Riscorp Announces Merger Agreement

Zenith Insurance Company says it has signed a definitive agreement to merge with Griffin Acquisition Corp.), a company controlled by William Griffin, the majority shareholder of Riscorp. In the merger, holders of the Class A Common Stock will be cashed out and receive $2.85 per share in cash, plus a contingent right to receive an additional pro rata cash amount if Riscorp recovers any additional amounts from Zenith Insurance Company.

At June 30, 1999, the net book value of Riscorp was approximately $2.36 per share. The Board of Directors of Riscorp believes that the liquidation value per share of Riscorp is less than the book value per share. In addition, under the terms of the merger, the acquiring firm will assume all of the liabilities of Riscorp, including its pending litigation. The transaction is subject to other customary conditions, including shareholder approval and is expected to close in the first quarter of 2000.

In addition, Riscorp announced that the Board of Directors has named Walter Riehemann, its general counsel, to also fill the position of president following the recent death of Frederick Dawson. Riehemann's primary responsibility will be to oversee completion of the proposed transaction.

Riehemann, the president and general counsel of Riscorp, said, ``We are extremely pleased with the proposed transaction. The $2.85 price per share represents a significant premium over net book value per share and the amount Class A shareholders would receive in a liquidation of the company. In addition, any liquidation would require a significant amount of cash to be withheld from distribution to shareholders pending resolution of outstanding liabilities. This transaction puts more cash in the hands of our shareholders and does so much faster than any other alternative.''