<PAGE> 1
As filed with the Securities and Exchange Commission on March 10, 2000
Registration Statement No. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
----------------------
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)
----------------------
COPIES TO:
JONATHAN WOLFMAN, ESQ.
HALE AND DORR LLP
60 STATE STREET
BOSTON, MASSACHUSETTS 02109
TEL: (617) 526-6000
FAX: (617) 526-5000
Approximate date of commencement of proposed sale to public: As soon as
practicable after this registration statement becomes effective.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ] 333-_______.
If this form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ] 333-__________.
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
-------------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
Proposed
Amount Proposed Maximum Maximum
Title of Each Class of to be Offering Price Aggregate Amount of
Securities to be Registered Registered Per Share Offering Price Registration Fee
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.01 par value per
share................................. 82,644 $107.13 (1) $8,853,652 (1) $2,338
- ----------------------------------------------------------------------------------------------------------------
</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
March 7,2000.
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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.
<PAGE> 2
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. THESE
SECURITIES MAY NOT BE SOLD UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS DECLARED EFFECTIVE. THIS PROSPECTUS IS NOT
AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT
PERMITTED.
SUBJECT TO COMPLETION, DATED MARCH 10, 2000
PROSPECTUS
SAPIENT CORPORATION
82,644 SHARES OF COMMON STOCK
---------------------
In October 1999, Sapient Corporation issued 88,044 shares of common
stock to the members of E.Lab, L.L.C. in connection with our acquisition of the
assets of that company. This prospectus relates to resales of some of those
shares by the members of E.Lab, L.L.C. We will not receive any of the proceeds
from the sale of the shares. The shares of common stock covered by this
prospectus also include the additional shares issued as the result of a
two-for-one stock split effected as a 100% stock dividend distributed on
November 5, 1999 to stockholders of record on November 1, 1999. Unless otherwise
indicated, all share numbers in this prospectus have been adjusted to reflect
the stock split.
We have agreed to pay certain expenses of registering the shares being
offered by the selling stockholders. The selling stockholders will pay all
brokerage fees, 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 offer the shares from time to time through
public or private transactions at prevailing market prices, at prices related to
prevailing market prices or at privately negotiated prices. Our common stock is
traded on the Nasdaq National Market under the symbol SAPE. On March 8, 2000,
the closing sale price of our common stock on Nasdaq was $110.875 per share.
---------------------
INVESTING IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. SEE "RISK
FACTORS" BEGINNING ON PAGE 6.
---------------------
THE SECURITIES AND EXCHANGE COMMISSION AND STATE SECURITIES REGULATORS
HAVE NOT APPROVED OR DISAPPROVED 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 ________ __, 2000.
<PAGE> 3
TABLE OF CONTENTS
PAGE
----
Where to Find More Information..............................................3
Incorporation of Certain Documents by Reference.............................3
Summary Description of Our Business.........................................5
Risk Factors................................................................6
Special Note Regarding Forward-Looking Statements..........................13
Use of Proceeds............................................................14
The E.Lab Acquisition......................................................14
Selling Stockholders.......................................................14
Description of Capital Stock...............................................16
Plan of Distribution.......................................................18
Legal Matters..............................................................20
Experts....................................................................20
WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION DIFFERENT
FROM THAT CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS. THE SELLING
STOCKHOLDERS ARE OFFERING TO SELL, AND SEEKING OFFERS TO BUY, SHARES OF OUR
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 COMMON STOCK.
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WHERE TO FIND MORE INFORMATION
We file reports, proxy statements, and other documents with the
Securities and Exchange Commission and with Nasdaq. Here are ways you can access
this information:
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WHAT IS AVAILABLE WHERE TO GET IT
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Paper copies of information SEC's Public Reference Room
Judiciary Plaza Building
450 Fifth Street, N.W., Room 1024
Washington, D.C. 20549
---------------------------------
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 SEC's Call the SEC at
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 us and our common stock, including certain exhibits and
schedules. You can obtain 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
that 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. Information contained in this prospectus and information
that we file with the SEC in the future and incorporate by reference in this
prospectus automatically updates and supercedes previously filed 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:
(i) Our Annual Report on Form 10-K for the year ended
December 31, 1998, filed with the SEC on March 16,
1999, as amended by Form 10-K/A filed with the SEC on
April 30, 1999;
(ii) Our Quarterly Report on Form 10-Q for the quarter
ended March 31, 1999, filed with the SEC on May 14,
1999, as amended by Form 10-Q/A filed with the SEC on
May 21, 1999;
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(iii) Our Quarterly Report on Form 10-Q for the quarter
ended June 30, 1999, filed with the SEC on August 13,
1999;
(iv) Our Quarterly Report on Form 10-Q for the quarter
ended September 30, 1999, filed with the SEC on
October 21, 1999;
(v) Our Current Report on Form 8-K/A, filed with the SEC
on February 23, 1999;
(vi) Our Current Report on Form 8-K, filed with the SEC on
April 7, 1999;
(vii) Our Current Report on Form 8-K, filed with the SEC on
April 23, 1999, as amended by Form 8-K/A filed with
the SEC on April 23, 1999;
(viii) Our Current Report on Form 8-K, filed with the SEC on
July 26, 1999;
(ix) Our Current Report on Form 8-K, filed with the SEC on
December 10, 1999;
(x) Our Current Report on Form 8-K, filed with the SEC on
December 28, 1999;
(xi) Our Current Report on Form 8-K, filed with the SEC on
January 4, 2000;
(xii) All of our filings pursuant to the Exchange Act after
the date of filing the initial registration statement
and prior to effectiveness of the registration
statement; and
(xiii) The description of our common stock contained in our
Registration Statement on Form 8-A, filed with the
SEC on March 26, 1996, as amended by Form 8-A/A filed
with the SEC on March 28, 1996.
You may request a copy of these documents, which will be provided to
you at no cost, by contacting:
Sapient Corporation
One Memorial Drive
Cambridge, Massachusetts 02142
Attention: Investor Relations
(617) 621-0200
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SUMMARY DESCRIPTION OF OUR BUSINESS
Sapient is a leading e-services consultancy providing Internet strategy
consulting and sophisticated Internet-based solutions to Global 1000 companies
and startup businesses. We help our clients define Internet strategies to
improve their competitive position and we design, architect, develop and
implement solutions to execute those strategies. These solutions focus on
large-scale and complex business-to-consumer and business-to-business electronic
commerce, digital customer relationship management, supply chain optimization,
electronic markets and Internet portals.
We believe that our key strength is our ability to deliver high quality
solutions, primarily on a fixed-price, fixed-timeframe basis, through a rapid,
effective and integrated process. Our services include:
- digital business strategy development;
- experience modeling;
- creative design;
- technology development and systems integration; and
- integrated engagement leadership.
We provide end-to-end solutions to our clients using multidisciplinary
teams composed of business strategists, researchers, creative specialists,
technology professionals and program managers. We deliver our solutions
primarily through five industry business units: financial services; media,
entertainment and communications; manufacturing, retail and distribution; public
sector; and energy services. Using this industry alignment helps us accurately
define and deliver tailored solutions that effectively address the market
dynamics and business opportunities that our clients face. We have been
providing Internet solutions for over five years and employ approximately 2,100
people in offices across the United States and in London, Milan and Sydney.
Sapient Corporation was incorporated in Delaware in 1991. Our principal
executive offices are located at One Memorial Drive, Cambridge, MA 02142. Our
telephone number at that location is 617-621-0200 and our Internet address is
www.sapient.com. The information contained on our website is not incorporated by
reference in this prospectus. Unless the context otherwise requires, references
in this prospectus to "Sapient", "we", "us", and "our" refer to Sapient
Corporation and its subsidiaries.
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RISK FACTORS
You should carefully consider the risks described below before you
decide to buy our common stock. The risks and uncertainties described below are
not the only ones facing our company. Additional risks and uncertainties may
also impair our business operations. If any of the following risks actually
occur, our business, financial condition, or results of operations would likely
suffer. In such case, the trading price of our common stock could fall, and you
may lose all or part of the money you paid to buy our common stock.
IF BUSINESSES DO NOT INCREASE THEIR USE OF THE INTERNET AS A MEANS FOR
CONDUCTING COMMERCE, OUR REVENUES WILL BE ADVERSELY AFFECTED
Our future success depends heavily on the increased acceptance and use
of the Internet as a means for conducting commerce. We focus our services on the
development and implementation of Internet strategies and solutions. If commerce
on the Internet does not continue to grow, or grows more slowly than expected,
our revenue growth would slow or decline and our business, financial condition
and results of operations would be materially adversely affected. Consumers and
businesses may reject the Internet as a viable medium for commerce for a number
of reasons, including:
- inadequate network infrastructure;
- delays in the development of Internet enabling technologies and
performance improvements;
- delays in the development or adoption of new standards and protocols
required to handle increased levels of Internet activity;
- delays in the development of security and authentication technology
necessary to effect secure transmission of confidential information;
- changes in, or insufficient availability of, telecommunications
services to support the Internet; and
- failure of companies to meet their customers' expectations in
delivering goods and services over the Internet.
IF WE DO NOT ATTRACT AND RETAIN QUALIFIED PROFESSIONAL STAFF, WE MAY NOT BE ABLE
TO ADEQUATELY PERFORM OUR CLIENT ENGAGEMENTS AND COULD NOT ACCEPT NEW CLIENT
ENGAGEMENTS
Our business is labor intensive and our success will depend in large
part upon our ability to attract, retain, train and motivate highly-skilled
employees. Because of the rapid growth of the Internet, there is intense
competition for employees who have strategic, experience modeling, creative
design, technical or program management experience. In addition, the Internet
has created many opportunities for people with the skills we seek to form their
own companies or join startup companies and these opportunities frequently offer
the potential for significant future financial profit through equity incentives
which we cannot match. During the third quarter of 1999, our rate of voluntary
employee turnover was
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higher than our target rate. We may not be successful in attracting a sufficient
number of highly skilled employees in the future, or in retaining, training and
motivating the employees we are able to attract. Any inability to attract,
retain, train and motivate employees could impair our ability to adequately
manage and complete existing projects and to bid for or accept new client
engagements.
IF WE DO NOT MANAGE OUR GROWTH EFFECTIVELY, OUR OPERATING RESULTS WILL BE
ADVERSELY AFFECTED
Our growth has placed significant demands on our management and other
resources. Our revenues increased approximately 79% in 1998 from $92.0 million
in 1997 to $164.9 million in 1998. Our revenues for the nine months ended
September 30, 1999 increased approximately 76% over the same period for 1998.
Our staff increased from 1,383 full-time employees at September 30, 1998 to
1,939 at September 30, 1999. 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;
- integrating and managing acquired businesses, joint ventures and
strategic investments;
- training, motivating and managing our employees;
- estimating fixed-price fees and project timeframes accurately;
- maintaining high rates of employee utilization; and
- maintaining project quality and client satisfaction.
Our management has limited experience managing a business of Sapient's
current size. If we are unable to manage our growth and projects effectively,
the quality of our services and products, our ability to retain key personnel
and our business, financial condition and results of operations may be
materially adversely affected.
WE HAVE SIGNIFICANT FIXED OPERATING COSTS WHICH MAY BE DIFFICULT TO ADJUST IN
RESPONSE TO UNANTICIPATED FLUCTUATIONS IN REVENUES
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 may
cause significant variations in operating results in any particular quarter and
could result in losses for that quarter.
An unanticipated termination of a major project, a client's decision
not to proceed with 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 revenues and earnings may
also fluctuate from quarter to quarter based on such factors as:
- the contractual terms and timing of completion of projects;
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- any delays incurred in connection with projects;
- the adequacy of provisions for losses;
- the accuracy of our estimates of resources required to complete ongoing
projects; and
- general economic conditions.
THE INCREASED SIZE AND COMPLEXITY OF THE SOLUTIONS WE ARE IMPLEMENTING MAKES IT
MORE LIKELY THAT WE WILL FAIL TO SATISFY CLIENT EXPECTATIONS, WHICH WOULD DAMAGE
OUR REPUTATION AND BUSINESS
The average dollar size of our solutions has grown significantly, while
the timeframe for delivering solutions has generally decreased. As our client
engagements become larger and more complex and must be completed in shorter
timeframes, it becomes more difficult to manage the development process and the
likelihood and consequences of any mistakes increase. Any inability by us to
complete client solutions in a timely manner, any defects contained in the
solutions we deliver and any other failure by us to achieve client expectations,
would have a material adverse effect on our reputation with the affected client
and generally within our industry and could have a material adverse effect on
our business, results of operations or financial condition.
WE ENTER INTO FIXED-PRICE CONTRACTS AND COULD LOSE MONEY ON THESE CONTRACTS
Most of our projects are based on fixed-price, fixed-timeframe
contracts, rather than contracts in which payment to us is determined on a time
and materials basis. Our failure to accurately estimate the resources required
for a project or our failure to complete our contractual obligations in a manner
consistent with the project plan upon which our fixed-price, fixed-time frame
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 projects in the past, which has resulted in losses on
those contracts. We recognize that we will experience similar situations in the
future and that the consequences could be more severe than in the past due to
the increased size and complexity of our solutions. In addition, for some
projects we may fix the price at an early stage of the process, which could
result in a fixed price that turns out to be too low and therefore would
adversely affect our profitability.
WE DEPEND HEAVILY ON A LIMITED NUMBER OF CLIENT PROJECTS, THE LOSS OF ANY OF
WHICH WOULD ADVERSELY AFFECT OUR OPERATING RESULTS
We have derived, and believe that we will continue to derive, a
significant portion of our revenues from a limited number of clients for whom we
perform large projects. In 1998, our five largest clients accounted for
approximately 30% of our revenues, with four clients each accounting for more
than 5% of our revenues. For the nine months ended September 30, 1999, our five
largest clients accounted for approximately 26% of our revenues, with three
clients each accounting for more than 5% of our revenues. In addition, revenues
from a large client may constitute a significant portion of our total revenues
in a particular quarter. The loss of any principal client for any reason,
including as a result of
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<PAGE> 10
the acquisition of that client by another entity, could have a material adverse
effect on our business, financial condition and results of operations.
IF WE ARE UNABLE TO ACHIEVE ANTICIPATED BENEFITS FROM ACQUISITIONS, JOINT
VENTURES AND STRATEGIC INVESTMENTS, OUR BUSINESS COULD BE ADVERSELY AFFECTED
During the past two years, we have completed four acquisitions and
entered into one joint venture. The anticipated benefits from these and future
acquisitions, joint ventures and strategic investments may not be achieved. For
example, when we acquire a company, we cannot be certain that customers of the
acquired business will continue to do business with us or that employees of the
acquired business will continue their employment or become well integrated into
our operations and culture. The identification, consummation and integration of
acquisitions, joint ventures and strategic investments requires substantial
attention from management. The diversion of the attention of management relating
to these activities, as well as any difficulties encountered in the integration
process, could have an adverse impact on our business, financial condition and
results of operations.
IF CLIENTS UNEXPECTEDLY TERMINATE THEIR CONTRACTS FOR OUR SERVICES, OUR BUSINESS
COULD BE ADVERSELY AFFECTED
Some of our contracts can be canceled by the client with limited
advance notice and without significant penalty. Termination by any client of a
contract for our services could result in a loss of expected revenues and
additional expenses for staff which were allocated to that client's project. 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.
OUR STOCK PRICE IS VOLATILE AND MAY RESULT IN SUBSTANTIAL LOSSES FOR PURCHASERS
OF OUR COMMON STOCK
The trading price of our common stock could be subject to wide
fluctuations in response to:
- quarterly variations in operating results and our achievement of key
business metrics;
- changes in earnings estimates by securities analysts;
- any differences between reported results and securities analysts'
published or unpublished expectations;
- announcements of new contracts or service offerings by us or our
competitors;
- market reaction to any acquisitions, joint ventures or strategic
investments announced by us or our competitors; and
- general economic or stock market conditions unrelated to our operating
performance.
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In the past, securities class action litigation has often been
instituted against companies following periods of volatility in the market price
of their securities. This type of litigation could result in substantial costs
and a diversion of management attention and resources.
IF WE DO NOT KEEP PACE WITH TECHNOLOGICAL CHANGES, OUR COMPETITIVE POSITION WILL
SUFFER
Our markets and the technologies used in our solutions are
characterized by rapid technological change. Failure to respond in a timely and
cost-effective way to these technological developments would have a material
adverse effect on our business, financial condition and results of operations.
We expect to derive a substantial portion of our revenues from providing
Internet solutions that are based upon leading technologies and that are capable
of adapting to future technologies. As a result, our success will depend on our
ability to offer services that keep pace with continuing changes in technology,
evolving industry standards and changing client preferences. We may not be
successful in addressing future developments on a timely basis. Our failure to
keep pace with the latest technological developments would have a material
adverse effect on our business, financial condition and results of operations.
WE MAY BECOME SUBJECT TO CLAIMS THAT THE SOLUTIONS WE HAVE DESIGNED AND
IMPLEMENTED ARE NOT YEAR 2000 COMPLIANT
Since 1991, we have designed, developed and implemented solutions for a
large number of clients. There can be no way of assuring that all of these
solutions will be Year 2000 compliant. We have also recommended, implemented and
customized various third-party technology and software packages for our clients,
some of which may not be Year 2000 compliant. There can be no assurance that we
will not become involved in disputes with clients regarding Year 2000 problems
involving solutions we developed or implemented or the interaction of those
solutions with other applications. These disputes could require us to incur
unanticipated expenses and distract us from our core business and these expenses
and distractions could have a material adverse effect on our business, financial
condition and results of operations.
WE FACE SIGNIFICANT COMPETITION IN MARKETS THAT ARE NEW AND RAPIDLY CHANGING
The markets for the services we provide are highly competitive. We
believe that we currently compete principally with strategy consulting firms,
Internet professional services firms, systems integration firms, technology
vendors and internal information systems groups. Many of the companies that
provide services in our markets 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 competition from new entrants into our markets.
We believe that the principal competitive factors in our markets
include:
- ability to integrate strategy, experience modeling, creative design and
technology services;
- quality of service, speed of delivery and price;
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- industry knowledge;
- sophisticated project and program management capability; and
- Internet technology expertise and talent.
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
professional staff;
- the development by others of Internet services or software that is
competitive with our solutions; and
- the extent of our competitors' responsiveness to client needs.
There can be no assurance that we will be able to compete successfully
in our markets.
GOVERNMENT REGULATION COULD INTERFERE WITH THE ACCEPTANCE OF THE INTERNET AND
ELECTRONIC COMMERCE, WHICH WOULD ADVERSELY AFFECT THE DEMAND FOR OUR SERVICES
Any new laws and regulations applicable to the Internet and electronic
commerce that are adopted by federal, state or foreign governments could dampen
the growth of the Internet and decrease its acceptance as a commercial medium.
If this occurs, companies may decide in the future not to pursue Internet
initiatives, which would decrease demand for our services. A decrease in the
demand for our services would have a material adverse effect on our business,
financial condition and results of operations.
INTERNATIONAL EXPANSION OF OUR BUSINESS COULD RESULT IN FINANCIAL LOSSES DUE TO
CHANGES IN FOREIGN ECONOMIC CONDITIONS OR FLUCTUATIONS IN CURRENCY AND EXCHANGE
RATES
We expect to continue to expand our international operations. We
currently have offices in the United Kingdom and Australia and have recently
commenced a joint venture in Italy. We have limited experience in marketing,
selling and providing our services internationally. International operations are
subject to other inherent risks, including:
- recessions in foreign countries;
- fluctuations in currency exchange rates;
- the scheduled conversion to the euro by most European Union members;
- difficulties and costs of staffing and managing foreign operations;
- reduced protection for intellectual property in some countries;
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- changes in regulatory requirements; and
- U.S. imposed restrictions on the import and export of technologies.
IF WE ARE UNABLE TO PROTECT OUR PROPRIETARY METHODOLOGY, OUR BUSINESS COULD BE
ADVERSELY AFFECTED
Our success depends, in part, upon our proprietary methodology and
other intellectual property rights. We rely upon a combination of trade secrets,
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 these agreements, and limit access to and distribution of our proprietary
information. There can be no assurance that the steps we take 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. In addition, although we believe that
our services and products do not infringe on the intellectual property rights of
others, there can be no assurance that infringement claims will not be asserted
against us in the future, or that if asserted that any infringement claim will
be successfully defended. A successful claim against us could materially
adversely affect our business, financial condition and results of operations.
WE MAY NOT HAVE THE RIGHT TO RESELL OR REUSE SOLUTIONS DEVELOPED FOR SPECIFIC
CLIENTS
A portion of our business involves the development of technology
solutions for specific client engagements. Ownership of these solutions is the
subject of negotiation and is frequently assigned to the client, although we may
retain a license for certain uses. Some clients have prohibited us from
marketing the applications developed for them for specified periods of time or
to specified third parties and there can be no assurance that clients will not
demand similar or other restrictions in the future. Issues relating to the
ownership of and rights to use solutions can be complicated and there can be no
assurance that disputes will not arise that affect our ability to resell or
reuse these solutions. Any limitation on our ability to resell or reuse a
solution could require us to incur additional expenses to develop new solutions
for future projects.
OUR CO-CHAIRMEN AND CO-CEOS HAVE SIGNIFICANT VOTING POWER AND MAY EFFECTIVELY
CONTROL THE OUTCOME OF ANY STOCKHOLDER VOTE
Jerry A. Greenberg and J. Stuart Moore, our co-Chairmen of the Board of
Directors and co-Chief Executive Officers, beneficially own approximately 36.6%
of our common stock. As a result, they 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 also have the effect of delaying or preventing a
change in control of Sapient even if such a change of control would benefit
other investors.
WE ARE DEPENDENT ON OUR KEY PERSONNEL
Our success will depend in large part upon the continued services of a
number of key employees, including Messrs. Greenberg and Moore. Our employment
contracts with Messrs. Greenberg and Moore
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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. Greenberg or
Moore or of one or more of our other key personnel could have a material adverse
effect on our business, financial condition and results of operations. 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 personnel, there can be no
assurance that we would be able to prevent the unauthorized disclosure or use of
our technical knowledge, practices or procedures by such personnel.
OUR CORPORATE GOVERNANCE PROVISIONS MAY DETER A FINANCIALLY ATTRACTIVE TAKEOVER
ATTEMPT
Provisions of our charter and by-laws may discourage, delay or prevent
a merger or acquisition that stockholders may consider favorable, including
transactions in which stockholders would receive a premium for their shares.
These provisions include the following:
- any action that may be taken by stockholders must be taken at an annual
or special meeting and may not be taken by written consent;
- stockholders must comply with advance notice requirements before
raising a matter at a meeting of stockholders or nominating a director
for election;
- a chairman of the board or a chief executive officer are the only ones
who may call a special meeting of stockholders;
- our board of directors is staggered into three classes and the members
may be removed only for cause upon the affirmative vote of holders of
at least two-thirds of the shares entitled to vote; and
- our board of directors has the authority, without further action by the
stockholders, to fix the rights and preferences of and issue shares of
preferred stock.
Provisions of Delaware law may also discourage, delay or prevent
someone from acquiring us or merging with us. See "Description of Capital Stock
- -- Preferred Stock" and "-- Delaware Law and Certain Charter and Bylaw
Provisions."
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus includes and incorporates forward-looking statements
that are subject to a number of risks and uncertainties. All statements, other
than statements of historical facts included or incorporated in this prospectus,
regarding our strategy, future operations, financial position, estimated
revenues, projected costs, prospects, plans and objectives of management are
forward-looking statements. When used in this prospectus, the words "will",
"believe", "anticipate", "intend", "estimate", "expect", "project" and similar
expressions are intended to identify forward-looking statements, although not
all forward-looking statements contain these identifying words. We cannot
guarantee future results, levels of activity, performance or achievements and
you should not place undue reliance on our forward-looking
-13-
<PAGE> 15
statements. Our forward-looking statements do not reflect the potential impact
of any future acquisitions, mergers, dispositions, joint ventures or strategic
investments. Our actual results could differ materially from those anticipated
in these forward-looking statements as a result of various factors, including
the risks described in "Risk Factors" and elsewhere in this prospectus. We do
not assume any obligation to update any of the forward-looking statements we
make.
USE OF PROCEEDS
We will not receive any proceeds from the sale of shares by the selling
stockholders.
The selling stockholders will pay any underwriting discounts and
commissions and 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. We will bear all other costs, fees and
expenses incurred in effecting the registration of the shares covered by this
prospectus, including, without limitation, all registration and filing fees,
Nasdaq listing fees and fees and expenses of our counsel and our accountants.
THE E.LAB ACQUISITION
We acquired substantially all of the assets of E.Lab on October 8, 1999
through an asset purchase agreement. In exchange for E.Lab's assets, we issued
an aggregate of 88,044 shares of Sapient common stock, which were valued at
approximately $3.8 million based on the last sale price of Sapient common stock
on the Nasdaq National Market on October 8, 1999. 13,206 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 all 88,044 shares for
resale by the E.Lab members following the acquisition. We registered 5,400 of
the shares issued to two of E.Lab's members in November 1999.
SELLING STOCKHOLDERS
The following table sets forth, to our knowledge, certain information
about the selling stockholders as of March 1, 2000.
Beneficial ownership is determined in accordance with the rules of the
SEC, and includes voting or investment power with respect to shares. Unless
otherwise indicated below, to our knowledge, all persons named in the table have
sole voting and investment power with respect to their shares of common stock,
except to the extent authority is shared by spouses under applicable law. The
inclusion of any shares in this table does not constitute an admission of
beneficial ownership for the person named below.
-14-
<PAGE> 16
<TABLE>
<CAPTION>
NUMBER OF PERCENTAGE
SHARES OF OF SHARES
COMMON OF COMMON PERCENTAGE OF
STOCK STOCK NUMBER OF NUMBER OF SHARES OF
BENEFICIALLY BENEFICIALLY SHARES OF SHARES OF COMMON
OWNED OWNED COMMON COMMON STOCK STOCK
PRIOR PRIOR TO STOCK BENEFICIALLY BENEFICIALLY
NAME OF SELLING TO OFFERING OFFERED OWNED AFTER OWNED AFTER
STOCKHOLDER OFFERING(1) (1)(2) HEREBY(1) OFFERING(2) OFFERING (2)
--------------- ------------ ------------ --------- ------------ -------------
<S> <C> <C> <C> <C> <C>
Rick Robinson 38,014 * 38,014 0 *
John Cain 29,858 * 29,858 0 *
Lisa Humphrey 4,010 * 4,010 0 *
Mary R. McCarthy
Living Trust 3,890 * 3,890 0 *
Maria Bezaitis 2,864 * 2,864 0 *
Jason Nims 2,290 * 2,290 0 *
Johanna Schoss 1,718 * 1,718 0 *
</TABLE>
- -------------------
* Less than one percent of the number of shares of common stock
outstanding.
(1) The selling stockholders have sole voting power and investment power
with respect to all shares listed as owned by the selling stockholders.
Of the total shares of common stock listed as owned by the selling
stockholders, a total of 13,206 shares are held in an escrow account to
secure indemnification obligations of the members of E.Lab to us. It is
expected that these shares (less any shares that may be distributed
from the escrow account to us in satisfaction of indemnification
claims) will be released from escrow and distributed to the selling
stockholders on or about October 8, 2000. The number of shares
indicated as owned by each selling stockholder includes those shares
which such selling stockholder is entitled to receive upon distribution
of these shares from the escrow account.
(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 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.
None of the selling stockholders has held any position or office with,
or has otherwise had a material relationship with us or any of our subsidiaries
within the past three years, except that in connection with the acquisition of
the assets of E.Lab we entered into employment letters with each of the selling
stockholders providing for their employment by us. The employment relationships
are not for a stated term but are "employment at will" relationships. In
connection with the purchase agreement,
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<PAGE> 17
certain of the selling stockholders also entered into non-competition agreements
with Sapient, and we agreed to make loans to the selling stockholders to
facilitate the payment of taxes by such selling stockholders, if they so
requested.
DESCRIPTION OF CAPITAL STOCK
Our authorized capital stock 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. As of January 31, 2000, 57,805,757 shares of our common
stock were issued and outstanding and no shares of preferred stock were
outstanding.
The following summary of our securities and provisions of our
certificate of incorporation and our bylaws is not intended to be complete and
is qualified by reference to the provisions of applicable law and to our
certificate of incorporation and bylaws.
COMMON STOCK
Holders of our common stock are entitled to one vote for each share on
all matters submitted to a vote of stockholders and do not have cumulative
voting rights. Accordingly, holders of a majority of the outstanding shares of
common stock entitled to vote in any election of directors may elect all of the
directors standing for election. Holders of common stock are entitled to receive
ratably such dividends, if any, as may be declared by the board of directors out
of funds legally available therefor, subject to the preferential dividend rights
of any preferred stock then outstanding. Upon any liquidation, dissolution or
winding-up, holders of common stock are entitled to receive ratably the net
assets available for distribution after the payment of all debts and other
liabilities and subject to any prior rights of any preferred stock then
outstanding. Holders of common stock have no preemptive, subscription,
redemption or conversion rights. The outstanding shares of common stock are, and
the shares to be issued by us in the offering 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
Our board of directors is authorized, subject to any limitations
prescribed by law, but 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 may have such number of shares,
designations, preferences, voting powers, qualifications, restrictions and
special or relative rights or privileges as is determined by our board of
directors, which may include, among others, dividend rights, voting rights,
redemption and sinking fund provisions, liquidation preferences, conversion
rights and preemptive rights.
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<PAGE> 18
Our stockholders 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 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, control of Sapient.
DELAWARE LAW AND CERTAIN CHARTER AND BYLAW PROVISIONS
We are subject to the provisions of Section 203 of the General
Corporation Law of Delaware, an anti-takeover law. In general, 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 some
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 certificate of incorporation and bylaws provide for the division of
our board of directors into three classes as nearly equal in size as possible
with staggered three-year terms. In addition, our certificate of incorporation
and bylaws provide that directors may be removed only for cause by the
affirmative vote of the holders of two-thirds of the shares of our capital stock
entitled to vote. Under our certificate of incorporation and 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 our 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.
Our certificate of incorporation and 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. Our certificate of incorporation and 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 or by the
board of directors. Under our bylaws, in order for any matter to be considered
"properly brought" before a meeting, a stockholder must comply with requirements
regarding advance notice to us. 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 from making a tender offer for our
common stock, because even if such person acquired a majority of our outstanding
voting securities it would be able to take action as a stockholder, such as
electing new directors or approving a merger, only at a duly called
stockholders' meeting, and not by written consent.
Our certificate of incorporation and bylaws require the affirmative
vote of the holders of at least 75% of the shares of our capital stock issued
and outstanding and entitled to vote to amend or repeal any of the provisions
described in the prior two paragraphs.
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<PAGE> 19
LIMITATION OF LIABILITY
Our certificate of incorporation contains provisions:
- eliminating a director's liability to us or our 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; and
- 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.
STOCK TRANSFER AGENT
The transfer agent and registrar for our common stock is American Stock
Transfer & Trust Company.
PLAN OF DISTRIBUTION
The shares covered by this prospectus may be offered and sold from time
to time by the selling stockholders. The term "selling stockholders" includes
donees, pledgees, transferees or other successors-in-interest selling shares
received after the date of this prospectus from a selling stockholder as a gift,
pledge, partnership distribution or other non-sale related transfer. The selling
stockholders will act independently of us in making decisions with respect to
the timing, manner and size of each sale. Such sales may be made on one or more
exchanges or in the over-the-counter market or otherwise, at prices and under
terms then prevailing or at prices related to the then current market price or
in negotiated transactions. 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 resale by such
broker-dealer for its own 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;
- in privately negotiated transactions; and
-18-
<PAGE> 20
- in options transactions.
In addition, any shares that qualify for sale pursuant to Rule 144 may
be sold under Rule 144 rather than pursuant to this prospectus.
To the extent required, this prospectus may be amended or supplemented
from time to time to describe a specific plan of distribution. In connection
with distributions of the shares or otherwise, the selling stockholders may
enter into hedging transactions with broker-dealers or other financial
institutions. In connection with such transactions, broker-dealers or other
financial institutions may engage in short sales of the common stock in the
course of hedging the positions they assume with selling stockholders. The
selling stockholders may also sell the common stock short and redeliver the
shares to close out such short positions. The selling stockholders may also
enter into option or other transactions with broker-dealers or other financial
institutions which require the delivery to such broker-dealer or other financial
institution of shares offered by this prospectus, which shares such
broker-dealer or other financial institution may resell pursuant to this
prospectus (as supplemented or amended to reflect such transaction). The selling
stockholders may also pledge shares to a broker-dealer or other financial
institution, and, upon a default, such broker-dealer or other financial
institution, may effect sales of the pledged shares pursuant to this prospectus
(as supplemented or amended to reflect such transaction).
In effecting sales, broker-dealers or agents engaged by the selling
stockholders may arrange for other broker-dealers to participate. Broker-dealers
or agents may receive commissions, discounts or concessions from the selling
stockholders in amounts to be negotiated immediately prior to the sale.
In offering the shares covered by this prospectus, 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 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 for the purpose of satisfying the prospectus delivery requirements
of the Securities Act. The selling stockholders may indemnify any broker-dealer
that participates in transactions involving the sale of the shares against
certain liabilities, including liabilities arising under the Securities Act.
At the time a particular offer of shares is made, if required, a
prospectus supplement will be distributed that will set forth the number of
shares being offered and the terms of the offering, including the name of any
underwriter, dealer or agent, the purchase price paid by any underwriter, any
discount, commission and other item constituting compensation, any discount,
commission or concession allowed or reallowed or paid to any dealer, and the
proposed selling price to the public.
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<PAGE> 21
We have agreed to indemnify the selling stockholders against certain
liabilities, including certain liabilities under the Securities Act.
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 covered by this prospectus have
been disposed of pursuant to and in accordance with the Registration Statement
or (ii) October 8, 2000.
LEGAL MATTERS
Hale and Dorr LLP has passed on the validity of the shares offered by
this prospectus.
EXPERTS
The consolidated balance sheets of Sapient as of December 31, 1998 and
1997 and the consolidated statements of income, stockholders' equity and cash
flows for each of the years in the three-year period ended December 31, 1998,
have been incorporated by reference herein and in the registration statement in
reliance upon the report of KPMG LLP, independent auditors, incorporated by
reference herein, and upon the authority of said firm as experts in accounting
and auditing.
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<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 ........ $2,338
Legal fees and expenses of the Company.................. $5,000
Accounting fees and expenses............................ $5,000
Miscellaneous expenses.................................. $2,662
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 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
II-1
<PAGE> 23
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 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).
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;
(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; 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.
provided, however, that paragraphs (i) and (ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the Registrant pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the Registration
Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment 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 of 1933, each filing of the Registrant's
annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act
of 1934 (and, where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in this Registration Statement shall be deemed to be a
new registration statement relating to the
II-3
<PAGE> 25
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 of 1933 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 this
10th day of March, 2000.
SAPIENT CORPORATION
/s/ Jerry A. Greenberg
By:_______________________________
Name: Jerry A. Greenberg
Title: Co-Chairman and Co-Chief
Executive Officer
II-5
<PAGE> 27
SIGNATURES AND POWER OF ATTORNEY
We, the undersigned officers and directors of Sapient Corporation,
hereby severally constitute and appoint Edward G. Goldfinger, 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 of 1933 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 March 10, 2000
- -------------------------- (Principal Executive Officer)
Jerry A. Greenberg
/s/ J. Stuart Moore Co-Chief Executive Officer and Director March 10, 2000
- -------------------------- (Principal Executive Officer)
J. Stuart Moore
/s/ Edward G. Goldfinger Chief Financial Officer (Principal March 10, 2000
- -------------------------- Financial and Accounting Officer)
Edward G. Goldfinger
/s/ Carl S. Sloane Director March 10, 2000
- --------------------------
Carl S. Sloane
/s/ Darius W. Gaskins, Jr. Director March 10, 2000
- --------------------------
Darius W. Gaskins, Jr.
/s/ Bruce D. Parker Director March 10, 2000
- --------------------------
Bruce D. Parker
Director
- --------------------------
R. Stephen Cheheyl
</TABLE>
II-6
<PAGE> 28
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
5.1 Opinion of Hale and Dorr LLP.
23.1 Consent of KPMG 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).
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EXHIBIT 5.1
HALE AND DORR LLP
COUNSELLORS AT LAW
60 STATE STREET, BOSTON, MASSACHUSETTS 02109
617-526-6000 o FAX 617-526-5000
March 10, 2000
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 88,044 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.
<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
CONSENT OF INDEPENDENT AUDITORS
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 LLP
Boston, Massachusetts
March 9, 2000
