##### Table of Contents





UNITED STATES SECURITIES AND
    EXCHANGE COMMISSIONWashington, D.C.
    20549
  Form 10-K
  þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    December 31, 2008ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)  OF THE
    SECURITIES EXCHANGE ACT OF 1934For 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
    incorporation or organization)

(I.R.S. Employer
    Identification No.)131 Dartmouth Street, Boston, MA(Address of principal
    executive offices)

02116(Zip
    Code)   617-621-0200
 (Registrants telephone number, including area code)
  Securities registered pursuant to Section 12(b) of the
    Act:
  Title of Each Class

Name of Each Exchange on Which RegisteredCommon Stock, $0.01 par value per share

The Nasdaq Global Stock Market   Securities registered pursuant to Section 12(g) of the
    Act:
 None
  o þ
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. o
  Rule 12b-2
  Large accelerated
    filer þ

Accelerated
    filer o

Non-accelerated
    filer o

Smaller reporting
    company o(Do not check if a smaller reporting company)   Rule 12b-2 o þ
      Class

Outstanding at February 16, 2009Common Stock, $0.01 par value per share

127,353,932 shares




---



##### 





SAPIENT
    CORPORATION
  ANNUAL REPORT ON
    FORM 10-K
 For the Fiscal Year Ended December 31, 2008
  TABLE OF
    CONTENTS
  
  PageItem 1.


Business


1Item 1A.


Risk Factors


10Item 1B.


Unresolved Staff Comments


17Item 2.


Properties


17Item 3.


Legal Proceedings


17Item 4.


Submission of Matters to a Vote of Security
    Holders


17Item 5.


Market for Registrants Common Equity,
    Related Stockholder Matters and Issuer Purchases of Equity
    Securities


18Item 6.


Selected Financial Data


20Item 7.


Managements Discussion and Analysis of
    Financial Condition and Results of Operations


21Item 7A.


Quantitative and Qualitative Disclosures About
    Market Risk


45Item 8.


Financial Statements and Supplementary Data


48Item 9.


Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure


95Item 9A.


Controls and Procedures


95Item 10.


Directors, Executive Officers and Corporate
    Governance


96Item 11.


Executive Compensation


97Item 12.


Security Ownership of Certain Beneficial Owners
    and Management and Related Stockholder Matters


97Item 13.


Certain Relationships and Related Transactions,
    and Director Independence


97Item 14.


Principal Accounting Fees and Services


97Item 15.


Exhibits and Financial Statement Schedules


98Signatures


99Ex-21 List of SubsidiariesEx-23 Consent of PricewaterhouseCoopers LLPEx-31.1 Section 302 Certification of CEOEx-31.2 Section 302 Certification of CFOEx-32.1 Section 906 Certification of CEOEx-32.2 Section 906 Certification of CFO    SPECIAL
    NOTE REGARDING FORWARD-LOOKING STATEMENTS
  Form 10-K
 i




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##### Table of Contents



PART I
  Item 1.
    Business  General
  1
  (617) 621-0200. http://www.sapient.com.
          1
 1




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Acquisitions
      ®
 2




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##### Table of Contents



Our
    Services
  Sapient
    Interactive
    Interactive
    Marketing and Creative Services
    
    visual concept, design and implementation via multiple
    interactive media;
    brand building and direct response programs; audience
    segmentation and profiling strategies;
    customer loyalty strategies;
    customer relationship strategy and implementation;
    customer lead generation and management; and
    integrated advertising campaigns.    Web &
    Interactive Development
    Media
    Planning & Buying
    Strategic
    Planning & Marketing Analytics
   3




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##### Table of Contents



Marketing
    Technologies
  ® e-commerce
  Consulting
    Services
    Business &
    IT Strategy
    
    Business-process consulting
    E-business &
    web strategy
    IT governance & advisory services
    IT strategy for SAP
    Program management office  Application
    Portfolio Value Insight Framework
   4




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##### Table of Contents



Business
    Applications
    
    Business applications
    Customer relationship solutions
    Custom & package applications
    Enterprise resource planning
    Supply chain solutions
    Web solutions    Business
    Intelligence
      Strategic
    Assessments & Business Case Development
    Business
    Intelligence Pilots
   5




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##### Table of Contents



Business
    Intelligence Implementation and Enhancement
    SAP
    Business Intelligence Training
    Business
    Intelligence Application Outsourcing
    Outsourcing
    Services
      
    Core Technologies:  Java and Microsoft
    environments, application server platforms and middleware/EAI
    technologies, databases and connectivity to legacy systems
    Platforms and Operating Systems:  Commonly used
    platforms such as the UNIX and Microsoft Windows family of
    operating systems, and Linux and associated hardware platforms
    Packages and Application Suites:  Capabilities
    and partnerships with top package providers in content lifecycle
    management, enterprise resource planning (ERP), customer
    relationship management (CRM), and supply chain management
    (SCM), in addition to industry-specific, market-leading package
    providers such as SAP and Oracle  Application
    Maintenance
    Application
    Testing
  24-hour
 6




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##### Table of Contents



Capacity
    Partnerships and Offshore Development Center Setup
        Trading
    and Risk Management
    
    A range of asset classes, including equities, fixed income and
    commodities
    Vanilla and over-the-counter (OTC) products
    The full trade lifecycle    
    defining target organizational, process or technology models and
    potential migration paths;
    benchmarking clients trading operations against comparable
    operations and industry initiatives;
    architecture design and software selection
    program scoping, planning and management;
    integrating clients systems with off-the-shelf software,
    frameworks and industry platforms; and
    developing, integrating and testing custom front, middle and
    back-office applications.    Alliances
   7




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The
    Sapient Approach
        ®
  Strategic
    Context, People and Culture
     8




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Selling
    and Marketing
    http://www.sapient.com.
    Competition
  and/or
      Intellectual
    Property Rights
     9




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Where to
    Find More Information
  Form 10-K, Form 10-Q, Form 8-K http://www.sapient.com http://www.sec.gov 1-800-SEC-0330.
  Item 1A.
    Risk
    Factors  Risk
    Factors
    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.
    Our
    markets are highly competitive and we may not be able to
    continue to compete effectively.
  and/or
 10




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Our
    international operations and Global Distributed Delivery
    (GDD) model subject us to increased
    risk.
    
    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.    Our
    business, financial condition and results of operations may be
    materially impacted by military actions, global terrorism,
    natural disasters and political unrest.
   11




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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.
    We
    earn revenues, incur costs and maintain cash balances in
    multiple currencies, and currency fluctuations affect our
    financial results.
      Due to
    our current inability to sell certain of our Auction Rate
    Securities (ARS), the securities may experience
    additional declines in value, and funds associated with the
    securities may be inaccessible in excess of 12 months,
    resulting in a material adverse impact to our income and results
    of operations.
   12




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We
    have significant fixed operating costs, which may be difficult
    to adjust in response to unanticipated fluctuations in
    revenues.
      
    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.  We may
    reduce our profits and/or incur significant unanticipated costs
    if we do not accurately estimate the costs of fixed-price
    engagements.
   13




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Our
    profitability will be adversely impacted if we are unable to
    maintain our pricing and utilization rates as well as control
    our costs.
    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.
    Our
    clients could unexpectedly terminate their contracts for our
    services.
    We may
    be liable to our clients for damages caused by unauthorized
    disclosures of confidential information or by our failure to
    remedy system failures.
    back-up
   14




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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.
    We may
    be unable to protect our proprietary methodology.
    Our
    stock price is volatile and may result in substantial losses for
    investors.
    
    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.    Our
    former Chairmen and Chief Executive Officers have significant
    voting power and may effectively control the outcome of any
    stockholder vote.
    We are
    dependent on our key employees.
   15




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We may
    be unable to achieve anticipated benefits from acquisitions and
    joint ventures.
    If we
    do not effectively improve our operational and financial
    processes and systems, our ability to achieve efficiencies and
    cost savings may be delayed and our results of operations may be
    adversely impacted.
    The
    failure to successfully and timely implement certain financial
    system changes to improve operating efficiency and enhance our
    reporting controls could harm our business.
    A
    failure to maintain effective internal controls over financial
    reporting could have a material adverse impact on the
    Company.
   16




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Item 1B.
    Unresolved
    Staff Comments    Item 2.
    Properties    Item 3.
    Legal
    Proceedings      Item 4.
    Submission
    of Matters to a Vote of Security Holders   17




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##### Table of Contents



PART II
  Item 5.
    Market
    for Registrants Common Equity, Related Stockholder Matters
    and Issuer Purchases of Equity Securities  Market
    Price of Common Stock
    High


Low2007:First Quarter

$
7.21


$
5.37Second Quarter

$
8.26


$
6.70Third Quarter

$
8.25


$
5.73Fourth Quarter

$
9.12


$
6.202008:First Quarter

$
8.97


$
6.10Second Quarter

$
7.75


$
6.14Third Quarter

$
9.97


$
5.84Fourth Quarter

$
7.46


$
3.30     COMPARISON
    OF 5 YEAR CUMULATIVE TOTAL RETURN*
    Among Sapient Corporation, The NASDAQ Composite Index
    And The Dow Jones US Technology Index
  
  
  18




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##### Table of Contents



12/31/03



12/31/04



12/31/05



12/31/06



12/31/07



12/31/08Sapient Corporation



100.00




140.25




100.89




97.34




156.21




78.72NASDAQ Composite



100.00




110.08




112.88




126.51




138.13




80.47Dow Jones US Technology



100.00




101.76




105.13




115.75




133.92




76.51       Issuer
    Purchases of Equity Securities
   19




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Item 6.
    Selected
    Financial Data  SELECTED
    CONSOLIDATED FINANCIAL DATA
    Year Ended December 31,2008


2007


2006


2005


2004(In thousands, except per share amounts)Statement of Operations Data(1):Revenues:Service revenues

$
662,412


$
546,438


$
405,582


$
313,556


$
248,154Reimbursable expenses


25,076



19,551



16,061



13,542



12,100Total gross revenues


687,488



565,989



421,643



327,098



260,254Operating expenses:Project personnel expenses


435,508



372,363



270,213



187,082



134,994Reimbursable expenses


25,076



19,551



16,061



13,542



12,100Total project personnel expenses and reimbursable expenses


460,584



391,914



286,274



200,624



147,094Selling and marketing expenses


36,233



33,113



24,025



13,718



13,926General and administrative expenses


123,188



120,617



109,022



84,725



67,179Restructuring and other related charges


194



32



1,912



6,374



1,546Amortization of intangible assets


2,660



2,038



3,564



1,104



515Total operating expenses


622,859



547,714



424,797



306,545



230,260Income (loss) from operations


64,629



18,275



(3,154
)


20,553



29,994Other income, net


1,280



422



1,929



92



65Interest income, net


5,806



5,478



4,238



4,181



3,011Income from continuing operations before income taxes,
    discontinued operations and cumulative effect of accounting
    change


71,715



24,175



3,013



24,826



33,070Provision for (benefit from) income taxes:Provision for income taxes


9,239



8,959



4,432



3,677



3,068Benefit from release of valuation allowance














(4,289
)


(635
)Provision for (benefit from) income taxes


9,239



8,959



4,432



(612
)


2,433Income (loss) from continuing operations before discontinued,
    operations and cumulative effect of accounting change


62,476



15,216



(1,419
)


25,438



30,637(Loss) income from discontinued operations










(433
)


961



665Gain on disposal of discontinued operations (net of tax
    provision of $342)










4,834







Income before cumulative effect of accounting change


62,476



15,216



2,982



26,399



31,302Cumulative effect of accounting change










154







Net income

$
62,476


$
15,216


$
3,136


$
26,399


$
31,302Basic income (loss) per share from continuing operations

$
0.50


$
0.12


$
(0.01
)

$
0.20


$
0.25Diluted income (loss) per share from continuing operations

$
0.48


$
0.12


$
(0.01
)

$
0.20


$
0.24Basic net income per share

$
0.50


$
0.12


$
0.03


$
0.21


$
0.25Diluted net income per share

$
0.48


$
0.12


$
0.03


$
0.20


$
0.24Weighted average common shares


125,988



124,180



123,692



124,725



123,040Weighted average dilutive common share equivalents


3,176



3,711







5,034



5,591Weighted average common shares and dilutive common share
    equivalents


129,164



127,891



123,692



129,759



128,631   20




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##### Table of Contents



Year Ended December 31,2008


2007


2006


2005


2004Balance Sheet Data:Working capital

$
198,062


$
189,201


$
148,899


$
179,528


$
116,830Total assets


452,270



407,604



342,064



286,051



269,331Redeemable common stock






290



480



671



Total stockholders equity(2)

$
301,947


$
260,559


$
214,497


$
201,420


$
183,724     (1)
    
    We sold our HWT, Inc. (HWT) unit in May, 2006. As a
    result, operating results of this subsidiary for all prior
    periods presented have been reclassified into the caption
    (Loss) income from discontinued operations.(2)
    
    We have never declared or paid any cash dividends.  Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  Overview
            and/or
 21




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##### Table of Contents



Summary
    of Critical Accounting Policies; Significant Judgments and
    Estimates
      Revenue
    Recognition
    81-1, Accounting for Performance of Construction Type and Certain
    Production Type Contracts. Revenue Recognition in Financial Statements Revenue Recognition time-and-materials time-and-materials time-and-materials
 22




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##### Table of Contents



No. 00-21, Revenue Arrangements with Multiple Deliverables No. 00-21).
  No. 99-19, Reporting Revenue Gross as a Principal versus Net as an Agent No. 99-19)
      arrangement-by-arrangement
  Allowance
    for Doubtful Accounts
   23




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##### Table of Contents



Valuation
    and Impairment of Investments and/or Marketable
    Securities
  and/or Accounting for Certain Investments in Debt and
    Equity Securities and/or and/or and/or
   24




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##### Table of Contents



The Fair
    Value Option for Financial Assets and Financial
    Liabilities  Including an amendment of FASB Statement
    No. 115,
    Fair Value Measurement
  
    Level 1  Quoted prices in active markets for
    identical assets or liabilities.
    Level 2  Inputs other than Level 1 that are
    observable, either directly or indirectly, such 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 for substantially the
    full term of the assets or liabilities.
    Level 3  Unobservable inputs that are supported
    by little or no market activity and that are significant to the
    fair value of the assets and liabilities.  Stock-Based
    Compensation Expense
   25




---



##### Table of Contents



Accounting
    for Income Taxes
  Accounting for Income Taxes
  Accounting for Uncertainty
    in Income Taxes Accounting for Income Taxes.
 26




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##### Table of Contents



Valuation
    of Long-Lived Assets and Intangible Assets
  Accounting for the
    Impairment or Disposal of Long-Lived Assets
  Valuation
    of Goodwill
  Goodwill and Other
    Intangible Assets
  
    significant underperformance relative to historical or projected
    future operating results;
    significant changes in the manner of or use of the acquired
    assets or the strategy for our overall business;
    identification of other impaired assets within a reporting unit;
    disposition of a significant portion of an operating segment;
    significant negative industry or economic trends;
    significant decline in our stock price for a sustained
    period; and
    a decline in our market capitalization relative to net book
    value.      Costs
    Incurred to Develop Computer Software for Internal Use
  SOP 98-1, Accounting for the Costs of Computer Software Developed or
    Obtained for Internal Use (SOP 98-1). SOP 98-1,
 27




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##### Table of Contents



Restructuring
    and Other Related Charges
  No. 94-3, Liability Recognition for Certain Employee Benefits and Other
    Costs to Exit an Activity (including Certain Costs incurred in a
    Restructuring) No. 94-3). No. 94-3, No. 94-3. Accounting for Costs Associated with
    Exit or Disposal Activities No. 94-3. Employers Accounting for
    Postemployment Benefits
  Contingent
    Liabilities
    Accounting
    for Acquisitions
   28




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Business Combinations
  Off-Balance
    Sheet Arrangements
      Discontinued
    Operations
    Related
    Party Transactions
   29




---



##### Table of Contents



Results
    of Operations
    Year Ended December 31,2008


2007


2006Revenues:Service revenues


100
%


100
%


100
%Reimbursable expenses


4
%


4
%


4
%Total gross revenues


104
%


104
%


104
%Operating expenses:Project personnel expenses


66
%


68
%


67
%Reimbursable expenses


4
%


4
%


4
%Total project personnel expenses and reimbursable expenses


70
%


72
%


71
%Selling and marketing expenses


5
%


6
%


6
%General and administrative expenses


19
%


22
%


27
%Restructuring and other related charges


0
%


0
%


0
%Amortization of intangible assets


0
%


0
%


1
%Total operating expenses (excluding reimbursable expenses)


90
%


97
%


101
%Income (loss) from operations


10
%


3
%


(1
%)Other income, net


0
%


0
%


0
%Interest income


1
%


1
%


1
%Income from continuing operations before income taxes,
    discontinued operations and cumulative effect of accounting
    change


11
%


4
%


1
%Provision for income taxes


2
%


2
%


1
%Income from continuing operations before discontinued operations
    and cumulative effect of accounting change


9
%


3
%


0
%(Loss) income from discontinued operations


0
%


0
%


0
%Gain on disposal of discontinued operations (net of tax
    provision of $342)


0
%


0
%


1
%Income before cumulative effect of accounting change


9
%


3
%


1
%Cumulative effect of accounting change


0
%


0
%


0
%Net income


9
%


3
%


1
%  30




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##### Table of Contents



Years
    Ended December 31, 2008 and 2007
  Service
    Revenues
    Year EndedDecember 31,


December 31,





Percentage2008


2007


Increase


Increase(In thousands, except percentages)Service revenues

$
662,412


$
546,438


$
115,974



21
%         Project
    Personnel Expenses
    Year EndedDecember 31,


December 31,


Increase/


Percentage2008


2007


(Decrease)


Increase(In thousands, except percentages)Project personnel expenses

$
435,508


$
372,363


$
63,145



17
%Project personnel expenses as a percentage of service revenues


66
%


68
%


(2 pts
)    31




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##### Table of Contents



Selling
    and Marketing Expenses
    Year EndedDecember 31,


December 31,


Increase/


Percentage2008


2007


(Decrease)


Increase(In thousands, except percentages)Selling and marketing expenses

$
36,233


$
33,113


$
3,120



9
%Selling and marketing expenses as a percentage of service
    revenues


5
%


6
%


(1 pt
)     General
    and Administrative Expenses
    Year EndedDecember 31,


December 31,


Increase/


Percentage2008


2007


(Decrease)


Increase(In thousands, except percentages)General and administrative expenses

$
123,188


$
120,617


$
2,571



2
%General and administrative expenses as a percentage of service
    revenues


19
%


22
%


(3 pts
)    32




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##### Table of Contents



Restructuring
    and Other Related Charges
  2006 
    Restructure Event
  Employers Accounting
    for Postemployment Benefits ,
    Accounting for Cost Associated with Exit or Disposal Activities
  Workforce(In thousands)2006 Provision

$
572Cash utilized


(572
)Balance, December 31, 2006

$
   2005 
    Restructure Event
    Workforce(In thousands)2005 Provision

$
300Balance at December 31, 2005

$
3002006 provision


430Cash utilized


(505
)Balance at December 31, 2006

$
225Cash utilized


(225
)Balance at December 31, 2007

$
   2001,
    2002 and 2003  Restructure Events
   33




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##### Table of Contents



true-up true-up,
  Facilities(In thousands)Balance at December 31, 2005

$
21,2752006 provision


910Cash utilized


(6,630
)Non-cash utilized


(172
)Balance at December 31, 2006

$
15,3832007 provision


32Cash utilized


(3,867
)Non-cash utilized


(275
)Balance at December 31, 2007

$
11,2732008 provision


194Cash utilized


(3,542
)Non-cash utilized


(3
)Balance at December 31, 2008

$
7,922   12-month
    Amortization
    of Intangible Assets
   34




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##### Table of Contents



Interest
    and Other Income
    Year EndedDecember 31,


December 31,





Percentage2008


2007


Increase


Increase(In thousands, except percentages)Interest and other income

$
7,086


$
5,900


$
1,186



20
%   Summary of Critical Accounting Policies;
    Valuation and Impairment of Investments
    and/or
    Marketable Securities
  Provision
    for Income Taxes
  Accounting for Income Taxes
    Results
    by Operating Segment
     35




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##### Table of Contents



2008


2007Service Revenues

(In thousands)North America

$
408,779


$
357,084Government Services


28,272



23,151Europe


225,361



166,203Total Service Revenues

$
662,412


$
546,438   2008


2007(In thousands)Income before Income TaxesNorth America(1)

$
96,453


$
83,574Government Services(1)


8,815



5,887Europe(1)


69,351



45,339Total Reportable Segments(1)


174,619



134,800Less Reconciling Items(2)


(102,904
)


(110,625
)Consolidated Income before Income Taxes

$
71,715


$
24,175     (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 unti 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:  2008


2007(In thousands)Centrally managed functions

$
92,050


$
87,887Restructuring and other related charges


194



32Amortization of intangible assets


2,660



2,038Stock-based compensation expense


15,122



17,996Interest and other income, net


(7,086
)


(5,900
)Unallocated expenses(3)


(36
)


8,572$
102,904


$
110,625   (3)
    
    Includes corporate portion of both selling, marketing and
    general and administrative expenses.  Years
    Ended December 31, 2008 and 2007
  Service
    Revenues by Operating Segments
   36




---



##### Table of Contents



Operating
    Income by Operating Segments
       37




---



##### Table of Contents



Years
    Ended December 31, 2007 and 2006
  Service
    Revenues
    Year EndedDecember 31,


December 31,





Percentage2007


2006


Increase


Increase(In thousands, except percentages)Service revenues

$
546,438


$
405,582


$
140,856



35
%       Project
    Personnel Expenses
    Project
    Personnel Expenses
  Year EndedDecember 31,


December 31,





Percentage2007


2006


Increase


Increase(In thousands, except percentages)Project personnel expenses

$
372,363


$
270,213


$
102,150



38
%Project personnel expenses as a percentage of service revenues


68
%


67
%


1 pt    38




---



##### Table of Contents



Selling
    and Marketing Expenses
  Year EndedDecember 31,


December 31,





Percentage2007


2006


Increase


Decrease(In thousands, except percentages)Selling and marketing expenses

$
33,113


$
24,025


$
9,088



38
%Selling and marketing expenses as a percentage of service
    revenues


6
%


6
%


0 pts     General
    and Administrative Expenses
  Year EndedDecember 31,


December 31,


Increase/


Percentage2007


2006


Decrease


Increase(In thousands, except percentages)General and administrative expenses

$
120,617


$
109,022


$
11,595



11
%General and administrative expenses as a percentage of service
    revenues


22
%


27
%


(5 pts
)       Amortization
    of Intangible Assets
   39




---



##### Table of Contents



Interest
    and Other Income
    Year EndedDecember 31,


December 31,





Percentage2007


2006


Decrease


Decrease(In thousands, except percentages)Interest and other income

$
5,900


$
6,167


$
(267
)


−4
%     Provision
    for (Benefit from) Income Taxes
  Accounting for Income
    Taxes
    Results
    by Operating Segment
     40




---



##### Table of Contents



2007


2006(In thousands)Service RevenuesNorth America

$
357,084


$
282,989Government Services


23,151



15,952Europe


166,203



106,641Total Service Revenues

$
546,438


$
405,582   2007


2006(In thousands)Income From Continuing Operations before Income Taxes,
    Discontinued Operations and Cumulative Effect of Accounting
    ChangeNorth America(1)

$
83,574


$
74,433Government Services(1)


5,887



2,993Europe(1)


45,339



28,965Total Reportable Segments(1)


134,800



106,391Less Reconciling Items(2)


(110,625
)


(103,378
)Consolidated Income from Continuing Operations beforeIncome Taxes, Discontinued Operations and Cumulative Effect of
    Accounting Change

$
24,175


$
3,013     (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 unti 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:  2007


2006(In thousands)Centrally managed functions

$
87,887


$
77,461Restructuring and other related charges


32



1,340Amortization of intangible assets


2,038



3,564Stock-based compensation expense


17,996



12,410Interest and other income, net


(5,900
)


(6,167
)Unallocated expenses(3)


8,572



14,770$
110,625


$
103,378   (3)
    
    Includes corporate portion of both selling, marketing and
    general and administrative expenses. 41




---



##### Table of Contents



Years
    Ended December 31, 2007 and 2006
  Service
    Revenues by Operating Segments
    Operating
    Income by Operating Segments
    Liquidity
    and Capital Resources
     42




---



##### Table of Contents



Payments Due By PeriodLess Than


1 - 3


3 - 5


More ThanOne Year


Years


Years


5 Years


Total(In thousands)Operating leases

$
10,070


$
16,414


$
8,447


$
11,600


$
46,531Cash outlays for restructuring and other related activities(1)


2,837



4,970











7,807Purchase obligations(2)


536



129











665Uncertain tax positions






6,669











6,669Total

$
13,443


$
28,182


$
8,447


$
11,600


$
61,672     (1)
    
    Cash outlay for restructuring and other related activities
    include minimum future lease and related payments for excess
    facilities, net of estimated sublease income of
    $9.9 million under existing arrangements, excluding
    expected sublease arrangements of approximately
    $0.8 million and estimated operating costs.(2)
    
    Purchase obligations represent minimum commitments due to third
    parties, including subcontractor agreements, telecommunications
    contracts, IT maintenance contracts in support of internal use
    of software and hardware and other marketing and consulting
    contracts. Contracts for which our commitment is variable based
    on volumes, with no fixed minimum quantities, and contracts that
    can be cancelled without payment penalties, have been excluded.
    Amounts presented also exclude accounts payable and accrued
    expenses at December 31, 2008.           43




---



##### Table of Contents



New
    Accounting Pronouncements
  Fair Value Measurement No. 157-1 No. 157-2. No. 157-1 No. 157-2, No. 157-2,
  
    Level 1  Quoted prices in active markets for
    identical assets or liabilities.
    Level 2  Inputs other than Level 1 that are
    observable, either directly or indirectly, such 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 for substantially the
    full term of the assets or liabilities.
    Level 3  Unobservable inputs that are supported
    by little or no market activity and that are significant to the
    fair value of the assets and liabilities.    The Fair Value Option for Financial
    Assets and Financial Liabilities  Including an
    amendment of FASB Statement No. 115 Accounting for Certain Investments in
    Debt and Equity Securities.
 44




---



##### Table of Contents



No. EITF 03-6-1, Determining Whether Instruments Granted in Share-Based
    Payment Transactions Are Participating Securities No. EITF 03-6-1). No. EITF 03-6-1 No. EITF 03-6-1
  No. FAS 142-3, Determination of the Useful Life of Intangible Assets No. FAS 142-3). No. FAS 142-3 Goodwill and
    Other Intangible Assets No. FAS 142-3 No. FAS 142-3
  Disclosures about Derivative Instruments and Hedging
    Activities  an amendment of FASB Statement
    No. 133 Accounting for Derivative
    Instruments and Hedging Activities
  Business Combinations
  Item 7A.
    Quantitative
    and Qualitative Disclosures About Market Risk     45




---



##### Table of Contents



Liquidity
    and Capital Resources
  and/or
    Exchange
    Rate Sensitivity
      Accounting
    for Derivative Instruments and Hedging Activities
 46




---



##### Table of Contents



47




---



##### 



Item 8.
    Financial
    Statements and Supplementary Data  SAPIENT
    CORPORATION
  INDEX TO
    CONSOLIDATED FINANCIAL STATEMENTS
   
 Report of Independent Registered Public
    Accounting Firm


49Consolidated Balance Sheets


50Consolidated Statements of Operations


51Consolidated Statements of Changes in
    Stockholders Equity


52Consolidated Statements of Cash Flows


53Notes to Consolidated Financial Statements


54Financial Statement Schedule:Schedule II  Valuation and
    Qualifying Accounts and Reserves


94   48




---



##### Table of Contents



Report of
    Independent Registered Public Accounting Firm     Internal Control 
    Integrated Framework
          49




---



##### Table of Contents



SAPIENT
    CORPORATION
  CONSOLIDATED
    BALANCE SHEETS
  December 31,


December 31,2008


2007(In thousands, except share and per share amounts)ASSETSCurrent assets:Cash and cash equivalents

$
169,340


$
118,697Marketable securities


3,462



57,667Restricted cash, current portion


372



458Accounts receivable, less allowance for doubtful accounts of
    $395 and $956 at December 31, 2008 and 2007, respectively


88,930



82,413Unbilled revenues


43,665



33,403Deferred tax assets, current portion


1,835



1,557Prepaid expenses


7,033



8,054Other current assets


11,355



13,109Total current assets


325,992



315,358Marketable securities


17,267



Restricted cash, net of current portion


2,139



1,294Property and equipment, net


32,397



34,914Purchased intangible assets, net


9,644



5,512Goodwill


51,711



40,544Deferred tax assets, net of current portion


7,520



5,164Other assets


5,600



4,818Total assets

$
452,270


$
407,604LIABILITIES, REDEEMABLE COMMON STOCK AND
    STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable

$
6,977


$
7,264Accrued expenses


39,951



45,850Accrued compensation


55,605



54,203Accrued restructuring costs, current portion


3,123



3,584Income taxes payable


6,653



1,107Deferred tax liabilities, current portion


478



448Deferred revenues, current portion


15,143



13,701Total current liabilities


127,930



126,157Accrued restructuring costs, net of current portion


4,799



7,689Deferred revenues, net of current portion


289



577Other long-term liabilities


17,305



12,332Total liabilities


150,323



146,755Commitments and contingencies (Note 14)Redeemable common stock, par value $0.01 per share, 0 and
    134,995 issued and outstanding at December 31, 2008 and
    2007, respectively






290Stockholders equity:Preferred stock, par value $0.01 per share, 5,000,000 authorized
    and none issued at December 31, 2008 and 2007






Common stock, par value $0.01 per share, 200,000,000 shares
    authorized, 131,785,758 shares issued at December 31,
    2008 and 2007


1,318



1,318Additional paid-in capital


580,936



564,878Treasury stock, at cost, 5,239,006 and 6,072,232 shares at
    December 31, 2008 and 2007, respectively


(24,165
)


(24,240
)Accumulated other comprehensive income


(24,535
)


12,686Accumulated deficit


(231,607
)


(294,083
)Total stockholders equity


301,947



260,559Total liabilities, redeemable common stock and
    stockholders equity

$
452,270


$
407,604    50




---



##### Table of Contents



SAPIENT
    CORPORATION
  CONSOLIDATED
    STATEMENTS OF OPERATIONS
   Year Ended December 31,2008


2007


2006(In thousands, except per share amounts)Revenues:Service revenues

$
662,412


$
546,438


$
405,582Reimbursable expenses


25,076



19,551



16,061Total gross revenues


687,488



565,989



421,643Operating expenses:Project personnel expenses


435,508



372,363



270,213Reimbursable expenses


25,076



19,551



16,061Total project personnel expenses and reimbursable expenses


460,584



391,914



286,274Selling and marketing expenses


36,233



33,113



24,025General and administrative expenses


123,188



120,617



109,022Restructuring and other related charges


194



32



1,912Amortization of intangible assets


2,660



2,038



3,564Total operating expenses


622,859



547,714



424,797Income (loss) from operations


64,629



18,275



(3,154
)Other income, net


1,280



422



1,929Interest income, net


5,806



5,478



4,238Income from continuing operations before income taxes,
    discontinued operations and cumulative effect of accounting
    change


71,715



24,175



3,013Provision for income taxes


9,239



8,959



4,432Income (loss) from continuing operations before discontinued
    operations and cumulative effect of accounting change


62,476



15,216



(1,419
)(Loss) from discontinued operations










(433
)Gain on disposal of discontinued operations (net of tax
    provision of $342)










4,834Income before cumulative effect of accounting change


62,476



15,216



2,982Cumulative effect of accounting change










154Net income

$
62,476


$
15,216


$
3,136Basic income (loss) per share from continuing operations

$
0.50


$
0.12


$
(0.01
)Diluted income (loss) per share from continuing operations

$
0.48


$
0.12


$
(0.01
)Basic net income per share

$
0.50


$
0.12


$
0.03Diluted net income per share

$
0.48


$
0.12


$
0.03Weighted average common shares


125,988



124,180



123,692Weighted average dilutive common share equivalents


3,176



3,711



Weighted average common shares and dilutive common share
    equivalents


129,164



127,891



123,692    51




---



##### Table of Contents



SAPIENT
    CORPORATION
  CONSOLIDATED
    STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY
  AccumulatedAdditional














Other





TotalCommon Stock


Paid-


Treasury Stock


Deferred


Comprehensive


Comprehensive


Accumulated


StockholdersShares


Amount


In Capital


Shares


Amount


Compensation


Income


Income


Deficit


Equity(In thousands)Balance at December 31, 2005


130,478


$
1,304


$
542,028



(6,952
)

$
(18,601
)

$
(11,927
)





$
1,051


$
(312,435
)

$
201,420Elimination of deferred compensation upon adoption of
    SFAS No. 123R










(11,927
)










11,927















Cumulative effect of accounting change upon adoption of
    SFAS No. 123R










(154
)


























(154
)Shares issued under stock option and purchase plans










446



1,610



5,060



















5,506Stock-based compensation expense










10,723



288



977



















11,700Repurchase of common stock














(3,436
)


(18,109
)


















(18,109
)Tax benefits from stock plans










220



























220Issuance of common stock in connection with acquisition


1,307



14



5,842



























5,856Reclassification of redeemable common stock (See Note 17)










191



























191Comprehensive income:Net income


























3,136







3,136



3,136Other comprehensive income:Currency translation adjustments


























4,266



4,266







4,266Net unrealized gain on investments


























465



465







465Total comprehensive income

























$
7,867











Balance at December 31, 2006


131,785


$
1,318


$
547,369



(8,490
)

$
(30,673
)

$







$
5,782


$
(309,299
)

$
214,497Shares issued under stock option and purchase plans










2,134



2,565



8,934



















11,068Vesting of restricted stock, net










(3,216
)


555



1,894



















(1,322
)Stock-based compensation expense










17,996



























17,996Repurchase of common stock














(702
)


(4,395
)


















(4,395
)Reclassification of redeemable common stock (See Note 17)










190



























190Tax benefit from employee stock option and purchase plans










405



























405Comprehensive income:Net income


























15,216







15,216



15,216Other comprehensive income:Currency translation adjustments


























6,882



6,882







6,882Net unrealized gain on investments


























22



22







22Total comprehensive income

























$
22,120











Balance at December 31, 2007


131,785


$
1,318


$
564,878



(6,072
)

$
(24,240
)

$







$
12,686


$
(294,083
)

$
260,559Shares issued under stock option and purchase plans










425



1,304



5,759



















6,184Vesting of restricted stock, net










(5,252
)


662



2,799



















(2,453
)Stock-based compensation expense










15,122



























15,122Repurchase of common stock














(1,441
)


(9,902
)


















(9,902
)Reclassification of redeemable common stock (See Note 17)










290



























290Issuance of common stock in connection with acquisition










5,388



308



1,419



















6,807Tax benefit from employee stock option and purchase plans










85



























85Comprehensive income:Net income


























62,476







62,476



62,476Other comprehensive income:Currency translation adjustments


























(37,064
)


(37,064
)






(37,064
)Net unrealized gain on investments


























(157
)


(157
)






(157
)Total comprehensive income

























$
25,255











Balance at December 31, 2008


131,785


$
1,318


$
580,936



(5,239
)

$
(24,165
)

$







$
(24,535
)

$
(231,607
)

$
301,947    52




---



##### Table of Contents



SAPIENT
    CORPORATION
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS
  Year Ended December 31,2008


2007


2006(In thousands)Cash flows from operating activities:Net income

$
62,476


$
15,216


$
3,136Adjustments to reconcile net income to net cash provided by
    operating activities:Loss recognized on disposition of fixed assets


660



72



128Unrealized gain on hedge positions


(264
)


(11
)


Unrealized loss on marketable securities and put right, net


310







Depreciation expense


17,218



15,300



10,016Amortization of purchased intangible assets


2,660



2,038



3,564Deferred income taxes


45



782



508(Recovery of) provision for allowance for doubtful accounts, net


(54
)


(1,426
)


1,776Stock-based compensation expense


15,122



17,996



12,410Gain on disposal of discontinued operations










(4,834
)Cumulative effect of accounting change










(154
)Changes in operating assets and liabilities, net of acquisitions
    and disposition:Accounts receivable


(7,132
)


(3,676
)


(6,993
)Unbilled revenues


(15,914
)


1,726



(16,075
)Prepaid expenses


101



(1,823
)


1,473Other current assets


652



776



(8,835
)Other assets


(189
)


(499
)


(3,172
)Accounts payable


(685
)


(3,342
)


122Accrued expenses


1,984



2,064



20,733Accrued compensation


2,009



18,180



5,896Accrued restructuring costs


(3,323
)


(4,572
)


(5,724
)Income taxes payable


6,409



(3,802
)


646Deferred revenues


3,002



(1,922
)


2,680Other long-term liabilities


(27
)


5,124



899Net cash provided by operating activities


85,060



58,201



18,200Cash flows from investing activities:Cash paid for acquisitions, including transaction costs, net of
    cash received


(23,517
)


(883
)


(27,655
)Cash received for sale of discontinued operations, net, and
    payment to minority stockholders


720



436



5,276Purchases of property and equipment and cost of internally
    developed software


(17,889
)


(20,361
)


(14,333
)Sales and maturities of marketable securities


54,741



103,637



151,511Purchases of marketable securities


(8,330
)


(109,423
)


(116,451
)Designation of cash equivalent to marketable securities


(11,626
)






Cash paid on hedge positions, net


(955
)






Restricted cash


(908
)


360



(223
)Net cash used in investing activities


(7,764
)


(26,234
)


(1,875
)Cash flows from financing activities:Principal payments under capital lease obligations


(68
)


(106
)


(135
)Repayment of bank loan


(1,364
)






Tax benefit on employee stock option plans


85



182



Proceeds from stock option and purchase plans


6,184



11,068



5,506Repurchases of common stock


(9,902
)


(4,395
)


(18,109
)Net cash (used in) provided by financing activities


(5,065
)


6,749



(12,738
)Effect of exchange rate changes on cash and cash equivalents


(21,588
)


4,959



1,487Increase in cash and cash equivalents


50,643



43,675



5,074Cash and cash equivalents, at beginning of period


118,697



75,022



69,948Cash and cash equivalents, at end of period

$
169,340


$
118,697


$
75,022    53




---



##### Table of Contents



SAPIENT
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  (1)
    Nature of
    Business    (2)
    Summary
    of Significant Accounting Policies  (a)
    Principles
    of Consolidation and Basis of Presentation      (b)
    Use of
    Estimates    (c)
    Foreign
    Currency Translation and Transactions  non-U.S. subsidiaries,
 54




---



##### Table of Contents



SAPIENT
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  non-U.S. subsidiaries,
    (d)
    Cash
    and Cash Equivalents    (e)
    Marketable
    Securities    and/or
   55




---



##### Table of Contents



SAPIENT
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  The Fair Value
    Option for Financial Assets and Financial
    Liabilities  Including an amendment of FASB Statement
    No. 115,
  and/or Fair Value Measurement
  (f)
    Financial
    Instruments and Concentration of Credit Risk        (g)
    Derivative
    Financial Instruments     56




---



##### Table of Contents



SAPIENT
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    (h)
    Property
    and Equipment    (i)
    Costs
    Incurred to Develop Computer Software for Internal
    Use  98-1, Accounting for the Costs of Computer Software Developed or
    Obtained for Internal Use (SOP 98-1). SOP 98-1,
    (j)
    Costs
    Incurred to Sell, Lease, or Otherwise Market Computer
    Software  Accounting for the
    Costs of Computer Software to be Sold, Leased, or Otherwise
    Marketed
 57




---



##### Table of Contents



SAPIENT
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    (k)
    Goodwill
    and Purchased Intangible Assets  Goodwill and Other
    Intangible Assets
  
    significant underperformance relative to historical or projected
    future operating results;
    significant changes in the manner of or use of the acquired
    assets or the strategy for our overall business;
    identification of other impaired assets within a reporting unit;
    disposition of a significant portion of an operating segment;
    significant negative industry or economic trends;
    significant decline in our stock price for a sustained
    period; and
    a decline in our market capitalization relative to net book
    value.      (l)
    Valuation
    of Long-lived Assets   58




---



##### Table of Contents



SAPIENT
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    (m)
    Revenue
    Recognition and Allowance for Doubtful Accounts    SOP 81-1, Accounting for Performance of Construction Type and Certain
    Production Type Contracts. Revenue
    Recognition in Financial Statements Revenue Recognition time-and-material
    No. 00-21 No. 00-21), Revenue Arrangements with Multiple Deliverables.
  No. 99-19, Reporting Revenue Gross as a Principal versus Net as an
    Agent No. 99-19)
 59




---



##### Table of Contents



SAPIENT
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        arrangement-by-arrangement
    (n)
    Stock-Based
    Compensation  Share-Based Payment Accounting for
    Stock-Based Compensation
  Accounting for Stock Issued to Employees paid-in-capital
 60




---



##### Table of Contents



SAPIENT
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    (o)
    Advertising
    Costs    (p)
    Income
    Taxes  Accounting
    for Income Taxes
      (q)
    Restructuring
    and Other Related Charges  No. 94-3, Liability Recognition for Certain Employee Benefits and Other
    Costs to Exit an Activity (including Certain Costs incurred in a
    Restructuring) No. 94-3).
 61




---



##### Table of Contents



SAPIENT
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  No. 94-3, No. 94-3. Accounting for Costs Associated with
    Exit or Disposal Activities No. 94-3. Employers Accounting for
    Postemployment Benefits
  (r)
    Income
    Per Share  Earnings Per Share
  (s)
    Comprehensive
    Income  Reporting Comprehensive Income
  (t)
    New
    Accounting Pronouncements  Fair Value Measurement No. 157-1 No. 157-2. No. 157-1 No. 157-2, No. 157-2,
 62




---



##### Table of Contents



SAPIENT
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    
    Level 1  Quoted prices in active markets for
    identical assets or liabilities.
    Level 2  Inputs other than Level 1 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 for substantially the
    full term of the assets or liabilities.
    Level 3  Unobservable inputs that are supported
    by little or no market activity and that are significant to the
    fair value of the assets or liabilities.    The Fair Value Option for Financial
    Assets and Financial Liabilities  Including an
    amendment of FASB Statement No. 115 Accounting for Certain Investments in
    Debt and Equity Securities.
  No. EITF 03-6-1, Determining Whether Instruments Granted in Share-Based
    Payment Transactions Are Participating Securities No. EITF 03-6-1). No. EITF 03-6-1 No. EITF 03-6-1
  No. FAS 142-3, Determination of the Useful Life of Intangible Assets No. FAS 142-3). No. FAS 142-3 Goodwill and
    Other Intangible Assets No. FAS 142-3 No. FAS 142-3
  Disclosures about Derivative Instruments and Hedging
    Activities  an amendment of FASB Statement
    No. 133 Accounting for Derivative
    Instruments and Hedging Activities
 63




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##### Table of Contents



SAPIENT
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Business Combinations
  (3)
    Acquisitions  Derivatives
    Consulting Group Limited
      AmountCash consideration

$
21,866Fair value of stock


6,771Transaction costs


2,615Aggregate consideration

$
31,252      64




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##### Table of Contents



SAPIENT
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    AmountCash

$
2,294Accounts receivable


9,370Other current assets


1,660Property and equipment


834Indentifiable intangible assets


9,045Goodwill


18,130Total assets acquired


41,333Accounts payable, accrued expenses and other current liabilities


(7,327
)Deferred revenues


(221
)Deferred tax liability


(2,533
)Total liabilities assumed


(10,081
)Total allocation of purchase price consideration

$
31,252     Weighted Average UsefulAmount


Life(In years)Customer relationships

$
5,814



5Non-compete agreements


2,193



5Tradename


1,038



1.5Identifiable intangible assets

$
9,045       Twelve Months Ended December 31,2008


2007(unaudited)Service revenues

$
686,992


$
578,389Net income

$
60,871


$
14,766Basic net income per share

$
0.48


$
0.12Diluted net income per share

$
0.47


$
0.11  65




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##### Table of Contents



SAPIENT
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Planning
    Group International, Inc.
            AmountTotal purchase consideration:Cash consideration

$
29,215Fair value of shares issued


5,855Transaction costs


570Total purchase consideration

$
35,640Allocation of the purchase consideration:Cash

$
3,304Other current assets


4,459Property and equipment


2,195Identifiable intangible assets


8,170Goodwill


23,683Total assets acquired

$
41,811Accounts payable, accrued expenses and other liabilities


(5,113
)Deferred revenue


(1,058
)Total liabilities assumed

$
(6,171
)Total allocation of purchase consideration

$
35,640  66




---



##### Table of Contents



SAPIENT
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Weighted  Average UsefulAmount


Life(In thousands)


(In years)Customer relationships

$
5,800



3.5Order backlog


1,200



1.0Non-compete agreements


1,170



5.0$
8,170     (4)
    Supplemental
    Cash Flow Information      (5)
    Marketable
    Securities, the Put Right and Fair Value Disclosures  Accounting for
    Certain Investments in Debt and Equity Securities
   67




---



##### Table of Contents



SAPIENT
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Available-for-Sale Securities as of December 31, 2008(In thousands)Amortized


Gross Unrealized


Gross Unrealized


Estimated FairCost


Gains


Losses


ValueLong-term:Auction rate securities

$
1,500


$



$
(157
)

$
1,343Short-term:Corporate debt securities


1,003







(1
)


1,002Money market fund deposits


2,460











2,460Total

$
4,963


$



$
(158
)

$
4,805   Trading Securities as of December 31, 2008(In thousands)Amortized

Gross Unrealized

Gross Unrealized

Estimated FairCost

Gains

Losses

ValueLong-term:Auction rate securities

$
17,925


$



$
(2,001
)

$
15,924Total

$
17,925


$



$
(2,001
)

$
15,924   Available-for-Sale Securities as of December 31, 2007(In thousands)Amortized


Gross Unrealized


Gross Unrealized


Estimated FairCost


Gains


Losses


ValueShort-term:Auction rate securities

$
41,575


$



$



$
41,575Corporate debt securities


11,599







(5
)


11,594Municipal bonds


999







(4
)


995Certificates of deposit


3,501



2







3,503Total

$
57,674


$
2


$
(9
)

$
57,667      68




---



##### Table of Contents



SAPIENT
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
         69




---



##### Table of Contents



SAPIENT
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Fair Value
    Measurement
  Fair Value Measurements at Reporting Date Using(In thousands)Level 1


Level 2


Level 3


TotalAssets:Auction rate securities

$



$



$
17,267


$
17,267Put Right









$
1,691


$
1,691Bank time deposits






22,724







22,724Corporate debt securities






1,002







1,002Foreign exchange option contracts






294







294Money market fund deposits


80,634







2,460



83,094Total

$
80,634


$
24,020


$
21,418


$
126,072Level 1


Level 2


Level 3


TotalLiabilities:Foreign exchange option contracts

$



$
19


$



$
19        70




---



##### Table of Contents



SAPIENT
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Level 3 Inputs(In thousands)Balance at December 31, 2007

$
Transfers into Level 3


43,476Unrealized loss included in other comprehensive (loss) income


(157
)Unrealized loss included in other income, net


(2,001
)Unrealized gain included in other income, net


1,691Net maturities, purchases and sales


(21,591
)Balance at December 31, 2008

$
21,418     (6)
    Restricted
    Cash    (7)
    Property
    and Equipment    December 31,2008


2007


Estimated Useful Life(In thousands)Leasehold improvements

$
20,182


$
19,397


Lesser of estimated useful life or the
    remaining lease termFurniture and fixtures


6,329



5,440


5 yearsOffice equipment


3,668



4,470


5 yearsComputer software


26,386



21,143


3 yearsComputer hardware


23,236



21,423


3 yearsProperty and equipment, gross


79,801



71,873Less accumulated depreciation


(47,404
)


(36,959
)Property and equipment, net

$
32,397


$
34,914    71




---



##### Table of Contents



SAPIENT
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  (8)
    Goodwill    North America


Europe


Total(In thousands)Goodwill as of December 31, 2006

$
38,929


$



$
38,929Contingent consideration recorded during the period


1,615







1,615Goodwill as of December 31, 2007


40,544







40,544Contingent consideration paid during the period


230







230Goodwill acquired during the period






18,130



18,130Exchange rate effect






(4,708
)


(4,708
)Adjustment to goodwill recorded during the period


(2,485
)






(2,485
)Goodwill as of December 31, 2008

$
38,289


$
13,422


$
51,711          72




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##### Table of Contents



SAPIENT
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  (9)
    Purchased
    Intangible and Long-lived Assets    December 31, 2008Gross





NetCarrying


Accumulated


BookAmount


Amortization


Value(In thousands)Customer lists and customer relationships

$
12,466


$
(5,322
)

$
7,144SAP license agreement


1,100



(1,100
)


Non-compete agreements


2,817



(854
)


1,963Tradename


779



(242
)


537Total purchased intangibles

$
17,162


$
(7,518
)

$
9,644   December 31, 2007Gross





NetCarrying


Accumulated


BookAmount


Amortization


Value(In thousands)Customer lists and customer relationships

$
8,100


$
(3,364
)

$
4,736SAP license agreement


1,100



(1,025
)


75Non-compete agreements


1,170



(469
)


701Total purchased intangibles

$
10,370


$
(4,858
)

$
5,512       Total(In thousands)2009


3,4782010


2,0152011


1,5482012


1,5482013


1,0552014


Total

$
9,644   (10)
    Investments
    and Minority Interest     73




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##### Table of Contents



SAPIENT
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    (11)
    Restructuring
    and Other Related Charges  2006 
    Restructure Event
  Employers Accounting
    for Postemployment Benefits Accounting for Costs Associated with Exit or Disposal
    Activities.
  Workforce(In thousands)2006 Provision

$
572Cash utilized


(572
)Balance, December 31, 2006

$
   2005 
    Restructure Event
  Accounting for Costs Associated with
    Exit or Disposal Activities
  Workforce(In thousands)2005 Provision

$
300Balance at December 31, 2005

$
3002006 provision


430Cash utilized


(505
)Balance at December 31, 2006

$
225Cash utilized


(225
)Balance at December 31, 2007

$
   2001,
    2002 and 2003  Restructure Events
   74




---



##### Table of Contents



SAPIENT
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    true-up true-up,
  Facilities(In thousands)Balance at December 31, 2005

$
21,2752006 provision


910Cash utilized


(6,630
)Non-cash utilized


(172
)Balance at December 31, 2006

$
15,3832007 provision


32Cash utilized


(3,867
)Non-cash utilized


(275
)Balance at December 31, 2007

$
11,2732008 provision


194Cash utilized


(3,542
)Non-cash utilized


(3
)Balance at December 31, 2008

$
7,922   12-month
   75




---



##### Table of Contents



SAPIENT
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  (12)
    Income
    Taxes    2008


2007


2006(In thousands)Federal, current

$
1,274


$
400


$
39State, current


1,160



289



(257
)Foreign, current


7,097



7,487



4,776Subtotal, current income tax provision


9,531



8,176



4,558Federal, deferred


946



929



712State, deferred


156



153



336Foreign, deferred


(1,394
)


(299
)


(1,174
)Subtotal, deferred income tax (benefit)


(292
)


783



(126
)Income tax provision

$
9,239


$
8,959


$
4,432     2008


2007


2006Statutory income tax rate


35.0
%


35.0
%


35.0
%Permanent items


1.7



4.7



25.3State income taxes, net of federal benefit


1.5



1.2



1.6Foreign taxes


(8.7
)


(10.0
)


(62.7
)Amortization


1.5



4.5



34.7Valuation allowance


(19.0
)


(2.1
)


119.3Other


0.9



3.8



(6.1
)Effective income tax (benefit) rate


12.9
%


37.1
%


147.1
%     2008


2007


2006(In thousands)United States

$
40,307


$
(1,814
)

$
(10,753
)International


31,408



25,989



13,766$
71,715


$
24,175


$
3,013  76




---



##### Table of Contents



SAPIENT
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   December 31,2008


2007(In thousands)Deferred income tax assets (liabilities), current:Deferred revenues


1,413



1,783Allowance for doubtful accounts


298



357Other reserves and accruals


4,022



3,628Unbilled revenues and costs


1,528



1,434Restructuring charges


84



1,408Gross deferred income tax assets, current


7,345



8,610Valuation allowance


(5,988
)


(7,501
)Net deferred income tax assets (liabilities), current

$
1,357


$
1,109Deferred income taxes (liabilities), non-current:Property and equipment

$
1,790


$
697Deferred revenues


2,868



892Deferred compensation


20,402



19,131Goodwill and other intangibles


(1,559
)


4,452Tax credits


6,338



6,320Unused net operating losses


72,826



78,014Restructuring charges


3,944



3,057Other


1,969



120Gross deferred income taxes, non-current


108,578



112,683Valuation allowance


(106,150
)


(109,908
)Net deferred income tax assets, non-current

$
2,428


$
2,775Net deferred income tax assets

$
3,785


$
3,884    December 31,2008


2007(In thousands)Current deferred tax assets

$
1,835


$
1,557Non-current deferred tax assets


7,520



5,164Current deferred tax liabilities


(478
)


(448
)Non-current deferred tax liabilities,included in other long-term
    liabilities


(5,092
)


(2,389
)Net deferred tax assets

$
3,785


$
3,884      77




---



##### Table of Contents



SAPIENT
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
               78




---



##### Table of Contents



SAPIENT
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    AmountBalance January 1, 2007

$
(2,707
)Prior year adjustments


2007 provision


(2,141
)Balance January 1, 2008


(4,848
)Prior year adjustments


2008 provision


(1,821
)Balance December 31, 2008

$
(6,669
)   non-U.S. income
    (13)
    Discontinued
    Operations     79




---



##### Table of Contents



SAPIENT
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  (14)
    Commitments
    and Contingencies  Lease
    Commitments
    Total(In thousands)2009


10,0702010


8,6952011


7,7192012


4,3612013


4,086Thereafter


11,600Total

$
46,531     Guarantees
    and Indemnification Obligations
     80




---



##### Table of Contents



SAPIENT
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Legal
    Claims
        Other
    Contingencies
     81




---



##### Table of Contents



SAPIENT
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      (15)
    Stock
    Plans    2008


2007


2006(In thousands)Project personnel expenses

$
6,890


$
9,029


$
6,140Selling and marketing expenses

$
3,403


$
3,729


$
2,818General and administrative expenses

$
4,829


$
5,238


$
3,452        82




---



##### Table of Contents



SAPIENT
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        Form 10-Q Form 10-K
  (a)
    1996
    Equity Stock Incentive Plan   83




---



##### Table of Contents



SAPIENT
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    (b)
    1996 Director
    Stock Option Plan    (c)
    1998
    Stock Incentive Plan    (d)
    2001
    Stock Option Plan  below-FMV
  (e)
    2005
    Employee Stock Purchase Plan   84




---



##### Table of Contents



SAPIENT
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      2008WeightedAverageShares


Exercise PriceOutstanding as of beginning of year


10,345


$
12.37Options exercised


(1,297
)


4.77Options forfeited/cancelled


(1,725
)


12.42Outstanding as of end of year


7,323


$
13.72Vested and expected to vest


7,318Options exercisable at year-end


7,271Aggregate intrinsic value of outstanding

$
4,099Aggregate intrinsic value of vested and expected to vest

$
4,097Aggregate intrinsic value of exerciseable

$
4,092       Year Ended December 31,2006


2006Stock Option


Stock PurchasePlans


PlanDividend yield


None



NoneExpected volatility


63.2%



45.0%Average risk-free interest rate


4.79%



4.82%Expected life


6.25 years



0.5 years    85




---



##### Table of Contents



SAPIENT
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Share-based Payment.
      2008Number of Shares


WeightedUnderlying


Average GrantRestricted Units


Date Fair ValueUnvested as of beginning of year


5,508


$
6.19Restricted units granted


2,204



6.51Vesting


(1,008
)


6.12Restricted units forfeited/cancelled


(470
)


6.60Unvested as of end of year


6,234


$
6.30Unvested and expected to vest


5,625     (16)
    Retirement
    Plans    (17)
    Stockholders
    Equity  (a)
    Redeemable
    Common Stock   86




---



##### Table of Contents



SAPIENT
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  (b)
    Preferred
    Stock    (c)
    Restricted
    Common Stock    (d)
    Treasury
    Stock     87




---



##### Table of Contents



SAPIENT
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  (e)
    Income
    Per Share    2008


2007


2006(In thousands, except per share amounts)Income (loss) from continuing operations

$
62,476


$
15,216


$
(1,419
)Basic income (loss) per share from continuing operations:Weighted average common shares outstanding


125,988



124,180



123,692Basic income (loss) per share from continuing operations

$
0.50


$
0.12


$
(0.01
)Diluted income (loss) per share from continuing operations:Weighted average common shares outstanding


125,988



124,180



123,692Weighted average dilutive common share equivalents


3,176



3,711



Weighted average common shares and dilutive common share
    equivalents


129,164



127,891



123,692Diluted income (loss) per share from continuing operations

$
0.48


$
0.12


$
(0.01
)Net income

$
62,476


$
15,216


$
3,136Basic net income per share:Weighted average common shares outstanding


125,988



124,180



123,692Basic net income per share

$
0.50


$
0.12


$
0.03Diluted net income per share:Weighted average common shares outstanding


125,988



124,180



123,692Weighted average dilutive common share equivalents


3,176



3,711



Weighted average common shares and dilutive common share
    equivalents


129,164



127,891



123,692Diluted net income per share

$
0.48


$
0.12


$
0.03     (18)
    Related
    Party Transactions     88




---



##### Table of Contents



SAPIENT
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    (19)
    Segment
    Reporting          Service Revenues

2008


2007


2006(In thousands)North America

$
408,779


$
357,084


$
282,989Government Services


28,272



23,151



15,952Europe


225,361



166,203



106,641Consolidated Total

$
662,412


$
546,438


$
405,582   89




---



##### Table of Contents



SAPIENT
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  2008


2007


2006(In thousands)Income From Continuing Operations before Income Taxes,
    Discontinued Operations and Cumulative Effect of Accounting
    ChangeNorth America(1)

$
96,453


$
83,574


$
74,433Government Services(1)


8,815



5,887



2,993Europe(1)


69,351



45,339



28,965Total Reportable Segments(1)


174,619



134,800



106,391Less Reconciling Items(2)


(102,904
)


(110,625
)


(103,378
)Consolidated Income from Continuing Operations before Income
    Taxes, Discontinued Operations and Cumulative Effect of
    Accounting Change

$
71,715


$
24,175


$
3,013     (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 unti segments.(2)
    
    Adjustments that are made to the total of the segmentss
    operating income to arrive at consolidated income before income
    taxes include the following:  2008


2007


2006(In thousands)Centrally managed functions

$
92,050


$
87,887


$
77,461Restructuring and other related charges


194



32



1,340Amortization of intangible assets


2,660



2,038



3,564Stock-based compensation expense


15,122



17,996



12,410Interest and other (income), net


(7,086
)


(5,900
)


(6,167
)Unallocated expenses(3)


(36
)


8,572



14,770$
102,904


$
110,625


$
103,378   (3)
    
    Includes corporate portion of both selling, marketing and
    general and administrative expenses.  Geographic
    Data
    December 31,2008


2007


2006(In thousands)Service revenues:United States

$
370,858


$
338,528


$
268,792International


291,554



207,910



136,790Total service revenues

$
662,412


$
546,438


$
405,582   90




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##### Table of Contents



SAPIENT
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  December 31,2008


2007(In thousands)Long-lived assets:United States

$
18,574


$
16,904International


13,823



18,010Total long-lived assets

$
32,397


$
34,914   (20)
    Prepaid
    Expenses and Other Current Assets, Other Non-Current Assets,
    Other Current Accrued Liabilities and other Long-Term
    Liabilities    December 31, 2008


December 31, 2007(In thousands)Prepaid expenses and other current assets:Prepaid insurance

$
838


$
1,021Prepaid media


831



4,339Prepaid rent


1,404



2,130VAT tax receivable


6,571



4,766Prepaid other


8,744



8,907$
18,388


$
21,163Other non-current assets:Put right related to marketable securities

$
1,691


$
Other assets


3,909



4,818$
5,600


$
4,818Current accrued expenses:Accrued media

$
5,917


$
9,797Accrued accounts payable


12,752



17,774VAT tax payable


11,459



10,319Other accrued expenses


9,823



7,960$
39,951


$
45,850Other long-term liabilities:Deferred tax liability, net of current portion

$
5,092


$
2,389Unrecognized tax benefit


6,669



4,848Other long-term liabilities


5,544



5,095$
17,305


$
12,332  91




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##### Table of Contents



SAPIENT
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  (21)
    Quarterly
    Financial Results (Unaudited)    Three Months EndedMarch 31,


June 30,


September 30,


December 31,2008


2008


2008


2008(In thousands,except per share amounts)(Unaudited)Revenues:Service revenues

$
154,231


$
165,826


$
177,671


$
164,684Reimbursable expenses


6,303



4,498



6,449



7,825Total gross revenues


160,534



170,324



184,120



172,509Operating expenses:Project personnel expenses


106,907



110,674



114,031



103,896Reimbursable expenses


6,303



4,498



6,449



7,825Total project personnel expenses and reimbursable expenses


113,210



115,172



120,480



111,721Selling and marketing expenses


10,853



10,498



8,659



6,223General and administrative expenses


30,041



32,155



33,462



27,530Restructuring and other related (benefits) charges


143



(136
)


92



95Amortization of intangible assets


487



473



732



968Total operating expenses


154,734



158,162



163,425



146,537Income from operations


5,800



12,162



20,695



25,972Interest and other income, net


2,770



1,584



1,450



1,282Income before income taxes


8,570



13,746



22,145



27,254Provision for income taxes


1,454



2,172



4,078



1,535Net income

$
7,116


$
11,574


$
18,067


$
25,719Basic net income per share

$
0.06


$
0.09


$
0.14


$
0.20Diluted net income per share

$
0.06


$
0.09


$
0.14


$
0.20Weighted average common shares


126,031



125,544



125,835



126,528Weighted average dilutive common share equivalents


2,925



3,101



4,278



2,401Weighted average common shares and dilutive common share
    equivalents


128,956



128,645



130,113



128,929   92




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##### Table of Contents



SAPIENT
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Three Months EndedMarch 31,


June 30,


September 30,


December 31,2007


2007


2007


2007(In thousands,except per share amounts)(Unaudited)Revenues:Service revenues

$
121,295


$
128,594


$
141,590


$
154,959Reimbursable expenses


4,494



4,531



4,825



5,701Total gross revenues


125,789



133,125



146,415



160,660Operating expenses:Project personnel expenses


83,830



87,157



96,694



104,682Reimbursable expenses


4,494



4,531



4,825



5,701Total project personnel expenses and reimbursable expenses


88,324



91,688



101,519



110,383Selling and marketing expenses


7,608



8,141



8,664



8,700General and administrative expenses


29,504



31,441



29,223



30,449Restructuring and other related (benefits) charges


(112
)


(57
)


(35
)


236Amortization of intangible assets


542



523



487



486Total operating expenses


125,866



131,736



139,858



150,254(Loss) income from operations


(77
)


1,389



6,557



10,406Interest and other income, net


1,303



1,216



1,596



1,785Income before income taxes


1,226



2,605



8,153



12,191Provision for income taxes


451



1,758



3,732



3,018Net income

$
775


$
847


$
4,421


$
9,173Basic net income per share

$
0.01


$
0.01


$
0.04


$
0.07Diluted net income per share

$
0.01


$
0.01


$
0.03


$
0.07Weighted average common shares


123,301



123,423



124,875



125,025Weighted average dilutive common share equivalents


3,593



4,153



3,439



3,658Weighted average common shares and dilutive common share
    equivalents


126,894



127,576



128,314



128,683   (22)
    Subsequent
    Event (unaudited)   93




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##### Table of Contents



SAPIENT
    CORPORATION
 SCHEDULE II 
    VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
    Years Ended December 31, 2008, 2007 and 2006  Balance at











Balance atBeginning of


Charge (Benefit)








End ofAllowance for Doubtful Accounts

Year


to Expense


Recoveries


Write-Offs


Year(In thousands)December 31, 2006

$
887


$
1,946


$
(170
)

$
(90
)

$
2,573December 31, 2007

$
2,573


$



$
(1,426
)

$
(191
)

$
956December 31, 2008

$
956


$
262


$
(316
)

$
(507
)

$
395  94




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##### Table of Contents



Item 9.
    Changes
    in and Disagreements with Accountants on Accounting and
    Financial Disclosure    Item 9A.
    Controls
    and Procedures  Evaluation
    of Disclosure Controls and Procedures
  Rule 13a-15(e)
  Managements
    Report on Internal Control Over Financial Reporting
  Rule 13a-15(f)
  
    pertain to the maintenance of records that, in reasonable
    detail, accurately and fairly reflect the transactions and
    dispositions of assets of the Company;
    provide reasonable assurance that the transactions are recorded
    as necessary to permit preparation of financial statements in
    accordance with generally accepted accounting principles, and
    that receipts and expenditures of the Company are being made
    only in accordance with authorizations of management and
    directors of the Company; and
    provide reasonable assurance regarding prevention or timely
    detection of unauthorized acquisition, use or disposition of the
    Companys assets that could have a material effect on the
    financial statements.    Internal
    Control  Integrated Framework
    Changes
    in Internal Control Over Financial Reporting
  13a-15(d)
 95




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##### Table of Contents



PART III
  Item 10.
    Directors,
    Executive Officers and Corporate Governance  Executive
    Officers
    Preston B. Bradford, Chief Operations and Administrative Officer


52


Mr. Bradford joined Sapient in September 1994. Mr. Bradford was
    appointed as Senior Vice President in April 2000 and Executive
    Vice President in February 2004. Prior to joining Sapient, Mr.
    Bradford held various positions with Sprint Corporation, a
    telecommunications company, from July 1980 to August 1994.Alan J. Herrick, President and Chief Executive Officer


43


Mr. Herrick joined Sapient in March 1995. Mr. Herrick was
    appointed as Vice President in December 1996, Executive Vice
    President in June 2002 and President and Chief Executive Officer
    in October 2006.Christian Oversohl, Senior Vice President and Managing Director,
    Europe


41


Mr. Oversohl joined Sapient in April 2000, following
    Sapients merger with the company he founded, The Launch
    Group. Mr. Oversohl serves as Senior Vice President and Managing
    Director of Sapients European Operations. Prior to joining
    Sapient, Mr. Oversohl was a manager at A.T. Kearney and also
    worked with Dicke & Wicharz Management Consulting, BMW,
    Henkel-Kosmetik, and Dresdner Bank.Jane E. Owens, Senior Vice President and General Counsel


55


Ms. Owens joined Sapient in September 2000 as Senior Vice
    President, General Counsel and Secretary. Prior to joining
    Sapient, Ms. Owens served as Senior Vice President, General
    Counsel and Secretary of The Dial Corporation, a consumer
    products company, from May 1997 to September 2000.Stephen P. Sarno, Vice President, Corporate Controller and Chief
    Accounting Officer


41


Mr. Sarno joined Sapient in October 2005 as Vice President,
    Corporate Controller and Chief Accounting Officer. Prior to
    joining Sapient, Mr. Sarno served as a Director of Finance with
    BearingPoint from 2004 to 2005. Mr. Sarno was formerly a
    Senior Manager with PricewaterhouseCoopers LLP.Joseph S. Tibbetts, Jr., Senior Vice President and Chief
    Financial Officer


56


Mr. Tibbetts joined Sapient in October 2006 as Senior Vice
    President and Chief Financial Officer. Prior to joining Sapient,
    Mr. Tibbetts was most recently the Chief Financial Officer of
    Novell, Inc. and also held a variety of senior financial
    management positions at Charles River Ventures, Lightbridge,
    Inc., and SeaChange International, Inc. Mr. Tibbetts also was
    formerly a partner with Price Waterhouse LLP.Alan M. Wexler, Senior Vice President and Managing Director,
    North America


45


Mr. Wexler joined Sapient in April 1998 and serves as Senior
    Vice President and Managing Director of Sapients North
    American Operations. Since joining Sapient in 1998, Mr. Wexler
    has held a number of key management positions, including Vice
    President and Managing Director of Sapients Technology and
    Communications Group. He launched Sapients Global Wireless
    Group, and led Sapients Media, Entertainment, and
    Communication Group in New York. Prior to joining Sapient,
    Mr. Wexler founded and operated a management and
    technology-consulting firm.  96




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##### Table of Contents



Directors
      Item 11.
    Executive
    Compensation    Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters    (c)(a)





Number of SecuritiesNumber of Securities


(b)


Remaining Available forto be Issued Upon


Weighted-Average


Future Issuance UnderExercise of


Exercise Price of


Equity Compensation PlansOutstanding Options,


Outstanding Options,


(Excluding SecuritiesPlan Category

Warrants and Rights


Warrants and Rights


Reflected in Column (a)(1)(2)Equity compensation plans approved by stockholders


13,556,683


$
10.31



11,601,101Equity compensation plans not approved by stockholders


NA



NA



NATotal


13,556,683


$
10.31



11,601,101     (1)
    
    6,416,801 of the shares listed in column (c) may be issued
    in the form of restricted stock or RSUs, pursuant to the terms
    of our 1998 Stock Incentive Plan, as amended. No shares of
    restricted stock are currently available for issuance under our
    other equity compensation plans.(2)
    
    Column (c) includes 1,773,600 shares that are available for
    issuance under our 2005 Employee Stock Purchase Plan as of
    December 31, 2008.  Item 13.
    Certain
    Relationships and Related Transactions, and Director
    Independence    Item 14.
    Principal
    Accountant Fees and Services   97




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##### Table of Contents



PART IV
  Item 15.
    Exhibits
    and Financial Statement Schedules  15(a)
    (1) Financial Statements
    15(a)
    (2) Consolidated Financial Statement Schedules
    15(a)
    (3) Exhibits
  Form 10-K Form 10-K Form 10-K.
 98




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##### Table of Contents



SIGNATURES      By:
    /s/  Alan
    J. Herrick   President and Chief Executive Officer
      Signature

Title

DatePrincipal Executive Officer:/s/  ALAN
    J. HERRICKAlan
    J. Herrick

President and Chief Executive Officer

February 23, 2009Principal Financial Officer:/s/  JOSEPH
    S. TIBBETTS, JR.Joseph
    S. Tibbetts, Jr.

Chief Financial Officer

February 23, 2009Principal Accounting Officer:/s/  STEPHEN
    P. SARNOStephen
    P. Sarno

Chief Accounting Officer

February 23, 2009Directors:/s/  JAMES
    M. BENSONJames
    M. Benson



February 23, 2009/s/  HERMANN
    BUERGERHermann
    Buerger



February 23, 2009/s/  DARIUS
    W. GASKINS, Jr.Darius
    W. Gaskins, Jr.



February 23, 2009/s/  ALAN
    J. HERRICKAlan
    J. Herrick



February 23, 2009/s/  J.
    STUART MOOREJ.
    Stuart Moore



February 23, 2009 99




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##### Table of Contents



Signature

Title

Date/s/  BRUCE
    D. PARKERBruce
    D. Parker



February 23, 2009/s/  ASHOK
    SHAHAshok
    Shah



February 23, 2009/s/  VIJAY
    SINGALVijay
    Singal



February 23, 2009  100




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##### Table of Contents



EXHIBIT INDEX
  ExhibitNumber



Description2.1



Agreement dated as of August 6, 2008, among Sapient
    Limited, Sapient Corporation and the persons listed on
    Schedule I thereto(1)3.1



Second Amended and Restated Certificate of Incorporation(2)3.2



Amended and Restated Bylaws(3)4.1



Specimen Certificate for Shares of Common Stock, $.01 par
    value, of the Company(4)10.1



1996 Equity Stock Incentive Plan(4)10.2



1996 Director Stock Option Plan(4)10.3



1998 Stock Incentive Plan(5)10.4



Amendment to 1998 Stock Incentive Plan(6)10.5



2001 Stock Option Plan(7)10.6



Sapient Corporation Winning Performance Plan(8)10.7



2007 Global Performance Bonus Plan(9)10.8



Joseph S. Tibbetts, Jr. Restricted Stock Units Agreement(9)10.9



Sheeroy D. Desai Transition Agreement(9)10.10



Sheeroy D. Desai Recruiting Agreement(9)10.11



Director Compensation Matters(10)10.12



J. Stuart Moore Separation Agreement(10)10.13



Joseph S. Tibbetts, Jr. Offer Letter(10)10.14



Alan M. Wexler Severance Agreement(10)10.15



Alan J. Herrick Employment Agreement(6)10.16



Form of Restricted Stock Units Agreement for Initial Grant to
    re-elected Board members(6)10.17



Form of Restricted Stock Units Agreement for Initial Grant to
    newly appointed Board members(6)10.18



Form of Restricted Stock Units Agreement for Employees(6)10.19



Amended and Restated Consulting Agreement with Jerry A.
    Greenberg(11)10.20



Employment Agreement between Sapient GmbH and Dr. Christian
    Oversohl(12)21*



List of Subsidiaries23*



Consent of PricewaterhouseCoopers LLP31.1*



Certification Pursuant to Section 302 of the Sarbanes-Oxley
    Act of 200231.2*



Certification Pursuant to Section 302 of the Sarbanes-Oxley
    Act of 200232.1*



Certification Pursuant to Section 906 of the Sarbanes-Oxley
    Act of 200232.2*



Certification Pursuant to Section 906 of the Sarbanes-Oxley
    Act of 2002     *
    
    Exhibits filed herewith.
    
    Management contract or compensatory plan or arrangement.(1)
    
    Incorporated herein by reference to the Companys
    Form 8-K
    filed August 7, 2008.(2)
    
    Incorporated herein by reference to the Companys
    Form 10-Q
    for the fiscal quarter ended September 30, 2004 (File
    No. 000-28074).(3)
    
    Incorporated herein by reference to the Companys
    Form 8-K
    filed February 10, 2009.(4)
    
    Incorporated herein by reference to the Companys
    Registration Statement on
    Form S-1
    (File
    No. 333-12671).(5)
    
    Incorporated herein by reference to the Companys
    Form 10-K
    for the fiscal year ended December 31, 1998 (File
    No. 000-28074).(6)
    
    Incorporated herein by reference to the Companys
    Form 10-Q
    for the period ended September 30, 2007
    (File No. 000-28074). 101




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##### Table of Contents



(7)
    
    Incorporated herein by reference to the Companys Proxy
    Statement for the 2001 Annual Meeting of Stockholders (File
    No. 000-28074).(8)
    
    Incorporated herein by reference to the Companys
    Form 10-Q
    for the period ended June 30, 2006
    (File No. 000-28074).(9)
    
    Incorporated herein by reference to the Companys
    Form 10-Q
    for the period ended June 30, 2007
    (File No. 000-28074).(10)
    
    Incorporated herein by reference to the Companys
    Form 10-K
    for the fiscal year ended December 31, 2006 (File
    No. 000-28074).(11)
    
    Incorporated herein by reference to the Companys
    Form 8-K
    filed November 13, 2007 (File
    No. 000-28074).(12)
    
    Incorporated herein by reference to the Companys
    Form 8-K
    filed March 19, 2008 (File
    No. 000-28074). 102