Stockholders' Equity

9 Months Ended

Sep. 30, 2013

Equity [Abstract]

Stockholders' Equity

Note 6 — Stockholders’ Equity

Equity Plans

Stock option activity for the nine months ended September 30, 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		489			35.20
Exercised		(524	)		25.46
Forfeited		(69	)		32.05
Outstanding at September 30, 2013		1,832		$	31.58		7.11	$	9,592
Exercisable at September 30, 2013		866		$	28.73		5.14	$	6,995

Restricted stock unit activity for the nine months ended September 30, 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		207			34.58
Vested or settled		(67	)		32.91
Forfeited		(56	)		31.02
Unvested at September 30, 2013		385		$	34.14

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 September 30,				Nine Months Ended September 30,
	2013		2012		2013		2012
Cost of services and fulfillment	$	1,061	$	835	$	2,708	$	2,213
Selling and marketing		321		207		893		638
General and administrative		478		367		987		1,070
Total	$	1,860	$	1,409	$	4,588	$	3,921

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 March 31, 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 nine months ended September 30, 2013.

Forrester utilizes the Black-Scholes valuation model for estimating the fair value of stock options. 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 September 30, 2013						Three Months Ended September 30, 2012
	Equity Incentive Plans			Employee Stock Purchase Plan			Equity Incentive Plans			Employee Stock Purchase Plan
Average risk-free interest rate		1.40	%		0.08	%		0.62	%		0.14	%
Expected dividend yield		2.1	%		2.1	%		1.7	%		1.7	%
Expected life		4.9 Years			0.5 Years			4.5 Years			0.5 Years
Expected volatility		36	%		19	%		40	%		31	%
Weighted average fair value	$	9.94		$	6.02		$	9.42		$	6.89
	Nine Months Ended September 30, 2013						Nine Months Ended September 30, 2012
	Equity Incentive Plans			Employee Stock Purchase Plan			Equity Incentive Plans			Employee Stock Purchase Plan
Average risk-free interest rate		0.81	%		0.08	%		0.87	%		0.14	%
Expected dividend yield		2.1	%		2.1	%		1.7	%		1.7	%
Expected life		4.9 Years			0.5 Years			4.5 Years			0.5 Years
Expected volatility		37	%		19	%		40	%		31	%
Weighted average fair value	$	9.15		$	6.02		$	9.81		$	6.87

Dividends

In the nine months ended September 30, 2013, the Company declared and paid dividends of $9.4 million consisting of a $0.15 per share dividend in each of the first three quarters of 2013. In the nine months ended September 30, 2012, the Company declared and paid dividends of $9.5 million consisting of a $0.14 per share dividend in each of the first three quarters of 2012. In October 2013, the Company declared a dividend of $0.15 per share payable on December 18, 2013 to shareholders of record as of December 4, 2013.

Treasury Stock

Forrester’s Board of Directors has authorized an aggregate $385.0 million, including $25 million authorized in July 2013 and $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. In the nine months ended September 30, 2013, the Company repurchased approximately 3.0 million shares of common stock at an aggregate cost of approximately $109.2 million, inclusive of the repurchase of shares pursuant to the “modified Dutch auction” described below. From the inception of the program through September 30, 2013, Forrester repurchased approximately 12.2 million shares of common stock at an aggregate cost of approximately $320.0 million.

On April 3, 2013 the Company commenced a “modified Dutch auction” self-tender offer to repurchase up to $130 million of its common stock at a price per share within the range of $32.00 to $36.00. A “modified Dutch auction” self-tender offer allows stockholders to indicate how many shares and at what price within the company’s specified range (in increments of $0.25 per share) they wish to tender. When the tender offer expired, based upon the number of shares tendered and the prices specified by the tendering stockholders, the Company determined the purchase price, which was the lowest price per share within the range that enabled the Company to purchase up to $130 million of its common stock. The tender offer expired on May 1, 2013 and the Company purchased 2,054,732 shares of its common stock on May 7, 2013 at a purchase price of $36.00 per share for an aggregate purchase price of $74.0 million, plus approximately $1.1 million of expenses related to the tender offer.

In the nine months ended September 30, 2013, the Company retired 11.7 million shares of treasury stock. These retired shares are now included in the Company’s pool of authorized but unissued shares. The retired stock had a carrying value of approximately $303.0 million. The Company’s accounting policy upon the formal retirement of treasury stock is to deduct the par value of the retired stock from Common Stock and to reflect the excess of cost over par value as a deduction from Additional Paid-in Capital.