<PAGE> 1
As filed with the Securities and Exchange Commission on August 31, 1998
Registration Statement No. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
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REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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SAPIENT CORPORATION
(Exact name of registrant as specified in its charter)
----------------------
<TABLE>
<CAPTION>
<S> <C>
DELAWARE 04-3130648
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
</TABLE>
ONE MEMORIAL DRIVE
CAMBRIDGE, MASSACHUSETTS 02142
(617) 621-0200
(Address, including zip code, and
telephone number, including area code,
of registrant's principal
executive offices)
----------------------
DEBORAH ENGLAND GRAY
GENERAL COUNSEL
SAPIENT CORPORATION
ONE MEMORIAL DRIVE
CAMBRIDGE, MASSACHUSETTS 02142
(617) 621-0200
(Name, address, including zip code, and
telephone number, including area code,
of agent for service)
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: AS SOON AS
PRACTICABLE AFTER THIS REGISTRATION STATEMENT BECOMES EFFECTIVE.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ] 333-_______.
<PAGE> 2
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ] 333-__________.
If delivery of the Prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
----------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
Proposed Proposed
Title of Each Class of Amount Maximum Maximum
Securities to be Registered to be Offering Aggregate Amount of
Registered Price Offering Price Registration
Per Share Fee
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.01 par value per share........ 205,315 $42.25(1) $8,674,559(1) $2,559
- ----------------------------------------------------------------------------------------------------------
</TABLE>
(1) Estimated solely for purposes of calculating the registration fee pursuant
to Rule 457(c) under the Securities Act and based upon the average of the
high and low prices on the Nasdaq National Market on August 28, 1998.
----------------------
THE COMPANY HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE COMPANY SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
SHALL DETERMINE.
================================================================================
<PAGE> 3
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED AUGUST 31, 1998
PROSPECTUS
SAPIENT CORPORATION
205,315 SHARES OF COMMON STOCK
---------------------
This Prospectus covers the offer and sale (the "Offering") of up to
205,315 shares (the "Shares") of common stock, $.01 par value per share (the
"Common Stock"), of Sapient Corporation (the "Company"). The Shares may be
offered and sold from time to time for the account of certain stockholders of
the Company (the "Selling Stockholders"). See "Selling Stockholders." The Shares
were issued to the Selling Stockholders in connection with the acquisition by
the Company of all of the outstanding capital stock of Studio Archetype, Inc.
("Studio") on August 25, 1998. See "The Acquisition."
The Company will not receive any of the proceeds from the sale of the
Shares covered by this Prospectus. The Company will bear all costs (excluding
any underwriting discounts and commissions or expenses incurred by the Selling
Stockholders for brokerage, accounting, tax or legal services or any other
expenses incurred by the Selling Stockholders in disposing of the Shares), fees
and expenses incurred in effecting the registration of the Shares covered by
this Prospectus, including, without limitation, all registration and filing
fees, Nasdaq listing fees, fees and expenses of counsel for the Company, fees
and expenses of accountants for the Company and blue sky fees and expenses.
The Shares covered by this Prospectus may be sold from time to time by
the Selling Stockholders, or by their pledgees, donees, transferees or other
successors in interest, in the over-the-counter market or on any exchange on
which the Shares may be listed, through the writing of options on the Shares, in
ordinary brokerage transactions, in negotiated transactions, or otherwise, at
market prices prevailing at the time of sale or at negotiated prices. See "Plan
of Distribution."
The Selling Stockholders and intermediaries through whom the Shares are
sold may be deemed "underwriters" within the meaning of the Securities Act of
1933, as amended (the "Securities Act"), with respect to the Shares offered
hereby, and any profits realized or commissions received may be deemed
underwriting compensation.
<PAGE> 4
The Company's Common Stock is traded on the Nasdaq National Market
("Nasdaq") under the symbol "SAPE." On August 28, 1998, the closing sale price
of the Common Stock on Nasdaq was $41.625 per share.
----------------------
THE SECURITIES OFFERED HEREBY INVOLVE A HIGH DEGREE
OF RISK. SEE "RISK FACTORS" BEGINNING ON PAGE 5.
----------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
---------------------
The date of this Prospectus is September __, 1998.
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<PAGE> 5
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information may be inspected and copied at the public
reference facilities maintained by the Commission at 450 Fifth Street, N.W.,
Room 1024, Washington, D.C. 20549 and at the Commission's regional offices
located at Seven World Trade Center, Suite 1300, New York, New York 10048, and
at Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661. Copies of such materials also may be obtained from the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at
prescribed rates. In addition, reports, proxy statements and other information
concerning the Company can be inspected and copied at the offices of The Nasdaq
Stock Market, Inc., 1735 K Street, N.W., Washington, D.C. 20006. The Company is
required to file electronic versions of certain documents through the
Commission's Electronic Data Gathering, Analysis and Retrieval (EDGAR) system.
The Commission maintains a World Wide Web site at http://www.sec.gov that
contains reports, proxy statements and other information regarding registrants
that file electronically with the Commission.
The Company has filed with the Commission a Registration Statement on
Form S-3 (together with all amendments, supplements, exhibits and schedules
thereto, the "Registration Statement") under the Securities Act, with respect to
the Shares offered hereby. This Prospectus does not contain all of the
information set forth in the Registration Statement, as certain items are
omitted in accordance with the rules and regulations of the Commission. For
further information pertaining to the Company, reference is made to such
Registration Statement. Statements contained in this Prospectus regarding the
contents of any agreement or other document are not necessarily complete, and in
each instance reference is made to the copy of such agreement or document filed
as an exhibit to the Registration Statement, each such statement being qualified
in all respects by such reference. The Registration Statement may be inspected
without charge at the office of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, and copies of all or any part thereof may be obtained
from the Commission at prescribed rates.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated herein by reference:
(i) The Company's Annual Report on Form 10-K for the year
ended December 31, 1997, filed with the Commission on
March 13, 1998, as amended by Form 10-K/As filed with
the Commission on March 18, 1998 and March 30, 1998;
(ii) The Company's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1998, filed with the
Commission on May 14, 1998;
(iii) The Company's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1998, filed with the
Commission on August 13, 1998;
(iv) The Company's Current Report on Form 8-K dated March
17, 1998, filed with the Commission on March 18,
1998;
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(v) The Company's Current Report on Form 8-K dated August
25, 1998, filed with the Commission on August 31,
1998; and
(vi) The Company's Registration Statement on Form 8-A,
filed with the Commission on March 26, 1996, as
amended by Form 8-A/A on March 28, 1996.
All documents filed by the Company with the Commission pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to August 31,
1998 (the date of the initial filing of the Registration Statement of which this
Prospectus is a part) and prior to the termination of the offering of the Shares
registered hereby shall be deemed to be incorporated by reference into this
Prospectus and to be a part hereof from the date of filing such documents. Any
statement contained in a document incorporated or deemed to be incorporated by
reference herein shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
The Company will provide without charge to each person to whom this
Prospectus is delivered, upon written or oral request of such person, a copy of
any or all of the foregoing documents incorporated by reference into this
Prospectus (without exhibits to such documents other than exhibits specifically
incorporated by reference into such documents). All such requests shall be
directed to: Sapient Corporation, One Memorial Drive, Cambridge, Massachusetts
02142, Attention: Secretary, Telephone: (617) 621-0200.
SPECIAL NOTE REGARDING FORWARD-LOOKING INFORMATION
Certain statements in this Prospectus and in the documents incorporated
herein by reference constitute "forward-looking statements" within the meaning
of Section 27A of the Securities Act and Section 21E of the Exchange Act. For
this purpose, any statements contained herein or incorporated herein by
reference that are not statements of historical fact may be deemed to be
forward-looking statements. Without limiting the foregoing, the words
"believes," "anticipates," "plans," "expects" and similar expressions are
intended to identify forward-looking statements. There are a number of important
factors that could cause the results of the Company to differ materially from
those indicated by such forward-looking statements. These factors include those
set forth in "Risk Factors" herein.
THE COMPANY
Sapient is a leading provider of business and information technology
solutions implemented on a fixed-price, fixed-timeframe basis. Using
client/server and Web-based technologies, Sapient offers a variety of services
designed to help clients rapidly achieve their business objectives, including
implementation and integration of packaged software solutions, custom software
development, implementation of enterprise resource planning ("ERP") systems,
production support, and business and operational consulting. Sapient targets
clients in information-intensive industries, including Financial Services,
Energy Services, Manufacturing, Communications, Health Care and Government.
Sapient delivers services using its proprietary QUADD (Quality Design
and Delivery) process. QUADD is a workshop-based methodology that emphasizes
active client participation to help visualize, prioritize and create
time-critical business and technology solutions. The Company believes that the
QUADD process is an important competitive differentiator that allows Sapient and
its clients to better understand the clients' business needs, and to design,
develop, integrate and implement
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solutions that address those needs. The QUADD process consists of four stages:
RIP workshop, Design, Implementation and Production. The RIP (Rapid
Implementation Plan) workshop is designed to rapidly identify the client's needs
and develop a strategy and action plan to meet those needs. The Design workshop
focuses on outlining the proposed process changes and required information
technology solutions. The Implementation stage primarily involves the
development and testing of the new applications or enhancements to third-party
packaged software applications or existing Sapient-developed solutions. The
Production stage primarily involves the maintenance, enhancement and support of
the solution after it is operational.
In December 1997, Sapient acquired EXOR Technologies, Inc. ("EXOR"), a
Dallas-based consulting and systems integration firm recognized as a leader in
implementing ERP solutions using Oracle applications. In August 1998, Sapient
acquired Studio, a San Francisco-based company which provides consultation and
design services in the areas of Internet website design, brand and identity
design, user interface design, content development and 3D modeling and
animation.
The Company's executive offices are located at One Memorial Drive,
Cambridge, MA 02142, and its telephone number is (617) 621-0200. Sapient(R),
QUADD(R) and RIP(R) are registered servicemarks of Sapient and Studio
Archetype(R) is a registered servicemark of Studio, a whollyowned
subsidiary of Sapient.
RISK FACTORS
The Shares offered hereby involve a high degree of risk. In addition to
the other information included or incorporated by reference in this Prospectus,
the following risk factors should be considered carefully in evaluating the
Company and its business before purchasing the Common Stock offered by this
Prospectus. Except for the historical information contained herein or
incorporated herein by reference, the discussion in this Prospectus contains
certain forward-looking statements that involve risks and uncertainties. The
cautionary statements contained or incorporated by reference in this Prospectus
should be read as being applicable to all related forward-looking statements
wherever they appear or are incorporated by reference in this Prospectus. The
Company's actual results could differ materially from those discussed here.
Important factors that could cause or contribute to such differences include
those discussed below, as well as those discussed elsewhere herein or
incorporated herein by reference.
MANAGEMENT OF GROWTH
The Company's growth has placed significant demands on its management
and other resources. The Company's revenues increased approximately 84% in 1997
from $49 million in 1996 to $90 million in 1997. Revenues for the first six
months of 1998 increased approximately 70% over the comparable period of the
prior year. The Company's staff increased from 677 full-time employees at June
30, 1997 to 1,035 at June 30, 1998. The Company's ability to manage its growth
effectively will require it to continue to develop and improve its operational,
financial and other internal systems, as well as its business development
capabilities and to train, motivate and manage its employees. In addition, the
Company's future success will depend in large part on its ability to continue to
set fixed-price fees accurately, maintain high rates of employee utilization and
maintain project quality. The Company's management has limited experience
managing a business of the Company's size or managing a public company. If the
Company is unable to manage its growth and projects effectively, such inability
could have a material adverse effect on the quality of the Company's services
and products, its ability to retain key personnel and its business, financial
condition and results of operations.
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<PAGE> 8
RISKS RELATED TO ACQUISITIONS
In December 1997, the Company completed the acquisition of EXOR and in
August 1998, the Company completed the acquisition of Studio. The anticipated
benefits from any acquisition, including Sapient's acquisitions of EXOR and
Studio, may not be achieved unless the operations of the acquired business are
successfully combined with those of Sapient in a timely manner. The integration
of acquisitions requires substantial attention from management. The diversion of
the attention of management, and any difficulties encountered in the transition
process, could have an adverse impact on the Company's business, financial
condition and results of operations. In addition, the process of integrating
various businesses could cause the interruption of, or a loss of momentum in,
the activities of some or all of these businesses, which could have an adverse
effect on the Company's business, financial condition and results of operations.
NEED TO ATTRACT AND RETAIN PROFESSIONAL STAFF
The Company's business is labor intensive. The Company's success will
depend in large part upon its ability to attract, retain, train and motivate
highly-skilled employees, particularly project managers and other senior
technical personnel. There is significant competition for employees with the
skills required to perform the services the Company offers. Qualified project
managers and senior technical staff are in great demand and are likely to remain
a limited resource for the foreseeable future. There can be no assurance that
the Company will be successful in attracting a sufficient number of
highly-skilled employees in the future, or that it will be successful in
retaining, training and motivating the employees it is able to attract, and any
inability to do so could impair the Company's ability to adequately manage and
complete its existing projects and to bid for or obtain new projects. If the
Company's employees are unable to achieve expected performance levels, the
Company's business, financial condition and results of operations could be
adversely affected.
POSSIBLE VOLATILITY OF STOCK PRICE
The trading price of the Common Stock could be subject to wide
fluctuations in response to quarterly variations in operating results, changes
in earnings estimates by analysts, announcements of new contracts or service
offerings by the Company or its competitors, general economic or stock market
conditions unrelated to the Company's operating performance and other events or
factors.
SUSCEPTIBILITY TO GENERAL ECONOMIC CONDITIONS
The Company's revenues and results of operations will be influenced by
general economic conditions. In the event of a general economic downturn or a
recession in the United States, Europe or Asia, the Company's clients and
potential clients may substantially reduce their information technology and
related budgets. Such an economic downturn may materially and adversely affect
the Company's business, financial condition and results of operations.
CUSTOMER CONCENTRATION; DEPENDENCE ON LARGE PROJECTS
The Company has derived, and believes that it will continue to derive,
a significant portion of its revenues from a limited number of large clients. In
1997, the Company's five largest clients accounted for approximately 31% of its
revenues, with three clients each accounting for more than 5% of such revenues.
For the first six months of 1998, the Company's five largest clients accounted
for approximately 37% of its revenues, with no client accounting for more than
10% of such revenues. The volume of work performed for specific clients is
likely to vary from year to year, and a major client in one year may not use the
Company's services in a subsequent year. The loss of any large client could
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<PAGE> 9
have a material adverse effect on the Company's business, financial condition
and results of operations. In addition, revenues from a large client may
constitute a significant portion of the Company's total revenues in a particular
quarter.
Most of the Company's fixed-price contracts are terminable by the
client following limited notice and without significant penalty. The
cancellation or a significant reduction in the scope of a large project could
have a material adverse effect on the Company's business, financial condition
and results of operations. In addition, while the QUADD process is designed as
an integrated approach, each stage of the QUADD process represents a separate
contractual commitment at the end of which the client may elect not to proceed
to the next stage. A decision by any large client not to proceed with a project
to the stage anticipated by the Company could also have a material adverse
effect on the Company's business, financial condition and results of operations.
FIXED-PRICE CONTRACTS
An important element of the Company's strategy is to enter into
fixed-price, fixed-timeframe contracts, rather than contracts in which payment
to the Company is determined on a time and materials basis. Consistent with this
strategy, the Company intends to provide its ERP system implementation services,
which historically have been provided by EXOR on a time and materials basis, on
a fixed-price, fixed-timeframe basis. The Company's failure to accurately
estimate the resources required for a project (including an ERP system
implementation, with respect to which the Company has limited experience) or its
failure to complete its contractual obligations in a manner consistent with the
project plan upon which its fixed-price, fixed-timeframe contract was based
would adversely affect the Company's overall profitability and could have a
material adverse effect on the Company's business, financial condition and
results of operations. The Company has been required to commit unanticipated
additional resources to complete certain projects, which has resulted in losses
on certain contracts. The Company recognizes that it will experience similar
situations in the future. In addition, for certain projects the Company may fix
the price before the design specifications are finalized, which could result in
a fixed price that turns out to be too low and therefore adversely affect the
Company's profitability.
EMERGING MARKETS; DEPENDENCE ON PRINCIPAL SERVICE OFFERINGS
The Company has derived a significant portion of its revenues from
projects based primarily on client/server and Web-based architectures. These
markets are continuing to develop and are subject to rapid change. The Company's
near-term success is dependent in part on the continued acceptance of
information processing systems using client/server and Web-based architectures.
Any factors negatively affecting the acceptance of such technology could have a
material adverse effect on the Company's business, financial condition and
results of operations.
The Company's success will also depend in part on its ability to
develop information technology solutions which keep pace with continuing changes
in technology, evolving industry standards and changing client preferences.
There can be no assurance that the Company will be successful in addressing
these developments on a timely basis or that if addressed the Company will be
successful in the marketplace. The Company's failure to address these
developments could have a material adverse effect on the Company's business,
financial condition and results of operations.
COMPETITION
The markets for the Company's services are highly competitive. The
Company believes that it currently competes principally with consulting and
software integration firms, application software
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<PAGE> 10
vendors and internal information systems groups. Many of these companies have
significantly greater financial, technical and marketing resources than the
Company and generate greater revenues and have greater name recognition than the
Company. In addition, there are relatively low barriers to entry into the
Company's markets and the Company has faced, and expects to continue to face,
additional competition from new entrants into its markets.
The Company believes that the principal competitive factors in its
markets include quality of service and deliverables, speed of development and
implementation, price, project management capability and technical and business
expertise. The Company believes that its ability to compete also depends in part
on a number of competitive factors outside its control, including the ability of
its competitors to hire, retain and motivate project managers and other senior
technical staff, the development by others of software that is competitive with
the Company's products and services and the extent of its competitors'
responsiveness to client needs. There can be no assurance that the Company will
be able to compete successfully with its competitors.
INTELLECTUAL PROPERTY RIGHTS
The Company's success is dependent, in part, upon its proprietary QUADD
methodology and other intellectual property rights. The Company relies upon a
combination of trade secret, nondisclosure and other contractual arrangements,
and copyright and trademark laws to protect its proprietary rights. The Company
enters into confidentiality agreements with its employees, generally requires
that its consultants and clients enter into such agreements, and limits access
to and distribution of its proprietary information. There can be no assurance
that the steps taken by the Company in this regard will be adequate to deter
misappropriation of its proprietary information or that the Company will be able
to detect unauthorized use and take appropriate steps to enforce its
intellectual property rights.
A portion of the Company's business involves the development of
software applications for specific client engagements. Ownership of such
software is the subject of negotiation and is frequently assigned to the client,
with the Company frequently retaining a license for certain uses. Issues
relating to the ownership of and rights to use software applications can be
complicated and there can be no assurance that disputes will not arise that
affect the Company's ability to resell or reuse such applications.
Although the Company believes that its services and products do not
infringe on the intellectual property rights of others, there can be no
assurance that such a claim will not be asserted against the Company in the
future, or that if asserted any such claim will be successfully defended. A
successful claim against the Company could materially and adversely affect the
Company's business, financial condition and results of operations.
CONCENTRATION OF CONTROL
Messrs. Greenberg and Moore, the Company's co-Chairmen of the Board of
Directors and co-Chief Executive Officers, beneficially own approximately 46% of
the Company's outstanding Common Stock. As a result, these stockholders have the
ability to substantially influence and may effectively control, the outcome of
corporate actions requiring stockholder approval, including the election of
directors. This concentration of ownership may have the effect of delaying or
preventing a change in control of the Company.
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DEPENDENCE ON KEY PERSONNEL
The Company's success will depend in large part upon the continued
services of a number of key employees, including its founders and co-Chairmen of
the Board of Directors and co-Chief Executive Officers, Jerry A. Greenberg and
J. Stuart Moore. The Company's employment contracts with Messrs. Greenberg and
Moore and with the Company's other key personnel provide that employment is
terminable at will by either party. The loss of the services of either of
Messrs. Greenberg or Moore or of one or more of the Company's other key
personnel could have a material adverse effect on the Company. In addition, if
one or more of the Company's key employees resigns from the Company to join a
competitor or to form a competing company, the loss of such personnel and any
resulting loss of existing or potential clients to any such competitor could
have a material adverse effect on the Company's business, financial condition
and results of operations. In the event of the loss of any such personnel, there
can be no assurance that the Company would be able to prevent the unauthorized
disclosure or use of its technical knowledge, practices or procedures by such
personnel.
VARIABILITY OF QUARTERLY OPERATING RESULTS
The Company's revenues and earnings may fluctuate from quarter to
quarter based on such factors as the number, size and scope of projects in which
the Company is engaged, the contractual terms and degree of completion of such
projects, any delays incurred in connection with projects, employee utilization
rates (particularly utilization rates of employees who specialize in certain
third-party applications or architectures and of recently hired employees), the
adequacy of provisions for losses, the accuracy of estimates of resources
required to complete ongoing projects, and general economic conditions. A high
percentage of the Company's operating expenses, particularly personnel and rent,
are relatively fixed in advance of any particular quarter. As a result,
unanticipated variations in the number, or progress toward completion, of the
Company's projects or in employee utilization rates may cause significant
variations in operating results in any particular quarter and could result in
losses for such quarter. An unanticipated termination of a major project, a
client's decision not to proceed to the stage of a project anticipated by the
Company or the completion during a quarter of several major client projects,
could require the Company to maintain underutilized employees and could
therefore have a material adverse effect on the Company's business, financial
condition and results of operations.
EFFECTS OF YEAR 2000 ISSUE
Although the Company does not believe that Year 2000 issues will have a
significant impact on the Company's internal operations or on solutions
developed by the Company for clients where the Company has provided an express
warranty regarding the Year 2000 issue, there can be no assurance that the
Company will not experience interruptions of operations because of Year 2000
problems or become involved in disputes with clients regarding Year 2000
problems involving solutions developed or implemented by the Company or the
interaction of such solutions with other applications. Year 2000 problems could
require the Company to incur unanticipated expenses, and such expenses could
have a material adverse effect on the Company's business, financial condition
and results of operations. Furthermore, the purchasing patterns of clients or
potential clients may be affected by Year 2000 issues as companies expend
significant resources to correct their current systems for Year 2000 compliance.
These expenditures may result in reduced funds being available to purchase
services offered by the Company.
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<PAGE> 12
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of the Shares
by the Selling Stockholders.
The Company will bear all costs (excluding any underwriting discounts
and commissions or expenses incurred by the Selling Stockholders for brokerage,
accounting, tax or legal services or any other expenses incurred by the Selling
Stockholders in disposing of the Shares), fees and expenses incurred in
effecting the registration of the Shares covered by this Prospectus, including,
without limitation, all registration and filing fees, Nasdaq listing fees, fees
and expenses of counsel for the Company, fees and expenses of accountants for
the Company, and blue sky fees and expenses.
THE ACQUISITION
Pursuant to a series of stock purchase agreements (the "Purchase
Agreements"), each dated as of August 25, 1998, the Company acquired all of the
outstanding common stock of Studio on August 25, 1998. As a result of the
Acquisition, Studio became a wholly owned subsidiary of Sapient. The Acquisition
will be treated as a taxable purchase and sale of Studio shares for U.S. income
tax purposes and will be accounted for under the purchase method of accounting.
In consideration for the Studio stock, Sapient issued an aggregate of
498,314 shares of Sapient common stock (the "Purchase Price Shares"), which were
valued at approximately $24.4 million based on the last sale price of Sapient
Common Stock on the Nasdaq National Market on August 25, 1998, and paid an
aggregate of $250,000 in cash to the former stockholders of Studio. 49,829 of
the Purchase Price Shares were placed in escrow to secure the indemnification
obligations of certain of the Selling Stockholders.
Sapient has agreed to use its best efforts to register 351,815 of the
Purchase Price Shares for resale by the former Studio stockholders at various
dates during the next twelve months. The Shares covered by this registration
statement represent approximately one-third of the Purchase Price Shares issued
to the five principal stockholders of Studio and all of the Purchase Price
Shares issued to the 16 other stockholders of Studio.
SELLING STOCKHOLDERS
The following table sets forth, to the knowledge of the Company,
certain information, as of August 25, 1998, with respect to the Selling
Stockholders.
None of the Selling Stockholders holds any position or office with, has
been employed by, or has otherwise had a material relationship with the Company
or any of its subsidiaries within the past three years, except that in
connection with the acquisition of Studio, the Company entered into an
employment letter with Clement Mok, formerly Chairman, President and Chief
Identity Architect of Studio, providing for his employment as Chief Creative
Officer of Sapient and with each of Mark Crumpacker, Chief Executive Officer and
Executive Creative Director of Studio, Peter Rack, Chief Financial Officer and
Secretary of Studio, Eric Wilson, Senior Vice President of Studio and Todd
Holcomb, Vice President of Operations of Studio, providing for their continued
employment by Studio in positions similar to those held by them prior to the
Acquisition and at their current rate of compensation. The employment
relationships are not for a stated term but are "employment at will"
relationships. In connection with the Purchase Agreements, certain of the
Selling Stockholders also entered into non-competition and non-solicitation
agreements with the Company or Studio and the Company lent to each Selling
Stockholder funds to facilitate the payment of taxes by such Selling
Stockholder.
-10-
<PAGE> 13
<TABLE>
<CAPTION>
Percentage of Percentage of
Number of Shares Shares of Common Number of Shares Shares of Common
of Common Stock Stock of Common Stock Stock
Beneficially Beneficially Number of Shares Beneficially Beneficially
Name of Selling Owned Prior Owned Prior to of Common Stock Owned After Owned after
Stockholder to Offering(1) Offering (1)(2) Offered Hereby Offering(1)(2) Offering (1)(2)
--------------- --------------- ----------------- --------------- ---------------- ----------------
<S> <C> <C> <C> <C> <C>
Clement Mok........... 219,583 * 89,591 129,992 *
Mark Crumpacker....... 139,754 * 56,989 82,765 *
Peter Rack............ 27,931 * 11,398 16,533 *
Eric Wilson........... 19,402 * 7,912 11,490 *
Amanda North.......... 17,403 * 17,403 _ _
Todd Holcomb.......... 4,216 * 1,726 2,490 *
Judith Hoogenboom..... 2,521 * 2,521 _ _
Samantha Fuetsch...... 2,514 * 2,514 _ _
Lillian Svec.......... 2,442 * 2,442 _ _
John Grotting......... 1,955 * 1,955 _ _
Gregg Heard........... 1,608 * 1,608 _ _
Chuck Adsit........... 1,325 * 1,325 _ _
Greg Shoemaker........ 1,260 * 1,260 _ _
Grant Peterson........ 1,232 * 1,232 _ _
Victoria Bracewell-
Short................. 1,028 * 1,028 _ _
Other Selling
Stockholders: (6 persons,
each of whom holds less
than 1,000 shares of the
outstanding Common
Stock)................ 4,411 * 4,411 _ _
</TABLE>
- --------------------
* Less than one percent of the number of shares of Common Stock outstanding.
(1) The number of Shares beneficially owned is determined under rules
promulgated by the Commission, and the information is not necessarily
indicative of beneficial ownership for any other purpose. The Selling
Stockholders have sole voting power and investment power with respect
to all Shares listed as owned by the Selling Stockholders. Certain of
such Shares may be registered in the name of a nominee holder,
including, without limitation, Goldman, Sachs & Co. Does not include an
aggregate of 49,829 shares of the Company's Common Stock
-11-
<PAGE> 14
placed in escrow to secure the indemnification obligations of certain
Selling Stockholders.
(2) It is unknown if, when or in what amounts a Selling Stockholder may
offer Shares for sale and there can be no assurance that the Selling
Stockholders will sell any or all of the Shares offered hereby. Because
the Selling Stockholders may offer all or some of the Shares pursuant
to this Offering, and because there are currently no agreements,
arrangements or understandings with respect to the sale of any of the
Shares that will be held by the Selling Stockholders after completion
of the Offering, no estimate can be given as to the amount of the
Shares that will be held by the Selling Stockholders after completion
of the Offering. However, for purposes of this table, the Company has
assumed that, after completion of the Offering, none of the Shares
covered hereby will be held by the Selling Stockholders.
DESCRIPTION OF CAPITAL STOCK
The authorized capital stock of the Company consists of 100,000,000
shares of Common Stock and 5,000,000 shares of Preferred Stock, par value $.01
per share.
COMMON STOCK
As of August 3, 1998, there were issued and outstanding an aggregate of
25,351,420 shares of Common Stock held of record by 264 stockholders.
Holders of Common Stock are entitled to one vote for each share held on
all matters submitted to a vote of stockholders and do not have cumulative
voting rights. Accordingly, holders of a majority of the outstanding shares of
Common Stock entitled to vote in any election of directors may elect all of the
directors standing for election. Holders of Common Stock are entitled to receive
ratably such dividends, if any, as may be declared by the Board of Directors out
of funds legally available therefor, subject to the preferential dividend rights
of any outstanding Preferred Stock. Upon the liquidation, dissolution or
winding-up of the Company, holders of Common Stock are entitled to receive
ratably the net assets of the Company available for distribution after the
payment of all debts and other liabilities of the Company and subject to the
prior rights of any outstanding Preferred Stock. Holders of Common Stock have no
preemptive, subscription, redemption or conversion rights. The outstanding
shares of Common Stock are, and the Shares will be, when issued and paid for,
fully paid and nonassessable. The rights, preferences and privileges of holders
of Common Stock are subject to, and may be adversely affected by, the rights of
holders of shares of any series of Preferred Stock that the Company may
designate and issue in the future.
PREFERRED STOCK
The Board of Directors is authorized, subject to any limitations
prescribed by law, without further stockholder approval, to issue from time to
time up to an aggregate of 5,000,000 shares of Preferred Stock, in one or more
series. Each such series of Preferred Stock shall have such number of shares,
designations, preferences, voting powers, qualifications and special or relative
rights or privileges as shall be determined by the Board of Directors, which may
include, among others, dividend rights, voting rights, redemption and sinking
fund provisions, liquidation preferences, conversion rights and preemptive
rights.
The stockholders of the Company have granted the Board of Directors
authority to issue the Preferred Stock and to determine its rights and
preferences in order to eliminate delays associated with a stockholder vote on
specific issuances. The issuance of Preferred Stock, while providing desirable
flexibility in connection with possible acquisitions and other corporate
purposes, could have
-12-
<PAGE> 15
the effect of making it more difficult for a third party to acquire, or of
discouraging a third party from attempting to acquire, a majority of the
outstanding voting stock of the Company. No shares of Preferred Stock are issued
or outstanding and the Company has no present plans to issue any shares of
Preferred Stock.
DELAWARE LAW AND CERTAIN CHARTER AND BYLAW PROVISIONS
The Company is subject to the provisions of Section 203 of the General
Corporation Law of Delaware. Section 203 prohibits a publicly-held Delaware
corporation from engaging in a "business combination" with an "interested
stockholder" for a period of three years after the date of the transaction in
which the person became an interested stockholder, unless the business
combination is approved in a prescribed manner. A "business combination"
includes mergers, asset sales and other transactions resulting in a financial
benefit to the interested stockholder. Subject to certain exceptions, an
"interested stockholder" is a person who, together with affiliates and
associates, owns, or within three years did own, 15% or more of the
corporation's voting stock.
The Amended and Restated Certificate of Incorporation of the Company
(the "Amended and Restated Certificate of Incorporation") and the Restated
Bylaws of the Company (the "Restated Bylaws") provide for the division of the
Board of Directors into three classes as nearly equal in size as possible with
staggered three-year terms. In addition, the Amended and Restated Certificate of
Incorporation and Restated Bylaws provide that directors may be removed only for
cause by the affirmative vote of the holders of two-thirds of the shares of
capital stock of the Company entitled to vote. Under the Amended and Restated
Certificate of Incorporation and the Restated Bylaws, any vacancy on the Board
of Directors, however occurring, including a vacancy resulting from an
enlargement of the Board, may only be filled by vote of a majority of the
directors then in office. The classification of the Board of Directors and the
limitations on the removal of directors and filling of vacancies could have the
effect of making it more difficult for a third party to acquire, or of
discouraging a third party from acquiring, control of the Company.
The Amended and Restated Certificate of Incorporation and the Restated
Bylaws also provide that any action required or permitted to be taken by the
stockholders of the Company at an annual meeting or special meeting of
stockholders may only be taken if it is properly brought before such meeting and
may not be taken by written action in lieu of a meeting. The Amended and
Restated Certificate of Incorporation and the Restated Bylaws further provide
that special meetings of the stockholders may only be called by a Chairman of
the Board of Directors, a Chief Executive Officer or, if none, a President of
the Company or by the Board of Directors. Under the Company's Restated Bylaws,
in order for any matter to be considered "properly brought" before a meeting, a
stockholder must comply with certain requirements regarding advance notice to
the Company. The foregoing provisions could have the effect of delaying until
the next stockholders' meeting stockholder actions which are favored by the
holders of a majority of the outstanding voting securities of the Company. These
provisions may also discourage another person or entity from making a tender
offer for the Common Stock, because such person or entity, even if it acquired a
majority of the outstanding voting securities of the Company, would be able to
take action as a stockholder (such as electing new directors or approving a
merger) only at a duly called stockholders' meeting, and not by written consent.
The General Corporation Law of Delaware provides generally that the
affirmative vote of a majority of the shares entitled to vote on any matter is
require to amend a corporations's Certificate of Incorporation or Bylaws, unless
a corporation's Certificate of Incorporation or Bylaws, as the case may be,
require a greater percentage. The Company's Amended and Restated Certificate of
Incorporation and the Restated Bylaws require the affirmative vote of the
holders of at least 75% of the shares of
-13-
<PAGE> 16
capital stock of the Company issued and outstanding and entitled to vote to
amend or repeal any of the provisions described in the prior two paragraphs.
The Amended and Restated Certificate of Incorporation contains certain
provisions permitted under the General Corporation Law of Delaware relating to
the liability of directors. The provisions eliminate a director's liability to
the Company or its stockholders for monetary damages for a breach of fiduciary
duty, except in circumstances involving certain wrongful acts, such as the
breach of a director's duty of loyalty or acts or omissions which involve
intentional misconduct or a knowing violation of law. The Amended and Restated
Certificate of Incorporation also contains provisions obligating the Company to
indemnify its officers and directors to the fullest extent permitted by the
General Corporation Law of Delaware. The Company believes that these provisions
will assist the Company in attracting and retaining qualified individuals to
serve as directors.
PLAN OF DISTRIBUTION
The Shares covered hereby may be offered and sold from time to time by
the Selling Stockholders, or by their pledgees, donees, transferees or other
successors in interest. The Selling Stockholders will act independently of the
Company in making decisions with respect to the timing, manner and size of each
sale. Such sales may be made in the over-the-counter market or otherwise, at
prices and under terms then prevailing or at prices related to the then current
market price or in negotiated transactions, including pursuant to one or more of
the following methods: (i) purchases by a broker-dealer as principal and resale
by such broker-dealer for its own account pursuant to this Prospectus; (ii)
ordinary brokerage transactions and transactions in which the broker solicits
purchasers; (iii) block trades in which the broker-dealer so engaged will
attempt to sell the Shares as agent but may position and resell a portion of the
block as principal to facilitate the transaction; (iv) an over-the-counter
distribution in accordance with the rules of the Nasdaq National Market; and (v)
in privately negotiated transactions. To the extent required, this Prospectus
may be amended and supplemented from time to time to describe a specific plan of
distribution. In connection with distributions of the Shares or otherwise, the
Selling Stockholders may enter into hedging transactions with broker-dealers or
other financial institutions. In connection with such transactions,
broker-dealers or other financial institutions may engage in short sales of the
Company's Common Stock in the course of hedging the positions they assume with
Selling Stockholders. The Selling Stockholders may also sell the Company's
Common Stock short and redeliver the Shares to close out such short positions.
The Selling Stockholders may also enter into option or other transactions with
broker-dealers or other financial institutions which require the delivery to
such broker-dealer or other financial institution of Shares offered hereby,
which Shares such broker-dealer or other financial institution may resell
pursuant to this Prospectus (as supplemented or amended to reflect such
transaction). The Selling Stockholders may also pledge Shares to a broker-dealer
or other financial institution, and, upon a default, such broker-dealer or other
financial institution, may effect sales of the pledged Shares pursuant to this
Prospectus (as supplemented or amended to reflect such transaction). In
addition, any Shares that qualify for sale pursuant to Rule 144 may be sold
under Rule 144 rather than pursuant to this Prospectus.
In effecting sales, broker-dealers or agents engaged by the Selling
Stockholders, or by their pledgees, donees, transferees or other successors in
interest may arrange for other broker-dealers to participate. Broker-dealers or
agents may receive commissions, discounts or concessions from the Selling
Stockholders, or from their pledgees, donees, transferees or other successors in
interest in amounts to be negotiated immediately prior to the sale.
In offering the Shares covered hereby, the Selling Stockholders, or
their pledgees, donees, transferees or other successors in interest and any
broker-dealers and any other participating broker-dealers who execute sales for
the Selling Stockholders may be deemed to be "underwriters" within the
-14-
<PAGE> 17
meaning of the Securities Act in connection with such sales, and any profits
realized by the Selling Stockholders and the compensation of such broker-dealer
may be deemed to be underwriting discounts and commissions.
In order to comply with the securities laws of certain states, if
applicable, the Shares must be sold in such jurisdictions only through
registered or licensed brokers or dealers. In addition, in certain states the
Shares may not be sold unless they have been registered or qualified for sale in
the applicable state or an exemption from the registration or qualification
requirement is available and is complied with.
The Company has advised the Selling Stockholders that the
anti-manipulation rules of Regulation M under the Exchange Act may apply to
sales of Shares in the market and to the activities of the Selling Stockholders
and their affiliates. In addition, the Company will make copies of this
Prospectus available to the Selling Stockholders and has informed them of the
need for delivery of copies of this Prospectus to purchasers at or prior to the
time of any sale of the Shares offered hereby. The Selling Stockholders may
indemnify any broker-dealer that participates in transactions involving the sale
of the Shares against certain liabilities, including liabilities arising under
the Securities Act.
At the time a particular offer of Shares is made, if required, a
Prospectus Supplement will be distributed that will set forth the number of
Shares being offered and the terms of the offering, including the name of any
underwriter, dealer or agent, the purchase price paid by any underwriter, any
discount, commission and other item constituting compensation, any discount,
commission or concession allowed or reallowed or paid to any dealer, and the
proposed selling price to the public.
The Company has agreed with the Selling Stockholders to keep the
Registration Statement of which this Prospectus constitutes a part effective
until the earlier of (i) such time as all of the Shares have been disposed of
pursuant to and in accordance with such Registration Statement or (ii) August
25, 1999.
LEGAL MATTERS
The validity of the Shares offered hereby will be passed upon for the
Company by Hale and Dorr LLP.
EXPERTS
The consolidated balance sheets of the Company as of December 31, 1997
and 1996 and the consolidated statements of income, stockholders' equity and
cash flows for each of the years in the three-year period ended December 31,
1997, have been incorporated by reference herein and in the Registration
Statement in reliance upon the report of KPMG Peat Marwick LLP, independent
auditors, incorporated by reference herein, and upon the authority of said firm
as experts in accounting and auditing.
-15-
<PAGE> 18
================================================================================
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE SELLING
STOCKHOLDERS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF ANY OFFER TO BUY TO ANY PERSON IN ANY JURISDICTION IN WHICH SUCH
OFFER OR SOLICITATION OF AN OFFER OR SOLICITATION WOULD BE UNLAWFUL. NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR ANY OFFER OR SALE MADE HEREUNDER SHALL, UNDER
ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE INFORMATION CONTAINED
HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
---------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information....................... 3
Incorporation of Certain Documents..........
By Reference.............................. 3
Special Note Regarding Forward-Looking
Information............................... 4
The Company................................. 4
Risk Factors................................ 5
Use of Proceeds............................. 10
The Acquisition............................. 10
Selling Stockholders........................ 10
Description of Capital Stock................ 12
Plan of Distribution........................ 14
Legal Matters............................... 15
Experts..................................... 15
</TABLE>
--------------
================================================================================
================================================================================
SAPIENT CORPORATION
205,315 SHARES
COMMON STOCK
--------------
PROSPECTUS
--------------
September ___, 1998
================================================================================
<PAGE> 19
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the various expenses to be incurred in
connection with the sale and distribution of the securities being registered
hereby, all of which will be borne by the Company (except expenses incurred by
the Selling Stockholders for brokerage, accounting, tax or legal services or any
other expenses incurred by the Selling Stockholders in disposing of the Shares).
All amounts shown are estimates except the Securities and Exchange Commission
registration fee.
<TABLE>
<CAPTION>
<S> <C>
Filing Fee - Securities and Exchange Commission .................. $2,559
Legal fees and expenses of the Company............................ $5,000
Accounting fees and expenses...................................... $5,000
Miscellaneous expenses............................................ $2,441
Total Expenses........................................... $15,000
=======
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the General Corporation Law of Delaware provides that a
corporation has the power to indemnify a director, officer, employee or agent of
the corporation and certain other persons serving at the request of the
corporation in related capacities against amounts paid and expenses incurred in
connection with an action or proceeding to which he is or is threatened to be
made a party by reason of such position, if such person shall have acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the corporation, and, in any criminal proceeding, if such person
had no reasonable cause to believe his conduct was unlawful; provided that, in
the case of actions brought by or in the right of the corporation, no
indemnification shall be made with respect to any matter as to which such person
shall have been adjudged to be liable to the corporation unless and only to the
extent that the adjudicating court determines that such indemnification is
proper under the circumstances.
Article EIGHTH of the Registrant's Amended and Restated Certificate of
Incorporation provides that a director or officer of the Registrant (a) shall be
indemnified by the Registrant against all expenses (including attorney's fees),
judgments, fines and amounts paid in settlement reasonably incurred in
connection with any litigation or other legal proceeding (other than an action
by or in the right of the Registrant) brought against him by virtue of his
position as a director or officer if he acted in good faith and in a manner he
reasonable believed to be in or not opposed to the best interests of the
Registrant, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful, and (b) shall be
indemnified by the Registrant against expenses (including attorney's fees) and
amounts paid in settlement reasonable incurred in connection with any action by
or in the right of the Registrant by virtue of his position as a director or
officer of the Registrant if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Registrant, except that no indemnification shall be made with
II-1
<PAGE> 20
respect to any such matter as to which such director or officer shall have been
adjudged to be liable to the Registrant, unless and only to the extent that a
court determines that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses as the court deems proper. Notwithstanding the
foregoing, to the extent that a director or officer has been successful, on the
merits or otherwise, he shall be indemnified against all expenses (including
attorney's fees) reasonably incurred by him in connection therewith. Expenses
incurred in defending a civil or criminal action, suit or proceeding shall be
advanced by the Registrant to a director or officer, at his request, upon
receipt of an undertaking by the director or officer to repay such amount if it
is ultimately determined that he is not entitled to indemnification.
Indemnification is required to be made unless the Registrant determines
(in the manner provided in its Amended and Restated Certificate of
Incorporation) that the applicable standard of conduct required for
indemnification has not been met. In the event of a determination by the
Registrant that the director or officer did not meet the applicable standard of
conduct required for indemnification, or if the Registrant fails to make an
indemnification payment within 60 days after such payment is claimed by such
person, such person is permitted to petition a court to make an independent
determination as to whether such person is entitled to indemnification. As a
condition precedent to the right of indemnification, the director or officer
must give the Registrant notice of the action for which indemnity is sought and
the Registrant has the right to participate in such action or assume the defense
thereof.
Article EIGHTH of the Registrant's Amended and Restated Certificate of
Incorporation further provides that the indemnification provided therein is not
exclusive, and provides that in the event that the General Corporation Law of
Delaware is amended to expand the indemnification permitted to officers and
directors, the Registrant must indemnify those persons to the fullest extent
permitted by such law as so amended.
Article SEVENTH of the Registrant's Amended and Restated Certificate of
Incorporation provides that, except to the extent that the General Corporation
Law of Delaware prohibits the elimination of liability of directors for breaches
of fiduciary duty, no director of the Registrant shall be personally liable to
the Registrant or its stockholders for monetary damages for any breach of
fiduciary duty as a director.
ITEM 16. EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
- ------ -----------
5.1 Opinion of Hale and Dorr LLP.
23.1 Consent of KPMG Peat Marwick LLP.
23.2 Consent of Hale and Dorr LLP, included in Exhibit 5.1 filed herewith.
24.1 Power of Attorney (See page II-5 of this Registration Statement).
24.2 Power of Attorney of Carl S. Sloane
24.3 Power of Attorney of Darius W. Gaskins, Jr.
24.4 Power of Attorney of Bruce D. Parker
II-2
<PAGE> 21
24.5 Power of Attorney of R. Stephen Cheheyl
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933, as amended (the "Securities Act");
(ii) To reflect in the Prospectus any facts or events arising
after the effective date of this Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in this Registration Statement. Notwithstanding the foregoing, any
increase or decrease in the volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than 20
percent change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective Registration
Statement; and
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in this Registration
Statement or any material change to such information in this
Registration Statement.
(2) That, for the purposes of determining any liability under the
Securities Act, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at the time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
The Registrant hereby undertakes that, for purposes of determining any
liability under the Securities Act, each filing of the Registrant's annual
report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of
1934, as amended (the "Exchange Act") (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the Exchange
Act) that is incorporated by reference in this Registration Statement shall be
deemed to be a new registration statement relating to the securities offered
therein and the offering of such securities at the time shall be deemed to be
the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the indemnification provisions described herein, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by
II-3
<PAGE> 22
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
II-4
<PAGE> 23
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Cambridge, Commonwealth of Massachusetts, on August
31, 1998.
SAPIENT CORPORATION
By: /s/ J. Stuart Moore
----------------------------------------
J. Stuart Moore
Co-Chief Executive Officer
SIGNATURES AND POWER OF ATTORNEY
We, the undersigned officers and directors of Sapient Corporation,
hereby severally constitute and appoint Susan D. Johnson, Deborah England Gray,
Paul P. Brountas and Jonathan Wolfman, and each of them singly, our true and
lawful attorneys with full power to any of them, and to each of them singly, to
sign for us and in our names in the capacities indicated below the Registration
Statement on Form S-3 filed herewith and any and all pre-effective and
post-effective amendments to said Registration Statement and generally to do all
such things in our name and behalf in our capacities as officers and directors
to enable Sapient Corporation to comply with the provisions of the Securities
Act and all requirements of the Securities and Exchange Commission, hereby
ratifying and confirming our signatures as they may be signed by our said
attorneys, or any of them, to said Registration Statement and any and all
amendments thereto.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Jerry A. Greenberg Co Chief Executive Officer and Director August 31, 1998
- ------------------------------- (Principal Executiver Officer)
Jerry A. Greenberg
/s/ J. Stuart Moore Co-Chief Executive Officer and Director August 31, 1998
- ------------------------------- (Principal Executiver Officer)
J. Stuart Moore
/s/ Susan D. Johnson Chief Financial Officer (Principal August 31, 1998
- ------------------------------- Financial and Accounting Officer)
Susan D. Johnson
</TABLE>
II-5
<PAGE> 24
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
<S> <C> <C>
* Director August 31, 1998
- -------------------------------
Carl S. Sloane
* Director August 31, 1998
- -------------------------------
Darius W. Gaskins, Jr.
* Director August 31, 1998
- -------------------------------
Bruce D. Parker
* Director August 31, 1998
- -------------------------------
R. Stephen Cheheyl
* By: /s/ Susan D. Johnson
- -------------------------------
Susan D. Johnson
Attorney-in-fact
</TABLE>
II-6
<PAGE> 25
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
- ------ -----------
5.1 Opinion of Hale and Dorr LLP.
23.1 Consent of KPMG Peat Marwick LLP.
23.2 Consent of Hale and Dorr LLP, included in Exhibit 5.1 filed herewith.
24.1 Power of Attorney (See page II-5 of this Registration Statement).
24.2 Power of Attorney of Carl S. Sloane
24.3 Power of Attorney of Darius W. Gaskins, Jr.
24.4 Power of Attorney of Bruce D. Parker
24.5 Power of Attorney of R. Stephen Cheheyl
<PAGE> 1
EXHIBIT 5.1
HALE AND DORR LLP
COUNSELLORS AT LAW
60 STATE STREET, BOSTON, MASSACHUSETTS 02109
617-526-6000 - FAX 617-526-5000
August 31, 1998
Sapient Corporation
One Memorial Drive
Cambridge, Massachusetts 02142
Registration Statement on Form S-3
----------------------------------
Ladies and Gentlemen:
This opinion is furnished to you in connection with a Registration
Statement on Form S-3 (the "Registration Statement") to be filed with the
Securities and Exchange Commission (the "Commission") under the Securities Act
of 1933, as amended (the "Securities Act"), for the registration of an aggregate
of 205,315 shares of Common Stock, $.01 par value per share (the "Shares"), of
Sapient Corporation, a Delaware corporation (the "Company"). All of the Shares
are being registered on behalf of certain stockholders of the Company (the
"Selling Stockholders").
We are acting as counsel for the Company in connection with the
registration for resale of the Shares. We have examined signed copies of the
Registration Statement as filed with the Commission. We have also examined and
relied upon the minutes of meetings of the stockholders and the Board of
Directors of the Company as provided to us by the Company, stock record books of
the Company as provided to us by the Company, the Certificate of Incorporation
and By-Laws of the Company, each as restated and/or amended to date, and such
other documents as we have deemed necessary for purposes of rendering the
opinions hereinafter set forth.
In our examination of the foregoing documents, we have assumed the
genuineness of all signatures, the authenticity of all documents submitted to us
as originals, the conformity to original documents of all documents submitted to
us as copies, the authenticity of the originals of such latter documents and the
legal competence of all signatories to such documents.
We assume that the appropriate action will be taken, prior to the offer
and sale of the Shares, to register and qualify the Shares for sale under all
applicable state securities or "blue sky" laws.
We express no opinion herein as to the laws of any state or
jurisdiction other than the state laws of the Commonwealth of Massachusetts, the
Delaware General Corporation Law statute and the federal laws of the United
States of America.
WASHINGTON, D.C. BOSTON, MA London, UK*
- --------------------------------------------------------------------------------
HALE AND DORR LLP INCLUDES PROFESSIONAL CORPORATIONS
*BROBECK HALE AND DORR INTERNATIONAL (AN INDEPENDENT JOINT VENTURE LAW FIRM)
<PAGE> 2
Sapient Corporation
August 31, 1998
Page 2
Based upon and subject to the foregoing, we are of the opinion that the
Shares have been duly authorized and are validly issued, fully paid and
nonassessable.
It is understood that this opinion is to be used only in connection
with the offer and sale of the Shares while the Registration Statement is in
effect.
Please note that we are opining only as to the matters expressly set
forth herein, and no opinion should be inferred as to any other matters.
We hereby consent to the filing of this opinion with the Commission as
an exhibit to the Registration Statement in accordance with the requirements of
Item 601(b)(5) of Regulation S-K under the Securities Act and to the use of our
name therein and in the related Prospectus under the caption "Legal Matters." In
giving such consent, we do not hereby admit that we are in the category of
persons whose consent is required under Section 7 of the Securities Act or the
rules and regulations of the Commission.
Very truly yours,
/s/ HALE AND DORR LLP
-------------------------------------
HALE AND DORR LLP
<PAGE> 1
EXHIBIT 23.1
INDEPENDENT ACCOUNTANTS' CONSENT
The Board of Directors and Stockholders
Sapient Corporation;
We consent to the use of our report incorporated by reference herein
and to the reference to our firm under the heading "Experts" in the Prospectus.
KPMG PEAT MARWICK LLP
Boston, Massachusetts
August 28, 1998
<PAGE> 1
EXHIBIT 24.2
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that I, the undersigned director of
Sapient Corporation, a Delaware corporation (the "Corporation"), which is to
file with the Securities and Exchange Commission (the "Commission") under the
provisions of the Securities Act of 1933, as amended, one or more Registration
Statements on Form S-3, or other appropriate form, for the registration for
resale by the persons to be named in said Registration Statements of up to
250,000 shares of Common Stock issued by the Corporation in connection with the
Corporation's acquisition of Studio Archetype, Inc., hereby constitute and
appoint Susan D. Johnson, Deborah England Gray and Jonathan Wolfman, and each of
them, my true and lawful attorneys-in-fact and agents, with full power to them
and each of them singly, to act for me and in my name, place and stead, in any
and all capacities, to sign, or cause to be signed electronically, any and all
of said Registration Statements and any and all amendments to the aforementioned
Registration Statements and to file said Registration Statements and amendments
thereto so signed with all exhibits thereto, and any and all other documents in
connection therewith, with the Commission, hereby granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform any and all acts and things requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as I might or could
do in person, hereby ratifying and confirming all that said attorneys-in-fact
and agents or any of them may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, I have executed this Power of Attorney as of the
18th day of August, 1998.
/s/ Carl S. Sloane
--------------------------------------
<PAGE> 1
EXHIBIT 24.3
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that I, the undersigned director of
Sapient Corporation, a Delaware corporation (the "Corporation"), which is to
file with the Securities and Exchange Commission (the "Commission") under the
provisions of the Securities Act of 1933, as amended, one or more Registration
Statements on Form S-3, or other appropriate form, for the registration for
resale by the persons to be named in said Registration Statements of up to
250,000 shares of Common Stock issued by the Corporation in connection with the
Corporation's acquisition of Studio Archetype, Inc., hereby constitute and
appoint Susan D. Johnson, Deborah England Gray and Jonathan Wolfman, and each of
them, my true and lawful attorneys-in-fact and agents, with full power to them
and each of them singly, to act for me and in my name, place and stead, in any
and all capacities, to sign, or cause to be signed electronically, any and all
of said Registration Statements and any and all amendments to the aforementioned
Registration Statements and to file said Registration Statements and amendments
thereto so signed with all exhibits thereto, and any and all other documents in
connection therewith, with the Commission, hereby granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform any and all acts and things requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as I might or could
do in person, hereby ratifying and confirming all that said attorneys-in-fact
and agents or any of them may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, I have executed this Power of Attorney as of the
18th day of August, 1998.
/s/ Darius W. Gaskins, Jr.
-------------------------------------
<PAGE> 1
EXHIBIT 24.4
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that I, the undersigned director of
Sapient Corporation, a Delaware corporation (the "Corporation"), which is to
file with the Securities and Exchange Commission (the "Commission") under the
provisions of the Securities Act of 1933, as amended, one or more Registration
Statements on Form S-3, or other appropriate form, for the registration for
resale by the persons to be named in said Registration Statements of up to
250,000 shares of Common Stock issued by the Corporation in connection with the
Corporation's acquisition of Studio Archetype, Inc., hereby constitute and
appoint Susan D. Johnson, Deborah England Gray and Jonathan Wolfman, and each of
them, my true and lawful attorneys-in-fact and agents, with full power to them
and each of them singly, to act for me and in my name, place and stead, in any
and all capacities, to sign, or cause to be signed electronically, any and all
of said Registration Statements and any and all amendments to the aforementioned
Registration Statements and to file said Registration Statements and amendments
thereto so signed with all exhibits thereto, and any and all other documents in
connection therewith, with the Commission, hereby granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform any and all acts and things requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as I might or could
do in person, hereby ratifying and confirming all that said attorneys-in-fact
and agents or any of them may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, I have executed this Power of Attorney as of the
18th day of August, 1998.
/s/ Bruce D. Parker
---------------------------------------
<PAGE> 1
EXHIBIT 24.5
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that I, the undersigned director of
Sapient Corporation, a Delaware corporation (the "Corporation"), which is to
file with the Securities and Exchange Commission (the "Commission") under the
provisions of the Securities Act of 1933, as amended, one or more Registration
Statements on Form S-3, or other appropriate form, for the registration for
resale by the persons to be named in said Registration Statements of up to
250,000 shares of Common Stock issued by the Corporation in connection with the
Corporation's acquisition of Studio Archetype, Inc., hereby constitute and
appoint Susan D. Johnson, Deborah England Gray and Jonathan Wolfman, and each of
them, my true and lawful attorneys-in-fact and agents, with full power to them
and each of them singly, to act for me and in my name, place and stead, in any
and all capacities, to sign, or cause to be signed electronically, any and all
of said Registration Statements and any and all amendments to the aforementioned
Registration Statements and to file said Registration Statements and amendments
thereto so signed with all exhibits thereto, and any and all other documents in
connection therewith, with the Commission, hereby granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform any and all acts and things requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as I might or could
do in person, hereby ratifying and confirming all that said attorneys-in-fact
and agents or any of them may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, I have executed this Power of Attorney as of the
18th day of August, 1998.
/s/ R. Stephen Cheheyl
--------------------------------------
