SNPS » Topics » A failure to recruit and retain key employees would have a material adverse effect on our ability to compete.

This excerpt taken from the SNPS 10-Q filed Jun 2, 2005.

A failure to recruit and retain key employees would have a material adverse effect on our ability to compete.

 

To be successful, we must attract and retain key technical, sales and managerial employees, including those who join Synopsys in connection with acquisitions. There are a limited number of qualified EDA and IC design engineers, and competition for these individuals is intense. Our employees, including employees who have joined Synopsys in connection with acquisitions, are often recruited aggressively by our competitors and our customers. Any failure to recruit and retain key technical, sales and managerial employees would have a material adverse effect on our business, results of operations and financial condition.

 

We issue stock options and maintain employee stock purchase plans as a key component of our overall compensation. There is growing pressure on public companies from stockholders generally to reduce the rate at which companies, including Synopsys, issue stock options to employees. We expect that the implementation of accounting rules that will require us to recognize on our income statement compensation expense from employee stock options and our employee stock purchase plan and which we will be required to adopt in the first quarter of fiscal 2006, will increase stockholder pressure to limit future option grants.

 

In addition, a substantial portion of the outstanding stock options held by employees have exercise prices above the market price of our stock (i.e., they are “underwater”), which has decreased the value of these options as an employee retention tool. Although our stockholders have approved, and we have launched, an employee stock option exchange program by which significantly underwater options may be exchanged for a lesser number of new options priced at current fair market value and with a new vesting period, the failure to obtain stockholder approval to issue new options in the future could  lead to higher employee turnover and it will make it more difficult to attract, retain and motivate employees, any of which could materially and adversely affect our business, results of operations and financial condition.

 

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This excerpt taken from the SNPS 10-Q filed Mar 10, 2005.

           A failure to recruit and retain key employees would have a material adverse effect on our ability to compete.

 

           To be successful, we must attract and retain key technical, sales and managerial employees, including those who join Synopsys in connection with acquisitions. There are a limited number of qualified EDA and IC design engineers, and competition for these individuals is intense. Our employees, including employees who have joined Synopsys in connection with acquisitions, are often recruited aggressively by our competitors and our customers. Our failure to recruit and retain key technical, sales and managerial employees would have a material adverse effect on our business, results of operations and financial condition.

 

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           We issue stock options and maintain employee stock purchase plans as a key component of our overall compensation. A substantial portion of the outstanding stock options held by employees have exercise prices above the market price of our stock (i.e., they are “underwater”), which has decreased the value of these options as an employee retention tool. In addition, there is growing pressure on public companies from shareholders generally to reduce the rate at which companies, including Synopsys, issue stock options to employees. We expect that the implementation of accounting rules that will require us to recognize on our income statement compensation expense from employee stock options and our ESPP and which we will be required to adopt in the fourth quarter of fiscal 2005, will increase shareholder pressure to limit future option grants. The failure to address the underwater option issue and the failure to obtain shareholder approval to issue new options at levels proposed by Synopsys could  lead to higher employee turnover and it will make it more difficult to attract, retain and motivate employees, any of which could materially and adversely affect our business, results of operations and financial condition.

 

This excerpt taken from the SNPS 10-K filed Jan 12, 2005.

        A failure to recruit and retain key employees would have a material adverse effect on our ability to compete.

        To be successful, we must attract and retain key technical, sales and managerial employees, including those who join Synopsys in connection with acquisitions. There are a limited number of qualified EDA and IC design engineers, and competition for these individuals is intense. In addition, a substantial portion of our outstanding stock options held by employees had exercise prices above the market price of our stock, which has decreased their value as an employee retention tool. As a result, we could experience higher employee turnover. Our employees, including employees who have joined Synopsys in connection with acquisitions, are often recruited aggressively by our competitors and our customers. Our failure to recruit and retain key technical, sales and managerial employees would have a material adverse effect on our business, results of operations and financial condition.

        We issue stock options and maintain employee stock purchase plans as a key component of our overall compensation. There is growing pressure on public companies from shareholders generally and various organizations to reduce the rate at which companies, including Synopsys, issue stock options to employees, which may make it more difficult to obtain stockholder approval of our equity compensation plans when required. In addition, the Financial Accounting Standards Board (FASB) has adopted changes to generally accepted accounting principles (GAAP) that will require us to adopt a different method of determining the compensation expense for our employee stock options and employee stock purchase plans beginning in the fourth quarter of fiscal 2005.We believe expensing stock options will increase shareholder pressure to limit future option grants. Any of these factors could make it more difficult for us to grant stock options to employees or maintain our employee stock purchase plans in the future. As a result, we may lose top employees to non-public, start-up companies or may generally find it more difficult to attract, retain and motivate employees, either of which could materially and adversely affect our business, results of operations and financial condition.

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