Stockholders' Equity

3 Months Ended

Mar. 31, 2013

Stockholders' Equity [Abstract]

Stockholders' Equity

Note 6 — Stockholders’ Equity

Equity Plans

Stock option activity for the three months ended March 31, 2013 is presented below (in thousands, except per share data):

	Number of Shares			Weighted - Average Exercise Price Per Share		Weighted - Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value
Outstanding at December 31, 2012		1,936		$	29.03
Granted		62			27.68
Exercised		(45	)		18.61
Forfeited		(32	)		30.75
Outstanding at March 31, 2013		1,921		$	29.20		6.35	$	6,332
Exercisable at March 31, 2013		1,071		$	26.88		4.69	$	5,346

Restricted stock unit activity for the three months ended March 31, 2013 is presented below (in thousands, except per share data):

	Number of Shares			Weighted - Average Grant Date Fair Value
Unvested at December 31, 2012		301		$	32.98
Granted		7			27.55
Vested or settled		—			—
Forfeited		(44	)		30.30
Unvested at March 31, 2013		264		$	33.29

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 March 31,
	2013		2012
Cost of services and fulfillment	$	904	$	653
Selling and marketing		422		224
General and administrative		534		446
Total	$	1,860	$	1,323

In 2009, the Company issued to its employees 95,496 performance-based RSUs. The vesting of the RSUs was subject to performance criteria and would 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 were achieved. Based on 2011 financial performance, 40% of the then outstanding RSUs vested on April 1, 2012. Compensation expense in 2010 and 2009 was recognized based on an estimate of 100% vesting of the RSUs and in the second quarter of 2011 the Company modified it assessment of vesting to the 40% level.

In 2010, the Company issued to its employees approximately 63,000 performance-based RSUs. The vesting of the RSUs was subject to performance criteria and would vest at 100% or 40% on April 1, 2013, or the RSUs could be forfeited, depending on whether specified revenue growth and certain operating margin targets related to full year 2012 performance were achieved. Based on 2012 financial performance these RSUs were forfeited. Compensation expense through the third quarter of 2011 was recognized based on an estimate of 100% vesting of the RSUs and in the fourth quarter of 2011 the Company modified its assessment of vesting to a zero percent level. The Company continued to utilize a zero percent vesting estimate through the first quarter of 2013.

In 2011, the Company issued to its employees approximately 71,000 performance-based RSUs. The vesting of the RSUs is subject to performance criteria and will vest at 100% or 40% on April 1, 2014, or the RSUs could be forfeited, depending on whether specified revenue growth and certain operating margin targets related to full year 2013 performance are achieved. Compensation expense through the third quarter of 2011 was recognized based on an estimate of 100% vesting of the RSUs and in the fourth quarter of 2011 the Company modified its assessment of vesting to a zero percent level. The Company continued to utilize a zero percent vesting estimate through the first quarter of 2013.

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 March 31, 2013						Three Months Ended March 31, 2012
	Equity Incentive Plans			Employee Stock Purchase Plan			Equity Incentive Plans			Employee Stock Purchase Plan
Average risk-free interest rate		0.81	%		0.11	%		0.84	%		0.14	%
Expected dividend yield		2.1	%		2.1	%		1.7	%		1.7	%
Expected life		4.5 Years			0.5 Years			4.5 Years			0.5 Years
Expected volatility		40	%		25	%		40	%		31	%
Weighted average fair value	$	7.72		$	5.97		$	10.05		$	7.54

Dividends

In the first quarter of 2013, the Company declared and paid a dividend of $0.15 per share or $3.4 million in the aggregate. In the first quarter of 2012, the Company declared and paid a dividend of $0.14 per share or $3.2 million in the aggregate. In April 2013, the Company declared a dividend of $0.15 per share payable on June 19, 2013 to shareholders of record as of June 5, 2013.

Treasury Stock

Forrester’s Board of Directors has authorized an aggregate $360.0 million, including $50 million authorized in February 2013, 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 March 31, 2013, Forrester had repurchased approximately 9.2 million shares of common stock at an aggregate cost of approximately $210.8 million.