Stockholders Equity

6 Months Ended

Jun. 30, 2011

Stockholders' Equity [Abstract]

Stockholders' Equity

Note 8 — Stockholders’ Equity

Comprehensive Income

The components of total comprehensive income for the three and six months ended June 30, 2011 and 2010 are as follows (in thousands):

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2011		2010			2011		2010
Net income	$	5,470	$	6,902		$	8,381	$	12,674
Cumulative translation adjustment		627		(3,109	)		2,891		(5,422	)
Unrealized gain (loss) on marketable investments, net of tax		205		(293	)		204		(243	)
Total comprehensive income	$	6,302	$	3,500		$	11,476	$	7,009

Equity Plans

Stock option activity for the six months ended June 30, 2011 is presented below (in thousands, except per share data):

				Weighted -		Weighted -
				Average		Average
				Exercise		Remaining		Aggregate
	Number			Price Per		Contractual		Intrinsic
	of Shares			Share		Term (in years)		Value
Outstanding at December 31, 2010		2,215		$	26.00
Granted		117			37.55
Exercised		(194	)		25.79
Forfeited		(46	)		32.42
Outstanding at June 30, 2011		2,092		$	26.52		6.49	$	14,036
Exercisable at June 30, 2011		1,379		$	24.84		5.45	$	11,204

Restricted stock unit activity for the six months ended June 30, 2011 is presented below (in thousands, except per share data):

				Weighted-
				Average
				Grant Date
	RSUs			Fair Value
Unvested at December 31, 2010		192		$	27.64
Granted		5			36.54
Vested or settled		(9	)		29.86
Forfeited		(11	)		27.49
Unvested at June 30, 2011		177		$	27.80

Stock-Based Compensation

Forrester recognizes the fair value of stock-based compensation in net income over the requisite service period of the individual grantee, which generally equals the vesting period. Stock-based compensation was recorded in the following expense categories (in thousands):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2011		2010		2011		2010
Cost of services and fulfillment	$	32	$	607	$	647	$	1,056
Selling and marketing		53		227		392		471
General and administrative		158		589		642		1,002
Total	$	243	$	1,423	$	1,681	$	2,529

In 2009, the Company issued to its employees 95,496 performance-based RSUs. The vesting of the RSUs is subject to performance criteria and will vest at 100% or 40% on April 1, 2012, or the RSUs could be forfeited, depending on whether specified revenue growth and certain operating margin targets related to full year 2011 performance are achieved. Compensation expense in 2009, 2010 and the three months ended March 31, 2011 was recognized based on an estimate of 100% vesting of the RSUs. During the three months ended June 30, 2011, the Company modified its assessment of the likelihood of vesting to the 40% level and recorded a credit, to stock-based compensation expense, of approximately $0.8 million during the quarter resulting from the change in estimate.

Forrester utilizes the Black-Scholes valuation model for estimating the fair value of stock-based compensation. Options granted under the equity incentive plans and shares subject to purchase under the employee stock purchase plan were valued using the following assumptions:

	Three Months Ended						Three Months Ended
	June 30, 2011						June 30, 2010
	Equity Incentive			Employee Stock			Equity Incentive			Employee Stock
	Plans			Purchase Plan			Plans			Purchase Plan
Average risk-free interest rate		1.69	%		0.18	%		2.11	%		0.15	%
Expected dividend yield	None			None			None			None
Expected life	3.5 Years			0.5 Years			3.7 Years			0.5 Years
Expected volatility		40	%		28	%		40	%		25	%
Weighted average fair value	$	11.79		$	7.55		$	9.81		$	5.89

	Six Months Ended						Six Months Ended
	June 30, 2011						June 30, 2010
	Equity Incentive			Employee Stock			Equity Incentive			Employee Stock
	Plans			Purchase Plan			Plans			Purchase Plan
Average risk-free interest rate		1.63	%		0.18	%		2.09	%		0.15	%
Expected dividend yield	None			None			None			None
Expected life	3.5 Years			0.5 Years			3.7 Years			0.5 Years
Expected volatility		40	%		28	%		40	%		25	%
Weighted average fair value	$	11.54		$	7.55		$	9.65		$	5.89

Treasury Stock

Forrester’s Board of Directors has authorized an aggregate $260 million to purchase common stock under the stock repurchase program. The shares repurchased may be used, among other things, in connection with Forrester’s employee and director equity incentive and purchase plans. As of June 30, 2011, Forrester had repurchased approximately 8.1 million shares of common stock at an aggregate cost of approximately $176.0 million.