Filed by Logitech International S.A.
Pursuant to Rule 425 under the Securities Act of 1933
and deemed filed pursuant to Rule 14d-2
of the Securities Exchange Act of 1934
Subject Company: Labtec Inc.
Commission File No. 333-56072
Labtec / Logitech Acquisition
Frequently Asked Questions Regarding Tendering of
Options Held by Labtec Employees
We urge you to read Logitech's offer to exchange cash and shares for shares of
Labtec common stock, a copy of which is being provided along with this Q & A,
because it contains important information. Logitech has also filed its offer
with the Securities and Exchange Commission as part of a Registration Statement.
The exchange offer was sent on or about February 23, 2001, to Labtec
shareholders. You may obtain copies of the exchange offer and other documents
filed by Logitech and Labtec with the SEC at the SEC's web site at
http://www.sec.gov.
You can also obtain free copies of the documents relating to Logitech by
contacting the Logitech Investor Relations Department at Logitech Inc., 6505
Kaiser Drive, Fremont, California 94555, or at (510) 795-8500.
GENERAL QUESTIONS
1. What's the difference between a tender offer and a merger?
The first stage in the transaction is the tender offer. This is Logitech's
offer to purchase all the outstanding shares of Labtec. In the second stage,
the two companies will merge. This may occur almost immediately or may take
until several months to complete.
2. When is everything final? When are we officially part of Logitech?
The deadline for the "tender offer" is midnight, March 22. Assuming all the
conditions for the closing are met, the tender offer will close within a few
days after that date. At that time, Labtec will become part of Logitech.
3. What is an "ADR" and how is it different from regular stock?
Logitech is a Swiss company that is publicly traded on both the Swiss stock
exchange and the NASDAQ exchange. Registered Shares are traded in
Switzerland on the Swiss Stock
-1-
Exchange. ADR stands for American Depositary Receipt, and ADRs are traded on
the NASDAQ exchange. Logitech has experienced that the Shares on the Swiss
Stock Exchange and the ADRs on the NASDAQ trade very close in price (given
exchange rates). There are 10 ADRs to one (Swiss) Registered Share.
TENDERING YOUR SHARES AND OPTIONS
4. Will I have to tender my shares if I hold options?
You will need to exercise your options and "tender" the shares to Logitech
via the Labtec Human Resources Department and the Bank of New York (BONY).
To do this, you must complete the paperwork that will be provided to you by
HR in an informational packet (more details below). Options not exercised at
either the tender offer or the final merger will be automatically terminated
immediately after the closing of the merger.
5. What will happen if I don't tender my options right now?
Options not turned in for the tender can be transacted at the final merger
date. The payout will be the same in the merger as in the tender offer. The
merger may occur immediately or it may not occur for several months. You
must be sure to have your exercise paperwork into HR to participate in the
merger if you don't participate in the tender offer. IF YOU DON'T SUBMIT
YOUR PAPERWORK ON TIME, YOUR OPTIONS WILL TERMINATE.
6. Who is Piper Jaffrey and why do I have to open an account with them?
U.S. Bancorp Piper Jaffrey is a broker which has a relationship with Labtec
so that employees who exercise options do so through a brokerage account
with Piper. The U.S. Bancorp Piper Jaffray brokerage office will oversee the
option transactions and they will be in contact with you (once an account
has been set up) on a one-on-one basis regarding these transactions.
EXERCISING YOUR OPTIONS.
7. What is my current option status and when will they vest?
You will receive a current status of your outstanding options in an
information packet prior to the transaction. All your outstanding options
will fully accelerate at the time of closing of the tender offer. They will
remain accelerated to full vesting through the final merger. That means,
whether the option holder is 25% vested or 50% vested by service years, on
the tender offer closing, all options will be 100% vested.
8. When must I exercise my options?
You may exercise your options at the time of the tender offer or anytime
before the merger. The merger may occur immediately after the tender offer
or it may take several months to complete. IF YOU DO NOT EXERCISE YOUR
OPTIONS FOR THE TENDER OFFER OR THEREAFTER BEFORE THE MERGER, YOUR OPTIONS
WILL TERMINATE. The safe thing to do is to exercise
-2-
your options promptly regardless of whether you decide to tender them in the
tender offer. Otherwise, you may miss the opportunity to participate in the
merger and your options will terminate.
9. How will I exercise my options?
There are several papers you must complete and return to HR by the close of
business on MARCH 21:
. You have already received information on how to set up an account with our
broker, U.S. Bancorp Piper Jaffray. This account must be set up in order
to participate in the tender offer.
. You must complete an Intent to Exercise Form. On this form, you are given
a choice of how to allocate your Logitech ADRs received as part of the
acquisition.
. You must complete the Form F-4 Letter of Transmittal. This form is a
little difficult to understand, and a sample form has been included in
your information packet.
10. What if I want to sell the Logitech ADRs I get from the transaction? What
if I want to sell some of my Logitech ADRs and hold some? What if I want to
keep (hold) all of my Logitech ADRs?
You can decide what to do with your Logitech ADRs. The intent to exercise
form in the information packet allows you to indicate if you wish to hold
your Logitech ADRs or if you wish to sell your Logitech ADRs, and how many
Logitech ADRs you want to sell.
11. What if I don't have enough cash to pay the exercise price, taxes, and
broker fees for my Labtec options?
Depending on your cost to exercise (strike price), you may show a debt to
Labtec because the cash you receive may be less than the amount you owe to
exercise your stock (including taxes and broker fees). If that happens, you
may need to sell some portion of your Logitech ADRs to pay for the exercise
cost, taxes, and broker fees. After those items are satisfied, you can
decide whether to sell or hold remaining Logitech shares.
12. What is the tax impact from exercising my Labtec options?
You will be taxed on any compensation received from exercising your Labtec
option. This includes the cash compensation received ($11 per Labtec share
after option exercise) and the fair market value of the Logitech stock you
receive in this transaction. The taxable compensation is determined by the
difference between the cost to exercise and the sale price. The total
package is considered compensation and is taxed accordingly (state, federal,
Medicare, social security, etc. in the US). The taxation of option exercises
is complex and you should consult your own tax advisor.
13. Will there be withholding from the transaction on any taxes due? What tax
rate will be used in the U.S.?
Yes, we will withhold all applicable taxes in the U.S. The tax rate is the
standard supplemental tax rate. This is 28% for Federal and varies depending
on the state in which you reside. In addition any
-3-
applicable Social Security, and Medicare taxes will be withheld. Outside the
U.S., local regulations will apply.
14. How long does the process take from the time I set up an account with Piper
Jaffray to when I get a check?
Depending on various elements (market behavior, compliance issues, accuracy
and completeness of forms, etc), most transactions should be cleared by mid-
April assuming that the tender offer closes by April 1. Most option holders
should have their proceeds in hand by then.
15. What if my options are under water? (Exercise priced higher than the
acquisition rate of $11 cash and $7 of Logitech ADRs based on a 20 day
trailing average)
Under water options, like all options that are not exercised, WILL TERMINATE
IMMEDIATELY AFTER THE CLOSING OF THE MERGER.
16. If I exercised some of my vested options earlier for a different sale price
than Logitech is offering, will I get a refund?
No. The Logitech price ($11 cash, approximately $7 Logitech stock) applies
only to the buy-out of options currently held, not those already exercised.
If some or all vested options were exercised earlier, the option holder no
longer owns those particular shares.
17. Why have some employees not received options?
The Labtec Option Program was a discretionary benefit. Options could be
granted only by vote of the Board of Directors. The Board did not "grant"
any additional options after May 2000.
FOR FOREIGN OPTION HOLDERS
18. How should option holders in the field or in foreign office handle their
transactions?
Option holders in the field and in foreign offices will also receive an
informational packet including the necessary forms to transact their
options. Any questions can be forwarded directly to our contact, Debra
Butler Hardy at Piper Jaffray in Portland, OR. (Telephone: 503- 603-1236)
19. Will foreign option holders be paid in U.S. $ at the buy-out?
Yes. Foreign option holders receive the same ratio in U.S. dollars ($11 cash
buy-out, approximately $7 in Logitech stock for each option held).
20. Will foreign option holders be subject to U.S. taxes in transacting their
options?
No.
-4-