HP 2013 Annual Report Download - page 41

executives, engineers, skilled solutions providers in the IT support business and qualified sales
representatives are critical to our future, and competition for experienced employees in the IT industry
can be intense. In order to attract and retain executives and other key employees in a competitive
marketplace, we must provide a competitive compensation package, including cash- and share-based
compensation. Our share-based incentive awards include stock options, restricted stock units and
performance-based restricted units, some of which contain conditions relating to HP’s stock price
performance and HP’s long-term financial performance that make the future value of those awards
uncertain. If the anticipated value of such share-based incentive awards does not materialize, if our
share-based compensation otherwise ceases to be viewed as a valuable benefit, if our total
compensation package is not viewed as being competitive, or if we do not obtain the shareholder
approval needed to continue granting share-based incentive awards in the amounts we believe are
necessary, our ability to attract, retain, and motivate executives and key employees could be weakened.
The failure to successfully hire executives and key employees or the loss of any executives and key
employees could have a significant impact on our operations. Further, changes in our management
team may be disruptive to our business, and any failure to successfully transition and assimilate key
new hires or promoted employees could adversely affect our business and results of operations.
System security risks, data protection breaches, cyber attacks and systems integration issues could disrupt our
internal operations or information technology services provided to customers, and any such disruption could
reduce our expected revenue, increase our expenses, damage our reputation and adversely affect our stock
price.
Experienced computer programmers and hackers may be able to penetrate our network security
and misappropriate or compromise our confidential information or that of third-parties, create system
disruptions or cause shutdowns. Computer programmers and hackers also may be able to develop and
deploy viruses, worms, and other malicious software programs that attack our products or otherwise
exploit any security vulnerabilities of our products. In addition, sophisticated hardware and operating
system software and applications that we produce or procure from third-parties may contain defects in
design or manufacture, including ‘‘bugs’’ and other problems that could unexpectedly interfere with the
operation of the system. The costs to us to eliminate or alleviate cyber or other security problems,
bugs, viruses, worms, malicious software programs and security vulnerabilities could be significant, and
our efforts to address these problems may not be successful and could result in interruptions, delays,
cessation of service and loss of existing or potential customers that may impede our sales,
manufacturing, distribution or other critical functions.
We manage and store various proprietary information and sensitive or confidential data relating to
our business. In addition, our outsourcing services business routinely processes, stores and transmits
large amounts of data for our clients, including sensitive and personally identifiable information.
Breaches of our security measures or the accidental loss, inadvertent disclosure or unapproved
dissemination of proprietary information or sensitive or confidential data about us, our clients or
customers, including the potential loss or disclosure of such information or data as a result of fraud,
trickery or other forms of deception, could expose us, our customers or the individuals affected to a
risk of loss or misuse of this information, result in litigation and potential liability for us, damage our
brand and reputation or otherwise harm our business. We also could lose existing or potential
customers of outsourcing services or other IT solutions or incur significant expenses in connection with
our customers’ system failures or any actual or perceived security vulnerabilities in our products and
services. In addition, the cost and operational consequences of implementing further data protection
measures could be significant.
Portions of our IT infrastructure also may experience interruptions, delays or cessations of service
or produce errors in connection with systems integration or migration work that takes place from time
to time. We may not be successful in implementing new systems and transitioning data, which could
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