**Exhibit 10.4**

 

 

**Keane, Inc.**

 

 

**Stock Restriction Agreement**

**Granted Under 2001 Stock IncentivePlan**

 

 

AGREEMENTmade this      day of                          ,          , betweenKeane, Inc., a Massachusetts corporation (the “Company”), and                                 (the “Employee”).

 

Forvaluable consideration, receipt of which is acknowledged, the parties heretoagree as follows:

 

1.                                       Purchaseof Shares.  The Company shall issueand sell to the Employee, and the Employee shall purchase from the Company,subject to the terms and conditions set forth in this Agreement,               shares (the “Shares”) of common stock, $.10 par value per share, of the Company(the “Common Stock”), at a purchase price of $.10 per share.  The aggregate purchase price for the sharesshall be paid by the Employee by check payable to the order of the Company orby such other method as may be acceptable to the Company.  Upon receipt of payment by the Company forthe Shares, the Company shall issue to the Employee one or more certificates,or otherwise cause to be issued shares in book entry form, in the name of theEmployee for that number of Shares purchased by the Employee.  The Employee agrees that the Shares shall besubject to the Purchase Option set forth in Section 2 of this Agreementand the restrictions on transfer set forth in Section 4 of theAgreement.  

 

2.                                       PurchaseOption.

 

In the event that the Employee ceases to beemployed by the Company for any reason or for no reason, with or without cause(the “Employment Termination”), prior to                         ,         , theCompany shall have the right and option (the “Purchase Option”) to purchasefrom the Employee, for a sum of $.10 per share (the “Option Price”), asfollows:

 

(a) Ifthe Employment Termination is effective on or before                       ,         , theCompany may exercise the Purchase Option against 75% of the total number ofShares;

 

(b) Ifthe Employment Termination is effective on or before                       ,         , theCompany may exercise the Purchase Option against 50% of the total number ofShares;

 

1

----

 

(c) Ifthe Employment Termination is effective on or before                       ,         , theCompany may exercise the Purchase Option against 25% of the total number ofShares;

 

(d) TheCompany’s Purchase Option shall expire on                       ,         .

 

3.                                       Exerciseof Purchase Option and Closing.

 

(a) The Company may exercise the Purchase Option by delivering ormailing to the Employee (or his or her estate), in accordance with Section 13,within 60 days after the termination of the employment of the Employee with theCompany, a written notice of exercise of the Purchase Option.  Such notice shall specify the number ofShares to be purchased.  If and to theextent the Purchase Option is not so exercised by the giving of such a noticewithin such 60-day period, the Purchase Option shall automatically expire andterminate effective upon the expiration of such 60-day period. 

 

(b) Within 10 days after his receipt of theCompany’s notice of the exercise of the Purchase Option pursuant to subsection (a)above, the Employee (or his or her estate) shall tender to the Company at itsprinciple offices the certificate or certificates representing the Shares whichthe Company has elected to purchase, duly endorsed in blank by the Employee orwith duly endorsed stock powers attached thereto, all in form suitable for thetransfer of such Shares to the Company. Upon its receipt of such certificate or certificates, the Company shalldeliver or mail to the Employee a check in the amount of the aggregate OptionPrice therefor.

 

(c)After the time at which any Shares are required to be delivered to the Companyfor transfer to the Company pursuant to subsection (b) above, the Companyshall not pay any dividend to the Employee on account of such Shares or permitthe Employee to exercise any of the privileges or rights of a stockholder withrespect to such Shares, but shall, in so far as permitted by law, treat theCompany as the owner of such Shares.

 

(d) The Option Price may be payable, at theoption of the Company, in cancellation of all or a portion of any outstandingindebtedness of the Employee to the Company or in cash (by check) or both.

 

4.                                       Restrictionson Transfer.

 

(a)Except as otherwise provided in subsection (b) below, the Employee shallnot, during the term of the Purchase Option, sell, assign, transfer, pledge,hypothecate or otherwise dispose of, by operation of law or otherwise(collectively “transfer”), any of the Shares, or any interest therein, unlessand until such Shares are no longer subject to the Purchase Option.

 

2

----

 

(b)Notwithstanding the foregoing, the Employee may transfer Shares to or for thebenefit of any spouse, child or grandchild, or to a trust for their benefit,provided that such Shares shall remain subject to this Agreement (includingwithout limitation the Purchase Option set forth in Section 2 and the restrictionson transfer set forth in this Section 4) and such permitted transfereeshall, as a condition to such transfer, deliver to the Company a writteninstrument confirming that such transferee shall be bound by all of the termsand conditions of this Agreement.

 

5.                                       Effectof Prohibited Transfer.  The Companyshall not be required (a) to transfer on its books any of the Shares whichshall have been sold or transferred in violation of any of the provisions setforth in this Agreement, or (b) to treat as owner of such Shares or to paydividends to any transferee to whom any such Shares shall have been so sold ortransferred.  

 

6.                                       RestrictiveLegend.  All certificatesrepresenting Shares shall have affixed thereto a legend in substantially thefollowing form, in addition to any other legends that may be required underfederal or state securities laws:      

 

“Theshares of stock represented by this certificate are subject to restrictions ontransfer and an option to purchase set forth in a certain Stock RestrictionAgreement between the corporation and the registered owner of these shares (orhis predecessor in interest), and such Agreement is available for inspectionwithout charge at the office of the Clerk of the corporation.”

 

(a) In the case of shares issued in book entry form, theCompany shall have the authority to impose stock transfer restrictionsconsistent with the terms of this agreement.

 

7.                                       Adjustmentsfor Stock Splits, Stock Dividends, etc.

 

(a) Iffrom time to time during the term of the Purchase Option there is any stocksplit-up, stock dividend, stock distribution or other reclassification of theCommon Stock of the Company, any and all new, substituted or additionalsecurities to which the Employee is entitled by reason of his or her ownershipof the Shares be immediately subject to the Purchase Option, the restrictionson transfer and other provisions of this Agreement in the same manner and tothe same extent as the Shares, and the Option Price shall be appropriatelyadjusted.  

 

(b) Ifthe Shares are converted into or exchanged for, or stockholders of the Companyreceive by reason of any distribution in total or partial liquidation,securities of another corporation, or other property (including cash), pursuantto any merger of the Company or acquisition of its assets, then the rights ofthe Company under this Agreement shall inure to the benefit of the Company’ssuccessor and this Agreement shall apply to the securities or other propertyreceived upon such conversion, exchange or distribution in the same manner andto the same extent as the Shares.

 

3

----

 

8.                                       WithholdingTaxes.

 

(a)The Employee acknowledges and agrees that the Company has the right to deductfrom payments of any kind otherwise due to the Employee any federal, state orlocal taxes of any kind required by law to be withheld with respect to thepurchase of the Shares by the Employee.

 

(b) Ifthe Employee elects, in accordance with Section 83(b) of the InternalRevenue Code of 1986, as amended, to recognize ordinary income in the year ofacquisition of the Shares, the Company will require the Employee to make to theCompany, at the time of such election, an additional payment for withholdingtax purposes based on the difference, if any, between the purchase price forsuch Shares and the fair market value of such Shares as of the day immediatelypreceding the date of the purchase of such Shares by the Employee.

 

9.                                       Severability.  The invalidity or unenforceability of anyprovision of this Agreement shall not affect the validity or enforceability ofany other provision of this Agreement, and each other provision of thisAgreement shall be severable and enforceable to the extent permitted by law.

 

10.                                 Waiver.  Any provision contained in this Agreement maybe waived, either generally or in any particular instance, by the Board ofDirectors of the Company.

 

11.                                 BindingEffect.  This Agreement shall bebinding upon and inure to the benefit of the Company and the Employee and theirrespective heirs, executors, administrators, legal representatives, successorsand assigns, subject to the restrictions on transfer set forth in Section 4of this Agreement. 

 

12.                                 NoSpecial Employment Rights; Agreement Not To Compete.  Nothing contained in the Plan shall beconstrued or deemed by any person under any circumstances to bind the Companyto continue the employment of the Participant for the period within which thisoption may be exercised.  The Companyexpressly reserves the right at any time to dismiss or otherwise terminate itsrelationship with a Participant free from any claim under the Plan.  In consideration of the benefits hereinconferred, the Participant hereby agrees and covenants with the Company thatfor a period of one (1) year following any termination of his or her employmentwith the Company he or she (i) will not hire, attempt to hire, solicit, orattempt to solicit to hire, or assist another or participate in any manner inthe hiring or soliciting for hire, of any person employed by Keane within theone (1) year prior to the termination of his or her employment; and (ii) willnot “compete” with Keane.  For purposesof the Agreement, “competing” is defined as soliciting or doing business with,directly or indirectly, any present or past (within the two years prior to thetermination of his or her employment) customer of Keane, or any prospectivecustomer of Keane, with whom he or she has had contact in connection with anybusiness activity, but is 

 

4

----

 

limited to thetype of services provided by Keane to any of its customers during the term ofhis or her employment. 

 

13.                                 Notice.  All notices required or permitted hereundershall be in writing and deemed effectively given upon personal delivery or upondeposit in the United States Post Office, by registered or certified mail,postage prepaid, addressed to the other party hereto at the address shownbeneath his or her or its respective signature to this Agreement, or at suchother address or addresses as either party shall designate to the other inaccordance with this Section 13.

 

14.                                 Pronouns.  Whenever the context may require, anypronouns used in this Agreement shall include the corresponding masculine,feminine or neuter forms, and the singular form of nouns and pronouns shallinclude the plural, and vice versa.

 

15.                                 EntireAgreement.  This Agreementconstitutes the entire agreement between the parties, and supercedes all prioragreements and understanding, relating to the subject matter of this Agreement.

 

16.                                 Amendment.  This Agreement may be amended or modifiedonly by a written instrument executed by both the Company and the Employee.

 

17.                                 GoverningLaw.  This Agreement shall begoverned by and enforced in accordance with the internal laws of theCommonwealth of Massachusetts, without giving effect to the principles ofconflicts of law thereof.

 

18.                                 SpecificPerformance.  The Company and theEmployee agree that any breach of this Agreement will cause the Companysubstantial and irrevocable damage and therefore, in the event of any suchbreach, in addition to such other remedies which may be available, the Companyshall have the right to specific performance and injunctive relief.

 

INWITNESS WHEREOF, the parties hereto have executed this Agreement as of the dayand year first above written.   

 

 
|   | KEANE, INC. |
|--------|-------------|
|   |        |
|   |        |   |
|   | Name/Title  |

 

5

----

 

**PARTICIPANT’SACCEPTANCE**

 

Theundersigned hereby accepts the foregoing option and agrees to the terms andconditions thereof.  The undersignedhereby acknowledges receipt of a copy of the Company’s 2001 Stock IncentivePlan.

 

 
|   | PARTICIPANT:          |
|--------|-----------------------|
|   |                  |
|   |                  |
|   | Signature:            |   |   |
|   |                  |
|   | Name (please  print): |   |   |
|   |                  |
|   | Address:              |   |   |
|   |                  |   |   |
|   |                  |   |   |
|        |                       |  |  |  |  |

 

 

I haveread the terms and conditions of the foregoing option and choose NOT TOACCEPT the option agreement.

 

 
|   | PARTICIPANT:          |
|--------|-----------------------|
|   |                  |
|   |                  |
|   | Signature:            |   |   |
|   |                  |
|   | Name (please  print): |   |   |
|   |                  |
|   | Address:              |   |   |
|   |                  |   |   |
|   |                  |   |   |
|        |                       |  |  |  |  |

 

6

----