Stockholder Advisory for Exchanged Holders of Genzyme Surgical Products Common Stock
On June 28, 1999 a common stock distribution of Genzyme Surgical Products was made to Genzyme General shareholders of record as of June 14, 1999. Regulation 1.307-1 of the Internal Revenue Service states that "(a) If a shareholder receives stock as a distribution on stock... previously held and under section 305 such distribution is not includible in gross income" (as in this case here) "then except as provided in section 307(b) and 1.307-2 the basis of the stock...with respect to which the distribution was made shall be allocated between the old and new stocks in proportion to the fair market value of each on the date of distribution."
An example of basis allocation follows:
 | Genzyme General Division common stockholders received 0.17901 share of Genzyme Surgical Products common stock for each share of Genzyme General Division common stock held, plus cash for any fractional share at a rate of $25.00 per share.
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| Adjustment to GENZ cost basis:
The cost basis of your shares should be allocated in proportion to fair market values (average of the high and low prices) of Genzyme General (GENZ) and Genzyme Surgical Products (GZSP) common stocks on the distribution date (June 28, 1999).
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6/28/99:
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GENZ
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GZSP
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High:
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$52.00
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$8.00
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Low:
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$50.50
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$4.688
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Average:
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$51.25
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$6.344
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The allocation of the cost basis must be weighted to the shares issued as it is not a 1:1 distribution. The calculation is based on the total market value of each common stock on the distribution date. For example,
If you owned 100 shares of GENZ for which you paid $25.00 per share, your total cost was $2,500.00 (total original basis).
At the distribution you had:
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| 100 shares of GENZ with an average market value of $51.25 per share = |
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$5,125.00
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97.9%
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17 shares of GZSP with an average market value of $6.344 per share =
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107.85
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2.1%
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$5,232.85
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100.0%
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Applying this to your original basis from above,
97.9 percent times $2,500.00 = $2,447.50, which is the basis for the total number of Genzyme General Division common stock shares. $2,447.50/100 = $24.48/share.
2.1percent times $2,500.00 = $52.50, which is the basis for the total number of Genzyme Surgical Products common stock shares. $52.50/17 = $3.09/share.
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CONTACT INFORMATION: |
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Genzyme Investor Relations
500 Kendall Street
Cambridge, MA 02142
T: 617 252 7500
F: 617 374 7368
Patrick Flanigan – 617 768 6563
Investor Information Line
U.S. T: 800 905 4369
Outside the U.S. T: 678 999 4572
Shareholder Contact
For questions about your shares, replacement of a lost stock certificate or a change of address call our transfer agent.
American Stock Transfer
59 Maiden Lane
New York, NY 10038
T: 212 936 5100
or
Genzyme Shareholder Services
T: 617 768 6686
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