<PAGE>

   As filed with the Securities and Exchange Commission on December 23, 1999
                                             Registration Statement No. 333-
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549

                                ---------------
                                   FORM S-1

            REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

                                ---------------
                                 DIGITAS INC.
            (Exact Name of Registrant as Specified in its Charter)

          DELAWARE                   8742                    04-2712533
       (State or Other   (Primary Standard Industrial     (I.R.S. Employer
       Jurisdiction       Classification Code Number)   Identification No.)
     of Incorporation or
      Organization)
  (Address, including zip code, and telephone number, including area code, of
                   Registrant's principal executive office)

                                ---------------

                                David W. Kenny
                            Chief Executive Officer
                   The Prudential Tower, 800 Boylston Street
                               Boston, MA 02199
                                (617) 867-1000
                             (617) 867-7308 (fax)
(Name, address, including zip code, and telephone number, including area code,
                             of agent for service)

                                ---------------
                                  Copies to:
  Stuart M. Cable, P.C.    Marschall I. Smith, Esq.    Keith F. Higgins, Esq.
 Jeffrey C. Hadden, P.C.        General Counsel             Ropes & Gray
oodwin,GProcter & Hoar LLP       Digitas Inc.         One International Place
      Exchange Place         The Prudential Tower      Boston, Massachusetts
Boson,tMassachusetts 02109- 2881                             02110-2624
                              800 Boylston Street
      (617) 570-1000      Boston, Massachusetts 02199      (617) 951-7000
   (617) 523-1231 (fax)         (617) 867-1000          (617) 951-7050 (fax)
                             (617) 369-8240 (fax)

   Approximate date of commencement of proposed sale to the public: As soon as
practicable after this Registration Statement becomes effective.
   If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [_]
   If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]
   If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
   If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
   If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]

                                ---------------

                        CALCULATION OF REGISTRATION FEE

-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
               Title of Each                      Proposed Maximum
            Class of Securities                       Aggregate                     Amount of
             to be Registered                    Offering Price (1)             Registration Fee
------------------------------------------------------------------------------------------------
<S>                                         <C>                           <C>
Common Stock, $.01 par value per share....          $200,000,000                     $52,800
</TABLE>
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
(1)Estimated solely for purposes of calculating the registration fee in
  accordance with Rule 457(o) under the Securities Act of 1933.
                                ---------------
   The registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this
registration statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the registration statement
shall become effective on such date as the SEC, acting pursuant to Section
8(a), may determine.

-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
<PAGE>

++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The information in this prospectus is not complete and may be changed. We may +
+not sell these securities until the registration statement filed with the     +
+Securities and Exchange Commission is effective. This prospectus is not an    +
+offer to sell these securities and we and the selling stockholders are not    +
+soliciting offers to buy these securities in any state where the offer or     +
+sale is not permitted.                                                        +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
PROSPECTUS (Subject to Completion)
Issued                 , 2000

                                        Shares
                                  DIGITAS INC.
                                  COMMON STOCK

                                  -----------

Digitas Inc. is offering        shares of common stock and the selling
shareholders are offering        shares of common stock. This is our initial
public offering and no public market currently exists for our shares. We
anticipate that the initial public offering price will be between $      and
$      per share.

                                  -----------

We have filed an application for the common stock to be quoted on the Nasdaq
National Market under the symbol "DTAS."

                                  -----------

Investing in our common stock involves risks. See "Risk Factors" beginning on
page 7.

                                  -----------

                               PRICE $    A SHARE

                                  -----------

<TABLE>
<CAPTION>
                               Underwriting                         Proceeds to
               Price to        Discounts and      Proceeds to         Selling
                Public          Commissions         Digitas        Shareholders
               --------        -------------      -----------      ------------
<S>        <C>               <C>               <C>               <C>
Per
 Share....       $                 $                 $                 $
Total.....      $                 $                 $                 $
</TABLE>

The Securities and Exchange Commission and state securities regulators have not
approved or disapproved these securities, or determined if this prospectus is
truthful or complete. Any representation to the contrary is a criminal offense.

Digitas Inc. and the selling shareholders have granted the underwriters the
right to purchase up to an additional      and     shares, respectively, to
cover over-allotments. Morgan Stanley & Co. Incorporated expects to deliver the
shares to purchasers on          , 2000.

                                  -----------

MORGAN STANLEY DEAN WITTER

     DEUTSCHE BANC ALEX. BROWN

           SALOMON SMITH BARNEY

                  BANC OF AMERICA SECURITIES LLC

                         BEAR, STEARNS & CO. INC.

     , 2000
<PAGE>

      [List of selected client Web sites and awards Digitas has received]
<PAGE>

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                     Page
                                     ----
<S>                                  <C>
Prospectus Summary..................    3
Risk Factors........................    7
Use of Proceeds.....................   15
Dividend Policy.....................   15
Certain Information.................   15
Capitalization......................   16
Dilution............................   17
Unaudited Pro Forma Combined
 Financial Data.....................   18
Selected Historical Financial
 Data...............................   19
Management's Discussion and Analysis
 of Financial Condition and Results
 of
 Operations.........................   20
</TABLE>
<TABLE>
<CAPTION>
                                     Page
                                     ----
<S>                                  <C>
Business............................   28
Management..........................   41
Certain Relationships and Related
 Transactions.......................   50
Principal and Selling
 Shareholders.......................   52
Description of Capital Stock........   54
Shares Eligible for Future Sale.....   58
Underwriters........................   61
Validity of Common Stock............   63
Experts.............................   63
Where You can Find More
 Information........................   63
Index to Financial Statements....... F-1
</TABLE>

                               ----------------

   We began business in 1980. In November 1998, we formed Bronner Slosberg
Humphrey Co., a Massachusetts business trust, to serve as the ultimate parent
of Bronnercom, LLC, the Delaware limited liability company through which our
business is operated. Immediately prior to the closing of this offering, all
outstanding equity interests in Bronner Slosberg Humphrey Co. will be
exchanged on a   -for-   basis for equivalent equity interests of Digitas
Inc., a newly-formed Delaware holding company. This offering will be for
shares of common stock of Digitas Inc. Our principal executive offices are
located at The Prudential Tower, 800 Boylston Street, Boston, Massachusetts
02199. Our telephone number at that location is (617) 867-1000. We have
applied to register our trademark Digitas Inc. This prospectus also contains
the trademarks and trade names of other entities which are the property of
their respective owners.

   You should rely only on the information contained in this prospectus. We
have not authorized anyone to provide you with information different from that
contained in this prospectus. We and the selling shareholders are offering to
sell, and seeking offers to buy, shares of common stock only in jurisdictions
where offers and sales are permitted. The information contained in this
prospectus is accurate only as of the date of this prospectus, regardless of
the time of delivery of this prospectus or of any sale of common stock.

   Until              , 2000, all dealers that buy, sell or trade Digitas'
common stock, whether or not participating in this offering, may be required
to deliver a prospectus. This delivery requirement is in addition to the
dealers' obligation to deliver a prospectus when acting as underwriters and
with respect to their unsold allotments or subscriptions.

                                       2
<PAGE>

                               PROSPECTUS SUMMARY

   This summary may not contain all of the information that is important to
you. You should read the entire prospectus, including the financial statements
and related notes, before making an investment decision.

                                  DIGITAS INC.

   Digitas is a leading Internet professional services firm that provides
integrated strategy, technology and marketing solutions to Fortune 100 and
other industry leading companies that have embraced the Internet as a principal
means of business transformation. We help our clients leverage their existing
asset base and the Internet to develop stronger and more profitable customer
relationships and gain a competitive advantage in the new digital economy.

   We develop large-scale, long-term, strategic relationships with a select
group of clients. Our clients include industry leaders such as American
Express, AT&T, Charles Schwab & Co. Inc. General Motors, Johnson & Johnson,
L.L. Bean and Neiman Marcus. We employ over 1,200 professionals and are
headquartered in Boston, Massachusetts with offices in New York City, San
Francisco, Salt Lake City and London.

                             OUR MARKET OPPORTUNITY

   The Internet is fundamentally changing the way consumers and businesses
interact. While many companies have built on-line storefronts, most still view
them as simply another independently operated channel for enabling transactions
and interacting with customers. This business model, however, prevents the new
on-line business from capitalizing on the power of the enterprise's existing
assets. To fully capture the potential of the Internet and maximize customer
value, companies must transform their businesses to a "bricks and clicks"
business model, in which their existing assets are integrated with a digital
strategy. This transformation is particularly challenging for large businesses
that have made significant investments in existing sales forces, marketing
strategies, brand names, supply chain management systems, distribution channels
and data management systems. However, it is also these companies that stand to
gain the most from a fully integrated business model.

   To transform their businesses, companies are increasingly seeking assistance
from outside Internet professional services firms. However, at a time when
companies need a service provider to do more than build a Web site or enable
on-line transactions, we believe that few Internet professional services
providers have the depth of resources and range of services necessary to
address the large-scale engagements and demands of large companies such as
Fortune 100 companies on an on-going basis.

   We believe there is a need for an innovative Internet professional services
provider, which has the scale, breadth of experience and expertise to help
companies understand and capitalize on the potential of the Internet as a part
of their overall business strategy and to leverage the power of their existing
assets to drive growth, maximize customer value and build a sustainable
competitive advantage.

                                       3
<PAGE>


                                  OUR SOLUTION

   In redefining a client's business model, we draw on our comprehensive
Internet professional services capabilities and marketing experience to provide
a fully integrated, end-to-end solution with the following key elements:

   Define digital business strategy. We work with members of our clients'
senior management to define new business strategies which are broad-based and
grounded in a thorough understanding of our clients' overall business and
competitive environment.

   Create enterprise-wide customer value propositions. We employ a customer-
centric approach to develop new customer value propositions that enhance
customer loyalty and generate new business opportunities by taking advantage of
our clients' existing assets such as distribution channels, customer service
networks and customer information systems.

   Build new technology and marketing infrastructure. We build new technology
and marketing infrastructure for our clients, including Web sites that enhance
our clients' brands and electronic customer relationship management systems, or
eCRM systems, that are designed to manage customer relationships.

   Implement solutions on enterprise-wide basis. We provide training,
organizational alignment and support to help our clients implement solutions
across their enterprises. We also coordinate the efforts of various client
businesses to create customer-oriented applications with a consistent corporate
message.

   Develop integrated marketing plan. We design integrated marketing plans that
typically involve identifying customer segments, developing marketing
strategies and optimizing on-line media planning and channel allocation,
including mix, messaging and frequency.

   Execute across marketing and service channels. We leverage our on-line media
buying, design and creative services and event sponsorships to market
seamlessly across multiple channels to help our clients build relationships
with their customers.

   Performance measurement. Through every step of our solution, we measure the
value being delivered to our clients. We continually work with our clients to
determine the relevant metrics and our performance against those metrics. We
collect data frequently and use it to continually refine our solution and
maximize our clients' return on investment.

                               OTHER INFORMATION

Stock Split

   In December 1999, we effected a 30-for-1 stock split of our common stock in
the form of a stock dividend. All information we present in this prospectus for
any date or period gives effect to the stock split.

The Holding Company Formation

   Bronner Slosberg Humphrey Co. is a Massachusetts business trust which serves
as the ultimate parent of Bronnercom, LLC, the Delaware limited liability
company through which our business is operated. Immediately prior to the
closing of this offering, all outstanding equity interests in Bronner Slosberg
Humphrey Co. will be exchanged on a     -for-     basis for equivalent equity
interests of Digitas Inc., a newly-formed Delaware holding company. This
offering will be for shares of common stock of Digitas Inc. All information
that we present in this prospectus for any date or period gives effect to the
formation of the new holding company and the exchange of equity interests.

                                       4
<PAGE>


                                  THE OFFERING

Common stock offered by:
<TABLE>
 <C>                                                  <S>
    Digitas..........................................      shares
    Selling shareholders.............................      shares
                                                      ----
        Total........................................      shares
                                                      ====
 Common stock to be outstanding after this offering..      shares(1)
 Use of proceeds..................................... To repay outstanding debt
                                                      and for general corporate
                                                      purposes, including
                                                      working capital,
                                                      expansion of our
                                                      operations and possible
                                                      acquisitions and
                                                      investments. See "Use of
                                                      Proceeds."
 Proposed Nasdaq National Market symbol.............. DTAS
</TABLE>
--------
(1)  The number of shares of our common stock that will be outstanding after
     this offering is based on 25,351,739.7 shares of common stock outstanding
     as of December 31, 1999. It excludes:

  .  any shares of common stock to be issued pursuant to the over-allotment
     option granted to the underwriters;

  .  13,927,736.1 shares of common stock issuable upon exercise of stock
     options outstanding as of December 31, 1999 at a weighted average
     exercise price of $4.7375 per share;

  .  390,000 shares of common stock issuable upon exercise of warrants
     outstanding as of December 31, 1999 at a weighted average exercise price
     of $5.0367;

  .  5,024,100 shares of common stock available for future grant under our
     stock option plans as of December 31, 1999; and

  .  1,100,000 shares of common stock reserved for purchase after this
     offering under our employee stock purchase plan.


                                       5
<PAGE>

                SUMMARY HISTORICAL AND PRO FORMA FINANCIAL DATA
                     (in thousands, except per share data)

   Effective January 1, 1999, the two companies through which we operated our
business were acquired by a private equity investor and several existing
shareholders. We refer to that transaction as the "recapitalization." These two
companies, which we refer to collectively as the "predecessor," were under
common control prior to the recapitalization, and their combined financial
information is presented for all periods before the recapitalization. Our
financial information for periods after the recapitalization reflects the
application of purchase accounting in connection with the recapitalization and
thus is not comparable to the financial information of the predecessor. Before
the recapitalization, the two predecessor companies were S corporations and
thus were not subject to federal income taxation. In addition, because the two
companies had different numbers of common shares outstanding that bear no
relationship to our current number of common shares outstanding, net income
(loss) per share has not been presented for periods before the
recapitalization.

   The pro forma statement of operations data for 1998 and the nine months
ended September 30, 1999 give effect to the recapitalization as if it had
occurred on January 1, 1998.
<TABLE>
<CAPTION>
                                                                            Pro Forma
                                 Predecessor (Combined)               Predecessor (Combined)      Company
                         ------------------------------------------ -------------------------- -------------
                          Year Ended December 31,
                         ---------------------------
                                                       Nine Months                Nine Months   Nine Months
                                                          Ended      Year Ended      Ended         Ended
                                                      September 30, December 31, September 30, September 30,
                          1996      1997      1998        1998          1998         1998          1999
                         -------  --------  --------  ------------- ------------ ------------- -------------
<S>                      <C>      <C>       <C>       <C>           <C>          <C>           <C>
Statement of operations data:
Revenue................. $83,157  $101,238  $122,309     $89,700      $122,309     $ 89,700      $133,907
Operating expenses:
 Professional services
  costs.................  43,272    57,610    65,696      49,606        65,696       49,606        73,238
 Selling, general and
  administrative
  expense...............  40,982    40,552    48,485      31,489        48,485       31,489        45,890
 Stock-based
  compensation..........     628     6,325    25,820       2,293         5,690        2,293           350
 Amortization of
  intangible assets.....     --        --        --          --         34,919       26,200        26,200
                         -------  --------  --------     -------      --------     --------      --------
 Total operating
  expenses..............  84,882   104,487   140,001      83,388       154,790      109,588       145,678
Income (loss) from
 operations.............  (1,725)   (3,249)  (17,692)      6,312       (32,481)     (19,888)      (11,771)
Other income (expense),
 net....................  (1,281)   (2,431)   (2,698)     (2,084)       (6,548)      (4,393)       (5,332)
Benefit from (provision
 for) income taxes......    (160)      114     1,439         (48)       (4,047)      (2,518)       (1,773)
                         -------  --------  --------     -------      --------     --------      --------
Net income (loss)....... $(3,166) $ (5,566) $(18,951)    $ 4,180      $(43,076)    $(26,799)     $(18,876)
                         =======  ========  ========     =======      ========     ========      ========
Net loss per share:
 Basic and diluted......                                                                         $  (0.76)
                                                                                                 ========
Weighted average shares
 outstanding:
 Basic and diluted......                                                                           24,966
</TABLE>

<TABLE>
<CAPTION>
                                                                   As of
                                                             September 30, 1999
                                                            --------------------
                                                             Actual  As Adjusted
                                                            -------- -----------
Balance sheet data:
<S>                                                         <C>      <C>
Cash and cash equivalents.................................. $  1,364     $
Total assets...............................................  264,250
Total long-term debt, less current portion.................   64,917
Shareholders' equity.......................................  134,105
</TABLE>


                                       6
<PAGE>

                                 RISK FACTORS

   You should carefully consider the following risks and all other information
contained in this prospectus before purchasing our common stock. If any of the
following risks occur, our business, results of operations and financial
condition could be harmed. In that case, the trading price of our common stock
could decline, and you could lose all or part of your investment.

Risks Related to Our Business

   The loss of even one significant client could have a material adverse
effect on our business, financial condition and results of operations

   We derive a significant portion of our revenues from large-scale
engagements for a limited number of clients. Most of these relationships are
terminable by the client without penalty on 30 days prior written notice. The
loss of any major client could dramatically reduce our revenues. In the first
nine months of 1999, our three largest clients collectively accounted for
approximately 62% of our revenues, and our largest client accounted for
approximately 24% of our revenues. The loss of any of these clients could have
a material adverse effect on our business, financial condition and results of
operations.

   Our failure to meet our clients' expectations could result in negative
publicity and losses and could subject us to liability for the services we
provide

   The average dollar amount of our client engagements has grown significantly
while the time frame for delivering our services has generally decreased. As
clients have dedicated more money and resources to our engagements with them,
their expectations have also increased. As our client engagements become
larger and more complex and are required to be completed in a shorter time
frame, we face increased management challenges and greater risk of mistakes.
Many of the services we provide are critical to the operations of our clients'
businesses. Any failure on our part to deliver these services in accordance
with our clients' expectations could result in:

  .  delayed or lost client revenues;

  .  adverse client reactions;

  .  negative publicity;

  .  additional expenditures to correct the problem; and

  .  claims against us.

   While our agreements with clients often limit our liability to damages
arising from our rendering of services, we cannot assure you that these
provisions will be enforceable in all instances or would otherwise protect us
from liability. Although we carry general liability insurance coverage, our
insurance may not cover all potential claims to which we are exposed or may
not be adequate to indemnify us for all liability that may be imposed. The
successful assertion of one or more claims against us could have a material
adverse effect on our business, results of operations and financial condition.

   If we are not successful in creating a worldwide network of offices, we may
jeopardize our relationships with existing clients and limit our ability to
attract new clients

   Increasingly, our clients are insisting that their Internet professional
services providers be able to handle assignments on a worldwide basis. Failure
to have a worldwide network of offices may jeopardize our existing client
relationships and limit our ability to attract new clients. Our London office
may be able to serve Europe, the Middle East and Africa, but we will need to
establish regional offices for Asia and Latin America in the near future. We
also need to deepen and broaden our expertise in dealing with worldwide
assignments by hiring more senior executives with multi-national marketing and
Internet expertise.

                                       7
<PAGE>

   We need qualified professionals to grow our business, and they are in short
   supply

   Our future success depends in large part on our ability to retain, hire,
train and motivate qualified people. Skilled professionals are in short
supply, and competition for them is intense. As a result, we may be unable to
retain our qualified professionals to meet our existing business needs. In
addition, we may be unable to hire a sufficient number of qualified
professionals to meet our business plans. We may also have difficulty
attracting and hiring our desired number of qualified professionals after the
offering since some may perceive that the stock option component of their
compensation package is no longer as valuable. Moreover, even if we are able
to expand our employee base, the resources required to train and retain our
employees may adversely affect our operating margins. If we are unable to hire
and retain qualified professionals, we may be unable to complete work for our
existing clients or accept work from new clients.

   We depend on our key personnel, and the loss of their services may
   adversely affect our business

   We believe that our success will depend on the continued employment of our
senior management team and other key personnel. This dependence is
particularly important to our business because personal relationships are a
critical element of obtaining and maintaining client engagements. If one or
more members of our senior management team or other key personnel were unable
or unwilling to continue in their present positions, our business could be
seriously harmed. In addition, if any of our key personnel join a competitor
or forms a competing company, some of our clients might choose to use the
services of that competitor or those of a new company instead of our own.
Furthermore, other companies seeking to develop in-house business capabilities
may hire away some of our key personnel.

   Fluctuations in our quarterly revenues and operating results may lead to
   reduced prices for our stock

   Our quarterly revenues and operating results are volatile. We believe that
period-to-period comparisons of our operating results are not necessarily
meaningful. These comparisons cannot be relied upon as indicators of future
performance. However, if our operating results in any future period fall below
the expectations of securities analysts and investors, the market price of our
securities would likely decline.

   Factors that may cause our quarterly results to fluctuate in the future
include the following:

  .  variability in market demand for Internet professional services;

  .  timing and amount of client bonus payments;

  .  length of the sales cycle associated with our service offerings;

  .  unanticipated variations in the size, budget, number or progress toward
     completion of our engagements;

  .  unanticipated termination of a major engagement, a client's decision not
     to proceed with an engagement we anticipated or the completion or delay
     during a quarter of several major client engagements;

  .  efficiency with which we utilize our employees, including our ability to
     transition employees from completed engagements to new engagements;

  .  our ability to manage our operating costs, a large portion of which are
     fixed in advance of any particular quarter;

  .  changes in pricing policies by us or our competitors;

  .  timing and cost of new office expansions;

  .  our ability to manage future growth; and

  .  costs of attracting and training skilled personnel.

Some of these factors are within our control while others are outside of our
control.

                                       8
<PAGE>

   Failure to manage our growth may impact our operating results

   We expect to continue to rapidly grow our business. The expansion of our
business and customer base has placed, and will continue to place, increased
demands on our management, operating systems, internal controls and financial
and physical resources. If not managed effectively, these increased demands
may adversely affect the services we provide to our existing clients. In
addition, our personnel, systems, procedures and controls may be inadequate to
support our future operations. Consequently, in order to manage our growth
effectively, we may be required to increase expenditures to expand, train and
manage our employee base, improve our management, financial and information
systems and controls, or make other capital expenditures. Any failure in our
efforts to manage our growth in an efficient manner could adversely affect our
business.

   Our planned international operations may be expensive and may not succeed

   We expect to expand our international operations. We have limited
experience in marketing, selling and supporting our services outside of North
America and the United Kingdom. Development of such skills may be more
difficult or take longer than we anticipate, especially due to language
barriers, cultural differences, currency exchange risks and the fact that the
Internet infrastructure in foreign countries may be less advanced than in the
United States. In addition, we will have to attract and retain experienced
management and employees, and we may be unable to do so. Moreover,
international operations are subject to a variety of additional risks that
could seriously harm our financial condition and operating results. These
risks include the following:

  .  the impact of recessions in economies outside the United States;

  .  political and economic instability;

  .  potentially adverse tax consequences;

  .  reduced protection for intellectual property rights in some countries;

  .  longer payment cycles and problems in collecting accounts receivable;

  .  the burden and expense of complying with foreign laws and regulations;

  .  currency issues, including fluctuations in currency exchange rates and
     the conversion to the euro by all countries of the European Union by
     year end 2003;

  .  tariffs, trade barriers and other import and export restrictions
     including restrictions on the import and export of certain sensitive
     technologies; and

  .  seasonal reductions in business activity in certain parts of the world,
     such as during the summer months in Europe.

   We must maintain our reputation and expand our name recognition to remain
   competitive

   We believe that establishing and maintaining name recognition and a good
reputation is critical to attracting and expanding our targeted client base as
well as attracting and retaining qualified employees. We also believe that the
importance of reputation and name recognition will increase due to the growing
number of Internet professional services providers. We are changing our name
in connection with this offering. If our reputation is damaged or if we are
unable to establish name recognition with respect to our new name, we may
become less competitive or lose our market share. In addition, our name could
be associated with any business difficulties of our clients. As a result, the
difficulties or failure of one of our clients could damage our reputation and
name and make it difficult for us to compete for new business.

                                       9
<PAGE>

   Our business will be negatively affected if we do not keep up with the
Internet's rapid technological changes, evolving industry standards and
changing client requirements

   The Internet professional services industry is characterized by rapidly
changing technology, evolving industry standards and changing client needs.
Accordingly, our future success will depend, in part, on our ability to meet
these challenges. Among the most important challenges facing us is the need
to:

  .  effectively use leading technologies;

  .  continue to develop our strategic and technical expertise;

  .  influence and respond to emerging industry standards and other
     technological changes;

  .  enhance our current service offerings; and

  .  develop new services that meet changing customer needs.

   We cannot assure you that we will succeed in effectively meeting these
challenges in a timely and cost-effective manner. Our failure to do so could
harm our business results.

   Our success depends on increased adoption of the Internet as a means of
   conducting business

   Our future success depends heavily on the acceptance and use of the
Internet as a means for conducting business. If commerce on the Internet does
not continue to grow, or grows more slowly than expected, our growth would
decline and our business would be seriously harmed. Customers and businesses
may reject the Internet as a viable commercial medium for a number of reasons,
including:

  .  inadequate network infrastructure;

  .  delays in the development of Internet enabling technologies and
     performance improvements;

  .  delays in the development or adoption of new standards and protocols
     required to handle increased levels of Internet activity;

  .  delays in the development of security and authentication technology
     necessary to effect secure transmission of confidential information;

  .  changes in, or insufficient availability of, telecommunications services
     to support the Internet; and

  .  failure of companies to meet their customers' expectations in delivering
     goods and services over the Internet.

   The Internet professional services industry is highly competitive and has
low barriers to entry; if we cannot effectively compete, our revenue may
decline

   The Internet professional services industry is relatively new and intensely
competitive. We expect competition to intensify even further as the Internet
professional services market evolves. Some of our competitors have more
clients, greater brand or name recognition and greater financial, technical,
marketing and public relations resources than we do. As a result, our
competitors may be in a stronger position to respond quickly to new or
emerging technologies and changes in client requirements. They may also
develop and promote their products and services more effectively than we do.

   There are relatively low barriers to entry into the Internet professional
services industry. In addition, we have no patented technology and limited
other proprietary rights that would preclude or inhibit competitors from
providing services similar to ours. As a result, new and unknown market
entrants pose a threat to our business.

   Current or future competitors may also develop or offer services that are
comparable or superior to ours at a lower price, which could affect our
ability to retain existing clients and attract new clients. In addition,
current and potential competitors have established or may establish corporate
relationships among themselves or other

                                      10
<PAGE>

third parties to increase their ability to address customer needs.
Accordingly, it is possible that new competitors or alliances among
competitors may emerge and rapidly acquire significant market share. There can
be no assurance that we will be able to continue to compete successfully with
our existing competitors or that we will be able to compete successfully with
new competitors.

   Actual and perceived conflicts of interest may restrict us in obtaining new
   clients

   Actual and perceived conflicts of interest are inherent in our industry. We
sometimes decline to accept potential clients because of actual or perceived
conflicts of interest with our existing clients. In addition, potential
clients may choose not to retain us for reasons of actual or perceived
conflicts of interest. Many of our clients compete in industries where only a
limited number of companies gain meaningful market share. As a result, if we
decide not to perform services for a particular client's competitors, or if
potential clients choose not to retain us because of actual or perceived
conflicts and our client fails to capture a significant portion of its market,
we are unlikely to receive future revenue in that particular industry.

   Potential future acquisitions could be difficult to integrate, disrupt our
business, adversely affect our operating results and dilute shareholder value

   We may acquire other businesses in the future, which may complicate our
management tasks. We may need to integrate widely dispersed operations with
distinct corporate cultures. Our failure to do so could result in our
inability to retain the management, key personnel, employees and clients of
the acquired business. Such integration efforts also may distract our
management from servicing existing clients. Our failure to manage future
acquisitions successfully could seriously harm our operating results. Also,
acquisition costs could cause our quarterly operating results to vary
significantly. Furthermore, our shareholders could be diluted if we finance
the acquisitions by incurring debt or issuing equity securities.

   We may need to raise additional capital, which may not be available to us,
and which may, if raised, dilute your ownership interest in us

   We expect that our net proceeds from this offering will be sufficient to
meet our working capital and capital expenditure needs for at least the next
12 months. After that, we may need to raise additional funds, and we cannot be
certain that we will be able to obtain additional financing on favorable terms
or at all. If we need additional capital and cannot raise it on acceptable
terms, we may not be able to:

  .  open new offices;

  .  create additional market-specific business units;

  .  enhance our infrastructure;

  .  hire, train and retain employees;

  .  keep up with technological advances;

  .  respond to competitive pressures or unanticipated requirements; or

  .  pursue acquisition opportunities.

Our failure to do any of these things could restrict our growth, hinder our
ability to compete and seriously harm our financial condition. Additionally,
if we are able to raise additional funds through equity financings, your
ownership interest in us will be diluted.

                                      11
<PAGE>

   The Year 2000 problem may adversely affect our business

   The Year 2000 problem is the potential for system and processing failures
of date-related data arising from the use of two digits by computer-controlled
systems, rather than four digits, to define the applicable year. We may
encounter the Year 2000 problem in three contexts:

  .  Our clients. The failure of our clients to ensure that their operations
     are Year 2000 compliant could have a material adverse effect on them,
     which, in turn, could limit their ability to retain third party service
     providers such as Digitas. In addition, clients or potential clients may
     delay purchasing software and related products and services, including
     those of Digitas, due to concerns related to Year 2000 problems.

  .  Our suppliers. Our business could be adversely affected if we cannot
     obtain products, services or systems that are Year 2000 compliant when
     we need them or if the products, services or systems that we have
     obtained are not Year 2000 compliant.

  .  Our services. The solutions which we provide to our clients integrate
     software and other technology from different providers. If there is a
     Year 2000 problem with respect to a solution provided by us, it may be
     difficult to determine whether the problem relates to services which we
     have performed or is due to the software, technology or services of
     other providers. Furthermore, in the past, we entered into a number of
     contracts with express or implied warranties with respect to Year 2000
     readiness which may make us vulnerable to Year 2000-related lawsuits,
     whether or not the services we have performed are Year 2000 compliant.
     We cannot be certain what the outcomes of these types of lawsuits may
     be.

Risks Related to the Securities Markets and This Offering

   Our stock price may be volatile and may result in substantial losses for
investors purchasing shares in the offering

   The market price of our common stock is likely to be highly volatile. The
stock market in general, and the market for Internet-related stocks in
particular, has been highly volatile. This volatility often has been unrelated
to the operating performance of particular companies. We cannot assure you
that our common stock will trade at the same levels of other Internet-related
stocks or that Internet-related stocks in general will sustain their current
market prices. We also cannot assure you that an active public market for our
securities will develop or continue after this offering.

   In addition, the trading price of our common stock could be subject to wide
fluctuations in response to:

  .  our perceived prospects;

  .  variations in our operating results and our achievement of key business
     targets;

  .  changes in securities analysts' recommendations or earnings estimates;

  .  differences between our reported results and those expected by investors
     and securities analysts;

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

  .  market reaction to any acquisitions, joint ventures or strategic
     investments announced by us or our competitors; and

  .  general economic or stock market conditions unrelated to our operating
     performance.

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

                                      12
<PAGE>

   Concentration of ownership may limit your ability to influence corporate
   matters

   Immediately following this offering, our executive officers, directors and
significant shareholders collectively will own approximately   % of the
outstanding shares of our common stock. If these shareholders choose to act or
vote together, they will have the power to control the election of our
directors, and the approval of any other action requiring the approval of our
shareholders, including any amendments to our certificate of incorporation and
mergers or sales of all or substantially all of our assets. In addition,
without the consent of these shareholders, we could be prevented from entering
into transactions that could be beneficial to us or our other shareholders.
Also, third parties could be discouraged from making a tender offer or bid to
acquire Digitas at a price per share that is above the then-current market
price.

   We will have broad discretion over the use of our net proceeds from this
offering, and you may not agree with how we use them

   Our management will have significant flexibility in applying our net
proceeds from this offering and may use the net proceeds in ways with which
shareholders disagree. Management's failure to effectively apply these net
proceeds could have an adverse effect on our ability to implement our business
strategy.

   Purchasers in this offering will incur immediate and substantial dilution

   The initial public offering price of our common stock is substantially
higher than the book value per share of the outstanding common stock. As a
result, if we were liquidated for book value immediately following this
offering, each shareholder purchasing in this offering would receive less than
the price they paid for their common stock. In addition, because our success
is so heavily dependent on our ability to attract and retain talented
personnel, we expect to offer a significant number of stock options to
employees in the future. Such issuances will cause further dilution to
investors.

   Future sales of our common stock may depress our stock price

   Sales of a substantial number of shares of our common stock in the public
market after the closing of this offering, or the perception that such sales
could occur, could adversely affect the market price of our common stock and
could make it more difficult for us to raise funds through future offerings of
common stock. For a description of the shares of common stock that are
available for future sale, see "Shares Eligible for Future Sale."

Risks Related to Legal Uncertainty

   We may be subject to lawsuits as a result of our attempts to hire qualified
   people

   Some companies have adopted a strategy of suing or threatening to sue
former employees and their new employers. As we hire new employees from our
current or potential competitors we may become a party to one or more lawsuits
involving the former employment of one of our employees. Any future litigation
against us or our employees, regardless of the outcome, may result in
substantial costs and expenses to us and may divert management's attention
away from the operation of our business.

   We may not be able to protect our intellectual property and proprietary
   rights

   We cannot guarantee that the steps we have taken to protect our proprietary
rights will be adequate to deter misappropriation of our intellectual
property. In addition, we may not be able to detect unauthorized use of our
intellectual property and take appropriate steps to enforce our rights. If
third parties infringe or misappropriate our trade secrets, copyrights,
trademarks or other proprietary information, our business could be seriously
harmed. In addition, although we believe that our proprietary rights do not
infringe on the intellectual property rights of others, other parties may
assert infringement claims against us or claim that we have violated their
intellectual property rights. Such claims, even if not true, could result in
significant legal and other costs and may be a distraction to management. If
any party asserts a claim against us relating to proprietary technology or

                                      13
<PAGE>

information, we may need to obtain licenses to the disputed intellectual
property. We cannot assure you, however, that we will be able to obtain any
licenses at all. In addition, protection of intellectual property in many
foreign countries is weaker and less reliable than in the United States so, as
our business expands into foreign countries, risks associated with protecting
our intellectual property will increase.

   Changes in government regulation of the Internet could adversely affect our
   business

   To date, government regulations have not materially restricted the use of
the Internet by our clients in their markets. However, the legal and regulatory
environment that pertains to the Internet may change. New laws and regulations,
or new interpretations of existing laws and regulations, could impact us
directly or indirectly by preventing our clients from delivering products or
services over the Internet or slowing the growth of the Internet. New state,
federal and foreign laws and regulations may be adopted regarding any of the
following issues:

  .  user privacy;

  .  the pricing and taxation of goods and services offered over the
     Internet;

  .  the content of Web sites;

  .  consumer protection; and

  .  the characteristics and quality of products and services offered over
     the Internet.

Any new legislation could inhibit the increased use of the Internet as a
commercial medium which in turn would decrease the demand for our services and
have a material adverse effect on our future operating performance.

   We may become subject to claims regarding foreign laws and regulations,
which could subject us to increased expenses

   Because we plan to expand our international operations and because many of
our current clients have international operations, we may be subject to the
laws of foreign jurisdictions for violations of their laws. These laws may
change, or new, more restrictive laws may be enacted in the future.
International litigation is often expensive, time-consuming and distracting to
management and could have a material adverse effect on our business.

   Provisions of Delaware law and of our charter and by-laws may make a
   takeover more difficult

   Provisions in our certificate of incorporation and by-laws and in the
Delaware corporate law may make it difficult and expensive for a third party to
pursue a tender offer, change in control or takeover attempt which is opposed
by our management and board of directors. Public shareholders who might desire
to participate in such a transaction may not have an opportunity to do so. In
our certificate of incorporation we also have a staggered board of directors
which makes it difficult for shareholders to change the composition of the
board of directors in any one year. These anti-takeover provisions could
substantially impede the ability of public shareholders to benefit from a
change in control or change our management and board of directors. See
"Description of Capital Stock."

   This prospectus contains forward-looking statements that involve substantial
   risks and uncertainties

   This prospectus contains forward-looking statements. In some cases you can
identify these statements by forward-looking words such as "anticipate,"
"believe," "could," "estimate," "expect," "intend," "may," "should," "will,"
and "would" or similar words. You should read statements that contain these
words carefully because they discuss our future expectations, contain
projections of our future results of operations or of our financial position or
state other "forward-looking" information. We believe that it is important to
communicate our future expectations to our investors. However, there may be
events in the future that we are not able to accurately predict or control and
our actual results may differ materially from the expectations we describe in
our forward-looking statements. Before you invest in our common stock, you
should be aware that the occurrence of the events described in these risk
factors and elsewhere in this prospectus could have an adverse effect on our
business, results of operations and financial position.

                                       14
<PAGE>

                                USE OF PROCEEDS

   We estimate that the net proceeds from our sale of    shares of common
stock in this offering will be approximately $    , assuming an initial public
offering price of $     per share and after deducting estimated underwriting
discounts and commissions and our estimated offering expenses. We estimate
that our net proceeds will be used as follows:

  .  approximately $69 million will be used to repay outstanding debt under
     the term loan portion of our credit facility; and

  .  the remaining proceeds will be used for general corporate purposes,
     including working capital, technology infrastructure improvements,
     capital expenditures for facilities and expansion activities and
     potential acquisitions, investments in complimentary businesses or
     strategic investments.

   As of December 31, 1999, there was approximately $69 million outstanding
under the term loan portion of our credit facility, which bore interest on
that date of 8.475%. The term loan portion of the credit facility is repayable
in quarterly installments which commenced on September 30, 1999 with final
maturity on December 31, 2004. We received the proceeds of the term loan
portion of the credit facility in January 1999 and used them in connection
with the recapitalization primarily to repay indebtedness, satisfy contractual
obligations to former shareholders, make transaction payments to existing
equity holders, repurchase stock options and stock appreciation rights and pay
expenses.

   Until allocated for specific use, we will invest our net proceeds in
government securities and other short-term, investment-grade securities.
Digitas will not receive any of the proceeds from the sale of common stock in
this offering by the selling shareholders.

                                DIVIDEND POLICY

   We currently intend to retain any future earnings to finance the expansion
of our business and do not expect to pay any cash dividends in the foreseeable
future. Any decision to pay cash dividends after the offering will be at the
discretion of our board of directors after taking into account such factors as
our financial condition, operating results, current and anticipated cash
needs, plans for expansion and restrictions in our financing agreements.

                              CERTAIN INFORMATION

   This prospectus includes data concerning the Internet professional services
industry that we obtained from industry publications. These publications
generally indicate that they have obtained information from sources that they
believe are reliable, but that they do not guarantee the accuracy and
completeness of the information. Although we believe that these industry
publications are reliable, we have not independently verified their data. We
also have not sought the consent of any of these publications to refer to
their data in this prospectus.

   All information in this prospectus relating to the number of shares of our
common stock or options is based upon information as of December 31, 1999, as
adjusted to reflect:

  .  a 30-for-1 stock split of our common stock effected in the form of a
     stock dividend in December 1999;

  .  our formation of a new Delaware holding company in connection with this
     offering; and

  .  the exchange of all outstanding equity interests in Bronner Slosberg
     Humphrey Co. for equivalent equity interests of Digitas Inc. on a     -
     for-     basis.

Unless otherwise specifically stated, all information in this prospectus
assumes the issuance and sale of common stock in the offering at an assumed
initial public offering price of $    per share.

                                      15
<PAGE>

                                CAPITALIZATION

   The following table sets forth our cash, short-term debt and capitalization
as of September 30, 1999:

  .  on an actual basis; and

  .  on an as adjusted basis to reflect our sale of      shares of common
     stock in this offering at an assumed initial public offering price of $
          per share, after deduction of estimated underwriting discounts and
     commissions and our estimated offering expenses and the use of the net
     proceeds as described in "Use of Proceeds."

<TABLE>
<CAPTION>
                                                                  As of
                                                            September 30, 1999
                                                          -----------------------
                                                           Actual     As Adjusted
                                                          ---------  ------------
                                                              (in thousands)
<S>                                                       <C>        <C>
Cash and cash equivalents................................ $   1,364      $
                                                          =========      ===
Short-term debt ......................................... $  15,525      $
                                                          =========      ===
Long-term debt, less current portion..................... $  64,917
Shareholders' equity (deficit):
  Common stock, no par value per share; 25,351,739.7
   shares authorized,  issued and outstanding, actual;
   and        shares issued and outstanding, as
   adjusted..............................................        10
  Additional paid-in capital.............................   155,432
  Accumulated (deficit)..................................   (21,337)
                                                          ---------      ---
    Total shareholders' equity...........................   134,105
    Total capitalization................................. $ 199,022      $
                                                          =========      ===
</TABLE>

   The table above excludes 12,620,486.1 shares of common stock issuable upon
exercise of stock options outstanding at September 30, 1999 at a weighted
average exercise price of $1.3616 per share and 450,000 shares of common stock
issuable upon exercise of warrants outstanding at September 30, 1999 at a
weighted average exercise price of $5.0367 per share.


                                      16
<PAGE>

                                   DILUTION

   As of September 30, 1999, we had a net tangible book value of $
million or $     per share of common stock. Net tangible book value per share
is determined by dividing our tangible net book value (total tangible assets
less total liabilities) by the total number of shares of common stock
outstanding. After giving effect to the sale of the      shares of common
stock offered by us in this offering at an assumed initial public offering
price of $     per share, and after deducting estimated underwriting discounts
and commissions and offering expenses payable by us, our adjusted net tangible
book value would have been approximately $    million, or $    per share of
common stock. This represents an immediate increase in net tangible book value
of $    per share to existing shareholders and an immediate dilution of $
per share to new investors purchasing shares of common stock in the offering.
The following table illustrates this dilution on a per share basis:

<TABLE>
   <S>                                                                  <C> <C>
   Assumed initial public offering price per share....................      $
     Net tangible book value per share before the offering as of
      September 30, 1999..............................................  $
     Increase in net tangible book value per share attributable to new
      investors.......................................................
                                                                        ---
   Net tangible book value per share after the offering...............
                                                                            ---
   Dilution per share to new investors................................      $
                                                                            ===
</TABLE>

   The following table summarizes, as of September 30, 1999, the number of
shares of common stock purchased from us, the total consideration paid and the
average price per share paid by our existing shareholders and to be paid by
new investors in this offering at an assumed initial public offering price of
$     per share, and before deducting estimated underwriting discounts and
commissions and estimated offering expenses payable by us:

<TABLE>
<CAPTION>
                                Shares
                              Purchased    Total Consideration
                            -------------- ---------------------  Average Price
                            Number Percent  Amount    Percent       Per Share
                            ------ ------- --------- -----------  -------------
<S>                         <C>    <C>     <C>       <C>          <C>
Existing shareholders(1)...              %  $                   %     $
New investors(1)...........
                             ---    -----   -------- -----------      ----
  Total....................         100.0%           $     100.0%
                             ===    =====   ======== ===========
</TABLE>
--------
(1)  Sales by selling shareholders in this offering will reduce the number of
     shares held by existing shareholders to           or approximately    %
     and will increase the number of shares held by new investors to
     or approximately    % of the total number of shares of common stock
     outstanding after this offering.

   The discussion and table above exclude:

  .      shares to be issued by us and the selling shareholders pursuant to
     the underwriters' over-allotment option;

  .  12,620,486.1 shares of common stock issuable upon exercise of stock
     options outstanding at September 30, 1999 at a weighted average price of
     $3.45 per share;

  .  450,000 shares of common stock issuable upon exercise of warrants
     outstanding at September 30, 1999 at a weighted average price of $5.0367
     per share; and

  .  6,706,350 shares available for future grant under our stock option plans
     at September 30, 1999.

   To the extent these options and warrants are exercised and the underlying
shares are issued, there will be further dilution to new investors.

                                      17
<PAGE>

                  UNAUDITED PRO FORMA COMBINED FINANCIAL DATA

   The following unaudited pro forma combined statement of operations data
reflect the combined results of operations of the predecessor for the year
ended December 31, 1998 and the nine months ended September 30, 1998, as if
the recapitalization and related purchase accounting described in Note 3 to
the financial statements had occurred on January 1, 1998.

   The unaudited pro forma combined statement of operations data are based on
the historical financial statements for the predecessor and the assumptions
and adjustments described in the accompanying notes. The unaudited pro forma
combined statement of operations data do not purport to represent what our
results of operations actually would have been if the recapitalization had
occurred on the date indicated or what the results may be for any future
periods. The unaudited pro forma combined statement of operations data are
based upon assumptions that we believe are reasonable and should be read in
conjunction with our financial statements and accompanying notes thereto
included elsewhere in this prospectus.

             Unaudited Pro Forma Combined Statement of Operations
                            (dollars in thousands)

<TABLE>
<CAPTION>
                                                                    Nine Months Ended September 30,
                            Year Ended December 31, 1998                         1998
                          --------------------------------------   --------------------------------------
                          Predecessor                  Pro Forma   Predecessor                  Pro Forma
                          (Combined)  Adjustments      Combined    (Combined)  Adjustments      Combined
                          ----------- -----------      ---------   ----------- -----------      ---------
<S>                       <C>         <C>              <C>         <C>         <C>              <C>
Statement of operations
 data:
Revenue.................   $122,309         --         $122,309      $89,700         --         $ 89,700
Operating expenses:
 Professional services
  costs.................     65,696         --           65,696       49,606         --           49,606
 Selling, general and
  administrative
  expense...............     48,485         --           48,485       31,489         --           31,489
 Stock-based
  compensation..........     25,820    $(20,130)(/1/)     5,690        2,293         --            2,293
 Amortization of
  intangible assets.....        --       34,919 (/2/)    34,919          --     $ 26,200 (/2/)    26,200
                           --------    --------        --------      -------    --------        --------
  Total operating
   expenses.............    140,001      14,789         154,790       83,388      26,200         109,588
Income (loss) from
 operations.............    (17,692)                    (32,481)       6,312                     (19,888)
Other income (expense)..     (2,698)     (3,850)(/3/)    (6,548)      (2,084)     (2,309)(/3/)    (4,393)
Benefit from (provision
 for) income taxes......      1,439      (5,486)(/4/)    (4,047)         (48)     (2,470)(/4/)    (2,518)
                           --------    --------        --------      -------    --------        --------
Net income (loss).......   $(18,951)   $(24,125)       $(43,076)     $ 4,180    $(30,979)       $(26,799)
                           ========    ========        ========      =======    ========        ========
</TABLE>
--------
(1)  Reflects exclusion of stock appreciation rights compensation expense of
     $20,130,000 as appreciation would 18have been recorded in the period
     prior to the recapitalization taking place.
(2)  Reflects amortization of goodwill and other intangible assets as if the
     recapitalization took place at the beginning of the period.
(3)  Reflects additional interest expense, at an assumed interest rate of
     8.43%, from the debt incurred in connection with the recapitalization as
     if it occurred at the beginning of the period. Other expense increases as
     a result of the amortization of debt issue costs.
(4)  Represents tax adjustments to reflect the pro forma income tax provision
     at an effective tax rate of 10.37%.

                                      18
<PAGE>

                      SELECTED HISTORICAL FINANCIAL DATA

   The following financial data for each of the years 1994 through 1998 have
been derived from our annual financial statements, which have been audited by
PricewaterhouseCoopers LLP. The data for the nine months ended September 30,
1998 and 1999 have been derived from our unaudited financial statements, which
in the opinion of management include all adjustments, consisting only of
normal recurring adjustments, necessary for a fair statement of the results
for the unaudited interim periods. Because the recapitalization has been
accounted for as a purchase, the financial statements for the periods after
January 1, 1999 are not comparable to prior periods. The data for the nine
months ended September 30, 1999 are not necessarily indicative of results for
the year ending December 31, 1999 or any future period. Before the
recapitalization, the two predecessor companies were S corporations and thus
were not subject to federal income taxation. In addition, because the two
companies had different numbers of common shares outstanding that bear no
relationship to our current number of common shares outstanding, net income
(loss) per share has not been presented for periods before the
recapitalization.

<TABLE>
<CAPTION>
                                          Predecessor (Combined)                          Company
                          ------------------------------------------------------------ -------------
                                                                          Nine Months   Nine Months
                                   Year Ended December 31,                   Ended         Ended
                          ---------------------------------------------  September 30, September 30,
                           1994     1995     1996      1997      1998        1998          1999
                          -------  -------  -------  --------  --------  ------------- -------------
                            (in thousands, except per share data)         (unaudited)   (unaudited)
<S>                       <C>      <C>      <C>      <C>       <C>       <C>           <C>
Statement of operations
 data:
Revenue.................  $50,000  $66,244  $83,157  $101,238  $122,309    $ 89,700      $133,907
Operating expenses:
 Professional services
  costs.................   23,371   32,922   43,272    57,610    65,696      49,606        73,238
 Selling, general and
  administrative
  expense...............   26,733   35,607   40,982    40,552    48,485      31,489        45,890
 Stock-based
  compensation (1)......                        628     6,325    25,820       2,293           350
 Amortization of
  intangible assets.....      --       --       --        --        --          --         26,200
                          -------  -------  -------  --------  --------    --------      --------
   Total operating
    expenses............   50,104   68,529   84,882   104,487   140,001      83,388       145,678
Income (loss) from
 operations.............     (104)  (2,285)  (1,725)   (3,249)  (17,692)      6,312       (11,771)
Other income (expense),
 net....................      106      151   (1,281)   (2,431)   (2,698)     (2,084)       (5,332)
Benefit from (provision
 for) income taxes......      (14)    (345)    (160)      114     1,439         (48)       (1,773)
                          -------  -------  -------  --------  --------    --------      --------
Net income (loss).......  $   (12) $(2,479) $(3,166) $ (5,566) $(18,951)   $  4,180      $(18,876)
                          =======  =======  =======  ========  ========    ========      ========
Net loss per share
  Basic and diluted.....                                                                 $  (0.76)
                                                                                         ========
Weighted average common
 shares outstanding
  Basic and diluted.....                                                                   24,966

<CAPTION>
                                                                             As of
                                     As of December 31,                  September 30,
                          ---------------------------------------------  -------------
                           1994     1995     1996      1997      1998        1999
                          -------  -------  -------  --------  --------  -------------
                                       (in thousands)
<S>                       <C>      <C>      <C>      <C>       <C>       <C>           <C>
Balance sheet data:
Cash and cash             $10,809
 equivalents............           $11,685  $   301  $  1,868  $     37    $  1,364
Total assets............   29,935   36,971   33,649    49,705    62,270     264,250
Total long-term debt,
 less current portion...      --       --     2,990     3,701     1,432      64,917
Shareholders' equity
 (deficit)..............   (2,131)     383    4,625    (9,831)  (27,760)    134,105
</TABLE>
--------

(1)  Stock-based compensation of the predecessor includes annual profit
     distributions and appreciation of stock appreciation rights ("SARs") held
     by predecessor employees. Stock-based compensation related to
     appreciation of SARs resulting from the recapitalization of $20,130,000
     was recognized in the fourth quarter of 1998. Stock-based compensation of
     the company relates to stock options granted to employees at exercise
     prices below the estimated fair value of the related common stock. See
     Note 8 to the financial statements.

                                      19
<PAGE>

                     MANAGEMENT'S DISCUSSION AND ANALYSIS
               OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

   You should read the following discussion together with the financial
statements and related notes appearing elsewhere in this prospectus. This
prospectus contains forward-looking statements that involve risks and
uncertainties. Our actual results may differ materially from those indicated
in forward-looking statements. See "Risk Factors."

Overview

   Digitas is a leading Internet professional services firm that provides
integrated strategy, technology and marketing solutions to Fortune 100 and
other industry leading companies that have embraced the Internet as a
principal means of business transformation. We help our clients leverage their
existing asset base and the Internet to develop stronger and more profitable
customer relationships.

   Prior to 1999, our company operated as two separate entities which were
under common control: Bronner Slosberg Humphrey Inc., which was originally
founded in 1980, and Strategic Interactive Group, Inc., which was founded in
1995. In November 1998, each of these entities merged into newly-formed
Delaware limited liability companies which were owned by separate newly-formed
Massachusetts business trusts.

   In January 1999, the two business trusts were acquired by a private equity
investor and several of our existing shareholders in a recapitalization. The
purpose of the recapitalization was to combine the trusts, realign the
ownership of the combined entities with those senior employees who would most
actively lead our future growth, establish an equity-based incentive program
to motivate our current and future employees and enhance our ability to make
strategic investments in our people and services.

Business Operations

   Our revenue is generated from providing professional services to our
clients. We expect that our revenue will continue to be driven primarily by
the number and scope of our client engagements. We focus on large-scale, long-
term, strategic relationships with a select group of clients. In the first
nine months of 1999, our three largest clients accounted for approximately 62%
of our revenue and our largest client accounted for approximately 24% of our
revenue.

   Historically, we have offered our services to clients primarily on a time
and materials basis. For these engagements, we recognize revenue as services
are provided based on actual costs incurred. As our client relationships have
grown, we have increasingly entered into broad contracts under which we
deliver our services based on mutually agreed upon scopes of work. These
contracts generally include estimates on total fees that clients will be
charged for the year. For these contracts, we recognize revenue on a
percentage of completion method based on the ratio of costs incurred to total
estimated costs. Additionally, some of our contracts include a bonus provision
whereby we get additional compensation based on our performance as evaluated
by our clients against agreed upon measures. We recognize bonus revenue in the
period we are informed that the bonus has been awarded. Most of our contracts
allow us to invoice our clients on a pro-rata basis for our services.

   We incur significant reimbursable costs, such as on-line media buying and
production costs, which are not reflected in revenue. These costs are
reflected in our accounts receivable, unbilled accounts receivable and
billings in excess of costs. We generally obtain our clients' approval prior
to incurring these costs.

   Professional services costs consist of professional salaries, payroll taxes
and benefits for our professional staff plus other non-reimbursable costs
directly attributable to servicing our clients. In addition to the
compensation of employees engaged in the delivery of professional services,
professional salaries include compensation for selling and management by our
senior account managers and most of our executives. We expect that per capita
professional services costs will increase over time due primarily to wage
increases, particularly among technology professionals.

                                      20
<PAGE>

   Selling, general and administrative expense consists primarily of
administrative and executive compensation, recruiting, professional fees, rent
and office expenses. In 2000, we expect to make significant expenditures for
recruiting and training as we expand our operations. We have incurred
significant costs to expand our operations internationally through our office
in London. We believe that a key source of our growth will be servicing
existing clients on a worldwide basis, as well as attracting new clients in
international markets.

   Stock-based compensation before the recapitalization consisted of annual
profit distributions and appreciation of stock appreciation rights. Stock-
based compensation after the recapitalization consisted primarily of non-cash
compensation arising from stock options granted to employees at exercise
prices below the estimated fair value of the related common stock.

   In connection with the recapitalization we recorded $190.6 million of
goodwill and other intangible assets. This amount, which represents the excess
of purchase price over net assets acquired, is being amortized over two to
seven years.

   We were taxed as an S corporation until January 1999 when we terminated our
S corporation election and became subject to federal taxation. No provision or
liability for federal taxes is reflected for periods prior to 1999. For the
periods prior to 1999, we have recorded provisions, tax assets and liabilities
for Massachusetts and various states where we do business that have a limited
state corporate income and excise tax.

Results of Operations

   The following table sets forth selected items included in our statement of
operations as a percentage of revenue for the periods indicated:

<TABLE>
<CAPTION>
                                                                             Predecessor (Combined)               Company
                                                                        -------------------------------------- -------------
                                                                           Year Ended            Nine Months    Nine Months
                                                                          December 31,              Ended          Ended
                                                                        ---------------------    September 30, September 30,
                                                                        1996    1997    1998         1998          1999
                                                                        -----   -----   -----   -------------- -------------
<S>                                                                     <C>     <C>     <C>     <C>            <C>
Revenue................................................................ 100.0 % 100.0 % 100.0 %     100.0 %        100.0 %
Operating expenses:
  Professional services costs..........................................  52.0    56.9    53.7        55.3           54.7
  Selling, general and administrative expense..........................  49.3    40.1    39.7        35.1           34.3
  Stock-based compensation.............................................   0.8     6.2    21.1         2.6            0.3
  Amortization of intangible assets....................................    --      --      --          --           19.5
                                                                        -----   -----   -----       -----          -----
    Total operating expenses........................................... 102.1   103.2   114.5        93.0          108.8
                                                                        -----   -----   -----       -----          -----
Income (loss) from operations..........................................  (2.1)%  (3.2)% (14.5)%       7.0%          (8.8)%
--------------------------------------------------
                                                                        =====   =====   =====       =====          =====
</TABLE>

   Nine months ended September 30, 1999 compared to nine months ended
September 30, 1998

   Revenue. Revenue for the nine months ended September 30, 1999 increased by
$44.2 million, or 49.3%, to $133.9 million from $89.7 million for the nine
months ended September 30, 1998. The increase was due primarily to growth in
revenue from new and existing clients and the increased demand for Internet-
related services.

                                      21
<PAGE>

   Professional services costs. Professional services costs for the nine
months ended September 30, 1999 increased by $23.6 million, or 47.6%, to $73.2
million from $49.6 million for the nine months ended September 30, 1998.
Professional services costs represented 54.7% of revenue for the nine months
ended September 30, 1999, as compared to 55.3% of revenue for the nine months
ended September 30, 1998. The increase in absolute dollars was due primarily
to an increase in the number of professionals we hired. Professional services
costs decreased as a percentage of revenue for the nine months ended September
30, 1999 due primarily to an increase in employee utilization rates, partially
offset by an increase in average compensation per professional.

   Selling, general and administrative expense. Selling, general and
administrative expense for the nine months ended September 30, 1999 increased
by $14.4 million, or 45.7%, to $45.9 million from $31.5 million for the nine
months ended September 30, 1998. As a percentage of revenue, selling, general
and administrative expense decreased from 35.1% in the 1998 period to 34.3% in
the 1999 period. The increase in absolute dollars for the nine months ended
September 30, 1999 was due primarily to increases in outside fees for
recruiting professionals, the hiring of senior client service executives, rent
and travel costs related to office expansion in New York and the opening of a
new office in London, and our overall growth in administrative headcount. The
decrease as a percentage of revenue was due to the economies of scale
associated with higher revenue levels.

   Stock-based compensation. Stock-based compensation for the nine months
ended September 30, 1999 consisted primarily of non-cash compensation arising
from stock options granted to employees at exercise prices below the estimated
fair value of the related common stock. Stock-based compensation for the nine
months ended September 30, 1998 consisted primarily of profit distributions
and appreciation of stock appreciation rights.

   Amortization of intangible assets. The increase in amortization of
intangible assets resulted from our recapitalization which was effected in
January 1999.

   Interest expense, net. Interest expense, net, for the nine months ended
September 30, 1999 increased by $3.2 million to $5.3 million from $2.1 million
for the nine months ended September 30, 1998. The increase in interest
expense, net, for the nine months ended September 30, 1999 was primarily due
to the interest expense on our long-term borrowings related to the
recapitalization. Additionally, we increased borrowings against our line of
credit to fund increased working capital needs.

   Provision for income taxes. The income tax provision for the nine months
ended September 30, 1999 was $1.8 million. For the nine months ended September
30, 1998, we were an S corporation. Therefore, we were only taxable at the
state level, and we did not provide for any federal income taxes in this
period.

   Year ended December 31, 1998 compared to year ended December 31, 1997

   Revenue. Revenue for 1998 increased by $21.1 million, or 20.8%, to $122.3
million from $101.2 million for 1997. The increase in revenue was due
primarily to growth in revenue from new and existing clients and increased
demand for Internet-related services. In 1997, we sought to expand our client
base and were successful in developing relationships with new, large-scale
clients. The revenue growth in 1998 as compared to 1997 was primarily
attributable to building those relationships.

   Professional services costs. Professional services costs for 1998 increased
by $8.1 million, or 14.0%, to $65.7 million from $57.6 million for 1997.
Professional services costs represented 53.7% of revenues for 1998 as compared
to 56.9% of revenues in 1997. The increase in absolute dollars for 1998 was
due primarily to an increase in the number of professionals we hired. The
decrease as a percentage of revenue for 1998 was due primarily to an increase
in employee utilization rates.

   Selling, general and administrative expense. Selling, general and
administrative expense for 1998 increased by $7.9 million, or 19.6%, to $48.5
million from $40.6 million for 1997. As a percentage of revenue, selling,
general and administrative expense was not materially different from 1997 to
1998. The increase in

                                      22
<PAGE>

absolute dollars was due primarily to a one time payment to senior management
in connection with the recapitalization. This increase was also due to general
growth of the business, including opening a new office in New York, increased
recruiting costs and expanded adminstrative headcount.

   Stock-based compensation. Stock-based compensation in 1998 consisted
primarily of profit distributions and appreciation of stock appreciation
rights from 1997 to 1998. Stock-based compensation in 1997 included profit
distributions on stock appreciation rights and the repurchase of equity held
by selected employee shareholders.

   Interest expense, net. Interest expense, net, for 1998 increased by $0.3
million to $2.7 million from $2.4 million in 1997. The increase in interest
expense, net, was primarily due to increased borrowings to fund increased
working capital needs during 1998, offset by a reduction in interest rates.

   Provision for income taxes. The income tax benefit for 1998 was $1.4
million compared to a tax benefit of $114,000 in 1997. We were an S
corporation in both 1998 and 1997. Therefore, we were only taxable at the
state level, and we did not provide for federal income taxes in either of
these years.

   Year ended December 31, 1997 compared to year ended December 31, 1996

   Revenue. Revenue for 1997 increased by $18.0 million, or 21.7%, to $101.2
million from $83.2 million for 1996. The increase was due primarily to the
addition of new clients and increased demand for Internet-related services.

   Professional services costs. Professional services costs for 1997 increased
by $14.3 million, or 33.1%, to $57.6 million from $43.3 million for 1996.
Professional services costs represented 56.9% of revenue for 1997 as compared
to 52.0% of revenue in 1996. The increase in absolute dollars was due
primarily to an increase in the number of professionals we hired. These costs
increased as a percentage of revenue due to decreased employee utilization
rates resulting from the hiring of a number of new professionals in 1997 ahead
of business demand.

   Selling, general and administrative expense. Selling, general and
administrative expense for 1997 decreased by $400,000, less than 1.0%, to
$40.6 million from $41.0 million for 1996. As a percentage of revenue,
selling, general and administrative expense decreased from 49.3% in 1996 to
40.1% in 1997 primarily due to reduced founders' compensation, offset by
increased recruiting costs, investments in our infrastructure and
administrative staff, expansion of our operations in Boston, and the opening
of an office in San Francisco.

   Stock-based compensation. Stock-based compensation in 1997 included profit
distributions on stock appreciation rights and the repurchase of equity held
by selected employee shareholders. Stock-based compensation in 1996 related
principally to the repurchase of equity held by an employee shareholder.

   Interest expense, net. Interest expense, net, for 1997 was $2.4 million, as
compared to interest expense, net, of $1.3 million in 1996. The increase in
interest expense, net, was primarily due to increased borrowings against our
line of credit and a long-term note to fund growth in working capital.

   Provision for income taxes. The income tax benefit for 1997 was $114,000
compared to a tax provision of $160,000 in 1996. We were an S corporation in
both 1997 and 1996. Therefore, we were only taxable at the state level, and we
did not provide for any federal income taxes in either of these years.

                                      23
<PAGE>

Quarterly Results of Operations

   The following table sets forth a summary of our unaudited quarterly
operating results for each of the three quarters ended September 30, 1999 both
in absolute dollars and as a percentage of our revenue in each quarter. This
information has been derived from our unaudited interim financial statements
which, in our opinion, have been prepared on substantially the same basis as
the audited financial statements contained elsewhere in this prospectus and
include all normal recurring adjustments necessary for a fair presentation of
the financial information for the periods presented. The results for any
quarter are not necessarily indicative of future quarterly results of
operations, and we believe that period-to-period comparisons should not be
relied upon as an indication of future performance that may be expected for
any future period.

<TABLE>
<CAPTION>
                                              Three Months Ended
                                -----------------------------------------------
                                March 31, 1999 June 30, 1999 September 30, 1999
                                -------------- ------------- ------------------
                                    (in thousands, except percentage data)
<S>                             <C>            <C>           <C>
Statement of operations data:
Revenue........................    $38,813        $44,047         $51,047
Operating expenses:
  Professional services costs..     20,041         24,350          28,847
  Selling, general and
   administrative expense......     13,961         15,593          16,336
  Stock-based compensation ....        --              35             315
  Amortization of intangible
   assets......................      8,733          8,733           8,734
                                   -------        -------         -------
Total operating expenses.......     42,735         48,711          54,232
                                   -------        -------         -------
Loss from operations...........     (3,922)        (4,664)         (3,185)
Other income (expense):
  Interest income..............        --             --               12
  Interest expense.............     (1,647)        (1,874)         (1,823)
                                   -------        -------         -------
                                    (1,647)        (1,874)         (1,811)
                                   -------        -------         -------
Loss before provision for
 income taxes..................     (5,569)        (6,538)         (4,996)
Provision for income taxes.....       (591)          (591)           (591)
                                   -------        -------         -------
Net loss.......................    $(6,160)       $(7,129)        $(5,587)
                                   =======        =======         =======
As a percentage of revenue:
Revenue........................      100.0 %        100.0 %         100.0 %
Operating expenses:
  Professional services costs..       51.6           55.3            56.5
  Selling, general and
   administrative expense......       36.0           35.4            32.0
  Stock-based compensation ....        --             --              0.6
  Amortization of intangible
   assets......................       22.5           19.8            17.1
                                   -------        -------         -------
Total operating expenses.......      110.1          110.5           106.2
                                   -------        -------         -------
Loss from operations...........      (10.1)         (10.5)           (6.2)
Other income (expense):
  Interest income..............        --             --              --
  Interest expense.............       (4.2)          (4.3)           (3.6)
                                   -------        -------         -------
                                      (4.2)          (4.3)           (3.6)
                                   -------        -------         -------
Loss before provision for
 income taxes..................      (14.3)         (14.8)           (9.8)
Provision for income taxes.....       (1.6)          (1.4)           (1.1)
                                   -------        -------         -------
Net loss.......................      (15.9)%        (16.2)%         (10.9)%
                                   =======        =======         =======
</TABLE>

   Revenue. Our growth in revenue on a quarterly basis was primarily due to
increased demand for our Internet professional services. We recognize bonus
revenue in the period we are informed that the bonus has been awarded.
Accordingly, we expect that our quarterly revenue in the first and second
quarters each year, including 1999, will be positively impacted compared to
the third and fourth quarters.


                                      24
<PAGE>

   Professional services costs. Professional services costs for the quarters
ended March 31, June 30 and September 30, 1999 increased in absolute dollars
as we continued to hire professionals to keep up with client demand. As a
percentage of revenue, professional services costs have fluctuated primarily
based on employee utilization, investments in the opening of our London office
and the timing of recognition of bonus revenue. We expect professional
services costs as a percentage of revenue to increase in the near term as we
hire new professionals and additional senior client service executives to
enhance our service capabilities and expand our operations.

   Selling, general and administrative expense. Selling, general and
administrative expense has increased in absolute dollars in the quarters ended
March 31, June 30 and September 30, 1998 primarily due to increased recruiting
costs, growth in administrative headcount, and rent and other expense related
to regional office expansions. As a percentage of revenue, selling, general
and administrative expense has decreased as a percentage of revenue through
the quarters primarily due to the economies of scale associated with higher
revenue levels.

Liquidity and Capital Resources

   From inception through January 6, 1999, we funded our operations primarily
through cash provided by operations, notes from shareholders and bank
borrowings. In connection with the recapitalization, we established credit
facilities totalling $93.4 million to repay our existing bank borrowings,
repay our notes to our shareholders, make transaction payments and repurchase
shares in connection with the recapitalization and provide working capital to
fund our ongoing operations. Long-term debt also includes an amount related to
the build out of our Boston office for costs incurred in excess of the lease
allowance.

   Our operating activities used cash of $9.6 million in 1996. They provided
cash of $1.5 million in 1997 and $8.2 million in 1998. For the first nine
months of 1999, operating activities used cash of $8.9 million. We experienced
an increased use of cash in 1999 primarily due to an expansion of our
business.

   Additionally, distributions paid to shareholders used cash of $315,000 in
1998 and $2.5 million for the nine months ended September 30, 1999.

   We incurred capital expenditures of $6.9 million in 1996, $7.9 million in
1997, $6.3 million in 1998 and $5.6 million in the first nine months of 1999.
These expenditures were incurred primarily for computer equipment,
telecommunications equipment, furniture and fixtures, and leasehold
improvements to support our growth. We expect that our capital expenditures
will increase to the extent that we increase headcount and expand our
operations. We also expect expenditures for technology to increase as we
expand our Internet capabilities. Finally, we recently executed a new lease to
consolidate our operations in New York. The lease commences on approximately
July 1, 2000. We expect to incur significant leasehold expenditures in 2000
related to the relocation of our New York and London offices.

   We believe that the proceeds of this offering and funds that are available
under our line of credit will be sufficient to finance our working capital and
capital expenditure requirements for the next twelve months.

Market Risk

   We utilize an interest rate swap agreement to fix the interest rate on
certain variable rate term loans in order to minimize the effect of changes in
interest rates on earnings.

   Our market risk exposure from the interest rate swap is assessed in light
of the underlying interest rate exposures. We believe our credit risk is
minimized because the agreement we have is with a major financial institution.
We monitor the credit worthiness of this financial institution and anticipate
full performance.

                                      25
<PAGE>

Year 2000 Compliance

   Year 2000 Issue. The year 2000 issue is a result of computer programs or
systems which store or process date-related information using only the last
two digits to refer to a year. These programs or systems may not be able to
distinguish properly between a year in the 1900's and a year in the 2000's.
Failure of these programs or systems to distinguish between the two centuries
could cause the programs or systems to create erroneous results or even to
fail.

   Our State of Readiness. We have established a year 2000 readiness team to
carry out a program for the assessment of our vulnerability to the year 2000
issue and remediation of identified problems. The team consists of senior
information technology and business professionals and meets on a regular
basis. An outside consultant is also working with the readiness team on a
temporary basis to assist them in carrying out their tasks.

   The readiness team has developed a program with the following key phases to
assess our state of year 2000 readiness:

  .  develop a complete inventory of our hardware and software, and assess
     whether that hardware and software is year 2000 ready;

  .  test our internal hardware and software which we believe have a
     significant impact on our daily operations to assess whether it is year
     2000 ready;

  .  upgrade, remediate or replace any of our hardware or software that is
     not year 2000 ready; and

  .  develop a business continuity plan to address possible year 2000
     consequences which we cannot control directly or which we have not been
     able to test or remediate.

   We have completed all of the tasks which our program requires, including:

  .  we have completed the inventory of hardware and software at all of our
     locations and have determined that all of the inventoried hardware and
     software which we believe have a significant impact on our daily
     operations are year 2000 ready or can be made ready with minimal changes
     or replacements, based on our vendors' web site certifications
     statements and commercially available year 2000 testing products;

  .  we have developed a list of all vendors which we deem to have a
     significant business relationship with us. Of the approximately 21
     vendors we have identified, we have obtained web site certifications or
     obtained assurances with respect to the year 2000 readiness of products
     or services that we purchase from those vendors;

  .  we have completed testing and implementation of any changes necessary to
     our internal hardware and software which we believe have a significant
     impact on our daily operations to confirm their year 2000 readiness;

  .  we have completed an internal review to determine the commitments we
     have made to our customers with respect to the year 2000 readiness of
     solutions which we have provided to those customers; and

  .  we have formulated a business continuity plan that encompasses our
     strategy for preparation, notification and recovery in the event of a
     failure due to the year 2000 issue. The plan includes procedures to
     minimize downtime and expedite resumption of business operations and
     other solutions for responding to internal failures in our internal
     information technology department as well as widespread external
     failures related to the year 2000 issue.

   Costs. To date, we have incurred approximately $3.3 million in connection
with our year 2000 readiness program. This amount includes internal labor
costs, outside consulting costs and additional hardware and software
purchases. We do not expect to incur any material additional expenses in
connection with our year 2000 readiness program, although there can be no
assurance that we will not be required to do so.

   Risks. If we fail to solve a year 2000 problem with respect to any of our
systems, we could experience a significant interruption of our normal business
operations. We believe that the most reasonably likely worst case scenarios
related to the year 2000 issue for our business are as follows:

                                      26
<PAGE>

  .  if a solution which we provided to a client causes damage or injury to
     that client because the solution was not year 2000 compliant, under the
     terms of some agreements we could be liable to the client for breach of
     warranty; and

  .  if there is a significant and protracted interruption of
     telecommunication services to our main office, we would be unable to
     conduct business because of our reliance on telecommunication systems to
     support daily operations, such as internal communications through e-
     mail.

                                      27
<PAGE>

                                   BUSINESS

Overview

   Digitas is a leading Internet professional services firm that provides
integrated strategy, technology and marketing solutions to Fortune 100 and
other industry leading companies that have embraced the Internet as a
principal means of business transformation. We help our clients leverage their
existing asset base and the Internet to develop stronger and more profitable
customer relationships. By assisting our clients in developing a "bricks and
clicks" business strategy, we help them establish a competitive advantage in
the new digital economy. We draw on our comprehensive Internet professional
services capabilities and marketing experience to provide end-to-end solutions
that integrate digital strategy, technology and infrastructure, multi-channel
marketing execution and measurement.

   We develop large-scale, long-term, strategic relationships with a select
group of clients. Our clients include industry leaders such as American
Express, AT&T, Charles Schwab & Co. Inc., General Motors, Johnson & Johnson,
L.L. Bean, and Neiman Marcus. We employ over 1,200 professionals and are
headquartered in Boston, Massachusetts with offices in New York City, San
Francisco, Salt Lake City and London.

Industry Background

   The Internet is fundamentally changing the way consumers and businesses
interact, introducing a new means of communicating, obtaining information,
purchasing goods and services, providing customer support, and soliciting
feedback. International Data Corporation, or IDC, estimates that the number of
Internet users will grow from 142 million at the end of 1998 to 500 million at
the end of 2003 and that revenues generated from Internet commerce in 2003
will exceed $2.3 trillion. The emergence of the Internet is also redefining
the core economics of businesses and forcing companies to re-evaluate and
transform the way they have traditionally conducted business and interacted
with their customers, suppliers and distribution partners.

   While businesses were early to embrace the Internet as a new commercial
medium, their ability to take advantage of its full potential continues to
evolve. Initially, businesses employed internal information technology
departments or hired outside Web site design firms to develop corporate Web
sites that were viewed as additional means of advertising or promoting their
businesses. As the number of Internet users has increased and corporate Web
sites have drawn more visitors, businesses have begun to view the Internet as
another distribution channel, or an on-line storefront, through which to
conduct customer transactions. The ability to conduct transactions over the
Internet, however, requires the integration of client/server systems with Web
site design and infrastructure. Most internal information technology
departments do not have the resources to perform this integration work and as
a result many companies are seeking the assistance of outside Internet
professional services providers. IDC defines Internet services as the
consulting, design, systems integration, support, management and outsourcing
services associated with the development, deployment and management of Web
sites. IDC expects the worldwide market for Internet services to grow at a
five-year compounded annual rate of 59%, from $7.8 billion in 1998 to $78.5
billion in 2003.

   We believe most businesses must transact with customers over the Internet
to retain and enhance their competitive positions. Widespread adoption of the
on-line transaction model, however, is only the beginning of the Internet's
transformation of traditional business models. While many companies have built
on-line storefronts, most still view them as simply another independently
operated channel for enabling transactions and interacting with customers.
This business model prevents the new on-line business from capitalizing on the
power of the enterprise's existing assets. To capture the full potential of
the Internet and maximize customer value, companies must view the Internet as
a principal means of fundamentally redefining the way they develop customer
relationships, manage brand names and build a sustainable competitive
advantage. The transformation to a "bricks and clicks" business model, in
which a company's existing assets are integrated with a digital strategy, is
particularly challenging for large businesses that have made significant
investments in existing sales

                                      28
<PAGE>

forces, marketing strategies, brand names, supply chain management systems,
distribution channels, and data management systems. However, it is also these
companies that stand to gain the most from a fully integrated "bricks and
clicks" business model that transforms customer relationships.

   At a time when companies need a service provider to do more than build a Web
site or enable on-line transactions, we believe few Internet professional
services providers have the depth of resources and range of services necessary
to address the large scale engagements and demands of Fortune 100 companies on
an ongoing basis. For instance, marketing firms typically provide off-line or
on-line services, but not both. Web design firms typically specialize only in
the front-end design of on-line storefronts. Similarly, traditional information
technology service providers typically focus only on the enhancement of legacy
systems and the implementation of traditional business applications. Strategic
consulting firms typically provide high level recommendations but are not held
accountable for implementation or results. Finally, Internet professional
service providers typically build e-commerce business systems in which on-line
business is conducted independently of the rest of the company and without the
benefit of the company's traditional assets.

   We believe that in the new digital economy there is a need for an innovative
Internet professional services provider that has the scale, breadth of
experience and expertise to help companies understand and develop the potential
of the Internet as a part of their overall business strategy and to leverage
the power of their existing assets to drive growth, maximize customer value and
build a sustainable competitive advantage.

The Digitas Solution

   We help our clients transform their businesses and customer relationships by
developing and implementing strategies to build on-line business solutions
linked to their traditional assets. We serve as a primary strategic partner to
our clients and utilize our strategic insight, marketing expertise, creativity
and execution skills to help them evaluate their business strategy, the value
they offer to their customers, their brand and the initiatives required to
succeed in the marketplace. We work with our clients to create a seamless
customer experience across all points of contact so that our clients can
develop higher value, long-term customer relationships. In addition, we seek to
quantify the value our solutions create and thereby enable our clients to
measure their return on investment. As a result of our broad-based perspective
and partnership approach, we have been able to couple development of
overarching interactive strategies with fast-paced execution that change the
way our clients acquire new customers, increase brand loyalty and build a
competitive economic model.

   In redefining a client's business model, we provide a fully-integrated, end-
to-end solution, the key elements of which are illustrated in the following
chart:

                    "Bricks and Clicks" Business Integration


                              [CHART APPEARS HERE]

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<PAGE>

   Define digital business strategy. We help our clients understand the impact
of the Internet on their core business models and define new business
strategies for the digital economy. Rather than focusing on a narrow
technology or marketing strategy, or the implementation of a single project,
we employ a broad-based approach grounded in a thorough understanding of our
clients' overall business strategy and competitive environment. We work with
members of our clients' senior management who are committed to transforming
their business strategies and organizations.

   Create enterprise-wide customer value propositions. Based on these new
strategies, we help our clients develop new customer value propositions that
involve more than creating attractive on-line storefronts. We seek to enhance
customer loyalty and generate new business opportunities by taking advantage
of existing assets such as distribution channels, customer service networks
and customer information systems. We believe that our customer-centric
approach allows us to deliver solutions that create economic value for our
clients.

   Build new technology and marketing infrastructure. Our solutions often
require us to build new technology and marketing infrastructures for our
clients. As part of our solution, we develop creative Web sites that enhance
our clients' brands and build and integrate electronic customer relationship
management, or eCRM, systems databases that are designed to manage customer
relationships. In developing new infrastructures, we also create links to
legacy information systems and other existing infrastructure.

   Implement solutions across client enterprise. Solutions are most effective
when they are implemented consistently throughout a client's organization. We
help our clients implement solutions across their enterprises by providing
appropriate training, organizational alignment and support. We coordinate the
efforts of various client businesses to create customer oriented applications
with a consistent corporate message. We also create and execute customized
pilot programs designed to test our solutions prior to implementation across
the enterprise.

   Develop integrated marketing plan. We design integrated marketing plans
that typically involve identifying customer segments, developing marketing
strategies and optimizing on-line media planning and channel allocation,
including mix, messaging and frequency.

   Execute across marketing and service channels. We leverage our on-line
media buying, design and creative services and event sponsorships to market
seamlessly across multiple channels to help our clients build relationships
with their customers.

   Performance measurement. Through every step of our solution, we measure the
value being delivered to our clients. We continually work with our clients to
determine the relevant metrics and our performance against those metrics. We
collect data frequently and use it to continually refine our solution and
maximize our clients' return on investment.

Strategy

   We intend to be the leading provider of digital strategy, technology and
infrastructure and integrated marketing solutions to industry-leading
companies. Our strategies for achieving this objective are as follows:

   Expand relationships with our existing clients. Our current client list
includes industry leaders with whom we have developed multi-year, large-scale
relationships. In 1999, approximately 89% of our revenue came from clients
with whom we have previously worked. We believe there are significant
opportunities for additional growth with our existing clients as they
transform their businesses and we add additional capabilities.

   Select additional industry leading clients to build new long-term client
relationships. We will seek relationships with additional industry leading
companies which we believe will be successful in the digital economy. These
companies could include additional Fortune 100 companies or emerging
companies, including "dot-coms," which are poised to be leaders in their
respective industries. In developing new client relationships,

                                      30
<PAGE>

we will continue to be highly selective and will seek industry leading clients
who are committed to a long-term and close working relationship with us. We
believe that our focus on industry leading companies provides us with the best
opportunities to leverage the depth of our expertise, attract outstanding
professionals, enhance our reputation and have an impact on the industries in
which our clients' operate.

   Maintain focus on large-scale, long-term relationships. We will maintain
our focus on large-scale, long-term client relationships. This strategy allows
us to build in-depth, client-specific knowledge, create more fully integrated
solutions and develop closer partnerships with our clients. We are also
extremely focused on quality, and working on a small number of long-term,
large-scale engagements allows us to devote the time and resources necessary
to develop innovative solutions which fully satisfy the needs of our clients.

   Maintain and grow a creative corporate culture. We have created a corporate
culture that attracts intelligent, motivated individuals and fosters
creativity and innovation. To retain this culture and uphold our high
standards of quality as we grow our business, we must continue to attract and
retain qualified individuals with superior creative, technological and
management skills. By hiring talented individuals and providing them with
relevant training and support, we believe we have created a scalable hiring
strategy without compromising our high standards.

   Expand and enhance our capabilities. We believe there is a significant
opportunity to further extend our client relationships by providing new on-
line and off-line services and capabilities to our new and existing clients.
We intend to expand our capabilities in a number of areas including supply
chain management, Internet workflow management, measurement tools, analytical
capabilities and channel optimization. Towards this end, we have a dedicated
team of technical specialists who evaluate new technologies and unique
applications for these technologies.

   Broaden our global reach. We seek to further broaden our global presence by
opening new offices in strategic locations. We currently expect to open two
new offices in 2000 to support our international efforts. We believe that we
need to have a local presence in key markets to meet the needs of our
multinational clients both globally and locally. In addition, we believe our
local presence will also enable us to build new relationships with industry
leading companies in foreign markets.

Services

   We provide our clients with end-to-end solutions that combine a broad range
of services in digital strategy, technology, marketing and measurement. The
following table is a brief summary of our capabilities in our four service
categories.

<TABLE>
<CAPTION>
                                Technology and               Integrated                 Performance
      Digital Strategy          Infrastructure                Marketing                 Measurement
      ----------------          --------------               ----------                 -----------
   <S>                     <C>                      <C>                           <C>
   .  Business             .  Web Site              .  Marketing Plan Development .  Web Site Usability
      Transformation          Development                                            Research
   .  e-commerce Strategy  .  eCRM                  .  Media Planning and         .  Web Site Performance
                                                       Buying                        and Diagnostics
   .  Enterprise Customer  .  User Interface Design .  On-line and Off-line       .  Consolidated Cross-
      Management                                       Creative                      Channel Reporting
   .  Operating Model      .  Customer Database     .  Events, Partnerships       .  Data Analytics
      Definition              Development              and Promotions
                           .  Application                                         .  Channel Optimization
                              Development
                           .  Solutions Integration
</TABLE>

                                      31
<PAGE>

  Digital Strategy

   We work closely with our clients' senior management to gain an in-depth
understanding of their enterprise-wide business objectives and competitive
environment. This knowledge is used as the basis for establishing business
strategies that capitalize on the power of the Internet to build customer
value propositions and improve our clients' competitive positions in the
digital economy. Our digital strategy capabilities include the following:

   Business transformation. We analyze our clients' existing assets and value
chain to identify opportunities for a digital strategy. We then utilize our
expertise in technology, infrastructure, customer experience, and integrated
marketing to identify the economic rationale and create a detailed plan of
action to effect fundamental business transformation.

   e-commerce strategy. We define and develop the most effective strategy for
marketing, transacting and distributing products and services over the
Internet. This may include enabling direct customer transactions or supporting
the off-line channel sales cycle.

   Enterprise customer management. We define and develop a consistent and
branded relevant customer experience across all points of contact to create
value for both our clients and their customers. We also identify opportunities
for collecting and leveraging customer data to create and enhance customer
value propositions and returns on investments for the clients' businesses.

   Operating model definition. We define new organizational structures,
business processes and management systems that are required to successfully
execute the digital strategy, and we integrate these into the existing
business. We also examine existing operational practices to identify
opportunities to improve services and reduce costs.

  Technology and Infrastructure

   We identify and implement innovative technology solutions within the broad
strategic context of our clients' businesses. We design the required
technology and infrastructure and select and manage external vendors to
support seamless dialogue and data management across marketing channels. We
also provide training and process management, organizational alignment and
channel implementation support. Our specific technology and infrastructure
capabilities include the following:

   Web site development. We build on-line value propositions for our clients
by designing and developing large-scale, complex e-commerce enabled Web sites
that utilize state of the art technologies and leverage existing assets.

   Electronic customer relationship management (eCRM). We develop and
implement customized applications to assist clients in building a seamless,
interactive and value-based dialogue with their customers across all
distribution channels and geographies. We also implement customized software
applications to manage marketing campaigns. We try to remain abreast of the
latest tools and technologies available to help manage customer relationships
and ensure that our clients are industry leaders in using these technologies.

   User interface design. We design and develop functional, user-friendly Web
sites, navigation systems and graphical user interfaces to create a positive
customer experience and effectively meet our clients' specific business
objectives.

   Customer database development. We design and develop customer databases to
collect and analyze customer profile information, including demographic
information, on-line and off-line transactional history and Web use patterns.
The databases are designed to allow increased access to information across all
marketing channels and thereby optimize customer interaction.

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<PAGE>

   Application development. We create customized applications, such as
proprietary content databases, specialized search functions and registration
engines, to improve customer interactions with our clients' businesses.

   Solutions integration. We frequently select and manage third party vendors
to assist our clients in integrating existing enterprise/legacy systems with
new Web and eCRM applications.

  Integrated Marketing

   Our extensive marketing, media and creative capabilities and experience
allow us to deliver measurable increases in customer value and loyalty through
innovative marketing solutions powered by customer insight, marketing
analytics and operational expertise. Our marketing capabilities include the
following:

   Marketing plan development. We develop integrated, measurable, marketing
campaigns across all direct customer channels, including Web, teleservices,
advertising and direct response channels.

   Media planning and buying. We design media campaigns across all channels
and allocate client expenditures to optimize customer response. We are a large
purchaser of on-line media, which enables us to negotiate discounts which we
pass on to our clients.

   On-line and off-line creative. We leverage our creative expertise in
marketing executions across numerous channels, clients and technologies. We
provide creative services to assist our clients in branding and marketing
their products and services through both on-line channels, such as e-mail,
Internet, and intranet, and off-line channels, such as teleservices, direct
response, print and television, catalogues and direct mail.

   Events, partnerships and promotions. We plan events and negotiate
partnerships and promotions that reinforce brand attributes, generate customer
interest and improve business results.

  Performance Measurement

   Performance measurement quantifies the results of our solutions to
determine their effectiveness and to illustrate to clients their return on
investment. We leverage our direct marketing heritage, extensive array of
proprietary methodologies and working relationships with other measurement
tool providers to provide meaningful measurement of the impact our solutions
have on our clients' businesses. Our specific measurement capabilities
include:

   Web site usability research. Through rapid prototyping and live customer
feedback, we identify opportunities to optimize Web site usability prior to
the launch of our clients' Web sites.

   Web site performance and diagnostics. We measure the overall effectiveness
of a Web site with its targeted users and identify areas for potential
upgrades.

   Consolidated cross-channel reporting. We design reporting strategy and
infrastructure and implement integrated management reporting systems across
our clients' businesses.

   Data analytics. We analyze customer behavior and transactional data to
improve effective targeting, messaging, and personalization.

   Channel optimization. We measure performance across multiple marketing and
distribution channels to ensure ongoing optimization of marketing resources.

                                      33
<PAGE>

Clients, Marketing and Sales

   We primarily market our services to Fortune 100 and other industry leading
companies. We seek clients that are committed at senior levels to building
long-term partnerships with us to leverage their existing traditional asset
bases to take advantage of the Internet's significant new opportunities for
customer interaction. We are also seeking to work with Internet-based companies
to enhance their customer relationships. In particular, we seek to work with
companies operating in industries in which the economics of customer loyalty
are most compelling, thereby providing us with the opportunity to greatly
impact market share and the return on their customer base investments. These
industries include financial and consulting services, software, technology and
telecommunications, travel and leisure, industrial and consumer brands and
retail.

   Our current clients include, among others, the following companies:

<TABLE>
<S>  <C>
       Aetna                             Harcourt
       American Electric Power           Johnson & Johnson
       American Express                  L.L. Bean
       Aquent                            Lifetime Rewards.com
       AT&T                              Morgan Stanley Dean Witter
       Charles Schwab & Co. Inc.         Neiman Marcus
       General Motors

</TABLE>
   Our results of operations and our business depend on our relationship with a
limited number of large clients. Of our total revenues during the first nine
months of 1999, American Express accounted for approximately 24%, General
Motors accounted for approximately 22% and AT&T accounted for approximately
16%.

   We do not have a separate sales and marketing force. Rather, our
relationship managers are primarily responsible for our marketing and sales
efforts. Members of our senior management team also market our services through
their speaking engagements at industry conferences. Additionally, we rely on
our strong reputation, quality client base and proven results to retain our
existing clients and develop new client relationships. In fact, many of our
existing clients have recommended our services to potential clients.

Client Case Studies

   American Express

   American Express is a world leader in charge and credit cards, travel-
related services, financial planning, investment products, insurance and
international banking. It has built one of the world's preeminent service
brands.

   Digitas began its relationship with American Express in 1981 by working on
direct marketing programs. In May 1998, we expanded our relationship with
American Express by working on various aspects of its Web site. Examples of
specific initiatives include:

  .  User interface and ease of navigation. We helped American Express
     implement a customer-centric navigation approach that segmented
     personal, small business, and corporate customers to address the needs
     of each group separately. This new approach created a single user
     experience across all American Express business units.

  .  "MyAmex". We worked with American Express to create and deploy "MyAmex"
     as a customer's personalized gateway to the company, allowing quick
     access to those elements of site content and functionality most relevant
     to individual customers.

  .  Web site templates. We partnered with American Express to develop style
     guide standards that would be used for all site design across
     americanexpress.com on a global basis. More specifically, we designed
     templates and components that we built into American Express' new
     content management utility.

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<PAGE>

  .  Blue from American Express. We helped design and implement a marketing
     campaign for the company's new Blue credit card offering utilizing both
     direct mail and on-line marketing channels. This included assisting in
     the development of a lifecycle management strategy, designing and
     implementing an on-line simulcast of a concert in Central Park to launch
     Blue, and creating the blue.com site.

  .  Measurement engine. We worked with American Express to develop a
     measurement plan and select a reporting utility to measure performance
     across americanexpress.com, including the initial reporting templates.

   We continue to work with American Express as its agency of record for
direct and on-line marketing initiatives.

  General Motors

   General Motors Corporation is the world's largest full-line vehicle
manufacturer. General Motors invests significant amounts each year on
"Customer Influence" through advertising, field sales and dealer support,
sales incentives, relationship marketing, event sponsorship and promotional
activities. General Motors has recognized, however, that the Internet is
transforming the vehicle manufacturing, distribution, and sales landscape and
that these traditional methods of customer influence must be integrated into
the digital world to remain effective.

   Over the past three years, Digitas has developed a broad and deep strategic
and operational partnership with numerous business units of General Motors to
help capture the power of the digital economy and leverage the value of their
traditional marketing investments and assets. The following descriptions
illustrate two isolated segments of our broad strategic relationship with
General Motors.

   Enterprise customer management

   At the beginning of the second quarter of 1998, we began working with
General Motors' Corporate Advertising and Marketing Group to do the following:

  .  Develop vision and digital strategy. We created an executive strategy
     for customer relationship management, which became the founding charter
     of General Motors' Global Enterprise Customer Management Group
     established in January 1999.

  .  Plan and execute marketing planning programs. Over the past year, we
     have designed and implemented cross-divisional, channel integrated
     marketing programs at both the regional and national levels.

  .  Design customer management system database. We designed General Motors'
     centralized household vehicle customer database, which enabled General
     Motors to identify significant customer and prospect opportunities, use
     a single platform for common measurement and collect and store
     information about customer behavior.

  .  Build multi-channel lead management system. We designed and managed the
     construction of an automated lead management system which provides
     General Motors' national and regional enterprise customer management and
     divisional marketing initiatives with tracking, treatment, and
     measurement capabilities.

  .  Design and implement new marketing segmentation and measurement
     processes. To help General Motors take full advantage of the new
     strategies and systems introduced, we implemented new processes for
     modeling and segmenting the customer and prospect base and for managing
     marketing investments to assist General Motors in planning, executing,
     measuring and continually improving its multi-channel initiatives.

                                      35
<PAGE>

   Pontiac GMC vehicle division

   We have completed approximately 125 initiatives for Pontiac GMC, many of
which are of similar scope and style to the two Pontiac initiatives described
below.

  .  Aztek pre-launch Web site and reporting. The Aztek Web site was an on-
     line experiment designed to test a new and more efficient way of
     introducing new vehicles to the market and to pioneer the use of
     customer feedback in the design of vehicles. Pontiac previewed the
     concept car at the 1999 Detroit Auto Show. To leverage the resulting
     media attention, Digitas built a Web site and collected on-line audience
     comments and feedback. As a result, Pontiac gained real-time knowledge
     of customer impressions and preferences. This information drove further
     evaluation of the vehicle design and will, ultimately, influence the
     consumer launch of the car.

  .  Sunfire eCare program. Pontiac targets young, first-time car buyers with
     its Sunfire model. To provide proactive and reactive customer care for
     this valuable demographic group, we implemented an innovative Web site
     which incorporates a real-time chat/call center to answer first time
     purchasers' questions. Call center agents can provide a caller with
     information and images in real time on a caller's computer, making
     communications more informative and valuable and potentially resulting
     in more sales.

   General Motors reports that our work to date has had a significant economic
impact on them. They believe that the replacement of multiple, redundant
legacy database systems with a centralized enterprise management system is
leading to substantial savings and improved access to and quality of
information. In particular, General Motors has seen improved customer loyalty,
higher customer conversion rates, lower costs to acquire new or re-gain former
customers, greater incremental sales per dollar invested, and an increasing
number of cross-sales. Through our interactive relationship, Digitas has
helped Pontiac become one of the leading General Motors divisions in terms of
Internet use. Although our relationship with General Motors is already very
large, we believe it is in its early stages and has both opportunities for
continued growth within our current relationships as well as opportunities for
additional relationships with other divisions.

   Neiman Marcus Group

   As a leader in the luxury fashion and apparel industry, Neiman Marcus has
built an enviable customer franchise by offering world renowned designer
brands and providing a best-in-class personalized shopping experience. In
early 1999, Neiman Marcus decided to take advantage of the opportunities
offered by the Internet to reach new customers and to enhance its
relationships with existing customers.

   In April 1999, Neiman Marcus Group retained Digitas as its overall
strategic and tactical partner to help define their digital strategy. The
solution we offered included the following:

  .  Develop digital strategy. We worked with Neiman Marcus to define a
     digital strategy which leveraged the Neiman Marcus brand to establish
     Neiman Marcus as the premier lifestyle platform for affluent consumers
     on the Web. Our strategy was to establish for Neiman Marcus a complete
     e-commerce organization which included neimanmarcus.com, a Web site that
     is fully integrated with the existing Neiman Marcus store and catalogue
     businesses.

  .  Develop creative and innovative Web site. We focused our creative
     efforts on developing a Web site that both offers users a high-end
     shopping experience and enhances the Neiman Marcus brand name. The Web
     site offers customers an easy to use interface, quick transaction times
     and information concerning specific product availability. To set the
     standard in on-line service while taking advantage of existing store
     inventory and fashion expertise, we worked with Neiman Marcus to develop
     the Neiman Marcus Virtual Studio. The Studio uses new interactive and
     visual telepresence technology for virtual merchandising and live
     assistance to connect customers with store associates. Users can either
     phone, e-mail, or chat on-line in real-time with sales associates.

                                      36
<PAGE>

  .  Design and build e-commerce infrastructure. We worked with Neiman Marcus
     to design and build an e-commerce organization and technology
     infrastructure that included merchandising, content management, eCare
     and site management processes. In addition, we integrated the Web site
     with catalogue and store databases to promote seamless customer service.

  .  Coordinated cross-channel Web marketing campaign. We worked with Neiman
     Marcus to design a comprehensive cross-channel Web marketing campaign
     which utilized on-line and off-line techniques to drive customers to the
     Neiman Marcus Web site and which was coordinated with existing customer
     mailings, special in store and top customer events, and banner ads and
     sponsorships.

   Through the implementation of our solution, we believe that Neiman Marcus
will be able to penetrate geographic locations not served by its stores and
improve its operating efficiency, marketing results and the quality of service
provided to its customers. The integration of the store, catalogue and Web
databases should permit Neiman Marcus to target past customers more
effectively, enhance existing customer relationships and achieve significant
cost savings. We are continuing to work with the senior management of Neiman
Marcus to further refine and build upon its digital strategy, migrate more of
its systems to the Web, improve the existing Web site and more effectively
target and service its customer base.

Competition

   Competition in the Internet professional services industry is intense. We
compete with companies which offer strategic consulting, Web design,
information technology and e-commerce services as well as the in-house
development efforts of many companies. Our current competitors include the
following:

  .  web consulting firms and on-line agencies, such as Agency.com, Diamond
     Technology Partners, iXL Enterprises, Proxicom, Razorfish, Scient,
     USWeb/CKS and US Interactive;

  .  general management consulting firms, such as Bain & Company, Booz Allen
     & Hamilton, Boston Consulting Group and McKinsey & Company;

  .  advertising and direct marketing agencies, such as Ogilvy One and
     Wunderman Cato Johnson;

  .  systems integrators that primarily engage in fixed-time/fixed-fee
     contracts, such as Cambridge Technology Partners, Sapient and Viant;

  .  large systems integrators, such as Andersen Consulting and the
     consulting arms of the "Big Five" accounting firms;

  .  the professional services groups of computer equipment companies, such
     as IBM Global Services;

  .  outsourcing firms, such as Computer Sciences Corporation, Electronic
     Data Systems and Perot Systems; and

  .  internal information technology departments of current and potential
     clients.

Because relatively low barriers to entry characterize our industry, we also
expect other companies to enter our market.

   We believe that the principal competitive factors in our industry are:

  .  quality of services;

  .  technical and strategic expertise;

  .  ability to provide end-to-end solutions;

  .  speed of development and implementation of Internet solutions;

  .  value of the services provided compared to the price of such services;

                                      37
<PAGE>

  .  reputation and experience of professionals delivering the service;

  .  project management capabilities;

  .  brand recognition and size of the firm; and

  .  effectiveness of sales and marketing efforts.

We believe that we presently compete favorably with respect to most of these
factors. In particular, we believe that we offer an integrated set of skills
and expertise that many existing service providers are not well suited to
provide. However, the market for Internet professional services is evolving
and we cannot be certain that we will compete successfully in the future. We
expect that competition will continue to intensify and increase in the future,
particularly if large information technology consulting firms focus more
resources on Internet solution opportunities.

People and Culture

   We believe we have an entrepreneurial culture in which creativity, teamwork
and individual development are strongly encouraged. Our employees are our
single greatest asset and the key to reaching our company-wide goal to be the
undisputed industry leader in Internet professional services. In furtherance
of this mission all of our employees collaborate to apply their creativity in
the conception, design, and implementation of innovative client solutions. Our
formal training program, to which we allocate substantial financial resources
and personnel, emphasizes improvement of individual skills as well as
optimization of team performance. We also conduct shared learning sessions in
which business and technological developments are discussed amongst the
various teams. Through the training and shared learning programs we continue
to bolster the talent and expertise of our employees which in turn improves
our Internet professional services capabilities. The end result is a dynamic
and rewarding work environment for intelligent, motivated individuals.

   Our training program is part of a larger core competency model instituted
in 1998 that is intended to incorporate the personal interests and career
goals of each employee with their individual development and team performance
training. Employees meet with a staffing officer to discuss their interests
and goals and thereby allow us to assign them to client teams which they will
find to be the most satisfying. We believe that our ongoing solicitation and
consideration of individual interests and goals enables us to improve the
attractiveness of the work environment to our employees and strengthens each
working group thereby further improving our competitive position in the
industry.

   To retain this culture and uphold the high standard of quality work that we
have set, we must continue to attract qualified individuals with superior
strategic, creative, technological and management skills in numbers sufficient
to meet the growing demands for our services. To this end, we have a dedicated
recruiting team of 27 individuals that utilizes various methods to attract the
most talented and promising professionals, including job boards, advertising
in newspapers and trade magazines, college and business school recruiting,
competitive targeting and an internal referral bonus program. In addition, we
retain recruiting professionals to supplement the recruiting efforts of our
in-house recruiting team. We recognize that the demand for Internet
professional services, however, is growing faster than the number of trained
professionals who are capable of providing those services and, therefore,
retention and training of existing employees is very important. By hiring
intelligent individuals and then providing them with relevant training and
support, we believe that we have created a truly scalable hiring strategy
without compromising our high standards.

   We provide our employees with a competitive base salary, performance driven
incentive programs, stock options in Digitas and comprehensive benefits
packages. Employees are rewarded for individual as well as team performance
and the success of their clients in the marketplace. For many of our
employees, however, a significant attraction is being part of a winning team
that applies industry leading expertise and technology to transform businesses
to be the best in their industry.


                                      38
<PAGE>

   As of December 1, 1999, we had approximately 1,200 full-time employees,
approximately 1,160 of whom were located in the United States and 40 of whom
were located in Europe. Our employees include approximately 175 digital
strategy consultants, 275 technology professionals, 250 design and creative
professionals, 300 integrated marketing managers, and 200 executive and
support personnel.

   Our employees are not represented by any union and, except for senior
management and certain other employees, are retained on an at-will basis.
However, the regulations of some European countries in which we operate may
make it difficult for us to terminate employees in those countries. In
addition, those regulations govern the amount of vacation time that must be
given to employees, which is significantly more vacation than in the United
States.

Intellectual Property Rights

   We seek to protect our intellectual property through a combination of
license agreements and trademark, service mark, copyright and trade secret
laws. We enter into confidentiality agreements with our employees and clients
and use our best efforts to limit access to and distribution of proprietary
information licensed from third parties.

   We pursue the protection of our trademarks in the United States and
internationally. We have obtained U.S. registration or have applied for
registration of certain of our other trademarks and servicemarks, including
the marks Digitas, Bronnercom, BSH and SIG.

   Our efforts to protect our intellectual property rights could be inadequate
to deter misappropriation of proprietary information. For example, we may not
detect unauthorized use of our intellectual property. In addition, the legal
status of intellectual property on the Internet is currently subject to
various uncertainties. See "Risk Factors--We may not be able to protect our
intellectual property and proprietary rights." and "Risk Factors--Changes in
government regulation of the Internet could adversely affect our business."

U.S. and Foreign Government Regulation

   Congress has recently passed legislation that regulates certain aspects of
the Internet, including on-line content, copyright infringement, user privacy,
taxation, access charges, liability for third-party activities and
jurisdiction. In addition, federal, state, local and foreign governmental
organizations also are considering, and may consider in the future, other
legislative and regulatory proposals that would regulate the Internet. Areas
of potential regulation include libel, pricing, quality of products and
services and intellectual property ownership.

   The European Union also has recently enacted several directives relating to
the Internet. In order to safeguard against the spread of certain illegal and
socially harmful materials on the Internet, the European Union has adopted the
"Action Plan on Promoting the Safe Use of the Internet." Other European
Commission directives address the regulation of privacy, e-commerce, security,
commercial piracy, consumer protection and taxation of transactions completed
over the Internet.

   It is not known how courts will interpret both existing and new laws.
Therefore, we are uncertain as to how new laws or the application of existing
laws will affect our business. In addition, our business may be indirectly
affected by our clients who may be subject to such legislation. Increased
regulation of the Internet may decrease the growth in the use of the Internet,
which could decrease the demand for our services, increase our cost of doing
business or otherwise have a material adverse effect on our business, results
of operations and financial condition. See "Risk Factors--Changes in
government regulation of the Internet could adversely affect our business.

Facilities

   Our headquarters and principal administrative and finance operations are
located in a leased facility in Boston, Massachusetts consisting of
approximately 200,000 square feet of office space. The lease for this office
space expires in November 2005. We also occupy office space in locations in
New York City under three separate leases.

                                      39
<PAGE>

One of the leases covers approximately 12,000 square feet of office space and
expires in September 2002. The second and third New York leases cover an
aggregate of approximately 38,000 square feet in the same building and expire
in September 2004 and September 2002. Due to our growth, in November 1999 we
executed a fourth lease for 132,000 square feet in a new New York City
location. That lease expires in March 2011. We anticipate relocating all of
our New York staff to the new larger location in September or October 2000. We
will continue to be obligated on our existing leases and will need to sublet
these leases to minimize cost and financial obligations. At this time, we
cannot be certain that we will be able to execute subleases that coincide with
our move or that the terms of the subleases will completely offset our costs.
We also lease office space in San Francisco, London and Salt Lake City.

Legal Proceedings

   We are not a party to any material legal proceedings.

                                      40
<PAGE>

                                  MANAGEMENT

Executive Officers and Directors

   Our executive officers and directors, and their respective ages and
positions as of December 31, 1999, are as follows:

<TABLE>
<CAPTION>
 Name                         Age Position
 ----                         --- --------
 <C>                          <C> <S>
                                  Director, Chairman and Chief Executive
 David W. Kenny..............  38 Officer
 Kathleen L. Biro............  47 Director, Vice Chairman and President
 Marschall I. Smith..........  53 General Counsel and Secretary
 Michael Ward................ 36  Chief Operating Officer and Acting Chief
                                  Financial Officer and Treasurer
 Michael E. Bronner..........  40 Director, Chairman Emeritus and Founder
 John L. Bunce, Jr...........  41 Director
 Orit Gadiesh (1)(2).........  48 Director
 Philip U. Hammarskjold (2)..  34 Director
 Patrick J. Healy (1)........  33 Director
 Arthur Kern (1)(2)..........  53 Director
</TABLE>
--------
(1) Member of the compensation committee.
(2) Member of the audit committee.

   David W. Kenny was named Chief Executive Officer of Digitas in September
1997 and Chairman in December 1999. He joined Digitas as a director and Vice
Chairman in January 1997. From 1991 to 1997, Mr. Kenny was a partner at Bain &
Company, a strategy consulting firm, and was named to its Policy Committee in
1995. Mr. Kenny also serves as a director of Harvard Business School
Publishing, The Corporate Executive Board and Teach for America. He holds a
B.S. degree from the General Motors Institute and an M.B.A. from Harvard
Business School.

   Kathleen L. Biro joined Digitas in 1991 and has served as President and a
director since December 1999 and as Vice Chairman since April 1999. Ms. Biro,
together with Robert Cosinuke and Ruben Pinchanski, founded Strategic
Interactive Group and served as its Chief Executive Officer from its founding
in April 1995 to December 1999. Prior to joining Digitas in 1991, Ms. Biro
served as Senior Vice President of Global Product Management for Bankers Trust
Global Operations and Information Systems business. Ms. Biro also sits on the
boards of directors of net.Genesis and Be Free. She holds a B.S. and an M.S.
in Educational Administration from New York University and an M.B.A. in
Marketing and Finance from the Columbia University Graduate School of
Business.

   Marschall I. Smith joined Digitas in October 1999 as General Counsel and
Secretary. From February 1994 to October 1999, Mr. Smith was associated with
Hamilton Holmes Associates, a financial and legal services consulting firm,
and served as Senior Vice President and General Counsel of IMC Global, Inc., a
mining and chemical manufacturer in Northbrook, Illinois. Mr. Smith holds an
A.B. from Princeton University, a J.D. from the University of Virginia Law
School and an M.B.A. from the University of Chicago Graduate School of
Business.

   Michael Ward has served as Chief Operating Officer of Digitas since March
1998 and as acting Chief Financial Officer and Treasurer since December 1999.
Mr. Ward joined Digitas in August 1997 as a Senior Vice President. Prior to
that, he was associated with Bain & Company, a strategy consulting firm, since
December 1994. Mr. Ward holds B.S. and B.A. degrees from the University of
Pennsylvania and an M.B.A. from the Amos Tuck School at Dartmouth College.

   Michael E. Bronner founded Digitas in 1980 and served as Chief Executive
Officer until September 1997 and Chairman until December 1999. Mr. Bronner is
currently a director and Chairman Emeritus of Digitas. Mr. Bronner is
currently the Chairman and founder of Lifetime Rewards.com. Mr. Bronner is
also Chairman of

                                      41
<PAGE>

the Boston Walk Committee for the March of Dimes and serves as a director of
the Boys and Girls Clubs, the Boston Public Library Foundation and the New
England Aquarium.

   John L. Bunce, Jr. has served as a director of Digitas since January 1999.
Mr. Bunce joined the predecessor to Hellman & Friedman LLC in 1988, became
partner of that entity in January 1996 and has served as a Managing Director
of Hellman & Friedman LLC since January 1998. He also serves on the boards of
directors of National Information Consortium and Western Wireless Corporation.
Mr. Bunce holds a B.A. from Stanford and an M.B.A. from Harvard Business
School.

   Orit Gadiesh has served as a director of Digitas since February 1999. Ms.
Gadiesh has served as the Chairman of the Board of Bain & Company, a strategy
consulting firm, since December 1994. Ms. Gadiesh is a board of directors and
council member at the Harvard Business School, the Wharton School, the Kellogg
School and the Harvard Business School Press Publications Review Board. She is
also a member of the Greater Boston Chamber of Commerce and the Massachusetts
Business Roundtable. She holds a B.A. from Hebrew University, Jerusalem, and
an M.B.A. from Harvard Business School.

   Philip U. Hammarskjold has served as a director of Digitas since December
1999. Mr. Hammarskjold joined the predecessor to Hellman & Friedman LLC in
1992, became partner of that entity in January 1996 and has been a Managing
Director of Hellman & Friedman LLC since January 1998. He has served on the
board of directors of The Covenant Group, Inc. since 1995 and served on the
board of directors of Young & Rubicam Inc. from December 1996 to December
1999. Mr. Hammarskjold holds a B.S.E. from Princeton University and an M.B.A.
from Harvard Business School.

   Patrick J. Healy has served as a director of Digitas since January 1999.
Mr. Healy has been employed by Hellman & Friedman LLC since 1994 and has
served as a Managing Director since January 1999. He serves on the board of
directors of National Information Consortium, Inc. Mr. Healy holds an A.B.
from Harvard College and an M.B.A. from Harvard Business School.

   Arthur Kern has served as a director of Digitas since January 1999. Prior
to investing in media and marketing services companies, he was co-founder and
Chief Executive Officer of American Media, a group owner of commercial radio
stations sold to AMFM (Chancellor Broadcasting) in 1994. Mr. Kern serves on
the boards of directors of Yahoo!, Inc. and Northwest Broadcasting, a
privately held company that owns and operates Fox Television affiliates in the
Northwest. Mr. Kern holds a B.A. from Yale University.

Board Composition

   The number of our directors is currently fixed at eight. Following the
closing of this offering, our board of directors will be divided into three
classes, each of whose members will serve for a staggered three-year term. Our
board of directors will consist of three Class I directors, whose term of
office will continue until the 2001 annual meeting of shareholders, two Class
II directors, whose term of office will continue until the 2002 annual meeting
of shareholders, and three Class III directors, whose term of office will
continue until the 2003 annual meeting of shareholders. The Class I directors
will be John L. Bunce, Jr., David W. Kenny and Arthur Kern; the Class II
directors will be Orit Gadiesh and Patrick J. Healy; and the Class III
directors will be Kathleen L. Biro, Michael E. Bronner and Philip U.
Hammarskjold. At each annual meeting of shareholders, a class of directors
will be elected for a three-year term to succeed the directors of the same
class whose terms are then expiring.

   There are no family relationships among any of our directors or executive
officers.

Board Committees

   Audit Committee. The members of the audit committee, a majority of whom are
independent directors, are responsible for recommending to the board of
directors the engagement of our outside auditors and reviewing our accounting
controls and the results and scope of audits and other services provided by
our auditors. The audit committee consists of Messrs. Hammarskjold, Chairman,
and Kern and Ms. Gadiesh.

                                      42
<PAGE>

   Compensation Committee. The members of the compensation committee, a
majority of whom are independent directors, are responsible for reviewing and
recommending to the board of directors the amount and type of consideration to
be paid to senior management, administering our stock plans and establishing
and reviewing general policies relating to compensation and benefits of
employees. The compensation committee consists of Messrs. Healy and Kern,
Chairman, and Ms. Gadiesh.

Director Compensation

   Directors who are employees receive no additional compensation for their
services as directors. Non-employee directors do not currently receive a fee
for their service as directors, although the board of directors may in the
future decide to pay non-employee directors a fee for their services. We
reimburse our directors for reasonable out-of-pocket expenses incurred in
attending meetings of the board of directors. Non-employee directors are also
eligible to participate in our stock option plans. Since their election to the
board of directors, we have granted to each of Messrs. Bronner and Kern and
Ms. Gadiesh non-qualified options to purchases 78,000 shares of our common
stock. The options granted to Mr. Kern and Ms. Gadiesh were granted on June 1,
1999, have an exercise price of $5.0367 per share and become exercisable in
full on June 1, 2002, regardless of whether the director is serving as a
director of Digitas at that time. The options granted to Mr. Bronner were
granted on December 2, 1999, have an exercise price of $17.50 per share and
become exercisable in full on December 2, 2002, regardless of whether Mr.
Bronner is serving as a director of Digitas at that time.

Executive Compensation

   The following table sets forth the total compensation paid or accrued in
the year ended December 31, 1999 to our Chief Executive Officer, each of our
other executive officers whose aggregate compensation exceeded $100,000 and
one former executive officer who received total compensation in excess of
$100,000 but was not serving as an executive officer on December 31, 1999. We
refer to each of these people in this prospectus as our "named executive
officers." No other executive officer earned an aggregate of salary and bonus
in excess of $100,000 for the year ended December 31, 1999.

                          Summary Compensation Table

<TABLE>
<CAPTION>
                                                       Long-Term
                               Annual Compensation    Compensation
                               --------------------   ------------
                                                       Number of
                                                       Shares of
                                                       Underlying
                                                        Options     All Other
Name and Principal Position     Salary     Bonus       Granted(1)  Compensation
---------------------------    --------------------   ------------ ------------
<S>                            <C>       <C>          <C>          <C>
David W. Kenny................ $ 500,000  $      (2)   1,650,000   $1,983,074(3)
 Chairman and Chief
 Executive Officer
Kathleen L. Biro..............   420,833         (2)     540,000      976,236(4)
 Vice Chairman and President
Michael Ward..................   370,833         (2)     450,000      202,717(5)
 Chief Operating Officer and
 Acting Chief Financial
 Officer
Meryl Beckingham (6)..........   305,000  425,000(7)     165,000      593,785(8)
 Former Chief Financial
 Officer and Executive
 Vice President
</TABLE>
--------
(1)  Does not include rollover options granted to the named executive officer
     in connection with the recapitalization in exchange for the cancellation
     of stock appreciation rights or stock options, as applicable,

                                      43
<PAGE>

   held by the named executive prior to the recapitalization. Messrs. Kenny
   and Ward received 3,000,000 and 300,000 rollover options, respectively, in
   connection with the recapitalization, and Mses. Biro and Beckingham
   received 649,542.6 and 135,000 rollover options, respectively, in
   connection with the recapitalization.
(2)  Annual bonuses for the year ended December 31, 1999 have not yet been
     determined for any named executive officer other than Ms. Beckingham.
(3)  Includes (i) transaction payment in the amount of $1,977,974 paid to Mr.
     Kenny in connection with the recapitalization; (ii) parking expenses in
     the amount of $4,200 paid by Digitas on behalf of Mr. Kenny; and (iii)
     $900 representing the dollar value of insurance premiums paid by Digitas
     with respect to a term life insurance policy purchased for Mr. Kenny's
     benefit.
(4)  Includes (i) transaction payment in the amount of $309,064 paid to Ms.
     Biro in connection with the recapitalization; (ii) deferred compensation
     payment in the amount of $658,000 paid to Ms. Biro in accordance with the
     terms of her employment agreement; (iii) parking expenses in the amount
     of $4,200 paid by Digitas on behalf of Ms. Biro; (iv) $810 representing
     the dollar value of insurance premiums paid by Digitas with respect to a
     term life insurance policy purchased for Ms. Biro's benefit; and
     (v) $4,162 representing the dollar value of insurance premiums paid for
     by Digitas with respect to an individual, supplemental long-term
     disability policy purchased in 1994 for Ms. Biro.
(5)  Includes (i) transaction payment in the amount of $197,797 paid to Mr.
     Ward in connection with the recapitalization; (ii) parking expenses in
     the amount of $4,200 paid by Digitas on behalf of Mr. Ward; and (iii)
     $720 representing the dollar value of insurance premiums paid by Digitas
     with respect to a term life insurance policy purchased for Mr. Ward's
     benefit.
(6)  Ms. Beckingham resigned from her position as Chief Financial Officer and
     Executive Vice President effective December 15, 1999.
(7)  Includes annual bonus in the amount of $175,000 and special bonuses in
     the aggregate amount of $250,000 paid to Ms. Beckingham in consideration
     for her services in effecting the recapitalization.
(8)  Includes (i) $500,000 payment paid to Ms. Beckingham in connection with
     her resignation from Digitas; (ii) transaction payment in the amount of
     $89,009 paid to Ms. Beckingham in connection with the recapitalization;
     (iii) parking expenses in the amount of $4,200 paid by Digitas on behalf
     of Ms. Beckingham; and (iv) $576 representing the dollar value of
     insurance premiums paid by Digitas with respect to term life insurance
     policy purchased for Ms. Beckingham's benefit. Ms. Beckingham will be
     entitled to receive up to an additional $420,000 between January 2000 and
     January 2001 in connection with her resignation from Digitas. We have
     also agreed to pay the cost of Ms. Beckingham's health insurance, life
     insurance and long term disability insurance plans until January 31, 2000
     and to provide her with other payments and benefits in connection with
     her resignation.

                                      44
<PAGE>

   The following table sets forth information regarding stock options granted
during 1999 to our named executive officers. All of the options, other than
options to purchase 450,000 shares which were granted to Ms. Biro under the
1999 option plan and options to purchase 150,000 shares which were granted to
Mr. Ward under the 1999 option plan, were granted under the 1998 option plan.
All of the options are non-qualified stock options, have a ten-year term and
generally terminate 30 days after the named executive's employment with us
terminates for any reason. During 1999, we granted options to purchase an
aggregate of 7,409,250 shares of common stock to employees, excluding rollover
options to purchase an aggregate of 8,233,322.4 shares.

                       Option Grants In Last Fiscal Year

<TABLE>
<CAPTION>
                                                                              Potential Realizable
                                                                                Value at Assumed
                                                                                Annual Rates of
                                                                                  Stock Price
                                                                                  Appreciation
                                                                               for Option Term (2)
                                                                             ----------------------
                         Number of
                         Shares of
                           Common
                           Stock       Percent of Total  Exercise
                         Underlying    Options Granted    Price
                           Options     to Employees in     Per    Expiration
Name                     Granted(1)    Fiscal Year(%)(1) Share($)    Date      5%($)      10%($)
----                     ----------    ----------------  -------- ---------- ---------- -----------
<S>                      <C>           <C>               <C>      <C>        <C>        <C>
David W. Kenny.......... 1,650,000(3)       22.27%       $5.0367    1/6/09   $5,226,463 $13,244,884
Kathleen L. Biro........    90,000(4)        1.21         5.0367    8/1/09      285,080     722,448
                           450,000(5)        6.07        17.5000   12/2/09    4,952,545  12,550,722
Michael Ward............   300,000(4)        4.05         5.0367    1/6/09      950,266   2,408,161
                           150,000(5)        2.02        17.5000   12/2/09    1,650,848   4,183,574
Meryl Beckingham........   105,000(4)        1.42         5.0367    1/6/09      332,593     842,856
                            60,000(4)         .81         5.0367    5/1/09      190,053     481,632
</TABLE>
--------
(1)  Does not include rollover options granted to the named executive officer
     in connection with the recapitalization in exchange for the cancellation
     of stock appreciation rights or stock options, as applicable, held by the
     named executive officer prior to the recapitalization. Messrs. Kenny and
     Ward received 3,000,000 and 300,000 rollover options, respectively, in
     connection with the recapitalization, and Mses. Biro and Beckingham
     received 649,542.6, and 135,000, respectively, in connection with the
     recapitalization.
(2)  Potential realizable value is based on the assumption that our common
     stock appreciates at the annual rate shown, compounded annually, from the
     date of grant until expiration of the ten-year term. These numbers are
     calculated based on Securities and Exchange Commission requirements and
     do not reflect our projection or estimate of future stock price growth.
     Potential realizable values are computed by multiplying the number of
     shares of common stock subject to a given option by the fair market value
     on the date of grant, as determined by our board of directors, assuming
     that the aggregate stock value derived from that calculation compounds at
     the annual 5% or 10% rate shown in the table for the entire ten-year term
     of the option and subtracting from that result the aggregate option
     exercise price.
(3)  Options to purchase 300,000 shares were immediately exercisable as of the
     grant date. The remainder of the options vest in equal installments on
     the third, fourth and fifth anniversary of the grant date.
(4)  Options vest in equal installments on the third, fourth and fifth
     anniversary of the grant date.
(5)  Options vest 25% on the first anniversary of the grant date and
     additional 6.25% on each consecutive three-month period thereafter.

                                      45
<PAGE>

   The following table sets forth information concerning the number and value
of unexercised options to purchase common stock held as of December 31, 1999
by the named executive officers. There was no public trading market for our
common stock as of December 31, 1999. Accordingly, the values of the
unexercised in-the-money options have been calculated on the basis of the fair
value at December 31, 1999 of $17.50, less the applicable exercise price,
multiplied by the number of shares acquired on exercise. None of the named
executive officers exercised any stock options in 1999.

         Aggregated Option Exercises and Fiscal Year-End Option Values

<TABLE>
<CAPTION>
                            Number of Shares
                            of Common Stock           Value of Unexercised
                         Underlying Unexercised       In-The-Money Options
                       Options at Fiscal Year-End      at Fiscal Year-End
                       -------------------------- -----------------------------
Name                   Exercisable  Unexercisable  Exercisable   Unexercisable
----                   ------------ ------------- -------------- --------------
<S>                    <C>          <C>           <C>            <C>
David W. Kenny........ 3,150,000.00 1,350,000.00  $41,052,000.00 $16,821,000.00
Kathleen L. Biro......   649,542.60   540,000.00    9,223,504.92   1,121,400.00
Michael Ward..........   300,000.00   450,000.00    4,650,000.00   3,738,000.00
Meryl Beckingham......         0.00         0.00            0.00           0.00
</TABLE>

1998 Option Plan

   In contemplation of the recapitalization, our board of directors adopted
our 1998 option plan. The plan allows us to:

  .  grant incentive stock options; and

  .  grant non-qualified stock options.

   More specifically, the plan authorized the grant of (i) 8,233,322.4
rollover options in exchange for the cancellation of stock appreciation rights
and stock options held by the SAR and option holders prior to the
recapitalization and (ii) an additional 5,872,350 options that are not
rollover options. In December 1999, the board of directors amended the plan to
decrease the number of non-rollover options that could be granted under the
plan to 5,076,000 shares.

   To date, all options granted under the plan have been non-qualified stock
options. As of December 31, 1999, options to purchase 12,455,486.1 shares of
common stock were outstanding under the plan and 165,000 shares were available
for future grant under the plan. The board does not intend to grant any
additional options under the plan after the offering.

   Grants under the plan may be made to employees and non-employee directors,
consultants and independent contractors who contribute to the management,
growth and profitability of the business of Digitas or its affiliates.

   A committee of the board of directors or, if no such committee is formed,
the board of directors, administers the plan which includes determining the
participants in the plan and the number of shares of common stock to be
covered by each option, amending the terms of any option, subject to certain
limitations, and interpreting the terms of the plan.

   Each rollover option is immediately exercisable as of the date of grant and
has an exercise price equal to the base value of the stock appreciation rights
or the exercise price of the stock options, as applicable, from which the
options were converted. All other options granted under the plan are generally
subject to a five-year vesting schedule pursuant to which the options vest in
equal annual installments on the third, fourth and fifth anniversaries of the
grant date. In addition, all options other than rollover options must have a
per share exercise price equal to or greater than the fair market value of a
share of Digitas' common stock as of the grant date, as determined by the
board of directors or a committee of such board. All options granted under the
plan terminate on the tenth anniversary of the grant date. Vested options may
be exercised for specified periods after the termination of the optionee's
employment or other service relationship with us or our affiliates.

                                      46
<PAGE>

   Under the plan, the exercise price of vested options may be delivered to us
by certified or bank check, wire transfer or such other instrument as the
board of directors or a committee of such board may accept. In addition, under
the terms of the plan, the committee may in its discretion approve payment by
delivery of unrestricted shares of common stock or by delivery of an exercise
notice, along with a copy of irrevocable instructions to a broker selling the
underlying shares of the optionee.

   In the event greater than 50% of the equity interest in Digitas is
acquired, measured by vote or value, solely for cash consideration by a non-
affiliate, all options under the plan will become fully vested and exercisable
immediately prior to the closing of the transaction.

1999 Option Plan

   In December 1999, our board of directors adopted our 1999 option plan which
allows for the grant of up to 2,937,250 shares of common stock. The plan
allows us to:

  .  grant incentive stock options; and

  .  grant non-qualified stock options.

To date, all options granted under the plan have been non-qualified stock
options. As of December 31, 1999, options to purchase 1,937,250 shares of
common stock were outstanding under the plan and 1,000,000 shares were
available for future grant under the plan.

   Grants under the plan may be made to employees and non-employee directors,
consultants and independent contractors who contribute to the management,
growth and profitability of the business of Digitas or its affiliates.

   A committee of the board of directors or, if no such committee is formed,
the board of directors, administers the plan which includes determining the
participants in the plan and the number of shares of common stock to be
covered by each option, amending the terms of any option, subject to certain
limitations, and interpreting the terms of the plan. The administrator of the
plan may authorize our chief executive officer to grant options under the plan
at fair market value to individuals who are not subject to the reporting and
other provisions of Section 16 of the Exchange Act or "covered employees"
within the meaning of Section 162(m) of the Internal Revenue Code of 1986. In
December 1999, our compensation committee granted this authority to Mr. Kenny.

   The exercise price of all other options granted under the plan is
determined by the board of directors or a committee of the board. Under
present law, incentive stock options and options intended to qualify as
performance-based compensation under Section 162(m) of the Internal Revenue
Code of 1986 may not be granted at an exercise price less than the fair market
value of the common stock on the date of grant, or less than 110% of the fair
market value in the case of incentive stock options granted to optionees
holding more than 10% of the voting power.

   Non-qualified stock options granted under the plan may be granted at prices
which are less than the fair market value of the underlying shares on the date
granted. Under the plan, incentive stock options and non-qualified stock
options are generally subject to a four-year vesting schedule pursuant to
which the options vest 25% on the first anniversary of the grant date and an
additional 6.25% on each consecutive three-month period thereafter. The
options generally terminate on the tenth anniversary of the grant date. In
addition, vested options may be exercised for specified periods after the
termination of the optionee's employment or other service relationship with us
or our affiliates.

   Under the plan, the exercise price for vested options may be delivered to
us by certified or bank check, wire transfer or such other instrument as the
board of directors or a committee of such board may accept. In addition, under
the terms of the plan, the committee may in its discretion approve payment by
delivery of unrestricted shares of common stock or by delivery of an exercise
notice, along with a copy of irrevocable instructions to a broker selling the
underlying shares of the optionee.

   In the event greater than 50% of the equity interest in Digitas is
acquired, measured by vote or value, solely for cash consideration by a non-
affiliate, all options under the plan will become fully vested and exercisable
immediately prior to the closing of the transaction.

                                      47
<PAGE>

2000 Stock Option and Incentive Plan

   Our board of directors and shareholders have adopted the 2000 stock option
and incentive plan, which allows for the issuance of up to 3,859,100 shares of
common stock. The plan permits us to:

  .  grant incentive stock options;

  .  grant non-qualified stock options;

  .  grant stock appreciation rights;

  .  issue or sell common stock with vesting or other restrictions, or
     without restrictions;

  .  grant rights to receive common stock in the future with or without
     vesting;

  .  grant common stock upon the attainment of specified performance goals;
     and

  .  grant dividend rights in respect of common stock.

These grants may be made to officers, employees, directors, consultants,
advisors and other key persons of Digitas or our affiliates.

   Our compensation committee has the right, in its discretion, to select the
individuals eligible to receive awards, determine the terms and conditions of
the awards granted, accelerate the vesting schedule of any award and generally
administer and interpret the plan. The compensation committee may authorize
our chief executive officer to grant options under the plan at fair market
value to individuals who are not subject to the reporting and other provisions
of Section 16 of the Exchange Act or "covered employees" within the meaning of
Section 162(m) of the Internal Revenue Code of 1986.

   The exercise price of options granted under the plan is determined by the
compensation committee with respect to individuals subject to Section 16
reporting requirements and the Chief Executive Officer with respect to all
other options granted. Under present law, incentive stock options and options
intended to qualify as performance-based compensation under Section 162(m) of
the Internal Revenue Code of 1986 may not be granted at an exercise price less
than the fair market value of the common stock on the date of grant, or less
than 110% of the fair market value in the case of incentive stock options
granted to optionees holding more than 10% of the voting power.

   The exercise price may also be delivered to us (i) by the optionee in the
form of a promissory note if the loan of such funds to the optionee has been
authorized by the compensation committee and the optionee pays so much of the
exercise price as represents the par value of the common stock acquired in a
form other than a promissory note and (ii) by a broker under irrevocable
instructions to the broker selling the underlying shares from the optionee.

   Non-qualified stock options may be granted at prices which are less than
the fair market value of the underlying shares on the date granted. Options
are typically subject to a four-year vesting schedule pursuant to which the
options vest 25% on the first anniversary of the grant date and an additional
6.25% on each consecutive three-month period thereafter. The options generally
terminate ten years from the date of grant and may be exercised for specified
periods after the termination of the optionee's employment or other service
relationship with us. Upon the exercise of options, the option exercise price
must be paid in full either in cash or by certified or bank check or other
instrument acceptable to the compensation committee or, in the sole discretion
of the committee, by delivery of shares of common stock that have been owned
by the optionee free of restrictions for at least six months.

   The plan and all awards issued under the plan terminate upon any merger,
reorganization or consolidation, sale of all or substantially all of our
assets or all of our outstanding capital stock or liquidation or other similar
transaction, unless Digitas and the other parties to such transactions have
agreed otherwise. All participants under the plan will be permitted to
exercise, for a period of 30 days before any such termination, all awards held
by them which are then exercisable or become exercisable upon the closing of
the transaction.

                                      48
<PAGE>

2000 Employee Stock Purchase Plan

   We have adopted an employee stock purchase plan under which employees will
be eligible to purchase shares of our common stock at a discount through
periodic payroll deductions. The 2000 employee stock purchase plan is intended
to meet the requirements of Section 423 of the Internal Revenue Code.
Purchases will occur at the end of twelve-month offering periods at a purchase
price equal to 85% of the market value of our common stock at either the
beginning of the offering period or the end of the offering period, whichever
is lower. The first offering period under the plan will begin on March 1, 2000
and will end on February 28, 2001. Participants may elect to have from 1% to
10% of their pay withheld for purchase of common stock at the end of the
offering period, up to a maximum of $25,000 within any offering period. We
have reserved 1,100,000 shares of common stock for issuance under this plan.

Employment Agreements

   We have employment agreements with each of Messrs. Kenny and Ward and Ms.
Biro. Each employment agreement entitles the named executive to an annual base
salary and an annual bonus. Under their respective agreements, Messrs. Kenny
and Ward and Ms. Biro are entitled to annual base salaries of $500,000,
$350,000 and $400,000, respectively. Each executive's base salary is subject
to annual review for possible raises. Since entering into their employment
agreements, the compensation committee has increased Mr. Ward's annual base
salary to $400,000 and Ms. Biro's annual base salary to $450,000. Ms. Biro's
employment agreement also entitles her to an aggregate of $872,333 in deferred
compensation. Of this amount, $658,000 was paid in 1999 and the remaining
$214,333 will be paid by May 30, 2000, if Ms. Biro is still employed by us at
that time.

   Each employment agreement has a two year term which automatically extends
for additional one year terms unless we or the named executive elect not to
renew the agreement. Each employment agreement can be terminated during its
term by us or by the employee. If the employee terminates the employment
agreement with good reason or if we terminate the employment agreement without
cause, the employee is entitled to receive certain severance benefits,
including one year of salary and group health benefits (or, in the case of Mr.
Kenny, two years of salary and group health benefits). If, however, the
employment agreement is terminated because of the employee's death or for any
reason other than by the employee for good reason or by us without cause, then
the employee receives only:

  .  his or her base salary for 90 days following termination of employment;

  .  any unpaid annual bonus for a fiscal year that has already ended;

  .  benefits under long-term disability insurance coverage (in the case of
     termination because of disability); and

  .  vested benefits, if any.

Each employment agreement is further subject to certain non-competition, non-
solicitation and confidentiality provisions and certain customary provisions
with respect to benefits, reimbursement of expenses and non-exclusivity of
rights.

Compensation Committee Interlocks and Insider Participation

   During the year ended December 31, 1999, each of Messrs. Healy, Kern, Kenny
and Ms. Gadiesh served as members of the compensation committee of our board
of directors. Mr. Kenny has served as our chief executive officer since
September 1997. None of these individuals serve as a member of the board of
directors or compensation committee of any entity that has one or more
executive officers serving as a member of our board of directors or
compensation committee.

                                      49
<PAGE>

                CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The Recapitalization

   In connection with the recapitalization, Positano Partners Ltd., a Bermuda
exempt company owned by Hellman & Friedman Capital Partners III, L.P., H&F
Orchard Partners III, L.P. and H&F International Partners III, L.P., purchased
shares of Bronner Slosberg Humphrey Co. and Strategic Interactive Group Co.
from the existing stockholders of those entities and we repurchased shares of
Bronner Slosberg Humphrey Co. from Mr. Bronner and the Michael E. Bronner 1998
Annuity Trust. The aggregate purchase price for these shares was approximately
$127,450,000, of which approximately $122,975,000 was paid to Mr. Bronner and
the Michael E. Bronner 1998 Annuity Trust, dated July 16, 1998, of which Mr.
Bronner and his wife are collectively the trustee, approximately $830,850 was
paid to Ms. Biro and approximately $3,644,150 was paid to other shareholders
of Bronner Slosberg Humphrey Co. and Strategic Interactive Group Co. who are
not executive officers or directors of Digitas. Messrs. Bunce, Hammarskjold
and Healy, each members of our board of directors, are each Managing Directors
of Hellman & Friedman LLC, an affiliate of Hellman & Friedman Capital Partners
III, L.P., H&F Orchard Partners III, L.P. and H&F International Partners III,
L.P.

   We also granted to Positano a warrant to purchase an aggregate of 450,000
shares of our common stock in connection with the recapitalization. The
warrant is fully exercisable for $5.0367 per share. Pursuant to the terms of
the recapitalization agreement, the shares subject to the warrant are subject
to upward or downward adjustment.

   Also as part of the recapitalization, Positano, Messrs. Bronner and Kenny
and the Bronner Slosberg Humphrey Co. trustee entered into a governance
agreement. Under the governance agreement, Positano is granted an approval
right over a number of specified fundamental corporate transactions as well as
the right to nominate and have elected two members of our board of directors.
The governance agreement also entitles Mr. Bronner and our chief executive
officer to be members of our board of directors. The governance agreement will
terminate upon consummation of this offering. Following the offering, Hellman
& Friedman Capital Partners III, L.P., H&F Orchard Partners III, L.P. and H&F
International Partners III, L.P., collectively, will have the right to elect
at least one director so long as they own at least 5% of our outstanding
common stock.

   We also entered into a shareholders agreement in connection with the
recapitalization. The shareholders agreement among other things entitles
Positano and Mr. Bronner to purchase at a discount shares of our common stock
held by former employees who are parties to the agreement to the extent we do
not elect to repurchase those shares. To date, neither Positano nor Mr.
Bronner has exercised these repurchase rights. The shareholders agreement also
entitles the shareholders and option holders who are parties to the agreement,
including Mr. Bronner, Positano and each of the executive officers other than
Mr. Smith, to participate in certain sales of common stock by either Positano
or Mr. Bronner. Sales of common stock in connection with this offering are
excluded. Prior to this offering neither Positano nor Mr. Bronner have sold
any shares of our common stock in a transaction that would entitle the other
parties to the shareholders agreement to participate. Upon consummation of
this offering, the shareholders agreement will terminate.

   Positano, Mr. Bronner and members of our senior management, including each
of our executive officers other than Mr. Smith, entered into an escrow
agreement in connection with the recapitalization. In the event we breached
our representations or warranties under the recapitalization agreement, the
escrow agreement entitles Positano to receive up to an aggregate of
approximately $18 million in cash, shares and options received by certain
members of our senior management in connection with the recapitalization. The
escrow agreement also entitles Messrs. Bronner and Kenny to direct the voting
of all shares of common stock held in escrow. The escrow agreement will
terminate immediately prior to the consummation of this offering.

                                      50
<PAGE>

   Under the registration rights agreement we entered into in connection with
the recapitalization, Positano and Mr. Bronner have demand registration rights
with respect to the common stock they hold. Positano, Mr. Bronner and the
other shareholders and option holders who are parties to the registration
rights agreement, including each of our executive officers other than Mr.
Smith, also have piggyback registration rights under the registration rights
agreement. See "Shares Eligible for Future Sale."

   Mr. Bronner entered into a noncompetition, nonsolicitation and
confidentiality agreement with us in connection with the recapitalization. In
accordance with the terms of the agreement, Mr. Bronner is entitled to a
salary of $500,000 per year while he is serving as chairman of the limited
liability company through which our business is operated. On December 2, 1999,
Mr. Bronner resigned as chairman of that company and was named Chairman
Emeritus of Digitas.

Other Transactions

   In January 1999, we issued to Positano two fully exercisable options, each
to purchase 45,000 shares of common stock at an exercise price per share equal
to $2.355, and an aggregate exercise price of $211,950, in exchange for an
aggregate payment of $241,350.

   In December 1999, we purchased options to purchase 150,000 shares of our
common stock held by Mr. Kenny for a per share purchase price of $17.50 and an
aggregate purchase price of $2,625,000, less $303,250, the aggregate exercise
price of such options. Also in December 1999, we purchased options to purchase
90,000 shares of our common stock held by Positano for a per share purchase
price of $17.50 and an aggregate purchase price of $1,575,000, less $211,950,
the aggregate exercise price of such options. We also purchased in December
1999 warrants to purchase 60,000 shares of our common stock held by Positano
for a per share purchase price of $17.50 and an aggregate purchase price of
$1,050,000, less $302,200, the aggregate exercise price of such warrants. We
paid for such purchases by delivering a promissory note which will be repaid
with the proceeds from this offering.

   Also in 1999, we sold an aggregate of 249,271.80 shares of our common stock
to two directors and one trust of which a director is the trustee. The shares
were sold for $5.0367 per share or an aggregate of $1,255,498.97, which price
the board of directors deemed to be the fair market value per share at the
time of sale. The following table sets forth the number of shares sold to each
director and/or trust and the date upon which the shares were sold:

<TABLE>
<CAPTION>
   Name                                   Date of Sale   Shares of Common Stock
   ----                                  --------------- ----------------------
   <S>                                   <C>             <C>
   The Arthur Kern Revocable Trust...... August 2, 1999         49,635.90
   Alan Beck............................ August 2, 1999         49,635.90
   Orit Gadiesh......................... August 26, 1999       150,000.00
</TABLE>

   Mr. Bronner is the chairman and founder of Lifetime Rewards.com, one of our
clients. During the last year, we provided approximately $85,000 in services
to Lifetime Rewards.com and expect that amount to increase next year. We
believe that the terms of our relationship with Lifetime Rewards.com are no
less favorable to us than they would have been had they been obtained from
unaffiliated third parties.

   We have adopted a policy providing that all material transactions between
us and our officers, directors and other affiliates must (i) be approved by a
majority of the members of our board of directors and by a majority of the
disinterested members of our board of directors and (ii) be on terms no less
favorable to us than could be obtained from unaffiliated parties.

                                      51
<PAGE>

                      PRINCIPAL AND SELLING SHAREHOLDERS

   The following table sets forth information regarding the beneficial
ownership of Digitas common stock as adjusted to reflect the sale of the
common stock offered hereby, by:

  .  all persons known by us to own beneficially 5% or more of the common
     stock;

  .  each of our directors;

  .  the chief executive officer and the other named executive officers;

  .  each of the selling shareholders; and

  .  all directors and executive officers as a group.

   Unless otherwise indicated, each of the shareholders has sole voting and
investment power with respect to the shares of common stock beneficially owned
by the shareholder.

   The number of shares beneficially owned by each shareholder is determined
under rules issued by the Securities and Exchange Commission and includes
voting or investment power with respect to securities. Under these rules,
beneficial ownership includes any shares as to which the individual or entity
has sole or shared voting power or investment power and includes any shares as
to which the individual or entity has the right to acquire beneficial
ownership within 60 days after December 20, 1999 through the exercise of any
warrant, stock option or other right. The inclusion in this prospectus of such
shares, however, does not constitute an admission that the named shareholder
is a direct or indirect beneficial owner of such shares. The applicable
percentage of "beneficial ownership" after the offering is based upon
25,351,739.70 shares of common stock outstanding as of December 20, 1999. The
address for Hellman & Friedman Capital Partners III, L.P., H&F Orchard
Partners III, L.P. and H&F International Partners III, L.P. is c/o Hellman &
Friedman LLC, One Maritime Plaza, San Francisco, California 94111. The address
for Squam Lake Investors, III L.P. and Sunapee Securities, Inc. is Two Copley
Place, Boston, Massachusetts 02116. The address for each of our directors and
named executive officers is c/o Digitas Inc., The Prudential Tower, 800
Boylston Street, Boston, Massachusetts 02199.

<TABLE>
<CAPTION>
                                     Shares Beneficially Owned(1)(2)
                          -----------------------------------------------------
                           Prior to Offering                After the Offering
                          --------------------              -------------------
                                               Shares to be
                                                 Sold in
Name of Beneficial Owner     Number    Percent   Offering     Number    Percent
------------------------  ------------ ------- ------------ ----------- -------
<S>                       <C>          <C>     <C>          <C>         <C>
5% Shareholders
Hellman & Friedman
 Capital Partners III,
 L.P. (2)...............  18,449,578.5  71.77%
H&F Orchard Partners
 III, L.P. (3)..........   1,358,400.0   5.35
H&F International
 Partners III, L.P.
 (4)....................     406,307.1   1.60
Other Selling
 Shareholders
Squam Lake Investors,
 III L.P................     158,850.0    *                      *
Sunapee Securities,
 Inc....................      39,690.0    *                      *
Directors and Named
 Executive Officers
Michael E. Bronner (5)..   3,554,760.3  14.02      --       3,554,760.3
David W. Kenny (6)......   3,150,000.0  11.05      --       3,150,000.0
Kathleen L. Biro (7)....     907,373.4   3.49      --         907,373.4
Michael Ward (8)........     300,000.0   1.17      --         300,000.0
Orit Gadiesh............     150,000.0    *        --         150,000.0    *
Arthur Kern (9).........     148,907.7    *        --         148,907.7    *
Meryl Beckingham........             0    *        --                 0    *
John L. Bunce, Jr.
 (10)...................             0    *        --                 0    *
Philip U. Hammarskjold
 (10)...................             0    *        --                 0    *
Patrick J. Healy (10)...             0    *        --                 0    *
All executive officers
 and directors, as a
 group
 (10 persons)...........   8,211,041.4  27.88      --       8,211,041.4
</TABLE>

                                      52
<PAGE>

--------
 *  Represents less than 1% of the outstanding shares of common stock
(1)  Assumes the underwriters do not elect to exercise the over-allotment
     option to purchase an additional          shares of common stock.
(2)  Includes 18,093,625.5 shares and warrants immediately exercisable at an
     exercise price of $5.0367 per share for 355,953 shares.
(3)  Includes 1,332,192 shares and warrants immediately exercisable at an
     exercise price of $5.0367 per share for 26,208 shares.
(4)  Includes 398,468.1 shares and warrants immediately exercisable at an
     exercise price of $5.0367 per share for 7,839 shares.
(5)  Includes 2,128,658.7 shares held by Michael Bronner and 1,426,101.6
     shares owned by the Michael E. Bronner 1998 Annuity Trust pursuant to
     which Michael Bronner has sole dispositive power over the shares until
     July 16, 2000. Michael Bronner and Lisa Bronner are collectively the
     trustee of the Michael E. Bronner 1998 Annuity Trust and have sole voting
     power with respect to the shares.
(6)  Includes options held by David W. Kenny which are immediately exercisable
     at an exercise price of $2.0217 per option for 2,850,000 shares and
     options immediately exercisable at an exercise price of $5.0367 per
     option for 300,000 shares.
(7)  Includes 257,830.8 shares held by Kathleen L. Biro and options
     immediately exercisable at an exercise price of $3.2997 per option for
     649,542.6 shares.
(8)  Includes options held by Michael Ward which are immediately exercisable
     at an exercise price of $2.3550 per option for 75,000 shares and options
     immediately exercisable at an exercise price of $1.8837 per option for
     225,000 shares.
(9)  Includes 148,907.7 shares held by the Arthur Kern Revocable Trust of
     which Arthur Kern has sole dispositive and voting power.
(10)  Messrs. Bunce, Hammarskjold and Healy are affiliated with Hellman &
      Friedman Capital Partners III, L.P., H&F Orchard Partners III, L.P. and
      H&F International Partners III, L.P. H&F Investors III is the sole
      general partner for each of Hellman & Friedman Capital Partners III,
      L.P., H&F Orchard Partners III, L.P. and H&F International Partners III,
      L.P. The managing general partner of H&F Investors III is Hellman &
      Friedman Associates III, L.P., which in turn has H&F Management III, LLC
      and H&F Investors III, Inc. as its general partners. The sole owner of
      H&F Investors III, Inc. is The Hellman Family Revocable Trust. Messrs.
      Bunce, Hammarskjold and Healy are members of H&F Management III, LLC.
      The investment decisions of H&F Management III, LLC and H&F Investors
      III, Inc. are made by a seven person executive committee of which Mr.
      Bunce is a member. While Hellman & Friedman Capital Partners III, L.P.,
      H&F Orchard Partners III, L.P. and H&F International Partners III, L.P.,
      H&F Investors III, Inc., Hellman & Friedman Associates III, L.P., H&F
      Management III, LLC, The Hellman Family Revocable Trust and Messrs.
      Bunce, Hammarskjold and Healy could each be deemed to beneficially own
      the shares held by Hellman & Friedman Capital Partners III, L.P., H&F
      Orchard Partners III, L.P. and H&F International Partners III, L.P.,
      each of them disclaims beneficial ownership except to the extent of its
      or his indirect pecuniary interest.

                                      53
<PAGE>

                         DESCRIPTION OF CAPITAL STOCK

Authorized and Outstanding Capital Stock

   As of December 31, 1999, there were 25,351,739.7 shares of common stock
issued and outstanding and outstanding stock options to purchase 13,927,736.1
shares of common stock, 7,559,486.1 of which were then exercisable and
outstanding warrants to purchase 390,000 shares, all of which were then
exercisable and outstanding. At December 31, 1999, there were fourteen holders
of record of our common stock. Following the offering, our authorized capital
stock will consist of 100,000,000 shares of common stock, par value $.01 per
share, of which             will be issued and outstanding, and 5,000,000
shares of undesignated preferred stock, par value $.01 per share, issuable in
one or more series designated by our board of directors, of which no shares
will be issued and outstanding.

Common Stock

   Voting Rights

   The holders of our common stock have one vote per share. Holders of our
common stock are not entitled to vote cumulatively for the election of
directors. Generally, all matters to be voted on by stockholders must be
approved by a majority, or, in the case of election of directors, by a
plurality, of the votes cast at a meeting at which a quorum is present, voting
together as a single class, subject to any voting rights granted to holders of
any then outstanding preferred stock.

   Dividends

   Holders of common stock will share ratably in any dividends declared by our
board of directors, subject to the preferential rights of any preferred stock
then outstanding. Dividends consisting of shares of common stock may be paid
to holders of shares of common stock.

   Other Rights

   On liquidation, dissolution or winding up of Digitas, all holders of common
stock are entitled to share ratably in any assets available for distribution
to holders of shares of common stock. No shares of common stock are subject to
redemption or have preemptive rights to purchase additional shares of common
stock.

Preferred Stock

   Our certificate of incorporation provides that shares of preferred stock
may be issued from time to time in one or more series. Our board of directors
is authorized to fix the voting rights, if any, designations, powers,
preferences, qualifications, limitations and restrictions thereof, applicable
to the shares of each series. Our board of directors may, without stockholder
approval, issue preferred stock with voting and other rights that could
adversely affect the voting power and other rights of the holders of the
common stock and could have anti-takeover effects, including preferred stock
or rights to acquire preferred stock in connection with implementing a
shareholder rights plan. We have no present plans to issue any shares of
preferred stock. The ability of our board of directors to issue preferred
stock without stockholder approval could have the effect of delaying,
deferring or preventing a change of control of Digitas or the removal of
existing management.

Indemnification Matters

   We have entered into indemnification agreements with each of our directors.
The form of indemnity agreement provides that we will indemnify our directors
or executive officers for expenses incurred because of their status as a
director or executive officer, to the fullest extent permitted by Delaware
law, our certificate of incorporation and our bylaws.

   Our certificate of incorporation contains a provision permitted by Delaware
law that generally eliminates the personal liability of directors for monetary
damages for breaches of their fiduciary duty, including breaches

                                      54
<PAGE>

involving negligence or gross negligence in business combinations, unless the
director has breached his or her duty of loyalty, failed to act in good faith,
engaged in intentional misconduct or a knowing violation of law, paid a
dividend or approved a stock repurchase in violation of the Delaware General
Corporation Law or obtained an improper personal benefit. This provision does
not alter a director's liability under the federal securities laws and does
not affect the availability of equitable remedies, such as an injunction or
rescission, for breach of fiduciary duty. Our by-laws provide that directors
and officers shall be, and in the discretion of our board of directors, non-
officer employees may be, indemnified by Digitas to the fullest extent
authorized by Delaware law, as it now exists or may in the future be amended,
against all expenses and liabilities reasonably incurred in connection with
service for or on behalf of Digitas. The by-laws also provide for the
advancement of expenses to directors and, in the discretion of our board of
directors, officers and non-officer employees. In addition, our by-laws
provide that the right of directors and officers to indemnification shall be a
contract right and shall not be exclusive of any other right now possessed or
hereafter acquired under any by-law, agreement, vote of stockholders or
otherwise. We also have directors' and officers' insurance against certain
liabilities.

   Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers or persons controlling Digitas
as described above, we have been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act and is therefore unenforceable. At present,
there is no pending material litigation or proceeding involving any director,
officer, employee or agent of Digitas in which indemnification will be
required or permitted.

Provisions of our Certificate of Incorporation and By-laws that may have Anti-
takeover Effect

   A number of provisions of our certificate of incorporation and by-laws
which will be effective upon completion of this offering concern matters of
corporate governance and the rights of stockholders. These provisions, as well
as the ability of our board of directors to issue shares of preferred stock
and to set the voting rights, preferences and other terms, may be deemed to
have an anti-takeover effect and may discourage takeover attempts not first
approved by our board of directors, including takeovers which stockholders may
deem to be in their best interests. These provisions, together with our
classified board of directors, also could delay or frustrate the removal of
incumbent directors even if the removal of incumbent directors would be
beneficial to our stockholders. Our board of directors believes that these
provisions are appropriate to protect the interests of Digitas and of our
stockholders. Our board of directors has no present plans to adopt any further
measures or devices which may be deemed to have an "anti-takeover effect."

   Classified Board of Directors

   Our board of directors is divided into three classes serving staggered
three-year terms, with one class being elected each year. Our classified
board, together with certain other provisions of our certificate of
incorporation authorizing the board of directors to fill vacant directorships
or increase the size of the board, may prevent a stockholder from removing, or
delay the removal of incumbent directors and simultaneously gaining control of
the board of directors by filling vacancies created by such removal with its
own nominees.

   No Stockholder Action by Written Consent

   Our certificate of incorporation provides that any action required or
permitted to be taken by our stockholders at an annual or special meeting of
stockholders must be effected at a duly called meeting and may not be taken or
effected by a written consent of stockholders.

   Special Meetings of Stockholders

   Our certificate of incorporation and by-laws provide that a special meeting
of stockholders may be called only by our board of directors unless otherwise
required by law. Our by-laws provide that only those matters included in the
notice of the special meeting may be considered or acted upon at that special
meeting unless otherwise provided by law.

                                      55
<PAGE>

   Advance Notice of Director Nominations and Stockholder Proposals

   Our by-laws include advance notice and informational requirements and time
limitations on any director nomination or any new proposal which a stockholder
wishes to make at an annual meeting of stockholders. For the first annual
meeting following the completion of this offering, a stockholder's notice of a
director nomination or proposal will be timely if delivered to the secretary
of Digitas at our principal executive offices not later than the close of
business on the later of the 75th day prior to the scheduled date of such
annual meeting or the 10th day following the day on which public announcement
of the date of such annual meeting is made by Digitas.

   Director Vacancies and Removal

   Our certificate of incorporation provides that vacancies in our board of
directors may be filled only by the affirmative vote of a majority of the
remaining directors. Our certificate of incorporation provides that directors
may be removed from office only with cause and only by the affirmative vote of
holders of at least seventy-five percent of the shares then entitled to vote
at an election of directors.

   Amendment of the Certificate of Incorporation

   Any amendment to our certificate of incorporation must first be approved by
a majority of our board of directors and, if required by law, thereafter
approved by a majority of the outstanding shares entitled to vote with respect
to such amendment, except that any amendment to the provisions relating to
stockholder action, directors, limitation of liability and the amendment of
our certificate of incorporation must be approved by not less than 75% of the
outstanding shares entitled to vote with respect to such amendment.

   Amendment of By-laws

   Our certificate of incorporation and by-laws provide that our by-laws may
be amended or repealed by our board of directors or by the stockholders. Such
action by the board of directors requires the affirmative vote of a majority
of the directors then in office. Such action by the stockholders requires the
affirmative vote of at least seventy-five percent of the shares present in
person or represented by proxy at an annual meeting of stockholders or a
special meeting called for such purpose unless our board of directors
recommends that the stockholders approve such amendment or repeal at such
meeting, in which case such amendment or repeal shall only require the
affirmative vote of a majority of the shares present in person or represented
by proxy at the meeting.

Statutory Business Combination Provision

   Following the offering, we will be subject to Section 203 of the Delaware
General Corporation Law, which prohibits a publicly held Delaware corporation
from consummating a "business combination," except under certain
circumstances, with an "interested stockholder" for a period of three years
after the date such person became an "interested stockholder" unless:

  .  before such person became an interested stockholder, the board of
     directors of the corporation approved the transaction in which the
     interested stockholder became an interested stockholder or approved the
     business combination;

  .  upon the closing of the transaction that resulted in the interested
     stockholder's becoming an interested stockholder, the interested
     stockholder owned at least 85% of the voting stock of the corporation
     outstanding at the time the transaction commenced, excluding shares held
     by directors who are also officers of the corporation and shares held by
     employee stock plans; or

  .  following the transaction in which such person became an interested
     stockholder, the business combination is approved by the board of
     directors of the corporation and authorized at a meeting of stockholders
     by the affirmative vote of the holders of 66% of the outstanding voting
     stock of the corporation not owned by the interested stockholder. The
     term "interested stockholder" generally is defined as a person who,
     together with affiliates and associates, owns, or, within the prior
     three years, owned, 15% or more of a corporation's outstanding voting
     stock.

                                      56
<PAGE>

   The term "business combination" includes mergers, consolidations, asset
sales involving 10% or more of a corporation's assets and other similar
transactions resulting in a financial benefit to an interested stockholder.
Section 203 makes it more difficult for an "interested stockholder" to effect
various business combinations with a corporation for a three-year period. A
Delaware corporation may "opt out" of Section 203 with an express provision in
its original certificate of incorporation or an express provision in its
certificate of incorporation or by-laws resulting from an amendment approved
by holders of a least a majority of the outstanding voting stock. Neither our
certificate of incorporation nor our by-laws contain any such exclusion.

Trading on the Nasdaq National Market System

   We have applied to have our common stock approved for quotation on the
Nasdaq National Market under the symbol "DTAS."

Transfer Agent and Registrar

   The transfer agent and registrar for our common stock will be EquiServe
Trust Company.

                                      57
<PAGE>

                        SHARES ELIGIBLE FOR FUTURE SALE

   Before this offering, there has been no public market for our common stock,
and no prediction can be made as to the effect, if any, that sales of common
stock or the availability of common stock for sale will have on the market
price of our common stock prevailing from time to time. Nonetheless,
substantial sales of common stock in the public market following this
offering, or the perception that such sales could occur, could lower the
market price of our common stock or make it difficult for us to raise
additional equity capital in the future.

   Following this offering, there will be          shares of our common stock
outstanding on a fully diluted basis. Of these shares, the          shares
which are being sold in this offering generally will be freely transferable
without restriction or further registration under the Securities Act, except
that any shares held by our "affiliates" as is defined in Rule 144 under the
Securities Act may be sold only in compliance with the limitations described
below.

Sales of Restricted Securities

   The remaining          shares of common stock which will be outstanding
after the offering will be "restricted securities" as defined in Rule 144, and
may be sold in the future without registration under the Securities Act
subject to compliance with the provisions of Rule 144 or any other applicable
exemption under the Securities Act.

   In general, under Rule 144 a shareholder who has beneficially owned his or
her restricted securities for at least one year including the holding period
of any prior owner, except an affiliate from whom those shares were purchased
is entitled to sell, within any three-month period commencing 90 days after
the date of this prospectus, a number of shares that does not exceed the
greater of 1% of the then outstanding shares of our common stock
(approximately                 shares immediately after this offering) or the
average weekly trading volume in our common stock during the four calendar
weeks preceding the date on which notice of such sale was filed under Rule
144, provided certain requirements concerning availability of public
information, manner of sale and notice of sale are satisfied. In addition, a
shareholder that is not one of our affiliates at any time during the three
months preceding a sale and who has beneficially owned the shares proposed to
be sold for at least two years including the holding period of any prior
owner, except an affiliate from whom those shares were purchased is entitled
to sell the shares immediately under Rule 144(k) without compliance with the
above described requirements under Rule 144.

   Securities issued in reliance on Rule 701 (such as shares of our common
stock acquired pursuant to the exercise of certain options granted under our
stock plans) are also restricted securities and, beginning 90 days after the
date of this prospectus, may be sold by shareholders other than our affiliates
subject only to the manner of sale provisions of Rule 144 and by affiliates
under Rule 144 without compliance with its one-year holding period
requirement.

Stock Options

   We intend to file registration statements on Form S-8 with respect to the
aggregate of 21,205,672.4 shares of common stock issuable under our stock
option and incentive plans and our employee stock purchase plan promptly
following the consummation of this offering. Shares issued upon the exercise
of stock options after the effective date of the Form S-8 registration
statement will be eligible for resale in the public market without
restriction, except that affiliates must comply with Rule 144.


                                      58
<PAGE>

Lock-up Agreements

   All officers and directors and certain shareholders holding an aggregate of
approximately        shares of Digitas' common stock have agreed, subject to
limited exceptions, not to offer, pledge, sell, contract to sell, sell any
option or contract to purchase, purchase any option or contract to sell, grant
any option, right or warrant to purchase, or otherwise transfer or dispose of,
directly or indirectly (or enter into any swap or other arrangement that
transfers to another, in whole or in part, any of the economic consequences of
ownership of), any shares of common stock or any securities convertible into
or exercisable or exchangeable for shares of common stock for a period of 180
days after the date of this prospectus, without the prior written consent of
Morgan Stanley & Co. Incorporated. However, if the reported last sale price of
the common stock on the Nasdaq National Market is at least twice the initial
public offering price per share for 20 of the 30 trading days ending on the
last trading day preceding the 90th day after the date of this prospectus, 25%
of the shares of common stock of Digitas subject to the 180-day restriction
described above will be released from these restrictions. The release of these
shares will occur on the later to occur of:

  .  the 90th day after the date of this prospectus if Digitas makes its
     first post-offering public release of its quarterly or annual earnings
     results during the period beginning on the eleventh trading day after
     the date of this prospectus and ending on the day prior to the 90th day
     after the date of this prospectus, or

  .  on the second trading day following the first public release of Digitas'
     quarterly or annual results occurring on or after the 90th day after the
     date of this prospectus, if Digitas does not make its first post-
     offering public release as set forth in the preceding clause.

These early release provisions do not apply to executive officers and
directors. Morgan Stanley & Co. Incorporated may in its sole discretion choose
to release any or all of these shares from such restrictions prior to the
expiration of such 90 or 180-day period.

Registration Rights

   In connection with the January 1999 recapitalization, we entered into a
registration rights agreement with Positano, Mr. Bronner and each of our other
shareholders and option holders as of the date of the recapitalization. Each
individual who has been granted options under the 1998 option plan since the
recapitalization has also become a party to the registration rights agreement.
Under the registration rights agreement, we have granted:

  .  Positano the right to require us, subject to the terms and conditions
     set forth in the registration rights agreement, to register shares of
     common stock held by it for sale in accordance with their intended
     method of disposition of those shares; and

  .  Mr. Bronner the right to require us, subject to the terms and conditions
     set forth in the registration rights agreement, to register the number
     of shares of common stock held by him and the Michael E. Bronner 1998
     Annuity Trust for sale in accordance with their intended method of
     disposition of those shares.

   Positano may request up to three demand registrations and Mr. Bronner may
request one demand registration, each as described above. Mr. Bronner may only
demand the registration of his securities if we have already consummated an
initial public offering and the aggregate market value of the shares of common
stock proposed to be registered by him is greater than or equal to $15
million. In addition, Positano may request that we defer any demand
registration requested by Mr. Bronner for up to 180 days after the date of
such request. Positano has the right to select the underwriters in connection
with any demand registration in which it is participating other than a Mr.
Bronner demand registration in which Mr. Bronner is offering a greater number
of shares of common stock.

   Subject to limitations set forth in the registration rights agreement, the
other parties to the registration rights agreement have the right to
participate in any demand registration requested by Positano or Mr. Bronner.
In addition, we have granted Positano, Mr. Bronner and the other parties to
the registration rights agreement, the right, subject to exceptions set forth
in the registration rights agreement, to participate in registrations of
common stock initiated by us on our own behalf or on behalf of any other
stockholder.

                                      59
<PAGE>

   The registration rights agreement provides that if requested by the
managing underwriter(s) of any underwritten offering of shares of common
stock, Positano, Mr. Bronner and the other parties to the registration rights
agreement will agree, not to effect any public sale or distribution of any
shares of common stock for a period of up to 180 days following and seven days
prior to the effective date of demand or piggyback registration. See
"Underwriters."

   Under the registration rights agreement, we are required to pay expenses
incurred by us and the fees and expenses of one counsel to the selling
shareholders in connection with any demand and piggyback registrations. We
also have agreed to indemnify the holders of registration rights under the
registration rights agreement against certain liabilities, including
liabilities under the Securities Act, and to contribute to payments they may
be required to make. The registration rights agreement will terminate on the
earlier of the date upon which the parties to the registration rights
agreement no longer hold any shares of common stock that must be registered in
order to be sold or the date upon which the parties agree that the agreement
should be terminated. After the consummation of this offering, the
registration rights agreement will terminate as to any party other than
Positano and Mr. Bronner at the time such party owns fewer than one percent of
our outstanding common stock.

Effect of Sale of Shares

   Prior to this offering, there has been no public market for our common
stock, and no prediction can be made as to the effect, if any, that market
sales of shares of common stock or the availability of shares for sale will
have on the market price of our common stock prevailing from time to time.
Nevertheless, sales of significant numbers of shares of our common stock in
the public market could adversely affect the market price of the common stock
and could impair our future ability to raise capital through an offering of
our equity securities.

                                      60
<PAGE>

                                 UNDERWRITERS

   Under the terms and subject to the conditions contained in the underwriting
agreement, the underwriters named below, for whom Morgan Stanley & Co.
Incorporated, Deutsche Bank Securities Inc., Salomon Smith Barney Inc., Banc
of America Securities LLC and Bear, Stearns & Co. Inc. are acting as
representatives, have severally agreed to purchase, and we and the selling
shareholders have agreed to sell to them, the respective number of shares of
common stock set forth opposite the names of the underwriters below:

<TABLE>
<CAPTION>
                                                                       Number of
     Name                                                                Shares
     ----                                                              ---------
     <S>                                                               <C>
     Morgan Stanley & Co. Incorporated................................
     Deutsche Bank Securities Inc.....................................
     Salomon Smith Barney Inc.........................................
     Banc of America Securities LLC...................................
     Bear, Stearns & Co. Inc..........................................
                                                                         ----
       Total..........................................................
                                                                         ====
</TABLE>

   The underwriters are offering the shares of common stock subject to their
acceptance of the shares from us and the selling stockholders and subject to
prior sale. The underwriting agreement provides that the obligations of the
several underwriters to pay for and accept delivery of the shares of common
stock offered in this offering are subject to the approval of various legal
matters by their counsel and to other delineated conditions. The underwriters
are obligated to take and pay for all of the shares of common stock offered in
this offering, other than those covered by the over-allotment option described
below, if any shares are taken.

   The underwriters initially propose to offer part of the shares of common
stock directly to the public at the initial public offering price set forth on
the cover page hereof and part to dealers at a price that represents a
concession not in excess of $         a share under the initial public
offering price. Any underwriters may allow, and the dealers may reallow, a
concession not in excess of $          a share to other underwriters or to
other dealers. After the initial offering of the shares of common stock, the
offering price and other selling terms may from time to time be varied by the
representatives of the underwriters.

   Digitas and the selling shareholders have granted to the underwriters an
option, exercisable for 30 days from the date of this prospectus, to purchase
up to an aggregate of       and       additional shares of common stock,
respectively, at the initial public offering price set forth on the cover page
of this prospectus, less underwriting discounts and commissions. The
underwriters may exercise such option solely for the purpose of covering over-
allotments, if any, made in connection with the offering of the shares of
common stock offered in this offering. To the extent such option is exercised,
each underwriter will become obligated, subject to certain conditions, to
purchase approximately the same percentage of such additional shares of common
stock as the number set forth next to such underwriter's name in the preceding
table bears to the total number of shares of common stock set forth next to
the names of all underwriters in the preceding table. If the underwriter's
over-allotment option is exercised in full, the total price to public would be
$        , the total underwriters' discounts and commissions would be
$             , and the total proceeds to us would be $           .

   At our request, the underwriters have reserved for sale, at the initial
public offering price, up to 10% of the shares of common stock offered in this
offering for our directors, officers, employees and related persons. The
number of shares of common stock available for sale to the general public will
be reduced to the extent such individuals purchase such reserved shares. Any
reserved shares which are not so purchased will be offered by the underwriters
to the general public on the same basis as the other shares offered hereby.

   Digitas, our directors, officers and our shareholders have each agreed,
without the prior written consent of Morgan Stanley & Co. Incorporated on
behalf of the underwriters, during the period ending 180 days after the date
of this prospectus, not to, directly or indirectly:

                                      61
<PAGE>

  .  offer, pledge, sell, contract to sell, sell any option or contract to
     purchase, purchase any option or contract to sell, grant any option,
     right or warrant to purchase, lend or otherwise transfer or dispose of,
     directly or indirectly, any shares of common stock or any securities
     convertible into or exercisable or exchangeable for common stock
     (whether such shares or any such securities are then owned by such
     person or are thereafter acquired directly from us); or

  .  enter into any swap or other arrangement that transfers to another, in
     whole or in part, any of the economic consequences of ownership of
     common stock,

whether any such transaction described above is to be settled by delivery of
common stock or such other securities, in cash or otherwise. This lock-up
restriction is subject, in limited circumstances for shares held by
shareholders other than officers and directors of Digitas, to earlier release.
See "Shares Eligible for Future Sale."

   The underwriters have informed us that they do not intend sales to
discretionary accounts to exceed five percent of the total number of shares of
common stock offered by them.

   We have filed an application for our common stock to be quoted on the
Nasdaq National Market under the symbol "DTAS."

   In order to facilitate the offering of the common stock, the underwriters
may engage in transactions that stabilize, maintain or otherwise affect the
price of the common stock. Specifically, the underwriters may over-allot in
connection with the offering, creating a short position in the common stock
for their own account. In addition, to cover over-allotments or to stabilize
the price of the common stock, the underwriters may bid for, and purchase,
shares of common stock in the open market. Finally, the underwriting syndicate
may reclaim selling concessions allowed to an underwriter or a dealer for
distributing the common stock in the offering, if the syndicate repurchases
the previously distributed shares of common stock in transactions to cover
syndicate short positions, in stabilization transactions or otherwise. Any of
these activities may stabilize or maintain the market price of the common
stock above independent market levels. The underwriters are not required to
engage in these activities and may end any of these activities at any time.

   We, the selling shareholders and the underwriters have agreed to indemnify
each other against certain liabilities, including liabilities under the
Securities Act.

   Deutsche Bank Securities Inc., one of the representatives of the
underwriters, is affiliated with Bankers Trust Company, one of Digitas'
lenders. More than 10% of the net proceeds Digitas receives from this offering
may be used to repay indebtedness owing to Bankers Trust. As a result, the
offering must be conducted in compliance with the conflict-of-interest
requirements of NASD Regulation, Inc., the regulatory agency that governs the
compensation paid to underwriters in securities offerings. Under these rules,
the initial public offering price of the common stock can be no higher than
that recommended by a qualified independent underwriter, as that term is
defined in the NASD's rules. Morgan Stanley & Co. Incorporated has agreed to
serve as a qualified independent underwriter and has conducted due diligence
and will recommend the maximum price for the shares of common stock to be
offered.

Pricing of the Offering

   Prior to this offering, there has been no public market for the shares of
common stock. Consequently, the initial public offering price for the shares
of common stock was determined by negotiations between Digitas and the
representatives of the underwriters. Among the factors considered in
determining the initial public offering price were:

  .  our record of operations, our current financial position and future
     prospects;

  .  the experience of our management;

  .  revenue, earnings and certain of our other financial and operating
     information in recent periods; and

  .  the price-earnings ratios, price-revenue ratios, market prices of
     securities and certain financial and operating information of companies
     engaged in activities similar to ours.

                                      62
<PAGE>

                           VALIDITY OF COMMON STOCK

   The validity of the shares of common stock we are offering will be passed
upon for us by Goodwin, Procter & Hoar LLP, Boston, Massachusetts. Legal
matters in connection with this offering will be passed upon for the
underwriters by Ropes & Gray, Boston, Massachusetts.

                                    EXPERTS

   The combined financial statements as of December 31, 1998 and 1997 and for
each of the three years in the period ended December 31, 1998 included in this
Prospectus have been so included in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.

                      WHERE YOU CAN FIND MORE INFORMATION

   We have filed with the Securities and Exchange Commission a registration
statement on Form S-1 under the Securities Act with respect to the common
stock we propose to sell in this offering. This prospectus, which constitutes
part of the registration statement, does not contain all of the information
set forth in the registration statement. For further information about us and
the common stock we propose to sell in this offering, we refer you to the
registration statement and the exhibits and schedules filed as a part of the
registration statement. Statements contained in this prospectus as to the
contents of any contract or other document filed as an exhibit to the
registration statement are not necessarily complete. If a contract or document
has been filed as an exhibit to the registration statement, we refer you to
the copy of the contract or document that we have filed. You may inspect the
registration statement, including exhibits, without charge at the principal
office of the Securities and Exchange Commission in Washington, D.C. You may
inspect and copy the same at the public reference facilities maintained by the
Securities and Exchange Commission at 450 Fifth Street, N.W., Judiciary Plaza,
Room 1024, Washington, D.C. 20549, and at the Commission's regional offices
located at Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511 and 7 World Trade Center, Suite 1300, New York, New York
10048. You can also obtain copies of this material at prescribed rates by mail
from the Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549. In addition, the Securities and Exchange Commission
maintains a website at http://www.sec.gov that contains reports, proxy and
information statements and other information regarding registrants that file
electronically with the Securities and Exchange Commission.

                                      63
<PAGE>

                                  DIGITAS INC.

                         INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                                                            Page
                                                                            ----
<S>                                                                         <C>
Report of Independent Accountants.........................................  F-2
Balance Sheet of the Predecessor (combined) at December 31, 1997 and 1998,
 and of the Company at September 30, 1999 (unaudited).....................  F-3
Statement of Operations of the Predecessor (combined) for the years ended
 December 31, 1996, 1997 and 1998 and for the nine months ended September
 30, 1998 (unaudited), and of the Company for the nine months ended
 September 30, 1999 (unaudited) ..........................................  F-4
Statement of Shareholders' Equity (deficit) of the Predecessor (combined)
 for the years ended December 31, 1996, 1997 and 1998, and of the Company
 for the nine months ended September 30, 1999 (unaudited).................  F-5
Statement of Cash Flows of the Predecessor (combined) for the years ended
 December 31, 1996, 1997 and 1998, and for the nine months ended September
 30, 1998 (unaudited), and of the Company for the nine months ended
 September 30, 1999 (unaudited) ..........................................  F-6
Notes to Financial Statements ............................................  F-7
</TABLE>

                                      F-1
<PAGE>

                       REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Stockholders of
Bronner Slosberg Humphrey Co. and
Strategic Interactive Group, Co.

In our opinion, the accompanying combined balance sheet and the related
combined statements of operations, of stockholders' equity (deficit) and of
cash flows present fairly, in all material respects, the combined financial
position of Bronner Slosberg Humphrey Co. and Strategic Interactive Group, Co.
at December 31, 1998 and 1997, and the combined results of their operations
and their combined cash flows for each of the three years in the period ended
December 31, 1998, in conformity with accounting principles generally accepted
in the United States. These financial statements are the responsibility of
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these statements in
accordance with auditing standards generally accepted in the United States,
which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for the opinion expressed above.

PricewaterhouseCoopers LLP

Boston, Massachusetts
March 15, 1999

                                      F-2
<PAGE>

                                  DIGITAS INC.

                                 BALANCE SHEET
                             (dollars in thousands)

<TABLE>
<CAPTION>
                                                 Predecessor
                                                 (combined)          Company
                                              ------------------  -------------
                                                December 31,
                                              ------------------  September 30,
                                                1997      1998        1999
                                              --------  --------  -------------
                                                                   (unaudited)
<S>                                           <C>       <C>       <C>
Assets
Current assets:
  Cash and cash equivalents.................  $  1,868  $     37    $  1,364
  Accounts receivable, net of allowance for
   doubtful accounts of $707, $741 and $767
   at December 31, 1997, 1998 and September
   30, 1999, respectively...................    16,212    23,782      33,902
  Accounts receivable, unbilled.............    13,893    15,150      32,407
  Other current assets......................     1,638     1,505       2,183
  Deferred tax assets.......................       297     1,952         --
                                              --------  --------    --------
   Total current assets.....................    33,908    42,426      69,856
Fixed assets, net...........................    15,764    17,975      19,404
Intangible assets, net......................       --        --      164,407
Deferred tax assets, long-term..............       --        --        8,265
Other assets................................        33     1,869       2,318
                                              --------  --------    --------
   Total assets.............................  $ 49,705  $ 62,270    $264,250
                                              ========  ========    ========
Liabilities and Shareholders' Equity
 (Deficit)
Current liabilities:
  Other current liabilities.................  $    --   $    --     $  1,350
  Accounts payable..........................    13,310     9,849       7,923
  Line of credit............................     4,655     7,000       8,000
  Current portion of long-term debt.........     1,809       172       7,525
  Billings in excess of cost and estimated
   earnings on uncompleted contracts........     7,076    10,517      18,882
  Accrued expenses..........................     3,358     7,039       7,005
  Accrued compensation......................     9,245    40,145      12,995
  Capital lease obligations.................       475     1,369         414
  Notes payable, shareholders...............    14,567    12,003         --
                                              --------  --------    --------
   Total current liabilities................    54,495    88,094      64,094
Long-term debt, less current portion........     3,701     1,432      64,917
Capital lease obligation, long-term
 portion....................................     1,228       317         615
Deferred tax liability......................       112       139         175
Other long-term liabilities.................       --         48         344
                                              --------  --------    --------
                                                59,536    90,030     130,145
Commitments (Note 15)
Shareholders' equity (deficit):
  BSH common shares, no par value per share,
   24,465,011, shares authorized, issued,
   and outstanding at December 31, 1997 and
   1998, respectively and 25,351,740 shares
   authorized, issued and outstanding at
   September 30, 1999.......................         1         1          10
  SIG common shares, no par value per share,
   193,960, shares authorized, issued, and
   outstanding at December 31, 1997 and
   1998, respectively.......................         1         1         --
  Additional paid-in capital................     3,435     3,435     155,432
  Notes receivable from shareholders........    (1,065)      --          --
  Interest receivable on shareholders'
   notes....................................      (366)      (94)        --
  Accumulated deficit.......................    (8,655)  (27,921)    (21,337)
  Less: treasury stock, at cost, 8,105,893
   shares at December 31, 1997 and 1998,
   respectively.............................    (3,182)   (3,182)        --
                                              --------  --------    --------
   Total shareholders' equity (deficit).....    (9,831)  (27,760)    134,105
                                              --------  --------    --------
   Total liabilities and shareholders'
    equity..................................  $ 49,705  $ 62,270    $264,250
                                              ========  ========    ========
</TABLE>

   The accompanying notes are an integral part of these financial statements.

                                      F-3
<PAGE>

                                  DIGITAS INC.

                            STATEMENT OF OPERATIONS
                     (in thousands, except per share data)

<TABLE>
<CAPTION>
                                    Predecessor (combined)                    Company
                          ---------------------------------------------- -----------------
                                                       Nine months ended Nine months ended
                                                         September 30,     September 30,
                           Year ended December 31,           1998              1999
                          ---------------------------  ----------------- -----------------
                           1996      1997      1998
                          -------  --------  --------
                                                          (unaudited)       (unaudited)
<S>                       <C>      <C>       <C>       <C>               <C>
Revenue.................  $83,157  $101,238  $122,309       $89,700          $133,907
                          -------  --------  --------       -------          --------
Operating expenses:
  Professional services
   costs................   43,272    57,610    65,696        49,606            73,238
  Selling, general and
   administrative
   expense..............   40,982    40,552    48,485        31,489            45,890
  Stock-based
   compensation.........      628     6,325    25,820         2,293               350
  Amortization of
   intangible assets....      --        --        --            --             26,200
                          -------  --------  --------       -------          --------
  Total operating
   expenses.............   84,882   104,487   140,001        83,388           145,678
                          -------  --------  --------       -------          --------
Income (loss) from
 operations.............   (1,725)   (3,249)  (17,692)        6,312           (11,771)
                          -------  --------  --------       -------          --------
Other income (expense):
  Interest income.......      123       182        21           534                12
  Interest expense......   (1,404)   (2,613)   (2,719)       (2,618)           (5,344)
                          -------  --------  --------       -------          --------
                           (1,281)   (2,431)   (2,698)       (2,084)           (5,332)
                          -------  --------  --------       -------          --------
Income (loss) before
 provision for income
 taxes..................   (3,006)   (5,680)  (20,390)        4,228           (17,103)
Benefit from (provision
 for) income taxes......     (160)      114     1,439           (48)           (1,773)
                          -------  --------  --------       -------          --------
Net income (loss).......  $(3,166) $ (5,566) $(18,951)      $ 4,180          $(18,876)
                          =======  ========  ========       =======          ========
Net loss per share (Note
 2)
  Basic and diluted.....                                                     $  (0.76)
                                                                             ========
Weighted average common
 shares
 outstanding (Note 2)
  Basic and diluted.....                                                       24,966
                                                                             ========
</TABLE>



   The accompanying notes are an integral part of these financial statements.

                                      F-4
<PAGE>

                                  DIGITAS INC.

                  STATEMENT OF SHAREHOLDERS' EQUITY (DEFICIT)
                             (dollars in thousands)

<TABLE>
<CAPTION>
                                                      Notes                                                      Total
                       Common stock     Additional  receivable   Interest on  Retained    Treasury stock     shareholders'
                     ------------------  paid-in       from     shareholders' earnings   ------------------     equity
                       Shares    Amount  capital   shareholders     notes     (deficit)   Shares    Amount     (deficit)
                     ----------  ------ ---------- ------------ ------------- ---------  ---------  -------  -------------
<S>                  <C>         <C>    <C>        <C>          <C>           <C>        <C>        <C>      <C>
Predecessor
 (combined)

Balance at December
 31, 1995..........  25,474,333   $  2   $  2,131    $(2,130)       $(188)    $     77   5,183,265  $  (275)     $  (383)
Shares issued
 pursuant to stock
 options...........     826,090             1,304                                                                  1,304
Treasury stock
 redemption........  (1,809,996)                       1,065                             1,809,996   (3,252)      (2,187)
Stock issued
 pursuant to stock
 agreement.........   1,277,156             2,063                                                                  2,063
Notes receivable
 issuance..........                                   (2,239)                                                     (2,239)
Interest income on
 shareholders'
 notes.............                                                  (193)                                          (193)
Interest forgiven
 on shareholders'
 notes.............                                                   176                                            176
Net loss...........                                                             (3,166)                           (3,166)
                     ----------   ----   --------    -------        -----     --------   ---------  -------    ---------
Balance at December
 31, 1996..........  25,767,583      2      5,498     (3,304)        (205)      (3,089)  6,993,261   (3,527)      (4,625)
Issuance of common
 stock.............       4,020
Reversal of prior
 year treasury
 stock redemption,
 net...............     669,678                                                           (669,678)   1,247        1,247
Treasury stock
 redemption........    (505,154)                         176                               505,154     (902)        (726)
Cancellation of
 note receivable in
 connection with
 exchange
 agreement.........  (1,277,156)           (2,063)     2,063                             1,277,156                   --
Interest income on
 shareholders'
 notes.............                                                  (161)                                          (161)
Net loss...........                                                             (5,566)                           (5,566)
                     ----------   ----   --------    -------        -----     --------   ---------  -------    ---------
Balance at December
 31, 1997..........  24,658,971      2      3,435     (1,065)        (366)      (8,655)  8,105,893   (3,182)      (9,831)
Offset of note
 receivable from
 shareholder
 against note
 payable from
 another
 shareholder.......                                    1,065          272                                          1,337
Distribution to
 shareholders......                                                               (315)                             (315)
Net loss...........                                                            (18,951)                          (18,951)
                     ----------   ----   --------    -------        -----     --------   ---------  -------    ---------
Balance at December
 31, 1998..........  24,658,971   $  2   $  3,435    $   --         $ (94)    $(27,921)  8,105,893  $(3,182)   $ (27,760)
                     ==========   ====   ========    =======        =====     ========   =========  =======    =========

Company

Balance at January
 1, 1999...........         --     --         --         --           --           --          --       --           --
Issuance of common
 stock in
 connection with
 Recapitalization
 (unaudited).......  25,043,244    --    $153,686                                                              $ 153,686
Exercise of stock
 options
 (unaudited).......      59,224   $  2        149                                                                    151
Distribution to
 shareholders
 (unaudited).......                                                           $ (2,461)                           (2,461)
Stock-based
 compensation
 (unaudited).......                           350                                                                    350
Issuance of common
 stock
 (unaudited).......     249,272      8      1,247                                                                  1,255
Net loss
 (unaudited).......                                                            (18,876)                          (18,876)
                     ----------   ----   --------    -------        -----     --------   ---------  -------    ---------
Balance at
 September 30, 1999
 (unaudited).......  25,351,740   $ 10   $155,432    $   --         $ --      $(21,337)        --   $   --     $ 134,105
                     ==========   ====   ========    =======        =====     ========   =========  =======    =========
</TABLE>

   The accompanying notes are an integral part of these financial statements.

                                      F-5
<PAGE>

                                  DIGITAS INC.

                            STATEMENT OF CASH FLOWS
                                 (in thousands)

<TABLE>
<CAPTION>
                                   Predecessor (combined)                   Company
                         --------------------------------------------- -----------------
                         Year ended December 31,     Nine months ended Nine months ended
                         --------------------------    September 30,     September 30,
                          1996     1997      1998          1998              1999
                         -------  -------  --------  ----------------- -----------------
                                                        (unaudited)       (unaudited)
<S>                      <C>      <C>      <C>       <C>               <C>
Cash flows from
 operating activities:
 Net income (loss).....  $(3,166) $(5,566) $(18,951)      $ 4,180          $(18,876)
 Adjustments to
  reconcile net loss to
  net cash provided by
  (used in) operating
  activities:
 Depreciation and
  amortization.........    2,299    3,360     4,645         3,272            31,186
 Loss on disposal of
  fixed assets.........      --       137        67            60                85
 Stock-based
  compensation.........      628      --     22,762           --                350
 Provision for doubtful
  accounts.............      163      310       216           162               682
 Deferred income
  taxes................      (31)    (124)   (1,628)           (3)              175
  Changes in operating
   assets and
   liabilities:
  Accounts receivable..     (138)  (4,051)   (7,786)        3,994           (10,802)
  Accounts receivable,
   unbilled............   (3,302)  (4,992)   (1,257)       (9,279)          (17,257)
  Other current
   assets..............     (104)  (1,105)      133           439              (679)
  Other assets.........  --           (12)   (1,836)           (2)           (2,569)
  Accounts payable.....  (1,668)    7,451    (3,461)      (10,087)           (1,926)
  Billings in excess of
   costs and estimated
   earnings on
   uncompleted
   contracts...........   (1,782)   1,582     3,441         1,829             8,365
  Accrued expenses.....   (4,633)     831     3,681         1,604               744
  Accrued
   compensation........    2,163    3,715     8,138           767               262
  Other liabilities....      --       --         48           --              1,350
                         -------  -------  --------       -------          --------
   Net cash provided by
    (used in) operating
    activities.........   (9,571)   1,536     8,212        (3,064)           (8,910)
                         -------  -------  --------       -------          --------
Cash flows from
 investing activities:
 Cash paid for
  acquisition, net of
  cash acquired .......      --       --        --            --            (60,640)
 Purchase of fixed
  assets...............   (6,930)  (7,944)   (6,329)       (4,892)           (5,608)
                         -------  -------  --------       -------          --------
   Net cash used in
    investing
    activities.........   (6,930)  (7,944)   (6,329)       (4,892)          (66,248)
                         -------  -------  --------       -------          --------
Cash flows from
 financing activities:
 Principal payments
  under capital lease
  obligations..........     (170)    (299)     (611)         (674)           (1,263)
 Proceeds from sale
  leaseback
  transaction..........      --     1,807       --            --                --
 Net proceeds from line
  of credit, bank......      600    4,055     2,345         3,345             8,000
 Proceeds from note
  payable, bank........      --     5,000     5,000         5,000            73,399
 Proceeds from (payment
  of) note payable,
  tenant allowances....      374      105      (155)         (102)             (113)
 Proceeds from notes
  payable,
  shareholders.........   10,102    3,251     3,000         3,000               --
 Payment of notes
  payable, bank........      --    (1,250)   (8,750)         (242)           (2,446)
 Payment of notes
  payable,
  shareholders.........   (6,367)  (4,532)   (4,228)       (3,627)              --
 Interest receivable on
  shareholders' notes..       78     (162)      --            --                --
 Distributions to
  shareholders.........      --       --       (315)          --             (2,461)
 Proceeds from issuance
  of common stock......      500      --        --            --              1,406
                         -------  -------  --------       -------          --------
   Net cash provided by
    (used in) financing
    activities.........    5,117    7,975    (3,714)        6,700            76,522
                         -------  -------  --------       -------          --------
Net increase (decrease)
 in cash and cash
 equivalents...........  (11,384)   1,567    (1,831)       (1,256)            1,364
Cash and cash
 equivalents, beginning
 of period.............   11,685      301     1,868         1,868               --
                         -------  -------  --------       -------          --------
Cash and cash
 equivalents, end of
 period................  $   301  $ 1,868  $     37       $   612          $  1,364
                         =======  =======  ========       =======          ========
Supplemental disclosure
 of cash flow
 information:
 Cash paid for taxes...  $    23  $    21  $    230       $    13          $  2,611
 Cash paid for
  interest.............      565    1,692     2,034         1,338             4,876
Supplemental
 disclosures of noncash
 investing and
 financing activities:
 Equipment acquired
  under capital lease..  $   --       --   $    594       $   340          $    606
 Assignment of notes
  receivable...........      --       --      1,065         1,065               --
 Interest accrued on
  notes receivable
  assignment...........      --   $ 2,241       272           272               --
 Cancellation of note
  payable to
  shareholder..........      --     2,187       --            --                --
 Issuance of notes
  payable to
  shareholders.........      --     1,666       --            --                --
</TABLE>

   The accompanying notes are an integral part of these financial statements.

                                      F-6
<PAGE>

                                 DIGITAS INC.

                         NOTES TO FINANCIAL STATEMENTS

1. Basis of Presentation and Description of Business

 Basis of Presentation

   Bronner Slosberg Humphrey Inc. was incorporated in Massachusetts in 1980 as
a sub-chapter S corporation. Strategic Interactive Group, Inc. was
incorporated in Massachusetts in 1995 as a sub-chapter S corporation. Through
December 31, 1998, certain shareholders of Bronner Slosberg Humphrey Inc.
owned a majority of the outstanding shares of Strategic Interactive Group,
Inc. Accordingly, financial statements of the two entities are combined for
1998 and prior years.

   On November 5, 1998, Bronner Slosberg Humphrey Inc. and Strategic
Interactive Group, Inc. completed transactions in which the two companies were
reorganized into Massachusetts business trusts (each a "Trust") each with a
wholly-owned limited liability company ("LLC"). After formation of the Trusts
and LLCs, the two companies were merged with and into Bronner Slosberg
Humphrey, LLC and Strategic Interactive Group, LLC, respectively, with each
shareholder of the original S corporations receiving as consideration an
equivalent number of beneficial common shares in the Bronner Slosberg Humphrey
Co., a Massachusetts business trust ("BSH") and Strategic Interactive Group,
Co. Massachusetts business trust ("SIG") as such shareholders held in the S
corporations prior to the mergers. The reorganization of the companies into
Trusts and subsidiary LLCs has been accounted for at historical cost as a
combination of entities under common control. BSH and SIG on a combined basis
are referred to herein as the "Predecessor".

   Effective January 1, 1999, the Predecessor completed a transaction with a
private equity investor and the existing shareholders (the
"Recapitalization"). Under the terms of the Recapitalization, $102 million was
used to purchase stock from existing shareholders of BSH and SIG. Borrowings
of approximately $73 million were used to purchase stock from the BSH and SIG
shareholders, prepay outstanding debt, accrued interest, notes held by
shareholders, certain stock options and shareholder appreciation rights and to
pay transaction related bonuses. On the date following the close of the
Recapitalization, SIG effectively merged into Bronner Slosberg Humphrey Co.
Bronner Slosberg Humphrey Co. serves as the ultimate parent of Bronnercom,
LLC, the Delaware limited liability company through which the business is
operated. Substantially all of the stock options and stock appreciation rights
of the Predecessor were replaced with stock options in Bronner Slosberg
Humphrey Co. with equivalent in-the-money value which existed at the date of
Recapitalization. The Recapitalization was accounted for as a purchase as
described in Note 3. On December 22, 1999, Digitas Inc., a Delaware
corporation was formed to ultimately hold the ownership interests of Bronner
Slosberg Humphrey Co. and Bronnercom, LLC after completing a reorganization to
become the sole shareholder of the Trust. The "Company" refers to Bronnercom,
LLC prior to this reorganization and Digitas Inc., thereafter. A United
Kingdom subsidiary was formed in late 1998 and is included in the financial
statements of the Predecessor and the Company subsequent to that date.

   The financial statements of the Company and the Predecessor are not
comparable in certain respects due to the application of purchase accounting
as of the date of the recapitalization. The Predecessor's combined financial
statements represent the historical basis of financial position, results of
operations and cash flows for the periods presented. The financial information
of the Predecessor presented herein does not necessarily reflect what the
financial position and results of operations of the Company would have been
had it been recapitalized for all the periods and may not be indicative of
future operations or financial position.

   The Predecessor and the Company have experienced substantial net losses for
the three years ended December 31, 1998 and the nine months ended September
30, 1999 and had an accumulated deficit of approximately $13 million. Such
losses and accumulated deficit resulted from the Company's distributions of
earnings to shareholders as well as expansion of Digitas' infrastructure. For
the foreseeable future, the Company expects to continue to experience
significant growth in its operating expenses. As a result, the Company's

                                      F-7
<PAGE>

                                 DIGITAS INC.

                  NOTES TO FINANCIAL STATEMENTS--(Continued)

business plan indicates that additional financing would be required to support
its planned expenditures. In the event that an initial public offering is not
completed on a timely basis, the Company would seek to extend its existing
loan facilities by $10 million.

 Operations

   The Company is an Internet professional services firm that provides
integrated digital strategy, technology and infrastructure and integrated
marketing solutions to Fortune 100 and other companies primarily in the United
States.

2. Summary of Significant Accounting Policies

 Cash and Cash Equivalents

   Cash and cash equivalents include all highly liquid debt instruments
purchased with an original maturity of three months or less. Cash equivalents
are stated at cost plus accrued interest which approximates market.

 Fixed Assets

   Fixed assets are recorded at cost. Expenditures for renewals and
improvements are capitalized, and repairs and maintenance are charged to
operations as incurred. Equipment held under capital leases is stated at the
present value of minimum lease payments at the inception of the lease and
amortized using the straight-line method over the lease term. Leasehold
improvements are recorded net of construction allowances provided by the
landlord. Depreciation is recorded on the straight-line basis over the
estimated useful life of the related assets, which are as follows:

<TABLE>
      <S>                                    <C>
      Furniture and fixtures................ 7 years
      Computer equipment and software....... 3-5 years
      Capital leases........................ Lesser of lease term or useful life
      Leasehold improvements................ Lesser of lease term or useful life

 Intangible Assets

   Intangible assets consist of assembled workforce, customer base and excess
cost over fair value of net assets acquired ("goodwill") and are stated at
cost less accumulated amortization. Intangible assets are amortized over their
estimated future lives, which are as follows:

      Assembled workforce................... 2 years
      Favorable lease....................... 6 years
      Goodwill.............................. 7 years
</TABLE>

 Capitalized Financing Fees

   Capitalized financing fees are amortized over the term of the underlying
debt utilizing the interest method, and the amortization is included in
interest expense.

 Internal Use Software

   AICPA Statement of Position 98-1 "Accounting for the Costs of Computer
Software Developed or Obtained for Internal Use" was adopted, effective
January 1, 1999. The company capitalizes external costs related to software
and implementation services in connection with its internal use software
systems.

 Impairment of Long-Lived Assets

   The Company records impairment losses on long-lived assets used in
operations when indicators of impairment are present and the undiscounted cash
flows estimated to be generated by those assets are less than the assets'
carrying amount.

                                      F-8
<PAGE>

                                 DIGITAS INC.

                  NOTES TO FINANCIAL STATEMENTS--(Continued)


 Revenue Recognition

   Revenue pursuant to fixed-price contracts is recognized as services are
rendered on the percentage-of-completion method of accounting (based on the
ratio of costs incurred to total estimated costs). Revenue pursuant to time
and materials contracts are recognized as services are provided. Certain
contracts contain provisions for performance incentives. Such contingent
revenue is recognized in the period in which the contingency is resolved.
Unbilled accounts receivable on contracts is comprised of costs plus earnings.
Included in accounts receivable are reimbursable costs charged to and
collected from clients. These costs are not included in revenue.

   Provisions for estimated losses on uncompleted contracts are made on a
contract-by-contract basis and are recognized in the period in which losses
are determined.

 Professional Services Costs

   Professional services costs consist primarily of compensation and benefits
of the Company's employees engaged in the delivery of professional services
plus other nonreimbursable service costs.

 Historical and Pro Forma (Unaudited) Net Income Per Share

   Basic and diluted earnings per share are computed in accordance with
Statement of Financial Accounting Standards No. 128 ("SFAS 128") "Earnings per
Share". SFAS 128 requires both basic earnings per share, which is based on the
weighted average number of common shares outstanding, and diluted earnings per
share, which is based on the weighted average number of common shares
outstanding and all dilutive potential common equivalent shares outstanding.
The dilutive effect of options is determined under the treasury stock method
using the average market price for the period. Common equivalent shares are
included in the per share calculations where the effect of their inclusion
would be dilutive.

   Historical net income (loss) per share is not presented in the financial
statements for the years ended December 31, 1996, 1997 and 1998 and the nine
months ended September 30, 1998 because it is not considered meaningful since
the two entities comprising the Predecessor were S corporations during that
time period.

 Income Taxes

   The Predecessor was taxed under the provisions of Subchapter S of the
Internal Revenue Code, whereby the corporate income is taxed to the individual
shareholders based on their proportionate share of the Company's taxable
income. Massachusetts taxes profits on S corporations with receipts exceeding
$6,000,000.

   On November 5, 1998, the Predecessor reorganized resulting in its
conversion into a Massachusetts business trust, a reorganization which affects
the Massachusetts tax treatment of the Predecessor and the Company and its
shareholders that are residents of Massachusetts. The Predecessor and the
Company recorded a provision for Massachusetts taxes that reflects its change
in status during 1998.

   Effective January 1, 1999, the Predecessor terminated its S corporation
election and is subject to corporate-level federal and certain additional
state income taxes.

   The Company accounts for income taxes using the asset and liability method
in accordance with SFAS No. 109, "Accounting for Income Taxes". Under SFAS No.
109, deferred tax assets and liabilities are recognized for future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective
income tax bases for operating profit and tax liability carryforward. Deferred
tax assets and liabilities are measured using enacted tax rates to taxable
income in the years in which those temporary differences are expected to be
recovered or settled. The effect on deferred tax assets or liabilities of a
change in tax rates is recognized in the period in which the tax change
occurs.

                                      F-9
<PAGE>

                                 DIGITAS INC.

                  NOTES TO FINANCIAL STATEMENTS--(Continued)


 Stock-based Compensation

   Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to
Employees" (APB 25), and related interpretations are applied in accounting for
its employee stock option plans. The disclosure option of Financial Accounting
Standards Board Statement No. 123, "Accounting for Stock-Based Compensation",
(SFAS No. 123) which includes information with respect to stock-based
compensation determined under the "fair value" method has been utilized in the
accompanying financial statements.

 Foreign Currency Translation

   The functional currency of the Company's foreign subsidiary is the U.S.
dollar. Monetary assets and liabilities of the subsidiary are translated into
U.S. dollars at the exchange rate in effect at period-end and nonmonetary
assets and liabilities are remeasured at historic exchange rates. Income and
expenses are remeasured at the average exchange rate for the period.
Translation gains and losses are reflected in SG&A in the statement of
operations.

 Management's Use of Estimates

   The preparation of the financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
period. Actual results could differ from those estimates.

 Comprehensive Income

   Effective January 1, 1998, the Statement of Financial Accounting Standards
No. 130, "Reporting Comprehensive Income" (SFAS 130) was adopted. This
statement requires that all components of comprehensive income be reported in
the financial statements in the period in which they are recognized. For each
year reported, comprehensive income (loss) under SFAS 130 was equivalent to
the Company's net income (loss) reported in the accompanying statement of
operations.

 Recently Issued Accounting Pronouncements

   In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards (SFAS) No. 133, "Accounting for Derivative
Instruments and Hedging Activities". SFAS No. 133 requires that all derivative
instruments be recorded on the balance sheet at their fair value. Changes in
the fair value of derivatives are recorded each period in current earnings or
other comprehensive income, depending on whether a derivative is designated as
part of a hedge transaction and, if it is, the type of hedge transaction. The
Company will adopt SFAS No. 133 as required by SFAS No. 137, "Deferral of the
Effective Date of the FASB Statement No. 133", in fiscal year 2001. The
Company has not yet determined the impact that the adoption of SFAS No. 133
will have on its financial position or results of operations.

 Unaudited Information

   The interim financial information as of and for the nine months ended
September 30, 1998 and 1999 is unaudited. However, in the opinion of
management, such information has been prepared on the same basis as the
audited financial statements and includes all adjustments, consisting solely
of normal and recurring adjustments, necessary for a fair presentation of the
financial position and the results of operations for the periods presented.
The interim results, however, are not necessarily indicative of results for
any future period.

                                     F-10
<PAGE>

                                  DIGITAS INC.

                   NOTES TO FINANCIAL STATEMENTS--(Continued)


3. Recapitalization

   The recapitalization described in Note 1 has been accounted for under the
purchase method. Accordingly, the purchase price has been allocated to tangible
and intangible assets acquired and liabilities assumed based on their
respective fair values on the acquisition date.

   The consideration paid was as follows:

<TABLE>
      <S>                                                              <C>
      Common stock...................................................  $126,134
      Redemption of Predecessor common shares and options and payment
       for other shareholder rights..................................    32,741
      Fair value of stock options exchanged and warrants issued......    27,551
      Direct costs of acquisition....................................     5,104
                                                                       --------
                                                                       $191,530
                                                                       ========
</TABLE>

   The purchase price was allocated to the assets acquired and liabilities
assumed as follows:

<TABLE>
      <S>                                                              <C>
      Goodwill........................................................ $163,473
      Workforce-in-place..............................................   22,900
      Favorable lease.................................................    4,234
      Deferred taxes..................................................    8,265
      Net assets acquired.............................................   (7,342)
                                                                       --------
                                                                       $191,530
                                                                       ========
</TABLE>

     The following unaudited pro forma results of operations reflects the
  combined results of operations of the Predecessor for the year ended
  December 31, 1998 and the nine-month period ended September 30, 1998, as if
  the purchase had occurred on the first day of the period presented. The
  unaudited pro forma information is not necessarily indicative of the
  combined results that would have occurred had the purchase taken place on
  the first day of the period presented, nor is it necessarily indicative of
  results that may occur in the future.

<TABLE>
<CAPTION>
                                                   Year ended  Nine months ended
                                                  December 31,   September 30,
                                                      1998           1998
                                                  ------------ -----------------
      <S>                                         <C>          <C>
      Revenue....................................   $122,309       $ 89,700
      Net loss...................................    (43,076)       (26,799)
</TABLE>

                                      F-11
<PAGE>

                                  DIGITAS INC.

                   NOTES TO FINANCIAL STATEMENTS--(Continued)


4. Fixed Assets

   Fixed assets consist of the following:

<TABLE>
<CAPTION>
                                                                                                 Predecessor
                                                                                                  (combined)         Company
                                                                                               -----------------  -------------
                                                                                                 December 31,
                                                                                               -----------------  September 30,
                                                                                                 1997     1998        1999
                                                                                               --------  -------  -------------
<S>                                                                                            <C>       <C>      <C>
Furniture and fixtures........................................................................ $  6,449  $ 7,401     $ 3,835
Computer equipment and software...............................................................   12,170   16,499      13,162
Leasehold improvements........................................................................    3,677    4,285       4,315
Capital leases................................................................................    2,642    3,236       2,792
                                                                                               --------  -------     -------
                                                                                                 24,937   31,421      24,104
                                                                                               --------  -------     -------
Less accumulated depreciation.................................................................   (9,173) (13,446)     (4,700)
                                                                                               --------  -------     -------
                                                                                               $ 15,764  $17,975     $19,404
--------------------------------------------------
                                                                                               ========  =======     =======
</TABLE>

   Depreciation expense for the years ended December 31, 1996, 1997, 1998 and
for the nine-month periods ended September 30, 1998 and 1999 was approximately
$2,299,000, $3,360,000, $4,645,000, $3,272,000 and $4,700,000, respectively.

5. Intangible Assets

   Intangible assets consist of the following:

<TABLE>
<CAPTION>
                                                                      Company
                                                                   -------------
                                                                   September 30,
                                                                       1999
                                                                   -------------
      <S>                                                          <C>
      Assembled workforce.........................................   $ 22,900
      Favorable lease.............................................      4,234
      Goodwill....................................................    163,473
                                                                     --------
                                                                      190,607
      Less accumulated amortization...............................    (26,200)
                                                                     --------
                                                                     $164,407
                                                                     ========
</TABLE>

   There were no intangible assets as of December 31, 1997 and 1998.

                                      F-12
<PAGE>

                                 DIGITAS INC.

                  NOTES TO FINANCIAL STATEMENTS--(Continued)


6. Debt

Debt consists of the following:

<TABLE>
<CAPTION>
                                                                                                 Predecessor
                                                                                                 (combined)         Company
                                                                                               ----------------  -------------
                                                                                                December 31,
                                                                                               ----------------  September 30,
                                                                                                1997     1998        1999
                                                                                               -------  -------  -------------
<S>                                                                                            <C>      <C>      <C>
Line of credit................................................................................ $ 4,655  $ 7,000     $ 8,000
Notes payable, term loan......................................................................   3,750      --       70,952
Notes payable, tenant allowance...............................................................   1,760    1,604       1,490
Notes payable, shareholders...................................................................  14,567   12,003         --
                                                                                               -------  -------     -------
                                                                                                24,732   20,607      80,442
Less: current portion......................................................................... (21,031) (19,175)    (15,525)
                                                                                               -------  -------     -------
  Total long-term debt........................................................................ $ 3,701  $ 1,432     $64,917
--------------------------------------------------
                                                                                               =======  =======     =======
</TABLE>

 Credit Agreements

   On March 13, 1997, the Predecessor entered into a Credit Agreement (the
"Credit Agreement") consisting of a $10,000,000 line of credit, a three-year
$5,000,000 term loan and a $5,537,500 standby letter of credit facility. At
December 31, 1997, approximately $3,750,000 was outstanding under the term
loan, $4,655,000 was outstanding under the line of credit and $5,537,000 was
outstanding under the standby letters of credit. The Predecessor was not in
compliance with certain of the Credit Agreement's covenants as of December 31,
1997 and obtained appropriate waivers from the bank.

   During 1998, the Predecessor entered into various amendments to the Credit
Agreement which increased the line of credit to $15,000,000 and extended the
expiration date from May 31, 1998 to November 30, 1998. A new term loan of
$5,000,000 ("Bridge Loan") was entered into on March 13, 1998 and expired on
September 30, 1998. Principal and interest on the term and bridge loans were
payable at LIBOR plus .25% to .75% or the prime rate plus 0% to .25% based on
quarterly leverage ratios.

   On November 25, 1998, the Predecessor entered into a Credit Agreement (the
"New Agreement") which replaced the existing Credit Agreement and all other
previous lending agreements. The New Agreement included a revolving line of
credit and a $10,000,000 standby letter of credit facility. Under the line of
credit terms, the maximum line was equal to $35,000,000 less outstanding
standby letters of credit and expired on October 31, 2001. At December 31,
1998, $7,000,000 was outstanding under the line of credit and approximately
$6,194,000 was outstanding under standby letters of credit. The interest rate
on the line of credit was either the bank's prime rate or the LIBOR rate, at
the Predecessor's discretion, plus the applicable margin of 0% to .25% on
prime loans and .5% to 1.5% on LIBOR loans based on certain ratios as set by
the bank. The rate at December 31, 1998 was 7.75%. The standby letter of
credit facility expired on October 31, 2001, subject to renewal, which was at
the discretion of the bank, and had an annual commitment fee that ranged from
 .20% to .25%. The New Agreement was collateralized by the combined assets of
Predecessor company and contained certain restrictive covenants. The covenants
limited shareholder distributions and payments on subordinated debt to certain
maintainable ratios for cash and also included minimum leverage and debt
service ratios. As part of the New Agreement, the Bridge Loan and the Credit
Agreement were paid in full.

   Effective January 1, 1999, in connection with the recapitalization
described in Note 3, the Company replaced the long-term borrowing arrangement
described above with the following new credit facilities:

     $73,399,000 term loan due December 31, 2004

                                     F-13
<PAGE>

                                 DIGITAS INC.

                  NOTES TO FINANCIAL STATEMENTS--(Continued)

     $20,000,000 revolving loan due December 31, 2004

   Included as part of the $20,000,000 revolving credit facility is a swing
line loan of $3,500,000 and a standby letter of credit facility of
$10,000,000.

   Amounts borrowed under either the term loan or the revolving loan bear
interest, at the Company's option, at either the Base Rate (higher of (i) the
prime rate or (ii) the rate which is .5% in excess of the Federal Reserve
weighted average rate on overnight federal funds) plus a margin of .5% to 2%,
or the EuroDollar Rate as determined by the lenders plus a margin of 1.5% to
3%. Amounts borrowed under the swing line bear interest at the Base Rate plus
a margin of .5% to 2%. At September 30, 1999, the applicable borrowing rates
were as follows: term loan 8.0%, revolving loan 7.9% and swing loan 9.4%.
Additionally, the Company is required to pay a commitment fee of .5% of the
average daily unused amount of the revolving loan and the letters of credit;
the unused portion of the revolving loan and the letters of credit at
September 30, 1999 was $7,405,948.

   The term loan is repayable as follows (in thousands):

<TABLE>
      <S>                                                                <C>
      1999.............................................................. $ 2,447
      2000..............................................................   7,341
      2001..............................................................  10,276
      2002..............................................................  13,213
      2003..............................................................  16,143
      2004..............................................................  21,532
                                                                         -------
                                                                         $70,952
                                                                         =======
</TABLE>

   Effective November 5, 1999, the Company increased its revolving loan to
$25,000,000 and, consequently, its letter of credit facility to $15,000,000 in
order to cover the required letter of credit for the new leased facility in
New York. See Note 15.

   The credit facilities contain certain change of control provisions and
impose certain restrictive covenants upon the Company related to the
incurrence of indebtedness, contingent obligations, transactions with
affiliates, business combinations, investments, purchases and asset sales,
payments of dividends, and attainment of financial covenants including
interest coverage, earnings and leverage ratios.

 Notes Payable, Tenant Allowances

   Since 1995, the Predecessor has received tenant allowances, which are
required to be reimbursed to the landlord through 2005. Interest expense
recognized in relation to these notes amounted to $179,000, $169,000, $114,000
and $109,000 for the years ended December 31, 1997 and 1998 and the nine
months ended September 30, 1998 and September 30, 1999, respectively.

 Notes Payable, Shareholders

   Notes payable, shareholders, include demand notes of approximately
$10,656,000 and $12,879,000 at December 31, 1998 and 1997, respectively. These
notes accrued interest monthly at a range of 8% to 8.25% per annum. Notes
payable, shareholders, also include notes payable to certain shareholders, for
the repurchase of stock that are payable in quarterly installments. All notes
payable, shareholders were paid in connection with the recapitalization
described in Note 3.

   For the years ended December 31, 1997 and 1998, interest expense on notes
payable, shareholders was approximately $1,216,000 and $1,114,000,
respectively. Accrued interest related to these notes was approximately
$1,786,000 and $2,471,000 at December 31, 1997 and 1998, respectively.

                                     F-14
<PAGE>

                                 DIGITAS INC.

                  NOTES TO FINANCIAL STATEMENTS--(Continued)


7. Shareholder's Equity

 Common Stock

   Under the Declaration of Trust of each of Bronner Slosberg Humphrey Co. and
Strategic Interactive Group Co., an unlimited amount of common shares were
authorized for no par value. All holders of common shares are entitled to one
vote per share and all dividends on common shares shall be distributed pro
rata, when and if declared by the board of directors.

 Stock Split

   On April 1, 1997 the Board of Directors approved a 6,911.02-for-1 stock
split of BSH common stock and amended the articles of incorporation to
increase the number of authorized shares from 12,500 to 1,000,000 shares of
common stock.

   On December 2, 1999 the Board of Directors approved a 30-for-1 stock split
of the Company's common stock. Share amounts have been restated to reflect the
split.

 Shareholder Transactions

   In 1996, BSH entered into a Stock Redemption Agreement, (the "1996
Agreement"). Under the terms of the 1996 Agreement, a shareholder sold back to
BSH 1,809,996 shares of common stock that were purchased in 1991. In
consideration for the stock redemption, BSH forgave a note receivable of
$1,065,000 and issued a note payable to the shareholder in the amount of
$2,187,000. In 1997, BSH restated the 1996 Agreement and canceled the related
note payable. Under the restated agreement, BSH reissued 669,678 shares of
common stock and a related note payable for $940,000 which accrues interest at
8.25% payable in quarterly installments.

   During 1996, under various stock purchase and stock option agreements,
three officers of BSH purchased shares of common stock. As part of this
transaction, BSH issued notes receivable from shareholders of $2,239,000 due
on March 31, 2009, which accrued interest at the prime rate. During 1997,
notes receivable in the amount of $2,063,000 with two former shareholders were
canceled in connection with an exchange agreement whereby the shareholders
gave up their shares of stock in exchange for SAR units under the SAR Plan
(see Note 8).

   In 1997, BSH entered into a stock redemption agreement with a shareholder.
Under this agreement, BSH repurchased 485,154 shares of BSH common stock and
20,000 shares of SIG common stock for the cancellation of the remaining note
receivable balance of $176,000 issued in 1996 and the issuance of a note
payable for $726,000 due by December 31, 1998, which accrued interest at
8.25%.

   On January 1, 1998 in connection with a sale of BSH shares between two
shareholders, a $1,065,000 note receivable from one of the shareholders to BSH
issued in 1996, was assumed by another shareholder. All previously owed
amounts from BSH to the selling shareholder for previous loans made by the
selling shareholder to BSH and an obligation to pay a 1995 year-end
compensation payment were discharged due to BSH's issuance of a note payable
to the selling shareholder in the amount of $1,764,000.

   On December 29, 1998, BSH declared and paid a cash dividend of $.0128619
per share on its outstanding common shares for a total distribution to
shareholders of $315,000.

                                     F-15
<PAGE>

                                 DIGITAS INC.

                  NOTES TO FINANCIAL STATEMENTS--(Continued)


8. Stock-based Compensation

 Stock Appreciation Rights

   The Predecessor established the 1997 Stock Appreciation Right Plan (the
"SAR Plan") which became effective on April 1, 1997. Under the SAR Plan,
certain key employees are granted stock appreciation right units ("SARs")
which vest in accordance with a vesting schedule indicated on each SAR
agreement. Participants are eligible for an annual distribution for each SAR
unit vested at the end of each year based on the Predecessor's operating
income after charges and reserves have been deducted as determined by the
Board. Additionally, the Predecessor is obligated to pay each participant the
appreciation on the SARs upon the occurrence of a triggering event, as defined
in the SAR Plan. Account appreciation, as defined by the SAR Plan, is the
difference between the fair market value of each SAR less the base value. BSH
reserved 9,000,000 SAR Units for issuance under the SAR Plan.

   BSH issued 1,020,000 and 5,985,000 SAR units in 1997 and 1998,
respectively. SIG issued 5,100 SAR units in 1997 and none in 1998.
Compensation expense of $3,428,765 was recorded for the year ended December
31, 1997 related to the SAR annual distribution. Effective January 1, 1999,
there was a triggering event, however, most participants elected to receive
the Company's stock options in lieu of cash payment. In 1998, the Predecessor
did not award a SAR annual distribution due to the triggering event, but
issued bonuses in lieu of the SAR annual distribution in the amounts of
$2,293,500 and $3,058,000 for the period ended September 30, 1998 and the year
ended December 31, 1998, respectively. The Company recorded compensation
expense of $20,130,000 for SAR appreciation for the year ended December 31,
1998.

 Stock Option Plans

   BSH established an informal Employee Stock Option Plan (the "Stock Option
Plan") in 1989. Under the Stock Option Plan, grants could be made to selected
officers and employees at fair market value on date of grant. Options became
exercisable as to 25% of the grants, on an initial date as defined in the
employee stock option agreements, and up to an additional 25% each year
thereafter.

   The following table summarizes stock option activity under the Stock Option
Plan:

<TABLE>
<CAPTION>
                          December 31, 1998    December 31, 1997    December 31, 1996
                          ------------------- -------------------- --------------------
                                    Weighted-            Weighted-            Weighted-
                                     average              average              average
                                    exercise             exercise             exercise
                           Shares     price    Shares      price    Shares      price
                          --------  --------- ---------  --------- ---------  ---------
<S>                       <C>       <C>       <C>        <C>       <C>        <C>
Outstanding at beginning
 of period .............   829,322    $0.18   1,036,651    $0.17   1,729,136    $0.16
Options granted.........       --                   --                   --
Options exercised ......       --                   --              (485,154)    0.14
Options cancelled.......  (414,661)            (207,331)    0.14    (207,331)    0.14
                          --------    -----   ---------    -----   ---------    -----
Outstanding at end of
 period ................   414,661    $0.18     829,320    $0.18   1,036,651    $0.17
</TABLE>

   SIG established an Employee Stock Option Plan (the "1995 Plan") in 1995.
Under the 1995 Plan, grants could be made to selected officers. The 1995 Plan
authorizes the granting of stock options for up to an aggregate of 120,000
shares of common stock and expires 10 years from the date of the grant.
Options became exercisable as to 33% of the grant on April 1, 1996 and an
additional 33% each year thereafter.

                                     F-16
<PAGE>

                                 DIGITAS INC.

                  NOTES TO FINANCIAL STATEMENTS--(Continued)


   The following table summarizes stock option activity under the 1995 Plan:

<TABLE>
<CAPTION>
                            December 31,
                                1998       December 31, 1997  December 31, 1996
                          ---------------- ------------------ ------------------
                                 Weighted-          Weighted-          Weighted-
                                  average            average            average
                                 exercise           exercise           exercise
                          Shares   price   Shares     price   Shares     price
                          ------ --------- -------  --------- -------  ---------
<S>                       <C>    <C>       <C>      <C>       <C>      <C>
Outstanding at beginning
 of period .............  52,194   $3.30    60,060   $0.0033   99,000   $0.0033
Options granted ........     --             52,194      3.30      --
Options exercised ......     --             (4,020)   0.0033  (29,940)   0.0033
Options cancelled ......     --            (56,040)   0.0033   (9,000)   0.0033
                          ------   -----   -------   -------  -------   -------
Outstanding at end of
 period ................  52,194   $3.30    52,194   $  3.30   60,060   $0.0033
Weighted-average grant
date fair value of
options granted during
the year at fair market
value...................             --              $ 70.88                --
</TABLE>

   In 1997, SIG terminated the 1995 Plan. In exchange for all unexercised
outstanding options, all option holders entered into an exchange agreement,
whereby they received exchange compensation, deferred compensation and 52,194
stock options. The 52,194 stock options were exercisable upon SIG's engagement
of underwriters in connection with a proposed public offering provided the
offering were to occur before May 15, 2000 or upon consummation of a change in
control provided the change in control would be effective before May 15, 2000.
In 1998, it became probable that a change in control would be effective with
the January 1, 1999 Recapitalization therefore the Predecessor recorded
compensation expense of $2,632,000 based on the difference between the fair
market value and the exercise price of the outstanding options.

   In contemplation of the recapitalization in 1999, the board of directors
adopted the 1998 option plan (the "1998 Plan"). The 1998 Plan authorized the
grant of (i) 8,563,322.40 rollover options in exchange for the cancellation of
stock appreciation rights and stock options held by the SAR and option holders
prior to the recapitalization and (ii) an additional 5,872,350 options that
are not rollover options. In September 1999, the board of directors amended
the plan to decrease the number of non-rollover options that could be granted
under the plan to 5,076,000 shares.

   All options granted under the 1998 Plan were non-qualified stock options.
Grants under the plan may be made to employees and non-employee directors,
consultants and independent contractors.

   A committee of the board of directors administers the plan which includes
determining the participants in the plan and the number of shares of common
stock to be covered by each option, amending the terms of any option, subject
to certain limitations, and interpreting the terms of the plan.

   Each rollover option is immediately exercisable as of the date of grant and
has an exercise price equal to the base value of the stock appreciation rights
or the exercise price of the stock options, as applicable, from which the
options were converted. All other options granted under the plan are generally
subject to a five-year vesting schedule pursuant to which the options vest in
equal annual installments on the third, fourth and fifth

                                     F-17
<PAGE>

                                 DIGITAS INC.

                  NOTES TO FINANCIAL STATEMENTS--(Continued)

anniversaries of the grant date. In addition, all options other than rollover
options must have a per share exercise price equal to or greater than the fair
market value of a share of the Company's common stock as of the grant date, as
determined by the board of directors or a committee of such board. All options
granted under the plan terminate on the tenth anniversary of the grant date.
Vested options may be exercised for specified periods after the termination of
the optionee's employment or other service relationship with us or our
affiliates.

   In September 1999, the board of directors adopted the 1999 option plan (the
"1999 Plan") which allows for the grant of up to 6,796,350 shares of common
stock.

   Grants under the plan may be made to employees and non-employee directors,
consultants and independent contractors who contribute to the management,
growth and profitability of the business of the Company's or its affiliates.

   A committee of the board of directors administers the plan which includes
determining the participants in the plan and the number of shares of common
stock to be covered by each option, amending the terms of any option, subject
to certain limitations, and interpreting the terms of the plan.

   Non-qualified stock options granted under the plan may be granted at prices
which are less than the fair market value of the underlying shares on the date
granted. Under the plan, incentive stock options and non-qualified stock
options are generally subject to a four-year vesting schedule pursuant to
which the options vest 25% on the first anniversary of the grant date and an
additional 6.25% on each consecutive three-month period thereafter. The
options generally terminate on the tenth anniversary of the grant date. In
addition, vested options may be exercised for specified periods after the
termination of the optionee's employment or other service relationship with us
or our affiliates.

   The following summarizes stock option activity under the 1998 and 1999
Plans:

<TABLE>
<CAPTION>
                                                           Options    Weighted
                                                          available   average
                                                          for grant   exercise
                                                            shares     price
                                                          ----------  --------
   <S>                                                    <C>         <C>
   Options exchanged in connection with recapitalization
    ..................................................... 14,316,174   $3.31
   Options exercised.....................................   (473,881)   0.48
   Options cancelled..................................... (1,221,806)   4.90
                                                          ----------   -----
   Outstanding at September 30, 1999..................... 12,620,487   $3.45
   Weighted average grant date fair value of options
    granted during the year at fair market value ........              $5.04
</TABLE>

<TABLE>
<CAPTION>
                 Options Outstanding               Options Exercisable
              --------------------------          ----------------------
                              Weighted
                               average               Number
                  Number      remaining  Weighted  exercisable  Weighted
Range of      outstanding at contractual average       at       average
exercise      September 30,   life (in   exercise September 30, exercise
price              1999        years)     price       1999       price
--------      -------------- ----------- -------- ------------- --------
<S>           <C>            <C>         <C>      <C>           <C>
$1.88--$2.55     5,939,225      9.27      $2.10     5,939,225    $2.10
$3.30--$5.04     6,681,262      9.41      $4.64     1,605,262    $3.40
                ----------      ----      -----     ---------
$1.88--$5.04    12,620,487      9.34      $3.45     7,544,487    $2.40
                ==========                =====     =========
</TABLE>

                                     F-18
<PAGE>

                                 DIGITAS INC.

                  NOTES TO FINANCIAL STATEMENTS--(Continued)


   Had compensation cost for the Predecessor stock-based compensation plans
been determined based on the fair value at the grant dates as calculated in
accordance with SFAS No. 123, the Company's net loss for the nine month period
shown below would have been as follows:

<TABLE>
<CAPTION>
                                                                  September 30,
                                                                      1999
                                                                  -------------
     <S>                                                          <C>
     Net loss:
      As reported................................................ $(18,876,000)
      Pro forma..................................................  (21,661,000)
     Net loss per share:
       As reported............................................... $      (0.76)
       Pro forma................................................. $      (0.87)
</TABLE>

   There were no compensation costs for the years ended December 31, 1998,
1997 and 1996 and the nine months ended September 30, 1998 because there were
no grants under the Stock Option Plan and no compensatory grants under the
1995 Plan.

   The Company calculated the minimum fair value of each option grant on the
date of grant using the minimum value option-pricing model with the following
weighted average assumptions used: no expected dividend yield, risk free
interest rate of 4.94% and expected life of 4.8 years.

9. Income Taxes

   The components of loss before income taxes and the benefit from (provision
for) income taxes are as follows:

<TABLE>
<CAPTION>
                                                                                          Predecessor
                                                                                           (combined)              Company
                                                                                    --------------------------  -------------
                                                                                          December 31,
                                                                                    --------------------------  September 30,
                                                                                     1996     1997      1998        1999
                                                                                    -------  -------  --------  -------------
<S>                                                                                 <C>      <C>      <C>       <C>
Loss before income taxes
  Domestic......................................................................... $(3,006) $(5,680) $(20,390)   $(14,656)
  International....................................................................     --       --        --       (2,447)
Provision for (benefit from) income taxes
  Current
    Federal........................................................................     --       --        --          935
    State and local................................................................       9       10       190         662
  Deferred
    Federal........................................................................     --       --        --       (6,441)
    State and local................................................................   (115)     (232)   (1,499)     (1,415)
Increase (decrease) in valuation allowance.........................................      87      108      (130)      8,032
                                                                                    -------  -------  --------    --------
Benefit from (provision for) income taxes.......................................... $   (19) $  (114) $ (1,439)   $ (1,773)
                                                                                    =======  =======  ========    ========
</TABLE>

                                     F-19
<PAGE>

                                 DIGITAS INC.

                  NOTES TO FINANCIAL STATEMENTS--(Continued)


   The reconciliation of the difference between the United States statutory
rate to the effective rate is as follows:

<TABLE>
<CAPTION>
                                                      Predecessor
                                                       (combined)
                                                     ----------------      Company
                                                     December 31,       -------------
                                                     ----------------   September 30,
                                                      1997      1998        1999
                                                     ------    ------   -------------
<S>                                                  <C>       <C>
United States statutory rate........................      0%        0%         35%
State taxes, net of federal benefit.................    --         (6)          1
Goodwill and other permanent differences............    --        --           (2)
Increase in valuation allowance.....................      2        (1)        (24)
                                                     ------    ------      ------
Effective tax rate..................................     (2)%      (7)%        10%
                                                     ======    ======      ======
</TABLE>


   The tax effects of temporary differences that give rise to a significant
portion of the deferred income tax assets (liabilities), net, are as follows:

<TABLE>
<CAPTION>
                                                      December
                                                         31,       September 30,
                                                     ------------  -------------
                                                     1997   1998       1999
                                                     ----  ------  -------------
<S>                                                  <C>   <C>     <C>
Deferred tax assets:
 Accrued expenses................................... $265  $2,036     $15,894
 Net operating loss carryforward....................  260     --          --
 Allowance for doubtful accounts....................   32      46         403
                                                     ----  ------     -------
 Total tax deferred assets..........................  557   2,082      16,297
 Valuation allowance................................ (260)   (130)     (8,032)
                                                     ----  ------     -------
Net deferred tax assets.............................  297   1,952       8,265
Deferred tax liability:
Basis difference of property and equipment..........  112     139         175
                                                     ----  ------     -------
  Total deferred tax liabilities.................... $112  $  139     $   175
                                                     ====  ======     =======
</TABLE>

   The Company has incurred losses for the three years ended December 31, 1998
and for the period ended September 30, 1999. Management believes that, based
on the history of such losses and other factors, the weight of available
evidence indicates that it is more likely than not that the Company will not
be able to realize its deferred tax assets and thus a full valuation reserve
has been recorded at September 30, 1999 for these costs.

10. Employee Profit Sharing Plan

   In 1996, an Employee Profit Sharing Plan (the "Profit Sharing Plan") was
established which pays certain employees a percentage of their earnings
dependent on financial results as determined by the Board of Directors. The
cost of the Profit Sharing Plan was approximately $1,744,000, $1,828,000,
$2,132,000, $1,599,275 and $1,968,493 for the years ended December 31, 1996,
1997, 1998 and the nine months ended September 30, 1998 and 1999. The Profit
Sharing Plan will be terminated effective December 31, 1999, with final
payments made before March 15, 2000. To replace this benefit program, the
Company adopted a stock option and incentive plan. See also Note 11.

11. Employee Savings Plan

   For the years ended December 31, 1996, 1997 and 1998, and the nine months
ended September 30, 1999, the Predecessor and the Company had a
noncontributory Employee Savings Plan (the "Plan"), which was administered in
accordance with the provisions of Section 401(k) of the Internal Revenue Code.
The Plan was a

                                     F-20
<PAGE>

                                 DIGITAS INC.

                  NOTES TO FINANCIAL STATEMENTS--(Continued)

voluntary program in which employees who met certain requirements elected to
reduce their annual salary by up to 18% and have this amount contributed to
the Plan on their behalf. Effective December 1999, the board of directors and
shareholders adopted the 2000 stock option and incentive plan (the "2000
Plan"). This new plan provides for a Company match of employee contributions,
up to 4%, subject to certain IRS restrictions. In addition, under the 2000
Plan, employees will be eligible to purchase common shares at a discount
through periodic payroll deductions. These grants may be made to officers,
employees, directors, consultants, advisors and other key persons of Digitas
or our affiliates.

12. Other Related Party Transactions

   A law firm, with a partner who was a member of the Predecessor's Board of
Directors during all of 1997 and a portion of 1998, provided legal services to
the Predecessor. Fees paid or accrued to the firm approximated $663,000 and
$216,000 for the years ended December 31, 1997 and 1998 and $216,000, and
$7,000 for the nine months ended September 30, 1998 and 1999, respectively.
See also Note 8.

13. Financial Instruments and Risk Management

 Interest Rate Risk Management

   The Company utilizes interest rate swap agreements to fix interest rates on
certain variable rate term loans and to mitigate the effect of changes in
interest rates on earnings. The Company entered into separate agreements (the
"Agreements") on February 22 and 24, 1999, each for a notional amount of $20
million. Under the Agreements, the Company locked in fixed rates of 5.36% and
5.30%, respectively, on the notional amounts and the Company compensates the
financial institution or is compensated by the financial institution for the
differential between the fixed rates and the current LIBOR rate. The interest
rate differential payable or accruable on the agreements is recognized on an
accrual basis as an adjustment to interest expense.At September 30, 1999 the
fair values of the interest rate swaps, which represent the amounts the
Company would receive or pay to terminate the respective agreements, are net
receivables of $151,000 and $185,000, respectively, based on dealer quotes.
The variable rates at September 30, 1999 were 5.38% and 5.48%.

   The market risk exposure from the interest rate swap is assessed in light
of the underlying interest rate exposures. Credit risk is minimized as the
agreement is with a major financial institution. The Company monitors the
credit worthiness of this financial institution and full performance is
anticipated.

14. Segment Information


   Historically, the Predecessor has operated under two reportable segments
based on the method of internal and external reporting, which segregates
between services provided. The two segments are Integrated Marketing
Infrastructure and Digital Strategy and Technology. The Integrated Marketing
and Infrastructure segment provides multi-channel marketing solutions and
services. The Digital Strategy and Technology segment provides services in
digital strategy, technology, marketing and measurement.

   The accounting policies of the segments are the same as those described in
the "Summary of Significant Accounting Policies" note (Note 2).

                                     F-21
<PAGE>

                                 DIGITAS INC.

                  NOTES TO FINANCIAL STATEMENTS--(Continued)


   On January 6, 1999, the existence of the two segments ceased as separate
operational entities and combined as one segment, as an Internet professional
services firm.

<TABLE>
<CAPTION>
                          Integrated Marketing Digital Strategy and
                           and Infrastructure       Technology      Consolidated
                          -------------------- -------------------- ------------
<S>                       <C>                  <C>                  <C>
December 31, 1996
 Revenue from external
  customers.............         69,948               13,209           83,157
 Depreciation expense...          2,113                  182            2,299
 Operating loss.........         (1,618)                (107)          (1,725)
December 31, 1997
 Revenue from external
  customers.............         78,047               23,191          101,238
 Depreciation expense...          2,647                  696            3,360
 Operating loss.........         (1,156)              (2,093)          (3,249)
September 30, 1998
 Revenue from external
  customers.............         70,635               19,065           89,700
 Depreciation expense...          2,537                  735            3,272
 Operating loss.........          6,453                 (141)           6,312
December 31, 1998
 Revenue from external
  customers.............         94,316               27,993          122,309
 Depreciation expense...          3,561                1,084            4,645
 Operating income
  (loss)................        (15,821)              (1,871)         (17,692)
</TABLE>

   The Company attempts to limit its concentration of credit risk by securing
well-known clients. While the Company often enters into written agreements
with its clients, such contracts are typically terminable between 30 and 90
days notice. Management believes a loss of significant clients could have a
material adverse effect on the Company's business, financial condition and
results of operations. During the nine months ended September 30, 1999 three
customers accounted for 62% of revenues. During 1996, two customers accounted
for approximately 72% of revenues. During 1997, one customer accounted for
approximately 43% of revenues. During the fiscal year ended December 31, 1998,
three customers accounted for approximately 64% of revenues.

15. Commitments

 Capitalized Leases

   During 1997, the Predecessor entered into an agreement for the sale and
leaseback of certain furniture and fixtures. The Predecessor had a purchase
option at the end of four years equal to remaining amounts due under the lease
plus $1.00. The lease is classified as a capital lease. The book value of the
assets was approximately $1,613,000. The gain realized on the transaction
totaling approximately $194,000 has been deferred and is being amortized over
the life of the assets. Assets under the capital lease were capitalized at
approximately $1,807,000 with an interest rate of 11.1% and are amortized over
the remaining life of the assets which is 5.5 years on average. The
Predecessor paid all amounts outstanding on this lease agreement on January 6,
1999. Additionally, the Company has certain noncancelable leases to finance
telephone and copier equipment.

   The total capitalized cost of the assets subject to capital leases was
approximately $2,642,000, $3,236,000 and $1,428,000 with accumulated
amortization of approximately $849,000, $1,344,000 and $1,029,000 as of
December 31, 1997, 1998 and September 30, 1999, respectively.

                                     F-22
<PAGE>

                                 DIGITAS INC.

                  NOTES TO FINANCIAL STATEMENTS--(Continued)


 Other Lease Obligations

   Office facilities and certain office equipment are leased by the Company
under cancelable and noncancelable operating lease agreements expiring at
various dates through 2011.

   Digitas leases office space under noncancelable operating leases. Rental
expense, including amounts described above, consisting of minimum lease
payments under noncancelable operating leases amounted to approximately
$4,257,000, $6,013,000, $6,819,000, $4,998,660 and $6,189,000 for the years
ended December 31, 1996, 1997, 1998 and the nine months ended September 30,
1998 and 1999. Digitas subleases a portion of its space to another tenant.
Digitas' minimum payments were partially offset by tenant income of $249,000,
$144,000, $228,000, $131,987 and $215,000 for the years ended December 31,
1996, 1997, 1998 and the nine months ended September 30, 1998 and 1999. The
future minimum rental payments, under capital and operating leases, as of
September 30, 1999 are as follows:

<TABLE>
<CAPTION>
                                                               Capital Operating
                                                               leases   leases
                                                               ------- ---------
      <S>                                                      <C>     <C>
      1999....................................................  $ 174  $  2,183
      2000....................................................    398    11,279
      2001....................................................    308    14,493
      2002....................................................    190    14,667
      2003 and beyond.........................................     38    81,179
                                                                -----  --------
      Total minimum rental payments required..................  1,108  $123,801
                                                                       ========
      Less amount representing interest.......................    (79)
                                                                -----
      Present value of net minimum lease payments.............  1,029
      Less current maturities.................................   (414)
                                                                -----
      Long-term obligations, capital lease....................  $ 615
                                                                =====
</TABLE>


                                     F-23
<PAGE>

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
                                     [LOGO]




--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE>

                                    PART II

                    INFORMATION NOT REQUIRED IN PROSPECTUS

Item 12. Other Expenses of Issuance and Distribution

   The following table sets forth the estimated expenses payable by us in
connection with the offering and distribution, including fees and expenses
attributable to shares to be sold on behalf of the selling shareholders
(excluding underwriting discounts and commissions):

<TABLE>
<CAPTION>
Nature of Expense                                                       Amount
-----------------                                                       -------
<S>                                                                     <C>
SEC Registration Fee................................................... $52,800
NASD Filing Fee........................................................  20,500
Nasdaq National Market Listing Fee.....................................   1,000
Accounting Fees and Expenses...........................................    *
Legal Fees and Expenses................................................    *
Printing Expenses......................................................    *
Blue Sky Qualification Fees and Expenses...............................  15,000
                                                                        -------
Transfer Agent's Fee...................................................    *
Miscellaneous..........................................................    *
                                                                        -------
  TOTAL................................................................
</TABLE>

   The amounts set forth above, except for the Securities and Exchange
Commission, National Association of Securities Dealers, Inc. and Nasdaq
National Market fees, are in each case estimated.

*  To be completed by amendment.

Item 14. Indemnification of Directors and Officers

   In accordance with Section 145 of the Delaware General Corporation Law,
Article VII of our certificate of incorporation provides that no director of
Digitas be personally liable to Digitas or its stockholders for monetary
damages for breach of fiduciary duty as a director, except for liability (1)
for any breach of the director's duty of loyalty to Digitas or its
stockholders, (2) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (3) in respect of
unlawful dividend payments or stock redemptions or repurchases, or (4) for any
transaction from which the director derived an improper personal benefit. In
addition, our certificate of incorporation provides that if the Delaware
General Corporation Law is amended to authorize the further elimination or
limitation of the liability of directors, then the liability of a director of
the corporation shall be eliminated or limited to the fullest extent permitted
by the Delaware General Corporation Law, as so amended.

   Article V of our by-laws provides for indemnification by Digitas of its
officers and certain non-officer employees under certain circumstances against
expenses, including attorneys fees, judgments, fines and amounts paid in
settlement, reasonably incurred in connection with the defense or settlement
of any threatened, pending or completed legal proceeding in which any such
person is involved by reason of the fact that such person is or was an officer
or employee of the registrant if such person acted in good faith and in a
manner he or she reasonably believed to be in or not opposed to the best
interests of Digitas, and, with respect to criminal actions or proceedings, if
such person had no reasonable cause to believe his or her conduct was
unlawful.

Item 15. Recent Sales of Unregistered Securities

   Since its formation on November 5, 1998, our predecessor entity, Bronner
Slosberg Humphrey Co., a Massachusetts business trust (the "Trust"), has
issued the following securities that were not registered under the Securities
Act of 1933, as amended (the "Securities Act"). The share numbers and per
share values do not give

                                     II-1
<PAGE>

effect to the 30-for-1 stock split effected by the Trust in the form of a
stock dividend on December 2, 1999 nor to the conversion of shares on a   -
for-   basis in connection with the formation of a Delaware holding company to
be effected in connection with this offering.

   (i) In connection with the formation of the Trust, on November 5, 1998 the
Trust issued 1,000 shares of beneficial interest in the Trust (the "Shares")
to Michael E. Bronner under Section 4(2) of the Securities Act ("Section
4(2)") for sales by an issuer not involving a public offering.

   (ii) On November 6, 1998, in connection with the merger of Bronner Slosberg
Humphrey, Inc. (the "Predecessor Corporation") with and into Bronner Slosberg
Humphrey, LLC ("BSH LLC"), the Trust:

    (a)  issued 815,500.36 Shares in the Trust in exchange for the
         cancellation of the same number of shares, with the same par
         value, in the Predecessor Corporation, all pursuant to Section
         4(2) for sales by an issuer not involving a public offering;

    (b)  assumed options to purchase 13,822.04 shares of the Predecessor
         Corporation granted pursuant to employee stock option agreements
         held by employees of the Predecessor Corporation as if such
         options were granted by the Trust, without any changes being made
         to any holder's rights under these employee stock option
         agreements and in reliance on Section 3(b) of the Securities Act
         ("Section 3(b)") and Rule 701 promulgated thereunder ("Rule 701")
         relative to sales pursuant to certain compensatory plans (to date,
         no option holder has exercised these options); and

    (c)  assumed 225,500 units of stock appreciation rights ("SARS")
         granted under the Predecessor Corporation's 1997 stock
         appreciation rights plan as if such SARS were granted by the
         Trust, without any changes being made to any holder's rights
         thereunder, and pursuant to Section 4(2) or Regulation D
         promulgated thereunder ("Regulation D") for sales by an issuer not
         involving a public offering.

   (iii) On January 6, 1999, in connection with the recapitalization of the
Trust, the Trust:

    (a)  issued options to purchase 219,000 Shares in the Trust under the
         1998 Option Plan (the "1998 Plan") in exchange for the
         cancellation of 219,000 SARS and in reliance on Section 3(a)(9) of
         the Securities Act ("Section 3(a)(9)") for exchanges by the issuer
         with certain security holders (to date, no option holder has
         exercised these options);

    (b)  issued options to purchase 13,822.04 Shares in the Trust under the
         1998 Plan in exchange for the cancellation of 13,822.04 options
         granted pursuant to employee stock option agreements assumed in
         connection with the merger of the Predecessor Corporation with and
         into BSH LLC and in reliance on Section 3(a)(9) for exchanges by
         the issuer with certain security holders (these options were
         repurchased by the Trust on July 6, 1999); and

    (c)  issued a warrant for 15,000 shares of stock pursuant to the terms
         of the warrant agreement, dated as of January 6, 1999, and in
         reliance on Section 4(2) for sales by an issuer not involving a
         public offering.

   (iv) On January 7, 1999, in connection with the transfer of Strategic
Interactive Group Co.'s ("SIG CO") membership interest in SIG Holding LLC
("SIG Holding") to the Trust, the Trust:

    (a)  issued 187,690.58 Shares of the Trust in exchange for the transfer
         by SIG Co. of its membership interest in SIG Holding and in
         reliance on Section 4(2) for sales by an issuer not involving a
         public offering; and

                                     II-2
<PAGE>

    (b)  issued options to purchase 55,444.08 Shares of the Trust pursuant
         to the Trust's 1998 Plan in exchange for the transfer by SIG Co.
         of its membership interest in SIG Holding and pursuant to Rule 701
         relative to sales pursuant to certain compensatory plans (1974.14
         Shares of the Trust have been issued to a holder upon the exercise
         of his options).

   (v) From January 7, 1999 to December 15, 1999, the Trust has issued the
following:

    (a)  in August 1999, the Trust sold 1,654.53 of its Shares to Arthur
         Kern as trustee of the Arthur Kern Revocable Trust for an
         aggregate purchase price of $249,834.03 and pursuant to Section
         4(2) or Regulation D promulgated thereunder for sales by an issuer
         not involving a public offering;

    (b)  in August 1999, the Trust sold 1,654.53 of its Shares to Alan Beck
         for an aggregate purchase price of $249,834.03 and pursuant to
         Section 4(2) or Regulation D promulgated thereunder for sales by
         an issuer not involving a public offering;

    (c)  in August 1999, the Trust sold 5,000 of its Shares to Orit
         Gadiesch for an aggregate purchase price of $755,000.00 and
         pursuant to Section 4(2) or Regulation D promulgated thereunder
         for sales by an issuer not involving a public offering;

    (d)  pursuant to the Trust's 1998 Plan, the Trust has issued options to
         purchase 464,644.08 Shares of the Trust, of which 15,867.73 were
         issued in reliance on Rule 701 relative to sales pursuant to
         certain compensatory plans and 448,776.35 were issued in reliance
         on Section 4(2) or Regulation D promulgated thereunder for sales
         by an issuer not involving a public offering (to date, no option
         holder has exercised these options); and

    (e)  pursuant to the Trust's 1999 Option Plan the Trust has issued a
         total of 51,600 options to purchase Shares of the Trust, of which
         41,975 were issued in reliance on Rule 701 relative to sales
         pursuant to certain compensatory plans and 22,600 were issued in
         reliance on Section 4(2) or Regulation D promulgated thereunder
         for sales by an issuer not involving a public offering (to date,
         no option holder has exercised these options).

Item 16. Exhibits and Financial Statement Schedules

<TABLE>
 <C>  <S>
 +1.1 Form of Underwriting Agreement.

  2.1 Agreement and Plan of Merger, dated as of November 6, 1998, by and among
      Bronner Slosberg Humphrey, LLC; Bronner Slosberg Humphrey Inc.; and
      Bronner Slosberg Humphrey Co.

  2.2 Agreement and Plan of Merger, dated as of November 6, 1998, by and among
      Strategic Interactive Group, LLC; Strategic Interactive Group, Inc.; and
      Strategic Interactive Group Co.

  2.3 Agreement and Plan of Merger, dated as of January 7, 1999, by and among
      Bronner Slosberg Humphrey, LLC; Strategic Interactive Group, LLC; and
      Bronner Slosberg Humphrey Co.

  2.4 Agreement and Plan of Merger, dated as of January 7, 1999, by and among
      BSH Holding LLC; SIG Holding LLC; and Bronner Slosberg Humphrey Co.

  2.5 The Recapitalization Agreement, dated as of November 28, 1998, by and
      among Hellman & Friedman Capital Partners III, L.P.; H & F Orchard
      Partners III, L.P.; H & F International Partners III, L.P.; Positano
      Partners Ltd.; Bronner Slosberg Humphrey Co.; Strategic Interactive Group
      Co.; the Shareholders of BSH and SIG; the Option Holders of BSH and SIG;
      the Share Appreciation Rights Holders of BSH and SIG; and the Other
      Rights Holders of BSH (including the Amendment Agreement, dated as of
      January 6, 1999).

</TABLE>

                                     II-3
<PAGE>

<TABLE>
 <C>    <S>
  +3.1  Certificate of Incorporation of Digitas Inc.

  +3.2  By-laws of Digitas Inc.

  +4.1  Specimen certificate for shares of common stock, $.01 par value, of
        Digitas Inc.

  +5.1  Opinion of Goodwin, Procter & Hoar LLP as to the legality of the
        securities being offered.

  10.1  The Bronner Slosberg Humphrey Co., 1998 Option Plan.

  10.2  The Bronner Slosberg Humphrey Co., 1999 Option Plan.

 +10.3  Form of 2000 Stock Option and Incentive Plan.

 +10.4  Form of 2000 Employee Stock Purchase Plan.

 +10.5  Lease Agreement, dated as of May 31, 1995, by and between The
        Prudential Insurance Company of America and Bronner Slosberg Humphrey
        Inc. (including amendment numbers 1-6, each dated as of May 31, 1995).

 +10.6  Seventh Amendment to Lease, dated as of March 29, 1999, by and between
        BP Prucenter Acquisition, LLC and Bronner Slosberg Humphrey, LLC.

 +10.7  Eight Amendment to Lease, dated as of July 30, 1999, by and between BP
        Prucenter Acquisition, LLC and Bronner Slosberg Humphrey, LLC.

 +10.8  Sublease, dated as of December 22, 1997, by and between EMI
        Entertainment World, Inc., and Bronner Slosberg Humphrey Inc.

 +10.9  Sublease, dated as of March 22, 1999, by and between EMI Music, Inc.
        and Bronner Slosberg Humphrey, LLC.
 +10.10 Agreement of Sublease, dated as of June 15, 1999, by and between Warner
        Music Group Inc. and Bronner Slosberg Humphrey, LLC.

 +10.11 Agreement of Sublease, dated as of November 15, 1999, by and between
        Bill Communications, Inc. and Bronnercom, LLC.

 +10.12 Sub-Sublease Agreement, dated as of June 5, 1998, by and between
        Strategic Interactive Group, Inc. and Allegiance Telecom, Inc.

 +10.13 Sublease Agreement, dated as of August 21, 1997, by and among Tesseract
        Corporation; Strategic Interactive Group, Inc.; and Bronner Slosberg
        Humphrey Inc. (including the First Amendment, dated as of June 15,
        1999).

 +10.14 Lease Agreement, dated as of August 23, 1999, by and between M&S
        Balanced Property Fund, L.P. and Bronnercom, LLC.

 +10.15 Lease Agreement, dated as of May 20, 1999, by and between Forward
        Publishing Limited and Bronner Slosberg Humphrey (UK) Inc.

 +10.16 Credit Agreement, dated as of January 6, 1999, by and among Bronner
        Slosberg Humphrey, LLC and Strategic Interactive Group, LLC (as
        borrower); the Lenders listed therein (as lenders); Bankers Trust
        Company (as administrative agent); Fleet National Bank (as
        documentation agent); and BankBoston, N.A. (as syndication agent).

 +10.17 The First Amendment to Credit Agreement, dated as of November 5, 1999,
        by and among Bronnercom, LLC (as borrower); the lenders listed on the
        signature page thereof (as lenders); Bankers Trust Company (as
        administrative agent); and Fleet Boston Corporation (as documentation
        and syndication agent).
  10.18 Warrant Agreement, dated as of January 6, 1999, by and between Bronner
        Slosberg Humphrey Co. and Positano Partners Ltd.

</TABLE>

                                      II-4
<PAGE>

<TABLE>
 <C>    <S>
  10.19 Escrow Agreement, dated as of January 6, 1999, by and among Michael E.
        Bronner; David W. Kenny; Bronner Slosberg Humphrey Co.; Strategic
        Interactive Group Co.; Positano Partners Ltd.; and Boston Safe Deposit
        and Trust Co.

  10.20 Shareholders Agreement, dated as of January 6, 1999, by and among
        Positano Partners Ltd.; the Holders (as defined therein); Michael E.
        Bronner; The Michael E. Bronner 1998 Annuity Trust; Bronner Slosberg
        Humphrey Co.; Bronner Slosberg Humphrey, LLC; and BSH Holding.

  10.21 Governance Agreement, dated as of January 6, 1999, by and among
        Positano Partners Ltd.; Vesuvio, Inc.; Michael E. Bronner; and David W.
        Kenny.

  10.22 Registration Rights Agreement, dated as of January 6, 1999, by and
        among Bronner Slosberg Humphrey Co.; Positano Partners Ltd.; Michael E.
        Bronner; and the Persons listed on Schedule 1 thereto.

  10.23 Employment Agreement, dated as of January 6, 1999, by and between
        Kathleen Biro and Bronner Slosberg Humphrey, LLC.

  10.24 Employment Agreement, dated as of January 6, 1999, by and between David
        W. Kenny and Bronner Slosberg Humphrey, LLC.

  10.25 Employment Agreement, dated as of January 6, 1999, by and between
        Michael Ward and Bronner Slosberg Humphrey, LLC.

  21.1  Subsidiaries of Digitas Inc.

 +23.1  Consent of Goodwin, Procter & Hoar LLP (included in Exhibit 5.1 hereto).

  23.2  Consent of PricewaterhouseCoopers LLP.

  24.1  Powers of Attorney (included on signature page).

  27.1  Financial Data Schedule.
</TABLE>
--------
+  To be filed by amendment to the registration statement.

  (b) Financial Statement Schedules
Schedule II--Valuation and Qualifying Accounts

   All other schedules have been omitted because they are not required or
because the required information is given in the Financial Statements or Notes
to those statements.

Item 17. Undertakings

   The undersigned registrant hereby undertakes to provide to the underwriters
at the closing specified in the Underwriting Agreement certificates in such
denominations and registered in such names as required by the underwriters to
permit prompt delivery to each purchaser.

   Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with
the securities being registered, the registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and will be governed by
the final adjudication of such issue.

                                     II-5
<PAGE>

   The undersigned registrant hereby undertakes that:

     (1) For purposes of determining any liability under the Securities Act
  of 1933, the information omitted from the form of prospectus filed as part
  of this registration statement in reliance upon Rule 430A and contained in
  a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
  (4) or 497(h) under the Securities Act shall be deemed to be part of this
  registration statement as of the time it was declared effective.

     (2) For the purpose of determining any liability under the Securities
  Act of 1933, each post-effective amendment that contains a form of
  prospectus shall be deemed to be a new registration statement relating to
  the securities offered therein, and the offering of such securities at that
  time shall be deemed to be the initial bona fide offering thereof.

                                     II-6
<PAGE>

                                   SIGNATURES

   Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Boston, Commonwealth of
Massachusetts, on December 23, 1999.

                                          DIGITAS INC.

                                          By: /s/ David W. Kenny
                                            -----------------------------------
                                            Name: David W. Kenny
                                            Title: Chief Executive Officer

                               POWER OF ATTORNEY

   KNOWN ALL MEN BY THESE PRESENTS that each individual whose signature appears
below constitutes and appoints each of David W. Kenny and Michael Ward such
person's true and lawful attorney-in-fact and agent with full power of
substitution and resubstitution, for such person and in such person's name,
place and stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments) to this Registration Statement (or to any
other registration statement for the same offering that is to be effective upon
filing pursuant to Rule 462(b) under the Securities Act), and to file the same,
with all exhibits thereto, and all documents in connection therewith, with the
Securities and Exchange Commission, granting unto each said attorney-in-fact
and agent full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises, as fully to
all intents and purposes as such person might or could do in person, hereby
ratifying and confirming all that any said attorney-in-fact and agent, or any
substitute or substitutes of any of them, may lawfully do or cause to be done
by virtue hereof.

   Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
<TABLE>
<S>  <C>

Signature                      Title
                                                                      Date

/s/ David W. Kenny             Chief Executive Officer and     December 23, 1999
-----------------------------  Chairman of the Board of
David W. Kenny                 Directors
                               (principal executive
                               officer)

/s/ Michael Ward               Acting Chief Financial          December 23, 1999
-----------------------------  Officer
Michael Ward                   (principal financial officer
                               and principal accounting
                               officer)

/s/ Michael Bronner            Director                        December 23, 1999
-----------------------------
Michael E. Bronner
</TABLE>

                                      II-7
<PAGE>

<TABLE>
<S>  <C>

/s/ John L. Bunce, Jr.         Director                   December 23, 1999
-----------------------------
John L. Bunce, Jr.

                               Director                   December    , 1999
-----------------------------
Orit Gadiesh

/s/ Patrick J. Healy           Director                   December 23, 1999
-----------------------------
Patrick J. Healy

/s/ Arthur Kern                Director                   December 23, 1999
-----------------------------
Arthur Kern

/s/ Kathleen L. Biro           Director                   December 23, 1999
-----------------------------
Kathleen L. Biro

/s/ Philip U. Hammarskjold     Director                   December 23, 1999
-----------------------------

Philip U. Hammarskjold
       .
</TABLE>

                                      II-8
<PAGE>

                                                                     SCHEDULE II

                                  DIGITAS INC.

                       VALUATION AND QUALIFYING ACCOUNTS

                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                             Charge To
           Description             Beginning  Expense  Deductions Other  Ending
           -----------             --------- --------- ---------- -----  ------
<S>                                <C>       <C>       <C>        <C>    <C>
FISCAL YEAR 1998
Allowance for Doubtful Accounts...   $741      $216      $(190)   $--     $767
FISCAL YEAR 1997
Allowance for Doubtful Accounts...    707       310       (276)    --      741
FISCAL YEAR 1996
Allowance for Doubtful Accounts...    551       163        --       (7)    707
</TABLE>
<PAGE>

                                 EXHIBIT INDEX

<TABLE>
<CAPTION>
 Exhibit
 Number                          Description                           Page No.
 -------                         -----------                           --------

 <C>     <S>                                                           <C>
  +1.1   Form of Underwriting Agreement.

   2.1   Agreement and Plan of Merger, dated as of November 6, 1998,
         by and among Bronner Slosberg Humphrey, LLC; Bronner
         Slosberg Humphrey Inc.; and Bronner Slosberg Humphrey Co.

   2.2   Agreement and Plan of Merger, dated as of November 6, 1998,
         by and among Strategic Interactive Group, LLC; Strategic
         Interactive Group, Inc.; and Strategic Interactive Group
         Co.

   2.3   Agreement and Plan of Merger, dated as of January 7, 1999,
         by and among Bronner Slosberg Humphrey, LLC; Strategic
         Interactive Group, LLC; and Bronner Slosberg Humphrey Co.

   2.4   Agreement and Plan of Merger, dated as of January 7, 1999,
         by and among BSH Holding LLC; SIG Holding LLC; and Bronner
         Slosberg Humphrey Co.

   2.5   The Recapitalization Agreement, dated as of November 28,
         1998, by and among Hellman & Friedman Capital Partners III,
         L.P.; H & F Orchard Partners III, L.P.; H & F International
         Partners III, L.P.; Positano Partners Ltd.; Bronner
         Slosberg Humphrey Co.; Strategic Interactive Group Co.; the
         Shareholders of BSH and SIG; the Option Holders of BSH and
         SIG; the Share Appreciation Rights Holders of BSH and SIG;
         and the Other Rights Holders of BSH (including the
         Amendment Agreement, dated as of January 6, 1999).

  +3.1   Certificate of Incorporation of Digitas Inc.

  +3.2   By-laws of Digitas Inc.

  +4.1   Specimen certificate for shares of common stock, $.01 par
         value, of Digitas Inc.

  +5.1   Opinion of Goodwin, Procter & Hoar LLP as to the legality
         of the securities being offered.

  10.1   The Bronner Slosberg Humphrey Co., 1998 Option Plan.

  10.2   The Bronner Slosberg Humphrey Co., 1999 Option Plan.

 +10.3   Form of 2000 Stock Option and Incentive Plan.

 +10.4   Form of 2000 Employee Stock Purchase Plan.

 +10.5   Lease Agreement, dated as of May 31, 1995, by and between
         The Prudential Insurance Company of America and Bronner
         Slosberg Humphrey Inc. (including amendment numbers 1-6,
         each dated as of May 31, 1995).

 +10.6   Seventh Amendment to Lease, dated as of March 29, 1999, by
         and between BP Prucenter Acquisition, LLC and Bronner
         Slosberg Humphrey, LLC.

 +10.7   Eight Amendment to Lease, dated as of July 30, 1999, by and
         between BP Prucenter Acquisition, LLC and Bronner Slosberg
         Humphrey, LLC.

 +10.8   Sublease, dated as of December 22, 1997, by and between EMI
         Entertainment World, Inc., and Bronner Slosberg Humphrey
         Inc.

 +10.9   Sublease, dated as of March 22, 1999, by and between EMI
         Music, Inc. and Bronner Slosberg Humphrey, LLC.

 +10.10  Agreement of Sublease, dated as of June 15, 1999, by and
         between Warner Music Group Inc. and Bronner Slosberg
         Humphrey, LLC.

</TABLE>
<PAGE>

<TABLE>
<CAPTION>
 Exhibit
 Number                          Description                           Page No.
 -------                         -----------                           --------

 <C>     <S>                                                           <C>
 +10.11  Agreement of Sublease, dated as of November 15, 1999, by
         and between Bill Communications, Inc. and Bronnercom, LLC.

 +10.12  Sub-Sublease Agreement, dated as of June 5, 1998, by and
         between Strategic Interactive Group, Inc. and Allegiance
         Telecom, Inc.

 +10.13  Sublease Agreement, dated as of August 21, 1997, by and
         between Tesseract Corporation; Strategic Interactive Group,
         Inc.; and Bronner Slosberg Humphrey Inc. (including the
         First Amendment, dated as of June 15, 1999).

 +10.14  Lease Agreement, dated as of August 23, 1999, by and
         between M&S Balanced Property Fund, L.P. and Bronnercom,
         LLC.

 +10.15  Lease Agreement, dated as of May 20, 1999, by and between
         Forward Publishing Limited and Bronner Slosberg Humphrey
         (UK) Inc.

 +10.16  Credit Agreement, dated as of January 6, 1999, by and among
         Bronner Slosberg Humphrey, LLC and Strategic Interactive
         Group, LLC (as borrower); the Lenders listed therein (as
         lenders); Bankers Trust Company (as administrative agent);
         Fleet National Bank (as documentation agent); and
         BankBoston, N.A. (as syndication agent).

 +10.17  The First Amendment to Credit Agreement, dated as of
         November 5, 1999, by and among Bronnercom, LLC (as
         borrower); the lenders listed on the signature page thereof
         (as lenders); Bankers Trust Company (as administrative
         agent); and Fleet Boston Corporation (as documentation and
         syndication agent).

  10.18  Warrant Agreement, dated as of January 6, 1999, by and
         between Bronner Slosberg Humphrey Co. and Positano Partners
         Ltd.

  10.19  Escrow Agreement, dated as of January 6, 1999, by and among
         Michael E. Bronner; David W. Kenny; Bronner Slosberg
         Humphrey Co.; Strategic Interactive Group Co.; Positano
         Partners Ltd.; and Boston Safe Deposit and Trust Co.

  10.20  Shareholders Agreement, dated as of January 6, 1999, by and
         among Positano Partners Ltd.; the Holders (as defined
         therein); Michael E. Bronner; The Michael E. Bronner 1998
         Annuity Trust; Bronner Slosberg Humphrey Co.; Bronner
         Slosberg Humphrey, LLC; and BSH Holding.

  10.21  Governance Agreement, dated as of January 6, 1999, by and
         among Positano Partners Ltd.; Vesuvio, Inc.; Michael E.
         Bronner; and David W. Kenny.

  10.22  Registration Rights Agreement, dated as of January 6, 1999,
         by and among Bronner Slosberg Humphrey Co.; Positano
         Partners Ltd.; Michael E. Bronner; and the Persons listed
         on Schedule 1 thereto.

  10.23  Employment Agreement, dated as of January 6, 1999, by and
         between Kathleen Biro and Bronner Slosberg Humphrey, LLC.

  10.24  Employment Agreement, dated as of January 6, 1999, by and
         between David W. Kenny and Bronner Slosberg Humphrey, LLC.
  10.25  Employment Agreement, dated as of January 6, 1999, by and
         between Michael Ward and Bronner Slosberg Humphrey, LLC.

  21.1   Subsidiaries of Digitas Inc.

</TABLE>
<PAGE>

<TABLE>
<CAPTION>
Exhibit
Number                                     Description                                   Page No.
-------                                    -----------                                   --------

<S>      <C>                                                                             <C>
+23.1    Consent of Goodwin, Procter & Hoar LLP (included in Exhibit 5.1 hereto).

 23.2    Consent of PricewaterhouseCoopers LLP.

 24.1    Powers of Attorney (included on signature page).

 27.1    Financial Data Schedule.
</TABLE>
--------
+  To be filed by amendment to the registration statement.