Stockholders Equity

9 Months Ended

Sep. 30, 2011

Stockholders' Equity [Abstract]

Stockholders' Equity

Note 8 — Stockholders’ Equity

Comprehensive Income

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

	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2011			2010		2011		2010
Net income	$	5,732		$	3,704	$	14,113	$	16,378
Cumulative translation adjustment		(2,593	)		3,637		298		(1,785	)
Unrealized gain (loss) on marketable investments, net of tax		(197	)		103		7		(140	)
Total comprehensive income	$	2,942		$	7,444	$	14,418	$	14,453

Equity Plans

Stock option activity for the nine months ended September 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		345			34.56
Exercised		(222	)		25.21
Forfeited		(64	)		31.30
Outstanding at September 30, 2011		2,274		$	27.22		6.59	$	12,771
Exercisable at September 30, 2011		1,373		$	24.99		5.24	$	10,332

Restricted stock unit activity for the nine months ended September 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		116			33.19
Vested or settled		(9	)		29.86
Forfeited		(20	)		27.90
Unvested at September 30, 2011		279		$	29.86

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				Nine Months Ended
	September 30,				September 30,
	2011		2010		2011		2010
Cost of services and fulfillment	$	678	$	531	$	1,325	$	1,588
Selling and marketing		294		238		686		708
General and administrative		440		387		1,082		1,390
Total	$	1,412	$	1,156	$	3,093	$	3,686

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 three months ended June 30, 2011 resulting from the change in estimate. Compensation expense in the three months ended September 30, 2011 continued to be recognized based on an estimate of 40% vesting.

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
	September 30, 2011						September 30, 2010
	Equity Incentive			Employee Stock			Equity Incentive			Employee Stock
	Plans			Purchase Plan			Plans			Purchase Plan
Average risk-free interest rate		1.11	%		0.08	%		1.37	%		0.20	%
Expected dividend yield		None			None			None			None
Expected life		3.5 Years			0.5 Years			3.5 Years			0.5 Years
Expected volatility		40	%		28	%		40	%		25	%
Weighted average fair value	$	10.01		$	7.56		$	9.49		$	6.87

	Nine Months Ended						Nine Months Ended
	September 30, 2011						September 30, 2010
	Equity Incentive			Employee Stock			Equity Incentive			Employee Stock
	Plans			Purchase Plan			Plans			Purchase Plan
Average risk-free interest rate		1.29	%		0.14	%		2.02	%		0.17	%
Expected dividend yield		None			None			None			None
Expected life		3.5 Years			0.5 Years			3.6 Years			0.5 Years
Expected volatility		40	%		28	%		40	%		25	%
Weighted average fair value	$	10.53		$	7.55		$	9.63		$	6.23

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 September 30, 2011, Forrester had repurchased approximately 8.2 million shares of common stock at an aggregate cost of approximately $181.0 million.