10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2010

OR

o 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.)
131 Dartmouth St, Boston, MA	02116
(Address of principal executive offices)	(Zip Code)

617-621-0200
(Registrant’s telephone number, including area code)

(none)
(Former name, former address and former fiscal year, if changed since last report)

     Indicate by check mark whether the registrant (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 registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes þ No o

     Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes þ No o

     Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer þ	Accelerated filer o	Non-accelerated filer o	Smaller reporting company o
	(Do not check if a smaller reporting company)

     Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o No þ

     Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class	Outstanding at August 2, 2010
Common Stock, $0.01 par value per share	135,004,546 shares

SAPIENT CORPORATION
INDEX

PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)	3
Consolidated and Condensed Balance Sheets as of June 30, 2010 and December 31, 2009	3
Consolidated and Condensed Statements of Operations for the Three and Six Months Ended June 30, 2010 and 2009	4
Consolidated and Condensed Statements of Cash Flows for the Three and Six Months Ended June 30, 2010 and 2009	5
Notes to Consolidated and Condensed Financial Statements	6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3. Quantitative and Qualitative Disclosures About Market Risk	30
Item 4. Controls and Procedures	31
PART II. OTHER INFORMATION
Item 1. Legal Proceedings	32
Item 1A. Risk Factors	32
Item 6. Exhibits	37
Signatures	37
EX-10.1
EX-10.2
EX-10.3
EX-10.4
EX-10.5
EX-31.1
EX-31.2
EX-32.1
EX-32.2
EX-101 INSTANCE DOCUMENT
EX-101 SCHEMA DOCUMENT
EX-101 CALCULATION LINKBASE DOCUMENT
EX-101 LABELS LINKBASE DOCUMENT
EX-101 PRESENTATION LINKBASE DOCUMENT

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

     This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements included in this Quarterly Report, including those related to our cash and liquidity resources and our cash expenditures relating to dividend payments and restructuring, as well as any statement other than statements of historical facts regarding our strategy, future operations, financial position, estimated revenues, projected costs, prospects, plans and objectives are forward-looking statements. When used in this Quarterly Report, 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 actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including the risks described below in Part II, Item 1A, “Risk Factors” in this Quarterly Report. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or strategic investments. In addition, any forward-looking statements represent our expectation only as of the day this Quarterly Report was first filed with the Securities and Exchange Commission (“SEC”) and should not be relied on as representing our expectations as of any subsequent date. While we may elect to update forward-looking statements at some point in the future, we specifically disclaim any obligation to do so, even if our expectations change.

2

SAPIENT CORPORATION

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements (unaudited)

CONSOLIDATED AND CONDENSED BALANCE SHEETS

	June 30,			December 31,
	2010			2009
	(Unaudited)
	(In thousands, except
	per share and share amounts)
ASSETS
Current assets:
Cash and cash equivalents	$	161,269		$	195,678
Marketable securities, current portion		6,825			16,082
Restricted cash, current portion		345			393
Accounts receivable, less allowance for doubtful accounts of $606 and $610 at June 30, 2010 and December 31, 2009, respectively		116,652			111,987
Unbilled revenues		59,184			47,426
Deferred tax assets, current portion		28,348			27,616
Prepaid expenses and other current assets		25,168			24,893
Total current assets		397,791			424,075
Marketable securities, net of current portion		1,358			1,362
Restricted cash, net of current portion		2,113			2,308
Property and equipment, net		28,482			29,229
Purchased intangible assets, net		19,799			23,061
Goodwill		77,276			76,004
Deferred tax assets, net of current portion		34,012			33,521
Other assets		5,841			5,359
Total assets	$	566,672		$	594,919
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	18,462		$	19,238
Accrued compensation		46,477			49,147
Accrued restructuring costs, current portion		4,264			3,727
Deferred revenues, current portion		14,720			19,544
Other current accrued liabilities		60,886			55,855
Total current liabilities		144,809			147,511
Accrued restructuring costs, net of current portion		1,004			2,994
Deferred tax liabilites, net of current portion		1,438			1,579
Other long-term liabilities		18,224			16,634
Total liabilities		165,475			168,718
Commitments and contingencies (Note 6)
Stockholders’ equity:
Preferred stock, par value $0.01 per share, 5,000,000 shares authorized and none issued or outstanding at June 30, 2010, and December 31, 2009		—			—
Common stock, par value $0.01 per share, 200,000,000 shares authorized, 135,340,233 and 133,272,997 shares issued at June 30, 2010, and December 31, 2009, respectively		1,353			1,333
Additional paid-in capital		550,503			583,291
Treasury stock, at cost, 444,418 shares at June 30, 2010, and December 31, 2009		(2,316	)		(2,316	)
Accumulated other comprehensive loss		(18,705	)		(12,626	)
Accumulated deficit		(129,638	)		(143,481	)
Total stockholders’ equity		401,197			426,201
Total liabilities and stockholders’ equity	$	566,672		$	594,919

     The accompanying notes are an integral part of these Consolidated and Condensed Financial Statements.

3

SAPIENT CORPORATION

CONSOLIDATED AND CONDENSED STATEMENTS OF OPERATIONS

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2010		2009		2010		2009
			(Unaudited)
			(In thousands, except per share amounts)
Revenues:
Service revenues	$	200,351	$	147,534	$	383,574	$	289,893
Reimbursable expenses		10,350		6,070		18,850		13,023
Total gross revenues		210,701		153,604		402,424		302,916
Operating expenses:
Project personnel expenses		139,345		101,939		267,112		202,117
Reimbursable expenses		10,350		6,070		18,850		13,023
Total project personnel expenses and reimbursable expenses		149,695		108,009		285,962		215,140
Selling and marketing expenses		10,225		7,274		18,872		14,416
General and administrative expenses		36,435		27,764		72,378		54,118
Restructuring and other related charges		128		158		414		2,303
Amortization of purchased intangible assets		1,359		898		2,826		1,765
Acquisition costs and other related charges		—		1,035		111		1,673
Total operating expenses		197,842		145,138		380,563		289,415
Income from operations		12,859		8,466		21,861		13,501
Interest and other income, net		745		809		1,545		1,815
Income before income taxes		13,604		9,275		23,406		15,316
Provision for income taxes		6,000		1,679		9,563		3,222
Net income	$	7,604	$	7,596	$	13,843	$	12,094
Basic net income per share	$	0.06	$	0.06	$	0.11	$	0.10
Diluted net income per share	$	0.06	$	0.06	$	0.10	$	0.09
Weighted average common shares		130,915		127,066		130,487		126,995
Weighted average dilutive common share equivalents		6,996		3,759		6,985		3,275
Weighted average common shares and dilutive common share equivalents		137,911		130,825		137,472		130,270

     The accompanying notes are an integral part of these Consolidated and Condensed Financial Statements.

4

SAPIENT CORPORATION

CONSOLIDATED AND CONDENSED STATEMENTS OF CASH FLOWS

	Six Months Ended
	June 30,
	2010			2009
	(Unaudited)
	(In thousands)
Cash flows from operating activities:
Net income	$	13,843			12,094
Adjustments to reconcile net income to net cash provided by operating activities:
Loss (gain) recognized on disposition of fixed assets		147			(102	)
Unrealized loss on financial instruments		340			543
Unrealized gain on investments		(132	)		(87	)
Depreciation expense		7,977			7,842
Amortization of purchased intangible assets		2,826			1,765
Deferred income taxes		(1,624	)		1,515
Provision for allowance for doubtful accounts, net		—			540
Stock-based compensation expense		9,635			7,146
Changes in operating assets and liabilities:
Accounts receivable		(7,912	)		(2,689	)
Unbilled revenues		(12,896	)		(2,083	)
Prepaid expenses and other current assets		6,792			(3,817	)
Other assets		(612	)		(45	)
Accounts payable		(563	)		2,085
Accrued compensation		(4,234	)		(21,196	)
Accrued restructuring costs		(1,344	)		(1,430	)
Deferred revenues		(4,416	)		(2,489	)
Other accrued liabilities		7,298			652
Other long-term liabilities		1,675			638
Net cash provided by operating activities		16,800			882
Cash flows from investing activities:
Cash paid for acquisitions		(3,163	)		—
Purchases of property and equipment and cost of internally developed software		(7,466	)		(3,542	)
Sales and maturities of available-for-sale marketable securities		781			2,296
Cash received on financial instruments, net		932			598
Restricted cash		46			217
Net cash used in investing activities		(8,870	)		(431	)
Cash flows from financing activities:
Principal payments under capital lease obligations		(41	)		—
Proceeds from stock option and purchase plans		4,240			155
Dividends paid on common stock		(46,832	)		—
Net cash (used in) provided by financing activities		(42,633	)		155
Effect of exchange rate changes on cash and cash equivalents		294			3,686
(Decrease) increase in cash and cash equivalents		(34,409	)		4,292
Cash and cash equivalents, at beginning of period		195,678			169,340
Cash and cash equivalents, at end of period	$	161,269		$	173,632
Supplemental Cash Flow Information:
Non-cash investing transaction:
Contingent earnout consideration associated with acquisition	$	2,371		$	2,363

     The accompanying notes are an integral part of these Consolidated and Condensed Financial Statements.

5

NOTES TO UNAUDITED CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

1. Basis of Presentation

     The accompanying unaudited consolidated and condensed financial statements have been prepared by Sapient Corporation pursuant to the rules and regulations of the Securities and Exchange Commission regarding interim financial reporting. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements and should be read in conjunction with the consolidated financial statements and notes thereto for the year ended December 31, 2009 included in the Company’s Annual Report on Form 10-K. These financial statements reflect all adjustments (consisting solely of normal, recurring adjustments) which are, in the opinion of management, necessary for a fair statement of results for the interim periods presented. The results of operations for the three and six months ended June 30, 2010, are not necessarily indicative of the results to be expected for any future period or the full fiscal year.

     In the first quarter of 2010, the Company realigned its North America and Europe business units and internal reporting systems to better align its services with its business and operational strategy. As such, the results of operations in Note 10, Segment Information, reflect the Company’s current business units: SapientNitro (new), Sapient Global Markets (new) and Sapient Government Services. SapientNitro is our customer experience business that combines multi-channel marketing, multi-channel commerce and the technology that binds them to help clients grow their businesses and create brand advocates. Sapient Global Markets provides advisory, analytics, technology, and operations solutions to today’s evolving financial and commodity markets. Sapient Government Services provides consulting, technology, and marketing services to a wide array of U.S. governmental agencies. Interim 2009 segment information has been recast to conform to the current structure.

     Unless the context requires otherwise, references in this Quarterly Report to “Sapient,” “the Company,” “we,” “us” or “our” refer to Sapient Corporation and its consolidated subsidiaries.

2. Acquisitions

Nitro Limited

     On July 1, 2009 the Company completed its acquisition of Nitro Ltd. (“Nitro”), a global advertising network. Nitro operates across North America, Europe, Australia and Asia. The acquisition added approximately 300 employees. The Company acquired Nitro to leverage Nitro’s traditional advertising services with the Company’s digital commerce and marketing technology services. Nitro’s results of operations are reflected in the Company’s consolidated statements of operations as of July 1, 2009. The Nitro transaction was accounted for using the acquisition method.

     The purchase price, net of cash acquired, was $31.0 million for the acquisition of 100% of Nitro’s outstanding shares. The $31.0 million consisted of $11.1 million in cash, net of cash acquired, deferred consideration with an estimated fair value of $8.1 million and the issuance of 3.3 million shares of restricted common stock valued at $11.8 million. The value of common stock was determined as $6.27 per share, the value of the Company’s common stock on the acquisition date, less $8.7 million. The $8.7 million reduction in purchase price reflects the impact of the selling restrictions on the shares of $7.1 million. The remaining $1.6 million reduction reflects the value of shares transferred as consideration that are also tied to the seller’s continued employment. The $1.6 million is being accounted for as compensation expense over the associated vesting period.

     The Company acquired a deferred consideration obligation of $8.0 million in the Nitro transaction. The obligation is denominated in a foreign currency. Pursuant to the purchase agreement, the seller agreed to indemnify the Company for payments in excess of $8.0 million. The Company paid $4.6 million in the fourth quarter of 2009 and $3.2 million in the first half of 2010 to settle this obligation. At June 30, 2010 the Company had a deferred consideration obligation of $1.3 million, offset by an indemnification asset of $1.1 million.

     Nitro can also receive additional consideration of up to $3.0 million, which is contingent on certain financial performance conditions during the twelve month period from October 1, 2009 to September 30, 2010, and is payable in either cash or stock at the Company’s discretion. Based on the Company’s most recent forecast, the Company does not believe Nitro will achieve the prescribed performance targets and as a result did not record a liability as of the acquisition date and as of June 30, 2010. The Company will continue to assess the probability of Nitro achieving this contingent consideration and any subsequent changes in the estimated fair value will be reflected in earnings. Furthermore, if Nitro’s financial performance did not meet certain revenue thresholds for the twelve months ended June 30, 2010, the Company could have clawed-back shares from the seller. As of June 30, 2010 Nitro’s financial performance met the prescribed target and the Company did not record an asset for this contingency. The following unaudited, pro forma information assumes the Nitro acquisition occurred at the beginning of the periods presented (in thousands, except per share amounts):

6

	Three Months		Six Months
	Ended June 30,		Ended June 30,
	2009		2009
	(unaudited)
Service revenues	$	159,687	$	314,198
Net income	$	6,097	$	7,216
Basic net income per share	$	0.05	$	0.06
Diluted net income per share	$	0.05	$	0.06

Derivatives Consulting Group Limited

     On August 6, 2008 the Company acquired 100% of the outstanding shares of Derivatives Consulting Group Limited (“DCG”). Aggregate initial consideration for the acquisition totaled $31.3 million, which consisted of: (i) cash consideration of $21.9 million, (ii) stock consideration of 307,892 shares, issued on the acquisition date, valued at $2.3 million, (iii) deferred stock consideration of 395,125 shares, valued at $4.5 million, which were issued in February 2010, and (iv) transaction costs of $2.6 million.

     Pursuant to the agreement, DCG could earn additional consideration subject to achieving certain operating objectives in years one, two and three, ending March 31, 2009, 2010 and 2011, respectively. The year one operating objectives were partially achieved and, as a result, the Company paid approximately $5.6 million in contingent consideration in 2009 which comprised $2.4 million in stock and $3.2 million in cash. The Company determined the amount of contingent consideration due to achievement of year two performance objectives was $2.4 million, which was paid by issuing 235,744 common shares during the second quarter of 2010. The maximum potential future consideration for the year three performance objectives, to be resolved over the next year, is £6.0 million (approximately $9 million at June 30, 2010 exchange rate) payable in cash or common stock. As the DCG acquisition was completed in 2008, it is accounted for as a business combination under the purchase method. Accordingly, any future contingent consideration payments will result in an increase in goodwill at the time the contingent consideration is earned.

     During the first quarter of 2009, the Company finalized an integration plan for DCG, which was initiated at the date of acquisition, which resulted in the termination of certain employees. The total cost of this plan was $0.5 million, which is for employee severance costs. The total cost of $0.5 million was recorded as an increase to goodwill and accrued in other current liabilities, and as of March 31, 2010 all amounts had been paid.

3. Marketable Securities, Put Right and Fair Value Disclosures

Marketable Securities and Put Right

     At June 30, 2010 the estimated fair value of the Company’s marketable securities classified as available-for-sale securities and trading securities were $1.4 million and $6.8 million, respectively. At December 31, 2009 the estimated fair value of the Company’s marketable securities classified as available-for-sale securities and trading securities were $2.1 million and $15.3 million, respectively. The Company sold, at amortized cost, $9.6 million of ARS classified as trading securities during the first half of 2010.

7

     The following tables summarize the Company’s marketable securities (in thousands):

	Available-for-Sale Securities as of June 30, 2010
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Long-term:
Auction rate securities	$	1,500	$	—	$	(142	)	$	1,358
	Trading Securities as of June 30, 2010
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Short-term:
Auction rate securities	$	6,825	$	—	$	—		$	6,825
	Available-for-Sale Securities as of December 31, 2009
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Long-term:
Auction rate securities	$	1,500	$	—	$	(138	)	$	1,362
Short-term:
Money market fund deposits		940		—		(186	)		754
Total	$	2,440	$	—	$	(324	)	$	2,116
	Trading Securities as of December 31, 2009
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Long-term:
Auction rate securities	$	16,425	$	—	$	(1,097	)	$	15,328

     The Company’s available-for-sale and trading securities consist of debt securities that comprise auction rate securities (“ARS”). As of June 30, 2010 all of the Company’s available-for-sale ARS have been in an unrealized loss position for more than twelve months. The Company’s trading ARS are stated at fair value.

     Using a discounted cash flow analysis, the Company has assessed that the fair value of its ARS classified as available-for-sale securities is $142,000 less than their amortized cost at June 30, 2010 compared to $138,000 less than amortized cost at December 31, 2009. The Company has recorded the change in valuation, a loss of $4,000, in the “accumulated other comprehensive loss” section on its consolidated and condensed balance sheets. The Company does not intend to sell its ARS classified as available-for-sale until a successful auction occurs and these ARS investments are liquidated at amortized cost, nor does the Company expect to be required to sell these ARS before a successful auction occurs.

     At December 31, 2009 the amortized cost of the Company’s investment in the Primary Fund, a mutual fund that suspended redemptions, was $0.8 million. Due to events in 2009 that limited the liquidity of this investment the Company recorded an impairment of $0.2 million in 2009. In January 2010 the Company received the remaining $0.8 million balance.

     The following table reconciles the total other-than-temporary impairment losses to other-than temporary losses reflected in earnings for the Company’s available-for-sale securities for the three and six months ended June 30, 2010 and 2009 (in thousands):

8

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2010		2009			2010			2009
Total other-than-temporary losses	$	—	$	(324	)	$	(4	)	$	(324	)
Less: portion of loss recognized in other comprehensive loss		—		(119	)		(4	)		(119	)
Net impairment losses recognized in earnings	$	—	$	(205	)	$	—		$	(205	)

     The Company has recorded its ARS classified as trading securities at their amortized cost. At December 31, 2009 the fair value of the ARS classified as trading securities was $1.1 million less than their amortized cost. The Company recorded the change in the other-than-temporary impairment in “interest and other income, net.” All of the Company’s ARS classified as trading securities are held with UBS, one of the Company’s brokers. On November 5, 2008 the Company accepted an offer from UBS which provided the Company with rights, the “Put Right”, to sell UBS its ARS investments at par at any time during a two-year period beginning June 30, 2010. The Put Right was initially measured at its fair value and changes in fair value of the Put Right were reflected in earnings. As the Company exercised the Put Right on June 30, 2010 – and subsequent to June 30, 2010 sold at amortized cost the remaining $6.8 million held with UBS back to UBS – the Put Right no longer held any significant value and the Company recorded the change in fair value of the Put Right, a loss of $1.1 million compared to its valuation as of December 31, 2009, in “interest and other income, net”. This loss was offset by a $1.1 million gain in fair value on the UBS ARS compared to their valuation as of December 31, 2009 as they were all sold at amortized cost.

     Actual maturities of our marketable securities may differ from contractual maturities because some borrowers have the right to call or prepay obligations. Gross realized gains and losses on the sale of securities are calculated using the specific identification method, and were not material to the Company’s operations for the three and six months ended June 30, 2010 and 2009.

Fair Value Disclosures

     The Company accounts for certain assets and liabilities at fair value. The following tables represent the Company’s fair value hierarchy for its cash equivalents, marketable securities, foreign exchange option contracts and acquired assets and liabilities measured at fair value on a recurring basis as of June 30, 2010 (in thousands):

	Fair Value Measurements at Reporting Date Using
	Level 1		Level 2		Level 3		Total
Financial assets:
Auction rate securities	$	—	$	—	$	8,183	$	8,183
Bank time deposits		—		65,219		—		65,219
Foreign exchange option contracts, net		—		88		—		88
Money market fund deposits		15,239		—		—		15,239
Indemnification assets acquired		—		—		1,228		1,228
Total	$	15,239	$	65,307	$	9,411	$	89,957

	Level 1		Level 2		Level 3		Total
Financial liabilities:
Foreign exchange option contracts, net	$	—	$	212	$	—	$	212
Deferred consideration acquired		—		—		231		231
Other long-term liabilities acquired		—		—		1,362		1,362
Total	$	—	$	212	$	1,593	$	1,805

     In January 2010 the Financial Accounting Standards Board (“FASB”) issued guidance related to disclosures of fair value measurements. The guidance requires gross presentation of activity within the Level 3 measurement roll-forward (below) and details of transfers in and out of Level 1 and 2 measurements. It also clarifies two existing disclosure requirements on the level of disaggregation of fair value measurements and disclosures on inputs and valuation techniques. A change in the hierarchy of an investment from its current level will be reflected in the period during which the pricing methodology of such investment changes. Disclosure of the transfer of securities from Level 1 to Level 2 or Level 3 will be made in the event that the related security is significant to total cash and investments. The Company did not have any transfers of assets and liabilities between Level 1 and Level 2 of the fair value measurement hierarchy during the six months ended June 30, 2010.

     Level 1 assets consist of money market fund deposits that are traded in an active market with sufficient volume and frequency of transactions. The fair value of these assets was determined from quoted prices in active markets for identical assets.

9

     Level 2 assets consist of bank time deposits and foreign exchange option contracts and Level 2 liabilities include foreign exchange option contracts. The fair value of these assets was determined from inputs that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

     Level 3 assets consist of ARS investments structured with short-term interest rate reset dates of generally less than ninety days but with contractual maturities that can be well in excess of ten years. At the end of each reset period, which occurs every seven to thirty-five days, investors can continue to hold the investments at par or sell the securities at auction provided there are willing buyers to make the auction successful. The ARS investments the Company holds are collateralized by student loans and municipal debt and, as noted above, have experienced failed auctions. Level 3 assets also include the following assumed, financial assets and liabilities as a result of the Nitro acquisition: (i) indemnification assets, (ii) deferred consideration and (iii) other long-term liability.

     The following table provides a summary of changes in fair value of the Company’s Level 3 financial assets measured on a recurring basis for the six months ended June 30, 2010 (in thousands):

	Level 3 Inputs
	Assets			Liabilities
Balance at December 31, 2009	$	20,847		$	5,736
Settlement of indemnification asset related to currency transaction loss on deferred consideration(1)		(1,079	)		(1,079	)
Loss on increase in fair value of deferred consideration acquired included in acquisition costs and other related charges		—			36
Loss on increase in fair value of other long-term liability acquired included in general and administrative expenses		—			63
Payment of acquired deferred consideration(1)		—			(3,163	)
Unrealized loss included in accumulated other comprehensive loss		(4	)		—
Unrealized loss included in other income, net		(1,096	)		—
Unrealized gain included in other income, net		1,096			—
Sales of marketable securities		(10,353	)		—
Balance at June 30, 2010	$	9,411		$	1,593

(1) Deferred consideration acquired in Nitro transaction is denominated in a foreign currency. Pursuant to the purchase agreement, the Company is indemnified against all currency transaction losses related to the deferred consideration. In the first half of 2010 the Company paid $3,163 and applied the $1,079 currency loss indemnification asset against the $4,437 accrued as of December 31, 2009.

     Included in the Company’s cash and cash equivalents balance of $161.3 million as of June 30, 2010, were $65.2 million of time deposits with maturities of less than or equal to 90 days and money market fund deposits of $15.2 million. Included in the Company’s cash and cash equivalents balance of $195.7 million as of December 31, 2009 were $56.2 million of time deposits with maturities of less than or equal to 90 days and money market fund deposits of $44.6 million.

4. Stock-Based Compensation

     The Company recorded $5.4 million and $3.7 million of stock-based compensation expense for the three months ended June 30, 2010 and 2009, respectively, and $9.6 million and $7.1 million for the six months ended June 30, 2010 and 2009, respectively. Project personnel expenses, selling and marketing expenses and general and administrative expenses appearing in the consolidated and condensed statements of operations include the following stock-based compensation amounts (in thousands):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2010		2009		2010		2009
Project personnel expenses	$	2,991	$	2,019	$	5,103	$	4,008
Selling and marketing expenses	$	417	$	436	$	852	$	823
General and administrative expenses	$	1,996	$	1,204	$	3,680	$	2,315

     Stock-based compensation expense capitalized related to individuals working on internally developed software was immaterial. The Company values restricted stock units (“RSUs”), RSUs based on performance conditions and restricted stock that is contingent on employment based on the fair market value on the date of grant, which is equal to the quoted market price of the Company’s common stock on the date of grant.

     The Company recognizes stock-based compensation expense net of a forfeiture rate and recognizes expense for only those shares

10

expected to vest on a straight-line basis over the requisite service period of the award when the only condition to vesting is continued employment. If vesting is subject to a market or performance condition, vesting is based on the derived service period. The Company estimates its forfeiture rate based on its historical experience.

     During the first quarter of 2010, the Company granted a special dividend equivalent payment of $0.35 per RSU for each outstanding RSU award as of March 1, 2010, to be paid in shares when the underlying award vests. If the underlying RSU does not vest, the dividend equivalent is forfeited. As the dividend declared on outstanding RSUs is a modification of the original awards, the cost of the dividend equivalent will be recognized as stock-based compensation in the same manner the Company recognizes stock-based compensation for RSUs. The Company estimated the total additional stock-based compensation expense related to the special dividend equivalent on RSUs, net of forfeitures, to be approximately $2 million. This expense will be recognized over the next four years, the amounts recorded in each period to be commensurate with the vesting of the underlying awards. During the second quarter, the Company granted RSU with service period and performance conditions to its Chief Executive Officer (“CEO”). Up to 150,000 units will vest on March 1, 2013 if the performance conditions are met. The performance conditions for 100,000 of the RSU have vesting based on the Company achieving certain financial measures for the three year period ending December 31, 2012. The remaining 50,000 RSU will vest if the CEO meets certain strategic objectives set by the Board of Directors over the same three year period.

     In connection with the Company’s internal review of its historical stock-based compensation practices from 1996 to 2006, the Company determined that certain stock options exercised in 2006 by current and former employees of the Company (the “Affected Employees”) had been mispriced and, therefore, were subject to an excise tax, and associated interest charges, under Section 409A of the Internal Revenue Code (“Section 409A”). As a result, during the first quarter of 2007, the Compensation Committee of the Company’s Board Directors approved a remediation plan that called for the Company to pay this tax (and interest charges) on behalf of the Affected Employees. Accordingly, the Company recorded an expense of $750,000 during the first quarter of 2007 related to this tax and associated interest charges. The Company has made payments of $0.4 million of this liability and the statute of limitations expired on $0.3 million of this liability. As a result $50,000 remained accrued at June 30, 2010.

     The following table summarizes activity relating to stock options under all stock option plans for the six months ended June 30, 2010 (in thousands, except prices):

				Weighted
				Average
				Exercise
	Shares			Price
Outstanding as of December 31, 2009		5,810		$	12.55
Options exercised		(861	)	$	4.82
Options forfeited/cancelled		(615	)	$	43.02
Outstanding as of June 30, 2010		4,334		$	9.77
Vested and expected to vest as of June 30, 2010		4,334		$	9.77
Options exercisable as of June 30, 2010		4,329		$	9.77
Aggregate intrinsic value of outstanding	$	16,438
Aggregate intrinsic value of vested and expected to vest	$	16,438
Aggregate intrinsic value of exerciseable	$	16,432

     The aggregate intrinsic value of stock options exercised in the six months ended June 30, 2010 and 2009 was $4.2 million and less than $0.1 million, respectively, determined at the date of exercise. As of June 30, 2010 there remained less than $0.1 million of compensation expense, net of estimated forfeitures related to non-vested stock options to be recognized as expense over a weighted average period of less than one year.

     The table below summarizes activity relating to RSUs for the six months ended June 30, 2010 (in thousands, except prices):

	Number of Shares			Weighted
	Underlying			Average Grant
	Restricted Units			Date Fair Value
Unvested as of December 31, 2009		6,629		$	6.23
Restricted units granted		2,520		$	9.32
Restricted units vested		(785	)	$	5.76
Restricted units forfeited/cancelled		(226	)	$	6.78
Unvested as of June 30, 2010		8,138		$	7.22
Expected to vest as of June 30, 2010		7,465		$	7.22

     The weighted average grant date fair value of RSUs granted for the six months ended June 30, 2010 and 2009 was $9.32 and $4.54,

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respectively. The aggregate intrinsic value of the RSUs vested in the six months ended June 30, 2010 and 2009, was $7.1 million and $5.3 million, respectively. The intrinsic value of the non-vested RSUs, net of forfeitures, as of June 30, 2010, was $82.5 million. As of June 30, 2010 there remained $44.8 million of compensation expense related to non-vested RSUs to be recognized as expense over a weighted average period of approximately 2.6 years.

5. Net Income Per Share

     The following information presents the Company’s computation of basic and diluted net income per share for the periods presented in the consolidated and condensed statements of operations (in thousands, except per share amounts):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2010		2009		2010		2009
			(Unaudited)
Net income	$	7,604	$	7,596	$	13,843	$	12,094
Basic net income per share:
Weighted average common shares outstanding		130,915		127,066		130,487		126,995
Basic net income per share	$	0.06	$	0.06	$	0.11	$	0.10
Diluted net income per share:
Weighted average common shares outstanding		130,915		127,066		130,487		126,995
Weighted average dilutive common share equivalents		6,996		3,759		6,985		3,275
Weighted average common shares and dilutive common share equivalents		137,911		130,825		137,472		130,270
Diluted net income per share	$	0.06	$	0.06	$	0.10	$	0.09
Anti-dilutive options and share based awards not included in the calculation		1,909		5,379		2,253		6,676

     Included in weighted average dilutive common share equivalents for 2010 are restricted shares associated with the Nitro acquisition. These shares are reflected in weighted average dilutive common share equivalents as they were contingent shares during the period presented.

6. Commitments and Contingencies

     The Company has certain contingent liabilities that arise in the ordinary course of its business activities. The Company accrues contingent liabilities when it is probable that future expenditures will be made and such expenditures can be reasonably estimated. The Company is subject to various legal claims that have arisen in the course of its business and that have not been fully adjudicated in which the damages claimed under such actions, in the aggregate, total approximately $2.4 million as of June 30, 2010. The Company has accrued at June 30, 2010, approximately $0.5 million related to certain of these items. The Company intends to defend these matters vigorously, however the ultimate outcome of these items is uncertain and the potential loss, if any, may be significantly higher or lower than the amounts that the Company has accrued. Should the Company fail to prevail in any of these legal matters or should several of these legal matters be resolved against the Company in the same reporting period, the operating results of a particular reporting period could be materially adversely affected.

7. Restructuring and Other Related Charges

2010 — Restructure Event

     In the first quarter of 2010, we consolidated our UK operations into one office space. As such, the Company restructured one lease which ends in March 2011. Estimated costs for the consolidation of facilities included contractual rental commitments and related costs, offset by estimated sub-lease income. The Company recorded $0.8 million in restructuring expense in the first quarter of 2010. These charges were not recorded to a segment because they impacted areas of the business that supported the business units and are reflected in “Reconciling Items” in Note 10, Segment Information. The following table shows activity during the six months ended June 30, 2010, related to the 2010 restructuring event (in thousands):

	Facilities
2010 provision	$	846
Cash utilized		(216	)
Balance, June 30, 2010	$	630

The remaining $0.6 million accrued restructuring as of June 30, 2010 is expected to be paid by March 2011.

2009 — Restructure Event

     In February 2009, in response to the impact of current global economic conditions on its demand environment, the Company implemented a restructuring plan to reduce its peoplecount during the first quarter of 2009. For the six months ended June 30, 2009,

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392 employees were terminated in connection with this restructuring plan and the Company recorded restructuring charges of $2.0 million in its consolidated and condensed statements of operations. These charges consisted of $1.9 million in employee cash severance payments and the remaining charges consisted of outplacement assistance fees and other associated costs. Of the $2.0 million restructuring charge, $1.2 million and $0.6 million were recorded to the Company’s SapientNitro and Sapient Global Markets operating segments. The remaining charges were not recorded to a segment because they impacted areas of the business that supported the business units and are reflected in “Reconciling Items” in Note 10, Segment Information. There were no amounts accrued for this restructuring event as of December 31, 2009.

2001, 2002, 2003 — Restructure Events

     As a result of the decline in the demand for advanced technology consulting services that began in 2000, the Company restructured its workforce and operations in 2001, 2002 and 2003. These charges were not recorded to a segment because they impacted areas of the business that supported the business units, but are included in “Reconciling Items” in Note 10, Segment Information. The restructuring consisted of ceasing operations and consolidating or closing excess offices. Estimated costs for the consolidation of facilities included contractual rental commitments or lease buy-outs for office space vacated and related costs, offset by estimated sublease income.

     For the six months ended June 30, 2010 the Company recorded a net restructuring benefit associated with the 2001, 2002 and 2003 events of approximately $0.4 million in its consolidated and condensed statements of operations principally related changes in the Company’s estimated operating expenses to be incurred and sub-lease income in connection with a previously restructured lease, which ends in 2011.

     For the six months ended June 30, 2009, the Company recorded net restructuring and other related charges of approximately $0.3 million in its consolidated and condensed statements of operations principally related to one item. The item involved recording a restructuring charge associated with a change of estimated operating expenses to be incurred in connection with three previously restructured leases.

     The following table shows activity during the six months ended June 30, 2010 related to 2001, 2002 and 2003 restructuring events (in thousands):

	Facilities
Balance, December 31, 2009	$	6,721
Charges, net		(515	)
Cash utilized		(1,568	)
Balance, June 30, 2010	$	4,638

     The total remaining accrued restructuring for the 2001, 2002 and 2003 events is $4.6 million at June 30, 2010 of which the cash outlay over the next 12 months is expected to be $3.6 million, and the remainder will be paid through 2011.

8. Income Taxes

     For the three months ended June 30, 2010 the Company recorded an income tax provision of $6.0 million compared to $1.7 million in 2009. For the six months ended June 30, 2010 and 2009, the Company recorded an income tax provision of $9.6 million and $3.2 million, respectively. Income tax is primarily related to foreign, federal and state tax obligations. The increase is primarily due to a higher effective tax rate on the Company’s U.S. income because of the releasing its valuation allowance on a substantial portion of its U.S. deferred taxes in the fourth quarter of 2009. Deferred tax assets are to be reduced by a valuation allowance if, based on the weight of available positive and negative evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. At December 31, 2008 all of the Company’s U.S. deferred tax assets had a full valuation allowance of $112.1 million. Based upon operating results for the years immediately preceding and through December 31, 2009, as well as an assessment of expected future results of operations in the U.S., at December 31, 2009 the Company determined that it had become more likely than not that it would realize a substantial portion of its deferred tax assets in the U.S. As a result, the Company released its valuation allowances on a substantial portion of its U.S. deferred tax assets in the fourth quarter of 2009. On June 30, 2010 the Company continues to provide a valuation allowance against certain deferred tax assets for one the Company’s European subsidiaries as the Company determined that it is more likely than not that the deferred tax assets may not be realized. At June 30, 2010 a valuation allowance remains certain state tax net operating loss carry forwards, as well as a portion of the net operating loss carry forwards relating to certain stock based compensation deductions. The Company continues to believe that deferred tax assets in various other foreign jurisdictions are more likely than not to be realized and, therefore, no valuation allowance has been recorded against these assets.

     The Company has gross unrecognized tax benefits, including interest and penalties, of approximately $10.0 million as of June 30, 2010 and $8.9 million as of December 31, 2009. These amounts represent the amount of unrecognized tax benefits that, if recognized,

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would result in a reduction of the Company’s effective tax rate. The Company recognizes interest and penalties accrued related to unrecognized tax benefits in the provision for income taxes. As of June 30, 2010 and December 31, 2009 interest accrued was approximately $2.0 million and $1.6 million, respectively.

     The Company conducts business globally and, as a result, one or more of its subsidiaries files income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. In the normal course of business the Company is subject to examination by taxing authorities throughout the world. Although the Company believes its estimates are appropriate, the final determination of tax filings could result in favorable or unfavorable changes in an estimate. During the first half of 2010, a favorable determination resulted in a decrease to unrecognized tax benefits of $0.7 million. We anticipate the settlement of tax filings in the next twelve months and the expiration of the relevant statue of limitations could result in an additional decrease in unrecognized tax benefits between $0.4 and $1.0 million.

9. Comprehensive Income

     The components of comprehensive income are presented below for the periods presented in the consolidated and condensed statements of operations (in thousands):

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2010			2009		2010			2009
Net income	$	7,604		$	7,596	$	13,843		$	12,094
Foreign currency translation (loss) gain		(4,573	)		15,426		(6,075	)		10,627
Unrealized (loss) gain on available-for-sale securities		—			72		(4	)		39
Comprehensive income	$	3,031		$	23,094	$	7,764		$	22,760

10. Segment Information

     The Company has discrete financial data by operating segments available based on its method of internal reporting, which disaggregates its operations. Operating segments are defined as components of the Company for which separate financial information is available to manage resources and evaluate performance.

     Beginning in 2010, the Company realigned its North America and Europe business units and internal reporting systems to better align its services with the Company’s business and operational strategy. The new business units are: SapientNitro (new), Sapient Global Markets (new) and Sapient Government Services. As such, results by operating segment for the three and six months ended June 30, 2009 have been recast to reflect the new business unit structure.

     The Company does not allocate certain marketing and general and administrative expenses to its business unit segments because these activities are managed separately from the business units. The Company allocated $1.2 million and $0.6 million of $2.0 million related to its first quarter 2009 reduction in workforce to the SapientNitro and Sapient Global Markets segments, respectively. The Company did not allocate the remaining $0.2 million of costs associated with the 2009 restructuring activity or costs associated with the 2001, 2002, 2003 and 2010 restructuring events across all operating segments for internal measurement purposes, because the substantial majority of these restructuring costs impacted areas of the business that supported the business units and, specifically in the case of our 2001, 2002, 2003 and 2010 events, were related to the initiative to reengineer general and administrative activities and the consolidation of facilities. Management does not allocate stock-based compensation to the segments for the review of results for the Chief Operating Decision Maker (“CODM”). Asset information by operating segment is not reported to or reviewed by the CODM, and therefore, the Company has not disclosed asset information for each operating segment.

     The tables below present the service revenues and income before income taxes attributable to these operating segments for the periods presented (in thousands):

14

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2010			2009			2010			2009
Service Revenues:
SapientNitro	$	125,547		$	94,770		$	241,239		$	184,736
Sapient Global Markets		62,185			44,769			119,296			88,879
Sapient Government Services		12,619			7,995			23,039			16,278
Total	$	200,351		$	147,534		$	383,574		$	289,893
Income Before Income Taxes:
SapientNitro (1)	$	35,539		$	27,043		$	64,981		$	47,075
Sapient Global Markets (1)		19,288			14,139			39,994			28,022
Sapient Government Services		3,625			1,658			6,397			4,038
Total reportable segments (1)		58,452			42,840			111,372			79,135
Less reconciling items (2)		(44,848	)		(33,565	)		(87,966	)		(63,819	)
Consolidated Income Before Income Taxes	$	13,604		$	9,275		$	23,406		$	15,316

(1)	Reflects only the direct controllable expenses of each business unit segment. It does not represent the total operating results for each business unit as it does not contain an allocation of certain corporate and general and administrative expenses incurred in support of the business unit segments.
(2)	Adjustments that are made to the total of the segments’ operating income to arrive at consolidated income before income taxes include the following (in thousands):

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2010			2009			2010			2009
Centrally managed functions	$	38,702		$	28,624		$	76,826		$	55,527
Restructuring and other related charges		128			158			414			515
Amortization of purchased intangible assets		1,359			898			2,826			1,765
Stock-based compensation expense		5,404			3,659			9,635			7,146
Interest and other income, net		(745	)		(809	)		(1,545	)		(1,815	)
Acquisition expense and other related charges		—			1,035			111			1,673
Unallocated expenses (a)		—			—			(301	)		(992	)
Total	$	44,848		$	33,565		$	87,966		$	63,819

(a) Reflects stock-option restatement related benefits.

11. Geographic Data

     Data for the geographic regions in which the Company operates is presented below for the periods presented in the consolidated and condensed statements of operations and the consolidated and condensed balance sheets (in thousands):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2010		2009		2010		2009
Service revenues:
United States	$	118,517	$	84,437	$	223,951	$	164,926
International		81,834		63,097		159,623		124,967
Total service revenues	$	200,351	$	147,534	$	383,574	$	289,893

	June 30,		December 31,
	2010		2009
Long-lived assets:
United States	$	13,546	$	14,844
International		14,936		14,385
Total long-lived assets (1)	$	28,482	$	29,229

(1) Reflects net book value of the Company’s property and equipment

15

12. Goodwill and Purchased Intangible Assets

     As a result of the Company realigning its North America and Europe business units, creating two new business units, SapientNitro and Sapient Global Markets, the Company’s goodwill balance as of December 31, 2009 has been allocated among the new business units based on the business units’ relative fair value as estimated by the Company. The following is a summary of goodwill allocated to the Company’s business segments as of June 30, 2010 and December 31, 2009 (in thousands):

							Government
	North America			Europe			Services		Total
Balance as of December 31, 2009	$	43,286		$	32,718		$	—	$	76,004
Allocation to SapientNitro		(31,797	)		(21,477	)		—		(53,274	)
Allocation to Sapient Global Markets		(11,489	)		(11,241	)		—		(22,730	)
Balance after allocation	$	—		$	—		$	—	$	—
							Sapient
				Sapient Global			Government
	SapientNitro			Markets			Services		Total
Allocation of December 31, 2009 goodwill balance to new operating segments	$	53,274		$	22,730		$	—	$	76,004
Contingent consideration recorded during the period		—			2,366			—		2,366
Exchange rate effect		(780	)		(314	)		—		(1,094	)
Goodwill as of June 30, 2010	$	52,494		$	24,782		$	—	$	77,276

     The following is a summary of intangible assets as of June 30, 2010, and December 31, 2009 (in thousands, the gross carrying amounts of local currency denominated purchased intangible assets are reflected at the respective balance sheet date exchange rate):

	June 30, 2010
	Gross					Net
	Carrying		Accumulated			Book
	Amount		Amortization			Value
Customer lists and customer relationships	$	22,662	$	(10,662	)	$	12,000
Non-compete agreements		8,435		(2,390	)		6,045
Tradename		3,092		(1,338	)		1,754
Total purchased intangible assets	$	34,189	$	(14,390	)	$	19,799

	December 31, 2009
	Gross					Net
	Carrying		Accumulated			Book
	Amount		Amortization			Value
Customer lists and customer relationships	$	22,927	$	(8,804	)	$	14,123
Non-compete agreements		8,554		(1,716	)		6,838
Tradename		3,144		(1,044	)		2,100
Total purchased intangible assets	$	34,625	$	(11,564	)	$	23,061

     Amortization expense related to the purchased intangible assets was $1.4 million and $0.9 million for the three months ended June 30, 2010 and 2009, respectively. Amortization expense related to the purchased intangible assets was $2.8 million and $1.8 million for the six months ended June 30, 2010 and 2009, respectively. Please see Note 2, Acquisitions, for a discussion of contingent consideration recorded during the period related to DCG.

13. Foreign Currency Translation and Derivative Instruments

     Foreign exchange losses and gains for the three months ended June 30, 2010 and 2009 were not material. Foreign exchange losses of $0.8 million and $0.2 million were incurred for the six months ended June 30, 2010 and 2009, respectively. Foreign exchange gains and losses are included in general and administrative expenses in the consolidated and condensed statements of operations. These gains and losses were primarily related to intercompany foreign currency transactions that are of a short-term nature.

     Approximately 15% of the Company’s operating expenses for the six months ended June 30, 2010 were denominated in Indian

16

rupees. Approximately 20% and 5% of service revenues for the six months ended June 30, 2010 were denominated in British pounds sterling and euros, respectively. As the Company has minimal associated revenues in Indian rupees, any movement in the exchange rate between the U.S. dollar and the rupee has a significant impact on its operating expenses and operating profit. Any significant movement in the exchange rate between the U.S. dollar and the British pound sterling and the U.S. dollar and the euro has a significant impact on the Company’s service revenues and operating income. The Company manages this exposure through a risk management program that partially mitigates its exposure to operating expenses denominated in the Indian rupee and operating margins denominated in the British pound sterling and the euro that includes the use of derivative financial instruments which are not designated as accounting hedges. The Company uses foreign exchange option contracts to partially protect its foreign currency exposure to: (i) Indian rupee denominated operating expenses against appreciation in the rupee relative to the U.S. dollar, (ii) British pound sterling denominated revenues against the appreciation of the U.S. dollar relative to the pound sterling and (iii) euro denominated revenues against the appreciation of the U.S. dollar relative to the euro. Currently, the Company enters into 30 day average rate instruments covering a rolling 90 day period with notional amounts of 350 million rupees (approximately $7.5 million), two million pounds sterling (approximately $3.0 million) and one million euros (approximately $1.2 million) per month. As these instruments are option collars that are settled on a net basis with the bank, the Company has not recorded the gross underlying notional amounts in its consolidated and condensed balance sheets as of June 30, 2010.

     The following table reflects the fair value of the Company’s derivative assets and liabilities on its consolidated and condensed balance sheets as of June 30, 2010 December 31, 2009 (in thousands):

	Derivative Assets Reported in				Derivative Liabilities Reported in
	Other Current Assets				Other Current Accrued Liabilities
			December 31,		June 30,		December 31,
	June 30, 2010		2009		2010		2009
Foreign exchange option contracts not designated	$	88	$	238	$	212	$	21

     Realized and unrealized losses on the Company’s foreign exchange option contracts are included in general and administrative expenses in the consolidated and condensed statements of operations. The following table shows the effect of realized and unrealized gains and losses, net, of the Company’s foreign exchange option contracts on its results of operations for the three and six months ended June 30, 2010 and 2009 (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2010		2009		2010			2009
Loss (gain) on foreign exchange option contracts not designated	$	18	$	320	$	(592	)	$	474

14. Dividend Payment

     On February 18, 2010 the Company announced a special dividend of $0.35 per common share for shareholders as of the record date March 1, 2010, which was paid on March 15, 2010. The dividend was a return of excess capital to shareholders. The $46.8 million in cash paid for the dividend is reflected as cash used in financing activities on the consolidated and condensed statements of cash flows.

15. Debt

     In May 2010, Sapient Consulting Pvt. Limited (a subsidiary of the Company in India) entered into a $10,000,000 uncommitted revolving credit facility. The facility matures in May 2011 and can be used to finance working capital requirements, capital expenditures or any other purpose which may be permissible under local regulations. Borrowings in U.S. dollars bear interest at the six-month LIBOR plus 2%. Short-term loans denominated in Indian rupees are also permissible and bear interest at prevailing local borrowing rates, currently between 6.0% and 8.85%, dependant on the payback period selected at the time of borrowing. There are no covenants based on financial measures governing this facility. As of June 30, 2010 there were no outstanding borrowings under this facility. On July 8, 2010 the Company took out a 60-day short-term loan on the facility of $100 million rupees (approximately $2.2 million) at an interest rate of 7.2%.

16. Recent Accounting Pronouncements

     On January 1, 2010 the Company early adopted the provisions of Accounting Standards Update No. 2009-13, Revenue Recognition (Topic 605) — Multiple-Deliverable Revenue Arrangements (“ASU 2009-13”). Prior to the adoption of ASU 2009-13, revenues from contracts with multiple elements (deliverables) were accounted for as follows:

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     The Company would evaluate all of the deliverables in a revenue arrangement to determine whether they represent separate units of accounting. The delivered item(s) would be considered a separate unit of accounting if all of the following criteria are met:

• The delivered item(s) has value to the customer on a standalone basis;

• There is objective and reliable evidence of the fair value of the undelivered item(s); and

• If the arrangement includes a general right of return relative to the delivered item and delivery or performance of the undelivered item(s) is considered probable and substantially in control of the company.

     If one of the above criteria is not met, the total arrangement fee must be recognized as one unit of accounting. However, if all of the criteria are met, the total value of the arrangement would be allocated to the separate units based on the estimated fair value of each deliverable. When fair value existed for the undelivered element but not for the delivered element, the residual method was used whereby any discount was allocated to the delivered element.

     ASU 2009-13 replaces the term fair value with the term selling price and establishes a selling price hierarchy for determining the selling price of a deliverable. The hierarchy for determining selling price of a deliverable is: (i) vendor-specific objective evidence (“VSOE”), (ii) third-party evidence (“TPE”) when VSOE is not available or (iii) an estimated selling price (“ESP”) when neither VSOE nor TPE is available (determination of VSOE, TPE and ESP is described further below). In addition, ASU 2009-13 eliminated both the combination of delivered and undelivered elements into one unit of accounting and the use of the residual method. Under ASU 2009-13, the delivered item(s) must still have value to the customer on a standalone basis and if the arrangement includes a general right of return relative to the delivered item, delivery or performance of the undelivered item(s) is considered probable and substantially in control of the Company in order to be considered for separate units of accounting. If neither of those criteria is met, all elements are recognized as one unit of accounting.

     To determine the selling price in multiple-element arrangements, we establish VSOE of selling price using the price charged for a deliverable when it is sold on a stand-alone basis. TPE is established by evaluating similar and interchangeable competitor services in stand-alone arrangements with similarly situated customers. The Company determines ESP for the purpose of allocating selling price to a deliverable within a multiple-deliverable arrangement by considering several internal and external factors including, but not limited to, pricing practices, profit margin objectives, competition, the geographies in which the Company offers its services and internal costs. The determination of ESP is made through consultation with an approval by management, taking into account the Company’s go-to-market strategy.

     Selling prices are analyzed on an annual basis or more frequently if the Company experiences significant changes in selling prices. The adoption of ASU 2009-13 did not have a material effect on the recognition of service revenues during the three and six months ended June 30, 2010. In addition, the retrospective application of ASU 2009-13 would not have a material effect on services revenues for the year ended 2009.

     In January 2010, the Company adopted ASU No. 2010-06 — Fair Value Measurements and Disclosures (Topic 820): Improving Disclosures about Fair Value Measurements. This standard amends the disclosure guidance with respect to fair value measurements for both interim and annual reporting periods. Specifically, this standard requires new disclosures for significant transfers of assets or liabilities between Level 1 and Level 2 in the fair value hierarchy; separate disclosures for purchases, sales, issuance and settlements of Level 3 fair value items on a gross, rather than net basis; and more robust disclosure of the valuation techniques and inputs used to measure Level 2 and Level 3 assets and liabilities. The Company included these new disclosures, as applicable, in Note 3.

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SAPIENT CORPORATION

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Overview

The Company

     Sapient Corporation (“Sapient” or the “Company”), a global services firm, helps clients transform in the areas of business, marketing, and technology and succeed in an increasingly complex marketplace. We market our services through three primary business units — SapientNitro, Sapient Global Markets, and Sapient Government Services — positioned at the intersection of marketing, business and technology. SapientNitro, one of the world’s largest independent digitally-led, integrated marketing services firms, provides multi-channel marketing and commerce services that span brand and marketing strategy, digital/broadcast/print advertising creative, web design and development, e-commerce, media planning and buying, and emerging platforms, such as social media and mobile. Through SapientNitro we offer a complete, multi-channel marketing and commerce solution that strengthens relationships between our clients’ customers and their brands. For simplicity of operations, SapientNitro also includes our traditional IT consulting services, which is currently, and is expected to remain, below 10% of our total revenues. Our Sapient Global Markets segment provides business and IT strategy, process and system design, program management, custom development and package implementation, systems integration and outsourced services to financial services and energy services market leaders. A core focus area within Sapient Global Markets is trading and risk management, to which we bring more than 15 years of experience. With our 2008 acquisition of Derivatives Consulting Group Ltd. (“DCG”), a leading provider of derivatives consulting and outsourcing services, we added a globally integrated service in derivatives processing to our capabilities. Sapient Government Services provides consulting, technology, and marketing services to a wide array of U.S. governmental agencies. Focused on driving long-term change and transforming the citizen experience, we use technology to help government agencies become more accessible, efficient, and transparent.

     Founded in 1990 and incorporated in Delaware in 1991, Sapient maintains a strong global presence with offices around the world. We utilize our proprietary Global Distributed Delivery (“GDD”) model in support of our SapientNitro and Sapient Global Markets segments. Our GDD model enables us to provide high-quality, cost-effective solutions under accelerated project schedules. By engaging India’s highly skilled technology specialists, we can provide services at lower total costs as well as offer a continuous delivery capability resulting from time differences between India and the countries we serve. We also employ our GDD model to provide application management services.

Summary of Results of Operations

     Our service revenues for the three months ended June 30, 2010 were $200.4 million, a 36% increase compared to service revenues for same period in 2009. Our service revenues for the six months ended June 30, 2010 were $383.6 million, a 32% increase compared to service revenues for same period in 2009. The increase in service revenues is primarily due to an increase in demand for our services compared to 2009, and to a lesser extent, revenue from our acquisition of Nitro Ltd (“Nitro”). Nitro’s results of operations are reflected in ours as of July 1, 2009. During the first quarter of 2010 we realigned our North America and Europe business units and internal reporting systems to better align our services with our business and operational strategy. The new business units are: SapientNitro (new), Sapient Global Markets (new) and Sapient Government Services (see Segment Information).

     For the three months ended June 30, 2010 we reported income from operations of $12.9 million, a 52% increase, compared to $8.5 million for the same period in 2009. For the six months ended June 30, 2010 we reported income from operations of $21.9 million, a 62% increase, compared to $13.5 million for the same period in 2009. The increase in operating income is due to the increase in demand for our services in addition to our management of project personnel, sales and marketing, and general and administrative expenses as all three of these operating expenses were, for the most part, the same percentage of service revenues in both periods of comparison.

     For the three months ended June 30, 2010 and 2009 we reported net income of $7.6 million. Net income remained constant as the 52% improvement in operating income was completely offset by a higher effective tax rate in 2010 compared to 2009. The reason for the increase in tax rate is the release of the Company’s valuation allowance on a substantial portion of its U.S. deferred tax assets in the fourth quarter of 2009. For the six months ended June 30, 2010 we reported net income of $13.8 million, a 14% increase compared to $12.1 million for the same period in 2009. The increase in net income is due to the 62% improvement in operating income, offset in part by the increase in effective tax rate in 2010.

Non-GAAP Financial Measures

     In our quarterly earnings press releases and conference calls we discuss two key measures that are not calculated according to generally accepted accounting principles (“GAAP”). The first non-GAAP measure is operating income, as reported on our consolidated and condensed statements of operations, excluding certain expenses and benefits, which we call “non-GAAP income from operations”. The second measure calculates non-GAAP income from operations as a percentage of reported services revenues, which we call “non-GAAP operating margin”. We believe that non-GAAP measures help illustrate underlying trends in our business,

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and use the measures to establish budgets and operational goals, communicated internally and externally, for managing our business and evaluating our performance. We exclude certain expenses from our non-GAAP operating income that we believe are not reflective of these underlying business trends or useful measures for determining our operational performance and overall business strategy. The following table reconciles income from operations as reported on our consolidated and condensed statements of operations to non-GAAP income from operations and non-GAAP operating margin for the three and six months ended June 30, 2010 and 2009 (in thousands, except percentages):

	Three Months Ended June						Six Months Ended June
	30,						30,
	2010			2009			2010			2009
Service revenues	$	200,351		$	147,534		$	383,574		$	289,893
GAAP income from operations	$	12,859		$	8,466		$	21,861		$	13,501
Stock-based compensation expense		5,404			3,659			9,635			7,146
Restructuring and other related charges		128			158			414			2,303
Amortization of purchased intangible assets		1,359			898			2,826			1,765
Acquisition costs and other related charges		—			1,035			111			1,673
Stock-based compensation review and restatement benefit		—			—			(301	)		(992	)
Non-GAAP income from operations	$	19,750		$	14,216		$	34,546		$	25,396
GAAP operating margin		6.4	%		5.7	%		5.7	%		4.7	%
Effect of adjustments detailed above		3.5	%		3.9	%		3.3	%		4.1	%
Non-GAAP operating margin		9.9	%		9.6	%		9.0	%		8.8	%

     Non-GAAP income from operations increased in the three and six months ended June 30, 2010 compared to 2009 due to the improvement in reported income from operations. Please see our Results of Operations section for a more detailed discussion and analysis of the excluded items.

     When important to management’s analysis operating results are compared in “constant currency terms”, which excludes the effect of foreign exchange rate fluctuations, a non-GAAP measure. The effect is excluded by translating the current period’s local currency service revenues and expenses into U.S. dollars at the average exchange rates of the prior period of comparison. For a discussion of our exposure to exchange rates see “Item 7a. Quantitative and Qualitative Disclosures About Market Risk”.

Summary of Critical Accounting Policies; Significant Judgments and Estimates

     We have identified the accounting policies which are critical to understanding our business and our results of operations. Excluding revenue recognition, described further below, management believes that there have been no significant changes during 2010 to the items disclosed in our summary of critical accounting policies, significant judgments and estimates in Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2009.

     Revenue Recognition

     On January 1, 2010 we early adopted the provisions of Accounting Standards Update No. 2009-13, Revenue Recognition (Topic 605) — Multiple-Deliverable Revenue Arrangements (“ASU 2009-13”). Prior to our adoption of ASU 2009-13, revenues from contracts with multiple elements (deliverables) were accounted for as follows:

     The Company would evaluate all of the deliverables in a revenue arrangement to determine whether they represent separate units of accounting. The delivered item(s) would be considered a separate unit of accounting if all of the following criteria are met:

• The delivered item(s) has value to the customer on a standalone basis;

• There is objective and reliable evidence of the fair value of the undelivered item(s); and

• If the arrangement includes a general right of return relative to the delivered item and delivery or performance of the undelivered item(s) is considered probable and substantially in control of the company.

     If one of the above criteria is not met, the total arrangement fee must be recognized as one unit of accounting. However, if all of the criteria are met, the total value of the arrangement would be allocated to the separate units based on the estimated fair value of each deliverable. When fair value existed for the undelivered element but not for the delivered element, the residual method was used whereby any discount was allocated to the delivered element.

     ASU 2009-13 replaces the term fair value with the term selling price and establishes a selling price hierarchy for determining the selling price of a deliverable. The hierarchy for determining selling price of a deliverable is: (i) vendor-specific objective evidence

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(“VSOE”), (ii) third-party evidence (“TPE”) when VSOE is not available or (iii) an estimated selling price (“ESP”) when neither VSOE nor TPE is available (determination of VSOE, TPE and ESP is described further below). In addition, ASU 2009-13 eliminated both the combination of delivered and undelivered elements into one unit of accounting and the use of the residual method. Under ASU 2009-13, the delivered item(s) must still have value to the customer on a standalone basis and if the arrangement includes a general right of return relative to the delivered item, delivery or performance of the undelivered item(s) is considered probable and substantially in control of the company in order to be considered for separate units of accounting. If neither of those criteria is met, all elements are recognized as one unit of accounting.

     To determine the selling price in multiple-element arrangements, we establish VSOE of selling price using the price charged for a deliverable when it is sold on a stand-alone basis. TPE is established by evaluating similar and interchangeable competitor services in stand-alone arrangements with similarly situated customers. We determine ESP for the purpose of allocating selling price to a deliverable within a multiple-deliverable arrangement by considering several internal and external factors including, but not limited to, pricing practices, profit margin objectives, competition, the geographies in which we offer our services and internal costs. The determination of ESP is made through consultation with an approval by our management, taking into account our go-to-market strategy.

     Selling prices are analyzed on an annual basis or more frequently if we experience significant changes in our selling prices. The adoption of ASU 2009-13 did not have a material effect on our recognition of service revenues during the three and six months ended June 30, 2010. In addition, the retrospective application of ASU 2009-13 would not have a material effect on our services revenues for the year ended 2009.

Results of Operations

     The following table sets forth the percentage of our service revenues of items included in our consolidated and condensed statements of operations:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2010			2009			2010			2009
Revenues:
Service revenues		100	%		100	%		100	%		100	%
Reimbursable expenses		5	%		4	%		5	%		4	%
Total gross revenues		105	%		104	%		105	%		104	%
Operating expenses:
Project personnel expenses		70	%		69	%		70	%		70	%
Reimbursable expenses		5	%		4	%		5	%		4	%
Total project personnel expenses and reimbursable expenses		75	%		73	%		75	%		74	%
Selling and marketing expenses		5	%		5	%		5	%		5	%
General and administrative expenses		18	%		19	%		19	%		19	%
Restructuring and other related charges		0	%		0	%		0	%		1	%
Amortization of purchased intangible assets		1	%		1	%		1	%		1	%
Acquisition costs and other related charges		0	%		1	%		0	%		1	%
Total operating expenses		99	%		98	%		99	%		99	%
Income from operations		6	%		6	%		6	%		5	%
Interest and other income, net		1	%		1	%		0	%		1	%
Income before income taxes		7	%		7	%		6	%		6	%
Provision for income taxes		3	%		1	%		2	%		1	%
Net Income		4	%		5	%		4	%		4	%

Three and six months ended June 30, 2010 compared to the three and six months ended June 30, 2009

Service Revenues

     Our service revenues for the three and six months ended June 30, 2010 and 2009 were as follows (in thousands, except percentages):

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	Three Months Ended
	June 30,		June 30,				Percentage
	2010		2009		Increase		Increase
Service revenues	$	200,351	$	147,534	$	52,817		36	%

	Six Months Ended
	June 30,		June 30,				Percentage
	2010		2009		Increase		Increase
Service revenues	$	383,574	$	289,893	$	93,681		32	%

     The increase in service revenues for the three months ended June 30, 2010 is primarily due to an increase in demand for our services compared to 2009, and to a lesser extent, incremental revenue from our Nitro acquisition. The following table compares our first quarter 2010 service revenues by industry sector to 2009 (in millions, except percentages):

								Percentage
	Three Months Ended June 30,							Increase /
Industry Sector	2010		2009		Increase			(Decrease)
Financial Services	$	66.9	$	50.9	$	16.0			31	%
Consumer, Travel & Automotive		60.7		31.8		28.9			91	%
Technology & Communications		28.3		24.4		3.9			16	%
Government, Health & Education		26.3		21.6		4.7			22	%
Energy Services		18.2		18.8		(0.6	)		-3	%
Total	$	200.4	$	147.5	$	52.9			36	%

     The increases in the Financial Services, Government, Health and Education and Technology and Communications sectors are due to an increase in demand for our services in these industries. The increase in the Consumer, Travel, and Automotive sector was due to an increase in demand for our services and revenue from our Nitro acquisition. In constant currency terms, service revenues also increased 36% compared to the same period in 2009.

     The increase in demand across the majority of industry sectors caused our average project personnel peoplecount to increase 33% for the three months ended June 30, 2010 compared to the same period in 2009. Utilization represents the percentage of our project personnel’s time spent on billable client work. Our utilization of 78% was lower than the 81% rate we had for the same period in 2009. We also increased our use of external contractors and consultants by 22% compared to 2009 as demand for our services concentrated in specialized areas increased.

     Our five largest customers, in the aggregate, accounted for approximately 19% of our service revenues for the three months ended June 30, 2010 compared to 23% for the same period in 2009. No customer accounted for more than 10% of our service revenues. Our Long-Term and Retainer revenues were 45% of our service revenues for the three months ended June 30, 2010 compared to 43% for the same period in 2009. Long-Term and Retainer Revenue are revenue contracts with duration of at least twelve months, applications management and long-term support projects, which are cancelable.

     The increase for the six months ended June 30, 2010 is primarily due to an increase in demand for our services compared to 2009, and to a lesser extent, incremental revenue from our Nitro acquisition. The following table compares our first quarter 2010 service revenues by industry sector to 2009 (in millions, except percentages):

	Six Months Ended June 30,						Percentage
Industry Sector	2010		2009		Increase		Increase
Financial Services	$	119.9	$	101.1	$	18.8		19	%
Consumer, Travel & Automotive		114.0		60.4		53.6		89	%
Technology & Communications		55.6		48.6		7.0		14	%
Government, Health & Education		53.8		42.8		11.0		26	%
Energy Services		40.3		37.0		3.3		9	%
Total	$	383.6	$	289.9	$	93.7		32	%

     The increases in the Financial Services, Government, Health and Education, Technology and Communications, and Energy Services sectors are due to an increase in demand for our services in these industries. The increase in the Consumer, Travel, and

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Automotive sector was due to an increase in demand for our services and revenue from our Nitro acquisition. In constant currency terms, service revenues increased 30% compared to the same period in 2009 as the U.S. dollar has appreciated in value against the local currencies in certain geographies our foreign subsidiaries operate in compared to the same period in 2009.

     The increase in demand across all industry sectors caused our average project personnel peoplecount to increase 29% for the six months ended June 30, 2010 compared to the same period in 2009. Our utilization of 76% was lower than the 77% rate we had for the same period in 2009. We also increased our use of external contractors and consultants by 23% compared to 2009 as demand for our services concentrated in specialized areas increased.

     Our five largest customers, in the aggregate, accounted for approximately 20% of our service revenues for the six months ended June 30, 2010 compared to 22% for the same period in 2009. No customer accounted for more than 10% of our service revenues. Our Long-Term and Retainer revenues were 45% of our service revenues for the six months ended June 30, 2010 compared to 42% for the same period in 2009.

Project Personnel Expenses

     Project personnel expenses consist principally of salaries and employee benefits for personnel dedicated to client projects, external contractors and direct expenses incurred to complete projects that were not reimbursed by the client. These expenses represent the most significant expense we incur in providing our services. Our project personnel expenses for the three and six months ended June 30, 2010 and 2009 were as follows (in thousands, except percentages):

	Three Months Ended
	June 30,			June 30,					Percentage
	2010			2009			Increase		Increase
Project personnel expenses	$	139,345		$	101,939		$	37,406		37	%
Project personnel expenses as a percentage of service revenues		70	%		69	%	1 point

	Six Months Ended
	June 30,			June 30,					Percentage
	2010			2009			Increase		Increase
Project personnel expenses	$	267,112		$	202,117		$	64,995		32	%
Project personnel expenses as a percentage of service revenues		70	%		70	%		—

     The increase for the three months ended June 30, 2010 was primarily due to the increase in project personnel peoplecount, and to a lesser extent, incremental expenses from Nitro. Compensation expense increased $28.3 million due to the increase in peoplecount and Nitro. Use of external contractors and consultants increased $3.5 million due to an increase in demand for our services in specialized areas. The remaining increase in expense was due to increases in various other project personnel expenses.

     The increase in project personnel expenses for the six months ended June 30, 2010 was also due to the increase in peoplecount and, to a lesser extent, incremental expense from Nitro. Compensation expense increased $52.6 million due to the increase in peoplecount and Nitro. Use of external contractors and consultants increased $6.6 million due to an increase in demand for our services in specialized areas. The remaining increase in expense was due to increases in various other project personnel expenses.

Selling and Marketing Expenses

     Selling and marketing expenses consist principally of salaries, employee benefits and travel expenses of selling and marketing personnel, and promotional expenses. Our selling and marketing expenses for the three and six months ended June 30, 2010 and 2009 were as follows (in thousands, except percentages):

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	Three Months Ended
	June 30,			June 30,					Percentage
	2010			2009			Increase		Increase
Selling and marketing expenses	$	10,225		$	7,274		$	2,951		41	%
Selling and marketing expenses as a percentage of service revenues		5	%		5	%		—

	Six Months Ended
	June 30,			June 30,					Percentage
	2010			2009			Increase		Increase
Selling and marketing expenses	$	18,872		$	14,416		$	4,456		31	%
Selling and marketing expenses as a percentage of service revenues		5	%		5	%		—

     The increase for the three months ended June 30, 2010 in sales and marketing expenses was primarily due to costs incurred to support the 36% increase in service revenues, and to a lesser extent an increase in sales and marketing peoplecount. External consultant expense increased $0.8 million due to the increase in service revenues as this required more general sales support in addition to costs associated with specific projects that required the use of external consultants. Travel and general marketing costs also increased $1.1 million. Compensation expense increased $1.1 million, primarily due to an increase in selling and marketing peoplecount.

     The increase for the six months ended June 30, 2010 in sales and marketing expenses is also due to costs incurred to support the 32% increase in service revenues, and to a lesser extent an increase in sales and marketing peoplecount. External consultant expense increased $1.5 million due to the increase in service revenues as this required more general sales support in addition to costs associated with specific projects that required the use of external consultants. Travel and general marketing costs also increased $1.7 million. Compensation expense increased $1.1 million, primarily due to an increase in selling and marketing peoplecount.

General and Administrative Expenses

     General and administrative expenses relate principally to salaries and employee benefits associated with our management, legal, finance, information technology, hiring, training and administrative groups, and depreciation and occupancy expenses. Our general and administrative expenses for the three and six months ended June 30, 2010 and 2009 were as follows (in thousands, except percentages):

	Three Months Ended
	June 30,			June 30,			Increase/			Percentage
	2010			2009			(Decrease)			Increase
General and administrative expenses	$	36,435		$	27,764		$	8,671			31	%
General and administrative expenses as a percentage of service revenues		18	%		19	%	(1 point		)

	Six Months Ended
	June 30,			June 30,					Percentage
	2010			2009			Increase		Increase
General and administrative expenses	$	72,378		$	54,118		$	18,260		34	%
General and administrative expenses as a percentage of service revenues		19	%		19	%		—

     The increase for the three months ended June 30, 2010 was due to multiple factors: (i) facilities expenses increased $2.2 million due to multiple reasons including Nitro, opening a new office in India in the first quarter of 2010 and our move to new office space in the United Kingdom in the second quarter of 2009, (ii) external consultant expenses increased $1.3 million due to internal projects and supporting our staffing efforts, (iii) compensation expense increased $2.5 million due to an increase in general and administrative peoplecount, including Nitro, (iv) employment agency fees increased $0.4 million due to the overall increase in peoplecount for the Company, as total employees increased from under 6,000 in the second quarter of 2009 to over 7,800 in the current period, (v) legal fees increased $0.7 million, (vi) stock-based compensation expense increased $0.8 million and (vii) other general and administrative expenses also increased $0.7 million.

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     The increase for the six months ended June 30, 2010 was due to multiple factors: (i) facilities expenses increased $5.1 million due to multiple reasons including Nitro, opening a new office in India in the first quarter of 2010 and our move to new office space in the United Kingdom in the second quarter of 2009, (ii) external consultant expenses increased $2.9 million due to internal projects and supporting our staffing efforts, (iii) compensation expense increased $4.1 million due to an increase in general and administrative peoplecount, including Nitro, (iv) employment agency fees increased $1.1 million due to the overall increase in peoplecount for the Company, as total employees increased compared to 2009, (v) legal fees increased $1.2 million, (vi) stock-based compensation expense increased $1.4 million and (vii) other general and administrative expenses and travel expenses also increased, in the aggregate, $1.7 million. Foreign exchange losses also increased $0.7 million compared to 2009. For a discussion of our exposure to exchange rates see “Item 7a. Quantitative and Qualitative Disclosures About Market Risk”.

Restructuring and Other Related Charges

     Restructuring and other related charges did not change significantly for the three months ended June 30, 2010 compared to the same period in 2009. The reason for the decrease for the six months ended June 30, 2010 is due to the first quarter of 2009 reflecting $2.0 million in expense associated with a reduction in workforce as a result of the global economic downturn in 2009.

Amortization of Intangible Assets

     Amortization of intangible assets consists of non-compete and non-solicitation agreements, customer lists, and tradenames acquired in business combinations. Amortization expense related to intangible assets was $1.4 million and $2.8 million for the three and six months ended June 30, 2010, respectively, compared to $0.9 million and $1.8 million for the same periods in 2009. The increase in expense was due to the amortization of intangible assets acquired in the Nitro acquisition.

Acquisition Costs and Other Related Charges

     Acquisition costs and other related charges are costs are associated with third-party professional services we incur related to our evaluation process of potential acquisition opportunities. Though we may incur acquisition costs and other related charges it is not indicative that any transaction will be consummated. Acquisition costs and other related expenses were zero and $0.1 million for the three and six months ended June 30, 2010, respectively, compared to $1.0 million and $1.7 million for the same periods in 2009. The decrease is due to the Nitro acquisition as the first half of 2009 reflects the period before acquisition when costs are generally higher.

Interest and Other Income, Net

     Interest and other income are derived primarily from investments in bank time deposits, money market funds, commercial paper and auction rate securities. Our interest and other income, net for the three and six months ended June 30, 2010 and 2009 were as follows (in thousands, except percentages):

	Three Months Ended
	June 30,		June 30,					Percentage
	2010		2009		Decrease			Decrease
Interest and other income, net	$	745	$	809	$	(64	)		-8	%
	Six Months Ended
	June 30,		June 30,					Percentage
	2010		2009		Decrease			Decrease
Interest and other income, net	$	1,545	$	1,815	$	(270	)		-15	%

     Interest and other income decreased for the three and six months ended June 30, 2010 compared to the same period in 2009 due to lower interest income. This decrease in interest income is due to lower interest rates on our investments compared to 2009.

Provision for Income Taxes

     For the three and six months ended June 30, 2010, we recorded an income tax provision of $6.0 million and $9.6 million, respectively, compared to $1.7 million and $3.2 million for the same period in 2009. Our income tax is primarily related to foreign, federal and state tax obligations. The increase is primarily due to a higher tax expense rate on our U.S. income due to us releasing our valuation allowance on a substantial portion of our U.S. deferred taxes in the fourth quarter of 2009. Deferred tax assets are to be reduced by a valuation allowance if, based on the weight of available positive and negative evidence, it is more likely than not that

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some portion or all of the deferred tax assets will not be realized. At December 31, 2008 all of our U.S. deferred tax assets had a full valuation allowance of $112.1 million. Based upon our operating results for the years immediately preceding and through December 31, 2009, as well as an assessment of our expected future results of operations in the U.S., at December 31, 2009 we determined that it had become more likely than not that we would realize a substantial portion of our deferred tax assets in the U.S. As a result, we released our valuation allowances on a substantial portion of our U.S. deferred tax assets in the fourth quarter of 2009. On June 30, 2010 we continue to provide a valuation allowance against certain deferred tax assets for one of our European subsidiaries as we determined that it is more likely than not that the deferred tax assets may not be realized. The establishment of valuation allowance against certain European deferred tax assets also contributed to a higher tax provision for the three and six months ended June 30, 2010, though to a lesser extent than the 2009 aforementioned release of our valuation allowance against U.S. deferred tax assets. At June 30, 2010 a valuation allowance remains on certain state tax net operating loss carry forwards, as well as a portion of the net operating loss carry forwards relating to certain stock based compensation deductions. We continue to believe that deferred tax assets in various other foreign jurisdictions are more likely than not to be realized and, therefore, no valuation allowance has been recorded against these assets.

     We have gross unrecognized tax benefits, including interest and penalties, of approximately $10.0 million as of June 30, 2010 and $8.9 million as of December 31, 2009. These amounts represent the amount of unrecognized tax benefits that, if recognized, would result in a reduction of our effective tax rate. We recognize interest and penalties accrued related to unrecognized tax benefits in the provision for income taxes. As of June 30, 2010 interest accrued was approximately $2.0 million.

     We conduct business globally and, as a result, one or more of our subsidiaries files income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. In the normal course of business we are subject to examination by taxing authorities throughout the world.

     Our effective tax rate may vary from period to period based on changes in estimated taxable income or loss by jurisdiction, changes to the valuation allowance, changes to federal, state or foreign tax laws, future expansion into areas with varying country, state, and local income tax rates, deductibility of certain costs and expenses by jurisdiction and as a result of acquisitions.

Results by Operating Segment

     We have discrete financial data by operating segments available based on our method of internal reporting, which disaggregates our operations. Operating segments are defined as components of the Company for which separate financial information is available to manage resources and evaluate performance.

     Beginning in 2010, we realigned our North America and Europe business units and internal reporting systems to better align our services with our business and operational strategy. The new business units are: SapientNitro (new), Sapient Global Markets (new) and Sapient Government Services. As such, results by operating segment for the three and six months ended June 30, 2009 have been recast to reflect the new business unit structure.

     We do not allocate certain marketing and general and administrative expenses to our business unit segments because these activities are managed separately from the business units. We allocated $1.2 million and $0.6 million of $2.0 million related to our first quarter 2009 reduction in workforce to our SapientNitro and Sapient Global Markets segments, respectively. We did not allocate the remaining $0.2 costs associated with our 2009 restructuring activity or costs associated with our 2001, 2002, 2003 and 2010 restructuring events across all operating segments for internal measurement purposes, because the substantial majority of these restructuring costs impacted areas of the business that supported the business units and, specifically in the case of our 2001, 2002, 2003 and 2010 events, were related to the initiative to reengineer general and administrative activities and the consolidation of facilities. Management does not allocate stock-based compensation to the segments for the review of results for the Chief Operating Decision Maker (“CODM”). Asset information by operating segment is not reported to or reviewed by the CODM, and therefore, the Company has not disclosed asset information for each operating segment.

     The tables below present the service revenues and income before income taxes attributable to these operating segments for the periods presented (in thousands):

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	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2010			2009			2010			2009
Service Revenues:
SapientNitro	$	125,547		$	94,770		$	241,239		$	184,736
Sapient Global Markets		62,185			44,769			119,296			88,879
Sapient Government Services		12,619			7,995			23,039			16,278
Total	$	200,351		$	147,534		$	383,574		$	289,893
Income Before Income Taxes:
SapientNitro (1)	$	35,539		$	27,043		$	64,981		$	47,075
Sapient Global Markets (1)		19,288			14,139			39,994			28,022
Sapient Government Services		3,625			1,658			6,397			4,038
Total reportable segments (1)		58,452			42,840			111,372			79,135
Less reconciling items (2)		(44,848	)		(33,565	)		(87,966	)		(63,819	)
Consolidated Income Before Income Taxes	$	13,604		$	9,275		$	23,406		$	15,316

(1)	Reflects only the direct controllable expenses of each business unit segment. It does not represent the total operating results for each business unit as it does not contain an allocation of certain corporate and general and administrative expenses incurred in support of the business unit segments.
(2)	Adjustments that are made to the total of the segments’ operating income to arrive at consolidated income before income taxes include the following (in thousands):

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2010			2009			2010			2009
Centrally managed functions	$	38,702		$	28,624		$	76,826		$	55,527
Restructuring and other related charges		128			158			414			515
Amortization of purchased intangible assets		1,359			898			2,826			1,765
Stock-based compensation expense		5,404			3,659			9,635			7,146
Interest and other income, net		(745	)		(809	)		(1,545	)		(1,815	)
Acquisition expense and other related charges		—			1,035			111			1,673
Unallocated expenses (a)		—			—			(301	)		(992	)
Total	$	44,848		$	33,565		$	87,966		$	63,819

(a) Reflects stock-option restatement related benefits.

     The increase in SapientNitro service revenues for the three and six months ended June 30, 2010 was primarily due to an increase in demand for our services in the majority of the industry sectors we operate in and, to a lesser extent, revenues from our Nitro acquisition. The following table compares SapientNitro service revenues by industry sector for the three and six months ended June 30, 2010 compared to the same periods in 2009 (in millions, except percentages):

								Percentage
	Three Months Ended June 30,				Increase /			Increase /
Industry Sector	2010		2009		(Decrease)			(Decrease)
Consumer, Travel & Automotive	$	60.6	$	32.4	$	28.2			87	%
Technology & Communications		28.2		24.3		3.9			16	%
Financial Services		20.6		20.2		0.4			2	%
Government, Health & Education		13.7		13.6		0.1			1	%
Energy Services		2.4		4.3		(1.9	)		-44	%
Total	$	125.5	$	94.8	$	30.7			32	%

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								Percentage
	Six Months Ended June 30,				Increase /			Increase /
Industry Sector	2010		2009		(Decrease)			(Decrease)
Consumer, Travel & Automotive	$	114.0	$	60.9	$	53.1			87	%
Technology & Communications		55.4		48.4		7.0			14	%
Financial Services		36.2		39.7		(3.5	)		-9	%
Government, Health & Education		30.8		26.6		4.2			16	%
Energy Services		4.8		9.1		(4.3	)		-47	%
Total	$	241.2	$	184.7	$	56.5			31	%

     Service revenues in the Consumer, Travel and Automotive sector increased due to an increase in demand for our services and incremental revenue from Nitro. Service revenues in the Energy Services and Financial services sectors decreased due to a decrease in demand for our services. The increase in revenues for the remaining sectors was due to an increase in demand for our services. In constant currency terms, SapientNitro services revenues increased 32% for the three months ended June 30, 2010 and 28% for the six months ended June 30, 2010 compared to 2009. The overall increase in demand for our services contributed to SapientNitro’s average project personnel peoplecount increasing compared to 2009.

     The increase in Sapient Global Markets’ revenue for the three and six months ended June 30, 2010 was due to an increase in demand for out service compared to 2009. The following table compares Sapient Global Markets service revenues by industry sector for the three and six months ended June 30, 2010 compared to the same periods in 2009 (in millions, except percentages):

	Three Months Ended June 30,						Percentage
Industry Sector	2010		2009		Increase		Increase
Financial Services	$	46.3	$	30.3	$	16.0		53	%
Energy Services		15.9		14.5		1.4		10	%
Total	$	62.2	$	44.8	$	17.4		39	%

	Six Months Ended June 30,						Percentage
Industry Sector	2010		2009		Increase		Increase
Financial Services	$	83.7	$	61.0	$	22.7		37	%
Energy Services		35.6		27.9		7.7		28	%
Total	$	119.3	$	88.9	$	30.4		34	%

     The increase in both industry sectors was due to an increase in demand for our services. In constant currency terms, Sapient Global Markets service revenues increased 39% for the three months ended June 30, 2010 and 32% for the six months ended June 30, 2010 compared to 2009. The increase in demand for our services contributed to Sapient Global Markets’ average project personnel peoplecount increasing compared to the same period in 2009.

     Service revenues for our Sapient Government Services operating segment increased during the three and six months ended June 30, 2010 compared to the same periods in 2009 due to an increase in demand for our services in this segment. The increased demand contributed to Sapient Government Services’ average project personnel peoplecount increasing compared to the same period in 2009.

Operating Income by Operating Segments

     SapientNitro’s operating income decreased as a percentage of related service revenues to 28% for the three months ended June 30, 2010 compared to 29% for 2009. The decrease is primarily due to an increase in compensation expense as a percentage of revenue compared to 2009. SapientNitro’s operating income increased as a percentage of revenue to 27% for the six months ended June 30, 2010 compared to 25% for 2009. The increase was primarily due to the growth in revenues in addition to management of certain direct expenses and lowering consultant usage as consultant expense, in dollars, decreased compared to 2009.

     Sapient Global Markets’ operating income decreased as a percentage of related service revenues to 31% for the three months ended June 30, 2010 compared to 32% for 2009. The decrease is primarily due to an increase in consultant usage as a percentage of revenue compared to 2009 as demand for our services in specialized areas increased . Sapient Global Markets’ operating income increased as

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a percentage of revenue to 34% for the six months ended June 30, 2010 compared to 32% for 2009. This increase is due to an increase in profitability for projects in the current period as evidenced by revenue growing $30.4 million, or 34%, compared to an $18.4 million, or 30%, increase in direct expenses.

     Sapient Government Services’ operating income increased as a percentage of related service revenues to for both the three and six months ended June 30, 2010 compared to 2009. This increase was primarily due to the growth in service revenues in addition to managing direct expenses.

Liquidity and Capital Resources

     We invest our excess cash predominantly in money market funds, time deposits with maturities of less than or equal to 90 days and other cash equivalents. At June 30, 2010 we had approximately $171.9 million in cash, cash equivalents, restricted cash and marketable securities, compared to $215.8 million at December 31, 2009.

     We have approximately $2.5 million with various banks as collateral for letters of credit and performance bonds and have classified this cash as restricted on our consolidated and condensed balance sheet at June 30, 2010.

     Cash provided by operating activities was $16.8 million for the six months ended June 30, 2010. This resulted from net income, the addition of non-cash charges and the sale of $7.8 million in trading marketable securities, which is reflected in prepaid expenses and other current assets on our consolidated and condensed statements of cash flow. These increases in operating cash flow were offset by increases in unbilled revenues and accounts receivable. The increase in unbilled revenues is due to an increase in revenues derived from time and materials arrangements, which we discuss below, and the timing of achieving certain project milestones. In summary, cash provided by operating activities increased compared to the same period in 2009 due to lower bonus payment of prior year bonuses — as bonuses based on 2009 results were lower than those paid in the first quarter of 2009 which were based on 2008 results — and, to a lesser extent, sales of trading marketable securities.

     Days sales outstanding (“DSO”) is calculated based on actual six months of total revenue and period end receivables, unbilled and deferred revenue balances. DSO increased 5% to 69 days for the second quarter of 2010 as compared to DSO as of December 31, 2009. DSO increased primarily due to the increase in unbilled revenues, specifically the timing of achieving certain project milestones and an increase in the percentage of revenue derived from time and materials arrangements. Time and materials arrangements have longer billing cycles than fixed-price contracts, which increases DSO. Approximately 56% of our services revenue for the first six months of 2010 was derived from time and materials arrangements as compared to 53% for the fourth quarter of 2009. We expect our unbilled revenues to be short-term in nature, with a majority being billed within 90 days.

     Cash used by investing activities was $8.9 million for the six months ended June 30, 2010. This was due to $3.2 million in payments of deferred consideration related to the Nitro acquisition and $7.5 million in capital expenditures and the costs of internally developed software. These uses of cash were offset by $0.8 million in redemptions of available-for-sale marketable securities and the receipt of $0.9 million on our hedge positions. Cash used by investing activities increased significantly compared to the same period in 2009 due to the deferred consideration payment and an increase in capital expenditures. Capital expenditures increased in the current period due to a concerted effort to reduce capital expenditures the first half of 2009 in light of the economic environment at that time.

     Cash used by financing activities was $42.6 million for the six months ended June 30, 2010, as a result of a $46.8 million special dividend payment on all outstanding common stock as of March 1, 2010 as a return of capital to shareholders. This was offset by $4.2 million in proceeds associated with the issuance of common stock for stock option exercises. The difference between the financing activities in the current period compared to the same period in 2009 is the dividend payment. In addition, we entered into a $10.0 million revolving credit facility in India, which matures in May 2011, to finance the build-out of a new India unit in a Special Economic Zone (“SEZ”) which is eligible for a five year, 100% tax holiday. Management concluded that this short-term credit facility was the most efficient financing method available.

     Non-cash investing activity of $2.4 million reflects the value of common shares issued as part of contingent consideration in connection with our DCG acquisition.

     Our marketable securities comprise of auction rate securities (“ARS”). Though our ARS investments have experienced events that limit their liquidity, we do not anticipate the current lack of liquidity on these investments will affect our ability to operate our business based on our ability to access our cash, other short term investments and our expected operating cash flows. Please see “Item 3. Quantitative and Qualitative Disclosures About Market Risk” for a discussion of our marketable securities.

     We use foreign currency option contracts to partially mitigate the effects of exchange rate fluctuations on certain revenues and operating expenses denominated in foreign currencies. Please see “Item 3. Quantitative and Qualitative Disclosures About Market Risk” for a discussion of our use of such derivative financial instruments.

     We accrue contingent liabilities when it is probable that future expenditures will be made and such expenditures can be reasonably estimated. We are subject to various legal claims totaling approximately $2.4 million and various administrative audits, each of which have arisen in the ordinary course of our business. We have an accrual at June 30, 2010, of approximately $0.5 million related to certain of these items. We intend to defend these matters vigorously, although the ultimate outcome of these items is uncertain and the potential loss, if any, may be significantly higher or lower than the amounts that we have previously accrued.

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     We believe that our existing cash, credit facility and other short-term investments will be sufficient to meet our working capital and capital expenditure requirements, investing activities and the expected cash outlay for our previously recorded restructuring activities for at least the next 12 months.

New Accounting Pronouncements

     In January 2010, we adopted ASU No. 2010-06 — Fair Value Measurements and Disclosures (Topic 820): Improving Disclosures about Fair Value Measurements. This standard amends the disclosure guidance with respect to fair value measurements for both interim and annual reporting periods. Specifically, this standard requires new disclosures for significant transfers of assets or liabilities between Level 1 and Level 2 in the fair value hierarchy; separate disclosures for purchases, sales, issuance and settlements of Level 3 fair value items on a gross, rather than net basis; and more robust disclosure of the valuation techniques and inputs used to measure Level 2 and Level 3 assets and liabilities. We have included these new disclosures, as applicable, in Note 3 in the Notes to Consolidated and Condensed Financial Statements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

     Our cash equivalents and our portfolio of marketable securities are subject to market risk due to changes in interest rates. Fixed rate interest securities may have their market value adversely impacted due to a rise in interest rates, while floating rate securities may produce less income than expected if interest rates fall. Due in part to these factors, our future investment income may fall short of expectations due to changes in interest rates or we may suffer losses in principal if we are forced to sell securities that decline in the market value due to changes in interest rates. Should the interest rate fluctuate by 10%, the change in value of our marketable securities would not have been material as of June 30, 2010 and our interest income would have changed by approximately $0.1 million for the three months ended June 30, 2010.

     During the quarter we sold $7.8 million, at amortized cost, of our ARS classified as trading marketable securities. As of June 30, 2010 we held $8.3 million in ARS, $6.8 million classified as trading and $1.5 million classified as available-for-sale. In July 2010, we sold the remaining $6.8 million trading securities. We do not intend to sell the remaining $1.5 million (amortized cost) in ARS classified as available-for-sale until a successful auction occurs, nor do we believe that we will be required to sell these securities at less than amortized cost before a successful auction occurs. The inability to liquidate our remaining ARS may have a material impact on our income and results of operations.

Exchange Rate Sensitivity

     We face exposure to adverse movements in foreign currency exchange rates because a significant portion of our revenues, expenses, assets, and liabilities are denominated in currencies other than the U.S. dollar, primarily the British pound sterling, the euro, the Indian rupee and the Canadian dollar. These exposures may change over time as business practices evolve.

For the three months ended June 30, 2010, approximately 41% of our revenues and approximately 55% of our operating expenses were denominated in foreign currencies, as compared to 43% and 57%, respectively, during the same period in 2009. For the six months ended June 30, 2010, approximately 42% of our revenues and approximately 56% of our operating expenses were denominated in foreign currencies, as compared to 43% and 56%, respectively, during the same period in 2009. In addition, 51% of our assets and liabilities were subject to foreign currency exchange fluctuations at June 30, 2010 as compared to 49% and 47% for our assets and liabilities, respectively, at December 31, 2009. We also have assets and liabilities in certain entities that are denominated in currencies other than the entity’s functional currency.

     Approximately 15% of our operating expenses for six months ended June 30, 2010 were denominated in Indian rupees. Because we have minimal associated revenues in Indian rupees, any movement in the exchange rate between the U.S. dollar and the Indian rupee has a significant impact on our operating expenses and operating profit. Approximately 20% of our service revenues for the six months ended June 30, 2010 are denominated in the British pound sterling. Any movement in the exchange rate between the U.S. dollar and the British pound has a significant impact on our revenues and operating income. Approximately 5% of our service revenues for the six months ended June 30, 2010 are denominated in the euro. Any movement in the exchange rate between the U.S. dollar and the euro has a significant impact on our revenues and operating income. We manage this exposure through a risk management program that partially mitigates our exposure to operating expenses denominated in the Indian rupee and operating margins denominated in the British pound sterling and the euro, and that includes the use of derivative financial instruments which are not designated as accounting hedges. As of June 30, 2010 we had option contracts outstanding in the notional amount of approximately $23.4 million ($15.0 million for our Indian rupee contracts, $6.0 million for our British pound sterling contracts and $2.4 million for our euro contracts). Because these instruments are option collars that are settled on a net basis with the bank, we have not recorded the gross underlying notional amounts in our assets and liabilities as of June 30, 2010. The following table details our net realized and unrealized gains/losses on these option contracts for the three and six months ended June 30, 2010 and 2009 (in thousands):

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	Three Months Ended June 30,				Six Months Ended June 30,
	2010		2009		2010			2009
Loss (gain) on foreign exchange option contracts not designated	$	18	$	320	$	(592	)	$	474

     We also performed a sensitivity analysis of the possible loss that could be incurred on these contracts as a result of movements in the Indian rupee. Changes of 10%, 15% and 20% of the underlying average exchange rate of our unsettled Indian rupee positions as of June 30, 2010 would result in maximum losses on these positions of $0.8 million, $1.4 million, and $2.0 million, respectively. Changes of 10%, 15% and 20% of the underlying average exchange rate of our unsettled British pound sterling positions as of June 30, 2010 would result in maximum losses on these positions of $0.2 million, $0.3 million, and $0.4 million, respectively. Changes of 10%, 15% and 20% of the underlying average exchange rate of our unsettled euro positions as of June 30, 2010 would result in maximum losses on these positions of $0.1 million, $0.2 million, and $0.2 million, respectively. Positions expire in July and August of 2010 and therefore, any losses in respect to these positions after June 30, 2010 would be recognized in the three months ending September 30, 2010.

     For additional quantitative and qualitative disclosures about market risk affecting Sapient, see Item 7A, “Quantitative and Qualitative Disclosures About Market Risk”, in our Annual Report on Form 10-K for the fiscal year ended December 31, 2009.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

     Under the supervision of and with the participation of our management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), we conducted an evaluation of the effectiveness, as of June 30, 2010, of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Based on our evaluation our CEO and CFO have concluded that our disclosure controls and procedures (as defined by Rule 13a-15(e) and 15d-15(e) under the Exchange Act) are effective to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms and is accumulated and communicated to management, including our CEO and CFO, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

     No changes in our internal control over financial reporting occurred during the six months ended June 30, 2010 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

     We have certain contingent liabilities that arise in the ordinary course of our business activities. We accrue contingent liabilities when it is probable that future expenditures will be made and such expenditures can be reasonably estimated. We are subject to various legal claims that have arisen in the course of our business and that have not been fully adjudicated in which the damages claimed under such actions, in the aggregate, total approximately $2.4 million as of June 30, 2010. We have accrued at June 30, 2010, approximately $0.5 million related to certain of these items. We intend to defend these matters vigorously, however, the ultimate outcome of these items is uncertain and the potential loss, if any, may be significantly higher or lower than the amounts that we have accrued. Should we fail to prevail in any of these legal matters or should several of these legal matters be resolved against us in the same reporting period, the operating results of a particular reporting period could be materially adversely affected.

Item 1A. Risk Factors

Risk Factors

     The following important factors, among others, could cause our actual business and financial results to differ materially from those contained in forward-looking statements made in this Quarterly Report or presented elsewhere by management from time to time.

Our business, financial condition and results of operations may be materially impacted by economic conditions and related fluctuations in customer demand for marketing, business, technology and other consulting services.

     The market for our consulting services and the technologies used in our solutions historically has tended to fluctuate with economic cycles — particularly those cycles in the United States and Europe, where we earn the majority of our revenues. During economic cycles in which many companies are experiencing financial difficulties or uncertainty, clients and potential clients may cancel or delay spending on marketing, technology and other business initiatives. Our efforts to down-size, when necessary, in a manner intended to mirror downturned economic conditions could be delayed and costly. A downturn could result in a reduced demand for our services, project cancellations or delays, lower revenues and operating margins resulting from price reduction pressures for our services, and payment and collection issues with our clients. Any of these events could materially and adversely impact our business, financial condition and results of operations.

Our markets are highly competitive and we may not be able to continue to compete effectively.

The markets for the services we provide are highly competitive. We believe that we compete principally with large systems consulting and implementation firms, offshore outsourcing companies, interactive and traditional advertising agencies, and clients’ internal information systems departments. To a lesser extent, other competitors include boutique consulting firms that maintain specialized skills and/or are geography based. Regarding our Government Services practice, we both compete and partner with large defense contractors. Some of our competitors have significantly greater financial, technical and marketing resources, and generate greater revenues and have greater name recognition, than we do. Often, these competitors offer a larger and more diversified suite of products and services than we offer. These competitors may win client engagements by significantly discounting their services in exchange for a client’s promise to purchase other goods and services from the competitor, either concurrently or in the future. If we cannot keep pace with the intense competition in our marketplace, our business, financial condition and results of operations will suffer.

Our international operations and Global Distributed Delivery (“GDD”) model subject us to increased risk.

     We have offices throughout the world. Our international operations are a significant percentage of our total revenues, and our GDD model is a key component of our ability to deliver our services successfully. Our international operations are subject to inherent risks, including:

• economic recessions in foreign countries;

• fluctuations in currency exchange rates or impositions of restrictive currency controls;

• political instability, war or military conflict;

• changes in regulatory requirements;

• complexities and costs in effectively managing multi-national operations and associated internal controls and procedures;

• significant changes in immigration policies or difficulties in obtaining required immigration approvals for international assignments;

• restrictions imposed on the import and export of technologies in countries where we operate;

• reduced protection for intellectual property in some countries; and

• changes in tax laws.

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     In particular, our GDD model depends heavily on our offices in Gurgaon, Bangalore and Noida, India. Any escalation in the political or military instability in India or Pakistan or the surrounding countries, or a business interruption resulting from a natural disaster, such as an earthquake, could hinder our ability to use GDD successfully and could result in material adverse effects to our business, financial condition and results of operations. Furthermore, the delivery of our services from remote locations causes us to rely on data, phone, power and other networks which are not as reliable in India as those in other countries where we operate. Any failures of these systems, or any failure of our systems generally, could affect the success of our GDD model. Remote delivery of our services also increases the complexity and risk of delivering our services, which could affect our ability to satisfy our clients’ expectations or perform our services within the estimated time frame and budget for each project. Changes to government structure or policies in countries in which we operate could negatively impact our operations if such changes were to limit or cease any benefits that may currently be available to us. For example, although the Indian government has historically offered generous tax incentives to induce foreign companies to base operations in India, new taxes have been introduced in recent years that partially offset those benefits. On April 1, 2009 the income-tax incentive of one of our Software Technology Parks (“STPs”) Units in India expired. Beginning April 1, 2011, the income-tax incentives applicable to our other two STPs Units in India are scheduled to expire. In addition, in 2009 we established a new India unit in a Special Economic Zone (“SEZ”) which is eligible for a five year, 100% tax holiday. This expiration of incentives may adversely affect our cost of operations and increase the risk of delivering our services on budget for client projects. Expiration of benefits provided to us by having operations based in India could have a material adverse effect on our business, financial condition and results of operations.

Our business, financial condition and results of operations may be materially impacted by military actions, global terrorism, natural disasters and political unrest.

     Military actions in Iraq, Afghanistan and elsewhere, global terrorism, natural disasters and political unrest are among the factors that may adversely impact regional and global economic conditions and, concomitantly, client investments in our services. In addition to the potential impact of any of these events on the business of our clients, these events could pose a threat to our global operations and people. Specifically, our people and operations in India could be impacted if the recent rise in civil unrest, terrorism and conflicts with bordering countries in India were to increase significantly. As a result, significant disruptions caused by such events could materially and adversely affect our business, financial condition and results of operations.

If we do not attract and retain qualified professional staff, we may be unable to perform adequately our client engagements and could be limited in accepting new client engagements.

     Our business is labor intensive, and our success depends upon our ability to attract, retain, train and motivate highly skilled employees. The improvement in demand for marketing and business and technology consulting services has further increased the need for employees with specialized skills or significant experience in marketing, business and technology consulting, particularly at senior levels. We have been expanding our operations, and these expansion efforts will be highly dependent on attracting a sufficient number of highly skilled people. We may not be successful in attracting enough employees to achieve our expansion or staffing plans. Furthermore, the industry turnover rates for these types of employees are high, and we may not be successful in retaining, training and motivating the employees we attract. Any inability to attract, retain, train and motivate employees could impair our ability to manage adequately and complete existing projects and to bid for or accept new client engagements. Such inability may also force us to increase our hiring of expensive independent contractors, which may increase our costs and reduce our profitability on client engagements. We must also devote substantial managerial and financial resources to monitoring and managing our workforce and other resources. Our future success will depend on our ability to manage the levels and related costs of our workforce and other resources effectively.

We earn revenues, incur costs and maintain cash balances in multiple currencies, and currency fluctuations affect our financial results.

     We have significant international operations, and we frequently earn our revenues and incur our costs in various foreign currencies. Our international service revenues were $159.6 million for the first half of 2010. Doing business in these foreign currencies exposes us to foreign currency risks in numerous areas, including revenues and receivables, purchases, payroll and investments. We also have a significant amount of foreign currency operating income and net asset exposures. Certain foreign currency exposures, to some extent, are naturally offset within an international business unit, because revenues and costs are denominated in the same foreign currency, and certain cash balances are held in U.S. dollar denominated accounts. However, due to the increasing size and importance of our international operations, fluctuations in foreign currency exchange rates could materially impact our financial results. Our GDD model also subjects us to increased currency risk because we incur a significant portion of our project costs in Indian rupees and earn revenue from our clients in other currencies. While we have entered into foreign currency offsetting option positions that allow the Company partially to hedge certain short-term translation exposures in Indian rupee and British pound sterling currency, and may in the future enter into foreign currency exchanges swaps and purchases as well as sales of foreign currency options, we will continue to experience foreign currency gains and losses in certain instances where it is not possible or cost effective to hedge foreign currencies. There is no guarantee that such hedging activity will be effective or that our financial condition will not be negatively impacted by the currency exchange rate fluctuations of the Indian rupee versus the U.S. dollar. Costs for our delivery of services, including labor, could increase as a result of the decrease in value of the U.S. dollar against the Indian rupee, affecting our reported results.

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Our cash positions include amounts denominated in foreign currencies. We manage our worldwide cash requirements considering available funds from our subsidiaries and the cost effectiveness with which these funds can be accessed. The repatriation of cash balances from certain of our subsidiaries outside the United States could have adverse tax consequences and be limited by foreign currency exchange controls. However, those balances are generally available without legal restrictions to fund ordinary business operations. Any fluctuations in foreign currency exchange rates, or changes in local tax laws, could materially impact the availability and size of these funds for repatriation or transfer.

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 salary expense, rent, depreciation expense and amortization of intangible assets, are fixed in advance of any particular quarter. As a result, an unanticipated decrease in the number or average size of, or an unanticipated delay in the scheduling for, our projects may cause significant variations in operating results in any particular quarter and could have a material adverse effect on operations for that quarter.

     An unanticipated termination or decrease in size or scope 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 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 because of such factors as:

• the contractual terms and timing of completion of projects, including achievement of certain business results;

• any delays incurred in connection with projects;

• the adequacy of provisions for losses and bad debts;

• the accuracy of our estimates of resources required to complete ongoing projects;

• loss of key highly-skilled personnel necessary to complete projects; and

• general economic conditions.

Changes in our effective tax rate or tax liability may have an adverse effect on our results of operations.

     Our effective tax rate could be adversely impacted by several factors, some of which are outside our control, including:

• Changes in relative amounts of income before taxes in the various jurisdictions in which we operate that have differing statutory tax rates;

• Changes in tax laws and the interpretation of those tax laws;

• Changes to our assessments about the realizability of our deferred tax assets which are based on estimates of our future results, the prudence and feasibility of possible tax planning strategies and the economic environment in which we do business;

• The outcome of future tax audits and examinations;

• Changes in generally accepted accounting principles that affect the accounting for taxes.

     In the ordinary course of our business, many transactions occur where the ultimate tax determination is uncertain. Significant judgment is required in determining our worldwide provision for income taxes. Although we believe our tax estimates are reasonable, the final determination could be materially different from our historical tax provisions and accruals.

Our profits may decrease and/or we may incur significant unanticipated costs if we do not accurately estimate the costs of fixed-price engagements.

     Approximately 44% of our projects are based on fixed-price contracts, rather than contracts in which payment to us is determined on a time and materials or other basis. Our failure to estimate accurately the resources and schedule 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 contract was based, could adversely affect our overall profitability and could have a material adverse effect on our business, financial condition and results of operations. We are consistently entering into contracts for large projects that magnify this risk. We have been required to commit unanticipated additional resources to complete projects in the past, which has occasionally resulted in losses on those contracts. We will likely experience similar situations in the future. In addition, we may fix the price for some projects at an early stage of the project engagement, which could result in a fixed price that is too low. Therefore, any changes from our original estimates could adversely affect our business, financial condition and results of operations.

Our profitability will be adversely impacted if we are unable to maintain our pricing and utilization rates as well as control our costs.

     Our profitability derives from and is impacted primarily by three factors, primarily: (i) the prices for our services; (ii) our professionals’ utilization or billable time, and (iii) our costs. To achieve our desired level of profitability, our utilization must remain at an appropriate rate, and we must contain our costs. Should we reduce our prices in the future as a result of pricing pressures, or should we be unable to achieve our target utilization rates and costs, our profitability could be adversely impacted and our stock price could decline materially.

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We partner with third parties on certain complex engagements in which our performance depends upon, and may be adversely impacted by, the performance of such third parties.

     Certain complex projects may require that we partner with specialized software or systems vendors or other partners to perform our services. Often in these circumstances, we are liable to our clients for the performance of these third parties. Should the third parties fail to perform timely or satisfactorily, our clients may elect to terminate the projects or withhold payment until the services have been completed successfully. Additionally, the timing of our revenue recognition may be affected or we may realize lower profits if we incur additional costs due to delays or because we must assign additional personnel to complete the project. Furthermore, our relationships with our clients and our reputation generally may suffer harm as a result of our partners’ unsatisfactory performance.

Our clients could unexpectedly terminate their contracts for our services.

     Most of our contracts can be canceled by the client with limited advance notice and without significant penalty. A client’s termination of a contract for our services could result in a loss of expected revenues and additional expenses for staff that were allocated to that client’s project. We could be required to maintain underutilized employees who were assigned to the terminated contract. The unexpected cancellation or significant reduction in the scope of any of our large projects, or client termination of one or more recurring revenue contracts (see explanation of “Recurring Revenues” in Part I, Item 1, above), could have a material adverse effect on our business, financial condition and results of operations.

We may be liable to our clients for substantial damages caused by our unauthorized disclosures of confidential information, breaches of data security, failure to remedy system failures or other material contract breaches.

     We frequently receive confidential information from our clients, including confidential customer data that we use to develop solutions. If any person, including one of our employees, misappropriates client confidential information, or if client confidential information is inappropriately disclosed due to a breach of our computer systems, system failures or otherwise, we may have substantial liabilities to our clients or client customers.

     Further, many of our projects involve technology applications or systems that are critical to the operations of our clients’ businesses and handle very large volumes of transactions. If we fail to perform our services correctly, we may be unable to deliver applications or systems to our clients with the promised functionality or within the promised time frame, or to satisfy the required service levels for support and maintenance. While we have taken precautionary actions to create redundancy and back-up systems, any such failures by us could result in claims by our clients for substantial damages against us.

Although we attempt to limit the amount and type of our contractual liability for our breaches of confidentiality or data security, defects in the applications or systems we deliver or other material contract breaches that we may commit during the performance of our services (collectively, “Contract Breaches”), in certain circumstances we agree to unlimited liability for Contract Breaches. Additionally, while we carry insurance that is intended to mitigate our liabilities for such Contract Breaches, we cannot be assured that our insurance coverages will be applicable and enforceable in all cases, or sufficient to cover substantial liabilities that we may incur. Further, we cannot be assured that contractual limitations on liability will be applicable and enforceable in all cases. Accordingly, even if our insurance coverages or contractual limitations on liability are found to be applicable and enforceable, our liability to our clients for Contract Breaches could be material in amount and affect our business, financial condition and results of operations. Moreover, such claims may harm our reputation and cause us to lose clients.

Our services may infringe the intellectual property rights of third parties, and create liability for us as well as harm our reputation and client relationships.

     The services that we offer to clients may infringe the intellectual property (“IP”) rights of third parties and result in legal claims against our clients and Sapient. These claims may damage our reputation, adversely impact our client relationships and create liability for us. Moreover, although we generally agree in our client contracts to indemnify the clients for expenses or liabilities they incur as a result of third party IP infringement claims associated with our services, the resolution of these claims, irrespective of whether a court determines that our services infringed another party’s IP rights, may be time-consuming, disruptive to our business and extraordinarily costly. Finally, in connection with an IP infringement dispute, we may be required to cease using or developing certain IP that we offer to our clients. These circumstances could adversely impact our ability to generate revenue as well as require us to incur significant expense to develop alternative or modified services for our clients.

We may be unable to protect our proprietary methodology.

     Our success depends, in part, upon our proprietary methodology and other IP 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, contractors, vendors and clients, and limit access to and distribution of our proprietary information. We cannot be certain 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 IP rights.

Our stock price is volatile and may result in substantial losses for investors.

     The trading price of our common stock has been subject to wide fluctuations, particularly in the second half of 2008 and the first half of 2009. Our trading price could continue to be subject to wide fluctuations in response to:

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• quarterly variations in operating results and achievement of key business metrics by us or our competitors;

• changes in operating results estimates by securities analysts;

• any differences between our reported results and securities analysts’ published or unpublished expectations;

• announcements of new contracts or service offerings made by us or our competitors;

• announcements of acquisitions or joint ventures made by us or our competitors; and

• general economic or stock market conditions.

     In the past, securities class action litigation has often been instituted against companies following periods of volatility in the market price of their securities. The commencement of this type of litigation against us could result in substantial costs and a diversion of management’s attention and resources.

Our former Chairmen and Chief Executive Officers have significant voting power and may effectively control the outcome of any stockholder vote.

     Jerry A. Greenberg, our former Co-Chairman of the Board of Directors and Chief Executive Officer of the Company, and J. Stuart Moore, our former Co-Chairman of the Board of Directors and Co-Chief Executive Officer and current member of our Board of Directors, own, in the aggregate, approximately 21% of our outstanding common stock as of August 2, 2010. 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 in control would benefit other investors.

We are dependent on our key employees.

     Our success depends in large part upon the continued services of a number of key employees. Our employment arrangements with key personnel provide that employment is terminable at will by either party. The loss of the services of any of our key personnel could have a material adverse effect on our business, financial condition and results of operations. In addition, if our key employees resign 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. Although, to the extent permitted by law, we require our employees to sign agreements prohibiting them from joining a competitor, forming a competing company or soliciting our clients or employees for certain periods of time, we cannot be certain that these agreements will be effective in preventing our key employees from engaging in these actions or that courts or other adjudicative entities will substantially enforce these agreements.

We may be unable to achieve anticipated benefits from acquisitions.

     The anticipated benefits from any acquisitions that we may undertake might not be achieved. For example, if we acquire a company, we cannot be certain that clients of the acquired business will continue to conduct business with us, or that employees of the acquired business will continue their employment or integrate successfully into our operations and culture. The identification, consummation and integration of acquisitions and joint ventures require substantial attention from management. The diversion of management’s attention, as well as any difficulties encountered in the integration process, could have an adverse impact on our business, financial condition and results of operations. Further, we may incur significant expenses in completing any such acquisitions, and we may assume significant liabilities, some of which may be unknown at the time of such acquisition.

The failure to successfully and timely implement certain financial system changes to improve operating efficiency and enhance our reporting controls could harm our business.

     In parallel with the foregoing operational process redesign and role transition activities, we have implemented and continue to install several upgrades and enhancements to our financial systems. We expect these initiatives to enable us to achieve greater operating and financial reporting efficiency and also enhance our existing control environment through increased levels of automation of certain processes. Failure to successfully execute these initiatives in a timely, effective and efficient manner could result in the disruption of our operations, the inability to comply with our Sarbanes-Oxley obligations and the inability to report our financial results in a timely and accurate manner.

A failure to maintain effective internal controls over financial reporting could have a material adverse impact on the Company.

     We are required to maintain internal control over financial reporting to provide reasonable assurance regarding the reliability of financial reporting and the preparation of our financial statements for external purposes in accordance with generally accepted accounting principles. We may in the future identify material weaknesses in our internal control over financial reporting. Further, because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements, regardless of the adequacy of such controls. Should we fail either to maintain adequate internal controls or implement required new or improved controls, our business and results of operations could be harmed, we may be unable to report properly or timely the results of our operations, and investors could lose faith in the reliability of our financial statements. Consequently, the price of our securities may be adversely and materially impacted.

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SAPIENT CORPORATION
PART II. OTHER INFORMATION

Item 6. Exhibits

3.1	Second Amended and Restated Certificate of Incorporation (1)
3.2	Amended and Restated Bylaws (2)
4.1	Specimen Certificate for Shares of Common Stock, $.01 par value, of the Company (3)
10.1*	Amendment to 1998 Stock Incentive Plan
10.2*	Alan J. Herrick Restricted Stock Units Agreement
10.3*	Form of Restricted Stock Units Agreement for Employees
10.4*	Form of Restricted Stock Units Agreement for Directors (Initial Grant)
10.5*	Form of Restricted Stock Units Agreement for Directors (Annual Grant)
31.1*	Certification of Alan J. Herrick pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*	Certification of Joseph S. Tibbetts, Jr. pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1*	Certification of Alan J. Herrick pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2*	Certification of Joseph S. Tibbetts, Jr. pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101*	The following materials from Sapient Corporation on Form 10-Q for the quarterly period ended June 30, 2010, formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated and Condensed Statements of Operations, (ii) the Consolidated and Condensed Balance Sheets, (iii) the Consolidated and Condensed Statements of Cash Flows and (iv) Notes to the Consolidated Financial Statements, tagged as blocks of text.

*	Exhibits filed herewith.
(1)	Incorporated herein by reference to the Company’s Form 10-Q for the fiscal quarter ended September 30, 2004 (File No. 000-28074).
(2)	Incorporated herein by reference to the Company’s Form 8-K, filed February 10, 2009.
(3)	Incorporated herein by reference to the Company’s Registration Statement on Form S-1 (File No. 333-12671).

SIGNATURES

     Pursuant to the requirements 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.

Signature	Title	Date
/s/ Alan J. Herrick Alan J. Herrick	President and Chief Executive Officer  (Principal Executive Officer)	August 5, 2010
/s/ Joseph S. Tibbetts, Jr. Joseph S. Tibbetts, Jr.	Chief Financial Officer  (Principal Financial Officer)	August 5, 2010

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EX-10.1

EXHIBIT 10.1

AMENDMENT
TO
SAPIENT CORPORATION
1998 STOCK INCENTIVE PLAN

     WHEREAS, Sapient Corporation (the “Company”) established the 1998 Stock Incentive Plan effective March 24, 1998 and on May 8, 1998 the shareholders of the Company voted to approve the Plan;

     WHEREAS, The Board of Directors of the Company delegated the administration of the Plan to the Compensation Committee of the Board of Directors (the “Committee”);

     WHEREAS, the Committee desires to amend the Plan to include a description of the Company’s discretion to provide for the payment of amounts in lieu of cash dividends or other cash distributions (i.e., a “dividend equivalent”) with respect to stock of the Company subject to an award under the Plan (other than a stock option or a stock appreciation right); and

     WHEREAS, Section 11(d) of the Plan reserves to the Company the right to amend the Plan.

     NOW, THEREFORE, the Plan is hereby amended, effective as of June 1, 2010, by adding a new Section 10(i) to read in its entirety as follows:

“The Board may provide for the payment of amounts (on terms and subject to conditions established by the Board) in lieu of cash dividends or other cash distributions with respect to Common Stock subject to an Award other than a Stock Option or a stock appreciation right. Any entitlement to dividend equivalents or similar entitlements may be settled in Common Stock if the Board so determines, in which case the shares delivered shall be treated as awarded under the Plan (and shall reduce the number of shares thereafter available under the Plan in accordance with the rules set forth in Section 4). Any entitlement to dividend equivalents or similar entitlements shall be established and administered either consistent with an exemption from, or in compliance with, the requirements of Section 409A. In addition, any amounts payable in respect of a Restricted Stock Award or restricted stock units may be subject to such limits or restrictions as the Board may impose.”

Executed this 1^st day of June, 2010.

SAPIENT CORPORATION

/s/ Jane E. Owens Jane E. Owens

Senior Vice President, General Counsel

& Secretary

EX-10.2

EXHIBIT 10.2

SAPIENT CORPORATION
RESTRICTED STOCK UNITS
AGREEMENT

     In recognition of the important contributions that Alan J. Herrick (the “Employee”) makes to the success of Sapient Corporation (the “Company” or “Sapient”) and its Affiliates (together with the Company, the “Company Group”), pursuant to the Sapient Corporation 1998 Stock Incentive Plan (the “Plan”), the Company hereby grants to the Employee the Restricted Stock Units Award described below. In the event of conflict or inconsistency between this Agreement and the Letter Agreement between the Employee and the Company dated July 21, 2007, as amended, which is attached hereto as Exhibit A and incorporated herein by reference (the “Letter Agreement”), the terms of the Letter Agreement shall govern. The Notice attached to this Agreement is incorporated herein by reference.

1. The Restricted Stock Unit Award. The Company hereby grants to the Employee the number of restricted stock units (the “Units”) set forth on the Notice, subject to the terms and conditions of this Agreement, the Letter Agreement and the Plan. The Units constitute the right to receive, without payment, (i) the number of shares of Common Stock set forth on the Notice (the “Unit Award”), and (ii) the right to receive, without payment, additional shares of Common Stock or an amount of cash, as determined by the Company in its sole discretion, on the same basis as the Unit Award, equal in value to the cash dividends, if any, that would have been paid on or before the Payment Date with respect to the shares of Common Stock underlying the Unit Award had such shares of Common Stock been issued to the Employee on the Grant Date (the “Dividend Equivalent Award”), in each case subject to the terms and conditions of the Plan and those set forth herein (including, but not limited to, the conditions relating to vesting, forfeiture and timing of payment set forth herein). An Award shall be paid hereunder, only to the extent that such Award is Vested, as provided in this Agreement and the Letter Agreement. The Employee’s rights to the Units are subject to the restrictions described in the Letter Agreement, this Agreement and the Plan in addition to such other restrictions, if any, as may be imposed by law.

2. Definitions. The following definitions will apply for purposes of this Agreement. Capitalized terms not defined in this Agreement are used as defined in the Plan and the Notice.

(a)	“Agreement” means this Restricted Stock Units Agreement granted by the Company and agreed to by the Employee.
(b)	“Award” means the grant of Units, including both the Unit Award and the Dividend Equivalent Award, in accordance with this Agreement.
(c)	“Common Stock” means common stock of the Company, $.01 par value.

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(d)	“Fair Market Value” means the per share closing price of a share of Sapient Common Stock on the Nasdaq trading day immediately preceding the applicable Vesting Date.
(e)	“Grant Date” means the date designated as the Date of Grant on the Notice.
(f)	“NASDAQ” means the Nasdaq Global Select Stock Market.
(g)	“Notice” means the Notice of Restricted Stock Units Award attached to this Agreement and incorporated herein by reference.
(h)	“Payment Date” means, as to Vested Units, the date on which the Award is settled, which date will in any event be within 30 days of the date on which the Units become Vested.
(i)	“Unit” means a notional unit which is equivalent to a single share of Common Stock on the Grant Date, subject to Section 4.
(j)	“Vested” means that portion of the Award to which the Employee has a nonforfeitable right under the terms of this Agreement, the Letter Agreement and the Plan.
(k)	“Vesting Dates” means the dates listed in the Vesting Schedule on the attached Notice.

3. Vesting.

(a)	The Unit Award shall become Vested on the basis of one Unit to one share of Common Stock only upon the Vesting Dates and the satisfaction of the performance criteria, if any, as set forth in the Vesting Schedule, and the Dividend Equivalent Award shall become Vested only upon the vesting of the underlying Unit Award and only if a cash dividend has actually been declared and issued on the Common Stock on or after the Grant Date and on or before the Payment Date of the underlying Unit, in each case except as otherwise provided herein or in the Letter Agreement or determined by the Company in its sole discretion. Further, except as otherwise provided in the Letter Agreement, no portion of any Award shall become Vested on the Vesting Date unless the Employee is then, and since the Grant Date has continuously been, employed by a member of the Company Group.
(b)	In the event that the Employee’s employment terminates prior to a Vesting Date, the terms of the Letter Agreement will govern.
(c)	In the event of a merger or acquisition of the Company, the terms of the Letter Agreement and any other agreement between the Employee and the Company entered into after the date hereof for which the Employee is eligible to receive certain change-in-control benefits, will govern.

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4. Adjustments Based on Certain Changes in the Common Stock. In the event of any stock split, reverse stock split, stock dividend, recapitalization or similar change affecting the Common Stock, the Award shall be equitably adjusted as set forth in the Letter Agreement.

5. No Voting Rights/Dividends. The Award shall not be interpreted to bestow upon the Employee any equity interest or ownership in the Company Group prior to the Payment Date. Once the Unit Award and the Dividend Equivalent Award have become Vested and the shares of Common Stock underlying those Awards have been delivered, but not until such time and only with respect to the shares of Common Stock so delivered, the Employee shall have the rights of a stockholder, including, but not limited to, the right to vote and receive dividends.

6. Payment of Award. On the Payment Date, the Company shall issue to the Employee (i) that number of shares of Common Stock as equals that number of Units which have become Vested and (ii) additional shares of Common Stock or an amount of cash, as determined by the Company, equal in value to the Dividend Equivalent Award which has become Vested. If the Dividend Equivalent Award is paid by the issuance of additional shares of Common Stock, the number of shares so issued shall be determined by dividing the cash value of the Dividend Equivalent Award by the price per share of the Company’s common stock reported by NASDAQ at market close on the Vesting date of the Units and Dividend Equivalent Award.

7. Employment Rights. This Agreement shall not create any right of the Employee to continued employment with the Company or the Company Group or limit the right of the Company Group to terminate the Employee’s employment at any time and shall not create any right of the Employee to employment with the Company Group. The Employee acknowledges and represents to the Company that the Employee has not been induced to receive the Award by expectation of employment or continued employment. Except to the extent required by applicable law that cannot be waived, the loss of the Award shall not constitute an element of damages or indemnity in the event of termination of the Employee’s employment even if the termination is determined to be in violation of an obligation of the Company Group to the Employee by contract or otherwise.

8. Unfunded Status. The obligations of the Company Group hereunder shall be contractual only. The Employee shall rely solely on the unsecured promise of the Company and nothing herein shall be construed to give the Employee or any other person or persons any right, title, interest or claim in or to any specific asset, fund, reserve, account or property of any kind whatsoever owned by the Company Group.

9. No Assignment. No right or benefit or payment under the Plan shall be subject to assignment or other transfer nor shall it be liable or subject in any manner to attachment, garnishment or execution.

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10. Withholding. The Company’s obligation to deliver to the Employee shares of Common Stock under an Award shall be subject to the satisfaction of all applicable federal, state and local income and employment tax withholding requirements as determined by the Company Group (“Withholding Taxes”). To satisfy any Withholding Taxes due upon the vesting of the Employee’s Award, the Company shall withhold shares of Common stock that would otherwise be delivered to the Employee, provided that such withholding shall be limited to the minimum required applicable tax withholding and, provided further, that the Employee may elect instead, by written notice to the Company at least 30 days prior to the Payment Date, to satisfy the Withholding Taxes by doing one of the following (each, an “Election”):

(a)	paying the Company the Withholding Taxes (which may be accomplished through payroll withholding);
(b)	delivering to the Company other shares of Common Stock owned by the Employee prior to such date having a Fair Market Value not less than the Withholding Taxes due, which either have been owned by the Employee for more than six (6) months or were not acquired, directly or indirectly, from the Company; or
(c)	making a payment to the Company consisting of a combination of cash and such shares of Common Stock.

For purposes of satisfying Withholding Taxes pursuant to this Section 10, and in the event that the Employee does not make an Election, the Employee hereby agrees to the terms of the Irrevocable Standing Order to Sell Shares (the “Standing Order”), attached as Exhibit A and to the following:

(1)	The Employee authorizes the Company’s agent to sell, at the market price and on each Vesting Date (or the first NASDAQ trading day thereafter if a Vesting Date is a day in which NASDAQ is closed), the number of Vested shares that, per the Company’s instructions to its agent, is necessary to obtain proceeds sufficient to satisfy the Withholding Taxes. The Employee understands and agrees that the number of shares that such agent will sell will be based on the closing price of the Common Stock on the NASDAQ trading day immediately preceding the Vesting Date.
(2)	The Employee agrees that the proceeds received from the sale of Vested shares pursuant to this Section 10 will be used to satisfy the Withholding Taxes and, accordingly, the Employee hereby authorizes the Company’s agent to pay such proceeds to the Company for such purpose. The Employee understands that to the extent that the proceeds obtained by such sale exceed the amount necessary to satisfy the Withholding Taxes, such excess proceeds shall be deposited into the Employee’s stock brokerage account with E*TRADE Financial or such other third party brokerage under which the Employee maintains a brokerage account (the “Account”). The Employee further understands that any remaining Vested shares shall be deposited into the Account.
(3)	The Employee acknowledges and agrees that, in the event that a market in the Common Stock does not exist, the Employee shall pay to the Company

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amounts sufficient to pay the Withholding Taxes and, to the extent that such payment is not made, the Company shall have the right to make other arrangements to satisfy the Withholding Taxes due upon the vesting of the Employee’s Shares.

11. Amendment or Termination. This Agreement may be amended by mutual written agreement of the parties.

12. Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the Commonwealth of Massachusetts.

13. Section 409A Exemption. The Award is intended to be exempt from the requirements of Section 409A of the Internal Revenue Code of 1986, as amended from time to time, and guidance issued thereunder and shall be construed and administered accordingly. Notwithstanding the above, neither the Company, nor any subsidiary, nor the Committee, nor any person acting on behalf of the Company, any subsidiary, or the Committee, shall be liable to the Employee or to the estate or beneficiary of the Employee by reason of any acceleration of income, or any additional tax, asserted by reason of the failure of this Agreement or any payment hereunder to satisfy the requirements of Section 409A of the Code.

  IN WITNESS WHEREOF, Sapient Corporation has executed this Restricted Stock Units Agreement as of the first day of April, 2010.

SAPIENT CORPORATION
By:	/s/ Darius W. Gaskins, Jr. Darius W. Gaskins, Jr., Chairman
	Board of Directors

Agreed: /s/ Alan J. Herrick   Alan J. Herrick

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Exhibit A

Letter Agreement*

     *Incorporated herein by reference to the Company’s Form 10-Q for the period ended September 30, 2007 and Form 10-Q for the period ended June 30, 2009 (File No. 000-28074).

A-1

Exhibit B

IRREVOCABLE STANDING ORDER TO SELL SHARES

I have received from the Company on a voluntary basis the right to acquire shares of Sapient common stock (the “Shares”) pursuant to the attached Restricted Stock Units Agreement between Sapient and me.

I understand that I must maintain a securities brokerage account with E*TRADE Financial or such other third party brokerage (each of E*TRADE Financial or such other third party brokerage is herein defined as the “Broker”) to participate in the stock unit plan described in detail in the Restricted Stock Units Agreement, and Sapient has informed me about this requirement as well as the requirements for the opening of such a securities brokerage account so that the vested Shares can be deposited into account. Furthermore, I understand that on each vesting date, the vested Shares will be deposited into my stock brokerage account with the broker and that I will incur taxable ordinary employment income (“Taxable Income”) upon my receipt of the vested Shares. Per the terms of the Agreement, and if so directed by Sapient, I understand and agree to do the following as a condition of my receipt of vested Shares:

Upon each vesting date, I must sell a number of Shares that is sufficient to satisfy all withholding taxes, as determined by Sapient or my Sapient-affiliated employer, which are applicable to my Taxable Income (the “Withholding Taxes”). Accordingly, I HEREBY DIRECT THE BROKER TO SELL, ON EACH VESTING DATE LISTED ABOVE (OR THE FIRST NASDAQ TRADING DAY THEREAFTER IF A VESTING DATE IS A DAY ON WHICH NASDAQ IS CLOSED), THAT NUMBER OF SHARES THAT, PER SAPIENT’S INSTRUCTIONS TO THE AGENT, IS SUFFICIENT TO OBTAIN SALE PROCEEDS SUFFICIENT TO SATISFY THE WITHHOLDING TAXES. THE PER SHARE SALES PRICE SHALL BE CALCULATED BASED ON THE CLOSING PRICE OF A SHARE OF SAPIENT COMMON STOCK ON THE NASDAQ TRADING DAY IMMEDIATELY PRECEDING THE APPLICABLE VESTING DATE.

I understand that the Broker will remit the proceeds of the foregoing sale promptly to Sapient for payment by Sapient or my Sapient-affiliated employer of the Withholding Taxes, and I authorize and direct the Broker to pay such proceeds to Sapient for this purpose.

I acknowledge that I have not been induced to participate in any trade in return for or as an expectation of employment or continued employment. I understand and agree that by signing below, I am making an Irrevocable Standing Order to Sell Shares that will remain in effect until such time as I have received all Shares to which I am entitled under this Agreement. I also agree that this Irrevocable Standing Order to Sell Shares is in addition and subject to the terms and conditions of any existing Account Agreement that I have with the Broker.

B-1

EX-10.3

EXHIBIT 10.3

SAPIENT CORPORATION
RESTRICTED STOCK UNITS
AGREEMENT

     In recognition of the important contributions that the employee whose name appears on the Notice attached to this Agreement (the “Employee”) makes to the success of Sapient Corporation (the “Company” or “Sapient”) and its Affiliates (together with the Company, the “Company Group”), pursuant to the Sapient Corporation 1998 Stock Incentive Plan (the “Plan”), the Company hereby grants to the Employee the Restricted Stock Units Award described below. The Notice attached to this Agreement is incorporated herein by reference.

1.

The Restricted Stock Unit Award. The Company hereby grants to the Employee the number of restricted stock units (the “Units”) set forth on the Notice, subject to the terms and conditions of this Agreement and the Plan. The Units constitute the right to receive, without payment, (i) the number of shares of Common Stock set forth on the Notice (the “Unit Award”), and (ii) the right to receive, without payment, additional shares of Common Stock or an amount of cash, as determined by the Company in its sole discretion, on the same basis as the Unit Award, equal in value to the cash dividends, if any, that would have been paid on or before the Payment Date with respect to the shares of Common Stock underlying the Unit Award had such shares of Common Stock been issued to the Employee on the Grant Date (the “Dividend Equivalent Award”), in each case subject to the terms and conditions of the Plan and those set forth herein (including, but not limited to, the conditions relating to vesting, forfeiture and timing of payment set forth herein). An Award shall be paid hereunder only to the extent that such Award is Vested, as provided in this Agreement. The Employee’s rights to the Units are subject to the restrictions described in this Agreement and the Plan in addition to such other restrictions, if any, as may be imposed by law.

2.

Definitions. The following definitions will apply for purposes of this Agreement. Capitalized terms not defined in this Agreement are used as defined in the Plan and the Notice.

(a)	“Agreement” means this Restricted Stock Units Agreement granted by the Company and agreed to by the Employee.
(b)	“Award” means the grant of Units, including both the Unit Award and any Dividend Equivalent Award, in accordance with this Agreement.
(c)	“Common Stock” means common stock of the Company, $.01 par value.
(d)	“Fair Market Value” means the per share closing price of a share of Sapient Common Stock on the Nasdaq trading day immediately preceding the applicable Vesting Date.
(e)	“Grant Date” means the date designated as the Date of Grant on the Notice.
(f)	“NASDAQ” means the Nasdaq Global Select Stock Market.

(g)	“Notice” means the Notice of Restricted Stock Units Award attached to this Agreement and incorporated herein by reference.
(h)	“Payment Date” means, as to Vested Units, the date on which the Award is settled, which date will in any event be within 30 days of the date on which the Units become Vested.
(i)	“Unit” means a notional unit which is equivalent to a single share of Common Stock on the Grant Date, subject to Section 4.
(j)	“Vested” means that portion of the Award to which the Employee has a nonforfeitable right under the terms of this Agreement and the Plan.
(k)	“Vesting Dates” means the dates listed in the Vesting Schedule on the attached Notice.

3. Vesting.

(a)	The Unit Award shall become Vested on the basis of one Unit to one share of Common Stock only upon the Vesting Dates and the satisfaction of the performance criteria, if any, as set forth in the Vesting Schedule, and the Dividend Equivalent Award shall become Vested only upon the vesting of the underlying Unit Award and only if a cash dividend has actually been declared and issued on the Common Stock on or after the Grant Date and on or before the Payment Date of the underlying Unit, in each case except as otherwise provided herein or determined by the Company in its sole discretion. No portion of any Award shall become Vested on the Vesting Date unless the Employee is then, and since the Grant Date has continuously been, employed by a member of the Company Group.
(b)	In the event that the Employee takes a leave of absence from his or her employment prior to a Vesting Date, the Company Group has the discretion to suspend vesting during such leave of absence as provided for in the Corporation’s leave policy, to the extent permitted by applicable law. Upon the Employee’s return to active work, vesting will resume; however, unless otherwise provided in the Company’s leave policy, or otherwise required by applicable law, the Employee will not receive credit for any vesting during the leave of absence period.
(c)	In the event that the Employee’s employment terminates prior to a Vesting Date for any reason, including without limitation (1) death, (2) disability, or (3) termination by the Company or the Company Group, or (4) other termination of employment, any portion of the Award that has not then become Vested will be forfeited automatically.
(d)	In the event of a merger or acquisition of the Company in which the Company is not the surviving entity, or a sale of substantially all of the Company’s assets, the Company may, in its sole discretion, accelerate the Vesting of all or any portion of any Award, unless the surviving entity agrees to assume or provide substituted awards in respect of the portion of the Awards that have not yet become Vested.

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4.	Adjustments Based on Certain Changes in the Common Stock. In the event of any stock split, reverse stock split, stock dividend, recapitalization or similar change affecting the Common Stock, the Award shall be equitably adjusted.
5.	No Voting Rights/Dividends. The Award shall not be interpreted to bestow upon the Employee any equity interest or ownership in the Company Group prior to the Payment Date. Once the Unit Award and the Dividend Equivalent Award have become Vested and the shares of Common Stock underlying those Awards have been delivered, but not until such time and only with respect to the shares of Common Stock so delivered, the Employee shall have the rights of a stockholder, including, but not limited to, the right to vote and receive dividends.
6.	Payment of Award. On the Payment Date, the Company shall issue to the Employee (i) that number of shares of Common Stock as equals that number of shares underlying the Unit Award which have become Vested and (ii) additional shares of Common Stock or an amount of cash, as determined by the Company, equal in value to the Dividend Equivalent Award which has become Vested. If the Dividend Equivalent Award is paid by the issuance of additional shares of Common Stock, the number of shares so issued shall be determined by dividing the cash value of the Dividend Equivalent Award by the price per share of the Company’s common stock reported by NASDAQ at market close on the record date established by the Company’s Board of Directors for determining the Company’s stockholders of record entitled to receive the cash dividend to which the Dividend Equivalent Award relates.
7.	Employment Rights. This Agreement shall not create any right of the Employee to continued employment with the Company or the Company Group or limit the right of the Company Group to terminate the Employee’s employment at any time and shall not create any right of the Employee to employment with the Company Group. The Employee acknowledges and represents to the Company that the Employee has not been induced to receive the Award by expectation of employment or continued employment. Except to the extent required by applicable law that cannot be waived, the loss of the Award shall not constitute an element of damages or indemnity in the event of termination of the Employee’s employment even if the termination is determined to be in violation of an obligation of the Company Group to the Employee by contract or otherwise.
8.	Unfunded Status. The obligations of the Company Group hereunder shall be contractual only. The Employee shall rely solely on the unsecured promise of the Company and nothing herein shall be construed to give the Employee or any other person or persons any right, title, interest or claim in or to any specific asset, fund, reserve, account or property of any kind whatsoever owned by the Company Group.
9.	No Assignment. No right or benefit or payment under the Plan shall be subject to assignment or other transfer nor shall it be liable or subject in any manner to attachment, garnishment or execution.

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10. Withholding. The Company’s obligation to deliver to the Employee shares of Common Stock under an Award shall be subject to the satisfaction of all applicable federal, state and local income and employment tax withholding requirements as determined by the Company Group (“Withholding Taxes”). To satisfy any Withholding Taxes due upon the vesting of the Employee’s Award, the Company shall withhold shares of Common stock that would otherwise be delivered to the Employee, provided that such withholding shall be limited to the minimum required applicable tax withholding and, provided further, that the Employee may elect instead, by written notice to the Company at least 30 days prior to the Vest Date, to satisfy the Withholding Taxes by doing one of the following (each, an “Election”):

(a)	paying the Company the Withholding Taxes in cash (via check or wire transfer); or
(b)	delivering to the Company other shares of Common Stock owned by the Employee prior to such date having a Fair Market Value not less than the Withholding Taxes due, which either have been owned by the Employee for more than six (6) months or were not acquired, directly or indirectly, from the Company.

For purposes of satisfying Withholding Taxes pursuant to this Section 10, and in the event that the Employee does not make an Election, the Employee hereby agrees to the terms of the Irrevocable Standing Order to Sell Shares (the “Standing Order”), attached as Exhibit A and to the following:

(1)	The Employee authorizes the Company’s agent to sell, at the market price and on each Vesting Date (or the first NASDAQ trading day thereafter if a Vesting Date is a day in which NASDAQ is closed), the number of Vested shares that, per the Company’s instructions to its agent, is necessary to obtain proceeds sufficient to satisfy the Withholding Taxes. The Employee understands and agrees that the number of shares that such agent will sell will be based on the closing price of the Common Stock on the NASDAQ trading day immediately preceding the Vesting Date.
(2)	The Employee agrees that the proceeds received from the sale of Vested shares pursuant to this Section 10 will be used to satisfy the Withholding Taxes and, accordingly, the Employee hereby authorizes the Company’s agent to pay such proceeds to the Company for such purpose. The Employee understands that to the extent that the proceeds obtained by such sale exceed the amount necessary to satisfy the Withholding Taxes, such excess proceeds shall be deposited into the Employee’s stock brokerage account with E*TRADE Financial or such other third party brokerage under which the Employee maintains a brokerage account (the “Account”). The Employee further understands that any remaining Vested shares shall be deposited into the Account.
(3)	The Employee acknowledges and agrees that, in the event that a market in the Common Stock does not exist, the Employee shall pay to the Company amounts sufficient to pay the Withholding Taxes and, to the extent that such payment is not made, the Company shall have the right to make other

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arrangements to satisfy the Withholding Taxes due upon the vesting of the Employee’s Shares.

11.	Amendment or Termination. This Agreement may be amended by mutual written agreement of the parties.
12.	Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the Commonwealth of Massachusetts.
13.	Section 409A Exemption. The Award is intended to be exempt from the requirements of Section 409A of the Internal Revenue Code of 1986, as amended from time to time, and guidance issued thereunder and shall be construed and administered accordingly. Notwithstanding the above, neither the Company, nor any subsidiary, nor the Committee, nor any person acting on behalf of the Company, any subsidiary, or the Committee, shall be liable to the Employee or to the estate or beneficiary of the Employee by reason of any acceleration of income, or any additional tax, asserted by reason of the failure of this Agreement or any payment hereunder to satisfy the requirements of Section 409A of the Code.

          IN WITNESS WHEREOF, Sapient Corporation has executed this Restricted Stock Units Agreement as of the       day of                     , 20      .

SAPIENT CORPORATION
By:	/s/ Alan J. Herrick
	Alan J. Herrick
	Chief Executive Officer

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Exhibit A

IRREVOCABLE STANDING ORDER TO SELL SHARES

I have received from the Company on a voluntary basis the right to acquire shares of Sapient common stock (the “Shares”) pursuant to the attached Restricted Stock Units Agreement between Sapient and me.

I understand that I must maintain a securities brokerage account with E*TRADE Financial or such other third party brokerage (each of E*TRADE Financial or such other third party brokerage is herein defined as the “Broker”) to participate in the stock unit plan described in detail in the Restricted Stock Units Agreement, and Sapient has informed me about this requirement as well as the requirements for the opening of such a securities brokerage account so that the vested Shares can be deposited into account. Furthermore, I understand that on each vesting date, the vested Shares will be deposited into my stock brokerage account with the broker and that I will incur taxable ordinary employment income (“Taxable Income”) upon my receipt of the vested Shares. Per the terms of the Agreement, and if so directed by Sapient, I understand and agree to do the following as a condition of my receipt of vested Shares:

Upon each vesting date, I must sell a number of Shares that is sufficient to satisfy all withholding taxes, as determined by Sapient or my Sapient-affiliated employer, which are applicable to my Taxable Income (the “Withholding Taxes”). Accordingly, I HEREBY DIRECT THE BROKER TO SELL, ON EACH VESTING DATE LISTED ABOVE (OR THE FIRST NASDAQ TRADING DAY THEREAFTER IF A VESTING DATE IS A DAY ON WHICH NASDAQ IS CLOSED), THAT NUMBER OF SHARES THAT, PER SAPIENT’S INSTRUCTIONS TO THE AGENT, IS SUFFICIENT TO OBTAIN SALE PROCEEDS SUFFICIENT TO SATISFY THE WITHHOLDING TAXES. THE PER SHARE SALES PRICE SHALL BE CALCULATED BASED ON THE CLOSING PRICE OF A SHARE OF SAPIENT COMMON STOCK ON THE NASDAQ TRADING DAY IMMEDIATELY PRECEDING THE APPLICABLE VESTING DATE.

I understand that the Broker will remit the proceeds of the foregoing sale promptly to Sapient for payment by Sapient or my Sapient-affiliated employer of the Withholding Taxes, and I authorize and direct the Broker to pay such proceeds to Sapient for this purpose.

I acknowledge that I have not been induced to participate in any trade in return for or as an expectation of employment or continued employment. I understand and agree that by signing below, I am making an Irrevocable Standing Order to Sell Shares that will remain in effect until such time as I have received all Shares to which I am entitled under this Agreement. I also agree that this Irrevocable Standing Order to Sell Shares is in addition and subject to the terms and conditions of any existing Account Agreement that I have with the Broker.

 A-1 

EX-10.4

Exhibit 10.4

SAPIENT CORPORATION
RESTRICTED STOCK UNITS
AGREEMENT

     In recognition of the important contributions that                           (the “Director”) makes to the success of Sapient Corporation (the “Company” or “Sapient”) and its Affiliates (together with the Company, the “Company Group”) as a member of the Company’s Board of Directors, the Company hereby grants to the Director, pursuant to the Sapient Corporation 1998 Stock Incentive Plan (the “Plan”), the Restricted Stock Units Award described below.

1.

The Restricted Stock Units Award. The Company hereby grants to the Director                                (                    ) Units, subject to the terms and conditions of this Agreement and the Plan. The Units constitute the right to receive, without payment, (i) the number of shares of Common Stock set forth above (the “Unit Award”), and (ii) the right to receive, without payment, additional shares of Common Stock or an amount of cash, as determined by the Company in its sole discretion, on the same basis as the Unit Award, equal in value to the cash dividends, if any, that would have been paid on or before the Payment Date with respect to the shares of Common Stock underlying the Unit Award had such shares of Common Stock been issued to the Director on the Grant Date (the “Dividend Equivalent Award”), in each case subject to the terms and conditions of the Plan and those set forth herein (including, but not limited to, the conditions relating to vesting, forfeiture and timing of payment set forth herein). An Award shall be paid hereunder, only to the extent that such Award is Vested, as provided in this Agreement. The Director’s rights to the Units are subject to the restrictions described in this Agreement and the Plan in addition to such other restrictions, if any, as may be imposed by law.

2.

Definitions. The following definitions will apply for purposes of this Agreement. Capitalized terms not defined in this Agreement are used as defined in the Plan.

(a)	“Agreement” means this Restricted Stock Units Agreement granted by the Company and agreed to by the Director.
(b)	“Award” means the grant of Units, including both the Unit Award and any Dividend Equivalent Award, in accordance with this Agreement.
(c)	“Change in Control” means the occurrence of any of the following events: (i) any “person”, as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (other than the Company, J. Stuart Moore, any trustee or other fiduciary holding securities under an employee benefit plan of the Company, or any corporation owned directly or indirectly by the stockholders of the Company in substantially the same proportion as their ownership of stock of the Company), is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 50% or more of the combined voting power of the Company’s then outstanding securities; (ii) the stockholders of the Company

approve a merger or consolidation of the Company with any other corporation, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than 50% of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation; (iii) the stockholders of the Company approve a plan of complete liquidation of the Company or an agreement for the sale of disposition by the Company of all or substantially all of the Company’s assets; or (iv) individuals who, on the date on which the Plan was adopted by the Board, constituted the Board of Directors of the Company, together with any new director whose election by the Board or nomination for election by the Company’s stockholders was approved by a vote of at least a majority of the directors then still in office who were directors on the date on which the Plan was adopted by the Board or whose election or nomination was previously so approved, cease for any reason to constitute at least a majority of the Board of Directors.

(d)	“Common Stock” means common stock of the Company, $0.01 par value.
(e)	“Grant Date” means                     .
(f)	“NASDAQ” means the Nasdaq Global Select Stock Market.
(g)	“Payment Date” means, as to Vested Units, the date on which the Award is settled, which date will in any event be within 30 days of the date on which the Units become Vested, except that in connection with a Change in Control, the Payment Date shall mean immediately prior to or coincident with the occurrence of the Change in Control.
(h)	“Unit” means a notional unit which is equivalent to a single share of Common Stock on the Grant Date, subject to Section 4.
(i)	“Vested” means that portion of the Award to which the Director has a nonforfeitable right under the terms of this Agreement and the Plan.
(j)	“Vesting Dates” means the dates set forth in Section 3.

3. Vesting.

(a) The Unit Award shall become Vested on the basis of one Unit to one share of Common Stock only upon the Vesting Dates and the satisfaction of the performance criteria, if any, as set forth in this Section 3, and the Dividend Equivalent Award shall become Vested only upon the vesting of the underlying Unit Award and only if a cash dividend has actually been declared and issued on the Common Stock on or after the Grant Date and on or before the Payment Date of the underlying Unit, in each case except as otherwise provided herein or determined by the Company in its sole discretion. No portion of any Award shall become Vested on the Vesting Date unless the Director is then, and since the Grant Date has continuously been, a Director of the Company.

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(b) Subject to subsections (c), (d) and (e), below, an Award shall become Vested based on the following schedule.

Vesting Date	Percentage Vested on Anniversary Date
First Anniversary of Grant Date	25%
Second Anniversary of Grant Date	25%
Third Anniversary of Grant Date	25%
Fourth Anniversary of Grant Date	25%

(c)	Upon the occurrence of a Change in Control, the length of the Director’s service shall be deemed to be twelve months longer than the actual length, and Vested shares shall be distributed immediately prior to or coincident with the Change in Control; provided, however, that in no event shall such deemed time extension serve to increase the number of Vested shares to more than the number of shares of Common Stock as equals that number of Units which have been awarded hereunder.
(d)	Notwithstanding Section 3(b), if the service of the Director terminates by reason of death or disability (within the meaning of Section 22(e)(3) of the Internal Revenue Code), the length of the Director’s service shall be deemed to be six months longer than the actual length; provided, however, that in no event shall such deemed time extension serve to increase the number of Vested shares to more than the number of shares of Common Stock as equals that number of Units which have been awarded hereunder.
(e)	Notwithstanding Section 3(b), in the event that the Director has completed the full term of service as a Director for which he or she was elected at an Annual Meeting of Stockholders of the Company, but is not standing for re-election to a subsequent term as a Director at the Annual Meeting of Stockholders of the Company at which he or she would otherwise have been re-elected (the “Retirement Meeting”), any Award shares scheduled to vest on a date subsequent to the Retirement Meeting that is not later than the ninetieth (90th) day following the Retirement Meeting date shall become Vested shares as of the date immediately preceding such Retirement Meeting; provided, however, that in no event shall such deemed time extension serve to increase the number of Vested Shares to more than the number of shares of Common Stock equal to that number of Units which have been awarded under this Agreement.
(f)	In the event that the Director’s tenure as a member of the Company’s Board of Directors terminates prior to a Vesting Date for any reason other than as set forth in this Section 3, including without limitation termination by the Company or the Company Group, any portion of the Award that has not then become Vested will be forfeited automatically.

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4.	Adjustments Based on Certain Changes in the Common Stock. In the event of any stock split, reverse stock split, stock dividend, recapitalization or similar change affecting the Common Stock, the Award shall be equitably adjusted.
5.	No Voting Rights/Dividends. The Award shall not be interpreted to bestow upon the Director any equity interest or ownership in the Company Group prior to the Payment Date. Once the Unit Award and the Dividend Equivalent Award have become Vested and the shares of Common Stock underlying those Awards have been delivered, but not until such time and only with respect to the shares of Common Stock so delivered, the Director shall have the rights of a stockholder, including, but not limited to, the right to vote and receive dividends.
6.	Payment of Award. On the Payment Date, the Company shall issue to the Director (i) that number of shares of Common Stock as equals that number of shares underlying the Units Award which have become Vested and (ii) additional shares of Common Stock or an amount of cash, as determined by the Company, equal in value to the Dividend Equivalent Award which has become Vested. If the Dividend Equivalent Award is paid by the issuance of additional shares of Common Stock, the number of shares so issued shall be determined by dividing the cash value of the Dividend Equivalent Award by the price per share of the Company’s common stock reported by NASDAQ at market close on the record date established by the Company’s Board of Directors for determining the Company’s stockholders of record entitled to receive the cash dividend to which the Dividend Equivalent Award relates.
7.	Unfunded Status. The obligations of the Company Group hereunder shall be contractual only. The Director shall rely solely on the unsecured promise of the Company and nothing herein shall be construed to give the Director or any other person or persons any right, title, interest or claim in or to any specific asset, fund, reserve, account or property of any kind whatsoever owned by the Company Group.
8.	No Assignment. No right or benefit or payment under the Plan shall be subject to assignment or other transfer nor shall it be liable or subject in any manner to attachment, garnishment or execution.
9.	Amendment or Termination. This Agreement may be amended by mutual written agreement of the parties.
10.	Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the Commonwealth of Massachusetts.
11.	Section 409A Exemption. The Award is intended to be exempt from the requirements of Section 409A of the Internal Revenue Code of 1986, as amended from time to time, and guidance issued thereunder and shall be construed and administered accordingly. Notwithstanding the above, neither the Company, nor any subsidiary, nor the Committee, nor any person acting on behalf of the Company, any subsidiary, or the Committee, shall be liable to the Director or to the estate or beneficiary of the Director by reason of any acceleration of income, or any additional tax, asserted by reason of the failure of this Agreement or any payment hereunder to satisfy the requirements of Section 409A of the Code.

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     IN WITNESS WHEREOF, Sapient Corporation and                           have executed this Restricted Stock Units Agreement effective as of the       day of                     ,           .

Sapient Corporation	Director
By:	Name:
Title:

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EX-10.5

EXHIBIT 10.5

SAPIENT CORPORATION
RESTRICTED STOCK UNITS
AGREEMENT

     In recognition of the important contributions that                                (the “Director”) makes to the success of Sapient Corporation (the “Company” or “Sapient”) and its Affiliates (together with the Company, the “Company Group”) as a member of the Company’s Board of Directors, the Company hereby grants to the Director, pursuant to the Sapient Corporation 1998 Stock Incentive Plan (the “Plan”), the Restricted Stock Units Award described below.

1.

The Restricted Stock Units Award. The Company hereby grants to the Director                                          (                    ) Units, subject to the terms and conditions of this Agreement and the Plan. The Units constitute the right to receive, without payment, (i) the number of shares of Common Stock set forth above (the “Unit Award”), and (ii) the right to receive, without payment, additional shares of Common Stock or an amount of cash, as determined by the Company in its sole discretion, on the same basis as the Unit Award, equal in value to the cash dividends, if any, that would have been paid on or before the Payment Date with respect to the shares of Common Stock underlying the Unit Award had such shares of Common Stock been issued to the Director on the Grant Date (the “Dividend Equivalent Award”), in each case subject to the terms and conditions of the Plan and those set forth herein (including, but not limited to, the conditions relating to vesting, forfeiture and timing of payment set forth herein). An Award shall be paid hereunder, only to the extent that such Award is Vested, as provided in this Agreement. The Director’s rights to the Units are subject to the restrictions described in this Agreement and the Plan in addition to such other restrictions, if any, as may be imposed by law.

2.

Definitions. The following definitions will apply for purposes of this Agreement. Capitalized terms not defined in this Agreement are used as defined in the Plan.

(a)	“Agreement” means this Restricted Stock Units Agreement granted by the Company and agreed to by the Director.
(b)	“Award” means the grant of Units, including both the Unit Award and any Dividend Equivalent Award, in accordance with this Agreement.
(c)	“Change in Control” means the occurrence of any of the following events: (i) any “person”, as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (other than the Company, J. Stuart Moore, any trustee or other fiduciary holding securities under an employee benefit plan of the Company, or any corporation owned directly or indirectly by the stockholders of the Company in substantially the same proportion as their ownership of stock of the Company), is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 50% or more of the combined voting power of the Company’s then outstanding securities; (ii) the stockholders of the Company

approve a merger or consolidation of the Company with any other corporation, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than 50% of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation; (iii) the stockholders of the Company approve a plan of complete liquidation of the Company or an agreement for the sale of disposition by the Company of all or substantially all of the Company’s assets; or (iv) individuals who, on the date on which the Plan was adopted by the Board, constituted the Board of Directors of the Company, together with any new director whose election by the Board or nomination for election by the Company’s stockholders was approved by a vote of at least a majority of the directors then still in office who were directors on the date on which the Plan was adopted by the Board or whose election or nomination was previously so approved, cease for any reason to constitute at least a majority of the Board of Directors.

(d)	“Common Stock” means common stock of the Company, $0.01 par value.
(e)	“Grant Date” means                               .
(f)	“NASDAQ” means the Nasdaq Global Select Stock Market.
(g)	“Payment Date” means, as to Vested Units, the date on which the Award is settled, which date will in any event be within 30 days of the date on which the Units become Vested, except that in connection with a Change in Control, the Payment Date shall mean immediately prior to or coincident with the occurrence of the Change in Control.
(h)	“Unit” means a notional unit which is equivalent to a single share of Common Stock on the Grant Date, subject to Section 4.
(i)	“Vested” means that portion of the Award to which the Director has a nonforfeitable right under the terms of this Agreement and the Plan.
(j)	“Vesting Dates” means the dates set forth in Section 3.

3. Vesting.

(a) The Unit Award shall become Vested on the basis of one Unit to one share of Common Stock only upon the Vesting Dates and the satisfaction of the performance criteria, if any, as set forth in this Section 3, and the Dividend Equivalent Award shall become Vested only upon the vesting of the underlying Unit Award and only if a cash dividend has actually been declared and issued on the Common Stock on or after the Grant Date and on or before the Payment Date of the underlying Unit, in each case except as otherwise provided herein or determined by the Company in its sole discretion. No portion of any Award shall become Vested on the Vesting Date unless the Director is then, and since the Grant Date has continuously been, a Director of the Company.

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(b) Subject to subsections (c), (d) and (e), below, an Award shall become Vested based on the following schedule.

Vesting Date	Percentage Vested on Anniversary Date
First Anniversary of Grant Date	100%

(c)	Upon the occurrence of a Change in Control, an Award shall become 100% Vested, such shares to be distributed immediately prior to or coincident with the Change in Control.
(d)	Notwithstanding Section 3(b), if the service of the Director terminates by reason of death or disability (within the meaning of Section 22(e)(3) of the Internal Revenue Code), the length of the Director’s service shall be deemed to be six months longer than the actual length; provided, however, that in no event shall such deemed time extension serve to increase the number of Vested shares to more than the number of shares of Common Stock as equals that number of Units which have been awarded hereunder.
(e)	Notwithstanding Section 3(b), in the event that the Director has completed the full term of service as a Director for which he or she was elected at an Annual Meeting of Stockholders of the Company, but is not standing for re-election to a subsequent term as a Director at the Annual Meeting of Stockholders of the Company at which he or she would otherwise have been re-elected (the “Retirement Meeting”), any Award shares scheduled to vest on a date subsequent to the Retirement Meeting that is not later than the ninetieth (90th) day following the Retirement Meeting date shall become Vested shares as of the date immediately preceding such Retirement Meeting; provided, however, that in no event shall such deemed time extension serve to increase the number of Vested Shares to more than the number of shares of Common Stock equal to that number of Units which have been awarded under this Agreement.
(f)	In the event that the Director’s tenure as a member of the Company’s Board of Directors terminates prior to a Vesting Date for any reason other than as set forth in this Section 3, including without limitation termination by the Company or the Company Group, any portion of the Award that has not then become Vested will be forfeited automatically.

4.

Adjustments Based on Certain Changes in the Common Stock. In the event of any stock split, reverse stock split, stock dividend, recapitalization or similar change affecting the Common Stock, the Award shall be equitably adjusted.

5.

No Voting Rights/Dividends. The Award shall not be interpreted to bestow upon the Director any equity interest or ownership in the Company Group prior to the Payment Date. Once the Unit Award and the Dividend Equivalent Award have become Vested and the shares of Common Stock underlying those Awards have been delivered, but not until such time and only with respect to the shares of Common Stock so delivered, the Director shall have the rights of a stockholder, including, but not limited to, the right to vote and receive dividends.

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6.	Payment of Award. On the Payment Date, the Company shall issue to the Director (i) that number of shares of Common Stock as equals that number of shares underlying the Units Award which have become Vested and (ii) additional shares of Common Stock or an amount of cash, as determined by the Company, equal in value to the Dividend Equivalent Award which has become Vested. If the Dividend Equivalent Award is paid by the issuance of additional shares of Common Stock, the number of shares so issued shall be determined by dividing the cash value of the Dividend Equivalent Award by the price per share of the Company’s common stock reported by NASDAQ at market close on the record date established by the Company’s Board of Directors for determining the Company’s stockholders of record entitled to receive the cash dividend to which the Dividend Equivalent Award relates.
7.	Unfunded Status. The obligations of the Company Group hereunder shall be contractual only. The Director shall rely solely on the unsecured promise of the Company and nothing herein shall be construed to give the Director or any other person or persons any right, title, interest or claim in or to any specific asset, fund, reserve, account or property of any kind whatsoever owned by the Company Group.
8.	No Assignment. No right or benefit or payment under the Plan shall be subject to assignment or other transfer nor shall it be liable or subject in any manner to attachment, garnishment or execution.
9.	Amendment or Termination. This Agreement may be amended by mutual written agreement of the parties.
10.	Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the Commonwealth of Massachusetts.
11.	Section 409A Exemption. The Award is intended to be exempt from the requirements of Section 409A of the Internal Revenue Code of 1986, as amended from time to time, and guidance issued thereunder and shall be construed and administered accordingly. Notwithstanding the above, neither the Company, nor any subsidiary, nor the Committee, nor any person acting on behalf of the Company, any subsidiary, or the Committee, shall be liable to the Director or to the estate or beneficiary of the Director by reason of any acceleration of income, or any additional tax, asserted by reason of the failure of this Agreement or any payment hereunder to satisfy the requirements of Section 409A of the Code.

     IN WITNESS WHEREOF, Sapient Corporation and                                have executed this Restricted Stock Units Agreement effective as of the            day of                     ,           .

Sapient Corporation	Director
By:	Name:
Title:

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EX-31.1

EXHIBIT 31.1

I, Alan J. Herrick, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of Sapient Corporation;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Signature	Title	Date
/s/ Alan J. Herrick	President and Chief Executive Officer	August 5, 2010
Alan J. Herrick	(Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

I, Joseph S. Tibbetts, Jr., certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of Sapient Corporation;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Signature	Title	Date
/s/ Joseph S. Tibbetts, Jr.	Chief Financial Officer	August 5, 2010
Joseph S. Tibbetts, Jr.	(Principal Financial Officer)

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Sapient Corporation (the “Corporation”) on Form 10-Q for the fiscal quarter ended June 30, 2010, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Alan J. Herrick, the Chief Executive Officer of the Corporation, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Corporation.

/s/ Alan J. Herrick Alan J. Herrick

President and Chief Executive Officer

Dated: August 5, 2010

EX-32.2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Sapient Corporation (the “Corporation”) on Form 10-Q for the fiscal quarter ended June 30, 2010, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Joseph S. Tibbetts, Jr., the Chief Financial Officer of the Corporation, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Corporation.

/s/ Joseph S. Tibbetts, Jr.

Joseph S. Tibbetts, Jr.

Chief Financial Officer

Dated: August 5, 2010