MERGER: Hercules Inc. [HPC] and Ashland Inc. [ASH] - taxable

Issue:

On 11/13/08, Hercules Inc. [HPC] was merged into Ashland Inc.[ASH].

Cause:

This merger is not a typical cash plus stock reorganization. It is a completely taxable transaction. This opinion can be verified by reading the documents at http://files.shareholder.com/support/download.aspx?file=ASH/546298194x0x262445/588eeac9-4f60-49df-9099-a604d9926335/Hercules_Tax_Information.pdf

For each HPC share, shareholders received $18.60 in cash and 0.093 shares of ASH common stock.

Resolution:

This merger will be accounted for as a sale of the HPC stock and a purchase of ASH stock. The total merger consideration can be computed as the sum of the cash received plus the value of the ASH shares received, plus any cash received for fractional shares. ASH closed at $17.9 on 11/13/08.
1) Multiply ASH shares received by 17.9 = ____________
2) Cash received @ 18.60 times HPC shares = ____________
3) Cash in lieu of fractional shares, if any = __________________________
4) Total merger consideration (1) + (2) + (3) = _______________________

First, enter a sale of all HPC stock for the total merger consideration computed above. Round this sale amount to two decimal places. Then, enter a purchase of the number of ASH shares received for the purchase amount computed in (1), above, rounded to two decimal places.

If the broker charges a Reorganization Fee, you can either deduct that as a commission against the sale of the HPC stock, or add it as a commission on the purchase of the ASH shares.