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Filed pursuant to Rule 424(b)(3)
Registration No. 333-45636
PROSPECTUS
SAPIENT CORPORATION
1,503,294 SHARES OF COMMON STOCK
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On August 28, 2000, Sapient Corporation issued 1,503,294 shares of common
stock to the stockholders of Human Code, Inc. in connection with our acquisition
of that company. This prospectus relates to resales of those shares by the
former stockholders of Human Code. We will not receive any of the proceeds from
the sale of the shares.
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 September 26,
2000, the closing sale price of our common stock on Nasdaq was $41.19 per share.
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INVESTING IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. SEE "RISK
FACTORS" BEGINNING ON PAGE 4.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
REGULATOR HAS APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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The date of this prospectus is September 26, 2000.
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TABLE OF CONTENTS
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SUMMARY DESCRIPTION OF OUR BUSINESS......................... 3
RISK FACTORS................................................ 4
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS........... 10
WHERE TO FIND MORE INFORMATION.............................. 10
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE............. 10
USE OF PROCEEDS............................................. 12
THE HUMAN CODE ACQUISITION.................................. 12
SELLING STOCKHOLDERS........................................ 13
DESCRIPTION OF CAPITAL STOCK................................ 15
PLAN OF DISTRIBUTION........................................ 16
LEGAL MATTERS............................................... 18
EXPERTS..................................................... 18
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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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SUMMARY DESCRIPTION OF OUR BUSINESS
Sapient is a leading creator of new economy businesses 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 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 have the 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 six industry business units:
- financial services;
- media, entertainment and communications;
- retail and consumer products;
- technical and industrial services;
- public services; 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 2,500 people in offices across the
United States and in London, Sydney, Tokyo, Milan, Munich and New Delhi.
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. 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 68% from $164.9 million in 1998
to $276.8 million in 1999. Our revenues for the six months ended June 30, 2000
increased approximately 85% to $226.1 million from $122.0 million for the six
months ended June 30, 1999. Our staff increased from 1,492 full-time employees
at December 31, 1998 to 2,111 at December 31, 1999. Our staff increased from
1,790 full-time employees at June 30, 1999 to 2,565 at June 30, 2000. 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;
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- 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;
- 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.
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.
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
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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 1999, our five largest clients accounted for approximately
22% of our revenues, with no client accounting for more than 10% of our
revenues. For the six months ended June 30, 2000, our five largest clients
accounted for approximately 23% of our revenues, with no client accounting for
more than 10% 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 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 three years, we have completed five 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.
OUR STOCK PRICE IS VOLATILE AND MAY RESULT IN SUBSTANTIAL LOSSES FOR INVESTORS
PURCHASING SHARES IN THE OFFERING
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.
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.
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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 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;
- 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.
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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 London, Sydney, Tokyo, Milan, Munich and New Delhi. 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;
- 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 34.0%
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.
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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 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."
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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 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.
WHERE TO FIND MORE INFORMATION
We file reports, proxy statements, and other documents with the Securities
and Exchange Commission. 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
On-line information SEC's Internet website at
http://www.sec.gov
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 or termination of effectiveness if the registration statement of
which this prospectus is a part:
(i) Our Annual Report on Form 10-K for the year ended December 31,
1999, filed with the SEC on March 30, 2000;
(ii) Our Quarterly Report on Form 10-Q for the three months ended
March 31, 2000, filed with the SEC on May 12, 2000;
(iii) Our Quarterly Report on Form 10-Q for the three months ended
June 30, 2000, filed with the SEC on August 14, 2000;
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(iv) Our Current Report on Form 8-K, filed with the SEC on January 4,
2000;
(v) Our Current Report on Form 8-K, filed with the SEC on August 17,
2000;
(vi) Our Current Report on Form 8-K, filed with the SEC on August 31,
2000;
(vii) Our Current Report on Form 8-K, filed with the SEC on September
12, 2000;
(viii) 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
(ix) 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.
We will provide to each person, including any beneficial owner, to whom a
copy of this prospectus is delivered, a copy of any or all of the documents that
are incorporated by reference in this prospectus. These documents will be
provided, without cost, upon written or oral request by contacting:
Sapient Corporation
One Memorial Drive
Cambridge, Massachusetts 02142
Attention: Investor Relations
(617) 621-0200
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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 HUMAN CODE ACQUISITION
We acquired Human Code on August 28, 2000 pursuant to a merger agreement.
We issued an aggregate of 1,503,294 shares of Sapient common stock, which were
valued at approximately $78.8 million based on the last sale price of Sapient
common stock on the Nasdaq National Market on August 28, 2000, in exchange for
all of the outstanding stock of Human Code. 150,334 of the shares were placed in
escrow to secure the indemnification obligations of the former Human Code
stockholders. The transaction will be accounted for as a purchase.
We agreed to use our reasonable best efforts to register all 1,503,294
shares for resale by the former Human Code stockholders following the
acquisition.
The Human Code acquisition is more fully described in our current report on
Form 8-K filed with the SEC on September 12, 2000.
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SELLING STOCKHOLDERS
The following table sets forth, to our knowledge, certain information about
the selling stockholders as of September 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.
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NUMBER OF PERCENTAGE OF PERCENTAGE
SHARES OF SHARES OF NUMBER OF OF SHARES OF
COMMON COMMON SHARES OF COMMON
STOCK STOCK NUMBER OF COMMON STOCK
BENEFICIALLY BENEFICIALLY SHARES OF STOCK BENEFICIALLY
OWNED OWNED PRIOR COMMON BENEFICIALLY OWNED
PRIOR TO THE TO STOCK OFFERED OWNED AFTER AFTER
NAME OF SELLING STOCKHOLDER OFFERING(1) OFFERING(1)(2) HEREBY(1) OFFERING(2) OFFERING(2)
--------------------------- ------------ -------------- ------------- ------------ ------------
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Elizabeth Walker........................ 245,925(3) * 245,925(3) 0 *
Applied Technology TIE.................. 371,120 * 371,120 0 *
Applied Technology TIP.................. 177,646 * 177,646 0 *
Austin Ventures IV-A, L.P............... 67,165 * 67,165 0 *
Austin Ventures IV-B, L.P............... 140,911 * 140,911 0 *
Austin Ventures VI, L.P................. 427,955 * 427,955 0 *
AV Partners IV, L.P..................... 150,334(4) * 150,334(4) 0 *
AV Partners VI, L.P..................... 150,334(4) * 150,334(4) 0 *
Other selling stockholders (36 persons,
each of whom owns less than 1% of the
outstanding common stock)............. 226,178(5) * 222,906 3,272(5) *
</TABLE>
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* 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 150,334 shares are held in an escrow account to secure
indemnification obligations of the former Human Code stockholders 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
August 28, 2001. 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.
(3) Includes 150,334 shares held in the escrow account securing the
indemnification obligations of the former Human Code stockholders to us
which may be sold by Ms. Walker solely in her capacity as an indemnification
representative under the escrow agreement to satisfy certain payment
obligations of the former Human Code stockholders to American Stock Transfer
& Trust Company as escrow agent.
(4) Consists of shares held in the escrow account securing the indemnification
obligations of the former Human Code stockholders to us which may be sold by
AV Partners IV, L.P. or AV Partners VI, L.P. solely in their capacity as
indemnification representatives under the escrow agreement to satisfy
certain payment obligations of the former Human Code stockholders to
American Stock Transfer & Trust Company as escrow agent.
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(5) Includes an aggregate of 3,272 shares of common stock issuable within 60
days of September 1, 2000 pursuant to the exercise of stock options.
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
Human Code certain selling stockholders entered into non-competition,
non-solicitation, non-disclosure and lock-up agreements with Sapient.
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DESCRIPTION OF CAPITAL STOCK
Our authorized capital stock consists of 200,000,000 shares of common
stock, par value $.01 per share, and 5,000,000 shares of preferred stock, par
value $.01 per share. As of August 31, 2000, 120,616,103 shares of our common
stock were issued and outstanding and no shares of preferred stock were
outstanding. The number of outstanding shares has been adjusted to reflect the
two-for-one stock split effected as a 100% stock dividend distributed on August
28, 2000 to stockholders of record on August 14, 2000.
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.
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
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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.
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;
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- 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
- 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).
As a condition to including shares in the registration statement of which
this prospectus is a part, we may require each selling stockholder to agree to
engage Goldman, Sachs & Co. to act as such selling stockholder's broker, dealer
or other intermediary in connection with sales pursuant to this prospectus.
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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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 use our reasonable best
efforts 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 or (ii) August 28, 2002. We have the
right to suspend sales of shares hereunder under certain circumstances.
LEGAL MATTERS
Hale and Dorr LLP, Boston, Massachusetts, has passed on the validity of the
shares offered by this prospectus.
EXPERTS
The financial statements as of and for the year ended December 31, 1999
incorporated in this Prospectus by reference to the Annual Report on Form 10-K
of Sapient Corporation for the year ended December 31, 1999 have been so
incorporated in reliance on the report of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of said firm as experts in
accounting and auditing.
The consolidated balance sheet of Sapient Corporation and subsidiaries as
of December 31, 1998, and the related consolidated statements of income, changes
in stockholders' equity, and cash flows for each of the years in the two-year
period ended December 31, 1998, and the consolidated financial statement
schedule as of and for the two years 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, and upon the authority of
said firm as experts in accounting and auditing.
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