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As filed with the Securities and Exchange Commission on February 19, 1999
Registration Statement No. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
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REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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SAPIENT CORPORATION
(Exact name of registrant as specified in its charter)
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DELAWARE 04-3130648
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
ONE MEMORIAL DRIVE
CAMBRIDGE, MASSACHUSETTS 02142
(617) 621-0200
(Address, including zip code, and
telephone number, including area code,
of registrant's principal
executive offices)
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DEBORAH ENGLAND GRAY
GENERAL COUNSEL
SAPIENT CORPORATION
ONE MEMORIAL DRIVE
CAMBRIDGE, MASSACHUSETTS 02142
(617) 621-0200
(Name, address, including zip code, and
telephone number, including area code,
of agent for service)
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: AS SOON AS
PRACTICABLE AFTER THIS REGISTRATION STATEMENT BECOMES EFFECTIVE.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. [X]
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If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ] 333-_______.
If this form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. o 333-_______.
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
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Proposed Proposed
Maximum Maximum
Amount Offering Aggregate
Title of Each Class of to be Price Offering Amount of
Securities to be Registered Registered Per Share Price Registration Fee
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<S> <C> <C> <C> <C>
Common Stock, $.01 par value
per share............................ 73,250 $68.125(1) $4,990,157(1) $1,388
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</TABLE>
(1) Estimated solely for purposes of calculating the registration fee
pursuant to Rule 457(c) under the Securities Act and based upon the
average of the high and low prices on the Nasdaq National Market on
February 12, 1999.
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
SHALL DETERMINE.
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THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS DECLARED EFFECTIVE. THIS PROSPECTUS IS NOT
AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED FEBRUARY 19, 1999
PROSPECTUS
SAPIENT CORPORATION
73,250 SHARES OF COMMON STOCK
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In August 1998, Sapient Corporation issued 498,314 shares of common
stock to the former stockholders of Studio Archetype, Inc. in connection with
our acquisition of that company. This prospectus relates to resales of some of
those shares by certain former stockholders of Studio. We will not receive any
of the proceeds from the sale of the shares.
Sapient has agreed to pay certain expenses of registering the shares
being offered by the selling stockholders. The selling stockholders will pay all
underwriting discounts and selling commissions, if any, in connection with the
sale of the shares.
The selling stockholders, or their pledgees, donees, transferees or
other successors in interest, may sell the shares in public or private
transactions at prevailing market prices, at prices related to prevailing market
prices or at privately negotiated prices. Sapient's common stock is traded on
the Nasdaq National Market under the symbol SAPE. On February 18, 1999, the
closing sale price of our common stock on Nasdaq was $70.125 per share.
THE SECURITIES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" BEGINNING ON PAGE 7.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this prospectus is February __, 1999.
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TABLE OF CONTENTS
Page
Where to Find More Information................................................3
Incorporation of Certain Documents by Reference...............................3
Special Note Regarding Forward-looking Information............................4
Summary Description of Our Business...........................................5
Recent Developments...........................................................6
Risk Factors..................................................................7
Use of Proceeds..............................................................13
The Studio Acquisition.......................................................13
Selling Stockholders.........................................................13
Description of Capital Stock.................................................15
Plan of Distribution.........................................................17
Legal Matters................................................................19
Experts ....................................................................19
WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION DIFFERENT
FROM THAT CONTAINED IN THIS PROSPECTUS. THE SELLING STOCKHOLDERS ARE OFFERING TO
SELL, AND SEEKING OFFERS TO BUY, SHARES OF SAPIENT COMMON STOCK ONLY IN
JURISDICTIONS WHERE OFFERS AND SALES ARE PERMITTED. THE INFORMATION CONTAINED IN
THIS PROSPECTUS IS ACCURATE ONLY AS OF THE DATE OF THIS PROSPECTUS, REGARDLESS
OF THE TIME OF DELIVERY OF THIS PROSPECTUS OR OF ANY SALE OF THE SHARES.
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WHERE TO FIND MORE INFORMATION
We file annual, quarterly, and current reports, proxy statements, and
other documents with the Securities and Exchange Commission and with Nasdaq.
Here are ways you can access this information:
WHAT IS AVAILABLE WHERE TO GET IT
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SEC's Public Reference Room
Judiciary Plaza Building
450 Fifth Street, N.W., Room 1024
Washington, D.C. 20549
Paper copies of information
The Nasdaq Stock Market, Inc.
1735 K Street, N.W.
Washington, D.C. 20006
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On-line information SEC's Internet website at
http://www.sec.gov
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Information about the Call the SEC at
SEC's Public Reference Room 1-800-SEC-0330
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This prospectus is part of a registration statement that we filed with
the SEC. The registration statement contains more information than this
prospectus regarding Sapient and its common stock, including certain exhibits
and schedules. You can get a copy of the registration statement from the sources
listed above.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows us to incorporate into this prospectus information we
file with the SEC in other documents. This means that we can disclose important
information to you by referring to other documents that contain that
information. The information incorporated by reference is considered to be part
of this prospectus, and information that we file after February 19, 1999 (the
initial filing date of this prospectus) with the SEC will automatically update
and may supersede this information. We are incorporating by reference the
documents listed below and any future filings we make with the SEC under
Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 prior
to the sale of all the shares covered by this prospectus.
The following documents filed by Sapient with the SEC are incorporated
herein by reference:
(i) The Company's Annual Report on Form 10-K for the year
ended December 31, 1997, filed with the Commission on
March 13, 1998, as
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amended by Form 10-K/As filed with the Commission on
March 18, 1998 and March 30, 1998;
(ii) The Company's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1998, filed with the
Commission on May 14, 1998;
(iii) The Company's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1998, filed with the
Commission on August 13, 1998;
(iv) The Company's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1998, filed with the
Commission on November 16, 1998;
(v) The Company's Current Report on Form 8-K dated March
17, 1998, filed with the Commission on March 18,
1998;
(vi) The Company's Current Report on Form 8-K dated August
25, 1998, filed with the Commission on August 31,
1998, as amended by Form 8-K/A filed with the
Commission on November 4, 1998; and
(vii) The Company's Registration Statement on Form 8-A,
filed with the Commission on March 26, 1996, as
amended by Form 8-A/A on March 28, 1996.
You may request a copy of these documents, which will be provided to
you at no cost, by telephone or by writing to:
Sapient Corporation
One Memorial Drive
Cambridge, Massachusetts 02142
Attention: Investor Relations
(617) 621-0200
SPECIAL NOTE REGARDING FORWARD-LOOKING INFORMATION
This prospectus contains or incorporates "forward-looking statements"
within the meaning of Section 27A of the Securities Act of 1933 and Section 21E
of the Securities Exchange Act of 1934. The words "believes," "anticipates,"
"plans," "expects," "may," "will," "intends," "estimates" and similar
expressions, whether in the negative or affirmative, are intended to identify
forward-looking statements. We can give no assurance that we actually will
achieve these plans, intentions or expectations. Our actual results could differ
materially from the plans, intentions and expectations disclosed in these
forward-looking statements. We have included important factors in the cautionary
statements below that we believe could cause our actual results to differ
materially from our forward-looking statements. We do not intend to update
information contained in any of our forward-looking statements.
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SUMMARY DESCRIPTION OF OUR BUSINESS
Sapient Corporation is an innovative provider of integrated management
consulting services, Internet commerce solutions and systems implementation
services. Using a proven, fixed-price model designed to ensure on-budget and
on-time delivery, we offer a variety of integrated services to help clients
rapidly achieve their critical business objectives, including:
- implementation and integration of packaged software solutions,
- custom software development,
- implementation of enterprise resource planning systems,
- production support, and
- business and operational consulting.
We target clients in information-intensive industries, including Financial
Services, Energy Services, Manufacturing, Communications, Health Care and
Government.
We deliver services using our proprietary QUADD (Quality Design and
Delivery) process. QUADD is a workshop-based methodology that emphasizes active
client participation to help visualize, prioritize and create time-critical
business and technology solutions. We believe that the QUADD process is an
important competitive differentiator that allows us and our clients to better
understand the clients' business needs, and to design, develop, integrate and
implement solutions that address those needs. The QUADD process consists of four
stages: RIP workshop, Design, Implementation and Production.
- The RIP (Rapid Implementation Plan) workshop is designed to
rapidly identify the client's needs and develop a strategy and
action plan to meet those needs.
- The Design workshop focuses on outlining the proposed process
changes and required information technology solutions.
- The Implementation stage primarily involves the development
and testing of the new applications or enhancements to
third-party packaged software applications or existing
Sapient-developed solutions.
- The Production stage primarily involves the maintenance,
enhancement and support of the solution after it is
operational.
In December 1997, we acquired EXOR Technologies, Inc., a Dallas-based
consulting and systems integration firm recognized as a leader in implementing
ERP solutions using Oracle applications. In August 1998, we acquired Studio
Archetype, Inc., a San Francisco-based company which provides consultation and
design services in the areas of Internet website design, brand and identity
design, user interface design, content development and 3D modeling and
animation.
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Our headquarters are located at One Memorial Drive, Cambridge, MA
02142, and our telephone number is (617) 621-0200. Sapient(R), QUADD(R) and
RIP(R) are registered servicemarks of Sapient and Studio Archetype(R) is a
registered servicemark of Studio, a wholly owned subsidiary of Sapient.
RECENT DEVELOPMENTS
We recently announced financial results for our fourth quarter and year
ended December 31, 1998. For the year, consolidated revenues increased 77% to
$160,372,000, from $90,360,000 for 1997. Net income for the year would have been
$20,725,000 or $0.74 per share, excluding a one-time charge of $11,100,000
(offset by a tax benefit of $4,074,000) associated with the acquisition of
Studio compared to $12,705,000 or $0.49 per share, excluding a one-time charge
of $560,000 (offset by a tax benefit of $213,000) associated with the
acquisition of EXOR for the year ended 1997. Including the one-time charges, net
income for 1998 was $13,699,000 or $0.49 per share, compared to $12,358,000 or
$0.47 per share for the year ended 1997.
Consolidated revenues for the quarter ended December 31, 1998 increased
95% to $52,454,000 from $26,965,000 for the same period in 1997. Diluted
earnings per share for the quarter was $0.21, compared to $0.14 for the same
period of 1997, excluding the one-time charge associated with the acquisition of
EXOR. Net income for the quarter ended December 31, 1998 was $6,012,000,
representing a 68 percent increase over the fourth quarter of 1997, excluding
the one-time charge associated with the acquisition of EXOR.
Although we reported our third quarter results of 1998 in accordance
with what we believed were established accounting practice and valuation
methodologies for acquired in-process research and development, we have taken
the initiative to conform our accounting for acquisition-related in-process
research and development charges in response to recent SEC interpretative
guidelines. Accordingly, we have reduced our research and development charge
from $14,800,000 we recorded in the third quarter of 1998 to reflect the
acquisition of Studio to $11,100,000. The $3,700,000 reduction in the value of
the in-process technology will be capitalized as goodwill and amortized over 7
years. Amortization of intangibles related to the Studio acquisition for the
fourth quarter and total year amounted to $559,000 and $687,000, respectively.
The impact on this restatement for the third quarter of 1998 is to reduce the
previously reported net loss from $3,969,000 to $1,627,000.
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RISK FACTORS
You should carefully consider the risks described below before making
an investment decision. If any of the events described below actually occur, our
business, financial condition, or results of operations could be materially
adversely affected. In such case, the trading price of our common stock could
decline and you may lose all or part of your investment.
This prospectus contains forward-looking statements that involve risks
and uncertainties. Our actual results could differ materially from those
anticipated in such forward-looking statements as a result of a variety of
factors, including those set forth in the following risk factors and elsewhere
in, or incorporated by reference into, this prospectus. In evaluating an
investment in the shares, you should consider carefully the following risk
factors in addition to the other information presented in this prospectus or
incorporated by reference into this prospectus.
WE MAY HAVE DIFFICULTY MANAGING OUR GROWTH
Our growth has placed significant demands on our management and other
resources. Our revenues increased approximately 77% in 1998 from approximately
$90.3 million in 1997 to approximately $160.3 million in 1998. Our staff
increased from 817 full-time employees at December 31, 1997 to 1,450 at December
31, 1998. Our future success will depend on our ability to manage our growth
effectively, including by:
- developing and improving our operational, financial and other
internal systems,
- improving our business development capabilities,
- continuing to train, motivate and manage our employees,
- continuing to set fixed-price fees accurately,
- maintaining high rates of employee utilization, and
- maintaining project quality.
Our management has limited experience managing a business of Sapient's size or
managing a public company. If we are unable to manage our growth and projects
effectively, such inability could have a material adverse effect on the quality
of our services and products, our ability to retain key personnel and our
business, financial condition and results of operations.
OUR BUSINESS COULD BE ADVERSELY AFFECTED IF WE ARE UNABLE TO INTEGRATE
BUSINESSES WE ACQUIRE
In December 1997, we completed the acquisition of EXOR and in August
1998, we completed the acquisition of Studio. The anticipated benefits from any
acquisition, including our acquisitions of EXOR and Studio, may not be achieved
unless the operations of the
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acquired business are successfully combined with those of Sapient in a timely
manner. The integration of acquisitions requires substantial attention from
management. The diversion of the attention of management, and any difficulties
encountered in the transition process, could have an adverse impact on our
business, financial condition and results of operations. In addition, the
process of integrating various businesses could cause the interruption of, or a
loss of momentum in, the activities of some or all of these businesses, which
could have an adverse effect on our business, financial condition and results of
operations.
WE MAY NOT BE ABLE TO ATTRACT AND RETAIN PROFESSIONAL STAFF
Our business is labor intensive. Our success will depend in large part
upon our ability to attract, retain, train and motivate highly-skilled
employees, particularly project managers and other senior technical personnel.
There is significant competition for employees with the skills required to
perform the services we offer. Qualified project managers and senior technical
staff are in great demand and are likely to remain a limited resource for the
foreseeable future. There can be no assurance that we will be successful in
attracting a sufficient number of highly skilled employees in the future, or
that we will be successful in retaining, training and motivating the employees
we are able to attract. Any inability to retain, train and motivate our
employees could impair our ability to adequately manage and complete our
existing projects and to bid for or obtain new projects. If our employees are
unable to achieve expected performance levels, our business, financial condition
and results of operations could be adversely affected.
THE PRICE OF OUR COMMON STOCK IS SUBJECT TO SIGNIFICANT FLUCTUATION
The trading price of our common stock could be subject to wide
fluctuations in response to quarterly variations in:
- operating results,
- changes in earnings estimates by analysts,
- announcements of new contracts or service offerings by us or
our competitors,
- general economic or stock market conditions unrelated to our
operating performance, and
- other events or factors.
OUR BUSINESS IS SENSITIVE TO ECONOMIC DOWNTURNS
Our revenues and results of operations will be influenced by general
economic conditions. In the event of a general economic downturn or a recession
in the United States, Europe or Asia, our clients and potential clients may
substantially reduce their information technology and related budgets. Such an
economic downturn may materially and adversely affect our business, financial
condition and results of operations.
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WE DEPEND HEAVILY ON OUR PRINCIPAL CLIENTS
We have derived, and believe that we will continue to derive, a
significant portion of our revenues from a limited number of large clients. In
1998, our five largest clients accounted for approximately 30% of our revenues,
with four clients each accounting for more than 5% of such revenues. The volume
of work performed for specific clients is likely to vary from year to year, and
a major client in one year may not use our services in a subsequent year. The
loss of any large client could have a material adverse effect on our business,
financial condition and results of operations. In addition, revenues from a
large client may constitute a significant portion of our total revenues in a
particular quarter.
WE DEPEND HEAVILY ON LARGE PROJECTS
Most of our fixed-price contracts are terminable by the client
following limited notice and without significant penalty. The cancellation or a
significant reduction in the scope of a large project could have a material
adverse effect on our business, financial condition and results of operations.
In addition, while the QUADD process is designed as an integrated approach, each
stage of the QUADD process represents a separate contractual commitment at the
end of which the client may elect not to proceed to the next stage. A decision
by any large client not to proceed with a project to the stage we anticipated
could have a material adverse effect on our business, financial condition and
results of operations.
WE ENTER INTO FIXED-PRICE CONTRACTS
An important element of our strategy is to enter into fixed-price,
fixed-timeframe contracts, rather than contracts in which payment to us is
determined on a time and materials basis. Consistent with this strategy, we
intend to provide our enterprise resource planning system implementation
services, which historically have been provided by EXOR on a time and materials
basis, on a fixed-price, fixed-timeframe basis. Our failure to accurately
estimate the resources required for a project (including an enterprise resource
planning system implementation, with respect to which we have limited
experience) or our failure to complete our contractual obligations in a manner
consistent with the project plan upon which our fixed-price, fixed-timeframe
contract was based would adversely affect our overall profitability and could
have a material adverse effect on our business, financial condition and results
of operations. We have been required to commit unanticipated additional
resources to complete certain projects, which has resulted in losses on certain
contracts. We recognize that we will experience similar situations in the
future. In addition, for certain projects we may fix the price before the design
specifications are finalized, which could result in a fixed price that turns out
to be too low and therefore adversely affect our profitability.
OUR MARKETS ARE SUBJECT TO RAPID CHANGE
We have derived a significant portion of our revenues from projects
based primarily on client/server and Web-based architectures. These markets are
continuing to develop and are subject to rapid change. Our near-term success is
dependent in part on the continued acceptance of information processing systems
using client/server and Web-based architectures. Any factors negatively
affecting the acceptance of such technology could have a material adverse effect
on our business, financial condition and results of operations.
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WE MAY HAVE DIFFICULTY RESPONDING TO CHANGING TECHNOLOGY, INDUSTRY STANDARDS AND
CLIENT PREFERENCES
Our success will depend in part on our ability to develop information
technology solutions which keep pace with continuing changes in technology,
evolving industry standards and changing client preferences. There can be no
assurance that we will be successful in addressing these developments on a
timely basis or that if addressed we will be successful in the marketplace. Our
failure to address these developments could have a material adverse effect on
our business, financial condition and results of operations.
WE FACE SIGNIFICANT COMPETITION FROM A VARIETY OF SOURCES
The markets for the services we provide are highly competitive. We
believe that we currently compete principally with consulting and software
integration firms, application software vendors and internal information systems
groups. Many of these companies have significantly greater financial, technical
and marketing resources than we do and generate greater revenues and have
greater name recognition than we do. In addition, there are relatively low
barriers to entry into our markets and we have faced, and expect to continue to
face, additional competition from new entrants into our markets.
We believe that the principal competitive factors in our markets
include:
- quality of service and deliverables,
- speed of development and implementation,
- price,
- project management capability, and
- technical and business expertise.
We believe that our ability to compete also depends in part on a number of
competitive factors outside our control, including:
- the ability of our competitors to hire, retain and motivate
project managers and other senior technical staff,
- the development by others of software that is competitive with
our products and services, and
- the extent of our competitors' responsiveness to client needs.
There can be no assurance that we will be able to compete successfully with our
competitors.
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OUR OPERATING RESULTS ARE SUBJECT TO FLUCTUATIONS
Our revenues and earnings may fluctuate from quarter to quarter based
on such factors as:
- the number, size and scope of projects in which we are
engaged,
- the contractual terms and degree of completion of such
projects,
- any delays incurred in connection with projects,
- employee utilization rates (particularly utilization rates of
employees who specialize in certain third-party applications
or architectures and of recently hired employees),
- the adequacy of provisions for losses,
- the accuracy of estimates of resources required to complete
ongoing projects, and
- general economic conditions.
A high percentage of our operating expenses, particularly personnel and rent,
are fixed in advance of any particular quarter. As a result, unanticipated
variations in the number, or progress toward completion, of our projects or in
employee utilization rates may cause significant variations in operating results
in any particular quarter and could result in losses for such quarter. An
unanticipated termination of a major project, a client's decision not to proceed
to the stage of a project we anticipated or the completion during a quarter of
several major client projects, could require us to maintain underutilized
employees and could therefore have a material adverse effect on our business,
financial condition and results of operations.
OUR BUSINESS COULD BE ADVERSELY AFFECTED IF WE ARE UNABLE TO PROTECT OUR
PROPRIETARY TECHNOLOGY
Our success depends, in part, upon our proprietary QUADD methodology
and other intellectual property rights including but not limited to the research
and development projects engaged in by Studio. We rely upon a combination of
trade secret, nondisclosure and other contractual arrangements, and copyright
and trademark laws to protect our proprietary rights. We enter into
confidentiality agreements with our employees, generally require that our
consultants and clients enter into such agreements, and limit access to and
distribution of our proprietary information. There can be no assurance that the
steps taken by us in this regard will be adequate to deter misappropriation of
our proprietary information or that we will be able to detect unauthorized use
and take appropriate steps to enforce our intellectual property rights.
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WE MAY NOT HAVE THE RIGHT TO RESELL OR REUSE APPLICATIONS DEVELOPED FOR SPECIFIC
CLIENTS
A portion of our business involves the development of software
applications for specific client engagements. Ownership of such software is the
subject of negotiation and is frequently assigned to the client, although we may
retain a license for certain uses. Issues relating to the ownership of and
rights to use software applications can be complicated and there can be no
assurance that disputes will not arise that affect our ability to resell or
reuse such applications.
OTHERS COULD CLAIM THAT WE INFRINGE THEIR INTELLECTUAL PROPERTY
Although we believe that our services and products do not infringe on
the intellectual property rights of others, there can be no assurance that such
a claim will not be asserted against us in the future, or that if asserted any
such claim will be successfully defended. A successful claim against us could
materially and adversely affect our business, financial condition and results of
operations.
YEAR 2000 ISSUES MAY AFFECT OUR BUSINESS
Although we do not believe that year 2000 issues will have a
significant impact on our internal operations or on solutions developed for
clients where we have provided an express warranty regarding the year 2000
issue, there can be no assurance that we will not experience interruptions of
operations because of year 2000 problems or become involved in disputes with
clients regarding year 2000 problems involving solutions we developed or
implemented or the interaction of such solutions with other applications. Year
2000 problems could require Sapient to incur unanticipated expenses, and such
expenses could have a material adverse effect on our business, financial
condition and results of operations. Furthermore, the purchasing patterns of
clients or potential clients may be affected by year 2000 issues as companies
expend significant resources to correct their current systems for year 2000
compliance. These expenditures may result in reduced funds being available to
purchase services offered by Sapient.
OUR OFFICERS AND DIRECTORS HAVE SIGNIFICANT VOTING POWER
Messrs. Greenberg and Moore, our co-Chairmen of the Board of Directors
and co-Chief Executive Officers, beneficially own approximately 42% of our
outstanding Common Stock. As a result, these stockholders have the ability to
substantially influence and may effectively control, the outcome of corporate
actions requiring stockholder approval, including the election of directors.
This concentration of ownership may have the effect of delaying or preventing a
change in control of Sapient.
WE ARE DEPENDENT ON A NUMBER OF KEY PERSONNEL
Our success will depend in large part upon the continued services of a
number of key employees, including Sapient's founders and co-Chairmen of the
Board of Directors and co-Chief Executive Officers, Jerry A. Greenberg and J.
Stuart Moore. The employment contracts with Messrs. Greenberg and Moore and with
our other key personnel provide that employment is terminable at will by either
party. The loss of the services of either of Messrs.
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Greenberg or Moore or of one or more of our other key personnel could have a
material adverse effect on Sapient. In addition, if one or more of our key
employees resigns from Sapient to join a competitor or to form a competing
company, the loss of such personnel and any resulting loss of existing or
potential clients to any such competitor could have a material adverse effect on
our business, financial condition and results of operations. In the event of the
loss of any such personnel, there can be no assurance that we would be able to
prevent the unauthorized disclosure or use of its technical knowledge, practices
or procedures by such personnel.
USE OF PROCEEDS
We will not receive any proceeds from the sale of the shares by the
selling stockholders. Also, we will bear most of the costs of registering the
shares covered by this prospectus. Those costs include registration and filing
fees and Nasdaq listing fees and fees and expenses of our counsel and
accountants.
However, the selling stockholders will be responsible for any
underwriting discounts and commissions or expenses incurred by the selling
stockholders for brokerage, accounting, tax or legal services.
THE STUDIO ACQUISITION
We acquired all of the outstanding common stock of Studio on August 25,
1998 through a series of stock purchase agreements. As a result of the
acquisition, Studio became a wholly owned subsidiary of Sapient. The acquisition
of Studio has been treated as a taxable purchase and sale of Studio shares for
U.S. income tax purposes and has been accounted for under the purchase method of
accounting.
In exchange for the Studio stock, we issued an aggregate of 498,314
shares of Sapient common stock, which were valued at approximately $24.4 million
based on the last sale price of Sapient common stock on the Nasdaq National
Market on August 25, 1998, and paid an aggregate of $250,000 in cash to the
former stockholders of Studio. 49,829 of the shares were placed in escrow to
secure the indemnification obligations of certain of the selling stockholders.
We agreed to use our best efforts to register 351,815 of the shares for
resale by the former Studio stockholders at various dates during the twelve
months following the acquisition. In August 1998, we registered 205,315 of these
shares. We are required to register an additional 73,250 shares by May 22, 1999.
SELLING STOCKHOLDERS
The following table sets forth, to our knowledge, certain information,
as of February 4, 1999, with respect to the selling stockholders.
None of the selling stockholders holds any position or office with, has
been employed by, or has otherwise had a material relationship with Sapient or
any of its subsidiaries within the past three years, except that in connection
with the acquisition of Studio, we entered into
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<PAGE> 16
an employment letter with Clement Mok, formerly Chairman, President and Chief
Identity Architect of Studio, providing for his employment as Chief Creative
Officer of Sapient and with each of Mark Crumpacker, Chief Executive Officer and
Executive Creative Director of Studio, Peter Rack, Chief Financial Officer and
Secretary of Studio, Eric Wilson, Senior Vice President of Studio and Todd
Holcomb, Vice President of Operations of Studio, providing for their continued
employment by Studio in positions similar to those held by them prior to the
acquisition and at their current rate of compensation. The employment
relationships are not for a stated term but are "employment at will"
relationships. In connection with the purchase agreements, certain of the
selling stockholders also entered into non-competition and non-solicitation
agreements with Sapient or Studio and we lent to each selling stockholder funds
to facilitate the payment of taxes by such selling stockholder.
<TABLE>
<CAPTION>
Number of Percentage of Percentage
Shares of Shares of Number of of Shares of
Common Common Number of Shares of Common
Stock Stock Shares of Common Stock
Beneficially Beneficially Common Stock Beneficially
Owned Prior Owned Prior Stock Beneficially Owned after
Name of Selling to to Offering Offered Owned After Offering
Stockholder Offering(1) (1)(2) Hereby Offering(1)(2) (1)(2)
- --------------------------- ------------ ------------- --------- -------------- ------------
<S> <C> <C> <C> <C> <C>
Clement Mok................ 129,992 * 39,152 90,840 *
Mark Crumpacker............ 82,765 * 24,905 57,860 *
Peter Rack................. 16,631 * 4,981(3) 11,650 *
Eric Wilson................ 11,490 * 3,457 8,033 *
Todd Holcomb............... 2,490 * 755 1,735 *
</TABLE>
- --------------------
* Less than one percent of the number of shares of common stock outstanding.
(1) The number of shares beneficially owned is determined under rules
promulgated by the SEC, and the information is not necessarily
indicative of beneficial ownership for any other purpose. The selling
stockholders have sole voting power and investment power with respect
to all shares listed as owned by the selling stockholders. Certain of
such shares may be registered in the name of a nominee holder,
including, without limitation, Goldman, Sachs & Co. Does not include an
aggregate of 49,829 shares of Sapient's common stock placed in escrow
to secure the indemnification obligations of certain selling
stockholders.
(2) We do not know when or in what amounts a selling stockholder may offer
shares for sale and there can be no assurance that the selling
stockholders will sell any or all of the shares offered hereby. Because
each selling stockholder may offer all or some of the shares pursuant
to this offering, and because there are currently no agreements,
arrangements or understandings with respect to the sale of any of the
shares that will
-14-
<PAGE> 17
be held by the selling stockholders after completion of the offering,
no estimate can be given as to the amount of the shares that will be
held by the selling stockholders after completion of the offering.
However, for purposes of this table, we have assumed that, after
completion of the offering, none of the shares covered hereby will be
held by the selling stockholders.
(3) In addition to the 4,981 shares of common stock held by Mr. Rack
registered hereby, Sapient previously registered 98 shares held by Mr.
Rack in connection with Registration Statement No. 333-62589 which were
not sold by Mr. Rack as of February 4, 1999.
DESCRIPTION OF CAPITAL STOCK
The authorized capital stock of Sapient consists of 100,000,000 shares
of common stock, par value $.01 per share, and 5,000,000 shares of preferred
stock, par value $.01 per share.
COMMON STOCK
As of January 31, 1999, there were issued and outstanding an aggregate
of 26,684,869 shares of Common Stock held of record by 291 stockholders.
Holders of common stock are entitled to one vote for each share held on
all matters submitted to a vote of stockholders and do not have cumulative
voting rights. Accordingly, holders of a majority of the shares of common stock
entitled to vote in any election of directors may elect all of the directors
standing for election. Holders of common stock are entitled to receive ratably
such dividends, if any, as may be declared by the Board of Directors out of
funds legally available therefor, subject to the preferential dividend rights of
any outstanding preferred stock. Upon the liquidation, dissolution or winding-up
of Sapient, holders of common stock are entitled to receive ratably the net
assets of Sapient available for distribution after the payment of all debts and
other liabilities of Sapient and subject to the prior rights of any outstanding
preferred stock. Holders of common stock have no preemptive, subscription,
redemption or conversion rights. The outstanding shares of common stock are, and
the shares will be, when issued and paid for, fully paid and nonassessable. The
rights, preferences and privileges of holders of common stock are subject to,
and may be adversely affected by, the rights of holders of shares of any series
of preferred stock that we may designate and issue in the future.
PREFERRED STOCK
The Board of Directors is authorized, subject to any limitations
prescribed by law, without further stockholder approval, to issue from time to
time up to an aggregate of 5,000,000 shares of preferred stock, in one or more
series. Each such series of preferred stock shall have such number of shares,
designations, preferences, voting powers, qualifications and special or relative
rights or privileges as shall be determined by the Board of Directors, which may
include, among others, dividend rights, voting rights, redemption and sinking
fund provisions, liquidation preferences, conversion rights and preemptive
rights.
-15-
<PAGE> 18
The stockholders of Sapient have granted the Board of Directors
authority to issue preferred stock and to determine its rights and preferences
in order to eliminate delays associated with a stockholder vote on specific
issuances. The issuance of preferred stock, while providing desirable
flexibility in connection with possible acquisitions and other corporate
purposes, could have the effect of making it more difficult for a third party to
acquire, or of discouraging a third party from attempting to acquire, a majority
of our outstanding voting stock. No shares of preferred stock are issued or
outstanding and we have no present plans to issue any shares of preferred stock.
DELAWARE LAW AND CERTAIN CHARTER AND BYLAW PROVISIONS
We are subject to the provisions of Section 203 of the General
Corporation Law of Delaware. Section 203 prohibits a publicly-held Delaware
corporation from engaging in a "business combination" with an "interested
stockholder" for a period of three years after the date of the transaction in
which the person became an interested stockholder, unless the business
combination is approved in a prescribed manner. A "business combination"
includes mergers, asset sales and other transactions resulting in a financial
benefit to the interested stockholder. Subject to certain exceptions, an
"interested stockholder" is a person who, together with affiliates and
associates, owns, or within three years did own, 15% or more of the
corporation's voting stock.
Our Amended and Restated Certificate of Incorporation and our Restated
Bylaws provide for the division of the Board of Directors into three classes as
nearly equal in size as possible with staggered three-year terms. In addition,
the Amended and Restated Certificate of Incorporation and Restated Bylaws
provide that directors may be removed only for cause by the affirmative vote of
the holders of two-thirds of the shares of capital stock of Sapient entitled to
vote. Under the Amended and Restated Certificate of Incorporation and the
Restated Bylaws, any vacancy on the Board of Directors, however occurring,
including a vacancy resulting from an enlargement of the Board, may only be
filled by vote of a majority of the directors then in office. The classification
of the Board of Directors and the limitations on the removal of directors and
filling of vacancies could have the effect of making it more difficult for a
third party to acquire, or of discouraging a third party from acquiring, control
of Sapient.
The Amended and Restated Certificate of Incorporation and the Restated
Bylaws also provide that any action required or permitted to be taken by our
stockholders at an annual meeting or special meeting of stockholders may only be
taken if it is properly brought before such meeting and may not be taken by
written action in lieu of a meeting. The Amended and Restated Certificate of
Incorporation and the Restated Bylaws further provide that special meetings of
the stockholders may only be called by a Chairman of the Board of Directors, a
Chief Executive Officer or, if none, a President of the Company or by the Board
of Directors. Under our Restated Bylaws, in order for any matter to be
considered "properly brought" before a meeting, a stockholder must comply with
certain requirements regarding advance notice to the Company. The foregoing
provisions could have the effect of delaying until the next stockholders'
meeting stockholder actions which are favored by the holders of a majority of
our outstanding voting securities. These provisions may also discourage another
person or entity from making a tender offer for our common stock, because such
person or entity, even if it acquired a majority of our outstanding voting
securities, would be able to take
-16-
<PAGE> 19
action as a stockholder (such as electing new directors or approving a merger)
only at a duly called stockholders' meeting, and not by written consent.
The General Corporation Law of Delaware provides generally that the
affirmative vote of a majority of the shares entitled to vote on any matter is
required to amend a corporation's Certificate of Incorporation or Bylaws, unless
a corporation's Certificate of Incorporation or Bylaws, as the case may be,
require a greater percentage. Our Amended and Restated Certificate of
Incorporation and the Restated Bylaws require the affirmative vote of the
holders of at least 75% of the shares of capital stock of Sapient issued and
outstanding and entitled to vote to amend or repeal any of the provisions
described in the prior two paragraphs.
The Amended and Restated Certificate of Incorporation contains certain
provisions permitted under the General Corporation Law of Delaware relating to
the liability of directors. The provisions eliminate a director's liability to
Sapient or its stockholders for monetary damages for a breach of fiduciary duty,
except in circumstances involving certain wrongful acts, such as the breach of a
director's duty of loyalty or acts or omissions which involve intentional
misconduct or a knowing violation of law. The Amended and Restated Certificate
of Incorporation also contains provisions obligating us to indemnify our
officers and directors to the fullest extent permitted by the General
Corporation Law of Delaware. We believe that these provisions will assist us in
attracting and retaining qualified individuals to serve as directors.
PLAN OF DISTRIBUTION
We are registering all of the shares on behalf of the selling
stockholders. "Selling stockholders," as used in this prospectus, includes
donees, pledgees, transferees or other successors in interest selling shares
received from a named selling stockholder after the date of this prospectus. The
selling stockholders may sell their shares from time to time. The selling
stockholders will act independently of Sapient in making decisions with respect
to the timing, manner and size of each sale. The sales may be made on one or
more exchanges or in the over-the-counter market or otherwise, at prices and at
terms then prevailing or at prices related to the then current market price, or
in negotiated transactions. The selling stockholders may sell their shares by
one or more of, or a combination of, the following methods:
- purchases by a broker-dealer as principal and the resale by
such broker or dealer for its account pursuant to this
prospectus,
- ordinary brokerage transactions and transactions in which the
broker solicits purchasers,
- block trades in which the broker-dealer so engaged will
attempt to sell the shares as agent but may position and
resell a portion of the block as principal to facilitate the
transaction,
- an over-the-counter distribution in accordance with the rules
of the Nasdaq National Market,
-17-
<PAGE> 20
- in privately negotiated transactions,
- in options transactions, and
- for shares that qualify for resale under Rule 144 of the
Securities Act, under that rule rather than this prospectus.
In effecting sales, broker-dealers engaged by the selling stockholders
may arrange for other broker-dealers to participate. Broker-dealers will receive
commissions or discounts from the selling stockholders in amounts to be
negotiated immediately prior to the sale. In offering the shares covered hereby,
the selling stockholders and any broker-dealers who execute sales for the
selling stockholders may be deemed to be "underwriters" within the meaning of
the Securities Act in connection with such sales. Any profits realized by the
selling stockholders and the compensation of any broker-dealer may be deemed to
be underwriting discounts and commissions.
In connection with the offering contemplated hereby, certain persons
participating in the offering may purchase and sell the shares in the open
market. These transactions may include over-allotment and stabilizing
transactions and purchases to cover short positions created by such persons in
connection with the offering. Stabilizing transactions consist of certain bids
of purchases for the purpose of preventing or retarding a decline in the market
price of the common stock. Short positions created by such persons involve the
sale by such persons of a greater number of shares of common stock than they may
be required to purchase in the offering. Certain persons participating in the
offering also may impose a penalty bid, whereby selling concessions allowed to
broker-dealers in respect of the common stock are repurchased by such persons in
stabilizing or covering transactions. These activities may stabilize, maintain
or otherwise affect the market price of the common stock, which may be higher
than the price that might otherwise prevail in the open market; and these
activities, if commenced, may be discontinued at any time. These transactions
may be effected on the Nasdaq National Market, in the over-the-counter market or
otherwise.
In order to comply with the securities laws of certain states, if
applicable, the shares must be sold in such jurisdictions only through
registered or licensed brokers or dealers. In addition, in certain states the
shares may not be sold unless they have been registered or qualified for sale in
the applicable state or an exemption from the registration or qualification
requirement is available and is complied with.
We have advised the selling stockholders that the anti-manipulation
rules of Regulation M under the Exchange Act may apply to sales of shares in the
market and to the activities of the selling stockholders and their affiliates.
In addition, we will make copies of this prospectus available to the selling
stockholders and have informed them of the need for delivery of copies of this
prospectus to purchasers at or prior to the time of any sale of the shares
offered hereby. The selling stockholders may indemnify any broker-dealer that
participates in transactions involving the sale of the shares against certain
liabilities, including liabilities arising under the Securities Act.
-18-
<PAGE> 21
At the time a particular offer of shares is made, if required, a
prospectus supplement will be distributed that will set forth the number of
shares being offered and the terms of the offering, including the name of any
underwriter, dealer or agent, the purchase price paid by any underwriter, any
discount, commission and other item constituting compensation, any discount,
commission or concession allowed or reallowed or paid to any dealer, and the
proposed selling price to the public.
We have agreed with the selling stockholders to keep the registration
statement of which this prospectus constitutes a part effective until the
earlier of (i) such time as all of the shares have been disposed of pursuant to
and in accordance with such registration statement or (ii) August 25, 1999.
LEGAL MATTERS
Hale and Dorr LLP will pass on the validity of the shares offered by
this prospectus.
EXPERTS
The consolidated balance sheets of Sapient as of December 31, 1997 and
1996 and the consolidated statements of income, stockholders' equity and cash
flows for each of the years in the three-year period ended December 31, 1997,
have been incorporated by reference herein and in the registration statement in
reliance upon the report of KPMG Peat Marwick LLP, independent auditors,
incorporated by reference herein, and upon the authority of said firm as experts
in accounting and auditing.
-19-
<PAGE> 22
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the various expenses to be incurred in
connection with the sale and distribution of the securities being registered
hereby, all of which will be borne by the Registrant (except expenses incurred
by the selling stockholders for brokerage, accounting, tax or legal services or
any other expenses incurred by the selling stockholders in disposing of the
shares). All amounts shown are estimates except the Securities and Exchange
Commission registration fee.
Filing Fee - Securities and Exchange Commission...................... $ 1,388
Legal fees and expenses of the Company............................... $ 5,000
Accounting fees and expenses......................................... $ 5,000
Miscellaneous expenses............................................... $ 3,612
Total Expenses.............................................. $15,000
=======
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the General Corporation Law of Delaware provides that a
corporation has the power to indemnify a director, officer, employee or agent of
the corporation and certain other persons serving at the request of the
corporation in related capacities against amounts paid and expenses incurred in
connection with an action or proceeding to which he is or is threatened to be
made a party by reason of such position, if such person shall have acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the corporation, and, in any criminal proceeding, if such person
had no reasonable cause to believe his conduct was unlawful; provided that, in
the case of actions brought by or in the right of the corporation, no
indemnification shall be made with respect to any matter as to which such person
shall have been adjudged to be liable to the corporation unless and only to the
extent that the adjudicating court determines that such indemnification is
proper under the circumstances.
Article EIGHTH of the Registrant's Amended and Restated Certificate of
Incorporation provides that a director or officer of the Registrant (a) shall be
indemnified by the Registrant against all expenses (including attorney's fees),
judgments, fines and amounts paid in settlement reasonably incurred in
connection with any litigation or other legal proceeding (other than an action
by or in the right of the Registrant) brought against him by virtue of his
position as a director or officer if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Registrant, and, with
II-1
<PAGE> 23
respect to any criminal action or proceeding, had no reasonable cause to believe
his conduct was unlawful, and (b) shall be indemnified by the Registrant against
expenses (including attorney's fees) and amounts paid in settlement reasonably
incurred in connection with any action by or in the right of the Registrant by
virtue of his position as a director or officer of the Registrant if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the Registrant, except that no indemnification shall be made
with respect to any such matter as to which such director or officer shall have
been adjudged to be liable to the Registrant, unless and only to the extent that
a court determines that, despite the adjudication of liability but in view of
all the circumstances of the case, such person is fairly and reasonably entitled
to indemnity for such expenses as the court deems proper. Notwithstanding the
foregoing, to the extent that a director or officer has been successful, on the
merits or otherwise, he shall be indemnified against all expenses (including
attorney's fees) reasonably incurred by him in connection therewith. Expenses
incurred in defending a civil or criminal action, suit or proceeding shall be
advanced by the Registrant to a director or officer, at his request, upon
receipt of an undertaking by the director or officer to repay such amount if it
is ultimately determined that he is not entitled to indemnification.
Indemnification is required to be made unless the Registrant determines
(in the manner provided in its Amended and Restated Certificate of
Incorporation) that the applicable standard of conduct required for
indemnification has not been met. In the event of a determination by the
Registrant that the director or officer did not meet the applicable standard of
conduct required for indemnification, or if the Registrant fails to make an
indemnification payment within 60 days after such payment is claimed by such
person, such person is permitted to petition a court to make an independent
determination as to whether such person is entitled to indemnification. As a
condition precedent to the right of indemnification, the director or officer
must give the Registrant notice of the action for which indemnity is sought and
the Registrant has the right to participate in such action or assume the defense
thereof.
Article EIGHTH of the Registrant's Amended and Restated Certificate of
Incorporation further provides that the indemnification provided therein is not
exclusive, and provides that in the event that the General Corporation Law of
Delaware is amended to expand the indemnification permitted to officers and
directors, the Registrant must indemnify those persons to the fullest extent
permitted by such law as so amended.
Article SEVENTH of the Registrant's Amended and Restated Certificate of
Incorporation provides that, except to the extent that the General Corporation
Law of Delaware prohibits the elimination of liability of directors for breaches
of fiduciary duty, no director of the Registrant shall be personally liable to
the Registrant or its stockholders for monetary damages for any breach of
fiduciary duty as a director.
II-2
<PAGE> 24
ITEM 16. EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
5.1 Opinion of Hale and Dorr LLP.
23.1 Consent of KPMG Peat Marwick LLP.
23.2 Consent of Hale and Dorr LLP, included in Exhibit 5.1 filed herewith.
24.1 Power of Attorney (See page II-5 of this Registration Statement).
24.2 Power of Attorney of Carl S. Sloane
24.3 Power of Attorney of Darius W. Gaskins, Jr.
24.4 Power of Attorney of Bruce D. Parker
24.5 Power of Attorney of R. Stephen Cheheyl
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933, as amended (the "Securities Act");
(ii) To reflect in the Prospectus any facts or events
arising after the effective date of this Registration Statement (or the
most recent post-effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the information set
forth in this Registration Statement. Notwithstanding the foregoing,
any increase or decrease in the volume of securities offered (if the
total dollar value of securities offered would not exceed that which
was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than 20
percent change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective Registration
Statement; and
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in this Registration
Statement or any material change to such information in this
Registration Statement.
II-3
<PAGE> 25
(2) That, for the purposes of determining any liability under the
Securities Act, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at the time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
The Registrant hereby undertakes that, for purposes of determining any
liability under the Securities Act, each filing of the Registrant's annual
report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of
1934, as amended (the "Exchange Act") (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the Exchange
Act) that is incorporated by reference in this Registration Statement shall be
deemed to be a new registration statement relating to the securities offered
therein and the offering of such securities at the time shall be deemed to be
the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the indemnification provisions described herein, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
II-4
<PAGE> 26
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Cambridge, Commonwealth of Massachusetts, on February
19, 1999,
SAPIENT CORPORATION
By: /s/ J. Stuart Moore
----------------------------------------
J. Stuart Moore
Co-Chief Executive Officer
SIGNATURES AND POWER OF ATTORNEY
We, the undersigned officers and directors of Sapient Corporation,
hereby severally constitute and appoint Susan D. Johnson, Deborah England Gray,
Paul P. Brountas and Jonathan Wolfman, and each of them singly, our true and
lawful attorneys with full power to any of them, and to each of them singly, to
sign for us and in our names in the capacities indicated below the Registration
Statement on Form S-3 filed herewith and any and all pre-effective and
post-effective amendments to said Registration Statement and generally to do all
such things in our name and behalf in our capacities as officers and directors
to enable Sapient Corporation to comply with the provisions of the Securities
Act and all requirements of the Securities and Exchange Commission, hereby
ratifying and confirming our signatures as they may be signed by our said
attorneys, or any of them, to said Registration Statement and any and all
amendments thereto.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Jerry A. Greenberg Co-Chief Executive Officer and Director February 19, 1999
- ------------------------------ (Principal Executive Officer)
Jerry A. Greenberg
/s/ J. Stuart Moore Co-Chief Executive Officer and Director February 19, 1999
- ------------------------------ (Principal Executive Officer)
J. Stuart Moore
</TABLE>
II-5
<PAGE> 27
<TABLE>
<S> <C> <C>
/s/ Susan D. Johnson Chief Financial Officer (Principal February 19, 1999
- ------------------------------ Financial and Accounting Officer)
Susan D. Johnson
</TABLE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
<TABLE>
<S> <C> <C>
* Director February 19, 1999
- ------------------------------
Carl S. Sloane
* Director February 19, 1999
- ------------------------------
Darius W. Gaskins, Jr.
* Director February 19, 1999
- ------------------------------
Bruce D. Parker
* Director February 19, 1999
- ------------------------------
R. Stephen Cheheyl
* By: /s/ Susan D. Johnson
------------------------
Susan D. Johnson
Attorney-in-fact
</TABLE>
II-6
<PAGE> 28
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
5.1 Opinion of Hale and Dorr LLP.
23.1 Consent of KPMG Peat Marwick LLP.
23.2 Consent of Hale and Dorr LLP, included in Exhibit 5.1 filed herewith.
24.1 Power of Attorney (See page II-5 of this Registration Statement).
24.2 Power of Attorney of Carl S. Sloane
24.3 Power of Attorney of Darius W. Gaskins, Jr.
24.4 Power of Attorney of Bruce D. Parker
24.5 Power of Attorney of R. Stephen Cheheyl
<PAGE> 1
EXHIBIT 5.1
HALE AND DORR LLP
COUNSELLORS AT LAW
60 STATE STREET, BOSTON, MASSACHUSETTS 02109
617-526-6000 - FAX 617-526-5000
February 19, 1999
Sapient Corporation
One Memorial Drive
Cambridge, Massachusetts 02142
Registration Statement on Form S-3
----------------------------------
Ladies and Gentlemen:
This opinion is furnished to you in connection with a Registration
Statement on Form S-3 (the "Registration Statement") to be filed with the
Securities and Exchange Commission (the "Commission") under the Securities Act
of 1933, as amended (the "Securities Act"), for the registration of an aggregate
of 73,250 shares of Common Stock, $.01 par value per share (the "Shares"), of
Sapient Corporation, a Delaware corporation (the "Company"). All of the Shares
are being registered on behalf of certain stockholders of the Company (the
"Selling Stockholders").
We are acting as counsel for the Company in connection with the
registration for resale of the Shares. We have examined signed copies of the
Registration Statement as filed with the Commission. We have also examined and
relied upon the minutes of meetings of the stockholders and the Board of
Directors of the Company as provided to us by the Company, stock record books of
the Company as provided to us by the Company, the Certificate of Incorporation
and By-Laws of the Company, each as restated and/or amended to date, and such
other documents as we have deemed necessary for purposes of rendering the
opinions hereinafter set forth.
In our examination of the foregoing documents, we have assumed the
genuineness of all signatures, the authenticity of all documents submitted to us
as originals, the conformity to original documents of all documents submitted to
us as copies, the authenticity of the originals of such latter documents and the
legal competence of all signatories to such documents.
WASHINGTON, D.C. BOSTON, MA LONDON, UK*
- --------------------------------------------------------------------------------
HALE AND DORR LLP INCLUDES PROFESSIONAL CORPORATIONS
*BROBECK HALE AND DORR INTERNATIONAL (AN INDEPENDENT JOINT VENTURE LAW FIRM)
<PAGE> 2
Sapient Corporation
February 19, 1999
Page 2
We assume that the appropriate action will be taken, prior to the offer
and sale of the Shares, to register and qualify the Shares for sale under all
applicable state securities or "blue sky" laws.
We express no opinion herein as to the laws of any state or
jurisdiction other than the state laws of the Commonwealth of Massachusetts, the
Delaware General Corporation Law statute and the federal laws of the United
States of America.
Based upon and subject to the foregoing, we are of the opinion that the
Shares have been duly authorized and are validly issued, fully paid and
nonassessable.
It is understood that this opinion is to be used only in connection
with the offer and sale of the Shares while the Registration Statement is in
effect.
Please note that we are opining only as to the matters expressly set
forth herein, and no opinion should be inferred as to any other matters.
We hereby consent to the filing of this opinion with the Commission as
an exhibit to the Registration Statement in accordance with the requirements of
Item 601(b)(5) of Regulation S-K under the Securities Act and to the use of our
name therein and in the related Prospectus under the caption "Legal Matters." In
giving such consent, we do not hereby admit that we are in the category of
persons whose consent is required under Section 7 of the Securities Act or the
rules and regulations of the Commission.
Very truly yours,
/s/ HALE AND DORR LLP
HALE AND DORR LLP
<PAGE> 1
EXHIBIT 23.1
INDEPENDENT ACCOUNTANTS' CONSENT
The Board of Directors and Stockholders
Sapient Corporation;
We consent to the use of our report incorporated by reference herein
and to the reference to our firm under the heading "Experts" in the Prospectus.
KPMG PEAT MARWICK LLP
Boston, Massachusetts
February 19, 1999
<PAGE> 1
EXHIBIT 24.2
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that I, the undersigned director of
Sapient Corporation, a Delaware corporation (the "Corporation"), which is to
file with the Securities and Exchange Commission (the "Commission") under the
provisions of the Securities Act of 1933, as amended, one or more Registration
Statements on Form S-3, or other appropriate form, for the registration for
resale by the persons to be named in said Registration Statements of up to
146,500 shares of Common Stock issued by the Corporation in connection with the
Corporation's acquisition of Studio Archetype, Inc., hereby constitute and
appoint Susan D. Johnson, Deborah England Gray and Jonathan Wolfman, and each of
them, my true and lawful attorneys-in-fact and agents, with full power to them
and each of them singly, to act for me and in my name, place and stead, in any
and all capacities, to sign, or cause to be signed electronically, any and all
of said Registration Statements and any and all amendments to the aforementioned
Registration Statements and to file said Registration Statements and amendments
thereto so signed with all exhibits thereto, and any and all other documents in
connection therewith, with the Commission, hereby granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform any and all acts and things requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as I might or could
do in person, hereby ratifying and confirming all that said attorneys-in-fact
and agents or any of them may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, I have executed this Power of Attorney as of the
17th day of February, 1999.
/s/ Carl S. Sloane
-----------------------------------
<PAGE> 1
EXHIBIT 24.3
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that I, the undersigned director of
Sapient Corporation, a Delaware corporation (the "Corporation"), which is to
file with the Securities and Exchange Commission (the "Commission") under the
provisions of the Securities Act of 1933, as amended, one or more Registration
Statements on Form S-3, or other appropriate form, for the registration for
resale by the persons to be named in said Registration Statements of up to
146,500 shares of Common Stock issued by the Corporation in connection with the
Corporation's acquisition of Studio Archetype, Inc., hereby constitute and
appoint Susan D. Johnson, Deborah England Gray and Jonathan Wolfman, and each of
them, my true and lawful attorneys-in-fact and agents, with full power to them
and each of them singly, to act for me and in my name, place and stead, in any
and all capacities, to sign, or cause to be signed electronically, any and all
of said Registration Statements and any and all amendments to the aforementioned
Registration Statements and to file said Registration Statements and amendments
thereto so signed with all exhibits thereto, and any and all other documents in
connection therewith, with the Commission, hereby granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform any and all acts and things requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as I might or could
do in person, hereby ratifying and confirming all that said attorneys-in-fact
and agents or any of them may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, I have executed this Power of Attorney as of the
17th day of February, 1999.
/s/ Darius W. Gaskins, Jr.
-----------------------------------
<PAGE> 1
EXHIBIT 24.4
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that I, the undersigned director of
Sapient Corporation, a Delaware corporation (the "Corporation"), which is to
file with the Securities and Exchange Commission (the "Commission") under the
provisions of the Securities Act of 1933, as amended, one or more Registration
Statements on Form S-3, or other appropriate form, for the registration for
resale by the persons to be named in said Registration Statements of up to
146,500 shares of Common Stock issued by the Corporation in connection with the
Corporation's acquisition of Studio Archetype, Inc., hereby constitute and
appoint Susan D. Johnson, Deborah England Gray and Jonathan Wolfman, and each of
them, my true and lawful attorneys-in-fact and agents, with full power to them
and each of them singly, to act for me and in my name, place and stead, in any
and all capacities, to sign, or cause to be signed electronically, any and all
of said Registration Statements and any and all amendments to the aforementioned
Registration Statements and to file said Registration Statements and amendments
thereto so signed with all exhibits thereto, and any and all other documents in
connection therewith, with the Commission, hereby granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform any and all acts and things requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as I might or could
do in person, hereby ratifying and confirming all that said attorneys-in-fact
and agents or any of them may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, I have executed this Power of Attorney as of the
17th day of February, 1999.
/s/ Bruce D. Parker
-----------------------------------
<PAGE> 1
EXHIBIT 24.5
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that I, the undersigned director of
Sapient Corporation, a Delaware corporation (the "Corporation"), which is to
file with the Securities and Exchange Commission (the "Commission") under the
provisions of the Securities Act of 1933, as amended, one or more Registration
Statements on Form S-3, or other appropriate form, for the registration for
resale by the persons to be named in said Registration Statements of up to
146,500 shares of Common Stock issued by the Corporation in connection with the
Corporation's acquisition of Studio Archetype, Inc., hereby constitute and
appoint Susan D. Johnson, Deborah England Gray and Jonathan Wolfman, and each of
them, my true and lawful attorneys-in-fact and agents, with full power to them
and each of them singly, to act for me and in my name, place and stead, in any
and all capacities, to sign, or cause to be signed electronically, any and all
of said Registration Statements and any and all amendments to the aforementioned
Registration Statements and to file said Registration Statements and amendments
thereto so signed with all exhibits thereto, and any and all other documents in
connection therewith, with the Commission, hereby granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform any and all acts and things requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as I might or could
do in person, hereby ratifying and confirming all that said attorneys-in-fact
and agents or any of them may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, I have executed this Power of Attorney as of the
17th day of February 19, 1999.
/s/ R. Stephen Cheheyl
-----------------------------------
