Stockholders' Equity

9 Months Ended

Sep. 30, 2012

Stockholders' Equity [Abstract]

Stockholders' Equity

Note 7 — Stockholders’ Equity

Equity Plans

Stock option activity for the nine months ended September 30, 2012 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, 2011		2,130		$	27.46
Granted		381			33.84
Exercised		(323	)		24.72
Forfeited		(105	)		30.91
Outstanding at September 30, 2012		2,083		$	28.88		6.43	$	4,339
Exercisable at September 30, 2012		1,202		$	26.19		4.77	$	3,973

Restricted stock unit (RSU) activity for the nine months ended September 30, 2012 is presented below (in thousands, except per share data):

				Weighted-
				Average
	Number of			Grant Date
	Shares			Fair Value
Unvested at December 31, 2011		267		$	29.93
Granted		179			33.88
Vested or settled		(49	)		27.60
Forfeited		(72	)		27.68
Unvested at September 30, 2012		325		$	32.96

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,
	2012		2011		2012		2011
Cost of services and fulfillment	$	835	$	678	$	2,213	$	1,325
Selling and marketing		207		294		638		686
General and administrative		367		440		1,070		1,082
Total	$	1,409	$	1,412	$	3,921	$	3,093

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 its 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 is subject to performance criteria and will 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 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 continues to utilize a zero percent vesting estimate in 2012. In addition, Forrester issued approximately 42,000 RSUs during 2010 that generally vest equally over a four-year period.

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 continues to utilize a zero percent vesting estimate in 2012. In addition, Forrester issued approximately 48,000 RSUs during 2011 that generally vest equally over a four-year period.

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, 2012						September 30, 2011
	Equity Incentive			Employee Stock			Equity Incentive			Employee Stock
	Plans			Purchase Plan			Plans			Purchase Plan
Average risk-free interest rate		0.62	%		0.14	%		1.11	%		0.08	%
Expected dividend yield		1.7	%		1.7	%		None			None
Expected life		4.5 Years			0.5 Years			3.5 Years			0.5 Years
Expected volatility		40	%		31	%		40	%		28	%
Weighted average fair value	$	9.42		$	6.89		$	10.01		$	7.56
	Nine Months Ended						Nine Months Ended
	September 30, 2012						September 30, 2011
	Equity Incentive			Employee Stock			Equity Incentive			Employee Stock
	Plans			Purchase Plan			Plans			Purchase Plan
Average risk-free interest rate		0.87	%		0.14	%		1.29	%		0.14	%
Expected dividend yield		1.7	%		1.7	%		None			None
Expected life		4.5 Years			0.5 Years			3.5 Years			0.5 Years
Expected volatility		40	%		31	%		40	%		28	%
Weighted average fair value	$	9.81		$	6.87		$	10.53		$	7.55

Dividends

In the first nine months of 2012 the Company declared and paid dividends of $0.42 per share or $9.5 million in the aggregate. In October 2012, the Company declared a dividend of $0.14 per share payable on December 19, 2012 to shareholders of record as of December 5, 2012.

Treasury Stock

In October 2012 the Company’s Board of Directors approved an additional $50.0 million to purchase common stock under the stock repurchase program, bringing the total authorization under the program to $310.0 million. The shares repurchased may be used, among other things, in connection with the Company’s employee and director equity incentive and purchase plans. During the nine months ended September 30, 2012 the Company repurchased approximately 0.8 million shares of common stock at an aggregate cost of approximately $26.2 million. As of September 30, 2012, the Company had cumulative repurchases of approximately 9.0 million shares of common stock at an aggregate cost of approximately $207.2 million under the program.