##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 
 FORM 10-Q
 
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended July 31, 2008
 or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 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 90067
(Address of principal executive offices) (Zip code)
 (310) 552-1834
(Registrants telephone number, including area code)
 
 þ o
  Large accelerated filer þ
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting company o
 Yes o No þ




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##### 



KORN/FERRY INTERNATIONAL AND SUBSIDIARIES
Table of Contents
 PagePART I. FINANCIAL INFORMATION
    
    
    3Item 1. Condensed Financial Statements
    
    
    3Consolidated Balance Sheets as of July 31, 2008 (unaudited) and April 30, 2008
    
    
    3Unaudited Consolidated Statements of Income for the three months ended July 31, 2008 and 2007
    
    
    4Unaudited Consolidated Statements of Cash Flows for the three months ended July 31, 2008 and 2007
    
    
    5Notes to Unaudited Condensed Consolidated Financial Statements
    
    
    6Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    15Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    20Item 4. Controls and Procedures
    
    
    21PART II. OTHER INFORMATION
    
    
    22Item 1. Legal Proceedings
    
    
    22Item 1A. Risk Factors
    
    
    22Item 2. Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities
    
    
    22Item 3. Defaults Upon Senior Securities
    
    
    22Item 4. Submission of Matters to a Vote of Security Holders
    
    
    22Item 5. Other Information
    
    
    22Item 6. Exhibits
    
    
    23SIGNATURES
    
    
    24Exhibit 10.1Exhibit 10.2Exhibit 31.1Exhibit 31.2Exhibit 32.1
   2




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##### Table of Contents



PART I. FINANCIAL INFORMATION
 
 Item 1. Condensed Financial Statements
 KORN/FERRY INTERNATIONAL AND SUBSIDIARIES
 
 CONSOLIDATED BALANCE SHEETS
 (in thousands, except per share amounts)
 As of
    
    
    As ofJuly 31,
    
    
    April 30,2008
    
    
    2008(unaudited)ASSETSCash and cash equivalents
    
    $
    205,949
    
    
    $
    305,296Marketable securities
    
    
    2,865
    
    
    
    5,940Receivables due from clients, net of allowance for doubtful accounts of $12,558 and $11,504,
respectively
    
    
    138,716
    
    
    
    119,952Income tax and other receivables
    
    
    6,516
    
    
    
    7,071Deferred income taxes
    
    
    9,817
    
    
    
    10,401Prepaid expenses
    
    
    22,613
    
    
    
    20,057Total current assets
    
    
    386,476
    
    
    
    468,717Marketable securities, noncurrent
    
    
    86,215
    
    
    
    78,026Property and equipment, net
    
    
    32,631
    
    
    
    32,462Cash surrender value of company owned life insurance policies, net of loans
    
    
    81,556
    
    
    
    81,377Deferred income taxes
    
    
    43,338
    
    
    
    47,128Goodwill
    
    
    142,126
    
    
    
    142,699Intangible assets, net
    
    
    15,399
    
    
    
    15,519Investments and other
    
    
    15,046
    
    
    
    14,286Total assets
    
    $
    802,787
    
    
    $
    880,214LIABILITIES AND STOCKHOLDERS EQUITYAccounts payable
    
    $
    11,796
    
    
    $
    15,309Income taxes payable
    
    
    18,755
    
    
    
    20,948Compensation and benefits payable
    
    
    106,463
    
    
    
    199,081Other accrued liabilities
    
    
    35,953
    
    
    
    37,120Total current liabilities
    
    
    172,967
    
    
    
    272,458Deferred compensation and other retirement plans
    
    
    111,153
    
    
    
    105,719Other liabilities
    
    
    5,660
    
    
    
    5,903Total liabilities
    
    
    289,780
    
    
    
    384,080Stockholders equity:Common stock: $0.01 par value, 150,000 shares authorized, 55,945 and 54,786 shares issued
and 45,028 and 44,593 shares outstanding, respectively
    
    
    362,351
    
    
    
    358,568Retained earnings
    
    
    110,918
    
    
    
    95,014Accumulated other comprehensive income
    
    
    40,282
    
    
    
    43,097Stockholders equity
    
    
    513,551
    
    
    
    496,679Less: Notes receivable from stockholders
    
    
    (544
    )
    
    
    (545
    )Total stockholders equity
    
    
    513,007
    
    
    
    496,134Total liabilities and stockholders equity
    
    $
    802,787
    
    
    $
    880,214
   3




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##### Table of Contents



KORN/FERRY INTERNATIONAL AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF INCOME
 (in thousands, except per share amounts)
 (unaudited)
 Three Months EndedJuly 31,2008
    
    
    2007Fee revenue
    
    $
    205,733
    
    
    $
    185,353Reimbursed out-of-pocket engagement expenses
    
    
    11,739
    
    
    
    10,924Total revenue
    
    
    217,472
    
    
    
    196,277Compensation and benefits
    
    
    142,123
    
    
    
    122,986General and administrative expenses
    
    
    34,030
    
    
    
    31,701Out-of-pocket engagement expenses
    
    
    14,733
    
    
    
    14,127Depreciation and amortization
    
    
    2,832
    
    
    
    2,350Total operating expenses
    
    
    193,718
    
    
    
    171,164Operating income
    
    
    23,754
    
    
    
    25,113Interest and other income, net
    
    
    1,604
    
    
    
    2,730Interest expense
    
    
    1,224
    
    
    
    1,232Income before provision for income taxes and equity in earnings of unconsolidated subsidiaries
    
    
    24,134
    
    
    
    26,611Provision for income taxes
    
    
    9,293
    
    
    
    10,434Equity in earnings of unconsolidated subsidiaries, net
    
    
    1,063
    
    
    
    923Net income
    
    $
    15,904
    
    
    $
    17,100Basic earnings per common share
    
    $
    0.37
    
    
    $
    0.38Basic weighted average common shares outstanding
    
    
    43,432
    
    
    
    45,041Diluted earnings per common share
    
    $
    0.36
    
    
    $
    0.36Diluted weighted average common shares outstanding
    
    
    44,549
    
    
    
    47,063
   4




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KORN/FERRY INTERNATIONAL AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
 Three Months EndedJuly 31,2008
    
    
    2007Cash from operating activities:Net income
    
    $
    15,904
    
    
    $
    17,100Adjustments to reconcile net income to net cash provided by operating activities:Depreciation and amortization
    
    
    2,832
    
    
    
    2,350Stock compensation expense
    
    
    4,211
    
    
    
    3,904Loss on disposition of property and equipment
    
    
    21
    
    
    
    161Provision for doubtful accounts
    
    
    1,639
    
    
    
    3,056Loss (gain) on cash surrender value of life insurance policies
    
    
    202
    
    
    
    (863
    )Realized gains on marketable securities
    
    
    (237
    )
    
    
    (17
    )Deferred income taxes
    
    
    4,374
    
    
    
    (4,244
    )Change in other assets and liabilities, net of effect of acquisitions:Deferred compensation
    
    
    5,434
    
    
    
    8,343Receivables
    
    
    (19,848
    )
    
    
    (25,768
    )Prepaid expenses
    
    
    (2,556
    )
    
    
    (580
    )Investment in unconsolidated subsidiaries
    
    
    (1,316
    )
    
    
    (1,146
    )Income taxes payable
    
    
    (2,220
    )
    
    
    16,982Accounts payable and accrued liabilities
    
    
    (97,240
    )
    
    
    (92,743
    )Other
    
    
    (71
    )
    
    
    79Net cash used in operating activities
    
    
    (88,871
    )
    
    
    (73,386
    )Cash from investing activities:Purchase of property and equipment
    
    
    (2,895
    )
    
    
    (3,075
    )(Purchase of) proceeds from marketable securities, net
    
    
    (7,659
    )
    
    
    10,474Cash paid for acquisitions, net of cash acquired
    
    
    
    
    
    
    (2,800
    )Premiums on life insurance policies
    
    
    (425
    )
    
    
    (428
    )Dividends received from unconsolidated subsidiaries
    
    
    341
    
    
    
    888Net cash (used in) provided by investing activities
    
    
    (10,638
    )
    
    
    5,059Cash from financing activities:Payments on life insurance policy loans
    
    
    (367
    )
    
    
    Borrowings under life insurance policies
    
    
    411
    
    
    
    412Purchase of common stock
    
    
    (2,136
    )
    
    
    (17,851
    )Proceeds from issuance of common stock upon exercise of employee stock
options and in connection with an employee stock purchase plan
    
    
    1,761
    
    
    
    14,077Tax benefit from exercise of stock options
    
    
    36
    
    
    
    2,896Receipts on stockholders notes
    
    
    1
    
    
    
    2Net cash used in financing activities
    
    
    (294
    )
    
    
    (464
    )Effect of exchange rates on cash and cash equivalents
    
    
    456
    
    
    
    757Net decrease in cash and cash equivalents during the period
    
    
    (99,347
    )
    
    
    (68,034
    )Cash and cash equivalents at beginning of the period
    
    
    305,296
    
    
    
    226,137Cash and cash equivalents at end of the period
    
    $
    205,949
    
    
    $
    158,103
   5




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##### Table of Contents



KORN/FERRY INTERNATIONAL AND SUBSIDIARIES
 
 NOTES TO UNAUDITED
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share amounts)
 1. Summary of Significant Accounting Policies
 Basis of Presentation
  Critical Accounting Policies and Use of Estimates
  Cash and Cash Equivalents
  Available-for-Sale Securities
  Stock-Based Compensation
   6




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Three Months EndedJuly 31,2008
    
    
    2007Stock options and SARs
    
    $
    288
    
    
    $
    719Restricted stock
    
    
    3,790
    
    
    
    3,025Employee Stock Purchase Plan
    
    
    133
    
    
    
    141Total stock-based compensation expense, pre-tax
    
    
    4,211
    
    
    
    3,885Tax benefit from stock-based compensation expense
    
    
    (1,537
    )
    
    
    (1,418
    )Total stock-based compensation expense, net of tax
    
    $
    2,674
    
    
    $
    2,467
  Three Months EndedJuly 31,2008
    
    
    2007Expected volatility
    
    
    44.11
    %
    
    
    44.42
    %Risk-free interest rate
    
    
    3.27
    %
    
    
    4.60
    %Expected option life (in years)
    
    
    4.25
    
    
    
    4.00Expected dividend yield
    
    
    0.00
    %
    
    
    0.00
    %
  Common Stock
  Reclassifications
  New Accounting Standards
   7




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##### Table of Contents



2. Basic and Diluted Earnings Per Share
  Three Months EndedJuly 31,2008
    
    
    2007Net income (Numerator):Net income for basic EPS
    
    $
    15,904
    
    
    $
    17,100Interest expense on convertible securities, net of related tax effects
    
    
    
    
    
    
    38Net income for diluted EPS
    
    $
    15,904
    
    
    $
    17,138Shares (Denominator):Weighted average shares for basic EPS
    
    
    43,432
    
    
    
    45,041Effect of:Warrants
    
    
    80
    
    
    
    146Restricted stock
    
    
    278
    
    
    
    310Stock options
    
    
    748
    
    
    
    1,562Employee stock purchase plan
    
    
    11
    
    
    
    4Adjusted weighted average shares for diluted EPS
    
    
    44,549
    
    
    
    47,063Basic EPS
    
    $
    0.37
    
    
    $
    0.38Diluted EPS
    
    $
    0.36
    
    
    $
    0.36
   8




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3 . Comprehensive Income
   Three Months EndedJuly 31,2008
    
    
    2007Net income
    
    $
    15,904
    
    
    $
    17,100Foreign currency translation adjustment
    
    
    (1,385
    )
    
    
    3,085Unrealized loss on marketable securities, net of taxes
    
    
    (1,430
    )
    
    
    (277
    )Comprehensive income
    
    $
    13,089
    
    
    $
    19,908
  Three Months EndedJuly 31,2008
    
    
    2007Foreign currency translation adjustments
    
    $
    42,823
    
    
    $
    22,399Unrealized (losses) gains on marketable securities, net of taxes
    
    
    (3,320
    )
    
    
    1,349SFAS No. 158 adjustments, net of taxes
    
    
    779
    
    
    
    (335
    )Accumulated
other comprehensive income
    
    $
    40,282
    
    
    $
    23,413
 4. Employee Stock Plans
 Stock Option Plans
   Weighted-averageWeighted-
    
    
    remaining
    
    
    AggregateOptions
    
    
    average
    
    
    contractual
    
    
    intrinsic(in thousands)
    
    
    exercise price
    
    
    life (Yrs)
    
    
    valueOutstanding at April 30, 2008
    
    
    3,564
    
    
    $
    14.79Granted
    
    
    1
    
    
    
    16.69Exercised
    
    
    (17
    )
    
    
    10.59Forfeited/expired
    
    
    (23
    )
    
    
    19.26Outstanding at July 31, 2008
    
    
    3,525
    
    
    $
    14.78
    
    
    
    4.5
    
    
    $
    14,174Exercisable at July 31, 2008
    
    
    3,413
    
    
    $
    14.61
    
    
    
    4.4
    
    
    $
    14,171
   9




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Three Months EndedJuly 31,2008
    
    
    2007Weighted average fair value of stock options granted
    
    $
    6.75
    
    
    $
    10.30Total fair value of stock options and SARs vested
    
    
    1,692
    
    
    
    3,605Total intrinsic value of stock options exercised
    
    
    99
    
    
    
    10,693Total intrinsic value of SARs paid
    
    
    
    
    
    
    
 Restricted Stock
   Weighted-averageShares
    
    
    grant dateNonvested shares
    
    (in thousands)
    
    
    fair valueNonvested at April 30, 2008
    
    
    1,952
    
    
    $
    22.01Granted
    
    
    1,182
    
    
    
    17.60Vested
    
    
    (510
    )
    
    
    21.66Forfeited
    
    
    (31
    )
    
    
    17.79Nonvested at July 31, 2008
    
    
    2,593
    
    
    $
    18.42
  Employee Stock Purchase Plan
   10




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5. Marketable Securities
   
    
    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.
        11




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Total
    
    
    Level 1
    
    
    Level 2
    
    
    Level 3Cash equivalents
    
    $
    74,021
    
    
    $
    74,021
    
    
    $
    
    
    
    $
    Auction rate securities
    
    
    17,783
    
    
    
    
    
    
    
    
    
    
    
    17,783Equity securities (1)
    
    
    37,520
    
    
    
    37,520
    
    
    
    
    
    
    
    Fixed income mutual fund (1)
    
    
    8,291
    
    
    
    8,291
    
    
    
    
    
    
    
    Noncurrent money market mutual funds (1)
    
    
    25,486
    
    
    
    25,486
    
    
    
    
    
    
    
    Total
    
    $
    163,101
    
    
    $
    145,318
    
    
    $
    
    
    
    $
    17,783
 
 (1)
    
    These investments are held in trust for settlement of the Companys
obligations under certain of its deferred compensation plans.  AuctionRateSecuritiesBalance at April 30, 2008
    
    $
    20,475Unrealized loss included in other comprehensive income
    
    
    (259
    )Sales of securities
    
    
    (2,550
    )Reversal of unrealized loss associated with sales of securities at par
    
    
    117Ending balance at July 31, 2008
    
    $
    17,783
  6. Deferred Compensation and Retirement Plans
  Three Months EndedJuly 31,Components of net periodic benefit costs:
    
    2008
    
    
    2007Service cost
    
    $
    174
    
    
    $
    267Interest cost
    
    
    910
    
    
    
    835Amortization of actuarial gain
    
    
    (21
    )
    
    
    (18
    )Amortization of net transition obligation
    
    
    53
    
    
    
    53Net periodic benefit cost
    
    $
    1,116
    
    
    $
    1,137
   12




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7. Business Segments
   Three Months EndedJuly 31,2008
    
    
    2007Fee revenue:Executive recruitment:North America
    
    $
    93,974
    
    
    $
    87,314EMEA
    
    
    51,590
    
    
    
    44,722Asia Pacific
    
    
    21,403
    
    
    
    22,661South America
    
    
    7,585
    
    
    
    5,070Total executive recruitment
    
    
    174,552
    
    
    
    159,767Futurestep
    
    
    31,181
    
    
    
    25,586Total fee revenue
    
    $
    205,733
    
    
    $
    185,353
 Three Months EndedJuly 31,2008
    
    
    2007Total revenue:Executive Recruitment:North America
    
    $
    99,844
    
    
    $
    92,230EMEA
    
    
    53,480
    
    
    
    46,033Asia Pacific
    
    
    21,855
    
    
    
    23,242South America
    
    
    7,693
    
    
    
    5,186Total executive recruitment
    
    
    182,872
    
    
    
    166,691Futurestep
    
    
    34,600
    
    
    
    29,586Total revenue
    
    $
    217,472
    
    
    $
    196,277
 Three Months EndedJuly 31,2008
    
    
    2007Operating income (loss):Executive recruitment:North America
    
    $
    18,637
    
    
    $
    19,791EMEA
    
    
    8,486
    
    
    
    7,691Asia Pacific
    
    
    3,476
    
    
    
    4,537South America
    
    
    1,080
    
    
    
    661Total executive recruitment
    
    
    31,679
    
    
    
    32,680Futurestep
    
    
    2,855
    
    
    
    2,084Corporate
    
    
    (10,780
    )
    
    
    (9,651
    )Total operating income
    
    $
    23,754
    
    
    $
    25,113
  13




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8. Subsequent Events
   14




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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 Forward-looking Statements
 This quarterly report on Form 10-Q 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 are also 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, dependence on attracting and retaining
qualified and experienced consultants, portability of client relationships, local political or
economic developments in or affecting countries where we have operations, currency fluctuations in
our international operations, ability to manage growth, restrictions imposed by off-limits
agreements, competition, risks related to the growth and results of Futurestep, reliance on
information processing systems, and employment liability risk as well as the matters disclosed
under the heading Risk Factors in Item 1A of the Companys annual report on Form 10-K for fiscal
2008 (Form 10-K). Readers are urged to consider these factors carefully in evaluating the
forward-looking statements. The forward-looking statements included in this Form 10-Q are made only
as of the date of this report 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 condensed consolidated financial
statements included in this Form 10-Q .
 Executive Summary
      15




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Critical Accounting Policies
  Results of Operations
  Three Months EndedJuly 31,2008
    
    
    2007Fee revenue
    
    
    100.0
    %
    
    
    100.0
    %Reimbursed out-of-pocket engagement expenses
    
    
    5.7
    
    
    
    5.9Total revenue
    
    
    105.7
    
    
    
    105.9Compensation and benefits
    
    
    69.1
    
    
    
    66.4General and administrative expenses
    
    
    16.5
    
    
    
    17.1Out-of-pocket engagement expenses
    
    
    7.2
    
    
    
    7.6Depreciation and amortization
    
    
    1.4
    
    
    
    1.3Operating income
    
    
    11.5
    
    
    
    13.5Net income
    
    
    7.7
    %
    
    
    9.2
    %
  Three Months Ended July 31,2008
    
    
    2007Dollars
    
    
    %
    
    
    Dollars
    
    
    %Fee revenueExecutive recruitment:North America
    
    $
    93,974
    
    
    
    45.7
    %
    
    $
    87,314
    
    
    
    47.1
    %EMEA
    
    
    51,590
    
    
    
    25.1
    
    
    
    44,722
    
    
    
    24.1Asia Pacific
    
    
    21,403
    
    
    
    10.4
    
    
    
    22,661
    
    
    
    12.2South America
    
    
    7,585
    
    
    
    3.7
    
    
    
    5,070
    
    
    
    2.7Total executive recruitment
    
    
    174,552
    
    
    
    84.9
    
    
    
    159,767
    
    
    
    86.1Futurestep
    
    
    31,181
    
    
    
    15.1
    
    
    
    25,586
    
    
    
    13.9Total fee revenue
    
    
    205,733
    
    
    
    100.0
    %
    
    
    185,353
    
    
    
    100.0
    %Reimbursed out-of-pocket engagement expenses
    
    
    11,739
    
    
    
    
    
    
    
    10,924Total revenue
    
    $
    217,472
    
    
    
    
    
    
    $
    196,277
  16




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##### Table of Contents



Three Months Ended July 31,2008
    
    
    2007Dollars
    
    
    %
    
    
    Dollars
    
    
    %Operating income (loss)Executive recruitment:North America
    
    $
    18,637
    
    
    
    19.8
    %
    
    $
    19,791
    
    
    
    22.7
    %EMEA
    
    
    8,486
    
    
    
    16.4
    
    
    
    7,691
    
    
    
    17.2Asia Pacific
    
    
    3,476
    
    
    
    16.2
    
    
    
    4,537
    
    
    
    20.0South America
    
    
    1,080
    
    
    
    14.2
    
    
    
    661
    
    
    
    13.0Total executive recruitment
    
    
    31,679
    
    
    
    18.1
    
    
    
    32,680
    
    
    
    20.5Futurestep
    
    
    2,855
    
    
    
    9.2
    
    
    
    2,084
    
    
    
    8.1Corporate
    
    
    (10,780
    )
    
    
    
    
    
    
    (9,651
    )Total operating income
    
    $
    23,754
    
    
    
    11.5
    %
    
    $
    25,113
    
    
    
    13.5
    %
 Three Months Ended July 31, 2008 Compared to Three Months Ended July 31, 2007
 Fee Revenue.
 Executive Recruitment.
     Futurestep.
  17




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##### Table of Contents



Compensation and Benefits.
    General and Administrative Expenses.
    Out-of-Pocket Engagement Expenses.
  18




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##### Table of Contents



Depreciation and Amortization Expenses.
 Operating Income.
   Interest Income and Other Income, Net.
 Interest Expense.
 Provision for Income Taxes.
 Equity in Earnings of Unconsolidated Subsidiaries.
 Liquidity and Capital Resources
    19




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##### Table of Contents



Off-Balance Sheet Arrangements
  
 Item 3. Quantitative and Qualitative Disclosures About Market Risk
  Foreign
Currency Risk
     20




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##### Table of Contents



Interest
Rate Risk
   
 Item 4. Controls and Procedures
 (a) Evaluation
of Disclosure Controls and Procedures.
  (b) Changes in Internal Control over Financial Reporting.
   21




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##### Table of Contents



PART II. OTHER INFORMATION
 
 Item 1. Legal Proceedings
  
 Item 1A. Risk Factors
  
 Item 2.
    Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity
Securities
  ApproximateShares
    
    
    Dollar Value ofPurchased
    
    
    Shares thatAverage
    
    
    as Part of a
    
    
    May Yet BePrice
    
    
    Publicly-
    
    
    PurchasedPaid
    
    
    Announced
    
    
    Under theShares
    
    
    Per
    
    
    Program
    
    
    ProgramPurchased
    
    
    Share
    
    
    (1)
    
    
    (1)May 1, 2008   May 31, 2008
    
    
    334
    
    
    $
    16.80
    
    
    
    
    
    
    $
    43.7 millionJune 1, 2008   June 30, 2008
    
    
    47,126
    
    
    $
    16.80
    
    
    
    
    
    
    $
    43.7 millionJuly 1, 2008   July 31, 2008
    
    
    80,147
    
    
    $
    16.70
    
    
    
    9,200
    
    
    $
    43.6 millionBalance as of July 31, 2008
    
    
    127,607
    
    
    
    
    
    
    
    9,200
 (1)
    
    On November 2, 2007, 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. 
 Item 3. Defaults Upon Senior Securities
  
 Item 4. Submission of Matters to a Vote of Security Holders
  
 Item 5. Other Information
   22




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##### Table of Contents



Item 6. Exhibits
 ExhibitNumber
    
    Description of Exhibit3.1
    
    
    Certificate of Incorporation of the Company, filed as Exhibit 3.1 to the Companys Quarterly Report on
Form 10-Q, dated December 15, 1999, and incorporated herein by reference.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, dated June 18, 2002, and incorporated herein by reference.3.3
    
    
    Amended and Restated Bylaws of the Company, filed as Exhibit 3.3 to the Companys Annual Report on Form
10-K, dated July 29, 2002, and incorporated herein by reference.10.1
    *
    
    Offer of Employment Letter
between the Company and Paul C. Reilly dated June 26, 2008.10.2
    *
    
    Reimbursement Letter
Agreement between the Company and Paul C. Reilly dated as of
March 1, 2008.31.1
    
    
    Certification by Chief Executive Office pursuant to Rule 13a-14(a) under the Exchange Act, as adopted
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.2
    
    
    Certification by Chief Financial Officer pursuant to Rule 13a-14(a) under the Exchange Act, as adopted
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.1
    
    
    Chief Executive Officer and Chief Financial Officer Certification pursuant to 18 U.S.C. Section 1350.
 *
    
    Management contract, compensatory plan or arrangement.  23




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##### Table of Contents



SIGNATURE
  KORN/FERRY INTERNATIONALDate: September 9, 2008
    By:
    /s/ STEPHEN J. GIUSTOStephen J. GiustoExecutive Vice President and
Chief Financial Officer  24




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##### Table of Contents



EXHIBIT INDEX
 ExhibitNumber
    
    Description of Exhibit10.1
    *
    
    Offer of Employment Letter
between the Company and Paul C. Reilly dated June 26, 2008.10.2
    *
    
    Reimbursement Letter
Agreement between the Company and Paul C. Reilly dated as of
March 1, 2008.31.1
    
    
    Certification by Chief Executive Office pursuant to Rule 13a-14(a) under the Exchange Act, as adopted
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.2
    
    
    Certification by Chief Financial Officer pursuant to Rule 13a-14(a) under the Exchange Act, as adopted
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.1
    
    
    Chief Executive Officer and Chief Financial Officer Certification pursuant to 18 U.S.C. Section 1350.
 *
    
    Management contract, compensatory plan or arrangement.  25