SCHEDULE 14(A)
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
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[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec. 240.14a-12
FORRESTER RESEARCH, INC.
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(Name of Registrant as Specified In Its Charter)
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(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 9, 2004
To Our Stockholders:
You are cordially invited to attend the 2004 Annual Meeting of Stockholders
of Forrester Research, Inc., which will be held on Tuesday, May 11, 2004, at the
offices of Ropes & Gray LLP, 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 11, 2004
Notice is hereby given that the 2004 Annual Meeting of Stockholders of
Forrester Research, Inc. will be held at the offices of Ropes & Gray LLP, One
International Place, Boston, Massachusetts at 10:00 a.m. (local time) on
Tuesday, May 11, 2004 for the following purposes:
1. To elect two Class II directors to serve until the 2007 Annual Meeting
of Stockholders;
2. 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 1, 2004 are
entitled to notice of and to vote at the meeting. A list of stockholders
entitled to vote at the meeting will be open to examination by stockholders at
the meeting and during normal business hours from April 30, 2004 to the date of
the meeting at our offices, located at 400 Technology Square, Cambridge,
Massachusetts 02139.
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
GAIL S. MANN, ESQ.
Secretary
Cambridge, Massachusetts
April 9, 2004
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 11, 2004
PROXY STATEMENT
The Board of Directors of Forrester Research, Inc., a Delaware corporation,
is soliciting the enclosed proxy card from our stockholders. The proxy will be
used at our 2004 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 11, 2004 at the offices of Ropes & Gray LLP, One International
Place, Boston, Massachusetts. This proxy statement was first mailed to
stockholders on or about April 9, 2004.
This proxy statement contains important information regarding our annual
meeting. Specifically, it identifies the proposal 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,
2003 and ended on December 31, 2003 as "fiscal 2003."
WHO MAY ATTEND AND VOTE?
Stockholders who owned our common stock at the close of business on April
1, 2004 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 22,039,924 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.
WHAT DOES THE BOARD OF DIRECTORS RECOMMEND?
The Boards recommends that you vote FOR:
- the election of the nominees for Class II directors identified in
Proposal One.
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 be cast on a particular matter,
present in person or represented by proxy, constitutes a quorum as to any
proposal. The nominees for election of the Class II directors at the meeting who
receive the greatest number of votes properly cast for the election of directors
will be elected. As a result, shares that withhold authority as to the nominees
recommended by the Board will have no effect on
the outcome. Brokers who hold shares for customers will have discretion to vote
their shares without instructions from the beneficial owner, and thus, there
will be no broker non-votes.
CAN I VOTE IF MY SHARES ARE HELD IN STREET NAME?
If you hold shares in "street name" (that is, through a bank, broker, or
other nominee), the bank, broker, or other nominee 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
- if you are the shareholder of record, 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.
HOW CAN I OBTAIN AN ANNUAL REPORT ON FORM 10-K?
Our annual report is available on our website at www.forrester.com. If you
would like a copy of our Annual Report on Form 10-K for the fiscal year ended
December 31, 2003, we will send you one without charge. Please contact the
Director, Investor Relations, Forrester Research, Inc., 400 Technology Square,
Cambridge, MA 02139, Tel: (617) 613-6234.
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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. Henk W. Broeders and
George R. Hornig are the Class II directors whose terms expire at this annual
meeting. The Board of Directors has nominated them to serve as Class II
directors until the 2007 annual meeting.
The proxies intend to vote each share for which a proper proxy card has
been returned and not revoked in favor of the Class III director named above. If
you wish to withhold the authority to vote for the election of either of the
nominees, your returned proxy card must be marked to that effect.
It is expected that Messrs. Broeders and Hornig 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 II DIRECTORS -- TERM EXPIRING 2007
Henk W. Broeders, age 51, a Class II director, became a director of
Forrester in May 1998. Since October 2003, Mr. Broeders has been a member of the
Executive Committee of Cap Gemini S.A., a global management consulting firm
headquartered in Paris, France operating under the name Cap Gemini Ernst &
Young. From 1998 to 2003, Mr. Broeders served as Chairman of the Executive Board
of Cap Gemini N.V., a subsidiary of Cap Gemini S.A. located in the Netherlands.
From 1992 to 1998, Mr. Broeders served as a general manager of IQUIP Informatica
B.V., a software company in the Netherlands.
George R. Hornig, age 49, a Class II director, became a director of
Forrester in November 1996. Mr. Hornig has been a managing director and chief
operating officer of the Private Equity Division at Credit Suisse First Boston,
an investment banking firm, since 1999. He was an executive vice president of
Deutsche Bank Americas Holding Corporation, a diversified financial services
holding company, from 1993 to 1998. He is also director of Unity Mutual Life
Insurance Company, Pacific Fiber Company, L.P., Office Tiger LLC, and Ascent
Assurance, Inc.
OUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE ELECTION OF
THE NOMINEES NAMED ABOVE.
CLASS I DIRECTORS CONTINUING IN OFFICE UNTIL 2005
George F. Colony, age 50, 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 49, a Class I director, became a director of
Forrester in November 1996. Mr. Welles is chief operating officer and founder of
S2 Security Corporation, an IP-based facility security systems start-up. He
previously served as vice president and general manager of the platforms
business with NMS Communications, an OEM infrastructure supplier to the telecom
industry, from 2000 to 2002, vice president of news operations and engineering
for Individual.com, NewsEdge Corporation, and Individual, Inc., a group of news
solutions companies, from 1997 to 2000, and before that, as a general manager at
Lotus Development Corporation, a software company, from 1991 to 1997.
CLASS III DIRECTOR CONTINUING IN OFFICE UNTIL 2006
Robert M. Galford, age 51, a Class III director, became a director of
Forrester in November 1996. Mr. Galford has been a managing partner of the
Center for Executive Development, an executive education provider, in Boston,
since April 2001. From 1999 to 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. Before joining
Columbia's Executive Programs, he taught at Boston University from 1993 to 1994.
Prior to his work in executive
3
education, Mr. Galford was vice president of the MAC Group, and its successor
firm, Gemini Consulting, both of which are management consulting firms, from
1991 to 1994.
CORPORATE GOVERNANCE
We believe that good corporate governance is important to ensure that
Forrester is managed for the long-term benefit of its stockholders. Based on our
continuing review of the provisions of the Sarbanes-Oxley Act of 2002, rules of
the Securities and Exchange Commission and the listing standards of The NASDAQ
Stock Market, Inc., our Board of Directors has adopted Corporate Governance
Guidelines, an amended and restated charter for the Audit Committee of the Board
of Directors, and a new charter for the Compensation Committee of the Board, to
which additional responsibilities have been delegated and which has been renamed
the Compensation and Nominating Committee. We have also adopted a written code
of business conduct and ethics that applies to all of our officers, directors
and employees, including our principal executive officer, principal financial
officer, principal accounting officer, and persons performing similar functions.
You can access our Code of Business Conduct and Ethics, Corporate Governance
Guidelines and our current committee charters on our website, at
www.forrester.com.
INFORMATION WITH RESPECT TO BOARD OF DIRECTORS
BOARD MEETINGS AND COMMITTEES
Our Board of Directors has determined that each of the directors, with the
exception of Mr. Colony, our Chairman and Chief Executive Officer, is
independent under applicable NASDAQ standards as currently in effect.
Our Board of Directors held eight meetings during fiscal 2003. 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. Forrester does
not require directors to attend the annual meeting of stockholders, but all
directors are encouraged to do so. Other than Mr. Colony who presided at the
meeting, our directors did not attend the 2003 annual meeting of stockholders.
The Board of Directors currently has two standing committees, the Audit
Committee and the Compensation and Nominating Committee.
Our Audit Committee consists of three members: George R. Hornig, Chairman,
Henk W. Broeders, and Michael H. Welles, each of whom is "independent" under
NASDAQ rules. The Board has determined that Mr. Hornig is an "audit committee
financial expert" under applicable rules of the Securities and Exchange
Commission, and satisfies the financial literacy standards of NASDAQ. The Audit
Committee held five meetings during fiscal 2003. The Board of Directors has
adopted an amended and restated charter with respect to the Audit Committee's
roles and responsibilities. The responsibilities of our Audit Committee and its
activities during fiscal 2003 are described in the committee's amended and
restated charter attached to this proxy statement as Exhibit A and in the Report
of the Audit Committee contained in this proxy statement at page A-1.
Our Compensation and Nominating Committee consists of two members: Robert
M. Galford and Michael H. Welles, each of whom is "independent" under NASDAQ
rules. The Compensation Committee held one meeting during fiscal 2003. The
Compensation and Nominating Committee has authority, as specified in the
committee's charter, to, among other things, evaluate, and approve the
compensation of, our Chief Executive Officer, review and approve the
compensation of our other executive officers, administer our stock plans, and
oversee the development of executive succession plans for the CEO and other
executive officers. The committee also has the authority to identify and
recommend to the Board qualified candidates for director. See the "Report of the
Compensation and Nominating Committee of the Board of Directors" on page 10 for
more information about the committee's activities with respect to executive
compensation.
DIRECTOR CANDIDATES
As noted above, the Compensation and Nominating Committee has
responsibility for recommending nominees for election as directors of Forrester.
Our Stockholders may recommend individuals for this
4
committee to consider as potential director candidates by submitting their names
and background to the "Forrester Research Compensation and Nominating
Committee", c/o Chief Legal Officer and Secretary, 400 Technology Square,
Cambridge, MA 02139. The Compensation and Nominating Committee will consider a
recommended candidate for the next annual meeting of stockholders only if
biographical information and background material is provided no later than the
date specified below under "Stockholder Proposals" for receipt of stockholder
proposals.
The process that the Compensation and Nominating Committee will follow to
identify and evaluate candidates includes requests to Board members and others
for recommendations, meetings from time to time to evaluate biographical
information and background material relating to potential candidates, and
interviews of selected candidates by members of the Compensation and Nominating
Committee. Assuming that biographical and background material is provided for
candidates recommended by the stockholders, the Compensation and Nominating
Committee will evaluate those candidates by following substantially the same
process, and applying substantially the same criteria, as for candidates
submitted by Board members.
In considering whether to recommend any candidate for inclusion in the
Board's slate of recommended director nominees, including candidates recommended
by stockholders, the Compensation and Nominating Committee will apply the
criteria set forth in the committee's charter and in the Corporate Governance
Guidelines. These criteria include, among others, the candidate's integrity,
experience, commitment, diligence, conflicts of interest, and the ability to act
in the interests of all stockholders. The Compensation and Nominating Committee
does not assign specific weights to particular criteria and no particular
criterion is necessarily applicable to all prospective nominees. We believe that
the backgrounds and qualifications of the directors, considered as a group,
should provide a composite mix of experience, knowledge, and abilities that will
allow the Board to fulfill its responsibilities.
In addition, our bylaws permit stockholders to nominate directors for
election at an annual meeting of stockholders. To nominate a director, in
addition to providing certain information about the nominee and the nominating
stockholder, the stockholder must give timely notice to Forrester, which, in
general, requires that the notice be received by us no less than 60 nor more
than 90 days prior to the applicable annual meeting of stockholders. In
accordance with our by-laws, the 2005 Annual Meeting will be held on May 10,
2005.
COMMUNICATIONS FROM STOCKHOLDERS
The Board will give appropriate attention to communications on issues that
are submitted by stockholders, and will respond if and as appropriate. Absent
unusual circumstances or as contemplated by committee charters, the Compensation
and Nominating Committee will, with the assistance of the Chief Legal Officer,
(1) be primarily responsible for monitoring communications from stockholders and
(2) provide copies of summaries of such communications to the other directors as
he or she considers appropriate.
Stockholders who wish to send communications on any topic to the Board
should address such communications to the Forrester Research Compensation and
Nominating Committee, c/o Chief Legal Officer and Secretary, Forrester Research,
Inc., 400 Technology Square, Cambridge, MA 02139.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation and Nominating 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 as a member of the compensation
committee (or of any committee performing an equivalent function, or if none,
the board of directors,) of any entity in which any of our directors serves as
an executive officer.
DIRECTOR COMPENSATION
CASH COMPENSATION
Prior to 2004, our directors did not receive any cash compensation for
their service as directors. Members of our Board of Directors are reimbursed for
their expenses incurred in connection with attending any meeting. Commencing in
January 2004, our non-employee directors receive an annual retainer of $10,000,
payable
5
quarterly in arrears, and members of the Audit Committee receive $1,500 for each
meeting they attend, with the Chairman of the Audit Committee receiving an
additional $5,000 per year.
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, each non-employee
director receives an option to purchase 12,500 shares of our common stock at an
exercise price equal to the fair market value on that date. These options vest
in four equal annual installments. After last year's annual meeting, our four
non-employee directors received an option to purchase 12,500 shares of our
common stock at an exercise price of $18.75 per share. 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 on the date he
or she is first elected as a director. These options also vest in four equal
annual installments.
The Compensation and Nominating Committee of the Board of Directors also
has the authority under the plan to grant stock options to non-employee
directors in such amounts and on such terms as it shall determine at the time of
grant. No such awards have been made.
6
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table and notes provide information about the beneficial
ownership of our outstanding common stock as of March 29, 2004 by:
(i) each person who we know beneficially owns more than 5% of our
common stock;
(ii) each of the executive officers named below 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.
COMMON STOCK
BENEFICIALLY OWNED
----------------------------
SHARES PERCENTAGE OF
BENEFICIALLY OUTSTANDING
NAME OF BENEFICIAL OWNER OWNED(1) SHARES
------------------------ ------------ -------------
George F. Colony, c/o Forrester Research, Inc.,............. 8,001,166 36.3%
400 Technology Square,
Cambridge, MA, 02139(2)
Dalton, Greiner, Hartman, Maher & Co(3)..................... 1,606,100 7.3%
565 Fifth Avenue, Suite 2101
New York, NY 10017
Royce & Associates, LLC(4).................................. 1,249,300 5.7%
1414 Avenue of the Americas
New York, NY 10019
Neil Bradford(5)............................................ 148,332 *
Richard Belanger(6)......................................... 66,918 *
Brian E. Kardon(7).......................................... 8,750 *
Timothy M. Riley(8)......................................... 63,140 *
Robert M. Galford(9)........................................ 45,150 *
Henk W. Broeders(10)........................................ 36,584 *
George R. Hornig(11)........................................ 33,917 *
Michael H. Welles(12)....................................... 63,250 *
Directors and executive officers as a group (14
persons)(13).............................................. 8,611,960 38.1%
---------------
(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and, unless otherwise indicated,
includes sole voting and/or investment power with respect to the shares. In
calculating the percentage of Forrester's common stock beneficially owned
by each person, group, or entity listed, the number of shares deemed
outstanding consists of shares actually outstanding as of March 29, 2004,
plus, for that person, group, or entity only, any shares subject to stock
options that were exercisable on, or within 60 days after, March 29, 2004.
Shares subject to options currently exercisable or exercisable within 60
days of March 29, 2004 are included as beneficially owned.
(2) Includes (a) 1,446 shares issuable on the exercise of options currently
exercisable or exercisable within 60 days, (b) 1,580 shares held by Mr.
Colony's wife as to which Mr. Colony disclaims beneficial ownership, and
(c) 70,500 shares that are subject to options Mr. Colony granted to one
employee.
(3) Beneficial ownership as of December 31, 2003, as reported in a Schedule 13G
filed with the Securities and Exchange Commission on February 17, 2004.
Beneficial owner has sole voting power with respect to 1,349,200 shares.
(4) Beneficial ownership as of December 31, 2003, as reported in a Schedule 13G
filed with the Securities and Exchange Commission on February 2, 2004.
7
(5) Includes 86,666 shares issuable on the exercise of options.
(6) Includes 66,918 shares issuable on the exercise of options.
(7) Includes 8,750 shares issuable on the exercise of options.
(8) Includes 63,140 shares issuable on the exercise of options.
(9) Includes 2,400 shares held in trust for Mr. Galford's children as to which
Mr. Galford disclaims beneficial ownership and 42,750 shares issuable on
the exercise of options.
(10) Includes 36,584 shares issuable on the exercise of options.
(11) Includes 33,917 shares issuable on the exercise of options.
(12) Includes 63,250 shares issuable on the exercise of options.
(13) Includes 548,174 shares issuable on the exercise of options.
* Less than 1%.
EXECUTIVE COMPENSATION
COMPENSATION OF EXECUTIVE OFFICERS
The following table shows the compensation paid or awarded during fiscal
2003 to our Chief Executive Officer and each of our four most highly compensated
executives officers as of December 31, 2003. We refer to these officers as the
"named executive officers".
SUMMARY COMPENSATION TABLE
LONG-TERM
COMPENSATION
------------
ANNUAL COMPENSATION(1) SECURITIES
----------------------- UNDERLYING
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS
--------------------------- ---- ---------- ---------- ------------
George F. Colony.................................... 2003 $250,000 $160,333 --
Chairman of the Board and 2002 $241,667 $ 82,614 --
Chief Executive Officer 2001 $250,000 $ 77,500 100
Neil Bradford....................................... 2003 $208,333 $111,291 58,000
President, North America 2002 $200,000 $ 40,850 25,000
2001 $151,338 $ 17,850 100
Richard Belanger.................................... 2003 $208,600 $104,173 21,000
Chief Technology Officer 2002 $203,000 $ 46,609 20,000
2001 $210,000 $ 34,099 100
Brian E. Kardon..................................... 2003 $202,000 $112,970 41,000
Chief Marketing and Strategy Officer 2002 N/A N/A N/A
2001 N/A N/A N/A
Timothy M. Riley.................................... 2003 $212,100 $105,164 26,000
Chief People Officer 2002 $206,500 $ 46,784 20,000
2001 $210,000 $ 35,018 100
---------------
(1) No named executive officer received perquisites or other personal benefits
in excess of the lesser of $50,000 or 10% of his salary and bonus.
8
OPTIONS GRANTED AND OPTIONS EXERCISED IN THE LAST FISCAL YEAR
The following tables set forth certain information about stock options
granted to and held by the named executive officers during fiscal 2003. None of
the named executive officers exercised any options in fiscal 2003.
OPTION GRANTS IN LAST FISCAL YEAR
POTENTIAL
REALIZABLE VALUE
% OF TOTAL AT ANNUAL RATES
NUMBER OF OPTIONS OF STOCK PRICE
SECURITIES GRANTED TO APPRECIATION FOR
UNDERLYING EMPLOYEES EXERCISE OPTION TERM(3)
OPTIONS IN FISCAL PRICE EXPIRATION -------------------
NAME GRANTED (#) YEAR ($/SHARE) DATE 5% ($) 10% ($)
---- ----------- ---------- --------- ---------- -------- --------
George F. Colony............ -- -- -- -- -- --
Richard Belanger............ 15,000(1) 1.0% $14.73 03/30/13 $138,906 $351,988
6,000(2) * $13.94 09/30/13 $ 52,583 $133,244
Neil Bradford............... 30,000(1) 2.1% $14.73 03/30/13 $277,812 $703,976
20,000(1) 1.4% $14.94 09/11/13 $187,686 $475,749
8,000(2) * $13.94 09/30/13 $ 70,110 $177,659
Brian E. Kardon............. 35,000(1) 2.4% $15.54 01/05/13 $341,771 $866,383
6,000(2) * $13.94 09/30/13 $ 52,583 $133,244
Timothy M. Riley............ 20,000(1) 1.4% $14.73 03/30/13 $185,208 $469,317
6,000(2) * $13.94 09/30/13 $ 52,583 $133,244
---------------
* Less than 1%
(1) The exercise price of the options granted is equal to the fair market value
of our common stock on the date of grant. Pursuant to the terms set forth in
the option certificate, the option becomes exercisable in four equal
installments on the first, second, third, and fourth anniversaries from the
date of grant. All options expire approximately 10 years from the date of
grant.
(2) The exercise price of the options is equal to the fair market value of our
common stock on the date of grant. Pursuant to the terms set forth in the
option certificate, the option becomes 100% exercisable on the first
anniversary from the date of grant. All options expire approximately 10
years from the date of grant.
(3) The amounts shown on this table represent hypothetical gains that could be
achieved for the respective options if exercised at the end of the option
term. These gains are based on assumed rates of stock appreciation of 5% and
10%, compounded annually from the date the respective options were granted
to their expiration date. The gains shown are net of the option exercise
price, but do not include deductions for taxes or other expenses associated
with the exercise. Actual gains, if any, on stock option exercises will
depend on the future performance of our common stock, the holder's continued
employment through the option period, and the date on which the options are
exercised.
9
AGGREGATED OPTION EXERCISES IN 2003 AND
FISCAL YEAR-END OPTION VALUES
FISCAL YEAR-END OPTION VALUES
---------------------------------------------------------
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS AT FISCAL AT FISCAL
YEAR-END (#): YEAR-END ($)(1):
--------------------------- ---------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ------------- ----------- -------------
George F. Colony.............................. 1,446 800 $ 7,071 --
Neil Bradford................................. 72,916 77,050 $ 9,188 $204,843
Richard Belanger.............................. 58,168 46,800 $227,540 $150,810
Brian E. Kardon............................... -- 41,000 -- $100,210
Timothy M. Riley.............................. 53,140 51,800 $268,539 $165,910
---------------
(1) Based upon the market price of $17.75 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 2003 less the option exercise price per share.
EQUITY COMPENSATION PLAN INFORMATION
The following table provides information as of December 31, 2003, the last
day of fiscal 2003, about our equity compensation plans that were in effect
during fiscal 2003.
NUMBER OF SECURITIES
NUMBER OF SECURITIES WEIGHTED-AVERAGE REMAINING AVAILABLE FOR
TO BE ISSUED UPON EXERCISE PRICE OF FUTURE ISSUANCE UNDER
EXERCISE OF OUTSTANDING EQUITY COMPENSATION PLANS
OUTSTANDING OPTIONS, OPTIONS, WARRANTS (EXCLUDING SECURITIES
WARRANTS AND RIGHTS AND RIGHTS REFLECTED IN COLUMN (A))
-------------------- ----------------- -------------------------
PLAN CATEGORY (A) (B) (C)
------------- -------------------- ----------------- -------------------------
Equity compensation plans approved by
shareholders(1).................... 4,847,000 $19.30 3,507,837(2)
--------- ------ ---------
Total................................ 4,847,000 $19.30 3,507,837
--------- ------ ---------
---------------
(1) The approved plans are Forrester's 1996 Amended and Restated Equity
Incentive Plan (the "1996 Plan"), 1996 Amended and Restated Stock Option
Plan for Non-Employee Directors, and 1996 Employee Stock Purchase Plan, as
amended. We do not have any equity compensation plans that have not been
approved by our shareholders.
(2) Of these shares available for issuance, all those available under the 1996
Plan may be issued as restricted stock. We have never awarded any shares of
restricted stock under the 1996 Plan.
REPORT OF THE COMPENSATION AND NOMINATING COMMITTEE OF THE BOARD OF DIRECTORS
The Compensation and Nominating Committee is responsible, among other
things, for reviewing the compensation of Forrester's directors, the chief
executive officer and other executive officers, and administering Forrester's
stock plans. The members of the committee are Messrs. Galford and Welles, both
of whom are independent directors under the applicable standards of the NASDAQ
Stock Market, and neither of whom is or ever has been an executive officer or
employee of Forrester.
Forrester's culture emphasizes certain key values -- including client
service, quality, 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
10
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.
Compensation for Forrester's executive officers in 2003 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 based on Forrester's overall
performance against key business objectives.
Stock Options. The principal equity component of executive compensation is
stock options granted under Forrester's equity incentive plan. 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 and Nominating 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
2003, the Compensation and Nominating Committee considered formal and informal
surveys of businesses like Forrester, that rely heavily on the quality of their
analysts, and that recognize that equity compensation is a key retention
incentive.
Mr. Colony's compensation package in 2003 as Chief Executive Officer
consisted of base salary, cash bonus, and the same executive and employee
benefit programs as those in which other executives participate. In deciding the
size of his cash bonus, the committee considered Forrester's performance,
including revenues, operating income, bookings, and agreement value, although no
single factor was more important than any other in determining Mr. Colony's cash
bonus or overall compensation. Given Mr. Colony's significant ownership of
Forrester common stock, the committee did not grant stock options to Mr. Colony
in 2003.
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
11
REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
The Board of Directors has appointed an Audit Committee composed of three
non-employee directors: Messrs. Hornig (Chairman), Welles, and Broeders. Each of
the members of the Audit Committee is "independent" as defined under the NASDAQ
Stock Market listing standards. The Board has determined that Mr. Hornig is an
"audit committee financial expert" under applicable rules of the Securities and
Exchange Commission, and satisfies the NASDAQ financial literacy standards.
The Audit Committee is responsible for providing independent oversight of
Forrester's accounting functions and internal controls. The Audit Committee
oversees Forrester's financial reporting process on behalf of the Board of
Directors, reviews financial disclosures, and meets privately, outside of the
presence of management, with the independent auditors. The Audit Committee also
selects and appoints the independent auditors, reviews the performance of the
independent auditors, and reviews the independent auditors' fees. The Audit
Committee operates under a written charter adopted by the Board of Directors
that is attached as Exhibit A to this proxy statement.
In fulfilling its oversight responsibilities, the Audit Committee reviewed
and discussed Forrester's audited financial statements for the fiscal year ended
December 31, 2003 with Forrester's management and with Deloitte & Touche LLP,
Forrester's independent auditors. The Audit Committee also discussed with
Deloitte & Touche LLP the matters required by Statement of Auditing Standards
No. 61, as amended (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 Deloitte & Touche LLP required by Independence Standards Board
Standard No. 1 (Independence Discussion with Audit Committees) and the Audit
Committee discussed the independence of Deloitte & Touche LLP with that firm.
Based on the Audit Committee's review and discussions noted above, the
Audit Committee recommended to the Board of Directors, and the Board of
Directors approved, the inclusion of the audited financial statements in our
Annual Report on Form 10-K for the fiscal year ended December 31, 2003 for
filing with the Securities and Exchange Commission.
AUDIT COMMITTEE OF THE
BOARD OF DIRECTORS
George R. Hornig, Chairman
Michael H. Welles
Henk W. Broeders
12
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 Russell 2000 index for the period commencing December
31, 1998 and ending on December 31, 2003. The chart data assumes in each case
that $100 was invested on December 31, 1998 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]
--------------------------------------------------------------------------------------
12/31/98 12/31/99 12/29/00 12/31/01 12/31/02 12/31/03
--------------------------------------------------------------------------------------
Forrester
Research......... $100.00 $157.43 $228.86 $ 92.07 $71.18 $ 81.14
Nasdaq Stock Market
(US Companies)... $100.00 $185.43 $111.83 $ 88.76 $61.37 $ 91.75
Russell 2000....... $100.00 $119.62 $114.59 $115.77 $90.79 $134.35
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 2003, except for three gifts made in
June 2003 by Mr. Colony totaling 9,700 shares which were reported late.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Indemnification Agreement with Mr. Colony. At the time of our initial
public offering, we entered into an indemnification agreement with Mr. Colony
relating to each party's respective tax liabilities. 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 (at the closing of the offering). The
agreement generally provides that we will indemnify
13
Mr. Colony for any increase in his taxes (including interest and penalties)
resulting from adjustments initiated by taxing authorities and from payments
made to Mr. Colony under the agreement, and Mr. Colony will pay us an amount
equal to any reduction 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 our income as
a 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. At the time of our
initial public offering, we entered into a registration rights and
non-competition agreement with Mr. Colony which provides that if Mr. Colony's
employment with us is terminated he will not compete with us for the one year
period after the date of such termination. The agreement also provides that in
the event we propose to file a registration statement under the Securities Act
of 1933, as amended, with respect to an offering by us for our own account or
the account of another person, or both, Mr. Colony shall be entitled to include
shares held by him in such a registration, subject to the right of the managing
underwriter of any such offering to exclude some or all of such shares from such
registration if and to the extent the inclusion of the shares would adversely
affect the marketing of the shares to be sold by us. The agreement also provides
that Mr. Colony may require us to register shares under the Securities Act with
a fair market value of at least $5 million, except that we are not required to
effect such registration more than twice or at certain times described in the
agreement. The agreement also provides that we will pay all expenses incurred in
connection with such registration.
INDEPENDENT AUDITORS
Deloitte & Touche LLP ("Deloitte") audited our financial statements for the
fiscal year ended December 31, 2003. We expect that representatives of Deloitte
will attend the Annual Meeting, will have an opportunity to make a statement,
and will be available to respond to appropriate questions.
REPLACEMENT OF DELOITTE & TOUCHE LLP
On April 7, 2004, our Audit Committee dismissed Deloitte as our independent
auditor. On that date, our Audit Committee selected BDO Seidman, LLP as its
independent auditor for the current fiscal year ended December 31, 2004. Both
decisions were approved by our Audit Committee.
Deloitte's reports on Forrester's consolidated financial statements for
each of the years ended December 31, 2003 and December 31, 2002 did not contain
an adverse opinion or disclaimer of opinion, nor were they qualified or modified
as to uncertainty, audit scope, or accounting principles. Deloitte's reports
contained explanatory paragraphs relating to the adoption of Statement of
Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets"
and the application of procedures relating to certain disclosures of financial
statement amounts related to the 2001 financial statements that were audited by
other auditors who have ceased operations. During the years ended December 31,
2003 and December 31, 2002, and through April 7, 2004, there were no
disagreements with Deloitte on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedure which, if not
resolved to Deloitte's satisfaction, would have caused it to make reference to
the subject matter in connection with its report on Forrester's consolidated
financial statements for such years. There were no reportable events as defined
in Item 304(a)(1)(v) of Regulation S-K.
Forrester provided Deloitte with a copy of the foregoing disclosures and
Deloitte provided a letter to the Securities and Exchange Commission dated April
9, 2004 agreeing with such disclosure.
During the years ended December 31, 2003 and December 31, 2002, and through
April 7, 2004, Forrester did not consult BDO Seidman, LLP 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
Forrester's consolidated financial statements, or any other matter that was
either the subject of a disagreement (as defined in Item 304(a)(1)(iv) of
Regulation S-K) or a reportable event (as described in Item 304(a)(1)(v) of
Regulation S-K).
14
REPLACEMENT OF INDEPENDENT PUBLIC ACCOUNTANTS IN 2002
On April 1, 2002, the Audit Committee of Forrester recommended, and the
Board of Directors of Forrester decided, to no longer engage Arthur Andersen LLP
("Andersen") as Forrester's independent public accountants and engaged Deloitte
& Touche LLP to serve as Forrester's independent public accountants for the
fiscal year 2002.
Andersen's reports on Forrester's consolidated financial statements for the
year ended December 31, 2001 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 year ended December 31, 2001 and through April
1, 2002, there were no disagreements with Andersen on any matter of accounting
principles or practices, financial statement disclosure, or auditing scope or
procedure which, if not resolved to Andersen's satisfaction, would have caused
it to make reference to the subject matter in connection with its report on
Forrester's consolidated financial statements for such years. There were no
reportable events as defined in Item 304(a)(1)(v) of Regulation S-K.
Forrester provided Andersen with a copy of the foregoing disclosures. A
letter from Andersen dated April 5, 2002 and addressed to the Securities and
Exchange Commission (the "SEC") is included as Exhibit 16.1 to Forrester's
Current Report on Form 8-K filed with the SEC on April 5, 2002 and states that
Andersen agrees with such disclosure.
During the year ended December 31, 2001 and through April 1, 2002,
Forrester did not consult Deloitte & Touche LLP 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 Forrester's
consolidated financial statements, or any other matter that was either the
subject of a disagreement (as defined in Item 304(a)(1)(iv) of Regulation S-K)
or a reportable event (as described in Item 304(a)(1)(v) of Regulation S-K).
INDEPENDENT AUDITORS' FEES AND OTHER MATTERS
The following table presents the aggregate fees billed for services
rendered by Deloitte & Touche LLP, the member firms of Deloitte Touche Tohmatsu,
and their respective affiliates, for the fiscal years ended December 31, 2003
and December 31, 2002. Because the rules of the Securities and Exchange
Commission on how these fees are presented have changed, we have reclassified
the amounts shown in our proxy statement for 2002 to conform to the 2003
presentation and to include fees related to international statutory audits and
international tax services:
FISCAL 2003 FISCAL 2002
----------- -----------
Audit Fees.................................................. $205,000 $184,000
Audit-Related Fees.......................................... 5,000 --
Tax Fees.................................................... -- 117,000
All Other Fees.............................................. -- --
Total Fees.................................................. $210,000 $301,000
AUDIT FEES
These are fees related to professional services rendered in connection with
the audit of our annual financial statements, the reviews of the financial
statements included in each of our Quarterly Reports on Form 10-Q, international
statutory audits, and accounting consultations that relate to the audited
financial statements and are necessary to comply with generally accepted
auditing standards.
15
AUDIT RELATED FEES
These fees are for consultations regarding accounting matters not related
to financial reporting.
TAX FEES
These are fees billed for professional services related to tax compliance
and tax consulting services.
AUDIT COMMITTEE'S PRE-APPROVAL POLICY AND PROCEDURES
During 2003, the Audit Committee of our Board of Directors adopted a policy
for the pre-approval of audit and non-audit services for the purpose of
maintaining the independence of our independent auditors. We may not engage our
independent auditors to render any audit or non-audit service unless either the
service is approved in advance by the Audit Committee or by the Chairman
pursuant to delegated authority. At each regularly scheduled meeting of the
Audit Committee, management or a representative of the independent auditors must
report to the Audit Committee summarizing the services provided by the
independent auditors, including the fees charged for the services, listing newly
pre-approved services since the last regularly scheduled meeting, and an updated
projection for the current year of the estimated annual fees to be paid to the
independent auditors for all pre-approved audit and permissible non-audit
services.
STOCKHOLDER PROPOSALS
Stockholder proposals to be considered at the Annual Meeting of
Stockholders in 2005 must be received by December 15, 2004, to be considered for
inclusion in our proxy materials for that meeting.
Stockholders who wish to make a proposal at the 2005 annual meeting, other
than proposals included in the proxy materials, must notify us between February
9, 2005 and March 11, 2005. If the stockholder does not notify us by March 11,
2005, 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.
FORM 10-K
A copy of our annual report on Form 10-K filed with the Securities and
Exchange Commission has been mailed with this proxy statement and is available
to stockholders without charge by writing to Forrester Research, Inc., Investor
Relations, 400 Technology Square, Cambridge, Massachusetts 02139.
16
EXHIBIT A
AMENDED AND RESTATED CHARTER OF THE AUDIT COMMITTEE OF THE
BOARD OF DIRECTORS OF FORRESTER RESEARCH, INC.
MARCH 8, 2004
1. Purpose. The purpose of the Audit Committee (the "Committee") shall be
to (a) appoint, oversee and replace, if necessary, the independent auditor; (b)
assist the Board of Directors' oversight of (i) the preparation of the Company's
financial statements, (ii) the Company's compliance with legal and regulatory
requirements, (iii) the independent auditor's qualifications and independence,
and (iv) the performance of the Company's independent auditor and internal audit
function; and (c) prepare the report the SEC rules require be included in the
Company's annual proxy statement.
2. Composition of the Audit Committee. The Committee shall consist of not
less than three board members appointed by the Board of Directors of the
Company, one of whom shall be appointed as Chairman. Committee members may be
removed by the Board of Directors in its discretion. Members of the Committee
shall each satisfy the independence requirements of the Sarbanes-Oxley Act of
2002 (the "Sarbanes-Oxley Act") and the The Nasdaq Stock Market, Inc.
("Nasdaq"), and the Board of Directors shall annually review the Committee's
compliance with such requirements. Members of the Committee shall be able to
read and understand fundamental financial statements, including a balance sheet,
income statement and cash flow statement. No member of the Committee may sit on
more than three separate audit committees.
3. Meetings of the Audit Committee. The Committee shall hold regularly
scheduled meetings and such special meetings as circumstances dictate. It shall
meet separately, at least quarterly, with management, with personnel responsible
for the internal audit function, and with the independent auditor to discuss
results of examinations, or discuss any matters that the Committee or any of
these persons or firms believes should be discussed privately. The Committee
shall report regularly to the Board of Directors.
4. Responsibilities of the Audit Committee. The function of the Committee
is oversight. Although the Committee has the responsibilities set forth in this
charter, it is not the responsibility of the Committee to plan or conduct
audits, to determine that the Company's financial statements are complete and
accurate and are in accordance with generally accepted accounting principles, or
to assure compliance with laws, regulations or any internal rules or policies of
the Company. The Committee has direct and sole responsibility for the
appointment, compensation, oversight and replacement, if necessary, of the
independent auditor, including the resolution of disagreements between
management and the auditor regarding financial reporting. Each member of the
Committee shall be entitled to rely on (i) the integrity of those persons and
organizations within and outside the Company that it receives information from
and (ii) the accuracy of the financial and other information provided to the
Committee by such persons or organizations absent actual knowledge to the
contrary (which shall be promptly reported to the Board of Directors).
5. Duties and Proceedings of the Audit Committee. The Committee shall
assist the Board of Directors in fulfilling its oversight responsibilities by
accomplishing the following:
5.1 Oversight of Independent Auditor.
(a) Annually evaluate, determine the selection of, and if necessary,
determine the replacement of or rotation of, the independent auditor.
(b) Establish and periodically review a policy for pre-approval of all
auditing services (including comfort letters and statutory audits) and all
permitted non-audit services by the independent auditor, and approve or
pre-approve any such services in accordance with the policy.
(c) Review, evaluate and discuss formal reports, at least annually, from
the independent auditor regarding the auditor's independence, including a
delineation of all relationships between the auditor and the Company; and take,
or recommend that the Board of Directors take, appropriate action to oversee the
independence of the independent auditor.
A-1
(d) Establish hiring policies for employees or former employees of the
independent auditors.
(e) At least annually, receive a report, orally or in writing, from the
independent auditor detailing the firm's internal quality control procedures and
any material issues raised by the independent auditor's internal quality control
review, peer review or any governmental or other professional inquiry performed
within the past five years and any remedial actions implemented by the firm.
5.2Oversight of Audit Process and Company's Legal Compliance Program.
(a) Review with personnel responsible for internal audit and with the
independent auditor the overall scope and plans for audits, including authority
and organizational reporting lines and adequacy of staffing and fees, and review
any difficulties with audits and management's response.
(b) Review and discuss with management, personnel responsible for internal
audit function, and independent auditor the Company's system of internal
control, its financial and critical accounting practices, and policies relating
to risk assessment and management.
(c) Receive and review reports of the independent auditor discussing (1)
all critical accounting policies and practices to be used in the Company's
financial statements, (2) all alternative treatments of financial information
within generally accepted accounting principles ("GAAP") that have been
discussed with management, ramifications of the use of such alternative
disclosures and treatments, and the treatment preferred by the independent
auditor, and (3) other material written communications between the independent
auditor and management, such as any management letter or schedule of unadjusted
differences.
(d) Discuss with management and the independent auditor any changes in the
Company's critical accounting principles and the effects of alternative GAAP
methods, off-balance sheet structures and regulatory and accounting initiatives.
(e) Review and discuss with management and the independent auditor the
annual and quarterly financial statements and MD&A included in the Company's
periodic reports prior to their filing with the SEC. Discuss results of the
annual audit and quarterly review and any other matters required to be
communicated to the Committee by the independent auditor under generally
accepted auditing standards. Discuss with management and the independent auditor
their judgment about the quality of accounting principles, the reasonableness of
significant judgments, including a description of any transactions as to which
management obtained Statement on Auditing Standards No. 50 letters, and the
clarity of disclosures in the Company's financial statements and MD&A.
(f) Review earnings press releases and earnings guidance provided to
analysts and rating agencies.
(g) Review material pending legal proceedings involving the Company and
other contingent liabilities.
(h) Receive and review any reports from the CEO and CFO on any significant
deficiencies or material weaknesses in the design or operation of internal
controls, or any fraud that involves management or other employees who have a
significant role in the company's internal controls.
(i) Discuss with the independent auditor the matters required to be
communicated to audit committees in accordance with Statement on Auditing
Standards No. 61.
(j) Establish procedures for the receipt, retention and treatment of
complaints received by the Company regarding accounting, internal accounting
controls or auditing matters, and the confidential, anonymous submissions by
employees of concerns regarding questionable accounting or accounting matters.
5.3 Other Responsibilities.
(a) Review the adequacy of this charter annually and submit the charter to
the Board of Directors for approval.
(b) Prepare a report for inclusion in the Company's annual proxy statement
as required by the rules of the SEC.
(c) Report to the Board on a regular basis.
A-2
(d) Annually perform, or participate in, an evaluation of the performance
of the Committee, the results of which shall be presented to the Board.
(e) Perform any other activities consistent with the Charter, By-laws and
governing law as the Board of Directors or the Audit Committee shall deem
appropriate, including holding meetings with the Company's investment bankers
and financial analysts.
6. Authority and Resources of the Audit Committee. The Committee has the
authority to retain legal, accounting or other experts that it determines to be
necessary to carry out its duties. It also has authority to determine
compensation for such advisors as well as for the independent auditor. The
Committee may determine appropriate funding needs for its own ordinary
administrative expenses that are necessary and appropriate to carrying out its
duties.
A-3
DETACH HERE ZFRRC2
PROXY
FORRESTER RESEARCH, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
THE COMPANY FOR AN ANNUAL MEETING, MAY 11, 2004
The undersigned appoints George F. Colony and Gail S. Mann, 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 LLP, One International Place, Boston, Massachusetts
02110 at 10:00 a.m. on Tuesday, May 11, 2004, 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 FOR the election of the directors.
----------- -----------
SEE REVERSE SEE REVERSE
SIDE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SIDE
----------- -----------
FORRESTER RESEARCH, INC.
c/o EQUISERVE TRUST COMPANY, N.A.
P.O. BOX 8694
EDISON, NJ 08818-8694
[FRRCM - FORRESTER RESEARCH, INC.][FILE NAME: ZFRRC1.ELX] [VERSION - (1)]
[04/06/04] [orig. 04/06/04] ZFRRC1
DETACH HERE IF YOU ARE RETURNING YOUR PROXY CARD BY MAIL
[X] PLEASE MARK | #FRR
VOTES AS IN |
THIS EXAMPLE. |_____
1. To elect two directors to serve 2. To transact such other business
until the 2007 Annual Meeting of as may properly come before the
Stockholders; meeting and any adjournments
thereof.
Nominees: (01) Henk W. Broeders
and (02) George R. Hornig
FOR [ ] WITHHELD [ ]
BOTH FROM BOTH
NOMINEES NOMINEES
[ ] ________________________________________
For all nominees except as noted above
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: ________