To shareholders and all members of the Forrester community,
In 2022, we remained laser-focused on building a contract value (CV) growth engine. Forrester Decisions — our
power research platform — grew 400% and now constitutes approximately one-third of our total CV. And we have
begun the voyage of moving our sales capabilities from good to great.
2022 was a tale of two cities
In the first half of the year, the company achieved double-digit CV growth, continuing the trend from 2021, a year in
which we grew CV 15%. In the second half of the year, challenged by economic uncertainty from higher inflation
and the impending recession, along with a slowdown in technology — the largest vertical market we serve — we did
not meet our sales targets. The complexity of migrating clients from our legacy research products to Forrester
Decisions also impeded our sales momentum.
Despite these challenges, the company grew its top and bottom lines, with revenue increasing 9% and adjusted EPS
increasing 18%. These results were driven by healthy bookings in the first half of 2022, as well as continued close
management of our cost structure in the second half of the year. Lower performance in the second half did impact our
key metrics as CV increased only 3% for the full year and deferred revenue, wallet retention, and revenue growth
slowed.
Our consulting business revenue declined 2% as analysts shifted a portion of their focus to serving Forrester Decisions
clients.
Our events business revenue rose 140%, driven by strong demand from attendees and sponsors and our continued
hybrid approach to in-person events. We held 11 events with over 5,300 paid attendees in 2022.
Forrester Decisions is the future of the company
Forrester Decisions launched in August of 2021 as our power research platform — integrating Forrester and
SiriusDecisions research into one offering. It constitutes 16 services, each directed at business and technology leaders
across IT, marketing, sales, product, customer experience, and digital functions. Forrester Decisions clients have access
to a rich array of features, including:
1) Vision research — enabling clients to see around corners and into the future.
2)
Strategy research — equipping executives with the analysis and information to make the right decisions,
particularly in choosing technology vendors.
3) Operational research — models, frameworks, and case studies enabling personas to organize and operate
efficiently.
4) Unlimited guidance and inquiry sessions with analysts — advising clients in person on how they can best
deploy research in their organizations.
5) Benchmarking — fact-based comparisons that enable clients to understand where their budgets, processes,
and practices are lagging competitors.
6) Customer data — global surveys of B2C and B2B customers revealing behavior changes, buyer emotion,
changes in trust, and specific company brand scoring.
7) Certification — courses that teach client teams how to run their internal operations.
8) Attendance at a Forrester event — a chance to network and exchange best practices with peers.
Unlike competitive offerings, Forrester Decisions intentionally combines the disciplines of business and technology
into one conversation. We have found that companies that build their businesses to be fully digital are best able to
win, serve, and retain buyers — this is what we call customer obsession. For leading corporations, business is
technology and technology is business — and that’s precisely the worldview that Forrester Decisions delivers.
Despite the complexity of transitioning our clients to Forrester Decisions in 2022, we achieved the goal of moving
approximately one-third of our CV to the new research portfolio.
Forrester Decisions is our top-performing research product and retained at an 89% retention rate. Additionally, client
engagement was considerably higher with Forrester Decisions — on average, Forrester Decisions users visited our site
50% more than users of our legacy research. Forrester Decisions is also the top-performing Forrester product
according to the Customer Experience Index survey of our clients.
Given strong client acceptance of the platform, we have confidence in achieving our goal of converting approximately
two-thirds of CV to Forrester Decisions by year-end 2023.
Taking sales from good to great
The construction of the CV growth engine requires a refinement and sharpening of the Forrester sales channel. We
increased our sales personnel headcount by 11% in 2022 and spent much of the year transitioning the sales force
culture to focus on selling research contract value and achieving net contract-value increase.
Nate Swan, a 20-year research industry veteran, has joined the company as chief sales officer with the charter to
accelerate this effort. Nate will build a sales force that is data-driven and capable of repeatable, scalable selling
motions. Forrester Decisions has opened unique opportunities for new business and the upsell and cross-sell of
existing clients — an expanded and finely tuned sales force will capture those opportunities. We are all excited to have
Nate on our team.
We continued to advance on our ESG journey
In 2022, we made significant progress on the environmental, social, and governance (ESG) front. We pledged to
halve our carbon emissions to continue to reduce our environmental footprint. We took decisive strides toward the
diversity and inclusion (D&I) goals we set in 2021, improving our D&I fluency and establishing more inclusive
recruitment practices. We also continue to hold ourselves to the highest standards of integrity — both in our research
and throughout our operations. We will continue to embed ESG principles into the fabric of our company in 2023
and beyond.
Outlook for 2023
We expect the challenges of 2022 to continue into 2023, as economic uncertainty and the slowdown in the
technology market will persist. Forrester will not stand still — we will use this time to perfect the CV growth engine
that will enable the company to drive long-term growth.
In 2023, Forrester will celebrate its 40th anniversary. Over its four decades of operation, the company has managed
through a number of recessions and global economic downturns. We are proven stewards of spending and asset
management in difficult economic times — those disciplines will serve us well in 2023.
I am optimistic about Forrester’s future. We are laser-focused on driving contract value; we have a valuable and client-
tested product in Forrester Decisions; our strategy of coaching large corporations to be customer-obsessed is resonant
and unique; and we are building a world-class sales organization that can double CV in the next five years. The
technology and business worlds have never been more dynamic and challenging for large companies — these changes
are the gasoline that drives the Forrester opportunity forward.
I am grateful to our investors for their continued support, and I want to thank our clients for sharing their business
challenges with us and welcoming Forrester into their boardrooms. And finally, I want to thank all Forresterites for
their ingenuity and energy as they do the important work of finding the best path forward for our clients.
Thank you.
George F. Colony
CEO, Forrester
FORRESTER RESEARCH 2022 ANNUAL REPORT
Form 10-K
2022
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2022
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
TO
Commission File Number 000-21433
FOR THE TRANSITION PERIOD FROM
Forrester Research, Inc.
(Exact name of Registrant as specified in its Charter)
Delaware
(State or other jurisdiction of
incorporation or organization)
60 Acorn Park Drive
Cambridge, Massachusetts
(Address of principal executive offices)
04-2797789
(I.R.S. Employer
Identification No.)
02140
(Zip Code)
Securities registered pursuant to Section 12(b) of the Act:
Registrant’s telephone number, including area code: (617) 613-6000
Trading Symbol(s)
FORR
Title of each class
Common Stock, $0.01 Par Value
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. YES ☐ NO ☒
Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. YES ☐ NO ☒
Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90
days. YES ☒ NO ☐
Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T
(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). YES ☒ NO ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth
company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the
Exchange Act.
Name of each exchange on which registered
Nasdaq Global Select Market
Large accelerated filer
Non-accelerated filer
Emerging growth company
☐
☐
☐
Accelerated filer
Smaller reporting company
☒
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised
financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over
financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the
correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the
registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES ☐ NO ☒
The aggregate market value of the voting and non-voting common equity held by non-affiliates of the Registrant, based on the closing price of the shares of common
stock on The NASDAQ Stock Market on June 30, 2022, was approximately $532,000,000.
The number of shares of Registrant’s Common Stock outstanding as of March 6, 2023 was 19,191,000.
Portions of the registrant’s Proxy Statement related to its 2023 Annual Stockholders’ Meeting to be filed subsequently -- Part III of this Form 10-K.
DOCUMENTS INCORPORATED BY REFERENCE
FORRESTER RESEARCH, INC.
INDEX TO FORM 10-K
Business
Risk Factors
Unresolved Staff Comments
Properties
Legal Proceedings
Mine Safety Disclosures
Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity
Securities
[Reserved]
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Quantitative and Qualitative Disclosures About Market Risk
Consolidated Financial Statements and Supplementary Data
Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
Controls and Procedures
Other Information
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Directors, Executive Officers, and Corporate Governance
Executive Compensation
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Certain Relationships and Related Transactions, and Director Independence
Principal Accountant Fees and Services
Exhibits and Financial Statement Schedules
Form 10-K Summary
PART I
Item 1.
Item 1A.
Item 1B.
Item 2.
Item 3.
Item 4.
PART II
Item 5.
Item 6.
Item 7.
Item 7A.
Item 8.
Item 9.
Item 9A.
Item 9B.
Item 9C.
PART III
Item 10.
Item 11.
Item 12.
Item 13.
Item 14.
PART IV
Item 15.
Item 16
SIGNATURES
Page
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7
9
9
10
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11
12
13
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23
55
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57
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61
2
This Annual Report on Form 10-K contains forward-looking statements within the meaning of the Private Securities Litigation
Reform Act of 1995. Words such as “expects,” “believes,” “anticipates,” “intends,” “plans,” “estimates,” or similar expressions are
intended to identify these forward-looking statements. Reference is made in particular to our statements about changing stakeholder
expectations, migration of our clients into our Forrester Decisions products, product development, holding hybrid events, possible
acquisitions, future dividends, future share repurchases, future growth rates, operating income and cash from operations, future
deferred revenue, future compliance with financial covenants under our credit facility, future interest expense, anticipated increases
in, and productivity of, our sales force and headcount, the adequacy of our cash, and cash flows to satisfy our working capital and
capital expenditures, and the anticipated impact of accounting standards. These statements are based on our current plans and
expectations and involve risks and uncertainties. Important factors that could cause actual future activities and results of operations
to be materially different from those set forth in the forward-looking statements are discussed below under “Risk Factors.” We
undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events, or
otherwise.
PART I
Item 1. Business
General
Forrester Research, Inc. is a global independent research and advisory firm. We help leaders across technology, customer
experience, marketing, sales and product functions use customer obsession to accelerate growth. Through Forrester’s proprietary
research, consulting, and events, leaders from around the globe are empowered to be bold at work, navigate change, and put their
customers at the center of their leadership, strategy, and operations. Our unique insights are grounded in annual surveys of more than
700,000 consumers, business leaders, and technology leaders worldwide, rigorous and objective research methodologies, over 100
million real-time feedback votes, and the shared wisdom of our clients.
Our common stock is listed on Nasdaq Global Select Market under the symbol "FORR".
Market Overview
We believe that market dynamics — from empowered customers to the COVID-19 pandemic — have fundamentally changed
business and technology. These dynamics continue to change stakeholder expectations.
Consumers and buyers have new demands and requirements. To win, serve, and retain customers in this environment, we
believe that companies require a higher level of customer obsession. Customer obsessed firms put their customers at the center of their
leadership, strategy, and operations. Our research has shown that customer-obsessed firms grow faster and are more profitable.
Organizations and leaders require a continuous stream of guidance and analysis to adapt to these ever-changing behaviors and
realities. We believe that there is an increasing need for objective external sources of this guidance and analysis, fueling what we call
the “golden age of research.”
Forrester’s Strategy and Business Model
The foundation of our business model is our ability to help business and technology leaders tackle their most pressing priorities
and drive growth through customer obsession. Forrester helps clients solve problems, make decisions, and take action to deliver
results. With our proprietary research, consulting, and events, our business model provides multiple sources of value to our clients and
creates a system to expand contract value ("CV"), which we view as our most significant business metric.
Generally speaking, we define CV products as those services that our clients use over a year’s time and that are renewable
periodically, usually on an annual basis. Our CV products primarily consist of our subscription research products, while our non-CV
businesses, consulting and events, play critical complementary roles in driving our CV growth.
With respect to our clients, we believe that it has become difficult for large companies to run multi-year strategy and change
management projects on their own as customers are changing faster and competitors are increasingly aggressive. Multi-year CV
product relationships enable us to help our clients formulate their vision for the future and then translate those plans into
implementation and outcomes over time. For our investors, we believe that CV growth will result in predictable and profitable revenue
streams.
Our business model is built on the premise that an increase in CV generates more cash which can then be invested in improving
our go-to-market structure (activities including sales, product, marketing and acquisitions) and creating CV products that clients renew
year after year—repeating the cycle and driving the model forward. We refer to this model as our "CV growth engine."
3
Our Products and Services
We strive to be an indispensable source that business and technology leaders across functions, including technology, customer
experience, digital, marketing, sales, and product, worldwide turn to for ongoing guidance to plan and operate more effectively.
We deliver our products and services globally through three business segments – Research, Consulting and Events.
Research
For 40 years, Forrester has been providing objective, independent and data-driven research insights utilizing both qualitative and
quantitative data. We adhere to rigorous, unbiased research methodologies that are transparent and publicly available to ensure
consistent research quality across markets, technologies, and geographies.
Our primary subscription research services include Forrester Decisions, Forrester Research, and SiriusDecisions Research. This
portfolio of research services is designed to provide business and technology leaders with a proven path to growth through customer
obsession. Key content available via online access includes:
•
•
•
•
•
future trends, predictions, and market forecasts;
deep consumer and business buyer data and insights;
curated best practice models and tools to run business functions;
operational and performance benchmarking data; and
technology and service market landscapes and vendor evaluations.
Our research services also include time with our analysts to apply research to their context.
Launched in 2021, Forrester Decisions is a portfolio of standardized research services combining key features of Forrester
Research with key features of SiriusDecisions Research. We intend to migrate our existing clients that purchase Forrester Research
and SiriusDecisions Research products to the Forrester Decisions products, and as of January 1, 2023, Forrester Decisions will be our
only subscription research product that will be available for most new clients. As of December 31, 2022, approximately 32% of our
CV was composed of Forrester Decisions products.
Consulting
Our Consulting business includes consulting projects and advisory services. We deliver focused insights and recommendations
to assist clients in developing and executing their technology and business strategies. Our consulting projects help clients with
challenges addressed in our published research. Our consulting projects include conducting maturity assessments, prioritizing best
practices, developing strategies, building business cases, selecting technology vendors, structuring organizations, developing content
marketing strategies and collateral, and sales tools. Consulting plays an important role in supporting our CV growth, as we have found
that clients that purchase consulting projects from us renew their CV contracts at higher rates compared to clients that do not purchase
consulting.
Events
We host multiple events across North America, Europe, and the Asia-Pacific region throughout the year. Forrester Events are
thoughtfully designed and curated experiences to provide clients with insights and actionable advice to achieve accelerated business
growth. Forrester Events focus on business imperatives of significant interest to clients, including business-to-business marketing,
sales and product leadership, customer experience, security and risk, new technology and innovation, and data strategies and insights.
One of the primary purposes of our Events business is to help drive our CV growth, and we have found that prospective clients that
have attended one of our events convert into clients at higher rates compared to those that have not attended an event.
Due to the COVID-19 pandemic, in 2020 and 2021 we began offering our events as live virtual experiences. These virtual
events allowed us to offer added attendee benefits such as on demand sessions, more networking opportunities and more content,
leading to higher attendee engagement. In 2022 we held all of our events as hybrid events, consisting of both in-person and virtual
experiences. We currently plan to hold all of our events in 2023 and beyond as hybrid events.
Sales and Marketing
We believe we have a strong alignment across our sales, marketing and product functions.
4
We sell our products and services through our direct sales force in various locations in North America, Europe and the Asia
Pacific region. Our sales organization is organized into groups based on client size, geography, and market potential. Our Premier
groups focus on our largest vendor and end user clients across the globe while our Core group focuses on small to mid-sized vendor
clients. Our European and Asia Pacific groups focus on both end user and vendor clients in their respective geographies. Our
International Business Development group sells our products and services through independent sales representatives in select
international locations. We also have a group dedicated to event sales.
We employed 709 sales personnel as of December 31, 2022 compared to 637 sales personnel employed as of December 31,
2021.
We also sell select Research products directly online through our website.
Our marketing activities are designed to elevate the Forrester brand, differentiate and promote Forrester’s products and services,
improve the client experience, and drive growth. We achieve these outcomes by combining the value of reputation, demand
generation, customer engagement, and sales and customer success enablement programs to deliver multichannel campaigns and high-
quality digital experiences. Our customer success organization conducts post-sale engagement activities that are designed to align to
client outcomes, accelerate time to value, and drive higher retention.
As of December 31, 2022, our products and services were delivered to more than 2,700 client companies. No single client
company accounted for more than 4% of our 2022 revenues.
Pricing and Contracts
We report our revenue from client contracts in three categories of revenue: (1) research, (2) consulting, and (3) events. We
classify revenue from subscriptions to, and licenses of, our research products and services as research revenue. We classify revenue
from our consulting projects and standalone advisory services as consulting revenue. We classify revenue from tickets to and
sponsorships of events as events revenue.
Contract pricing for annual subscription-based products is principally a function of the number of licensed users at the client.
Pricing of contracts is a fixed fee for the consulting project or shorter-term advisory service. We periodically review and increase the
list prices for our products and services.
We track contract value as a significant business indicator. Contract value is defined as the value attributable to all of our
recurring research-related contracts. Contract value is calculated as the annualized value of all contracts in effect at a specific point in
time, without regard to how much revenue has already been recognized. Contract value increased 3% to $353.4 million at
December 31, 2022 from $343.0 million at December 31, 2021.
Competition
We believe our focus on helping business and technology leaders use customer obsession to drive growth sets us apart from our
competition. In addition, we believe we compete favorably due to:
•
•
•
•
our ability to offer forward-looking research, tools and frameworks as well as hands-on guidance;
our focus on providing teams within our clients' organizations with the confidence to execute effectively with end-to-end
guidance, valuable knowledge, know-how, and a shared vocabulary;
our use of rigorous research methodologies to offer objective insights; and
our brand promise to be “on your side and by your side,” meaning that we strive to be obsessed about our clients' needs
and priorities and aligned to their strategies.
Our principal direct competitors include other independent providers of research and advisory services, such as Gartner, as well
as marketing agencies, general business consulting firms, survey-based general market research firms, providers of peer networking
services, and digital media measurement services. In addition, our indirect competitors include the internal planning and marketing
staffs of our current and prospective clients, as well as other information providers such as electronic and print publishing companies.
We also face competition from free sources of information available on the Internet, such as Google. Our indirect competitors could
choose to compete directly against us in the future. In addition, there are relatively few barriers to entry into certain segments of our
market, and new competitors could readily seek to compete against us in one or more of these market segments. Increased competition
could adversely affect our operating results through pricing pressure and loss of market share. There can be no assurance that we will
be able to continue to compete successfully against existing or new competitors.
5
Intellectual Property
Our proprietary research, methodologies and other intellectual property play a significant role in the success of our business. We
rely on a combination of copyright, trademark, trade secret, confidentiality, and other contractual provisions to protect our intellectual
property. We actively monitor compliance by our employees, clients and third parties with our policies and agreements relating to
confidentiality, ownership, and the use and protection of Forrester’s intellectual property.
Employees
Attracting, retaining, and developing the best and brightest talent around the globe is critical to the ongoing success of our
company. As of December 31, 2022, we employed a total of 2,033 persons. Of these employees, 1,487 were in the United States and
Canada; 298 in Europe, Middle East and Africa (“EMEA”); and 248 in the Asia Pacific region.
Culture. Our culture emphasizes certain key values — including client, courage, collaboration, integrity, and quality — that we
believe are critical to deliver Forrester’s unique value proposition of helping business and technology leaders use customer obsession
to drive growth. In addition, we seek to foster a culture where employees can be creative, feel supported and empowered, and are
encouraged to think boldly about new ideas. As a reflection of these efforts, in 2022, for the fifth time in six years, Forrester was
honored with a Glassdoor Employees’ Choice Award, recognizing the Best Places to Work in 2022.
Diversity and Inclusion (D&I). We focus on attracting, hiring, and the inclusion of all backgrounds and perspectives, with the
goals of improving employee retention and engagement, strengthening the quality of our research, and improving client retention and
customer experience. We field regular all-employee surveys to measure our progress against our goals. In 2022, in addition to the
ongoing activities of our D&I Council and regional D&I Networks, examples of our efforts with respect to D&I included:
•
•
•
launching companywide inclusion training for employees and managers;
expanding our global and regional D&I events and celebrating diversity heritage and awareness months through events
and discussions; and
our continuation of various partnerships to attract and access more talent from underrepresented groups.
Learning and Development. We have a robust learning and development program and celebrate and enrich the Forrester culture
through frequent recognition of achievements. To keep employees and teams connected and inspired to do their best work in a
distributed work environment, we have enhanced the learning and development opportunities for our employees across a broad range
of initiatives including new hire and onboarding, D&I, and leadership training.
Available Information
Forrester Research Inc. was incorporated in Massachusetts on July 7, 1983 and reincorporated in Delaware on February 16,
1996. Forrester’s corporate offices are located in Cambridge, Massachusetts.
Our Internet address is www.forrester.com. We make available free of charge, on or through the investor information section of
our website, annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those
reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 as soon as reasonably practicable
after we electronically file such material with, or furnish it to, the SEC. The SEC maintains an internet site (http://www.sec.gov) that
contains reports, proxy and information statements and other information regarding issuers that file documents electronically.
6
Item 1A. Risk Factors
We operate in a rapidly changing and competitive environment that involves risks and uncertainties, certain of which are beyond
our control. These risks and uncertainties could have a material adverse effect on our business and our results of operations and
financial condition. These risks and uncertainties include, but are not limited to:
Risk Factors Specific to our Business
A Decline in Renewals or Demand for Our Subscription-Based Research Services. Our success depends in large part upon
retaining (on both a client company and dollar basis) and enriching existing subscriptions for our Research products and services,
including the migration of our existing clients from our legacy Forrester Research and SiriusDecisions products into our new Forrester
Decisions portfolio of services. Future declines in client retention and wallet retention, or failure to generate demand for and new sales
of our subscription-based products and services, including Forrester Decisions, due to competition, changes in our offerings, or
otherwise, could have an adverse effect on our results of operations and financial condition.
Demand for Our Consulting Services. Consulting revenues comprised 28% of our total revenues in 2022 and 32% of our total
revenues in 2021. Consulting engagements generally are project-based and non-recurring. A decline in our ability to fulfill existing or
generate new consulting engagements could have an adverse effect on our results of operations and financial condition.
Our Business May be Adversely Affected by the Economic Environment. Our business is in part dependent on technology
spending and is impacted by economic conditions such as inflation, slowing growth, rising interest rates, threat of recession and
supply chain issues that may impact us and our customers. The economic environment may materially and adversely affect demand
for our products and services. If conditions in the United States and the global economy were to lead to a decrease in technology
spending, or in demand for our products and services, this could have an adverse effect on our results of operations and financial
condition. Although we do not have any employees or material client relationships in Russia or Ukraine, if the Russian military
invasion of Ukraine that commenced in February 2022 were to escalate or spread to other regions, there may be negative effects on
both the United States and the global economy that could materially and adversely affect our business.
Our International Operations Expose Us to a Variety of Operational Risks which Could Negatively Impact Our Results of
Operations. As of December 31, 2022, we have clients in approximately 79 countries and approximately 21% of our revenues come
from international sales. Our operating results are subject to the risks inherent in international business activities, including general
political and economic conditions in each country, challenges in staffing and managing foreign operations, changes in regulatory
requirements, compliance with numerous foreign laws and regulations, differences between U.S. and foreign tax rates and laws,
fluctuations in currency exchange rates, difficulty of enforcing client agreements, collecting accounts receivable and protecting
intellectual property rights in international jurisdictions, and potential disruptions caused by foreign wars and conflicts. Furthermore,
we rely on local independent sales representatives in some international locations. If any of these arrangements are terminated by our
representatives or us, we may not be able to replace the arrangement on beneficial terms or on a timely basis, or clients sourced by the
local sales representative may not want to continue to do business with us or our new representative.
Ability to Develop and Offer New Products and Services. Our future success will depend in part on our ability to offer new
products and services. These new products and services must successfully gain market acceptance by anticipating and identifying
changes in client requirements and changes in the technology industry and by addressing specific industry and business organization
sectors. The process of internally researching, developing, launching, and gaining client acceptance of a new product or service, or
assimilating and marketing an acquired product or service, is risky and costly. We may not be able to introduce new, or assimilate
acquired, products or services successfully. Our failure to do so would adversely affect our ability to maintain a competitive position
in our market and continue to grow our business.
Loss of Key Management. Our future success will depend in large part upon the continued services of a number of our key
management employees. The loss of any one of them, in particular George F. Colony, our founder, Chairman of the Board and Chief
Executive Officer, could adversely affect our business.
The Ability to Attract and Retain Qualified Professional Staff. Our future success will depend in large measure upon the
continued contributions of our senior management team, research professionals, consultants, and experienced sales and marketing
personnel. Thus, our future operating results will be largely dependent upon our ability to retain the services of these individuals and
to attract additional professionals from a limited pool of qualified candidates. Our future success will also depend in part upon the
effectiveness of our sales leadership in hiring and retaining sales personnel and in improving sales productivity. We experience
competition in hiring and retaining professionals from developers of Internet and emerging-technology products, other research firms,
management consulting firms, print and electronic publishing companies, and financial services companies, many of which have
substantially greater ability, either through cash or equity, to attract and compensate professionals. If we lose professionals or are
unable to attract new talent, we will not be able to maintain our position in the market or grow our business.
7
Failure to Anticipate and Respond to Market Trends. Our success depends in part upon our ability to anticipate rapidly
changing technologies and market trends and to adapt our research and consulting services, and other related products and services to
meet the changing needs of our clients. The technology and commerce sectors that we analyze undergo frequent and often dramatic
changes. The environment of rapid and continuous change presents significant challenges to our ability to provide our clients with
current and timely analysis, strategies, and advice on issues of importance to them. Meeting these challenges requires the commitment
of substantial resources. Any failure to continue to provide insightful and timely analysis of developments, technologies, and trends in
a manner that meets market needs could have an adverse effect on our market position and results of operations.
We Have Outstanding Debt Which Could Materially Restrict our Business and Adversely Affect our Financial Condition,
Liquidity, and Results of Operations.
In December of 2021, we entered into an amendment of our existing credit agreement to
eliminate our term loan facility, increase the available amount of our revolving credit facility to $150.0 million, and extend the
maturity date to December 2026 (as so amended, “the Facility”). As of December 31, 2022, we had outstanding debt of $50.0 million
under the Facility (refer to Note 4 – Debt in the Notes to Consolidated Financial Statements for further information). The obligations
incurred under this Facility could impair our future financial condition and operating results. In addition, the affirmative, negative, and
financial covenants of the Facility could limit our future financial flexibility. A failure to comply with these covenants could result in
acceleration of all amounts outstanding, which could materially impact our financial condition unless accommodations could be
negotiated with our lenders. No assurance can be given that we would be successful in doing so, or that any accommodations that we
were able to negotiate would be on terms as favorable as those currently. The outstanding debt may limit the amount of cash or
additional credit available to us, which could restrain our ability to expand or enhance products and services, respond to competitive
pressures or pursue future business opportunities requiring substantial investments of additional capital.
Competition. We compete principally in the market for research and advisory services, with an emphasis on customer behavior
and customer experience, and the impact of technology on our clients’ business and service models. Our principal direct competitors
include other independent providers of research and advisory services, such as Gartner, as well as marketing agencies, general
business consulting firms, survey-based general market research firms, providers of peer networking services, and digital media
measurement services. Some of our competitors have substantially greater financial and marketing resources than we do. In addition,
our indirect competitors include the internal planning and marketing staffs of our current and prospective clients, as well as other
information providers such as electronic and print publishing companies. We also face competition from free sources of information
available on the Internet, such as Google. Our indirect competitors could choose to compete directly against us in the future. In
addition, there are relatively few barriers to entry into certain segments of our market, and new competitors could readily seek to
compete against us in one or more of these market segments. Increased competition could adversely affect our operating results
through pricing pressure and loss of market share. There can be no assurance that we will be able to continue to compete successfully
against existing or new competitors.
Fluctuations in Our Operating Results. Our revenues and earnings may fluctuate from quarter to quarter based on a variety of
factors, many of which are beyond our control, and which may affect our stock price. These factors include, but are not limited to:
•
•
•
•
•
•
•
•
•
Trends in technology and research and advisory services spending in the marketplace and general economic conditions.
The timing and size of new and renewal subscriptions for our products and services from clients.
The utilization of our advisory services by our clients.
The timing of revenue-generating events sponsored by us.
The introduction and marketing of new products and services by us and our competitors.
The hiring and training of new research professionals, consultants, and sales personnel.
Changes in demand for our research and advisory services.
Fluctuations in currency exchange rates.
An increase in the interest rates applicable to our outstanding debt obligations.
As a result, our operating results in future quarters may be below the expectations of securities analysts and investors, which
could have an adverse effect on the market price for our common stock. Factors such as announcements of new products, services,
offices, acquisitions or strategic alliances by us, our competitors, or in the research and professional services industries generally, may
have a significant impact on the market price of our common stock. The market price for our common stock may also be affected by
movements in prices of stocks in general.
Concentration of Ownership. Our largest stockholder is our Chairman and CEO, George F. Colony, who owns approximately
39% of our outstanding stock. This concentration of ownership enables Mr. Colony to strongly influence or effectively control matters
requiring stockholder approval, including the election of directors, amendment of our certificate of incorporation, adoption or
amendment of equity plans, and approval of significant transactions such as mergers, acquisitions, consolidations, and sales or
8
purchases of assets. This concentration of ownership may also limit the liquidity of our stock. As a result, efforts by stockholders to
change the direction, management, or ownership of Forrester may be unsuccessful, and stockholders may not be able to freely
purchase and sell shares of our stock.
General Risk Factors
We Face Risks from Network Disruptions or Security Breaches that Could Damage Our Reputation and Harm Our Business
and Operating Results. We face risks from network disruptions or security breaches caused by computer viruses, illegal break-ins or
hacking, sabotage, acts of vandalism by third parties, or terrorism. To date, none have resulted in any material adverse impact to our
business, operations, products, services or customers. However, our security measures or those of our third-party service providers
may not detect or prevent such security breaches. Any such compromise of our information security could result in the unauthorized
publication of our confidential business or proprietary information, cause an interruption in our operations, result in the unauthorized
release of customer or employee data, result in a violation of privacy or other laws, expose us to a risk of litigation, or damage our
reputation, which could harm our business and operating results.
Failure to Enforce and Protect our Intellectual Property Rights. We rely on a combination of copyright, trademark, trade
secret, confidentiality, and other contractual provisions to protect our intellectual property. Unauthorized third parties may obtain or
use our proprietary information despite our efforts to protect it. The laws of certain countries do not protect our intellectual property to
the same extent as the laws of the United States and accordingly we may not be able to protect our intellectual property against
unauthorized use or distribution, which could adversely affect our business.
Privacy Laws. Privacy laws and regulations, and the interpretation and application of these laws and regulations, in the U.S,
Europe and other countries around the world where we conduct business are sometimes inconsistent and frequently changing. This
includes, but is not limited to, the European Union General Data Protection Regulation (GDPR), the California Consumer Privacy Act,
and the California Privacy Rights Act. Compliance with these laws, or changing interpretations and application of these laws, could
cause us to incur substantial costs or require us to take action in a manner that would be adverse to our business.
Taxation Risks. We operate in numerous jurisdictions around the world. A portion of our income is generated outside of the
United States and is taxed at lower rates than rates applicable to income generated in the U.S. or in other jurisdictions in which we do
business. Our effective tax rate in the future, and accordingly our results of operations and financial position, could be adversely
affected by changes in applicable tax law or if more of our income becomes taxable in jurisdictions with higher tax rates.
We Face Risks Related to Health Epidemics That Could Adversely Impact Our Business. Our business and operations could be
adversely affected by health epidemics, including the recent COVID-19 pandemic, impacting the markets and communities in which
we and our clients operate. The COVID-19 pandemic has caused significant disruption to the business and financial markets, and there
remains uncertainty about the duration of this disruption on both a nationwide and global level, as well as the ongoing effect on our
business. The full extent to which the COVID-19 pandemic will directly or indirectly impact our business, results of operations and
financial condition will depend on future developments that are uncertain and unpredictable. We continue to monitor the COVID-19
situation and potential effects on our business and operations. While the spread and impact of COVID-19 has stabilized, there is no
guarantee that a future outbreak of this or any other widespread epidemics will not occur.
Any Weakness Identified in Our System of Internal Controls by Us and Our Independent Registered Public Accounting Firm
Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002 Could Have an Adverse Effect on Our Business. Section 404 of the
Sarbanes-Oxley Act of 2002 requires that companies evaluate and report on their systems of internal control over financial reporting.
In addition, our independent registered public accounting firm must report on its evaluation of those controls. There can be no
assurance that no weakness in our internal control over financial reporting will occur in future periods, or that any such weakness will
not have a material adverse effect on our business or financial results, including our ability to report our financial results in a timely
manner.
Item 1B. Unresolved Staff Comments
We have not received written comments from the Securities and Exchange Commission that remain unresolved.
Item 2. Properties
Our corporate headquarters building is comprised of approximately 190,000 square feet of office space in Cambridge,
Massachusetts, substantially all of which is currently occupied by the Company. This facility accommodates research, marketing,
sales, consulting, technology, and operations personnel. The lease term of this facility expires February 28, 2027.
We also rent office space in San Francisco, New York City, McLean (VA), Nashville, Norwalk (CT), London, New Delhi,
Singapore, and Sydney. In addition, we lease office space on a relatively short-term basis in various other locations in North America,
Europe, and Asia.
9
We believe that our existing facilities are adequate for our current needs and that additional facilities are available for lease to
meet future needs.
Item 3. Legal Proceedings
From time to time, we may be subject to legal proceedings and civil and regulatory claims that arise in the ordinary course of
our business activities. It is our policy to record accruals for legal contingencies to the extent that we have concluded that it is probable
that a liability has been incurred and the amount of the loss can be reasonably estimated, and to expense costs associated with loss
contingencies, including any related legal fees, as they are incurred.
We believe that we have meritorious defenses in connection with our current lawsuits and material claims and disputes and
intend to vigorously contest each of them. Regardless of the outcome, litigation can have a material adverse effect on us because of
defense and settlement costs, diversion of management resources, and other factors.
In our opinion based upon information currently available to us, while the outcome of these legal proceedings and claims is
uncertain, the likely results of these lawsuits, claims and disputes are not expected, either individually or in the aggregate, to have a
material adverse effect on our financial position, results of operations or cash flows, although the effect could be material to our
consolidated results of operations or consolidated cash flows for any interim reporting period.
Item 4. Mine Safety Disclosures
Not applicable.
10
PART II
Item 5. Market For Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities
Our common stock is listed on the Nasdaq Global Select Market under the symbol “FORR”. On November 27, 2018, in
conjunction with the announcement of the acquisition of SiriusDecisions, Forrester announced the indefinite suspension of its
quarterly dividend program beginning in 2019. The actual declaration of any potential future dividends, and the establishment of the
per share amount and payment dates for any such future dividends, are subject to the discretion of the Board of Directors.
As of March 6, 2023 there were approximately 24 stockholders of record of our common stock. On March 6, 2023 the closing
price of our common stock was $34.09 per share.
As of December 31, 2022, our Board of Directors authorized an aggregate $585.0 million to purchase common stock under our
stock repurchase program. As of December 31, 2022, we had repurchased approximately 17.0 million shares of common stock at an
aggregate cost of $510.0 million.
During the quarter ended December 31, 2022, we did not purchase any shares of our common stock under the stock repurchase
program.
See “Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” for
information on our equity compensation plans.
The following graph contains the cumulative stockholder return on our common stock during the period from December 31,
2017 through December 31, 2022 with the cumulative return during the same period for the Russell 2000 and the S&P 600 Small Cap
Information Technology Index, and assumes that the dividends, if any, were reinvested.
11
Item 6. [Reserved]
12
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Overview
We derive revenues from subscriptions to our Research products and services, licensing electronic “reprints” of our Research,
performing consulting projects and advisory services, and hosting events. We offer contracts for our Research products that are
typically renewable annually and payable in advance. Subscription products are recognized as revenue over the term of the contract.
Accordingly, a substantial portion of our billings are initially recorded as deferred revenue. Reprints include an obligation to deliver a
customer-selected research document and certain usage data provided through an on-line platform, which represents two performance
obligations. We recognize revenue for the performance obligation for the data portion of the reprint ratably over the license term. We
recognize revenue for the performance obligation for the research document at the time of providing access to the document. Billings
for licensing of reprints are initially recorded as deferred revenue. Clients purchase consulting projects and advisory services
independently and/or to supplement their access to our subscription-based products. Consulting project revenues, which are based
upon fixed-fee agreements, are recognized as the services are provided. Advisory service revenues, such as speeches and advisory
days, are recognized when the service is complete or the customer receives the agreed upon deliverable. Billings attributable to
consulting projects and advisory services are initially recorded as deferred revenue. Events revenues consist of ticket and sponsorship
sales for a Forrester-hosted event. Billings for events are also initially recorded as deferred revenue and are recognized as revenue
upon completion of each event.
Our primary operating expenses consist of cost of services and fulfillment, selling and marketing expenses, and general and
administrative expenses. Cost of services and fulfillment represents the costs associated with the production and delivery of our
products and services, including salaries, bonuses, employee benefits, and stock-based compensation expense for all personnel that
produce and deliver our products and services, including all associated editorial, travel, and support services. Selling and marketing
expenses include salaries, sales commissions, bonuses, employee benefits, stock-based compensation expense, travel expenses,
promotional costs, and other costs incurred in marketing and selling our products and services. General and administrative expenses
include the costs of the technology, operations, finance, and human resources groups and our other administrative functions, including
salaries, bonuses, employee benefits, and stock-based compensation expense. Overhead costs such as facilities, net of sublease
income, and annual fees for cloud-based information technology systems are allocated to these categories according to the number of
employees in each group.
Our key metrics focus on our contract value ("CV") products. We are focusing on CV products as these products are our most
profitable products and historically our contracts for CV products have renewed at high rates (as measured by our client retention and
wallet retention metrics). Our CV products make up essentially all of our research revenues.
We calculate CV at the foreign currency rates used for internal planning purposes each year. For comparative purposes, we have
recast historical CV at the current year foreign currency rates. We have included the recast CV metric below for the year ended
December 31, 2021, and we have also provided recast CV amounts dating back to the fourth quarter of 2020, on the investor relations
section of our website.
Contract value, client retention, wallet retention, and number of clients are metrics that we believe are important to
understanding our research business. We define these metrics as follows:
•
•
•
•
Contract value (CV) — is defined as the value attributable to all of our recurring research-related contracts. Contract value
is calculated as the annualized value of all contracts in effect at a specific point in time, without regard to how much
revenue has already been recognized. Contract value primarily consists of subscription-based products for which revenue
is recognized on a ratable basis, except for the entitlements embedded in our subscription products, such as event tickets
and advisory sessions, for which the revenue is recognized when the item is delivered. Contract value also includes our
reprint products, as these products are used throughout the year by our clients and are typically renewed.
Client retention — represents the percentage of client companies (defined as all clients that buy a CV product) at the prior
year measurement date that have active contracts at the current year measurement date.
Wallet retention — represents a measure of the CV we have retained with clients over a twelve-month period. Wallet
retention is calculated on a percentage basis by dividing the annualized contract value of our current clients, who were
also clients a year ago, by the total annualized contract value from a year ago.
Clients — is calculated at the enterprise level as all clients that have an active CV contract.
Client retention and wallet retention are not necessarily indicative of the rate of future retention of our revenue base. A summary
of our key metrics is as follows (dollars in millions):
13
Contract value
Client retention
Wallet retention
Number of clients
$
353.4
$
74%
94%
2,778
343.0
$
10.4
78% (4) points
102% (8) points
(227)
3,005
3%
—
—
(8%)
As of
December 31,
2022
2021
Absolute
Increase
(Decrease)
Percentage
Increase
(Decrease)
Contract value increased 3% during 2022 and this represents an 11-point decrease from the 14% growth in contract value that
we generated during 2021. The decline in our CV growth rate was primarily due to a significant decline in our retention metrics and
client count during 2022. The decrease in our retention rates and number of clients is primarily attributable 1) macroeconomic
conditions affecting our client base including a) funding and budget pressure on our smaller technology clients and b) the uncertain
economic conditions caused by high inflation, increasing interest rates, geopolitical turbulence, and the threat of recession, and 2) the
ongoing transition of our client base to our Forrester Decisions product platform that was launched in August 2021. As of December
31, 2022, approximately 32% of our CV was composed of our Forrester Decisions products, and we anticipate achieving
approximately two-thirds of our CV in Forrester Decisions products by the end of 2023. The ongoing macroeconomic conditions and
product transition are anticipated to pressure our key metrics through the first half of 2023.
Critical Accounting Estimates
Management’s discussion and analysis of financial condition and results of operations are based upon our consolidated financial
statements, which have been prepared in accordance with generally accepted accounting principles in the United States of America
(“GAAP”). The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts
of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, we
evaluate our estimates, including but not limited to, those related to our revenue recognition, goodwill, intangible and other long-lived
assets, and income taxes. Management bases its estimates on historical experience, data available at the time the estimates are made,
and various assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making
judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ
from these estimates under different assumptions or conditions.
We consider the following accounting estimates to be those that require the most subjective judgment or that involve uncertainty
that could have a material impact on our financial statements. If actual results differ significantly from management’s estimates and
projections, there could be a material effect on our financial statements.
•
Revenue Recognition. We generate revenues from subscriptions to our Research products and services, licensing
electronic reprints of our Research, performing consulting projects and advisory services, and hosting events. We execute
contracts that govern the terms and conditions of each arrangement. Revenues are recognized when an approved contract
with a customer exists, the fees, payment terms, and rights regarding the products or services to be transferred can be
identified, it is probable we will collect substantially all of the consideration for the products and services expected to be
provided, and we have transferred control of the products and services to the customer. We continually evaluate
customers’ ability and intention to pay by reviewing factors including the customer’s payment history, our ability to
mitigate credit risk, and experience selling to similarly situated customers. Although write-offs of customer receivables
have not been significant during the last three years ($0.7 million, $0.3 million, and $0.9 million during 2022, 2021, and
2020, respectively), if our customers' financial condition were to deteriorate unexpectedly, we could experience a
significant increase in our expense.
Our contracts may include either a single promise (referred to as a performance obligation) to transfer a product or service
or a combination of multiple promises to transfer products or services. We evaluate the existence of multiple performance
obligations within our products and services by using judgment to determine if: (1) the customer can benefit from each
contractual promise on its own or together with other readily available resources; and (2) the transfer of each contractual
promise is separately identifiable from other promises in a contract. When both criteria are met, each promise is accounted
for as a separate performance obligation. Revenues from contracts that contain multiple products or services are allocated
among the separate performance obligations on a relative basis according to their standalone selling prices. We obtain the
standalone selling prices of our products and services based upon an analysis of standalone sales of these products and
services. When there is an insufficient history of standalone sales, we use judgment to estimate the standalone selling
price, taking into consideration available market conditions, factors used to set list prices, pricing of similar products, and
internal pricing objectives. Standalone selling prices are typically analyzed and updated on an annual basis, or as business
conditions change.
14
Consulting project revenues are recognized over time as the services are provided, based on an input method that
calculates the total hours expended compared to the estimated hours required to satisfy the performance obligation. This
method requires the use of judgement in determining the required number of hours to complete the project.
We are required to estimate the amount of prepaid performance obligations that will expire unused and recognize revenue
for that estimate over the same period the related rights are exercised by our customers. This assessment requires
judgment, including estimating the percentage of prepaid rights that will go unexercised and anticipating the impact that
future changes to products, pricing, and customer engagement will have on actual expirations. We update the estimates
used to recognize unexercised rights on a quarterly basis.
• Goodwill, Intangible Assets, and Other Long-Lived Assets. As of December 31, 2022, we had $291.7 million of
goodwill and intangible assets with finite lives recorded in our Consolidated Balance Sheets.
When acquiring a business, as of the acquisition date, we determine the estimated fair values of the assets acquired and
liabilities assumed, which may include a significant amount of intangible assets and goodwill. Goodwill is required to be
assessed for impairment at least annually or whenever events or circumstances indicate that there may be an impairment.
An impairment assessment requires evaluating the potential impairment at the reporting unit level using either a
qualitative assessment, to determine if it is more likely than not that the fair value of any reporting unit is less than its
carrying amount, or a quantitative analysis, to determine and compare the fair value of each reporting unit to its carrying
value, or a combination of both. Judgement is required in determining the use of a qualitative or quantitative assessment,
as well as in determining each reporting unit’s estimated fair value as it requires us to make estimates of market
conditions and operational performance, including projected financial results, discount rates, control premium, and
valuation multiples for key financial metrics.
Absent an event that indicates a specific impairment may exist, we have selected November 30th as the date to perform
the annual goodwill impairment test. We completed the annual goodwill impairment testing as of November 30, 2022
utilizing a qualitative assessment to determine if it was more likely than not that the fair values of each of our reporting
units was less than their respective carrying values and concluded that no impairments existed. Future events could cause
us to conclude that impairment indicators exist and that goodwill is impaired. Any resulting impairment loss could have a
material adverse impact on our results of operations.
Intangible assets with finite lives as of December 31, 2022 consist of acquired customer relationships, acquired
technology, and acquired trademarks and were valued according to the future cash flows they were estimated to produce
or the estimated costs to replace the assets. These assigned values are amortized on a basis which best matches the periods
in which the economic benefits are expected to be realized. Tangible assets with finite lives consist of property and
equipment, which are depreciated over their estimated useful lives. Other long-lived assets consist primarily of operating
lease right-of-use assets as described under Leases in the critical accounting policies and estimates footnote found in Note
1 - Summary of Significant Accounting Policies.
We continually evaluate whether events or circumstances have occurred that indicate the estimated remaining useful life
of any of our intangible assets, tangible assets, or operating lease right-of-use assets may warrant revision, or that the
carrying value of these assets may be impaired. To compute whether these assets have been impaired, we estimate the
undiscounted future cash flows for the estimated remaining useful life of the assets and compare that to the carrying value.
To the extent that the future cash flows are less than the carrying value, the assets are written down to their estimated fair
value.
During 2022, we recorded $3.7 million of right-of-use asset impairments and $1.3 million of leasehold improvement
impairments related to closing one floor of our offices located at 150 Spear Street, San Francisco, California. During
2020, we recorded $2.3 million of right-of-use asset impairments and $1.1 million of leasehold improvement impairments
related to a facility lease we no longer used as a result of the integration of an acquired entity from 2019.
•
Income Taxes. We recognize deferred tax assets and liabilities using enacted tax rates for the effect of temporary
differences between book and tax bases of assets and liabilities, operating loss carryforwards (from acquisitions) and U.S.
capital losses (through December 31, 2021). Such amounts are adjusted as appropriate to reflect changes in the tax rates
expected to be in effect when the temporary differences reverse. We record a valuation allowance to reduce our deferred
taxes to an amount we believe is more likely than not to be realized. We consider all available evidence, both positive and
negative, to determine whether, based on the weight of that evidence, a valuation allowance is needed for some portion or
all of a net deferred income tax asset. Judgment is required in considering the relative impact of negative and positive
evidence. In arriving at these judgments, the weight given to the potential effect of negative and positive evidence is
commensurate with the extent to which it can be objectively verified. As of December 31, 2022 and 2021, we maintained
a valuation allowance of $1.0 million and $1.1 million, respectively, primarily relating to foreign net operating loss
carryforwards from an acquisition and as of December 31, 2021, also from U.S. capital losses from our investment in
technology-related private equity funds. During 2020, we recognized an income tax benefit in the amount of $1.0 million
15
from the utilization of a capital loss carryforward, and the reversal of the related valuation allowance, due to a sale of an
investment within the private equity fund.
Results of Operations for the years ended December 31, 2022 and 2021
The following table sets forth our Consolidated Statements of Income as a percentage of total revenues for the years noted.
Revenues:
Research revenues
Consulting revenues
Events revenues
Total revenues
Operating expenses:
Cost of services and fulfillment
Selling and marketing
General and administrative
Depreciation
Amortization of intangible assets
Integration costs
Restructuring costs
Income from operations
Interest expense
Other income (expense), net
Gains on investments, net
Income before income taxes
Income tax expense
Net income
Years Ended
December 31,
2022
2021
65.9%
28.4
5.7
100.0
41.6
33.8
12.6
1.7
2.5
—
1.7
6.1
(0.5)
—
0.1
5.7
1.6
4.1%
65.8%
31.6
2.6
100.0
40.8
34.6
11.7
1.9
3.1
0.1
—
7.8
(0.9)
(0.2)
—
6.7
1.7
5.0%
16
2022 compared to 2021
Revenues
$
Total revenues
$
Research revenues
$
Consulting revenues
Events revenues
$
Revenues attributable to customers outside of the U.S. $
Percentage of revenue attributable to customers
2022
2021
(dollars in millions)
537.8
354.5
152.6
30.7
111.7
$
$
$
$
$
494.3
325.3
156.1
12.9
112.7
$
$
$
$
$
Absolute
Increase
(Decrease)
Percentage
Increase
(Decrease)
43.5
29.1
(3.5)
17.9
(1.0)
9%
9%
(2%)
139%
(1%)
—
outside of the U.S.
21%
23%
(2) points
Total revenues increased 9% during 2022 compared to 2021, and increased by 10% when excluding the effect of changes in
foreign currencies. Revenues from customers outside of the U.S. decreased 1% during 2022 compared to the prior year, and increased
by 5% when excluding the effect of changes in foreign currencies.
Research revenues are recognized as revenue primarily on a ratable basis over the term of the contracts, which are generally
twelve-month periods. Research revenues increased 9% during 2022 compared to 2021, and increased by 10% when excluding the
effect of changes in foreign currencies. The increase in revenues was primarily due to the combined effect of strong CV growth of
14% during 2021 and lower CV growth of 3% during 2022. Due to the ongoing macroeconomic conditions and the Forrester
Decisions product transition (as discussed under our key metrics above), we anticipate our CV growth rate to further decline in the
range of flat to low single digits through the first half of 2023.
Consulting revenues decreased 2% during 2022 compared to 2021, and decreased by 1% when excluding the effect of changes
in foreign currencies. The decrease in revenues was primarily due to a decrease in delivery of advisory services by our research
analysts as they shifted more of their efforts to developing and delivering our CV products, which have been partially offset by an
increase in delivery of consulting services by our consulting organization.
Events revenues increased 139% during 2022 compared to 2021, and increased by 142% when excluding the effect of changes
in foreign currencies. The increase in revenues was primarily due an increase in both sponsorship revenues and paid ticket attendance,
primarily due to the return of in-person attendance at our events. All of our events during 2022 were held as hybrid events, consisting
of both in-person and virtual experiences, while all of our events during 2021 were held as virtual events.
Refer to the “Segment Results” section below for a discussion of revenue and expenses by segment.
Cost of Services and Fulfillment
2022
2021
Absolute
Increase
(Decrease)
Percentage
Increase
(Decrease)
Cost of services and fulfillment (dollars in millions)
Cost of services and fulfillment as a percentage of
total revenues
Service and fulfillment employees (at end of period)
$
223.8
$
201.8
$
22.0
42%
920
41%
822
1 point
98
11%
—
12%
Cost of services and fulfillment expenses increased 11% in 2022 compared to 2021, and increased by 13% when excluding the
effect of changes in foreign currencies. The increase was primarily due to (1) a $8.9 million increase in event expenses due to the
return of in-person attendance at our events, (2) a $7.4 million increase in compensation and benefit costs due to an increase in
headcount, benefit costs, and merit increases, which were partially offset by lower incentive bonus costs, (3) a $2.4 million increase in
stock compensation expense, (4) a $1.7 million increase in travel and entertainment expenses due to the return of in-person attendance
at our events and increased general business travel, and (5) a $0.8 million increase in professional services costs primarily due to an
increase in contractor costs.
17
Selling and Marketing
2022
2021
Absolute
Increase
(Decrease)
Percentage
Increase
(Decrease)
Selling and marketing expenses (dollars in millions)
Selling and marketing expenses as a percentage of
total revenues
Selling and marketing employees (at end of period)
$
181.9
$
170.9
$
11.0
34%
804
35%
720
(1) point
84
6%
—
12%
Selling and marketing expenses increased 6% in 2022 compared to 2021, and increased by 8% when excluding the effect of
changes in foreign currencies. The increase was primarily due to (1) a $9.4 million increase in compensation and benefit costs due to
an increase in headcount, commissions expense, benefit costs, and merit increases, which were partially offset by lower incentive
bonus costs, (2) a $1.1 million increase in stock compensation expense, and (3) a $0.9 million decrease in allocated facilities costs.
General and Administrative
2022
2021
Absolute
Increase
(Decrease)
Percentage
Increase
(Decrease)
General and administrative expenses (dollars in
millions)
$
67.7
$
58.1
$
9.6
General and administrative expenses as a percentage
of total revenues
General and administrative employees (at end
of period)
13%
309
12%
1 point
239
70
17%
—
29%
General and administrative expenses increased 17% in 2022 compared to 2021, and increased by 19% when excluding the effect
of changes in foreign currencies. The increase was primarily due to (1) a $3.5 million increase in compensation and benefit costs due
to an increase in headcount, benefit costs, and merit increases, which were partially offset by lower incentive bonus costs, (2) a $3.3
million increase in professional services costs due to an increase in legal and contractor costs, (3) a $1.0 million increase in stock
compensation expense, and (4) a $0.9 million increase in software costs.
Depreciation
Depreciation expense was consistent in 2022 compared to 2021.
Amortization of Intangible Assets
Amortization expense decreased by $2.0 million in 2022 compared to 2021 primarily due to a certain intangible assets becoming
fully amortized in 2021. We expect amortization expense related to our intangible assets to be approximately $11.9 million for the
year ending December 31, 2023.
Restructuring
In the fourth quarter of 2022, we incurred restructuring costs of $9.3 million. Approximately $5.0 million of the costs related to
an impairment of the right-of-use asset and leasehold improvements for the closing of one floor of our offices located at 150 Spear
Street, San Francisco, California. In addition, we incurred $4.3 million of costs for severance and related benefits for the termination,
in January 2023, of approximately 4% of our employees across various geographies and functions to streamline operations.
Approximately all of the $4.3 million of the severance and related benefit costs incurred during 2022 are expected to be paid in 2023.
Interest Expense
Interest expense consists of interest on our borrowings and realized gains and losses on the related interest rate swap. Interest
expense decreased by $1.8 million in 2022 compared to 2021 due to lower average outstanding borrowings. The benefit from lower
outstanding borrowings was partially offset by an increase in the annualized interest rate on our borrowings during 2022. We expect
interest expense in 2023 to be essentially consistent with 2022.
18
Other Income (Expense), Net
Other income (expense), net primarily consists of gains and losses on foreign currency, gains and losses on foreign currency
forward contracts, and interest income. Other income (expense), net increased by $1.5 million in 2022 compared to 2021 due to a
decrease in foreign currency losses and an increase in interest income.
Gains on Investments, Net
Gains on investments, net primarily represents our share of equity method investment gains and losses from our technology-
related investment funds. Gains on investments, net increased $0.3 million in 2022 compared to 2021 due to an increase in investment
gains generated by the underlying funds.
Income Tax Expense
2022
2021
Absolute
Increase
(Decrease)
Percentage
Increase
(Decrease)
Provision for income taxes (dollars in millions)
Effective tax rate
$
$
8.9
29%
$
8.3
25%
0.6
4 points
7%
—
The increase in the effective tax rate during 2022 as compared to 2021 was primarily due to increased non-deductible stock
compensation, an increase in foreign subsidiary income subject to U.S. tax in 2022, and an increase in non-deductible expenses related
to meals and entertainment in 2022 that did not occur in 2021. These increases were partially offset by a benefit related to a change in
tax legislation during 2022.
Segment Results
We operate in three segments: Research, Consulting, and Events. These segments, which are also our reportable segments, are
based on our management structure and how management uses financial information to evaluate performance and determine how to
allocate resources. Our products and services are delivered through each segment as described below.
The Research segment includes the revenues from all of our research products as well as consulting revenues from advisory
services (such as speeches and advisory days) delivered by our research organization. Research segment costs include the cost of the
organizations responsible for developing and delivering these products in addition to the cost of the product management organization
that is responsible for product pricing and packaging and the launch of new products.
The Consulting segment includes the revenues and the related costs of our project consulting organization. The project
consulting organization delivers a majority of our project consulting revenue and certain advisory services.
The Events segment includes the revenues and the costs of the organization responsible for developing and hosting in-person
and virtual events. As of January 1, 2022, we realigned our events sales costs from selling and marketing expense to the Events
segment as they now fall under the Events management structure. The 2021 amounts have been revised to conform to the current
presentation.
We evaluate reportable segment performance and allocate resources based on segment revenues and expenses. Segment
expenses include the direct expenses of each segment organization and exclude selling and marketing expenses, general and
administrative expenses, stock-based compensation expense, depreciation expense, adjustments to incentive bonus compensation from
target amounts, amortization of intangible assets, restructuring and integration costs, interest and other income (expense), and gains on
investments. The accounting policies used by the segments are the same as those used in the consolidated financial statements. We do
not review or evaluate assets as part of segment performance. Accordingly, we do not identify or allocate assets by reportable
segment.
19
Year Ended December 31, 2022
Research revenues
Consulting revenues
Events revenues
Total segment revenues
Segment expenses
Year over year revenue change
Year over year expense change
Year Ended December 31, 2021
Research revenues
Consulting revenues
Events revenues
Total segment revenues
Segment expenses
$
$
Research
Segment
Consulting
Segment
Events
Segment
Consolidated
(In thousands, except percentages)
— $
$
354,453
41,559
—
396,012
(133,566)
6%
13%
111,028
—
111,028
(56,889)
2%
10%
— $
—
30,747
30,747
(21,801)
139%
72%
354,453
152,587
30,747
537,787
(212,256)
9%
16%
Research
Segment
Consulting
Segment
Events
Segment
Consolidated
325,340
47,247
—
372,587
(118,155)
$
(In thousands)
— $
108,867
—
108,867
(51,770)
— $
—
12,861
12,861
(12,709)
325,340
156,114
12,861
494,315
(182,634)
Research segment revenues increased 6% during 2022 compared to 2021. Research product revenues within this segment
increased 9%, which was primarily due to the combined effect of strong CV growth of 14% during 2021 and lower CV growth of 3%
during 2022. Consulting product revenues within this segment decreased 12% primarily due to decreased delivery of consulting and
advisory services by our research analysts as they shifted more of their efforts to developing and delivering our CV products.
Research segment expenses increased 13% during 2022 compared to 2021. The increase in expenses was primarily due to (1) a
$13.5 million increase in compensation and benefit costs primarily due to an increase in headcount, benefit costs, and merit increases
and (2) a $1.1 million increase in travel and entertainment expenses.
Consulting segment revenues increased 2% during 2022 compared to 2021 due to demand for our content marketing and
strategy consulting offerings.
Consulting segment expenses increased 10% during 2022 compared to 2021. The increase in expenses was primarily due to (1)
a $3.6 million increase in compensation and benefit costs primarily due to an increase in headcount, benefit costs, and merit increases
and (2) a $1.5 million increase in professional services primarily due to an increase in contractor costs.
Event segment revenues increased 139% during 2022 compared to 2021. The increase in revenues was due to an increase in
both sponsorship revenues and paid ticket attendance, primarily due to the return of in-person events.
Event segment expenses increased 72% during 2022 compared to 2021. The increase in expenses was primarily due to an
increase in event expenses due to the return of in-person attendance at our events.
A detailed description and analysis of the fiscal year 2020 year-over-year changes can be found in Item 7. Management’s
Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended
December 31, 2021.
Liquidity and Capital Resources
We have historically financed our operations primarily through funds generated from operations. Research revenues, which
constituted 66% of our revenues during 2022, are generally renewable annually and are typically payable in advance. We generated
cash from operating activities of $39.4 million and $107.1 million during the years ended December 31, 2022 and 2021, respectively.
The $67.6 million decrease in cash provided from operations during 2022 was primarily due to 1) a $50.9 million decrease in cash
generated from accounts receivable and deferred revenue due to an increase in deferred revenue during the 2021 period from client
billings in excess of revenue that did not recur in the 2022 period, 2) a $26.5 million increase in cash used for accrued expenses
resulting from the payout of year end incentive compensation, and 3) a $14.5 million reduction in cash used for working capital
(excluding accounts receivable, deferred revenue and accrued expenses).
During 2022, we used cash in investing activities of $6.8 million, which consisted of $5.7 million of purchases of property and
equipment, primarily consisting of computer software and equipment, and $1.4 million in net purchases of marketable investments.
During 2021, we used cash in investing activities of $29.3 million, which consisted of $18.6 million in net purchases of marketable
20
investments and $10.7 million of purchases of property and equipment, primarily consisting of computer software, leasehold
improvements and equipment.
During 2022, we used $38.9 million of cash from financing activities primarily due to $25.0 million of discretionary repayments
of our revolving credit facility and $15.1 million for purchases of our common stock, partially offset by $1.2 million of net proceeds
from the issuance of common stock under our stock-based incentive plans. During 2021, we used $49.1 million of cash from financing
activities primarily due to $34.4 million of repayments of our debt, which consisted of $9.4 million of required payments on our term
loan and $25.0 million of discretionary payments on our revolving credit facility, $20.1 million for purchases of our common stock, as
well as $3.4 million in taxes paid related to net share settlements of restricted stock units, partially offset by $9.2 million of net
proceeds from the issuance of common stock under our stock-based incentive plans. As of December 31, 2022, our remaining stock
repurchase authorization was approximately $75.0 million.
On December 21, 2021, we and certain of our subsidiaries entered into an amendment of our existing credit facility, dated as of
January 3, 2019, with JPMorgan Chase Bank, N.A., as administrative agent (the “Administrative Agent”), and the lenders party
thereto (the “Existing Credit Agreement” and the Existing Credit Agreement as amended by the Amendment, the “Amended Credit
Agreement”). The Existing Credit Agreement was amended to, among other things, (a) increase the aggregate principal amount of
revolving credit commitments (the "Revolving Credit Facility") from $75.0 million to $150.0 million and eliminate the existing term
loan facility, (b) extend the scheduled maturity date of the revolving credit commitments to December of 2026, (c) reduce (i) the
applicable margin with respect to revolving loans to, at Forrester’s option, (i) between 1.25% and 1.75% per annum for loans based on
LIBOR and (ii) between 0.25% and 0.75% per annum for loans based on the applicable base rate, in each case, based on Forrester’s
consolidated total leverage ratio, (d) reduce the commitment fee applicable to undrawn revolving credit commitments to between
0.30% and 0.20% per annum based on our consolidated total leverage ratio, (e) replace the minimum fixed charge coverage ratio
financial covenant under the Existing Credit Agreement with a minimum consolidated interest coverage ratio of 3.50:1.00 and (f)
include a covenant limiting the amount of capital expenditures in each fiscal year.
The Amended Credit Agreement permits an increase in commitments under the Revolving Credit Facility in an aggregate
principal amount up to $50.0 million, subject to approval by the Administrative Agent and certain customary terms and conditions.
Additional information is provided in Note 4 – Debt in the Notes to Consolidated Financial Statements. The Revolving Credit Facility
matures on December 21, 2026. There was a balance of $50.0 million outstanding on the facility at December 31, 2022.
The Amended Credit Agreement contains certain customary restrictive loan covenants, including among others, financial
covenants that apply a maximum leverage ratio, minimum interest coverage ratio, and maximum annual capital expenditures. The
negative covenants limit, subject to various exceptions, our ability to incur additional indebtedness, create liens on assets, merge,
consolidate, liquidate or dissolve any part of the Company, sell assets, change fiscal year, or enter into certain transactions with
affiliates and subsidiaries. We were in full compliance with the covenants as of December 31, 2022 and expect to continue to be in
compliance through the next 12 months.
Additional future contractual cash obligations extending over the next 12 months and beyond primarily consist of operating
lease payments. We lease office space under non-cancelable operating lease agreements (refer to Note 5 – Leases in the Notes to
Consolidated Financial Statements for additional information). The remaining duration of non-cancelable office space leases ranges
from less than 1 year to 8 years. Remaining lease payments within one year, within two to three years, within four to five years, and
after five years from December 31, 2022 are $16.5 million, $30.1 million, $17.7 million, and $8.7 million, respectively.
In addition to the contractual cash commitments included above, we have other payables and liabilities that may be legally
enforceable but are not considered contractual commitments. See Note 14 – Certain Balance Sheet Accounts in the Notes to
Consolidated Financial Statements for more information on our payables and liabilities.
As of December 31, 2022, we had cash, cash equivalents, and marketable investments of $123.3 million. This balance includes
$81.4 million held outside of the U.S. If the cash outside of the U.S. is needed for operations in the U.S., we would be required to
accrue and pay U.S. state taxes and may be required to pay withholding taxes to foreign jurisdictions to repatriate these funds.
However, our intent is to permanently reinvest these funds outside of the U.S. and our current plans do not demonstrate a need to
repatriate these funds for our U.S. operations. We believe that our current cash balance and cash flows from operations will satisfy
working capital, financing activities, and capital expenditure requirements for the next twelve months and to meet our known long-
term cash requirements.
As of December 31, 2022, we did not have any significant unrecognized tax benefits for uncertain tax positions.
Recent Accounting Pronouncements
See Note 1 – Summary of Significant Accounting Policies in the Notes to Consolidated Financial Statements for a full
description of recent accounting pronouncements, including the expected dates of adoption and effects on results of operations and
financial condition.
21
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
The following discussion about our market risk disclosures involves forward-looking statements. Actual results could differ
materially from those projected in the forward-looking statements. We are exposed to market risk related to changes in foreign
currency exchange rates and changes in interest rates on our variable-rate debt.
Foreign Currency Exchange. On a global level, we face exposure to movements in foreign currency exchange rates as we
enter into normal business transactions that may be in currencies other than the local currency of our subsidiaries, including the Euro,
British Pound, and other foreign currencies. During 2022, we entered into several foreign currency forward contracts to mitigate the
effects of adverse fluctuations in foreign currency exchange rates and we may continue to enter into hedging agreements in the future.
In addition, transactions and account balances between our U.S. and foreign subsidiaries expose us to currency exchange risk. This
exposure may change over time as business practices evolve and could have a material adverse effect on our results of operations.
We incurred foreign currency exchange losses of $0.2 million, $1.4 million, and $0.6 million during the years ended
December 31, 2022, 2021, and 2020, respectively.
Interest Rate Risk. As of December 31, 2022, we had $50.0 million in total debt principal outstanding. See Note 4 — Debt in
the Notes to Consolidated Financial Statements for additional information regarding our outstanding debt obligations.
All of our debt outstanding as of December 31, 2022 was based on a floating base rate of interest, which exposes us to increases
in interest rates. As an indication of our potential exposure to changes in interest rates, a hypothetical 25 basis point increase or
decrease in interest rates on our debt could change our annual pretax interest expense for the following 12-month period by
approximately $0.1 million.
The primary objective of our investment activities is to preserve principal and maintain liquidity while at the same time
maximizing the income we receive from our investments without significantly increasing risk. To achieve this objective, we maintain
our portfolio of cash equivalents and marketable investments in a variety of securities during the course of the year, which may
include U.S. government agencies, municipal notes and bonds, corporate notes and bonds, commercial paper, and money market
funds. The securities, other than money market funds, are classified as available-for-sale and consequently are recorded on the
Consolidated Balance Sheets at fair value with unrealized gains or losses reported as a component of accumulated other
comprehensive loss in the Consolidated Balance Sheets. If interest rates rise, the market value of our investments may decline, which
could result in a realized loss if we are forced to sell an investment before its scheduled maturity. We have the ability to hold our fixed
income investments until maturity (without giving effect to any future acquisitions or mergers). Therefore, we would not expect our
operating results or cash flows to be affected to any significant degree by a sudden change in market interest rates on our securities
portfolio. In addition, given the short maturities and investment grade quality of the portfolio holdings at December 31, 2022, a
hypothetical 10% change in interest rates would not materially affect the fair value of our cash and cash equivalents.
The following table provides information about our investment portfolio, for which all of the securities are denominated in U.S.
dollars. For investment securities, the table presents principal cash flows and related weighted-average interest rates by maturity date.
Principal amounts by maturity dates (dollars in thousands):
Corporate obligations
Federal obligations
Total
Weighted average interest rates
Years Ended December 31,
2024
2023
2025
$
$
11,982
—
11,982
$
$
3.45%
$
$
3,815
1,985
5,800
2.88%
1,906
—
1,906
2.53%
22
Item 8. Consolidated Financial Statements and Supplementary Data
The financial statements listed in the following Index to Financial Statements are filed as a part of this 2022 Annual Report on
Form 10-K.
FORRESTER RESEARCH, INC.
INDEX TO FINANCIAL STATEMENTS
Report of PricewaterhouseCoopers LLP, Independent Registered Public Accounting Firm (PCAOB ID 238) ............................
Consolidated Balance Sheets...........................................................................................................................................................
Consolidated Statements of Income ................................................................................................................................................
Consolidated Statements of Comprehensive Income ......................................................................................................................
Consolidated Statements of Stockholders’ Equity ..........................................................................................................................
Consolidated Statements of Cash Flows .........................................................................................................................................
Notes to Consolidated Financial Statements ...................................................................................................................................
Page
24
26
27
28
29
30
31
23
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Stockholders of Forrester Research, Inc.
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying consolidated balance sheets of Forrester Research, Inc. and its subsidiaries (the “Company”) as of
December 31, 2022 and 2021, and the related consolidated statements of operations, of comprehensive income (loss), of stockholders’
equity and of cash flows for each of the three years in the period ended December 31, 2022, including the related notes (collectively
referred to as the “consolidated financial statements”). We also have audited the Company's internal control over financial reporting as
of December 31, 2022, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO).
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of
the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the
period ended December 31, 2022 in conformity with accounting principles generally accepted in the United States of America. Also in
our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31,
2022, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.
Basis for Opinions
The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over
financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s
Report on Internal Control over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the
Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We
are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are
required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules
and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits
to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to
error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the
consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such
procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial
statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well
as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting
included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and
testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included
performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable
basis for our opinions.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting
principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the
maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the
company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in
accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect
on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections
of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in
conditions, or that the degree of compliance with the policies or procedures may deteriorate.
24
Critical Audit Matters
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements
that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are
material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The
communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a
whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or
on the accounts or disclosures to which it relates.
Revenue Recognition – Identification of Distinct Performance Obligations
As described in Note 1 to the consolidated financial statements, the Company generates all of its revenues from contracts with
customers, which totaled $537.8 million for the year ended December 31, 2022. Performance obligations within a contract are
identified based on the products and services promised to be transferred in the contract. When a contract includes more than one
promised product or service, management must apply judgment to determine whether the promises represent multiple performance
obligations or a single, combined performance obligation. This evaluation requires management to determine if the promises are both
capable of being distinct, where the customer can benefit from the product or service on its own or together with other resources
readily available, and are distinct within the context of the contract, where the transfer of products or services is separately identifiable
from other promises in the contract. When both criteria are met, each promised product or service is accounted for as a separate
performance obligation.
The principal considerations for our determination that performing procedures relating to revenue recognition, specifically the
identification of distinct performance obligations, is a critical audit matter are the significant audit effort in performing procedures and
evaluating evidence related to management’s identification of the distinct performance obligations.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion
on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the revenue
recognition process, including controls over the identification of performance obligations. These procedures also included, among
others, testing management’s process for identifying distinct performance obligations within contracts with customers and evaluating
the revenue recognition impact of contractual terms and conditions by examining contracts on a test basis.
/s/ PricewaterhouseCoopers LLP
Boston, Massachusetts
March 10, 2023
We have served as the Company’s auditor since 2010.
25
FORRESTER RESEARCH, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
Current Assets:
ASSETS
Cash and cash equivalents
Marketable investments (Note 2)
Accounts receivable, net of allowance for expected credit losses of $560 and $610 as
of December 31, 2022 and 2021, respectively (Note 1, 14)
Deferred commissions
Prepaid expenses and other current assets
Total current assets
Property and equipment, net
Operating lease right-of-use assets
Goodwill
Intangible assets, net
Other assets
Total assets
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable
Accrued expenses and other current liabilities
Deferred revenue
Total current liabilities
Long-term debt
Non-current operating lease liabilities
Other non-current liabilities (Note 14)
Total liabilities
Commitments and contingencies (Note 5, 15)
Stockholders' Equity:
Preferred stock, $0.01 par value
Authorized - 500 shares; issued and outstanding - none
Common stock, $0.01 par value
Authorized - 125,000 shares
Issued - 24,367 and 24,085 shares as of December 31, 2022 and 2021, respectively
Outstanding - 19,062 and 19,058 shares as of December 31, 2022 and
2021, respectively
Additional paid-in capital
Retained earnings
Treasury stock - 5,305 and 5,027 shares as of December 31, 2022 and 2021, respectively
Accumulated other comprehensive loss
Total stockholders’ equity
Total liabilities and stockholders’ equity
December 31,
2022
December 31,
2021
$
$
$
$
103,629
19,688
$
73,345
24,559
14,069
235,290
23,208
49,970
242,149
49,504
8,317
608,438
361
91,007
178,021
269,389
50,000
50,751
16,642
386,782
$
$
115,769
18,509
86,965
29,631
18,614
269,488
28,245
65,009
244,994
62,733
9,660
680,129
840
97,800
213,696
312,336
75,000
65,038
23,848
476,222
—
—
244
261,766
174,631
(207,067)
(7,918)
221,656
608,438
$
241
245,985
152,825
(191,955)
(3,189)
203,907
680,129
The accompanying notes are an integral part of these consolidated financial statements.
26
FORRESTER RESEARCH, INC.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
2022
Years Ended December 31,
2021
2020
Revenues:
Research
Consulting
Events
Total revenues
Operating expenses:
Cost of services and fulfillment
Selling and marketing
General and administrative
Depreciation
Amortization of intangible assets
Integration costs
Restructuring costs
Total operating expenses
Income from operations
Interest expense
Other income (expense), net
Gains on investments, net
Income before income taxes
Income tax expense
Net income
Basic income per common share
Diluted income per common share
Basic weighted average common shares outstanding
Diluted weighted average common shares outstanding
$
$
$
$
$
$
$
$
354,453
152,587
30,747
537,787
223,773
181,940
67,655
9,269
13,161
—
9,335
505,133
32,654
(2,461)
222
309
30,724
8,918
21,806
1.15
1.14
18,967
19,172
$
$
$
$
325,340
156,114
12,861
494,315
201,815
170,949
58,056
9,390
15,129
334
—
455,673
38,642
(4,222)
(1,229)
—
33,191
8,347
24,844
1.30
1.28
19,110
19,357
301,544
137,303
10,137
448,984
180,899
166,200
50,369
9,879
19,683
5,779
—
432,809
16,175
(5,340)
(374)
2,472
12,933
2,943
9,990
0.53
0.53
18,827
18,935
The accompanying notes are an integral part of these consolidated financial statements.
27
FORRESTER RESEARCH, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands)
Net income
Other comprehensive income (loss), net of tax:
Foreign currency translation
Net change in market value of interest rate swap
Net change in market value of investments
Other comprehensive income (loss)
Comprehensive income
2022
Years Ended December 31,
2021
2020
$
21,806
$
24,844
$
9,990
(4,807)
212
(134)
(4,729)
17,077
$
(3,083)
609
(25)
(2,499)
22,345
$
4,884
(717)
—
4,167
14,157
$
The accompanying notes are an integral part of these consolidated financial statements.
28
FORRESTER RESEARCH, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(In thousands)
Common Stock
Number of
Shares
$0.01 Par
Value
Additional
Paid-in
Capital
Treasury Stock
Retained
Earnings
Number of
Shares
23,275
$
233
$
216,454
$
118,147
4,631
2,797
10,877
—
—
—
—
230,128
5,787
—
10,070
—
—
—
—
245,985
1,238
—
14,543
—
—
—
—
(156)
9,990
—
—
127,981
—
—
—
24,844
—
—
—
152,825
—
—
—
21,806
—
—
—
—
—
—
—
4,631
—
396
—
—
—
—
—
5,027
—
278
—
—
—
Cost
$ (171,889)
—
—
—
—
—
—
(171,889)
—
(20,066)
—
—
—
—
—
(191,955)
—
(15,112)
—
—
—
Accumulated
Other
Comprehensive
Loss
Total
Stockholders'
Equity
$
(4,857)
$
158,088
—
—
2,800
10,877
—
—
(717)
4,884
(690)
—
—
—
—
609
(25)
(3,083)
(3,189)
—
—
—
—
212
(156)
9,990
(717)
4,884
185,766
5,792
(20,066)
10,070
24,844
609
(25)
(3,083)
203,907
1,241
(15,112)
14,543
21,806
212
(134)
(4,807)
221,656
—
—
261,766
$
—
—
174,631
$
—
—
5,305
—
—
$ (207,067)
$
(134)
(4,807)
(7,918)
$
373
—
—
—
—
—
23,648
437
—
—
—
—
—
—
24,085
282
—
—
—
—
—
—
24,367
$
3
—
—
—
—
—
236
5
—
—
—
—
—
—
241
3
—
—
—
—
—
—
244
Balance at December 31, 2019
Issuance of common stock under stock
plans, including tax effects
Stock-based compensation expense
Cumulative effect adjustment due
to adoption of new accounting
pronouncement, net of tax
Net income
Net change in interest rate swap, net of tax
Foreign currency translation
Balance at December 31, 2020
Issuance of common stock under
stock plans, including tax effects
Repurchases of common stock
Stock-based compensation expense
Net income
Net change in interest rate swap, net of tax
Net change in marketable investments, net
of tax
Foreign currency translation
Balance at December 31, 2021
Issuance of common stock under
stock plans, including tax effects
Repurchases of common stock
Stock-based compensation expense
Net income
Net change in interest rate swap, net of tax
Net change in marketable investments, net
of tax
Foreign currency translation
Balance at December 31, 2022
The accompanying notes are an integral part of these consolidated financial statements.
29
FORRESTER RESEARCH, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
2022
Years Ended December 31,
2021
2020
$
21,806
$
24,844
$
9,990
Cash flows from operating activities:
Net income
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation
Impairment of property and equipment
Amortization of intangible assets
Net gains from investments
Deferred income taxes
Stock-based compensation
Operating lease right-of-use assets amortization and impairments
Amortization of deferred financing fees
Amortization of premium (discount) on investments
Foreign currency losses
Changes in assets and liabilities
Accounts receivable
Deferred commissions
Prepaid expenses and other current assets
Accounts payable
Accrued expenses and other liabilities
Deferred revenue
Operating lease liabilities
Net cash provided by operating activities
Cash flows from investing activities:
Purchases of property and equipment
Purchases of marketable investments
Proceeds from maturities of marketable investments
Proceeds from sales of marketable investments
Other investing activity
Net cash used in investing activities
Cash flows from financing activities:
Payments on borrowings
Payment of debt issuance costs
Deferred acquisition payments
Repurchases of common stock
Proceeds from issuance of common stock under employee equity
incentive plans
Taxes paid for net share settlements of stock-based compensation awards
Net cash used in financing activities
Effect of exchange rate changes on cash, cash equivalents and restricted cash
Net increase (decrease) in cash, cash equivalents and restricted cash
Cash, cash equivalents and restricted cash, beginning of year
Cash, cash equivalents and restricted cash, end of year
Supplemental disclosure of cash flow information:
Cash paid for interest
Cash paid for income taxes
$
$
$
9,269
1,296
13,161
(309)
(6,652)
14,543
14,511
443
(3)
239
12,835
5,070
4,374
(461)
(6,102)
(31,656)
(12,939)
39,425
(5,663)
(28,683)
27,331
—
201
(6,814)
(25,000)
—
—
(15,112)
4,352
(3,111)
(38,871)
(6,117)
(12,377)
118,031
105,654
2,015
8,901
$
$
$
9,390
—
15,129
—
(275)
10,070
11,415
920
65
1,439
(3,898)
(6,010)
(1,283)
201
20,426
36,007
(11,373)
107,067
(10,745)
(21,607)
2,000
1,000
56
(29,296)
(34,375)
(494)
—
(20,066)
9,165
(3,373)
(49,143)
(1,249)
27,379
90,652
118,031
3,279
9,815
$
$
$
9,879
1,098
19,683
(2,472)
(1,677)
10,877
13,397
981
—
582
234
(3,299)
(423)
109
297
(925)
(10,577)
47,754
(8,905)
—
—
—
4,335
(4,570)
(23,375)
—
(3,112)
—
5,706
(2,906)
(23,687)
1,963
21,460
69,192
90,652
4,373
3,194
The accompanying notes are an integral part of these consolidated financial statements.
30
FORRESTER RESEARCH, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2022
Note 1 – Summary of Significant Accounting Policies
Basis of Presentation
Forrester Research, Inc. is a global independent research and advisory firm. The Company helps leaders across technology,
customer experience, marketing, sales and product functions use customer obsession to accelerate growth. Through Forrester’s
proprietary research, consulting, and events, leaders from around the globe are empowered to be bold at work, navigate change, and
put their customers at the center of their leadership, strategy, and operations. The Company’s unique insights are grounded in annual
surveys of more than 700,000 consumers, business leaders, and technology leaders worldwide, rigorous and objective research
methodologies, over 100 million real-time feedback votes, and the shared wisdom of our clients.
The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting
principles in the United States of America (“GAAP”) and pursuant to the rules and regulations of the Securities and Exchange
Commission (“SEC”) for reporting on Form 10-K. The Company’s fiscal year is the twelve months from January 1 through December
31 and all references to 2022, 2021, and 2020 refer to the fiscal year unless otherwise noted.
Principles of Consolidations
The accompanying consolidated financial statements include the accounts of Forrester and its wholly-owned subsidiaries. All
intercompany transactions and balances have been eliminated in consolidation.
Management Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial
statements, and the reported amounts of revenues and expenses during the reporting period. Forrester considers the more significant of
these estimates to be revenue recognition, ongoing impairment reviews of goodwill, intangible and other long-lived assets, and income
taxes. On an ongoing basis, management evaluates its estimates. Actual results could differ from these estimates.
Adoption of New Accounting Pronouncements
The Company adopted the guidance in the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Update
(“ASU”) No. 2019-12, Income Taxes – Simplifying the Accounting for Income Taxes on January 1, 2021. The standard provides
guidance to simplify the accounting for income taxes in certain areas, changes the accounting for select income tax transactions, and
makes other minor improvements. The adoption of this standard did not have a material impact on the Company’s financial position or
results of operations.
In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses: Measurement of Credit Losses on
Financial Instruments. The standard and its related amendments (collectively “Topic 326”) modified the financial instrument incurred
loss impairment model by requiring entities to use a forward-looking approach based on expected losses and to consider a broader
range of reasonable and supportable information to estimate credit losses on certain types of financial instruments, including accounts
receivable. On January 1, 2020, the Company adopted Topic 326 using the modified retrospective method in which prior periods are
not adjusted and the cumulative effect of applying the standard is recorded at the date of initial application. The Company recorded a
cumulative effect adjustment of $0.2 million to decrease retained earnings as a result of adopting the standard.
The allowance for expected credit losses on accounts receivable for the twelve months ended December 31, 2020 and adoption
impact is summarized in Note 14 - Certain Balance Sheet Accounts.
When evaluating the adequacy of the allowance for expected credit losses, the Company makes judgments regarding the
collectability of accounts receivable based, in part, on the Company’s historical loss rate experience, customer concentrations,
management’s expectations of future losses as informed by current economic conditions, and changes in customer payment terms. If
the expected financial condition of the Company’s customers were to deteriorate, resulting in an impairment of their ability to make
payments, additional allowances may be required. If the expected financial condition of the Company’s customers were to improve,
the allowances may be reduced accordingly.
The Company adopted the guidance in ASU No. 2017-04, Intangibles-Goodwill and Other: Simplifying the Test for Goodwill
Impairment on January 1, 2020. The standard simplified the subsequent measurement of goodwill by eliminating Step 2 from the
31
goodwill impairment test and required that instead, an entity should perform its goodwill impairment test by comparing the fair value
of a reporting unit with its carrying amount. The adoption of this standard did not impact the Company’s financial position or results
of operations.
The Company adopted the guidance in ASU No. 2018-13, Fair Value Measurement Disclosure Framework – Changes to the
Disclosure Requirements for Fair Value Measurement on January 1, 2020. The standard modified the disclosure requirements for fair
value measurements under Topic 820, Fair Value Measurement, including changes to transfers between fair value levels, and Level 3
fair value measurements. Changes required upon adoption of this standard are included in Note 8 – Fair Value Measurements and did
not impact the Company’s financial position or results of operations.
The Company adopted the guidance in ASU No. 2018-15, Intangibles-Goodwill and Other-Internal-Use Software: Customer’s
Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract on January 1, 2020
using the prospective method. The standard aligned the requirements for capitalizing implementation costs incurred in a hosting
arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain
internal-use software (and hosting arrangements that include an internal-use software license). The adoption of this standard did not
have a material impact on the Company’s financial position or results of operations.
Fair Value Measurements
The carrying amounts reflected in the Consolidated Balance Sheets for cash, certain cash equivalents, accounts receivable,
accounts payable, and accrued expenses approximate fair value due to their short-term maturities. The Company’s financial
instruments also include its outstanding variable-rate borrowings (refer to Note 4 – Debt). The Company believes that the carrying
amount of its variable-rate borrowings reasonably approximate their fair values because the rates of interest on those borrowings
reflect current market rates of interest.
Additionally, the Company has certain financial assets and liabilities recorded at fair value at each balance sheet date, including
cash equivalents, marketable investments, and a derivative contract for an interest rate swap, in accordance with the accounting
standards for fair value measurements. Refer to Note 7 – Fair Value Measurements for the Company’s fair value disclosures.
Cash, Cash Equivalents, and Marketable Investments
Forrester considers all short-term, highly liquid investments with original maturities at the time of purchase of 90 days or less to
be cash equivalents.
The Company’s portfolio of investments may at any time include securities of U.S. government agencies, municipal notes and
bonds, corporate notes and bonds, commercial paper, and money market funds. Marketable investments are classified as current assets
as they are available for use in current operations. Forrester accounts for all marketable investments as available-for-sale securities and
as such, the marketable investments are carried at fair value with unrealized gains and losses (not related to credit losses) recorded in
accumulated other comprehensive loss in the Consolidated Balance Sheets. Realized gains and losses on securities are included in
earnings and are determined using the specific identification method. The Company conducts periodic reviews to identify and evaluate
each investment that has an unrealized loss, in accordance with the meaning of other-than-temporary impairment and its application to
certain investments, as required under the accounting standards. Unrealized losses on available-for-sale securities that are determined
to be temporary, and not related to credit loss, are recorded, net of tax, in accumulated other comprehensive loss. During the years
ended December 31, 2022 and 2021, the Company did not record any other-than-temporary impairment losses on its available-for-sale
securities. The Company did not own any marketable investments during the year ended December 31, 2020.
The Company did not realize any gains or losses from the Company's available-for-sale securities during the years ended
December 31, 2022 and 2021.
Presentation of Restricted Cash
The following table summarizes the end-of-period cash and cash equivalents from the Company's Consolidated Balance Sheets
and the total cash, cash equivalents and restricted cash as presented in the accompanying Consolidated Statements of Cash Flows (in
thousands).
Cash and cash equivalents
Restricted cash classified in other assets (1):
Cash, cash equivalents and restricted cash shown in statement of cash flows
$
$
103,629
2,025
105,654
$
$
115,769
2,262
118,031
For the Year Ended December 31,
2022
2021
32
(1) Restricted cash consists of collateral required for leased office space. The short-term or long-term classification regarding the
collateral for the leased office space is determined in accordance with the expiration of the underlying leases.
Concentrations of Credit Risk
Financial instruments that potentially subject Forrester to concentrations of credit risk are principally cash, cash equivalents,
accounts receivable, and foreign currency forward exchange contracts. The Company limits its risk exposure by having its cash, cash
equivalents, interest rate swap and foreign currency forward exchange contracts with large commercial banks and by diversifying
counterparties. No single customer accounted for greater than 4% of revenues or 4% of accounts receivable in any of the periods
presented.
Forrester does not have any off-balance sheet arrangements.
Business Acquisitions
Forrester accounts for business combinations in accordance with the acquisition method of accounting as prescribed by FASB
ASC Topic 805, Business Combinations. The acquisition method of accounting requires the Company to record the assets acquired
and liabilities assumed based on their estimated fair values as of the acquisition date, with any excess of the consideration transferred
over the estimated fair value of the net assets acquired, including identifiable intangible assets, to be recorded to goodwill. The
Company did not consummate a business combination during the years ended December 31, 2022, 2021, and 2020.
Goodwill
Goodwill represents the excess of the purchase price of acquired businesses over the estimated fair values of the tangible and
identifiable intangible net assets acquired. Goodwill is not amortized; however, it is required to be tested for impairment annually,
which requires assessment of the potential impairment at the reporting unit level. Reporting units are determined based on the
components of the Company's operating segments that constitute a business for which financial information is available and for which
operating results are regularly reviewed by segment management. Testing for impairment is also required on an interim basis if an
event or circumstance indicates it is more likely than not an impairment loss has been incurred. When performing an impairment
assessment, the Company either uses a qualitative assessment, to determine if it is more likely than not that the estimated fair value of
any reporting unit is less than its carrying amount, or a quantitative analysis, to determine and compare the fair value of each reporting
unit to its carrying value, or a combination of both. An impairment of goodwill is recognized to the extent that the carrying amount of
a reporting unit exceeds its estimated fair value. Absent an event that indicates a specific impairment may exist, the Company has
selected November 30th as the date for performing the annual goodwill impairment test. Goodwill impairment charges have not been
required for the years ended December 31, 2022, 2021 and 2020.
Impairment of Other Long-Lived Tangible and Intangible Assets
Other long-lived assets primarily consist of property and equipment, operating lease right-of-use assets and intangible assets.
The Company periodically evaluates the recoverability of other long-lived assets whenever events and changes in circumstances,
indicate that the carrying amount of an asset may not be fully recoverable. When indicators of impairment are present, the carrying
values of the asset group are evaluated in relation to the future undiscounted cash flows of the underlying business. The net book value
of the underlying asset is adjusted to fair value if the sum of the expected discounted cash flows is less than book value. Fair values
are based on estimates of market prices and assumptions concerning the amount and timing of estimated future cash flows and
assumed discount rates, reflecting varying degrees of perceived risk. The Company recorded $5.0 million and $3.4 million of long-
lived asset impairment charges during 2022 and 2020, respectively (refer to Note 5 – Leases). No impairment charges were recorded
during 2021.
Non-Current Liabilities
The Company records deferred tax liabilities and other liabilities that are expected to be settled over a period that exceeds one
year as non-current liabilities.
33
Foreign Currency
The functional currency of Forrester’s wholly-owned subsidiaries is their respective local currency. These subsidiary financial
statements are translated to U.S. dollars using period-end exchange rates for assets and liabilities and average exchange rates during
the corresponding period for revenues and expenses, with translation gains and losses recorded as a component of accumulated other
comprehensive loss in the Consolidated Balance Sheets. Gains and losses related to the remeasurement of monetary assets and
liabilities denominated in a currency other than an entity’s functional currency are included in other income (expense), net in the
Consolidated Statements of Income. Forrester recorded $0.2 million, $1.4 million, and $0.6 million of foreign exchange losses during
2022, 2021, and 2020, respectively.
Revenue
The Company generates all of its revenues from contracts with customers, which totaled $537.8 million for the year ended
December 31, 2022.
The Company recognizes revenue when a customer obtains control of promised products or services, in an amount that reflects
the consideration expected to be received in exchange for those products or services. The Company follows the five-step model
prescribed under Topic 606: (i) identify the contract(s) with a customer; (ii) identify the performance obligation(s) in the contract; (iii)
determine the transaction price; (iv) allocate the transaction price to the performance obligation(s) in the contract; and (v) recognize
revenue when (or as) the Company satisfies each performance obligation. Revenues are presented net of any sales or value added
taxes collected from customers and remitted to the government.
The Company accounts for a contract when it has approval and commitment from both parties, the fees, payment terms and
rights of the parties regarding the products or services to be transferred are identified, the contract has commercial substance, and it is
probable that substantially all of the consideration for the products and services expected to be transferred is collectible. The Company
applies judgment in determining the customer’s ability and intention to pay for services expected to be transferred, which is based on
factors including the customer’s payment history, management’s ability to mitigate exposure to credit risk (for example, requiring
payment in advance of the transfer of products or services, or the ability to stop transferring promised products or services in the event
a customer fails to pay consideration when due), and experience selling to similarly situated customers. Since the transaction price is
fixed and defined as part of entering into a contract, and generally does not change, variable consideration is insignificant.
Performance obligations within a contract are identified based on the products and services promised to be transferred in the
contract. When a contract includes more than one promised product or service, the Company must apply judgment to determine
whether the promises represent multiple performance obligations or a single, combined performance obligation. This evaluation
requires the Company to determine if the promises are both capable of being distinct, where the customer can benefit from the product
or service on its own or together with other resources readily available, and are distinct within the context of the contract, where the
transfer of products or services is separately identifiable from other promises in the contract. When both criteria are met, each
promised product or service is accounted for as a separate performance obligation. In cases where the promises are distinct, the
Company is further required to evaluate if the promises are a series of products and services that are substantially the same and have
the same pattern of transfer to the customer (referred to as the “series” guidance). When the Company determines that promises meet
the series guidance, they are accounted for as a single, combined performance obligation.
34
Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance
obligation on a relative basis according to their standalone selling prices. The Company determines standalone selling price based on
the price at which the performance obligation is sold separately. If the Company does not have a history of selling a performance
obligation, management applies judgment to estimate the standalone selling price, taking into consideration available information,
including market conditions, factors considered to set list prices, pricing of similar products, and internal pricing objectives. The
corresponding allocated revenues are recognized when (or as) the performance obligations are satisfied, as discussed further below.
Research revenues
The majority of research revenues are annual subscriptions to our research, including access to a designated portion of our
research and, depending on the type of license, unlimited analyst inquiry or guidance sessions, an executive coach or advisor, peer
offerings, and unlimited participation in Forrester webinars, all of which are delivered throughout the contract period. The Company
has concluded that these promises represent a stand ready obligation to provide a daily information service, in which the services are
the same each day, every day is distinct, and the customer simultaneously receives and consumes the benefits as the Company
transfers control throughout the contract period. Accordingly, these subscriptions meet the requirements of the series guidance and are
each accounted for as a single performance obligation. The Company recognizes revenue ratably over the contract term, using an
output measure of time elapsed. Certain of the research products include advisory services and/or an event ticket, which are accounted
for as a separate performance obligation and are recognized at the point in time the service is completed, the final deliverable is
transferred to the customer, or the event occurs. Research revenues also include sales of electronic reprints, which are written research
documents prepared by Forrester’s analysts and hosted via an on-line platform. Reprints include a promise to deliver a customer-
selected research document and certain usage data provided through the on-line platform, which represents two performance
obligations. The Company satisfies the performance obligation for the research document by providing access to the electronic reprint
and accordingly recognizes revenue at that point in time. The Company satisfies the performance obligation for the data portion of the
reprint on a daily basis and accordingly recognizes revenue over time.
Consulting revenues
Consulting revenues consists of consulting projects and advisory services.
Consulting project revenues consist of the delivery of focused insights and recommendations that assist customers with their
challenges in developing and executing strategies around technology, customer experience, and digital transformation. Projects are
fixed-fee arrangements that are generally completed over two weeks to three months. The Company has concluded that each project
represents a single performance obligation as each is a single promise to deliver a customized engagement and deliverable. For the
majority of these services, either practically or contractually, the work performed and delivered to the customer has no alternative use
to the Company. Additionally, Forrester maintains an enforceable right to payment at all times throughout the contract. The Company
utilizes an input method and recognizes revenue over time, based on hours expended relative to the total estimated hours required to
satisfy the performance obligation. The input method closely aligns with how control of interim deliverables is transferred to the
customer throughout the engagement and is also the method used internally to price the project and assess operational performance. If
the Company were to enter into an agreement where it does not have an enforceable right to payment at all times, revenue would be
recognized at the point in time the project is completed.
Advisory services revenues are short-term presentations or knowledge sharing sessions (which can range from one hour to two
days), such as speeches and advisory days. Each is a promise for a Forrester analyst to deliver a deeper understanding of Forrester’s
published research and represents a single performance obligation. Revenue is recognized at the point in time the service is completed
or the final deliverable is transferred to the customer, which is when the customer has received the benefit(s) of the service.
35
Events revenues
Events revenues consist of either ticket or sponsorship sales for Forrester-hosted events. Each is a single promise that either
allows entry to, or grants the right to promote a product or service at, a specific event. The Company concluded that each of these
represents a single performance obligation. The Company recognizes revenue at the completion of the event, which is the point in time
when the customer has received the benefit(s) from attending or sponsoring the event.
Prepaid performance obligations
Prepaid performance obligations (including event tickets, reprints, consulting projects, and advisory services) on non-
cancellable contracts, for which the Company estimates will expire unused, are recognized in proportion to the pattern of related rights
exercised by the customer. This assessment requires judgment, including estimating the percentage of prepaid rights that will go
unexercised and anticipating the impact that future changes to products, pricing, and customer engagement will have on actual
expirations. The Company updates estimates used to recognize unexercised rights on a quarterly basis.
Contract modifications
Consulting contracts are occasionally modified to update the scope of the services purchased. Since a consulting project is a
single performance obligation that is only partially satisfied at the modification date, the updated project requirements are not distinct
and the modification is accounted for as part of the existing contract. The effect of the modification on the transaction price and the
Company’s measure of progress for the performance obligation to which it relates is recognized as an adjustment to revenue (either an
increase or decrease) on a cumulative catch-up basis. For the year ended December 31, 2022, the Company recorded an immaterial
amount of cumulative catch-up adjustments.
Refer to Note 13 – Operating Segment and Enterprise Wide Reporting for a summary of disaggregated revenue by geographic
region.
Contract Assets and Liabilities
Accounts receivable
Accounts receivable includes amounts billed and currently due from customers. Since the only condition for payment of the
Company's invoices is the passage of time, the Company records a receivable on the date the invoice is issued. Also included in
accounts receivable are unbilled amounts resulting from revenue exceeding the amount billed to the customer, where the right to
payment is unconditional. If the right to payment for services performed was conditional on something other than the passage of time,
the unbilled amount would be recorded as a separate contract asset. There were no contract assets as of December 31, 2022.
The majority of the Company’s contracts are non-cancelable. However, for contracts that are cancelable by the customer, the
Company does not record a receivable when it issues an invoice. The Company records accounts receivable on these contracts only up
to the amount of revenue earned but not yet collected.
In addition, since the majority of the Company’s contracts are for a duration of one year and payment is expected within one
year from the transfer of products and services, the Company does not adjust its receivables or transaction price for the effects of a
significant financing component.
Deferred revenue
The Company refers to contract liabilities as deferred revenue on the Consolidated Balance Sheets. Payment terms in the
Company’s customer contracts vary, but generally require payment in advance of fully satisfying the performance obligation(s).
Deferred revenue consists of billings in excess of revenue recognized. Similar to accounts receivable, the Company does not record
deferred revenue for unpaid invoices issued on a cancelable contract.
During the years ended December 31, 2022 and 2021, the Company recognized approximately $189.2 million and $154.9
million of revenue, respectively, related to its deferred revenue balance at January 1 of each such period.
Approximately $416.8 million of revenue is expected to be recognized during the next 24 months from remaining performance
obligations as of December 31, 2022.
Cost to Obtain Contracts
The Company capitalizes commissions paid to sales representatives and related fringe benefits costs that are incremental to
obtaining customer contracts. These costs are included in deferred commissions on the Consolidated Balance Sheets. The Company
36
elected the practical expedient to account for these costs at a portfolio level as the Company’s contracts are similar in nature and the
amortization model used closely matches the amortization expense that would be recognized on a contract-by-contract basis. Costs to
obtain a contract are amortized to earnings over the initial contract term, which is the same period the related revenue is recognized.
Amortization of the expense related to deferred commissions was $45.9 million, $43.9 million, and $40.0 million for the years
ended December 31, 2022, 2021, and 2020, respectively, and is recorded in selling and marketing expenses in the Consolidated
Statements of Income. The Company evaluates the recoverability of deferred commissions at each balance sheet date and there were
no impairments recorded during 2022, 2021, or 2020.
Leases
The Company determines whether an arrangement is a lease at inception of the arrangement. The Company accounts for a lease
when it has the right to control the leased asset for a period of time while obtaining substantially all of the assets’ economic benefits.
All of the Company’s leases are operating leases, the majority of which are for office space. Operating lease right-of-use ("ROU")
assets and non-current operating lease liabilities are included as individual line items on the Consolidated Balance Sheets, while short-
term operating lease liabilities are recorded within accrued expenses and other current liabilities.
Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum
lease payments over the lease term at commencement date. The discount rate used to determine the present value of the lease
payments is the Company’s incremental borrowing rate based on the information available at lease inception, as generally an implicit
rate in the lease is not readily determinable. An operating lease ROU asset includes all lease payments, lease incentives and initial
direct costs incurred. Some of the Company’s leases include options to extend or terminate the lease. When determining the lease
term, these options are included in the measurement and recognition of the Company’s ROU assets and lease liabilities when it is
reasonably certain that the Company will exercise the option(s). The Company considers various economic factors when making this
determination, including, but not limited to, the significance of leasehold improvements incurred in the office space, the difficulty in
replacing the asset, underlying contractual obligations, and specific characteristics unique to a particular lease.
Subsequent to entering into a lease arrangement, the Company reassesses the certainty of exercising options to extend or
terminate a lease. When it becomes reasonably certain that the Company will exercise an option that was not included in the lease
term, the Company accounts for the change in circumstances as a lease modification, which results in the remeasurement of the ROU
asset and lease liability as of the modification date.
Lease expense for operating leases is recognized on a straight-line basis over the lease term based on the total lease payments
(which include initial direct costs and lease incentives). The expense is included in operating expenses in the Consolidated Statements
of Income.
The Company’s lease agreements generally contain lease and non-lease components. Non-lease components are fixed charges
stated in an agreement and primarily include payments for parking at the leased office facilities. The Company accounts for the lease
and fixed payments for non-lease components as a single lease component under Topic 842, which increases the amount of the ROU
assets and lease liabilities. Most of the Company’s lease agreements also contain variable payments, primarily maintenance-related
costs, which are expensed as incurred and not included in the measurement of the ROU assets and lease liabilities.
Leases with an initial term of twelve months or less are not recorded on the Consolidated Balance Sheets and are not material.
37
Advertising Costs
The Company expenses advertising costs as incurred. Advertising expense for the years ended December 31, 2022, 2021, and
2020 was $2.3 million, $2.1 million, and $0.7 million, respectively. These expenses consisted primarily of online marketing and is
included in selling and marketing expense in the Consolidated Statements of Income.
Stock-Based Compensation
The Company recognizes the fair value of stock-based compensation expense over the requisite service period of the individual
grantee, which generally equals the vesting period. Forfeitures are recognized as they occur and all income tax effects related to
settlements of share-based payment awards are reported in earnings as an increase or decrease to income tax expense. All income tax-
related cash flows resulting from share-based payments are reported as operating activities in the Consolidated Statements of Cash
Flows and cash paid by directly withholding shares for tax withholding purposes is classified as a financing activity.
Stock-based compensation expense was recorded in the following expense categories (in thousands):
Cost of services and fulfillment
Selling and marketing
General and administrative
Total
Years Ended December 31,
2021
2020
2022
$
$
8,435 $
2,774
3,334
14,543 $
6,057 $
1,698
2,315
10,070 $
6,156
1,751
2,970
10,877
Shares subject to the employee stock purchase plan were valued utilizing the Black-Scholes model using the following
assumptions and had the following fair values (no options were granted in 2022, 2021, or 2020):
Average risk-free interest rate
Expected dividend yield
Expected life
Expected volatility
Weighted average fair value
Years Ended December 31,
2021
2020
2022
3.71%
0.0%
0.05%
0.0%
0.12%
0.0%
0.5 Years
0.5 Years
0.5 Years
33%
30%
$
10.22
$
11.20
$
93%
14.57
Expected volatility is based on the historical volatility of Forrester’s common stock as well as management’s expectations of
future volatility over the expected term of the awards granted. The risk-free interest rate is based on the U.S. Treasury Constant
Maturity rate with an equivalent remaining term. The expected term calculation is based upon the option period of the employee stock
purchase plan.
The unamortized fair value of stock-based awards as of December 31, 2022 was $24.2 million with a weighted average
remaining recognition period of 2.4 years.
Depreciation and Amortization
Forrester provides for depreciation and amortization of property and equipment, computed using the straight-line method, over
their estimated useful lives of its assets as follows:
Computers and equipment
Computer software
Furniture and fixtures
Leasehold improvements
Estimated
Useful Life
3 to 10 Years
3 to 5 Years
7 Years
Shorter of asset life or lease term
Forrester provides for amortization of intangible assets, computed using an accelerated method according to the expected cash
flows to be received from the underlying assets, over their estimated useful lives as follows:
Customer relationships
Technology
Trademarks
Estimated
Useful Life
5 to 9 Years
1 to 8 Years
6 to 8 Years
38
Income Taxes
Forrester recognizes deferred tax assets and liabilities for the expected future tax consequences of temporary differences
between the financial statements and tax basis of assets and liabilities as well as operating loss carryforwards.
Forrester’s provision for income taxes is composed of a current and a deferred provision for federal, state, and foreign
jurisdictions. The current provision is calculated as the estimated taxes payable or refundable on tax returns for the current year. The
deferred provision is calculated as the net change during the year in deferred tax assets and liabilities. Valuation allowances are
provided if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax asset will not be
realized.
Forrester accounts for uncertain tax positions using a “more-likely-than-not” threshold for recognizing and resolving uncertain
tax positions. The evaluation of uncertain tax positions is based on factors including, but not limited to, changes in tax law, the
measurement of tax positions taken or expected to be taken in tax returns, the effective settlement of matters subject to audit, new
audit activity, and changes in facts or circumstances related to a tax position. The Company evaluates these tax positions on a
quarterly basis. The Company also accrues for potential interest and penalties related to unrecognized tax benefits in income tax
expense.
Net Income Per Common Share
Basic net income per common share is computed by dividing net income by the basic weighted average number of common
shares outstanding during the period. Diluted net income per common share is computed by dividing net income by the diluted
weighted average number of common shares and common equivalent shares outstanding during the period. The weighted average
number of common equivalent shares outstanding has been determined in accordance with the treasury-stock method. Common stock
equivalents consist of common stock issuable upon the exercise of outstanding stock options and the vesting of restricted stock units.
Basic and diluted weighted average common shares are as follows (in thousands):
Basic weighted average common shares outstanding
Weighted average common equivalent shares
Diluted weighted average common shares outstanding
Options and restricted stock units excluded from diluted weighted
average share calculation as effect would have been anti-dilutive
2022
Years Ended December 31,
2021
2020
18,967
205
19,172
210
19,110
247
19,357
18,827
108
18,935
3
326
Recent Accounting Pronouncements
In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848) – Facilitation of the Effects of
Reference Rate Reform on Finance Reporting. The new standard provides optional guidance for a limited period of time to ease the
potential burden in accounting for, or recognizing the effects of, reference rate reform on financial reporting due to the risk of
cessation of the London Interbank Offered Rate (“LIBOR”). The updates apply to contracts, hedging relationships, and other
transactions that reference LIBOR, or another reference rate expected to be discontinued because of reference rate reform, and as a
result require a modification. An entity may elect to apply the amendments immediately or at any point through December 31, 2022. It
is anticipated the standard will have no impact on the Company’s financial position or results of operations.
In December 2022, the FASB issued ASU No. 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of
Topic 848. The amendments in this update defer the sunset date of Topic 848 from December 31, 2022, to December 31, 2024, after
which entities will no longer be permitted to apply the relief in Topic 848. The amendments in this update apply to all entities, subject
to meeting certain criteria, that have contracts, hedging relationships, and other transactions that reference LIBOR or another reference
rate expected to be discontinued because of reference rate reform. It is anticipated the standard will have no impact on the Company’s
financial position or results of operations.
Note 2 – Marketable Investments
The following table summarizes the Company’s marketable investments (in thousands):
39
Corporate obligations
Federal agency obligations
Total
Corporate obligations
Total
Amortized
Cost
17,900
1,999
19,899
$
$
As of December 31, 2022
Gross
Gross
Unrealized
Unrealized
Losses
Gains
Market
Value
8
—
8
$
$
(205) $
(14)
(219) $
17,703
1,985
19,688
Amortized
Cost
As of December 31, 2021
Gross
Gross
Unrealized
Unrealized
Losses
Gains
Market
Value
18,542
18,542
$
$
— $
— $
(33) $
(33) $
18,509
18,509
$
$
$
$
Realized gains and losses on investments are included in earnings and are determined using the specific identification method.
There were no realized gains or losses on marketable investments during the years ended December 31, 2022 and 2021.
The following table summarizes the maturity periods of the marketable investments in the Company’s portfolio as of
December 31, 2022 (in thousands).
Corporate obligations
Federal agency obligations
Total
2023
2024
2025
Total
$
$
11,982
—
11,982
$
$
3,816
1,985
5,801
$
$
1,905
—
1,905
$
$
17,703
1,985
19,688
The following table shows the gross unrealized losses and market value of the Company’s available-for-sale securities with
unrealized losses that are not deemed to be other-than-temporary, aggregated by investment category and length of time that
individual securities have been in a continuous unrealized loss position (in thousands):
Corporate obligations
Federal agency obligations
Total
Corporate obligations
Total
As of December 31, 2022
Less Than 12 Months
12 Months or Greater
Market
Value
Unrealized
Losses
Market
Value
Unrealized
Losses
9,619
1,985
11,604
$
$
139
14
153
$
$
8,084
—
8,084
$
$
66
—
66
As of December 31, 2021
Less Than 12 Months
12 Months or Greater
Market
Value
Unrealized
Losses
Market
Value
Unrealized
Losses
18,509
18,509
$
$
33
33
$
$
— $
— $
—
—
$
$
$
$
Note 3 – Goodwill and Other Intangible Assets
A summary of goodwill by segment and the changes in the carrying amount of goodwill is shown in the following table (in
thousands):
Balance at December 31, 2020
Translation adjustments
Balance at December 31, 2021
Translation adjustments
Balance at December 31, 2022
Research
Segment
Consulting
Segment
$
$
238,913
(2,143)
236,770
(2,750)
234,020
$
$
8,298
(74)
8,224
(95)
8,129
$
$
Total
247,211
(2,217)
244,994
(2,845)
242,149
The Company performed its annual impairment test as of November 30, 2022 utilizing a qualitative assessment to determine if it
was more likely than not that the fair values of each of its reporting units was less than their respective carrying values, and concluded
that no impairments existed.
40
As of December 31, 2022, the Company had no accumulated goodwill impairment losses and the Consulting reporting unit had
a negative carrying value.
A summary of Forrester’s intangible assets is as follows (in thousands):
Amortizable intangible assets:
Customer relationships
Technology
Trademarks
Total
Amortizable intangible assets:
Customer relationships
Technology
Trademarks
Total
December 31, 2022
Gross
Carrying
Amount
Accumulated
Amortization
Net
Carrying
Amount
77,786 $
16,803
12,472
107,061 $
33,805 $
14,696
9,056
57,557 $
43,981
2,107
3,416
49,504
Gross
Carrying
Amount
December 31, 2021
Accumulated
Amortization
Net
Carrying
Amount
78,364 $
16,845
12,478
107,687 $
25,805
13,073
6,076
44,954
$
$
52,559
3,772
6,402
62,733
$
$
$
$
Amortization expense related to intangible assets was approximately $13.2 million, $15.1 million, and $19.7 million during the
years ended December 31, 2022, 2021, and 2020, respectively. Estimated intangible asset amortization expense for each of the five
succeeding years is as follows (in thousands):
2023
2024
2025
2026
2027
Thereafter
Total
$
$
11,938
9,898
8,872
8,390
8,324
2,082
49,504
Note 4 – Debt
Amended Credit Agreement
On December 21, 2021, the Company and certain of its subsidiaries entered into an amendment of its existing credit facility,
dated as of January 3, 2019, with JPMorgan Chase Bank, N.A., as administrative agent (the “Administrative Agent”), and the lenders
party thereto (the "Existing Credit Agreement" and the Existing Credit Agreement as amended by the Amendment, the "Amended
Credit Agreement").
The Existing Credit Agreement was amended to, among other things, (a) increase the aggregate principal amount of revolving
credit commitments (the "Revolving Credit Facility") from $75.0 million to $150.0 million and eliminate the existing term loan
facility, (b) extend the scheduled maturity date of the revolving credit commitments to December of 2026, (c) reduce (i) the applicable
margin with respect to revolving loans to, at Forrester’s option, (i) between 1.25% and 1.75% per annum for loans based on LIBOR
and (ii) between 0.25% and 0.75% per annum for loans based on the applicable base rate, in each case, based on Forrester’s
consolidated total leverage ratio, (d) reduce the commitment fee applicable to undrawn revolving credit commitments to between
0.30% and 0.20% per annum based on the Company's consolidated total leverage ratio, (e) replace the minimum fixed charge
coverage ratio financial covenant under the Existing Credit Agreement with a minimum consolidated interest coverage ratio of
3.50:1.00 and (f) include a covenant limiting the amount of capital expenditures made by the Company in each fiscal year.
On December 21, 2021, the Company converted the $100.0 million outstanding term loan amounts under the Existing Credit
Agreement to $100.0 million outstanding on the Revolving Credit Facility as the lenders remained the same under both facilities. The
Amended Credit Agreement permits the Company to increase commitments under the Revolving Credit Facility in an aggregate
principal amount up to $50.0 million, subject to approval by the Administrative Agent and certain customary terms and conditions.
41
The Company may voluntarily prepay revolving loans under the Amended Credit Agreement at any time and from time to time,
without premium or penalty, other than customary breakage reimbursement requirements for LIBOR-based loans. No interim
amortization payments are required to be made under the Amended Credit Agreement.
The Amended Credit Agreement provides that once LIBOR ceases to exist in 2023, the benchmark rate for the Revolving Credit
Facility will automatically transfer from LIBOR to the Secured Overnight Financing Rate.
Up to $5.0 million of the Revolving Credit Facility is available for the issuance of letters of credit, and any drawings under the
letters of credit must be reimbursed within one business day. As of December 31, 2022, $0.6 million in letters of credit were issued
under the Revolving Credit Facility.
The Company incurred $0.5 million in costs related to the issuance of the Revolving Credit Facility under the Amended Credit
Agreement, which are included in other assets on the Consolidated Balance Sheets. These costs are being amortized on a straight-line
basis over the five-year term of the Revolving Credit Facility and are included in interest expense in the Consolidated Statements of
Income. The Amended Credit Agreement was accounted for as a debt modification and thus no existing debt issuance costs were
written off to interest expense as a result of the modification.
Existing Credit Agreement
Prior to December 21, 2021, the Company had a credit facility that provided for a $125.0 million Term Loan A facility and a
$75.0 million Revolving Credit Facility. The term loan amounts outstanding under the Existing Credit Agreement were repaid when
the Company entered into the Amended Credit Agreement on December 21, 2021.
Outstanding Borrowings
The following table summarizes the Company’s total outstanding borrowings as of the dates indicated (in thousands):
Description:
Revolving credit facility (1) (2) (3)
December 31, 2022 December 31, 2021
75,000
$
50,000 $
(1) The contractual annualized interest rate as of December 31, 2022 on the Revolving Credit Facility was 5.6875%, which consisted
of LIBOR of 4.4375% plus a margin of 1.25%.
(2) The Company had $99.4 million of available borrowing capacity on the Revolving Credit Facility (not including the expansion
feature) as of December 31, 2022.
(3) The weighted average annual effective rate on the Company's total debt outstanding for the years ended December 31, 2022 and
2021 was 2.9% and 2.1%, respectively.
The Amended Credit Agreement contains certain customary restrictive loan covenants, including among others, financial
covenants that apply a maximum leverage ratio, minimum interest coverage ratio, and maximum annual capital expenditures. The
negative covenants limit, subject to various exceptions, the Company’s ability to incur additional indebtedness, create liens on assets,
merge, consolidate, liquidate or dissolve any part of the Company, sell assets, change fiscal year, or enter into certain transactions with
affiliates and subsidiaries. The Company was in full compliance with the covenants as of December 31, 2022. The Facility also
contains customary events of default, representations, and warranties.
All obligations under the Amended Credit Agreement are unconditionally guaranteed by each of the Company’s existing and
future, direct and indirect, material wholly-owned domestic subsidiaries, other than certain excluded subsidiaries, and are
collateralized by a first priority lien on substantially all tangible and intangible assets, including intellectual property, and all of the
capital stock of the Company and its subsidiaries (limited to 65% of the voting equity of certain subsidiaries).
Note 5 – Leases
The components of lease expense were as follows (in thousands):
Year Ended
December 31, 2022
Year Ended
December 31, 2021
Year Ended
December 31, 2020
Operating lease cost
Short-term lease cost
Variable lease cost
Sublease income
Total lease cost
$
$
14,284
754
5,416
(746)
19,708
$
$
15,527
439
5,582
(549)
20,999
$
$
16,188
330
1,871
(256)
18,133
42
Additional lease information is summarized in the following table (in thousands, except lease term and discount rate):
Cash paid for amounts included in the measurement of
operating lease liabilities
Operating ROU assets obtained in exchange for
lease obligations
Weighted-average remaining lease term - operating
leases (years)
Weighted-average discount rate - operating leases
Year Ended
December 31, 2022
Year Ended
December 31, 2021
$
$
12,939
323
$
$
11,373
7,522
5.1
4.3%
5.9
4.3%
Future minimum lease payments under non-cancelable leases and estimated future sublease cash receipts from non-cancelable
arrangements as of December 31, 2022 are as follows (in thousands):
2023
2024
2025
2026
2027
Thereafter
Total lease payments
Less imputed interest
Present value of lease liabilities
Lease balances are as follows (in thousands):
Operating lease ROU assets
Short-term operating lease liabilities (1)
Non-current operating lease liabilities
Total operating lease liabilities
Operating Lease
Payments
Sublease
Cash Receipts
$
$
16,463
16,027
14,074
12,118
5,589
8,728
72,999
(8,616)
64,383
606
624
—
—
—
—
1,230
$
$
As of
December 31, 2022
49,970
$
$
$
13,632
50,751
64,383
(1) Included in accrued expenses and other current liabilities in the Consolidated Balance Sheets.
The Company’s leases do not contain residual value guarantees, material restrictions or covenants. During the year ended
December 31, 2021, the Company subleased one of its facilities in San Francisco, California. The sublease agreement expires in 2024
and (i) does not include renewal and termination options, (ii) provides for customary escalations of lease payments in the normal
course of business, and (iii) grants the subtenant certain allowances, such as free rent.
During the year ended December 31, 2022, the Company recorded $3.7 million of ROU asset impairments and $1.3 million of
leasehold improvement impairments related to closing one floor of its offices located at 150 Spear Street, San Francisco, California.
The space had been vacant prior to the Company electing to permanently reduce its office space. The impairments are included in
restructuring costs in the Consolidated Statements of Income. During the year ended December 31, 2020, the Company recorded $2.3
million of ROU asset impairments and $1.1 million of leasehold improvement impairments related to a facility lease from the
SiriusDecisions acquisition in 2019 that the Company no longer used as a result of the integration of SiriusDecisions. The impairments
are included in integration costs in the Consolidated Statements of Income. The leasehold improvements were originally recorded in
property and equipment, net in the Consolidated Balance Sheets. As a result of the impairments, the ROU asset and leasehold
improvements were required to be recorded at their estimated fair value as Level 3 non-financial assets. The fair value of the asset
group was determined using a discounted cash flow model, which required the use of estimates, including projected cash flows for the
related assets, the selection of a discount rate used in the model, and regional real estate industry data. The fair value of the asset group
was allocated to the ROU asset and leasehold improvements based on their relative carrying values.
During the fourth quarter of 2020, the Company received a variable incentive payment of $3.5 million from one of its landlords
to terminate the related office space lease early. This amount was recognized as a reduction in variable lease expense.
The Company did not have any lease impairments or abandonments during 2021.
43
Note 6 – Derivatives and Hedging
The Company enters into derivative contracts (an interest rate swap and foreign currency forwards) to mitigate the cash flow
risk associated with changes in interest rates on its variable rate debt (refer to Note 4 – Debt) and changes in foreign exchange rates on
forecasted foreign currency transactions. The Company accounts for its derivative contracts in accordance with FASB ASC Topic 815
– Derivatives and Hedging (“Topic 815”), which requires all derivatives, including derivatives designated as accounting hedges, to be
recorded on the balance sheet at fair value.
Interest Rate Swap
During 2019, the Company entered into a single interest rate swap contract that matured on December 31, 2022, with an initial
notional amount of $95.0 million. The Company paid a base fixed rate of 1.65275% and in return received the greater of: (1) 1-month
LIBOR, rounded up to the nearest 1/16 of a percent, or (2) 0.00%.
The swap had been designated and accounted for as a cash flow hedge of the forecasted interest payments on the Company’s
debt. The swap was considered to be a highly effective hedge of the designated interest rate risk for the entire contract period and
changes in the fair value of the swap were recorded in accumulated other comprehensive loss, a component of equity in the
Consolidated Balance Sheets.
Foreign Currency Forwards
The Company enters into a limited number of foreign currency forward exchange contracts to mitigate the effects of adverse
fluctuations in foreign currency exchange rates on transactions entered into in the normal course of business that are denominated in
foreign currencies that differ from the local functional currency. These contracts generally have short durations and are recorded at fair
value with both realized and unrealized gains and losses recorded in other income (expense), net in the Consolidated Statements of
Income because the Company does not designate these contracts as hedges for accounting purposes.
During 2022, the Company entered into ten foreign currency forward exchange contracts, all of which settled by December 31,
2022. Accordingly, as of December 31, 2022, there are no amounts recorded in the Consolidated Balance Sheets. During 2021, the
Company entered into seven foreign currency forward exchange contracts, all of which settled by December 31, 2021. Accordingly, as
of December 31, 2021, there are no amounts recorded in the Consolidated Balance Sheets. During 2020, the Company entered into
three foreign currency forward exchange contracts, all of which settled by December 31, 2020.
The Company’s derivative counterparties are investment grade financial institutions. The Company does not have any collateral
arrangements with its derivative counterparties and the derivative contracts do not contain credit risk related contingent features. The
table below provides information regarding amounts recognized in the Consolidated Statements of Income for derivative contracts for
the periods indicated (in thousands):
Amount recorded in:
Interest expense (1)
Other income (expense), net (2)
Total
For the Year Ended December 31,
2021
2020
2022
$
$
(103)
(194)
(297)
$
$
(807)
(90)
(897)
$
$
(858)
(157)
(1,015)
(1) Consists of interest expense from the interest rate swap contract.
(2) Consists of net realized losses on foreign currency forward contracts.
Note 7 – Fair Value Measurements
The Company has certain financial assets and liabilities which have been classified as either Level 1, 2, or 3 within the fair value
hierarchy as described below.
Level 1 — Fair value based on quoted prices in active markets for identical assets or liabilities.
Level 2 — Fair value based on inputs other than Level 1 inputs that are observable, either directly or indirectly, such as quoted
prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be
corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3 — Fair value based on unobservable inputs that are supported by little or no market activity and such inputs are
significant to the fair value of the assets or liabilities.
44
The following table represents the Company’s fair value hierarchy for its financial assets and liabilities that are measured at fair
value on a recurring basis (in thousands):
Assets:
Money market funds (1)
Marketable investments (2)
Total Assets
Assets:
Money market funds (1)
Marketable investments (2)
Total Assets
Liabilities:
Interest rate swap (3)
Total Liabilities
$
$
$
$
$
$
Level 1
As of December 31, 2022
Level 2
Total
5,800
—
5,800
$
$
— $
19,688
19,688
$
5,800
19,688
25,488
Level 1
As of December 31, 2021
Level 2
Total
6,885
$
— $
$
6,885
— $
18,509
18,509
$
6,885
18,509
25,394
— $
— $
(294) $
(294) $
(294)
(294)
(1) Included in cash and cash equivalents in the Consolidated Balance Sheets.
(2) Marketable investments have been initially valued at the transaction price and subsequently valued, at the end of the reporting
period, utilizing third party pricing services or other market observable data. The pricing services utilize industry standard
valuation methods, including both income and market based approaches and observable market inputs to determine value. These
observable market inputs include reportable trades, benchmark yields, credit spreads, broker/dealer quotes, bids, offers, current
spot rates and other industry and economic events.
(3) The Company had an interest rate swap contract that hedged the risk of variability from interest payments on its borrowings (refer
to Note 4 – Debt and Note 6 – Derivatives and Hedging). The fair value of the interest rate swap was based on mark-to-market
valuations prepared by a third-party broker. Those valuations were based on observable interest rates and other observable market
data, which the Company considers Level 2 inputs.
During the years ended December 31, 2022 and 2021, the Company did not transfer assets or liabilities between levels of the
fair value hierarchy. Additionally, there have been no changes to the valuation techniques for Level 2 assets and liabilities.
Level 3 activity consisted entirely of the contingent purchase price related to the acquisition of FeedbackNow during 2018.
Changes in the fair value of Level 3 contingent consideration were as follows (in thousands):
Balance at December 31, 2019
Fair value adjustment of contingent purchase price (1)
Payment of contingent purchase price (2)
Foreign exchange effect
Balance at December 31, 2020
Contingent
Consideration
(2,511)
(22)
2,680
(147)
—
$
(1) Subsequent to the acquisition of FeedbackNow, the increases in the fair value of the contingent consideration were primarily due
to the achievement of contract bookings during these periods. The Monte Carlo simulation was used to determine the fair value
and increases or decreases in the simulation’s inputs would have resulted in higher or lower fair value measurements. These
amounts were recognized as acquisition and integration costs in the Consolidated Statements of Income.
(2) During the third quarter of 2020, the second year financial targets were met and $2.7 million was paid to the sellers during the
fourth quarter of 2020.
45
Note 8 – Income Taxes
Income before income taxes consists of the following (in thousands):
Domestic
Foreign
Total
Years Ended December 31,
2021
2020
2022
$
$
16,552 $
14,172
30,724 $
22,424 $
10,767
33,191 $
7,237
5,696
12,933
The components of the income tax expense are as follows (in thousands):
Current:
Federal
State
Foreign
Total current
Deferred:
Federal
State
Foreign
Total deferred
Income tax expense
Years Ended December 31,
2021
2020
2022
$
$
9,349 $
3,819
2,402
15,570
(5,513)
(1,788)
649
(6,652)
8,918 $
4,203 $
2,272
2,147
8,622
334
(663)
54
(275)
8,347 $
603
2,054
1,963
4,620
490
(1,641)
(526)
(1,677)
2,943
A reconciliation of the federal statutory rate to Forrester’s effective tax rate is as follows:
Income tax provision at federal statutory rate
Increase (decrease) in tax resulting from:
State tax provision, net of federal benefit
Foreign tax rate differential
Stock compensation
Withholding taxes
Non-deductible expenses
Change in valuation allowance
Foreign subsidiary income subject to U.S. tax
Change in tax legislation
Other, net
Effective tax rate
Years Ended December 31,
2021
2020
2022
21.0%
5.2
(0.5)
0.9
1.7
1.5
1.0
0.6
(1.6)
(0.8)
29.0%
21.0%
3.8
(0.4)
(0.4)
1.3
—
—
(0.5)
(0.3)
0.6
25.1%
21.0%
2.6
(0.2)
5.7
3.3
2.2
(5.8)
(4.3)
(1.9)
0.2
22.8%
The increase in the effective tax rate during 2022 as compared to 2021 was primarily due to increased non-deductible stock
compensation, an increase in foreign subsidiary income subject to U.S. tax in 2022, and an increase in non-deductible expenses related
to meals and entertainment in 2022 that did not occur in 2021. These increases were partially offset by a benefit related to a change in
tax legislation in 2022.
46
The components of deferred income taxes are as follows (in thousands):
Non-deductible reserves and accruals
Net operating loss and other carryforwards
Stock compensation
Lease liability
Gross deferred tax asset
Less - valuation allowance
Sub-total
Other liabilities
Depreciation and amortization
Goodwill and intangible assets
Operating lease right-of-use assets
Deferred commissions
Net deferred tax liability
As of December 31,
2022
2021
$
$
2,736 $
6,215
2,051
17,715
28,717
(989)
27,728
(807)
(1,023)
(18,648)
(13,705)
(6,913)
(13,368) $
1,567
8,343
1,256
20,870
32,036
(1,114)
30,922
(741)
(1,962)
(22,488)
(17,340)
(8,268)
(19,877)
As of December 31, 2022 and 2021, long-term net deferred tax assets were $0.8 million and $1.5 million, respectively, and are
included in other assets in the Consolidated Balance Sheets. Long-term net deferred tax liabilities were $14.1 million and $21.3
million at December 31, 2022 and 2021, respectively, and are included in non-current liabilities in the Consolidated Balance Sheets.
As of December 31, 2022, the Company has fully utilized its U.S. federal net operating loss carryforwards.
The Company has foreign net operating loss carryforwards of approximately $18.9 million, which can be carried forward
indefinitely. Approximately $3.1 million of the foreign net operating loss carryforwards relate to a prior acquisition, the utilization of
which is subject to limitation under the tax law of the United Kingdom.
As of December 31, 2022, the Company has no U.S. federal and state capital loss carryforwards.
The Company considers all available evidence, both positive and negative, to determine whether, based on the weight of that
evidence, a valuation allowance is needed for some portion or all of a net deferred income tax asset. Judgment is required in
considering the relative impact of negative and positive evidence. In arriving at these judgments, the weight given to the potential
effect of negative and positive evidence is commensurate with the extent to which it can be objectively verified. Although realization
is not assured, based upon the Company’s historical taxable income and projections of the Company’s future taxable income over the
periods during which the deferred tax assets are deductible and the carryforwards expire, management believes it is more likely than
not that the Company will realize the benefits of these deductible differences, net of the existing valuation allowances, as discussed
below.
As of December 31, 2022 and 2021, the Company maintained a valuation allowance of approximately $1.0 million and $1.1
million, respectively, primarily relating to foreign net operating loss carryforwards from an acquisition, and as of December 31, 2021,
also from U.S. capital losses from the Company’s investment in technology-related private equity funds.
The following table provides a summary of the changes in the deferred tax valuation allowance for the years ended
December 31, 2022, 2021, and 2020 (in thousands):
Deferred tax valuation allowance at January 1
Additions
Deductions
Change in tax legislation
Translation adjustments
Deferred tax valuation allowance at December 31
2022
2021
2020
$
$
1,114
106
(336)
186
(81)
989
$
$
1,237
—
(108)
—
(15)
1,114
$
$
2,274
52
(1,134)
2
43
1,237
The Company will generally be free of additional U.S. federal tax consequences on additional unremitted foreign earnings that
have been subject to U.S. tax primarily through GILTI or would be eligible for a dividends received deduction for earnings distributed
after January 1, 2018. Notwithstanding the U.S. taxation of these amounts, the Company intends to continue to invest all of its
unremitted earnings of $41.7 million, as well as the capital in these subsidiaries, indefinitely outside of the U.S. unless there are
opportunities in the future to repatriate in a tax efficient manner. The Company does not expect to incur any material, additional taxes
related to such amounts.
47
The Company utilizes a two-step process for the measurement of uncertain tax positions that have been taken or are expected to
be taken on a tax return. The first step is a determination of whether the tax position should be recognized in the financial statements.
The second step determines the measurement of the tax position. A reconciliation of the beginning and ending amount of
unrecognized tax benefits is summarized as follows for the years ended December 31, 2022, 2021, and 2020 (in thousands):
Unrecognized tax benefits at January 1
Reductions for tax positions of prior years
Translation adjustments
Unrecognized tax benefits at December 31
2022
2021
2020
5 $
(4)
(1)
— $
28 $
(24)
1
5 $
345
(344)
27
28
$
$
As of December 31, 2022, the Company had no unrecognized tax benefits. The Company does not expect the liability for
unrecognized tax benefits to change materially within the next 12 months.
The Company recognizes interest and penalties related to uncertain tax positions in income tax expense and such amounts were
not significant in the years ended December 31, 2022, 2021, and 2020. Accrued interest and penalties were insignificant at
December 31, 2022, 2021, and 2020.
The Company files income tax returns in the U.S. and in foreign jurisdictions. Generally, the Company is no longer subject to
U.S., state, local, and foreign income tax examinations by tax authorities in its major jurisdictions for years before 2016, except to the
extent of net operating loss and tax credit carryforwards from those years. Major taxing jurisdictions include the U.S., the Netherlands,
the United Kingdom, Germany, and Switzerland. As of December 31, 2022, the Company has no jurisdictions under audit.
Note 9 – Stockholders’ Equity
Preferred Stock
Forrester has authorized 500,000 shares of $0.01 par value preferred stock. The Board of Directors has full authority to issue
this stock and to fix the voting powers, preferences, rights, qualifications, limitations, or restrictions thereof, including dividend rights,
conversion rights, redemption privileges, liquidation preferences, and the number of shares constituting any series or designation of
such series.
Treasury Stock
As of December 31, 2022, Forrester’s Board of Directors has authorized an aggregate $585.0 million to purchase common stock
under the Company’s stock repurchase program. The shares repurchased may be used, among other things, in connection with
Forrester’s equity incentive and purchase plans. As of December 31, 2022, the Company had repurchased approximately 17.0 million
shares of common stock at an aggregate cost of $510.0 million.
Dividends
The Company does not currently pay cash dividends on its common stock.
Equity Plans
The Company maintains the Forrester Research, Inc. Amended and Restated Equity Incentive Plan (the “Equity Incentive
Plan”). The Equity Incentive Plan, which runs until May 2026, provides for the issuance of stock-based awards, including incentive
stock options (“ISOs”), non-qualified stock options (“NSOs”), and restricted stock units (“RSUs”) to purchase up to 6,350,000 shares
authorized in the plan and 793,275 shares returned from prior plans. Under the terms of the Equity Incentive Plan, ISOs may not be
granted at less than fair market value on the date of grant (and in no event less than par value). Options and RSUs generally vest
annually over four years and options expire after 10 years. No future awards can be granted or issued under prior plans and there is a
maximum amount of awards issuable under the plan to the Company’s non-employee Directors. RSUs granted to non-employee
directors vest quarterly over one year. Options and RSUs granted under the Equity Incentive Plan immediately vest upon certain
events, as described in the plan. As of December 31, 2022, approximately 1.4 million shares were available for future grant of awards
under the Equity Incentive Plan.
As of December 31, 2022, no options remain outstanding under prior plans.
48
Restricted Stock Units
Restricted stock units represent the right to receive one share of Forrester common stock when the restrictions lapse and the
vesting conditions are met. RSUs are valued on the date of grant based upon the value of the Company’s stock on the date of grant less
the present value of dividends expected to be paid during the requisite service period. Shares of Forrester’s common stock are
delivered to the grantee upon vesting, subject to a reduction of shares for payment of withholding taxes. The weighted average grant
date fair value for RSUs granted in 2022, 2021, and 2020 was $50.37, $46.64, and $35.15, respectively. The value of RSUs vested and
converted to common stock, based on the value of Forrester’s common stock on the date of vesting, was $10.8 million, $11.5 million,
and $10.0 million during 2022, 2021, and 2020, respectively.
RSU activity for the year ended December 31, 2022 is presented below (in thousands, except per share data):
Unvested at December 31, 2021
Granted
Vested
Forfeited
Unvested at December 31, 2022
Number of
Shares
Weighted-
Average
Grant Date
Fair Value
634 $
355
(230)
(77)
682 $
42.45
50.37
42.45
44.99
46.28
Stock Options
Stock option activity for the year ended December 31, 2022 is presented below (in thousands, except per share data and
contractual term):
Weighted -
Average
Exercise
Price Per
Share
Weighted -
Average
Remaining
Contractual
Term (in years)
Aggregate
Intrinsic
Value
Number
of Shares
Outstanding at December 31, 2021
Exercised
Forfeited
Outstanding at December 31, 2022
Vested and Exercisable at December 31, 2022
114
(23)
(2)
89
89
$
$
$
35.52
35.35
34.91
35.58
35.58
2.07
2.07
$
$
116
116
The total intrinsic value of options exercised during 2022, 2021, and 2020 was $0.3 million, $2.2 million, and $0.5 million,
respectively.
No stock options were granted during the year ended December 31, 2022.
Employee Stock Purchase Plan
In May 2022, stockholders of the Company approved an amendment to the Company’s Second Amended and Restated
Employee Stock Purchase Plan, which provided for an additional 600,000 shares of common stock, par value $0.01 per share, to be
granted under the plan. The Company's Third Amended and Restated Employee Stock Purchase Plan (the "Stock Purchase Plan"),
provides for the issuance of up to 0.8 million shares of common stock and as of December 31, 2022, approximately 0.7 million shares
remain available for issuance. With certain limited exceptions, all employees of Forrester whose customary employment is more than
20 hours per week, including officers and directors who are employees, are eligible to participate in the Stock Purchase Plan. Purchase
periods under the Stock Purchase Plan are six months in length and commence on each successive March 1 and September 1. Stock
purchased under the Stock Purchase Plan is required to be held for one year before it is able to be sold. During each purchase period
the maximum number of shares of common stock that may be purchased by an employee is limited to the number of shares equal to
$12,500 divided by the fair market value of a share of common stock on the first day of the purchase period. An employee may elect
to have up to 10% deducted from his or her compensation for the purpose of purchasing shares under the Stock Purchase Plan. The
price at which the employee’s shares are purchased is the lower of: (1) 85% of the closing price of the common stock on the day that
the purchase period commences, or (2) 85% of the closing price of the common stock on the day that the purchase period terminates.
49
Shares purchased by employees under the Stock Purchase Plan are as follows (in thousands, except per share data):
Purchase Period Ended
February 28, 2022
August 31, 2022
February 28, 2021
August 31, 2021
Shares
Purchased
Purchase
Price
41 $
54 $
51 $
39 $
40.50
35.35
30.29
39.13
Accumulated Other Comprehensive Loss (“AOCL”)
The components of accumulated other comprehensive loss are as follows (in thousands):
Balance at December 31, 2019
Foreign currency translation (1)
Unrealized loss before reclassification, net
of tax of $283
Reclassification to income, net
of tax of $(242) (2)
Balance at December 31, 2020
Foreign currency translation (1)
Unrealized gain (loss) before reclassification, net
of tax of $(6)
Reclassification to income, net
of tax of $(227) (2)
Balance at December 31, 2021
Foreign currency translation (1)
Unrealized gain (loss) before reclassification, net
of tax of $(10)
Reclassification to income, net
of tax of $(28) (2)
Balance at December 31, 2022
Marketable
Investments
Interest Rate
Swap
Translation
Adjustment
Total AOCL
— $
—
(104) $
—
(4,753) $
4,884
—
—
—
—
(25)
—
(25)
—
(134)
(1,333)
—
616
(821)
—
29
580
(212)
—
137
—
131
(3,083)
—
—
(2,952)
(4,807)
—
(4,857)
4,884
(1,333)
616
(690)
(3,083)
4
580
(3,189)
(4,807)
3
—
(159) $
75
— $
—
(7,759) $
75
(7,918)
$
$
(1) The Company does not record tax provisions or benefits for the net changes in foreign currency translation adjustments as it
intends to permanently reinvest undistributed earnings of its foreign subsidiaries.
(2) Reclassification is related to the Company’s interest rate swap (cash flow hedge) and was recorded in interest expense in the
Consolidated Statements of Income. Refer to Note 6 – Derivatives and Hedging.
Note 10 – Employee Pension Plans
Forrester sponsors several defined contribution plans for eligible employees. Generally, the defined contribution plans have
funding provisions which, in certain situations, require contributions based upon formulas relating to employee wages or the level of
elective participant contributions, as well as allow for additional discretionary contributions. Further, certain plans contain vesting
provisions. Forrester’s contributions to these plans totaled approximately $8.2 million, $6.5 million, $7.6 million for the years ended
December 31, 2022, 2021, and 2020, respectively.
Note 11 – Restructuring
In January 2023, the Company implemented a reduction in its workforce of approximately 4% of its employees across various
geographies and functions to streamline operations. The Company recorded $4.3 million of severance and related costs for this action
in the fouth quarter of 2022. The Company also recorded a restructuring charge of $5.0 million during the fourth quarter of 2022
related to closing one floor of its offices located at 150 Spear Street, San Francisco, California, of which $3.7 million related to an
impairment of a right-of-use asset and $1.3 million related to an impairment of leasehold improvements.
Approximately all $4.3 million of the severance and related benefit costs incurred during 2022 are expected to be paid in 2023.
50
Note 12 – Non-Marketable Investments
At December 31, 2022 and 2021, the carrying value of the Company’s non-marketable investments, which were interests in
technology-related private equity funds, was $0.9 million and $0.6 million, respectively, and is included in other assets in the
Consolidated Balance Sheets.
The Company’s investments are accounted for using the equity method as the investments are limited partnerships and the
Company has an ownership interest in excess of 5%. Accordingly, the Company records its share of the investee’s operating results
each period, which are included in gains on investments, net in the Consolidated Statement of Income. The Company recorded $0.3
million and $2.5 million in gains from its non-marketable investments for the years ended December 31, 2022 and 2020, respectively,
and gains were immaterial during 2021.
The Company uses the cumulative earnings approach to classify distributions received from equity method investments. During
the years ended December 31, 2022 and 2021, no distributions were received from the funds. During the year ended December 31,
2020, $4.3 million was distributed from the funds to the Company. This amount was included within other investing activity in the
Consolidated Statements of Cash Flows as it was considered a return on investment.
Note 13 – Operating Segment and Enterprise Wide Reporting
The Company’s chief operating decision-maker (used in determining the Company’s segments) is the chief executive officer
and the chief financial officer. The Company operates in three segments: Research, Consulting, and Events. These segments, which
are also the Company's reportable segments, are based on the management structure of the Company and how the chief operating
decision maker uses financial information to evaluate performance and determine how to allocate resources. The Company’s products
and services are delivered through each segment as described below.
The Research segment includes the revenues from all of the Company’s research products as well as consulting revenues from
advisory services (such as speeches and advisory days) delivered by the Company’s research organization. Research segment costs
include the cost of the organizations responsible for developing and delivering these products in addition to the costs of the product
management organization responsible for product pricing and packaging, and the launch of new products.
The Consulting segment includes the revenues and the related costs of the Company’s project consulting organization. The
project consulting organization delivers a majority of the Company’s project consulting revenue and certain advisory services.
The Events segment includes the revenues and the costs of the organization responsible for developing and hosting in-person
and virtual events. As of January 1, 2022, the Company realigned its events sales costs from selling and marketing expense to the
Events segment as they now fall under the Events management structure. The 2021 and 2020 amounts have been revised to conform to
the current presentation.
The Company evaluates reportable segment performance and allocates resources based on segment revenues and expenses.
Segment expenses include the direct expenses of each segment organization and exclude selling and marketing expenses, general and
administrative expenses, stock-based compensation expense, depreciation expense, adjustments to incentive bonus compensation from
target amounts, amortization of intangible assets, restructuring and integration costs, interest and other income (expense), and gains on
investments. The accounting policies used by the segments are the same as those used in the consolidated financial statements. The
Company does not review or evaluate assets as part of segment performance. Accordingly, the Company does not identify or allocate
assets by reportable segment.
The Company provides information by reportable segment in the tables below (in thousands):
Year Ended December 31, 2022
Research revenues
Consulting revenues
Events revenues
Total segment revenues
Segment expenses
Selling, marketing, administrative and other expenses
Amortization of intangible assets
Restructuring costs
Interest expense, other income, and gains on investments
Income before income taxes
Research
Segment
Consulting
Segment
Events
Segment
Consolidated
$
354,453
41,559
—
396,012
(133,566)
$
— $
111,028
—
111,028
(56,889)
— $
—
30,747
30,747
(21,801)
$
51
354,453
152,587
30,747
537,787
(212,256)
(270,381)
(13,161)
(9,335)
(1,930)
30,724
Year Ended December 31, 2021
Research revenues
Consulting revenues
Events revenues
Total segment revenues
Segment expenses
Selling, marketing, administrative and other expenses
Amortization of intangible assets
Integration costs
Interest expense, other expense, and gains on investments
Income before income taxes
Year Ended December 31, 2020
Research revenues
Consulting revenues
Events revenues
Total segment revenues
Segment expenses
Selling, marketing, administrative and other expenses
Amortization of intangible assets
Integration costs
Interest expense, other expense, and gains on investments
Income before income taxes
$
$
Research
Segment
Consulting
Segment
Events
Segment
Consolidated
325,340
47,247
—
372,587
(118,155)
$
— $
108,867
—
108,867
(51,770)
— $
—
12,861
12,861
(12,709)
$
325,340
156,114
12,861
494,315
(182,634)
(257,576)
(15,129)
(334)
(5,451)
33,191
Research
Segment
Consulting
Segment
Events
Segment
Consolidated
301,544
50,406
—
351,950
(110,843)
$
— $
86,897
—
86,897
(40,168)
— $
—
10,137
10,137
(11,221)
$
301,544
137,303
10,137
448,984
(162,232)
(245,115)
(19,683)
(5,779)
(3,242)
12,933
Net long-lived tangible assets by location as of December 31, 2022 and 2021 are as follows (in thousands):
United States
United Kingdom
Europe (excluding United Kingdom)
Asia Pacific
Total
2022
60,631 $
8,678
319
3,550
73,178 $
2021
76,966
10,667
316
5,305
93,254
$
$
Revenues by geographic destination, based on the location products and services are consumed, and as a percentage of total
revenues for the years ended December 31, 2022, 2021, and 2020 are as follows (dollars in thousands):
United States
Europe (excluding United Kingdom)
United Kingdom
Canada
Asia Pacific
Other
Total
United States
Europe (excluding United Kingdom)
United Kingdom
Canada
Asia Pacific
Other
Total
2022
426,041 $
36,664
20,079
20,759
26,548
7,696
537,787 $
2021
381,662 $
41,264
21,913
17,213
26,768
5,495
494,315 $
2020
356,288
34,897
15,741
14,005
22,969
5,084
448,984
$
$
2022
2021
2020
79%
7
4
4
5
1
100%
77%
9
5
3
5
1
100%
79%
8
4
3
5
1
100%
52
Note 14 – Certain Balance Sheet Accounts
Property and Equipment:
Property and equipment as of December 31, 2022 and 2021 is recorded at cost less accumulated depreciation and consists of the
following (in thousands):
Computers and equipment
Computer software
Furniture and fixtures
Leasehold improvements
Total property and equipment
Less accumulated depreciation
Total property and equipment, net
2022
2021
$
$
14,303 $
34,903
9,745
30,285
89,236
(66,028)
23,208 $
15,751
39,858
10,896
31,697
98,202
(69,957)
28,245
The Company incurs costs to develop or obtain internal use computer software used for its operations, and certain of these costs
meeting the criteria in ASC 350 – Internal Use Software (as updated by ASU No. 2018-15, refer to Note 1 – Summary of Significant
Accounting Policies) are capitalized and amortized over their useful lives. The entire balance in the computer software category above
consists of these costs. Amortization of capitalized internal use software costs totaled $4.8 million, $4.6 million, and $4.9 million for
the years ended December 31, 2022, 2021, and 2020, respectively, and is included in depreciation expense in the Consolidated
Statements of Income.
Accrued Expenses and Other Current Liabilities:
Accrued expenses and other current liabilities as of December 31, 2022 and 2021 consist of the following (in thousands):
Payroll and related benefits
Taxes
Lease liability
Other
Total
2022
2021
$
$
53,581 $
5,823
13,632
17,971
91,007 $
61,979
4,731
12,992
18,098
97,800
Non-Current Liabilities:
Non-current liabilities as of December 31, 2022 and 2021 consist of the following (in thousands):
Deferred tax liability
Other
Total
Allowance for Doubtful Accounts:
2022
2021
$
$
14,133 $
2,509
16,642 $
21,346
2,502
23,848
A rollforward of the allowance for doubtful accounts as of and for the years ended December 31, 2022, 2021, and 2020 is as
follows (in thousands):
Balance, beginning of year
Cumulative effect adjustment of adopting Topic 326 (1)
Provision for doubtful accounts
Write-offs
Translation adjustments
Balance, end of year
$
$
610 $
—
638
(669)
(19)
560 $
708 $
—
225
(318)
(5)
610 $
628
218
721
(850)
(9)
708
2022
2021
2020
(1) Topic 326 was adopted on January 1, 2020. Refer to Note 1 – Summary of Significant Accounting Policies for a discussion on the
adoption.
53
Note 15 – Contingencies
From time to time, the Company may be subject to legal proceedings and civil and regulatory claims that arise in the ordinary
course of its business activities. It is our policy to record accruals for legal contingencies to the extent that it has concluded that it is
probable that a liability has been incurred and the amount of the loss can be reasonably estimated, and to expense costs associated with
loss contingencies, including any related legal fees, as they are incurred.
The Company believes that it has meritorious defenses in connection with its current lawsuits and material claims and disputes
and intends to vigorously contest each of them. Regardless of the outcome, litigation can have a material adverse effect on the
Company because of defense and settlement costs, diversion of management resources, and other factors.
In the opinion of the Company's management based upon information currently available to the Company, while the outcome of
these legal proceedings and claims is uncertain, the likely results of these lawsuits, claims and disputes are not expected, either
individually or in the aggregate, to have a material adverse effect on the Company's financial position, results of operations or cash
flows, although the effect could be material to the Company's consolidated results of operations or consolidated cash flows for any
interim reporting period.
54
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Not applicable.
Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness
of our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”)) as of the end of the period covered by this report. Based on the evaluation, our Chief Executive Officer and Chief
Financial Officer concluded that our disclosure controls and procedures were effective as of December 31, 2022.
Management’s Report on Internal Control over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule
13a-15(f) and 15d-15(f) under the Exchange Act. Internal control over financial reporting is designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles in the United States (“GAAP”). Internal control over financial reporting includes those
policies and procedures that: 1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of the assets of the Company, 2) provide reasonable assurance that transactions are recorded as necessary
to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures of the Company are being
made only in accordance with authorizations of management and directors of the Company, and 3) provide reasonable assurance
regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a
material effect on the financial statements.
Management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2022. In
making its assessment, management used the criteria set forth in Internal Control — Integrated Framework (2013) issued by the
Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in 2013. Based on this assessment, management
concluded that as of December 31, 2022, the Company’s internal control over financial reporting was effective.
The effectiveness of our internal control over financial reporting as of December 31, 2022 has been audited by
PricewaterhouseCoopers LLP, our independent registered public accounting firm, as stated in their report which appears herein.
Changes in Internal Control Over Financial Reporting
There was no change in our internal control over financial reporting (as defined in Rules 13a-15(f) of the Exchange Act) that
occurred during the quarter ended December 31, 2022, which has materially affected, or is reasonably likely to materially affect, our
internal control over financial reporting.
Item 9B. Other Information
On March 8, 2023, our Board of Directors approved an amendment to our bylaws to clarify procedures relating to our existing
advance notice bylaws and any potential nomination of directors under Rule 14a-19 (“Rule 14a-19”) of the Securities Exchange Act of
1934, as amended, including as to the maximum number of nominees a stockholder may nominate and the impact of noncompliance
with Rule 14a-19 by a stockholder who provides notice of nomination pursuant to Rule 14a-19.
A copy of our bylaws marked to show the changes approved by our Board is filed as Exhibit 3.4 to this Annual Report on Form
10-K and an unmarked copy of our bylaws incorporating the changes approved by our Board is filed as Exhibit 3.5 to this Annual
Report on Form 10-K.
Item 9C. Disclosure Regarding Foreign Jurisdictions That Prevent Inspections
Not applicable
55
Item 10. Directors, Executive Officers, and Corporate Governance
Executive Officers
The following table sets forth information about our executive officers as of March 10, 2023.
PART III
Name
George F. Colony
Ryan D. Darrah
L. Christian Finn
Carrie Johnson
Mike Kasparian
Sharyn Leaver
Sarah Le Roy
Shirley Macbeth
Steven Peltzman
Nate Swan
Age
69
51
52
47
47
48
54
51
54
57
Position
Chairman of the Board, Chief Executive Officer
Chief Legal Officer and Secretary
Chief Financial Officer
Chief Product Officer
Chief Information Officer
Chief Research Officer
Chief People Officer
Chief Marketing Officer
Chief Business Technology Officer
Chief Sales Officer
George F. Colony, Forrester’s founder, has served as Chairman of the Board of Directors and Chief Executive Officer since the
Company’s inception in July 1983, and as President since September 2001 and from 1983-2000.
Ryan D. Darrah began serving as Chief Legal Officer and Secretary in March 2017. Previously, he was the Assistant General
Counsel and Assistant Secretary of the Company. Prior to joining the Company in 2007, Mr. Darrah served as General Counsel and
Secretary of Sports Loyalty Systems, Inc. and ProfitLogic, Inc.
L. Christian Finn became the Company’s Chief Financial Officer in September 2021. Prior to joining Forrester, he was Vice
President FP&A and Global Procurement of LogMeIn, Inc., a software as a service company focused on unified communications and
collaboration, from September 2015 to September 2021. Prior to joining LogMeIn, from 2011 to 2015 Mr. Finn was with Nuance
Communications, Inc., most recently serving as the Chief Financial Officer of its Healthcare division.
Carrie Johnson became Forrester’s Chief Product Officer in January 2022. Previously, she served as Chief Research Officer
from November 2018 until January 2022, Senior Vice President, Research from August 2015 to November 2018, and Vice President,
Group Director from October 2013 to August 2015. Ms. Johnson joined Forrester in 1998.
Mike Kasparian began serving as Chief Information Officer in May 2018. Previously he served as Vice President, Information
Technology from 2011 to May 2018. Mr. Kasparian joined Forrester in 2001.
Sharyn Leaver began serving as the Company's Chief Research Officer in January 2022. Previously she served as Senior Vice
President, Research, from November 2018 to January 2022, and Vice President and Group Research Director from October 2013 to
November 2018. Ms. Leaver joined Forrester in 2001.
Sarah Le Roy became the Company's Chief People Officer in April 2022. Prior to joining Forrester, she was Chief Human
Resources Officer of RSA Security, a computer and network security company based in Bedford, Massachusetts, from December
2020 to April 2022. Prior to joining RSA, from 2019 to 2020 Ms. Le Roy was Chief Human Resources Officer of Decision Resources
Group based in Burlington, Massachusetts and from 2018 to 2019 she was Senior Vice President, Chief Human Resources Officer, of
Lantheus Medical Imaging based in Billerica, Massachusetts.
Shirley Macbeth became the Company’s Chief Marketing Officer in March 2020. Prior to joining Forrester, she was Senior Vice
President, Corporate Marketing, of ACI Worldwide, a publicly traded payment systems company, from October 2011 to March 2020.
Steven Peltzman joined Forrester as its Chief Business Technology Officer in September 2011. From 2001 to 2011, Mr.
Peltzman was the Chief Information Officer of the Museum of Modern Art in New York City. Prior to that, Mr. Peltzman served as
the Chief Technology Officer at MarketMedical.com and as the vice president of technology at Earthweb and was an officer in the
United States Air Force.
Nate Swan became Forrester’s Chief Sales Officer in January 2023. Prior to joining Forrester, he was Vice President of Sales at
OneTrust LLC, a software as a service company focused on privacy management software platforms, from January to December
2022. Prior to joining OneTrust, from June to September 2021, Mr. Swann was Chief Sales Officer of Ideal Image, and from 1997
until June of 2021, he was with Gartner, Inc., most recently as Senior Vice President, Sales Learning and Development.
Our Code of Business Conduct and Ethics covers all employees, officers and directors, including our principal executive,
financial and accounting officers. A copy of our Code of Business Conduct and Ethics can be found on our web site,
www.forrester.com.
56
We intend to satisfy the disclosure requirements under Item 5.05 of Form 8-K regarding an amendment to, or waiver from, a
provision of the Company’s Code of Business Conduct and Ethics, that relates to a substantive amendment or material departure from
a provision of the Code, by posting such information on our Internet website at www.forrester.com. We also intend to satisfy the
disclosure requirements of the Nasdaq Stock Market regarding waivers of the Code of Business Conduct and Ethics by posting such
information on our Internet website at www.forrester.com.
The remainder of the response to this item is contained in our Proxy Statement for our 2023 Annual Meeting of Stockholders
(the “2023 Proxy Statement”) under the captions “Election of Directors” and “Section 16(a) Beneficial Ownership Reporting
Compliance”, all of which is incorporated herein by reference.
Item 11. Executive Compensation
The response to this item is contained in the 2023 Proxy Statement under the captions “Director Compensation” and “Executive
Compensation” and is incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The response to this item is contained in the 2023 Proxy Statement under the caption “Security Ownership of Certain Beneficial
Owners and Management” and is incorporated herein by reference.
The following table summarizes, as of December 31, 2022, the number of options issued under our equity incentive plans and
the number of shares available for future issuance under these plans:
(a)
Number of
Securities
to be Issued Upon
Exercise
of Outstanding
Options,
Warrants and
Rights
(b)
Weighted Average
Exercise
Price of
Outstanding
Options, Warrants
and Rights
(c)
Number of Securities
Remaining
Available for Future
Issuance Under
Equity Compensation
Plans (Excluding
Securities Reflected
in Column (a)(1)
771,072 (1) $
N/A
771,072
$
35.58
N/A
35.58
2,136,068 (2)
N/A
2,136,068
Plan Category
Equity compensation plans
approved by stockholders
Equity compensation plans not
approved by stockholders
Total
(1) Includes 682,122 restricted stock units that are not included in the calculation of the weighted average exercise price.
(2) Includes, as of December 31, 2022, 1,412,830 shares available for issuance under our Equity Incentive Plan and 723,238 shares
that are available for issuance under our Stock Purchase Plan.
The shares available under our Equity Incentive Plan are available to be awarded as restricted or unrestricted stock or stock
units.
Item 13. Certain Relationships and Related Transactions, and Director Independence
The response to this item is contained in the Company’s 2023 Proxy Statement under the captions “Information with Respect to
Board of Directors”, “Certain Relationships and Related Transactions”, and “Related Person Transactions” and is incorporated herein
by reference.
Item 14. Principal Accountant Fees and Services
The response to this item is contained in the Company’s 2023 Proxy Statement under the caption “Independent Auditors’ Fees
and Other Matters” and is incorporated herein by reference.
57
Item 15. Exhibits and Financial Statement Schedules.
a. Financial Statements. See Index to Financial Statement herein.
b. Financial Statement Schedules. None.
PART IV
c. Exhibits. A complete listing of exhibits required is given in the Exhibit Index herein, which precedes the exhibits filed with
this report.
Item 16. Form 10-K Summary.
Not applicable.
58
Exhibit No.
Description
EXHIBIT INDEX
2.1
3.1
3.2
3.3
3.4(1)
3.5(1)
4.1
4.2
10.01+
10.02+
10.03+
10.04+
10.05+
10.06+
Agreement and Plan of Merger, dated as of November 26, 2018, by and among Forrester Research, Inc., Supernova
Acquisition Corp., SiriusDecisions, Inc., the Founder Stockholders named therein, and Fortis Advisors LLC, as
Stockholder Representative
Restated Certificate of Incorporation of Forrester Research, Inc. (see Exhibit 3.1 to Registration Statement on Form S-
1A filed on November 5, 1996)
Certificate of Amendment of the Certificate of Incorporation of Forrester Research, Inc. (see Exhibit 3.1 to Annual
Report on Form 10-K for the year ended December 31, 1999)
Certificate of Amendment to Restated Certificate of Incorporation of Forrester Research, Inc.
Amendments to Amended and Restated By-Laws Effective March 8, 2023
Amended and Restated By-Laws of Forrester Research, Inc.
Specimen Certificate for Shares of Common Stock, $.01 par value, of Forrester Research, Inc. (see Exhibit 4 to
Registration Statement on Form S-1A filed on November 5, 1996)
Description of Common Stock
Registration Rights and Non-Competition Agreement (see Exhibit 10.1 to Registration Statement on Form S-1 filed on
September 26, 1996)
Amended and Restated Employee Stock Purchase Plan
Amended and Restated Equity Incentive Plan
Form of Incentive Stock Option Certificate (Amended and Restated Equity Incentive Plan)
Form of Non-Qualified Stock Option Certificate (Amended and Restated Equity Incentive Plan)
Form of Performance-Based Stock Option Certificate (Amended and Restated Equity Incentive Plan)
10.07+(1)
Form of Performance-Based Restricted Stock Unit Award Agreement (Amended and Restated Equity Incentive Plan)
10.08+
10.09+
10.10+
10.11+
10.12+
10.13+
Form of Restricted Stock Unit Award Agreement (Amended and Restated Equity Incentive Plan)
Form of Restricted Stock Unit Award Agreement for Directors with One-Year Vesting (Amended and Restated Equity
Incentive Plan)
Form of Stock Option Certificate with Non-Solicitation Covenant (Amended and Restated Equity Incentive Plan)
Form of Stock Option Certificate with Non-Solicitation and Non-Competition Covenant (Amended and Restated
Equity Incentive Plan)
Form of Restricted Stock Unit Award Agreement with Non-Solicitation Covenant (Amended and Restated Equity
Incentive Plan)
Form of Restricted Stock Unit Award Agreement with Non-Solicitation and Non-Competition Covenant (Amended and
Restated Equity Incentive Plan)
10.14+(1)
Amended and Restated Executive Cash Incentive Plan
10.15+
Executive Quarterly Cash Incentive Plan (incorporated by reference to Exhibit 10.18 to the 2021 Form 10-K)
10.16
10.17
10.18
10.19
Forrester Research, Inc. Executive Severance Plan
Lease of Premises at Cambridge Discovery Park, Cambridge, Massachusetts dated as of September 29, 2009 from
BHX, LLC, as Trustee of Acorn Park I Realty Trust to the Company
First Amendment of Lease dated as of December 21, 2009 by 200 Discovery Park, LLC, successor to BHX, LLC, as
Trustee of Acorn Park I Realty Trust, and the Company
Agreement Regarding Project Rights dated as of September 29, 2009, by BHX, LLC, a Massachusetts limited liability
company, as Trustee of Acorn Park I Realty Trust, a Massachusetts nominee trust, and the Company
59
10.20
10.21
10.22
Second Amendment of Lease dated as of February 8, 2012 by 200 Discovery Park, LLC and the Company
Credit Agreement, dated as of January 3, 2019, among the Company, as borrower, JPMorgan Chase Bank, N.A., as
administrative agent, and the lenders from time to time party thereto.
First Amendment to Credit Agreement, dated December 21, 2021, among the Company, as borrower, SiriusDecisions,
Inc. and Whitcomb Investments, Inc., each as subsidiary guarantors, JPMorgan Chase Bank, N.A., as administrative
agent, and the lenders party thereto.
21(1)
Subsidiaries of the Registrant
23.1(1)
31.1(1)
31.2(1)
32.1(2)
32.2(2)
Consent of PricewaterhouseCoopers LLP
Certification of the Principal Executive Officer
Certification of the Principal Financial Officer
Certification of the Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Certification of the Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS(1)
Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL
tags are embedded within the Inline XBRL document
101.SCH(1)
Inline XBRL Taxonomy Extension Schema Document
101.CAL(1)
Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF(1)
Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB(1)
Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE(1)
Inline XBRL Taxonomy Extension Presentation Linkbase Document
104(1)
Cover Page Interactive Data File (embedded within the Inline XBRL document)
(1) Filed herewith.
(2) Furnished herewith.
+ Denotes management contract or compensation arrangements.
60
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly authorized.
SIGNATURES
FORRESTER RESEARCH, INC.
By:
/s/ GEORGE F. COLONY
George F. Colony
Chairman of the Board and Chief Executive
Officer
Date: March 10, 2023
Pursuant to the requirement of the Securities Exchange Act of 1934, this report has been signed by the following persons on
behalf of the registrant in the capacities and on the dates indicated.
Signature
Capacity In Which Signed
Chairman of the Board and Chief Executive Officer
(Principal Executive Officer)
Date
March 10, 2023
Chief Financial Officer (Principal Financial Officer)
March 10, 2023
/s/ GEORGE F. COLONY
George F. Colony
/s/ L. CHRISTIAN FINN
L. Christian Finn
/s/ SCOTT R. CHOUINARD
Scott R. Chouinard
Chief Accounting Officer and Treasurer
(Principal Accounting Officer)
March 10, 2023
/s/ YVONNE L. WASSENAAR
Yvonne L. Wassenaar
/s/ ROBERT M. GALFORD
Robert M. Galford
/s/ GRETCHEN TEICHGRAEBER
Gretchen Teichgraeber
/s/ DAVID J. BOYCE
David J. Boyce
/s/ ANTHONY J. FRISCIA
Anthony J. Friscia
/s/ NEIL BRADFORD
Neil Bradford
/s/
JEAN BIRCH
Jean Birch
/s/ WARREN ROMINE
Warren Romine
Member of the Board of Directors
March 10, 2023
Member of the Board of Directors
March 10, 2023
Member of the Board of Directors
March 10, 2023
Member of the Board of Directors
March 10, 2023
Member of the Board of Directors
March 10, 2023
Member of the Board of Directors
March 10, 2023
Member of the Board of Directors
March 10, 2023
Member of the Board of Directors
March 10, 2023
61
Notice Of 2023 Annual Meeting Of Stockholders
And Proxy Statement
Forrester Research, Inc.
60 Acorn Park Drive
Cambridge, Massachusetts 02140
March 28, 2023
George F. Colony
Chairman of the Board
and Chief Executive Officer
To Our Stockholders:
You are cordially invited to attend the 2023 Annual Meeting of Stockholders of Forrester Research, Inc., which will be held on
Tuesday, May 9, 2023 at 10:00 a.m. Eastern Daylight Time. The Annual Meeting will be a virtual stockholder meeting, conducted via
live audio webcast,
through which you can submit questions and vote online. You may attend the meeting by visiting
www.virtualshareholdermeeting.com/FORR2023 and entering your 16-digit control number included with these proxy materials.
On the following pages, you will find the formal notice of the Annual Meeting and our proxy statement. At the Annual Meeting
you are being asked to elect eight Directors, to approve an amendment and restatement of our Amended and Restated Equity Incentive
Plan, to ratify the selection of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year
ending December 31, 2023, to approve by non-binding vote our executive compensation, and to cast a non-binding vote on the frequency
of non-binding executive compensation votes.
We hope that many of you will be able to attend. Thank you for your continued support and investment in Forrester.
Sincerely yours,
GEORGE F. COLONY
Chairman of the Board
and Chief Executive Officer
Forrester Research, Inc.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
May 9, 2023
Notice is hereby given that the 2023 Annual Meeting of Stockholders of Forrester Research, Inc. will be held at 10:00 a.m. Eastern
Daylight Time on Tuesday, May 9, 2023. The annual meeting will be a virtual stockholder meeting, conducted via live audio webcast,
through which
visiting
www.virtualshareholdermeeting.com/FORR2023 and entering your 16-digit control number included with these proxy materials. The
purpose of the annual meeting will be the following:
online. You may
the meeting
questions
submit
attend
vote
you
and
can
by
1.
2.
3.
4.
5.
To elect the eight directors named in the accompanying proxy statement to serve until the 2024 Annual Meeting of
Stockholders;
To approve an amendment and restatement of the Forrester Research, Inc. Amended and Restated Equity Incentive Plan;
To ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the
fiscal year ending December 31, 2023;
To approve by non-binding vote our executive compensation; and
To cast a non-binding vote on the frequency of non-binding executive compensation votes.
The foregoing items of business are more fully described in the proxy statement accompanying this notice.
Stockholders of record at the close of business on March 13, 2023 are entitled to notice of and to vote at the meeting. A list of
stockholders entitled to vote at the meeting will be open to examination by any stockholder, for any purpose germane to the meeting,
during normal business hours for a period of ten days before the meeting at our corporate offices at 60 Acorn Park Drive, Cambridge,
Massachusetts 02140, and online during the meeting accessible at www.virtualshareholdermeeting.com/FORR2023.
If you are unable to participate in the annual meeting online, please vote your shares as provided in this proxy statement.
By Order of the Board of Directors
RYAN D. DARRAH
Secretary
Cambridge, Massachusetts
March 28, 2023
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE MEETING. PLEASE
VOTE YOUR SHARES OVER THE INTERNET OR BY TELEPHONE IN ACCORDANCE WITH
THE INSTRUCTIONS SET FORTH ON THE PROXY CARD, OR COMPLETE, SIGN AND RETURN
THE ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE WHETHER OR
NOT YOU PLAN TO PARTICIPATE IN THE MEETING ONLINE.
FORRESTER RESEARCH, INC.
Annual Meeting of Stockholders
May 9, 2023
PROXY STATEMENT
The Board of Directors of Forrester Research, Inc., a Delaware corporation, is soliciting proxies from our stockholders. The proxy
will be used at our 2023 Annual Meeting of Stockholders and at any adjournments thereof. You are invited to attend the meeting to be
held at 10:00 a.m. Eastern Daylight Time on Tuesday, May 9, 2023. The annual meeting will be held virtually, conducted via live audio
and vote online. You may attend the meeting by visiting
webcast,
www.virtualshareholdermeeting.com/FORR2023. Be sure to have your 16-digit control number included with these proxy materials in
order to access the annual meeting. This proxy statement was first made available to stockholders on or about March 28, 2023.
through which you can submit questions
This proxy statement contains important information regarding our annual meeting. Specifically, it identifies the proposals upon
which you are being asked to vote, provides information that you may find useful in determining how to vote, and describes voting
procedures.
We use several abbreviations in this proxy statement. We call our Board of Directors the “Board”, refer to our fiscal year which
began on January 1, 2022 and ended on December 31, 2022 as “fiscal 2022,” and refer to our fiscal year ending December 31, 2023 as
“fiscal 2023”. We also refer to ourselves as “Forrester” or the “Company.”
Who May Attend and Vote?
Stockholders who owned our common stock at the close of business on March 13, 2023 are entitled to notice of and to vote at the
annual meeting. We refer to this date in this proxy statement as the “record date.” As of the record date, we had 19,190,575 shares of
common stock issued and outstanding. Each share of common stock is entitled to one vote on each matter to come before the meeting.
How Do I Vote?
If you are a stockholder of record of our common stock:
1.
2.
3.
You may vote over the internet.
If you have internet access, you may vote your shares from any location in the world by
following the "Vote by Internet" instructions on the enclosed proxy card. In addition, you may attend the annual meeting
via the internet and vote during the annual meeting. Please have your 16-digit control number included with these proxy
materials in order to access the annual meeting.
You may vote by telephone. You may vote your shares by following the “Vote by Phone” instructions on the enclosed
proxy card.
You may vote by mail.
postage-paid envelope provided.
If you choose to vote by mail, simply mark your proxy card, date and sign it, and return it in the
By voting over the internet or by telephone, or by signing and returning the proxy card according to the enclosed instructions, you
are enabling the individuals named on the proxy card (known as “proxies”) to vote your shares at the meeting in the manner you indicate.
We encourage you to vote in advance even if you plan to attend the meeting. In this way, your shares will be voted even if you are
unable to attend the meeting. Your shares will be voted in accordance with your instructions. If a proxy card is signed and received by
our Secretary, but no instructions are indicated, then the proxy will be voted “FOR” the election of the nominees for directors, “FOR”
approval of the amendment and restatement of the Forrester Research, Inc. Amended and Restated Equity Incentive Plan, “FOR”
ratifying the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for fiscal 2023, “FOR”
approval of the non-binding vote on our executive compensation, and for holding a non-binding vote on our executive compensation at
the annual meeting of stockholders every year.
How Do I Vote if My Shares are Held in Street Name?
If you hold shares in “street name” (that is, through a bank, broker, or other nominee), the bank, broker, or other nominee, as the
record holder of your shares, is required to vote your shares according to your instructions. In order to vote your shares, you will need
to follow the directions your brokerage firm provides you. Many brokers also offer the option of voting over the internet or by telephone,
instructions for which would be provided by your brokerage firm on your voting instruction form. Please follow the instructions on that
form to make sure your shares are properly voted. If you hold shares in “street name” and would like to attend the annual meeting and
vote online, you must contact the person in whose name your shares are registered and follow directions provided to obtain a proxy card
from that person and have it available for the annual meeting.
What Does the Board of Directors Recommend?
The Board recommends that you vote FOR the election of nominees for directors identified in Proposal One, FOR approval of the
amendment and restatement of the Forrester Research, Inc. Amended and Restated Equity Incentive Plan, FOR ratifying the appointment
of PricewaterhouseCoopers LLP as our independent registered public accounting firm as described in Proposal Three, FOR approval
by non-binding vote of our executive compensation as provided in Proposal Four, and, on Proposal Five, for holding a non-binding vote
on executive compensation every year.
If you are a record holder and submit the proxy card but do not indicate your voting instructions, the persons named as proxies on
your proxy card will vote in accordance with the recommendations of the Board of Directors. If you hold your shares in “street name”,
and you do not indicate how you wish to have your shares voted, your nominee has discretion to instruct the proxies to vote on Proposal
Three but does not have the authority, without your specific instructions, to vote on the election of directors or on Proposals Two, Four,
or Five, and those votes will be counted as “broker non-votes”.
What Vote is Required for Each Proposal?
A majority of the shares entitled to vote on a particular matter, present in person or represented by proxy, constitutes a quorum as
to any proposal. The nominees for election of the directors at the meeting (Proposal One) who receive the greatest number of votes
properly cast for the election of directors will be elected. As a result, shares that withhold authority as to the nominees recommended by
the Board will have no effect on the outcome. The affirmative vote of the holders of a majority of the shares of common stock present
in person or represented by proxy and voting is required to approve the amendment and restatement of the Forrester Research, Inc.
Amended and Restated Equity Incentive Plan (Proposal Two), to ratify the appointment of PricewaterhouseCoopers LLP as our
independent registered public accounting firm (Proposal Three), and to approve the non-binding vote on our executive compensation
(Proposal Four). The option of one year, two years or three years that receives a majority of the shares of common stock present in
person or represented by proxy and voting will be the frequency for the advisory vote on executive compensation (Proposal Five), and
if no option receives a majority of the votes cast, we will consider the option that receives the most votes to be the option selected by
stockholders.
Shares represented by proxies that indicate an abstention or a “broker non-vote” (that is, shares represented at the annual meeting
held by brokers or nominees as to which (i) instructions have not been received from the beneficial owners or persons entitled to vote
and (ii) the broker or nominee does not have discretionary voting power on a particular matter) will be counted as shares that are present
and entitled to vote on the matter for purposes of determining the presence of a quorum, but are not considered to have been voted, and
have the practical effect of reducing the number of affirmative votes required to achieve a majority for those matters requiring the
affirmative vote of the holders of a majority of the shares present or represented by proxy and voting (Proposals Two, Three, Four and
Five) by reducing the total number of shares from which the majority is calculated. However, because directors are elected by a plurality
vote, abstentions and broker non-votes will have no effect on the outcome on Proposal One.
May I Change or Revoke My Vote After I Return My Proxy Card or After I Have Voted My Shares over the Internet or by
Telephone?
Yes. If you are a stockholder of record, you may change or revoke a proxy any time before it is voted by:
•
•
•
returning to us a newly signed proxy bearing a later date;
delivering a written instrument to our Secretary revoking the proxy; or
attending the annual meeting via the internet and voting online. Simply attending the annual meeting will not, by itself,
revoke your proxy.
If you hold shares in “street name”, you should follow the procedure in the instructions that your nominee has provided to you.
Who Will Bear the Cost of Proxy Solicitation?
We will bear the expense of soliciting proxies. Our officers and regular employees (who will receive no compensation in addition
to their regular salaries) may solicit proxies. In addition to soliciting proxies through the mail, our officers and regular employees may
solicit proxies personally, as well as by mail, telephone, and electronically from brokerage houses and other stockholders. We will
reimburse brokers and other persons for reasonable charges and expenses incurred in forwarding soliciting materials to their clients.
Important Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting To Be Held on May 9, 2023
This proxy statement and our Annual Report to Stockholders are available on-line at www.proxyvote.com. These materials will
be mailed to stockholders who request them.
How Can I Obtain an Annual Report on Form 10-K?
Our Annual Report on Form 10-K for
the fiscal year ended December 31, 2022 is available on our website at
www.forrester.com/aboutus. If you would like a copy of our Annual Report on Form 10-K for the fiscal year ended December 31, 2022,
we will send you one without charge. Please contact Investor Relations, Forrester Research, Inc., 60 Acorn Park Drive, Cambridge, MA
02140, Tel: (617) 613-6000.
2
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table and notes provide information about the beneficial ownership of our outstanding common stock as of March
13, 2023 (except as otherwise noted) by:
(i)
(ii)
(iii)
(iv)
each person who we know beneficially owns more than 5% of our common stock;
each of the executive officers named below in the Summary Compensation Table;
each member of our Board of Directors; and
our directors and executive officers as a group.
Except as otherwise indicated, each of the stockholders named in the table below has sole voting and investment power with
respect to the shares of our common stock beneficially owned. Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission (“SEC”) and includes voting or investment power with respect to the shares. Shares subject to
exercisable options and vesting restricted stock units include options that are currently exercisable or exercisable within 60 days of
March 13, 2023 and shares underlying restricted stock units scheduled to vest within 60 days of March 13, 2023.
Name of Beneficial Owner
George F. Colony
c/o Forrester Research, Inc.
60 Acorn Park Drive
Cambridge, MA 02140(1)
Royce & Associates, LP
745 Fifth Avenue
New York, NY 10151(2)
BlackRock, Inc.
55 East 52nd Street
New York, NY 10022(3)
The Vanguard Group
100 Vanguard Boulevard
Malvern, PA 19355(4)
Jean Birch
David Boyce
Neil Bradford
Tony Friscia
Robert Galford
Warren Romine
Gretchen Teichgraeber
Yvonne Wassenaar
L. Christian Finn
Kelley Hippler
Carrie Johnson
Sharyn Leaver
Sarah Le Roy
Directors, named executive officers, and other executive
officers as a group (19 persons)(1)
Common Stock Beneficially Owned
Shares
Subject
to Exercisable
Options and
Vesting
Restricted
Stock Units
Percentage of
Outstanding
Shares
Shares
Beneficially
Owned
7,380,411
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
2,668
38.5%
10.1%
9.8%
7.2%
*
*
*
*
*
*
*
*
*
*
*
*
*
1,934,979
1,876,680
1,377,276
13,961
8,912
20,072
16,338
28,776
2,252
14,004
14,973
5,317
—
6,972
7,094
—
7,569,503
10,245
39.5%
Includes 1,580 shares held by Mr. Colony’s wife as to which Mr. Colony disclaims beneficial ownership.
(1)
(2) Beneficial ownership as of December 31, 2022, as reported in a Schedule 13G filed with the SEC on January 23, 2023, stating
that Royce & Associates, LP has sole voting and dispositive power with respect to 1,934,979 shares.
(3) Beneficial ownership as of December 31, 2022, as reported in a Schedule 13G filed with the SEC on January 24, 2023, stating
that BlackRock, Inc. has sole voting power with respect to 1,864,071 shares and sole dispositive power with respect to 1,876,680
shares.
3
(4) Beneficial ownership as of December 30, 2022, as reported in a Schedule 13G filed with the SEC on February 9, 2023, stating
that The Vanguard Group has shared voting power with respect to 18,970 shares, sole dispositive power with respect to 1,348,661
shares and shared dispositive power with respect to 28,615 shares.
* Less than 1%
PROPOSAL ONE:
ELECTION OF DIRECTORS
Our directors are elected annually by the stockholders. The Board has nominated David Boyce, Neil Bradford, George Colony,
Anthony Friscia, Robert Galford, Warren Romine, Gretchen Teichgraeber and Yvonne Wassenaar to serve one-year terms that will
expire at the 2024 Annual Meeting of Stockholders. These individuals all currently serve on our Board.
One of our current directors, Jean Birch, will be retiring from the Board effective May 9, 2023, and is not a nominee for election
at the forthcoming annual meeting. Ms. Birch has served as a member of the Board and as the Chair of the Audit Committee for 5 years.
We gratefully acknowledge her dedicated service and numerous contributions to Forrester.
The proxies intend to vote each share for which a proper proxy card has been returned or voting instructions received and not
revoked in favor of the nominees named above. If you wish to withhold the authority to vote for the election of any of the nominees,
your voting instructions must so indicate or your returned proxy card must be marked to that effect.
It is expected that each of the nominees will be able to serve, but if any of them is unable to serve, the proxies reserve discretion
to vote, or refrain from voting, for a substitute nominee or nominees.
The following section provides information about each nominee, including information provided by each nominee about his or
her principal occupation and business experience for the past five years and the names of other publicly-traded companies, if any, for
which he or she currently serves as a director or has served as a director during the past five years. In addition to the information
presented with respect to each nominee’s experience, qualifications and skills that led our Board to conclude that he or she should serve
as a director, we also believe that each of the nominees has demonstrated business acumen and a significant commitment to our company,
and has a reputation for integrity and adherence to high ethical standards.
NOMINEES FOR ELECTION
David Boyce, age 55, became a director of Forrester in June 2017. Mr. Boyce is an investor and advisor on product-led growth
(PLG). He teaches PLG at Brigham Young University's Marriott School of Business, invests in PLG companies through his own
investing entity Formative Ventures, and advises growth companies on PLG via Winning by Design, LLC, a global revenue architecture
consultancy working primarily with growth-stage unicorn and pre-unicorn companies. From 2014 until its acquisition by Aurea in 2021,
Mr. Boyce was the Chief Strategy Officer of XANT, Inc. (formerly known as InsideSales.com, Inc.), a software company offering a
leading sales acceleration platform. Prior to joining XANT, Mr. Boyce was the Chief Executive Officer and Chairman of Fundly, Inc.,
a crowdfunding site for online fundraising from 2010 to 2013. Previously, Mr. Boyce was global VP of Strategy at Oracle from 2005
to 2010. We believe Mr. Boyce’s qualifications to serve on our Board of Directors include his extensive experience as an operating
executive at several software companies and his expertise in product, strategy and marketing.
Neil Bradford, age 50, became a director of Forrester in February 2018. Mr. Bradford is the founder and Chief Executive Officer
of General Index Limited, a start-up provider of energy and commodity pricing data. From 2017 to March 2019, Mr. Bradford served
as the Chief Executive Officer of Financial Express, Ltd., an investment ratings and fund research agency based in the United Kingdom.
Prior to joining FE, Mr. Bradford was the Chief Executive Officer of Argus Media, a provider of price assessments, business intelligence
and market data for the global energy and commodities markets. In 1997, Mr. Bradford co-founded Fletcher Research Limited, a UK-
based technology research firm that was acquired by Forrester in 1999. Mr. Bradford served in executive roles with Forrester until
2006. We believe Mr. Bradford’s qualifications to serve on our Board of Directors include his years of experience in the research and
advisory business, having both founded and led companies in the industry, his prior experience as an executive officer of Forrester, and
his perspective on European business as a UK citizen having worked for firms headquartered in London.
George F. Colony, age 69, is the founder of Forrester and since 1983, he has served as Chairman of the Board and Chief Executive
Officer. He also has served as Forrester’s President since September 2001, and he previously was Forrester’s President from 1983 to
2000. We believe Mr. Colony’s qualifications to serve on our Board of Directors and as its Chairman include his extensive experience
in the research industry, including more than 35 years as our chief executive officer, and his significant ownership stake in the Company.
4
Anthony Friscia, age 67, became a director of Forrester in June 2017. Mr. Friscia is currently an independent business consultant.
From 2014 to 2016, Mr. Friscia was the President and Chief Executive Officer of Eduventures, Inc., a research and advisory firm that
provides proprietary research and strategic advice to higher education leaders. Previously, from 2011 to 2014, Mr. Friscia served as a
consultant and special advisor to the President of the New School, a private university in New York City. In 1986, Mr. Friscia founded
AMR Research, a provider of research and advice on global supply chain and enterprise technology to operations and IT executives,
and served as its President and Chief Executive Officer until 2010. We believe Mr. Friscia’s qualifications to serve on our Board of
Directors include his years of experience in business leadership and providing strategic advice to senior leaders, including extensive
experience as a chief executive officer in the research and advisory business.
Robert M. Galford, age 70, became a director of Forrester in November 1996. Since November 2007, Mr. Galford has been the
managing partner of the Center for Leading Organizations, an organizational development firm he founded in Concord, Massachusetts.
From 2001 to 2007, Mr. Galford was a managing partner of the Center for Executive Development, an executive education provider in
Boston, Massachusetts. We believe Mr. Galford’s qualifications to serve on our Board of Directors include his many years of
organizational development and executive education experience, along with his more recent corporate governance experience as an
instructor for the National Association of Corporate Directors.
Warren Romine, age 52, became a director of Forrester in March 2022. Mr. Romine is the founder and managing director of
Orchard Knob Capital LLC, an independent financial advisory firm focused on the aerospace, defense and government services markets.
In October 2022, Mr. Romine joined the faculty at Harvard Business School as a Professor/Senior Lecturer in the finance department.
From 2017 to January 2022, Mr. Romine was a Managing Director and co-head of the Aerospace and Defense group at KippsDeSanto
& Co., an investment bank focused on growth-oriented aerospace, defense and technology companies. Previously, from 2013 to 2017,
Mr. Romine was a Managing Director and head of the Aerospace, Defense and Government Services group at FBR & Co., an investment
banking and brokerage firm. From 2006 to 2014, Mr. Romine also served as chair of the audit committee of the board of directors of
RELM Wireless Corporation, a publicly-traded manufacturer of telecommunications products. We believe that Mr. Romine's
qualifications to serve on our Board of Directors include his extensive finance and management experience in the investment banking
business, his expertise regarding mergers and acquisitions, and his prior experience as a public company board member.
Gretchen G. Teichgraeber, age 69, became a director of Forrester in December 2005. Since 2017, Ms. Teichgraeber has been the
chair of the board of Leadership Connect, a premier information services company with its main office in New York City that publishes
biographical and contact data on leaders in the private and public sectors, and she was previously their CEO from 2009 to 2017.
Previously, Ms. Teichgraeber was an independent consultant to digital media companies and various non-profit organizations from 2007
to 2009. From 2000 to 2007, Ms. Teichgraeber was the chief executive officer of Scientific American, Inc., publisher of the science and
technology magazine, Scientific American. Prior to joining Scientific American, Ms. Teichgraeber served as general manager,
publishing, and vice president, marketing and information services at CMP Media, Inc., a leading provider of technology news and
information. We believe Ms. Teichgraeber’s qualifications to serve on our Board of Directors include her significant general
management and marketing experience in the publishing and information services business, including on-line and print media.
Yvonne Wassenaar, age 54, became a director of Forrester in June 2017. Ms. Wassenaar currently also serves as a director of
Arista Networks, Inc., JFrog Ltd., Rubrik, Inc. and Harvey Mudd College. From 2019 to 2022, Ms. Wassenaar was the Chief Executive
Officer of Puppet, Inc., an information technology automation software company. From 2017 to 2018, Ms. Wassenaar was the Chief
Executive Officer of Airware, an enterprise drone solutions company. From 2014 to 2017, Ms. Wassenaar was with New Relic, Inc., a
cloud-based SaaS company, most recently as Chief Information Officer. Prior to joining New Relic, Ms. Wassenaar held senior positions
at VMware, Inc. from 2010 to 2014. We believe Ms. Wassenaar’s qualifications to serve on our Board of Directors include her thought
leadership in the areas of cloud computing, big data analytics and business digitization and her extensive experience in senior leadership
positions at technology companies.
OUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE ELECTION OF THE NOMINEES
NAMED ABOVE.
Corporate Governance
We believe that good corporate governance is important to ensure that Forrester is managed for the long-term benefit of its
stockholders. Based on our continuing review of the provisions of the Sarbanes-Oxley Act of 2002, rules of the Securities and Exchange
Commission and the listing standards of The NASDAQ Stock Market, our Board of Directors has adopted Corporate Governance
Guidelines, an amended and restated charter for the Audit Committee of the Board of Directors, and a charter for the Compensation and
Nominating Committee of the Board.
Our Corporate Governance Guidelines include stock retention guidelines applicable to executive officers and directors. The
guidelines, which are described in more detail below in the Compensation Discussion and Analysis section, require all directors and
executive officers to hold a targeted value of our common stock within specified time frames, and include restrictions on sales of our
5
common stock by such directors and executive officers until the guidelines have been met. These guidelines may be waived, at the
discretion of the Compensation and Nominating Committee of the Board of Directors, if compliance with the guidelines would create
severe hardship or prevent an executive officer or director from complying with a court order. We currently do not have a policy
regarding hedging.
We also have a written code of business conduct and ethics that applies to all of our officers, directors and employees, including
our principal executive officer, principal financial officer, principal accounting officer, and persons performing similar functions. You
can access our Code of Business Conduct and Ethics, Corporate Governance Guidelines and our current committee charters on our
website, at www.forrester.com/aboutus.
Information With Respect to Board of Directors
Board Meetings and Committees
Our Board of Directors has determined that each of the current directors, with the exception of Mr. Colony, our Chairman and
Chief Executive Officer, is independent under applicable NASDAQ standards as currently in effect.
Our Board of Directors held five meetings during fiscal 2022. Each director attended at least 75 percent of the aggregate of the
meetings of the Board of Directors and of each committee of which he or she is a member. Forrester does not require directors to attend
the annual meeting of stockholders. Mr. Colony, who presided at the meeting, attended the 2022 annual meeting of stockholders, as did
Mr. Galford. Historically, very few stockholders have attended our annual meeting and we have not found it to be a particularly useful
forum for communicating with our stockholders. The Board of Directors currently has two standing committees, the Audit Committee
and the Compensation and Nominating Committee, whose members consist solely of independent directors.
Our Audit Committee consists of five members: Jean M. Birch, Chair, Neil Bradford, Tony Friscia, Warren Romine, and Yvonne
Wassenaar, each of whom, in addition to satisfying the NASDAQ independence standards, also satisfies the Sarbanes-Oxley
independence requirements for audit committee membership. In addition, the Board has determined that Ms. Birch is an “audit
committee financial expert” under applicable rules of the Securities and Exchange Commission, and all of the members of the Audit
Committee satisfy the financial literacy standards of NASDAQ. The Audit Committee held five meetings during fiscal 2022. The
responsibilities of our Audit Committee and its activities during fiscal 2022 are described in the committee’s amended and restated
charter, which is available on our website at www.forrester.com/aboutus. The charter will also be made available without charge to any
stockholder who requests it by writing to Forrester Research, Inc., Attn: Chief Legal Officer and Secretary, 60 Acorn Park Drive,
Cambridge, MA 02140.
Our Compensation and Nominating Committee consists of three members: Robert M. Galford, Chair, David Boyce, and Gretchen
G. Teichgraeber. The Compensation and Nominating Committee held six meetings during fiscal 2022. The Compensation and
Nominating Committee has authority, as specified in the committee’s charter, to, among other things, evaluate and approve the
compensation of our Chief Executive Officer, review and approve the compensation of our other executive officers, administer our stock
plans, and oversee the development of executive succession plans for the CEO and other executive officers. The committee also has the
authority to identify and recommend to the Board qualified candidates for director. The Compensation and Nominating Committee
charter is available on our website at www.forrester.com/aboutus. The charter will also be made available without charge to any
stockholder who requests it by writing to Forrester Research, Inc., Attn: Chief Legal Officer and Secretary, 60 Acorn Park Drive,
Cambridge, MA 02140.
During fiscal 2021, Forrester engaged Mercer to provide general compensation and benefits advice with respect to 2022 and
brokerage services. The total fees paid to Mercer with respect to these services were approximately $432,000.
Compensation Committee Interlocks and Insider Participation
No person who served during the past fiscal year as a member of our Compensation and Nominating Committee is or was an
officer or employee of Forrester, or had any relationship with Forrester requiring disclosure in this proxy statement. During the past
fiscal year, none of our executive officers served as a member of the board of directors of another entity, any of whose executive officers
served as one of our directors.
Board Leadership Structure
At the present time, Mr. Colony serves as both Chairman of the Board and Chief Executive Officer. Mr. Colony is a significant
stakeholder in Forrester, beneficially owning approximately 39% of our outstanding common stock. As such, we believe it is appropriate
that he set the agenda for the Board of Directors in addition to serving as the Chief Executive Officer. We also do not believe that the
size of the Company warrants the division of these responsibilities.
6
In 2017, the Board of Directors selected Robert Galford to act as lead independent director. In this role, Mr. Galford presides at
executive sessions of the independent directors and will bear such further responsibilities as the Board as a whole may designate from
time to time.
The Board’s Role in Risk Oversight; Risk Considerations in our Compensation Programs
The Board’s role in the Company’s risk oversight process includes receiving regular reports from members of management on
areas of material risk to the Company, including financial, strategic, operational, cybersecurity, ESG, legal and regulatory risks. The full
Board (or the appropriate Committee in the case of risks that are under the purview of a particular Committee) receives these reports
from the appropriate manager within the Company. When a committee receives such a report, the Chair of the relevant Committee
reports on the discussion to the full Board during the Committee reports portion of the next Board meeting, enabling the full Board to
coordinate the risk oversight role, particularly with respect to risk interrelationships.
Our Compensation and Nominating Committee does not believe that our compensation programs encourage excessive or
inappropriate risk taking. We structure our pay programs to consist of both fixed and variable compensation, with the fixed base salary
portion providing steady income regardless of our stock price performance. The variable components, consisting of cash bonus and
stock-based awards, and for our chief sales officer with respect to periods through December 31, 2022 but not thereafter, sales
commissions, are designed to reward both short and long-term performance. Targets under our bonus plans are a function of contract
value (CV) bookings and modified operating income (described in greater detail in the Compensation Discussion and Analysis below),
important financial metrics for our business. For long-term performance, we generally have awarded restricted stock units vesting over
four years and, commencing March 1, 2023, have also awarded stock options and performance-based restricted stock units. We believe
that the variable elements of compensation are a sufficient percentage of overall compensation to motivate executives to produce
excellent short and long-term results for the Company, while fixed base salary is also sufficiently high such that the executives are not
encouraged to take unnecessary or excessive risks. In addition, our bonus plan funding metrics apply company-wide, regardless of
function or client group, which we believe encourages relatively consistent behavior across the organization. While sales commissions
are not capped, we cap our bonus at 1.95 times target company performance. Therefore, even if Company performance dramatically
exceeds target performance, bonus payouts are limited. Conversely, we have a minimum threshold on Company performance under our
executive bonus plan approved by the Compensation and Nominating Committee so that the bonus plan is not funded at performance
below a certain level. We also believe that our Executive Severance Plan described in detail below, which provides severance
compensation in the event of involuntary termination of employment without cause and in connection with a change in control, promotes
stability and continuity of operations.
Director Candidates
As noted above, the Compensation and Nominating Committee has responsibility for recommending nominees for election as
directors of Forrester. Our stockholders may recommend individuals for this committee to consider as potential director candidates by
submitting their names and background to the “Forrester Research Compensation and Nominating Committee”, c/o Chief Legal Officer
and Secretary, 60 Acorn Park Drive, Cambridge, MA 02140. The Compensation and Nominating Committee will consider a
recommended candidate for the next annual meeting of stockholders only if biographical information and background material are
provided no later than the date specified below under “Stockholder Proposals” for receipt of director nominations.
The process that the Compensation and Nominating Committee will follow to identify and evaluate candidates includes requests
to Board members and others for recommendations, meetings from time to time to evaluate biographical information and background
material relating to potential candidates, and interviews of selected candidates by members of the Compensation and Nominating
Committee. Assuming that biographical and background material is provided for candidates recommended by the stockholders, the
Compensation and Nominating Committee will evaluate those candidates by following substantially the same process, and applying
substantially the same criteria, as for candidates submitted by Board members.
In considering whether to recommend any candidate for inclusion in the Board’s slate of recommended director nominees,
including candidates recommended by stockholders, the Compensation and Nominating Committee will apply the criteria set forth in
the committee’s charter and in the Corporate Governance Guidelines. These criteria include, among others, the candidate’s integrity,
age, experience, commitment, diligence, conflicts of interest, and the ability to act in the interests of all stockholders. Although the
Compensation and Nominating Committee considers as one of many factors in the director identification and nomination process
diversity of race, gender and ethnicity, as well as geography and business experience, it has no specific diversity policy. The
Compensation and Nominating Committee does not assign specific weights to particular criteria and no particular criterion is necessarily
applicable to all prospective nominees. We believe that the backgrounds and qualifications of the directors, considered as a group, should
provide a composite mix of experience, knowledge and abilities, including direct operating experience, that will allow the Board to
fulfill its responsibilities.
7
In addition, our by-laws permit stockholders to nominate directors for election at an annual meeting of stockholders, other than as
part of the Board’s slate. To nominate a director, in addition to providing certain information about the nominee and the nominating
stockholder, the stockholder must give timely notice to Forrester, which, under our advance notice by-law, requires that the notice be
received by us no less than 90 nor more than 120 days prior to the anniversary date of the preceding annual meeting of stockholders. In
addition, to comply with the universal proxy rules, stockholders who intend to solicit proxies in support of director nominees other than
the company’s nominees must also comply with the additional requirements of Rule 14a-19 under the Securities Exchange Act of 1934.
In accordance with our by-laws, the 2024 Annual Meeting will be held on May 14, 2024.
Board Diversity
The following Board Diversity Matrix presents our Board diversity statistics in accordance with Nasdaq Rule 5606, as self-
disclosed by our directors. We currently satisfy the minimum objectives of Nasdaq Rule 5605(f)(2) by having at least one director who
identifies as female and one director who identifies as a member of an Underrepresented Minority (as defined by the Nasdaq Rules).
Total Number of Directors
Board Diversity Matrix (As of March 28, 2023)
9
Female
Male
Non-Binary
Part I: Gender Identity
Directors
Part II: Demographic Background
African American or Black
Alaskan Native or Native American
Asian
Hispanic or Latinx
Native Hawaiian or Pacific Islander
White
Two or More Races or Ethnicities
LGBTQ+
Did not Disclose Demographic Background
Communications from Stockholders
3
–
–
–
–
–
3
–
5
1
–
–
–
–
4
–
–
1
–
–
–
–
–
–
–
–
Did not
Disclose
Gender
1
–
–
–
–
–
–
–
The Board will give appropriate attention to communications on issues that are submitted by stockholders, and will respond if and
as appropriate. Absent unusual circumstances or as contemplated by committee charters, the Compensation and Nominating Committee,
with the assistance of the Chief Legal Officer and Secretary, will be primarily responsible for monitoring communications from
stockholders and will provide copies of summaries of such communications to the other directors as deemed appropriate.
Stockholders who wish to send communications on any topic to the Board should address such communications to the Forrester
Research Compensation and Nominating Committee, c/o Chief Legal Officer and Secretary, Forrester Research, Inc., 60 Acorn Park
Drive, Cambridge, MA 02140.
Environmental, Social and Governance (ESG)
Forrester recognizes the importance of being accountable not only to our stockholders, but also to a broader range of stakeholders,
including our customers, employees and the public in general. In addition to our own internal efforts, we have research teams focusing
on corporate values, Diversity and Inclusion (“D&I”), and sustainability. We work closely with senior leaders at our clients to advise
them on how they can align their ESG efforts with their businesses, and in 2022 we launched our "green market revolution" research to
help our clients capitalize on the unique business opportunities presented by sustainability. Our goal is to effect positive change in
society and for our planet through our research, data, and expertise.
Our culture emphasizes certain key values — including client, courage, collaboration, integrity, and quality — that we believe are
critical to deliver Forrester’s unique value proposition of helping business and technology leaders use customer obsession to drive
growth. In addition, we seek to foster a culture where employees can be creative, feel supported and empowered, and are encouraged to
think boldly about new ideas. As a reflection of these efforts, in 2022, for the fifth time in six years, Forrester was honored with a
Glassdoor Employees’ Choice Award, recognizing the Best Places to Work in 2022.
8
Attracting, retaining, and developing the best and brightest talent around the globe is critical to the ongoing success of our
company. To this end, we focus on attracting, hiring, and the inclusion of all backgrounds and perspectives, with the goals of improving
employee retention and engagement, strengthening the quality of our research, and improving client retention and customer experience.
We field regular all-employee surveys to measure our progress against our goals. In 2022, in addition to the ongoing activities of our
D&I Council and regional D&I Networks, examples of our efforts with respect to D&I included: launching company-wide inclusion
training for employees and managers; expanding our global and regional D&I events and celebrating diversity heritage and awareness
months through events and discussions; and our continuation of various partnerships to attract and access more talent from
underrepresented groups.
We have a robust learning and development program and celebrate and enrich the Forrester culture through frequent recognition
of achievements. To keep employees and teams connected and inspired to do their best work in a distributed work environment, we have
enhanced the learning and development opportunities for our employees across a broad range of initiatives including new hire and
onboarding, D&I, and leadership training. We also support our employees’ efforts to serve in their local communities by offering each
employee the opportunity to take paid volunteer days each calendar year. In addition, we and our employees frequently contribute funds
or goods to support philanthropic and community giving efforts. Past initiatives have included employee participation in sponsored
charitable events and distribution of goods through select disaster relief organizations.
Forrester also recognizes a shared responsibility to respect and protect the environment. Although our facilities and operations
have a small ecological footprint, we reduce the environmental impact of our business through various waste reduction practices,
including WELL and LEED certified/eco-friendly buildings, recycling, and battery disposal. In addition, we have invested in multiple
technologies to facilitate remote work that can in many cases reduce the need for travel and the related environmental impacts, and our
hybrid work policy should significantly reduce the time spent commuting to most of our major offices, while also lowering our energy
consumption and allowing us to use our office spaces more efficiently.
In 2021, we engaged our sustainability research team, which actively advises our clients on building more sustainable business
strategies, to assess our carbon emissions and develop a plan to continue to lessen our environmental impact. While we found that our
emissions are in line with industry standards, in 2022 we continued to take steps that will help us reduce our carbon footprint by at least
50% by 2025. In addition to our hybrid work policy, these steps include revisiting our company-wide travel policies to optimize internal
and external travel, eliminating emissions from our data center by continuing to accelerate the migration of more of our platforms and
services to the cloud, and our events team partnering with One Tree Planted, a global reforestation nonprofit organization, to plant a
new tree for every attendee survey response submitted after one of our events.
Our clients trust us with some of their most sensitive confidential information, and we take our obligation to secure it seriously.
We have implemented appropriate technical and organizational measures to ensure a level of security appropriate to the risk of disclosure
of this information, and we attempt to minimize the amount of personally identifiable information regarding third parties in our
possession. When the processing of personally identifiable information is unavoidable, we strive to comply with all applicable laws and
regulations, including the European Union General Data Protection Regulation (GDPR), the California Consumer Privacy Act and the
California Privacy Rights Act. We have also implemented a Privacy Impact Assessment process to be used before we contract with new
vendors of products or services that may have access to confidential and/or personal information.
9
EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
Executive Summary
We have implemented an executive compensation program that rewards performance. Our executive compensation program is
designed to attract, retain and motivate the key individuals who are most capable of contributing to the success of our Company and
building long-term value for our stockholders. The elements of our executives’ total compensation are base salary, cash incentive awards,
equity incentive awards and other employee benefits. We have designed a compensation program that makes a substantial portion of
executive pay variable, subject to increase when performance targets are exceeded, and subject to reduction when performance targets
are not achieved.
2022 Business Results
In 2022, we accelerated our product transition to our new Forrester Decisions platform. Although the Company missed its sales
plan for the year, it exceeded or met its revenue, adjusted operating margin and adjusted earnings per share guidance for the year, with
revenues increasing by 9% to $537.8 million.
Compensation for Performance
A substantial amount of the total compensation of our executive officers is linked to our performance, both through short-term
cash incentive compensation and long-term equity incentive compensation. We believe this aligns our executives’ incentives with our
objective of enhancing stockholder value over the longer term.
Cash Compensation. A significant portion of the current cash compensation opportunity for our executive officers is achieved
through our Amended and Restated Executive Cash Incentive Plan (the “Executive Cash Incentive Plan”). As described in more detail
below, payments under the plan are based on company financial performance metrics (for 2022, booked sales accounts for the Company's
CV products, or “CV bookings”, and modified operating income). By design, our plan pays more when we perform well and less, or
nothing, when we do not.
Equity Awards. Another key component of compensation for our executive officers consists of long-term equity incentives,
principally in the form of restricted stock units (RSUs). In 2022, all RSUs granted to executive officers vest over time, with 25% to vest
annually over four years. We believe these awards have retention value and reflect a balance between short-term financial performance
and long-term stockholder return, supporting our performance-based compensation. Consistent with past years, we did not grant equity
awards in 2022 to George Colony, our Chairman and Chief Executive Officer, who is the beneficial owner of approximately 39% of our
common stock.
Compensation Program Changes in 2022
Base Salary and Short-Term Cash Incentive Compensation.
Based on a review of market data, and taking into account the
contributions of the named executive officers and our financial performance in 2021, during its annual executive compensation review
our Compensation and Nominating Committee (the “Committee”) increased, effective January 1, 2022, the base salaries of four of the
named executive officers then in office by an average of approximately 10.8% over 2021, while increasing the target cash incentive
bonus amount of those named executive officers by an average of 20.1% over 2021, as discussed further below.
Executive Cash Incentive Plan. As was the case in the five previous years, while the Committee approved the same performance
matrix for purposes of both the Executive Cash Incentive Plan and the Forrester Employee Bonus Plan, the Committee decided to place
a stronger emphasis on exceeding, rather than just meeting, the target metrics for the executive team. Accordingly, the Committee
approved different percentage payouts at various performance levels for the Executive Cash Incentive Plan than the Forrester Employee
Bonus Plan, with executive officers achieving less compensation if 2022 performance were to meet or fall short of the targeted levels,
and additional compensation for performance above the targeted levels.
Supplemental Bonuses.
In 2022, in addition to target cash incentive bonuses under the Executive Cash Incentive Plan, the
Committee approved additional potential bonuses totaling $170,000 for Mr. Colony and $75,000 for the other named executive officers
upon achievement by the Company of specified levels of CV product contract bookings and client count, as discussed in more detail
below. The Committee also approved an additional potential bonus of $30,000 for Mr. Colony based on the achievement of a specified
stock price on December 31, 2022.
10
Stock Retention Guidelines. As a result of its annual review of the Company's stock retention guidelines described in more detail
below, the Committee determined that changes in annual compensation and stock market fluctuations had caused the retention targets
of some executive officers to be inconsistent with the goal of the guidelines. Accordingly, as discussed in further detail below, the
Committee decided to update the retention targets for all executive officers and directors effective April 1, 2022.
Say on Pay Stockholder Vote. As we have done each year since 2011, in 2022 we submitted our executive compensation program
to an advisory vote of our stockholders and, consistent with the results of our previous say on pay votes, it received the support of 99%
of the total votes cast at our annual meeting. We pay careful attention to any feedback we receive from our stockholders about our
executive compensation program, including the say on pay vote. The Committee considered this feedback when setting our executive
cash compensation program and granting equity awards to executives in 2022 and will continue to consider stockholder feedback in its
subsequent executive compensation decision making.
Compensation Objectives and Strategy
The primary purpose of our executive compensation program is to attract, retain and motivate the key individuals who are most
capable of contributing to the success of our Company and building long-term value for our stockholders. Our principal objectives and
strategy concerning our executive compensation program are as follows:
•
•
•
•
encourage achievement of key Company values — including client service, quality, collaboration, courage and integrity —
that we believe are critical to our continued growth;
base cash compensation on individual achievement and responsibility, teamwork, and our short-term financial performance;
align employees’ incentives with our objective of enhancing stockholder value over the longer term through long-term
incentives, principally in the form of RSUs; and
emphasize individual excellence and encourage employees at all levels, as well as executive officers, to take initiative and
lead individual projects that enhance our performance.
These objectives and strategy are reviewed each year by the Committee, which oversees our executive compensation program. In
furtherance of these objectives, the Committee takes the following actions each year:
•
•
•
•
•
•
reviews the performance of George Colony, our Chairman and Chief Executive Officer, including his demonstration of
leadership and his overall contribution to the financial performance of the Company;
reviews the assessment by Mr. Colony of the performance of the other executive officers against their individual and team
goals;
reviews the company-wide financial goals that are used in the calculation of the cash incentive compensation for our
executives;
reviews all components of compensation for each executive officer: base salary, short-term cash incentive compensation,
and long-term equity incentive compensation;
assesses relevant market data; and
holds executive sessions (without our management present) as appropriate to accomplish the above actions.
Mr. Colony also plays a substantial role in the compensation process for the other executive officers, primarily by recommending
those goals, and providing
annual goals for the executives reporting directly to him, evaluating their performance against
recommendations on their compensation to the Committee.
In late 2021, we engaged Mercer to help us assess the compensation paid to our executives. The findings of Mercer were referenced
by Forrester management in working with the Committee to formulate compensation recommendations for 2022, but were not used to
specifically target compensation or create a compensation framework. The Committee did not separately engage an independent
compensation consultant in 2022 for its general executive compensation analysis because the members were comfortable relying on
their independent review of the market data, surveys and other supporting information provided by management, taking into account
that the Company does not offer special perquisites, deferred compensation plans, or other special executive compensation arrangements.
The Committee believes it is adequately experienced to address relevant issues and discharge its responsibilities consistent with the
Company’s compensation objectives and philosophy.
11
The Committee has not historically used formal benchmarking data to establish compensation levels but has relied instead on
relevant market data and surveys to design compensation packages that it believes are competitive with other similarly situated
companies or those with whom we compete for talent. While compensation surveys provide useful data for comparative purposes, the
Committee believes that successful compensation programs also require the application of sound judgment and subjective
determinations of individual and Company performance.
The Committee believes it is helpful to utilize data compiled from a wide array of companies and believes it important to consider
comparative data from companies of comparable size and revenue, operating within a comparable industry, and located or operating
within our principal geographic markets. In setting executive compensation for 2022, the Committee primarily considered data from the
Radford Global Compensation Database, which included companies with annual revenues from $200 million to $1 billion, as well as
comparable companies in the industries and geographies applicable to our executives. For each of the Company’s executive officers,
the data the Committee reviewed included comparative market percentiles for base salary, total annual cash compensation opportunity
(or “on-target earnings”), and total direct compensation (on-target earnings plus equity incentives). The Committee determined that each
of the compensation components of the named executive officers, other than Mr. Colony, were aligned with the comparative market
data considering experience, role criticality, and performance and, accordingly, made its decisions regarding 2022 executive
compensation with the goal of maintaining that status.
Since Mr. Colony owns such a substantial percentage of our common stock, the Committee generally does not deem the available
market data on chief executive officer compensation as comparable and does not place substantial weight on that data when setting his
executive compensation.
Elements of Compensation
Compensation for our named executive officers consists of the following principal components:
•
•
•
•
•
base salary;
short-term cash incentive compensation;
long-term equity incentive compensation, principally in the form of RSUs;
severance and change-of-control benefits; and
other benefits available generally to all full-time employees.
We do not have an express policy for weighting different elements of compensation or for allocating between long-term and short-
term compensation, but we do attempt to maintain compensation packages that will advance our overall compensation objectives. In
reviewing and setting the compensation of each executive officer, we consider the individual’s position with the Company and his or
her ability to contribute to achievement of strategic and financial objectives.
In 2022, as illustrated below, base salaries for our named executive officers other than Mr. Colony represented an average of
approximately 32.8% of total target compensation for these individuals, while the base salary for Mr. Colony represented 40.7% of his
total target compensation. Because of Mr. Colony’s significant ownership of our common stock, the Committee generally does not grant
equity-based awards to him, resulting in a higher ratio of base salary to total target compensation than that of the other named executive
officers.
12
Base Salary.
The Committee approves the base salaries of our named executive officers annually by evaluating the
responsibilities of their position, the experience and performance of the individual, and as necessary or appropriate, survey and market
data. The base salary of a named executive officer is also considered together with the other components of his or her compensation to
ensure that both the executive’s total cash compensation opportunity (or “on-target earnings”) and the allocation between base salary
and variable compensation for the executive are in line with our overall compensation philosophy and business strategy. Additionally,
the Committee may adjust base salary more frequently than annually to address retention issues or to reflect promotions or other changes
in the scope or breadth of an executive’s role or responsibilities.
Our goal is to pay base salaries to our named executive officers that are competitive with the base salaries of companies that are
similarly situated or with which we compete to attract and retain executives, while taking into account total on-target earnings, and
remaining consistent with our overall compensation objectives with respect to variable compensation. In January 2022, in connection
with her promotion to Chief Research Officer, the Committee increased Sharyn Leaver's base salary by 6.6%. In February 2022, taking
into account the market data discussed above, the respective tenures, experience and performance of the named executive officers and
our financial performance in 2021, the Committee decided to increase the base salaries of the other named executive officers then in
office by an average of 10.8%, with such changes effective as of January 1, 2022.
Short-Term Cash Incentive Compensation. A significant portion of each of our named executive officers’ total annual cash
compensation is dependent on our achievement of annual financial objectives set forth under our Executive Cash Incentive Plan. Payouts
under the plan are made annually in arrears.
An individual named executive officer’s annual bonus payout under the Executive Cash Incentive Plan is based on the following
factors, which are discussed in more detail below:
•
•
•
the named executive officer’s target award;
the Company’s financial performance; and
if applicable, the named executive officer’s individual and/or team performance.
Effective January 1, 2022, in connection with her promotion to Chief Research Officer, the Committee set Ms. Leaver's target
cash incentive bonus amount at $187,500, a 75.0% increase over her previous target award under the Forrester Employee Bonus Plan.
Also effective January 1, 2022, as part of its executive compensation reviews, the Committee increased the target cash incentive bonus
amounts for each of the other named executive officers then in office by an average of approximately 20.1%, taking into account the
Company’s financial performance in 2021, the market data discussed above, and the respective tenures, experience and performance of
our named executive officers, and also increased Ms. Leaver's target cash incentive bonus amount by an additional 20.0%. After giving
effect to these increases, and including the annualized target cash incentive bonus of $192,500 for Sarah Le Roy, our Chief People
Officer, the average annual target cash incentive bonus amount for our named executive officers, other than Kelley Hippler, our former
Chief Sales Officer, was approximately 72.1% of that person’s base salary. As of January 1, 2022, Ms. Hippler’s target cash incentive
bonus amount under our Executive Cash Incentive Plan was $149,625, or 40.0% of her base salary, because as Chief Sales Officer, a
significant portion of her target cash incentive amount was tied to sales commissions. Ms. Hippler’s 2022 commission-based target cash
incentive amount was set at $277,875, or 74.1% of her base salary.
For purposes of the Executive Cash Incentive Plan, the financial performance of our Company for 2022 was measured based on
booked sales accounts of our CV products (referred to as “CV bookings”) and modified operating income. Generally speaking, we
define CV products as those services that our clients use over a year’s time and that are renewable periodically, usually on an annual
basis. Our CV products primarily consist of our subscription research products. Because CV products are our most profitable products
and historically our contracts for CV products have renewed at high rates (as measured by our client retention and wallet retention
metrics), the Company views the increase in CV as one of its key metrics. The Committee also selected CV bookings as one of the
metrics because we believe that CV bookings provide an important measure of our current business activity and estimated future
revenues.
We define modified operating income to mean the Company’s operating income assuming cash incentive compensation payouts
under the Executive Cash Incentive Plan and the Forrester Employee Bonus Plan at target levels and excluding amortization of
acquisition-related intangible assets, reorganization costs, costs associated with acquisition activities, stock-based compensation and net
gains or losses from investments. The Committee selected modified operating income as the other key metric because we believe
modified operating income provides a comprehensive measure of our financial performance that takes into account the importance of
both revenue growth and expense management. In addition, by linking payouts under the plan to the Company’s profitability, we provide
our employees with the opportunity to share in our profits while assuring that payouts are only made if we achieve a satisfactory, pre-
approved level of profitability, taking into account the nature of our business, planned investments to support growth of the business,
and the economic environment.
13
The Committee may adjust the CV bookings and modified operating income metrics, as it deems appropriate, to include or exclude
particular non-recurring items to avoid unanticipated results and to promote, and provide appropriate incentives for, actions and
decisions that are in the best interests of the Company and its stockholders.
The Executive Cash Incentive Plan was structured as follows in 2022, similar in structure to that in 2021:
•
•
•
•
•
•
A matrix for 2022 containing CV bookings on the x axis and modified operating income on the y axis was approved by the
Committee under the plan based on the Company’s 2022 operating plan approved by the Board of Directors. Minimum CV
bookings and modified operating income levels were set taking into account the Company’s recent levels of CV bookings
and modified operating income and planned investments to support growth of the business. Failure of our Company to meet
either of these minimum levels would result in each executive officer being ineligible to receive any bonus payout. The
minimum, target and maximum levels of CV bookings and modified operating income under the Executive Cash Incentive
Plan approved by the Committee were as follows (all dollars in thousands):
Minimum
Target
Maximum
CV
Bookings
Modified
Operating
Income
$
$
$
348,218 $
386,909 $
425,600 $
55,732
69,665
83,598
If the Company’s target CV bookings and modified operating income were both exactly achieved, the Executive Cash
Incentive Plan allowed for the payment of 95% of a named executive officer’s target award.
If both CV bookings and modified operating income were above the minimum thresholds but neither exceeded the target,
the bonus payout would be between 0% and 75% of the target award.
If both CV bookings and modified operating income were above the minimum thresholds but only modified operating
income exceeded the target, the bonus payout would be between 65% and 100% of the target award.
If both CV bookings and modified operating income were above the minimum thresholds but only CV bookings exceeded
the target, the bonus payout would be between 40% and 125% of the target award.
If both of the applicable target CV bookings and modified operating income were exceeded, the plan allowed for the
payment of up to 195% of a named executive officer’s target award.
The Company’s actual CV bookings and modified operating income for 2022 were $349.7 million and $69.3 million, respectively,
resulting in 55% of each eligible named executive officer’s target award being payable. This illustrates the pay for performance structure
of the compensation awarded to our named executive officers, as our 2022 CV bookings were only slightly higher than the minimum
threshold while modified operating income was only slightly below our target level. The total cash incentive plan compensation paid to
Ms. Hippler for 2022 also included commissions of $132,584, or 47.7% of her targeted commissions for 2022, as set forth in the
Summary Compensation Table under the heading “Non-Equity Incentive Plan Compensation”.
In 2022, the Committee determined to offer the named executive officers two additional potential bonuses. The first bonus would
be payable if the Company were to achieve CV bookings of at least $399.1 million in 2022, and the second bonus would be payable if
the Company were to have at least 3,200 client companies as of December 31, 2022. The amount of the potential CV-related bonus was
$90,000 for Mr. Colony and $52,500 for each of the other named executive officers, and the amount of the potential client-related bonus
was $80,000 for Mr. Colony and $22,500 for each of the other named executive officers. The Company’s actual CV bookings for 2022
were $349.7 million and the Company had 2,778 client companies as of December 31, 2022, resulting in none of the named executive
officers receiving these additional bonuses. The Committee also determined to offer Mr. Colony a further additional bonus of $30,000
based on the Company's stock price being at least $70 per share at the close of business on December 30, 2022. The Company's stock
price at such time was $35.76, resulting in Mr. Colony not receiving this additional bonus.
Pursuant to our employment offer letter dated March 18, 2022 with Ms. Le Roy that was approved by the Committee, Ms. Le Roy
received an additional sign-on bonus of $100,000.
Long-term Equity Incentive Compensation. Since 2016, our equity awards to executive officers have consisted of RSUs granted
under our equity incentive plan, with the number of RSUs awarded to be calculated with reference to a specific compensation value
divided by the share price of our common stock on the award date.
All stock-based compensation awards granted to our executive officers are granted by the Committee. We believe that stock-based
awards help to motivate and retain executives and also align management’s incentives with long-term stock price appreciation. In
general, we believe that time-based equity-based awards serve to encourage retention while further aligning the interests of executives
14
and stockholders, as the awards have value only if the recipient continues to provide service to the Company through the vesting date,
and, while the RSUs have immediate compensatory value to recipient upon vesting, increases in our share price provide significant
additional compensatory value to the recipient, and decreases in the share price reduce the original compensation value of the award.
Neither the Company nor our board of directors, including the Committee, has any plan, program or practice of timing equity incentive
awards in coordination with the release or withholding of material non-public information.
In determining the size and nature of stock-based awards for 2022, the Committee considered the aggregate number of stock-
based awards outstanding relative to the Company’s total shares outstanding, the average aggregate size of stock-based awards made to
executive officers of companies that are similarly situated or with which we compete to attract and retain executives, and the individuals
that they believed were most likely to contribute to or influence a return to the Company’s historical growth levels and improvement in
the Company’s operating margin. On February 7, 2022, the Committee reviewed and approved the grant of time-based RSUs to each of
L. Christian Finn, our Chief Financial Officer, Ms. Hippler, Carrie Johnson, our Chief Product Officer, and Ms. Leaver, effective March
1, 2022, as part of a grant of equity-based compensation to key employees across the Company. Mr. Finn was granted 9,934 RSUs, Ms.
Hippler was granted 10,927 RSUs, Ms. Johnson was granted 8,940 RSUs, and Ms. Leaver was granted 6,457 RSUs. The Committee
determined that the RSUs would vest 25% annually over four years.
On May 2, 2022, pursuant to her previously-referenced employment offer letter, Ms. Le Roy received an award of 9,071 RSUs
that would vest 25% annually over four years.
Given Mr. Colony’s significant ownership of our common stock, the Committee did not grant stock options or RSUs to Mr.
Colony in 2022.
Severance and Change in Control Agreements.
Effective May 15, 2014, we adopted the Forrester Research, Inc. Executive
Severance Plan (the “Severance Plan”), applicable to all of our executive officers, including the named executive officers. Similar to
plans maintained by many other companies, our Severance Plan provides for payments and benefits to our executive officers upon a
qualifying termination of employment, including in connection with a change in control. Further detail on the Severance Plan is
contained below under the heading “Severance and Change-of-Control Benefits.” We believe that the Severance Plan functions as a
retention tool for our executive officers to remain with the Company and enable the executive officers to focus on the continuing business
operations and, as applicable, the success of a potential business combination that the Board of Directors has determined to be in the
best interests of the stockholders. We believe this results in stability and continuity of operations.
Other Benefits
As employees of our Company, our executive officers are eligible to participate in all Company-sponsored benefit programs on
the same basis as other full-time employees, including health and dental insurance and life and disability insurance. In addition, our
executive officers are eligible to receive the same employer match under our 401(k) plan as is applicable for all participating employees
and to participate in our employee stock purchase plan, pursuant to which participants may elect to purchase shares of our stock on a
semi-annual basis at a 15% discount based on the lower of the price of our stock at the beginning and end of each period. We do not
offer any supplemental executive health and welfare or retirement programs, or provide any other supplemental benefits or perquisites,
to our executives.
Stock Retention Guidelines
Our Corporate Governance Guidelines include stock retention guidelines to further align the interests of our directors and
executive officers with those of our stockholders. Members of our executive team and Board of Directors are subject to these stock
retention guidelines for so long as they remain an executive officer, or serve as a director, of the Company.
The guidelines require directors of the Company to acquire and hold during their service as a Forrester Board member shares of
Forrester’s common stock (“Common Stock”) equal in value to at least two times their total annual compensation from Forrester
(including cash retainer and grant date value of equity grants) as in effect on April 23, 2019 (or, if later, the date of commencement of
Board service or such other date as the Committee shall designate). Directors have five years from April 23, 2019 (or, if later, the date
of commencement of Board service) to meet the target stock ownership guideline.
15
Executive officers of the Company are required to acquire and hold during their service as a Forrester executive team member
shares of Common Stock equal in value to at least one times their total annual on-target earnings (defined as base salary plus total annual
cash compensation opportunity) as in effect on April 23, 2019 (or, if later, the date of commencement of executive team service or such
other date as the Committee shall designate). In April of 2022, the Committee determined that the retention targets for all executive
officers and directors would be adjusted, effective immediately, using the average closing stock price of the Company during March
2022 and the on-target earnings (for executive officers) and total compensation (for directors) as of April 1, 2022 for purposes of
calculating such targets. Executive officers with fewer than two years tenure on the executive team as of April 23, 2019 or that become
executive officers thereafter have five years from April 23, 2019 (or, if later, the date of commencement of executive team service) to
meet the target stock ownership guideline, and officers with two or more years tenure on the executive team as of April 23, 2019 have
three years from such date to meet the target stock ownership guideline.
Until such time as a director or officer reaches his or her share ownership guideline, the director or officer may sell shares of
Common Stock only to the extent that, subsequent to such sale, such director or officer continues to hold more shares than he or she
held as of December 31 of the preceding year. In addition, if a director or officer has not reached his or her share ownership guideline
within the required accumulation period, he or she will be required to retain 100% of the net shares of Forrester common stock delivered
to him or her upon the exercise or vesting of stock awards held by him or her until such guideline is reached. Net shares are the number
of shares remaining after shares are sold or netted to pay the exercise price of stock options and withholding taxes. For directors, the
applicable withholding taxes will be presumed to be the minimum withholding tax applicable to an employee. All directors and executive
officers are expected to continuously own sufficient shares to meet the guideline once it has been reached. Unexercised stock options
and unvested restricted stock units will not count toward meeting the stock ownership guidelines.
These guidelines may be waived, at the discretion of the Committee, if compliance with the guidelines would create severe
hardship or prevent an executive officer or director from complying with a court order. The Committee will reassess these guidelines
on an annual basis, taking into account factors such as compensation and stock price changes. Our directors and executive officers have
complied in full with these guidelines since their initial adoption.
Impact of Tax and Accounting on Compensation Decisions
As a result of federal tax legislation enacted in December 2017, compensation paid to certain of our executive officers in excess
of $1 million per person per year will not be deductible unless it qualifies for transition relief applicable to certain compensation
arrangements in place as of November 2, 2017 and not later materially modified.
The Committee believes that the interests of our stockholders are best served if the Committee continues to retain flexibility and
discretion to approve and amend compensation plans, agreements and arrangements to support our corporate objectives, even if a plan,
agreement or arrangement does not qualify for full or partial tax deductibility and even if an amendment results in a loss or limitation
of tax deductibility. Despite the changes as a result of the 2017 tax legislation, the Committee currently expects (consistent with its
executive compensation philosophy) to structure executive compensation programs such that a significant portion of executive
compensation is linked to our performance.
The Committee also takes into consideration the accounting treatment of the different forms of awards it may grant to executive
officers.
Compensation Committee Report
The Compensation and Nominating Committee of the Board of Directors has reviewed and discussed the Compensation
Discussion and Analysis included in this proxy statement with management and, based on this review and discussion, recommended to
the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement.
Compensation and Nominating Committee
Robert M. Galford, Chair
David Boyce
Gretchen G. Teichgraeber
The information contained in the report above shall not be deemed to be “soliciting material” or to be “filed” with the SEC, nor
shall such information be incorporated by reference into any future filing under the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended, except to the extent that we specifically incorporate it by reference in any such filing.
16
SUMMARY COMPENSATION TABLE
The following table shows the compensation earned by our Chief Executive Officer, our Chief Financial Officer, each of our three
other most highly compensated executive officers as of December 31, 2022, and one of our other highly compensated executive officers
who resigned in September 2022. We refer to these officers as the “named executive officers.”
Name and Principal Position
George F. Colony
Chairman of the Board and
Chief Executive Officer
L. Christian Finn
Chief Financial Officer
Carrie Johnson
Chief Product Officer
Sharyn Leaver
Chief Research Officer
Sarah Le Roy(4)
Chief People Officer
Kelley Hippler(5)
Chief Sales Officer
Salary
($)
597,896
461,923
425,000
Bonus
($)(1)
—
150,000
237,500
Stock
Awards
($)(2)
—
—
—
Non-Equity
Incentive Plan
Compensation
($)
371,250
922,500
—
All Other
Compensation
($)(3)
23,484
17,845
19,343
Total
($)
992,630
1,552,268
681,843
420,083
110,385
— 499,978
999,986
200,000
428,750
387,385
371,354
— 449,950
399,979
349,967
50,000
120,000
145,736
229,503
175,313
445,500
—
11,320
446
1,077,117
1,540,319
11,766
9,780
12,056
1,065,779
1,292,644
853,377
Year
2022
2021
2020
2022
2021
2022
2021
2020
2022
374,556
— 324,981
123,750
10,400
833,687
2022
248,235
100,000
499,994
71,172
1,378
920,779
2022
2021
2020
304,908
349,566
340,112
— 549,956
499,997
399,993
50,000
56,000
132,584
545,854
179,935
6,722
10,356
12,588
994,170
1,455,773
988,628
(2)
(1) Amounts for 2020 represent discretionary bonuses approved by the Committee. Amounts for 2021 represent: additional
performance-based bonuses approved by the Committee of $150,000 for Mr. Colony and $50,000 for each of Mr. Finn, Ms.
Hippler and Ms. Johnson; and a sign-on bonus of $150,000 for Mr. Finn. Amount for 2022 represents a sign-on bonus for Ms. Le
Roy.
These amounts represent the aggregate grant date fair value of restricted stock unit awards. The grant date fair value of restricted
stock units is based upon the closing price of the Company’s common stock on the date of grant, as adjusted to reflect the absence
of dividend credits prior to vesting of the restricted stock units, if any. The amounts set forth may be more or less than the value
ultimately realized by the named executive officer based upon, among other things, the value of the Company’s common stock at
the time of vesting of the restricted stock units and whether the restricted stock units actually vest.
2022 amounts include the following amounts of Company matching contributions under our 401(k) plan: Mr. Colony, $9,150;
Mr. Finn, $9,150; Ms. Johnson, $9,150; Ms. Leaver, $9,150; Ms. Le Roy, $155; and Ms. Hippler, $6,722. Other amounts consist
of group term life insurance premiums and miscellaneous other items.
(3)
(4) Ms. Le Roy became our Chief People Officer on April 29, 2022.
(5) As disclosed in the Company’s Form 8-K filed September 6, 2022, Ms. Hippler resigned as an executive officer of the Company,
effective September 30, 2022. Because of her total compensation received during 2022, Ms. Hippler is listed as a named executive
officer of the Company in the above table, but she was no longer an executive officer of the Company at December 31, 2022.
17
GRANTS OF PLAN-BASED AWARDS FOR 2022
The following table sets forth information with respect to plan-based awards granted to named executive officers in 2022.
Name
George F. Colony
L. Christian Finn
Carrie Johnson
Sharyn Leaver
Sarah Le Roy
Kelley Hippler
Grant
Date
Committee
Approval
Date
Threshold
($)
Estimated Possible Payouts Under
Non-Equity Incentive Plan
Awards(1)(2)(3)(4)
Target
($)
675,000
90,000
80,000
30,000
Maximum
($)
1,316,250
90,000
60,000
30,000
— 270,000
N/A
—
N/A
—
N/A
—
All Other
Stock
Awards:
Number of
Shares of
Stock (#)
—
—
—
—
All Other
Option
Awards:
Number of
Securities
Underlying
Options (#)
—
—
—
—
— 106,000
N/A
—
N/A
—
—
02/07/22
— 127,500
N/A
—
N/A
—
—
02/07/22
—
—
—
02/07/22
—
—
—
03/09/22
—
—
—
02/07/22
90,000
N/A
N/A
—
52,107
N/A
N/A
—
59,850
N/A
N/A
—
265,000
52,500
22,500
—
318,750
52,500
22,500
—
225,000
52,500
22,500
—
130,267
52,500
22,500
—
427,500
52,500
22,500
—
516,750
52,500
22,500
—
621,563
52,500
22,500
—
438,750
52,500
22,500
—
254,021
52,500
22,500
—
N/A
52,500
22,500
—
—
—
—
9,934
—
—
—
8,940
—
—
—
6,457
—
—
—
9,071
—
—
—
10,927
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
03/01/22
—
—
—
03/01/22
—
—
—
03/01/22
—
—
—
05/02/22
—
—
—
03/01/22
Grant
Date
Fair
Value of
Stock
and
Option
Awards
($)(5)
—
—
—
—
—
—
—
499,978
—
—
—
449,950
—
—
—
324,981
—
—
—
499,994
—
—
—
549,956
Exercise
or Base
Price of
Option
Awards
($/Sh)
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
(1)
Except with respect to Ms. Hippler, consists of: awards under our Executive Cash Incentive Plan, a non-equity incentive plan,
with payouts thereunder made annually in arrears; two additional potential annual bonuses conditioned upon attainment of targeted
levels of CV bookings and client count, respectively; and, with respect to Mr. Colony, an additional potential annual bonus
conditioned upon the attainment of a targeted stock price. Our Executive Cash Incentive Plan and the additional bonuses are
described in detail, including calculation of threshold, target and maximum awards under the plan, in the Compensation Discussion
and Analysis above. Actual amounts awarded are set forth in the Summary Compensation Table above.
(2) Mr. Colony’s “Target” amounts include the target amount he was eligible to receive under our Executive Cash Incentive Plan of
(3)
$675,000 and three targeted additional bonuses of $90,000, $80,000 and $30,000.
The “Target” amounts for Mr. Finn, Ms. Johnson, Ms. Leaver and Ms. Le Roy include the target amounts they were eligible to
receive under our Executive Cash Incentive Plan of $265,000, $318,750, $225,000 and $130,267, respectively, and targeted
additional bonuses of $52,500 and $22,500 for each officer.
(4) Ms. Hippler’s “Target” amounts include the target amount she was eligible to receive under our Executive Cash Incentive Plan of
$149,625, target sales commissions of $277,875, and targeted additional bonuses of $52,500 and $22,500. There is no cap on Ms.
Hippler’s “Maximum” amount because there is no cap on possible commission payments.
The grant date fair value of restricted stock units is based upon the closing price of the Company’s common stock on the date of
grant.
(5)
18
OUTSTANDING EQUITY AWARDS AT 2022 FISCAL YEAR-END
The following table sets forth information for the named executive officers regarding outstanding option awards and stock awards
held as of December 31, 2022.
Option Awards
Stock Awards
Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable
Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable
Option
Exercise
Price
($)
Option
Expiration
Date
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Equity Incentive
Plan
Awards:
Number of
Unearned Shares,
Units
or Other
Rights That
Have Not Vested
(#)
—
15,120(2)
9,934(3)
2,211(4)
4,862(5)
6,610(6)
8,940(3)
589(4)
1,388(5)
2,478(6)
6,457(3)
9,071(7)
—
Equity Incentive
Plan
Awards: Market or
Payout Value of
Unearned Shares,
Units
or Other
Rights That
Have Not Vested
($)(1)
—
540,691
355,240
79,065
173,865
236,374
319,694
21,063
49,635
88,613
230,902
324,379
—
Name
George F. Colony
L. Christian Finn
Carrie Johnson
Sharyn Leaver
Sarah Le Roy
Kelley Hippler
(1)
(2)
(3)
(4)
(5)
(6)
(7)
The market value was calculated based on $35.76, the closing price per share of our common stock on December 30, 2022.
Consists of time-based restricted stock units that vest as to one third of the shares subject to the award on each of October 1, 2023,
October 1, 2024 and October 1, 2025.
Consists of time-based restricted stock units that vest as to 25% of the shares subject to the award on each of March 1, 2023, March 1,
2024, March 1, 2025, and March 1, 2026.
Consists of time-based restricted stock units that vest on August 1, 2023.
Consists of time-based restricted stock units that vest as to 50% of the shares subject to the award on each of August 1, 2023 and August
1, 2024.
Consists of time-based restricted stock units that vest as to one third of the shares subject to the award on each of August 1, 2023, August
1, 2024 and August 1, 2025.
Consists of time-based restricted stock units that vest as to 25% of the shares subject to the award on each of May 1, 2023, May 1, 2024,
May 1, 2025, and May 1, 2026.
19
OPTION EXERCISES AND STOCK VESTED TABLE FOR 2022
The following table sets forth information for the named executive officers regarding the value realized during 2022 by the
executives pursuant to option exercises and the vesting of RSUs.
Name
George F. Colony
L. Christian Finn
Carrie Johnson
Sharyn Leaver
Sarah Le Roy
Kelley Hippler
Pension Benefits
Option Awards
Stock Awards
Number of
Shares
Acquired
on Exercise
(#)
—
—
—
—
—
8,750
Value
Realized
on Exercise
($)
Number of
Shares
Acquired on
Vesting (#)
—
—
—
—
—
77,343
—
5,041
8,194
2,475
—
10,478
Value
Realized
on Vesting ($)
—
181,526
385,547
117,637
—
498,019
We have no defined benefit pension plans or long-term incentive plans applicable to the named executive officers.
Nonqualified Deferred Compensation
We have no nonqualified defined contribution or deferred compensation plans.
Severance and Change-of-Control Benefits
Effective May 15, 2014, our Board of Directors adopted and approved the Forrester Research, Inc. Executive Severance Plan (the
“Severance Plan”), which is applicable to all of the Company’s executive officers, including the named executive officers. The Severance
Plan provides for the payment of severance and other benefits to each executive officer in the event of a termination of employment
with the Company without cause and also, in the case of a change in control, by an executive officer for good reason, each as defined in
the Severance Plan (each, a “Qualifying Termination”). In the event of a Qualifying Termination and subject to the executive’s execution
of a general release of claims against the Company, in addition to any accrued obligations such as unpaid base salary, vacation and
earned bonuses, the Severance Plan provides for the following severance payments and benefits:
•
In the event of a Qualifying Termination other than following a change in control:
•
•
•
•
continued payment of the executive officer’s base salary in installments for one year, or in the case of Mr. Colony (or
any successor CEO), for 18 months, after the Qualifying Termination;
payment in a lump sum of an amount equal to the lesser of the executive officer’s (x) annual target bonus and, if
applicable, sales commissions, as in effect on the date of the Qualifying Termination, or (y) the average of the actual
bonus and, if applicable, sales commissions, earned by the executive officer under the applicable plans for the two
fiscal years preceding the year of the Qualifying Termination (or for such shorter period that the executive officer was
employed by the Company); or in the case of the chief executive officer, payment in a lump sum of an amount equal
to one and one-half times the lesser of the chief executive officer’s (x) annual target bonus and, if applicable, sales
commissions, as in effect on the date of the Qualifying Termination, or (y) the average of the actual bonus and, if
applicable, sales commissions earned by the chief executive officer under the applicable plans for the two fiscal years
preceding the year of the Qualifying Termination;
payment in cash during the 12-month period following a Qualifying Termination for executive officers other than the
chief executive officer, and during the 18-month period following a Qualifying Termination for the chief executive
officer, of an amount equal to the Company’s portion of the cost for medical and dental coverage under applicable
Company plans; and
6 months of outplacement assistance, subject to extension for an additional 6 months upon request of the executive
officer and at the discretion of the Company.
•
In the event of a Qualifying Termination during the 18-month period following a change in control (as defined in the
Severance Plan):
•
payment in a lump sum of the executive officer’s annual base salary, or in the case of the chief executive officer, two
times annual base salary;
20
•
•
•
•
•
payment in a lump sum of an amount equal to the excess, if any, of (x) the executive officer’s annual target bonus
amount and/or annual target sales commission amount pro-rated as of the Qualifying Termination, over (y) the amount
paid or payable for the actual bonus and/or sales commissions earned through the Qualifying Termination;
payment of the higher of the executive officer’s (x) target annual incentive opportunity, including target bonus
opportunity and, if applicable, target sales commissions, or (y) the average of the actual bonus and, if applicable, sales
commissions, earned by the executive under the applicable plans for the two fiscal years preceding the year of the
Qualifying Termination (or such shorter period that the executive officer was employed by the Company); or in the
case of the chief executive officer, the higher of two times his or her (x) target annual incentive opportunity, including
target bonus opportunity and, if applicable, target sales commissions, or (y) the average of the actual bonus and, if
applicable, sales commissions, earned by the chief executive officer under applicable plans for the two fiscal years
preceding the year of the Qualifying Termination;
payment in cash in a lump sum of an amount equal to 12 months for executive officers other than the chief executive
officer, and 24 months for the chief executive officer, of the Company’s portion of the cost for medical and dental
coverage under applicable Company plans;
12 months of outplacement assistance; and
without limiting an executive officer’s rights under any equity plans or agreements, accelerated vesting of, or
cancellation and payment of merger consideration for (net of exercise price, if any), all unvested equity and equity-
based awards, with performance-based awards, if any, vesting at target level of performance.
The Severance Plan shall also reimburse each executive officer whose termination of employment results from a change of control
all reasonable legal fees and expenses incurred to obtain or enforce rights or benefits under the Severance Plan if the executive officer
prevails in substantial part on the material issues of the proceeding.
The Severance Plan does not provide for a gross-up payment to any of the executive officers to offset any excise taxes that may
be imposed on excess parachute payments under Section 4999 (“Excise Tax”) of the Internal Revenue Code of 1986, as amended.
Instead, the Severance Plan provides that in the event that the severance payments and benefits described above, and any other parachute
payments, would, if paid, be subject to the Excise Tax, then the severance payments and benefits under the Severance Plan will be
reduced to the extent necessary so that no portion of the payments or benefits under the Severance Plan are subject to the Excise Tax,
provided that there shall be no such reduction if the net amount of the payments received by the executive officer after giving effect to
all applicable taxes is greater than the net amount of the payments received by the executive officer after giving effect to the reduction.
We have not entered into agreements providing for severance benefits with any of the other named executive officers. Each of
our named executive officers other than Mr. Colony has entered into stock option and restricted stock unit grant agreements that provide
for full acceleration of vesting upon a change of control of the Company, unless there is an assumption, substitution or cash-out of the
options or restricted stock units in connection with the change of control.
The following table provides the details of payments that would have been paid to, or value that would have been received by, the
named executive officers in connection with either a change of control, a termination of employment without cause or for good reason
in connection with a change of control, or a termination of employment without cause in the absence of a change of control, in each case
effective as of December 31, 2022.
21
Name
George F. Colony
Salary
Continuation
($)
Annual
Incentive
Compensation
($)
Payment in
Lieu of
Medical and
Dental ($)
Outplacement
Assistance
($)(2)
—
—
—
—
Value of
Accelerated
Unvested
Equity ($)(3)
—
1,200,000
2,253,750
30,375
20,000
900,000
982,500
22,781
10,000
—
—
Event (1)
Change in Control
Termination Upon
Change in Control
Not for Cause
Termination
Total
($)
—
3,504,125
1,915,281
L. Christian Finn
Change in Control
—
—
—
—
895,931
895,931
Termination Upon
Change in Control
Not for Cause
Termination
420,000
534,264
24,474
20,000
895,931
1,894,669
420,000
279,503
24,474
10,000
—
733,977
Carrie Johnson
Change in Control
—
—
—
—
808,998
808,998
Termination Upon
Change in Control
Not for Cause
Termination
425,000
612,287
22,567
20,000
808,998
1,888,852
425,000
307,750
22,567
10,000
—
765,317
Sharyn Leaver
Change in Control
—
—
—
—
390,213
390,213
Termination Upon
Change in Control
Not for Cause
Termination
375,000
476,250
24,474
20,000
390,213
1,285,937
375,000
123,750
24,474
10,000
—
533,224
Sarah Le Roy
Change in Control
—
—
—
—
324,379
324,379
Kelley Hippler(4)
Termination Upon
Change in Control
Not for Cause
Termination
Change in Control
Termination Upon
Change in Control
Not for Cause
Termination
385,000
400,731
24,327
20,000
324,379
1,154,437
385,000
71,172
24,327
10,000
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
490,499
—
—
—
(1) None of the named executive officers has an agreement to receive any salary continuation, variable cash compensation, benefits
continuation, acceleration of equity or gross-up in the event such named executive officer dies, becomes disabled, voluntarily
terminates his or her employment with Forrester without “Good Reason” or if that named executive officer is terminated by
Forrester for cause.
Estimated cost of 12 months of outplacement service in the event of a change in control and 6 months of outplacement service in
the event of termination without a change in control.
(2)
(3) Calculated using $35.76, the closing price per share of our common stock on December 30, 2022. In the case of unvested options,
calculated using the difference between $35.76 and the exercise price of the applicable option, multiplied by the number of
unvested shares. In the case of unvested restricted stock units (RSUs), calculated using $35.76 multiplied by the number of shares
underlying such unvested RSU.
(4) Ms. Hippler was no longer serving as an executive officer as of December 31, 2022, and was thus no longer eligible for any
payments under the Severance Plan described above.
22
Director Compensation
DIRECTOR COMPENSATION TABLE FOR 2022
The following table shows the compensation that we paid during the year ended December 31, 2022 to each of our directors, other
than Mr. Colony, who was not paid additional compensation for his service as a director and whose compensation is reflected in
“Executive Compensation” above.
Name
Jean M. Birch
Dave Boyce
Neil Bradford
Tony Friscia
Robert M. Galford
Warren Romine
Gretchen G. Teichgraeber
Yvonne Wassenaar
Fees Earned
or Paid in
Cash
($)
43,000
35,000
35,000
35,000
50,000
33,750
35,000
35,000
Stock
Awards
($)(1)(2)(3)
119,981
119,981
119,981
119,981
119,981
149,975
119,981
119,981
Total
($)
162,981
154,981
154,981
154,981
169,981
183,725
154,981
154,981
(1)
The amounts in this column reflect the aggregate grant date fair value of restricted stock unit awards for 2022. The grant date fair
value of restricted stock units is based upon the closing price of the Company’s common stock on the date of grant. The amounts
set forth may be more or less than the value ultimately realized by the named director based upon, among other things, the value
of the Company’s Common Stock at the time of vesting of the restricted stock units and whether such restricted stock units actually
vest.
(2) On April 1, 2022, Mr. Romine received 523 restricted stock units. On June 1, 2022, each of the directors, other than Mr. Colony,
received 2,306 restricted stock units.
(3) At December 31, 2022, the non-employee directors held options to purchase, and restricted stock units for, the number of shares
listed next to their names below:
Name
Jean M. Birch
Dave Boyce
Neil Bradford
Tony Friscia
Robert M. Galford
Warren Romine
Gretchen G. Teichgraeber
Yvonne Wassenaar
Number of Shares
Options
RSUs
—
—
—
—
—
—
—
—
1,154
1,154
1,154
1,154
1,154
1,154
1,154
1,154
Our non-employee directors receive an annual retainer of $30,000 and members of each Board committee receive an additional
annual retainer of $5,000 for each committee on which they serve, with the Chairman of the Audit Committee receiving an additional
$8,000 per year and the Chairman of the Compensation and Nominating Committee receiving an additional $5,000 per year. Our lead
independent director receives an additional $10,000 annual retainer. Each of these annual fees is payable quarterly in arrears. Members
of our Board of Directors are reimbursed for their expenses incurred in connection with attending any meeting.
The Compensation and Nominating Committee of the Board of Directors has the authority under the Forrester Research, Inc.
Amended and Restated Equity Incentive Plan (“Equity Incentive Plan”) to grant stock options and RSUs to non-employee directors in
such amounts and on such terms as it shall determine at the time of grant. On April 1, 2022, in connection with his election to the Board
of Directors, Mr. Romine received 523 restricted stock units, which equals the number of whole shares calculated by dividing $30,000
by $57.35, the closing price of the Company’s common stock on the date of award. These RSUs vested fully on June 1, 2022. On June
1, 2022, our eight non-employee directors at that time each received 2,306 restricted stock units, which equals the number of whole
shares calculated by dividing $120,000 by $52.03, the closing price of the Company’s common stock on the date of award. These RSUs
vest in four equal quarterly installments over a one-year period. RSUs granted under the Equity Incentive Plan become vested in full
upon a change of control of the Company, unless there is an assumption, substitution or cash-out of such RSUs in connection with the
change of control.
23
CEO PAY RATIO
Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 requires most companies with
publicly traded stock in the United States to identify the median annual total compensation of their worldwide employee population
(other than the chief executive officer) and to compare that amount with the annual total compensation of their chief executive officer.
The pay ratio information included below is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-
K.
We identified our median employee using our total employee population as of October 1, 2021 by applying a consistently applied
compensation measure across our global employee population. For our consistently applied compensation measure, we used cash
compensation (base salary plus bonuses and commissions) paid in the nine months ending September 30, 2021. We used cash
compensation as our consistently applied compensation measure as we believe that this measure provides a reasonably accurate depiction
of total earnings for the purpose of identifying our median employee. We do not believe that there have been any changes to our
employee population or employee compensation arrangements that would result in a significant change in our pay ratio disclosure and
so have elected to use the same median employee for our 2022 disclosure, as permitted by Item 402(u) of Regulation S-K. We then
calculated the median employee’s total annual compensation in accordance with the requirements of the Summary Compensation Table.
Earnings of our employees outside the U.S. were converted to U.S. dollars using the currency exchange rates used for organizational
planning purposes, which consider historical and forecasted rates as well as other factors. We did not use any other material estimates,
assumptions, adjustments or statistical sampling to determine the worldwide median employee.
Our median employee’s total 2022 compensation (other than the CEO) was $110,642. Our Chief Executive Officer’s total 2022
compensation was $992,630, as reported in the Summary Compensation Table. Accordingly, our 2022 CEO to Median Employee Pay
Ratio was 9.0 to 1.
Please keep in mind that under the SEC’s rules and guidance, there are numerous ways to determine the compensation of a
company’s median employee, including the employee population sampled, the elements of pay and benefits used, any assumptions made
and the use of statistical sampling. In addition, no two companies have identical employee populations or compensation programs, and
pay, benefits and retirement plans differ by country even within the same company. As such, our pay ratio may not be comparable to
the pay ratio reported by other companies.
24
PAY VERSUS PERFORMANCE
As described in greater detail in “Executive Compensation – Compensation Discussion and Analysis,” our executive compensation
program reflects a variable pay-for-performance philosophy. The following table and related disclosures provide further “pay versus
performance” disclosure with respect to our chief executive officer, also referred to as our principal executive officer (PEO), and our
other named executive officers (NEOs), as contemplated by Item 402(v) of Regulation S-K.
Year
Summary
Compensation
Table Total to
PEO1
Compensation
Actually Paid to
PEO2
Average Summary
Compensation
Table Total For
Non-PEO NEOs3
Average
Compensation
Actually Paid to
Non-PEO NEOs4
Value of Initial Fixed $100
Investment Based On:
Net Income
(millions)7
Year-Over-
Year CV
Bookings
Growth8
(a)
2022
2021
2020
$
$
$
(b)
992,630 $
1,552,268 $
681,843 $
(c)
992,630 $
1,552,268 $
681,843 $
(d)
978,306 $
1,134,598 $
860,550 $
(e)
449,918 $
1,324,876 $
873,033 $
Company
TSR5
(f)
Peer Group
TSR6
(g)
86 $
141 $
100 $
126 $
162 $
128 $
(h)
21.8
24.8
10.0
(i)
0.8%
16.0%
-3.5%
(1)
(2)
(3)
(4)
The dollar amounts reported in column (b) are the amounts of total compensation reported for Mr. Colony (our Chief Executive
Officer or PEO) for each corresponding year in the “Total” column of the Summary Compensation Table. Refer to “Executive
Compensation –Summary Compensation Table.”
The dollar amounts reported in column (c) represent the amount of “compensation actually paid” to Mr. Colony, as computed in
accordance with Item 402(v) of Regulation S-K. Because Mr. Colony did not receive or hold any equity awards during the years
reflected in the table and we do not maintain a pension in which Mr. Colony participates, no additions or deductions from Summary
Compensation Table (SCT) total compensation for our PEO are needed to determine the amount of “compensation actually paid”
in accordance with Item 402(v) of Regulation S-K.
The dollar amounts reported in column (d) represent the average of the amounts reported for the Company’s named executive
officers (NEOs) as a group (excluding Mr. Colony, who has served as our CEO in each of the covered years) in the “Total” column
of the Summary Compensation Table in each applicable year. The names of each of the NEOs (excluding Mr. Colony) included
for purposes of calculating the average amounts in each applicable year are as follow: (i) for 2022, L. Christian Finn, Kelley
Hippler, Carrie Johnson, Sharyn Leaver, and Sarah Le Roy; (ii) for 2021, Scott Chouinard, Ryan Darrah, Michael Doyle, L.
Christian Finn, Kelley Hippler, and Carrie Johnson; and (iii) for 2020, Michael Doyle, Kelley Hippler, Carrie Johnson, and Steve
Peltzman.
The dollar amounts reported in column (e) represent the average amount of “compensation actually paid” (CAP) to the NEOs as
a group (excluding Mr. Colony), as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not
reflect the average amount of compensation earned by or paid to the NEOs as a group (excluding Mr. Colony) during the applicable
year. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to the average
compensation for the NEOs as a group (excluding Mr. Colony) for each year to determine the compensation actually paid:
Average Non-PEO NEOs SCT Total to CAP Reconciliation:
Year
Salary
Bonus and Non-
Equity Incentive
Compensation
Other
Compensation
SCT Total
Reported Value of
Equity Awards
Equity Award
Adjustments
CAP
2022
2021
2020
$
$
$
355,306 $
290,528 $
369,916 $
149,711 $
376,641 $
141,109 $
8,317 $
104,942 $
12,038 $
978,306 $
1,134,598 $
860,550 $
(i)
(ii)
(464,972) $
(362,487) $
(337,488) $
(iii)
(63,417) $
552,765 $
349,971 $
449,918
1,324,876
873,033
(i)
(ii)
(iii)
Reflects "all other compensation" reported in the SCT for each year shown.
Represents the grant date fair value of equity-based awards granted each year as reported in the “Stock Awards” column in
the Summary Compensation Table for the applicable year. Because we do not maintain a pension in which any NEO
participates, no adjustments from the SCT total related to pension value are needed to calculate “compensation actually
paid” in accordance with Item 402(v) of Regulation S-K.
The equity award adjustments for each applicable year include the addition (or subtraction, as applicable) of the following:
(i) the year-end fair value of any equity awards granted in the applicable year that are outstanding and unvested as of the
end of the year; (ii) the amount of change as of the end of the applicable year (from the end of the prior fiscal year) in fair
25
value of any awards granted in prior years that are outstanding and unvested as of the end of the applicable year; (iii) for
awards that are granted and vest in same applicable year, the fair value as of the vesting date; (iv) for awards granted in
prior years that vest in the applicable year, the amount equal to the change as of the vesting date (from the end of the prior
fiscal year) in fair value; (v) for awards granted in prior years that are determined to fail to meet the applicable vesting
conditions during the applicable year, a deduction for the amount equal to the fair value at the end of the prior fiscal year;
and (vi) the dollar value of any dividends or other earnings paid on awards in the applicable year prior to the vesting date
that are not otherwise reflected in the fair value of such award or included in any other component of total compensation
for the applicable year. The valuation assumptions used to calculate fair values did not materially differ from those disclosed
at the time of grant. The amounts deducted or added in calculating the equity award adjustments are as follows:
Average Non-PEO NEOs Equity Award Adjustments:
2020 Average
2021 Average 2022 Average
Plus: Fair Value for Stock Awards Granted in the Covered Year that are Unvested at
End of Year
Change in Fair Value of Outstanding Unvested Stock Awards from Prior Year
Change in Fair Value of Stock Awards from Prior Years that Vested in the Covered
Year
Less: Fair Value of Stock Awards Forfeited during the Covered Year
Total Adjustment
$
$
$
$
392,907 $
2,451 $
450,772 $ 257,486
121,557 $ (152,787)
(45,387) $
- $
349,971 $
27,727 $
(47,291) $
552,765 $
(71,058)
(97,057)
(63,417)
(5) Company TSR is calculated to show the cumulative stockholder return on our common stock during the covered period. We did
not pay any dividends in the covered years.
(6) Represents the weighted peer group TSR, weighted according to the respective companies’ stock market capitalization at the
beginning of each period for which a return is indicated. The peer group used for this purpose is the following published industry
index: S&P Small Cap 600 Information Technology.
The dollar amounts reported represent the amount of net income reflected in our audited financial statements for the applicable
year.
(7)
(8) Year-over-year CV bookings growth is the percentage increase in bookings of our CV products with respect to a given covered
year compared to the prior covered year.
Financial Performance Measures
As described in greater detail in “Executive Compensation – Compensation Discussion and Analysis,” our executive compensation
program reflects a variable pay-for-performance philosophy. The most important financial performance measures we used to link
executive compensation actually paid to our NEOs, for the most recently completed fiscal year, to our performance are as follows:
•
•
•
CV Bookings
Modified Operating Income
Year-Over-Year CV Bookings Growth
Analysis of the Information Presented in the Pay versus Performance Table
While we utilize several performance measures to align executive compensation with our performance, all of these measures are
not presented in the above Pay versus Performance Table. Moreover, we generally seek to incentivize long-term performance, and
therefore do not specifically align our performance measures with compensation that is actually paid (as computed in accordance with
Item 402(v) of Regulation S-K) for a particular year. In accordance with Item 402(v) of Regulation S-K, we are providing the following
descriptions of the relationships between information presented in the Pay versus Performance Table.
26
CAP versus TSR
As shown in the chart below, the PEO and other NEOs’ CAP amounts are aligned with the Company’s TSR. This is due primarily
to the Company’s use of equity incentives, which are tied directly to stock price in addition to the company’s financial performance.
CAP versus Net Income
As shown in the chart below, while the variations in the Company’s net income and the PEO and other NEOs’ CAP have been
directionally consistent each year, the decrease in the CAP amounts was proportionately greater than the decrease in net income in 2022.
This is due in large part to the significant emphasis the Company places on equity incentives, which are sensitive to changes in stock
price. In addition, the Company does not use net income to determine compensation levels or incentive plan payouts.
27
CAP versus Company-Selected Measure (CSM)
The chart below compares the PEO and other NEOs’ CAP to our CSM, year-over-year CV bookings growth, which indicates
there is a very strong relationship between this CSM and CAP.
The Company's amount of CV bookings is one of the two metrics used in determining the level of payout under our Executive
Cash Incentive Plan, with the target level of CV bookings being derived from the targeted year-over-year CV bookings growth
percentage reflected in the annual operating plan approved by the Board of Directors. In addition, we believe there is a strong correlation
between our CV bookings growth and our stock price, which in turn leads to fluctuations in the CAP to our non-PEO NEOs, who receive
equity incentives as part of their compensation.
28
TSR: Company versus Peer Group
As shown in the chart below, the Company's 3-year cumulative TSR is less than the companies included in our industry index,
the S&P Small Cap 600 Information Technology Index. For more information regarding the Company’s performance and the companies
that the Compensation Committee considers when determining compensation, refer to “Executive Compensation – Compensation
Discussion and Analysis.”
The information contained above under the heading “Pay Versus Performance” shall not be incorporated by reference into any
future filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the extent
that we specifically incorporate it by reference in any such filing.
29
REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
The Board of Directors has appointed an Audit Committee composed of five non-employee directors: Ms. Birch (Chair), Mr.
Bradford, Mr. Friscia, Mr. Romine, and Ms. Wassenaar. Each of the members of the Audit Committee is “independent” as defined under
the NASDAQ Stock Market listing standards. The Board has determined that Ms. Birch is an “audit committee financial expert” under
applicable rules of the Securities and Exchange Commission (“SEC”), and the members of the Audit Committee satisfy the NASDAQ
financial literacy standards.
The Audit Committee is responsible for providing independent oversight of Forrester’s accounting functions and internal controls.
The Audit Committee oversees Forrester’s financial reporting process on behalf of the Board of Directors, reviews financial disclosures,
and meets privately, outside of the presence of management, with Forrester’s internal auditor and with representatives of the independent
registered public accounting firm. The Audit Committee also selects and appoints the independent registered public accounting firm,
reviews the performance of the independent registered public accounting firm, and reviews the independent registered public accounting
firm’s fees. The Audit Committee operates under a written charter adopted by the Board of Directors.
In fulfilling its oversight responsibilities, the Audit Committee reviewed and discussed Forrester’s audited financial statements
for
the fiscal year ended December 31, 2022 with Forrester’s management and with PricewaterhouseCoopers LLP
(“PricewaterhouseCoopers”), Forrester’s independent registered public accounting firm. The Audit Committee also reviewed the report
of management contained in Forrester’s Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC, as well
as PricewaterhouseCoopers’ report included in Forrester’s Annual Report on Form 10-K related to its audit of (i) the consolidated
financial statements and (ii) the effectiveness of internal control over financial reporting.
The Audit Committee has discussed with PricewaterhouseCoopers the matters required to be discussed under the rules adopted
by the Public Company Accounting Oversight Board (“PCAOB”). The Audit Committee has received the written disclosures and the
letter from PricewaterhouseCoopers required by the PCAOB regarding PricewaterhouseCoopers’ communications with the Audit
Committee concerning independence and has discussed with PricewaterhouseCoopers their independence.
Based on the Audit Committee’s review and discussions noted above, the Audit Committee recommended to the Board of
Directors, and the Board of Directors approved, the inclusion of the audited financial statements in our Annual Report on Form 10-K
for the fiscal year ended December 31, 2022 for filing with the SEC.
AUDIT COMMITTEE OF THE BOARD OF
DIRECTORS
Jean M. Birch, Chair
Neil Bradford
Tony Friscia
Warren Romine
Yvonne Wassenaar
The information contained in the report above shall not be deemed to be “soliciting material” or to be “filed” with the SEC, nor
shall such information be incorporated by reference into any future filing under the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended, except to the extent that we specifically incorporate it by reference in any such filing.
30
OTHER INFORMATION
Delinquent Section 16(a) Reports
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our officers and directors, and persons who own more
than 10% of our common stock to file reports of ownership and changes in ownership on Forms 3, 4 and 5 with the Securities and
Exchange Commission (“SEC”). Officers, directors and greater than 10% beneficial stockholders are required by SEC regulation to
furnish to us copies of all Forms 3, 4 and 5 they file. Based solely on our review of copies of such forms which we received, we believe
that all of our officers, directors, and greater than 10% beneficial owners complied on a timely basis with all filing requirements with
respect to transactions during 2022, except for one report filed for Scott Chouinard, our Chief Accounting Officer and Treasurer, with
respect to a transfer of shares in 2022.
Certain Relationships and Related Transactions
Registration Rights and Non-Competition Agreement. At the time of our initial public offering, we entered into a registration
rights and non-competition agreement with Mr. Colony which provides that if Mr. Colony’s employment with us is terminated he will
not compete with us for the one year period after the date of such termination. The agreement also provides that in the event we propose
to file a registration statement under the Securities Act of 1933, as amended, with respect to an offering by us for our own account or
the account of another person, or both, Mr. Colony shall be entitled to include shares held by him in such a registration, subject to the
right of the managing underwriter of any such offering to exclude some or all of such shares from such registration if and to the extent
the inclusion of the shares would adversely affect the marketing of the shares to be sold by us. The agreement also provides that Mr.
Colony may require us to register shares under the Securities Act with a fair market value of at least $5 million, except that we are not
required to effect such registration more than twice or at certain times described in the agreement. The agreement also provides that we
will pay all expenses incurred in connection with such registration.
Related Person Transactions
Pursuant to its amended and restated charter, our Audit Committee has responsibility for the review and approval of all transactions
between the Company and any related parties or affiliates of the Company, its officers, and directors.
Related persons can include any of our directors or executive officers, certain of our stockholders, and any of their immediate
family members. In evaluating related person transactions, the committee members apply the same standards they apply to their general
responsibilities as members of a committee of the board of directors and as individual directors. The committee will approve a related
person transaction when, in its good faith judgment, the transaction is in the best interest of the Company. To identify related person
transactions, each year we require our directors and officers to complete a questionnaire identifying any transactions with the Company
in which the officer or director or their family members have an interest. In addition, our Code of Business Conduct and Ethics includes
our expectation that all directors, officers and employees who may have a potential or apparent conflict of interest will notify our legal
department.
31
PROPOSAL TWO:
APPROVAL OF AN AMENDMENT AND RESTATEMENT OF THE
FORRESTER RESEARCH, INC. AMENDED AND RESTATED EQUITY INCENTIVE PLAN
On March 8, 2023, the Compensation and Nominating Committee of the Board of Directors approved an amendment and
restatement of the Forrester Research, Inc. Equity Incentive Plan, which is subject to stockholder approval (the “Plan”). The Board has
ratified and approved the Plan and recommends the stockholders approve an amendment and restatement of the Plan that will (1) extend
the term of the Plan for ten years to May 8, 2033; (2) increase the number of shares issuable under the plan by three million five hundred
thousand (3,500,000) shares; (3) increase the maximum annual amount of awards issuable under the Plan to our non-employee directors;
(4) remove certain references to Section 162(m) of the Internal Revenue Code that are now outdated due to changes in applicable law;
(5) update the definition of performance criteria applicable to performance awards; and (6) affirmatively provide that so called “liberal
share recycling”, or the regrant of shares withheld to satisfy the exercise price or withholding obligations relating to the exercise or
settlement of an award, is prohibited.
The closing price of our common stock on March 23, 2023 was $31.89.
Summary of the Plan
The Board believes that the success of Forrester depends, in large part, on the ability of Forrester to attract, retain and motivate
key personnel. Accordingly, the Board firmly believes that a broad-based equity compensation plan is a necessary retention tool that is
in the best interests of Forrester and its stockholders.
The following summary and Plan description are qualified in their entirety by reference to the full text of the Plan attached to this
proxy statement as Exhibit A.
The amendment and restatement of the Plan will become effective, subject to stockholder approval, on May 9, 2023. Assuming
approval of the amendment and restatement by the stockholders, no awards may be made under the Plan after May 8, 2033. The
maximum number of shares of our common stock that may be delivered in satisfaction of Awards made under the Plan is 3,500,000
newly authorized shares plus the number of shares currently authorized and available for issuance under the Plan. As of March 20, 2023,
there were 1,038,753 awards outstanding under the Plan, consisting of 230,088 options and 808,665 restricted stock units, and there
remained available for future awards to be made under the Plan a total number of shares equal to 1,031,217.
Shares delivered under the Plan may consist of either authorized but unissued shares or treasury shares. For purposes of calculating
the maximum number of shares that may be delivered in satisfaction of Awards made under the Plan, such maximum will be determined
net of any shares (i) awarded as restricted stock but subsequently forfeited, or (ii) subject to an Award that is exercised or satisfied, or
terminates or expires, without the delivery of such shares. The Plan precludes so-called “liberal share recycling” or the regrant of shares
withheld to satisfy the exercise price or withholding obligation relating to the exercise or settlement of an award. In the event of a stock
dividend, stock split or other change in our capital structure, the Administrator will make appropriate adjustments to the limits described
above and to the number and kind of shares of stock or securities subject to Awards, any exercise prices relating to Awards, any other
provisions of Awards effected by the change, or similar adjustments deemed appropriate to preserve the value of Awards and avoid
distortion in the operation of the Plan.
Administration. The Compensation and Nominating Committee of the Board of Directors (“Administrator”) administers the Plan.
The Administrator has authority to determine who will receive Awards and to determine the types of Awards to be granted, as well as
the amounts, terms, and conditions of any Awards. The types of Awards that may be granted under the Plan are described below
(collectively, the “Awards”). The Administrator has the right to determine any questions that may arise regarding the interpretation and
application of the provisions of the Plan, and to make, administer, and interpret such rules and regulations as it deems necessary or
advisable. To the extent permitted by law and the terms of the Plan, the Administrator may, in its discretion, delegate its duties, powers,
and rights under the Plan to one or more of its members or officers of the Company. Determinations of the Administrator and its
delegatees under the Plan are conclusive and binding on all parties.
Eligibility. Key employees, our independent directors, and consultants and advisors to, the Company are eligible to be granted
Awards under the Plan, except that incentive stock options may only be granted to employees of the Company and its subsidiaries. As
of March 20, 2023, the group of persons from whom the Administrator may select participants consists of approximately 1,900
individuals.
Non-Employee Director Limit. The Plan provides that the maximum number of shares that may be delivered in satisfaction of
Awards granted during a single fiscal year under the Plan, or under any other equity plan maintained by the Company, to any non-
employee director, taken together with any cash fees paid to the non-employee director during the fiscal year, may not exceed $300,000,
except that in the case of a newly-appointed director, the maximum amount payable to the director in his or her first year of service may
be up to 50% greater than this maximum.
32
Clawback. The Plan provides that Awards and shares of stock (and proceeds therefrom) obtained pursuant to or on exercise of
Awards are subject to forfeiture, setoff, recoupment or other recovery if the Administrator determines in good faith that such action is
required by applicable law or Company policy.
Types of Awards
Stock Options. The Administrator may award options to any participant, subject to the limitations described above. Stock options
give the holder the right to purchase shares of Forrester common stock within a specified period of time at a specified price. The Plan
provides for the grant of incentive stock options (“ISOs”), which are subject to special tax treatment described below, and non-statutory
stock options (“NSOs”). The Plan provides that the maximum number of shares that may be delivered in satisfaction of ISOs under the
Plan is 2,000,000.
The exercise price of both an ISO and NSO granted under the Plan may not be less than the fair market value of our common
stock on the date the option is granted. The expiration date of an ISO may not be more than ten years after the original grant date. The
Administrator determines all other terms relating to the exercise of the option, including the consideration to be paid, if any, for the grant
of the option and the time at which options may be exercised. The option exercise price is payable in cash or check, and the Administrator
may, in its discretion, also permit optionees to make payment in our common stock having a fair market value equal to the option
exercise price, through withholding by the Company of shares of stock otherwise issuable upon exercise of the Award, or subject to
certain conditions, using a broker-assisted “cashless exercise” program.
All unexercised options terminate not later than after a certain number of years as determined by the Administrator, but the
maximum term of an ISO may not be longer than ten years. Except as otherwise provided in the Plan and the applicable Award
agreement, vested options generally must be exercised within three months of the cessation of the holder’s employment with the
Company.
Stock Appreciation Rights. The Plan permits the Administrator to grant SARs. A SAR entitles the holder, upon exercise, to receive
an amount in our common stock, or cash, or a combination thereof, determined by reference to appreciation from and after the date of
grant in the base price of a share of our common stock, which may not be less than such share’s fair market value on the date of grant.
No SARs have been granted under the Plan.
Restricted and Unrestricted Stock; Stock Unit Awards. Under the Plan the Administrator may grant non-transferable shares of
restricted or unrestricted common stock and restricted or unrestricted stock unit awards. A stock award is an award of shares of our
common stock, while a stock unit award entitles the recipient to the future delivery of shares of common stock or an amount of equivalent
value. Stock unit awards may be settled in shares, cash, or a combination thereof. Awards of restricted and unrestricted stock may be
made in exchange for past services or other lawful consideration. Generally, awards of restricted stock and restricted stock unit awards
are subject to the requirement that the shares or Award be forfeited or resold to the Company unless specified conditions, such as
continued employment and/or achievement of performance goals, are met. Subject to these restrictions, any recipient of an award of
restricted stock will have the rights of a stockholder, including the right to vote the shares and receive dividends. Other Awards under
the Plan may also be settled in restricted stock. To date, while the Administrator has approved awards of restricted stock units under
the Plan, there have been no awards of restricted or unrestricted stock to any eligible Plan participant.
Performance Awards. The Administrator may also make Awards subject to the satisfaction of specified performance criteria other
than the mere continuation of employment or passage of time (“Performance Awards”). Performance Awards may consist of stock
options, SARs, restricted stock, or restricted stock units. The performance criteria applicable to a particular Performance Award will be
determined by the Administrator and may consist of any business criteria or other measures of performance, including, but not limited
to, objectively or subjectively determinable measures of performance relating to any or any combination of the following (determined
either on a consolidated basis or, as the context permits, on a divisional, subsidiary, line of business, project, or geographical basis or in
combinations thereof): bookings; sales; revenues; operating income or operating margin; assets; expenses; earnings before or after
deduction for all or any portion of interest, taxes, depreciation, or amortization, whether or not on a continuing operations or an aggregate
or per share basis; return on equity, investment, capital or assets; one or more operating ratios; borrowing levels, leverage ratios or credit
rating; market share; capital expenditures; cash flow; stock price; stockholder return; sales of particular products or services; customer
acquisition or retention; acquisitions and divestitures (in whole or in part); joint ventures and strategic alliances; spin-offs, split-ups and
the like; reorganizations, recapitalizations, restructurings, financings (issuance of debt or equity) or refinancings; or strategic business
criteria, which may include one or more objectives based on meeting specified revenue, market penetration, geographic business
expansion goals, cost targets, or objective goals relating to reorganizations, acquisitions, divestitures, market share, debt reduction,
customer growth, long-term client value growth, research and development achievements, regulatory compliance and achievements
(including submitting or filing applications or other documents with regulatory authorities or receiving approval of any such applications
or other documents), strategic partnerships or transactions and co-development, co-marketing, profit sharing, joint venture or other
similar arrangements, implementation, completion or attainment of measurable objectives with respect to research, development; or
other measures (including, but not limited to, gross profits, economic profit, comparisons with various stock market indices, cost of
capital or assets under management, improvements in capital structure, days sales outstanding, sales performance, sales quota attainment,
cross-sales, recurring sales, one-time sales, net new sales, cancellations, retention rates, new benchmark mandates, new exchange traded
fund launches, financing and other capital raising transactions (including sales of the Company’s equity or debt securities); factoring
33
transactions; sales or licenses of the Company’s assets, including its intellectual property, whether in a particular jurisdiction or territory
or globally; or through partnering transactions). Any of the foregoing performance criteria and any targets set by the Administrator with
respect to those criteria need not be based upon an increase, a positive or improved result, or avoidance of loss. The measures used in
setting performance criteria under the Plan may be determined with or without regard to a specified list of factors, and the Administrator
may exercise discretion to cause one or more of these factors to be included in the determination of the performance criteria. In addition,
the Administrator may, in its discretion, increase or reduce the number of shares that may be received under an Award that are subject
to the satisfaction of the applicable performance criteria. The Administrator will determine whether the performance targets or goals
that have been chosen for a particular Performance Award have been met.
General Provisions Applicable to All Awards. Neither ISOs, nor, except as the Administrator may otherwise determine or provide
in any Award, any other Award may be sold, assigned, transferred, pledged or otherwise encumbered by the person to whom it is granted,
either voluntarily or by operation of law, except by will or the laws of descent and distribution. During the life of a participant an ISO
is exercisable only by the recipient. Other Awards may be transferred during the recipient’s lifetime, but only on a gratuitous basis and
only to the extent, if any, permitted by the Administrator.
Treatment of Awards in Connection with Certain Transactions. The Plan provides that, subject to customary exceptions designed
to avoid an inadvertent trigger of the Plan terms applicable to covered transactions, in the event of (i) a consolidation, merger, or similar
transaction or series of transactions in which Forrester is not the surviving corporation or which results in the acquisition by a person or
entity or by a group of persons or entities acting together of substantially all of our common stock, (ii) a sale of all or substantially all
the assets of Forrester, or (iii) a complete liquidation or dissolution of the Company (collectively, the “covered transactions”), the
following rules will apply unless otherwise provided in an Award:
•
•
•
If there is a surviving or acquiring entity, the Administrator may arrange to have that entity (or an affiliate) assume some or
all outstanding Awards or grant substitute Awards. Any such assumption or substitution of a stock option or SAR exempt
from the requirements of Section 409A of the Internal Revenue Code will be accomplished in a manner that preserves such
exemption.
If the transaction involves a payment to Forrester stockholders (whether cash, non-cash, or some combination of the two),
the Administrator may provide for a “cash-out” payment with respect to some or all Awards or portions thereof. With respect
to each affected Award, the “cash-out” payment will be equal to the excess, if any, of the fair market value of one share of
our common stock multiplied by the number of shares of stock subject to the Award or portion thereof over the aggregate
exercise or purchase price (if any) of the Award or portion thereof.
Regardless of whether there is a surviving or acquiring entity, if the transaction does not involve an assumption or
substitution of Awards or a “cash-out” payment, all Awards requiring exercise will become fully exercisable and the delivery
of shares deliverable under a stock unit award will be accelerated prior to the completion of the transaction on a basis that
gives participants a reasonable opportunity, as determined by the Administrator, to participate in the transaction as a
stockholder.
•
Existing Awards, unless assumed, will terminate upon completion of the transaction.
The Administrator may require that any amounts delivered, exchanged or otherwise paid with respect to a “cash-out” or
acceleration of an outstanding Award contain restrictions as it deems appropriate to reflect any performance or other vesting conditions
to which the Award was subject. In the case of restricted stock, the Administrator may require that any amounts delivered, exchanged
or otherwise paid in respect of such stock be placed in escrow or otherwise made subject to restrictions.
Amendment and Termination. The Administrator may amend the Plan or any outstanding Award at any time or times for any
purpose which may at the time be permitted by law, and may at any time terminate the Plan as to any future grants of Awards. The
Administrator may not, however, alter the terms of an Award so as to affect adversely the participant’s rights under an Award without
the participant’s consent, unless the Administrator expressly reserved the right to do so at the time of an Award.
34
Plan Benefits
The future benefits or amounts that would be received under the Plan by executive officers, non-executive officer employees, and
independent directors are discretionary and are therefore not determinable at this time. However, the following table sets forth the
number of shares (excluding shares covered by awards that were canceled or forfeited) subject to options and restricted stock units as
of March 20, 2023 that were granted under the Plan from January 1, 2022 to December 31, 2022 to our named executive officers, all
current executive officers as a group, all current directors who are not executive officers and were not executive officers at the time of
grant, as a group, and all employees, excluding executive officers.
Name and Position
Number of Shares Subject to Awards Granted Under the Plan from
January 1, 2022 to December 31, 2022
Stock Options
Restricted Stock Units
-
-
-
-
9,934
George F. Colony
Chief Executive Officer
L. Christian Finn
Chief Financial Officer
Carrie Johnson
Chief Product Officer
Sharyn Leaver
Chief Research Officer
Sarah Le Roy
Chief People Officer
Kelley Hippler(1)
Former Chief Sales Officer
All current executive officers as a group (including the 6 officers
above)
All current directors who were not executive offcers at the time of
grant, as a group
All employees and officers, excluding current executive officers
and directors, as a group
(1) Ms. Hippler ceased serving as our Chief Sales Officer effective September 30, 2022. Because of her total compensation received
during 2022, Ms. Hippler is listed as a named executive officer of the Company in this proxy statement. She was no longer an
executive officer of the Company at December 31, 2022. Had Ms. Hippler continued to be an employee of the Company through
March 20, 2023, the above-table would have disclosed that Ms. Hippler held 10,927 restricted stock units, and a corresponding
adjustment would have been made to the disclosure for all current executive officers as a group.
238,824
56,254
18,448
6,457
9,071
8,940
-
-
-
-
-
-
-
U.S. Federal Tax Consequences
The following discussion summarizes certain United States federal income tax consequences of the issuance and receipt of options
and restricted stock awards under the Plan under the law as in effect on the date of this proxy statement. The Plan provides for the grant
of ISOs and NSOs, as well as other Awards. This summary does not purport to cover federal employment law tax or other federal tax
consequences that may be associated with the Plan, nor does it address the tax laws of any state, municipality, or foreign country where
a participant may reside.
ISOs. An optionee realizes no taxable income upon the grant or, for regular tax purposes, upon the exercise of an ISO. However,
the exercise of an ISO may result in an alternative minimum tax liability to the optionee. With certain exceptions, a disposition of shares
purchased under an ISO within two years from the date of grant or within one year after exercise produces ordinary income to the
optionee (and a deduction to Forrester) equal to the value of the shares at the time of exercise less the exercise price. Any additional
gain recognized in the disposition is treated as a capital gain for which Forrester is not entitled to a deduction. If the optionee does not
dispose of the shares until after the expiration of these one- and two-year holding periods, any gain or loss recognized upon a subsequent
sale is treated as a long-term capital gain or loss for which Forrester is not entitled to a deduction.
NSOs. In general, in the case of an NSO, the optionee has no taxable income at the time of grant but realizes income in connection
with exercise of the option in an amount equal to the excess (at the time of exercise) of the fair market value of the shares acquired
upon exercise over the exercise price; a corresponding deduction is available to Forrester; and upon a subsequent sale or exchange of
the shares, any recognized gain or loss after the date of exercise is treated as capital gain or loss for which Forrester is not entitled to a
deduction.
In general, an ISO that is exercised by the optionee more than three months after termination of employment is treated as an NSO.
ISOS are also treated as NSOs to the extent they first become exercisable by an individual in any calendar year for shares having a
market value (determined as of the date of grant) in excess of $100,000.
35
The Administrator may award stock options that are exercisable for restricted stock, or may award shares of restricted stock.
Generally, taxes are not due when an award of restricted stock is initially made, or when restricted stock is received upon exercise of a
stock option, but the award becomes taxable when it is no longer subject to a “substantial risk of forfeiture” (it becomes vested or
transferable). Income tax is paid on the value of the stock at ordinary rates when the restrictions lapse, and then at capital gain rates
when the shares are sold. However, no later than 30 days after a participant receives an award of restricted stock or a stock option
exercisable for restricted stock, pursuant to Section 83(b) of the Internal Revenue Code, the participant may elect to recognize taxable
ordinary income in an amount equal to the fair market value of the stock subject to the award at the time of exercise of the option or
receipt of the award of restricted stock. Provided that the election is made in a timely manner, the participant will not recognize any
additional income when the restrictions on the stock lapse. Assuming no other applicable limitations, the amount and timing of the
deduction available to Forrester will correspond to the income recognized by the participant.
The Administrator may also award restricted stock units. The recipient of restricted stock units will not recognize taxable income
at the time of grant of a restricted stock unit, and we are not entitled to a tax deduction at that time. The recipient will recognize
compensation taxable as ordinary income, however, at the time of settlement of the Award, equal to the fair market value of any shares
delivered and the amount of cash paid. With respect to any awards described above where we would generally be entitled to a deduction
related to such awards, we will be subject to the deduction limits of Section 162(m).
Under the so-called “golden parachute” provisions of the Internal Revenue Code, the accelerated vesting of Awards in connection
with a change of control of Forrester may be required to be valued and taken into account in determining whether participants have
received compensatory payments, contingent on the change in control, in excess of certain limits.
If these limits are exceeded, a
substantial portion of amounts payable to the participant, including income recognized by reason of the grant, vesting or exercise of
Awards under the Plan may be subject to an additional 20% federal tax and may be nondeductible to Forrester.
It is the intention of Forrester that Awards will comply with Section 409A of the Internal Revenue Code regarding nonqualified
deferred compensation arrangements or will satisfy the conditions of applicable exemptions. However, if an Award is subject to and
fails to comply with the requirements of Section 409A, the participant may recognize ordinary income on the amounts deferred under
the Award, to the extent vested, prior to the time when the compensation is received. In addition, Section 409A imposes a 20% penalty
tax, as well as interest, on the participant with respect to such amounts.
The foregoing general tax discussion is intended for the information of Forrester’s stockholders in considering how to vote with
respect to this proposal, and not as tax guidance to participants in the Plan.
OUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR APPROVAL OF THE AMENDMENT AND
RESTATEMENT OF THE FORRESTER RESEARCH, INC. EQUITY INCENTIVE PLAN.
36
PROPOSAL THREE:
RATIFICATION OF THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP
AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
FOR THE FISCAL YEAR ENDING DECEMBER 31, 2023
PricewaterhouseCoopers LLP audited our financial statements for the fiscal year ended December 31, 2022. Our Audit Committee
has selected PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending December 31,
2023. Although stockholder approval of the selection of PricewaterhouseCoopers LLP is not required by law, our Board of Directors
believes that it is advisable to give stockholders an opportunity to ratify this selection.
If stockholders do not approve this proposal at the 2023 annual meeting, our Audit Committee will reconsider its selection of
PricewaterhouseCoopers LLP. If stockholders do ratify this appointment, the Audit Committee, which has direct authority to engage
our independent registered public accounting firm, may appoint a different independent registered public accounting firm at any time
during the year if it determines that the change would be in the best interests of Forrester and our stockholders.
The Audit Committee has approved all services provided to Forrester by PricewaterhouseCoopers LLP during 2022.
Representatives of PricewaterhouseCoopers LLP are expected to be present at the 2023 annual meeting. They will have the opportunity
to make a statement if they desire to do so and will also be available to respond to appropriate questions from stockholders.
Independent Auditors’ Fees and Other Matters
The following table presents the aggregate fees billed or expected to be billed by PricewaterhouseCoopers LLP (“PwC”) and its
affiliates for fiscal 2022 and fiscal 2021.
Audit Fees(1)
Audit-Related Fees(2)
Tax Fees(3)
All Other Fees(4)
Total Fees
Fiscal 2022
Fiscal 2021
$ 1,701,000 $ 1,463,426
—
36,252
6,706
$ 1,751,955 $ 1,506,384
—
33,290
17,665
(1) Audit fees are fees related to professional services rendered by PwC and its affiliates in connection with the audit of our financial
statements and our internal controls over financial reporting, the reviews of our interim financial statements included in each of
our quarterly reports on Form 10-Q, international statutory audits, and review of other SEC filings.
There were no audit-related fees in fiscal 2022 or fiscal 2021.
Tax fees are fees billed for professional services related to tax compliance and tax consulting services.
(2)
(3)
(4) All other fees include licenses to web-based accounting and finance reference materials and, in fiscal 2022, services related to a
Registration Statement on Form S-8 filing.
Audit Committee’s Pre-Approval Policy and Procedures
The Audit Committee approves the engagement of our independent registered public accounting firm to render any audit or non-
audit services. At a regularly scheduled Audit Committee meeting, management or a representative of the Company’s independent
registered public accounting firm summarizes the services to be provided by the firm and the fees that will be charged for the services.
Thereafter, if new services or dollar amounts in excess of those pre-approved at the meeting are proposed, they are either presented for
pre-approval at the next meeting of the Audit Committee or approved by the Chair of the Audit Committee pursuant to delegated
authority. At subsequent meetings, the Audit Committee is provided a listing of any newly pre-approved services since the last meeting,
and an updated projection for the current year of the estimated annual fees to be paid to the firm for all pre-approved audit and permissible
non-audit services.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT
THE STOCKHOLDERS VOTE FOR RATIFICATION OF THE APPOINTMENT OF
PRICEWATERHOUSECOOPERS LLP AS OUR INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING DECEMBER 31, 2023.
37
PROPOSAL FOUR:
NON-BINDING VOTE ON EXECUTIVE COMPENSATION
We have implemented an executive compensation program that rewards performance. Our executive compensation program is
designed to attract, retain and motivate the key individuals who are most capable of contributing to the success of our Company and
building long-term value for our stockholders. The elements of our executives’ total compensation are base salary, cash incentive awards,
equity incentive awards, severance and change of control benefits, and other employee benefits. We have designed a compensation
program that makes a substantial portion of executive pay variable, subject to increase when performance targets are exceeded, and
subject to reduction when performance targets are not achieved.
We believe our executive compensation program strikes the appropriate balance between utilizing responsible, measured pay
practices and providing incentives to our executives to create value for our stockholders. We believe this is evidenced by the following:
•
•
•
•
•
•
The mix of compensation among base salary and cash incentives.
Generally our compensation policies and practices are uniform across each of our business units and geographic regions.
Our bonus plan for executive officers provides for multiple payout levels based on targets established and approved by our
Compensation and Nominating Committee during the first quarter of the applicable plan year.
We require that minimum threshold performance targets be achieved before any bonuses under our executive cash incentive
plan are paid, and bonus payouts under our executive cash incentive plan are capped.
We use multiple performance measures under our executive cash incentive plan, including CV bookings and modified
operating income.
We currently grant equity-based awards to executives under our equity incentive plan subject to multi-year vesting criteria,
and require that the executive remain employed through the vesting date to realize the value of these awards.
The Board endorses the Company’s executive compensation program and recommends that stockholders vote in favor of the
following resolution:
RESOLVED, that the stockholders approve the compensation of the Company’s named executive officers as described in this
proxy statement under “Executive Compensation”, including the Compensation Discussion and Analysis and the tabular and narrative
disclosure contained in this proxy statement.
Because the vote is non-binding, neither the Board of Directors nor the Compensation and Nominating Committee of the Board
will be required to take any action as a result of the outcome of the vote on this proposal. The Compensation and Nominating Committee
will carefully consider the outcome of the vote when evaluating future executive compensation arrangements.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE APPROVAL OF THE
COMPANY’S EXECUTIVE COMPENSATION.
PROPOSAL FIVE:
NON-BINDING VOTE ON FREQUENCY OF NON-BINDING VOTES ON EXECUTIVE COMPENSATION
The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 requires that we include in this proxy statement a non-
binding stockholder vote to advise on whether non-binding votes on the Company’s executive compensation should occur every one,
two or three years. You have the option to vote for any of the three options, or to abstain on the matter.
The option of one year, two years or three years that receives a majority of all the votes cast by stockholders will be the frequency for
the advisory vote on executive compensation that has been selected by the stockholders. In the event that no option receives a majority
of the votes cast, we will consider the option that receives the most votes to be the option selected by the stockholders. Although the
vote is non-binding, our Board of Directors will take into account the outcome of the vote when making future decisions about the
frequency of non-binding votes on executive compensation.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE TO CONDUCT A NON-BINDING VOTE ON EXECUTIVE
COMPENSATION EVERY YEAR.
38
STOCKHOLDER PROPOSALS
Stockholder proposals to be considered at the Annual Meeting of Stockholders in 2024 must be received by November 28, 2023
to be considered for inclusion in our proxy materials for that meeting.
Stockholders who wish to make a proposal at the 2024 annual meeting, other than proposals included in our proxy materials, or
who wish to nominate individuals for election as directors, must notify us between January 9, 2024 and February 8, 2024 in manner that
satisfies the requirements specified in our by-laws. If the stockholder does not notify us by February 8, 2024 or the notice is not in
accordance with the requirements specified in our by-laws, the proxies will have discretionary authority to vote on a stockholder’s
proposal brought before the meeting. In addition, to comply with the universal proxy rules, stockholders who intend to solicit proxies in
support of director nominees other than the Company’s nominees must also comply with the additional requirements of Rule 14a-19
under the Securities Exchange Act of 1934.
The Board of Directors has no knowledge of any other matter that may come before the annual meeting and does not, itself,
currently intend to present any other such matter.
OTHER BUSINESS
A copy of our annual report on Form 10-K for the fiscal year ended December 31, 2022 filed with the Securities and Exchange
Commission will be sent to stockholders without charge by writing to Forrester Research, Inc., Investor Relations, 60 Acorn Park Drive,
Cambridge, Massachusetts 02140.
FORM 10-K
39
FORRESTER RESEARCH, INC.
AMENDED AND RESTATED EQUITY INCENTIVE PLAN
(as amended through May 9, 2023)
Exhibit A
1.
DEFINED TERMS
Exhibit A, which is incorporated by reference, defines the terms used in the Plan and sets forth certain operational rules related
to those terms.
2.
PURPOSE
The Plan has been established to advance the interests of the Company by providing for the grant to Participants of Stock-based
Awards.
3.
ADMINISTRATION
The Administrator has discretionary authority, subject only to the express provisions of the Plan, to interpret the Plan; determine
eligibility for and grant Awards; determine, modify or waive the terms and conditions of any Award; prescribe forms, rules and
procedures; and otherwise do all things necessary to carry out the purposes of the Plan Determinations of the Administrator made
under the Plan will be conclusive and will bind all parties.
4.
LIMITS ON AWARDS UNDER THE PLAN
a)
Number of Shares. The number of Shares available for delivery in satisfaction of Awards under the Plan shall be
determined in accordance with this Section 4(a).
(1)
Subject to Section 7(b), the maximum number of Shares that may be delivered in satisfaction of Awards under the
Plan shall be nine million nine hundred thirty thousand (9,930,000) plus the number (not to exceed two and one-half million
(2,500,000)) of unused Shares from the Prior Plans. For purposes of the preceding sentence, shares of Stock shall be unused
Prior Plan shares (i) if they were subject to awards under the Prior Plan, other than restricted stock awards, that were outstanding
on the day preceding the Original 2006 Plan Effective Date to the extent such Prior Plan awards are exercised or are satisfied, or
terminate or expire, on or after the Original 2006 Plan Effective Date without the delivery of such shares, or (ii) if they were
outstanding on the day preceding the Original 2006 Plan Effective Date as restricted stock awards under the Prior Plan and are
thereafter forfeited. The number of Shares delivered in satisfaction of an Award shall be, for purposes of the first sentence of
this Section 4(a)(1), the number of Shares subject to the Award reduced by the number of Shares (a) awarded under the Plan as
Restricted Stock but thereafter forfeited, or (b) made subject to an Award that is exercised or satisfied, or that terminates or
expires, without the delivery of such shares, but Shares withheld to satisfy the exercise price or tax withholding obligations
(through non-broker-assisted exercise or sale) relating to the exercise or settlement of an Award shall not reduce the number of
Shares treated as delivered in satisfaction of such Award and any such Shares will not be again available for grants in respect of
other Awards.
(2)
To the extent consistent with the requirements of Section 422 and with other applicable legal requirements
(including applicable stock exchange or Nasdaq requirements), Stock issued under awards of an acquired company that are
converted, replaced, or adjusted in connection with the acquisition shall not reduce the number of Shares available for Awards
under the Plan.
b)
Type of Shares. Stock delivered by the Company under the Plan may be authorized but unissued Stock or previously
issued Stock acquired by the Company. No fractional Shares will be delivered under the Plan.
c)
ISO Limit. The maximum number of Shares that may be delivered in satisfaction of ISOs under the Plan shall be two
million (2,000,000) shares.
d)
Non-Employee Director Limits. The maximum number of Shares that may be delivered in satisfaction of Awards granted
during a single fiscal year under the Plan, or under any other equity plan maintained by the Company, to any Outside Director, taken
together with any cash fees payable to such Outside Director during the fiscal year, may not exceed three hundred thousand dollars
($300,000) in total value, provided, however, that in the case of an Outside Director who is newly appointed to the Board, the
maximum amount payable to such Outside Director in his or her first year as an Outside Director may be up to 50% greater than the
maximum amount set forth in this sentence. The value of any Award for purposes of this Section 4(e) shall be determined by reference
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to the grant date fair value of such Award used by the Company for financial reporting purposes and shall exclude the value of any
dividends or dividend equivalents paid pursuant to an Award granted in a prior fiscal year.
5.
ELIGIBILITY AND PARTICIPATION
The Administrator will select Participants from among those key Employees, Outside Directors, and consultants and advisors to,
the Company or its Affiliates who, in the opinion of the Administrator, are in a position to make a significant contribution to the
success of the Company and its Affiliates. Eligibility for ISOs is limited to employees of the Company or of a “parent corporation” or
“subsidiary corporation” of the Company as those terms are defined in Section 424 of the Code.
6.
RULES APPLICABLE TO AWARDS
a)
All Awards
1.
Award Provisions. The Administrator will determine the terms of all Awards, subject to the limitations provided
herein. By accepting any Award granted hereunder, the Participant agrees to the terms of the Award and the Plan.
Notwithstanding any provision of this Plan to the contrary, awards of an acquired company that are converted, replaced or
adjusted in connection with the acquisition may contain terms and conditions that are inconsistent with the terms and conditions
specified herein, as determined by the Administrator.
2.
Term of Plan. No Awards may be made after May 8, 2033, but previously granted Awards may continue beyond
that date in accordance with their terms.
3.
Transferability. ISOs may not be transferred other than by will or the laws of descent and distribution and may be
exercised, during the lifetime of the Participant to whom they were awarded, only by that Participant. Other Awards may be
transferred during a Participant’s lifetime only on a gratuitous basis and then only to the extent, if any, determined by the
Administrator.
4.
Vesting, Etc. The Administrator may determine the time or times at which an Award will vest or become
exercisable and the terms on which an Award requiring exercise will remain exercisable. Without limiting the foregoing, the
Administrator may at any time accelerate the vesting or exercisability of an Award, regardless of any adverse or potentially
adverse tax consequences resulting from such acceleration. Unless the Administrator expressly provides otherwise, however,
the following rules will apply: immediately upon the cessation of the Participant’s Employment, each Award requiring exercise
that is then held by the Participant or by the Participant’s permitted transferees, if any, will cease to be exercisable and will
terminate, and all other Awards that are then held by the Participant or by the Participant’s permitted transferees, if any, to the
extent not already vested will be forfeited, except that:
A.
subject to (B) and (C) below, all Stock Options and SARs held by the Participant or the Participant’s
permitted transferees, if any, immediately prior to the cessation of the Participant’s Employment, to the extent then
exercisable, will remain exercisable for the lesser of (i) a period of three months or (ii) the period ending on the latest date
on which such Stock Option or SAR could have been exercised without regard to this Section 6(a)(4), and will thereupon
terminate;
B.
all Stock Options and SARs held by a Participant or the Participant’s permitted transferees, if any,
immediately prior to the Participant’s death, to the extent then exercisable, will remain exercisable for the lesser of (i) the
one year period ending with the first anniversary of the Participant’s death or (ii) the period ending on the latest date on
which such Stock Option or SAR could have been exercised without regard to this Section 6(a)(4), and will thereupon
terminate; and
C.
all Stock Options and SARs held by a Participant or the Participant’s permitted transferees, if any,
immediately prior to the cessation of the Participant’s Employment will immediately terminate upon such cessation if the
Administrator in its sole discretion determines that such cessation of Employment has resulted for reasons which cast such
discredit on the Participant as to justify immediate termination of the Award.
5.
Taxes. The Administrator will make such provision for the withholding of taxes as it deems necessary. The
Administrator may, but need not, hold back Shares from an Award or permit a Participant to tender previously owned Shares or
through broker-assisted sales of Shares underlying an Award in satisfaction of tax withholding requirements (but not in excess
of the maximum withholding required by law).
6.
Dividend Equivalents, Etc. The Administrator may provide for the payment of amounts in lieu of cash dividends or
other cash distributions with respect to Stock subject to an Award. Any entitlement to dividend equivalents or similar
entitlements shall be established and administered consistent either with exemption from, or compliance with, the requirements
of Section 409A to the extent applicable.
7.
Rights Limited. Nothing in the Plan will be construed as giving any person the right to continued employment or
service with the Company or its Affiliates, or any rights as a stockholder except as to Shares actually issued under the Plan. The
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loss of existing or potential profit in Awards will not constitute an element of damages in the event of termination of
Employment for any reason, even if the termination is in violation of an obligation of the Company or Affiliate to the
Participant.
8.
Performance Awards. In connection with the grant of Performance Awards to Participants, the Administrator shall
have the authority to grant any such Performance Awards with the following terms and conditions and with such additional
terms and conditions, in either case not inconsistent with the provisions of the Plan, as the Administrator shall determine:
A.
Performance Awards may be denominated as a number of Shares or units or a combination thereof and are
Awards which may be earned upon achievement or satisfaction of performance conditions, which may include any
Performance Criteria, specified by the Administrator. In addition, the Administrator may specify that any other Award
shall constitute a Performance Award by conditioning the grant to a Participant or the right of a Participant to exercise the
Award or have it settled, and the timing thereof, upon achievement or satisfaction of such performance conditions as may
be specified by the Administrator. Subject to the terms of the Plan, the performance goals to be achieved during any
Performance Period, the length of any Performance Period, the amount of any Performance Award granted and the
amount of any payment or transfer to be made pursuant to any Performance Award shall be determined by the
Administrator.
B.
If the Administrator determines that a change in the business, operations, corporate structure or capital
structure of the Company, or the manner in which the Company conducts its business, or other events or circumstances
render the performance objectives unsuitable, the Administrator may modify the performance objectives or the related
minimum acceptable level of achievement, in whole or in part, as the Administrator deems appropriate and equitable such
that it does not provide any undue enrichment or harm. Performance measures may vary from Performance Award to
Performance Award and from Participant to Participant, and may be established on a stand-alone basis, in tandem or in the
alternative. The Administrator shall have the power to impose such other restrictions on Awards subject to this Section
8(B) as it may deem necessary or appropriate to ensure that such Awards satisfy all requirements of any applicable law,
stock market or exchange rules and regulations or accounting or tax rules and regulations.
C.
Settlement of Performance Awards shall be in Shares, other Awards, other property, net settlement, or any
combination thereof, as determined in the discretion of the Administrator.
D.
A Performance Award shall not convey to the Participant the rights and privileges of a stockholder with
respect to the Share subject to the Performance Award, such as the right to vote (except as relates to Restricted Stock) or
the right to receive dividends, unless and until Shares are issued to the Participant to settle the Performance Award. The
Administrator, in its sole discretion, may provide that a Performance Award shall convey the right to receive dividend
equivalents on the Shares underlying the Performance Award with respect to any dividends declared during the period that
the Performance Award is outstanding, in which case, such dividend equivalent rights shall accumulate and shall be paid
in cash or Shares on the settlement date of the Performance Award, subject to the Participant’s earning of the Shares
underlying the Performance Awards with respect to which such dividend equivalents are paid upon achievement or
satisfaction of performance conditions specified by the Administrator. Shares delivered upon the vesting and settlement of
a Performance Award may be evidenced in such manner as the Administrator may deem appropriate, including book-
entry registration. For the avoidance of doubt, unless otherwise determined by the Administrator, no dividend equivalent
rights shall be provided with respect to any Shares subject to Performance Awards that are not earned or otherwise do not
vest or settle pursuant to their terms.
E.
The Administrator may, in its discretion, increase or reduce the amount of a settlement otherwise to be made
in connection with a Performance Award.
b)
Awards Requiring Exercise
1.
409A Exemption. Except as the Administrator otherwise determines, no Award requiring exercise shall have
deferral features, or shall be administered in a manner, that would cause such Award to fail to qualify for exemption from
Section 409A.
2.
Time And Manner Of Exercise. Unless the Administrator expressly provides otherwise, an Award requiring
exercise by the holder will not be deemed to have been exercised until the Administrator receives a notice of exercise (in form
acceptable to the Administrator) signed by the appropriate person and accompanied by any payment required under the Award.
If the Award is exercised by any person other than the Participant, the Administrator may require satisfactory evidence that the
person exercising the Award has the right to do so.
3.
Exercise Price. The exercise price (or the base value from which appreciation is to be measured) of each Award
requiring exercise shall be not less than 100% of the fair market value of the Stock subject to the Award, determined as of the
date of grant, or such higher amount as the Administrator may determine in connection with the grant. Fair market value shall be
determined by the Administrator consistent with the requirements of Section 422 and Section 409A, as applicable. No such
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Award, once granted, may be repriced other than in accordance with the applicable stockholder approval requirements of
Nasdaq.
4.
Payment Of Exercise Price. Where the exercise of an Award is to be accompanied by payment, the Administrator
may determine the required or permitted forms of payment, subject to the requirements of this paragraph. All payments will be
by cash or check acceptable to the Administrator, or, if so permitted by the Administrator and if legally permissible, (i) through
the delivery of Shares that have been outstanding for at least six months (unless the Administrator approves a shorter period)
and that have a fair market value equal to the exercise price, (ii) by delivery to the Company of a promissory note of the person
exercising the Award, payable on such terms as are specified by the Administrator, (iii) through a broker-assisted exercise
program acceptable to the Administrator, (iv) through withholding by the Company of Shares otherwise issuable upon exercise
of the Award, with such withheld shares to be applied to the applicable exercise price based on the then-existing fair market
value of the shares, (v) by other means acceptable to the Administrator, or (vi) by any combination of the foregoing permissible
forms of payment. The delivery of shares in payment of the exercise price under clause (i) above may be accomplished either
by actual delivery or by constructive delivery through attestation of ownership, subject to such rules as the Administrator may
prescribe.
5.
In the case of an ISO granted to an owner of stock (as determined by Section 424(d) of the Code) possessing more
than ten percent (10%) of the voting power of all classes of stock of the Company or of a “parent corporation or “subsidiary
corporation” of the Company (as those terms are defined in Section 424(d) of the Code), the exercise price shall be no less than
110% of the fair market value of the Stock subject to the ISO, determined as of the date of grant, and the term of the ISO shall
be no more than five (5) years from the date of grant.
c)
Awards Not Requiring Exercise
Restricted Stock and Unrestricted Stock, whether delivered outright or under Awards of Stock Units or other Awards that do not
require exercise, may be made in exchange for such lawful consideration, including services, as the Administrator determines. Any
Award resulting in a deferral of compensation subject to Section 409A shall be construed to the maximum extent possible, as
determined by the Administrator, consistent with the requirements of Section 409A.
7.
EFFECT OF CERTAIN TRANSACTIONS
a) Mergers, etc. Except as otherwise provided in an Award, the following provisions shall apply in the event of a Covered
Transaction:
1.
Assumption or Substitution. If the Covered Transaction is one in which there is an acquiring or surviving entity, the
Administrator may provide for the assumption of some or all outstanding Awards or for the grant of new awards in substitution
therefor by the acquiror or survivor or an affiliate of the acquiror or survivor. Any substitution or assumption of a Stock Option
or SAR exempt from the requirements of Section 409A shall be accomplished on a basis that preserves such exemption.
2.
Cash-Out of Awards. If the Covered Transaction is one in which holders of Stock will receive upon consummation
a payment (whether cash, non-cash or a combination of the foregoing), the Administrator may provide for payment (a “cash-
out”), with respect to some or all Awards or portions thereof, equal in the case of each affected Award or portion thereof to the
excess, if any, of (A) the fair market value of one share of Stock (as determined by the Administrator in its reasonable
discretion) times the number of shares of Stock subject to the Award or such portion, over (B) the aggregate exercise or
purchase price, if any, under the Award or such portion (in the case of a SAR, the aggregate base price above which
appreciation is measured), in each case on such payment terms (which need not be the same as the terms of payment to holders
of Stock) and other terms, and subject to such conditions, as the Administrator determines.
3.
Acceleration of Certain Awards. If the Covered Transaction (whether or not there is an acquiring or surviving
entity) is one in which there is no assumption, substitution or cash-out, each Award requiring exercise will become fully
exercisable, and the delivery of shares of Stock deliverable under each outstanding Award of Stock Units (including Restricted
Stock Units and Performance Awards to the extent consisting of Stock Units) will be accelerated and such shares will be
delivered, prior to the Covered Transaction, in each case on a basis that gives the holder of the Award a reasonable opportunity,
as determined by the Administrator, following exercise of the Award or the delivery of the shares, as the case may be, to
participate as a stockholder in the Covered Transaction.
4.
Termination of Awards Upon Consummation of Covered Transaction. Each Award (unless assumed pursuant to
Section 7(a)(1) above), other than outstanding shares of Restricted Stock (which shall be treated in the same manner as other
shares of Stock, subject to Section 7(a)(5) below), will terminate upon consummation of the Covered Transaction.
5.
Additional Limitations. Any share of Stock delivered pursuant to Section 7(a)(2) or Section 7(a)(3) above with
respect to an Award may, in the discretion of the Administrator, contain such restrictions, if any, as the Administrator deems
appropriate to reflect any performance or other vesting conditions to which the Award was subject. In the case of Restricted
Stock, the Administrator may require that any amounts delivered, exchanged or otherwise paid in respect of such Stock in
A-4
connection with the Covered Transaction be placed in escrow or otherwise made subject to such restrictions as the
Administrator deems appropriate to carry out the intent of the Plan.
b)
Change in and Distributions With Respect to Stock.
1.
Basic Adjustment Provisions. In the event of a stock dividend, stock split or combination of shares (including a
reverse stock split), recapitalization or other change in the Company’s capital structure, the Administrator will make appropriate
adjustments to the maximum number of shares specified in Section 4(a) that may be delivered under the Plan, to the maximum
share limits described in Section 4(c), and to the maximum ISO limit in Section 4(d), and will also make appropriate
adjustments to the number and kind of shares of stock or securities subject to Awards then outstanding or subsequently granted,
any exercise prices relating to Awards and any other provision of Awards affected by such change.
2.
Certain Other Adjustments. The Administrator may also make adjustments of the type described in Section 7(b)(1)
above to take into account distributions to stockholders other than those provided for in Section 7(a) and 7(b)(1), or any other
event, if the Administrator determines that adjustments are appropriate to avoid distortion in the operation of the Plan and to
preserve the value of Awards made hereunder, having due regard for the qualification of ISOs under Section 422, the
requirements of Section 409A, and the performance-based compensation rules of Section 162(m), where applicable.
3.
Continuing Application of Plan Terms. References in the Plan to Shares will be construed to include any stock or
securities resulting from an adjustment pursuant to this Section 7.
8.
LEGAL CONDITIONS ON DELIVERY OF STOCK
The Company will not be obligated to deliver any Shares pursuant to the Plan or to remove any restriction from Shares
previously delivered under the Plan until: (i) the Company is satisfied that all legal matters in connection with the issuance and
delivery of such shares have been addressed and resolved; (ii) if the outstanding Stock is at the time of delivery listed on any stock
exchange or national market system, the shares to be delivered have been listed or authorized to be listed on such exchange or system
upon official notice of issuance; and (iii) all conditions of the Award have been satisfied or waived. If the sale of Stock has not been
registered under the Securities Act of 1933, as amended, the Company may require, as a condition to exercise of the Award, such
representations or agreements as counsel for the Company may consider appropriate to avoid violation of such Act. The Company
may require that certificates evidencing Stock issued under the Plan bear an appropriate legend reflecting any restriction on transfer
applicable to such Stock, and the Company may hold the certificates pending lapse of the applicable restrictions.
9.
AMENDMENT AND TERMINATION
The Administrator may at any time or times amend the Plan or any outstanding Award for any purpose which may at the time be
permitted by law, and may at any time terminate the Plan as to any future grants of Awards; provided, that except as otherwise
expressly provided in the Plan the Administrator may not, without the Participant’s consent, alter the terms of an Award so as to affect
adversely the Participant’s rights under the Award, unless the Administrator expressly reserved the right to do so at the time of the
Award. Any amendments to the Plan shall be conditioned upon stockholder approval only to the extent, if any, such approval is
required by law (including the Code and applicable stock exchange or Nasdaq requirements), as determined by the Administrator. To
the extent any amendment effected pursuant to the amendments made to the Plan in connection with this amendment and restatement
of the Plan in 2023 adversely affect a Participant’s rights under an Award that was outstanding prior to the effective date of such
amendment and restatement, any such amendment shall not apply to any such Award to the minimum extent necessary to avoid such
adverse impact, in each case as determined by the Administrator in its sole discretion.
10. OTHER COMPENSATION ARRANGEMENTS
The existence of the Plan or the grant of any Award will not in any way affect the Company’s right to award a person bonuses
or other compensation in addition to Awards under the Plan.
11. MISCELLANEOUS
a. Waiver of Jury Trial. By accepting an Award under the Plan, each Participant waives any right to a trial by jury in any
action, proceeding or counterclaim concerning any rights under the Plan and any Award, or under any amendment, waiver, consent,
instrument, document or other agreement delivered or which in the future may be delivered in connection therewith, and agrees that
any such action, proceedings or counterclaim shall be tried before a court and not before a jury. By accepting an Award under the
Plan, each Participant certifies that no officer, representative, or attorney of the Company has represented, expressly or otherwise, that
the Company would not, in the event of any action, proceeding or counterclaim, seek to enforce the foregoing waivers.
b.
Limitation of Liability. Notwithstanding anything to the contrary in the Plan, neither the Company, any Affiliate, nor the
Administrator, nor any person acting on behalf of any of them, shall be liable to any Participant or to the estate or beneficiary of any
Participant or to any other holder of an Award by reason of any acceleration of income, or any additional tax, asserted by reason of the
failure of an Award to satisfy the requirements of Section 422 or Section 409A or by reason of Section 4999 of the Code; provided,
A-5
that nothing in this Section 11(b) shall limit the ability of the Administrator or the Company to provide by separate express written
agreement with a Participant for a gross-up payment or other payment in connection with any such tax or additional tax.
c.
Section 409A of the Code. With respect to Awards subject to Section 409A of the Code, the Plan is intended to comply
with the requirements of Section 409A of the Code, and the provisions of the Plan and any Award Agreement shall be interpreted in a
manner that satisfies the requirements of Section 409A of the Code, and the Plan shall be operated accordingly. If any provision of the
Plan or any term or condition of any Award would otherwise frustrate or conflict with this intent, the provision, term or condition shall
be interpreted and deemed amended so as to avoid this conflict. Notwithstanding anything in the Plan to the contrary, if the Board
considers a Participant to be a “specified employee” under Section 409A of the Code at the time of such Participant’s “separation from
service” (as defined in Section 409A of the Code), and any amount hereunder is “deferred compensation” subject to Section 409A of
the Code, any distribution of such amount that otherwise would be made to such Participant with respect to an Award as a result of
such “separation from service” shall not be made until the date that is six months after such “separation from service,” except to the
extent that earlier distribution would not result in such Participant’s incurring interest or additional tax under Section 409A of the
Code. If an Award includes a “series of installment payments” (within the meaning of Section 1.409A -2(b)(2)(iii) of the Treasury
Regulations), the Participant’s right to such series of installment payments shall be treated as a right to a series of separate payments
and not as a right to a single payment, and if an Award includes “dividend equivalents” (within the meaning of Section 1.409A -3(e)
of the Treasury Regulations), the Participant’s right to such dividend equivalents shall be treated separately from the right to other
amounts under the Award. Notwithstanding the foregoing, the tax treatment of the benefits provided under the Plan or any Award
Agreement is not warranted or guaranteed, and in no event shall the Company be liable for all or any portion of any taxes, penalties,
interest or other expenses that may be incurred by any Participant on account of non-compliance with Section 409A of the Code.
d.
Effective Date of the Amended and Restated Plan. The most recently amended and restated version of the Plan was
approved by the Board on March 23, 2023. The amended and restated version of the Plan shall become effective as, and subject to, its
approval by the stockholders of the Company. If the Plan is not approved by the stockholders of the Company, the amended and
restated version of the Plan will not become effective.
e.
Data Protection. By participating in the Plan, the Participant consents to the holding and processing of personal
information provided by the Participant to the Company or any of its Affiliates, trustee or third party service provider, for all purposes
relating to the operation of the Plan. These include:
1.
2.
administering and maintaining Participant records;
providing information to the Company, any Subsidiary, trustees of any employee benefit trust, registrars, brokers or
third party administrators of the Plan;
3.
providing information to future purchasers or merger partners of the Company or any of its Affiliates, or the
business in which the Participant works; and
4.
transferring information about the Participant to any country or territory that may not provide the same protection
for the information as the Participant’s home country.
f.
Clawback. Notwithstanding any provision herein to the contrary, Awards and shares of Stock (and proceeds therefrom)
obtained pursuant to or on exercise of such Awards hereunder are subject to forfeiture, setoff, recoupment or other recovery if the
Administrator determines in good faith that such action is required by applicable law or Company policy.
g.
Successors and Assigns. The terms of the Plan shall be binding upon and inure to the benefit of the Company and any
successor entity, including any successor entity contemplated by Section 7(a).
h.
Governing Law. The Plan and each Award Agreement shall be governed by the laws of the State of Delaware, without
application of the conflicts of law principles thereof.
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EXHIBIT A
Definition of Terms
The following terms, when used in the Plan, will have the meanings and be subject to the provisions set forth below:
“Administrator”: The Compensation Committee, except that the Compensation Committee may delegate (i) to one or more of
its members such of its duties, powers and responsibilities as it may determine; (ii) to one or more officers of the Company the power
to grant rights or options to the extent permitted by Section 157(c) of the Delaware General Corporation Law; (iii) to one or more
officers of the Company the authority to allocate other Awards among such persons (other than officers of the Company) eligible to
receive Awards under the Plan as such delegated officer or officers determine consistent with such delegation; provided, that with
respect to any delegation described in this clause (iii) the Compensation Committee (or a properly delegated member or members of
such Committee) shall have authorized the issuance of a specified number of Shares under such Awards and shall have specified the
consideration, if any, to be paid therefor; and (iv) to such Employees or other persons as it determines such ministerial tasks as it
deems appropriate. Unless the Board shall determine otherwise, and to the extent necessary to comply with applicable law, each
member of the Compensation Committee shall also satisfy the requirements of “non-employee director” for purposes of Rule 16b-3 of
the Securities Exchange Act of 1934. The Board may designate one or more directors as a subcommittee who may act for the
Compensation Committee if necessary to satisfy the requirements of the prior sentence. In the event of any delegation described in the
preceding sentence, the term “Administrator” shall include the person or persons so delegated to the extent of such delegation.
“Affiliate”: Any corporation or other entity that stands in a relationship to the Company that would result in the Company and
such corporation or other entity being treated as one employer under Section 414(b) or Section 414(c) of the Code, except that in
determining eligibility for the grant of a Stock Option or SAR by reason of service for an Affiliate, Sections 414(b) and 414(c) of the
Code shall be applied by substituting “at least 50%” for “at least 80%” under Section 1563(a)(1), (2) and (3) of the Code and Treas.
Regs. § 1.414(c)-2; provided, that to the extent permitted under Section 409A, “at least 20%” shall be used in lieu of “at least 50%”;
and further provided, that the lower ownership threshold described in this definition (50% or 20% as the case may be) shall apply only
if the same definition of affiliation is used consistently with respect to all compensatory stock options or stock awards (whether under
the Plan or another plan). The Company may at any time by amendment provide that different ownership thresholds (consistent with
Section 409A) apply. Notwithstanding the foregoing provisions of this definition, except as otherwise determined by the
Administrator, a corporation or other entity shall be treated as an Affiliate only if its employees would be treated as employees of the
Company for purposes of the rules promulgated under the Securities Act of 1933, as amended, with respect to the use of Form S-8.
“Award”: Any or a combination of the following:
(i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
Stock Options.
SARs.
Restricted Stock.
Unrestricted Stock.
Stock Units, including Restricted Stock Units.
Performance Awards.
Awards (other than Awards described in (i) through (vi) above) that are convertible into or otherwise based on Stock.
“Award Agreement”: any agreement, contract or other instrument or document (including in electronic form) evidencing any
Award granted under the Plan, which may, but need not, be executed or acknowledged by a Participant.
“Board”: The Board of Directors of the Company.
“Code”: The U.S. Internal Revenue Code of 1986 as from time to time amended and in effect, or any successor statute as from
time to time in effect.
“Compensation Committee”: The Compensation and Nominating Committee of the Board.
“Company”: Forrester Research, Inc.
“Covered Transaction”: Any of (i) a consolidation, merger, or similar transaction or series of related transactions, including a
sale or other disposition of stock, in which the Company is not the surviving corporation or which results in the acquisition of all or
substantially all of the Company’s then outstanding common stock by a single person or entity or by a group of persons and/or entities
acting in concert, (ii) a sale or transfer of all or substantially all the Company’s assets, or (iii) a dissolution or liquidation of the
Company. Where a Covered Transaction involves a tender offer that is reasonably expected to be followed by a merger described in
clause (i) (as determined by the Administrator), the Covered Transaction shall be deemed to have occurred upon consummation of the
tender offer. Notwithstanding the foregoing, (A) no Covered Transaction shall be deemed to have occurred if there is consummated
A-7
any transaction or series of integrated transactions immediately following which the record holders of the Shares immediately prior to
such transaction or series of transactions continue to have substantially the same proportionate ownership in an entity which owns
substantially all of the assets of the Company immediately prior to such transaction or series of transactions, (B) to the extent an
Award is subject to Section 409A of the Code if and only to the extent required to comply with the requirements of Section 409A of
the Code, no event or circumstances described in any of clauses (i) through (iii) above shall constitute a Covered Transaction unless
such event or circumstances also constitute a change in the ownership or effective control of the Company, or in the ownership of a
substantial portion of the Company’s assets, as defined in Section 409A of the Code and (C) no Covered Transaction shall be deemed
to have occurred upon the acquisition of additional control of the Company by any person that is considered to effectively control the
Company. In no event will a Covered Transaction be deemed to have occurred if any Participant is part of a “group” within the
meaning of Section 13(d)(3) of the Exchange Act that effects a Covered Transaction. Terms used in the definition of a Covered
Transaction shall be as defined or interpreted in a manner consistent with Section 409A of the Code.
“Director”: Any member of the Board.
“Employee”: Any person who is employed by the Company or an Affiliate.
“Employment”: A Participant’s employment or other service relationship with the Company and its Affiliates. Employment
will be deemed to continue, unless the Administrator expressly provides otherwise, so long as the Participant is employed by, or
otherwise is providing services in a capacity described in Section 5 to the Company or its Affiliates. If a Participant’s employment or
other service relationship is with an Affiliate and that entity ceases to be an Affiliate, the Participant’s Employment will be deemed to
have terminated when the entity ceases to be an Affiliate unless the Participant transfers Employment to the Company or its remaining
Affiliates.
“Exchange Act”: the Securities Exchange Act of 1934, as amended from time to time, and the rules, regulations and guidance
thereunder. Any reference to a provision in the Exchange Act shall include any successor provision thereto.
“ISO”: A Stock Option intended to be an “incentive stock option” within the meaning of Section 422. Each option granted
pursuant to the Plan will be treated as providing by its terms that it is to be a non-incentive stock option unless, as of the date of grant,
it is expressly designated as an ISO.
“Original 2006 Plan Effective Date”: May 9, 2006, the date of the Company’s annual meeting of stockholders at which the
Plan was first presented to the stockholders for approval.
“Outside Director”: A member of the Board who is not otherwise an Employee of the Company.
“Participant”: A person who is granted an Award under the Plan.
“Performance Award”: An Award subject to Performance Criteria. The Administrator in its discretion may grant
Performance Awards that are intended to qualify for the performance-based compensation exception under Section 162(m) and
Performance Awards that are not intended so to qualify.
“Performance Criteria”: Specified criteria, other than the mere continuation of Employment or the mere passage of time, the
satisfaction of which is a condition for the grant, exercisability, vesting or full enjoyment of an Award. Performance Criteria may,
subject to the prior sentence of this definition, consist of any business criteria or other measures of performance as may be deemed
appropriate by the Administrator, including, but not limited to, objectively or subjectively determinable measures of performance
relating to any or any combination of the following (measured either absolutely or by reference to an index or indices and determined
either on a consolidated basis or, as the context permits, on a divisional, subsidiary, line of business, project or geographical basis or in
combinations thereof): bookings; sales; revenues; operating income or operating margin; assets; expenses; earnings before or after
deduction for all or any portion of interest, taxes, depreciation, or amortization, whether or not on a continuing operations or an
aggregate or per share basis; return on equity, investment, capital or assets; one or more operating ratios; borrowing levels, leverage
ratios or credit rating; market share; capital expenditures; cash flow; stock price; stockholder return; sales of particular products or
services; customer acquisition or retention; acquisitions and divestitures (in whole or in part); joint ventures and strategic alliances;
spin-offs, split-ups and the like; reorganizations, recapitalizations, restructurings, financings (issuance of debt or equity) or
refinancings; or strategic business criteria, which may include one or more objectives based on meeting specified revenue, market
penetration, geographic business expansion goals, cost targets, or objective goals relating to reorganizations, acquisitions, divestitures,
market share, debt reduction, customer growth, long-term client value growth, research and development achievements, regulatory
compliance and achievements (including submitting or filing applications or other documents with regulatory authorities or receiving
approval of any such applications or other documents), strategic partnerships or transactions and co-development, co-marketing, profit
sharing, joint venture or other similar arrangements, implementation, completion or attainment of measurable objectives with respect
to research, development; or other measures (including, but not limited to, gross profits, economic profit, comparisons with various
A-8
stock market indices, cost of capital or assets under management, improvements in capital structure, days sales outstanding, sales
performance, sales quota attainment, cross-sales, recurring sales, one-time sales, net new sales, cancellations, retention rates, new
benchmark mandates, new exchange traded fund launches, financing and other capital raising transactions (including sales of the
Company’s equity or debt securities); factoring transactions; sales or licenses of the Company’s assets, including its intellectual
property, whether in a particular jurisdiction or territory or globally; or through partnering transactions). Performance Criteria and any
targets with respect thereto determined by the Administrator need not be based upon an increase, a positive or improved result or
avoidance of loss. The measures used in setting Performance Criteria under the Plan for any given Award may, to the extent
applicable, be determined either in accordance with generally accepted accounting principles (“GAAP”) or not in accordance with
GAAP, without regard to (1)unusual or infrequent events, (2) the impact of any change in accounting principles that occurs during the
Performance Period (or that occurred during any period that the Performance Period is being compared to) and the cumulative effect
thereof (provided that the Administrator may (as specified by the Administrator within the Applicable Period) either apply the
changed accounting principle to all periods referenced in the Award, or exclude the changed accounting principle from all periods
referenced in the Award), (3) goodwill and other intangible impairment and/or amortization charges, (4) gains or charges associated
with discontinued operations or with the obtaining or losing control of a business, (5) gains or charges related to the sale or
impairment of assets, (6)(i) all transaction costs directly related to reorganizations, acquisitions and/or divestitures, (ii) all
restructuring charges directly related to reorganizations, acquisitions and/or divestitures, (iii) all charges and gains arising from the
resolution of contingent liabilities related to a reorganization, acquisition and/or divestiture, and (iv) all other charges directly related
to acquisitions, (7) the impact of any discrete income tax charges or benefits identified during the Performance Period (or during any
period that the Performance Period is being compared to), (8) stock based compensation, (9) gains or losses on investments, (10)
duplicate lease costs, (11) other objective income, expense, asset, and/or cash flow adjustments as may be consistent with the purposes
of the Performance Criteria set for the given Performance Period and specified by the Administrator within the Applicable Period, and
(12) the tax effects of the foregoing; and provided further that the Administrator in its sole discretion and within the Applicable Period
may determine that any or all of the carve-outs described in subsections (1) through (12) shall not be excluded from the measures used
to determine the Performance Criteria for a particular Performance Period or shall be modified, and/or may determine to exclude other
items from such measures for such Performance Period.
“Performance Period”: a period for which Performance Criteria are set and during which performance is to be measured to
determine whether a participant is entitled to payment of an Award under the Plan. A Performance Period may coincide with one or
more complete or partial calendar or fiscal years or quarters of the Company. Unless otherwise designated by the Administrator, the
Performance Period will be based on the calendar year.
“Plan”: Forrester Research, Inc. Amended and Restated Equity Incentive Plan as from time to time amended and in effect.
“Prior Plan”: Forrester Research, Inc. 1996 Amended and Restated Equity Incentive Plan, as amended and restated and in
effect prior to the Original 2006 Plan Effective Date.
“Restricted Stock”: Stock subject to restrictions requiring that it be redelivered or offered for sale to the Company if specified
conditions are not satisfied.
“Restricted Stock Unit”: A Stock Unit that is, or as to which the delivery of Stock or cash in lieu of Stock is, subject to the
satisfaction of specified performance or other vesting conditions.
“SAR”: A right entitling the holder upon exercise to receive an amount (payable in Shares of equivalent value) equal to the
excess of the fair market value of the Shares subject to the right over the fair market value of such shares at the date of grant.
“Section 409A”: Section 409A of the Code.
“Section 422”: Section 422 of the Code.
“Section 162(m)”: Section 162(m) of the Code.
“Share”: a share of Stock.
“Stock”: Common Stock of the Company, par value $.01 per share.
“Stock Option”: An option entitling the holder to acquire Shares upon payment of the exercise price.
“Stock Unit”: An unfunded and unsecured promise, denominated in Shares, to deliver Stock or cash measured by the value of
Stock in the future.
“Unrestricted Stock”: Stock not subject to any restrictions under the terms of the Award.
A-9
Annual Meeting
Forrester’s annual meeting of stockholders
will be held at 10 a.m. EDT on May 9,
2023, online at virtualshareholdermeeting.com/FORR2023.
Investor Relations
Requests for financial information should
be sent to:
Investor Relations
Forrester Research, Inc.
60 Acorn Park Drive
Cambridge, MA 02140
USA
Tel: +1 617.613.6000
Fax: +1 617.613.5000
Email: investor@forrester.com
Transfer Agent
Computershare Investor Services
P.O. Box 30170
College Station, TX 77842-3170
www.computershare.com/investor
Independent Registered
Public Accounting Firm
PricewaterhouseCoopers LLP
Boston, MA
Legal Counsel
Choate Hall & Stewart LLP
Boston, MA
Stock Listing And Trading Symbol
Forrester’s common stock is listed on the
Nasdaq Global Select Market under the
trading symbol “FORR.”
Corporate Headquarters
Forrester Research, Inc.
60 Acorn Park Drive
Cambridge, MA 02140
USA
Tel: +1 617.613.6000
Fax: +1 617.613.5000
www.forrester.com
©2023 Forrester Research, Inc. All rights reserved.
Reproduction in any form without prior written
permission is forbidden.
COMPANY INFORMATION
Board Of Directors
George F. Colony
Chairman of the Board and
Chief Executive Officer
Jean M. Birch
Former Chief Executive Officer,
Papa Murphy’s Holdings, Inc.
David Boyce
Investor and Advisor
on Product-led Growth
Neil Bradford
Chief Executive Officer,
General Index Limited
Anthony Friscia
Founder and Former President and CEO,
AMR Research, Inc.
Robert M. Galford
Managing Partner, Center for
Leading Organizations
Warren Romine
Founder and Managing Director,
Orchard Knob Capital LLC
Gretchen G. Teichgraeber
Chair of the Board,
Leadership Connect
Yvonne Wassenaar
Former Chief Executive Officer,
Puppet, Inc.
Executive Officers
George F. Colony
Chairman of the Board and
Chief Executive Officer
Ryan D. Darrah
Chief Legal Officer and Secretary
L. Christian Finn
Chief Financial Officer
Carrie Johnson
Chief Product Officer
Mike Kasparian
Chief Information Officer
Sharyn Leaver
Chief Research Officer
Sarah Le Roy
Chief People Officer
Shirley Macbeth
Chief Marketing Officer
Steven Peltzman
Chief Business Technology Officer
Nate Swan
Chief Sales Officer