SAPIENT CORP, PRE 14A, 1998-03-25

SAPIENT CORP
PRE 14A, 1998-03-25
COMPUTER INTEGRATED SYSTEMS DESIGN

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<PAGE> 1

SCHEDULE 14A

(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )

FILED BY THE REGISTRANT [X] FILED BY A PARTY OTHER THAN THE REGISTRANT [ ]

- --------------------------------------------------------------------------------

Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))

SAPIENT CORPORATION
(Name of Registrant as Specified in its Charter)

[NAME OF PERSON FILING]
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

1) Title of each class of securities to which transaction applies:

2) Aggregate number of securities to which transaction applies:

3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (set forth the amount on which the filing fee
is calculated and state how it was determined):

4) Proposed maximum aggregate value of transaction:

5) Total fee paid:

[ ] Fee paid previously with preliminary materials.

[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the form or schedule and the date of its filing.

1) Amount Previously Paid:

2) Form, Schedule or Registration Statement No.:

3) Filing Party:

4) Date Filed:

- --------------------------------------------------------------------------------
<PAGE> 2

PRELIMINARY COPIES

SAPIENT CORPORATION

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD ON MAY 8, 1998

NOTICE IS HEREBY GIVEN that the Annual Meeting of the Stockholders of
Sapient Corporation, a Delaware corporation (the "Company"), will be held on
Friday, May 8, 1998, at 10:00 a.m., at The Harvard Club, 374 Commonwealth
Avenue, Boston, Massachusetts for the purpose of considering and voting upon the
following matters:

1. To elect two Class II Directors for the ensuing three years;

2. To approve an amendment to the Company's Amended and Restated
Certificate of Incorporation increasing the number of authorized shares
of Common Stock from 40,000,000 to 100,000,000;

3. To approve the Company's 1998 Stock Incentive Plan and the reservation
of 2,000,000 shares of Common Stock for issuance thereunder;

4. To approve an amendment to the Company's 1996 Employee Stock Purchase
Plan increasing the number of shares of Common Stock reserved for
purchase thereunder from 300,000 to 660,000, and making the other
changes described herein;

5. To ratify the appointment of KPMG Peat Marwick LLP as independent
auditors of the Company for the current year; and

6. To transact such other business as may properly come before the meeting
or any adjournment thereof.

The Board of Directors has no knowledge of any other business to be
transacted at the meeting.

The Board of Directors has fixed the close of business on Monday, March 30,
1998 as the record date for the determination of stockholders entitled to notice
of and to vote at the meeting and at any adjournments thereof.

A copy of the Company's Annual Report to Stockholders for the year ended
December 31, 1997, which contains consolidated financial statements and other
information of interest to stockholders, accompanies this Notice and the
enclosed Proxy Statement.

By order of the Board of Directors,

JERRY A. GREENBERG
Secretary

Cambridge, Massachusetts
April 8, 1998

WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE PROMPTLY COMPLETE,
DATE, SIGN AND RETURN THE ENCLOSED PROXY IN THE ACCOMPANYING ENVELOPE. NO
POSTAGE NEED BE AFFIXED IF THE PROXY IS MAILED IN THE UNITED STATES.
<PAGE> 3

PRELIMINARY COPIES
SAPIENT CORPORATION
ONE MEMORIAL DRIVE
CAMBRIDGE, MASSACHUSETTS 02142

PROXY STATEMENT

FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 8, 1998

This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Sapient Corporation (the "Company") for use
at the Annual Meeting of Stockholders to be held on Friday, May 8, 1998, at
10:00 a.m., at The Harvard Club, 374 Commonwealth Avenue, Boston, Massachusetts
and at any adjournments thereof (the "Meeting").

All proxies will be voted in accordance with the instructions of the
stockholder. If no choice is specified, the proxies will be voted in favor of
the matters set forth in the accompanying Notice of Meeting. Any proxy may be
revoked by a stockholder at any time before its exercise by delivery of a
written revocation to the Secretary of the Company. Attendance at the Meeting
will not itself be deemed to revoke a proxy unless the stockholder gives
affirmative notice at the Meeting that the stockholder intends to revoke the
proxy and vote in person.

At the close of business on March 30, 1998, the record date for the
determination of stockholders entitled to vote at the Meeting, there were
outstanding and entitled to vote an aggregate of shares of Common
Stock of the Company, $.01 par value per share (the "Common Stock"). Each share
entitles the record holder to one vote on each of the matters to be voted upon
at the Meeting.

All share numbers in this Proxy Statement are adjusted to reflect a
two-for-one stock split effected by the Company as a 100% stock dividend
distributed on March 9, 1998 to stockholders of record on February 20, 1998.

THE NOTICE OF MEETING, THIS PROXY STATEMENT, THE ENCLOSED PROXY AND THE
COMPANY'S ANNUAL REPORT TO STOCKHOLDERS FOR THE YEAR ENDED DECEMBER 31, 1997 ARE
BEING MAILED TO STOCKHOLDERS ON OR ABOUT APRIL 8, 1998. THE COMPANY WILL, UPON
WRITTEN REQUEST OF ANY STOCKHOLDER, FURNISH WITHOUT CHARGE A COPY OF ITS ANNUAL
REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1997, AS FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION, WITHOUT EXHIBITS. PLEASE ADDRESS ALL SUCH
REQUESTS TO THE COMPANY, ATTENTION: INVESTOR RELATIONS, ONE MEMORIAL DRIVE,
CAMBRIDGE, MASSACHUSETTS 02142. EXHIBITS WILL BE PROVIDED UPON WRITTEN REQUEST
AND PAYMENT OF AN APPROPRIATE PROCESSING FEE.

VOTES REQUIRED

The holders of a majority of the shares of Common Stock issued and
outstanding and entitled to vote at the Meeting shall constitute a quorum for
the transaction of business at the Meeting. Shares of Common Stock present in
person or represented by proxy (including shares which abstain or do not vote
with respect to one or more of the matters presented for stockholder approval)
will be counted for purposes of determining whether a quorum exists at the
Meeting.

The affirmative vote of the holders of a plurality of the shares of Common
Stock voting on the matter is required for the election of directors. The
affirmative vote of the holders of a majority of the outstanding shares of
Common Stock is required to approve the proposed amendment to the Company's
Amended and Restated Certificate of Incorporation. The affirmative vote of the
holders of a majority of the shares of Common Stock voting on the matter is
required to: (i) approve the Company's 1998 Stock Incentive Plan, (ii) approve
the
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<PAGE> 4

proposed amendments to the Company's 1996 Employee Stock Purchase Plan and (iii)
ratify the appointment of the Company's independent auditors for the current
year.

Shares which abstain from voting as to a particular matter, and shares held
in "street name" by brokers or nominees who indicate on their proxies that they
do not have discretionary authority to vote such shares as to a particular
matter, will not be voted in favor of such matter, and will also not be counted
as shares voting on such matter. Accordingly, abstentions and "broker non-votes"
will have no effect on the voting on a matter that requires the affirmative vote
of a plurality or a majority of the shares voting on a matter. However, because
shares which abstain and shares represented by broker non-votes are nonetheless
considered outstanding shares, abstentions and broker non-votes with respect to
the proposed amendment of the Company's Amended and Restated Certificate of
Incorporation will have the same effect as a vote against such proposed
amendment.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information as of February 28, 1998
with respect to the beneficial ownership of shares of Common Stock by (i) each
person known to the Company to own beneficially more than 5% of the outstanding
shares of Common Stock, (ii) each director and nominee for director of the
Company, (iii) Messrs. Greenberg and Moore, the Co-Chief Executive Officers of
the Company, and the two other executive officers listed in the Summary
Compensation Table set forth under the caption "Compensation of Executive
Officers" below (the "Named Executive Officers"), and (iv) the directors and
executive officers of the Company as of February 28, 1998 as a group.

Jerry A. Greenberg.......................................... 6,580,830(2) 27.0%
Co-Chief Executive Officer
c/o Sapient Corporation
One Memorial Drive
Cambridge, Massachusetts 02142

J. Stuart Moore............................................. 6,486,210(3) 26.6%
Co-Chief Executive Officer
c/o Sapient Corporation
One Memorial Drive
Cambridge, Massachusetts 02142

Pilgrim Baxter & Associates, Ltd. .......................... 1,332,000(4) 5.5%
825 Duportail Road
Wayne, PA 19087

OTHER DIRECTORS
R. Stephen Cheheyl.......................................... 7,600 *
Darius W. Gaskins, Jr. ..................................... 7,600 *
Bruce D. Parker............................................. 7,600 *
Carl S. Sloane.............................................. 7,600 *
</TABLE>

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<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
BENEFICIAL OWNERSHIP(1)
--------------------------------
PERCENT OF
BENEFICIAL OWNER NUMBER OF SHARES CLASS
---------------- ---------------- ----------
<S> <C> <C>
OTHER NAMED EXECUTIVE OFFICERS
Sheeroy D. Desai............................................ 392,704 1.6%
Susan D. Johnson............................................ 29,300 *
All executive officers and directors as a group (12
persons).................................................. 13,983,532 56.8%
</TABLE>

- ---------------
* Less than 1%

(1) Each stockholder possesses sole voting and investment power with respect to
the shares listed, except as otherwise noted. Includes the following number
of shares issuable within the 60-day period following February 28, 1998
pursuant to the exercise of options: Mr. Cheheyl (5,000); Mr. Gaskins
(5,000); Mr. Parker (5,000); Mr. Sloane (5,000); Mr. Desai (94,000); Ms.
Johnson (20,500); and all executive officers and directors as a group
(272,600). As of February 28, 1998, there were 24,361,540 shares
outstanding.

(2) Includes 368,344 shares held by the Jerry A. Greenberg Three-Year Qualified
Annuity Trust-1996, 1,782,904 shares held by the Jerry A. Greenberg
Eight-Year Qualified Annuity Trust-1996 and 517,082 shares held by the Jerry
A. Greenberg Three-Year Qualified Annuity Trust-1997, of which trusts Mr.
Greenberg is a co-trustee with Samuel C. Sichko and over which shares Mr.
Greenberg shares voting and/or investment control.

(3) Includes (i) 1,902,304 shares held by the J. Stuart Moore Eight-Year
Qualified Annuity Trust-1996, of which Mr. Moore is the sole trustee and
over which Mr. Moore has sole voting and investment control, (ii) 428,000
shares held by the J. Stuart Moore Two-Year Qualified Annuity Trust-1996,
26,666 shares held by the J. Stuart Moore Remainder Trust and 400,000 shares
held by the J. Stuart Moore Two-Year Qualified Annuity Trust-1998, of which
trusts Mr. Moore is a co-trustee and over which shares Mr. Moore shares
investment control, (iii) 11,410 shares held by the J. Stuart Moore
Irrevocable Trust, of which Mr. Moore's wife is a co-trustee and over which
shares Mr. Moore's wife shares voting and/or investment control and (iv)
540,000 shares held by the J. Stuart Moore Gift Trust of 1995, over which
shares Mr. Moore does not have voting or investment control but in which
shares Mr. Moore has a beneficial interest. Mr. Moore disclaims beneficial
ownership of the shares held by the trusts except to the extent of his
proportionate pecuniary interest therein.

(4) The information reported is based on a Schedule 13G, dated February 13,
1998, filed with the Securities and Exchange Commission by Pilgrim Baxter &
Associates, Ltd ("Pilgrim"). Pilgrim is a registered investment advisor, in
which capacity it has sole voting power over 1,096,200 shares and sole
dispositive power over 1,332,000 shares.

PROPOSAL 1 -- ELECTION OF DIRECTORS

The Company's Board of Directors is divided into three classes, with
members of each class holding office for staggered three-year terms. There are
currently two Class I directors, whose terms expire in 2000, two Class II
directors, whose terms expire at the Meeting, and two Class III directors, whose
terms expire in 1999 (in all cases subject to the election and qualification of
their successors or their earlier death, resignation or removal).

The persons named in the enclosed proxy will vote each proxy for the
election of Darius W. Gaskins, Jr. and J. Stuart Moore as Class II directors,
unless authority to vote for the election of either or both of the

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nominees is withheld by marking the proxy to that effect. Messrs. Gaskins and
Moore are both currently directors of the Company.

Each Class II director will be elected to hold office until the Company's
annual meeting of stockholders to be held in 2001 and until his successor is
elected and qualified. Each of the nominees has indicated his willingness to
serve, if elected; however, if either nominee should be unable or unwilling to
stand for election, the person acting under the proxy may vote the proxy for a
substitute nominee designated by the Board of Directors. The Board of Directors
has no reason to believe that either of the nominees will be unable to serve if
elected.

All of the Company's directors are listed below with their principal
occupation and business experience for the past five years, the names of other
publicly held companies of which they serve as a director, age and length of
service as a director of the Company.

Darius W. Gaskins, Jr.... 58 1995 Mr. Gaskins is a founding partner of Carlisle, Fagan,
Gaskins & Wise, Inc., a management consulting firm,
which was formed in May 1993. Since June 1991, Mr.
Gaskins has also been a partner of High Street
Associates, Inc., which owns and manages specialty
chemical companies. Mr. Gaskins is a director of
Anacomp Inc., UNR Industries, Inc. and Northwestern
Steel and Wire Company.

J. Stuart Moore.......... 36 1991 Mr. Moore co-founded the Company in 1991 and has
served as Co-Chairman of the Board of Directors and
Co-Chief Executive Officer of the Company since its
inception in 1991.

DIRECTORS WHOSE TERMS EXPIRE IN 1999 (CLASS III DIRECTORS)

R. Stephen Cheheyl....... 52 1996 From October 1994 until he retired on December 31,
1995, Mr. Cheheyl served as Executive Vice President,
Business Operations, of Bay Networks, Inc., a
manufacturer of computer networking products, which
was formed through the merger of Wellfleet
Communications, Inc. and Synoptics Communications,
Inc. From December 1990 to October 1994, Mr. Cheheyl
served as Senior Vice President, Finance and
Administration of Wellfleet. Mr. Cheheyl is a
director of Auspex Systems, Inc., ON Technology
Corporation and Infinium Software, Inc.

Carl S. Sloane........... 61 1995 Mr. Sloane is the Ernest L. Arbuckle Professor of
Business Administration at Harvard University's
Graduate School of Business Administration, where he
has been a member of the faculty since September
1991. Mr. Sloane is a director of Ionics, Inc.
</TABLE>

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<PAGE> 7

<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION, OTHER BUSINESS
DIRECTOR EXPERIENCE DURING PAST FIVE YEARS AND
NAME AGE SINCE OTHER DIRECTORSHIPS
---- --- -------- -------------------------------------
<S> <C> <C> <C>
DIRECTORS WHOSE TERMS EXPIRE IN 2000 (CLASS I DIRECTORS)
Jerry A. Greenberg....... 32 1991 Mr. Greenberg co-founded the Company in 1991 and has
served as Co-Chairman of the Board of Directors and
Co-Chief Executive Officer of the Company since its
inception in 1991.

Bruce D. Parker.......... 50 1995 Since December 1997, Mr. Parker has been Senior Vice
President and Chief Information Officer at United
Airlines, Inc. From September 1994 to December 1997,
Mr. Parker was Senior Vice President -- Management
Information Systems and Chief Information Officer at
Ryder System, Inc., a transportation company. From
April 1993 to September 1994, Mr. Parker served as a
Vice President of American Airlines, Inc. and as
President of its Sabre Development Services Division.
Mr. Parker served as a Vice President of Sabre
Computer Services Division from 1988 until April
1993.
</TABLE>

For information relating to shares of Common Stock owned by each of the
directors, see "Security Ownership of Certain Beneficial Owners and Management."

BOARD AND COMMITTEE MEETINGS

The Board of Directors met seven times (including by telephone conference)
during 1997. All directors attended at least 75% of the meetings of the Board of
Directors and of the committees on which they served.

The Company has a standing Audit Committee, which is responsible for
reviewing the results and scope of the audit and other services provided by the
Company's independent public accountants. The Audit Committee held five meetings
during 1997. The Audit Committee is currently comprised of Messrs. Cheheyl and
Parker, each a non-employee director.

The Company has a standing Compensation Committee, which is responsible for
reviewing the Company's overall compensation policies and approving the
compensation of the Company's executive officers. The current members of the
Compensation Committee are Messrs. Parker and Sloane, each a non-employee
director. The Compensation Committee held one meeting during 1997.

DIRECTOR COMPENSATION

Each non-employee director is paid $3,000 for attendance in person at each
Board meeting and $750 for attendance in person at any committee meeting that is
not held on the same day as a Board meeting. If a director participates by
telephone, rather than in person, one-half of such amount is paid. In addition,
each non-employee director is reimbursed for expenses incurred in connection
with attending meetings. Directors receive no other cash compensation for
serving as directors.

On July 17, 1997, each of the Company's four non-employee directors was
granted a stock option under the Company's 1996 Equity Stock Incentive Plan to
acquire 4,000 shares of Common Stock at an exercise price of $27.375 per share,
which the Board determined to be the fair market value of the Common Stock on
such date. Such options vest in four equal annual installments starting on the
first anniversary of the date of grant.
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<PAGE> 8

In February 1996, the Board adopted and the stockholders approved the 1996
Director Stock Option Plan (the "Director Plan"), pursuant to which each new
non-employee director elected to the Board of Directors in the future will be
granted, upon his or her initial election as a director, an option to purchase
10,000 shares of Common Stock. All options granted under the Director Plan will
have an exercise price equal to the fair market value of the Common Stock on the
date of grant, will vest over a four-year period, provided the optionholder
continues to serve as a director of the Company, and will expire ten years from
the date of grant (subject to earlier termination in the event the optionee
ceases to serve as a director of the Company). No options have been granted
under the Director Plan, which provides for the issuance of a maximum of 60,000
shares.

COMPENSATION OF EXECUTIVE OFFICERS

SUMMARY COMPENSATION TABLE

The following table sets forth certain information with respect to the
compensation paid in each of the last three fiscal years to the Named Executive
Officers.

<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
-------------
NUMBER OF
SHARES
ANNUAL COMPENSATION(1) UNDERLYING ALL OTHER
NAME AND ----------------------- STOCK COMPENSATION
PRINCIPAL POSITION YEAR SALARY($) BONUS($) OPTIONS(#)(2) ($)(3)
------------------ ---- ---------- --------- ------------- ------------
<S> <C> <C> <C> <C> <C>
Jerry A. Greenberg.................. 1997 $50,000 $107,396 0 $ 470
Co-Chairman of the Board and 1996 50,000 106,567 0 0
Co-Chief Executive Officer 1995 50,000 110,500 0 0

J. Stuart Moore..................... 1997 $50,000 $107,396 0 $1,250
Co-Chairman of the Board and 1996 50,000 106,567 0 1,250
Co-Chief Executive Officer 1995 50,000 110,500 0 0

Sheeroy D. Desai.................... 1997 $50,000 $109,650 0 $1,250
Executive Vice President 1996 50,000 94,900 0 1,172
1995 50,000 80,750 0 1,250

Susan D. Johnson.................... 1997 $60,000 $ 67,750 40,000 $1,250
Chief Financial Officer 1996 60,000 43,875 0 1,250
1995 60,000 26,230 30,000 1,250
</TABLE>

- ---------------
(1) In accordance with the rules of the Securities and Exchange Commission,
other compensation in the form of perquisites and other personal benefits
has been omitted because such perquisites and other personal benefits
constituted less than the lesser of $50,000 or ten percent of the total
annual salary and bonus for the Named Executive Officer for such year.

(2) The Company has never granted any stock appreciation rights.

(3) Amounts shown in this column represent the Company's matching contributions
under the Company's 401(k) Plan.

Each Named Executive Officer has executed agreements which prohibit them
from competing with the Company for a period of 12 months following termination
of their employment with the Company.

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<PAGE> 9

OPTION GRANTS IN LAST FISCAL YEAR

The following table sets forth certain information regarding options
granted during the fiscal year ended December 31, 1997 by the Company to the
Named Executive Officers.

<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
-----------------------------------------------------------------------------------------
PERCENT OF
NUMBER OF TOTAL POTENTIAL REALIZABLE VALUE AT
SECURITIES OPTIONS ASSUMED ANNUAL RATES OF
UNDERLYING GRANTED TO EXERCISE STOCK PRICE APPRECIATION FOR
OPTION EMPLOYEES OR BASE OPTION TERM(3)
GRANTED IN FISCAL PRICE EXPIRATION ------------------------------
NAME (#)(1) YEAR ($/SH)(2) DATE 5%($) 10%($)
---- ---------- -------------- --------- ---------- ------------ --------------
<S> <C> <C> <C> <C> <C> <C>
Jerry A. Greenberg... -- -- -- -- -- --
J. Stuart Moore...... -- -- -- -- -- --
Sheeroy D. Desai..... -- -- -- -- -- --
Susan D. Johnson..... 10,000 .48% $ 20.25 1/14/07 $127,351 $ 322,733
30,000 1.43% $25.875 12/15/07 $488,179 $1,237,143
</TABLE>

- ---------------
(1) Represents options granted pursuant to the Company's 1996 Equity Stock
Incentive Plan. Options granted become exercisable in four equal
installments commencing on the first anniversary of the date of grant.

(2) The exercise price is equal to the fair market value of the Company's Common
Stock on the date of grant.

(3) Potential realizable value is based on an assumption that the market price
of the stock will appreciate at the stated rate, compounded annually, from
the date of grant until the end of the 10-year term. These values are
calculated based on rules promulgated by the Securities and Exchange
Commission and do not reflect the Company's estimate or projection of future
stock prices. Actual gains, if any, on stock option exercises will depend on
the future performance of the Company's Common Stock, the optionholder's
continued employment through the option period and the date on which the
options are exercised.

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<PAGE> 10

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES

The following table summarizes, for each of the Named Executive Officers,
the number of shares acquired on exercise of options during the fiscal year
ended December 31, 1997, the aggregate dollar value realized upon such exercise
and the number and value of unexercised options held by such officers on
December 31, 1997.

<TABLE>
<CAPTION>
NUMBER OF SHARES
UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED IN-THE-MONEY OPTIONS
NUMBER OF OPTIONS AT FISCAL YEAR-END
SHARES VALUE AT FISCAL YEAR-END EXERCISABLE/
ACQUIRED ON REALIZED EXERCISABLE/ UNEXERCISABLE
NAME EXERCISE(#) ($)(1) UNEXERCISABLE(#) ($)(2)
---- ----------- -------- ------------------ --------------------
<S> <C> <C> <C> <C>
Jerry A. Greenberg(3).......... -- -- -- --
J. Stuart Moore(3)............. -- -- -- --
Sherroy D. Desai............... 10,000 $260,225 72,000/128,000 $2,101,510/3,733,080
Susan D. Johnson............... 0 0 17,000/ 76,000 $ 484,750/1,219,875
</TABLE>

- ---------------
(1) Represents the difference between the exercise price and the fair market
value of the Common Stock on the date of exercise.

(2) Represents the difference between the last reported sale price per share
($30.625) of the Common Stock on December 31, 1997, as reported on the
Nasdaq National Market, and the exercise price.

(3) Messrs. Greenberg and Moore do not participate in the Company's stock plans.

REPORT ON EXECUTIVE COMPENSATION

The Compensation Committee of the Board of Directors is responsible for
reviewing the Company's overall compensation policies and, with the input of the
Company's Co-Chief Executive Officers, setting the compensation of the Company's
executive officers. Throughout 1997, the Compensation Committee was comprised
solely of non-employee directors. Until October 30, 1997, all four of the
Company's non-employee directors were members of both the Compensation Committee
and the Audit Committee. On October 30, 1997, the Board reallocated the
committee responsibilities among the non-employee directors. Since that
reallocation, the members of the Compensation Committee have been Messrs. Parker
and Sloane.

Compensation Philosophies and Goals

The Company's executive compensation program for 1997, which consisted of a
combination of base salary, cash bonuses and stock options, was designed in
large part to align executive incentives with the Company's strategic goal of
achieving high levels of client satisfaction. Accordingly, more than half of the
total cash compensation of the Company's senior executives involved in the
delivery of client projects in 1997 was directly linked to the Company's
measurements of client satisfaction. By tying compensation to the achievement of
one of the Company's core objectives and fundamental values, the Company
believes that a performance-oriented environment is created for its executives
and other employees.

The Company's executive compensation program for 1997 was also intended to
align executive and shareholder interests by providing executives with an equity
interest in the Company through the granting of stock options. Consistent with
this purpose, because Messrs. Greenberg and Moore, the Company's founders, each
already holds a significant equity stake in the Company, they do not participate
in the Company's stock option plans. The size of option grants was recommended
by the Co-Chief Executive Officers to the

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<PAGE> 11

Compensation Committee for approval. The Compensation Committee based its review
of such recommended grants on various factors, including the executive's
responsibilities, the executive's past, present and expected contributions to
the Company and the executive's current stock and option holdings.

The Company also seeks to structure its executive compensation program in a
manner which will reward executives for the achievement of the Company's
business objectives as well as for individual performance and will enable the
Company to attract and retain key executives.

Compensation in Fiscal 1997

Cash Compensation

In keeping with the Company's desire to create a performance-oriented
environment through its compensation programs, the bonus component of the cash
compensation payable to the Company's executive officers is generally greater
than the base salary component. Base salaries of the executive officers for 1997
were subjectively determined by the Compensation Committee.

The Company adopted an executive bonus plan for 1997 which covered the
executive officers and other senior management of the Company who are involved
in the delivery of client projects. Under the bonus plan, which was amended by
the Company during the year in order to better align the Company's compensation
policies with its objectives, the Co-Chief Executive Officers recommended to the
Compensation Committee for approval the target amount of bonus compensation
payable to each participant for the year. Each participant's actual bonus
compensation was then determined based on the following factors:

- Client Satisfaction. Sixty percent of each participant's bonus
compensation was based on a weighted average of the participant's client
satisfaction rating, measured against the target client satisfaction
rating established by the Board of Directors. Each participant's rating
was based on the Company's measurements of client satisfaction throughout
the year, which were collected by the Company in writing in connection
with each client project.

- Office Communications. Twenty percent of each participant's bonus
compensation was based on the participant's office communications rating,
measured against the target office communications rating established by
the Board of Directors. These ratings were measured quarterly through
office ratings and Company-wide employee surveys.

- Revenues. The remaining twenty percent of each participant's bonus
compensation was based on the Company's achievement of a revenue target
established by the Board of Directors.

In order to receive 100% of the bonus compensation allocable to each
factor, a participant's client satisfaction and office communications ratings
had to meet the internal target ratings set by the Company's senior management
and the Company had to meet its revenue target. If performance exceeded the
established target for any of the factors, the bonus amount with respect to such
factor would increase. If performance was below the established target for any
of the factors, the bonus amount with respect to such factor would decrease,
provided that (i) no amount with respect to the office communications factor
would be payable if the participant's rating was below a specified minimum and
(ii) no amount with respect to the revenue factor would be payable if the
Company did not meet its revenue target.

Because the Company's Chief Financial Officer is not directly involved in
the delivery of client projects, her bonus compensation was determined with
reference to both objective and subjective factors recommended by the Co-Chief
Executive Officers to the Compensation Committee for approval. These factors
were intended to provide a direct link between the Chief Financial Officer's
compensation and her role in helping

10
<PAGE> 12

the Company attain annual performance measures. For 1997, these factors were the
achievement of key financial metrics and management of internal budget controls
and other departmental objectives.

In February 1998, the Compensation Committee reviewed the Company's and
each executive officer's performance against the objective criteria described
above. Based on this review, and in accordance with the criteria described
above, bonus payments were approved to each executive officer ranging from
approximately 83% to 97% of his or her full target bonus. As indicated in the
Summary Compensation Table, Messrs. Greenberg and Moore each received a bonus of
$107,396 in 1997.

Incentive Compensation

In light of the existing stock and option holdings of each of the Named
Executive Officers, options were not granted to any of the Named Executive
Officers in 1997 other than the Chief Financial Officer, as indicated in the
Option Grants in Last Fiscal Year table.

Compliance with Internal Revenue Code Section 162(m)

Section 162(m) of the Internal Revenue Code of 1986, as amended, generally
disallows a federal income tax deduction to public companies for certain
compensation in excess of $1 million paid to a corporation's chief executive
officer or any of its four other most highly compensated executive officers.
Qualifying performance-based compensation will not be subject to the deduction
limit if certain requirements are met. The Company has structured the 1998 Stock
Incentive Plan to qualify income received upon the exercise of stock options
granted under that plan as performance-based compensation. The Compensation
Committee intends to review the potential effects of Section 162(m) periodically
and in the future may decide to structure additional portions of the Company's
compensation program in a manner designed to permit deductibility for federal
income tax purposes.

R. Stephen Cheheyl
Darius W. Gaskins, Jr.
Bruce D. Parker
Carl S. Sloane

11
<PAGE> 13

STOCK PERFORMANCE GRAPH

The following graph compares the cumulative total stockholder return on the
Common Stock of the Company from April 3, 1996 (the date the Common Stock of the
Company was registered under the Securities Exchange Act of 1934, as amended)
through December 31, 1997 with the cumulative total return on (i) the Nasdaq
Composite Index and (ii) the GSTI Computer Services Index. The comparison
assumes the investment of $100 on April 3, 1996 in the Company's Common Stock
and in each of the indices and, in each case, assumes reinvestment of all
dividends.

[PERFOMANCE GRAPH]

<TABLE>
<CAPTION>
4/3/96 6/30/96 9/30/96 12/31/96 3/31/97 6/30/97 9/30/97 12/31/97
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------
Sapient Corporation 100 132.03 139.06 131.64 100 154.69 158.98 191.41
- --------------------------------------------------------------------------------------------------------------
Nasdaq Composite Index 100 106.20 109.95 115.70 109.49 129.24 151.07 140.73
- --------------------------------------------------------------------------------------------------------------
GSTI Computer Services Index 100 105.32 113.70 102.94 92.76 109.34 103.37 117.80
- --------------------------------------------------------------------------------------------------------------
</TABLE>

12
<PAGE> 14

PROPOSAL 2 -- APPROVAL OF AMENDMENT INCREASING
AUTHORIZED COMMON STOCK

On March 24, 1998, the Board of Directors of the Company approved, subject
to stockholder approval, an amendment to the Company's Amended and Restated
Certificate of Incorporation increasing the number of authorized shares of
Common Stock from 40,000,000 to 100,000,000 shares.

THE BOARD OF DIRECTORS BELIEVES THAT THE PROPOSED AMENDMENT IS IN THE BEST
INTERESTS OF THE COMPANY AND ITS STOCKHOLDERS AND THEREFORE RECOMMENDS A VOTE
"FOR" THIS PROPOSAL.

The authorized Common Stock of the Company currently consists of 40,000,000
shares, $.01 par value per share, of which (i) 24,206,570 shares were
outstanding as of December 31, 1997 and (ii) 5,417,000 additional shares were
reserved for issuance as of December 31, 1997 pursuant to the Company's existing
stock plans. If the 1998 Stock Incentive Plan and the amendment to the 1996
Employee Stock Purchase Plan are approved at the Meeting, 2,360,000 additional
shares would be reserved for issuance under such plans. In addition, on March
13, 1998, the Company filed a registration statement with the Securities and
Exchange Commission covering the issuance by the Company of up to 653,125 shares
of Common Stock (including shares issuable upon exercise of an option to
purchase additional shares solely to cover over-allotments) in connection with a
proposed public offering.

The Board believes that the authorization of additional shares of Common
Stock is desirable to provide shares for issuance in connection with the
exercise of stock options expected to be granted under the Company's stock
option and stock purchase plans, including the 1998 Stock Incentive Plan and the
amended 1996 Employee Stock Purchase Plan, and in connection with possible
future stock dividends, financings, joint ventures, acquisitions and other
general corporate purposes. Other than as described above, however, there are no
existing plans, understandings or agreements for the issuance of any shares of
Common Stock. If the amendment is adopted by the stockholders, the Board of
Directors will have authority to issue shares of Common Stock without the
necessity of further stockholder action. Holders of the Common Stock have no
preemptive rights with respect to any shares which may be issued in the future.

Under Delaware law, stockholders are not entitled to dissenter's rights
with respect to the proposed amendment to the Company's Amended and Restated
Certificate of Incorporation.

PROPOSAL 3 -- APPROVAL OF 1998 STOCK INCENTIVE PLAN

On March 24, 1998, the Board of Directors of the Company adopted, subject
to stockholder approval, the 1998 Stock Incentive Plan (the "1998 Plan"). Up to
2,000,000 shares of Common Stock (subject to adjustment in the event of stock
splits and other similar events) may be issued pursuant to awards granted under
the 1998 Plan.

The Board of Directors believes that adoption of the 1998 Plan is essential
to the Company's ability to maintain a competitive position in attracting,
retaining and motivating key personnel. ACCORDINGLY, THE BOARD OF DIRECTORS
BELIEVES THAT ADOPTION OF THE 1998 PLAN IS IN THE BEST INTERESTS OF THE COMPANY
AND ITS STOCKHOLDERS AND RECOMMENDS A VOTE "FOR" THE ADOPTION OF THE 1998 PLAN
AND THE RESERVATION OF 2,000,000 SHARES OF COMMON STOCK FOR ISSUANCE THEREUNDER.

The 1998 Plan will become effective upon stockholder approval of the 1998
Plan at the Meeting. If the 1998 Plan is not approved by the stockholders, no
awards will be granted under the 1998 Plan.

13
<PAGE> 15

SUMMARY OF THE 1998 PLAN

The following is a brief summary of the material terms of the 1998 Plan.
This summary is qualified in its entirety by reference to the 1998 Plan, a copy
of which may be obtained from the Secretary of the Company.

Description of Awards. The 1998 Plan provides for the grant of incentive
stock options intended to qualify under Section 422 of the Internal Revenue Code
of 1986, as amended (the "Code"), nonstatutory stock options, restricted stock
awards and other stock-based awards, including the grant of shares based upon
certain conditions, the grant of securities convertible into Common Stock and
the grant of stock appreciation rights (collectively "Awards").

Incentive Stock Options and Nonstatutory Stock Options. Optionees receive
the right to purchase a specified number of shares of Common Stock at a
specified option price and subject to such other terms and conditions as are
specified in connection with the option grant. Options may be granted at an
exercise price which may be less than, equal to or greater than the fair market
value of the Common Stock on the date of grant. Under present law, however,
incentive stock options and options intended to qualify as performance-based
compensation under Section 162(m) of the Code may not be granted at an exercise
price less than the fair market value of the Common Stock on the date of grant
(or less than 110% of the fair market value in the case of incentive stock
options granted to optionees holding more than 10% of the voting power of the
Company). Options may not be granted for a term in excess of ten years. The 1998
Plan permits the Board to determine the manner of payment of the exercise price
of options, including through payment by cash, check or in connection with a
"cashless exercise" through a broker, by surrender to the Company of shares of
Common Stock, by delivery to the Company of a promissory note, or by any other
lawful means.

Restricted Stock Awards. Restricted stock Awards entitle recipients to
acquire shares of Common Stock, subject to the right of the Company to
repurchase all or part of such shares from the recipient in the event that the
conditions specified in the applicable Award are not satisfied prior to the end
of the applicable restriction period established for such Award.

Other Stock-Based Awards. Under the 1998 Plan, the Board has the right to
grant other Awards based upon the Common Stock having such terms and conditions
as the Board may determine, including the grant of shares based upon certain
conditions, the grant of securities convertible into Common Stock and the grant
of stock appreciation rights.

General Provisions Applicable to Awards. The 1998 Plan authorizes the
Board to provide for transferable Awards. In addition, except as otherwise
determined by the Board, participants may satisfy withholding tax requirements
by delivery of shares of Common Stock, including shares retained from the Award
creating the tax obligation.

Eligibility to Receive Awards. Officers, employees (including individuals
who have accepted an offer for employment), directors, consultants and advisors
of the Company and its subsidiaries are eligible to be granted Awards under the
1998 Plan. Under present law, however, incentive stock options may only be
granted to employees. The maximum number of shares with respect to which an
Award may be granted to any participant under the 1998 Plan may not exceed
500,000 shares per calendar year.

All of the Company's employees, including the eight current executive
officers, and all of the Company's directors, including the four current
non-employee directors, are eligible to receive Awards under the 1998 Plan. As
of December 31, 1997, the Company had 817 full-time employees. The granting of
Awards under the 1998 Plan is discretionary, and the Company cannot now
determine the number or type of Awards to be granted in the future to any
particular person or group.

14
<PAGE> 16

Administration. The 1998 Plan is administered by the Board of Directors.
The Board has the authority to adopt, amend and repeal the administrative rules,
guidelines and practices relating to the 1998 Plan and to interpret the
provisions of the 1998 Plan. Pursuant to the terms of the 1998 Plan, the Board
of Directors may delegate authority under the 1998 Plan to one or more
committees of the Board, and subject to certain limitations, to one or more
executive officers of the Company. The Board has authorized the Compensation
Committee to administer certain aspects of the 1998 Plan, including the granting
of options to executive officers, and has authorized the Co-CEO's to administer
certain aspects of the 1998 Plan, including the grant of Awards to employees who
are not executive officers (subject to certain limitations on the maximum number
of shares subject to any such Award). Subject to any applicable limitations
contained in the 1998 Plan, the Board of Directors, the Compensation Committee,
or any other committee or executive officer to whom the Board delegates
authority, as the case may be, selects the recipients of Awards and determines
(i) the number of shares of Common Stock covered by options and the dates upon
which such options become exercisable, (ii) the exercise price of options, (iii)
the duration of options, and (iv) the number of shares of Common Stock subject
to any restricted stock or other stock-based Awards and the terms and conditions
of such Awards, including conditions for repurchase, issue price and repurchase
price.

Adjustments. The Board of Directors is required to make appropriate
adjustments in connection with the 1998 Plan and any outstanding Awards to
reflect stock dividends, stock splits and certain other events. The 1998 Plan
also provides for adjustments to be made to Awards if the Common Stock of the
Company is converted into or exchanged for cash, securities or other property in
connection with a merger, consolidation or statutory share exchange transaction
(an "Acquisition Event"). In the case of options, upon the occurrence of an
Acquisition Event, or the execution by the Company of any agreement with respect
to an Acquisition Event, the Board shall provide that all outstanding options
shall be assumed, or equivalent options substituted, by the acquiring
corporation. If the acquiring corporation does not agree to assume, or
substitute for, such options, then the Board shall accelerate the exercisability
of all outstanding options or provide for a cash out of the value of such
options. In the case of restricted stock Awards, upon the occurrence of an
Acquisition Event, the 1998 Plan provides that the repurchase rights of the
Company shall continue to apply to the cash, securities or other property into
which the Common Stock is exchanged for as a result of the Acquisition Event in
the same manner and to the same extent as before the Acquisition Event.

Amendment or Termination. No Award may be made under the 1998 Plan after
March 24, 2008, but Awards previously granted may extend beyond that date. The
Board of Directors may at any time amend, suspend or terminate the 1998 Plan,
except that no Award designated as subject to Section 162(m) of the Code by the
Board of Directors after the date of such amendment shall become exercisable,
realizable or vested (to the extent such amendment was required to grant such
Award) unless and until such amendment shall have been approved by the Company's
stockholders.

On March 30, 1998, the last reported sale price of the Company's Common
Stock on the Nasdaq National Market was $ .

Federal Income Tax Consequences. For a summary of the United States
federal income tax consequences that generally will arise with respect to Awards
granted under the 1998 Plan and with respect to the sale of Common Stock
acquired under the 1998 Plan, see Appendix A.

PROPOSAL 4 -- APPROVAL OF AMENDMENTS TO
1996 EMPLOYEE STOCK PURCHASE PLAN

The Board of Directors believes that the continued growth and profitability
of the Company depends, in large part, upon the ability of the Company to
maintain a competitive position in attracting and retaining key

15
<PAGE> 17

personnel. Accordingly, in 1996, the Company adopted an Employee Stock Purchase
Plan which permits eligible employees to purchase shares of the Company's Common
Stock at a discounted price.

As of March 30, 1998, 172,542 shares remained available for issuance under
the Company's 1996 Employee Stock Purchase Plan (the "Purchase Plan") in a
series of semi-annual offerings scheduled to begin during 1998 and 1999. On
March 24, 1998, the Board of Directors adopted, subject to stockholder approval,
an amendment to the Purchase Plan increasing the total number of shares of
Common Stock available for purchase under the Purchase Plan from 300,000 to
660,000 and authorizing an increase in the total number of offerings under the
Purchase Plan from six to twelve. If the proposed amendments are approved, the
final offering under the Purchase Plan will commence on July 1, 2002.

The Purchase Plan is also being amended to revise or delete certain
existing provisions which make reference to old Rule 16b-3 under the Securities
Exchange Act of 1934, as amended, and to change the formula used for calculating
the maximum number of shares any participant in an offering may purchase.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE APPROVAL OF THE
AMENDMENTS TO THE PURCHASE PLAN AND THE RESERVATION OF AN ADDITIONAL 360,000
SHARES OF COMMON STOCK FOR ISSUANCE THEREUNDER.

SUMMARY OF THE PURCHASE PLAN

The following is a brief summary of the material terms of the Purchase
Plan. This summary is qualified in its entirety by reference to the Purchase
Plan, a copy of which may be obtained from the Secretary of the Company.

General. The Purchase Plan provides eligible employees with the
opportunity to purchase shares of the Company's Common Stock at a discounted
price.

Eligibility. Each employee of the Company and its eligible subsidiaries,
including any officer or director who is also an employee, is eligible to
participate in the Purchase Plan, provided he or she (i) is employed by the
Company or any eligible subsidiary on the applicable offering commencement date,
(ii) is customarily employed by the Company or any eligible subsidiary for 20 or
more hours per week and for more than five months in a calendar year and (iii)
has been employed by the Company or any eligible subsidiary for at least one day
prior to enrolling in the Purchase Plan. As of January 1, 1998, approximately
800 employees were eligible to participate in the Purchase Plan. The purchase of
shares under the Purchase Plan is discretionary, and the Company cannot now
determine the number of shares to be purchased in the future by any particular
person or group.

Offerings. The Purchase Plan is implemented through a series of offerings,
each of which is six months in length. Currently, a total of six offerings are
authorized under the Purchase Plan, three of which have already been completed.
If the proposed amendment is approved at the Meeting, the maximum number of
offerings will increase to 12. Participants in an offering purchase shares with
funds set aside through payroll withholding. An employee may elect to have a
percentage from 1% to up to 10% withheld from his or her pay for purposes of
purchasing shares under the Purchase Plan, subject to certain limitations on the
maximum number of shares that may be purchased.

Purchase Price. The price at which shares may be purchased during each
offering is the lower of (i) 85% of the closing price of the Common Stock as
reported on the Nasdaq National Market on the date that the offering commences
or (ii) 85% of the closing price of the Common Stock as reported on the Nasdaq
National Market on the date that the offering terminates.

Number of Shares; Adjustments. Currently, an aggregate of 300,000 shares
of Common Stock may be issued pursuant to the Purchase Plan, of which 127,458
have already been issued. If the proposed amendment

16
<PAGE> 18

is approved at the Meeting, the maximum number of shares issuable under the
Purchase Plan will increase to 660,000 shares. Currently the maximum number of
shares which may be issued in any one offering is 50,000 shares, plus any
unpurchased shares available from previous offerings. If the proposed amendment
is approved, the maximum number of shares which may be issued in each of the six
new additional offerings will be 60,000 shares, plus any unpurchased shares
available from previous offerings. The Purchase Plan contains provisions
relating to adjustments to be made under the Purchase Plan in the event of stock
splits and other similar events and certain mergers, acquisitions and other
extraordinary corporate transactions involving the Company.

Administration. The Purchase Plan is administered by the Board of
Directors of the Company, which has the authority to make rules and regulations
for the administration of the Purchase Plan. Pursuant to the terms of the
Purchase Plan, the Board of Directors may delegate authority under the Purchase
Plan to a committee of the Board.

Amendment or Termination. The Board of Directors may at any time terminate
or amend the Purchase Plan, provided that no amendment may be made without prior
approval of the stockholders of the Company if such approval is required by
Section 423 of the Code, and in no event may any amendment be made which would
cause the Purchase Plan to fail to comply with Section 423 of the Code.

FEDERAL INCOME TAX CONSEQUENCES

For a summary of the United States federal income tax consequences that
generally will arise with respect to participation in the Purchase Plan and with
respect to the sale of Common Stock acquired under the Purchase Plan, see
Appendix A.

PROPOSAL 5 -- RATIFICATION OF THE APPOINTMENT OF AUDITORS

The Board of Directors has selected the firm of KPMG Peat Marwick LLP as
independent auditors of the Company for the current fiscal year. KPMG Peat
Marwick LLP has served as the Company's independent auditors since 1994.
Although stockholder approval of the Board of Director's selection of KPMG Peat
Marwick LLP is not required by law, the Board of Directors believes that it is
advisable to give stockholders an opportunity to ratify this selection. If this
proposal is not approved at the Meeting, the Board of Directors will reconsider
its selection of KPMG Peat Marwick LLP.

A representative of KPMG Peat Marwick LLP is expected to be present at the
Annual Meeting to respond to appropriate questions, and to make a statement if
he or she so desires.

THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE
RATIFICATION OF THE SELECTION OF KPMG PEAT MARWICK LLP AS THE COMPANY'S
INDEPENDENT AUDITORS FOR THE YEAR ENDING DECEMBER 31, 1998.

OTHER MATTERS

The Board of Directors knows of no other business which will be presented
for consideration at the Meeting other than that described above. However, if
any other matters are properly presented to the Meeting, it is the intention of
the persons named in the accompanying proxy to vote, or otherwise act, in
accordance with their judgment on such matters.

The Company will bear the costs of soliciting proxies. In addition to
solicitations by mail, the Company's directors, officers and regular employees
may, without additional remuneration, solicit proxies by telephone, telegraph,
facsimile and personal interviews. The Company reserves the right to retain
outside agencies for the purpose of soliciting proxies. The Company will also
request brokerage houses, custodians, nominees and
17
<PAGE> 19

fiduciaries to forward copies of the proxy material to those persons for whom
they hold shares and request instructions for voting the proxies and the Company
will reimburse them for their out-of-pocket expenses in connection with this
distribution.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors, executive officers and holders of more than 10% of the
Common Stock to file with the Securities and Exchange Commission initial reports
of ownership and reports of changes in ownership of Common Stock and other
equity securities of the Company. Based solely upon a review of reports
submitted, and representations made, to the Company, the Company believes that
during 1997 its executive officers, directors and holders of more than 10% of
the Common Stock complied with all Section 16(a) filing requirements.

STOCKHOLDER PROPOSALS FOR 1999 ANNUAL MEETING

Proposals of stockholders intended to be presented at the 1999 Annual
Meeting of Stockholders must be received by the Company at its principal
offices, One Memorial Drive, Cambridge, Massachusetts 02142, no later than
December 10, 1998 in order to be considered for inclusion in the proxy statement
for that meeting.

By Order of the Board of Directors,

JERRY A. GREENBERG
Secretary

April 8, 1998

THE BOARD OF DIRECTORS HOPES THAT STOCKHOLDERS WILL ATTEND THE MEETING.
HOWEVER, WHETHER OR NOT YOU PLAN TO ATTEND, YOU ARE URGED TO COMPLETE, DATE,
SIGN AND RETURN THE ENCLOSED PROXY IN THE ACCOMPANYING ENVELOPE. PROMPT RESPONSE
WILL GREATLY FACILITATE ARRANGEMENTS FOR THE MEETING AND YOUR COOPERATION IS
APPRECIATED. STOCKHOLDERS WHO ATTEND THE MEETING MAY VOTE THEIR STOCK PERSONALLY
EVEN THOUGH THEY HAVE SENT IN THEIR PROXIES.

18
<PAGE> 20

APPENDIX A: FEDERAL INCOME TAX CONSEQUENCES

1998 STOCK INCENTIVE PLAN

The following is a summary of the United States federal income tax
consequences that generally will arise with respect to Awards granted under the
1998 Plan and with respect to the sale of Common Stock acquired under the 1998
Plan.

Tax Consequences to Participant -- Incentive Stock Options. In general, a
participant will not recognize taxable income upon the grant or exercise of an
incentive stock option. Instead, a participant will recognize taxable income
with respect to an incentive stock option only upon the sale of Common Stock
acquired through the exercise of the option ("ISO Stock"). The exercise of an
incentive stock option, however, may subject the participant to the alternative
minimum tax.

Generally, the tax consequences of selling ISO Stock will vary with the
length of time that the participant has owned the ISO Stock at the time it is
sold. If the participant sells ISO Stock after having owned it for at least two
years from the date the option was granted (the "Grant Date") and one year from
the date the option was exercised (the "Exercise Date"), then the participant
will recognize long-term capital gain in an amount equal to the excess of the
sale price of the ISO Stock over the exercise price.

If the participant sells ISO Stock for more than the exercise price prior
to having owned it for at least two years from the Grant Date and one year from
the Exercise Date (a "Disqualifying Disposition"), then all or a portion of the
gain recognized by the participant will be ordinary compensation income and the
remaining gain, if any, will be a capital gain. This capital gain will be a
long-term capital gain if the participant has held the ISO Stock for more than
one year prior to the date of sale.

If a participant sells ISO Stock for less than the exercise price, then the
participant will recognize capital loss equal to the excess of the exercise
price over the sale price of the ISO Stock. This capital loss will be a
long-term capital loss if the participant has held the ISO Stock for more than
one year prior to the date of sale.

Tax Consequences to Participant -- Nonstatutory Stock Options. As in the
case of an incentive stock option, a participant will not recognize taxable
income upon the grant of a nonstatutory stock option. Unlike the case of an
incentive stock option, however, a participant who exercises a nonstatutory
stock option generally will recognize ordinary compensation income in an amount
equal to the excess of the fair market value of the Common Stock acquired
through the exercise of the option ("NSO Stock") on the Exercise Date over the
exercise price.

With respect to any NSO Stock, a participant will have a tax basis equal to
the exercise price plus any income recognized upon the exercise of the option.
Upon selling NSO Stock, a participant generally will recognize capital gain or
loss in an amount equal to the excess of the sale price of the NSO Stock over
the participant's tax basis in the NSO Stock. This capital gain or loss will be
a long-term gain or loss if the participant has held the NSO Stock for more than
one year prior to the date of the sale.

Tax Consequences to Participant -- Restricted Stock Awards. A participant
will not recognize taxable income upon the grant of a restricted stock Award,
unless the participant makes an election under Section 83(b) of the Code (a
"Section 83(b) Election"). If the participant makes a Section 83(b) Election
within 30 days of the date of the grant, then the participant will recognize
ordinary compensation income, for the year in which the Award is granted, in an
amount equal to the difference between the fair market value of the Common Stock
at the time the Award is granted and the purchase price paid for the Common
Stock. If a Section 83(b) Election is not made, then the participant will
recognize ordinary compensation income, at the time that the forfeiture
provisions or restrictions on transfer lapse, in an amount equal to the
difference between the fair market value of the Common Stock at the time of such
lapse and the original purchase price
A-1
<PAGE> 21

paid for the Common Stock. The participant will have a tax basis in the Common
Stock acquired equal to the sum of the price paid and the amount of ordinary
compensation income recognized.

Upon the disposition of the Common Stock acquired pursuant to a restricted
stock Award, the participant will recognize a capital gain or loss equal to the
difference between the sale price of the Common Stock and the participant's tax
basis in the Common Stock. The gain or loss will be a long-term gain or loss if
the shares are held for more than one year. For this purpose, the holding period
shall begin just after the date on which the forfeiture provisions or
restrictions lapse if a Section 83(b) Election is not made, or just after the
Award is granted if a Section 83(b) Election is made.

Tax Consequences to Participant -- Other Stock-Based Awards. The tax
consequences associated with any other stock-based Award granted under the 1998
Plan will vary depending on the specific terms of such Award. Among the relevant
factors are whether or not the Award has a readily ascertainable fair market
value, whether or not the Award is subject to forfeiture provisions or
restrictions on transfer, the nature of the property to be received by the
participant under the Award, and the participant's holding period and tax basis
for the Award or underlying Common Stock.

Tax Consequences to the Company. The grant of an Award under the 1998 Plan
will have no tax consequences to the Company. Moreover, in general, neither the
exercise of an incentive stock option nor the sale of any Common Stock acquired
under the 1998 Plan will have any tax consequences to the Company. The Company
generally will be entitled to a business expense deduction, however, with
respect to any ordinary compensation income recognized by a participant under
the 1998 Plan, including as a result of the exercise of a nonstatutory stock
option, a Disqualifying Disposition, or a Section 83(b) Election. Any such
deduction will be subject to the limitations of Section 162(m) of the Code. The
Company will have a withholding obligation with respect to any ordinary
compensation income recognized by participants under the 1998 Plan who are
employees or otherwise subject to withholding.

1996 EMPLOYEE STOCK PURCHASE PLAN

The following is a summary of the United States federal income tax
consequences that generally will arise with respect to participation in the
Purchase Plan and with respect to the sale of Common Stock acquired under the
Purchase Plan.

Tax Consequences to Participants. In general, a participant will not
recognize taxable income upon enrolling in the Purchase Plan or upon purchasing
shares of Common Stock at the end of an offering. Instead, if a participant
sells Common Stock acquired under the Purchase Plan at a sale price that exceeds
the price at which the participant purchased the Common Stock, then the
participant will recognize taxable income in an amount equal to the excess of
the sale price of the Common Stock over the price at which the participant
purchased the Common Stock. A portion of that taxable income will be ordinary
income, and a portion may be capital gain.

If the participant sells the Common Stock more than one year after
acquiring it and more than two years after the date on which the offering
commenced (the "Grant Date"), then the participant will be taxed as follows. If
the sale price of the Common Stock is higher than the price at which the
participant purchased the Common Stock, then the participant will recognize
ordinary compensation income in an amount equal to the lesser of:

(i) fifteen percent of the fair market value of the Common Stock on
the Grant Date; and

(ii) the excess of the sale price of the Common Stock over the price
at which the participant purchased the Common Stock.

A-2
<PAGE> 22

Any further income will be long-term capital gain. If the sale price of the
Common Stock is less than the price at which the participant purchased the
Common Stock, then the participant will recognize long-term capital loss in an
amount equal to the excess of the price at which the participant purchased the
Common Stock over the sale price of the Common Stock.

If the participant sells the Common Stock within one year after acquiring
it or within two years after the Grant Date (a "Disqualifying Disposition"),
then the participant will recognize ordinary compensation income in an amount
equal to the excess of the fair market value of the Common Stock on the date
that it was purchased over the price at which the participant purchased the
Common Stock. The participant will also recognize capital gain in an amount
equal to the excess of the sale price of the Common Stock over the fair market
value of the Common Stock on the date that it was purchased, or capital loss in
an amount equal to the excess of the fair market value of the Common Stock on
the date that it was purchased over the sale price of the Common Stock. This
capital gain or loss will be a long-term capital gain or loss if the participant
has held the Common Stock for more than one year prior to the date of the sale
and will be a short-term capital gain or loss if the participant has held the
Common Stock for a shorter period.

Tax Consequences to the Company. The offering of Common Stock under the
Purchase Plan will have no tax consequences to the Company. Moreover, in
general, neither the purchase nor the sale of Common Stock acquired under the
Purchase Plan will have any tax consequences to the Company except that the
Company will be entitled to a business-expense deduction with respect to any
ordinary compensation income recognized by a participant upon making a
Disqualifying Disposition. Any such deduction will be subject to the limitations
of Section 162(m) of the Code.

A-3
<PAGE> 23
SAPIENT CORPORATION

1998 STOCK INCENTIVE PLAN

1. Purpose

The purpose of this 1998 Stock Incentive Plan (the "Plan") of Sapient
Corporation, a Delaware corporation (the "Company"), is to advance the interests
of the Company's stockholders by enhancing the Company's ability to attract,
retain and motivate persons who make (or are expected to make) important
contributions to the Company by providing such persons with equity ownership
opportunities and performance-based incentives and thereby better aligning the
interests of such persons with those of the Company's stockholders. Except where
the context otherwise requires, the term "Company" shall include any present or
future subsidiary corporations of Sapient Corporation as defined in Section
424(f) of the Internal Revenue Code of 1986, as amended, and any regulations
promulgated thereunder (the "Code").

2. Eligibility

All of the Company's employees, officers, directors, consultants and
advisors (and any individuals who have accepted an offer for employment) are
eligible to be granted options, restricted stock awards, or other stock-based
awards (each, an "Award") under the Plan. Each person who has been granted an
Award under the Plan shall be deemed a "Participant".

3. Administration, Delegation

(a) Administration by Board of Directors. The Plan will be
administered by the Board of Directors of the Company (the "Board"). The Board
shall have authority to grant Awards and to adopt, amend and repeal such
administrative rules, guidelines and practices relating to the Plan as it shall
deem advisable. The Board may correct any defect, supply any omission or
reconcile any inconsistency in the Plan or any Award in the manner and to the
extent it shall deem expedient to carry the Plan into effect and it shall be the
sole and final judge of such expediency. All decisions by the Board shall be
made in the Board's sole discretion and shall be final and binding on all
persons having or claiming any interest in the Plan or in any Award. No director
or person acting pursuant to the authority delegated by the Board shall be
liable for any action or determination relating to or under the Plan made in
good faith.

(b) Delegation to Executive Officers. To the extent permitted by
applicable law, the Board may delegate to one or more executive officers of the
Company the power to make Awards and exercise such other powers under the Plan
as the Board
<PAGE> 24

may determine, provided that the Board shall fix the maximum number of shares
subject to Awards and the maximum number of shares for any one Participant to be
made by such executive officers.

(c) Appointment of Committees. To the extent permitted by applicable
law, the Board may delegate any or all of its powers under the Plan to one or
more committees or subcommittees of the Board (a "Committee"). All references in
the Plan to the "Board" shall mean the Board or a Committee of the Board or the
executive officer referred to in Section 3(b) to the extent that the Board's
powers or authority under the Plan have been delegated to such Committee or
executive officer.

4. Stock Available for Awards

(a) Number of Shares. Subject to adjustment under Section 8, Awards may
be made under the Plan for up to 2,000,000 shares of common stock, $0.01 par
value per share, of the Company (the "Common Stock"). If any Award expires or is
terminated, surrendered or canceled without having been fully exercised or is
forfeited in whole or in part or results in any Common Stock not being issued,
the unused Common Stock covered by such Award shall again be available for the
grant of Awards under the Plan, subject, however, in the case of Incentive Stock
Options (as hereinafter defined), to any limitation required under the Code.
Shares issued under the Plan may consist in whole or in part of authorized but
unissued shares or treasury shares.

(b) Per-Participant Limit. Subject to adjustment under Section 8, the
maximum number of shares of Common Stock with respect to which an Award may be
granted to any Participant under the Plan shall be 500,000 per calendar year.
The per-Participant limit described in this Section 4(b) shall be construed and
applied consistently with Section 162(m) of the Code.

5. Stock Options

(a) General. The Board may grant options to purchase Common Stock
(each, an "Option") and determine the number of shares of Common Stock to be
covered by each Option, the exercise price of each Option and the conditions and
limitations applicable to the exercise of each Option, including conditions
relating to applicable federal or state securities laws, as it considers
necessary or advisable. An Option which is not intended to be an Incentive Stock
Option (as hereinafter defined) shall be designated a "Nonstatutory Stock
Option".

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<PAGE> 25
(b) Incentive Stock Options. An Option that the Board intends to be an
"incentive stock option" as defined in Section 422 of the Code (an "Incentive
Stock Option") shall only be granted to employees of the Company and shall be
subject to and shall be construed consistently with the requirements of Section
422 of the Code. The Company shall have no liability to a Participant, or any
other party, if an Option (or any part thereof) which is intended to be an
Incentive Stock Option is not an Incentive Stock Option.

(c) Exercise Price. The Board shall establish the exercise price at
the time each Option is granted and specify it in the applicable option
agreement.

(d) Duration of Options. Each Option shall be exercisable at such
times and subject to such terms and conditions as the Board may specify in the
applicable option agreement; provided, however, that no Option will be granted
for a term in excess of 10 years.

(e) Exercise of Option. Options may be exercised by delivery to the
Company of a written notice of exercise signed by the proper person or by any
other form of notice (including electronic notice) approved by the Board
together with payment in full as specified in Section 5(f) for the number of
shares for which the Option is exercised.

(f) Payment Upon Exercise. Common Stock purchased upon the exercise of
an Option granted under the Plan shall be paid for as follows:

(1) in cash or by check, payable to the order of the Company;

(2) except as the Board may, in its sole discretion, otherwise
provide in an option agreement, (i) delivery of an irrevocable and unconditional
undertaking by a creditworthy broker to deliver promptly to the Company
sufficient funds to pay the exercise price, (ii) delivery by the Participant to
the Company of a copy of irrevocable and unconditional instructions to a
creditworthy broker to deliver promptly to the Company cash or a check
sufficient to pay the exercise price, or (iii) delivery of shares of Common
Stock owned by the Participant valued at their fair market value as determined
by (or in a manner approved by) the Board in good faith ("Fair Market Value"),
which Common Stock was owned by the Participant at least six months prior to
such delivery;

(3) to the extent permitted by the Board, in its sole discretion
(i) by delivery of a promissory note of the Participant to the Company on terms
determined by the Board, or (ii) by payment of such other lawful consideration
as the Board may determine; or

(4) any combination of the above permitted forms of payment.

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<PAGE> 26
6. Restricted Stock

(a) Grants. The Board may grant Awards entitling recipients to acquire
shares of Common Stock, subject to the right of the Company to repurchase all or
part of such shares at their issue price or other stated or formula price (or to
require forfeiture of such shares if issued at no cost) from the recipient in
the event that conditions specified by the Board in the applicable Award are not
satisfied prior to the end of the applicable restriction period or periods
established by the Board for such Award (each, "Restricted Stock Award").

(b) Terms and Conditions. The Board shall determine the terms and
conditions of any such Restricted Stock Award, including the conditions for
repurchase (or forfeiture) and the issue price, if any. Any stock certificates
issued in respect of a Restricted Stock Award shall be registered in the name of
the Participant and, unless otherwise determined by the Board, deposited by the
Participant, together with a stock power endorsed in blank, with the Company (or
its designee). At the expiration of the applicable restriction periods, the
Company (or such designee) shall deliver the certificates no longer subject to
such restrictions to the Participant or if the Participant has died, to the
beneficiary designated, in a manner determined by the Board, by a Participant to
receive amounts due or exercise rights of the Participant in the event of the
Participant's death (the "Designated Beneficiary"). In the absence of an
effective designation by a Participant, Designated Beneficiary shall mean the
Participant's estate.

7. Other Stock-Based Awards

The Board shall have the right to grant other Awards based upon the
Common Stock having such terms and conditions as the Board may determine,
including the grant of shares based upon certain conditions, the grant of
securities convertible into Common Stock and the grant of stock appreciation
rights.

8. Adjustments for Changes in Common Stock and Certain Other Events

(a) Changes in Capitalization. In the event of any stock split,
reverse stock split, stock dividend, recapitalization, combination of shares,
reclassification of shares, spin-off or other similar change in capitalization
or event, or any distribution to holders of Common Stock other than a normal
cash dividend, (i) the number and class of securities available under this Plan,
(ii) the per-Participant limit set forth in Section 4(b), (iii) the number and
class of securities and exercise price per share subject to each outstanding
Option, (iv) the repurchase price per share subject to each outstanding
Restricted Stock Award, and (v) the terms of each other outstanding Award shall
be appropriately adjusted by the Company (or substituted Awards may be made, if
applicable) to the extent the Board shall determine, in good faith, that such an
adjustment (or substitution) is necessary and appropriate. If this Section 8(a)

4
<PAGE> 27
applies and Section 8(c) also applies to any event, Section 8(c) shall be
applicable to such event, and this Section 8(a) shall not be applicable.

(b) Liquidation or Dissolution. In the event of a proposed liquidation
or dissolution of the Company, the Board shall upon written notice to the
Participants provide that all then unexercised Options will (i) become
exercisable in full as of a specified time at least 10 business days prior to
the effective date of such liquidation or dissolution and (ii) terminate
effective upon such liquidation or dissolution, except to the extent exercised
before such effective date. The Board may specify the effect of a liquidation or
dissolution on any Restricted Stock Award or other Award granted under the Plan
at the time of the grant of such Award.

(1) Definition. An "Acquisition Event" shall mean: (a) any merger
or consolidation of the Company with or into another entity as a result of which
the Common Stock is converted into or exchanged for the right to receive cash,
securities or other property or (b) any exchange of shares of the Company for
cash, securities or other property pursuant to a statutory share exchange
transaction.

(2) Consequences of an Acquisition Event on Options. Upon the
occurrence of an Acquisition Event, or the execution by the Company of any
agreement with respect to an Acquisition Event, the Board shall provide that all
outstanding Options shall be assumed, or equivalent options shall be
substituted, by the acquiring or succeeding corporation (or an affiliate
thereof), provided that any options substituted for Incentive Stock Options
shall satisfy, in the determination of the Board, the requirements of Section
424(a) of the Code. Notwithstanding the foregoing, if the acquiring or
succeeding corporation (or an affiliate thereof) does not agree to assume, or
substitute for, such Options, then the Board shall, upon written notice to the
Participants, provide that all then unexercised Options will become exercisable
in full as of a specified time (the "Acceleration Time") prior to the
Acquisition Event and will terminate immediately prior to the consummation of
such Acquisition Event, except to the extent exercised by the Participants
before the consummation of such Acquisition Event; provided, however, that in
the event of an Acquisition Event under the terms of which holders of Common
Stock will receive upon consummation thereof a cash payment for each share of
Common Stock surrendered pursuant to such Acquisition Event (the "Acquisition
Price"), then the Board may instead provide that all outstanding Options shall
terminate upon consummation of such Acquisition Event and that each Participant
shall receive, in exchange therefor, a cash payment equal to the amount (if any)
by which (A) the Acquisition Price multiplied by the number of shares of Common
Stock subject to such outstanding Options (whether or not then exercisable),
exceeds (B) the aggregate exercise price of such Options.

5
<PAGE> 28
(3) Consequences of an Acquisition Event on Restricted Stock
Awards. Upon the occurrence of an Acquisition Event, the repurchase and other
rights of the Company under each outstanding Restricted Stock Award shall inure
to the benefit of the Company's successor and shall apply to the cash,
securities or other property which the Common Stock was converted into or
exchanged for pursuant to such Acquisition Event in the same manner and to the
same extent as they applied to the Common Stock subject to such Restricted Stock
Award.

(4) Consequences of an Acquisition Event on Other Awards. The
Board shall specify the effect of an Acquisition Event on any other Award
granted under the Plan at the time of the grant of such Award.

9. General Provisions Applicable to Awards

(a) Transferability of Awards. Except as the Board may otherwise
determine or provide in an Award, Awards shall not be sold, assigned,
transferred, pledged or otherwise encumbered by the person to whom they are
granted, either voluntarily or by operation of law, except by will or the laws
of descent and distribution, and, during the life of the Participant, shall be
exercisable only by the Participant. References to a Participant, to the extent
relevant in the context, shall include references to authorized transferees.

(b) Documentation. Each Award shall be evidenced by a written
instrument in such form as the Board shall determine. Each Award may contain
terms and conditions in addition to those set forth in the Plan.

(c) Board Discretion. Except as otherwise provided by the Plan, each
Award may be made alone or in addition or in relation to any other Award. The
terms of each Award need not be identical, and the Board need not treat
Participants uniformly.

(d) Termination of Status. The Board shall determine the effect on an
Award of the disability, death, retirement, authorized leave of absence or other
change in the employment or other status of a Participant and the extent to
which, and the period during which, the Participant, the Participant's legal
representative, conservator, guardian or Designated Beneficiary may exercise
rights under the Award.

(e) Withholding. Each Participant shall pay to the Company, or make
provision satisfactory to the Board for payment of, any taxes required by law to
be withheld in connection with Awards to such Participant no later than the date
of the event creating the tax liability. Except as the Board may otherwise
provide in an Award, Participants may satisfy such tax obligations in whole or
in part by delivery of shares of Common Stock, including shares retained from
the Award creating the

6
<PAGE> 29
tax obligation, valued at their Fair Market Value. The Company may, to the
extent permitted by law, deduct any such tax obligations from any payment of any
kind otherwise due to a Participant.

(f) Amendment of Award. The Board may amend, modify or terminate any
outstanding Award, including but not limited to, substituting therefor another
Award of the same or a different type, changing the date of exercise or
realization, and converting an Incentive Stock Option to a Nonstatutory Stock
Option, provided that the Participant's consent to such action shall be required
unless the Board determines that the action, taking into account any related
action, would not materially and adversely affect the Participant.

(g) Conditions on Delivery of Stock. The Company will not be obligated
to deliver any shares of Common Stock pursuant to the Plan or to remove
restrictions from shares previously delivered under the Plan until (i) all
conditions of the Award have been met or removed to the satisfaction of the
Company, (ii) in the opinion of the Company's counsel, all other legal matters
in connection with the issuance and delivery of such shares have been satisfied,
including any applicable securities laws and any applicable stock exchange or
stock market rules and regulations, and (iii) the Participant has executed and
delivered to the Company such representations or agreements as the Company may
consider appropriate to satisfy the requirements of any applicable laws, rules
or regulations.

(h) Acceleration. The Board may at any time provide that any Options
shall become immediately exercisable in full or in part, that any Restricted
Stock Awards shall be free of restrictions in full or in part or that any other
Awards may become exercisable in full or in part or free of some or all
restrictions or conditions, or otherwise realizable in full or in part, as the
case may be.

10. Miscellaneous

(a) No Right To Employment or Other Status. No person shall have any
claim or right to be granted an Award, and the grant of an Award shall not be
construed as giving a Participant the right to continued employment or any other
relationship with the Company. The Company expressly reserves the right at any
time to dismiss or otherwise terminate its relationship with a Participant free
from any liability or claim under the Plan, except as expressly provided in the
applicable Award.

(b) No Rights As Stockholder. Subject to the provisions of the
applicable Award, no Participant or Designated Beneficiary shall have any rights
as a stockholder with respect to any shares of Common Stock to be distributed
with respect to an Award until becoming the record holder of such shares.
Notwithstanding the foregoing, in the event the Company effects a split of the

7
<PAGE> 30
Common Stock by means of a stock dividend and the exercise price of and the
number of shares subject to such Option are adjusted as of the date of the
distribution of the dividend (rather than as of the record date for such
dividend), then an optionee who exercises an Option between the record date and
the distribution date for such stock dividend shall be entitled to receive, on
the distribution date, the stock dividend with respect to the shares of Common
Stock acquired upon such Option exercise, notwithstanding the fact that such
shares were not outstanding as of the close of business on the record date for
such stock dividend.

(c) Effective Date and Term of Plan. The Plan shall become effective on
the date on which it is adopted by the Company's stockholders. No Awards shall
be granted under the Plan after March 24, 2008, but Awards previously granted
may extend beyond that date.

(d) Amendment of Plan. The Board may amend, suspend or terminate the
Plan or any portion thereof at any time, provided that to the extent required by
Section 162(m), no Award granted to a Participant designated as subject to
Section 162(m) by the Board after the date of such amendment shall become
exercisable, realizable or vested, as applicable to such Award (to the extent
that such amendment to the Plan was required to grant such Award to a particular
Participant), unless and until such amendment shall have been approved by the
Company's stockholders as required by Section 162(m) (including the vote
required under Section 162(m)).

(e) Governing Law. The provisions of the Plan and all Awards made
hereunder shall be governed by and interpreted in accordance with the laws of
the State of Delaware, without regard to any applicable conflicts of law.

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<PAGE> 31
SAPIENT CORPORATION

1996 EMPLOYEE STOCK PURCHASE PLAN

The purpose of this Plan is to provide eligible employees of Sapient
Corporation, a Delaware corporation (the "Company"), and certain of its
subsidiaries with opportunities to purchase shares of the Company's common
stock, $.01 par value (the "Common Stock"), commencing on July 1, 1996.
Six hundred and sixty thousand (660,000) shares of Common Stock in the aggregate
have been approved for this purpose.

1. Administration. The Plan will be administered by the Company's
Board of Directors (the "Board") or by a Committee appointed by the Board (the
"Committee"). The Board or the Committee has authority to make rules and
regulations for the administration of the Plan and its interpretation and
decisions with regard thereto shall be final and conclusive.

2. Eligibility. Participation in the Plan will neither be permitted
nor denied contrary to the requirements of Section 423 of the Internal Revenue
Code of 1986, as amended (the "Code"), and regulations promulgated thereunder.
All employees of the Company, including Directors who are employees, and all
employees of any subsidiary of the Company (as defined in Section 424(f) of the
Code) designated by the Board or the Committee from time to time (a "Designated
Subsidiary"), are eligible to participate in any one or more of the offerings
of Options (as defined in Section 9) to purchase Common Stock under the Plan
provided that:

(a) they are customarily employed by the Company or a Designated
Subsidiary for more than 20 hours a week and for more than five months
in a calendar year; and

(b) they have been employed by the Company or a Designated
Subsidiary for at least one day prior to enrolling in the Plan; and

(c) they are employees of the Company or a Designated Subsidiary
on the first day of the applicable Plan Period (as defined below).

No employee may be granted an option hereunder if such employee,
immediately after the option is granted, owns 5% or more of the total combined
voting power or value of the stock of the Company or any subsidiary. For
purposes of the preceding sentence, the attribution rules of Section 424(d) of
the Code shall apply in determining the stock ownership of an employee, and all
stock which the employee has a contractual right to purchase shall be treated as
stock owned by the employee.

<PAGE> 32
3. Offerings. The Company will make twelve semiannual offerings
("Offerings") to employees to purchase stock under this Plan. Offerings will
begin each July 1 and January 1, or the first business day thereafter, beginning
July 1, 1996 (the "Offering Commencement Dates"). Each Offering Commencement
Date will begin a six (6) month period (a "Plan Period") during which payroll
deductions will be made and held for the purchase of Common Stock at the end of
the Plan Period. The maximum number of shares which may be issued in any one
Offering is (i) with respect to the first six offerings under the Plan, 50,000
shares, and (ii) with respect to the seventh through twelfth offerings under the
Plan, 60,000 shares, plus, in each case, any unpurchased shares available from
previous Offerings.

4. Participation. An employee eligible on the Offering Commencement
Date of any Offering may participate in such Offering by completing and
forwarding a payroll deduction authorization form to the employee's appropriate
payroll office at least 15 days prior to the applicable Offering Commencement
Date. The form will authorize a regular payroll deduction from the Compensation
received by the employee during the Plan Period. Unless an employee files a new
form or withdraws from the Plan, his deductions and purchases will continue at
the same rate for future Offerings under the Plan as long as the Plan remains in
effect.

The term "Compensation" means the amount of money reportable on the
employee's Federal Income Tax Withholding Statement, including incentive or
bonus awards and sales commissions, but excluding allowances and reimbursements
for expenses (such as relocation allowances and travel expenses), income or
gains on the exercise of Company stock options or stock appreciation rights and
similar items, whether or not shown on the employee's Federal Income Tax
Withholding Statement, unless otherwise determined by the Board or the
Committee.

5. Deductions. The Company will maintain payroll deduction accounts
for all participating employees. With respect to any Offering made under this
Plan, an employee may authorize a payroll deduction at a rate between 1% and 10%
of the Compensation he or she receives during the Plan Period, with any change
in compensation during the Plan Period to result in an automatic corresponding
change in the dollar amount withheld.

No employee may be granted an Option (as defined in Section 9) which
permits his rights to purchase Common Stock under this Plan and any other
employee stock purchase plan (as defined in Section 423(b) of the Code) of the
Company and its subsidiaries, to accrue at a rate which exceeds $25,000 of the
fair market value of such Common Stock (determined at the Offering Commencement
Date of the Plan Period) for each calendar year in which the Option is
outstanding at any time.

6. Deduction Changes. An employee may decrease or discontinue his
payroll deduction once during any Plan Period, by filing a new payroll deduction
authorization form. However, an employee may not increase his payroll deduction
during a Plan Period. If an employee elects to discontinue his payroll
deductions during a Plan Period, but does not elect to withdraw his funds
pursuant to Section 8

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<PAGE> 33
hereof, funds deducted prior to his election to discontinue will be applied to
the purchase of Common Stock on the Exercise Date (as defined below).

7. Interest. Interest will not be paid on any employee accounts,
except to the extent that the Board or the Committee, in its sole discretion,
elects to credit employee accounts with interest at such per annum rate as it
may from time to time determine.

8. Withdrawal of Funds. An employee may at any time prior to the
close of business on the last business day in a Plan Period and for any reason
permanently draw out the balance accumulated in the employee's account and
thereby withdraw from participation in an Offering. Partial withdrawals are not
permitted. The employee may not begin participation again during the remainder
of the Plan Period. The employee may participate in any subsequent Offering in
accordance with terms and conditions established by the Board or the Committee.

9. Purchase of Shares. On the Offering Commencement Date of each Plan
Period, the Company will grant to each eligible employee who is then a
participant in the Plan an option ("Option") to purchase on the last business
day of such Plan Period (the "Exercise Date"), at the Option Price hereinafter
provided for, the largest number of whole shares of Common Stock of the Company
as does not exceed the number of shares determined by dividing $12,500 by the
closing price (as defined below) on the Offering Commencement Date of such Plan
Period.

The purchase price for each share purchased will be 85% of the closing
price of the Common Stock on (i) the first business day of such Plan Period or
(ii) the Exercise Date, whichever closing price shall be less. Such closing
price shall be (a) the closing price on any national securities exchange on
which the Common Stock is listed, (b) the closing price of the Common Stock on
the Nasdaq National Market or (c) the average of the closing bid and asked
prices in the over-the-counter-market, whichever is applicable, as published in
The Wall Street Journal. If no sales of Common Stock were made on such a day,
the price of the Common Stock for purposes of clauses (a) and (b) above shall be
the reported price for the next preceding day on which sales were made.

Each employee who continues to be a participant in the Plan on the
Exercise Date shall be deemed to have exercised his Option at the Option Price
on such date and shall be deemed to have purchased from the Company the number
of full shares of Common Stock reserved for the purpose of the Plan that his
accumulated payroll deductions on such date will pay for, but not in excess of
the maximum number determined in the manner set forth above.

In the event that the total number of shares of Common Stock that would
otherwise be purchased in any Offering with accumulated payroll deductions of

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<PAGE> 34
participants exceeds the maximum number of shares available in that Offering,
the Board or the Committee will allot the shares then available on a pro rata
basis.

Any balance remaining in an employee's payroll deduction account at the
end of a Plan Period will be automatically refunded to the employee.

10. Issuance of Certificates. Certificates representing shares of
Common Stock purchased under the Plan may be issued only in the name of the
employee, in the name of the employee and another person of legal age as joint
tenants with rights of survivorship, or (in the Company's sole discretion) in
the name of a brokerage firm, bank or other nominee holder designated by the
employee. The Company may, in its sole discretion and in compliance with
applicable laws, authorize the use of book entry registration of shares in lieu
of issuing stock certificates.

11. Rights on Retirement, Death or Termination of Employment. In the
event of a participating employee's termination of employment prior to the last
business day of a Plan Period, no payroll deduction shall be taken from any pay
due and owing to an employee and the balance in the employee's account shall be
paid to the employee or, in the event of the employee's death, (a) to a
beneficiary previously designated in a revocable notice signed by the employee
(with any spousal consent required under state law) or (b) in the absence of
such a designated beneficiary, to the executor or administrator of the
employee's estate or (c) if no such executor or administrator has been appointed
to the knowledge of the Company, to such other person(s) as the Company may, in
its discretion, designate. If, prior to the last business day of the Plan
Period, the Designated Subsidiary by which an employee is employed shall cease
to be a subsidiary of the Company, or if the employee is transferred to a
subsidiary of the Company that is not a Designated Subsidiary, the employee
shall be deemed to have terminated employment for the purposes of this Plan.

12. Optionees Not Stockholders. Neither the granting of an Option to
an employee nor the deductions from his pay shall constitute such employee a
stock holder of the shares of Common Stock covered by an Option under this Plan
until such shares have been purchased by and issued to him.

13. Rights Not Transferable. Rights under this Plan are not
transferable by a participating employee other than by will or the laws of
descent and distribution, and are exercisable during the employee's lifetime
only by the employee.

14. Application of Funds. All funds received or held by the Company
under this Plan may be combined with other corporate funds and may be used for
any corporate purpose.

15. Adjustment in Case of Changes Affecting Common Stock. In the event
of a subdivision of outstanding shares of Common Stock, or the payment of a

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<PAGE> 35
dividend in Common Stock, the number of shares approved for this Plan, and the
share limitation set forth in Section 9, shall be increased proportionately, and
such other adjustment shall be made as may be deemed equitable by the Board or
the Committee. In the event of any other change affecting the Common Stock, such
adjustment shall be made as may be deemed equitable by the Board or the
Committee to give proper effect to such event.

16. Merger. If the Company shall at any time merge or consolidate with
another corporation and the holders of the capital stock of the Company
immediately prior to such merger or consolidation continue to hold at least 80%
by voting power of the capital stock of the surviving corporation ("Continuity
of Control"), the holder of each Option then outstanding will thereafter be
entitled to receive at the next Exercise Date upon the exercise of such Option
for each share as to which such Option shall be exercised the securities or
property which a holder of one share of the Common Stock was entitled to upon
and at the time of such merger or consolidation, and the Board or the Committee
shall take such steps in connection with such merger or consolidation as the
Board or the Committee shall deem necessary to assure that the provisions of
Section 15 shall thereafter be applicable, as nearly as reasonably may be, in
relation to the said securities or property as to which such holder of such
Option might thereafter be entitled to receive thereunder.

In the event of a merger or consolidation of the Company with or into
another corporation which does not involve Continuity of Control, or of a sale
of all or substantially all of the assets of the Company while unexercised
Options remain outstanding under the Plan, (a) subject to the provision of
clauses (b) and (c), after the effective date of such transaction, each holder
of an outstanding Option shall be entitled, upon exercise of such Option, to
receive in lieu of shares of Common Stock, shares of such stock or other
securities as the holders of shares of Common Stock received pursuant to the
terms of such transaction; or (b) all outstanding Options may be cancelled by
the Board or the Committee as of a date prior to the effective date of any such
transaction and all payroll deductions shall be paid out to the participating
employees; or (c) all outstanding Options may be cancelled by the Board or the
Committee as of the effective date of any such transaction, provided that notice
of such cancellation shall be given to each holder of an Option, and each holder
of an Option shall have the right to exercise such Option in full based on
payroll deductions then credited to his account as of a date determined by the
Board or the Committee, which date shall not be less than ten (10) days
preceding the effective date of such transaction.

17. Amendment of the Plan. The Board may at any time, and from time to
time, amend this Plan in any respect, except that (a) if the approval of any
such amendment by the shareholders of the Company is required by Section 423 of
the Code, such amendment shall not be effected without such approval and (b) in
no

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<PAGE> 36
event may any amendment be made which would cause the Plan to fail to comply
with Section 423 of the Code.

18. Termination of the Plan. This Plan shall terminate when the maximum
number of shares issuable hereunder has been purchased pursuant to this Plan. In
addition, this Plan may be terminated at any time by the Board. Upon termination
of this Plan all amounts in the accounts of participating employees shall be
promptly refunded.

19. Governmental Regulations. The Company's obligation to sell and
deliver Common Stock under this Plan is subject to listing on a national stock
exchange or quotation on the Nasdaq National Market and the approval of all
governmental authorities required in connection with the authorization, issuance
or sale of such stock.

20. Governing Law. The Plan shall be governed by Delaware law except to
the extent that such law is preempted by federal law.

21. Issuance of Shares. Shares may be issued upon exercise of an Option
from authorized but unissued Common Stock, from shares held in the treasury of
the Company, or from any other proper source.

22. Notification upon Sale of Shares. Each employee agrees, by entering
the Plan, to promptly give the Company notice of any disposition of shares
purchased under the Plan where such disposition occurs within two years after
the date of grant of the Option pursuant to which such shares were purchased.

23. Effective Date and Approval of Shareholders. The Plan shall take
effect on April 10, 1996 (the date of the closing of the Company's initial
public offering of Common Stock pursuant to the Securities Act of 1933, as
amended) subject to approval by the shareholders of the Company as required by
Section 423 of the Code, which approval must occur within twelve months of the
adoption of the Plan by the Board.

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<PAGE> 37
PROXY

SAPIENT CORPORATION
ANNUAL MEETING OF STOCKHOLDERS -- MAY 8, 1998
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned, revoking all prior proxies, hereby appoint(s) Jerry A.
Greenberg and J. Stuart Moore, and each of them, with full power of
substitution, as Proxies to represent and vote as designated hereon all shares
of stock of Sapient Corporation (the "Company") which the undersigned would be
entitled to vote if personally present at the Annual Meeting of Stockholders of
the Company to be held on Friday, May 8, 1998, at 10:00 a.m., Boston time, at
The Harvard Club, 374 Commonwealth Avenue, Boston, Massachusetts and at any
adjournment thereof.

PLEASE FILL IN, DATE, SIGN AND MAIL THIS PROXY IN THE ENCLOSED
POSTAGE-PAID RETURN ENVELOPE.

SEE REVERSE
CONTINUED AND TO BE SIGNED ON REVERSE SIDE SIDE
<PAGE> 38
X Please mark votes
as in this example.

IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR THE ELECTION OF THE CLASS
II DIRECTOR NOMINEES AND FOR PROPOSALS 2, 3, 4 AND 5.

1. To elect two Class II Directors for the For ____ Withheld ____
ensuing three years.

-----------------------------
NOMINEES: Darius W. Gaskins, Jr. _____ For both nominees
and J. Stuart Moore except as noted above

2. To approve an amendment to the For ___ Against ___ Abstain ___
Company's Amended and Restated
Certificate of Incorporation
increasing the number of authorized
shares of Common Stock from
40,000,000 to 100,000,000.

3. To approve the Company's 1998 Stock For ___ Against ___ Abstain ___
Incentive Plan and the reservation
of 2,000,000 shares of Common Stock
for issuance thereuder.

4. To approve an amendment to the For ___ Against ___ Abstain ___
Company's 1996 Employee Stock
Purchase Plan increasing the number
of shares of Common Stock for
purchase thereunder from 300,000 to
660,000 and making the other changes
described in the proxy statement.

5. To ratify the appointment of KPMG For ___ Against ___ Abstain ___
Peat Marwick LLP as independent
auditors of the Company for the
current year.

MARK HERE MARK HERE
FOR ADDRESS IF YOU PLAN
CHANGE AND TO ATTEND
NOTE AT LEFT _____ THE MEETING _____

IN THEIR DISCRETION, THE PROXIES ARE
AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE
MEETING OR ANY ADJOURNMENT THEREOF.

Please sign exactly as name appears
hereon. If the stock is registered in the
names of two or more persons, each should
sign. When signing as an executor,
administrator, trustee, guardian, or
attorney, please give full title as such.
If a corporation, please sign in full
corporate name by an authorized officer.
If a partnership, please sign in full
partnership name by an authorized person.

Signature:___________________________ Date:_______________