##### Table of Contents





UNITED STATES SECURITIES AND
    EXCHANGE COMMISSIONWashington, D.C.
    20549
      Form 10-K
  þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    April 30,
    2010ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934   Commission File Number
    001-14505
      KORN/FERRY
    INTERNATIONAL
 (Exact Name of Registrant as
    Specified in its Charter)
  Delaware

95-2623879(State or Other Jurisdiction
    of
    Incorporation or Organization)

(I.R.S. Employer
    Identification Number)1900 Avenue of the Stars, Suite 2600,
    Los Angeles, California(Address of principal
    executive offices)

90067(Zip code)   (310) 552-1834
 (Registrants telephone
    number, including area code)
      Securities registered pursuant to Section 12(b) of the
    Act:
  Title of Each Class

Name of Each Exchange on Which RegisteredCommon Stock, par value $0.01 per share

New York Stock Exchange   Securities registered pursuant to Section 12(g) of the
    Act:
 None
  þ o
  o þ
  þ o
  Regulation S-T o o
  Regulation S-K Form 10-K Form 10-K. þ
  12b-2
  Large accelerated filer þ

Accelerated filer o

Non-accelerated filero
    (Do not check if a smaller reporting company)

Smaller Reporting company o   Rule 12b-2 o þ
    DOCUMENTS
    INCORPORATED BY REFERENCE
  Form 10-K.




---



##### 





KORN/FERRY
    INTERNATIONAL
  Index to
    Annual Report on
    Form 10-K
    for the Fiscal Year Ended April 30, 2010
   
 Item #

Description

PagePART I.Item 1


Business


1Item 1A


Risk Factors


9Item 1B


Unresolved Staff Comments


13Item 2


Properties


13Item 3


Legal Proceedings


13Item 4


Reserved


13Executive Officers


13PART II.Item 5


Market for Registrants Common Equity,
    Related Stockholder Matters and Issuer Purchases of Equity
    Securities


15Item 6


Selected Financial Data


18Item 7


Managements Discussion and Analysis of
    Financial Condition and Results of Operations


19Item 7A


Quantitative and Qualitative Disclosures About
    Market Risk


32Item 8


Financial Statements and Supplementary Data


33Item 9


Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure


33Item 9A


Controls and Procedures


33Item 9B


Other Information


34PART III.Item 10


Directors, Executive Officers and Corporate
    Governance


34Item 11


Executive Compensation


34Item 12


Security Ownership of Certain Beneficial Owners
    and Management and Related Stockholder Matters


34Item 13


Certain Relationships and Related Transactions,
    and Director Independence


34Item 14


Principal Accountant Fees and Services


34PART IV.Item 15


Exhibit and Financial Statements


35Signatures


38Financial Statements and Financial Statement
    Schedules


F-1EX-10.40EX-21.1EX-23.1EX-31.1EX-31.2EX-32.1




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##### Table of Contents



PART I.  Item 1.
    Business  Business
    Overview
        Executive Recruitment:
  Leadership and Talent Consulting
    (LTC):
  Talent Acquisition Solutions: Korn/Ferrys
  1-800-732-0330. www.sec.gov
  www.kornferry.com
  www.kornferry.com
 1




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##### Table of Contents



Industry
    Overview
  Executive Recruitment:
  Leadership and Talent Consulting:
  Talent Acquisition Solutions:
  Industry
    Trends
    Consolidation of Talent Management Solution
    Providers
  
    Companies are actively in search of preferred providers in order
    to create efficiencies and consolidate vendor relationships;
    Companies that can offer a full suite of talent management
    solutions are becoming increasingly attractive; and
    Clients seek trusted advisors who understand their business and
    unique organizational culture in order to manage the multiple
    needs of their business on a global scale.  Aging Population
  Globalization of Business
  Increased Outsourcing of Recruitment
    Functions
 2




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##### Table of Contents




    Access to a diverse and highly qualified pool of candidates on
    an as-needed basis;
    Reduction or elimination of the costs required to maintain and
    train an in-house recruiting department in a rapidly changing
    industry;
    Access to the most updated industry and geographic market
    information;
    Access to cutting-edge search technology software; and
    Ability to maintain management focus on core strategic business
    issues.  Key Role of Advanced Technology
  Other Industry Trends
  
    Increasing demand for managers with broader qualifications;
    Increasing desire by candidates to more actively manage their
    careers;
    Increasing demand for senior executives with not just the right
    technical skills, but also the right leadership characteristics
    to meet the specific requirements of the position and
    organizational culture;
    Increasing demand for senior executives who can exceed the high
    standards of due diligence and public scrutiny as a result of
    recent securities legislation;
    Decreasing executive management tenure and more frequent job
    changes;
    Inadequate succession planning; and
    Increasing impact of Internet-enabled social media on the role
    of HR and the recruitment process.  Growth
    Strategy
    Recruiting
    and Retaining Key Consultants
    Broadening
    our Product and Service Offerings
   3




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##### Table of Contents



Global
    Account Management
  Premier Client Partnerships
  Expanding
    our Market Reach and Presence through Technology and Assessment
    Solutions
  e-Korn/Ferry Searcher Express state-of-the-art Searcher Express Client
    Advantage Talent Dashboard e-Korn/Ferry K/F Connect
  Talent
    Dash
  Search
    Assessment
  Talent Acquisition Solutions:
    Leveraging
    our Leadership and Brand Name in Executive
    Recruitment
   4




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##### Table of Contents



Our
    Services and Organization
    Executive
    Recruitment Services
  Overview.
  The Korn/Ferry Advantage
  Leadership Sort System
    Search
    AssessmentSM
    Industry Specialization.
 5




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##### Table of Contents



Percentage
    of Fiscal 2010 Assignments by Industry Specialization
  Global Markets:Industrial


27
%Consumer


19
%Financial Services


18
%Technology


14
%Life Sciences


13
%Regional Specialties:Education/Not-for-Profit


5
%Healthcare Provider


4
%   Functional Expertise.
  Percentage
    of Fiscal 2010 Assignments by Functional Expertise
  Board Level/CEO/CFO/Senior Executive and General Management


69
%Marketing and Sales


11
%Manufacturing/Engineering/Research and Development/Technology


7
%Human Resources and Administration


6
%Finance and Control


5
%Information Systems


2
%   Regions
  North America
  Europe, the Middle East and Africa
    (EMEA)
  Asia Pacific
  South America
 6




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##### Table of Contents



Client Base.
  Competition.
  Leadership and Talent Consulting. Leadership and Talent Consulting
          Talent
    Acquisition Solutions  Futurestep
  Overview.
     7




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##### Table of Contents



Regions.
  Competition.
    Organization
    Professional
    Staff and Employees
     8




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##### Table of Contents



Form 10-K.
  Operating


Number of


Number ofFee


Income


Offices as of


Consultants as ofRevenue


(Loss)


April 30, 2010


April 30, 2010(Dollars in thousands)Executive Recruitment:North America

$
278,746


$
42,604



23



229EMEA


137,497



(15,511
)


20



139Asia Pacific


64,132



7,826



19



85South America


24,026



3,286



7



20Total Executive Recruitment


504,401



38,205



69



473Futurestep(1)


67,979



1,291



7



154Corporate






(42,218
)






Total

$
572,380


$
(2,722
)


76



627     (1)
    
    Futurestep partially occupies 20 of the executive recruitment
    offices globally in 13 countries.    Year Ended April 30,2010


2009


2008(In thousands)Fee Revenue:United States

$
270,859


$
305,472


$
368,039Canada


32,115



41,861



48,646EMEA


157,376



172,899



223,826Asia Pacific


88,004



93,668



124,503South America


24,026



24,323



25,556Total

$
572,380


$
638,223


$
790,570   Item 1A.
    Risk
    Factors  The risks described below are the material risks facing our
    Company. Additional risks not presently known to us or that we
    currently deem immaterial may also impair our business
    operations. Our business, financial condition or results of
    operations could be materially adversely affected by any of
    these risks.
  Competition
    in our industry could result in us losing market share and/or
    require us to charge lower prices for services, which could
    reduce our revenue.
   9




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and/or
  If we
    fail to attract and retain qualified and experienced
    consultants, our revenue could decline and our business could be
    harmed.
    Global
    economic developments and the conditions in the geographic
    regions and the industries from which we derive a significant
    portion of our fee revenue could negatively affect our business,
    financial condition and results of operations.
    If we
    are unable to retain our executive officers and key personnel,
    or integrate new members of our senior management who are
    critical to our business, we may not be able to successfully
    manage our business in the future.
    If we
    are unable to maintain our professional reputation and brand
    name, our business will be harmed.
     10




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We are
    subject to potential legal liability from clients, employees and
    candidates for employment. Insurance coverage may not be
    available to cover all of our potential liability and available
    coverage may not be sufficient to cover all claims that we may
    incur.
    We
    rely heavily on our information systems and if we lose that
    technology, or fail to further develop our technology, our
    business could be harmed.
    We
    face risks associated with social and political instability,
    legal requirements, economic conditions and currency
    fluctuations in our international operations.
    
    changes in and compliance with applicable laws and regulatory
    requirements;
    difficulties in staffing and managing global operations;
    social and political instability;
    fluctuations in currency exchange rates;
    statutory equity requirements;
    repatriation controls; and
    potential adverse tax consequences.    We may
    be limited in our ability to recruit employees from our clients
    and we could lose those opportunities to our competition, which
    could harm our business.
   11




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##### Table of Contents



We
    have provisions that make an acquisition of us more difficult
    and expensive.
    
    a classified Board of Directors;
    limitations on the removal of directors;
    limitation on stockholder actions;
    advance notification requirements for director nominations and
    actions to be taken at stockholder meetings; and
    the ability to issue one or more series of preferred stock by
    action of our Board of Directors.    We
    have deferred tax assets that we may not be able to use under
    certain circumstances.
    An
    impairment in the carrying value of goodwill and other
    intangible assets could negatively impact our consolidated
    results of operations and net worth.
    Acquisitions
    may have an adverse effect on our business.
   12




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##### Table of Contents



We may
    not be able to align our cost structure with our revenue
    level.
    We may
    require additional capital in the future, which may not be
    available at all or may be available only on unfavorable
    terms.
    Item 1B.
    Unresolved
    Staff Comments    Item 2.
    Properties    Item 3.
    Legal
    Proceedings    Item 4.
    Removed
    and Reserved  Executive
    Officers of the Registrant
  Name

Age

PositionGary D. Burnison


49


President and Chief Executive OfficerMichael A. DiGregorio


55


Executive Vice President and Chief Financial OfficerAna Dutra


46


Executive Vice President and Chief Executive Officer of
    Leadership and Talent ConsultingRobert H. McNabb


63


Executive Vice President, Premier Client PartnershipByrne Mulrooney


49


Chief Executive Officer, Futurestep    13




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##### Table of Contents



Gary D. Burnison
  Michael A. DiGregorio
  Ana Dutra
  Robert H. McNabb go-to-market
  Byrne Mulrooney
 14




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##### Table of Contents



PART II.  Item 5.
    Market
    for Registrants Common Equity, Related Stockholder Matters
    and Issuer Purchases of Equity Securities  Common
    Stock
    High


LowFiscal Year Ended April 30, 2010First Quarter

$
14.29


$
9.43Second Quarter

$
17.28


$
12.57Third Quarter

$
18.00


$
14.31Fourth Quarter

$
18.62


$
14.65Fiscal Year Ended April 30, 2009First Quarter

$
18.88


$
15.42Second Quarter

$
20.52


$
9.87Third Quarter

$
14.50


$
9.28Fourth Quarter

$
11.49


$
7.54    15




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##### Table of Contents



Performance
    Graph
      Form 10-K
  COMPARISON
    OF 5 YEAR CUMULATIVE TOTAL RETURN* AMONG
    KORN/FERRY INTERNATIONAL, THE S&P 500 INDEX
    AND A PEER GROUP
  
  4/30/05
  ©  www.researchdatagroup.com/S&P.htm
 16




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##### Table of Contents



Dividends
    and Stock Repurchases
    Issuer
    Purchases of Equity Securities
    Approximate DollarValue of SharesShares Purchased


that may Yet beas Part of Publicly-


Purchased UnderShares


Average Price


Announced Programs


the ProgramsPurchased


Paid per Share


(1), (2), (3) and (4)


(1), (2), (3) and (4)February 1, 2010  February 28, 2010





$







$
36.4 millionMarch 1, 2010  March 31, 2010


5,750
(5)

$
17.66






$
36.4 millionApril 1, 2010  April 30, 2010


84,807


$
16.30



84,807


$
35.0 millionTotal


90,557







84,807     (1)
    
    On December 7, 2005, the Board of Directors approved the
    repurchase of up to $50 million of the Companys
    common stock in a common stock repurchase program. The shares
    can be repurchased in open market transactions or privately
    negotiated transactions at the Companys discretion.(2)
    
    On June 8, 2006, the Board of Directors approved the
    repurchase of an additional $25 million of the
    Companys common stock in a common stock repurchase
    program. The shares can be repurchased in open market
    transactions or privately negotiated transactions at the
    Companys discretion.(3)
    
    On March 6, 2007, the Board of Directors approved the
    repurchase of an additional $50 million of the
    Companys common stock in a common stock repurchase
    program. The shares can be repurchased in open market
    transactions or privately negotiated transactions at the
    Companys discretion.(4)
    
    On November 2, 2007, the Board of Directors approved the
    repurchase of an additional $50 million of the
    Companys common stock in a common stock repurchase
    program. The shares can be repurchased in open market
    transactions or privately negotiated transactions at the
    Companys discretion.(5)
    
    Represents withholding of a portion of restricted shares to
    cover taxes upon vesting of restricted shares. 17




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##### Table of Contents



Item 6.
    Selected
    Financial Data  Form 10-K. Form 10-K. Form 10-K
  Year Ended April 30,2010


2009


2008


2007


2006(In thousands, except per share data and other operating
    data)Selected Statement of Operations Data:Fee revenue

$
572,380


$
638,223


$
790,570


$
653,422


$
522,882Reimbursed
    out-of-pocket
    engagement expenses


27,269



37,905



45,072



35,779



28,887Total revenue


599,649



676,128



835,642



689,201



551,769Compensation and benefits


413,340



442,632



540,056



447,692



341,196General and administrative expenses


115,280



126,882



134,542



105,312



93,462Out-of-pocket
    engagement expenses


41,585



49,388



58,750



44,662



31,927Depreciation and amortization


11,493



11,583



10,441



9,280



9,002Restructuring charges, net(1)


20,673



41,915











Total operating expenses


602,371



672,400



743,789



606,946



475,587Operating (loss) income


(2,722
)


3,728



91,853



82,255



76,182Other income (loss), net(3)


10,066



(14,738
)


4,656



2,524



6,046Interest (expense) income, net(3)


(2,622
)


(1,063
)


2,481



(2,280
)


(5,204
)(Benefit) provision for income taxes


(485
)


384



36,081



30,164



19,594Equity in earnings of unconsolidated subsidiaries, net


91



2,365



3,302



3,163



2,000Net income (loss)

$
5,298


$
(10,092
)

$
66,211


$
55,498


$
59,430Basic earning (loss) per share

$
0.12


$
(0.23
)

$
1.50


$
1.40


$
1.49Diluted earning (loss) per share

$
0.12


$
(0.23
)

$
1.46


$
1.24


$
1.32Basic weighted average common shares outstanding


44,413



43,522



44,012



39,774



39,890Diluted weighted average common shares outstanding


45,457



43,522



45,528



46,938



47,270Other Operating Data:Fee revenue by business segment:Executive recruitment:North America

$
278,746


$
309,514


$
374,891


$
329,065


$
259,089EMEA


137,497



143,184



183,042



146,155



120,059Asia Pacific


64,132



66,332



95,915



74,987



57,922South America


24,026



24,323



25,556



17,426



15,660Total executive recruitment


504,401



543,353



679,404



567,633



452,730Futurestep


67,979



94,870



111,166



85,789



70,152Total fee revenue

$
572,380


$
638,223


$
790,570


$
653,422


$
522,882Number of offices (at period end)


76



78



89



82



72Number of consultants (at period end)


627



615



684



601



507Number of new engagements opened


9,794



9,630



11,106



10,415



9,608Selected Balance Sheet Data as of April 30:Cash and cash equivalents

$
219,233


$
255,000


$
305,296


$
226,137


$
211,753Marketable securities


77,219



75,255



83,966



98,130



66,444Working capital


188,368



198,250



196,259



193,716



197,540Total assets


827,098



740,879



880,214



761,491



635,491Total long-term debt(2)


















45,147Mandatorily redeemable preferred stock(2)


















10,989Total stockholders equity


491,342



459,099



496,134



432,955


$
323,751  18




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##### Table of Contents



(1)
    
    During fiscal 2010, our restructuring initiatives resulted in
    restructuring charges of $25.8 million against operations,
    of which $16.0 million and $9.8 million related to
    severance costs and the consolidation of premises, respectively.
    These restructuring charges were partially offset by
    $5.1 million of reductions from previous restructuring
    charges resulting in net restructuring costs of
    $20.7 million during fiscal 2010. During fiscal 2009, the
    restructuring charges were comprised of severance charges of
    $26.9 million and facilities charges of $15.0 million.(2)
    
    In the fourth quarter of fiscal 2007, we issued notice for the
    redemption of our 7.5% Convertible Series Subordinated
    Notes and 7.5% Convertible Series A Preferred Stock.
    In response, the holder of the notes and preferred stock
    exercised its option to convert the debt and preferred stock
    pursuant to the terms of the original agreements. The conversion
    resulted in approximately 5.6 million shares of our common
    stock being delivered to the debt and preferred stock holder in
    April 2007. As of April 30, 2010, we had no outstanding
    amounts related to these convertible securities.(3)
    
    Certain amounts in the consolidated statement of operations have
    been conformed to current year presentation.  Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  Forward-looking
    Statements
  This Annual Report on
    Form 10-K
    may contain certain statements that we believe are, or may be
    considered to be, forward-looking statements, within
    the meaning of Section 27A of the Securities Act of 1933
    and Section 21E of the Securities Exchange Act of 1934.
    These forward-looking statements generally can be identified by
    use of statements that include phrases such as
    believe, expect, anticipate,
    intend, plan, foresee,
    may, will, estimates,
    potential, continue or other similar
    words or phrases. Similarly, statements that describe our
    objectives, plans or goals also are forward-looking statements.
    All of these forward-looking statements are subject to risks and
    uncertainties that could cause our actual results to differ
    materially from those contemplated by the relevant
    forward-looking statement. The principal risk factors that could
    cause actual performance and future actions to differ materially
    from the forward-looking statements include, but are not limited
    to, those set forth above under the caption, Risk
    Factors, including dependence on attracting and retaining
    qualified and experienced consultants, portability of client
    relationships, global, local political or economic developments
    in or affecting countries where we have operations, currency
    fluctuations in our international operations, ability to manage
    growth, competition, reliance on information processing systems,
    employment liability risk, an impairment in the carrying value
    of goodwill and other intangible assets, deferred tax assets
    that we may not be able to use and alignment of our cost
    structure to our revenue level, and also includes risks related
    to the integration of recently acquired businesses. Readers are
    urged to consider these factors carefully in evaluating the
    forward-looking statements. The forward-looking statements
    included in this Annual Report on
    Form 10-K
    are made only as of the date of this Annual Report on
    Form 10-K
    and we undertake no obligation to publicly update these
    forward-looking statements to reflect subsequent events or
    circumstances.
  The following presentation of managements discussion
    and analysis of our financial condition and results of
    operations should be read together with our consolidated
    financial statements and related notes included in this Annual
    Report on
    Form 10-K.
  Executive
    Summary
   19




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##### Table of Contents



Critical
    Accounting Policies
  Form 10-K
  Revenue Recognition.
  Deferred Compensation.
 20




---



##### Table of Contents



Carrying Values.
  Results
    of Operations
    Year Ended April 30,2010


2009


2008Fee revenue


100.0
%


100.0
%


100.0
%Reimbursed
    out-of-pocket
    engagement expenses


4.8



5.9



5.7Revenue


104.8



105.9



105.7Compensation and benefits


72.2



69.3



68.3General and administrative expenses


20.2



19.9



17.0Out-of-pocket
    engagement expenses


7.3



7.7



7.4Depreciation and amortization


2.0



1.8



1.4Restructuring charges


3.6



6.6



Operating (loss) income


(0.5
)%


0.6



11.6Net income (loss)


0.9
%


(1.6
)%


8.4
%     Year Ended April 30,2010


2009


2008Dollars


%


Dollars


%


Dollars


%(Dollars in thousands)Fee revenueExecutive recruitment:North America

$
278,746



48.7
%

$
309,514



48.5
%

$
374,891



47.4
%EMEA


137,497



24.0



143,184



22.4



183,042



23.2Asia Pacific


64,132



11.2



66,332



10.4



95,915



12.1South America


24,026



4.2



24,323



3.8



25,556



3.2Total executive recruitment


504,401



88.1



543,353



85.1



679,404



85.9Futurestep


67,979



11.9



94,870



14.9



111,166



14.1Total fee revenue


572,380



100.0
%


638,223



100.0
%


790,570



100.0
%Reimbursed
    out-of-pocket
    engagement expense


27,269







37,905







45,072Total revenue

$
599,649






$
676,128






$
835,642   21




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##### Table of Contents



Year Ended April 30,2010


2009


2008Dollars


Margin(1)


Dollars


Margin(1)


Dollars


Margin(1)(Dollars in thousands)Operating (loss) incomeExecutive recruitment:North America

$
42,604



15.3
%

$
37,516



12.1
%

$
70,628



18.8
%EMEA


(15,511
)


(11.3
)


2,061



1.4



29,820



16.3Asia Pacific


7,826



12.2



5,396



8.1



19,299



20.1South America


3,286



13.7



2,441



10.0



2,230



8.7Total executive recruitment


38,205



7.6



47,414



8.7



121,977



18.0Futurestep


1,291



1.9



(12,003
)


(12.7
)


8,545



7.7Corporate


(42,218
)






(31,683
)






(38,669
)Total operating (loss) income

$
(2,722
)


(0.5
)%

$
3,728



0.6
%

$
91,853



11.6
%     (1)
    
    Margin calculated as a percentage of fee revenue by business
    segment.  Fiscal
    2010 Compared to Fiscal 2009
  Fee
    Revenue
  Fee Revenue.
  Executive Recruitment.
     22




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##### Table of Contents



Futurestep.
  Compensation
    and Benefits
  Restructuring Charges go-to-market
       23




---



##### Table of Contents



General
    and Administrative Expenses
          Out-of-Pocket
    Engagement Expenses
  Out-of-pocket Out-of-pocket Out-of-pocket
  Depreciation
    and Amortization Expenses
    Restructuring
    Charges
  go-to-market
 24




---



##### Table of Contents



Operating
    (Loss) Income
        Other
    Income (Loss), Net
  available-for-sale
  Interest
    (Expense) Income, Net
    Income
    Tax (Benefit) Provision
  set-up
  Equity
    in Earnings of Unconsolidated Subsidiary
   25




---



##### Table of Contents



Fiscal
    2009 Compared to Fiscal 2008
  Fee
    Revenue
  Fee Revenue.
  Executive Recruitment.
          Futurestep.
 26




---



##### Table of Contents



Compensation
    and Benefits
          General
    and Administrative Expenses
         27




---



##### Table of Contents



Out-of-Pocket
    Engagement Expenses
  Out-of-pocket Out-of-pocket Out-of-pocket
  Depreciation
    and Amortization Expenses
    Restructuring
    Charges
    Operating
    Income
        Other
    (Loss) Income, Net
  available-for-sale
  Interest
    (Expense) Income, Net
   28




---



##### Table of Contents



Provision
    for Income Taxes
  available-for-sale
  Equity
    in Earnings of Unconsolidated Subsidiary
    Liquidity
    and Capital Resources
           29




---



##### Table of Contents



Off-Balance
    Sheet Arrangements
    Contractual
    Obligations
    Payments Due in:Less Than








More ThanNote

Total


1 Year


1-3 Years


3-5 Years


5 Years(In thousands)Operating lease commitments

15

$
222,716


$
28,878


$
56,380


$
50,547


$
86,911Accrued restructuring charges(1)

6


14,318



6,197



4,089



3,070



962Total



$
237,034


$
35,075


$
60,469


$
53,617


$
87,873     (1)
    
    Represents rent payments, net of sublease income on an
    undiscounted basis.  Deferred Compensation
    and Retirement Plans
  Long-Term Debt
   30




---



##### Table of Contents



Long-Term
    Debt
        Accounting
    Developments
  Recently
    Adopted Accounting Standards
  Form 10-K
     31




---



##### Table of Contents



Form 10-K
  Recently
    Issued Accounting Standards
    Item 7A.
    Quantitative
    and Qualitative Disclosures About Market Risk    Foreign
    Currency Risk
     32




---



##### Table of Contents



Interest
    Rate Risk
      Item 8.
    Financial
    Statements and Supplementary Data  page F-1 Form 10-K.
  Quarterly
    Results
  Item 9.
    Changes
    in and Disagreements with Accountants on Accounting and
    Financial Disclosure    Item 9A.
    Controls
    and Procedures    Form 10-K, 13a-15(e) 15d-15(e)
     33




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##### Table of Contents



Annual
    Certifications
  Form 10-K
  Item 9B.
    Other
    Information   PART III.  Item 10.
    Directors,
    Executive Officers and Corporate Governance  Form 10-K
    Item 11.
    Executive
    Compensation    Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters    Item 13.
    Certain
    Relationships and Related Transactions, and Director
    Independence    Item 14.
    Principal
    Accountant Fees and Services   34




---



##### 



PART IV.  Item 15.
    Exhibits
    and Financial Statement Schedules  Financial
    Statements.
   
 Page1.


Index to Financial Statements:See Consolidated Financial Statements included as part of this
    Form 10-K.
    Pursuant to
    Rule 7-05
    of
    Regulation S-X,
    the schedules have been omitted as the information to be set
    forth therein is included in the notes of the audited
    consolidated financial statements.


F-1    Exhibits:
  ExhibitNumber

Description3
.1+

Certificate of Incorporation of the Company, filed as
    Exhibit 3.1 to the Companys Quarterly Report on
    Form 10-Q,
    filed December 15, 1999.3
.2+

Certificate of Designations of 7.5% Convertible Preferred
    Stock, filed as Exhibit 3.1 to the Companys Current
    Report on
    Form 8-K,
    filed June 18, 2002.3
.3+

Second Amended and Restated Bylaws of the Company, filed as
    Exhibit 3.1 to the Companys Current Report on
    Form 8-K,
    filed April 29, 2009.4
.1+

Form of Common Stock Certificate of the Company, filed as
    Exhibit 4.1 to the Companys Registration Statement on
    Form S-3
    (No. 333-49286),
    filed November 3, 2000.4
.2+

Form of Stock Purchase Warrant, filed as Exhibit 4.2 to the
    Companys Current Report on
    Form 8-K,
    filed June 18, 2002.10
.1*+

Form of Indemnification Agreement between the Company and some
    of its executive officers and Directors, filed as
    Exhibit 10.1 to the Companys Registration Statement
    on
    Form S-1
    (No. 333-61697),
    effective February 10, 1999.10
.2*+

Form of U.S. and International Worldwide Executive Benefit
    Retirement Plan, filed as Exhibit 10.3 to the
    Companys Registration Statement of
    Form S-1
    (No. 333-61697),
    effective February 10, 1999.10
.3*+

Form of U.S. and International Worldwide Executive Benefit Life
    Insurance Plan, filed as Exhibit 10.4 to the Companys
    Registration Statement on
    Form S-1
    (No. 333-61697),
    effective February 10, 1999.10
.4*+

Worldwide Executive Benefit Disability Plan (in the form of
    Long-Term Disability Insurance Policy), filed as
    Exhibit 10.5 to the Companys Registration Statement
    on
    Form S-1
    (No. 333-61697),
    effective February 10, 1999.10
.5*+

Form of U.S. and International Enhanced Executive Benefit and
    Wealth Accumulation Plan, filed as Exhibit 10.6 to the
    Companys Registration Statement on
    Form S-1
    (No. 333-61697),
    effective February 10, 1999.10
.6*+

Form of U.S. and International Senior Executive Incentive Plan,
    filed as Exhibit 10.7 to the Companys Registration
    Statement on
    Form S-1
    (No. 333-61697),
    effective February 10, 1999.10
.7*+

Executive Salary Continuation Plan, filed as Exhibit 10.8
    to the Companys Registration Statement on
    Form S-1
    (No. 333-61697),
    effective February 10, 1999.10
.8*+

Form of Amended and Restated Stock Repurchase Agreement, filed
    as Exhibit 10.10 to the Companys Registration
    Statement on
    Form S-1
    (No. 333-61697),
    effective February 10, 1999.10
.9*+

Form of Standard Employment Agreement, filed as
    Exhibit 10.11 to the Companys Registration Statement
    on
    Form S-1
    (No. 333-61697),
    effective February 10, 1999.10
.10*+

Form of U.S. and Foreign Executive Participation Program, filed
    as Exhibit 10.27 to the Companys Registration
    Statement on
    Form S-1
    (No. 333-61697),
    effective February 10, 1999.10
.11*+

Korn/Ferry International Special Severance Pay Policy, dated
    January 1, 2000, filed as Exhibit 10.2 to the
    Companys Quarterly Report on
    Form 10-Q,
    filed March 19, 2001.10
.12*+

Korn/Ferry International Second Amended and Restated Performance
    Award Plan, filed as Appendix A to the Companys
    Definitive Proxy Statement, filed August 12, 2004. 35




---



##### Table of Contents



ExhibitNumber

Description10
.13*+

Letter from Korn/Ferry International Futurestep, Inc. to Robert
    H. McNabb, dated December 3, 2001, filed as
    Exhibit 10.29 to the Companys Amended Annual Report
    on
    Form 10-K/A,
    filed August 12, 2002.10
.14*+

Letter from the Company to Robert H. McNabb, dated
    November 29, 2001, filed as Exhibit 10.30 to the
    Companys Amended Annual Report on
    Form 10-K/A,
    filed August 12, 2002.10
.15*+

Employment Agreement between the Company and Robert H. McNabb,
    dated October 1, 2003, filed as Exhibit 10.2 to the
    Companys Quarterly Report on
    Form 10-Q,
    filed December 12, 2003.10
.16*+

Employee Stock Purchase Plan filed as Exhibit 10.29 to the
    Companys Annual Report on
    Form 10-K,
    filed July 22, 2003.10
.17*+

Employment Agreement between the Company and Gary D. Burnison,
    dated October 1, 2003, filed as Exhibit 10.2 to the
    Companys Quarterly Report on
    Form 10-Q,
    filed March 12, 2004.10
.18+

Letter Agreement, dated December 31, 2003, among the
    Company, Friedman Fleischer & Lowe Capital Partners,
    L.P. and FFL Executive Partners, L.P., filed as
    Exhibit 10.1 to the Companys Quarterly Report on
    Form 10-Q,
    filed March 12, 2004.10
.19*+

Form of Indemnification Agreement between the Company and some
    of its executive officers and directors, filed as
    Exhibit 10.4 to the Companys Quarterly Report on
    Form 10-Q,
    filed March 12, 2004.10
.20+

Summary of Non-Employee Director Compensation, filed as
    Exhibit 10.1 to the Companys Current Report on
    Form 8-K,
    filed January 12, 2006.10
.21*+

Form of Restricted Stock Award Agreement to Employees Under the
    Performance Award Plan filed as Exhibit 10.1 to the
    Companys Current Report on
    Form 8-K,
    filed June 29, 2006.10
.22*+

Form of Restricted Stock Award Agreement to Non-Employee
    Directors Under the Performance Award Plan filed as
    Exhibit 10.2 to the Companys Current Report on
    Form 8-K,
    filed June 29, 2006.10
.23*+

Stock and Asset Purchase Agreement dated as of August 8,
    2006 by and among Lominger Limited, Inc., Lominger Consulting,
    Inc., Michael M. Lombardo, Robert W. Eichinger, and the Company
    filed as Exhibit 10.1 to the Companys Quarterly
    Report on
    Form 10-Q,
    filed September 8, 2006.10
.24*+

Letter Agreement between the Company and Robert H. McNabb dated
    as of September 29, 2006, filed as Exhibit 10.1 to the
    Companys Quarterly Report on
    Form 10-Q,
    filed December 11, 2006.10
.25*+

Letter from the Company to Gary Burnison, dated March 30,
    2007, filed as Exhibit 10.38 to the Companys Annual
    Report on
    Form 10-K,
    filed June 29, 2007.10
.26*+

Employment Agreement between the Company and Gary Burnison,
    dated April 24, 2007, filed as Exhibit 10.41 to the
    Companys Annual Report on
    Form 10-K,
    filed June 29, 2007.10
.27*+

Employment Agreement between the Company and Stephen J. Giusto,
    dated October 10, 2007, filed as Exhibit 10.1 to the
    Companys Quarterly Report on
    Form 10-Q,
    filed December 10, 2007.10
.28*+

Form of Restricted Stock Unit Award Agreement to Directors Under
    the Performance Award Plan, filed as Exhibit 10.2 to the
    Companys Quarterly Report on
    Form 10-Q,
    filed December 10, 2007.10
.29*+

Letter from the Company to Ana Dutra, dated January 16,
    2008, filed as Exhibit 10.1 to the Companys Quarterly
    Report on
    Form 10-Q,
    filed March 11, 2008.10
.30*+

Offer of Employment Letter between the Company and Paul C.
    Reilly, dated June 26, 2008, filed as Exhibit 10.1 to
    the Companys Quarterly Report on
    Form 10-Q,
    filed September 9, 2008.10
.31*+

Reimbursement Letter Agreement between the Company and Paul C.
    Reilly, dated March 1, 2008, filed as Exhibit 10.2 to
    the Companys Quarterly Report on
    Form 10-Q,
    filed September 9, 2008.10
.32*+

Employment Agreement between the Company and Stephen J. Giusto
    dated March 17, 2009.10
.33*+

Employment Agreement between the Company and Michael A.
    DiGregorio.10
.34*+

Korn/Ferry Amended and Restated 2008 Stock Incentive Plan, filed
    as Exhibit 99.1 to the Companys Registration
    Statement on
    Form S-8
    (No. 333-161844),
    filed September 10, 2009.10
.35*+

Form of Restricted Stock Award Agreement to Employees and
    Non-Employee Directors Under the Korn/Ferry International 2008
    Stock Incentive Plan, filed as Exhibit 10.2 to the
    Companys Current Report on
    Form 8-K,
    filed June 12, 2009.10
.36*+

Form of Stock Option Agreement to Employees and Non-Employee
    Directors Under the Korn/Ferry International 2008 Stock
    Incentive Plan, filed as Exhibit 10.3 to the Companys
    Current Report on
    Form 8-K,
    filed June 12, 2009. 36




---



##### Table of Contents



ExhibitNumber

Description10
.37*+

Korn/Ferry International Executive Capital Accumulation Plan,
    filed as Exhibit 4.1 to the Companys Registration
    Statement on
    Form S-8
    (No. 333-111038),
    filed December 10, 2003.10
.38*+

Letter Agreement dated June 25, 2009, by and among the
    Company and Robert McNabb, modifying the terms of
    Mr. McNabbs Employment Agreement, dated
    October 1, 2003, as renewed and amended on September on
    September 29, 2006.10
.39*+

Letter Agreement between the Company and Gary D. Burnison dated
    June 25, 2009.10
.40*

Employment Agreement between the Company and Byrne Mulrooney
    dated March 5, 2010.21
.1

Subsidiaries of Korn/Ferry International.23
.1

Consent of Ernst & Young LLP, Independent Registered
    Public Accounting Firm.24
.1

Power of Attorney (contained on signature page).31
.1

Chief Executive Officer Certification pursuant to
    Rule 13a-14(a)
    under the Exchange Act.31
.2

Chief Financial Officer Certification pursuant to
    Rule 13a-14(a)
    under the Exchange Act.32
.1

Chief Executive Officer and Chief Financial Officer
    Certification pursuant to 18 U.S.C. Section 1350.     *
    
    Management contract, compensatory plan or arrangement.+
    
    Incorporated herein by reference. 37




---



##### Table of Contents



SIGNATURES  Pursuant to the requirements of Section 13 or 15(d) of
    the Securities Exchange Act of 1934, as amended, the registrant
    has duly caused this report to be signed on its behalf by the
    undersigned, thereunto duly authorized.
  Korn/Ferry International
  By:
    /s/  Michael
    A. DiGregorio  Michael A. DiGregorio
 Executive Vice President and
 Chief Financial Officer
    POWER OF
    ATTORNEY
      Signature

Title

Date/s/  Kenneth
    WhippleKenneth
    Whipple

Chairman of the Board and Director

June 29, 2010/s/  Gary
    D. BurnisonGary
    D. Burnison

President, Chief Executive Officer (Principal Executive
    Officer)and Director

June 29, 2010/s/  Michael
    A. DiGregorioMichael
    A. DiGregorio

Executive Vice President and Chief Financial Officer
    (Principal Financial Officer)

June 29, 2010/s/  Mark
    NealMark
    Neal

Vice President, Finance (Principal Accounting Officer)

June 29, 2010/s/  Denise
    KingsmillDenise
    Kingsmill

Director

June 29, 2010 38




---



##### Table of Contents



Signature

Title

Date/s/  Edward
    D. MillerEdward
    D. Miller

Director

June 29, 2010/s/  Debra
    PerryDebra
    Perry

Director

June 29, 2010/s/  Gerhard
    SchulmeyerGerhard
    Schulmeyer

Director

June 29, 2010/s/  George
    T. ShaheenGeorge
    T. Shaheen

Director

June 29, 2010/s/  Harry
    L. YouHarry
    L. You

Director

June 29, 2010  39




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##### Table of Contents



KORN/FERRY
    INTERNATIONAL AND SUBSIDIARIESINDEX TO CONSOLIDATED FINANCIAL STATEMENTS
  APRIL 30,
    2010
  PageManagements Report on Internal Control over
    Financial Reporting


F-2Report of Independent Registered Public
    Accounting Firm on Internal Control over Financial Reporting


F-3Report of Independent Registered Public
    Accounting Firm


F-4Consolidated Balance Sheets as of April 30,
    2010 and 2009


F-5Consolidated Statements of Operations for the
    years ended April 30, 2010, 2009 and 2008


F-6Consolidated Statements of Stockholders
    Equity for the years ended April 30, 2010, 2009 and 2008


F-7Consolidated Statements of Cash Flows for the
    years ended April 30, 2010, 2009 and 2008


F-8Notes to Consolidated Financial Statements


F-9   F-1




---



##### Table of Contents



MANAGEMENTS
    REPORT ON
    INTERNAL CONTROL OVER FINANCIAL REPORTING        Internal
    Control  Integrated Framework
    Form 10-K, Form 10-K.
   F-2




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
    ON INTERNAL CONTROL OVER FINANCIAL REPORTING     Internal Control  Integrated
    Framework
            
    F-3




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED
    PUBLIC ACCOUNTING FIRM             
    F-4




---



##### Table of Contents



KORN/FERRY
    INTERNATIONAL AND SUBSIDIARIES



CONSOLIDATED
    BALANCE SHEETS  April 30,2010


2009(In thousands, except per share data)ASSETSCash and cash equivalents

$
219,233


$
255,000Marketable securities


4,114



4,263Receivables due from clients, net of allowance for doubtful
    accounts of $5,983 and $11,197, respectively


107,215



67,308Income taxes and other receivables


6,292



9,001Deferred income taxes


20,844



14,583Prepaid expenses and other assets


28,753



21,442Total current assets


386,451



371,597Marketable securities, non-current


73,105



70,992Property and equipment, net


24,963



27,970Cash surrender value of company owned life insurance policies,
    net of loans


69,069



63,108Deferred income taxes


59,742



45,141Goodwill


172,273



133,331Intangible assets, net


25,425



16,928Investments and other assets


16,070



11,812Total assets

$
827,098


$
740,879LIABILITIES AND STOCKHOLDERS EQUITYAccounts payable

$
11,148


$
10,282Income taxes payable


6,323



2,059Compensation and benefits payable


131,550



116,705Other accrued liabilities


49,062



44,301Total current liabilities


198,083



173,347Deferred compensation and other retirement plans


123,794



99,238Other liabilities


13,879



9,195Total liabilities


335,756



281,780Commitments and contingenciesStockholders equity:Common stock: $0.01 par value, 150,000 shares
    authorized, 57,614 and 56,185 shares issued and 45,979 and
    44,729 shares outstanding, respectively


388,717



368,430Retained earnings


90,220



84,922Accumulated other comprehensive income, net


12,934



6,285Stockholders equity


491,871



459,637Less: notes receivable from stockholders


(529
)


(538
)Total stockholders equity


491,342



459,099Total liabilities and stockholders equity

$
827,098


$
740,879    F-5




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##### Table of Contents



KORN/FERRY
    INTERNATIONAL AND SUBSIDIARIES



CONSOLIDATED
    STATEMENTS OF OPERATIONS  Year Ended April 30,2010


2009


2008(In thousands, except per share data)Fee revenue

$
572,380


$
638,223


$
790,570Reimbursed
    out-of-pocket
    engagement expenses


27,269



37,905



45,072Total revenue


599,649



676,128



835,642Compensation and benefits


413,340



442,632



540,056General and administrative expenses


115,280



126,882



134,542Out-of-pocket
    engagement expenses


41,585



49,388



58,750Depreciation and amortization


11,493



11,583



10,441Restructuring charges, net


20,673



41,915



Total operating expenses


602,371



672,400



743,789Operating (loss) income


(2,722
)


3,728



91,853Other income (loss), net


10,066



(14,738
)


4,656Interest (expense) income, net


(2,622
)


(1,063
)


2,481Income (loss) before (benefit) provision for income taxes and
    equity in earnings of unconsolidated subsidiaries


4,722



(12,073
)


98,990Income tax (benefit) provision


(485
)


384



36,081Equity in earnings of unconsolidated subsidiaries, net


91



2,365



3,302Net income (loss)

$
5,298


$
(10,092
)

$
66,211Earnings (loss) per common share:Basic

$
0.12


$
(0.23
)

$
1.50Diluted

$
0.12


$
(0.23
)

$
1.46Weighted-average common shares outstanding:Basic


44,413



43,522



44,012Diluted


45,457



43,522



45,528    F-6




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##### Table of Contents



KORN/FERRY
    INTERNATIONAL AND SUBSIDIARIES



CONSOLIDATED
    STATEMENTS OF STOCKHOLDERS EQUITY   AccumulatedOtherCommon Stock


Retained


ComprehensiveShares


Amount


Earnings


Income, Net


Total(In thousands)Balance at May 1, 2007


46,040


$
380,559


$
32,344


$
20,605


$
433,508Comprehensive income:Net income










66,211







66,211Other comprehensive income, net of tax:Unrealized loss on marketable securities, net of taxes














(3,516
)


(3,516
)Foreign currency translation adjustments














24,894



24,894Defined benefit plan














1,114



1,114Total comprehensive income


















88,703Purchase of stock


(3,099
)


(60,950
)










(60,950
)Issuance of stock


1,652



18,736











18,736Variable stock-based compensation






(76
)










(76
)Stock-based compensation






15,429











15,429Tax benefit from exercise of stock options






5,096











5,096Cumulative adjustment for accounting change in income tax
    uncertainties










(3,541
)






(3,541
)Purchase of minority shares






(226
)










(226
)Balance at April 30, 2008


44,593



358,568



95,014



43,097



496,679Comprehensive loss:Net loss










(10,092
)






(10,092
)Other comprehensive loss, net of tax:Unrealized loss on marketable securities, net of taxes














(3,624
)


(3,624
)Reclassification of unrealized losses on marketable securities,
    net of taxes to
    other-than-temporary
    impairment and upon transfer of securities from
    available-for-sale
    to trading














5,514



5,514Foreign currency translation adjustments














(40,685
)


(40,685
)Defined benefit plan














1,983



1,983Total comprehensive loss


















(46,904
)Purchase of stock


(709
)


(9,588
)










(9,588
)Issuance of stock


845



3,609











3,609Stock-based compensation






16,495











16,495Tax expense from exercise of stock options






(654
)










(654
)Balance at April 30, 2009


44,729



368,430



84,922



6,285



459,637Comprehensive income:Net income










5,298







5,298Other comprehensive income, net of tax:Foreign currency translation adjustments














15,377



15,377Defined benefit plan














(8,728
)


(8,728
)Total comprehensive income


















11,947Purchase of stock


(226
)


(3,136
)










(3,136
)Issuance of stock


1,476



6,526











6,526Stock-based compensation






17,508











17,508Tax expense from exercise of stock options






(611
)










(611
)Balance at April 30, 2010


45,979


$
388,717


$
90,220


$
12,934


$
491,871    F-7




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##### Table of Contents



KORN/FERRY
    INTERNATIONAL AND SUBSIDIARIES



CONSOLIDATED
    STATEMENTS OF CASH FLOWS   Year Ended April 30,2010


2009


2008(In thousands)Cash flows from operating activities:Net income (loss)

$
5,298


$
(10,092
)

$
66,211Adjustments to reconcile net income (loss) to net cash (used in)
    provided by operating activities:Depreciation and amortization


11,493



11,583



10,441Stock-based compensation expense


17,729



16,301



15,949Loss on disposition of property and equipment


323



3,740



561Provision for doubtful accounts


3,340



9,127



10,299(Gain) loss on cash surrender value of life insurance policies


(9,558
)


3,578



(3,780
)Gain on marketable securities classified as trading


(11,137
)






Realized loss (gain) on
    available-for-sale
    marketable securities






5,040



(5,555
)Other-than-temporary
    impairment on
    available-for-sale
    securities, net of unrealized gains reclassified to other income
    upon the transfer of
    available-for-sale
    securities to trading






9,967



Deferred income taxes


(20,862
)


(4,354
)


(5,992
)Change in other assets and liabilities:Deferred compensation


15,828



(3,085
)


14,359Receivables


(33,516
)


44,639



(23,214
)Prepaid expenses


(4,198
)


(1,340
)


(3,143
)Investment in unconsolidated subsidiaries


(91
)


(2,365
)


(4,180
)Income taxes payable


2,844



(18,909
)


(5,282
)Accounts payable and accrued liabilities


(783
)


(82,236
)


47,802Other


(7,556
)


21,577



(4,965
)Net cash (used in) provided by operating activities


(30,846
)


3,171



109,511Cash flows from investing activities:Purchase of property and equipment


(7,282
)


(11,947
)


(16,976
)Purchase of intangible assets


(3,481
)






Proceeds from (purchase of) marketable securities, net


9,211



(4,104
)


14,038Cash paid for acquisitions, net of cash acquired and earn-outs


(18,734
)


(12,900
)


(3,622
)Payment of earn-outs from acquisitions


(2,405
)






Premiums on life insurance policies


(1,711
)


(1,781
)


(1,835
)Dividends received from unconsolidated subsidiaries


958



2,952



2,923Net cash used in investing activities


(23,444
)


(27,780
)


(5,472
)Cash flows from financing activities:Payments on life insurance policy loans


(183
)


(770
)


(1,012
)Borrowings under life insurance policies


5,500



1,721



1,736Purchase of common stock


(3,136
)


(9,588
)


(64,162
)Proceeds from issuance of common stock upon exercise of employee
    stock options and in connection with an employee stock purchase
    plan


6,526



3,609



17,436Tax (expense) benefit from exercise of stock options


(611
)


(654
)


4,612Net cash provided by (used in) financing activities


8,096



(5,682
)


(41,390
)Effect of exchange rate changes on cash and cash equivalents


10,427



(20,005
)


16,510Net (decrease) increase in cash and cash equivalents


(35,767
)


(50,296
)


79,159Cash and cash equivalents at beginning of year


255,000



305,296



226,137Cash and cash equivalents at end of year

$
219,233


$
255,000


$
305,296Supplemental cash flow information:Cash used to pay interest

$
3,992


$
5,969


$
4,379Cash used to pay income taxes

$
8,111


$
24,369


$
47,760    F-8




---



##### Table of Contents



KORN/FERRY
    INTERNATIONAL AND SUBSIDIARIES



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS

April 30, 2010 1.
    Organization
    and Summary of Significant Accounting Policies  Nature
    of Business
    Basis
    of Consolidation and Presentation
        Use of
    Estimates and Uncertainties
    Revenue
    Recognition
    Reimbursements
  out-of-pocket
 F-9




---



##### Table of Contents



KORN/FERRY
    INTERNATIONAL AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Allowance
    for Doubtful Accounts
    Cash
    and Cash Equivalents
    Marketable
    Securities
  available-for-sale.
    available-for-sale
  Available-for-sale other-than-temporary, other-than-temporary other-than-temporary other-than-temporary
  Property
    and Equipment
     F-10




---



##### Table of Contents



KORN/FERRY
    INTERNATIONAL AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Goodwill
    and Intangible Assets
      Compensation
    and Benefits Expense
    Deferred
    Compensation and Pension Plans
     F-11




---



##### Table of Contents



KORN/FERRY
    INTERNATIONAL AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Cash
    Surrender Value of Life Insurance
    Restructuring
    Charges
    Stock-Based
    Compensation
    Translation
    of Foreign Currencies
    Income
    Taxes
     F-12




---



##### Table of Contents



KORN/FERRY
    INTERNATIONAL AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Fair
    Value of Financial Instruments
    
    Level 1:  Observable inputs such as quoted
    prices (unadjusted) in active markets that are accessible at the
    measurement date for identical, unrestricted assets or
    liabilities.
    Level 2:  Inputs other than quoted prices
    that are observable for the asset or liability, either directly
    or indirectly. These include quoted prices for similar assets or
    liabilities in active markets and quoted prices for identical or
    similar assets or liabilities in markets that are not active.
    Level 3:  Unobservable inputs that reflect
    the reporting entitys own assumptions.    Concentration
    of Credit Risk
    Accounting
    Adjustment
  Considering the
    Effects of Prior Year Misstatements when Quantifying
    Misstatements in Current Year Financial Statements
  Reclassifications
   F-13




---



##### Table of Contents



KORN/FERRY
    INTERNATIONAL AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Recently
    Adopted Accounting Standards
  Form 10-K
          Form 10-K
  Recently
    Issued Accounting Standards
   F-14




---



##### Table of Contents



KORN/FERRY
    INTERNATIONAL AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    2.
    Basic and
    Diluted Earnings (Loss) Per Share  in-the-money
    Year Ended April 30,2010


2009


2008(In thousands, except per share data)Net earnings (loss):Net earnings (loss)

$
5,298


$
(10,092
)

$
66,211Interest expense on convertible securities, net of related tax
    effects










145Net earnings (loss) attributable to common stockholders

$
5,298


$
(10,092
)

$
66,356Weighted-average common shares outstanding:Basic weighted-average number of common shares outstanding


44,413



43,522



44,012Effect of dilutive securities:Warrants


53







109Restricted stock


587







319Stock options


401







1,078Employee stock purchase plan


3







10Diluted weighted-average number of common shares outstanding


45,457



43,522



45,528Net earnings (loss) per common share:Basic earnings (loss) per share

$
0.12


$
(0.23
)

$
1.50Diluted earnings (loss) earnings per share

$
0.12


$
(0.23
)

$
1.46  F-15




---



##### Table of Contents



KORN/FERRY
    INTERNATIONAL AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  3.
    Comprehensive
    Income (Loss)      April 30,2010


2009(In thousands)Foreign currency translation adjustments

$
18,900


$
3,523Defined benefit pension adjustments, net of taxes


(5,966
)


2,762Accumulated other comprehensive income

$
12,934


$
6,285   4.
    Employee
    Stock Plans  Stock-Based
    Compensation
    Year Ended April 30,2010


2009


2008(In thousands)Restricted stock

$
16,470


$
15,633


$
13,590Stock options and SARs


853



210



1,806ESPP


406



458



553Total stock-based compensation expense, pre-tax


17,729



16,301



15,949Tax benefit from stock-based compensation expense


(6,471
)


(5,950
)


(5,821
)Total stock-based compensation expense, net of tax

$
11,258


$
10,351


$
10,128       Year Ended April 30,2010


2009


2008Expected volatility


48.91
%


44.11
%


44.42
%Risk-free interest rate


2.53
%


3.27
%


4.60
%Expected option life (in years)


5.00



4.25



4.00Expected dividend yield


0.00
%


0.00
%


0.00
%  F-16




---



##### Table of Contents



KORN/FERRY
    INTERNATIONAL AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Stock
    Incentive Plans
      Stock
    Incentive Plans
    April 30,2010


2009


2008Weighted-





Weighted-





Weighted-Average





Average





AverageExercise





Exercise





ExerciseOptions


Price


Options


Price


Options


Price(In thousands, except per share data)Outstanding, beginning of year


3,113


$
14.83



3,564


$
14.79



4,738


$
14.52Granted


621


$
11.26



6


$
14.54



6


$
21.11Exercised


(531
)

$
8.21



(127
)

$
8.91



(1,095
)

$
13.29Forfeited/expired


(480
)

$
18.14



(330
)

$
16.61



(85
)

$
19.71Outstanding, end of year


2,723


$
14.72



3,113


$
14.83



3,564


$
14.79Exercisable, end of year


2,142


$
15.68



3,042


$
14.74



3,257


$
14.41      F-17




---



##### Table of Contents



KORN/FERRY
    INTERNATIONAL AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    April 30, 2010Options Outstanding


Options ExercisableWeighted-








Weighted-Average








AverageRemaining


Weighted-





Remaining


Weighted-Contractual


Average





Contractual


AverageLife


Exercise





Life


ExerciseRange of Exercise Prices

Shares


(In years)


Price


Shares


(In years)


Price(In thousands, except per share data)$ 6.26 - $ 8.10


650



2.6


$
7.72



650



2.6


$
7.72$ 8.11 - $14.93


628



5.9


$
10.84



77



3.4


$
10.85$14.94 - $19.10


709



4.0


$
17.60



681



3.9


$
17.60$19.11 - $36.19


736



2.5


$
21.45



734



2.5


$
21.452,723



3.7


$
14.72



2,142



3.0


$
15.68     Year Ended April 30,2010


2009


2008(In thousands, except per share data)Weighted-average fair value of stock options granted

$
5.07


$
5.77


$
8.54Total fair value of stock options and SARs vested


612



1,986



4,103Total intrinsic value of stock options exercised


2,631



640



12,552Total intrinsic value of SARs paid


75







   Restricted
    Stock
      April 30,2010


2009


2008Weighted-





Weighted-





Weighted-Average





Average





AverageGrant Date





Grant Date





Grant DateShares


Fair Value


Shares


Fair Value


Shares


Fair Value(In thousands, except per share data)Non-vested, beginning of year


2,387


$
15.50



1,952


$
22.01



1,356


$
19.26Granted


1,017


$
10.57



1,288


$
17.57



1,216


$
24.16Vested


(754
)

$
20.43



(602
)

$
21.25



(506
)

$
19.88Forfeited/expired


(170
)

$
17.91



(251
)

$
19.67



(114
)

$
22.49Non-vested, end of year


2,480


$
9.93



2,387


$
15.50



1,952


$
22.01    F-18




---



##### Table of Contents



KORN/FERRY
    INTERNATIONAL AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Employee
    Stock Purchase Plan
    5.
    Marketable
    Securities    Trading(In thousands)Auction rate securities

$
7,455Auction rate securities put option


745Mutual funds(1)


69,019Total


77,219Less: current portion of marketable securities


(4,114
)Non-current marketable securities

$
73,105     Available-for-Trading


Sale(2)


Total(In thousands)Auction rate securities

$
11,329


$



$
11,329Auction rate securities put option


1,096







1,096Mutual funds(1)


60,828







60,828Time deposits






2,002



2,002Total


73,253



2,002



75,255Less: current portion of marketable securities


(2,261
)


(2,002
)


(4,263
)Non-current marketable securities

$
70,992


$



$
70,992     (1)
    
    These investments are held in trust for settlement of the
    Companys obligations under certain of its deferred
    compensation plans with $4.1 million and $2.3 million
    classified as current assets as of April 30, 2010 and 2009,
    respectively (see Note 7).(2)
    
    Due to the short maturities for these instruments fair value
    approximates amortized cost.   F-19




---



##### Table of Contents



KORN/FERRY
    INTERNATIONAL AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    available-for-sale other-than-temporary other-than-temporary
      available-for-sale
 F-20




---



##### Table of Contents



KORN/FERRY
    INTERNATIONAL AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    April 30, 2010Total


Level 1


Level 2


Level 3(In thousands)Cash equivalents

$
148,238


$
148,238


$



$
Auction rate securities


7,455











7,455Auction rate securities put option


745











745Mutual funds


69,019



69,019







Total

$
225,457


$
217,257


$



$
8,200   April 30, 2009Total


Level 1


Level 2


Level 3(In thousands)Cash equivalents

$
165,590


$
165,590


$



$
Auction rate securities


11,329











11,329Auction rate securities put option


1,096











1,096Mutual funds


60,828



60,828







Time deposits


2,002



2,002







Total

$
240,845


$
228,420


$



$
12,425     April 30,Auction Rate Securities

2010


2009(In thousands)Balance, beginning of year

$
12,425


$
20,475Auction rate securities put option


(351
)


1,096Reversal of unrealized loss associated with transfer of
    securities to trading






780Unrealized gain (loss) included in operations


351



(1,096
)Unrealized loss included in accumulated other comprehensive
    income (loss)






(586
)Sale of securities


(4,225
)


(9,025
)Reversal of unrealized loss associated with sales of securities
    at par






781Balance, end of year

$
8,200


$
12,425   6.
    Restructuring
    Charges    go-to-market
 F-21




---



##### Table of Contents



KORN/FERRY
    INTERNATIONAL AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Severance


Facilities


Total(In thousands)Liability as of April 30, 2008

$



$
2,264


$
2,264Additions charged to expense


26,857



15,058



41,915Non-cash items


(678
)


(2,921
)


(3,599
)Reductions for cash payments


(15,668
)


(1,692
)


(17,360
)Exchange rate fluctuations


43



98



141Liability as of April 30, 2009


10,554



12,807



23,361Additions charged to expense


15,940



9,835



25,775Reductions


(2,331
)


(2,771
)


(5,102
)Non-cash items


(370
)


(452
)


(822
)Reductions for cash payments


(21,849
)


(8,691
)


(30,540
)Exchange rate fluctuations


770



367



1,137Liability as of April 30, 2010

$
2,714


$
11,095


$
13,809       April 30, 2010Severance


Facilities


Total(In thousands)Executive RecruitmentNorth America

$
5


$
845


$
850EMEA


2,429



7,816



10,245Asia Pacific






773



773South America


115







115Total Executive Recruitment


2,549



9,434



11,983Futurestep


165



1,661



1,826Liability as of April 30, 2010

$
2,714


$
11,095


$
13,809   F-22




---



##### Table of Contents



KORN/FERRY
    INTERNATIONAL AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  April 30, 2009Severance


Facilities


Total(In thousands)Executive RecruitmentNorth America

$
3,052


$
3,187


$
6,239EMEA


4,714



2,514



7,228Asia Pacific


48



1,243



1,291South America


787



334



1,121Total Executive Recruitment


8,601



7,278



15,879Futurestep


1,953



5,529



7,482Liability as of April 30, 2009

$
10,554


$
12,807


$
23,361   7.
    Deferred
    Compensation and Retirement Plans      Year Ended April 30,2010


2009(In thousands)Deferred compensation plans

$
60,890


$
48,367Pension plan


3,483



2,974Retirement plans


2,611



2,854Executive Capital Accumulation Plan


56,810



45,043Total long-term benefit obligation

$
123,794


$
99,238   Deferred
    Compensation Plans
     F-23




---



##### Table of Contents



KORN/FERRY
    INTERNATIONAL AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Pension
    Plan
    Accounting
    for Deferred Compensation and Pension Plans
      Deferred
    Compensation Plan
    Year Ended April 30,2010


2009


2008(In thousands)Change in benefit obligation:Benefit obligation, beginning of year

$
52,149


$
54,749


$
54,873Service cost


339



696



1,067Interest cost


3,557



3,432



3,140Plan participants contributions with interest


194



367



561Actuarial loss (gain)


12,848



(3,263
)


(1,560
)Benefits paid


(4,197
)


(3,832
)


(3,332
)Benefit obligation, end of year


64,890



52,149



54,749Less: current portion of benefit obligation


(4,000
)


(3,782
)


(3,284
)Non-current benefit obligation

$
60,890


$
48,367


$
51,465     2010


2009


2008(In thousands)Service cost

$
339


$
696


$
1,067Interest cost


3,557



3,432



3,140Amortization of net transition obligation






212



212Net periodic benefit cost

$
3,896


$
4,340


$
4,419  F-24




---



##### Table of Contents



KORN/FERRY
    INTERNATIONAL AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    2010


2009


2008Discount rate, beginning of year


7.10
%


6.50
%


5.90
%Discount rate, end of year


5.61
%


7.10
%


6.50
%Rate of compensation increase


0.00
%


0.00
%


0.00
%   Pension
    Plan
    Year Ended April 30,2010


2009


2008(In thousands)Change in benefit obligation:Benefit obligation, beginning of year

$
3,125


$
3,119


$
3,300Interest cost


214



196



188Actuarial loss (gain)


503



(4
)


(152
)Benefits paid


(212
)


(186
)


(217
)Benefit obligation, end of year


3,630



3,125



3,119Less: current portion of benefit obligation


(147
)


(151
)


(133
)Non-current benefit obligation

$
3,483


$
2,974


$
2,986     2010


2009


2008(In thousands)Interest cost

$
214


$
196


$
188Amortization of actuarial gain


(78
)


(84
)


(71
)Net periodic benefit cost

$
136


$
112


$
117     2010


2009


2008Discount rate, beginning of year


7.10
%


6.50
%


5.90
%Discount rate, end of year


5.61
%


7.10
%


6.50
%Rate of compensation increase


0.00
%


0.00
%


0.00
%     DeferredCompensation


PensionYear Ending April 30,

Plans


Benefits(In thousands)2011

$
5,158


$
2532012


5,039



2602013


5,210



2762014


5,654



2912015


5,513



3022016-2020


25,762



1,315  F-25




---



##### Table of Contents



KORN/FERRY
    INTERNATIONAL AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  International
    Retirement Plans
    Executive
    Capital Accumulation Plan (ECAP)
  and/or
        Year Ended April 30,2010


2009(In thousands)Balance, beginning of year

$
45,102


$
48,655Employee contributions


2,493



5,071Amortization of employer contributions


8,456



6,692Gain (loss) on investment


8,875



(10,468
)Employee distributions


(7,627
)


(4,929
)Exchange rate translations


572



81Balance, end of year


57,871



45,102Current portion


(1,061
)


(59
)Non-current portion, end of year

$
56,810


$
45,043   Company
    Owned Life Insurance
   F-26




---



##### Table of Contents



KORN/FERRY
    INTERNATIONAL AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    8.
    Income
    Taxes      Year Ended April 30,2010


2009


2008(In thousands)Current income taxes:Federal

$
862


$
3,378


$
14,788State


2,281



601



5,658Foreign


6,738



4,859



21,627Current provision for income taxes


9,881



8,838



42,073Deferred income taxes:Federal


(2,729
)


(4,459
)


(1,699
)State


(1,303
)


(1,002
)


(1,805
)Foreign


(6,334
)


(2,993
)


(2,488
)Deferred benefit for income taxes


(10,366
)


(8,454
)


(5,992
)Total (benefit) provision for income taxes

$
(485
)

$
384


$
36,081     Year Ended April 30,2010


2009


2008(In thousands)Domestic

$
10,669


$
(7,806
)

$
38,865Foreign


(5,947
)


(4,267
)


60,125Income (loss) before (benefit) provision for income taxes and
    equity in earnings of unconsolidated subsidiaries

$
4,722


$
(12,073
)

$
98,990  F-27




---



##### Table of Contents



KORN/FERRY
    INTERNATIONAL AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Year Ended April 30,2010


2009


2008U.S. federal statutory income tax rate


35.0
%


35.0
%


35.0
%Foreign source income, net of credits used


52.9



1.8



2.1Income subject to net differing foreign tax rates


52.6



(27.8
)


(1.9
)Foreign tax credits generated






47.0



COLI increase, net


(69.8
)


(1.3
)


(1.7
)Repatriation of foreign earnings


38.5







0.3State income taxes, net of federal benefit


13.8



2.2



3.9Adjustments for contingencies and valuation allowance


52.7



(54.7
)


(1.5
)Tax exempt interest income


(0.7
)


2.0



(0.5
)Expense disallowances


7.5



(3.4
)


0.5Uncertain tax position reserve reversal


(208.8
)






Other


16.0



(4.0
)


0.2Effective income tax rate


(10.3
)%


(3.2
)%


36.4
%     April 30,2010


2009(In thousands)Deferred tax assets:Deferred compensation

$
64,984


$
40,861Loss and credit carryforwards


48,142



24,513Allowance for doubtful accounts


1,020



1,658Property and equipment


739



1,315Unrealized losses


20



4,130Other


5,761



8,198Gross deferred tax assets


120,666



80,675Deferred tax liabilities:Intangibles


(6,340
)


(5,513
)Other






(5,703
)Gross deferred tax liabilities


(6,340
)


(11,216
)Valuation allowances


(33,740
)


(9,735
)Net deferred tax asset

$
80,586


$
59,724    F-28




---



##### Table of Contents



KORN/FERRY
    INTERNATIONAL AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    April 30,2010


2009(In thousands)Current:Deferred tax assets

$
21,974


$
15,447Deferred tax liabilities


(1,130
)


(864
)Current deferred tax asset, net


20,844



14,583Non-current:Deferred tax asset


117,244



65,228Deferred tax liabilities


(23,762
)


(10,352
)Non-current deferred tax asset, gross


93,482



54,876Valuation allowance


(33,740
)


(9,735
)Non-current deferred tax asset, net


59,742



45,141Net deferred tax assets

$
80,586


$
59,724          F-29




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##### Table of Contents



KORN/FERRY
    INTERNATIONAL AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Year Ended April 30,2010


2009(In thousands)Unrecognized tax benefits, beginning of year

$
13,392


$
10,770Additions based on tax positions related to the current year






2,000Estimated interest for the year


469



622Recognized tax benefits


(10,329
)


Unrecognized tax benefits, end of year

$
3,532


$
13,392     9.
    Property
    and Equipment    April 30,2010


2009(In thousands)Computer equipment and software

$
63,717


$
60,274Furniture and fixtures


22,526



21,757Leasehold improvements


21,450



21,865Automobiles


2,154



2,414109,847



106,310Less: accumulated depreciation and amortization


(84,884
)


(78,340
)Property and equipment, net

$
24,963


$
27,970   10.
    Stockholders
    Equity    11.
    Long-Term
    Debt   F-30




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##### Table of Contents



KORN/FERRY
    INTERNATIONAL AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      12.
    Business
    Segments      Year Ended April 30, 2010Executive RecruitmentNorth





Asia


SouthAmerica


EMEA


Pacific


America


Subtotal


Futurestep


Corporate


Consolidated(In thousands)Fee revenue

$
278,746


$
137,497


$
64,132


$
24,026


$
504,401


$
67,979


$



$
572,380Total revenue

$
294,588


$
141,982


$
65,508


$
24,536


$
526,614


$
73,035


$



$
599,649Operating income (loss)

$
42,604


$
(15,511
)

$
7,826


$
3,286


$
38,205


$
1,291


$
(42,218
)

$
(2,722
)Depreciation and amortization

$
4,561


$
2,196


$
1,163


$
439


$
8,359


$
1,007


$
2,127


$
11,493Identifiable assets(1)

$
211,728


$
135,165


$
71,993


$
21,195


$
440,081


$
69,085


$
317,932


$
827,098Long-lived assets(1)

$
8,918


$
2,960


$
1,610


$
1,041


$
14,529


$
1,480


$
8,954


$
24,963Goodwill(1)

$
88,612


$
50,389


$
972


$



$
139,973


$
32,300


$



$
172,273   F-31




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##### Table of Contents



KORN/FERRY
    INTERNATIONAL AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Year Ended April 30, 2009Executive RecruitmentNorth





Asia


SouthAmerica


EMEA


Pacific


America


Subtotal


Futurestep


Corporate


Consolidated(In thousands)Fee revenue

$
309,514


$
143,184


$
66,332


$
24,323


$
543,353


$
94,870


$



$
638,223Total revenue

$
330,453


$
149,016


$
67,983


$
24,841


$
572,293


$
103,835


$



$
676,128Operating income (loss)

$
37,516


$
2,061


$
5,396


$
2,441


$
47,414


$
(12,003
)

$
(31,683
)

$
3,728Depreciation and amortization

$
4,003


$
2,003


$
1,621


$
371


$
7,998


$
1,873


$
1,712


$
11,583Identifiable assets(1)

$
254,123


$
113,489


$
70,463


$
20,236


$
458,311


$
65,094


$
217,474


$
740,879Long-lived assets(1)

$
8,621


$
3,120


$
1,850


$
1,100


$
14,691


$
3,112


$
10,167


$
27,970Goodwill(1)

$
71,131


$
31,331


$
972


$



$
103,434


$
29,897


$



$
133,331   Year Ended April 30, 2008Executive RecruitmentNorth





Asia


SouthAmerica


EMEA


Pacific


America


Subtotal


Futurestep


Corporate


Consolidated(In thousands)Fee revenue

$
374,891


$
183,042


$
95,915


$
25,556


$
679,404


$
111,166


$



$
790,570Total revenue

$
395,320


$
189,203


$
98,288


$
25,964


$
708,775


$
126,867


$



$
835,642Operating income (loss)

$
70,628


$
29,820


$
19,299


$
2,230


$
121,977


$
8,545


$
(38,669
)

$
91,853Depreciation and amortization

$
2,915


$
2,299


$
1,766


$
371


$
7,351


$
1,816


$
1,274


$
10,441Identifiable assets(1)

$
269,407


$
162,756


$
97,762


$
19,072


$
548,997


$
87,665


$
243,552


$
880,214Long-lived assets(1)

$
9,000


$
5,578


$
3,209


$
1,504


$
19,291


$
4,540


$
8,631


$
32,462Goodwill(1)

$
69,533


$
37,379


$
972


$



$
107,884


$
34,815


$



$
142,699     (1)
    
    As of the end of the fiscal year.   F-32




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##### Table of Contents



KORN/FERRY
    INTERNATIONAL AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  13.
    Acquisitions    Year Ended April 30, (1)2010(2)


2009(3)


2008(4)(In thousands)Assets acquired

$
14,055


$
4,676


$
406Intangibles acquired


6,835



2,115



Liabilities acquired


22,958



2,451



307Net (liabilities) assets acquired


(2,068
)


4,340



99Purchase price


25,848



13,189



3,622Goodwill

$
27,916


$
8,849


$
3,523Goodwill by segment:Executive recruitment

$
27,916


$
8,849


$
493Futurestep










3,030Goodwill

$
27,916


$
8,849


$
3,523Acquisition costs (included in purchase price)





$
535


$
323     (1)
    
    Certain employees who joined the Company through these
    acquisitions will be eligible to receive earn-out payments of up
    to $15.7 million over the next three years, if certain
    financial metrics are achieved during that period, of which
    $7.1 million is included in the Companys consolidated
    balance sheet. The Company also accrued an additional
    $2.8 million related to prior year acquisitions.(2)
    
    On June 11, 2009, the Company acquired all of the
    outstanding share capital of Whitehead Mann Limited and
    Whitehead Mann SAS, together referred to as Whitehead Mann
    (WHM). WHM is engaged in providing executive
    recruitment and other related recruiting services in the United
    Kingdom, Dubai and France. Actual results of operations of WHM
    are included in the Companys consolidated financial
    statements from June 11, 2009, the effective date of the
    acquisition.On January 1, 2010, the Company acquired SENSA Solutions,
    Inc. (SENSA), a leading management consulting firm
    widely respected for its leadership and organizational
    development solutions utilized by U.S. federal agencies.
    Actual results of operations of SENSA are included in the
    accompanying consolidated financial statements from
    January 1, 2010, the effective date of the acquisition.(3)
    
    On November 3, 2008, the Company acquired Lore
    International, Inc, a Delaware corporation (Lore).
    Actual results of operations of Lore are included in the
    Companys consolidated financial statements from
    November 3, 2008, the effective date of the acquisition.(4)
    
    During fiscal 2009, adjustments to the preliminary purchase
    price allocation for an acquisition in fiscal 2008, resulted in
    a $1.9 million reduction in goodwill. F-33




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##### Table of Contents



KORN/FERRY
    INTERNATIONAL AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  14.
    Goodwill
    and Intangible Assets    Executive RecruitmentNorth





AsiaAmerica


EMEA


Pacific


Subtotal


Futurestep


Consolidated(In thousands)Balance as of April 30, 2008

$
69,533


$
37,379


$
972


$
107,884


$
34,815


$
142,699Additions


8,849











8,849







8,849Reclassifications


(1,834
)










(1,834
)






(1,834
)Exchange rate fluctuations


(5,417
)


(6,048
)






(11,465
)


(4,918
)


(16,383
)Balance as of April 30, 2009


71,131



31,331



972



103,434



29,897



133,331Additions


12,182



18,812







30,994



2,200



33,194Exchange rate fluctuations


5,299



246







5,545



203



5,748Balance as of April 30, 2010

$
88,612


$
50,389


$
972


$
139,973


$
32,300


$
172,273     Weighted-Average


April 30,Amortization Period


2010


2009(In thousands)Amortized intangible assets:Non-compete agreements


5 years


$
510


$
400Customer lists


7 years



6,399



2,060Proprietary databases


10 years



3,931



450Trademarks


5 years



2,386



Intellectual property


24 years



11,400



11,40024,626



14,310Accumulated amortization






(2,853
)


(1,182
)21,773



13,128Unamortized intangible assets:Trademarks






3,800



3,800Exchange rate fluctuations






(148
)


Intangible assets





$
25,425


$
16,928  F-34




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##### Table of Contents



KORN/FERRY
    INTERNATIONAL AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    EstimatedAnnualAmortizationYear Ending April 30,

Expense(In thousands)2011

$
2,4032012


2,4032013


2,3912014


2,3272015


2,004Thereafter


10,245$
21,773     15.
    Commitments
    and Contingencies  Lease
    Commitment
      Year Ending April 30,

Lease Commitment(In thousands)2011

$
28,8782012


28,6702013


27,7102014


26,2232015


24,324Thereafter


86,911$
222,716   Letters
    of Credit
    Employment
    Agreements
   F-35




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##### Table of Contents



KORN/FERRY
    INTERNATIONAL AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Litigation
    16.
    Quarterly
    Results (Unaudited)    Quarters EndedFiscal 2010


Fiscal 2009April 30


January 31


October 31


July 31


April 30


January 31


October 31


July 31(In thousands, except per share data)Fee revenue

$
168,690


$
146,742


$
140,145


$
116,803


$
106,980


$
136,210


$
189,300


$
205,733Operating income (loss)

$
13,629


$
6,383


$
2,218


$
(24,952
)

$
(30,256
)

$
(11,258
)

$
21,488


$
23,754Net income (loss)

$
8,916


$
7,910


$
2,745


$
(14,273
)

$
(17,200
)

$
(22,356
)

$
13,560


$
15,904Net income (loss) per share:Basic

$
0.20


$
0.18


$
0.06


$
(0.33
)

$
(0.40
)

$
(0.52
)

$
0.31


$
0.37Diluted

$
0.19


$
0.17


$
0.06


$
(0.33
)

$
(0.40
)

$
(0.52
)

$
0.30


$
0.36  F-36