp. receives the
Settlement Notice;

(ii) contain an agreement by Conning Corp. to bear and promptly
pay all expenses incurred by GAMHC in the continuing defense of
the proposed adjustment; and

(iii) be accompanied by an opinion of independent tax counsel, or
of a tax partner of an independent nationally recognized
accounting firm, that there is a reasonable basis to conclude
that the affected Conning Group member would prevail on the
merits or obtain a more favorable settlement than proposed by
GAMHC.

If the Settlement Response approves of the proposed settlement, or if
Conning Corp. fails to provide a Settlement Response which meets the
requirements of an effective disapproval, then Conning Corp. shall be
deemed to have conclusively and irrevocably consented to the
settlement proposed in the Settlement Notice.

(c) If Conning Corp. provides a Settlement Response which effectively
disapproves of the proposed settlement, and if continuing to resist
the proposed adjustment would not require GAMHC to take a position
inconsistent with positions taken on other material issues in defense
of the consolidated return, then GAMHC shall not enter the proposed
settlement, but shall continue to defend against the proposed
adjustment, at Conning Corp.'s expense. In that event, Conning Corp.
may also participate in such defense, including reviewing GAMHC's
proposed arguments against the proposed adjustment and suggesting
additional arguments.

GAMHC may bill Conning Corp. at monthly or greater intervals for all
expenses incurred in such representation, and such bills shall be
payable upon receipt.

14. If a member of the Conning Group generates a net operating loss ("NOL")
for a period subsequent to the Consolidation Period, and if Conning Corp.
requests that GAMHC file an amended tax return for the Consolidation Period
utilizing such NOL, then GAMHC shall file such amended return, and shall pay
any amounts realized from the NOL to the affected Conning Group member in
accordance with the provisions of the Sections 1 through 9 set forth above.
Conning Corp. shall reimburse GAMHC for all costs resulting from such
request, including the cost of filing the return and defending such tax
position. Likewise, if it is subsequently determined that the refund was
improper, Conning Corp. shall pay GAMHC the amount due the IRS, including any
interest and penalties.

15. GAMHC shall indemnify and hold harmless each member of the Conning
Group, on an after-tax basis, against the tax liability of any member of the
GAXCON Group, and against the cost of enforcing GAMHC's obligations under
this Agreement.

16. Conning Corp., Conning, Company, and CAM shall jointly and severally
indemnify and hold harmless each member of the GAXCON Group, on an after-tax
basis, against the tax liability of any member of the Conning Group, and
against the cost of enforcing the obligations of Conning Corp., Conning,
Company, and CAM under this Agreement.

4
<PAGE> 5

17. To the extent that an indemnification against tax liability is made
pursuant to this Agreement, the indemnifying party shall be entitled to any
refund of the tax indemnified against, and any interest paid as a part of
such refund. Nothing in this Agreement shall affect any indemnification
obligation of General American Life Insurance Company under Section 3.9 of
the Contribution Agreement dated July 24, 1995, between Conning Corp. and
General American Life Insurance Company, among others.

18. If a party is required by this Agreement to indemnify or reimburse a
member of the Conning Group or the GAXCON Group for any purpose, including
the defense of tax positions, such amounts shall include a reasonable
allocation for work performed in-house, in addition to reimbursement for
out-of-pocket expenses. Such allocation of in-house expenses shall be made in
the same manner as the method then used by GAMHC in allocating personnel time
and other expenses among various areas of the company and shall be fair and
reasonable to both parties. If an amount is due, pursuant to this Agreement,
from a party to this Agreement to a member of the Conning Group or the GAXCON
Group, and if such payment is not made within thirty days of its due date,
the party shall also pay interest from the due date to the date paid, at the
short term Applicable Federal Interest Rate in effect on the due date.

19. This Agreement shall be effective as of the day and year first above
written.

20. Any provision of this Agreement which is prohibited or unenforceable in
any jurisdiction shall be ineffective only in such jurisdiction, and only to
the extent of such prohibition or unenforceability, without invalidating the
remaining provisions hereof.

21. This Agreement shall be governed by and construed in accordance with
the laws of the State of Missouri.

22. Except as otherwise provided herein, each party shall bear its own
costs and expenses incurred pursuant to this Agreement.

23. No failure or delay of any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof, nor shall any single
or partial exercise thereof preclude any other or further exercise thereof or
the exercise of any other right, power or privilege.

24. This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be any original, but all of which together shall
constitute one and the same instrument.

25. No party may assign or otherwise transfer any of its rights or
obligations under this Agreement without the consent of the other parties
hereto.

5
<PAGE> 6

IN WITNESS WHEREOF, the parties have caused their duly authorized
representatives to execute this Agreement in duplicate originals as of the
day and year first above written.

GENERAL AMERICAN MUTUAL
HOLDING COMPANY

By: /s/ Kent P. Zimmerman
----------------------------------------------
Kent P. Zimmerman
Assistant Treasurer

CONNING CORPORATION

By: /s/ Leonard M. Rubenstein
----------------------------------------------
Leonard M. Rubenstein
Chairman & Chief Executive Officer

CONNING, INC.

By: /s/ Fred M. Schpero
----------------------------------------------
Fred M. Schpero
Secretary

CONNING & COMPANY

By: /s/ Fred M. Schpero
----------------------------------------------
Fred M. Schpero
Senior Vice President, Secretary
& Chief Financial Officer

CONNING ASSET MANAGEMENT COMPANY

By: /s/ Leonard M. Rubenstein
----------------------------------------------
Leonard M. Rubenstein
Chairman & Chief Executive Officer

<PAGE> 1

CONNING ASSET MANAGEMENT COMPANY

INCENTIVE STOCK OPTION AWARD

Name of Option Recipient: <<name>>

On August 11, 1995, the Company awarded you a stock option. You were
granted an option to buy 100 shares of the Company's Class B Non-Voting
Common Stock at the price of $5.33 per share.

You may purchase shares under the option as follows:

Number of May be Purchased
Shares Not Before Not After
--------- ----------------------------------

20 August 11, 1996 August 11, 2005
40 August 11, 1997 August 11, 2005
60 August 11, 1998 August 11, 2005
80 August 11, 1999 August 11, 2005
100 August 11, 2000 August 11, 2005

Upon an initial public offering of any class of the Company's
capital stock, you may purchase all of the shares under this option.
IMPORTANT: By signing below, you agree to be bound by, and acknowledge
receipt of, the attached Terms and Conditions of this Incentive Stock Option
Award and the Conning Asset Management Company 1995 Flexible Stock Plan.

CONNING ASSET MANAGEMENT COMPANY
Read and agreed
to this 11th day of
August, 1995.

By:
------------------------------------
Name: Leonard M. Rubenstein
- ------------------------------ Title: Chief Executive Officer
<<name>>

<PAGE> 2

TERMS AND CONDITIONS
--------------------

INCENTIVE STOCK OPTION AWARD GRANTED UNDER
------------------------------------------

CONNING ASSET MANAGEMENT COMPANY
--------------------------------

1995 FLEXIBLE STOCK PLAN
------------------------

1. Definitions
-----------

(a) Committee The committee of directors (or, in certain cases,
---------
their designees) which administers the Stock Option
Plan.

(b) Company Conning Asset Management Company, a Missouri
-------
corporation.

(d) Option The option granted by the Option Award.
------

(e) Option Award The Incentive Stock Option Award to which the
------------
Terms and Conditions are attached together with, except
where the context requires otherwise, these Terms and
Conditions.

(f) Participant The recipient of an Option Award. Each Participant
-----------
must be employed by the Company or Affiliate of the
Company and otherwise satisfy the requirements of
Section 422 of the Internal Revenue Code of 1986,
as amended ("Code").

(g) Shareholders' That certain shareholder's agreement dated August
-------------
Agreement 11, 1995, by and among the Company, General American
---------
Life Insurance Company, General American Holding
Company and certain individuals.

(h) Stock Option Plan The Conning Asset Management Company 1995 Flexible
-----------------
Plan, as amended.

All capitalized terms not otherwise defined herein shall have the meanings
given to such terms by the Stock Option Plan.
2. Evidence of Option Grant and Incentive Stock Option
---------------------------------------------------

-1-
<PAGE> 3

The Option Award evidences a grant to the Participant of an
Option to purchase that number of shares ("Optioned Shares") of the par value
$.01 per share Class B Non-Voting Common Stock of the Company ("Stock") set
forth on the Option Award. The Participant may exercise the Option as shown
on the Option Award, except that upon the occurrence of an IPO, the Option
shall become exercisable in its entirety. In no event shall the Option or
any part of the Option be exercisable after August, 2005 (the "Option
Expiration Date"). The Option is intended to constitute an "Incentive Stock
Option", as defined in Section 422 of the Code.
3. Exercise of Option
------------------
The Option shall be exercised by the Participant delivering a
written notice of exercise to the Company's Secretary. This notice shall
specify the number of Optioned Shares the Participant then desires to
purchase.
4. Payment of Option Price
-----------------------
Payment for the Shares purchased under the Option shall be made
to the Company either:
(a) in cash (including cashier's check, bank draft or money
order); or
(b) by the tender to the Company of shares owned by the
Participant having a Fair Market Value equal to the Option
price;
(c) in cash, but by means of a so-called "cashless exercise"; or
(d) by any combination of cash and Shares.
In addition to the foregoing methods of payment, payment of the Option price
may, at the discretion of the Committee, be made in whole or in part in other
property, rights and credits, including the Participant's promissory note.

-2-
<PAGE> 4

5. Form of Notice of Exercise
--------------------------
The Participant's notice as required by Section 3 shall be signed
by the Participant and shall be in substantially the following form with
appropriate adjustments depending on how the Option price is paid:

"I hereby exercise my Option to purchase ---------- Shares in
accordance with my Option Award dated --------, 19--, granted under the
Company's 1995 Flexible Stock Plan, as amended.

The aggregate Option price of the Shares I am purchasing is
$-----------. I hereby tender in payment of such price the following:

(a) my cashier's check, bank draft or money order made payable
to the Company in the amount of $----------; and/or

(b) ------- Shares having a Fair Market Value of $----------.

I have forwarded to you under separate cover a stock power (with
signature guaranteed) authorizing you to transfer my ------- Shares as per
the requirements of this letter and my Option Award.

I hereby represent to the Company that I own the --------- Shares
delivered herewith free and clear of all liens and encumbrances and that I
have the full and lawful right to transfer such Shares to the Company.

If the Shares purchased have not been registered under the
Securities Act of 1933, I hereby further represent to the Company that I
am acquiring the -------- Shares that I am purchasing solely for
investment and solely for my own account and that I have no present
intention of selling or offering for sale any of such Shares to any other
person or persons."

6. Stock Certificates
------------------
Upon the exercise of the Option solely for cash or cash and
property (other than Stock), rights and/or credits specifically permitted
by the Committee, the Participant shall be entitled to one Stock
certificate evidencing the Shares acquired upon exercise. However, if the

-3-
<PAGE> 5

Participant delivers Stock of the Company when exercising the Option,
then the Participant shall be entitled to two or three certificates.
If the number of Shares tendered is less than or equal to the
number required to pay for all of the Shares purchased, then the Participant
shall be entitled to receive two certificates. One certificate shall
represent a number of Shares equal to the number of Shares delivered by the
Participant. The second certificate shall represent the additional Shares
acquired by the Participant upon the exercise of the Option.
If the number of Shares tendered is more than the number required
to pay for all of the Shares purchased, then the Participant shall be
entitled to receive three certificates, one for the portion of the number of
Shares purchased which is equal to the number of tendered Shares applied to
exercise the Option, a second for the remainder of the number of Shares
purchased upon exercise of the Option, and a third for the number of Shares
tendered which were not applied to purchase the Shares pursuant to the
Option.
7. Legends on Certificates
-----------------------
The certificate or certificates to be issued under Section 6
shall be issued as soon as practicable. Such certificate or certificates
shall contain thereon a legend in substantially the following form if the
Shares evidenced by such certificate have not been registered under the
Securities Act of 1933, as amended:

"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 (satisfactory to the Company)
that registration is not required."

-4-
<PAGE> 6

The certificates shall also contain such other legends as may be appropriate
or required by law, such as a legend relating to any shareholders agreement
that may apply to the Shares.
8. Termination of Employment; Nonassignability
-------------------------------------------
8.1 Termination for Cause or Voluntary Quit. If, on or after
---------------------------------------
the date that the Option shall have first become exercisable, the
Participant's employment shall be terminated by the Participant prior to age
65, or by the Company for "Cause", as defined below, the Participant shall
have the right, within 3 months after such termination (but not later than
the Option Expiration Date), to exercise such Option to the extent that such
Option or any installment thereof shall have accrued at the date of such
termination of employment and shall not have been exercised. In the event of
Participant's death during such 3 month (or shorter) period, the provisions
of Section 8.4 shall apply. For purposes of these Terms and Conditions,
"Cause" shall have the meaning given such term in Participant's employment
agreement with the Company, as in effect from time to time.
8.2 Disability. If, on or after the date that the Option
----------
shall first have become exercisable, the Participant's employment shall be
terminated for disability (as such term is defined at Section 422(c)(6) of
the Code), the Participant shall have the right, within 1 year after such
termination (but not later than the Option Expiration Date), to exercise such
Option to the extent that such Option or any installment thereof shall have
accrued at the date of such termination of employment and shall not have been
exercised. In the event of Participant's death during such 1 year (or
shorter) period, the provisions of Section 8.4 shall apply.
8.3 Discharge Without Cause or Retirement. If the
-------------------------------------
Participant's employment shall be terminated by the Company without Cause or
by the Participant on or after his

-5-
<PAGE> 7

attainment of age 65, all installments of the Option granted hereunder shall
become immediately exercisable (if not already exercisable), and the Participant
shall have the right, within 3 months after such termination (but not later than
the Option Expiration Date), to exercise such Option to the extent that such
Option or any installment thereof shall not have been exercised. In the event
of the Participant's death during such 3 month (or shorter) period, the
provisions of Section 8.4 shall apply.
8.4 Death. If a Participant shall die within the 3 month (or
-----
shorter) period referred to in Section 8.1 or Section 8.3, the 1 year (or
shorter) period referred to in Section 8.2, or while in the employ of the
Company or an Affiliate on or after the date that the Option shall have first
become exercisable, the beneficiary designed pursuant to Section 8.6 hereof,
or, if no such designation is in effect, the personal representative of the
estate of the decedent or the person or persons to whom the Option shall have
been validly transferred by such personal representative pursuant to will or
the laws of descent and distribution, shall have the right, within 1 year
from the date of the Participant's death (but no later than the Option
Expiration Date), to exercise the Participant's Option to the extent that
such Option or any installment thereof shall have accrued at the date of
death and shall not have been exercised. No transfer of the Option shall be
effective to bind the Company unless the Company shall have been furnished
with written notice of such transfer and a copy of the will and/or such other
evidence as the Committee may deem necessary to establish the validity of the
transfer. No transfer shall be effective without the acceptance by the
transferee of the terms and conditions of such Option.
8.5 Option Not Vested. Except provided in Section 8.3, if the
-----------------
Participant's employment shall terminate before the Option shall have first
become exercisable, or before any

-6-
<PAGE> 8

installment or installments are exercisable, then the Participant's full
interest in the Option or such installment or installments, as the case may be,
shall terminate and all rights thereunder shall cease.
8.6 Non-Transferability of Rights; Designation of Beneficiaries.
-----------------------------------------------------------
The Option shall not be transferable by the Participant otherwise than by will
or the laws of descent and distribution or as provided in this Section 8.6.
During the lifetime of the Participant the Option shall be exercisable only by
the Participant.
The Participant, however, may file with the Company a written
designation of a beneficiary or beneficiaries to exercise, in the event of
death of the Participant, the Option granted hereunder, subject to all of the
provisions of this Section 8. A Participant may from time to time revoke or
change any such designation of beneficiary and any designation of beneficiary
under the Plan shall be controlling over any other disposition, testamentary
or otherwise; provided, however, that if the Committee shall be in doubt as
to the right of any such beneficiary to exercise the Option, the Committee
may determine to recognize only an exercise by the personal representative of
the estate of the Participant, in which case the Company, the Committee and
the members thereof shall not be under any further liability to anyone.
8.7 Limitation on Extensions. Certain provisions hereof extend
------------------------
the date by which the Option must otherwise be exercised under the provisions
of Section 1 and the Option Award. Notwithstanding those provisions herein
which otherwise extend the time period in which the Option must be exercised,
no extension may extend the Option later than the day immediately preceding
the tenth annual anniversary date of the date hereof.
9. Withholding
-----------

-7-
<PAGE> 9

The Company or any Affiliate that employs the Participant shall
have the right to deduct any sums that federal, state or local tax law
requires to be withheld with respect to the exercise of the Option, or as
otherwise may be required by such laws. The Company or any such Affiliate
may require as a condition to issuing Stock upon the exercise of the Option
that the Participant or other person exercising the Option pay any sum that
federal, state or local tax law requires to be withheld with respect to such
exercise. In the alternative, the Participant or other person exercising the
Option, may elect to pay such sums to the Company or the Affiliate delivering
written notice of that election to the Company's Secretary prior to or
concurrently with exercise. There is no obligation that the Participant be
advised of the existence of the tax or the amount which the employer
corporation will be so required to withhold.
10. Changes in Capital Structure
----------------------------
If there is any change in the capital structure of the Company,
or if there shall be any dividend upon the Stock, payable in Stock, or of
there shall be a Stock split, spin-off, split-up, spin-out, recapitalization,
merger, consolidation, reorganization, combination or exchange of shares, the
maximum aggregate number of shares with respect to which Options may be
exercised hereunder and the number and the Option Price of the shares of
Stock with respect to which the Option has been granted hereunder, shall be
proportionately adjusted by the Committee as it deems equitable, in its
absolute discretion, to prevent dilution or enlargement of the rights of the
Participant. The issuance of Stock for consideration and the issuance of
Stock rights shall not be considered a change in the Company's capital
structure. No adjustment provided for in this section shall require the
issuance of any fractional shares.
11. Stock Option Plan Controls
--------------------------

-8-
<PAGE> 10
The Option Award and these Terms and Conditions are subject to
all terms and provisions of the Stock Option Plan which is incorporated
herein by reference. In the event of any conflict, the Stock Option Plan
shall control over the Option Award and these Terms and Conditions.
12. Shareholders Agreement
----------------------
Notwithstanding any other provision of the Option Award and these
Terms and Conditions, the provisions of Sections 2, 5, and 7 of the
Shareholders Agreement shall be applicable to the Option as if the Stock
subject to the Option were Restricted Shares; provided, however, that the
provisions of Sections 2, 5 and 7 of the Shareholders Agreement shall only
apply to the number of Shares of Stock with respect to which the Option could
then be exercised; and provided further, the purchase price shall be reduced
by the amount of the exercise price.

-9-

<PAGE> 1

CONNING ASSET MANAGEMENT COMPANY

INCENTIVE STOCK OPTION AWARD

Name of Option Recipient: Name
-----------

On November 22, 1996, the Company awarded you a stock option. You
were granted an option to buy 100 shares of the Company's Class B Non-Voting
Common Stock at the price of $7.00 per share.

You may purchase shares under the option as follows:
<TABLE>
<CAPTION>
May be Purchased
Number of Shares Not Before Not After
---------------- ---------- ---------
<S> <C> <C>
20 November 22, 1997 November 21, 2006

40 November 22, 1998 November 21, 2006

60 November 22, 1999 November 21, 2006

80 November 22, 2000 November 21, 2006

100 November 22, 2001 November 21, 2006

</TABLE>

IMPORTANT: By signing below, you agree to be bound by, and
acknowledge receipt of, the attached Terms and Conditions of this Incentive
Stock Option Award and the Conning Corporation 1996 Flexible Stock Plan.

CONNING CORPORATION
Read and agreed
to this 22nd day of
November, 1996

- ---------------------------------- By: -------------------------------
Name: Leonard M. Rubenstein

<PAGE> 2

TERMS AND CONDITIONS
--------------------

INCENTIVE STOCK OPTION AWARD GRANTED UNDER
------------------------------------------

CONNING CORPORATION
-------------------

1996 FLEXIBLE STOCK PLAN
------------------------

1. Definitions
-----------
<TABLE>
<C> <S>
(a) Committee The committee of directors (or, in certain cases, their designees) which administers
--------- the Stock Option Plan.

(b) Company Conning Corporation, a Missouri corporation.
-------

(d) Option The option granted by the Option Award.
------

(e) Option Award The Incentive Stock Option Award to which the Terms and
------------ Conditions are attached together with, except where the context
requires otherwise, these Terms and Conditions.

(f) Participant The recipient of an Option Award. Each Participant must be
----------- employed by the Company or an Affiliate of the Company or must
be a director of the Company, and otherwise satisfy the
requirements of Section 422 of the Internal Revenue Code of 1986,
as amended ("Code").

(g) Stock Option Plan The Conning Corporation 1996 Flexible Stock Plan, as amended
----------------- from time to time.
</TABLE>

All capitalized terms not otherwise defined herein shall have the meanings
given to such terms by the Stock Option Plan.

2. Evidence of Option Grant and Incentive Stock Option
---------------------------------------------------

The Option Award evidences a grant to the Participant of an Option to
purchase that number of shares ("Optioned Shares") of the par value $.01 per
share Class B Non-Voting

<PAGE> 3
Common Stock of the Company (or, following the automatic conversion of the Class
B Non-Voting Common Stock, that number of shares of Class A Voting Common Stock
into which such shares of Class B Non-Voting Common Stock would have been
converted had they been outstanding at the time of such automatic conversion)
("Stock") set forth on the Option Award. The Participant may exercise the Option
as shown on the Option Award. In no event shall the Option or any part of the
Option be exercisable after November 21, 2006 (the "Option Expiration Date").
The Option is intended to constitute an "Incentive Stock Option" as defined in
Section 422 of the Code.

3. Exercise of Option
------------------

The Option shall be exercised by the Participant delivering a written
notice of exercise to the Company's Secretary. This notice shall specify
the number of Optioned Shares the Participant then desires to purchase.

4. Payment of Option Price
-----------------------

Payment for the Shares purchased under the Option shall be made to
the Company either:

(a) in cash (including cashier's check, bank draft or money
order); or

(b) by the tender to the Company of shares owned by the
Participant having a Fair Market Value equal to the
Option price:

(d) by any combination of cash and Shares.

In addition to the foregoing methods of payment, payment of the Option price
may, at the discretion of the Committee, be made in whole or in part in
other property, rights and credits, including, to the extent permitted by
applicable law, the Participant's promissory note.

2
<PAGE> 4

5. Form of Notice of Exercise
--------------------------

The Participant's notice as required by Section 3 shall be signed
by the Participant and shall be in substantially the following form with
appropriate adjustments depending on how the Option price is paid:

"I hereby exercise my Option to purchase ------------- Shares in
accordance with my Option Award dated -----------------, 19---,
granted under the Company's 1996 Flexible Stock Plan.

The aggregate Option price of the Shares I am purchasing is
$------------. I hereby tender in payment of such price the following:

(a) my cashier's check, bank draft or money order made payable
to the Company in the amounts of $-------------; and/or

(b) --------- Shares having a Fair Market Value of
$-------------.

I have forwarded to you under separate cover a stock power (with
signature guaranteed) authorizing you to transfer my ----------- Shares as
per the requirements of this letter and my Option Award.

I hereby represent to the Company that I own the -----------
Shares delivered herewith free and clear of all liens and encumbrances
and that I have the full and lawful right to transfer such Shares to the
Company.

If the Shares purchased have not been registered under the
Securities Act of 1933, I hereby further represent to the Company that I
am acquiring the --------- Shares that I am purchasing solely for
investment and solely for my own account and that I have no present
intention of selling or offering for sale any of such Shares to any other
person or persons."

6. Stock Certificates
------------------

Upon the exercise of the Option solely for cash or cash and
property (other than Stock), rights and/or credits specifically permitted by
the Committee, the Participant shall be entitled to one Stock certificate
evidencing the Shares acquired upon exercise. However, if the Participant
delivers Stock of the Company when exercising the Option, then the
Participant shall be entitled to two or three certificates.

3
<PAGE> 5

If the number of Shares tendered is less than or equal to the
number required to pay for all of the Shares purchased, then the Participant
shall be entitled to receive two certificates. One certificate shall
represent a number of Shares equal to the number of Shares delivered by the
Participant. The second certificate shall represent the additional Shares
acquired by the Participant upon the exercise of the Option.

If the number of Shares tendered is more than the number
required to pay for all of the Shares purchased, then the Participant shall
be entitled to receive three certificates, one for the portion of the number
of Shares purchased which is equal to the number of tendered Shares applied
to exercise the Option, a second for the remainder of the number of Shares
purchased upon exercise of the Option, and a third for the number of Shares
tendered which were not applied to purchase the Shares pursuant to the
Option.

7. Legends on Certificates
-----------------------

The certificate or certificates to be issued under Section 6
shall be issued as soon as practicable. Such certificate or certificates
shall contain thereon a legend in substantially the following form if the
Shares evidenced by such certificate have not been registered under the
Securities Act of 1933, as amended:

"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
(satisfactory to the Company) that registration is not required."

The certificates shall also contain such other legends as may be appropriate
or required by law, such as a legend relating to any shareholders' agreement
that may apply to the Shares.

4
<PAGE> 6

8. Termination of Employment; Nonassignability
-------------------------------------------

8.1 Termination of Employment or Status as Director. If, on or
-----------------------------------------------
after the date that the Option shall have first become exercisable, the
Participant's employment shall be terminated for any reason, the Participant
shall have the right, within 3 months after such termination (but not later
than the Option Expiration Date), to exercise such Option to the extent that
such Option or any installment thereof shall have accrued at the date of
such termination and shall not have been exercised. In the event of the
Participant's death during such 3 month (or shorter) period, the provisions
of Section 8.4 shall apply. For purposes of this Section, termination of
employment shall be deemed to occur on the later of the termination of a
Participant's employment with the Company or an Affiliate or a Participant's
ceasing to serve as a director of the Company.

8.2 Disability. If, on or after the date that the Option shall
----------
first have become exercisable, the Participant's employment shall be
terminated for disability (as such term is defined at Section 422(c)(6) of
the Code), the Participant shall have the right, within 1 year after such
termination (but not later than the Option Expiration Date), to exercise
such Option to the extent that such Option or any installment thereof shall
have accrued at the date of such termination of employment and shall not
have been exercised. In the event of the Participant's death during such 1
year (or shorter) period, the provisions of Section 8.4 shall apply.

8.3 Intentionally Omitted.
---------------------

8.4 Death. If a Participant shall die within the 3 month (or
-----
shorter) period referred to in Section 8.1 or the 1 year (or shorter) period
referred to in Section 8.2 or while in the employ or serving as a director of
the Company or an Affiliate on or after the date that the Option shall have
first become exercisable, the beneficiary designated pursuant to Section 8.6

5
<PAGE> 7
hereof, or, if no such designation is in effect, the personal representative of
the estate of the decedent or the person or persons to whom the Option shall
have been validly transferred by such personal representative pursuant to will
or the laws of descent and distribution, shall have the right, within 1 year
from the date of the Participant's death (but no later than the Option
Expiration Date), to exercise the Participant's Option to the extent that such
Option or any installment thereof shall have accrued at the date of death and
shall not have been exercised. No transfer of the Option shall be effective to
bind the Company unless the Company shall have been furnished with written
notice of such transfer and a copy of the will and/or such other evidence as the
Committee may deem necessary to establish the validity of the transfer. No
transfer shall be effective without the acceptance by the transferee of the
terms and conditions of such Option and the terms and conditions of any
shareholders' agreement applicable to the Option.

8.5 Option Not Vested. If a Participant's employment shall
-----------------
terminate before the Option shall have first become exercisable, or before
any installment or installments are exercisable, then the Participant's full
interest in the Option or such installment or installments, as the case may
be, shall terminate and all rights thereunder shall cease. For purposes of
this Section, termination of employment shall be deemed to occur on the
later of the termination of a Participant's employment with the Company or
an Affiliate or a Participant's ceasing to serve as a director of the
Company.

8.6 Non-Transferability of Rights, Designation of Beneficiaries.
-----------------------------------------------------------
The Option shall not be transferable by the Participant otherwise than by
will or the laws of descent and distribution or as provided in this Section
8.6. During the lifetime of the Participant, the Option shall be
exercisable only by the Participant.

6
<PAGE> 8

The Participant, however, may file with the Company a written
designation of a beneficiary or beneficiaries to exercise, in the event of
death of the Participant, the Option granted hereunder, subject to all of
the provisions of this Section 8. A Participant may from time to time
revoke or change any such designation of beneficiary and any designation of
beneficiary under the Plan shall be controlling over any other disposition,
testamentary or otherwise; provided, however, that if the Committee shall be
in doubt as to the right of any such beneficiary to exercise the Option, the
Committee may determine to recognize only an exercise by the personal
representative of the estate of the Participant, in which case the Company,
the Committee and the members thereof shall not be under any further
liability to anyone.

8.7 Limitation on Extensions. Certain provisions hereof extend
------------------------
the date by which the Option must otherwise be exercised under the
provisions of Section 1 and the Option Award. Notwithstanding those
provisions herein which otherwise extend the time period in which the Option
must be exercised, no extension may extend the Option later than the day
immediately preceding the tenth annual anniversary date of the date hereof.

9. Withholding.
-----------

7
<PAGE> 9
with exercise. There is no obligation that the Participant be advised of the
existence of the tax or the amount which the employer corporation will be so
required to withhold.

10. Changes in Capital Structure.
----------------------------

If there is any change in the capital structure of the Company, or if
there shall be any dividend upon the Stock, payable in Stock, or if there shall
be a Stock split, spin-off, split-up, spin-out, recapitalization, merger,
consolidation, reorganization, combination or exchange of shares, the maximum
aggregate number of shares with respect to which Options may be exercised
hereunder and the number and the Option Price of the shares of Stock with
respect to which the Option has been granted hereunder, shall be proportionately
adjusted by the Committee as it deems equitable, in its absolute discretion, to
prevent dilution or enlargement of the rights of the Participant. The issuance
of Stock for consideration and the issuance of Stock rights shall not be
considered a change in the Company's capital structure. No adjustment provided
for in this section shall require the issuance of any fractional shares.

11. Stock Option Plan Controls
--------------------------

The Option Award and these Terms and conditions are subject to all
terms and provisions of the Stock Option Plan which is incorporated herein by
reference. In the event of any conflict, the Stock Option Plan shall control
over the Option Award and these Terms and Conditions.

<PAGE> 1
AMENDMENT TO LEASE

THIS AMENDMENT TO LEASE (this "Amendment") is made and entered into as
of the 30th day of June, 1997, by and between HARTFORD CITYPLACE L.L.C.
("Landlord") and CONNING & COMPANY and CONNING, INC., formerly known as
CONNING CORPORATION (collectively, the "Tenant").

R E C I T A L S:
- - - - - - - -

JMB/Urban CityPlace Limited Partnership (Landlord's predecessor in
interest) and Tenant have previously entered into that certain Office Lease
dated August 22, 1989 (the "Lease"), which demised the entire eighth (8th)
and ninth (9th) floors containing approximately 32,966 square feet of
rentable area (the "Current Space") in the Building known as CityPlace II,
185 Asylum Street, Hartford, Connecticut (all capitalized terms herein that
are defined in the Lease shall have the same meaning herein as therein,
unless the context otherwise requires). Landlord and Tenant desire to amend
the Lease upon the terms and conditions hereinafter set forth.

NOW THEREFORE, for and in consideration of the mutual premises as
contained herein, the parties agree as follows:

1. LEASING OF NEW SPACE. Landlord hereby leases to Tenant, and
--------------------
Tenant hereby accepts and leases from Landlord, the entire seventh (7th)
floor of the Building containing approximately 16,483 square feet of rentable
area as shown on the diagram annexed hereto and made a part hereof as
Exhibit A (the "New Space") for a term to commence upon September 1, 1997
- ---------
(subject to the provisions of Paragraph 4 below, herein called the "New Space
Commencement Date") and which shall end upon March 31, 2005, the Termination
Date under the Lease. Tenant's use and occupancy of the New Space shall be
governed by the terms, provisions and conditions of the Lease and, unless the
context otherwise requires, the term "Premises" as used in the Lease, as
amended by this Amendment, shall mean both the Current Space and the New
Space, containing an aggregate of approximately 49,449 rentable square feet
of space.

2. BASE RENT. The Base Rent for the New Space shall be payable
---------
upon the due dates set forth in the Lease and shall be: Eighty-Four Thousand
($84,000) Dollars per annum, payable in equal monthly installments of $7,000,
for the period commencing upon the thirtieth (30th) day following the New
Space Commencement Date to and including June 30, 1998; One Hundred Nineteen
Thousand Eight Hundred Sixty Four ($119,864) Dollars per annum, payable in
equal monthly installments of $9,988.67, for the period commencing upon July
1, 1998 to and including July 31, 2000; and One Hundred Fifty-Two Thousand
Eight Hundred Thirty ($152,830) Dollars per annum, payable in equal

-1-
<PAGE> 2

monthly installments of $12,735.84, for the period commencing upon August 1,
2000 to and including March 31, 2005. Base Rent payments for any partial month
shall be prorated. The Base Rent for the Current Space shall remain unchanged
and be governed by the terms of the Lease. As used in the Lease, the term "Base
Rent" shall mean the Base Rent for both the Current Space and the New Space,
unless the context requires a different interpretation.

3. ADDITIONAL RENT. "Tenant's Prorata Share" as defined in
---------------
Section 4.2.2 of the Lease shall be Fifteen and Twenty-three one-hundredths
(15.23%) percent commencing upon the thirtieth (30th) day following the New
Space Commencement Date to and including June 30, 1998, and Sixteen and
Seventy-seven one-hundredths (16.77%) percent commencing upon July 1, 1998 to
and including the Termination Date of the Lease.

4. TENANT'S WORK. Landlord shall cause certain tenant
-------------
improvements to be installed in the Premises (herein called the "Tenant's
Work") in the manner provided in Exhibit B attached hereto. In the event the
---------
Premises shall not be substantially completed on September 1, 1997 for any
reason, this Lease shall nevertheless continue in force and effect, but Base
Rent shall abate until the earlier to occur of (i) the date upon which the
Premises are "substantially completed" (which for purposes of this Paragraph
4 means that the Tenant's Work is completed in such a manner so as not to
materially interfere with Tenant's use and occupancy of the Premises, even
though minor details of such work remain undone or incomplete, and a
---
temporary certificate of occupancy is issued for the New Space by the City of
Hartford); or (ii) October 1, 1997, as the case may be, and Landlord shall
have no other liability whatsoever on account thereof provided, however, that
--------- --------
(x) there shall be no abatement of Base Rent if the Premises are not ready
for occupancy because of a "Tenant Delay", as such term is defined in
Exhibit B; and (y) said October 1, 1997 date shall be extended for the actual
- ---------
number of days of delay to the substantial completion of the Premises if due to
an act of God or a construction delay caused by Landlord or the contractor which
is not a "Tenant Delay".

5. LANDLORD'S CONTRIBUTION. Provided that Tenant shall not be
-----------------------
in default under any material term, provision or condition of this Lease,
Landlord agrees to contribute the amount of Five Hundred Ninety-Three
Thousand Three Hundred Eighty-Eight ($593,388) Dollars toward the cost of
performing the Tenant's work described on Exhibit B hereof, including
architectural and engineering fees therefor ("Landlord's Contribution").
Landlord's Contribution shall be payable by Landlord to the contractors
performing the Tenant's Work as construction progresses and in such manner as
Landlord shall determine. Said Contribution shall be a single, non-recurring
obligation of Landlord. In any event, Tenant shall be fully responsible to
pay all costs and expenses associated with the performance and completion of
Tenant's Work in excess of Landlord's Contribution, whether resulting from
cost over-runs, delays or any other matter

-2-
<PAGE> 3
whatsoever. The rights to receive Landlord's Contribution are personal to the
named Tenant and cannot be assigned or transferred in any manner to any other
person or entity. If, after Tenant's Work is finally completed and fully paid
for, Landlord's Contribution has not been fully disbursed as hereinabove
contemplated, Tenant shall be entitled to a credit against the next ensuing
monthly installments of Base Rent coming due under this Lease equal to such
undisbursed amount.

6. EXPANSION RIGHTS. (a) FIRST EXPANSION RIGHT. As of April
---------------- ---------------------
1, 2000, and provided that Tenant shall not be in default under any material
term, provision or condition of this Lease, Tenant shall have the right to
lease approximately 8,250 square feet (+/- 10%) of rentable area on the six
(6th) floor of the Building (Landlord and Tenant to mutually determine the
exact location and amount of space at the time of Tenant's exercise) (the
"First Expansion Space") in an "as is" condition, on the same terms and
provisions then in effect under this Lease, except that (i) the annual Base
Rent shall be increased by an amount equal to Ten ($10) Dollars multiplied by
the number of rentable square feet of space in the First Expansion Space;
(ii) Tenant's Pro Rata share will be proportionately increased taking into
account the number of rentable square feet of area in the First Expansion
Space; and (iii) Landlord shall build out the Expansion Space in the same
manner and subject to the same terms and conditions as set forth on Exhibit B
hereto, except that (1) the Landlord's Contribution shall be either (x) $35
multiplied by the number of rentable square feet of area in the First
Expansion Space, if the First Expansion Space is "shell" space previously
unimproved by or on behalf of any tenant or occupant, or (y) $10 multiplied
by the number of rentable square feet of area in the First Expansion Space,
if the First Expansion Space is space which was previously improved by or on
behalf of a prior tenant or occupant; and (2) the latest date by which rent
will commence for the First Expansion Space shall be April 1, 2000.

Tenant shall exercise its right to lease the First Expansion Space upon
the terms described above by delivering its written election to Landlord no
later than nine (9) full calendar months preceding April 1, 2000. If Tenant
exercises the right to lease the First Expansion Space, said lease shall
continue for the duration of the Term of this Lease.

(b) SECOND EXPANSION RIGHT. As of April 1, 2002, Tenant shall
----------------------
have the additional right to lease either (1) the balance of the sixth (6th)
floor of the Building not then already leased to Tenant, in the event Tenant
previously exercised its option under Sub-paragraph (a) immediately above, or
(2) approximately 8,250 square feet (+/- 10%) of rentable area on said six
(6th) floor, in the event Tenant did not previously exercise its option under
said Sub-paragraph (a) (Landlord and Tenant to mutually determine the exact
location and amount of space at the time of Tenant's exercise) (the "Second
Expansion Space") in an "as is" condition, on the same terms and provisions
then in effect under this Lease, except that (i) the annual Base Rent shall
be increased to reflect

-3-
<PAGE> 4

the Expansion Prevailing Rental Rate; (ii) Tenant's Pro Rata share will be
proportionately increased taking into account the number of rentable square feet
of area in the Second Expansion Space; and (iii) Landlord shall perform no work
nor make a contribution towards tenant's work, unless required by the
application of the following provisions of this Paragraph. "Expansion
Prevailing Rental Rate" means the average per square foot rental rate for all
leases for comparable space and build out in the Building and for approximately
the same number of months, executed by tenants during the six (6) months
immediately prior to the date upon which such Expansion Prevailing Rental Rate
is to become effective and payable, under the terms of this Lease, where the
rates for such expansions were not set in such leases, subject to reasonable
adjustments for comparable space on more or less desirable floors or areas of
the Building. If no comparable space has been leased during such six (6) month
period, the rental rates used for purposes of this provision shall be adjusted
as follows: the Expansion Prevailing Rental Rate shall be the fair market
rental rate per rentable square foot which landlords are then charging for a
comparable lease term for comparable tenants leasing comparable space of
comparable size and build out in comparable Class A office buildings in
Hartford, Connecticut central business district. In all cases, such rates shall
be determined without regard to any take-over incentives. In the event that
such comparable leases include base years, stop levels, or other provisions
respecting taxes or operating expenses, or include other economic provisions,
such as but not limited to consumer price provisions, utility reimbursements, or
fixed rent increases, the same shall be included in Tenant's leasing terms. In
all other respects, the leasing shall be on a triple net basis.

Tenant shall exercise its right to lease the Second Expansion Space
upon the terms described above by delivering its written election to Landlord
no earlier than twelve (12) full calendar months nor later than nine (9) full
calendar months preceding April 1, 2002. If Tenant exercises the right to
lease the Second Expansion Space, said lease shall continue for the duration
of the Term of this Lease.

If the parties are unable to agree on the Expansion Prevailing Rental
Rate within one hundred twenty (120) days after Tenant shall have delivered
its exercise notice, either party may request the Expansion Prevailing Rental
Rate be determined by arbitration, under the Commercial Arbitration Rules of
the American Arbitration Association then in effect. Such determination
shall be final and binding upon the parties. In recognition that the
Expansion Prevailing Rental Rate may not be determined until after the
commencement of the lease for the Second Expansion Space, Tenant shall pay,
as rent for the Expansion Space, until the Expansion Prevailing Rental Rate
is determined, one hundred ten (110%) percent of the amount of Rent under the
Lease then in effect for the 6th floor (if Tenant previously exercised its
option under Sub-paragraph (a) immediately above) or for the 7th floor (in
all other cases) on a per rentable square foot basis (including Base Rent,
and all other charges). If the Expansion Prevailing Rental Rate is

-4-
<PAGE> 5

determined to be greater or lesser than such amount, Tenant shall pay
Landlord, or Landlord shall credit Tenant, as the case may be, within thirty
(30) days after written request therefor, the difference between the amount
required by such determination of the Expansion Prevailing Rental Rate, and
the amount of Rent theretofore paid by Tenant for the Second Expansion Space.

(c) GENERAL EXPANSION PROVISIONS. The foregoing two expansion
----------------------------
rights shall apply only with respect to the entire Expansion Space to which
they apply, and may not be exercised with respect to only a portion thereof.
If Tenant shall fail to exercise any such expansion right within the time
period stated herein, such right shall be deemed to have lapsed and expired,
and shall be of no further force or effect. Landlord may thereafter freely
lease all or a portion of the applicable Expansion Space to any other party,
at any time, on any terms, in Landlord's sole discretion.

If Tenant shall exercise any expansion right granted herein, Landlord
does not guarantee that the applicable Expansion Space shall be available on
the commencement date of the lease thereof if the then existing occupants of
such Expansion Space shall hold over or remain in occupancy for any other
reason beyond Landlord's reasonable control. In such event, Rent with
respect to the applicable Expansion Space shall be abated until Landlord
delivers the same to Tenant, as Tenant's sole recourse. However, in the
event such existing occupant remains in occupancy beyond sixty (60) days
following said commencement date, Landlord agrees to use commercially
reasonable efforts to make such space available, including the possible
eviction of such occupant.

After Tenant validly exercises an expansion right provided herein, the
parties shall promptly execute an amendment to this Lease, adding the
applicable Expansion Space, or shall execute a new lease for the applicable
Expansion Space (cross defaulted with this Lease), or such other
documentation as Landlord shall require, any of which shall be prepared by
Landlord and be reasonably satisfactory to Tenant. The foregoing written
agreements shall be confirmatory in nature, it being agreed however that the
leasing of the applicable Expansion Space as of April 1, 2000 (with respect
to the First Expansion Space) and April 1, 2002 (with respect to the Second
Expansion Space) shall be fully effective, whether or not such confirmatory
documentation is executed. Tenant further agrees that upon the addition of
any Expansion Space, any security deposit held by Landlord shall be ratably
increased to reflect the additional financial obligations of Tenant
hereunder.

If Tenant shall fail to exercise any option herein provided, said
option shall terminate, and shall be null and void and of no further force or
effect. Tenant's exercise of said option shall not operate to cure any
default by Tenant of any of the terms or provisions in the Lease, nor to
extinguish or impair any rights or remedies of Landlord

-5-
<PAGE> 6

arising by virtue of such default. If the Lease or Tenant's right to possession
of the Premises shall terminate, or be sublet or assigned in any manner
whatsoever, other than a subletting or assignment (i) consented to by Landlord,
or (ii) to an Affiliate of Tenant, before Tenant shall exercise the option
herein provided, then immediately upon such termination, sublease or assignment,
the option herein granted to expand the Premises shall simultaneously terminate
and become null and void. Time is of the essence on the part of Tenant to
exercise any expansion right herein contained. Any rights to expand under
the Lease other than set forth in this Amendment are hereby deleted in their
entirety.

7. RIGHT OF FIRST OFFER. Article 55 of the Lease is hereby
--------------------
modified by deleting references of the "seventh floor" therefrom and
inserting the following in lieu thereof: "six (6th) floor." In the event
that Tenant does not accept an offer under this Paragraph and no third party
accepts an offer by Landlord to lease the space within a three month period
following the date Tenant has declined, or is deemed to have declined, the
offer, Landlord shall thereafter first re-offer the space to Tenant prior to
offering it again to third parties if the offer by Landlord to such third
parties would be on substantially different material terms than that
originally proposed to Tenant.

8. INSURANCE REQUIREMENTS. Prior to taking occupancy of the New
----------------------
Space, Tenant shall provide to Landlord evidence of insurance, as set forth
in Article 11 of the Lease, with respect to the New Space.

9. PARKING. From and after the Effective Date, Tenant shall be
-------
entitled to an additional two (2) general non-exclusive indoor parking spaces
at the Building on-site garage and an additional fifteen (15) general
non-exclusive parking spaces at locations selected by Landlord in the
existing municipal parking garage located on Church Street, Hartford,
Connecticut and being adjacent to the existing Sheraton Hotel subject to and
in accordance with Article 36 of the Lease.

10. BROKERS. Tenant represents to Landlord that it has not dealt
-------
with any broker or finder with respect to the transactions referred to in
this Amendment other than RealCorp, LLC (Scott Macbeth, broker) and hereby
indemnifies and agrees to defend and hold Landlord harmless from and against
any claims made by any broker or finder, other than RealCorp for a commission
or fee in connection with the transactions herein set forth. Landlord
represents that it has not dealt with or engaged any brokers other RealCorp
with respect to the transactions referred to in this Amendment.

-6-
<PAGE> 7

11. NOTICES. The address for notices to Landlord shall be modified
-------
as follows:

Hartford CityPlace, L.L.C. With copies to:
c/o Finard & Company Hartford CityPlace L.L.C.
CityPlace II c/o Oaktree Capital Management, L.L.C.
185 Asylum Street 550 Hope Street
Hartford, Connecticut 06103 Los Angeles, CA 90071
Attn: Law Department

12. CHANGES IN ORIGINALLY NAMED TENANT. Tenant represents and
----------------------------------
warrants to Landlord that: (a) Conning International, Inc. has been
dissolved in accordance with Connecticut law; and (b) Conning Corporation has
changed its corporate name to "Conning, Inc." Accordingly, Conning
International, Inc. is deleted as a tenant under the Lease and references to
"Conning Corporation" shall be changed to "Conning, Inc."

13. ASSIGNMENT, SUBLETTING, ETC. Tenant has advised Landlord
---------------------------
that Conning Asset Management Company is an Affiliate of Tenant (as such term
is defined in Section 16.8 of the Lease) and Landlord acknowledges its
present and/or future occupancy of the Premises. No merger, consolidation,
reorganization or sale of all of the stock in the named Tenant or the sale of
all of the assets of the named Tenant shall be deemed a "Transfer" under
Section 16.7 of the Lease, provided and upon the conditions that: Tenant
shall not be in default under any material term, condition or provision of
this Lease; Tenant shall have given Landlord no less than thirty (30) days'
prior written notice of the effective date of the event; and, prior to the
effective date of such event, the surviving entity shall have (i)
demonstrated to Landlord's satisfaction that it has and shall reasonably
continue to maintain a net worth of no less than Ten Million ($10,000,000)
Dollars, calculated in accordance with generally accepted accounting
procedures, and (ii) executed, acknowledged and delivered to Landlord a
written assumption agreement, satisfactory to Landlord, in which said entity
agrees to timely be bound by and perform all of the terms, provisions and
agreements of this Lease on the part of the tenant to be observed and
performed hereunder as of and from the commencement date of this Lease.

14. MISCELLANEOUS. The parties agree that a default in a
-------------
"material" term, condition or provision under this Lease shall include the
non-payment by Tenant of any rent or additional rent beyond the applicable
notice and grace periods provided for same.

15. REAFFIRMATION. Except as amended hereby, all of the terms and
-------------
provisions of the Lease shall remain unchanged, the terms and provisions of
which are hereby ratified and confirmed in all respects. Tenant represents
and warrants to Landlord that (a) the Lease is in full force and effect and
free from default, (b) Tenant's interest in the

-7-
<PAGE> 8

Lease and the Current Space is free and clear of any liens, encumbrances or
adverse interests of third parties, (c) Tenant has full and lawful power and
authority to enter into this Amendment and to consummate the transactions herein
described, and (d) Tenant has no, and hereby waives any, offsets, defenses or
counterclaims against Landlord's enforcement of any of the terms or conditions
of the Lease, including the payment of rent. Landlord represents and warrants
to Tenant that (a) the Lease is in full force and effect and free from default,
and (b) Landlord has full and lawful power and authority to enter into this
Amendment and to consummate the transactions herein described.

16. CONCLUDING PROVISIONS. This Amendment shall bind and inure
---------------------
to the benefit of the parties hereto and their respective successors and
permitted assigns. This Amendment shall not be binding upon Landlord unless
and until Landlord executes same and delivers a fully executed counterpart
thereof to Tenant.

IN WITNESS WHEREOF, Landlord and Tenant have executed this
Amendment as of the date and year first above written.

HARTFORD CITYPLACE, L.L.C. CONNING & COMPANY
By: TCW Asset Management Company,
its agent and manager

By: /s/ Bruce Brodie
--------------------------------------
Name: Bruce B. Brodie
By: /s/ Russel S. Bernard Its: S.V.P. & Chief Operating Officer
------------------------------- Authorized Signatory
Russel S. Bernard, Authorized
Signatory

CONNING, INC., formerly known as
By: /s/ Wm. Gregory Geiger CONNING CORPORATION
-------------------------------
W. Gregory Geiger,
Authorized Signatory

By: /s/ Bruce Brodie
--------------------------------------
Name: Bruce B. Brodie
Its: S.V.P. & Chief Operating Officer
Authorized Signatory

The Company hereby undertakes to furnish schedules hereto to the Commission
supplementally upon request.

-8-
<PAGE> 9

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

OFFICE LEASE

CITYPLACE II

HARTFORD, CONNECTICUT

<PAGE> 10

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

Office Lease

Index

1. TERM 1
2. TENANT'S WORK 2
3. BASE RENT 4
4. ADDITIONAL RENT 5
5. USE OF PREMISES 9
6. CONDITION OF PREMISES 9
7. SERVICES 9
8. REPAIRS 11
9. ADDITIONS AND ALTERATIONS 11
10. COVENANT AGAINST LIENS 12
11. INSURANCE 13
12. FIRE OR CASUALTY 14
13. WAIVER OF CLAIMS-INDEMNIFICATION 15
14. NONWAIVER 16
15. CONDEMNATION 16
16. ASSIGNMENT AND SUBLETTING 17
17. SURRENDER OF POSSESSION 20
18. HOLDING OVER 21
19. ESTOPPEL CERTIFICATE 21
20. SUBORDINATION 21
21. CERTAIN RIGHTS RESERVED BY LANDLORD 22
22. RULES AND REGULATIONS 24
23. LANDLORD'S REMEDIES 27
24. EXPENSES OF ENFORCEMENT 30
25. COVENANT OF QUIET ENJOYMENT 30
26. FINANCIAL REPORTS 30
27. REAL ESTATE BROKER 30
28. RIGHTS CUMULATIVE 31
29. INTEREST 31
30. TERMS 31
31. BINDING EFFECT 31
32. LEASE CONTAINS ALL TERMS 31
33. DELIVERY FOR EXAMINATION 31
34. NO AIR RIGHTS 32
35. MODIFICATION OF LEASE 32
36. PARKING 32
37. TRANSFER OF LANDLORD'S INTEREST 32
38. LANDLORD'S TITLE 33
39. PROHIBITION AGAINST RECORDING 33
40. CAPTIONS 33
41. COVENANTS AND CONDITIONS 33
42. RELATIONSHIP OF PARTIES 33
43. APPLICATION OF PAYMENTS 33
44. TIME OF ESSENCE 34

- i -
<PAGE> 11

45. GOVERNING LAW 34
46. PARTIAL INVALIDITY 34
47. NOTICES 34
48. NO WARRANTY 35
49. LANDLORD EXCULPATION 35
50. OPTIONS TO EXTEND 35
51. OPTION TO EXPAND 37
52. CONSENTS 39
53. INITIAL SECURITY DEPOSIT 39
54. OTHER PREMISES 40
55. RIGHT OF FIRST OFFER 41
56. FORCE MAJEURE 42

EXHIBITS
- --------

EXHIBIT A - PLAN SHOWING LOCATION OF PREMISES

EXHIBIT B - OUTLINE OF LANDLORD'S AND TENANT'S WORK

EXHIBIT C - JANITORIAL SERVICES

- ii -
<PAGE> 12

AGREEMENT OF LEASE made as of this 22nd day of August, 1989
(hereinafter referred to as the "Lease") between JMB/Urban CityPlace Limited
Partnership, an Illinois limited partnership (hereinafter referred to as
"Landlord") and CONNING & COMPANY, a Connecticut corporation whose present
address is 101 Pearl Street, Hartford, Connecticut 06103, CONNING
INTERNATIONAL, INC., a Connecticut corporation whose present address is 101
Pearl Street, Hartford, Connecticut, and CONNING CORPORATION, a Delaware
corporation, whose present address is 101 Pearl Street, Hartford, Connecticut
(hereinafter collectively referred to as "Tenant").

WITNESSETH:

Landlord hereby leases to Tenant, and Tenant hereby accepts from
Landlord, the premises (hereinafter referred to as the "Premises") being the
entire eighth (8th) and ninth (9th) floors, containing 32,966 square feet of
rentable area and designated on the plan attached hereto as Exhibit A, in the
---------
office building containing 297,124 square feet of rentable area known as
CityPlace II (hereinafter referred to as the "Building"), located at 185
Asylum Street, Hartford, Connecticut, subject to the covenants, terms,
provisions and conditions of this Lease. The Premises specifically excludes
any ceilings, floors or walls (with the exception of the inner surfaces
thereof and with the further exception of any walls which are constructed
solely to partition space within the Premises). Tenant shall have, as
appurtenant to the Premises, rights to use in common, subject to reasonable
rules of general applicability to tenants of the Building from time to time
made by Landlord of which Tenant is given notice: (a) the common lobbies,
corridors, stairways, elevators and loading platform of the Building, and the
pipes, ducts, conduits, wires and appurtenant meters and equipment serving
the Premises in common with others, (b) common walkways and driveways
necessary for access to the Building, and (c) if the Premises include less
than the entire rentable floor area of any floor, the common toilets,
corridors and elevator lobby of such floor. In the event Tenant shall
validly exercise its expansion rights, as hereinafter provided, the term
"Premises" for all purposes of this Lease (including, without limitation,
Paragraph 3 hereof) shall include such additional space.

In consideration thereof, Landlord and Tenant covenant and agree as
follows (the covenants and agreements of Tenant are the joint and several
covenants and agreements of each of the entities comprising Tenant):

1. TERM.

The term of this Lease (hereinafter referred to as the "Term") shall
commence on the earlier to occur of (i) the date Tenant takes possession of
the Premises, or part thereof, or (ii) the lst day of April, 1990
(hereinafter referred to as the "Commencement Date") and shall end on the
31st day of March, 2005 (hereinafter referred to as the "Initial Termination
Date") , unless sooner terminated or extended as provided herein.
Notwithstanding the foregoing from and after December 1, 1989 Tenant shall be
given access to the Premises for purposes of commencing and performing
Tenant's work, subject to all of the terms and provisions of this Lease,
except the payment of Base Rent and the Expense Adjustment Amount. In the
event that the Building shall not be "available to Tenant" as of December 1,
1989, the Commencement Date (and the Initial

- 1 -
<PAGE> 13

Termination Date) shall be postponed one day for each day the Building is not
"available to Tenant" until the Building becomes "available to Tenant", and
Landlord shall have no other liability whatsoever on account thereof. The
Building shall be "available to Tenant" upon the following occurring: (1) the
Building in completed to such an extent that it is feasible for Tenant to
commence and prosecute the Tenant's Work to completion with the expectation
that, on or about April 1, 1990 (A) all Building systems required to service
the Premises will be operational, (B) the parking garages referred to herein,
including any garage elevators therein, will be available to Tenant; and (2)
Tenant shall have access for itself, its employees and contractors for
purposes of entering the Building and Premises to perform Tenant's Work and
(3) there will be made available at least one elevator (passenger or freight)
to service the moving in of Tenant's furniture and equipment installers.

2. TENANT'S WORK.

2.1 Tenant shall be fully responsible to perform all work required for
Tenant's initial occupancy of the Premises. All such work shall be completed
by Tenant at Tenant's expense and shall hereinafter be referred to as
"Tenant's Work". Landlord shall have no obligation to perform any work at
the Premises.

2.2 Tenant's Work shall be performed in conformance with Exhibit B.
---------

2.3 Tenant agrees to submit to Landlord, as provided in Exhibit B, plans
and specifications covering Tenant's Work in such detail as Landlord may
require and agrees not to commence work on any of the aforesaid Tenant's
Work, whether initially or at any time during the Term of this Lease, until
Landlord has approved such plans and specifications in writing and until
Tenant shall have supplied all the items set forth in Exhibit B as
prerequisites to the commencement of Tenant's Work. Landlord agrees not to
unreasonably withhold or delay its approval of said plans and specifications.
Tenant shall commence construction of Tenant's Work within ten (10) days
after Landlord's written approval of Tenant's Working Drawings, as defined in
Exhibit B, or thereafter if otherwise directed by Landlord in writing, and
diligently thereafter complete same. Tenant shall have no claim whatsoever
for damages or otherwise against Landlord for any delay in the date on which
the Premises shall be ready for commencement of Tenant's Work. The Term of
this Lease shall not, however, in any event extend beyond the Initial
Termination Date above stated in Paragraph 1 hereof.

2.4 In the event Tenant shall have failed to complete Tenant's Work and to
have occupied the Premises on or before the Commencement Date, as hereinabove
defined, then Tenant's rental shall nevertheless commence on the Commencement
Date, as determined pursuant to Article 1 hereinabove.

2.5 Tenant shall have the right to select its own general contractor to
perform Tenant's Work, subject to the prior approval of Landlord, not to be
unreasonably withheld or delayed. During any period of construction, Tenant
agrees to conduct its labor relations and its relations with its employees in
such a manner as to avoid all strikes, picketing and boycotts of, on or about
the Premises or the Building. Tenant further agrees that if, during the
period of construction of the Premises, any of its employees strike, or if
picket lines or boycotts or

- 2 -
<PAGE> 14

other visible activities objectionable to Landlord are established or
conducted or carried out against Tenant or its employees, or any of them, on
or about the Premises or the Building, Tenant shall immediately remove or
cause to be removed all employees from the Building involved in such
activities until the dispute giving rise to such strike, picket line, boycott
or objectionable activity has been settled to Landlord's satisfaction. For
purposes of this paragraph the employees of Tenant's contractors,
subcontractors, materialmen and suppliers shall be deemed to be Tenant's
employees.

2.6 If there is some defect in the items supplied by or on behalf of Tenant
as set forth in Exhibit B prior to the commencement of Tenant's Work or if
Tenant is not performing Tenant's Work consistent with Tenant's Drawings as
approved by Landlord and Tenant fails to cure such defect or defects in the
items to be supplied or in the performance of Tenant's Work within 48 hours
of notice thereof (or, except in the event of an emergency, as soon
thereafter as reasonably practical) from Landlord, Landlord shall have the
right, in addition to all other remedies of Landlord and without affecting
the Commencement Date or in any manner affecting the validity or continued
effectiveness of this Lease, to enter the Premises and physically prevent the
continuation of the performance of Tenant's Work until such time as Landlord
in its sole judgment has determined that the performance contemplated herein
by Tenant will proceed under the terms hereof.

2.7 Upon demand, Tenant and Landlord shall each execute and promptly
deliver to the other a written certificate confirming the Commencement Date
of this Lease.

2.8 Provided Tenant shall not be in default under any of the terms,
provisions or conditions of this Lease, Landlord agrees to contribute an
amount towards the actual cost of the performance of Tenant's Work not in any
event to exceed the sum of One Million Eight Hundred Seventy-Nine Thousand
Sixty-Two ($1,879,062.00) Dollars ("Landlord's Contribution"), which
Landlord's Contribution shall be delivered to Tenant, but be made payable to
the order of Tenant's contractor, as construction progresses upon the payment
dates set forth in the construction contracts providing for Tenant's Work
(collectively, the "Contracts"); provided, however, in no event earlier than
the date that Tenant delivers to Landlord lien waivers (in recordable form
and satisfactory to Landlord) for all portions of the Tenant's Work then
supplied, delivered and performed and a certificate signed by Tenant's
architect certifying (i) that all Tenant's Work to be performed under the
Contracts to the date of such certificate has been performed; (ii) the amount
of the installment payment then due to each of Tenant's contractors,
subcontractors, materialmen and suppliers (collectively, the "Contractors")
under the Contracts and authorizing payment of such amounts to the
Contractors; and (iii) the amounts remaining to be paid under the Contracts
as of the date of such certificate for Tenant's Work yet to be performed.
Tenant shall be solely responsible for, and shall pay when due, all amounts
in connection with Tenant's Work in excess of the amount of Landlord's
Contribution, as aforesaid. The obligation of Landlord to contribute the
Landlord's Contribution shall be a single, non-recurring obligation. The
right of the named Tenant hereunder to receive the Landlord's Contribution is
personal to it and shall not be transferred, assigned or pledged by it to any
person or entity.

- 3 -
<PAGE> 15

2.9 Prior to commencing any Tenant's Work at the Premises, and as a
precondition thereto, Tenant shall submit to Landlord for Landlord's approval
(not to be unreasonably withheld or delayed) Tenant's good faith estimate of
the costs and expenses to be incurred by Tenant to fully perform and complete
all of Tenant's Work. Upon Landlord's approval of said cost estimates, as
aforesaid, Tenant shall deposit with Landlord, in good funds, a sum (the
"Deposit") equal to the total dollar value of the approved cost estimates,
less the amount of Landlord's Contribution, as defined in Section 2.8 above.
Upon depletion of Landlord's Contribution, portions of said Deposit shall be
delivered to Tenant, and made payable to the order of Tenant's contractor, as
construction progresses, in accordance with the same procedure set forth in
Section 2.8 above with respect to Landlord's Contribution. In the event that
at any time Landlord has reason to believe that the full cost of performing
and completing Tenant's Work shall exceed the aggregate of Landlord's
Contribution plus said Deposit, Tenant shall, upon demand, deposit with
Landlord such additional sums as Landlord shall reasonably require as
security for the full performance and completion of Tenant's Work, to be held
and applied in accordance with the terms and provisions hereof.
Notwithstanding the foregoing, provided that Tenant shall deliver to Landlord
complete recordable mechanic lien waivers (which shall also waive all rights
to pre-judgment and attachment remedies) in form satisfactory to Landlord
duly executed by all Contractors performing and/or supplying Tenant's Work in
which said Contractors, inter alia, waive all rights to place any liens
----------
against the Land and Building for any aspect of Tenant's Work, the amount of
the Deposit shall be reduced in half and Landlord shall not fund Tenant's
Work with portions of said Deposit until such time as the cost of completing
Tenant's Work is equal to or less than the amount of the Deposit.

2.10 Provided Tenant shall not be in default under any of the terms,
provisions or conditions of this Lease, and as a special inducement to the
named Tenant to enter into and consummate this lease transaction, Landlord
agrees to pay to the named Tenant the sum of Six Hundred Twenty Five Thousand
($625,000) Dollars in cash in installments as follows: Three Hundred Thousand
($300,000) Dollars upon the date which is no later than thirty (30) days
following the date that both Landlord and the named Tenant have executed and
delivered to the other a fully signed original of this Lease; and Three
Hundred Twenty Five Thousand ($325,000) Dollars on the thirtieth (30th) day
following the date the named Tenant shall take possession of the Premises.
The right of the named Tenant hereunder to receive such special inducement is
personal to it and shall not be transferred, assigned, or pledged by it to
any person or entity.

3. BASE RENT.

3.1 Tenant shall pay, without notice or demand, to Landlord or Landlord's
agent at the Office of the Building, CityPlace, 185 Asylum Street, Hartford,
Connecticut, or at such other place as Landlord may from time to time
designate in writing, in coin or currency which, at the time or payment, is
legal tender for public or private debts in the United States of America,
annual Base Rent with respect to the Premises being initially demised to
Tenant under this Lease as of the Commencement Date (excluding, in any event,
any Rent for Expansion Space) as follows: Three Hundred Seventy Thousand
Eight Hundred Sixty-Seven and 50/100 ($370,867.50) Dollars per annum for the
period commencing upon the Commencement Date to and including the day
preceding the Third (3rd) anniversary

- 4 -
<PAGE> 16

of the Commencement Date; Seven Hundred Forty-One Thousand Seven Hundred
Thirty-Five ($741,735.00) Dollars per annum for the period commencing upon
the Third (3rd) anniversary of the Commencement Date to and including the day
preceding the Fifth (5th) anniversary of the Commencement Date; Nine Hundred
Twenty-Three Thousand Forty-Eight ($923,048) Dollars per annum for the period
commencing upon the Fifth (5th) anniversary of the Commencement Date to and
including the day preceding the Tenth (10th) anniversary of the Commencement
Date, and One Million Seventy-One Thousand Three Hundred Ninety-Five
($1,071,395) Dollars per annum for the period commencing upon the Tenth
(10th) anniversary of the Commencement Date to and including the Initial
Termination Date.

All of said Base Rent shall be payable in equal monthly installments, in
advance, on or before the first day of each and every month during the Term,
without any set off or deduction whatsoever. If the Term commences other
than on the first day of a month or ends other than on the last day of the
month, the Rent for such shall be prorated. The prorated Rent for the
portion of the month in which the Term commences shall be paid on the first
day of the first full month of the Term.

3.2 Provided Tenant shall not be in material default under any of the
terms, provisions or conditions of this Lease, Landlord agrees that the named
Tenant shall receive a credit against Base Rent payable under this Lease from
and after the Tenth (10th) anniversary of the Commencement Date in the amount
of Three Hundred Seventy Five Thousand ($375,000) Dollars. The right of the
named Tenant hereunder to receive such rental credit is personal to it and
shall not be transferred, assigned or pledged by it to any person or entity.
The parties agree that a "material default under any of the terms, provisions
or conditions of this Lease" shall include any of the following: a monetary
default hereunder; failure of Tenant to comply with any of the insurance
provisions of this Lease; the occurrence of any Transfer in violation of the
provisions of Article 16 hereof; failure of Tenant to deliver or renew any
letter of credit required under the terms of this Lease; the creation of a
hazardous condition at the Premises which is not immediately remedied; or any
other default by Tenant which either threatens damage to the Building, the
Premises or its systems, threatens forfeiture of Landlord's estate in the
Building or part thereof or threatens a default under any mortgage or ground
lease affecting the Building.

4. ADDITIONAL RENT.

4.1 In addition to paying the Base Rent specified in Section 3 hereof,
Tenant shall pay as "Additional Rent" the amounts determined as hereinafter
set forth. The Base Rent and the Additional Rent are sometimes herein
collectively referred to as the "Rent". All amounts due under this paragraph
as Additional Rent shall be payable for the same periods and in the same
manner, time and place as the Base Rent; provided, however, that if Base Rent
only is abated by Landlord, no such abatement shall apply to Tenant's
obligation to pay Additional Rent. Without limitation on other obligations
of Tenant which shall survive the expiration of the Term, the obligations of
the Tenant to pay the Additional Rent provided for in this Paragraph 4 shall
survive the expiration of the Term. For any partial Calendar Year, Tenant
shall be obligated to pay only a pro rata share of the Additional Rent, based
on the number of days of the Term falling within such Calendar Year.

- 5 -
<PAGE> 17

4.2 As used in this Paragraph 4, the terms:

4.2.1 "Calendar Year" shall mean each calendar year in which any part of the
Term falls, through and including the year in which the Term expires.

4.2.2 "Tenant's Pro Rata Share" shall mean Eleven and One-tenths (11.10%)
percent, subject to increase in the event Tenant exercises any expansion
rights hereafter set forth.

4.2.3 "Taxes" shall mean all federal, state, county, or local governmental or
municipal taxes, fees, charges or other impositions of any kind and nature,
whether general, special, ordinary or extraordinary (including without
limitation, real estate taxes, general and special assessments, transit
taxes, leasehold taxes or taxes based upon the receipt of rent including
gross receipts or sales taxes applicable to the receipt of rent, unless
required to be paid by Tenant, personal property taxes imposed upon the
fixtures, machinery, equipment, apparatus, systems and equipment,
appurtenances, furniture and other personal property used in connection with
the Building) which Landlord shall be required to pay during any calendar
year (without regard to any different fiscal year used by such government or
municipal authority) because of or in connection with the ownership, leasing
and operation of the Building and the land associated therewith (the "Land").
Notwithstanding the foregoing, there shall be excluded from Taxes all excess
profits taxes, franchise taxes, gift taxes, capital stock taxes, inheritance
and succession taxes, estate taxes, federal and state income taxes, and other
taxes to the extent applicable to Landlord's general or net income (as
opposed to rents, receipts or income attributable to operations at the
Building). If the method of taxation of real estate prevailing at the time
of execution hereof shall be, or has been altered, so as to cause the whole
or any part of the taxes now, hereafter or heretofore levied, assessed or
imposed on real estate to be levied, assessed or imposed on Landlord, wholly
or partially, as a capital levy or otherwise, or on or measured by the rents
received therefrom, then such new or altered taxes attributable to the
Property shall be included within the term "Taxes", except that the same
shall not include any enhancement of said tax attributable to other income of
Landlord. Any expenses incurred by Landlord in attempting to protest, reduce
or minimize Taxes shall be included in Taxes in the calendar year such
expenses are paid. Tax refunds shall be deducted from Taxes in the year they
are received by Landlord. If Taxes for any period during the Term or any
extension thereof shall be increased after payment thereof by Landlord for
any reason, including without limitation error or reassessment by applicable
governmental or municipal authorities, Tenant shall pay Landlord upon demand
Tenant's Pro Rata Share of such increased Taxes. Tenant acknowledges that
the exclusive right to contest or appeal any Taxes shall be Landlord's, in
Landlord's sole discretion, and Tenant hereby waives any and all rights now
or hereafter conferred upon it by law to independently contest or appeal any
Taxes. In the event that Landlord shall receive a refund of Taxes covering
any period for which Tenant shall have paid its Pro Rata share of such Taxes,
Landlord shall pay to Tenant, or give Tenant a credit against the next due
installments of Basic Rent hereunder, an amount equal to Tenant's Pro Rata
Share of the net refund of such Taxes (after deducting the reasonable
expenses of Landlord in obtaining such refund).

- 6 -
<PAGE> 18

4.2.4 "Operating Expenses" shall mean all reasonable and necessary expenses,
costs and amounts (including Taxes) of every kind and nature which Landlord
shall pay during any Calendar Year because of or in connection with the
ownership, management, repair, replacement, restoration and operation of the
Building, incurred to maintain the Building in a first-class condition,
including without limitation, any amounts paid for: (a) utilities for the
Building, including but not limited to electricity, power, gas, steam, oil or
other fuel, water, sewer, lighting, heating, air conditioning and
ventilating, (b) permits, licenses and certificates necessary to operate,
manage and lease the Building, (c) insurance, not limited to the amount of
coverage Landlord is required to provide under this Lease, (d) supplies,
tools, equipment and materials used in the operation, repair and maintenance
of the Building, (e) accounting and professional services (including
inspection and consultation), (f) any equipment rental agreements or
management agreements (including the cost of any customary management fee and
the fair rental value of any office space provided thereunder), (g) wages,
salaries, and other compensation and benefits of all persons directly engaged
in the operation, maintenance or security of the Building (but not employees
above the grade of building manager) and employers Social Security taxes,
unemployment taxes or insurance, and any other taxes which may be levied on
such wages, salaries, compensation and benefits, (h) payments under any
easement, operating agreement, declaration, restrictive covenant, or
instrument pertaining to the sharing of costs by the Building, and (i)
operation, repair, maintenance and replacement of all Systems and Equipment
(defined in subparagraph 4.2.7) and components thereof, janitorial service,
alarm and security service, window cleaning, trash removal, cleaning of
walks, parking facilities and building walls, removal of ice and snow,
replacement of wall and floor coverings, ceiling tiles and fixtures in
lobbies, corridors, restrooms and other common or public areas or facilities,
maintenance and renovation of elevators, maintenance and replacement of trees
and other landscaped items, drainage facilities, curbs, and walkways,
separate operations, repair to roofs and re-roofing. Notwithstanding the
foregoing, Operating Expenses shall not, however, include:

(i) depreciation, interest and amortization on mortgages, and
other debt costs or ground lease payments, if any; legal fees
incurred in negotiating and enforcing tenant leases; real estate
brokers' leasing commissions; improvements or alterations to
tenant spaces; the cost of providing any service directly to and
paid directly by, any tenant; financing or refinancing costs; any
costs expressly excluded from Operating Expenses elsewhere in the
Lease; costs of any items to the extent Landlord receives
reimbursement from insurance proceeds (such proceeds to be
deducted from Operating Expenses in the year in which received
(or rebated to Tenant if the Lease term shall have expired),
except that any deductible amount under any insurance policy
shall be included within Operating Expenses) or from a third
party (other than Expense Adjustment Amount payments from tenants
of the Building); and

(ii) costs of capital improvements, except those: (a) intended to
and which reduce Operating Expenses, or minimize any increase
therein, or to comply with any governmental requirements, or (b)
for replacements (as opposed to additions or new improvements) of
items located in the common areas of the Building required to
keep

- 7 -
<PAGE> 19

such areas in good condition; provided for purposes of this
Lease, all such permitted capital expenditures shall be amortized
in accordance with generally accepted accounting procedures (even
if Landlord pays the entire cost when work is performed) over
their useful lives at an annual rate of interest which in 200
basis points above the "prime" or "base" rate of interest from
time to time charged by The First National Bank of Chicago.

4.2.5 "Systems and Equipment" shall mean any plant, machinery, transformers,
duct work, cable wires, and other equipment, facilities, and systems designed
to supply heat, ventilation, air conditioning and humidity or any other
services or utilities, or comprising or serving as any component or portion
of the electrical, gas, steam, plumbing, sprinkler, communications, alarm,
security, or fire/life/safety systems or equipment, or any other mechanical,
electrical, electronic, computer or other systems or equipment which serve in
whole or in part the Building.

4.3 Tenant shall pay to Landlord or Landlord's agent as Rent, in addition
to the Base Rent required by Paragraph 3 hereof, an amount ("Expense
Adjustment Amount") equal to Tenant's Pro Rata Share of the Operating
Expenses (subject to adjustment pursuant to Subparagraph 4.4 hereof) incurred
with respect to each Calendar Year. The Expense Adjustment Amount with
respect to each Calendar Year shall be paid in monthly installments, in an
amount estimated from time to time by Landlord and communicated by written
notice to Tenant. Landlord shall cause to be kept books and records showing
Operating Expenses in accordance with an appropriate system of accounts and
accounting practices, consistently maintained. Following the close of each
Calendar Year, Landlord shall cause the amount of the Expense Adjustment
Amount for such Calendar Year to be computed based on Operating Expenses for
such Calendar Year and Landlord shall deliver to Tenant a statement of such
amount and Tenant shall pay any deficiency to Landlord as shown by such
statement within thirty (30) days after receipt of such statement. If the
total of the estimated monthly installments paid by Tenant during any
Calendar Year exceed the actual Expense Adjustment Amount due from Tenant for
such Calendar Year, at Landlord's option such excess shall either be credited
against payments next due hereunder or refunded by Landlord, provided Tenant
is not then in default hereunder. Delay in computation or billing of the
Expense Adjustment Amount shall not be deemed a default hereunder or a waiver
of Landlord's right to collect the Expense Adjustment Amount.

Notwithstanding the foregoing, for and during the period commencing
upon the Commencement Date and ending upon the date which is the day
preceding the Third (3rd) Anniversary of the Commencement Date, Tenant shall
pay one-half of the Expense Adjustment Amount it would have otherwise paid
pursuant to the foregoing provisions of this Section 4.3.

4.4 If Landlord is not furnishing any particular work or service (the cost
of which, if performed by Landlord, would be included in Operating Expenses)
to a tenant who has undertaken to perform such work or service in lieu of the
performance thereof by Landlord, Operating Expenses shall be deemed for the
purposes of this Paragraph to be increased by an amount equal to the
additional Operating Expenses which would reasonably have been incurred
during such period

- 8 -
<PAGE> 20

by Landlord if it had at its own expense furnished such work or service to
such tenant.

4.5 Tenant shall have the right, at its sole cost and expense and upon no
less than thirty (30) days' prior written notice, to examine Landlord's books
and records to the extent they solely relate to the computation of Operating
Expenses by Landlord in order to verify same. Such inspection shall take
place at Landlord's office or such other reasonable place as Landlord shall
designate, during reasonable business hours. In the event that it is
conclusively determined that Landlord had overstated the Operating Expenses
for any given period, Tenant's sole remedy shall be to obtain a credit or
refund for any such Expenses paid by Tenant which were not proper and
Landlord shall pay the reasonable cost of Tenant's audit.

5. USE OF PREMISES.

Tenant shall use and occupy the Premises solely as and for general and
executive offices only and for no other purpose. Tenant may utilize an
incidental portion of the Premises for retail stock brokerage services
provided the Certificate of Occupancy for the Building and Premises is not
violated thereby and such use does not create a flow of pedestrian traffic
within the Building greater than that created by ordinary office use, as
determined by Landlord.

6. CONDITION OF PREMISES.

Tenant's taking possession of the Premises or any portion thereof shall
be conclusive evidence that the Premises or any such portion was in good
order and satisfactory condition when the Tenant took possession, except for
any punchlist items as defined in Exhibit B. Tenant shall be responsible for
any items of damage to the Premises caused by Tenant or its agents,
employees, independent contractors or suppliers. No promise of the Landlord
to alter, remodel or improve the Premises or the Building and no
representation by Landlord or its agents respecting the condition of the
Premises or the Building have been made to Tenant or relied upon by Tenant
other than as may be contained in this Lease or in any written amendment
hereto signed by Landlord and Tenant.

7. SERVICES.

7.1 Landlord shall provide the following services on all days during the
Term, except Sundays and holidays observed by the New York Stock Exchange,
unless otherwise stated:

7.1.1 Subject to all governmental rules, regulations and guidelines
applicable thereto, heating and air conditioning when necessary for normal
comfort in the Premises, from Monday through Friday, during the period from 8
a.m. to 6 p.m. and on Saturday during the period from 8 a.m. to 1 p.m. Tenant
will pay for all heating and air conditioning requested and furnished prior
to or following such hours or required due to special heat-producing
equipment installed by Tenant at rates to be reasonably established generally
for all tenants at the Building from time to time by Landlord. Requests for
any additional services

- 9 -
<PAGE> 21

shall be in writing and delivered to Landlord no later than 2:00 P.M. the
previous day.

7.1.2 Adequate electrical wiring and facilities to the base building core
electrical closets for connection to Tenant's lighting fixtures and
incidental uses, provided that (a) the connected electrical load of the
incidental use equipment does not exceed an average of one (1) watt per
usable square foot of the Premises, (b) the electricity so furnished for
incidental uses will be at a nominal one hundred twenty (120) volts and no
electrical circuit for the supply of such incidental use will have a current
capacity exceeding twenty (20) amperes; (c) the connected electrical load of
Tenant's lighting fixtures does not exceed an average of three (3) watts per
usable square foot of the Premises, and (d) the electricity so furnished for
Tenant's lighting will be at a nominal one hundred twenty (120) volts. If
Tenant's requirements for electricity are in excess of those set forth in the
preceding sentence hereof, Landlord reserves the right to require Tenant to
install the conduit, wiring and other equipment necessary to supply
electricity for such excess use requirements at the Tenant's expense, or to
install same itself and bill Tenant for the costs thereof. Tenant shall bear
the cost of replacement of lamps, starters and ballasts for lighting fixtures
within the Premises.

7.1.3 City water (including heated water) from the regular Building outlets
for drinking, lavatory and toilet purposes.

7.1.4 Janitorial services Monday through Friday in and about the Premises and
window washing services both as set forth on Exhibit C attached hereto and
---------
made a part hereof.

7.1.5 Non-exclusive automatic passenger elevator service at all times.

7.1.6 Non-exclusive freight elevator services subject to scheduling by
Landlord. Tenant shall have the right to use such freight elevator services
prior to the Commencement Date in connection with its access pursuant to
Article 1 hereof and, in connection therewith, shall pay the building
standard fee for such usage as determined by Landlord.

7.2 Tenant agrees that Landlord shall not be liable for damages (by
abatement of Rent or otherwise) for interruption in or failure to furnish or
delay in furnishing any service, or for any diminution in the quality or
quantity thereof, when such failure or delay or diminution is occasioned, in
whole or in part, by repairs, replacements, or improvements, by any strike,
lockout or other labor trouble, by inability to secure electricity, gas,
water, or other fuel at the Building, by any accident or casualty whatsoever,
by act or default of Tenant or other parties, or by any other cause beyond
Landlord's reasonable control; and such interruption, failure, delay or
diminution shall never be deemed to constitute an eviction or disturbance of
the Tenant's use and possession of the Premises or relieve the Tenant from
paying Rent or performing any of its obligations under this Lease. If an
interruption of services occurs which is within Landlord's control, and if
such interruption continues for thirty (30) continuous days, then until
Landlord has caused such service to be resumed or such interruption is no
longer within Landlord's control, whichever is earlier,

- 10 -
<PAGE> 22

Basic Rent and Additional Rent shall abate to the extent the Premises are
rendered untenantable for Tenant's uses hereunder.

7.3 Charges for any service for which Tenant is required to pay from time
to time hereunder including but not limited to hoisting services or after
hours heating or air conditioning shall be due and payable at the same time
as the installment of Rent with which they are billed, or if billed
separately, shall be due and payable within ten (10) days after such billing.
If Tenant shall fail to make payment for any such services, Landlord may,
with notice to Tenant, discontinue any or all of such services and such
discontinuance shall not be deemed to constitute an eviction or disturbance
of Tenant's use and possession of the Premises or relieve Tenant from paying
Rent or performing any of its other obligations under this Lease.

7.4 Tenant shall pay for the use of all electrical service to the Premises
(other than the electrical service necessary for Landlord to fulfill its
obligation to provide heating and air conditioning as provided in
Subparagraph 7.1.1 hereof) provided that Landlord can make satisfactory
arrangements with the utility company supplying electricity to the Premises
for separate metering and billing. Tenant shall be billed directly by such
utility company and Tenant agrees to pay each bill promptly in accordance
with its terms. In the event that for any reason Tenant cannot be billed
directly, Landlord shall forward each bill received by it with respect to the
Premises to Tenant and Tenant shall pay it promptly in accordance with its
terms.

If the Premises cannot be separately metered for any reason, Tenant
shall pay Landlord as Additional Rent, in monthly installments at the time
prescribed for monthly installments of Rent, an annual amount, as estimated
by Landlord from time to time, which Tenant would pay for such electricity if
the same were separately metered to the Premises by the local utility company
and billed to Tenant at such utility company's then current rates.

8. REPAIRS.

Tenant will, at Tenant's own expense, keep the Premises, including all
improvements, fixtures and furnishings therein, in good order, repair and
condition at all times during the Term, except for repairs the necessity of
which shall have been occasioned by the acts or negligence of Landlord, its
agents, employees or contractors or of any other tenant at the Building in
occupancy of their space, and Tenant shall promptly and adequately repair all
damage to the Premises and replace or repair all damaged or broken fixtures
and appurtenances, under the supervision and subject to the approval of the
Landlord, not to be unreasonably withheld or delayed, and within any
reasonable period of time specified by the Landlord. If the Tenant does not
do so, Landlord may, but need not, make such repairs and replacements, and
Tenant shall pay Landlord the cost thereof, including a percentage of the
cost thereof (to be uniformly established for the Building) sufficient to
reimburse Landlord for all overhead, general conditions, fees and other costs
or expenses arising from Landlord's involvement with such repairs and
replacements forthwith upon being billed for same. Landlord may, but shall
not be required to, enter the Premises at all reasonable times and, except
for emergency, upon reasonable advance notice (which may be telephonic), to
make such repairs, alterations, improvements and additions

- 11 -
<PAGE> 23

to the Premises or to the Building or to any equipment located in the
Building as Landlord shall desire or deem necessary or as Landlord may be
required to do by governmental or quasi-governmental authority or court order
or decree.

9. ADDITIONS OR ALTERATIONS.

9.1 Tenant shall not, without the prior written consent of Landlord, make
any alterations, improvements or additions to the Premises. Landlord's
refusal to give said consent shall be conclusive. Landlord's consent shall
not be unreasonably withheld or delayed for any alterations, improvements or
additions to the Premises which are neither structural in nature nor affect
the Building's building systems. If Landlord consents to said alterations,
improvements or additions, it may impose such conditions with respect thereto
as Landlord deems appropriate, including, without limitation, requiring
Tenant to furnish Landlord with security for the payment of all costs to be
incurred in connection with such work, a lien waiver from Tenant's general
contractor, insurance against liabilities which may arise out of such work
and plans, specifications and permits necessary for such work. The work
necessary to make any alterations, improvements or additions to the Premises,
whether prior to or subsequent to the Commencement Date, shall be done at
Tenant's expense by employees of or contractors hired by Landlord except to
the extent Landlord gives its prior written consent to Tenant's hiring
contractors; such consent not to be unreasonably withheld or delayed with
respect to all contractors other than those which may be performing
structural work or other work at the Building affecting its building systems.
Tenant shall promptly pay to Landlord or Tenant's contractors, as the case
may be, when due, the cost of all such work and of all repairs to the
Building required by reason thereof. Tenant shall also pay to Landlord a
percentage of the cost of such work (such percentage to be established on a
uniform basis for the Building) sufficient to reimburse Landlord for all
overhead, general conditions, fees and other costs and expenses arising from
Landlord's involvement with such work; the foregoing provisions of this
sentence shall not apply to the initial Tenant's Work to be performed as of
the Commencement Date of this Lease. Upon completion of such work Tenant
shall deliver to Landlord, if payment is made directly to contractors,
evidence of payment, contractors' affidavits and full and final waivers of
all liens for labor, services or materials. Tenant shall defend and hold
Landlord harmless from all costs, damages, liens and expenses related to such
work. All work done by Tenant or its contractors pursuant to Paragraphs 8 or
9 shall be done in a first-class workmanlike manner using only good grades of
materials and shall comply with all insurance requirements and all applicable
laws and ordinances and rules and regulations of governmental departments or
agencies.

9.2 Unless otherwise agreed in writing by Landlord, all alterations,
improvements or additions to the Premises, whether temporary or permanent in
character, made or paid for by Landlord or Tenant, shall without compensation
to Tenant become Landlord's property at the termination of this lease by
lapse of time or otherwise and shall, unless Landlord requests their removal
(in which case Tenant shall remove the same as provided in Paragraph 17), be
relinquished to Landlord in good condition, ordinary wear excepted.

- 12 -
<PAGE> 24

10. COVENANT AGAINST LIENS.

Tenant has no authority or power to cause or permit any lien or
encumbrance of any kind whatsoever, whether created by act of Tenant,
operation of law or otherwise, to attach to or be placed upon Landlord's
title or interest in the land, Building or Premises, and any and all liens
and encumbrances created by Tenant shall attach to Tenant's interests only.
Tenant covenants and agrees not to suffer or permit any lien of mechanics or
materialmen or others to be placed against the Land, Building or the Premises
with respect to work or services claimed to have been performed for or
materials claimed to have been furnished to Tenant or the Premises, and, in
case of any such lien attaching or notice of any lien, Tenant covenants and
agrees to cause it to be immediately released and removed of record. In the
event that such lien is not immediately released and removed, Landlord, at
its sole option, may take all action necessary to release and remove such
lien (without any duty to investigate the validity thereof) and Tenant shall
promptly upon notice reimburse Landlord for all sums, costs and expenses
(including reasonable attorney's fees) incurred by Landlord in connection
with such lien.

11. INSURANCE.

11.1 Landlord and Tenant each hereby waive any and every claim for recovery
from the other for any and all loss of or damage to the Building or Premises
or to the contents thereof, which loss or damage is covered by valid and
collectible physical damage insurance policies, to the extent that such loss
or damage is recoverable under said insurance policies. Inasmuch as this
mutual waiver will preclude the assignment of any such claim by subrogation
(or otherwise) to an insurance company (or any other person), Landlord and
Tenant each agree to give to each insurance company which has issued, or in
the future may issue, to it policies of physical damage insurance, written
notice of the terms of this mutual waiver, and to have said insurance
policies properly endorsed, if necessary, to prevent the invalidation of said
insurance coverage by reason of said waiver.

11.2 Tenant shall purchase and maintain insurance during the entire Term for
the benefit of Tenant and Landlord (as their interests may appear) with
terms, coverage and in companies satisfactory to Landlord, and with such
increases in limits as Landlord may from time to time reasonably request, but
initially Tenant shall maintain the following coverages in the following
amounts:

11.2.1 Comprehensive General Liability Insurance covering the insured
against claims of bodily injury, personal injury and property damage arising
out of Tenant's operation, assumed liabilities or use of the Premises, for
limits of liability not less than:

Personal Injury and $3,000,000 each occurrence
Property Damage Liability $3,000,000 annual aggregate

- 13 -
<PAGE> 25

11.2.2 Comprehensive Automobile Insurance covering all owned, non-owned
and hired automobiles of Tenant including the loading and unloading of any
automobile with limits of liability not less than:

Bodily Injury and $3,000,000 each person
Property Damage Liability $3,000,000 each accident

11.2.3 Physical Damage Insurance covering all office furniture, trade
fixtures, office equipment, merchandise and all other items of Tenant's
property on the Premises. Such insurance shall be written on an "all risks"
of physical loss or damage basis, for the full replacement cost value of the
covered items and in amounts that meet any co-insurance clauses of the
policies of insurance.

11.3 Tenant shall, prior to the commencement of the Term, and thereafter not
later than thirty (30) days prior to the expiration date of any insurance
coverage, furnish to Landlord certificates evidencing such coverage, which
certificates shall state that such insurance coverage may not be changed or
canceled without at least thirty (30) days prior written notice to Landlord
and Tenant and shall name Landlord, its partners, mortgagees, management
agent and such other parties as Landlord shall reasonably request as
additional insureds. Any policies purchased by Tenant shall contain a clause
pursuant to which the insurance carrier waives all rights of subrogation
against Landlord with respect to losses payable under such policies.

11.4 Landlord agrees to keep in force and effect insurance on the Building
(other than portions thereof which tenants are to insure under the terms of
their leases) against fire, vandalism, and malicious mischief, sprinkler
leakage and such other risks as may be included in extended coverage
insurance from time-to-time available in an amount not less than 100% of the
full insurable replacement value of the Building or such lesser amount as is
sufficient to prevent Landlord from becoming a co-insurer under the terms of
any applicable policies. Any policies purchased pursuant to said program
shall contain a replacement cost endorsement and a clause pursuant to which
the insurance carriers waive all rights of subrogation against Tenant with
respect to losses payable under such policies.

11.5 Tenant shall comply with all applicable laws and ordinances, all orders
and decrees of court and all requirements of other governmental or
quasi-governmental authorities, and shall not, directly or indirectly, make
any use of the Premises which may thereby be prohibited or be dangerous to
person or property or which may jeopardize any insurance coverage or may
increase the cost of insurance or require additional insurance coverage. If by
reason of the failure of Tenant to comply with the provisions of this
Subparagraph 11.5, any insurance coverage is jeopardized or insurance premiums
are increased, and Tenant shall not cease the non-complying activity within 48
hours or promptly agree to pay any increased insurance premiums by reason
thereof, as Landlord shall decide, Landlord shall have the option either to
terminate this Lease or to require Tenant to make immediate payment of the
increased insurance premium.

- 14 -
<PAGE> 26

12. FIRE OR CASUALTY.

12.1 If the Premises or any common areas of the Building necessary to the
enjoyment and occupancy of the Premises or serving the Premises or providing
access to the Premises shall be damaged by fire or other casualty, Landlord
shall promptly and diligently, subject to reasonable delays for insurance
adjustment or other matters beyond Landlord's reasonable control, restore the
Premises and such common areas. Such restoration shall be to substantially
the same condition of the Premises and common areas prior to the casualty,
except for modifications required by zoning and building codes and other
laws, or by the holder of a mortgage on the Building, or any other
modifications to the common areas deemed desirable by Landlord (provided,
with respect to all or any of the foregoing parties' requirements, to the
extent practical, essential common facilities shall not be materially
impaired, access to the Premises and any common restrooms serving the
Premises is not materially impaired and the character of the Building as a
first-class office building is not materially altered), and except that
Landlord shall not be required to repair or replace any of Tenant's
furniture, furnishing, fixtures or equipment. Landlord shall not be liable
for any inconvenience or annoyance to Tenant or its visitors, or injury to
Tenant's business resulting in any way from such damage or the repair
thereof, except that Landlord shall allow a proportionate abatement of Rent
during the time and to the extent the Premises are unfit for occupancy for
the purposes permitted under this Lease, and not occupied by Tenant as a
result thereof; provided, if the Premises or any other portion of the
Building is damaged by fire or other casualty caused in whole or in part by
Tenant or any of Tenant's agents, contractors, employees, or visitors, Rent
shall not be so abated.

12.2 Notwithstanding the foregoing to the contrary, Landlord may elect not
to perform restoration work, and instead terminate this Lease by notifying
the Tenant in writing of such termination within sixty (60) days after the
date of damage (such notice to include a termination date giving Tenant one
hundred twenty (120) days to vacate the Premises), but Landlord may so elect
only if the Building shall be damaged by fire or other casualty or cause
(whether or not the Premises are affected) such that: (a) repairs cannot be
reasonably completed within one hundred twenty (120) days after being
commenced without the payment of overtime or other premiums, (b) the holder
of any mortgage on the Building or ground lessor with respect to the Land
shall require that the insurance proceeds or any substantial portion thereof
be used to retire the mortgage debt (or shall terminate the ground lease, as
the case may be), or (c) the damage is not substantially covered by
Landlord's insurance policies, provided Landlord shall not have been in
default of maintaining its fire insurance policies, as set forth in Paragraph
11.4 above. Tenant hereby waives any rights it may have under any applicable
law to terminate the Lease by reason of damage to the Premises or the
Building. In the event that repairs or restoration for the Premises are
undertaken by Landlord and such repairs or restoration for the Premises are
not substantially complete within one hundred eighty (180) days after
commencement of same, Tenant shall have the right (subject to the following
provisions of this Paragraph) within thirty (30) days following the
expiration of said 180-day period to terminate this Lease as to the portions
of the Premises so affected by giving written notice of same to Landlord; it
being understood, however, that Landlord shall have the right to

- 15 -
<PAGE> 27

substantially complete the Premises within thirty (30) days after Landlord's
receipt of Tenant's said notice, and if the Premises are so substantially
completed, this Lease shall continue in full force and effect and Tenant's
said right to terminate shall be nullified. Landlord agrees to use
reasonable efforts to obtain all insurance proceeds and thereafter to
commence the performance of such repairs and restoration, both as soon as
reasonably practical.

13. WAIVER OF CLAIMS - INDEMNIFICATION.

To the extent not prohibited by law, and except for damage caused by
the gross negligence or wilful acts of Landlord, its agents, contractors or
employees, Landlord, its partners and their respective officers, agents,
servants and employees shall not be liable for any damage either to person or
property or resulting from the loss of use thereof sustained by Tenant or by
other persons claiming through Tenant due to Building or any part thereof or
any appurtenances thereof becoming out of repair, or due to the happening of
any accident or event in or about the Building, or due to any act or neglect
of any tenant or occupant of the Building, including the Premises or of any
other person. This provision shall apply particularly, but not exclusively,
to damage caused by gas, electricity, snow, frost, steam, sewage, sewer gas
or odors, fire, water or by the bursting or leaking of pipes, faucets,
sprinklers, plumbing fixtures and windows, and shall apply without
distinction as to the person whose act or neglect was responsible for the
damage and whether the damage was due to any of the causes specifically
enumerated above or to some other cause of an entirely different kind.
Tenant further agrees that all personal property upon the Premises, or upon
loading docks, receiving and holding areas, or freight elevators of the
Building, shall be at the risk of Tenant only, and that Landlord shall not be
liable for any loss or damage thereto or theft thereof. Without limitation
of any other provisions thereof, Tenant agrees to defend, protect, indemnify
and save harmless Landlord from and against all liability to third parties
(including but not limited to the officers, agents, contractors and business
associates of Tenant) arising out of Tenant's use and occupancy of the
Premises or the acts or omissions of Tenant (whether or not such acts or
omissions constitute a violation of applicable law or of this Lease) and its
servants, agents, employees, contractors, suppliers, workers and invitees.

14. NONWAIVER.

No waiver of any provision of this Lease shall be implied by any
failure of Landlord or Tenant to enforce any remedy on account of the
violation of such provision, even if such violation be continued or repeated
subsequently, and no express waiver shall affect any provision other than the
one specified in such waiver and that one only for the time and in the manner
specifically stated. No receipt of moneys by Landlord from Tenant after the
termination of this Lease shall in any way alter the length of the Term or of
Tenant's right of possession hereunder or after the giving of notice shall
reinstate, continue or extend the Term or affect any notice given Tenant
prior to the receipt of such moneys, it being agreed that after the service
of notice or the commencement of a suit or after final judgment for
possession of the Premises, Landlord may receive and collect any Rent due,
and the payment of said Rent shall not waive or affect said notice, suit or
judgment.

- 16 -
<PAGE> 28

15. CONDEMNATION.

If the whole or any substantial part of the Premises or Building shall
be taken by power of eminent domain or condemned by any competent authority
for any public or quasi-public use or purpose, or if any adjacent property or
street shall be so taken or condemned, or reconfigured or vacated by such
authority in such manner as to require the use, reconstruction or remodeling
of any part of the Premises or Building, or if Landlord shall grant a deed or
other instrument in lieu of such taking by eminent domain or condemnation
(any of the foregoing events is hereafter called an "Eminent Domain Event"),
Landlord shall have the option to terminate this Lease upon ninety (90) days
notice, provided such notice is given no later than one hundred eighty (180)
days after the date of such taking, condemnation, reconfiguration, vacation,
deed or other instrument. If more than ten percent (10%) of the rentable
area of the Premises is taken, or if access to the Premises is substantially
impaired, or if the Building can no longer be operated as a first class
office building, Tenant shall have the option to terminate this Lease upon
ninety (90) days notice, provided such notice is given no later than one
hundred eighty (180) days after the date of such taking. Landlord shall be
entitled to receive the entire award or payment in connection therewith,
except that Tenant shall have the right to file any separate claim available
to Tenant for any taking of Tenant's personal property and fixtures belonging
to Tenant and removable by Tenant upon expiration of the Term, and for moving
expenses (so long as such claim does not diminish the award available to
Landlord, its ground lessor with respect to the Land or its mortgagee, and
such claim is payable separately to Tenant). All Rent shall be apportioned
as of the date of such termination, or the date possession of the Premises or
Building, or portions thereof, is taken by the condemning authority,
whichever shall first occur. If any part of the Premises shall be taken, and
this Lease shall not be so terminated, the Rent shall be proportionately
abated. Notwithstanding anything contained hereinabove to the contrary, if
an Eminent Domain Event occurs to less than a substantial part of the
Premises or Building, Landlord may terminate this Lease if the amount of the
award resulting from such Eminent Domain Event shall not be sufficient to
reconstruct the part or parts of the Building or Premises so affected to its
original character, and if in Landlord's judgment it is no longer practical
or economically feasible to operate the Building as a first-class office
building in the manner and with the number of tenancies as originally
conceived.

16. ASSIGNMENT AND SUBLETTING.

16.1 Tenant shall not, without the prior written consent of Landlord as set
forth below (i) assign, mortgage, pledge, hypothecate, encumber, or permit
any lien to attach to, or otherwise transfer, this Lease or any interest
hereunder, (ii) permit any assignment or other such foregoing transfer of
this Lease or any interest hereunder by operation of law, (iii) sublet the
Premises or any part thereof, or (iv) permit the use of the Premises by any
persons other than Tenant and its employees (all of the foregoing are
hereinafter sometimes referred to collectively as "Transfers" and any person
to whom any Transfer is made or sought or be made is hereinafter sometimes
referred to as a "Transferee"). If Tenant shall desire Landlord's consent to
any Transfer, Tenant shall notify Landlord in writing, which notice shall
include: (a) the proposed effective date (which

- 17 -
<PAGE> 29

shall not be less than forty-five [45] days nor more than one hundred eighty
[180] days after the Tenant's notice), (b) the portion of the Premises to be
Transferred (herein called the "Subject Space"), (c) all of the terms of the
proposed Transfer and the consideration therefor, the name and address of the
proposed Transferee, and a copy of all documentation pertaining to the
proposed Transfer, and (d) current financial statements of the proposed
Transferee certified by an officer, partner or owner thereof, and any other
information to enable Landlord to determine the financial responsibility,
character, and reputation of the proposed Transferee, nature of such
Transferee's business and proposed use of the Subject Space, and other such
information as Landlord may reasonably require. Any Transfer made without
Landlord's prior written consent shall, at Landlord's option, be null, void,
and of no effect, and any acceptance of rent by Landlord from any purported
Transferee shall not be deemed a consent to a Transfer or a waiver of any of
Landlord's rights or remedies hereunder. Whether or not Landlord shall grant
consent, Tenant shall pay $500.00 towards Landlord's review and processing
expenses, as well as any reasonable legal fees incurred by Landlord, within
thirty (30) days after written request by Landlord.

16.2 Landlord will not unreasonably withhold or delay its consent to any
proposed Transfer of the Subject Space to the Transferee on the terms
specified in Tenant's notice. The parties hereby agree that it shall be
reasonable under this Lease and under any applicable law for Landlord to
withhold consent to any proposed Transfer where one or more of the following
applies (without limitation as to other reasonable grounds for withholding
consent): (i) the Transferee is of a character or reputation or engaged in a
business which is not consistent with the quality of the Building, or would
be a significantly less prestigious occupant of the Building than Tenant,
(ii) the Transferee intends to use the Subject Space for purposes which are
not permitted under this Lease, (iii) the Transfer will result in more than a
reasonable and safe number of occupants per floor with the Subject Space, or
will result in insufficient parking for the Building, (iv) the Subject Space
is not regular in shape with appropriate means of ingress and egress suitable
for normal renting purposes, (v) the Transferee is either a government (or
agency or instrumentality thereof) or an occupant of the Building, (vi) the
Transfer will involve any transaction other than an assignment of the Lease
for the entire Premises and the remaining Term, or other than a sublease of
all or a portion of the Premises for a term of at least one year, or such
lesser time as remain in the Term, (vii) the proposed Transferee is not
solvent or does not in Landlord's reasonable judgment have an adequate net
worth, (viii) Tenant has committed a default under this Lease not cured at
the time Tenant requests consent to the proposed transfer, or (ix) the
proposed Transfer would cause Landlord to be in violation of any other leases
or agreements to which Landlord is a party, or would give any occupant of the
Building a right to cancel its lease.

16.3 If Landlord consents to a Transfer, and as a condition thereto which
the parties hereby agree is reasonable, Tenant shall pay Landlord ninety
percent (90%) of any Transfer Premium received by Tenant from such Transfer.
"Transfer Premium" shall mean all rent, additional rent or other
consideration payable by such Transferee in excess of the Rent payable by
Tenant under this Lease (on a monthly basis during the Term, and prorated on
a per rentable square foot basis, if less than all of the Premises is
transferred), after amortizing in equal monthly installments of the period of
the Transfer the reasonable expenses

- 18 -
<PAGE> 30

incurred by Tenant for any changes, alterations and improvement to the
Premises and any brokerage commissions in connection with the Transfer. If
part of the consideration for such Transfer shall be payable other than in
cash, Landlord's share of such non-cash consideration shall be in the form as
is reasonably satisfactory to Landlord. Such percentage of the Transfer
Premium shall be paid promptly by Tenant upon Tenant's receipt from time to
time of periodic payments from such Transferee or such other time as Tenant
shall realize a Transfer Premium from such Transferee. In lieu of accepting
such percentage of the Transfer Premium, Landlord may elect in writing within
ninety (90) days after Tenant's notice, to increase the monthly Base Rent
hereunder during the Term of the Transfer by an amount equal to Landlord's
share of such Transfer Premium.

16.4 Notwithstanding anything to the contrary in this Paragraph 16, Landlord
shall have the option, by giving written notice to Tenant within thirty (30)
days after receipt of Tenant's notice of any proposed Transfer, to recapture
the Subject Space. Such recapture notice shall cancel and terminate the
Lease with respect to the Subject Space as of the date stated in Tenant's
notice as the effective date of the proposed Transfer, unless Tenant shall,
within five (5) business days after receipt of notice from Landlord of
Landlord's intent to recapture, deliver to Landlord a notice in which Tenant
shall nullify its request for Landlord to consent to any Transfer. If this
Lease shall be canceled with respect to less than the entire Premises, the
Rent reserved herein shall be prorated on the basis of the number of rentable
square feet retained by Tenant in proportion to the number of rentable square
feet contained in the Premises, this Lease as so amended shall continue
thereafter in full force and effect, and upon request of either party, the
parties shall execute written confirmation of the same.

16.5 Notwithstanding anything to the contrary set forth in Sub-paragraphs
16.1 and 16.4 above and only during the period from the Commencement Date to
and including the Third (3rd) anniversary thereof, no consent shall be
required from Landlord with respect to the subletting by Tenant of no more
than ten thousand (10,000) rentable square feet of single-floor contiguous
space at the Premises (the "Permitted Sublease"); provided that (a) Tenant
shall not be in default under the terms, provisions and conditions of this
Lease, (b) the proposed subtenant shall be either a professional or
non-governmental institutional office user, and (c) at least twenty (20) days
prior to the effective date of the proposed subletting Landlord shall have
received the names and addresses of the proposed subtenant and its key
principals, a diagram showing the location within the Premises of the
proposed sublet space, a description of the proposed use of the sublet space,
and such other information or documentation (including, without limitation, a
photocopy of the proposed sublease) Landlord may reasonably require regarding
the proposed subtenant and proposed sublease transaction. No Transfer
Premium shall be due Landlord which results from the Permitted Sublease.

16.6 If Landlord consents to a Transfer: (a) the terms and conditions of
this Lease, including among other things, Tenant's liability for the Subject
Space, shall in no way be deemed to have been waived or modified, (b) such
consent shall not be deemed consent to any further Transfer by either Tenant
or a Transferee, (c) no Transferee shall succeed to any rights provided in
this Lease or any amendment hereto to extend the Term of this Lease, expand
the Premises, or lease additional space, any such rights being deemed
personal to Tenant, (d) as a

- 19 -
<PAGE> 31

condition thereto Tenant shall first deliver to Landlord an original executed
copy of all documentation pertaining to the Transfer, including but not
limited to an assumption agreement by the Transferee, in form reasonably
acceptable to Landlord, and (e) Tenant shall furnish upon Landlord's request
a complete statement, certified by an independent certified public
accountant, or Tenant's chief financial officer, setting forth in detail the
computation of any Transfer Premium Tenant has derived and shall derive from
such Transfer. Landlord or its authorized representatives shall have the
right at all reasonable times and, except for an emergency, upon prior
advance notice which may be telephonic, to audit the books, records and
papers of Tenant relating to any Transfer, and shall have the right to make
copies thereof. If the Transfer Premium respecting any Transfer shall be
found understated, Tenant shall within thirty (30) days after demand pay the
deficiency, and Landlord's costs of such audit, and if understated by more
than five percent (5%), Landlord shall have the right to cancel this Lease
upon thirty (30) days notice. Any sublease hereunder shall be subordinate
and subject to the provisions of this Lease, and if this Lease shall be
terminated during the term of any sublease, Landlord shall have the right to
(i) treat such sublease as canceled and repossess the Subject Space by any
lawful means, or (ii) require that such subtenant attorn to and recognize
Landlord as its landlord under such sublease.

16.7 For purposes of this Lease, the term "Transfer" shall also include (a)
if Tenant is a partnership, the withdrawal or change, voluntary, involuntary
or by operation of law, of a majority of the partners, or transfer of a
majority of partnership interests, within a twelve (12) month period, or the
dissolution of the partnership, and (b) if Tenant is a closely held
corporation (i.e. whose stock is not publicly held and not traded through an
exchange or over the counter), the dissolution, merger, consolidation or
other reorganization of Tenant, or within a twelve (12) month period: (i) the
sale or other transfer of more than an aggregate of fifty percent (50%) of
the voting shares of Tenant (other than to immediate family members by reason
of gift or death) or (ii) the sale of more than an aggregate of fifty percent
(50%) of the value of the unencumbered assets of Tenant.

16.8 Notwithstanding anything to the contrary contained in this Article and
provided that Tenant shall not be in default under any of the terms,
provisions, or conditions under this Lease, and provided further that
Landlord shall have first received notice of the occurrence of any of the
following (which notice shall specify the occupant in detail) Landlord agrees
to consent to any Affiliate of Tenant (hereinafter defined) occupying all or
any portion of the Premises. If such occupancy is pursuant to either a
sublease agreement or an assignment of this Lease, the terms and provisions
of Section 16.6 above shall control, except that such Affiliate shall be
deemed to be a "named Tenant" hereunder. As used herein, the term
"Affiliate" shall mean any corporation or other entity controlled by, under
common control with, or controlling any of the entities comprising the named
Tenant hereunder. The term "control" or similar term used above shall mean
holding no less than fifty-one (51%) percent of the voting control and
interest of the applicable entity, sufficient to direct management policy.

- 20 -
<PAGE> 32

17. SURRENDER OF POSSESSION.

Upon expiration of the Term or upon the termination of Tenant's right
of possession, whether by lapse of time or otherwise, Tenant shall forthwith
surrender the Premises to Landlord in good order, repair and condition,
ordinary wear excepted, and shall, if Landlord so requires, restore the
Premises to the condition existing at the beginning of the Term, ordinary
wear and tear excepted and improvements consented to by Landlord excepted.
Unless hereafter agreed to by Landlord in writing, any interest of Tenant in
the alterations, improvements and additions to the Premises made or paid for
by Landlord or Tenant shall, without compensation to Tenant, become
Landlord's property at the termination of this Lease by lapse of time or
otherwise and such alterations, improvements or additions shall be
relinquished to Landlord in good condition, ordinary wear excepted. Upon the
termination of the Term or of Tenant's right of possession, Tenant shall
remove office furniture, trade fixtures, office equipment and all other items
of Tenant's property on the Premises. Tenant shall pay Landlord upon demand
the cost of repairing any damage to the Premises and to the Building caused
by such removal. If Tenant shall fail or refuse to remove any such property
from the Premises, Tenant shall be conclusively presumed to have abandoned
the same, and title thereto shall thereupon pass to Landlord without any
cost either by set-off, credit, allowance or otherwise, and Landlord may at
its option accept the title to such property or at Tenant's expense may (i)
remove the same or any part thereof in any manner Landlord shall choose, (ii)
repair any damage to the Premises caused by such removal, and (iii) store,
destroy or otherwise dispose of the same without incurring liability to
Tenant or any other person.

18. HOLDING OVER.

In addition to performing all of Tenant's other obligations hereunder,
Tenant shall pay to Landlord an amount as Rent equal to the greater of (i)
the market rental rate or (ii) two hundred percent (200%) if one-twelfth the
Base Rent and one hundred percent (100%) of one-twelfth the Additional Rent
paid by Tenant during the previous Calendar Year herein provided during each
month or portion thereof for which Tenant shall retain possession of the
Premises or any part thereof after the termination of the Term or of Tenant's
right of possession, whether by lapse of time or otherwise, and also shall
pay all damages sustained by Landlord, whether direct or consequential, on
account thereof. At the option of Landlord, expressed in a written notice to
Tenant and not otherwise, such holding over shall constitute a renewal of
this Lease for a period of one year at such Base Rent and Additional Rent as
would be applicable for such year. The provisions of this Paragraph 18 shall
not be deemed to limit or constitute a waiver of any other rights or remedies
of Landlord provided herein or at law.

19. ESTOPPEL CERTIFICATE.

Tenant agrees that, from time to time upon not less than fifteen (15)
days prior request by Landlord, the Tenant, or Tenant's duly authorized
representative having knowledge of the following facts, will deliver to
Landlord a certificate in writing certifying (i) that this Lease is
unmodified and in full force and effect (or if there have been modifications,
that the Lease as modified is in

- 21 -
<PAGE> 33

full force and effect); (ii) the dates to which Rent and other charges have
been paid; (iii) that the Landlord is not in default under any provision of
this Lease, or if in default, the nature thereof in detail and (iv) such
further matters as may reasonably be requested, it being intended that any
such statement may be relied upon by any mortgagees or prospective mortgagees
of the Land or Building, or any prospective assignee of any mortgage thereof
or any prospective or actual purchaser of the Land or Building or an interest
therein. Tenant shall execute and deliver whatever other instruments may be
reasonably required for such purposes, and in the event Tenant fails to do so
within fifteen (15) days after demand in writing, Tenant shall be considered
in default under this Lease.

20. SUBORDINATION.

20.1 This Lease is subject and subordinate to all present and future ground
or underlying leases of the Land and to the lien of any mortgages or trust
deeds, now or hereafter in force against the Land and Building, or either,
and to all renewals, extensions, modifications, consolidations and
replacements thereof, and to all advances made or hereafter to be made upon
the security of such mortgages or trust deeds, unless the holders of such
mortgages or trust deeds, or the lessors under such ground lease or
underlying leases require in writing that this Lease shall be superior
thereto. Tenant covenants and agrees in the event any proceedings are
brought for the foreclosure of any such mortgage, to attorn, without any
deductions or set-offs whatsoever, to the purchaser upon any such foreclosure
sale if so requested to do so by such purchaser, and to recognize such
purchaser as the lessor under this Lease. Tenant shall at Landlord's request
execute such further instruments or assurances as Landlord may reasonably
deem necessary to evidence or confirm the subordination or superiority of
this Lease to any such mortgages, trust deeds, ground leases or underlying
leases.

20.2 Landlord agrees to use reasonable and diligent efforts to obtain from
any mortgagee or ground lessor a "Non-Disturbance Agreement". A
Non-Disturbance Agreement shall mean an agreement in which Tenant agrees to
attorn to and recognize, as Landlord, the purchaser at a foreclosure sale or
the mortgagee or its nominee in the event the mortgagee or such nominee
accepts the deed in lieu of foreclosure, or the ground or underlying lessor
in the event of the termination of such underlying or ground lease in return
for an agreement, by such mortgagee or ground or underlying lessor, as the
case may be, in the form customarily used by Landlord's mortgagee or ground
lessee agreeing that in the event of a foreclosure of such mortgage or the
giving of a deed in lieu of foreclosure or termination of such ground or
underlying lease, Tenant may remain in possession of the Premises pursuant to
the terms of this Lease and retain all rights, options and privileges granted
to Tenant hereunder so long as Tenant is not in default hereunder and
continues to perform its obligations hereunder and further agreeing that the
purchaser at a foreclosure sale or transferee in the case of a deed in lieu
of foreclosure or ground or underlying lessor as the case may be, will assume
all of the obligations of Landlord in such case; provided, however, that in
no event shall any such party acting as Landlord hereunder have any personal
liability hereunder or any liability whatsoever for the acts of Landlord
prior to such transfer or any liability for any deposits made by Tenant
hereunder unless such deposits have been transferred to such parties;
provided, however, that such parties shall have the liability to perform all
of Landlord's

- 22 -
<PAGE> 34

continuing obligations, if any, to be performed from and after the date of
transfer. Such agreement may, among other things, require Tenant to notify
the mortgagee of any default by Landlord and afford such mortgagee or ground
lessor a reasonable opportunity to cure such default prior to any termination
of this Lease by Tenant. Tenant agrees to accept any such mortgagee's or
lessor's customary form of Non-Disturbance Agreement, and the delivery of
such form to Tenant shall release Landlord from any further obligation
hereunder to Tenant with respect to such mortgagee or lessor. Tenant, at its
own expense, shall be solely responsible for all negotiations concerning any
Non-Disturbance Agreement.

21. CERTAIN RIGHTS RESERVED BY LANDLORD.

Landlord shall have the following rights, each of which Landlord may
exercise without notice to Tenant and without liability to Tenant for damage
or injury to property, person or business on account of the exercise thereof,
and the exercise of any such rights shall not be deemed to constitute an
eviction or disturbance of Tenant's use or possession of the Premises and
shall not give rise to any claim for set-off or abatement of rent and any
other claim:

21.1 To change the Building's name or street address; provided, however,
that Landlord shall endeavor to keep the current street address (that is, 185
Asylum Street) as an alternative address for the Building, unless otherwise
directed by law or requirement or recommendation of any applicable authority.

21.2 To install, affix and maintain any and all signs on the exterior and on
the interior of the Building.

21.3 To decorate or make repairs, alterations, additions, or improvements,
whether structural or otherwise (including alterations in the configuration
of the common areas), in and about the Building, or any part thereof,
provided that the character of the Building as a first-class office building
is not materially and adversely affected as a result of the foregoing, and
for such purposes to enter the Premises, and during the continuance of any
said work, to temporarily close doors, entryways, public space and corridors
in the Building and to interrupt or temporarily suspend services or use of
facilities, all without affecting any of Tenant's obligations hereunder, so
long as the Premises are reasonably accessible and usable.

21.4 To furnish door keys or other entry devices for the entry door(s) in
the Premises at commencement of the Term and to retain at all times, and to
use in appropriate instances, keys to all doors within and into the Premises.
Tenant agrees to purchase only from Landlord or Landlord's designee
additional duplicate keys as required, to change no locks, and to affix no
locks on doors without the prior written consent of Landlord.
Notwithstanding the provisions for Landlord's access to the Premises, Tenant
relieves and releases Landlord of all responsibility arising out of theft,
robbery, pilferage, and personal assault, except for the wilful acts or
negligence of Landlord, its agents, employees and contractors. Upon the
expiration of the Term or of Lessee's right to possession, Tenant shall
return all keys to Landlord and shall disclose to Landlord the combination of
any safes, cabinets or vaults left in the Premises.

21.5 To designate and approve all window coverings used in the Building.

- 23 -
<PAGE> 35

21.6 To approve the weight, size and location of safes, vaults and other
heavy equipment and articles in and about the Premises and the Building so as
not to exceed the live load per square foot designated by the structural
engineers for the Building, and to require all such items and furniture and
similar items to be moved into or out of the Building and Premises only at
such times and in such manner as Landlord shall direct in writing. Tenant
shall not install or operate machinery or any mechanical devises of a nature
not directly related to Tenant's ordinary use of the Premises without the
prior written consent of Landlord. Tenant's movement of property into or out
of the Building or Premises and within the Building are entirely at the risk
and responsibility of the Tenant, and Landlord reserves the right to require
permits before allowing any property to be moved into or out of the Building
or Premises.

21.7 To establish controls for the purpose of regulating all property and
packages, both personal and otherwise, to be moved into or out of the
Building and Premises and all persons using the Building after normal office
hours.

21.8 To regulate delivery and service of supplies in order to insure the
cleanliness and security of the Premises and to avoid congestion of the
loading docks, receiving areas and freight elevators.

21.9 To show the Premises to prospective tenants at reasonable hours and,
except for emergencies, upon prior reasonable notice which may be telephonic,
during the last twelve months of the Term and, if vacated or abandoned, to
show the Premises at any time and to prepare the Premises for re-occupancy.

21.10 To erect, use and maintain pipes, ducts, wiring, and conduits, and
appurtenances thereto, in and through the Premises at reasonable locations.

21.11 To enter the Premises at any reasonable time and, except for
emergencies, upon prior reasonable notice which may be telephonic, to inspect
the Premises.

21.12 To grant any person or to reserve unto itself the exclusive right to
conduct business or render any service in the Building. If Landlord elects
to make available to tenants in the Building any services or supplies, or
arranges a master contract therefor, Tenant agrees to obtain its
requirements, if any therefore from Landlord or any such contract, provided
that the changes therefor are reasonable. Landlord agrees to place in the
vicinity of each of the two entrances at the Building, an electronic
directory which shall set forth Tenant's name.

22. RULES AND REGULATIONS.

Tenant shall, and shall cause all of its subtenants and occupants, its
and their agents, employees, invitees and licensees to observe faithfully and
comply strictly with the following rules and regulations, as they may be
supplemented and revised by Landlord from time to time, and such other rules
and regulations promulgated from time to time by Landlord, as in the
Landlord's judgment may be desirable for the safety, care and cleanliness of
the Building and the Premises, or for the preservation of good order therein.
Landlord shall not be liable to Tenant for violation of such rules and
regulations by, or for

- 24 -
<PAGE> 36

Landlord's failure to enforce the same against, any other tenant, its
subtenants and occupants and its and their agents, employees, invitees or
licensees, nor shall any such violation or failure constitute, or be treated
as contributing to, an eviction, actual or constructive, or affect Tenant's
covenants and obligations hereunder, or allow Tenant to reduce, abate or
offset the payment of Rent or other sum under this Lease.

22.1 Any sign, lettering, picture, notice, or advertisement installed within
the Tenant's Premises which is visible to the public from within the Building
shall be installed at Tenant's cost and in such manner, character and style
as Landlord may approve in writing. No sign, lettering, picture, notice or
advertisement shall be placed on any outside window or in any position so as
to be visible from outside the Building.

22.2 Tenant shall not use the name of the Building or use pictures or
illustrations of the Building in advertising or other publicity, without
prior written consent of Landlord.

22.3 Tenant, its subtenants and its and their agents, employees, customers,
invitees, licensees, and guests shall not obstruct sidewalks, entrances,
passages, courts, corridors, vestibules, halls, elevators, and stairways in
and about the Building. Each of said parties shall lend its full cooperation
to keep such areas free from all obstruction and in a clean and sightly
condition, and move all supplies, furniture and equipment as soon as received
directly to the Premises, and shall move all such items and waste (other than
waste customarily removed by Building employees) that are at any time being
taken from the Premises directly to the areas designated for disposal.
Landlord shall in all cases retain the right to control and prevent access to
all courts, passageways, entrances, exits, loading or shipping areas,
elevators, stairways, corridors, halls and roofs by all persons whose
presence in the judgment of Landlord shall be prejudicial to the safety or
security of the Building or its occupants. None of said parties shall enter
into areas reserved for the exclusive use of Landlord or its agents,
employees, licensees, or invitees.

22.4 Tenant shall not make noises, cause disturbances, create vibrations,
odors or noxious fumes or use or operate any electrical or electronic devices
or other devices that emit sound waves or are dangerous to other tenants and
occupants of the Building or that would interfere with the operation of any
device or equipment or radio or television broadcasting or reception from or
within the Building or elsewhere, and shall not place or install any
projections, antennae, aerials, or similar devices inside or outside of the
Premises.

22.5 Tenant shall not make any room-to-room canvass to solicit business from
other tenants in the Building, and shall not exhibit, sell or offer to sell,
use, rent or exchange any item or services in or from the Premises unless
ordinarily embraced within the Tenant's use of the Premises as specified in
its lease.

22.6 Tenant shall not waste electricity or water and agrees to cooperate
fully with Landlord to assure the most effective operation of the Building's
heating and air conditioning and shall refrain from attempting to adjust any
controls. Tenant shall keep public corridor doors closed.

- 25 -
<PAGE> 37

22.7 Bicycles shall not be permitted in the Building in other than
Landlord-designated locations.

22.8 Tenant assumes full responsibility for protecting its space from theft,
robbery and pilferage, which includes keeping doors locked and other means of
entry to the Premises closed and secured.

22.9 Peddlers, solicitors and beggars shall be reported to the office of the
Building or as Landlord otherwise requests.

22.10 Tenant shall neither install nor operate machinery or any mechanical
devices of a nature not directly related to Tenant's ordinary use of the
Premises without the written permission of the Landlord.

22.11 No person or contractor not employed by Landlord shall be used to
perform window washing, cleaning, decorating, repair or other work in the
Premises, except as otherwise provided in this Lease.

22.12 Unless Landlord so consents, Tenant shall not, and Tenant shall not
permit or suffer anyone to:

(i) Place vending or dispensing machines of any kind in
or about the Premises except for soda and candy
vending machines for use by its employees; or

(ii) Cook in the Premises (except that Tenant may install
at the Premises a small "kitchenette", without oven
or other cooking facility other than a microwave
oven, Dwyer type of unit, and a coffee maker); or

(iii) At any time sell, purchase or give away, or permit
the sale, purchase or gift of, food in any form,
except as an incidental use to its stock brokerage
practice, to its own employees, guests, and clients
at the Premises and then only for client receptions,
seminars and similar functions (collectively,
"Functions") or to provide daily meals.

22.13 Tenant shall not:

(i) Use the Premises for lodging or for any immoral or
illegal purposes.

(ii) Use the Premises to engage in the manufacture or sale
of, or (except if incidental to a Function) permit
the use of, any spirituous, fermented, intoxicating
or alcoholic beverages on the Premises.

(iii) Use the Premises to engage in the manufacture or sale
of, or permit the use of, any illegal drugs on the
Premises.

- 26 -
<PAGE> 38

22.14 In no event shall any person bring into the Building inflammables such
an gasoline, kerosene, naphtha and benzene, or explosives or firearms or any
other article of intrinsically dangerous nature. If by reason of the failure
of Tenant to comply with the provision of this paragraph, any insurance
premium payable by Landlord for all or any part of the Building shall at any
time be increased above normal insurance premiums for insurance not covering
the items aforesaid, Landlord shall have the option to terminate the Lease if
Tenant shall not make immediate payment for the whole of the increased
insurance premium or immediately cease such activity, as Landlord shall
direct.

22.15 Tenant shall cooperate and participate in all security programs
affecting the Building.

22.16 Tenant shall cause all floors within the Premises to be carpeted;
provided that areas such as kitchens, utility closets, entrances,
photocopying areas and other similar areas may contain another type of floor
covering if Tenant first obtains written approval from Landlord.

22.17 Tenant shall not drill, or permit to be drilled, any holes in any
window frames (mullions) located within the Premises.

22.18 Furniture, freight and other large or heavy articles may be brought
into the Building only at times and in the manner (including use of freight
elevators and the loading area) designated by Landlord, and always at
Tenant's sole responsibility. Landlord may direct and control the location
of safes and all other heavy articles and, if considered necessary by
Landlord, require supplementary supports at the expense of Tenant of such
material and dimensions as Landlord may deem necessary to property distribute
the weight. Any damage done to the Building by moving or maintaining such
furniture, freight, safes or any other articles shall be repaired at the
expense of Tenant.

All furniture, equipment, cartons and similar articles desired to be
removed from the Premises or the Building shall be listed in writing by
Tenant with Landlord and a removal permit therefor shall first be obtained
from Landlord.

Landlord shall have the right from time to time to prescribe additional
rules and regulations which, in its judgement, may be desirable for the use,
entry, operation and management of the Premises and Building, each of which
rules and regulations and any amendments thereto shall become a part of this
Lease without further action of the parties. Tenant shall comply with all
such rules and regulations; provided, however that such rules and regulations
shall not substantially diminish any right or privilege herein expressly
granted Tenant.

23. LANDLORD'S REMEDIES.

If default shall be made in the payment of the Rent or any installment
thereof or in the payment of any other sum required to be paid by Tenant
under this Lease or under the terms of any other agreement between Landlord
and Tenant and such default shall continue for five (5) days after written
notice to Tenant, or if default shall be made in the observance or
performance of any of the other

- 27 -
<PAGE> 39

covenants or conditions in this Lease which Tenant is required to observe and
perform and such default shall continue for ten (10) days after written
notice to Tenant (provided, however, if such default is non-monetary and not
reasonably susceptible of cure by Tenant within 10 days, Tenant shall not be
deemed to be in default hereunder if Tenant shall commence such cure within
said 10 day period and thereafter diligently and expeditiously prosecute such
cure to completion on or before the 60th day following the initial
notification of default by Landlord, or if a default involves a hazardous
condition and is not cured by Tenant immediately upon written notice to
Tenant, or if the interest of Tenant in this Lease shall be levied on under
execution or other legal process, or if any voluntary petition in bankruptcy
or for corporate re-organization or any similar relief shall be filed by
Tenant, or if any involuntary petition in bankruptcy shall be filed against
Tenant under any federal or state bankruptcy or insolvency act and shall not
have been dismissed within forty-five (45) days from the filing thereof, or
if a receiver shall be appointed for Tenant or any of the property of Tenant
by any court and such receiver shall not have been dismissed within thirty
(30) days from the date of his appointment, or if Tenant shall make an
assignment for the benefit of creditors, or if Tenant shall admit in writing
Tenant's inability to meet Tenant's debts as they mature, or if Tenant shall
cease to occupy the Premises for a period of seven (7) days during the Term,
then Landlord may treat the occurrence of any one or more of the foregoing
events as a breach of this Lease, and thereupon at its option may, without
notice or any demand of any kind to Tenant or any other person, have any one
or more of the following described remedies in addition to all other rights
and remedies provided at law or in equity or elsewhere herein:

(i) Landlord may terminate this Lease and the Term
created hereby by giving Tenant written notice of
Landlord's election to do so and the effective date
thereof, in which event Landlord may forthwith
repossess the Premises and may be entitled to recover
forthwith, in addition to any other sums or damages
for which Tenant may be liable to Landlord, as
liquidated damages a sum of money equal to the excess
of the value of the Rent provided to be paid by
Tenant for the balance of the Term over the fair
market rental value of the Premises, after deduction
of all anticipated expenses of reletting, for said
period. Should the fair market rental value of the
Premises, after deduction of all anticipated expenses
of reletting, for the balance of the Term exceed the
value of the Rent provided to be paid by Tenant for
the balance of the Term, Landlord shall have no
obligation to pay to Tenant the excess or any part
thereof or to credit such excess or any part thereof
against any other sums or damages for which Tenant
may be liable to Landlord.

(ii) Landlord may terminate the right of Tenant to
possession of the Premises without terminating this
Lease by giving written notice to Tenant that
Tenant's right to possession shall end upon the date
stated in such notice, whereupon the right of Tenant
to possession of the Premises or any part thereof
shall cease on the date stated in such notice. If
Landlord terminates the right of Tenant to possession
of the Premises without terminating this Lease, such
termination of possession

- 28 -
<PAGE> 40

shall not release Tenant, in whole or in part, from
Tenant's obligation to pay the Rent hereunder for the
full Term, or the present value of the Rent (at the
then current rates therefor) for the period from the
date stated in the notice terminating possession to
the Terminating Date (such present value to be
computed on the basis of a per annum discount rate
equal to 200 basis points above the effective annual
yield on U.S. Treasury obligations maturing closest
to the Termination Date calculated on the date
specified in said notice) shall, at the option of
Landlord, be immediately due and payable by Tenant to
Landlord together with other monies due hereunder,
and Landlord shall have the right of immediate
recovery of all such amounts. In the alternative,
Landlord shall have the right from time to time to
recover from Tenant, and Tenant shall remain liable
for all Rent not theretofore accelerated and paid
pursuant to the foregoing sentence and any other sums
thereafter accruing as they become due under this
Lease during the period from the date of such notice
of termination of possession to the Termination Date.
In any such case, Landlord may (but shall be under no
obligation to, except as required by law) relet the
Premises or any part thereof for the account of
Tenant, for such rent, from time to time (which may
be for a term extending beyond the Term of this
Lease) and upon such terms as Landlord in Landlord's
sole discretion shall determine, and Landlord shall
not be required to accept any tenant offered by
Tenant or to observe any instructions given by Tenant
relative to such reletting. Also, in any such case,
Landlord may change the locks or other entry devices
of the Premises and make repairs, alterations and
additions in or to the Premises and redecorate same
to the extent deemed by Landlord necessary or
desirable, and Tenant shall upon written demand pay
the cost thereof together with Landlord's expenses of
reletting, including without limitation, brokerage
commissions payable to Landlord's agent or to others.
Landlord may collect the rents from any such
reletting and apply the same first to the payment of
expenses of reentry, redecoration, repair and
alterations and the expenses of reletting and second
to the payment of Rent therein provided to be paid by
Tenant, and any excess or residue shall operate only
as an offsetting credit against the amount of Rent
due and owing or paid as a result of acceleration or
as the same thereafter becomes due and payable
hereunder, but the use of such offsetting credit to
reduce the amount of Rent due Landlord, if any, shall
not be deemed to give Tenant any right, title or
interest in or to such excess or residue shall belong
to Landlord solely; provided that in no event shall
Tenant be entitled to a credit on its indebtedness
to Landlord in excess of either the aggregate sum due
and owing or paid as a result of acceleration or
which would have been paid by Tenant for the period
for which the credit to Tenant is being determined,
had no default occurred, as applicable. No such
reentry, repossession, repairs, alterations,
additions or reletting shall be construed

- 29 -
<PAGE> 41

as an eviction or ouster of Tenant or as an election
on Landlord's part to terminate this Lease, unless a
written notice of such intention is given to Tenant,
or shall operate to release Tenant in whole or in
part from any of Tenant's obligations hereunder, and
Landlord may, at any time and from time to time, sue
and recover judgment for any deficiencies from time
to time remaining after the application from time to
time of the proceeds of any such reletting.

(iii) Landlord, without thereby waiving such default, may
perform the same for the account and at the expense
of Tenant, without notice in a case of emergency or
in case of correction of a dangerous or hazardous
condition, and in any other case if such default
continues after ten (10) days from the date of the
giving by Landlord to Tenant of written notice of
intention to do so. Bills for any expense incurred
by Landlord in connection with any such performance
by Landlord for the account of Tenant, and shall be
due and payable in accordance with the terms of said
bills, and if not paid when due, the amounts thereof
shall immediately become due and payable as
Additional Rent under this Lease.

24. EXPENSES OF ENFORCEMENT.

The Tenant shall pay upon demand all Landlord's reasonable costs,
charges and expenses including the fees and out-of-pocket expenses of
counsel, agents and others retained by Landlord incurred in enforcing the
Tenant's obligations hereunder or incurred by the Landlord in any litigation,
negotiation or transaction in which the Tenant causes the Landlord without
the Landlord's fault to become involved and concerned.

25. COVENANT OF QUIET ENJOYMENT.

Landlord covenants that the Tenant, on paying the Rent, charges for
services and other payments herein reserved and on keeping, observing and
performing all other terms, covenants, conditions, provisions and agreements
herein contained on the part of the Tenant to be kept, observed and
performed, shall, during the Term, peaceably and quietly have, hold and enjoy
the Premises subject to the terms, covenants, conditions, provisions and
agreements hereof without interference by any persons lawfully claiming by or
through the Landlord. The foregoing covenant is in lieu of any other
covenant express or Implied.

26. FINANCIAL REPORTS.

26.1 Upon Landlord's request, Tenant will at its own cost and expense
deliver to Landlord with reasonable promptness, complete annual audited and
certified (by a certified public accountant acceptable to Landlord) financial
statements of Tenant and its business operation, prepared in accordance with
generally acceptable accounting principles.

- 30 -
<PAGE> 42

27. REAL ESTATE BROKER.

The Tenant represents that Tenant has dealt with (and only with) The
Farley Company as broker in connection with this Lease, and insofar as the
Tenant knows, no other broker negotiated this Lease or is entitled to any
commission in connection therewith. Tenant agrees to indemnify, defend and
hold Landlord and its beneficiaries, employees, agents, their officers and
partners, harmless from and against any successful claims made by any broker
or finder other than the broker named above for a commission or fee in
connection with this Lease, provided that Landlord has not in fact retained
such broker or finder.

28. RIGHTS CUMULATIVE.

All rights and remedies of Landlord under this Lease shall be
cumulative and none shall exclude any other rights and remedies allowed by
law.

29. INTEREST.

All payments becoming due under this Lease and remaining unpaid when
due shall bear interest until paid at the rate of the greater of (i) fourteen
percent (14%) per annum or (ii) four hundred basis points above the "prime"
or "base" rate charged from time to time by The First National Bank of
Chicago (but in no event at a rate which is more than the highest rate which
is at the time unlawful in the State of Connecticut).

30. TERMS.

The necessary grammatical changes required to make the provisions hereof
apply either to corporations or partnerships or individuals, men or women as
the case may require, shall in all cases to be assumed as though in each case
fully expressed.

31. BINDING EFFECT.

Each of the provisions of this Lease shall extend to and shall, as the
case may require, bind or inure to the benefit not only of the Landlord and of
Tenant, but also of their respective successors or assigns, provided this
clause shall not permit any assignment by Tenant contrary to the provisions
of Paragraph 16 hereof. The obligations and liabilities of each of the
entities comprising Tenant hereunder shall be joint and several. As used
herein, the term "named Tenant" shall mean, collectively, Conning & Co.,
Conning International and Conning Corporation.

32. LEASE CONTAINS ALL TERMS.

All of the representations and obligations of Landlord are contained
herein, and no modification, waiver or amendment of this Lease or of any of
its conditions or provisions shall be binding upon the Landlord unless in
writing signed by Landlord or by a duly authorized agent of the Landlord
empowered by a written authority signed by Landlord.

- 31 -
<PAGE> 43

33. DELIVERY FOR EXAMINATION.

Submission of the form of the Lease for examination shall not bind
Landlord in any manner, and no Lease or obligation of the Landlord shall
arise until this instrument is signed by both Landlord and Tenant and
delivery is made to each.

34. NO AIR RIGHTS.

No rights to any view or to light or air over any property, whether
belonging to Landlord or any other person, are granted to Tenant by this
Lease.

35. MODIFICATION OF LEASE.

Should the first mortgagee to place a mortgage lien on the Building or
part thereof, after the date of this Lease, require a modification or
modifications of this Lease, which modification or modifications will not
cause an increased Rent, cost or expense to Tenant or in any other way
materially and adversely change the rights and obligations of Tenant
hereunder and will not materially increase the benefits of Landlord
hereunder, then and in such event, Tenant agrees that this Lease shall be so
modified and agrees to execute whatever documents are reasonably required
therefor and deliver the same to Landlord within ten (10) days following the
request therefor. Should any such prospective mortgagee or ground lessor
require execution of a short form of lease for recording (containing, among
other customary provisions, the names of the parties, a description of the
Premises and the term of this Lease), Tenant agrees to execute such short
form of Lease and deliver the same to Landlord within ten (10) days following
the request therefor. In the event Tenant shall fail to execute any document
under this paragraph within the time periods herein provided, Landlord shall
have the right to terminate this Lease upon not less than 60 days' notice.

36. PARKING.

Landlord shall provide (a) five (5) reserved and five (5) general
non-exclusive indoor parking spaces for the use of Tenant or its employees at
the on-site building garage, and (b) twenty-five (25) general non-exclusive
parking spaces at locations selected by Landlord in the existing municipal
parking garage located on Church Street, Hartford, Connecticut and being
adjacent to the existing Sheraton Hotel. Landlord and Tenant hereby agree
that Landlord shall not be obliged to administer or police the use of any
parking spaces and shall not be liable to Tenant in any manner for the
unauthorized use by others of any parking spaces specifically reserved to
Tenant or its employees.

Tenant shall pay to Landlord, as Additional Rental, together with its
installments of Base Rent, a charge for each such space equal to the then
current rates being charged at the respective garages to the general public,
as the same may hereafter increase from time to time. All parking rights
granted hereunder shall be personal to the named Tenant only and may not be
assigned, sublet or transferred in any manner whatsoever.

- 32 -
<PAGE> 44

37. TRANSFER OF LANDLORD'S INTEREST.

Tenant acknowledges that Landlord has the right to transfer all or any
portion of its interest in the Land and Building and in this Lease and Tenant
agrees that in the event of any such transfer Landlord shall automatically be
released from all liability under this Lease and Tenant agrees to look solely
to such transferee for the performance of Landlord's obligations hereunder
after the date of transfer. Such transferee shall have no liability under
this Lease with regard to Landlord's obligations prior to such date of
Transfer. The liability of any transferee of Landlord shall be limited to
the interest of such transferee in the Land and Building and such transferee
shall be without personal liability under this Lease, Tenant hereby expressly
waiving and releasing said personal liability on behalf of itself and all
persons claiming by, through or under Tenant. Tenant further acknowledges
that Landlord may assign its interest in this Lease to a mortgage lender as
additional security and agrees that such an assignment shall not release
Landlord from its obligations hereunder and that Tenant shall continue to
look to Landlord for the performance of its obligations hereunder.

38. LANDLORD'S TITLE.

Landlord's title is and always shall be paramount to the title of
Tenant. Nothing herein contained shall empower Tenant to do any act which
can, shall or may encumber the title of Landlord.

39. PROHIBITION AGAINST RECORDING.

This Lease shall not be recorded by Tenant or by anyone acting through,
under or on behalf of Tenant, and the recording thereof in violation of this
provision shall make this Lease null and void at Landlord's election.
However, at the request of either party, Landlord and Tenant shall execute
and record a notice of lease in form mutually agreeable to each party.

40. CAPTIONS.

The captions of Paragraphs and subparagraphs arm for convenience only
and shall not be deemed to limit, construe, affect or alter the meaning of
such Paragraphs or subparagraphs.

41. COVENANTS AND CONDITIONS.

All of the covenants of Tenant hereunder shall be deemed and construed
to be "conditions" if Landlord so elects, as well as "covenants" as though
the words specifically expressing or importing covenants and conditions were
used in each separate instance.

42. RELATIONSHIP OF PARTIES.

Nothing contained in this Lease shall be deemed or construed by the
parties hereto or by any third party to create the relationship of principal
and agent, partnership, joint venturer or any association between Landlord
and Tenant it being expressly understood and agreed that neither the method
of computation of

- 33 -
<PAGE> 45

Rent nor any act of the parties hereto shall be deemed to create any
relationship between Landlord and Tenant other than the relationship of
landlord and tenant.

43. APPLICATION OF PAYMENTS.

Landlord shall have the right to apply payments received from Tenant
pursuant to this Lease (regardless of Tenant's designation of such payments)
to satisfy any obligations of Tenant hereunder, in such order and amounts, as
Landlord in its sole discretion, may elect.

44. TIME OF ESSENCE.

Time is of the essence of this Lease and each of its provisions

45. GOVERNING LAW.

Interpretation of this Lease shall be governed by the Law of the state
in which the Premises is located.

46. PARTIAL INVALIDITY.

If any term, provision or condition contained in this Lease shall, to
any extent, be invalid or unenforceable, the remainder of this Lease (or
application of such term, provision or condition to persons or circumstances
other than those in respect of which it is invalid or unenforceable) shall
not be affected thereby, and each and every other term, provision and
condition of this Lease shall be valid and enforceable to the fullest extent
possible permitted by law.

47. NOTICES.

All notices to be given under this Lease shall be in writing and either
hand delivered or deposited in the United States mail, certified or
registered mail with return receipt requested, postage prepaid, addressed as
follows:

If to Landlord:
JMB/Urban Development Co.
185 Asylum Street
Hartford, Connecticut 06103

copy to:
JMB/Urban Development Co.
900 North Michigan Avenue
Chicago, Illinois 60611
Attn: Law Department

- 34 -
<PAGE> 46

or to such other person or such other address designated by notice sent by
Landlord to Tenant.

If to Tenant:
c/o Conning Corporation
101 Pearl Street
Hartford, Connecticut 06103
Attn.; Fred M. Schpero, Vice President

Copy to:
Shipman & Goodwin
799 Main Street
Hartford, Connecticut
Attn: Coleman H. Casey, Esq.

and after occupancy of the Premises by Tenant, at the Premises, or to such
other address as is designated by Tenant in a notice to Landlord.

Notice by mail shall be deemed to have been given two business days
after mailing as aforesaid. Notice by hand delivery shall be deemed to have
been given at the time of delivery.

Notwithstanding anything to the contrary which may be contained in this
Lease Agreement, any payments to be made under this Lease by Landlord to
Tenant shall be deemed sufficiently and validly given if made by Landlord
directly to and to the order of Conning Corporation with the same force and
effect as if otherwise paid to all persons constituting the Tenant hereunder.
Any notice required to be given by Tenant to Landlord under this Lease shall
be deemed sufficient, valid and binding and given with the full authority of
Tenant if delivered by Conning Corporation. Additionally, any notice
required to be given by Landlord to Tenant hereunder shall be deemed
sufficient, valid, and binding and given with the full authority of Landlord
if delivered to Conning Corporation, at the address given above.

48. NO WARRANTY.

In executing and delivering this Lease, Tenant has not relied on any
representation (including, but not limited to, any representation whatsoever
as to the amount of any item comprising Additional Rent or the amount of the
Additional Rent in the aggregate or that Landlord is furnishing the same
services to other tenants, at all, on the same level or on the same basis),
warranty or any statement or Landlord which in not set forth herein or in one
of more of the Exhibits attached hereto.

49. LANDLORD EXCULPATION.

It is expressly understood and agreed that notwithstanding anything in
this Lease to the contrary, the liability of Landlord hereunder and any
recourse by Tenant against Landlord shall be limited solely and exclusively
to the interest of Landlord in and to the Land and Building, and neither
Landlord, nor any of its constituent partners, shall have any personal
liability therefor,

- 35 -
<PAGE> 47

Tenant hereby expressly waiving and releasing said personal liability on
behalf of itself and all persons claiming by, through or under Tenant.

50. OPTIONS TO EXTEND.

Provided Tenant shall not be in default under any of the terms,
provisions or conditions of this Lease, Tenant is hereby granted two separate
and successive options to extend the Term for two (2) additional periods of
five (5) consecutive Lease Years each (each such period being referred to
herein as an "Extension Period"), on the same terms and conditions in effect
under the Lease immediately prior to the applicable Extension Period, except
that the monthly Base Rent for each applicable Extension Period shall be
increased to the "Prevailing Rental Rate". "Prevailing Rental Rate" means
ninety-five (95%) percent of the average per square foot rental rate per
month for all leases approximately as long as the applicable Extension
Period, executed by tenants for similar uses for comparable space in the
Building during the six (6) months immediately prior to the date upon which
such Prevailing Rental Rate is to become effective, where such renewal rates
were not set by the terms of such leases, subject to reasonable adjustments
for comparable space on more desirable, or less desirable, floors or areas of
the Property. If leases for no such comparable space have been renewed
during such six (6) month period, the rental rates used for purposes of this
provisions shall be adjusted to the amounts Landlord would reasonably have
used had leases for such comparable space been renewed. The option to extend
may be exercised only by giving Landlord irrevocable and unconditional
written notice thereof no earlier than twenty-four (24) months and no later
than eighteen (18) months prior to the commencement of the applicable
Extension Period, and said exercise shall, at Landlord's election, be null
and void if Tenant is in default under the Lease at the date of said notice
or at any time thereafter and prior to commencement of the applicable
Extension Period. In all cases, the Prevailing Rental Rate shall be
determined without regard to any free rent periods, improvement allowances,
take-over lease obligations, or other economic incentives.

If Tenant disputes Landlord's determination of the Prevailing Rental
Rate as unreasonable, within sixty (60) days after its receipt of such
determination, Tenant must request that the Prevailing Rental Rate be
determined by arbitration, under the Commercial Arbitration Rules of the
American Arbitration Association then in effect. Such determination shall be
final and binding upon the parties. In recognition that the Prevailing
Rental Rate will not be determined until after the Commencement of the
Extension Period, Tenant shall pay, during each applicable Extension Period
until the Prevailing Rental Rate is determined, one hundred fifteen percent
(115%) of the amount of Rent then in effect immediately prior thereto,
(including Base Rent and all other charges). If the Prevailing Rental Rate
is determined to be greater or lesser than such amount, Tenant shall pay
Landlord, or Landlord shall pay Tenant, as the case may be, within thirty
(30) days after written request therefor, the difference between the amount
required by such determination of the Prevailing Rental Rate, and the amount
of Rent theretofore paid by Tenant for the applicable Extension Period. In
no event shall the Prevailing Rental Rate be less than the Base Rent payable
by Tenant under this Lease for the immediately preceding period.

- 36 -
<PAGE> 48

If Tenant shall fail to exercise either of the options herein provided,
said option shall terminate, and shall be null and void and of no further
force and effect. Tenant's exercise of any of said options shall not operate
to cure any default by Tenant of any of the terms or provisions in the Lease,
nor to extinguish or impair any rights or remedies of Landlord arising by
virtue of such default. If the Lease or Tenant's right to possession of the
Premises shall terminate in any manner whatsoever before Tenant shall
exercise any of the options herein provided, or if Tenant shall have
subleased or assigned all or any portion of the Premises, then immediately
upon such termination, sublease, or assignment, the said option herein
granted to extend the Term, shall simultaneously terminate and become null
and void. Such options are personal to the named Tenant. Under no
circumstances whatsoever shall the assignee under a partial assignment of the
Lease, or a subtenant under a sublease of the Premises, have the right to
exercise the option to extend granted herein provided Tenant shall not be in
default under any of the terms, provisions or conditions of this Lease. Time
is of the essence of this provision.

As used in this Article 50, the term "Lease Year" shall mean a period
of twelve consecutive calendar months. The parties acknowledge that the
first day of the first Extension Period, if the option for same is validly
exercised, shall be April 1, 2005; provided the Commencement Date is April 1,
1990 (it being understood that, if the Commencement Date is subsequent to
April 1, 1990, said first day shall be extended accordingly).

Tenant shall have no further or additional options to extend this
Lease, not heretofore expressly set forth.

51. OPTION TO EXPAND

Subject to the provisions of this Paragraph and provided Tenant shall
not be in default under any of the terms, provisions or conditions of this
Lease, Tenant shall have two separate expansion rights to lease, in each
instance, eight thousand two hundred (8,200) square feet (+/- 20%) of
rentable area on the seventh (7th) floor of the Building (the exact location
and configuration in each instance to be determined by Landlord
(respectively, the "First Expansion Space" and the "Second Expansion Space"),
each in an "as is" condition, on the same terms and provisions then in effect
under the Lease, except that the monthly Base Rent (as to such Expansion
Space) shall be increased to reflect the Expansion Prevailing Rental Rate.
Tenant's Pro Rata Share shall be increased to reflect the increased rentable
area of the Premises resulting from the addition of the applicable Expansion
Space. "Expansion Prevailing Rental Rate" means One Hundred (100%) percent
of the average per square foot rental rate per month for all leases for
comparable space and approximately the same number of months, executed by
tenants during the six (6) months immediately prior to the date upon which
such Expansion Prevailing Rental Rate is to become effective and payable
under the terms of this Lease, where the rates for such expansions were not
set in such leases, subject to reasonable adjustments for comparable space on
more desirable, or less desirable floors or areas of the Building. If leases
for no such comparable space has been leased during such six (6) month
period, the rental rates used for purposes of this provision shall be
adjusted to the amounts Landlord would reasonably have used had leases for
such comparable space been entered. In all cases, such rates shall be
determined without regard to any

- 37 -
<PAGE> 49

free rent periods, improvement allowances, take-over lease obligations, or
other economic incentives. In any event, the Expansion Prevailing Rental
Rate per square foot of rentable floor area for the First Expansion Space
shall not be less than $28.00 per square foot of rentable floor area and the
Expansion Prevailing Rental Rate per square foot of rentable floor area for
the Second Expansion Space shall not be less than $32.50 per square foot of
rentable floor area.

Tenant shall notify Landlord in writing exercising Tenant's respective
rights to lease the First Expansion Space on the terms described above no
earlier than twenty-four (24) months and no later than fifteen (15) months
prior to the Fifth (5th) anniversary of the Commencement Date, and the Second
Expansion Space on the terms described above no earlier than twenty-four (24)
months and no later than fifteen (15) months prior to the Tenth (10th)
anniversary of the Commencement Date. If Tenant exercises the right to lease
the First Expansion Space or Second Expansion Space, as the case may be, said
lease shall continue for the duration of the Term of the Lease. After Tenant
validly exercises the respective expansion rights provided herein, the
parties shall execute an amendment to the Lease, adding the applicable
Expansion Space, or a new lease for the applicable Expansion Space, or such
other documentation as Landlord shall require, promptly after Landlord shall
prepare the same, in order to confirm the leasing expansion rights contained
herein shall be fully effective, whether or not such confirmatory
documentation is executed. The commencement dates for the leasing of each
such Expansion Date shall be approximately six (6) months before or after
Fifth (5th) anniversary of the Commencement Date (as regards the First
Expansion Space) and the Tenth (10th) anniversary of the Commencement Date
(as regards the Second Expansion Space), as determined by Landlord.

If Tenant disputes Landlord's determination of the Expansion Prevailing
Rental Rate as unreasonable, within sixty (60) days after its receipt of such
determination Tenant must request that the Expansion Prevailing Rental Rate
be determined by arbitration, under the Commercial Arbitration Rules of the
American Arbitration Association then in effect. In recognition that the
Expansion Prevailing Rental Rate may not be determined until after the
Commencement of the lease for the Expansion Space, Tenant shall pay, as Rent
for the Expansion Space, until the Expansion Prevailing Rental Rate is
determined, one hundred fifteen percent (115%) of the amount of Rent then in
effect under the Lease on a per rentable square foot basis (including Base
Rent and all other charges). If the Expansion Prevailing Rental Rate is
determined to be greater or lesser than such amount, Tenant shall pay
Landlord, or Landlord shall pay Tenant, as the case may be, within thirty
(30) days after written request therefor, the difference between the amount
required by such determination of the Expansion Prevailing Rental Rate, and
the amount theretofore paid by Tenant for the Expansion Space.

The foregoing expansion right shall apply only with respect to the
entire applicable Expansion Space and may not be exercised with respect to
only a portion thereof. If Tenant shall fail to exercise such expansion
right within the time period stated herein, such right shall be deemed to
have lapsed and expired, and shall be of no further force or effect.
Landlord may thereafter freely lease all or a portion of the applicable
Expansion Space to any other party, at any time, on any terms, in Landlord's
sole discretion.

- 38 -
<PAGE> 50

If Tenant shall exercise any of its expansion rights granted herein,
Landlord does not guarantee that the Expansion Space will be available on the
commencement date for the lease thereof if the then existing occupants of the
Expansion Space shall hold-over or for any other reason beyond Landlord's
reasonable control. In such event, rent with respect to the Expansion Space
shall be abated until Landlord delivers the same to Tenant, as Tenant's sole
recourse. Tenant's exercise of such expansion right shall not operate to
cure any default by Tenant of any terms or provisions in the Lease, nor to
extinguish or impair any rights or remedies of Landlord arising by virtue of
such default. If the Lease or Tenant's right to possession of the Premises
shall terminate in any manner whatsoever before Tenant shall exercise the
right herein provided, or if Tenant shall have subleased or assigned all or
any portion of the Premises, then immediately upon termination, sublease or
assignment, the right to lease the expansion space herein granted shall
simultaneously terminate and become null and void. Such right to expand is
personal to the named Tenant. Under no circumstances whatsoever shall the
assignee under a partial assignment of the Lease, or a subtenant under a
sublease of the Premises, have any right to exercise the expansion right
granted herein. Tenant agrees that time is of the essence of this provision.
Upon the addition of any Expansion Space, the L.C. held by Landlord pursuant
to Article 53 hereof shall be increased by an amount which equals $10.62 per
each square foot of Floor Area contained in the Expansion Space.

52. CONSENTS.

Landlord's consent under this Lease to any matter or thing may be
arbitrarily withheld, unless expressly set forth herein to the contrary. In
no event shall Tenant be entitled to make, nor shall Tenant make any claim,
and Tenant hereby waives any claim for money damages, nor shall Tenant claim
any money damages by way of set-off, counterclaim or defense, based upon any
claim or assertion by Tenant that Landlord has unreasonably withheld or
unreasonably delayed any consent or approval it is required to give herein,
but Tenant's sole remedy shall be an action or proceeding to enforce any such
provision, or for specific performance, injunction or declaratory judgment.

53. INITIAL SECURITY DEPOSIT.

53.1 Upon the execution and delivery of this Lease, Tenant shall deposit
with Landlord a clean transferable, irrevocable, unconditional letter of
credit (the "$300,000 L.C.") in the amount of Three Hundred Thousand
($300,000) Dollars, and upon the Commencement Date, Tenant shall further
deposit another clean transferable irrevocable letter of credit (the "$325,000
L.C.") in the amount of Three Hundred Twenty-Five Thousand ($325,000) Dollars,
all as security for the full and faithful performance and observance by Tenant
of Tenant's covenants and obligations under this Lease, including without
limitation the payment of all Base Rent and Additional Rent. Each of the
$300,000 L.C. and the $325,000 L.C. are hereafter referred to as the "L.C.".
Each L.C. shall be issued by and drawn on a Connecticut bank reasonably
satisfactory to Landlord, with offices in the City of Hartford, in a form
satisfactory to Landlord. Each L.C. shall be for a minimum term of not lees
than one (1) year and shall provide that it is automatically transferable
without the consent of the issuing bank, at no charge to Landlord. Subject
to the provisions of Section 53.6, Tenant shall

- 39 -
<PAGE> 51

renew or replace each L.C. with an equivalent letter of credit on the First
anniversary of the Commencement Date and upon each and every anniversary of
the Commencement Date thereafter until the term of this Lease shall be
terminated and Tenant delivers to Landlord possession of the Premises. Each
renewal or replacement letter of credit shall be delivered to Landlord not
less than thirty (30) days prior to the expiration of the then current letter
of credit. Failure to deliver such renewal or replacement letter of credit
on or before said date shall be deemed to constitute a material breach of
this Lease and Landlord shall have the right, inter alia, to present all the
----------
then current letters of credit held by Landlord hereunder for payment.

53.2 If Tenant fails to perform any of its obligations hereunder within
applicable grace periods, Landlord may use, apply or retain the whole or any
part of each L.C. for the payment of (i) any Rent or other sums of money
which Tenant may not have paid when due, (ii) any sum expended by Landlord on
Tenant's behalf in accordance with the provisions of this Lease, and/or (iii)
any sum which Landlord may expend or be required to expend by reason of
Tenant's default or any loss or damage Landlord may incur as a result
therefrom, including, without limitation, any damage or deficiency in or from
the reletting of the Premises as provided in Paragraph 23. The use,
application or retention of each L.C., or any portion thereof, by Landlord
shall not prevent Landlord from exercising any other right or remedy provided
by this Lease or by law (it being intended that Landlord shall not first be
required to proceed against any L.C.) and shall not operate as a limitation
on any recovery to which Landlord may otherwise be entitled. If any portion
of any L.C. is drawn down, used, applied or retained by Landlord for the
purposes set forth above, Tenant agrees, within ten days after the written
demand therefor is made by Landlord, to deposit cash with the Landlord in an
amount sufficient to restore the sums held by Landlord hereunder to the
original amount of such L.C.

53.3 If Tenant shall fully and faithfully comply with all of the provisions
in this Lease, each L.C., or any of the balance thereof, shall be returned to
Tenant without interest after the expiration of the Term or upon any later
date after which Tenant has vacated the Premises. In the absence of evidence
satisfactory to Landlord of any permitted assignment of the right to receive
each L.C., or of the remaining balance proceeds thereof, Landlord may return
the same to the original Tenant, regardless of one or more assignments of
Tenant's interest in this Lease or such L.C. In such event, upon the return
of each L.C., or the remaining balance thereof to the original Tenant,
Landlord shall be completely relieved of liability under this Paragraph 53 or
otherwise with respect to such L.C.

53.4 Tenant acknowledges that Landlord has the right to transfer or mortgage
its interest in the Land and the Building and in this Lease and Tenant agrees
that in the event of such transfer or mortgage, Landlord shall have the right
to transfer or assign each L.C. or proceeds thereof to the transferee or
mortgagee. Upon, and only upon, written acknowledgement of transferee's or
mortgagee's receipt of such L.C. or proceeds thereof, Landlord shall thereby
be released by Tenant from all liability or obligation for the return of such
L.C. or proceeds thereof and Tenant shall look solely to such transferee or
mortgagee for the return of each L.C. or proceeds thereof.

- 40 -
<PAGE> 52

53.5 Each L.C. or proceeds thereof shall not be mortgaged, assigned or
encumbered in any manner whatsoever by Tenant without the prior written
consent of Landlord.

53.6 Notwithstanding anything contained in this Article 53 to the contrary,
Landlord agrees that the aggregate amount of all letters of credit to be held
by Landlord hereunder shall be in the amounts set forth below as of the dates
set forth below:

Date L.C. Amount
---- -----------
First anniversary of Commencement Date $500,000
Second anniversary of Commencement Date 375,000
Third anniversary of Commencement Date 350,000
to and including the end of the term hereof
(including renewal terms)

54. OTHER PREMISES.

Pursuant to a Sublease ("Sublease") dated May 23, 1985, the named
Tenant is currently the subtenant of Urban Investment and Development Co.
("Urban") of certain demised premises ("Other Premises") at 101 Pearl Street,
Hartford, Connecticut, which Other Premises are more particularly described
in that certain lease ("Other Lease") dated September 29, 1970, made by 101
Pearl Associates, as landlord, to Murtha, Cullina, Richter and Pinney
("Murtha"), as tenant, which Other Lease was assigned from Murtha to Urban by
Assignment of Lease dated April 19, 1985.

Provided the named Tenant is still the Tenant hereunder, and provided
further that Tenant shall not be in default under any of the terms,
provisions or conditions of this Lease, (a) Landlord shall cause Urban to
terminate the Sublease, as of the Commencement Date of this Lease, provided
all rental and other obligations under the Sublease on the part of the
subtenant thereunder have been fully paid and performed to such date; and (b)
Landlord agrees to negotiate in good faith with the owner of 101 Pearl
Street, Hartford, Connecticut ("Owner") for a termination of the Other Lease
in consideration of a cash settlement by Owner to Landlord. Landlord makes
no representations or warranties that a settlement of any nature may be
obtained. If any settlement (cash or otherwise) is reached regarding the
Other Lease, the same shall be disbursed in the following priority and in the
following manner:

A. First, any settlement obtained having a value of up to Three
Hundred Thousand ($300,000) Dollars shall be divided between
Landlord and Conning and Co. with Landlord receiving 75% of such
amount and Tenant receiving 25% of such amount, if, as and when
received;

B. Thereafter, any value of such settlement in excess of Three
Hundred Thousand ($300,000) Dollars but not to exceed Six Hundred
Thousand ($600,000) Dollars, shall be divided between Landlord
and Conning & Co., with Landlord receiving 25% of such amount and
Tenant receiving 75% of such amount, if, as and when received;

- 41 -
<PAGE> 53

The right of the named Tenant hereunder to receive any portion of any
settlement is personal to it and shall not be transferred, assigned or
pledged by it to any person or entity.

Notwithstanding anything to the contrary set forth above, to the extent
that any such settlement (cash or otherwise) in disbursed to Aetna Life &
Casualty in an amount not to exceed $75,000, Landlord and Tenant agree that
neither shall have any rights to receive a share in such settlement.

55. RIGHT OF FIRST OFFER.

In addition to the rights of Tenant set forth in Article 51 hereof, if,
at any time, and from time to time during the term of this Lease, Landlord
desires to lease all or any part of the seventh floor of the Building,
Landlord shall first offer to lease such portion of the seventh floor to the
named Tenant if it is then the Tenant hereunder in occupancy of the Premises,
for a specific rental and on specific terms and conditions. For a period of
thirty (30) days following the named Tenant's receipt of Landlord's offer to
lease the seventh floor or part thereof, as aforesaid, the named Tenant shall
have the right to accept, by delivery to Landlord within said thirty (30) day
period of a written instrument binding upon Tenant, Landlord's offer to so
lease the seventh floor, or portion thereof, as aforesaid. After Landlord
receives the written decision of the named Tenant not to accept Landlord's
offer or after the expiration of said thirty (30) day period without
Landlord's receipt of a written acceptance, whichever occurs earlier,
Landlord shall have the right to lease such portions of the seventh floor to
third parties. In the event the named Tenant shall accept said offer, said
Tenant agrees to execute and deliver an amendment of this Lease or a new
Lease incorporating the terms and conditions as accepted by Tenant, as
aforesaid, in such form as Landlord shall require; it being agreed, however,
that the rent commencement date for such space shall be as soon as reasonably
possible (giving due consideration to the amount of tenant finish work
reasonably required) but in no event later than 90 days following the date of
Tenant's acceptance. Otherwise, Tenant agrees to execute and deliver to
Landlord an instrument of confirmation in recordable form evidencing Tenant's
waiver of its rights under this Article and rejection of Landlord's offer, as
the case may be, at the request of Landlord. This Article shall not preclude
preliminary discussions, whether oral or in writing, between Landlord and any
prospective tenant(s) concerning terms and conditions for the leasing of all
or any part of the seventh floor. The provisions of this paragraph shall
expire upon the earlier to occur of an assignment of this Lease, or the
expiration or sooner termination of this Lease. Upon the timely delivery of
said instrument to Landlord, the seventh floor or portion thereof as offered
by Landlord shall immediately become a part of the Premises, and the rental,
terms and conditions set forth in said offer shall be deemed incorporated
into this Lease.

56. FORCE MAJEURE

The obligations of Tenant and Landlord hereunder (except with respect
to the obligations of Tenant to pay any and all Rent hereunder) may be
deferred for so long as a Force Majeure Event is occurring. "Force Majeure
Event" shall mean any delay resulting from strikes, riots, fire, acts of God,
governmental

- 42 -
<PAGE> 54

intervention, shortages of labor or materials or other circumstances or
occurrences which are not within the reasonable control of the performing
party.

IN WITNESS WHEREOF, Landlord and Tenant have caused this Lease to be
executed the day and date first above written.

LANDLORD:

JMB/URBAN CITYPLACE LIMITED PARTNERSHIP

BY: JMB CITYPLACE CO., INC.

By: /s/ Thomas G. Omundson
-------------------------------
Thomas G. Omundson
Its Vice President

TENANT:

CONNING & COMPANY

By: /s/ M. W. Slayton
-------------------------------
M. W. Slayton
Its President

CONNING CORPORATION

By: /s/ M. W. Slayton
-------------------------------
M. W. Slayton
Its President

CONNING INTERNATIONAL, INC.

By: /s/ M. W. Slayton
-------------------------------
M. W. Slayton
Its President

- 43 -

<PAGE> 1

Conning & Company
Insurance Asset Management

VENTURE CARRIED INTERESTS ALLOCATION PLAN

CONNING CORPORATION
-------------------

The purpose of this Venture Carried Interest Allocation Plan (the "Plan")
is to reserve a portion of the carried interests from the venture fund
activities of Conning Corporation (the "Company") and its subsidiaries and
affiliates (collectively, the "Group") for the benefit of the employees of
the Group. The Plan is designed to recognize that the foundation for
deriving value from the Group's venture fund activities has been laid
through the efforts of existing employees, but that the future efforts of
these and other employees of the Group will further contribute to the growth
in the value of the reserved carried interest. This Plan is not intended to
replace or diminish awards made to employees under the Company's various
cash bonus and stock option programs.
NOW, THEREFORE, the Company hereby establishes the following plan:

SECTION 1. Definitions.
- --------- -----------
As used in this Plan, the following terms shall have the following
meanings:
1.1 Allocation Year - means each of the calendar years 1990 through 1995.
---------------
1.2 Board - means the Board of Directors of the Company.
-----
1.3 Cause - means repeated insubordination, gross negligence, willful
-----
misconduct, commission of a felony or substantial failure to perform duties
of Employee's position, which failure involves dishonesty or conduct
materially injurious to the financial condition of the employing company
within the Group.

<PAGE> 2

Conning & Company
Insurance Asset Management

1.4 Committee - means the Board or a committee appointed by the Board
---------
to administer the Plan as provided in Section 2. hereof.

1.5 Employee - means any employee of the Group.
--------
1.6 Venture Interests - means any share or portion of the Venture Pool
-----------------
allocated to an Employee.
1.7 Venture Pool - means an amount equal to fifty percent (50%) of any
------------
carried interest distributions received by Conning & Company (i) directly
from the venture funds known as Conning Insurance Capital Limited
Partnership II, and Conning Insurance Capital International Partners II, or
(ii) through Conning Investment Partners Limited Partnership with respect to
the venture funds known as Conning Insurance Capital Limited Partnership and
Conning Insurance Capital International Partners. [For purposes hereof,
"distributions" shall not include management fees, advisory fees,
reimbursable expenses or other current fees for services rendered.]

SECTION 2. Committee and Its Duties
- --------- ------------------------
2.1 The Committee. The Committee may, from time to time, adopt rules
-------------
and regulations and prescribe forms and procedures for carrying out the
purposes and provisions of the Plan. The Committee shall have the sole and
final authority to select recipients, determine allocations, and determine
all questions arising under the Plan consistent with the requirements of
this document, including the proper construction and interpretation of the
Plan. Any interpretation, decision or determination made by the Committee
shall be final, binding and conclusive upon all interested parties,
including the Company, its subsidiaries and affiliates, their shareholders,
recipients and other Employees and the successors, heirs and representatives
of all such persons.

2
<PAGE> 3

Conning & Company
Insurance Asset Management

The Committee may hold meetings at such times and places as it may
decide and shall keep minutes of its proceedings. A majority of the members
of the Committee shall constitute a quorum for purposes of any action taken
by the Committee and all such actions shall be taken by a majority vote of
the members present at any such meeting. Any action by the Committee may be
taken by written instrument signed by all of the members, and any such
action shall be as fully effective as if it had taken by a majority of the
members at a meeting duly called and held.
2.2 Committee's Duties. As soon as practicable after the end of each
------------------
Allocation Year, but prior to the next succeeding March 31st, the Committee
shall:
(1) Select the recipients of Venture Interests from among the
then current Employees of the Group. Such recipients shall be persons that
the Committee determines have contributed to the funding, value, growth,
profitability and success of the Group as a whole, including, the formation,
management and success of the Venture Funds listed in Section 1.6 hereof;
(2) Decide the amount of Venture Interests to be allocated to
each such recipient in accordance with the provisions of this Plan; and
(3) Notify each recipient selected of the amount of Interests
allocated to him or her.

SECTION 3. Determination of Venture Interests.
- --------- ----------------------------------
3.1 Annual Allocation. The Committee shall set the number of units of
-----------------
participation ("Units") representing 100% of the Venture Pool. For each
Allocation Year, the Committee shall award Venture Interests in the form of
the Units equal, in the aggregate, to the percentage of the total Units
indicated for such Allocation Year as follows:

3
<PAGE> 4

Conning & Company
Insurance Asset Management

Allocation Year % of All Units
--------------- --------------
1990 25.0%
1991 25.0%
1992 20.0%
1993 20.0%
1994 10.0%
Total 100.00%

3.2 Allocation Rules. The annual allocation of Venture Interests made
----------------
by the Committee shall adhere to the following:
(1) Eighty percent (80%) of the Units to be awarded for the 1990
and 1991 Allocation Years shall be awarded, in the aggregate, to those of
the group consisting of the persons listed on Schedule A hereto who are then
Employees. The remaining twenty percent (20%) of such Units shall be
awarded to other Employees.
(2) For Allocation Years subsequent to 1991, Units shall be
awarded to the persons listed on Schedule A hereto who are then Employees,
such that the aggregate number of Units awarded to such persons for a given
Allocation Year compared to the total number of Units awarded for such year
equals at least 80% less the product of 7.5% times the number of persons on
Schedule A who are no longer Employees when such award is made (for example,
if only 5 of such persons are Employees when the award is made, the
percentage awarded to the group shall be reduced to 50% of the total awards
made in the applicable Allocation Year); provided, however, that if the
number of such persons who are Employees falls below 5, no special
allocation of Units to such persons shall be required. Units not required
to be awarded to persons on Schedule A hereto, may be awarded by the
Committee to any Employees in such percentages as the Committee, in its
discretion, deems appropriate in accordance herewith.

4
<PAGE> 5

Conning & Company
Insurance Asset Management

(3) If any Units which have been awarded lapse pursuant to
Section 3.3 hereof, the Committee shall promptly reallocate such Units to
Employees.
3.3 Lapse of Venture Interests. Units awarded to a recipient shall
--------------------------
lapse if, prior to March 31, 1995, the recipient either (i) has voluntarily
terminated his employment with the Group (except due to disability or normal
retirement) or (ii) has had his employment with the Group terminated for
Cause, and, in either case, he enters into competition with the Company as
defined in Section 3.5 hereof. A recipient of an allocation shall be
entitled to share in the Venture Pool on the basis of the Units held by such
recipient which have not lapsed so long as the carried interest
distributions eligible for the Venture Pool are being received by Conning &
Company.
3.4 Payments from Venture Pool. The Venture Pool shall be distributed
--------------------------
by the Company to the holders of Units according to the number so held.
Distributions shall be made at least once each year, within ninety (90) days
following receipt of distributions by Conning & Company that result in
increases to the Venture Pool hereunder. Venture Pool funds otherwise
available for distribution, but attributable to Units not yet allocated by
the Committee pursuant to this Section, shall be retained and reserved by
the Company until such time as the applicable Units are allocated and
distribution is made to the recipient(s) of such Units.
3.5 Competition. A recipient shall be in competition with the Company
-----------
if he, within the United States, directly or indirectly, owns, operates,
manages, joins, controls, participates in the ownership, management,
operation or control of, or is paid or employed by, or acquires any
securities of, or otherwise becomes associated with or provides assistance
to, as an employee, consultant, director, officer, shareholder, partner,
agent, associate, principal, representative or in any other capacity, any
business entity or activity which is the same, or similar to, or competitive

5
<PAGE> 6

Conning & Company
Insurance Asset Management

with the business carried on by the Company or any of its subsidiaries at
the date of termination of his employment, including without limitation the
asset management and investment advisory services provided to institutional
and individual clients, the consulting services provided to insurance
company clients, and the venture capital fund business of the Company (the
"Business"); provided, however, that the foregoing shall not prevent the
-------- -------
Employee from acquiring the securities of or an interest in any business,
provided such ownership of securities or interest represents at the time of
such acquisition, but including any previously held ownership interest, less
than five percent (5%) of any class or type of securities of, or interest
in, such business.

SECTION 4. Miscellaneous.
- --------- -------------
4.1 Effective Date, Plan Duration and Amendments. This Plan shall
--------------------------------------------
become effective when approved by the Board. The Board shall not have the
right to suspend, cancel or modify the Plan without the approval of the
holders of a majority all Units that have been granted as of the effective
date of such action.
4.2 Limitation of Rights. Nothing in this Plan, or any amendment
--------------------
hereof, shall be construed to give any Employee any right to receive Venture
Interests other than as provided herein. Nothing in this Plan, or any
amendment hereof, shall be construed to create rights of employment or to
limit in any way the right of the Company or a subsidiary or affiliate to
terminate an Employee's employment at any time, or give any right to an
Employee to remain employed by the Company or a subsidiary or affiliate in
any particular position or at any particular rate of remuneration.

6
<PAGE> 7

Conning & Company
Insurance Asset Management

4.3 Governing Law. This Plan and any rights of any persons hereunder
-------------
shall be construed in accordance with and be governed by the laws of the
State of Connecticut, including its conflict of laws principles.
4.4 Severability. If any provision of this Plan or application
------------
thereof to any person or circumstance shall to any extent be invalid, the
remainder of this Plan or the application of such provision to persons,
entities, or circumstances other than those as to which it is held invalid,
shall not be affected thereby and each provision of this Plan shall be valid
and enforceable to the fullest extent permitted by law.
4.5 Headings for Convenience. The underlined captions of this Plan
------------------------
are for convenience of reference only and shall not be deemed to define or
limit the provisions hereof or to affect their construction or application.
4.6 Gender. Neither the gender nor the number (singular or plural) of
------
any word shall be construed to exclude another gender or number where a
difference of gender or number would be appropriate.
4.7 Nonassignability. The Units may not be assigned by the recipient
----------------
without the prior written consent of the Company; provided, however, that
(i) the recipient may designate in such written form as the Company may
reasonably require a beneficiary or beneficiaries to receive the payments
from the Venture Pool upon the death or disability of the recipient, and
(ii) the executors, administrators or other legal representatives of the
recipient or his/her estate may assign the Units to the persons entitled
thereto.

<PAGE> 8

Amendment No. 1 to
------------------
Venture Carried Interests Allocation Plan
-----------------------------------------
of Conning Corporation
----------------------

AMENDMENT NO. 1 (the "Amendment") dated January 15, 1993, but
effective January 1, 1993, to Venture Carried Interests Allocation Plan of
Conning Corporation (the "Company") adopted at a Board of Directors meeting
of the Company on December 21, 1990 and attached as Exhibit H to a certain
Stock Purchase Agreement between the shareholders of the Company and
Covenant Mutual Insurance Company dated December 28, 1990 (the "Plan").

The Company hereby amends the Plan as follows:

1. Section 3.2 (Allocation Rules) of the Plan is hereby amended by
----------------
deleting subsection (2) thereof in its entirety, and substituting therefor
the following:

"(2) For Allocation Years subsequent to 1991, Units may be
awarded by the Committee to any Employees in such percentages as
the Committee, in its discretion, deems appropriate in accordance
herewith."

Except as specifically amended by this Amendment, all of the terms and
conditions of the Plan shall remain in full force and effect.

CONNING CORPORATION

By: /s/ Fred M. Schpero
-------------------------------------
Its: Secretary
------------------------------------

<PAGE> 9

AMENDMENT NO. 2

VENTURE CARRIED INTERESTS ALLOCATION PLAN

OF CONNING CORPORATION

AMENDMENT NO. 2 (the "Amendment") dated December 15, 1995, to
Venture Carried Interests Allocation Plan of Conning Corporation (the
"Company") dated as of December 28, 1990 (the "Plan").

The Company hereby amends the Plan as follows:

Section 3.4 (Payment From Venture Pool) of the Plan is deleted in its
-------------------------
entirety and the following new Section 3.4 is substituted therefor:

Section 3.4 Payment From Venture Pool. The Venture Pool shall be
-------------------------
distributed by the Company to the holders of Units according to the number
as held. Distributions shall be made at such time and in such form (cash or
kind) as shall be determined by the Committee. Notwithstanding the
foregoing, distributions of cash shall be made within 90 days following (i)
receipt of cash distributions by Conning & Company that result in increases
to the Venture Pool hereunder or (ii) conversion of in kind distributions to
cash.

Except as specifically amended by this Amendment, all of the terms and
conditions of the Plan shall remain in full force and effect.

Dated at Hartford, CT this 15th day of December, 1995.

CONNING CORPORATION

By: /s/ M. W. Slayton
------------------------
Its President and
Chief Executive Officer

<PAGE> 1
Exhibit 11.1

<TABLE>
(COMPUTATION OF EARNINGS PER SHARE)

<CAPTION>
FOR THE NINE MONTH
YEAR ENDED PERIOD ENDED
DECEMBER 31, 1996 SEPTEMBER 30, 1997
----------------- ------------------
<S> <C> <C>
Net Income $ 6,212,231 $ 6,422,418
=========== ===========

Weighted Average Number of
Common Shares and Common
Share Equivalents during the
period 10,602,547 10,802,499

Common shares and common share
equivalents related to SAB No. 83 343,446 659
----------- ------------

Total Shares used in Pro Forma
Weighted Average Common
Shares and Equivalents
Outstanding<F1> 10,945,993 11,145,949
=========== ===========

Pro Forma Earnings per Share $.57 $.58
==== ====

<FN>
<F1> Pro forma earnings per share is computed by dividing net income by the weighted
average number of common stock and common stock equivalents considered
outstanding. Common stock equivalents are computed using the treasury stock
method and for purposes of this calculation only, the assumed initial public offering
price of $15 per share was used in applying the treasury stock method. For purposes of
the calculation, the Series A & Series B Preferred Stock is considered common stock
equivalents. Pursuant to the Securities and Exchange Commission Staff Accounting
Bulletin No. 83, shares issued, and stock options and warrants granted by the Company
at an exercise price below the assumed public offering price during the twelve-month
period preceding the date of the initial filing of the Registration Statement have
been included in the calculation of common stock equivalent shares, using the
treasury stock method, as if they were outstanding for the periods presented.
</TABLE>

<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
November 5, 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
November 5, 1997

<PAGE> 1

CONSENT OF EAGER & ASSOCIATES

The undersigned hereby consents to the reference to this firm and to
the description of its report entitled "1996 Study of Insurance Companies'
Use of External Managers: Key Trends and Issues Affecting Insurance
Companies' Use of External Managers" under the captions "Prospectus Summary -
The Company - General," "Prospectus Summary - The Company - Developing Trends
in the Insurance Industry," "Business - General," and "Business - Industry
Background and Trends" in the Registration Statement on Form S-1 (No.
333-35993), as it may be amended from time to time, filed by Conning
Corporation with the Securities and Exchange Commission in connection with
Conning Corporation's initial public offering of its common stock.

The undersigned further consents to the incorporation by reference of
this consent pursuant to Rule 439(b) under the Securities Act of 1933, as
amended (the "Securities Act"), into any subsequent registration statement
relating to the same offering that may be filed pursuant to Rule 462(b) under
the Securities Act.

EAGER & ASSOCIATES

By: /s/ David Holmes
-------------------------------
Name: David Holmes
-------------------------------
Title: Principal and Research Director
-------------------------------
10-29-97
[City], [State]
November --, 1997

<PAGE> 1

CONSENT OF ONESOURCE INFORMATION SERVICES, INC.

The undersigned hereby consents to the references to this firm and to the
use of the information reported by this firm as appear under the captions
"Prospectus Summary - The Company - General - Name Recognition Within the
Insurance Industry," "Business - General - Name Recognition Within the Insurance
Industry," and "Business - Insurance Research" in the Registration Statement
on Form S-1 (No. 333-35993), as it may be amended from time to time, filed
by Conning Corporation with the Securities and Exchange Commission in
connection with Conning Corporation's initial public offering of its common
stock.

ONESOURCE INFORMATION SERVICES, INC.

By: /s/ Roy London
--------------------------------
Name: Roy London
------------------------------
Title: V.P. Finance
-----------------------------

Cambridge, Massachusetts
November 6, 1997

<ARTICLE> 5

<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 19,266,280
<SECURITIES> 0
<RECEIVABLES> 8,698,730
<ALLOWANCES> 165,000
<INVENTORY> 0
<CURRENT-ASSETS> 29,978,025
<PP&E> 2,277,971
<DEPRECIATION> 1,281,545
<TOTAL-ASSETS> 54,646,121
<CURRENT-LIABILITIES> 14,468,323
<BONDS> 0
<COMMON> 68,200
36,151,590
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 54,646,121
<SALES> 46,295,732
<TOTAL-REVENUES> 46,924,874
<CGS> 34,000,243
<TOTAL-COSTS> 35,953,362
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 232,760
<INCOME-PRETAX> 10,738,752
<INCOME-TAX> 4,316,334
<INCOME-CONTINUING> 6,422,418
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 6,422,418
<EPS-PRIMARY> 0
<EPS-DILUTED> 0

</TABLE>