IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

                               IN AND FOR NEW CASTLE COUNTY


IN RE CITIZENS CORPORATION                      ) Consolidated
SHAREHOLDERS LITIGATION                         ) Civil Action No. 16745 NC


                                 ORDER AND FINAL JUDGMENT

          A hearing having been held before this Court (the "Court") on October 7, 1999, pursuant to

the Court's Order of August 6, 1999 (the "Scheduling Order"), upon a Stipulation of Settlement,

dated August 5,1999 (the "Stipulation"),  ofthe above-captioned action (the "Consolidated  Action"),

which is incorporated herein by reference; it appearing that due notice of said hearing has been

in accordance with the aforesaid Scheduling Order; the respective parties having appeared by their

attorneys of record; the Court having heard and considered evidence in support of the proposed

Settlement (as defined in the Stipulation); the attorneys for the respective parties having been

an opportunity to be heard having been given to all other persons requesting to be heard in

accordance with the Scheduling Order; the Court having determined that notice to the Class (as

defined below) preliminarily certified pursuant to the aforesaid Scheduling Order, was adequate and

sufficient; and the entire matter of the proposed Settlement having been heard and considered by the

court;

          IT IS HEREBY ORDERED, ADJUDGED AND DECREED this 7'" day of October, 1999,

that:

          1.     Unless otherwise defined herein, all defined terms shall have the meaning set

the Stipulation.




RLFI-192340-2

                 IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

                              IN AND FOR NEW CASTLE COUNTY


IN RE CITIZENS CORPORATION                     ) Consolidated
SHAREHOLDERS LITIGATION                        ) Civil Action No. 16745 NC


                                STIPULATION OF SETTLEMENT

         The parties to the above-captioned action, by and through their respective attorneys, have

entered into the following Stipulation of Settlement (the "Stipulation") subject to the approval of

the Court of Chancery of the State of Delaware in and for New Castle County (the "Court"):

         WHEREAS,

         A.       Defendant Citizens Corporation ("Citizens" or the "Company") is a Delaware

corporation with its principal executive offices in Worcester, Massachusetts. Citizens was formed

in 1993 by Allmerica Financial Corporation ("Allmerica") as a holding company for Citizens

Insurance Company of America, a Michigan insurance company. In March and April of 1993,

the Company issued an aggregate of 6,981,600  common shares in its initial public offering, as a

result of which approximately 19 % of the outstanding shares became publicly held. Since 1991,

the management and operations of the Company and other subsidiaries of Allmerica have been

combined in part.

         B.       Defendant Allmerica is a Delaware corporation with its principal executive offices

in Worcester, Massachusetts. Allmerica is a holding company for a diversified group of insurance

and financial services companies. Allmerica, through its subsidiaries, operates in two fundamental

areas: retirement and asset management and risk management. As of October 27, 1998,



RLFl-132335-2