Exhibit 10.1

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (“Agreement”) is entered into as of August 5, 2005, by
and between Keane, Inc., a Massachusetts corporation with its principal place of
business at 100 City Square, Boston, Massachusetts 02129 (“Keane” or the
“Company”), and Richard Garnick (the “Executive”).  Keane and the Executive are
referred to together herein as the “Parties.”

 

WHEREAS, Keane has offered employment to the Executive in the position of
President, North American Services, and the Executive has accepted, both Parties
desire to set forth in a written agreement the terms and conditions of the
Executive’s employment by and services to the Company;

 

NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of
which is hereby acknowledged, the Company and the Executive agree as follows:

 

1.             EFFECTIVE DATE. THE EFFECTIVE DATE OF THIS AGREEMENT IS SEPTEMBER
5, 2005.

 

2.             EXECUTIVE REPRESENTATIONS.

 

A.             THE EXECUTIVE AFFIRMS THAT HE IS NOT SUBJECT TO ANY AGREEMENT
THAT RESTRICTS HIS ABILITY TO WORK FOR KEANE IN THE ROLE CONTEMPLATED BY THIS
AGREEMENT.

 

B.             THE EXECUTIVE AFFIRMS THAT HE HAS NOT TAKEN AND WILL NOT TAKE,
BRING ONTO KEANE’S PREMISES, OR USE ON BEHALF OF KEANE ANY CONFIDENTIAL,
PROPRIETARY AND/OR TRADE SECRET INFORMATION BELONGING TO ANY CURRENT OR FORMER
EMPLOYER, PARTNER, CLIENT, JOINT VENTURE, INVESTOR, OR OTHER THIRD PARTY.

 

C.             THE EXECUTIVE AFFIRMS THAT HE HAS HONORED ALL COMMITMENTS TO
FORMER EMPLOYERS, AS SET FORTH IN ANY APPLICABLE EMPLOYMENT AGREEMENTS OR
OTHERWISE, AND INTENDS TO CONTINUE TO HONOR ALL SUCH COMMITMENTS.

 

3.             EMPLOYMENT PERIOD.  SUBJECT TO THE BENEFITS DESCRIBED IN SECTION
7, THE COMPANY RETAINS THE RIGHT TO TERMINATE THE EMPLOYMENT OF THE EXECUTIVE AT
ANY TIME, INCLUDING, WITHOUT LIMITATION, WITH OR WITHOUT NOTICE AND WITH OR
WITHOUT CAUSE.

 

4.             POSITION AND DUTIES.

 

A.             DURING HIS EMPLOYMENT WITH KEANE, THE EXECUTIVE SHALL SERVE AS
WITH THE DUTIES AND RESPONSIBILITIES CUSTOMARILY ASSIGNED TO THE POSITION OF
PRESIDENT, NORTH AMERICAN SERVICES, AND SUCH OTHER DUTIES AND RESPONSIBILITIES
AS THE BOARD OF DIRECTORS (THE “BOARD”) OR THE CHIEF EXECUTIVE OFFICER OF THE
COMPANY SHALL FROM TIME TO TIME ASSIGN TO THE EXECUTIVE.  THE EXECUTIVE SHALL
REPORT DIRECTLY TO THE CHIEF EXECUTIVE OFFICER OF THE COMPANY.

 

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B.             DURING HIS EMPLOYMENT WITH KEANE, AND EXCLUDING ANY PERIODS OF
VACATION AND SICK LEAVE TO WHICH THE EXECUTIVE IS ENTITLED, THE EXECUTIVE SHALL
DEVOTE HIS FULL BUSINESS ATTENTION AND TIME TO THE BUSINESS AND AFFAIRS OF KEANE
AND SHALL USE HIS BEST EFFORTS TO CARRY OUT SUCH RESPONSIBILITIES FAITHFULLY AND
EFFICIENTLY, AND IN ACCORDANCE WITH KEANE POLICY AND PROCEDURES. SUBJECT TO
COMPANY APPROVAL WHERE REQUIRED BY APPLICABLE POLICY, IT SHALL NOT BE CONSIDERED
A VIOLATION OF THE FOREGOING FOR THE EXECUTIVE TO (A) SERVE ON CORPORATE, CIVIC
OR CHARITABLE BOARDS OR COMMITTEES, (B) DELIVER LECTURES, FULFILL SPEAKING
ENGAGEMENTS OR TEACH AT EDUCATIONAL INSTITUTIONS AND (C) MANAGE PERSONAL
INVESTMENTS, SO LONG AS SUCH ACTIVITIES DO NOT MATERIALLY INTERFERE WITH THE
PERFORMANCE OF THE EXECUTIVE’S RESPONSIBILITIES AS AN EMPLOYEE OF KEANE IN
ACCORDANCE WITH THIS AGREEMENT.

 

C.             THE EXECUTIVE SHALL BE CONSIDERED AN OFFICER OF THE COMPANY.  AS
SUCH, HE SHALL BE ENTITLED TO INDEMNIFICATION AND OTHER RELATED PROTECTIONS, AS
DESCRIBED IN ARTICLE VI OF THE COMPANY’S RESTATED ARTICLES OF ORGANIZATION,
ATTACHED AS EXHIBIT A.  THESE PROTECTIONS INCLUDE, BUT ARE NOT LIMITED TO,
COVERAGE UNDER KEANE’S DIRECTORS & OFFICERS LIABILITY INSURANCE POLICY, WITHIN
ITS CURRENT LIMIT OF $35,000,000.

 

5.             COMPENSATION AND BENEFITS

 

A.             BASE SALARY. AS COMPENSATION FOR THE EXECUTIVE’S SERVICES
HEREUNDER DURING THE EMPLOYMENT PERIOD, THE COMPANY SHALL PAY TO THE EXECUTIVE
AN ANNUAL SALARY (THE “BASE SALARY”) OF NOT LESS THAN $500,000 PAYABLE AT SUCH
TIMES AND INTERVALS AS THE COMPANY PAYS THE BASE SALARIES OF ITS OTHER EXECUTIVE
EMPLOYEES. THE BASE SALARY SHALL BE REVIEWED ANNUALLY FOR POSSIBLE INCREASE. THE
BASE SALARY SHALL NOT BE REDUCED AFTER ANY SUCH INCREASE, AND THE TERM “BASE
SALARY” SHALL THEREAFTER REFER TO THE BASE SALARY AS SO INCREASED.

 

B.             ANNUAL BONUS.

 

(I)            FOR EACH FISCAL YEAR, THE EXECUTIVE SHALL BE ELIGIBLE FOR AN
ANNUAL BONUS (THE “ANNUAL BONUS”).  THE TARGET AMOUNT OF THE ANNUAL BONUS
(“BONUS TARGET”) WILL BE 80% OF THE ANNUAL BASE SALARY.  THE ACTUAL AMOUNT OF
EACH YEAR’S ANNUAL BONUS MAY BE LESS THAN THE BONUS TARGET OR UP TO 150% OF THE
BONUS TARGET, DEPENDING UPON CERTAIN PERFORMANCE MEASURES.  THE PRECISE AMOUNT
OF THE ANNUAL BONUS SHALL BE DETERMINED BY THE CHIEF EXECUTIVE OFFICER SUBJECT
TO APPROVAL BY THE COMPENSATION COMMITTEE OF THE BOARD. THE BONUS TARGET WILL BE
REVIEWED ANNUALLY FOR POSSIBLE FUTURE INCREASE OR DECREASE.  ANNUAL BONUSES ARE
NOT EARNED UNTIL THE CLOSE OF BUSINESS ON THE LAST BUSINESS DAY OF KEANE’S
FISCAL YEAR, ARE BASED ON FISCAL YEAR PERFORMANCE AND ARE GENERALLY PAID IN
MARCH OR APRIL OF THE FOLLOWING YEAR, SUBJECT TO THE CONDITION PRECEDENT THAT
THE EXECUTIVE IS EMPLOYED ON THE DATE THE ANNUAL BONUS IS PAID.

 

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(II)           FOR 2005, THE ANNUAL BONUS SHALL BE PRORATED TO REFLECT THE
AMOUNT OF TIME THE EXECUTIVE IS EMPLOYED BY KEANE.  OF THAT PRORATED AMOUNT,
KEANE WILL PAY NO LESS THAN SEVENTY-FIVE PERCENT (75%), SUBJECT TO THE CONDITION
PRECEDENT DESCRIBED IN SECTION 5.B(I).

 

C.             STOCK.

 

(I)            2005.  WITHIN THIRTY (30) DAYS OF THE EFFECTIVE DATE, THE
EXECUTIVE WILL BE AWARDED 300,000 KEANE INCENTIVE STOCK OPTIONS AND 10,000
SHARES OF RESTRICTED STOCK, BOTH SUBJECT TO THE TERMS AND CONDITIONS OF THE
APPLICABLE STOCK OPTION PLAN AND INCENTIVE AND/OR RESTRICTED STOCK AGREEMENTS,
ATTACHED AS EXHIBIT B.

 

(II)           2006 AND 2007.  THE EXECUTIVE WILL BE AWARDED NO LESS THAN
100,000 KEANE INCENTIVE STOCK OPTIONS IN 2006 AND IN 2007, PROVIDED THE
EXECUTIVE ACHIEVES NO LESS THAN TWENTY PERCENT (20%) ORGANIC GROWTH IN EACH OF
THESE YEARS (MEASURED BY BOTH REVENUE AND CONTRIBUTION) WITHIN THE AREA OF HIS
RESPONSIBILITY, SUBJECT TO APPROVAL BY THE COMPENSATION COMMITTEE OF THE BOARD.

 

D.             BENEFITS. DURING HIS EMPLOYMENT WITH KEANE, THE EXECUTIVE SHALL
BE ENTITLED TO RECEIVE EMPLOYEE BENEFITS (INCLUDING WITHOUT LIMITATION MEDICAL,
LIFE INSURANCE AND OTHER WELFARE BENEFITS AND BENEFITS UNDER RETIREMENT AND
SAVINGS PLANS), COMPANY-PROVIDED PARKING AND PAID VACATION, IN EACH CASE TO THE
SAME EXTENT AS, AND ON THE SAME TERMS AND CONDITIONS AS, OTHER SIMILARLY
SITUATED SENIOR EXECUTIVES OF THE COMPANY FROM TIME TO TIME.

 

E.             EXPENSES. THE EXECUTIVE SHALL BE ENTITLED TO RECEIVE PROMPT
REIMBURSEMENT FOR ALL REASONABLE EXPENSES INCURRED BY THE EXECUTIVE DURING HIS
EMPLOYMENT WITH KEANE IN CARRYING OUT HIS DUTIES UNDER THIS AGREEMENT, PROVIDED
THAT THE EXECUTIVE COMPLIES WITH THE POLICIES, PRACTICES AND PROCEDURES OF THE
COMPANY FOR SUBMISSION OF EXPENSE REPORTS, RECEIPTS, OR SIMILAR DOCUMENTATION OF
SUCH EXPENSES.

 

6.             EMPLOYMENT TERMINATION.  THE EXECUTIVE’S EMPLOYMENT PURSUANT TO
THIS AGREEMENT MAY BE TERMINATED AS FOLLOWS:

 

A.             FOR CAUSE.  AT THE ELECTION OF KEANE, FOR “CAUSE”, IMMEDIATELY
UPON WRITTEN NOTICE BY KEANE TO THE EXECUTIVE.  FOR THE PURPOSES OF THIS
AGREEMENT, “CAUSE” FOR TERMINATION SHALL MEAN AND SHALL BE LIMITED TO:

 

1.             WRONGFUL MISAPPROPRIATION OF THE FUNDS OR PROPERTY OF THE
COMPANY;

 

2.             USE OF ALCOHOL OR ILLEGAL DRUGS INTERFERING WITH THE PERFORMANCE
OF THE EXECUTIVE’S OBLIGATIONS, CONTINUING AFTER WRITTEN WARNING OF SUCH
ACTIONS;

 

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3.             COMMISSION OF A FELONY, OR OF ANY CRIME INVOLVING MORAL
TURPITUDE, DISHONESTY, THEFT OR UNETHICAL CONDUCT;

 

4.             COMMISSION OF ANY WILLFUL, INTENTIONAL OR GROSSLY NEGLIGENT ACT
WHICH WOULD REASONABLY BE EXPECTED TO MATERIALLY INJURE THE REPUTATION, BUSINESS
OR BUSINESS RELATIONSHIPS OF THE COMPANY OR WHICH WOULD BRING THE EXECUTIVE OR
THE COMPANY INTO DISREPUTE, OR THE WILLFUL COMMISSION OF ANY ACT WHICH IS A
BREACH OF THE EXECUTIVE’S FIDUCIARY DUTIES TO THE COMPANY;

 

5.             THE DELIBERATE OR WILLFUL FAILURE BY THE EXECUTIVE (OTHER THAN BY
REASON OF THE EXECUTIVE’S PHYSICAL OR MENTAL ILLNESS, INCAPACITY OR DISABILITY)
TO SUBSTANTIALLY PERFORM HIS DUTIES WITH THE COMPANY AND THE CONTINUATION OF
SUCH FAILURE FOR A PERIOD OF 30 DAYS AFTER DELIVERY BY THE COMPANY TO THE
EXECUTIVE OF NOTICE SPECIFYING THE SCOPE AND NATURE OF SUCH FAILURE AND THE
COMPANY’S INTENTION TO TERMINATE THE EXECUTIVE FOR CAUSE;

 

6.             COMMISSION OF ANY ACT WHICH CONSTITUTES A MATERIAL BREACH OF THE
POLICIES OF THE COMPANY, INCLUDING BUT NOT LIMITED TO THE DISCLOSURE OF ANY
CONFIDENTIAL INFORMATION OR TRADE SECRETS PERTAINING TO THE COMPANY OR ANY OF
ITS CLIENTS; OR

 

7.             COMMISSION OF ANY DISHONEST ACT OR THE MAKING OF ANY DISHONEST OR
INTENTIONALLY MISLEADING STATEMENT RELATING TO THE BUSINESS OF THE COMPANY.

 

B.             FOR GOOD REASON.  AT THE EXECUTIVE’S INITIATIVE, FOR “GOOD
REASON” IF:

 

1.             THE EXECUTIVE’S TITLE, DUTIES, STATUS, REPORTING RELATIONSHIP,
AUTHORITY OR RESPONSIBILITIES HAVE BEEN MATERIALLY AND ADVERSELY AFFECTED; OR

 

2.             THE EXECUTIVE’S COMPENSATION, INCLUDING BASE SALARY AND BONUS
TARGET, HAS BEEN REDUCED BY 10% OR GREATER; OR

 

3.             THE EXECUTIVE’S PRINCIPAL PLACE OF EMPLOYMENT IS RELOCATED TO A
LOCATION MORE THAN 60 MILES FROM SUCH PLACE OF EMPLOYMENT.

 

4.             IN THE CONTEXT OF A CHANGE IN CONTROL, AS DESCRIBED IN SECTION
7.B, “GOOD REASON” SHALL ALSO BE DEEMED TO EXIST IF THE EXECUTIVE’S PRINCIPAL
PLACE OF EMPLOYMENT IMMEDIATELY PRIOR TO THE CHANGE IN CONTROL IS RELOCATED TO A
LOCATION MORE THAN 25 MILES FROM SUCH PLACE OF EMPLOYMENT.

 

The Executive shall give the Company Notice of termination specifying which of
the foregoing provisions is applicable and the factual basis therefor, and if
the

 

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Company fails to remedy such material failure, the Executive’s last day of
actual employment with Keane shall be the 30th business day after such Notice is
given or such other date as the Company and the Executive shall agree.

 

C.             IN THE EVENT OF DEATH OR DISABILITY.  AS USED IN THIS AGREEMENT,
THE TERM “DISABILITY” SHALL MEAN THE INABILITY OF THE EXECUTIVE, DUE TO A
PHYSICAL OR MENTAL DISABILITY, FOR A PERIOD OF 180 DAYS, WHETHER OR NOT
CONSECUTIVE, DURING ANY 360-DAY PERIOD TO PERFORM THE SERVICES CONTEMPLATED
UNDER THIS AGREEMENT.  A DETERMINATION OF DISABILITY SHALL BE MADE BY A
PHYSICIAN SATISFACTORY TO BOTH THE EXECUTIVE AND KEANE, PROVIDED THAT IF THE
EXECUTIVE AND KEANE DO NOT AGREE ON A PHYSICIAN, THE EXECUTIVE AND KEANE SHALL
EACH SELECT A PHYSICIAN AND THESE TWO TOGETHER SHALL SELECT A THIRD PHYSICIAN,
WHOSE DETERMINATION AS TO DISABILITY SHALL BE BINDING ON ALL PARTIES;

 

D.             AT THE ELECTION OF KEANE WITHOUT CAUSE, UPON NOT LESS THAN 90
DAYS’ PRIOR WRITTEN NOTICE OF TERMINATION; OR

 

E.             AT THE ELECTION OF THE EXECUTIVE, OTHER THAN FOR GOOD REASON,
UPON NOT LESS THAN 90 DAYS’ PRIOR WRITTEN NOTICE OF TERMINATION.

 

7.             EFFECT OF EMPLOYMENT TERMINATION

 

A.             FOR CAUSE.  IF THE EXECUTIVE’S EMPLOYMENT IS TERMINATED BY KEANE
FOR CAUSE PURSUANT TO SECTION 6.A, KEANE SHALL PAY TO THE EXECUTIVE THE
COMPENSATION AND BENEFITS OTHERWISE PAYABLE TO HIM THROUGH THE LAST DAY OF HIS
ACTUAL EMPLOYMENT BY KEANE. 

 

B.             FOLLOWING A CHANGE IN CONTROL.  IF THE EXECUTIVE’S EMPLOYMENT IS
TERMINATED BY THE COMPANY WITHOUT CAUSE (AS DEFINED IN SECTION 6.A) OR BY THE
EXECUTIVE FOR GOOD REASON (AS DEFINED IN SECTION 6.B) WITHIN ONE YEAR FOLLOWING
A CHANGE IN CONTROL, AS DEFINED IN EXHIBIT C TO THIS AGREEMENT, THE EFFECTIVE
DATE OF ANY SUCH TERMINATION BEING HEREINAFTER REFERRED TO AS THE “CIC
TERMINATION DATE”) THE EXECUTIVE SHALL BE ENTITLED TO THE FOLLOWING SEVERANCE
BENEFITS (AND NO OTHERS):

 

(I)            FOR A PERIOD OF TWENTY-FOUR (24) MONTHS FOLLOWING THE CIC
TERMINATION DATE (THE “SALARY CONTINUATION PERIOD”), THE COMPANY SHALL CONTINUE
TO PAY THE EXECUTIVE THE BASE SALARY AND TARGETED ANNUAL BONUS (MONTHLY ON A PRO
RATA BASIS), BOTH AT THE RATE IN EFFECT IMMEDIATELY BEFORE THE CIC TERMINATION
DATE, EXCEPT THAT IN THE CASE OF A TERMINATION BY THE EXECUTIVE FOR GOOD REASON,
DISREGARDING ANY REDUCTION THEREOF THAT WAS THE BASIS FOR SUCH TERMINATION.

 

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(II)           UPON THE CIC TERMINATION DATE, ALL STOCK OPTIONS, RESTRICTED
STOCK AND OTHER EQUITY AWARDS PREVIOUSLY GRANTED TO THE EXECUTIVE SHALL BECOME
VESTED IMMEDIATELY AND SHALL BE EXERCISABLE IN FULL IN ACCORDANCE WITH THE
APPLICABLE STOCK OPTION, RESTRICTED STOCK OR OTHER FORM OF EQUITY AGREEMENT AND
THE TERMS OF ANY APPLICABLE STOCK OR EQUITY PLAN.

 

(III)          THE CIC TERMINATION DATE SHALL BE TREATED AS A QUALIFYING EVENT
UNDER THE CONSOLIDATED OMNIBUS RECONCILIATION ACT OF 1985 (“COBRA”).  UNDER
COBRA, IF THE EXECUTIVE IS COVERED BY THE GROUP MEDICAL AND/OR DENTAL PLAN
OFFERED BY KEANE, THE EXECUTIVE AND HIS OR HER SPOUSE AND DEPENDENTS ARE
ENTITLED TO ELECT A TEMPORARY EXTENSION OF HEALTH AND/OR DENTAL COVERAGE AT
GROUP RATES IN CERTAIN INSTANCES WHERE COVERAGE UNDER THE PLAN WOULD OTHERWISE
END (“CONTINUATION COVERAGE”).  IF THE EXECUTIVE ELECTS CONTINUATION COVERAGE
UNDER COBRA, DURING THE PERIOD OF SUCH CONTINUATION COVERAGE, THE EXECUTIVE WILL
BE RESPONSIBLE FOR ANY CONTRIBUTION REQUIRED FROM ACTIVE EMPLOYEES OF THE
COMPANY UNDER THE APPLICABLE GROUP MEDICAL AND/OR DENTAL PLAN.  IF AND TO THE
EXTENT THIS SECTION 7.B(III) DOES NOT APPLY, AS WHERE THE EXECUTIVE IS NOT
RESIDENT IN OR OF THE UNITED STATES, THE EXECUTIVE SHALL RECEIVE A MONTHLY
STIPEND TO OFFSET MEDICAL AND/OR DENTAL BENEFITS LOST FOLLOWING THE CIC
TERMINATION DATE.

 

(IV)          DURING THE SALARY CONTINUATION PERIOD, THE EXECUTIVE SHALL BE
ENTITLED TO CONTINUE PARTICIPATION IN THE EXECUTIVE FINANCIAL PLANNING BENEFIT
IN EFFECT AS OF THE CIC TERMINATION DATE.

 

C.             IN THE EVENT OF DEATH OR DISABILITY.  IF THE EXECUTIVE’S
EMPLOYMENT IS TERMINATED BY DEATH OR BECAUSE OF DISABILITY PURSUANT TO SECTION
6.C, KEANE SHALL PAY TO THE ESTATE OF THE EXECUTIVE OR TO THE EXECUTIVE, AS THE
CASE MAY BE, THE COMPENSATION WHICH WOULD OTHERWISE BE PAYABLE TO THE EXECUTIVE
UP TO THE END OF THE MONTH IN WHICH THE TERMINATION OF HIS EMPLOYMENT BECAUSE OF
DEATH OR DISABILITY OCCURS.

 

D.             AT THE ELECTION OF KEANE WITHOUT CAUSE OR AT THE INITIATIVE OF
THE EXECUTIVE FOR GOOD REASON.  IF THE EXECUTIVE’S EMPLOYMENT IS TERMINATED BY
KEANE WITHOUT CAUSE (AS DEFINED IN SECTION 6.A) PURSUANT TO SECTION 6.D OR AT
THE INITIATIVE OF THE EXECUTIVE FOR GOOD REASON, PURSUANT TO SECTION 6.B:

 

(I)            KEANE SHALL CONTINUE TO PAY THE EXECUTIVE HIS BASE SALARY, FOR
TWELVE (12) MONTHS, PLUS, IN THE CASE OF TERMINATION BY KEANE WITHOUT CAUSE, ANY
PORTION OF THE 90-DAY NOTICE PERIOD DESCRIBED IN SECTION 6.D THAT IS NOT
PROVIDED TO THE EXECUTIVE; AND

 

(II)           THE LAST DAY OF THE EXECUTIVE’S ACTUAL EMPLOYMENT WITH KEANE
SHALL BE TREATED AS A QUALIFYING EVENT UNDER THE CONSOLIDATED OMNIBUS
RECONCILIATION ACT OF 1985 (“COBRA”), AND THE EXECUTIVE WILL RECEIVE COBRA
INFORMATION UNDER SEPARATE COVER.  IF THE EXECUTIVE ELECTS

 

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CONTINUATION COVERAGE UNDER COBRA, DURING THE PERIOD THE EXECUTIVE IS RECEIVING
BASE SALARY CONTINUATION PAYMENTS UNDER THIS PARAGRAPH 7.D, HE WILL BE
RESPONSIBLE FOR ANY CONTRIBUTION REQUIRED FROM ACTIVE EMPLOYEES OF THE COMPANY
UNDER SAID HEALTH INSURANCE PROGRAM.

 

E.             RECEIPT OF SEVERANCE BENEFITS IS CONDITIONED ON EXECUTIVE’S
EXECUTION AND DELIVERY OF A SEPARATION AGREEMENT INCLUDING A GENERAL RELEASE OF
CLAIMS, IN A FORM ACCEPTABLE TO THE COMPANY, AND ON EXECUTIVE’S STRICT
COMPLIANCE WITH THE PROVISIONS OF ANY AGREEMENT BETWEEN THE EXECUTIVE AND KEANE
PERTAINING TO TRADE SECRETS, CONFIDENTIAL INFORMATION, WORKS MADE FOR HIRE AND
INVENTIONS, COMPETITION, SOLICITATION, HIRING, AND THE RETURN OF COMPANY
PROPERTY.

 

F.              AT THE ELECTION OF THE EXECUTIVE OTHER THAN FOR GOOD REASON.  IF
THE EXECUTIVE ELECTS TO TERMINATE HIS EMPLOYMENT OTHER THAN FOR GOOD REASON, IN
ACCORDANCE WITH SECTION 6.E, KEANE SHALL PAY TO THE EXECUTIVE THE COMPENSATION
AND BENEFITS OTHERWISE PAYABLE TO HIM THROUGH THE LAST DAY OF HIS ACTUAL
EMPLOYMENT BY KEANE.

 

8.             LIMITATIONS ON PAYMENT OF BENEFITS.

 

A.             NEITHER THE EXECUTIVE NOR KEANE SHALL HAVE THE RIGHT TO
ACCELERATE OR TO DEFER THE DELIVERY OF THE PAYMENTS TO BE MADE UNDER THIS
AGREEMENT; PROVIDED, HOWEVER, THAT IF THE EXECUTIVE IS A “SPECIFIED EMPLOYEE” AS
DEFINED IN SECTION 409A(A)(2)(B)(I) OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED (THE “CODE”), AND ANY OF THE PAYMENTS TO BE MADE TO THE EXECUTIVE UNDER
THIS AGREEMENT CONSTITUTE “NONQUALIFIED DEFERRED COMPENSATION” WITHIN THE
MEANING OF SECTION 409A OF THE CODE, THEN THE COMMENCEMENT OF THE DELIVERY OF
ANY SUCH PAYMENTS WILL BE DELAYED TO THE DATE THAT IS SIX MONTHS AFTER THE LAST
DAY OF THE EXECUTIVE’S ACTUAL EMPLOYMENT WITH KEANE.

 

B.             GROSS-UP PAYMENT.

 

(I)            ANYTHING IN THIS OR ANY OTHER AGREEMENT TO THE CONTRARY
NOTWITHSTANDING, IN THE EVENT AN EXECUTIVE BECOMES ENTITLED TO ANY BENEFITS OR
PAYMENTS UNDER THIS AGREEMENT OR UNDER ANY OTHER AGREEMENT, PLAN OR ARRANGEMENT
TO WHICH THE COMPANY AND THE EXECUTIVE ARE PARTIES, INCLUDING ANY NON-CASH
BENEFIT OR DEFERRED PAYMENT OR BENEFIT (THE “TOTAL BENEFITS”), WHICH WILL BE
SUBJECT TO A TAX IMPOSED BY SECTION 4999 OF THE CODE (THE “EXCISE TAX”) DUE TO
CLASSIFICATION AS AN EXCESS PARACHUTE PAYMENT IN ACCORDANCE WITH SECTION 280G OF
THE CODE, THE COMPANY SHALL PAY TO HIM AN ADDITIONAL AMOUNT (THE “GROSS-UP
PAYMENT”) SUCH THAT THE NET AMOUNT RETAINED BY HIM, AFTER REDUCTION OF ANY
EXCISE TAX ON THE TOTAL BENEFITS AND ANY FEDERAL, STATE AND LOCAL INCOME TAX,
EXCISE TAX AND FICA AND MEDICARE WITHHOLDING TAXES UPON THE PAYMENT PROVIDED FOR
BY THIS SECTION, SHALL BE EQUAL TO THE TOTAL BENEFITS.  FOR PURPOSES OF THIS
GROSS-UP PAYMENT, THE AMOUNT OF THE EXCISE TAX (IF ANY) IMPOSED ON ANY NON-CASH
BENEFITS OR ANY DEFERRED PAYMENT OR BENEFIT SHALL BE REASONABLY

 

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DETERMINED BY THE COMPANY, AFTER CONSULTATION WITH ITS LEGAL AND TAX ADVISORS.

 

(II)           FOR PURPOSES OF DETERMINING THE AMOUNT OF THE GROSS-UP PAYMENT,
AN EXECUTIVE SHALL BE DEEMED TO PAY FEDERAL INCOME TAXES AT THE HIGHEST MARGINAL
RATE OF FEDERAL INCOME TAXATION IN THE CALENDAR YEAR IN WHICH THE GROSS-UP
PAYMENT IS TO BE MADE AND STATE AND LOCAL INCOME TAXES AT THE HIGHEST MARGINAL
RATE OF TAXATION IN THE STATE AND LOCALITY OF HIS RESIDENCE ON THE TERMINATION
DATE, NET OF THE REDUCTION IN FEDERAL INCOME TAXES WHICH COULD BE OBTAINED FROM
DEDUCTION OF SUCH STATE AND LOCAL TAXES (CALCULATED BY ASSUMING THAT ANY
REDUCTION UNDER SECTION 68 OF THE CODE IN THE AMOUNT OF ITEMIZED DEDUCTIONS
ALLOWABLE TO HIM APPLIES FIRST TO REDUCE THE AMOUNT OF SUCH STATE AND LOCAL
INCOME TAXES THAT WOULD OTHERWISE BE DEDUCTIBLE BY HIM).

 

(III)          IN THE EVENT THAT THE EXCISE TAX IS SUBSEQUENTLY DETERMINED TO BE
LESS THAN THE AMOUNT TAKEN INTO ACCOUNT FOR PURPOSES OF CALCULATING THE GROSS-UP
PAYMENT, THE EXECUTIVE SHALL PROMPTLY REPAY TO THE COMPANY THE PORTION OF THE
GROSS-UP PAYMENT ATTRIBUTABLE TO SUCH REDUCTION (PLUS THAT PORTION OF THE
GROSS-UP PAYMENT ATTRIBUTABLE TO THE EXCISE TAX, FEDERAL, STATE AND LOCAL INCOME
TAXES AND FICA AND MEDICARE WITHHOLDING TAXES IMPOSED ON THE PORTION OF THE
GROSS-UP PAYMENT BEING REPAID BY HIM TO THE EXTENT THAT SUCH REPAYMENT RESULTS
IN A REDUCTION IN EXCISE TAX, FICA AND MEDICARE WITHHOLDING TAXES AND/OR
FEDERAL, STATE OR LOCAL INCOME TAXES) PLUS INTEREST ON THE AMOUNT OF SUCH
REPAYMENT AT THE RATE PROVIDED IN SECTION
1274(B)(2)(B) OF THE CODE.

 

(IV)          IN THE EVENT THAT THE EXCISE TAX IS DETERMINED TO EXCEED THE
AMOUNT TAKEN INTO ACCOUNT HEREUNDER, THE COMPANY SHALL MAKE AN ADDITIONAL
GROSS-UP PAYMENT TO HIM IN RESPECT OF SUCH EXCESS (PLUS ANY INTEREST, PENALTIES
OR ADDITIONS PAYABLE BY HIM WITH RESPECT TO SUCH EXCESS) AT THE TIME THAT THE
AMOUNT OF SUCH EXCESS IS FINALLY DETERMINED.

 

(V)           THE GROSS UP PAYMENT SHALL BE MADE WITHIN TWO AND A HALF MONTHS
AFTER THE LAST DAY OF THE EXECUTIVE’S ACTUAL EMPLOYMENT WITH KEANE; PROVIDED,
HOWEVER, THAT IF THE EXECUTIVE IS A “SPECIFIED EMPLOYEE” AS DEFINED IN SECTION
409A(A)(2)(B)(I) OF CODE AND ANY OF THE PAYMENTS TO BE MADE TO THE EXECUTIVE
UNDER THIS SECTION 4 CONSTITUTE “NONQUALIFIED DEFERRED COMPENSATION” WITHIN THE
MEANING OF SECTION 409A OF THE CODE, THEN THE COMMENCEMENT OF THE DELIVERY OF
ANY SUCH PAYMENTS WILL BE DELAYED BY SIX MONTHS.

 

(VI)          THE INTENT OF THIS SECTION 8 IS TO MAKE THE EXECUTIVE WHOLE, TO
THE EXTENT ALLOWED UNDER APPLICABLE LAWS AND REGULATIONS, SUCH THAT HE IS NOT
DETRIMENTALLY IMPACTED BY THE IMPOSITION OF A TAX OVER AND ABOVE THE MARGINAL
RATE APPLICABLE TO HIS KEANE-RELATED EARNINGS AS A RESULT OF A

 

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CHANGE IN CONTROL.  TO THE EXTENT THE EXECUTIVE IS SUBJECT TO INCOME TAX LAWS OF
A COUNTRY OTHER THAN THE UNITED STATES, THE COMPANY SHALL USE ITS BEST EFFORTS
TO IMPLEMENT THE INTENT OF THIS SECTION 8 IN ACCORDANCE WITH APPLICABLE LAWS AND
REGULATIONS.

 

9.             OBLIGATIONS AND RESTRICTIVE COVENANTS.

 

A.             THE EXECUTIVE AGREES TO EXECUTE AN AGREEMENT PERTAINING TO,
WITHOUT LIMITATION, CONFIDENTIALITY, NON-DISCLOSURE, NON-SOLICITATION AND
NON-COMPETITION, IN THE FORM ATTACHED AS EXHIBIT D.

 

B.             ALL OBLIGATIONS AND RESTRICTIVE COVENANTS AS SET FORTH IN ANY
EXISTING OR FUTURE EMPLOYMENT AGREEMENTS, STOCK OPTION AGREEMENTS, CODES OF
CONDUCT, OR THE LIKE, SHALL REMAIN IN FULL FORCE AND EFFECT NOTWITHSTANDING THIS
AGREEMENT, INCLUDING BUT NOT LIMITED TO, PROVISIONS AND/OR RESTRICTIONS RELATING
TO TRADE SECRETS, CONFIDENTIAL INFORMATION, WORKS MADE FOR HIRE AND INVENTIONS,
COMPETITION, SOLICITATION, HIRING, COMPANY PROPERTY, ET CETERA, EXCEPT THAT ANY
AND ALL SUCH OBLIGATIONS AND RESTRICTIVE COVENANTS SHALL REMAIN IN FULL FORCE
AND EFFECT FOR THE ENTIRE SALARY CONTINUATION PERIOD NOTWITHSTANDING ANY SHORTER
PERIOD SET FORTH THEREIN.

 

10.           NOTICES.

 

A.             EACH NOTICE, DEMAND, CONSENT OR COMMUNICATION (HEREINAFTER
“NOTICE”) WHICH IS OR MAY BE REQUIRED TO BE GIVEN BY ANY PARTY TO THE OTHER
PARTY IN CONNECTION WITH THIS AGREEMENT SHALL BE IN WRITING AND GIVEN BY
FACSIMILE, PERSONAL DELIVERY, RECEIPTED DELIVERY SERVICES, OR BY CERTIFIED MAIL,
RETURN RECEIPT REQUESTED, PREPAID AND PROPERLY ADDRESSED TO THE OTHER PARTY AS
SHOWN BELOW.

 

B.             NOTICES SHALL BE EFFECTIVE ON THE DATE SENT VIA FACSIMILE, THE
DATE DELIVERED PERSONALLY OR BY RECEIPTED DELIVERY SERVICE, OR THREE (3) DAYS
AFTER THE DATE MAILED:

 

(I)            TO THE COMPANY:

 

Legal Department
Attn: Corporate Counsel
Keane, Inc.
100 City Square
Charlestown, MA  02129

 

(II)           TO THE EXECUTIVE:

 

At the residence address most recently filed with the Company.

 

9

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11.           SUCCESSION AND ASSIGNMENT.  THIS AGREEMENT SHALL BE BINDING UPON
AND INURE TO THE BENEFIT OF THE PARTIES NAMED HEREIN AND THEIR RESPECTIVE
SUCCESSORS AND PERMITTED ASSIGNS.  NO PARTY MAY ASSIGN EITHER THIS AGREEMENT OR
ANY OF ITS RIGHTS, INTERESTS OR OBLIGATIONS HEREUNDER WITHOUT THE PRIOR WRITTEN
APPROVAL OF THE OTHER PARTY; PROVIDED, THAT KEANE MAY ASSIGN ITS RIGHTS,
INTERESTS OR OBLIGATIONS HEREUNDER TO: (A) A SUBSIDIARY, SUBDIVISION OR
AFFILIATE, PROVIDED THAT KEANE SHALL REMAIN RESPONSIBLE TO THE EXECUTIVE FOR
SUCH OBLIGATIONS IN THE EVENT THEY ARE NOT MET BY SUCH ASSIGNEE; OR (B) TO A
PERSON, CORPORATION, ORGANIZATION OR OTHER ENTITY THAT ACQUIRES (WHETHER BY
STOCK PURCHASE OR MERGER OR OTHERWISE) ALL OR SUBSTANTIALLY ALL OF THE BUSINESS
OR ASSETS OF KEANE.

 

12.           MISCELLANEOUS.

 

A.             THIS AGREEMENT MAY BE AMENDED OR MODIFIED ONLY BY A WRITTEN
INSTRUMENT EXECUTED BY KEANE AND THE EXECUTIVE.  NOTWITHSTANDING ANYTHING HEREIN
TO THE CONTRARY, TO THE EXTENT THAT THE EXECUTIVE OR KEANE REASONABLY BELIEVE
THAT SECTION 409A OF THE CODE WILL RESULT IN ADVERSE TAX CONSEQUENCES TO THE
EXECUTIVE AS A RESULT OF THIS AGREEMENT, THEN THE EXECUTIVE AND KEANE SHALL
RENEGOTIATE THIS AGREEMENT IN GOOD FAITH IN ORDER TO MINIMIZE OR ELIMINATE SUCH
TAX CONSEQUENCES AND RETAIN THE BASIC AFTER-TAX ECONOMICS OF THIS AGREEMENT FOR
THE EXECUTIVE TO THE EXTENT POSSIBLE.

 

B.             THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE INTERNAL LAWS (AND NOT THE LAWS OF CONFLICTS) OF THE COMMONWEALTH OF
MASSACHUSETTS.

 

C.             EXCEPT IN THE CASE OF SECTION 11 ABOVE, THE TERM “KEANE” OR THE
“COMPANY” SHALL INCLUDE KEANE, INC. AND ANY OF ITS SUBSIDIARIES, SUBDIVISIONS
AND AFFILIATES.  THE CAPTIONS OF THE SECTIONS OF THIS AGREEMENT ARE FOR
CONVENIENCE OF REFERENCE ONLY AND IN NO WAY DEFINE, LIMIT OR AFFECT THE SCOPE OR
SUBSTANCE OF ANY SECTION OF THIS AGREEMENT.

 

D.             THIS AGREEMENT MAY BE EXECUTED IN COUNTERPARTS, EACH OF WHICH
SHALL BE DEEMED TO BE AN ORIGINAL BUT BOTH OF WHICH TOGETHER SHALL CONSTITUTE
ONE AND THE SAME INSTRUMENT.

 

E.             THE INVALIDITY OR UNENFORCEABILITY OF ANY PROVISION OF THIS
AGREEMENT SHALL NOT AFFECT THE VALIDITY OR ENFORCEABILITY OF ANY OTHER PROVISION
OF THIS AGREEMENT. IF ANY PROVISION OF THIS AGREEMENT SHALL BE HELD INVALID OR
UNENFORCEABLE IN PART, THE REMAINING PORTION OF SUCH PROVISION, TOGETHER WITH
ALL OTHER PROVISIONS OF THIS AGREEMENT, SHALL REMAIN VALID AND ENFORCEABLE AND
CONTINUE IN FULL FORCE AND EFFECT TO THE FULLEST EXTENT CONSISTENT WITH LAW.

 

F.              THE EXECUTIVE’S OR THE COMPANY’S FAILURE TO INSIST UPON STRICT
COMPLIANCE WITH ANY PROVISION OF, OR TO ASSERT ANY RIGHT UNDER, THIS AGREEMENT
SHALL NOT BE DEEMED TO BE A WAIVER OF SUCH PROVISION OR RIGHT OR OF ANY OTHER
PROVISION OF OR RIGHT UNDER THIS AGREEMENT.

 

10

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G.             KEANE SHALL HAVE THE RIGHT TO WITHHOLD ALL APPLICABLE INCOME AND
EMPLOYMENT TAXES DUE WITH RESPECT TO ANY PAYMENT MADE TO THE EXECUTIVE UNDER
THIS AGREEMENT.

 

Executed this 5th day of August, 2005.

 

 

 

By:

/s/ Richard Garnick

 

 

 

 

 

 

Richard Garnick

 

 

 

 

 

Keane, Inc.

 

 

 

 

 

By:

/s/ Russell J. Campanello

 

 

 

 

 

 

Russell J. Campanello, Sr. Vice President,

 

 

Human Resources

 

11

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EXHIBIT A

 

Restated Articles of Organization

(General Laws Chapter 156D, Section 10.07; 950 CMR 113.35)

 

Keane, Inc. (the “Corporation”), having a registered office at 100 City Square,
Boston, MA 02129, certifies as follows:

 

FIRST, the Restated Articles were duly adopted and approved on February 10, 2005
by the board of directors without shareholder approval in the manner required by
General Laws, Chapter 156D and the Articles of Organization of the Corporation,
as amended to date, and shareholder approval was not required.

 

SECOND, the following is all the information required to be in the original
Articles of Organization, except that the supplemental information provided for
in Article VIII of the Articles of Organization is not included:

 

ARTICLE I.  The exact name of the corporation is Keane, Inc.

 

ARTICLE II. The purposes for which the corporation is formed are as follows:

 

To engage in the business of providing consulting and advisory services relating
to the use of data processing and data communication equipment and equipment
associated therewith; and to engage in the business of providing systems design
and computer programming services.

 

ARTICLE III.  The total number of shares of each class of stock that the
corporation is authorized to issue is as follows:

 

TYPE

 

NUMBER OF SHARES
AUTHORIZED

 

PAR VALUE

 

Common

 

200,000,000

 

$

.10

 

Class B Common

 

503,797

 

$

.10

 

Preferred

 

2,000,000

 

$

.01

 

 

ARTICLE IV.  If more than one class or series of shares is authorized, the
preferences, limitations and relative rights of each class or series are as
follows:

 

PART I.                                                     COMMON STOCK.

 

A.                                               Dividends, Combinations and
Subdivisions.

 

1.                                       Holders of Common Stock and Class B
Common Stock shall be entitled to receive such dividends, payable in cash or
other as may be declared thereon by the Board of Directors from time to time out
of the assets or funds of the corporation legally available

 

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therefor, provided that no regular cash quarterly dividend may be declared and
paid to holders of Class B Common Stock unless at the same time the Board of
Directors shall also declare and pay to the holders of Common Stock a per share
dividend which is $.05 per share greater than the per share dividend declared
and paid to holders of Class B Common Stock.  Otherwise, no dividends may be
declared or paid to holders of Class B Common Stock unless equal dividend is
declared and paid to holders of Common Stock.  In addition, the Board of
Directors may declare and pay dividends to the holders of Common Stock without
declaring and paying dividends to the holders of Class B Common Stock.

 

2.                                       If the outstanding shares of either the
Common Stock or the Class B Common Stock are changed into, exchanged for or
reclassified into a different number, class or kind of shares of the Corporation
or any other corporation or entity which does not result in the receipt by the
Corporation of any new consideration (other than a transfer of surplus of the
Corporation) without such action being taken on a proportionate basis with
respect to the other class of common stock, whether such change, exchange or
reclassification occurs through a reorganization, recapitalization, stock split
or otherwise, then the requirement that a greater per share dividend be declared
and paid with respect to the Common Stock shall be appropriately and equitably
adjusted to reflect such action.

 

3.                                       The requirement that a greater per
share dividend be declared and paid with respect to the Common Stock shall not
apply (a) to a dividend paid in partial or complete liquidation of the
Corporation, (b) to a special dividend payable in cash or capital stock or
(c) in the event of a dividend payable in any shares of an existing, or a newly
created, class of the Corporation’s capital stock.  If a dividend payable in any
class of the capital stock of the Corporation is declared on the Common Stock,
the Board of Directors shall also declare a dividend on the Class B Common Stock
payable in shares of the same capital stock of the Corporation equal, on a per
share basis, to the number of shares of capital stock of the Corporation which
are paid to holders of Common Stock.  If a dividend payable in any class of the
capital stock of the Corporation is declared on the Class B Common Stock, the
board shall also declare a dividend on the Common Stock payable in shares of the
same capital stock of the Corporation, equal, on a per share basis, to the
number of shares of capital stock of the Corporation which are paid to holders
of Class B Common Stock.

 

2

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B.                                                 Voting.

 

1.                                       Except as expressly provided herein, at
every meeting of stockholders of the Corporation, every holder of Common Stock
shall be entitled to one vote in person or by proxy for each share of Common
Stock standing in his name on the transfer books of the Corporation and every
holder of Class B Common Stock shall be entitled to ten votes in person or by
proxy for each share of Class B Common Stock standing in his name on the
transfer books of the Corporation.

 

2.                                       Except as may otherwise be required by
law or by this Article 4, the holders of Common Stock and Class B Common Stock
shall vote together as a single class.

 

C.                                                 Conversion.

 

1.                                       Each share of Class B Common Stock may
at any time be converted into one fully paid and nonassessable share of Common
Stock.  Such right of conversion shall be exercised by the surrender of the
certificate representing such share of Class B Common Stock to be converted to
the Corporation at any time during normal business hours at the principal
executive offices of the Corporation, or if an agent for the registration of
transfer of shares of Class B Common Stock is then duly appointed and acting
(said agent being hereinafter called the “Transfer Agent”) then at the office of
the Transfer Agent, accompanied by a written notice of the election by the
holder thereof to convert and (if so required by the Corporation or the Transfer
Agent) by instruments of transfer, in form satisfactory to the Corporation and
to the Transfer Agent, duly executed by such holder or his duly authorized
attorney, and transfer tax stamps or funds therefor, if required pursuant to
subparagraph (5) below.

 

2.                                       As promptly as practicable after the
surrender for conversion of a certificate representing shares of Class B Common
Stock in the manner provided in subparagraph (1) above and the payment in cash
of any amount required by the provisions of subparagraphs (1) and (5), the
Corporation will deliver or cause to be delivered at the office of the Transfer
Agent to, or upon the written order of, the holder of such certificate a
certificate or certificates representing the number of full shares of Common
Stock issuable upon such conversion, issued in such name or names as such holder
may direct.  Such conversion shall be deemed to have been made immediately prior
to the close of business on the date of the

 

3

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surrender of the certificate representing shares of Class B Common Stock, and
all rights of the holder of such shares as such holder shall cease at such time
and the person or persons in whose name or names the certificate or certificates
representing the shares of Common Stock are to be issued shall be treated for
all purposes as having become the record holder or holders of such shares of
Common Stock at such time; provided, however, that any such surrender and
payment on any date when the stock transfer books of the Corporation shall be
closed shall constitute the person or persons in whose name or names the
certificate or certificates representing shares of Common Stock are to be issued
as the record holder or holders thereof for all purposes immediately prior to
the close of business on the next succeeding day on which such stock transfer
books are open.

 

3.                                       No adjustments in respect of dividends
shall be made upon the conversion of any share of Class B Common Stock,
provided, however, that if a share shall be converted after the record date for
the payment of a dividend or other distribution on shares of Class B Common
Stock but before such payment, the registered holder of such share at the close
of business on such record date shall be entitled to receive the dividend or
other distribution payable on such share on the date set for payment of such
dividend or other distribution notwithstanding the conversion of such share or
the Corporation’s default in payment of the dividend due on such date.

 

4.                                       The Corporation covenants that it will
at all times reserve and keep available, solely for the purpose of issuance upon
conversion of the outstanding shares of Class B Common Stock, such number or
shares of Common Stock as shall be issuable upon the conversion of all such
outstanding shares, provided that nothing contained in these Articles shall be
construed to preclude the Corporation from satisfying its obligations in respect
of the conversion of the outstanding shares of Class B Common Stock by delivery
of purchased shares of Common Stock which are held in the treasury of the
Corporation.  The Corporation covenants that if any shares of Common Stock
required to be reserved for purposes of conversion hereunder require
registration with or approval of any government authority under any federal or
state law before such shares of Common Stock may be issued upon conversion, the
Corporation will cause such shares to be duly registered or approved, as the
case may be.  The Corporation covenants that all shares of Common Stock which
shall be issued upon conversion of the shares of Class B Common Stock will, upon
issue, be fully paid and nonassessable and not subject to any preemptive rights.

 

4

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5.                                       The issuance of certificates for shares
of Common Stock upon conversion of shares of Class B Common Stock shall be made
without charge for any stamp or other similar tax in respect of such issuance. 
However, if any such certificate is to be issued in a name other than that of
the holder of the share or shares of Class B Common Stock converted, the person
or persons requesting the issuance thereof shall pay to the Corporation the
amount of any tax which may be payable in respect of any transfer involved in
such issuance or shall establish to the satisfaction of the Corporation that
such tax has been paid.

 

6.                                       At any time while there are shares of
Class B Common Stock issued and outstanding, the Board of Directors of the
Corporation may, in its sole discretion, by a majority vote of the Directors
then in office convert all outstanding shares of Class B Common Stock into
Common Stock on a share for share basis.  Notice of automatic conversion of
Class B Common Stock specifying the date fixed for said conversion shall be
mailed, postage prepaid, at least 20 days but not more than 30 days prior to
said conversion date to the holders of record of the Class B Common Stock at
their respective addresses as the same shall appear on the books of the
Corporation.  Following the expiration of such notice period, each outstanding
share of Class B Common Stock shall be deemed to be a share of Common Stock for
all purposes.

 

D.                                                Distribution of Assets.

 

1.                                       If the Corporation shall be liquidated,
dissolved or wound up, whether voluntarily or involuntarily, the holders of the
Class B Common Stock shall be entitled to share ratably with the holders of the
Common Stock of the Corporation as a single class in the net assets of the
Corporation; that is, an equal amount of net assets for each share of Common
Stock and Class B Common Stock.  A merger or consolidation of the Corporation
with or into any other corporation or sale or conveyance of all or any part of
the assets of the Corporation (which shall not in fact result in the liquidation
of the Corporation and the distribution of assets to stockholders) shall not be
deemed to be a voluntary or involuntary liquidation or dissolution or winding up
of the Corporation within the meaning of this subparagraph (D).

 

5

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E.                                                  Authorized Shares;
Fractional Shares.

 

1.                                       The number of authorized shares of
Class B Common Stock may not be increased unless approved by the holders of a
majority of the then outstanding shares of Common Stock.

 

2.                                       No fractional shares of Common Stock
shall be issued upon conversion of shares of Class B Common Stock.  In lieu of
fractional shares, the Transfer Agent shall pay an amount in cash equal to the
closing market price of the shares of Common Stock on the conversion date
multiplied by the fraction of a share of Common Stock that would otherwise be
issuable.

 

PART II.                                                 PREFERRED STOCK.

 

Preferred Stock may be issued from time to time in one or more series, each of
such series to have such terms as stated or expressed herein and in the
resolution or resolutions providing for the issue of such series adopted by the
Board of Directors of the Corporation as hereinafter provided.  Any shares of
any series of Preferred Stock which may be redeemed, purchased or acquired by
the Corporation may be reissued as shares of the same series or as shares of one
or more other series of Preferred Stock except as otherwise provided by law. 
Different series of Preferred Stock shall not be construed to constitute
different classes of shares for the purposes of voting by classes unless
expressly provided.

 

Authority is hereby expressly granted to the Board of Directors from time to
time to issue the Preferred Stock in one or more series, and in connection with
the creation of any such series, by resolution or resolutions providing for the
issue of the shares thereof, to determine and fix such voting powers, full or
limited, or no voting powers, and such designations, preferences and relative
participating, optional or other special rights, and qualifications, limitations
or restrictions thereof, including without limitation dividend rights,
conversion rights, redemption privileges and liquidation preferences, as shall
be stated and expressed in such resolutions, all to the full extent now or
hereafter permitted by the Massachusetts Business Corporation Law.  Without
limiting the generality of the foregoing, the resolutions providing for issuance
of any series of Preferred Stock may provide that such series shall be superior
or rank equally or be junior to the Preferred Stock of any other series to the
extent permitted by law.

 

ARTICLE V.  The restrictions imposed by the Articles of Organization upon the
transfer of shares of any class or series of stock are as follows:

 

A.                                   No person holding shares of Class B Common
Stock (a “Class B Holder”) may transfer, except by gift, devise or bequest, a
transfer to the estate of a stockholder upon the death of such stockholder or a
transfer of shares held in a trust to the grantor of such trust or to any person
to whom or for whose benefit the principal of such trust may be distributed, and
the Corporation and the Transfer Agent shall not register the transfer of such
shares of Class B Common Stock, whether by sale, assignment, appointment or
otherwise.  Any purported transfer of shares of

 

6

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Class B Common Stock, other than a transfer of the type described above, shall
be null and void and of no effect and the purported transfer by a Class B Holder
will result in the immediate and automatic conversion of the shares of Class B
Common Stock held by such Class B Holder into shares of Common Stock.  The
purported transferee shall have no rights as a stockholder of the Corporation
and no other rights against, or with respect to, the Corporation except the
right to receive shares of Common Stock upon the immediate and automatic
conversion of his shares of Class B Common Stock into shares of Common Stock. 
The estate of any deceased stockholder, a transferee upon the distribution of
the assets of such an estate, any transferee of the Class B Common Stock by
gift, devise or bequest or a transferee from a trust of which such transferee
was the grantor or a principal beneficiary shall hold the transferred shares of
Class B Common Stock subject to the same restrictions on transferability as
apply to all Class B Holders under this Article V.

 

B.                                     Shares of Class B Common Stock shall be
registered in the name(s) of the beneficial owner(s) thereof (as hereafter
defined) and not in “street” or “nominee” names; provided, however, certificates
representing shares of Class B Common Stock issued as a stock dividend on the
Corporation’s then outstanding Common Stock may be registered in the same name
and manner as the certificates representing the shares of Common Stock with
respect to which the shares of Class B Common Stock are issued.  For the
purposes of this paragraph (B) the term “beneficial owner(s)” of any shares of
Class B Common Stock shall mean the person or persons who possess the power to
dispose, or to direct the deposition, of such shares.  Any shares of Class B
Common Stock registered in “street” or “nominee” name may be transferred to the
beneficial owner of such shares on the record date for such stock dividend, upon
proof satisfactory to the Corporation and the Transfer Agent that such person
was in fact the beneficial owner of such shares on the record date for such
stock dividend.

 

C.                                     Notwithstanding anything to the contrary
in this Article V, any Class B Holder may pledge such holder’s shares of Class B
Common Stock to a pledgee pursuant to a bona fide pledge of such shares as
collateral security for indebtedness due to the pledge, provided that such
shares shall not be transferred to, or registered in the name of, the pledgee
and shall remain subject to the provisions of this subparagraph (C) of
Article V.  In the event of foreclosure or other similar action by the pledgee,
such pledged shares of Class B Common Stock may not be transferred to the
pledgee and may only be converted into shares of Common Stock.

 

D.                                    The Corporation shall note on the
certificates representing the shares of Class B Common Stock the restrictions on
transfer and registration of transfer imposed by this Article V.

 

7

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E.                                      For purposes of this Article V:

 

(i)                                     Each joint owner of shares of Class B
Common Stock shall be considered a Class B Holder of such shares.

 

(ii)                                  A minor for whom shares of Class B Common
Stock are held pursuant to a Uniform Gifts to Minors Act or similar law shall be
considered a Class B Holder of such shares.

 

(iii)                               Unless otherwise specified, the term
“person” includes a natural person, corporation, partnership, unincorporated
association, firm, joint venture, trust or other entity.

 

(iv)                              Persons participating in a Thrift or Employee
Stock Ownership Plan of the Corporation (or any similar or successor plans)
shall be deemed to be the Class B Holders of the shares of Class B Common Stock
allocated to their accounts pursuant to such plans.

 

ARTICLE VI.  Other lawful provisions:

 

A.                                   Limitation of Liability of Directors for
Monetary Damages. To the fullest extent permitted by Chapter 156D of the General
Laws of Massachusetts (“Chapter 156D”), as it exists or may be amended, a
director of this Corporation shall not be personally liable to the Corporation
or its stockholders for monetary damages for breach of fiduciary duty as a
director, notwithstanding any provision of law imposing such liability. No
amendment to, or repeal of, this provision shall apply to or have any effect on
the liability or alleged liability of any director of the Corporation for or
with respect to any acts or omissions of such director occurring prior to such
amendment or repeal.

 

B.                                     Indemnification.

 

1.                                       Actions, Suits and Proceedings.  The
Corporation shall indemnify each person who was or is a party or is threatened
to be made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative, by reason
of the fact that he is or was, or has agreed to become, a director or officer of
the Corporation, or is or was serving, or has agreed to serve, at the request of
the Corporation, as a director or officer of, or in a similar capacity with,
another organization or in any capacity with respect to any employee benefit
plan of the Corporation (all such persons being referred to hereafter as an
“Indemnitee”), or by reason of any action alleged to have been taken or omitted
in such capacity, against all expenses (including attorneys’ fees), judgments
and fines incurred by him or on his behalf in connection with such action, suit
or proceeding and any appeal therefrom, unless the Indemnitee shall be finally
adjudicated in such action, suit or proceeding not to have acted in good faith
in the reasonable belief that his action was in the best interests of the
Corporation or, to the extent such matter relates to service with respect to an
employee benefit plan, in the best interests of

 

8

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the participants or beneficiaries of such employee benefit plan. 
Notwithstanding anything to the contrary in this Article, except as set forth in
Section 5 below, the Corporation shall not indemnify an Indemnitee seeking
indemnification in connection with a proceeding (or part thereof) initiated by
the Indemnitee unless the initiation thereof was approved by the Board of
Directors of the Corporation.

 

2.                                       Settlements.  The right to
indemnification conferred in this Article shall include the right to be paid by
the Corporation for amounts paid in settlement of any such action, suit or
proceeding and any appeal therefrom, and all expenses (including attorneys’
fees) incurred in connection with such settlement, pursuant to a consent decree
or otherwise, unless and to the extent it is determined pursuant to Section 5
below that the Indemnitee did not act in good faith in the reasonable belief
that his action was in the best interests of the Corporation or, to the extent
such matter relates to service with respect to an employee benefit plan, in the
best interests of the participants or beneficiaries of such employee benefit
plan.

 

3.                                       Notification and Defense of Claim.  As
a condition precedent to his right to be indemnified, the Indemnitee must notify
the Corporation in writing as soon as practicable of any action, suit,
proceeding or investigation involving him for which indemnity will or could be
sought.  With respect to any action, suit, proceeding or investigation of which
the Corporation is so notified, the Corporation will be entitled to participate
therein at its own expense and/or to assume the defense thereof at its own
expense, with legal counsel reasonably acceptable to the Indemnitee.  After
notice from the Corporation to the Indemnitee of its election so to assume such
defense, the Corporation shall not be liable to the Indemnitee for any legal or
other expenses subsequently incurred by the Indemnitee in connection with such
claim, other than as provided below in this Section 3.  The Indemnitee shall
have the right to employ his own counsel in connection with such claim, but the
fees and expenses of such counsel incurred after notice from the Corporation of
its assumption of the defense thereof shall be at the expense of the Indemnitee
unless (i) the employment of counsel by the Indemnitee has been authorized by
the Corporation, (ii) counsel to the Indemnitee shall have reasonably concluded
that there may be a conflict of interest or position on any significant issue
between the Corporation and the Indemnitee in the conduct of the defense of such
action or (iii) the Corporation shall not in fact have employed counsel to
assume the defense of such action, in each of which cases the fees and expenses
of counsel for the Indemnitee shall be at the expense of the Corporation, except
as otherwise expressly provided by this Article.  The Corporation shall not be
entitled to assume the defense of any claim brought by or in the right of the
Corporation, or as to which counsel for the Indemnitee shall have reasonably
made the conclusion provided for in clause (ii) above.

 

9

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4.                                       Advance of Expenses.  Subject to the
provisions of Section 5 below, in the event that the Corporation does not assume
the defense pursuant to Section 3 of this Article of any action, suit,
proceeding or investigation of which the Corporation receives notice under this
Article, any expenses (including attorneys’ fees) incurred by an Indemnitee in
defending a civil or criminal action, suit, proceeding or investigation or any
appeal therefrom shall be paid by the Corporation in advance of the final
disposition of such matter, provided, however, that the payment of such expenses
incurred by an Indemnitee in advance of the final disposition of such matter
shall be made only upon receipt of an undertaking by or on behalf of the
Indemnitee to repay all amounts so advanced in the event that it shall
ultimately be determined that the Indemnitee is not entitled to be indemnified
by the Corporation as authorized in this Article.  Such undertaking may be
accepted without reference to the financial ability of the Indemnitee to make
such repayment.

 

5.                                       Procedure for Indemnification.  In
order to obtain indemnification or advancement of expenses pursuant to
Section 1, 2 or 4 of this Article, the Indemnitee shall submit to the
Corporation a written request, including in such request such documentation and
information as is reasonably available to the Indemnitee and is reasonably
necessary to determine whether and to what extent the Indemnitee is entitled to
indemnification or advancement of expenses.  Any such indemnification or
advancement of expenses shall be made promptly, and in any event within 60 days
after receipt by the Corporation of the written request of the Indemnitee,
unless the Corporation determines, by clear and convincing evidence, within such
60-day period that the Indemnitee did not meet the applicable standard of
conduct set forth in Section 1 or 2, as the case may be.  Such determination
shall be made in each instance by (a) a majority vote of a quorum of the
directors of the Corporation, (b) a majority vote of a quorum of the outstanding
shares of stock of all classes entitled to vote for directors, voting as a
single class, which quorum shall consist of stockholders who are not at that
time parties to the action, suit or proceeding in question, (c) independent
legal counsel (who may be regular legal counsel to the Corporation), or (d) a
court of competent jurisdiction.

 

6.                                       Remedies.  The right to indemnification
or advances as granted by this Article shall be enforceable by the Indemnitee in
any court of competent jurisdiction if the Corporation denies such request, in
whole or in part, or if no disposition thereof is made within the 60-day period
referred to above in Section 5.  Unless otherwise provided by law, the burden of
proving that the Indemnitee is not entitled to indemnification or advancement of
expenses under this Article shall be on the Corporation.  Neither the failure of
the Corporation to have made a determination prior to the commencement of such
action that indemnification is proper in the circumstances because the
Indemnitee has met the applicable standard of conduct, nor an actual
determination by the Corporation pursuant to

 

10

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Section 5 that the Indemnitee has not met such applicable standard of conduct,
shall be a defense to the action or create a presumption that the Indemnitee has
not met the applicable standard of conduct.  The Indemnitee’s expenses
(including attorneys’ fees) incurred in connection with successfully
establishing his right to indemnification, in whole or in part, in any such
proceeding shall also be indemnified by the Corporation.

 

7.                                       Subsequent Amendment.  No amendment,
termination or repeal of this Article or of the relevant provisions of Chapter
156D or any other applicable laws shall affect or diminish in any way the rights
of any Indemnitee to indemnification under the provisions hereof with respect to
action, suit, proceeding or investigation arising out of or relating to any
actions, transactions or facts occurring prior to the final adoption of such
amendment, termination or repeal.

 

8.                                       Other Rights.  The indemnification and
advancement of expenses provided by this Article shall not be deemed exclusive
of any other rights to which an Indemnitee seeking indemnification or
advancement of expenses may be entitled under any law (common or statutory),
agreement or vote of stockholders or directors or otherwise, both as to action
in his official capacity and as to action in any other capacity while holding
office for the Corporation, and shall continue as to an Indemnitee who has
ceased to be a Director or officer, and shall inure to the benefit of the
estate, heirs, executors and administrators of the Indemnitee.  Nothing
contained in this Article shall be deemed to prohibit, and the Corporation is
specifically authorized to enter into, agreements with officers and directors
providing indemnification rights and procedures different from those set forth
in this Article.  In addition, the Corporation may, to the extent authorized
from time to time by its Board of Directors, grant indemnification rights to
other employees or agents of the Corporation or other persons serving the
Corporation and such rights may be equivalent to, or greater or less than, those
set forth in this Article.

 

9.                                       Partial Indemnification.  If an
Indemnitee is entitled under any provision of this Article to indemnification by
the Corporation for some or a portion of the expenses (including attorneys’
fees), judgments, fines or amounts paid in settlement actually and reasonably
incurred by him or on his behalf in connection with any action, suit, proceeding
or investigation and any appeal therefrom but not, however, for the total amount
thereof, the Corporation shall nevertheless indemnify the Indemnitee for the
portion of such expenses (including attorneys’ fees), judgments, fines or
amounts paid in settlement to which the Indemnitee is entitled.

 

10.                                 Insurance.  The Corporation may purchase and
maintain insurance, at its expense, to protect itself and any director, officer,
employee or agent of the Corporation or another organization or employee benefit
plan against any expense, liability or loss incurred by him in any such
capacity, or

 

11

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arising out of his status as such, whether or not the Corporation would have the
power to indemnify such person against such expense, liability or loss under
Chapter 156D.

 

11.                                 Merger or Consolidation.  If the Corporation
is merged into or consolidated with another corporation and the Corporation is
not the surviving corporation, the surviving corporation shall assume the
obligations of the Corporation under this Article with respect to any action,
suit, proceeding or investigation arising out of or relating to any actions,
transactions or facts occurring prior to the date of such merger or
consolidation.

 

12.                                 Savings Clause.  If this Article or any
portion hereof shall be invalidated on any ground by any court of competent
jurisdiction, then the Corporation shall nevertheless indemnify each Indemnitee
as to any expenses (including attorneys’ fees), judgments, fines and amounts
paid in settlement in connection with any action, suit, proceeding or
investigation, whether civil, criminal or administrative, including an action by
or in the right of the Corporation, to the fullest extent permitted by any
applicable portion of this Article that shall not have been invalidated and to
the fullest extent permitted by applicable law.

 

13.                                 Subsequent Legislation.  If the
Massachusetts General Laws are amended after adoption of this Article to expand
further the indemnification permitted to Indemnitees, then the Corporation shall
indemnify such persons to the fullest extent permitted by the Massachusetts
General Laws, as so amended.

 

14.                                 Amendments to Articles.  Notwithstanding any
other provisions of law, these Articles of Organization or the By-Laws of the
Corporation, and notwithstanding the fact that a lesser percentage may be
specified by law, the affirmative vote of at least sixty-six and two-thirds
percent (66 2/3%) of the votes which all the stockholders would be entitled to
cast at any annual election of directors or class or directors shall be required
to amend or repeal, or to adopt any provision inconsistent with, this
Article 6B.

 

C.                                     Authorization of Directors to Make, Amend
or Repeal Bylaws. The directors may make, amend or repeal the bylaws in whole or
in part, except with respect to any provision thereof which by law or the bylaws
of the corporation requires action by the stockholders.

 

ARTICLE VII.  The effective date of this restatement of the Articles of
Organization is the date and time these Restated Articles were received for
filing.

 

12

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THIRD, No Articles of the Articles of Organization of the corporation are being
amended by these Restated Articles.

 

 

Signed by

/s/ C. Whitney Pedersen

 

 

 

 

(signature of authorized individual)

 

 

 

 

 

 

(Please check appropriate box)

 

 

 

o

 

Chairman of the Board of Directors

 

 

 

o

 

President

 

 

 

ý

 

Other Officer

 

 

 

o

 

Court-appointed fiduciary,

 

Signed on this 10th day of May 2005.

 

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COMMONWEALTH OF MASSACHUSETTS

 

William Francis Galvin

Secretary of the Commonwealth

One Ashburton Place, Boston, Massachusetts 02108-1512

 

Restated Articles of Organization

(General Laws, Chapter 156D, Section 10.07)

 

I hereby certify that upon examination of these Restated Articles of
Organization, duly submitted to me, it appears that the provisions of the
General Laws relative to the organization of corporations have been complied
with, and I hereby approve said articles; and the filing fee in the amount of $
200 having been paid, said articles are deemed to have been filed with me this
16th  day of May, 2005 at 3:44 p.m.
                   time

 

Effective date:

 

 

(must be within 90 days of date submitted)

 

WILLIAM FRANCIS GALVIN

Secretary of the Commonwealth

 

 

/s/ William Francis Galvin

 

 

Contact information to be filled in by corporation:

 

C. Whitney Pedersen

100 City Square, Boston, MA 02129

Telephone:  (617) 241-9200

Email:  charles_w_pedersen@keane.com

 

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EXHIBIT B

 

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Keane, Inc.

 

 

Incentive Stock Option Agreement

Granted Under 1998 Stock Incentive Plan

 

1.                                       Grant of Option.

 

This agreement evidences the grant by Keane, Inc., a Massachusetts corporation
(the “Company”), on             ,      (the “Grant Date”) to
                     (the “Participant”), an employee of the Company or one of
its wholly-owned subsidiaries, as defined in Section 424(f) of the Internal
Revenue Code of 1986, as amended and any regulations promulgated thereunder (the
“Code”), of an option to purchase, in whole or in part, on the terms provided
herein and in the Company’s 1998 Stock Incentive Plan (the “Plan”), a total of 
      shares of common stock, $.10 par value per share, of the Company (“Common
Stock”) (the “Shares”) at $      per Share.  Unless earlier terminated, this
option shall expire on, and cannot be exercised on or after, the tenth
anniversary of the Grant Date (the “Expiration Date”).

 

It is intended that the option evidenced by this agreement shall be an incentive
stock option as defined in Section 422 of the Code.  For so long as the Code
shall so provide, options granted to any employee which are intended to
constitute incentive stock options shall not constitute incentive stock options
to the extent that such options, in the aggregate, become exercisable for the
first time in any one calendar year for shares of Common Stock with an aggregate
fair market value (determined as of the respective date or dates of grant) of
more than $100,000.  Any shares granted above the $100,000 limit are considered
non-qualified stock options.  Except as otherwise indicated by the context, the
term “Participant”, as used in this option, shall be deemed to include any
person who acquires the right to exercise this option validly under its terms.

 

2.             Vesting Schedule.

 

 Except as otherwise provided in this Agreement, this option shall become fully
exercisable as to all of the Shares on the fifth anniversary of the Grant Date
(the “Fifth Anniversary Date”).  Notwithstanding the foregoing, if prior to the
Fifth Anniversary Date the Company shall file with the Securities and Exchange
Commission an Annual Report on Form 10-K cash EPS for any fiscal year following
year 2000 greater than or equal to any of the cash EPS targets set forth below,

 

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then this option shall, upon filing of such Form 10-K, immediately become
exercisable as to not more than the number of shares set forth opposite such EPS
target in the table below.

 

Cash EPS Target

 

Number of
Shares as to which
Option is Exercisable

 

EPS = $1.00

 

34% of total number of Shares

 

EPS = $1.50

 

67% of total number of Shares

 

EPS = $2.00

 

100% of total number of Shares

 

 

The right of exercise shall be cumulative so that to the extent the option is
not exercised at any time to the maximum extent permissible it shall continue to
be exercisable, in whole or in part, with respect to all Shares for which it is
vested until the earlier of the Expiration Date or the termination of this
option under Section 3 hereof or the Plan.

 

3.             Exercise of Option.

 

(a)           Form of Exercise.  Each election to exercise this option shall be
in writing specifying the number of Shares to be exercised, the option exercise
price per Share and delivery instructions for the Shares, signed by the
Participant, and received by the Company at its principal office, accompanied by
payment in full as follows:

 

(i)                                     in cash or by check, payable to the
order of the Company; or

 

(ii)                                  by delivery of cash or a check equal to
the exercise price of the options by a creditworthy broker;

 

(iii)                               by delivery of shares of Common Stock owned
by the Participant valued at their fair market value as determined by (or in a
manner approved by) the Board in good faith, with written proof that the Common
Stock was owned by the Participant at least twelve months prior to such
delivery; or

 

(iv)                              by any combination of the above permitted
forms of payment.

The Participant may purchase less than the number of shares covered hereby,
provided that no partial exercise of this option may be for any fractional share
or for fewer than ten whole shares.

 

(b)           No Special Employment Rights; Agreement Not To Compete.  Nothing
contained in the Plan shall be construed or deemed by any person under any
circumstances to bind the Company to continue the employment of the Participant
for the period within which this option

 

2

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may be exercised.  The Company expressly reserves the right at any time to
dismiss or otherwise terminate its relationship with a Participant free from any
claim under the Plan.  In consideration of the benefits herein conferred, the
Participant hereby agrees and covenants with the Company that for a period of
one (1) year following any termination of his or her employment with the Company
he or she (i) will not hire, attempt to hire, solicit, or attempt to solicit to
hire, or assist another or participate in any manner in the hiring or soliciting
for hire, of any person employed by Keane within the one (1) year prior to the
termination of his or her employment; and (ii) will not “compete” with Keane. 
For purposes of the Agreement, “competing” is defined as soliciting or doing
business with, directly or indirectly, any present or past customer of Keane, or
any prospective customer of Keane, with whom he or she has had contact in
connection with any business activity.

 

(c)           Continuous Relationship with the Company Required.  Except as
otherwise provided in this Section 3, this option may not be exercised unless
the Participant, at the time he or she exercises this option, is, and has been
at all times since the date of grant of this option, an employee, officer or
director of, or consultant or advisor to, the Company or any parent or
subsidiary of the Company as defined in Section 424(e) or (f) of the Code (an
“Eligible Participant”).

 

(d)           No Rights As Stockholder.  No Participant shall have any rights as
a stockholder with respect to any shares of Common Stock to be distributed with
respect to this option (including, without limitation, any rights to dividends
or distributions) until becoming the record holder of such shares. 
Notwithstanding the foregoing, in the event the Company effects a split of the
Common Stock by means of a stock dividend and the exercise price of and the
number of shares subject to this option are adjusted as of the date of the
distribution of the dividend (rather than as of the record date for such
dividend), then if the Participant exercises this option between the close of
business on the record date for such stock dividend and the close of business on
the distribution date for such stock dividend, he or she shall be entitled to
receive, on the distribution date, the stock dividend with respect to the shares
of Common Stock acquired upon such option exercise, notwithstanding the fact
that such shares were not outstanding as of the close of business on the record
date for such stock dividend.

 

(e)           Termination of Relationship with the Company.  If the Participant
ceases to be an Eligible Participant for any reason, then, except as provided in
paragraphs (f) and (g) below, the right to exercise this option shall terminate
forty-five (45) days after such cessation (but in no event after the Expiration
Date), provided that this option shall be exercisable only to the extent that
the Participant was entitled to exercise this option on the date of such
cessation.  Notwithstanding the foregoing, if the Participant, prior to the
Expiration Date, violates the non-competition or confidentiality provisions of
any employment contract, confidentiality and nondisclosure agreement or other
agreement between the Participant and the Company, the right to exercise this
option shall terminate immediately upon written notice to the Participant from
the Company describing such violation.

 

3

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(f)            Exercise Period Upon Death or Disability.  If the Participant
dies or becomes disabled (within the meaning of Section 22(e)(3) of the Code)
prior to the Final Exercise Date while he or she is an Eligible Participant and
the Company has not terminated such relationship for “cause” as specified in
paragraph (g) below, this option shall be exercisable, within the period of one
year following the date of death or disability of the Participant by the
Participant, provided that this option shall be exercisable only to the extent
that this option was exercisable by the Participant on the date of his or her
death or disability, and further provided that this option shall not be
exercisable after the Expiration Date.

 

(g)           Discharge for Cause.  If the Participant, prior to the Expiration
Date, is discharged by the Company for “cause” (as defined below), the right to
exercise this option shall terminate immediately upon the effective date of such
discharge. “Cause” shall mean misconduct by the Participant or willful failure
by the Participant to perform his or her responsibilities to the Company in the
best interests of the Company (including, but not limited to, breach by the
Participant of any provision of any employment, consulting, advisory,
nondisclosure, non-competition or other similar agreement between the
Participant and the Company), as determined by the Company, which determination
shall be conclusive.  The Participant shall be considered to have been
discharged for “Cause” if the Company determines, within 30 days after the
Participant’s resignation, that discharge for cause was warranted.

 

(h)           Changes in Capitalization.  In the event of any stock split,
reverse stock split, stock dividend, recapitalization, combination of shares,
reclassification of shares, spin-off or other similar change in capitalization
or event, or any distribution to holders of Common Stock other than a normal
cash dividend, in each case other than an Acquisition Event (as defined in the
Plan), the number and class of securities and exercise price per share subject
to this option shall be appropriately adjusted by the Company to the extent the
Board shall determine, in good faith, that such an adjustment (or substitution)
is necessary and appropriate.

 

4.             Withholding.  No Shares will be issued pursuant to the exercise
of this option unless and until the Participant pays to the Company, or makes
provision satisfactory to the Company for payment of, any federal, state or
local withholding taxes required by law to be withheld in respect of this
option.

 

5.             Nontransferability of Option.  This option may not be sold,
assigned, transferred, pledged or otherwise encumbered by the Participant,
either voluntarily or by operation of law, except by will or the laws of descent
and distribution, and, during the lifetime of the Participant, this option shall
be exercisable only by the Participant.

 

6.             Disqualifying Disposition.  If the Participant disposes of Shares
acquired upon exercise of this option within two years from the date of grant of
the option or one year after such Shares were acquired pursuant to exercise of
this option, the Participant shall notify the Company in writing of such
disposition within 30 days of such disposition.

 

4

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7.             Provisions of the Plan.   This option is subject to the
provisions of the Plan, a copy of which is furnished to the Participant with
this option.

 

IN WITNESS WHEREOF, the Company has caused this option to be executed under its
corporate seal by its duly authorized officer.  This option shall take effect as
a sealed instrument.

 

 

 

KEANE, INC.

 

 

 

s/s Brian T. Keane

 

 

5

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PARTICIPANT’S ACCEPTANCE

 

The undersigned hereby accepts the foregoing option and agrees to the terms and
conditions thereof.  The undersigned hereby acknowledges receipt of a copy of
the Company’s 1998 Stock Incentive Plan.

 

 

 

PARTICIPANT:

 

 

 

 

 

Signature:

 

 

 

 

 

Name (please print):

 

 

 

 

 

Address:

 

 

 

 

 

 

 

 

 

 

 

 

I have read the terms and conditions of the foregoing option and choose NOT TO
ACCEPT the option agreement.

 

 

PARTICIPANT:

 

 

 

 

 

Signature:

 

 

 

 

 

Name (please print):

 

 

 

 

 

Address:

 

 

 

 

 

 

 

 

 

 

 

6

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EXHIBIT C

DEFINITION OF “CHANGE IN CONTROL”

 

“Change in Control” shall mean any of the following:

 

(A)                                    ANY “PERSON,” AS SUCH TERM IS USED IN
SECTIONS 13(D) AND 14(D) OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED (THE
“ACT”) (OTHER THAN THE COMPANY, ANY OF ITS SUBSIDIARIES, OR ANY TRUSTEE,
FIDUCIARY OR OTHER PERSON OR ENTITY HOLDING SECURITIES UNDER ANY EMPLOYEE
BENEFIT PLAN OR TRUST OF THE COMPANY OR ANY OF ITS SUBSIDIARIES), TOGETHER WITH
ALL “AFFILIATES” AND “ASSOCIATES” (AS SUCH TERMS ARE DEFINED IN RULE 12B-2 UNDER
THE ACT) OF SUCH PERSON, SHALL BECOME THE “BENEFICIAL OWNER” (AS SUCH TERM IS
DEFINED IN RULE 13D-3 UNDER THE ACT), DIRECTLY OR INDIRECTLY, OF SECURITIES OF
THE COMPANY REPRESENTING FIFTY PERCENT (50%) OR MORE OF EITHER (A) THE COMBINED
VOTING POWER OF THE COMPANY’S THEN OUTSTANDING SECURITIES HAVING THE RIGHT TO
VOTE IN AN ELECTION OF THE COMPANY’S BOARD (“VOTING SECURITIES”) OR (B) THE THEN
OUTSTANDING SHARES OF COMPANY’S COMMON STOCK (“COMMON STOCK”) (OTHER THAN AS A
RESULT OF AN ACQUISITION OF SECURITIES DIRECTLY FROM THE COMPANY); OR

 

(B)                                   DURING ANY PERIOD OF TWO YEARS OR LESS,
PERSONS WHO AT THE BEGINNING OF SUCH PERIOD (THE “COMMENCEMENT DATE”) CONSTITUTE
THE COMPANY’S BOARD (THE “INCUMBENT DIRECTORS”) CEASE FOR ANY REASON, INCLUDING,
WITHOUT LIMITATION, AS A RESULT OF A TENDER OFFER, PROXY CONTEST, MERGER OR
SIMILAR TRANSACTION, TO CONSTITUTE AT LEAST A MAJORITY OF THE BOARD, PROVIDED
THAT ANY PERSON BECOMING A DIRECTOR OF THE COMPANY SUBSEQUENT TO THE
COMMENCEMENT DATE SHALL BE CONSIDERED AN INCUMBENT DIRECTOR IF SUCH PERSON’S
ELECTION WAS APPROVED BY OR SUCH PERSON WAS NOMINATED FOR ELECTION BY A VOTE OF
AT LEAST A MAJORITY OF THE INCUMBENT DIRECTORS; BUT PROVIDED FURTHER, THAT ANY
SUCH PERSON WHOSE INITIAL ASSUMPTION OF OFFICE IS IN CONNECTION WITH AN ACTUAL
OR THREATENED ELECTION CONTEST RELATING TO THE ELECTION OF MEMBERS OF THE BOARD
OR OTHER ACTUAL OR THREATENED SOLICITATION OF PROXIES OR CONSENTS BY OR ON
BEHALF OF A PERSON OTHER THAN THE BOARD, INCLUDING BY REASON OF AGREEMENT
INTENDED TO AVOID OR SETTLE ANY SUCH ACTUAL OR THREATENED CONTEST OR
SOLICITATION, SHALL NOT BE CONSIDERED AN INCUMBENT DIRECTOR; OR

 

(C)                                    THE STOCKHOLDERS OF THE COMPANY SHALL
APPROVE (A) ANY CONSOLIDATION OR MERGER OF THE COMPANY WHERE THE STOCKHOLDERS OF
THE COMPANY, IMMEDIATELY PRIOR TO THE CONSOLIDATION OR MERGER, WOULD NOT,
IMMEDIATELY AFTER THE CONSOLIDATION OR MERGER, BENEFICIALLY OWN (AS SUCH TERM IS
DEFINED IN RULE 13D-3 UNDER THE ACT), DIRECTLY OR INDIRECTLY, SHARES
REPRESENTING IN THE AGGREGATE FIFTY PERCENT (50%) OR MORE OF THE VOTING SHARES
OF THE COMPANY ISSUING CASH OR SECURITIES IN THE CONSOLIDATION OR MERGER (OR OF
ITS ULTIMATE PARENT CORPORATION, IF ANY), (B) ANY SALE, LEASE, EXCHANGE OR OTHER
TRANSFER (IN ONE TRANSACTION OR A SERIES OF TRANSACTIONS CONTEMPLATED OR
ARRANGED BY ANY PARTY AS A SINGLE PLAN) OF ALL OR SUBSTANTIALLY ALL OF THE
ASSETS OF THE COMPANY OR (C) ANY PLAN OR PROPOSAL FOR THE LIQUIDATION OR
DISSOLUTION OF THE COMPANY.

 

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NOTWITHSTANDING THE FOREGOING, A “CHANGE OF CONTROL” SHALL NOT BE DEEMED TO HAVE
OCCURRED FOR PURPOSES OF THE FOREGOING CLAUSE (A) SOLELY AS THE RESULT OF AN
ACQUISITION OF SECURITIES BY THE COMPANY WHICH, BY REDUCING THE NUMBER OF SHARES
OF COMMON STOCK OR OTHER VOTING SECURITIES OUTSTANDING, INCREASES THE
PROPORTIONATE NUMBER OF SHARES BENEFICIALLY OWNED BY ANY PERSON TO FIFTY PERCENT
(50%) OR MORE OF EITHER (A) THE COMBINED VOTING POWER OF ALL OF THE THEN
OUTSTANDING VOTING SECURITIES OR (B) COMMON STOCK; PROVIDED, HOWEVER, THAT IF
ANY PERSON REFERRED TO IN THIS SENTENCE SHALL THEREAFTER BECOME THE BENEFICIAL
OWNER OF ANY ADDITIONAL SHARES OF VOTING SECURITIES OR COMMON STOCK (OTHER THAN
PURSUANT TO A STOCK SPLIT, STOCK DIVIDEND, OR SIMILAR TRANSACTION OR AS A RESULT
OF AN ACQUISITION OF SECURITIES DIRECTLY FROM THE COMPANY) AND IMMEDIATELY
THEREAFTER BENEFICIALLY OWNS FIFTY PERCENT (50%) OR MORE OF EITHER (A) THE
COMBINED VOTING POWER OF ALL OF THE THEN OUTSTANDING VOTING SECURITIES OR
(B) COMMON STOCK, THEN A “CHANGE OF CONTROL” SHALL BE DEEMED TO HAVE OCCURRED
FOR PURPOSES OF THE FOREGOING CLAUSE (A).

 

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EXHIBIT D

AGREEMENT

 

THIS AGREEMENT (“AGREEMENT”) IS BY AND BETWEEN KEANE, INC. (“KEANE”) AND THE
EMPLOYEE NAMED BELOW AND IS EFFECTIVE ON THE DATE OF EXECUTION BY BOTH PARTIES.

 

I UNDERSTAND THAT KEANE IS INVOLVED IN AN EXTREMELY COMPETITIVE INDUSTRY IN
WHICH INFORMATION AND KNOWLEDGE ARE VALUABLE ASSETS THAT MUST BE PROTECTED.

 

I ALSO UNDERSTAND THAT THIS AGREEMENT SEEKS TO PROTECT THESE ASSETS, AS WELL AS
OTHER LEGITIMATE BUSINESS INTERESTS, BY ADDRESSING THE ISSUES OF NON-DISCLOSURE
OF CONFIDENTIAL AND/OR PROPRIETARY INFORMATION AND TRADE SECRETS; RIGHTS IN
INVENTIONS; AND EMPLOYEE OBLIGATIONS AND RESTRICTIVE COVENANTS.

 

I UNDERSTAND THE MEANING AND EFFECT OF THE TERMS OF THIS AGREEMENT, AND
UNDERSTAND THAT AGREEMENT TO THE TERMS SET FORTH HEREIN IS A CONDITION OF MY
EMPLOYMENT OR CONTINUED EMPLOYMENT WITH KEANE.

 

NOW, THEREFORE, in consideration of the covenants herein and for other good and
valuable consideration, I hereby agree with Keane as follows:

 

EMPLOYMENT WITH KEANE

 

1.     I understand and agree that any subsequent change or changes in my
employment, including but not limited to change or changes to my title, duties,
responsibilities, compensation, benefits, reporting relationships and/or term of
my employment, shall not in any way affect the validity of this Agreement, which
shall be and remain in full force and effect.

 

Trade Secrets, Confidential Information and Keane Property.

 

2.     I acknowledge that my employment with Keane has given or will give me
access to certain trade secrets and confidential and/or proprietary information
belonging to Keane including, but not limited to, non-public information
pertaining to current or former employees, information pertaining to hires,
prospective hires or potential hires, reports, customer lists, customer prospect
material, price lists, rate structures, responses to requests for proposals,
presentations, methodologies and software owned either by Keane, or developed by
Keane for any of its clients, whether electronically and/or in hard copy (all
referred to as “Company Confidential Information”).

 

3.     I understand that I may use Company Confidential Information described in
paragraph 4 only in the ordinary course of my employment with Keane.  I also
understand that I may disclose Company Confidential Information described in
paragraph 4 to others only when authorized to do so and only when access to this
Company Confidential Information is necessary in the ordinary course of
employment by, on behalf of or in partnership with Keane.

 

4.     I understand that securities laws strictly prohibit the disclosure of
non-public information and the trading in a stock or other security by a person
in possession of material, non-public information concerning that security.

 

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5.     I understand that Keane retains exclusive rights in Company Confidential
Information described in paragraph 4.  I understand that I have no right to
edit, copy, remove, distribute, create derivative works or publish any such
Company Confidential Information in any form and medium, whether electronically
or in hard copy and whether alone or as part of a collective work, except as
necessary in the ordinary course of my employment with Keane.

 

6.     At the termination of employment I will not, without the express written
authorization of an officer (Senior Vice President or higher) of Keane, take
with me the original or any copy (in any form or medium, whether electronically
or in hard copy) of any Company Confidential Information and/or other Keane
information not readily available to the public in any form as defined under
paragraph 4.  I will promptly deliver to Keane all of such material held by me.

 

7.     At the termination of employment I will also return to Keane all property
and/or other equipment provided to me during the course of my employment.

 

Works Made for Hire and Inventions.

 

8.     I understand and agree that all inventions, computer programs and the
like created or conceived by me during the course of my employment (whether
solely or jointly with others) either for use by Keane or which could be used by
Keane in furtherance of its business activity, are “Works Made for Hire”, belong
solely to Keane, and are entitled to the same protections as Company
Confidential Information.

 

9.     I agree to sign all papers, to execute all oaths and to do everything
necessary and proper to protect Keane’s title to Works Made for Hire and to
enable Keane to apply for and obtain, maintain and enforce US and foreign
patents or copyrights thereof, but without expense to me.

 

Employee Obligations and Restrictive Covenants.

 

10.   I affirm that I am not subject to any agreement that restricts my ability
to work for Keane or on assignments at Keane’s clients.

 

11.   I will, during the period of my employment by Keane, devote my full time
and best efforts to Keane’s business and will not, without the express written
permission of Keane, engage in any business activities that would conflict with
my duties. Keane agrees that such permission will not be unreasonably withheld
so long as the requested activity is not similar to or does not conflict with
the primary business of Keane.  Furthermore, I expressly agree that during said
period, I will not, directly or indirectly, work for or assist in any way any
competitor of Keane.

 

12.   I agree that after my employment with Keane ends, for a period of twelve
(12) months immediately thereafter, I will not hire, attempt to hire, solicit,
or attempt to solicit to hire, or assist another or participate in any manner in
the hiring or soliciting for hire, of any person employed by Keane within the
one (1) year prior to the termination of my employment.

 

13.   I agree that after my employment with Keane ends, for a period of twelve
(12) months, I will not “compete” with Keane.  For purposes of this Agreement,
“competing” is

 

2

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defined as soliciting or doing business with, directly or indirectly, any past
(within the two years prior to the termination of my employment), present or
prospective customer of Keane, with whom I, or anyone reporting to me, have had
contact in connection with any business activity, but is limited to the type of
services provided by Keane to any of its customers during the term of my
employment.

 

Miscellaneous.

 

14.   Upon termination Keane is authorized to deduct from my compensation (net
pay) or other amounts owed to me, to the extent allowed by law, any debts or
financial obligations I have incurred and owe to Keane. In the event that the
amounts owed to me do not fully repay the obligation, I agree to pay Keane such
excess amount on or before my termination date.

 

15.   I understand that any breach of the above terms would cause irreparable
harm to Keane.  Therefore, in the event of any such breach, Keane shall have the
right to appropriate equitable relief, including but not limited to, injunctive
relief or specific performance, as well as any and all other appropriate
remedies of law.

 

16.   Any amendment to or modification of this Agreement, and any waiver of any
provision hereof, shall be in writing.  Any waiver by Keane of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of any
subsequent breach hereof.

 

17.   I agree that each provision herein shall be treated as a separate and
independent clause, and the unenforceability of any one clause shall in no way
impair the enforceability of any of the other clauses herein.  Moreover, if one
or more of the provisions contained in this Agreement shall for any reason by
held to be excessively broad as to scope, activity or subject so as to be
unenforceable at law, such provision or provisions shall be construed by the
appropriate judicial body by limiting and reducing it or them, so as to be
enforceable to the maximum extent compatible with the applicable law as it shall
then appear.  Upon termination of my employment for any reason I agree that the
terms and conditions of this Agreement shall continue to be of full force and
effect.

 

18.   This Agreement shall be governed by and construed in accordance with the
internal laws (and not the laws of conflicts) of the Commonwealth of
Massachusetts.

 

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19.   The term “Keane” shall include Keane, Inc. and any of its subsidiaries,
subdivisions and affiliates.  Keane shall have the right to assign this
Agreement to its successors and assigns, and all covenants and agreement
hereunder shall inure to the benefit of and be enforceable by said successors or
assigns.

 

 

I have read and agree to the above terms and conditions.

 

 

Signature:

 

 

 

 

 

Printed

 

 

Name:

 

 

 

 

 

Date:

 

 

 

 

Received at Branch/Corporate

 

 

By:

 

 

 

 

 

Printed

 

 

Name:

 

 

 

 

 

Date:

 

 

 

 

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