-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, EGDO099COhGqohhTMQyfjXHo/f6df8R10l9cuQYJHl/FVJiqEAdMsZQNEWivy8gD 5DPoS2Ji/sAgAf+M4k+pHQ== 0000950135-01-500881.txt : 20010501 0000950135-01-500881.hdr.sgml : 20010501 ACCESSION NUMBER: 0000950135-01-500881 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20001231 FILED AS OF DATE: 20010430 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SAPIENT CORP CENTRAL INDEX KEY: 0001008817 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER INTEGRATED SYSTEMS DESIGN [7373] IRS NUMBER: 043130648 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: SEC FILE NUMBER: 000-28074 FILM NUMBER: 1616222 BUSINESS ADDRESS: STREET 1: ONE MEMORIAL DR CITY: CAMBRIDGE STATE: MA ZIP: 02142 BUSINESS PHONE: 6176210200 MAIL ADDRESS: STREET 1: ONE MEMORIAL DRIVE CITY: CAMBRIDGE STATE: MA ZIP: 02142 10-K/A 1 b39190sce10-ka.txt SAPIENT CORPORATION 1 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K/A AMENDMENT NO. 1 FOR ANNUAL AND TRANSITION REPORTS PURSUANT TO SECTIONS 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (MARK ONE) [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO COMMISSION FILE NUMBER 0-28074 SAPIENT CORPORATION (Exact Name of Registrant as Specified in Its Charter) DELAWARE 04-3130648 (State or Other Jurisdiction of (I.R.S. Employer Incorporation or Organization) Identification No.) ONE MEMORIAL DRIVE, CAMBRIDGE, MA 02142 (Address of Principal Executive Offices) (Zip Code)
(617) 621-0200 Registrant's Telephone Number, Including Area Code SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: COMMON STOCK, $.01 PAR VALUE PER SHARE (Title of Class) Indicate by check mark whether the Company (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Company was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the Company's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendments to this Form 10-K. [ ] The aggregate market value of the voting stock held by non-affiliates of the Company was approximately $782,250,000 on March 19, 2001 based on the last reported sale price of the Company's common stock on the Nasdaq National Market on March 19, 2001. There were 122,538,818 shares of common stock outstanding as of March 19, 2001. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 2 Part III of the Annual Report on Form 10-K of the Company for the fiscal year ended December 31, 2000 is hereby amended and restated in its entirety as follows: PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY A. Directors and Compliance with section 16(a) of the Exchange Act
Principal Occupation, Other Business Director Experience During Past Five Years and Name Age Since Other Directorships ---- --- -------- ------------------------------------- NOMINEES FOR TERMS EXPIRING IN 2004 (CLASS II DIRECTORS) Darius W. Gaskins, Jr.... 61 1995 Mr. Gaskins has been a director of the Company since September 1995. Mr. Gaskins is a founding partner of Norbridge, Inc., formerly Carlisle, Fagan, Gaskins & Wise, Inc., a management consulting firm. Since 1991, Mr. Gaskins has also been a partner of High Street Associates, Inc., which owns and manages a specialty chemical company. Mr. Gaskins is also a director of Anacomp Inc., Northwestern Steel and Wire Company and RH Donnelley Corporation. J. Stuart Moore.......... 39 1991 Mr. Moore co-founded the Company in 1991 and has served as Co-Chairman of the Board of Directors and Co-Chief Executive Officer of the Company since its inception. Jurgen Weber............. 59 2000 Mr. Weber has been a director of the Company since October 2000. Since 1991, Mr. Weber has served as the Chairman and Chief Executive Officer of Deutsche Lufthansa AG. DIRECTORS WHOSE TERMS EXPIRE IN 2002 (CLASS III DIRECTORS) R. Stephen Cheheyl....... 55 1996 Mr. Cheheyl has been a director of the Company since January 1996. Since his retirement in December 1995, Mr. Cheheyl has been a private investor and independent consultant. From October 1994 until December 1995, Mr. Cheheyl served as an Executive Vice President of Bay Networks, Inc., a manufacturer of computer networking products, which was formed through the merger of Wellfleet Communications, Inc. and Synoptics Communications, Inc. Mr. Cheheyl is also a director of MCMS, Inc. Carl S. Sloane........... 64 1995 Mr. Sloane has been a director of the Company since September 1995. Mr. Sloane is the Ernest L. Arbuckle Professor of Business Administration, Emeritus, at Harvard University's Graduate School of Business Administration, where he served as a member of the faculty since 1991. Mr. Sloane is also an independent consultant and Deputy Chairman of Andell, Inc., a private investment company. Mr. Sloane is a director of Ionics, Inc., The Pittston Company and Rayonier, Inc. DIRECTORS WHOSE TERMS EXPIRE IN 2003 (CLASS I DIRECTORS) Jerry A. Greenberg....... 35 1991 Mr. Greenberg co-founded the Company in 1991 and has served as Co-Chairman of the Board of Directors and Co-Chief Executive Officer of the Company since its inception. Bruce D. Parker.......... 53 1995 Mr. Parker has been a director of the Company since September 1995. Mr. Parker became an Executive Vice President of the Company in December 1999. Mr. Parker served as Senior Vice President and Chief Information Officer at United Airlines, Inc. from December 1997 until December 1999. From September 1994 to December 1997, Mr. Parker was Senior Vice President -- Management Information Systems and Chief Information Officer at Ryder System Inc., a transportation company.
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the Company's directors, executive officers and holders of more than 10% of the Common Stock to file with the Securities and Exchange Commission initial reports of ownership and reports of changes in ownership of Common Stock and other equity securities of the Company. Based solely on a review of reports submitted, and representations made, to the Company, the Company believes that during 2000 its executive officers, directors and holders of more than 10% of the Common Stock complied with all Section 16(a) filing requirements, other than a stock option granted to Mr. Parker in December 1999, which was reported on a Form 5 for the calendar year 2000. B. Executive Officers of the Company The response to this Item is contained in Part I, after Item 4. ITEM 11. EXECUTIVE COMPENSATION DIRECTOR COMPENSATION Each non-employee director is paid $3,000 for attendance in person at each meeting of the Board of Directors of the Company (the "Board") and $750 for attendance in person at any committee meeting that is not held on the same day as a Board meeting. If a director participates by telephone, rather than in person, one-half of such amount is paid, in each case. In addition, each non-employee director is reimbursed for expenses incurred in connection with attending meetings. Directors receive no other cash compensation for serving as directors. 3 On May 23, 2000, each of Messrs. Cheheyl, Gaskins and Sloane was granted a stock option under the Company's 1998 Stock Incentive Plan to acquire 10,000 shares of Common Stock at an exercise price of $44.4375 per share, which was the fair market value of the Common Stock on such date. These options vest in three equal annual installments starting on the first anniversary of the date of grant. In February 1996, the Board adopted and the stockholders approved the 1996 Director Stock Option Plan (the "Director Plan"), pursuant to which each new non-employee director subsequently elected to the Board of Directors will be granted, upon his or her initial election, an option to purchase 40,000 shares of Common Stock. All options granted under the Director Plan will have an exercise price equal to the fair market value of the Common Stock on the date of grant, will vest over a four-year period (provided the option holder continues to serve as a director of the Company) and will expire ten years from the date of grant (subject to earlier termination in the event the optionee ceases to serve as a director of the Company). On October 18, 2000, Mr. Weber was granted a stock option under the Director Plan to acquire 40,000 shares of Common Stock at $37.125 per share, which was the fair market value of the Common Stock on such date. No other options have been granted under the Director Plan, which provides for the issuance of a maximum of 240,000 shares. COMPENSATION OF EXECUTIVE OFFICERS SUMMARY COMPENSATION TABLE The following table sets forth certain information with respect to the compensation paid in each of the last three fiscal years to the Named Executive Officers (as defined in Item 12 below).
LONG-TERM COMPENSATION AWARDS ------------ ANNUAL NUMBER OF COMPENSATION(1) SHARES --------------------- UNDERLYING ALL OTHER NAME AND SALARY BONUS STOCK COMPENSATION PRINCIPAL POSITION YEAR ($) ($) OPTIONS(2) ($)(3) ------------------ ---- --------- -------- ------------ ------------ Jerry A. Greenberg................... 2000 50,000 0 0 1,094 Co-Chairman of the Board and 1999 50,000 0 0 898 Co-Chief Executive Officer 1998 50,000 69,693 0 1,250 J. Stuart Moore...................... 2000 50,000 0 0 1,094 Co-Chairman of the Board and 1999 50,000 0 0 938 Co-Chief Executive Officer 1998 50,000 69,693 0 1,250 Bruce D. Parker(4)................... 2000 325,000 95,833 100,296 1,016 Executive Vice President 1999 12,500 450,000 154,000 1,250 Edward G. Goldfinger(4).............. 2000 200,000 59,821 90,292 0 Chief Financial Officer 1999 18,205 0 110,000 0 Paul DiGiammarino(4)................. 2000 175,000 39,881 63,208 1,146 Executive Vice President 1999 175,000 58,516 90,000 1,148 1998 33,333 25,000 180,000 0 Merle Sprinzen(4).................... 2000 173,672 89,631 40,000 1,086 Chief Marketing Officer
- --------------- (1) In accordance with the rules of the Securities and Exchange Commission, other compensation in the form of perquisites and other personal benefits has been omitted because such perquisites and other personal benefits constituted less than the lesser of $50,000 or ten percent of the total annual salary and bonus for the Named Executive Officer for such year. 4 (2) Messrs. Greenberg and Moore do not participate in the Company's stock plans, due to the significant equity ownership that each of them holds in the Company. The Company has never granted any stock appreciation rights. (3) Amounts shown in this column represent the Company's matching contributions under the Company's 401(k) Plan. (4) Mr. Parker joined the Company as Executive Vice President in December 1999. Mr. Goldfinger joined the Company in November 1999 and was appointed Chief Financial Officer of the Company in January 2000. Mr. DiGiammarino joined the Company as a Senior Vice President in August 1998 and was appointed an Executive Vice President in May 2000. Ms. Sprinzen was employed by the Company as Chief Marketing Officer from February 2000 until April 2001. Each Named Executive Officer has executed an agreement which prohibits him or her from competing with the Company for a period of 12 months following termination of such officer's employment with the Company. OPTION GRANTS IN LAST FISCAL YEAR The following table sets forth certain information regarding options granted by the Company during the fiscal year ended December 31, 2000 to the Named Executive Officers.
INDIVIDUAL GRANTS ------------------------------------------------ PERCENT OF TOTAL POTENTIAL REALIZABLE VALUE AT NUMBER OF OPTIONS ASSUMED ANNUAL RATES OF SECURITIES GRANTED TO EXERCISE STOCK PRICE APPRECIATION FOR UNDERLYING EMPLOYEES OR BASE OPTION TERM(3) OPTIONS IN FISCAL PRICE EXPIRATION ----------------------------- NAME GRANTED(1) YEAR ($/SH)(2) DATE 5%($) 10%($) ---- ---------- ---------- --------- ---------- ------------- ------------- Jerry A. Greenberg(4)..... -- -- -- -- -- -- J. Stuart Moore(4)........ -- -- -- -- -- -- Bruce D. Parker........... 296 * 35.75 02/28/10 2,924 16,865 100,000 * 36.50 02/23/10 1,008,427 5,817,159 Edward G. Goldfinger...... 292 * 35.75 02/28/10 2,884 16,637 90,000 * 30.06 04/17/10 747,452 4,311,710 Paul DiGiammarino......... 3,208 * 35.75 02/28/10 31,686 182,780 60,000 * 47.75 01/10/10 791,546 4,566,071 Merle Sprinzen............ 40,000 * 36.59 02/28/10 404,366 2,332,601
- --------------- * Less than .01% (1) Represents options granted pursuant to the Company's 1998 Stock Incentive Plan. All of the options vest in four equal annual installments of 25 percent, beginning on the first anniversary of the first day of the month following the date of grant, except that the options granted to Messrs. Parker, Goldfinger and DiGiammarino for 296, 292 and 3,208 shares, respectively, vest 50 percent after three months and an additional 50 percent after six months. (2) The exercise price is equal to the fair market value of the Company's Common Stock on the date of grant. (3) Potential realizable value is based on an assumption that the market price of the stock will appreciate at the stated rate, compounded annually, from the date of grant until the end of the ten-year term. These 5 values are calculated based on rules promulgated by the Securities and Exchange Commission and do not reflect the Company's estimate or projection of future stock prices. Actual gains, if any, on stock option exercises will depend on the future performance of the Company's Common Stock, the optionholder's continued employment through the option period and the date on which the options are exercised. (4) Messrs. Greenberg and Moore do not participate in the Company's stock option plans, due to the significant equity ownership that each of them holds in the Company. AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES The following table summarizes, for each of the Named Executive Officers, the number of shares acquired on exercise of options during the fiscal year ended December 31, 2000, the aggregate dollar value realized upon such exercise and the number and value of unexercised options held by such officers on December 31, 2000.
NUMBER OF SHARES VALUE OF UNEXERCISED UNDERLYING IN-THE-MONEY UNEXERCISED OPTIONS NUMBER OF OPTIONS AT FISCAL YEAR-END SHARES VALUE AT FISCAL YEAR-END (EXERCISABLE/ ACQUIRED ON REALIZED (EXERCISABLE/ UNEXERCISABLE) NAME EXERCISE ($)(1) UNEXERCISABLE) ($)(2) ---- ----------- -------- ------------------ --------------------- Jerry A. Greenberg(3).................. -- -- --/ -- --/ -- J. Stuart Moore(3)..................... -- -- --/ -- --/ -- Bruce D. Parker........................ -- -- 57,296/ 261,000 506,374/ 28,125 Edward G. Goldfinger................... -- -- 27,792/ 82,500 0/ 0 Paul DiGiammarino...................... 5,000 188,484 88,208/ 245,000 150,536/ 180,144 Merle Sprinzen......................... -- -- 0/ 40,000 0/ 0
- --------------- (1) Represents the difference between the exercise price and the fair market value of the Common Stock on the date of exercise. (2) Represents the difference between the last reported sale price per share ($11.9375) of the Common Stock on December 29, 2000, as reported on the Nasdaq National Market, and the exercise price. (3) Messrs. Greenberg and Moore do not participate in the Company's stock option plans, due to the significant equity ownership that each of them holds in the Company. CHANGE OF CONTROL ARRANGEMENTS In July 1998, the Company entered into an agreement with Mr. DiGiammarino in connection with his employment by the Company. The agreement provides for the acceleration of options held by Mr. DiGiammarino and certain payments to be made by the Company to Mr. DiGiammarino in the event of a change in control of the Company or termination of Mr. DiGiammarino's employment without cause. In the event of (i) a change in control of the Company that results in the termination of Mr. DiGiammarino's employment without cause within three years following the change in control or (ii) absent a change of control, the termination of Mr. DiGiammarino's employment without cause within three years from the commencement of his employment, then all outstanding stock options held by Mr. DiGiammarino will continue to vest until the second vesting date following the date of termination, in the case of a change of control, or until the first vesting date following the date of termination, in the case of termination without cause, and, in either case, the Company will pay Mr. DiGiammarino a lump sum amount equal to his then annual base salary and target bonus. If the Company terminates Mr. DiGiammarino's employment without 6 cause three years or more from the commencement of his employment, the Company will pay Mr. DiGiammarino a lump sum amount equal to one-half of his then annual base salary. In November 1999, the Company entered into an agreement with Mr. Goldfinger in connection with his employment by the Company. The agreement provides for the acceleration of options held by Mr. Goldfinger and certain payments to be made by the Company to Mr. Goldfinger in the event of a change in control of the Company or termination of Mr. Goldfinger's employment without cause. In the event of (i) a change in control of the Company that results in the termination of Mr. Goldfinger's employment without cause within three years following the change in control or (ii) absent a change of control, the termination of Mr. Goldfinger's employment without cause within three years from the commencement of his employment, then all outstanding stock options held by Mr. Goldfinger will continue to vest for an additional 12 months and the Company will pay Mr. Goldfinger a lump sum amount equal to his then annual base salary. If the Company terminates Mr. Goldfinger's employment without cause three years or more from the commencement of his employment, the Company will pay Mr. Goldfinger a lump sum amount equal to one-half of his then annual base salary. In November 1999, the Company entered into an agreement with Mr. Parker in connection with his employment by the Company. The agreement provides for the acceleration of options held by Mr. Parker and certain payments to be made by the Company to Mr. Parker in the event of a change in control of the Company or termination of Mr. Parker's employment without cause. In the event of certain unsolicited changes in control of the Company, (i) all outstanding stock options held by Mr. Parker will vest immediately and (ii) the Company will pay Mr. Parker a lump sum amount equal to three times his then annual base salary and target bonus. In the event of certain solicited changes in control of the Company, the vesting of Mr. Parker's stock options will accelerate by 24 months. For 24 months following a solicited or unsolicited change in control of the Company, if Mr. Parker's employment is terminated without cause or if he resigns for certain stated reasons, (i) all outstanding stock options held by Mr. Parker will immediately vest and (ii) the Company will pay Mr. Parker a lump sum amount equal to two times his then annual base salary and target bonus. Absent a change of control, if the Company terminates Mr. Parker's employment without cause, then the vesting of Mr. Parker's stock options will accelerate by 24 months, and if Mr. Greenberg is then the Co-Chief Executive Officer of the Company, the Company will pay Mr. Parker a lump sum amount equal to his then annual base salary and target bonus, but if Mr. Greenberg is not then the Co-Chief Executive Officer of the Company, the Company will pay Mr. Parker a lump sum amount equal to two times his then annual base salary and target bonus. All stock options held by Mr. Parker immediately vest upon his retirement following age 60. In January 2000, the Company entered into an agreement with Ms. Sprinzen in connection with her employment by the Company. The agreement provides for the acceleration of options held by Ms. Sprinzen and certain payments to be made by the Company to Ms. Sprinzen in the event of a change in control of the Company or termination of Ms. Sprinzen's employment without cause. In the event of (i) a change in control of the Company that results in the termination of Ms. Sprinzen's employment without cause within three years following the change in control or (ii) absent a change of control, the termination of Ms. Sprinzen's employment without cause within five years from the commencement of her employment, then all outstanding stock options held by Ms. Sprinzen will continue to vest for an additional 12 months and the Company will pay Ms. Sprinzen a lump sum amount equal to her then annual base salary and target bonus. If the Company terminates Ms. Sprinzen's employment without cause five years or more from the commencement of her employment, the Company will pay Ms. Sprinzen a lump sum amount equal to her then annual base salary and target bonus. In connection with the cessation of Ms. Sprinzen's employment in April 2001, the Company paid Ms. Sprinzen a lump sum amount equal to her current annual base salary and target bonus, and all outstanding stock options held by Ms. Sprinzen will continue to vest until April 2002. In October 2000, Mr. Weber was granted an option to purchase 40,000 shares of Common Stock under the Company's 1996 Director Stock Option Plan. Under the terms of the applicable stock option agreement between the Company and Mr. Weber, the option will immediately vest in full upon a change in control of the Company. 7 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following table sets forth certain information as of April 1, 2001, with respect to the beneficial ownership of shares of Common Stock by (i) each person known to the Company to own beneficially more than 5% of the outstanding shares of Common Stock, (ii) each director and nominee for director of the Company, (iii) Jerry A. Greenberg and J. Stuart Moore, the Co-Chief Executive Officers of the Company, and the four other executive officers listed in the Summary Compensation Table set forth under the caption "Compensation of Executive Officers" below (the "Named Executive Officers") and (iv) the directors and executive officers of the Company as a group. As of April 1, 2001, there were 122,614,278 shares of Common Stock outstanding.
AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP(1) -------------------------------------------------------- NUMBER OF OPTIONS NUMBER OF EXERCISABLE BY PERCENT OF BENEFICIAL OWNER SHARES OWNED MAY 31, 2001 TOTAL CLASS ---------------- ------------ -------------- ---------- ---------- 5% STOCKHOLDERS Jerry A. Greenberg............................ 21,156,281(2) 0 21,156,281(2) 17.25% Co-Chief Executive Officer c/o Sapient Corporation One Memorial Drive Cambridge, Massachusetts 02142 J. Stuart Moore............................... 20,394,314(3) 0 20,394,314(3) 16.63% Co-Chief Executive Officer c/o Sapient Corporation One Memorial Drive Cambridge, Massachusetts 02142 NON-EMPLOYEE DIRECTORS R. Stephen Cheheyl............................ 44,000 17,000 61,000 * Darius W. Gaskins, Jr......................... 20,400 37,000 57,400 * Carl S. Sloane................................ 10,400 21,800 32,200 * Jurgen Weber.................................. 0 0 0 0% OTHER NAMED EXECUTIVE OFFICERS Bruce D. Parker............................... 10,777 119,796 130,573 * Edward G. Goldfinger.......................... 900 45,792 46,692 * Merle Sprinzen................................ 396 10,000 10,396 * Paul DiGiammarino............................. 396 135,708 136,104 * All executive officers and directors, as a group (13 persons).......................... 42,714,102 1,096,631 43,810,733 35.73%
- --------------- * Less than 1% (1) Each stockholder possesses sole voting and investment power with respect to the shares listed, except as otherwise noted. (2) Includes 2,130,030 shares held by the Jerry A. Greenberg Remainder Trust-1996, 6,186,070 shares held by the Jerry A. Greenberg Eight-Year Qualified Annuity Trust-1996 and 599,727 shares held by the Jerry A. Greenberg Charitable Lead Annuity Trust-2000, of which trusts Mr. Greenberg is a co-trustee and over which shares Mr. Greenberg shares voting and/or investment control. (3) Includes (i) 7,314,138 shares held by the J. Stuart Moore Eight-Year Qualified Annuity Trust-1996, of which Mr. Moore is the sole trustee and over which Mr. Moore has sole voting and investment control, (ii) 2,606,044 shares held by the J. Stuart Moore Remainder Trust, of which Mr. Moore is a co-trustee and over which shares Mr. Moore shares investment control, (iii) 62,706 shares held by the J. Stuart Moore Irrevocable Trust, of which Mr. Moore's wife is a co-trustee and over which shares Mr. Moore's wife shares voting and investment control and (iv) 1,074,910 shares held by the J. Stuart Moore Gift Trust of 1995, over which shares Mr. Moore does not have voting or investment control, but in which shares Mr. Moore's children have a beneficial interest. Mr. Moore disclaims beneficial ownership of the shares held by the trusts except to the extent of his proportionate pecuniary interest therein. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS On July 2, 2000, the Company invested $2.0 million in HWT, Inc. (formerly known as HealthWatch Technologies, LLC) ("HWT"). HWT was created by the Company and others in 1998 for the purpose of performing Medicaid fraud, abuse and overpayment detection and collection services to state governments. HWT was created after the Company's Board of Directors determined that it would not be in the Company's best interest to directly provide such detection and collection services. Prior to this investment in July 2000, the Company owned approximately 44% of the outstanding equity interests of HWT, and certain affiliates of the Company owned approximately 12% of the outstanding equity interests of HWT. In addition, Messrs. Greenberg and Moore had loaned HWT approximately $2.4 million. After the July 2000 investment, the Company owned approximately 56% of the outstanding equity interests of HWT, and certain affiliates of the Company owned approximately 20.7% of the outstanding equity interests of HWT. The loans outstanding to Messrs. Greenberg and Moore, together with accrued interest at an annual rate of 8%, were converted into additional equity interests of HWT at the time of the Company's July 2000 investment. During 2000, the Company performed services for Sperry & Hutchinson Company, Inc. ("S&H"). Mr. Moore and members of his family own approximately 26% of the outstanding capital stock of S&H. Mr. Moore has also loaned approximately $2.0 million to S&H pursuant to a secured promissory note which bears interest at 5.18% per year. Certain other affiliates of the Company own approximately 1.4% of the outstanding capital stock of S&H. The Company's services involved the formulation and development of a business and web strategy for implementing a multi-channel customer loyalty program. The Company also provided creative and technical design, implementation and integration services for a website relating to the customer loyalty program. The Company's fees for the services it performed during 2000 were approximately $7.4 million, which have been paid in full by S&H, and were based on the Company's standard rates as determined on an arm's-length basis. On January 31, 2000, the Company entered into a strategic relationship with a client which included, among other things, the Company becoming a preferred supplier to that client and its numerous affiliated entities. As part of the relationship, Messrs. Greenberg and Moore each issued a $10.0 million convertible note to the client. Messrs. Greenberg and Moore entered into the convertible notes after the Company's Board of Directors determined that it would not be in the Company's best interest to directly enter into such a transaction. The notes are convertible into shares of the Company's Common Stock owned by Messrs. Greenberg and Moore at a conversion rate equal to the closing price of the Company's Common Stock as of the close of business on the date the convertible notes were executed. The client's ability to convert the notes is subject to certain vesting restrictions, based on the client's payment of certain levels of consulting revenues within prescribed timeframes. The notes cannot be converted before May 15, 2002. The Company's fees for services it performed for this client during 2000 were approximately $2.1 million, which have been paid in full by the client, and were based on the Company's standard rates as determined on an arm's-length basis. 8 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. SAPIENT CORPORATION By: /s/ JERRY A. GREENBERG ------------------------------------ JERRY A. GREENBERG CO-CHAIRMAN AND CO-CHIEF EXECUTIVE OFFICER Dated: April 30, 2001 -----END PRIVACY-ENHANCED MESSAGE-----