SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
FILED BY THE REGISTRANT [X] FILED BY A PARTY OTHER THAN THE REGISTRANT [ ]
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FORRESTER RESEARCH, INC.
(Name of Registrant as Specified In Its Charter)
NOT APPLICABLE
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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FORRESTER RESEARCH, INC.
400 TECHNOLOGY SQUARE
CAMBRIDGE, MASSACHUSETTS 02139
GEORGE F. COLONY
CHAIRMAN OF THE BOARD
AND CHIEF EXECUTIVE OFFICER
April 12, 2002
To Our Stockholders:
You are cordially invited to attend the 2002 Annual Meeting of Stockholders
of Forrester Research, Inc., which will be held on Tuesday, May 14, 2002, at the
offices of Ropes & Gray, One International Place, Boston, Massachusetts at 10:00
a.m. (local time).
On the following pages, you will find the formal notice of the Annual
Meeting and our proxy statement. When you have finished reading the proxy
statement, please promptly mark, sign, date, and return the enclosed proxy card
to ensure that your shares will be represented.
We hope that many of you will be able to attend in person. I look forward
to seeing you there.
Sincerely yours,
/s/ George F. Colony
GEORGE F. COLONY
Chairman of the Board
and Chief Executive Officer
FORRESTER RESEARCH, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
MAY 14, 2002
Notice is hereby given that the Annual Meeting of Stockholders of Forrester
Research, Inc. will be held at the offices of Ropes & Gray, One International
Place, Boston, Massachusetts at 10:00 a.m. (local time) on Tuesday, May 14, 2002
for the following purposes:
1. To elect two Class I directors to serve until the 2005 Annual Meeting
of Stockholders;
2. To approve an increase in the number of shares of common stock
available for purchase under Forrester's 1996 Employee Stock Purchase
Plan;
3. To approve an increase in the number of shares of common stock
available for issuance under Forrester's Amended and Restated 1996
Stock Option Plan for Non-Employee Directors; and
4. To transact such other business as may properly come before the meeting
and any adjournments thereof.
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 April 2, 2002 are
entitled to notice of and to vote at the meeting. If you are unable to be
present personally, please sign and date the enclosed proxy and return it
promptly in the enclosed envelope.
By Order of the Board of Directors
TIMOTHY J. MOYNIHAN, ESQ.
Secretary
Cambridge, Massachusetts
April 12, 2002
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE MEETING. PLEASE SIGN AND
RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE WHETHER OR NOT YOU PLAN TO
ATTEND THE MEETING IN PERSON.
FORRESTER RESEARCH, INC.
ANNUAL MEETING OF STOCKHOLDERS
MAY 14, 2002
PROXY STATEMENT
The Board of Directors of Forrester Research, Inc., a Delaware corporation,
is soliciting the enclosed proxy from our stockholders. The proxy will be used
at our 2002 Annual Meeting of Stockholders and at any adjournments thereof. You
are invited to attend the meeting to be held at 10:00 a.m. (local time) on
Tuesday, May 14, 2002 at the offices of Ropes & Gray, One International Place,
Boston, Massachusetts. This proxy statement is being mailed to stockholders on
or about April 12, 2002.
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" and refer to our fiscal year which began on January 1,
2001 and ended on December 31, 2001 as "fiscal 2001."
WHO MAY ATTEND AND VOTE?
Stockholders who owned our common stock at the close of business on April
2, 2002 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 23,281,340 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, you may vote:
- In person. If you attend the meeting, you may deliver your completed
proxy card in person or fill out and return a ballot that will be
supplied to you at the meeting.
- By Mail. If you choose to vote by mail, simply mark your proxy card,
date and sign it, and return it in the postage-paid envelope provided.
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 sign and return the proxy card 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 as you direct on the proxy card. 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
director, "FOR" the approval of an increase in the number of shares of common
stock available for purchase under our 1996 Employee Stock Purchase Plan, and
"FOR" the approval of an increase in the number of shares of common stock
available for issuance under our Amended and Restated 1996 Stock Option Plan for
Non-Employee Directors.
WHAT DOES THE BOARD OF DIRECTORS RECOMMEND?
The Board recommends that you vote:
- FOR the election of the two nominees for Class I directors identified in
Proposal One;
- FOR the increase in the number of shares of common stock available for
purchase under our 1996 Employee Stock Purchase Plan; and
- FOR the increase in the number of shares of common stock available for
issuance under our Amended and Restated 1996 Stock Option Plan for
Non-Employee Directors.
If you 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.
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 Class I directors at the meeting who receive the
greatest number of votes properly cast for the election of directors will be
elected. In the election of Class I directors, votes may be cast in favor of or
withheld with respect to any or all nominees; votes that are withheld will be
excluded entirely from the vote and will have no effect on the outcome of the
vote. The approval of the increase in the number of shares of common stock
available for purchase under our 1996 Employee Stock Purchase Plan and the
increase in the number of shares of common stock available for issuance under
our Amended and Restated 1996 Stock Option Plan for Non-Employee Directors
requires the affirmative vote of a majority of the shares present or represented
by proxy and entitled to vote.
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. Shares indicating an abstention and shares indicating
a broker non-vote, however, will not constitute votes cast at the meeting and
thus will have no effect on the outcome.
If you hold shares in "street name" (that is, through a bank, broker or
other nominee), the bank, broker, or other nominee will provide you with
separate voting instructions on the form you receive from them. If you hold
shares in "street name" and would like to attend the annual meeting and vote in
person, you will need to bring an account statement or other acceptable evidence
of ownership of our common stock as of the close of business on the record date.
Alternatively, in order to vote, you may contact the person in whose name your
shares are registered and obtain a proxy card from that person and bring it to
the annual meeting.
MAY I CHANGE MY VOTE AFTER I RETURN MY PROXY CARD?
Yes. You may revoke a proxy any time before it is voted by:
- returning to us a newly signed proxy card bearing a later date;
- delivering a written instrument to our Secretary revoking the proxy card;
or
- attending the annual meeting and voting in person.
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 telegram 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.
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PROPOSAL ONE:
ELECTION OF DIRECTORS
Our Board of Directors is divided into three classes of approximately equal
size. The members of each class are elected to serve a three-year term with the
term of office of each class ending in successive years. George F. Colony and
Michael H. Welles are the Class I directors whose terms expire at this annual
meeting. The Board of Directors has nominated them to serve as Class I directors
until the 2005 annual meeting.
The proxies intend to vote each share for which a properly completed proxy
card has been returned and not revoked in favor of the Class I directors named
above. If you wish to withhold the authority to vote for the election of either
nominee, your returned proxy card must be marked to that effect.
It is expected that Mr. Colony and Mr. Welles will be able to serve, but if
either of them is unable to serve, the proxies reserve discretion to vote, or
refrain from voting, for a substitute nominee or nominees.
NOMINEES FOR CLASS I DIRECTORS -- TERMS EXPIRING 2005
George F. Colony, age 48, a Class I director, 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.
Michael H. Welles, age 47, a Class I director, became a director of
Forrester in November 1996. Since July 2000, Mr. Welles has served as vice
president and general manager of the platforms business with NMS Communications,
an OEM infrastructure supplier to the telecom industry. From May 1997 to June
2000, he served as vice president of news operations and engineering for
Individual.com, NewsEdge Corporation, and Individual, Inc., a group of solutions
companies, and from 1991 to 1997, he served as a general manager of Lotus
Development Corporation, a software company.
OUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE ELECTION OF EACH NOMINEE
NAMED ABOVE.
CLASS III DIRECTOR CONTINUING IN OFFICE UNTIL 2003
Robert M. Galford, age 49, a Class III director, became a director of
Forrester in November 1996. Mr. Galford is currently managing partner of the
Center for Executive Development, an executive education provider, in Boston.
From 1999 to April 2001, he was the executive vice president and chief people
officer at Digitas, Inc., a technology and marketing services firm. From 1994 to
1999, he consulted to professional services firms and taught in the Executive
Programs at the Kellogg School of Management at Northwestern University and
Columbia University's Graduate School of Business. From 1993 to 1994, he taught
at Boston University. Prior to his work in executive education, Mr. Galford
served as vice president of the MAC Group from 1986 to 1991 and its successor
firm, Gemini Consulting, from 1991 to 1994, both of which are management
consulting firms.
CLASS II DIRECTORS CONTINUING IN OFFICE UNTIL 2004
Henk W. Broeders, age 49, a Class II director, became a director of
Forrester in May 1998. Mr. Broeders is currently Chairman of the Executive Board
of Cap Gemini N.V., a management consulting firm located in the Netherlands and
the Dutch subsidiary of the global CGEY organization. From 1992 to 1998, Mr.
Broeders served as a general manager of IQUIP Informatica B.V., a software
company located in the Netherlands.
George R. Hornig, age 47, a Class II director, became a director of
Forrester in November 1996. Mr. Hornig is currently a managing director at
Credit Suisse First Boston, an investment banking firm. From 1993 to 1998, he
served as an executive vice president of Deutsche Bank Americas Holding
Corporation, a diversified financial services holding company, and several of
its affiliated entities. He is also director of Unity Mutual Life Insurance
Company and U.S. Timberlands Company, L.P.
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INFORMATION WITH RESPECT TO BOARD OF DIRECTORS
BOARD MEETINGS AND COMMITTEES
Our Board of Directors held eight meetings during fiscal 2001. 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 is a member. The Board of
Directors currently has two standing committees, the Audit Committee and the
Compensation Committee. The Board of Directors does not have a Nominating
Committee or a committee performing similar functions.
Our Audit Committee consists of three members: George R. Hornig, Henk W.
Broeders, and Michael H. Welles, none of whom is an executive officer or
employee of Forrester. The Audit Committee held five meetings during fiscal
2001. The Audit Committee reviews our results of operations with our officers
responsible for accounting matters and, from time to time, meets with our
independent auditors. The Board of Directors has adopted a written charter with
respect to the Audit Committee's roles and responsibilities. See "Report of the
Audit Committee of the Board of Directors" on page 15 for more information.
Our Compensation Committee consists of two members: Robert M. Galford and
Michael H. Welles. The Compensation Committee held four meetings during fiscal
2001. The Compensation Committee, acting through our authorized officers,
administers our stock option plans, approves salaries and bonuses and other
compensation matters for our executive officers, and reviews annual compensation
for all other officers and significant employees. See "Report of the
Compensation Committee of the Board of Directors" on page 13 for more
information.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee consists of Messrs. Galford and Welles, neither
of whom is or has been an executive officer or employee of Forrester.
None of our executive officers serves:
(1) as a member of the compensation committee of any entity that has
one or more executive officers serving as a member of our
Compensation Committee;
(2) as a member of the board of directors of any entity that has one
or more executive officers serving as a member of our Compensation
Committee; or
(3) as a member of the executive compensation committee of any entity
that has one or more executive officers serving as a member of our
Board of Directors.
DIRECTOR COMPENSATION
EXPENSE REIMBURSEMENT
Members of our Board of Directors are reimbursed for their expenses
incurred in connection with attending any meeting.
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AMENDED AND RESTATED 1996 STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS
Under the Amended and Restated 1996 Stock Option Plan for Non-Employee
Directors, following each annual meeting of stockholders, our four existing
non-employee directors each receive an option to purchase 12,500 shares of our
common stock at an exercise price equal to the fair market value on the date of
grant. These options vest in four equal installments starting on the first
anniversary of the date of grant. After last year's annual meeting, our four
non-employee directors each received an option to purchase 12,500 shares of our
common stock at an exercise price of $26.50 per share, the fair market value of
our common stock on the date of last year's annual meeting. These options vest
in four equal installments starting on the first anniversary of the date of
grant. Each newly elected, non-employee director will receive an option to
purchase 6,000 shares of our common stock at an exercise price equal to the fair
market value of our common stock on the date he or she is first elected as a
director. These options vest in four equal installments commencing on the date
of grant and thereafter on the first, second, and third anniversaries of the
date of grant.
The Compensation Committee of the Board of Directors also has the authority
under the plan to grant options to non-employee directors in such amounts and on
such terms as it shall determine at the time of grant.
PROPOSAL TWO:
AMENDMENT TO THE 1996 EMPLOYEE
STOCK PURCHASE PLAN
The 1996 Employee Stock Purchase Plan (the "Stock Purchase Plan") is
intended to provide a method by which our eligible employees may use voluntary,
systematic payroll deductions to purchase shares of our common stock and thus
acquire an interest in the future of our company. A total of 400,000 shares of
common stock were initially available for purchase under the Stock Purchase
Plan. As of the record date, approximately 382,000 shares of common stock had
been purchased under the Stock Purchase Plan, and approximately 18,000 shares
remained available for purchase.
On January 29, 2002, our Board of Directors voted to increase the number of
shares of common stock available for purchase under the Stock Purchase Plan by
500,000 shares, subject to approval by our stockholders. Our Board of Directors
believes that the increase in the number of shares available for purchase under
the Stock Purchase Plan will allow us to attract and retain talented
professionals and help align our employees' incentives with the objective of
enhancing stockholder value.
The following summarizes the key features of the Stock Purchase Plan.
ADMINISTRATION
The Board of Directors, acting through our authorized officers, administers
the Stock Purchase Plan.
ELIGIBLE EMPLOYEES
Each employee (a) who has completed six months or more of continuous
employment with us, and (b) whose customary employment is more than 20 hours per
week, is eligible to participate in the Stock Purchase Plan. The number of
employees participating in the Stock Purchase Plan as of the record date, was
approximately 145.
MAXIMUM NUMBER OF SHARES
Currently, up to 400,000 shares of our common stock are available for
purchase under the Stock Purchase Plan, subject to adjustments for stock splits,
stock dividends, recapitalizations, mergers, consolidations, or other changes in
our common stock. Our Board of Directors approved and recommends that the
stockholders approve an increase of an additional 500,000 shares of our common
stock available for purchase under the Stock Purchase Plan.
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METHOD OF PARTICIPATION
An eligible employee may elect to participate in the Stock Purchase Plan by
executing and providing to us a payroll deduction authorization form at least 15
days prior to the first day of any six-month period in which eligible employees
are granted options (as defined below) under the Stock Purchase Plan. We refer
to this six-month period as the "option period." Such eligible employee then
becomes a "participant" on the first day of the option period and remains a
participant until his or her participation is terminated as provided in the
Stock Purchase Plan.
By completing a payroll deduction authorization form, each participant
designates a whole percentage of compensation to be withheld. The maximum amount
that may be withheld per option period is $10,000, and the percentage withheld
must not be less than 2% or more than 10% of compensation. During an option
period and upon written notice, a participant may decrease (but not increase)
the percentage -- by whole percentage points -- of compensation withheld. We
maintain a withholding account reflecting each participant's payroll deductions
during an option period.
At the beginning of each option period, a participant is granted the right
to purchase shares of our common stock under the Stock Purchase Plan. We refer
to this right as an "option." On the last day of the option period, the option
is deemed to be exercised for the number of whole shares equal to the quotient
obtained by dividing the balance in the participant's withholding account by the
purchase price of our common stock. The Stock Purchase Plan provides for a
purchase price of our common stock equal to the lesser of (a) 85% of the fair
market value of our common stock on the date of purchase (which is the last
business day of the applicable option period) or (b) 85% of the fair market
value on the first day of the applicable option period. The Stock Purchase Plan
defines fair market value as the closing price of our common stock on the
relevant day. As soon as practicable after the end of an option period, we issue
and deliver certificates representing the shares purchased under the stock
purchase plan.
CANCELLATION, WITHDRAWAL, AND TERMINATION
A participant who holds an option may cancel it at any time by written
notice. A participant may also terminate a payroll deduction at any time by
written notice. Upon any such cancellation or termination, the participant's
withholding account balance will be returned to the participant, without
interest. Once a participant cancels or terminates participation, he or she must
wait until a subsequent option period to rejoin the Stock Purchase Plan.
An eligible employee will cease to be a participant upon termination of
employment for any reason, and any option held by such participant under the
Stock Purchase Plan will be deemed cancelled. We will return the balance of the
withholding account to the participant, who will have no further rights under
the Stock Purchase Plan.
FEDERAL INCOME TAX ASPECTS OF THE STOCK PURCHASE PLAN
The Stock Purchase Plan is intended to qualify as an "employee stock
purchase plan" or ESPP under Section 423 of the Internal Revenue Code. The
following summary of certain federal income tax consequences assumes that the
Stock Purchase Plan so qualifies. The summary does not purport to be complete
and, among other things, does not discuss the income tax laws of any
municipality, state, or foreign country.
No taxable income results when a Stock Purchase Plan participation is
granted or exercises an option. If the participant disposes of the shares
acquired upon exercise more than two years after the date of grant of the option
and more than one year after exercise, of dies at any time while holding the
shares, the disposition will result in ordinary income equal to the lesser or
(i) 15% of the fair market value of the stock at the time the option was
granted, or (ii) the excess, if any, of the fair market value of the stock at
the time of disposition or death over the exercise price. We will not be
entitled to a deduction for this ordinary income amount. A participant who
disposes of the shares during the one-year or two-year holding periods described
above will have ordinary income in the year of the disposition equal to the
excess of the fair market value of the stock at the time the option was
exercised over the exercise price, and a corresponding deduction will be
available to
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us. Any additional gain, or any loss, recognized by the participant in
connection with the disposition will be taxable as a capital gain or loss,
long-term or short-term depending on the participant's holding period in the
shares.
The Internal Revenue Service has indicated that it will not assess FICA or
FUTA tax upon the exercise of an employee stock purchase plan option exercised
before January 1, 2003 or treat the disposition of shares acquired upon such an
exercise as requiring income tax withholding. These rules may change if
additional guidance proposed by the Internal Revenue Service is finalized or if
proposed legislation with respect to the employment tax treatment of statutory
options is enacted.
MARKET VALUE OF OUR COMMON STOCK
The closing price of our common stock, as reported on the Nasdaq National
Market on April 2, 2002, was $18.86 per share.
RECOMMENDATION AND VOTE
Our Board of Directors believes that the increase in the number of shares
available under the Stock Purchase Plan will promote the interests of the
stockholders and enable us to attract, retain and compensate employees.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE
STOCKHOLDERS VOTE TO APPROVE THE INCREASE IN THE NUMBER OF SHARES
OF COMMON STOCK AVAILABLE FOR PURCHASE
UNDER THE 1996 EMPLOYEE STOCK PURCHASE PLAN.
PROPOSAL THREE:
AMENDMENT TO THE AMENDED AND RESTATED 1996 STOCK OPTION
PLAN FOR NON-EMPLOYEE DIRECTORS
The Amended and Restated 1996 Stock Option Plan for Non-Employee Directors
(the "Director Plan") is designed to enhance our ability to attract and retain
non-employee directors who are in a position to make significant contributions
to our success by allowing them to become owners of our common stock. A total of
300,000 shares of common stock were initially available for issuance under the
Director Plan. As of the record date, 60,000 shares remained available for grant
under the Director Plan.
On January 29, 2002, our Board of Directors voted to increase the number of
shares of common stock available for issuance under the Director Plan by 300,000
shares, subject to approval by the stockholders. Our Board of Directors believes
that the increase in the number of shares available for issuance will allow us
to attract and retain talented directors and helps align our directors'
incentives with the objective of enhancing stockholder value.
The following summarizes the key features of the Director Plan.
ADMINISTRATION
The Compensation Committee administers the Director Plan.
ELIGIBLE PARTICIPANTS
Only directors who are not our employees are eligible to participate in the
Director Plan.
MAXIMUM NUMBER OF SHARES
Currently, up to 300,000 shares of our common stock were available for
issuance under the Director Plan, subject to adjustments for stock splits, stock
dividends, recapitalizations, or other changes in our common stock. As of the
record date, 60,000 shares remained available for issuance under the Director
Plan. Our Board
7
of Directors approved and recommends that the stockholders approve an increase
in the number of shares of our common stock available for issuance under the
Director Plan by 300,000 shares.
TYPES OF AWARDS
The Director Plan permits the Board of Directors to grant both formula
options and discretionary options.
- Formula Options. Each newly elected, non-employee director will receive
an option to purchase 6,000 shares of our common stock on the date he or
she is elected at an exercise price equal to the fair market value of our
common stock on the date of grant. These options become immediately
exercisable as to one-quarter of the shares on the date of grant and then
vest as to one-quarter of the shares of each of the first, second, and
third anniversaries of the date of grant. Additionally, following each
annual meeting of stockholders, each eligible director is awarded an
option to purchase 12,500 shares of our common stock at an exercise price
equal to the fair market value of our common stock on the date of the
grant. The Director Plan defines fair market value as the average of the
high and low sales price of our common stock on the date of grant. These
options vest in four equal installments, starting on the first
anniversary of the date of grant.
- Discretionary Options. The Compensation Committee also has the authority
to award options to purchase shares of our common stock in such amounts
and on such terms not inconsistent with the Director Plan as it shall
determine at the time of the award.
TERM OF OPTION
Options granted under the Director Plan have a term of ten years.
PLAN BENEFITS
The following table sets forth information with respect to the options that
will be granted under the Director Plan to our eligible directors immediately
after this year's annual meeting. As discussed above, our executive officers and
employees are not eligible for grants under the Director Plan.
<Table>
<Caption>
NUMBER OF
SHARES SUBJECT
TO OPTIONS
GRANTED UNDER
DIRECTOR THE DIRECTOR PLAN
- -------- -----------------
Henk W. Broeders............................................ 12,500
Robert M. Galford........................................... 12,500
George R. Hornig............................................ 12,500
Michael H. Welles........................................... 12,500
</Table>
TERMINATION AND AMENDMENT
Except as otherwise provided, if an eligible director ceases to be a
director of Forrester, all unvested options held by that director will terminate
and options that are vested on that date will continue to be exercisable for a
three-month period.
MERGERS AND SALE OF ASSETS
In the event of a consolidation or merger in which we are not the surviving
entity or a sale of substantially all of our assets to another entity, all
options granted under the Director Plan will terminate, provided that 20 days
prior to the effective date of the consolidation, merger, or sale of our assets,
all options granted under the Director Plan will become exercisable.
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FEDERAL INCOME TAX ASPECTS OF THE DIRECTOR PLAN
The following is a brief summary of the effect of U.S. federal income
taxation upon the eligible directors and Forrester with respect to the grant and
exercise of options under the Director Plan. This summary does not purport to be
complete, and, among other things, does not discuss the income tax laws of any
municipality, state, or foreign country.
Options granted under the Director Plan are nonstatutory stock options.
Generally, a director will not recognize taxable income at the time of grant of
a nonstatutory stock option. However, upon its exercise, the director will
recognize ordinary taxable income equal to the excess of the fair market value
of the shares at the time of exercise over the exercise price. Upon the
subsequent sale or exchange of such shares by the director, any difference
between the sale price and the director's tax basis (exercise price plus the
income recognized upon exercise), to the extent recognized as a gain or loss in
connection with the sale or exchange, will be treated as capital gain or loss,
long-term or short-term depending on the director's holding period in the
shares. A tax deduction will be available to us in the amount and at the time
that the director recognizes ordinary income with respect to shares acquired
upon exercise of a nonstatutory stock option.
MARKET VALUE OF OUR COMMON STOCK
The closing price of our common stock, as reported on the Nasdaq National
Market on April 2, 2002, was $18.86 per share.
RECOMMENDATION AND VOTE
Our Board of Directors believes that the increase in the number of shares
available under the Director Plan will promote the interests of the stockholders
and enable us to attract, retain, and reward directors.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE
STOCKHOLDERS VOTE TO APPROVE THE INCREASE IN THE NUMBER OF SHARES OF
COMMON STOCK AVAILABLE FOR ISSUANCE UNDER THE AMENDED AND RESTATED 1996 STOCK
OPTION PLAN FOR NON-EMPLOYEE DIRECTORS.
9
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table and notes provide information with respect to the
beneficial ownership of our outstanding common stock as of April 2, 2002 by:
(i) each person who we know beneficially owns more than 5% of our
common stock;
(ii) each of the executive officers named in the Summary Compensation
Table;
(iii) each member of our Board of Directors; and
(iv) 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.
<Table>
<Caption>
COMMON STOCK
BENEFICIALLY OWNED
----------------------------
SHARES PERCENTAGE OF
BENEFICIALLY OUTSTANDING
NAME OF BENEFICIAL OWNER OWNED(1) SHARES
- ------------------------ ------------ -------------
George F. Colony, c/o Forrester Research, Inc.,............. 8,264,743 35.5%
400 Technology Square,
Cambridge, MA, 02139(2)
Estate of William M. Bluestein, Ph.D.(3).................... 257,367 1.1%
Mary A. Modahl.............................................. -- *
Joel Blenner(4)............................................. 68,363 *
Susan Whirty Maffei, Esq.(5)................................ 114,250 *
Stanley H. Dolberg(6)....................................... 84,126 *
Emily Nagle Green(7)........................................ 94,134 *
Robert M. Galford(8)........................................ 25,358 *
Henk W. Broeders(9)......................................... 16,792 *
George R. Hornig(10)........................................ 14,125 *
Michael H. Welles(11)....................................... 48,466 *
Directors and executive officers as a group (18 persons).... 9,231,921 39.7%
</Table>
- ---------------
(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and includes voting or investment power
with respect to the shares. Shares subject to options exercisable currently
or within 60 days of April 2, 2002 are included as beneficially owned.
(2) Includes 1,580 shares held by Mr. Colony's wife as to which Mr. Colony
disclaims beneficial ownership. Includes 155,968 shares that are subject to
options Mr. Colony granted to six key employees.
(3) Includes 214,684 shares issuable on the exercise of options exercisable
currently or within 60 days which number includes 60,968 options granted by
Mr. Colony. Mr. Bluestein passed away on September 4, 2001, and
consequently, the rights associated with all of his stock options have
transferred to his estate.
(4) Includes 66,667 shares issuable on the exercise of options exercisable
currently or within 60 days.
(5) Includes 111,380 shares issuable on the exercise of options exercisable
currently or within 60 days.
(6) Includes 83,333 shares issuable on the exercise of options exercisable
currently or within 60 days.
(7) Includes 77,998 shares issuable on the exercise of options exercisable
currently or within 60 days.
(8) Includes 2,400 shares held in trust for Mr. Galford's children as to which
Mr. Galford disclaims beneficial ownership and 22,958 shares issuable on
the exercise of options exercisable currently or within 60 days.
(9) Includes 16,792 shares issuable on the exercise of options exercisable
currently or within 60 days.
10
(10) Includes 14,125 shares issuable on the exercise of options exercisable
currently or within 60 days.
(11) Includes 47,458 shares issuable on the exercise of options exercisable
currently or within 60 days.
* Less than 1%.
EXECUTIVE COMPENSATION
COMPENSATION OF EXECUTIVE OFFICERS
The following table shows the compensation paid or awarded during fiscal
2001 to our Chief Executive Officer and each of our four most highly compensated
executives as of December 31, 2001. In addition, we have included information
for Ms. Modahl and Mr. Bluestein, former executive officers, as each would have
been one of our four most highly compensated executives as of December 31, 2001
if they had been serving as one of our executive officers as of that date. We
refer to these officers as the "named executive officers."
SUMMARY COMPENSATION TABLE
<Table>
<Caption>
LONG-TERM
COMPENSATION
------------
ANNUAL COMPENSATION(1) SECURITIES
----------------------- UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS COMPENSATION
- --------------------------- ---- --------- --------- ------------ ------------
George F. Colony..................... 2001 $250,000 $ 77,500 100 --
Chairman of the Board, President,
and 2000 $241,667 $210,833 200 --
Chief Executive Officer 1999 $200,000 $ 65,000 10,500 --
William M. Bluestein, Ph.D. ......... 2001 $168,750(2) $ 24,063(2) 100 $29,166(2)
Former President and Chief
Operating 2000 $245,000 $195,825 150,200 --
Officer 1999 $207,500 $ 71,325 120,500 --
Mary A. Modahl....................... 2001 $142,847(3) $ 15,125(3) 100 $96,441(3)
Former Vice President, Marketing 2000 $220,000 $142,038 200 --
1999 $200,000 $ 77,325 120,500 --
Joel Blenner......................... 2001 $220,004 $ 56,210 100 --
Vice President, Worldwide Sales 2000 $200,000 $152,594 200 --
1999 $139,394 $ 81,250 208,400 --
Susan Whirty Maffei, Esq. ........... 2001 $220,004 $ 51,330 100 --
Chief Financial Officer, General 2000 $210,000 $142,550 200 --
Counsel, and Vice President, 1999 $173,750 $ 87,548 167,500 --
Operations
Stanley H. Dolberg................... 2001 $220,004 $ 47,380 100 --
Vice President, Strategy 2000 $200,000 $125,750 200 --
1999 $179,166 $ 56,662 185,500 --
Emily Nagle Green.................... 2001 $220,004 $ 45,569 100 --
Managing Director, Forrester N.A. 2000 $200,000 $121,350 200 --
1999 $187,500 $ 54,837 135,500 --
</Table>
- ---------------
(1) No named executive officer received perquisites or other personal benefits
in excess of the lesser of $50,000 or 10% of his salary and bonus.
(2) Mr. Bluestein passed away on September 4, 2001, and his salary and bonus
reflect all such payments made to him through September 4, 2001. We paid an
additional $29,166 in base salary to Mr. Bluestein's estate, which is set
forth as other compensation.
(3) Ms. Modahl left Forrester on August 28, 2001, and her salary and bonus
reflect all such payments made to her through August 28, 2001. We paid Ms.
Modahl an additional $96,441 in severance benefits, which is set forth as
other compensation.
11
OPTIONS GRANTED AND OPTIONS EXERCISED IN THE LAST FISCAL YEAR
The following table sets forth certain information regarding stock options
granted to, and exercised by, the named executive officers during fiscal 2001.
OPTION GRANTS IN LAST FISCAL YEAR
<Table>
<Caption>
POTENTIAL
REALIZABLE VALUE
% OF TOTAL AT ANNUAL RATES
NUMBER OF OPTIONS OF STOCK PRICE
SECURITIES GRANTED TO APPRECIATION FOR
UNDERLYING EMPLOYEES EXERCISE OPTION TERM(3)
OPTIONS IN FISCAL PRICE EXPIRATION ----------------
NAME GRANTED (#) YEAR ($/SHARE) DATE 5% ($) 10% ($)
- ---- ----------- ---------- --------- ---------- ------ -------
George F. Colony................. 100(1) * $27.68 3/17/07 $604 $1,690
William M. Bluestein, Ph.D. ..... 100(2) * $25.16 3/17/07 $856 $1,942
Mary A. Modahl................... 100(2) * $25.16 3/17/07 $856 $1,942
Joel Blenner..................... 100(2) * $25.16 3/17/07 $856 $1,942
Susan Whirty Maffei, Esq. ....... 100(2) * $25.16 3/17/07 $856 $1,942
Stanley H. Dolberg............... 100(2) * $25.16 3/17/07 $856 $1,942
Emily Nagle Green................ 100(2) * $25.16 3/17/07 $856 $1,942
</Table>
- ---------------
(1) The exercise price of the options granted is equal to 110% of the fair
market value of our common stock on the date of grant. Pursuant to the terms
set forth in the option certificate, the option was to become exercisable in
full on March 16, 2007 or earlier if we achieved a predetermined financial
goal. We did not achieve the goal prior to December 31, 2001. Therefore the
option will vest and become exercisable on March 16, 2007. All options
expire approximately 6 years from the date of grant.
(2) The exercise price of the options granted is equal to the fair market value
of our common stock on the date of grant. Pursuant to the terms set forth in
the option certificate, the option was to become exercisable in full on
March 16, 2007 or earlier if we achieved a pre-determined financial goal. We
did not achieve the goal prior to December 31, 2001. Therefore the option
will vest and become exercisable on March 16, 2007. All options expire
approximately 6 years from the date of grant. Because Mr. Bluestein passed
away on September 4, 2001 and Ms. Modahl left Forrester on August 28, 2001,
options granted to them in 2001 expired on September 4 and August 28,
respectively.
(3) The amounts shown on this table represent hypothetical gains that could be
achieved for the respective options if exercised at the end of the option
term. These gains are based on assumed rates of stock appreciation of 5% and
10%, compounded annually from the date the respective options were granted
to their expiration date. The gains shown are net of the option exercise
price, but do not include deductions for taxes or other expenses associated
with the exercise. Actual gains, if any, on stock option exercises will
depend on the future performance of our common stock, the holder's continued
employment through the option period, and the date on which the options are
exercised.
* Less than 1%
12
The following table contains information for the named executive officers
concerning the exercise of options during fiscal 2001 and unexercised options
held as of the end of fiscal 2001.
AGGREGATED OPTION EXERCISES IN 2001 AND
FISCAL YEAR-END OPTION VALUES
<Table>
<Caption>
FISCAL YEAR-END OPTION VALUES
---------------------------------------------------------
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS AT FISCAL AT FISCAL
SHARES YEAR-END (#): YEAR-END ($)(1):
ACQUIRED ON VALUE --------------------------- ---------------------------
NAME EXERCISE (#) REALIZED ($)(2) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ------------ --------------- ----------- ------------- ----------- -------------
George F. Colony............ -- -- 11,500 800 $ 85,650 --
William M. Bluestein,
Ph.D. .................... 151,456 $2,424,319 214,684 -- $1,599,378 --
Mary A. Modahl.............. 193,335 $4,890,978 -- -- -- --
Joel Blenner................ 66,733 $ 703,565 -- 66,967 -- $576,003
Susan Whirty Maffei,
Esq. ..................... 115,000 $2,442,056 111,380 60,802 $1,072,948 $507,017
Stanley H. Dolberg.......... 51,668 $ 875,444 109,000 60,802 $ 254,121 $227,678
Emily Nagle Green........... 55,530 $1,611,471 82,998 50,802 $ 334,133 $422,517
</Table>
- ---------------
(1) Based upon the market price of $20.14 per share, which was the closing price
per share of our common stock on the Nasdaq National Market on the last
trading day of fiscal 2001 less the option exercise price per share.
(2) Represents the difference between the fair market value of the stock at the
time of the exercise and the exercise price of the stock options.
EMPLOYMENT AND SEVERANCE AGREEMENTS
We entered a severance agreement with Joel Blenner on April 1, 1999. The
agreement states that if Mr. Blenner's employment is terminated by us without
cause, he will be entitled to:
- one year of his base salary, payable in accordance with our normal
payroll practices; and
- all options scheduled to vest during the year Mr. Blenner receives
severance pay.
We entered into a severance agreement with Mary Modahl dated August 27,
2001. Under the agreement, Ms. Modahl is entitled to receive 6 months of base
salary, plus one-half of her annualized target bonus for that period, payable in
accordance with our normal payroll practices.
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
Following Forrester's initial public offering, the Board of Directors
appointed a Compensation Committee consisting of Robert M. Galford and Michael
H. Welles. The Compensation Committee is responsible for reviewing with
management the compensation of Forrester's directors, officers, employees, and
agents, making recommendations to the Board of Directors, and administering
Forrester's stock plans.
Forrester's culture emphasizes certain key values -- quality, cooperation,
and creativity -- that it believes are critical to its continued growth. To
encourage achievement of these key values, Forrester places great emphasis on
individual excellence, and employees at all levels, as well as executive
officers, are encouraged to take initiative and lead individual projects that
enhance Forrester's effectiveness. Forrester's compensation philosophy bases
cash compensation on individual achievement, teamwork, and Forrester's
short-term performance. This philosophy aligns employees' incentives with
Forrester's objective of enhancing stockholder value over the long term through
long-term incentives, principally stock options. Compensation must also be
competitive with other companies in the industry so that Forrester can continue
to attract, retain, and motivate key employees who are critical to the long-term
success of Forrester.
13
Compensation for Forrester's executive officers in 2001 consisted of three
principal components: base salary, cash bonuses, and stock options.
Base Salary. Base salaries of executive officers were determined by
evaluating the responsibilities of the position, the experience and performance
of the individual, and formal and informal industry comparisons.
Cash Bonuses. Cash bonuses were determined based upon performance against
individual and team goals and are funded by Forrester's overall performance
against key business objectives.
Stock Options. The principal equity compensation component of executive
compensation is options granted under Forrester's stock option plan. Prior to
1996, Forrester had not issued stock options to executive officers or employees.
In 1996, Forrester granted stock options, some of which vested upon consummation
of Forrester's initial public offering and others of which vested over three
years, to executive officers and other employees based on seniority and the
position held with Forrester, and granted stock options, which vested over three
years, to new executive officers who joined Forrester in 1996. Stock options
generally will be granted when an executive joins Forrester, with additional
options granted from time to time for promotions and performance. The
Compensation Committee believes that stock option participation helps to
motivate and retain executives and also aligns management's incentives with
long-term stock price appreciation. In determining the size of awards for 2001,
the Compensation Committee considered formal and informal surveys of companies
in similar businesses, recognizing that equity compensation is a key retention
incentive in a company, like Forrester, that relies heavily on the quality of
its analysts.
Mr. Colony's compensation package in 2001 as Chief Executive Officer
consisted of the same benefits program as other executive officers, including
base salary, cash bonus, and other executive and employee benefit programs. Mr.
Colony also received a stock option for 100 shares that was made to every
employee of Forrester. In deciding the size of his cash bonus, the Compensation
Committee considered Forrester's performance, including the increase in
revenues, operating income, bookings, and agreement value, although no single
factor was more important than any other.
Section 162(m) of the Internal Revenue Code limits the deductibility of
compensation paid to certain executive officers in excess of $1 million unless
the compensation is performance based. To the extent consistent with its
performance goals, it is Forrester's policy to structure compensation
arrangements with its executive officers to preserve the deductibility of that
compensation in light of Section 162(m).
Robert M. Galford
Michael H. Welles
14
REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
The Board of Directors has appointed an Audit Committee composed of three
outside directors: Messrs. Hornig, Welles, and Broeders. Each of the members of
the Audit Committee is "independent" as defined under the National Association
of Securities Dealers listing standards.
The Audit Committee oversees our independent public accountants and assists
the Board of Directors in fulfilling its oversight responsibilities on the
matters relating to accounting, financial reporting, internal controls, and
auditing by meeting regularly with the independent auditors and operating and
financial personnel. The Audit Committee periodically reviews our accounting and
financial controls and our policies governing compliance with laws, regulations,
rules of ethics and conflicts of interest.
In fulfilling its oversight responsibilities, the Audit Committee reviewed
and discussed Forrester's audited financial statements for the fiscal year ended
December 31, 2001 with Forrester's management and Arthur Andersen LLP,
Forrester's independent public accountants. The Audit Committee also discussed
with Arthur Andersen LLP the matters required by Statement of Auditing Standards
No. 61 (Communications with Audit Committees). This included a discussion of the
independent auditors' judgments as to the quality, not just the acceptability,
of Forrester's accounting principles, and such other matters that generally
accepted auditing standards require to be discussed with the Audit Committee.
The Audit Committee also received the written disclosures and letter from Arthur
Andersen LLP required by Independence Standards Board Standard No. 1.
(Independence Discussion with Audit Committees) and the Audit Committee
discussed the independence of Arthur Andersen with that firm.
Based on the Audit Committee's review and discussions noted above, the
Audit Committee recommended to the Board of Directors that, and the Board of
Directors approved, the audited financial statements be included in our Annual
Report on Form 10-K for the fiscal year ended December 31, 2001 for filing with
the Securities and Exchange Commission.
AUDIT COMMITTEE OF THE
BOARD OF DIRECTORS
George R. Hornig
Michael H. Welles
Henk W. Broeders
15
STOCK PERFORMANCE GRAPH
Set forth below is a line graph comparing the cumulative total return on
our common stock to the cumulative total return on the Nasdaq Stock Market Index
of U.S. Companies and the H&Q Technology index for the period commencing
December 31, 1996 and ending on December 31, 2001. The chart data assumes in
each case that $100 was invested on December 31, 1996 and that all dividends
were reinvested. The stock performance graph is not necessarily indicative of
future stock performance.
COMPARISON OF CUMULATIVE TOTAL RETURNS
(STOCK PERFORMANCE GRAPH)
<Table>
<Caption>
- --------------------------------------------------------------------------------
1996 1997 1998 1999 2000 2001
- --------------------------------------------------------------------------------
Forrester.......... 100.00 88.35 169.90 267.48 388.83 156.43
Nasdaq US.......... 100.00 122.48 172.69 320.92 192.94 153.16
H&Q Technology..... 100.00 132.63 204.28 453.55 310.00 207.62
</Table>
OTHER INFORMATION
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act 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. 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 fiscal 2001, except that CarolAnn Shindelar, vice
president, marketing and Robert W. Davidson, managing director, Forrester
Europe, each inadvertently failed to file a Form 3 on a timely basis.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Indemnification Agreement with Mr. Colony. We entered into an
indemnification agreement with Mr. Colony, who was our sole stockholder prior to
our initial public offering, relating to each party's respective tax
liabilities. Under the agreement, Mr. Colony will continue to be liable for
personal income taxes on our income for all periods prior to the time we ceased
to be an S corporation. The agreement generally provides that we will indemnify
Mr. Colony for any increase in his taxes (including interest and penalties)
resulting
16
from adjustments initiated by taxing authorities and from payments made to him
under the agreement, and Mr. Colony will pay us an amount equal to any decrease
in his tax liability resulting from adjustments initiated by taxing authorities.
The agreement also provides that if we are determined to have been a C
corporation for tax purposes at any time we reported out income as an S
corporation, Mr. Colony will make a capital contribution to us in an amount
necessary to hold us harmless from any taxes and interest arising from such
determination up to the amount of distributions made by us to Mr. Colony prior
to the termination of our S corporation election less any taxes and interest
attributable to such distributions.
Registration Rights and Non-Competition Agreement. 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 under the
Securities Act shares having 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.
Indemnification Agreement. We entered an indemnification agreement with
our executive officers who were selling stockholders in our offering of common
stock in February 2000. The agreement provides that we will indemnify these
executive officers against any losses, claims, damages, or liabilities that
arise from these executive officers' agreement to indemnify the underwriters of
the offering.
INDEPENDENT PUBLIC ACCOUNTANTS
Upon the recommendation of our Audit Committee, our Board of Directors has
selected Deloitte & Touche LLP, certified public accountants, as our independent
auditors for the fiscal year ending December 31, 2002. Arthur Andersen LLP
audited our financial statements for the fiscal year ending December 31, 2001.
Representatives of Arthur Andersen LLP and Deloitte & Touche LLP will be present
at the annual meeting, and they will have the opportunity to make a statement if
they desire and will be available to respond to appropriate questions.
REPLACEMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
On April 1, 2002, our Audit Committee recommended and our Board of
Directors approved of the dismissal of Arthur Andersen LLP as our independent
auditor. On April 1, 2002, our Audit Committee recommended and our Board of
Directors approved the appointment of Deloitte & Touche LLP, certified public
accountants, as independent auditors for the fiscal year ending December 31,
2002.
The report of Arthur Andersen on the financial statements for our past two
fiscal years did not contain an adverse opinion or disclaimer of opinion, nor
were they qualified or modified as to uncertainty, audit scope, or accounting
principles. During the two most recent fiscal years and through the date of
dismissal of Arthur Andersen:
- there were no disagreements with Arthur Andersen on any matter of
accounting principles or practices, financial statement disclosure, or
auditing scope or procedure, which disagreements if not resolved to the
satisfaction of Arthur Andersen would have caused Arthur Andersen to make
reference to the subject matter of such disagreements in its report on
our financial statements for such years; and
- there were no reportable events as that term is defined in Item
304(a)(l)(v) of Regulation S-K of the Securities Act of 1933.
17
During our two most recent fiscal years and through the date of appointment
of Deloitte & Touche as independent auditors, we have not consulted with
Deloitte & Touche with respect to the application of accounting principles to a
specified transaction, either completed or proposed, or the type of audit
opinion that might be rendered on our financial statements, or on any matter
that was either the subject of a disagreement (as defined in Item 304(a)(l)(iv)
of Regulation S-K), or a reportable event (as defined in Item 304(a)(l)(v) of
Regulation S-K).
FEES
Fees billed to us by Arthur Andersen LLP for services rendered during the
fiscal year 2001 or related to the audit of the fiscal year 2001 financial
statements were as follows:
<Table>
Audit Fees.................................................. $118,500
Financial Information Systems Design and Implementation $176,070
Fees......................................................
All Other Fees.............................................. $340,858
</Table>
The Audit Committee has considered whether the provision of all non-audit
services is compatible with maintaining Arthur Andersen LLP's independence.
STOCKHOLDER PROPOSALS
Stockholder proposals to be considered at the Annual Meeting of
Stockholders in 2003 must be received by December 13, 2002, to be considered for
inclusion in our proxy materials for that meeting.
Stockholders who wish to make a proposal at the 2003 annual meeting, other
than proposals included in the proxy materials, must notify us between February
12, 2003 and March 14, 2003. If the stockholder does not notify us by March 14,
2003, the proxies will have discretionary authority to vote on a stockholder's
proposal brought before the meeting.
OTHER BUSINESS
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. However, if any such other matters properly come before the
meeting or any adjournment of the meeting, the persons named as proxies will
have discretionary authority to vote the shares represented by the accompanying
proxy in accordance with their own judgment.
ANNUAL REPORT AND FORM 10-K
A copy of our Annual Report has been mailed with this proxy statement. Our
annual report on Form 10-K filed with the Securities and Exchange Commission is
available to stockholders without charge by writing to Forrester Research, Inc.,
Investor Relations, 400 Technology Square, Cambridge, Massachusetts 02139.
18
APPENDIX A
FORRESTER RESEARCH, INC.
1996 EMPLOYEE STOCK PURCHASE PLAN
SECTION 1. PURPOSE OF PLAN
The Forrester Research, Inc. 1996 Employee Stock Purchase Plan (the "Plan") is
intended to provide a method by which eligible employees of Forrester Research,
Inc. ("Forrester") and of such of Forrester's subsidiaries as Forrester's Board
of Directors (the "Board of Directors") may from time to time designate (such
subsidiaries, together with Forrester, being hereinafter referred to as the
"Company") may use voluntary, systematic payroll deductions to purchase shares
of the Common Stock of Forrester (the "Stock") and thereby acquire an interest
in the future of the Company. For purposes of the Plan, a "subsidiary" is any
corporation in which Forrester owns, directly or indirectly, stock possessing
50% or more of the total combined voting power of all classes of stock.
SECTION 2. OPTIONS TO PURCHASE STOCK
Under the Plan, there is available an aggregate of not more than 200,000 shares
of Stock (subject to adjustment as provided in Section 15) for sale pursuant to
the exercise of options ("Options") granted under the Plan to employees of the
Company ("Employees") who meet the eligibility requirements set forth in Section
3 hereof ("Eligible Employees"). The Stock to be delivered upon exercise of
Options under the Plan may be either shares of authorized but unissued Stock or
previously issued shares acquired by the Company and held in treasury, as the
Board of Directors may determine.
SECTION 3. ELIGIBLE EMPLOYEES
Except as otherwise provided below, each Employee (a) who has completed six
months or more of continuous service in the employ of the Company, and (b) whose
customary employment is more than 20 hours per week, will be eligible to
participate in the Plan.
(a) Any Employee who immediately after the grant of an Option to him or her
would (in accordance with the provisions of Sections 423 and 424(d) of
the Internal Revenue Code of 1986, as amended (the "Code")) own stock
possessing 5% or more of the total combined voting power or value of
all classes of stock of the employer corporation or of its parent or
subsidiary corporations, as defined in Section 424 of the Code, will
not be eligible to receive an Option to purchase stock pursuant to the
Plan.
-1-
(b) No Employee will be granted an Option under the Plan which would permit
his or her rights to purchase shares of stock under all employee stock
purchase plans of Forrester and parent and subsidiary corporations to
accrue at a rate which exceeds $25,000 in fair market value of such
stock (determined at the time the Option is granted) for each calendar
year during which any such Option granted to such Employee is
outstanding at any time, as provided in Sections 423 and 424(d) of the
Code.
(c) For purposes of determining eligibility hereunder, the Board of
Directors, acting by and through the Director, Operations or any other
authorized officer, may grant past service credit to Employees of the
Company in a uniform and non-discriminatory manner for periods of
continuous service provided with respect to any company acquired
(whether by asset or stock purchase) of the Company.
SECTION 4. METHOD OF PARTICIPATION
The first stock option period (the "Initial Option Period") for which Options
may be granted hereunder shall commence on the date of the prospectus used in
connection with Forrester's initial public offering and end on June 30, 1997.
The Initial Option Period and each subsequent six-month period following the end
of the Initial Option Period shall be referred to as an "Option Period". Each
person who will be an Eligible Employee on the first day of any Option Period
may elect to participate in the Plan by executing and delivering, at least 15
days prior to such day, a payroll deduction authorization in accordance with
Section 5. Such Eligible Employee will thereby become a participant
("Participant") on the first day of such Option Period and will remain a
Participant until his or her participation is terminated as provided in the
Plan.
SECTION 5. PAYROLL DEDUCTION
The payroll deduction authorization will request withholding at a rate (in whole
percentages) of not less than 2% nor more than 10% from the Participant's
Compensation by means of substantially equal payroll deductions over the Option
Period. In no event shall more than $10,000 be withheld with respect to any
Participant for any Option Period. For purposes of the Plan, "Compensation" will
mean all compensation paid to the Participant by the Company and currently
includible in his or her income, including bonuses, commissions, and other
amounts includible in the definition of compensation provided in the Treasury
Regulations promulgated under Section 415 of the Code, plus any amount that
would be so included but for the fact that it was contributed to a qualified
plan pursuant to an elective deferral under Section 401(k) of the Code, but not
including payments under stock option plans and other employee benefit plans or
any other amounts excluded from the definition of compensation provided in the
Treasury Regulations under Section 415 of the Code. A Participant may reduce the
withholding rate of his or her payroll deduction authorization by one or more
whole percentage points (but not to below 2%) at any time during an
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Option Period by delivering written notice to the Company, such reduction to
take effect prospectively as soon as practicable, as determined by the Board of
Directors acting by and through the Director, Operations or any other authorized
officer, following receipt of such notice by the Company. A Participant may
increase or reduce the withholding rate of his or her payroll deduction
authorization for a future Option Period by written notice delivered to the
Company at least 15 days prior to the first day of the Option Period as to which
the change is to be effective. All amounts withheld in accordance with a
Participant's payroll deduction authorization will be credited to a withholding
account for such Participant.
SECTION 6. GRANT OF OPTIONS
Each person who is a Participant on the first day of an Option Period will as of
such day be granted an Option for such Period. Such Option will be for the
number of whole shares (not in excess of the share maximum as hereinafter
defined) of Stock to be determined by dividing (i) the balance in the
Participant's withholding account on the last day of the Option Period, by (ii)
the purchase price per share of the Stock determined under Section 7. For
purposes of the preceding sentence, the share maximum with respect to any Option
for any Option Period shall be the largest number of shares which, when
multiplied by the fair market value of a share of Stock at the beginning of the
Option Period, produces a dollar amount of $12,500 or less. The number of shares
of Stock receivable by each Participant upon exercise of his or her Option for
an Option Period will be reduced, on a substantially proportionate basis, in the
event that the number of shares then available under the Plan is otherwise
insufficient.
SECTION 7. PURCHASE PRICE
The purchase price of Stock issued pursuant to the exercise of an Option will be
85% of the fair market value of the Stock at (a) the time of grant of the Option
or (b) the time at which the Option is deemed exercised, whichever is less. Fair
market value on any given day will mean the Closing Price of the Stock on such
day or, if there was no Closing Price on such day, the latest day prior thereto
on which there was a Closing Price, provided that in the case of Options granted
during the first Option Period, fair market value at the time of grant of the
Option shall mean the initial public offering price of the Stock. The "Closing
Price" of the Stock on any business day will be the last sale price as reported
on the principal market on which the Stock is traded or, if no last sale is
reported, then the fair market value as determined by the Board of Directors. A
good faith determination by the Board of Directors as to fair market value shall
be final and binding.
SECTION 8. EXERCISE OF OPTIONS
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Each Employee who is a Participant in the Plan on the last day of an Option
Period will be deemed to have exercised on the last day of the Option Period the
Option granted to him or her for that Option Period. Upon such exercise, the
balance of the Participant's withholding account will be applied to the purchase
of the number of whole shares of Stock determined under Section 6 and as soon as
practicable thereafter certificates for said shares will be issued and delivered
to the Participant. In the event that the balance of the Participant's
withholding account following an Option Period is in excess of the total
purchase price of the shares so issued, the balance of the account shall be
returned to the Participant; provided, however, that if the balance left in the
account consists solely of an amount equal to the value of a fractional share,
it will be retained in the withholding account and carried over to the next
Option Period. The entire balance of the Participant's withholding account
following the final Option Period shall be returned to the Participant. No
fractional shares will be issued hereunder.
Notwithstanding anything herein to the contrary, Forrester's obligation to issue
and deliver shares of Stock under the Plan is subject to the approval required
of any governmental authority in connection with the authorization, issuance,
sale or transfer of said shares, to any requirements of any national securities
exchange applicable thereto, and to compliance by the Company with other
applicable legal requirements in effect from time to time, including without
limitation any applicable tax withholding requirements.
SECTION 9. INTEREST
No interest will be payable on withholding accounts.
SECTION 10. CANCELLATION AND WITHDRAWAL
A Participant who holds an Option under the Plan may at any time prior to
exercise thereof under Section 8 cancel such Option as to all (but not less than
all) the Shares subject or to be subject to such Option by written notice
delivered to the Company. Upon such cancellation, the Participant's withholding
account balance will be returned to him or her.
A Participant may terminate a payroll deduction authorization as of any date by
written notice delivered to the Company and will thereby cease to be a
Participant as of such date. Any Participant who voluntarily terminates a
payroll deduction authorization prior to the last business day of an Option
Period will be deemed to have cancelled the related Option.
Any Participant who cancels an Option or terminates a payroll deduction
authorization may at any time thereafter again become a Participant in
accordance with Section 4.
SECTION 11. TERMINATION OF EMPLOYMENT
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Subject to Section 12, any person will cease to be a Participant upon
termination of employment with the Company for any reason, and any Option held
by such Participant under the Plan will be deemed cancelled. The Company will
return the balance of the withholding account to the Participant, who will have
no further rights under the Plan.
SECTION 12. DEATH OF PARTICIPANT
A Participant may file a written designation of beneficiary specifying who is to
receive any Stock and/or cash credited to the Participant under the Plan in the
event of the Participant's death, which designation will also provide for the
Participant's election to either (i) cancel the Participant's Option upon his or
her death, as provided in Section 10 or (ii) apply as of the last day of the
Option Period the balance of the deceased Participant's withholding account at
the time of death to the exercise of the related Option, pursuant to Section 8
of the Plan. In the absence of a valid election otherwise, a Participant's death
will be deemed to effect a cancellation of the Option. A designation of
beneficiary and election may be changed by the Participant at any time, by
written notice. In the event of the death of a Participant and receipt by the
Company of proof of the identity and existence at the Participant's death of a
beneficiary validly designated by him or her under the Plan, the Company will
deliver to such beneficiary such Stock and/or cash to which the beneficiary is
entitled under the Plan. In the event of the death of a Participant and in the
absence of a beneficiary validly designated under the Plan who is living at the
time of such Participant's death, the Company will deliver such Stock and/or
cash to the executor or administrator of the estate of the Participant, if the
Company is able to identify such executor or administrator. If the Company is
unable to identify such administrator or executor, the Company, in its
discretion, may deliver such stock and/or cash to the spouse or to any one or
more dependents of a Participant as the Company may determine. No beneficiary
will, prior to the death of the Participant by whom he has been designated,
acquire any interest in any Stock or cash credited to the Participant under the
Plan.
SECTION 13. PARTICIPANT'S RIGHTS NOT TRANSFERABLE
All Participants will have the same rights and privileges under the Plan. All
rights and privileges under any Option may be exercisable during a Participant's
lifetime only by the Participant, and may not be sold, pledged, assigned, or
transferred in any manner. In the event any Participant violates the terms of
this Section, any Option held by him or her may be terminated by the Company and
upon return to the Participant of the balance of his or her withholding account,
all his or her rights under the Plan will terminate.
SECTION 14. EMPLOYMENT RIGHTS
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Nothing contained in the provisions of the Plan will be construed to give to any
Employee the right to be retained in the employ of the Company or to interfere
with the right of the Company to discharge any Employee at any time.
SECTION 15. CHANGE IN CAPITALIZATION
In the event of any change in the outstanding Stock of Forrester by reason of a
stock dividend, split-up, recapitalization, merger, consolidation,
reorganization, or other capital change after the effective date of this Plan,
the aggregate number of shares available under the Plan, the number of shares
under Options granted but not exercised, and the Option price will be
appropriately adjusted.
SECTION 16. ADMINISTRATION OF PLAN
The Plan will be administered by the Board of Directors, which will have the
right to determine any questions which 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 will deem necessary or advisable. The
Board of Director's determinations hereunder shall be final and binding.
SECTION 17. AMENDMENT AND TERMINATION OF PLAN
Forrester reserves the right at any time or times to amend the Plan to any
extent and in any manner it may deem advisable by vote of the Board of
Directors; provided, however, that any amendment relating to the aggregate
number of shares which may be issued under the Plan (other than an adjustment
provided for in Section 15) or to the Employees (or class of Employees) eligible
to receive Options under the Plan will have no force or effect unless it is
approved by the shareholders within twelve months before or after its adoption.
The Plan shall terminate automatically following the end of the first Option
Period beginning in 2006; provided, however, that the Board of Directors in its
discretion may extend the Plan for one or more Option Periods. The Plan may be
earlier suspended or terminated by the Board of Directors, but no such
suspension or termination will adversely affect the rights and privileges of
holders of outstanding Options. The Plan will terminate in any case when all or
substantially all the Stock reserved for the purposes of the Plan has been
purchased.
SECTION 18. APPROVAL OF SHAREHOLDERS
The Plan is subject to the approval of the shareholders of Forrester, which
approval must be secured within twelve months before or after the date the Plan
is adopted by the Board of Directors, and any Option granted hereunder prior to
such approval is conditioned on such approval being obtained prior to the
exercise thereof.
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APPENDIX B
FORRESTER RESEARCH, INC.
AMENDED AND RESTATED 1996 STOCK OPTION PLAN
FOR NON-EMPLOYEE DIRECTORS
1. PURPOSE
The purpose of this Amended and Restated 1996 Stock Option Plan for
Non-Employee Directors (the "Plan") is to advance the interests of Forrester
Research, Inc. (the "Company") by enhancing the ability of the Company to
attract and retain non-employee directors who are in a position to make
significant contributions to the success of the Company and to reward directors
for such contributions through the awarding of options ("Options") to purchase
shares of the Company's common stock (the "Stock").
2. ADMINISTRATION
The Plan shall be administered by a committee (the "Committee") of the
Board of Directors (the "Board") of the Company designated by the Board for that
purpose. Unless and until a Committee is appointed the Plan shall be
administered by the entire Board, and references in the Plan to the "Committee"
shall be deemed references to the Board. The Committee shall have authority, not
inconsistent with the express provisions of the Plan, (a) to grant Options in
accordance with the Plan to such directors as are eligible to receive Options;
(b) to prescribe the form or forms of instruments evidencing Options and any
other instruments required under the Plan and to change such forms from time to
time; (c) to adopt, amend and rescind rules and regulations for the
administration of the Plan; and (d) to interpret the Plan and to decide any
questions and settle all controversies and disputes that may arise in connection
with the Plan. Such determinations of the Committee shall be conclusive and
shall bind all parties.
3. EFFECTIVE DATE AND TERM OF PLAN
The Plan shall become effective on the date on which the Plan is approved
by the Board of Directors of the Company, subject to approval by the
shareholders of the Company. No Option shall be granted under the Plan after the
completion
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of ten years from the date on which the Plan was adopted by the Board, but
Options previously granted may extend beyond that date.
4. SHARES SUBJECT TO THE PLAN
(a) NUMBER OF SHARES. Subject to adjustment as provided in Section 4(c),
the aggregate number of shares of Stock that may be delivered upon the exercise
of Options granted under the Plan shall be 300,000. If any Option granted under
the Plan terminates without having been exercised in full, the number of shares
of Stock as to which such Option was not exercised shall be available for future
grants within the limits set forth in this Section 4(a).
(b) SHARES TO BE DELIVERED. Shares delivered under the Plan shall be
authorized but unissued Stock or, if the Board so decides in its sole
discretion, previously issued Stock acquired by the Company and held in
treasury. No fractional shares of Stock shall be delivered under the Plan.
(c) CHANGES IN STOCK. In the event of a stock dividend, stock split or
combination of shares, recapitalization or other change in the Company's capital
stock, after the effective date of the Plan, the number and kind of shares of
stock or securities of the Company subject to Options then outstanding or
subsequently granted under the Plan, the maximum number of shares or securities
that may be delivered under the Plan, the exercise price, and other relevant
provisions shall be appropriately adjusted by the Committee, whose determination
shall be binding on all persons.
5. ELIGIBILITY FOR OPTIONS
Directors eligible to receive Options under the Plan ("Eligible Directors")
shall be those directors who are not employees of the Company or of any
subsidiary of the Company.
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6. TERMS AND CONDITIONS OF OPTIONS
(a) FORMULA OPTIONS.
On the date that the Company first files a registration statement under the
Securities Act of 1933 covering shares of Stock, each person who has agreed to
serve as a director and who, upon commencing such service, would be an Eligible
Director shall be awarded on such date an Option covering 6,000 shares of Stock.
Each Eligible Director elected for the first time thereafter shall also be
awarded on the date of his or her first election an Option covering 6,000 shares
of Stock. In addition, immediately following the annual meeting of shareholders,
each Eligible Director shall be awarded an Option covering 12,500 shares of
Stock. The Options awarded under this paragraph (a) are referred to as "Formula
Options."
(b) DISCRETIONARY OPTIONS. The Committee shall also have the authority
under this Plan to award Options to purchase Stock to Eligible Directors in such
amounts and on such terms not inconsistent with this Plan as it shall determine
at the time of the award. The Options awarded under this paragraph (b) are
referred to herein as "Discretionary Options."
(c) EXERCISE PRICE. The exercise price of each Formula Option shall be (i)
in the case of Options granted prior to the Company's initial public offering,
the low end of the estimated price range reflected in the registration statement
and (ii) 100% of the fair market value per share of the Stock at the time the
Option is granted. The exercise price of each Discretionary Options shall be set
by the Committee. In no event, however, shall the Option price be less, in the
case of an original issue of authorized stock, than par value per share. For
purposes of this paragraph, the fair market value of a share of Stock will be
the mean between the high and low sale prices as reported on the principal
market on which the Stock is traded or, if no sales are reported, the fair
market value as determined in good faith by the Committee.
(d) DURATION OF OPTIONS. The latest date on which an Option may be
exercised (the "Final Exercise Date") shall be the date which is ten years from
the date the Option was granted.
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(e) EXERCISE OF OPTIONS.
(1) Each Formula Option shall become exercisable as to one quarter of the
shares covered thereby on each anniversary of the date of the grant;
provided, however, that the initial Formula Option for 6,000 shares
shall become exercisable as to one quarter of the shares on the date
of the award (or on the date of Company's initial public offering in
the case of such options granted prior to the Company's initial public
offering) and as to one quarter of the shares on each of the next
threeanniversaries of that date. Each Discretionary Option shall
become exercisable at such time or times as the Committee shall
determine.
(2) Any exercise of an Option shall be in writing, signed by the proper
person and delivered or mailed to the Company, accompanied by (i) any
documentation required by the Committee and (ii) payment in full for
the number of shares for which the Option is exercised.
(3) If an Option is exercised by the executor or administrator of a
deceased director, or by the person or persons to whom the Option has
been transferred by the director's will or the applicable laws of
descent and distribution, the Company shall be under no obligation to
deliver Stock pursuant to such exercise until the Company is satisfied
as to the authority of the person or persons exercising the Option.
(f) PAYMENT FOR AND DELIVERY OF STOCK. Stock purchased under the Plan shall
be paid for as follows: (i) in cash or by check (acceptable to the Company in
accordance with guidelines established for this purpose), bank draft or money
order payable to the order of the Company or (ii) if so permitted by the terms
of the Option, (A) through the delivery of shares of Stock (which, in the case
of shares of Stock acquired from the Company, have been outstanding for at least
six months) having a fair market value on the last business day preceding the
date of exercise equal to the purchase price or (B) by having the Company hold
back from the shares transferred upon exercise Stock having a fair market value
on the last business day preceding the date of exercise equal to the purchase
price or (C) by delivery of a promissory note of the Option holder to the
Company, such note to be payable on such terms as are specified or (D) by
delivery of an unconditional and irrevocable undertaking by a broker to deliver
promptly to the Company
-4-
sufficient funds to pay the exercise price or (E) by any combination of the
permissible forms of payment; PROVIDED, that if the Stock delivered upon
exercise of the Option is an original issue of authorized Stock, at least so
much of the exercise price as represents the par value of such Stock shall be
paid other than with a personal check or promissory note of the Option holder.
An Option holder shall not have the rights of a shareholder with regard to
awards under the Plan except as to Stock actually received by him or her under
the Plan.
The Company shall not be obligated to deliver any shares of Stock (a)
until, in the opinion of the Company's counsel, all applicable federal and state
laws and regulations have been complied with, and (b) if the outstanding Stock
is at the time listed on any stock exchange, until the shares to be delivered
have been listed or authorized to be listed on such exchange upon official
notice of issuance, and (c) until all other legal matters in connection with the
issuance and delivery of such shares have been approved by the Company's
counsel. 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
Option, such representations or agreements as counsel for the Company may
consider appropriate to avoid violation of such Act and may require that the
certificates evidencing such Stock bear an appropriate legend restricting
transfer.
(g) NONTRANSFERABILITY OF OPTIONS. Except as the Committee shall otherwise
provide, no Option may be transferred other than by will or by the laws of
descent and distribution, and during a director's lifetime an Option may be
exercised only by him or her.
(h) DEATH. Except as the Committee shall otherwise provided, upon the death
of any director granted Options under this Plan, all Options not then
exercisable shall terminate. All Options held by the director that are
exercisable immediately prior to death may be exercised by his or her executor
or administrator, or by the person or persons to whom the Option is transferred
by will or the applicable laws of descent and distribution, at any time within
one year after the director's death (subject, however, to the limitations of
Section 6(d) regarding the maximum exercise period for such Option). After
completion of that one-year period, such Options shall terminate to the extent
not previously exercised.
(i) OTHER TERMINATION OF STATUS OF DIRECTOR. Except as the Committee shall
otherwise provided, if a director's service with the Company terminates for any
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reason other than death, all Options held by the director that are not then
exercisable shall terminate. Options that are exercisable on the date of
termination shall continue to be exercisable for a period of three months
(subject to Section 6(d)). After completion of that three-month period, such
Options shall terminate to the extent not previously exercised, expired or
terminated.
(j) MERGERS, ETC. In the event of a consolidation or merger in which the
Company is not the surviving corporation (other than a consolidation or merger
in which the holders of Stock of the Company acquire a majority of the voting
stock of the surviving corporation) or which results in the acquisition of
substantially all the Company's outstanding Stock by a single person or entity
or by a group of persons and/or entities acting in concert, or in the event of a
sale or transfer of substantially all of the Company's assets or a dissolution
or liquidation of the Company, all Options hereunder will terminate; PROVIDED,
that 20 days prior to the effective date of any such merger, consolidation,
sale, dissolution, or liquidation, all Options outstanding hereunder that are
not otherwise exercisable shall become immediately exercisable. Notwithstanding
the foregoing, in the event that a transaction covered by this Section 6(j) is a
merger or consolidation intended to qualify as a pooling of interests for
accounting purposes, then the acquiring or surviving corporation shall assume,
or otherwise provide replacement options for, all Options outstanding under this
Plan, with such adjustments to the number of shares covered by such Option and
the exercise price thereof as may be necessary to reflect the exchange ratio
provided for in the merger or consolidation. Such substitute options shall
otherwise be on terms and conditions substantially equivalent to those set forth
in this Plan, shall be immediately exercisable and, except as to Eligible
Directors who become directors of the acquiring or surviving corporation, shall
terminate on the 180th day following the consummation of the merger or
consolidation. Options held by Eligible Directors who become directors of the
acquiring or surviving corporation shall be governed, mutatis mutandis, by the
provisions of this Plan and the agreement evidencing the Option surrendered in
substitution.
7. EFFECT, DISCONTINUANCE, CANCELLATION, AMENDMENT, TERMINATION AND
EFFECTIVENESS
Neither adoption of the Plan nor the grant of Options to a director shall
affect the Company's right to grant to such director Options that are not
subject to the Plan, to issue to such directors Stock as a bonus or otherwise,
or to adopt other plans or arrangements under which Stock may be issued to
directors.
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APPENDIX C
DETACH HERE
PROXY
FORRESTER RESEARCH, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
THE COMPANY FOR AN ANNUAL MEETING, MAY 14, 2002
The undersigned appoints George F. Colony and Timothy J. Moynihan, Esq.,
and each of them, as proxies, each with the power of substitution, and
authorizes them to represent and vote all shares of common stock of Forrester
Research, Inc. held by the undersigned at the Annual Meeting of Stockholders to
be held at the offices of Ropes & Gray, One International Place, Boston,
Massachusetts 02110 at 10:00 a.m. on Tuesday, May 14, 2002, or any adjournments
thereof, for the following purposes set forth on the reverse side.
This proxy when properly executed will be voted in the manner directed by
the undersigned stockholder(s). If no contrary direction is made, the proxy will
be voted: (1) FOR the election of the directors; (2) FOR an increase in the
number of shares of Common Stock available for purchase under Forrester's 1996
Employee Stock Purchase Plan; and (3) FOR an increase in the number of shares of
Common Stock available for issuance under Forrester's 1996 Stock Option Plan
for Non-employee Directors.
- ----------- -----------
SEE REVERSE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
SIDE SIDE
- ----------- -----------
FORRESTER RESEARCH, INC.
C/O EQUISERVE
P.O. BOX 43068
PROVIDENCE, RI 02940
DETACH HERE
Please mark
[X] votes as in
this example.
1. To elect two Class I directors to serve until the 2005 Annual Meeting of
Stockholders;
Nominees: (01) George F. Colony and (02) Michael H. Welles.
FOR WITHHELD
[ ] BOTH [ ] FROM BOTH
NOMINEES NOMINEES
[ ]_____________________________________________
For all nominees except as noted above
ABSTAIN
FOR AGAINST FROM
INCREASE INCREASE VOTE
2. To approve an increase in the number [ ] [ ] [ ]
of shares of Common Stock available
for purchase under Forrester's 1996
Employee Stock Purchase Plan:
ABSTAIN
FOR AGAINST FROM
INCREASE INCREASE VOTE
3. To approve an increase in the number [ ] [ ] [ ]
of shares of Common Stock available
for issuance under Forrester's 1996
Stock Option Plan for Non-employee
Directors:
4. To transact such other business as may properly come before the meeting and
any adjournments thereof.
MARK HERE IF YOU PLAN TO ATTEND THE MEETING [ ]
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT [ ]
Please sign exactly as your name appears hereon. Where shares are held jointly,
both holders should sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such.
Signature:______________ Date:_________ Signature:______________ Date:_________