Document:

EXHIBIT 4.3

CANDELA
CORPORATION

SECOND AMENDED AND RESTATED 1998 STOCK PLAN

October 5, 2005

1.     PURPOSE. The purpose of the Candela Corporation 1998 Stock Plan
(the “Plan”) is to encourage employees of Candela Corporation (the “Company”)
and of any present or future parent or subsidiary of the Company (collectively,
“Related Corporations”) and other individuals who render services to the
Company or a Related Corporation, by providing opportunities to participate in
the ownership of the Company and its future growth through (a) the grant
of options which qualify as “incentive stock options” (“ISOs”) under Section 422(b) of
the Internal Revenue Code of 1986, as amended (the “Code”); (b) the grant
of options that do not qualify as ISOs (“Non-Qualified Options”); (c) awards
of stock in the Company (“Awards”); (d) the grant of stock appreciation
rights (“SARs”); and (e) opportunities to make direct purchases of stock
in the Company (“Purchases”). Both ISOs and Non-Qualified Options are referred
to hereafter individually as an “Option” and collectively as “Options.”  Options, Awards, SARs and authorizations to
make Purchases are referred to hereafter collectively as “Stock Rights.”  As used herein, the terms “parent” and “subsidiary”
mean “parent corporation” and “subsidiary corporation,” respectively, as those
terms are defined in Section 424 of the Code.

2.     ADMINISTRATION OF THE PLAN.

A.            BOARD OR COMMITTEE
ADMINISTRATION. The Plan shall be administered by the Board of Directors of the
Company (the “Board”) or, subject to paragraph 2(D) (relating to
compliance with Section 162(m) of the Code), by a committee appointed
by the Board (the “Committee”). Hereinafter, all references in this Plan to the
“Committee” shall mean the Board if no Committee has been appointed. Subject to
ratification of the grant or authorization of each Stock Right by the Board (if
so required by applicable state law), and subject to the terms of the Plan, the
Committee shall have the authority to (i) determine to whom (from among
the class of employees eligible under paragraph 3 to receive ISOs) ISOs shall
be granted, and to whom (from 

 

among the
class of individuals and entities eligible under paragraph 3 to receive
Non-Qualified Options, SARs and Awards and to make Purchases) Non-Qualified
Options, SARs, Awards and authorizations to make Purchases may be granted; (ii) determine
the time or times at which Options, SARs or Awards shall be granted or
Purchases made; (iii) determine the purchase price of shares subject to
each Option or Purchase, which prices shall not be less than the minimum price
specified in paragraph 6; (iv) determine the grant price of SARs; (v) determine
whether each Option granted shall be an ISO or a Non-Qualified Option; (vi) determine
(subject to paragraph 7) the time or times when each Option or SAR shall become
exercisable and the duration of the exercise period; (vii) extend the
period during which outstanding Options or SARs may be exercised; (viii) determine
whether restrictions such as repurchase options are to be imposed on shares
subject to Options, SARs, Awards and Purchases and the nature of such
restrictions, if any, and (ix) interpret the Plan and prescribe and
rescind rules and regulations relating to it. If the Committee determines
to issue a Non-Qualified Option, it shall take whatever actions it deems
necessary, under Section 422 of the Code and the regulations promulgated
thereunder, to ensure that such Option is not treated as an ISO. The
interpretation and construction by the Committee of any provisions of the Plan
or of any Stock Right granted under it shall be final unless otherwise
determined by the Board. The Committee may from time to time adopt such rules and
regulations for carrying out the Plan as it may deem advisable. No member of
the Board or the Committee shall be liable for any action or determination made
in good faith with respect to the Plan or any Stock Right granted under it.

B.            COMMITTEE ACTIONS. The
Committee may select one of its members as its chairman, and shall hold
meetings at such time and places as it may determine. A majority of the
Committee shall constitute a quorum and acts of a majority of the members of
the Committee at a meeting at which a quorum is present, or acts reduced to or
approved in writing by all the members of the Committee (if consistent with
applicable state law), shall be the valid acts of the Committee. From time to
time the Board may increase the size of the Committee and appoint additional
members thereof, remove members (with or without cause) and appoint new members
in substitution therefor, fill vacancies however caused, or remove all members
of the Committee and thereafter directly administer the Plan.

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C.            GRANT OF STOCK
RIGHTS TO BOARD MEMBERS. Stock Rights may be granted to members of the Board. All
grants of Stock Rights to members of the Board shall in all respects be made in
accordance with the provisions of this Plan applicable to other eligible
persons. Members of the Board who either (i) are eligible to receive
grants of Stock Rights pursuant to the Plan or (ii) have been granted
Stock Rights may vote on any matters affecting the administration of the Plan
or the grant of any Stock Rights pursuant to the Plan, except that no such
member shall act upon the granting to himself or herself of Stock Rights, but
any such member may be counted in determining the existence of a quorum at any
meeting of the Board during which action is taken with respect to the granting
to such member of Stock Rights.

D.            PERFORMANCE-BASED
COMPENSATION. The Board, in its discretion, may take such action as may be
necessary to ensure that Stock Rights granted under the Plan qualify as “qualified
performance-based compensation” within the meaning of Section 162(m) of
the Code and applicable regulations promulgated thereunder (“Performance-Based
Compensation”). Such action may include, in the Board’s discretion, some or all
of the following: (i) if the Board determines that Stock Rights granted
under the Plan generally shall constitute Performance-Based Compensation, the
Plan shall be administered, to the extent required for such Stock Rights to
constitute Performance-Based Compensation, by a Committee consisting solely of
two or more “outside directors” (as defined in applicable regulations
promulgated under Section 162(m) of the Code), (ii) if any
Non-Qualified Options with an exercise price less than the fair market value
per share of the Company’s common stock, $0.01 par value per share (the “Common
Stock”), are granted under the Plan and the Board determines that such Options
should constitute Performance-Based Compensation, such options shall be made
exercisable only upon the attainment of a pre-established, objective
performance goal established by the Committee, and such grant shall be
submitted for, and shall be contingent upon shareholder approval, and (iii) Stock
Rights granted under the Plan may be subject to such other terms and conditions
as are necessary for compensation recognized in connection with the exercise or
disposition of such Stock Right or the disposition of Common Stock acquired
pursuant to such Stock Right, to constitute Performance-Based Compensation.

3.     ELIGIBLE EMPLOYEES AND OTHERS. ISOs may be granted only to
employees of the Company or any Related Corporation. Non-Qualified Options,
Awards, SARs and 

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authorizations to make Purchases may be granted to any
employee, officer or director (whether or not also an employee) or consultant
of the Company or any Related Corporation. The Committee may take into
consideration a recipient’s individual circumstances in determining whether to
grant a Stock Right. The granting of any Stock Right to any individual or
entity shall neither entitle that individual or entity to, nor disqualify such
individual or entity from, participation in any other grant of Stock Rights.

4.     STOCK. The stock subject to Stock Rights shall be authorized but
unissued shares of Common Stock or shares of Common Stock reacquired by the
Company in any manner. The aggregate number of shares which may be issued
pursuant to the Plan is 5,300,000, subject to adjustment as provided in
paragraph 13. If any Option granted under the Plan shall expire or terminate
for any reason without having been exercised in full or shall cease for any
reason to be exercisable in whole or in part or shall be repurchased by the
Company, the unpurchased shares of Common Stock subject to such Option shall
again be available for grants of Stock Rights under the Plan. Where payment
upon exercise of a SAR is made in shares of Common Stock, only the net number of shares of Common Stock
issued in connection with such exercise shall be deemed “issued” for purposes of this paragraph 4.

No employee of the Company or any Related Corporation
may be granted Options and/or SARs to acquire, in the aggregate, more than
700,000 shares of Common Stock under the Plan during any fiscal year of the
Company, subject to adjustment as provided in paragraph 13. If any Option
granted under the Plan shall expire or terminate for any reason without having
been exercised in full or shall cease for any reason to be exercisable in whole
or in part or shall be repurchased by the Company, the shares subject to such
Option shall be included in the determination of the aggregate number of shares
of Common Stock deemed to have been granted to such employee under the Plan.

5.     GRANTING OF STOCK RIGHTS. Stock Rights may be granted under the
Plan at any time on or after September 19, 1998 and prior to September 18,
2008. The date of grant of a Stock Right under the Plan will be the date
specified by the Committee at the time it grants the Stock Right; provided,
however, that such date shall not be prior to the date on which the Committee
acts to approve the grant. SARs may be granted in tandem with an Option (“Tandem

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SARs”), or may be granted on a freestanding basis, not
related to any Option (“Freestanding SARs”), or any combination of these forms
of SARs.

6.     MINIMUM PRICE; ISO LIMITATIONS; FAIR MARKET VALUE.

A.            PRICE FOR OPTIONS,
SARS, AWARDS AND PURCHASES. Subject to paragraph 2(D) (relating to
compliance with Section 162(m) of the Code), the exercise price per
share specified in the agreement relating to each Non-Qualified Option granted,
and the purchase price per share of stock granted in any Award or authorized as
a Purchase, under the Plan may be less than the fair market value of the Common
Stock of the Company on the date of grant; provided that, in no event shall
such exercise price or such purchase price be less than the minimum legal
consideration required therefor under the laws of any jurisdiction in which the
Company or its successors in interest may be organized. The grant price of a
Freestanding SAR shall equal the fair market value of a share of Common Stock
on the date of grant of the SAR. The grant price of a Tandem SAR shall equal
the exercise price of the related Option.

B.            PRICE FOR ISOS. The
exercise price per share specified in the agreement relating to each ISO
granted under the Plan shall not be less than the fair market value per share
of Common Stock on the date of such grant. In the case of an ISO to be granted
to an employee owning stock possessing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company or any Related
Corporation, the price per share specified in the agreement relating to such ISO
shall not be less than one hundred ten percent (110%) of the fair market value
per share of Common Stock on the date of grant. For purposes of determining
stock ownership under this paragraph, the rules of Section 424(d) of
the Code shall apply.

C.            $100,000 ANNUAL
LIMITATION ON ISO VESTING. Each eligible employee may be granted Options
treated as ISOs only to the extent that, in the aggregate under this Plan and
all incentive stock option plans of the Company and any Related Corporation,
ISOs do not become exercisable for the first time by such employee during any
calendar year with respect to stock having a fair market value (determined at
the time the ISOs were granted) in excess of $100,000. The Company intends to
designate any Options granted in excess of such limitation as Non-Qualified
Options, and the Company shall issue separate certificates to the optionee with
respect to Options that are Non-Qualified Options and Options that are ISOs.

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D.            DETERMINATION OF
FAIR MARKET VALUE. If, at the time an Option or SAR is granted under the Plan,
the Company’s Common Stock is publicly traded, “fair market value” shall be
determined as of the date of grant or, if the prices or quotes discussed in
this sentence are unavailable for such date, the last business day for which
such prices or quotes are available prior to the date of grant and shall mean (i) the
average (on that date) of the high and low prices of the Common Stock on the
principal national securities exchange on which the Common Stock is traded, if
the Common Stock is then traded on a national securities exchange; or (ii) the
last reported sale price (on that date) of the Common Stock on the Nasdaq
National Market, if the Common Stock is not then traded on a national
securities exchange; or (iii) the closing bid price (or average of bid
prices) last quoted (on that date) by an established quotation service for
over-the-counter securities, if the Common Stock is not reported on the Nasdaq
National Market. If the Common Stock is not publicly traded at the time an
Option or SAR is granted under the Plan, “fair market value” shall mean the
fair value of the Common Stock as determined by the Committee after taking into
consideration all factors which it deems appropriate, including, without
limitation, recent sale and offer prices of the Common Stock in private
transactions negotiated at arm’s length.

7.     OPTION AND SAR DURATION. Subject to earlier termination as
provided in paragraphs 9 and 10 or in the agreement relating to such Option or
SAR, each Option and SAR shall expire on the date specified by the Committee,
but not more than (i) ten years from the date of grant in the case of
Options and SARs generally and (ii) five years from the date of grant in
the case of ISOs granted to an employee owning stock possessing more than ten
percent (10%) of the total combined voting power of all classes of stock of the
Company or any Related Corporation, as determined under paragraph 6(B). Subject
to earlier termination as provided in paragraphs 9 and 10, the term of each ISO
shall be the term set forth in the original instrument granting such ISO,
except with respect to any part of such ISO that is converted into a
Non-Qualified Option pursuant to paragraph 16.

8.     EXERCISE OF OPTION AND SARS. Subject to the provisions of paragraphs
9 through 12, each Option or SAR granted under the Plan shall be exercisable as
follows:

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A.            VESTING. The Option
or SAR shall either be fully exercisable on the date of grant or shall become
exercisable thereafter in such installments as the Committee may specify.

B.            FULL VESTING OF
INSTALLMENTS. Once an installment becomes exercisable, it shall remain
exercisable until expiration or termination of the Option or SAR, unless
otherwise specified by the Committee.

C.            PARTIAL EXERCISE. Each
Option or, subject to subparagraph 14(B), each SAR or installment thereof, may
be exercised at any time or from time to time, in whole or in part, for up to
the total number of shares with respect to which it is then exercisable.

D.            ACCELERATION OF
VESTING. The Committee shall have the right to accelerate the date that any
installment of any Option or SAR becomes exercisable; provided that the
Committee shall not, without the consent of an optionee, accelerate the
permitted exercise date of any installment of any Option granted pursuant to
paragraph 16 if such acceleration would violate the annual vesting limitation
contained in Section 422(d) of the Code, as described in paragraph
6(C).

9.     TERMINATION OF EMPLOYMENT. Unless otherwise specified in the
agreement relating to such ISO, if an ISO optionee ceases to be employed by the
Company and all Related Corporations other than by reason of death or
disability as defined in paragraph 10, no further installments of his or her
ISOs shall become exercisable, and his or her ISOs shall terminate on the
earlier of (a) three months after the date of termination of his or her employment,
or (b) their specified expiration dates, except to the extent that such
ISOs (or unexercised installments thereof) have been converted into
Non-Qualified Options pursuant to paragraph 16. For purposes of this paragraph
9, employment shall be considered as continuing uninterrupted during any bona
fide leave of absence (such as those attributable to illness, military
obligations or governmental service) provided that the period of such leave
does not exceed 90 days or, if longer, any period during which such optionee’s
right to re-employment is guaranteed by statute or by contract. A bona fide
leave of absence with the written approval of the Committee shall not be
considered an interruption of employment under this paragraph 9, provided that
such written approval contractually obligates the Company or any Related
Corporation to continue the employment of the optionee after the approved
period of absence. ISOs granted under the Plan shall not be 

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affected by any change of employment within or among
the Company and Related Corporations, so long as the optionee continues to be
an employee of the Company or any Related Corporation. Nothing in the Plan
shall be deemed to give any grantee of any Stock Right the right to be retained
in employment or other service by the Company or any Related Corporation for
any period of time.

10.   DEATH; DISABILITY.

A.            DEATH. If an ISO
optionee ceases to be employed by the Company and all Related Corporations by
reason of his or her death, any ISO owned by such optionee may be exercised, to
the extent otherwise exercisable on the date of death, by the estate, personal
representative or beneficiary who has acquired the ISO by will or by the laws
of descent and distribution, until the earlier of (i) the specified
expiration date of the ISO or (ii) 180 days from the date of the optionee’s
death.

B.            DISABILITY. If an
ISO optionee ceases to be employed by the Company and all Related Corporations
by reason of his or her disability, such optionee shall have the right to
exercise any ISO held by him or her on the date of termination of employment,
for the number of shares for which he or she could have exercised it on that
date, until the earlier of (i) the specified expiration date of the ISO or
(ii) 180 days from the date of the termination of the optionee’s
employment. For the purposes of the Plan, the term “disability” shall mean “permanent
and total disability” as defined in Section 22(e)(3) of the Code or
any successor statute.

11.   TRANSFERABILITY OF OPTIONS AND SARS. Except
as otherwise provided in subparagraphs 11(a) and 11(b) below, an
Option or SAR may not be sold, pledged, assigned, hypothecated, transferred or
disposed of in any manner other than by will or by the laws of descent and
distribution and may be exercised, during the lifetime of the optionee or
grantee, only by the optionee or grantee. Notwithstanding the foregoing, with
the consent of the Board or the Compensation Committee thereof, in either case
in its sole discretion, an optionee or grantee may transfer all or a portion of
his or her vested Non-Qualified Options or SARs to:

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(a)           a trust for the exclusive benefit of
the optionee or grantee and/or one or more Immediate Family Members or spouses
of Immediate Family Members. For the purposes of this subparagraph 11(a), “Immediate
Family Members” shall mean the optionee’s or grantee’s spouse, former spouse,
children or grandchildren, whether natural or adopted; and

(b)           an organization which qualifies as a
tax exempt organization under Section 501(a) and 501(c)(3) of
the Code.

As a condition to any transfer pursuant to
subparagraphs 11(a) and 11(b) each such transferee shall agree in
writing (in a form satisfactory to the Committee) to be bound by the terms and
conditions of the Option or SAR agreement evidencing such transferred Option or
SAR, as well as any additional restrictions or conditions as the Committee may
require. Following the transfer of an Option or SAR in accordance with this
paragraph 11, the term “optionee” and “grantee” shall refer to the transferee,
except that, with respect to any requirements of continued service or
employment or provision of the Company’s tax withholding obligations, such
terms shall refer to the optionee or grantee. The Committee shall have no
obligation to notify any transferee of any termination of the transferred
Option or SAR, including an early termination resulting from the termination of
employment or service of the original optionee or grantee. No transferee shall
make a subsequent transfer of a transferred Option or SAR except to the
original optionee or grantee or as otherwise provided in this paragraph 11.

12.   TERMS AND CONDITIONS OF OPTIONS AND SARS. Options
or SARs shall be evidenced by instruments (which need not be identical) in such
forms as the Committee may from time to time approve. Such instruments shall
conform to the terms and conditions set forth in paragraphs 6 through 11 hereof
and may contain such other provisions as the Committee deems advisable which
are not inconsistent with the Plan, including restrictions applicable to shares
of Common Stock issuable upon exercise of Options or SARs. The Committee may
specify that any Non-Qualified Option or SARs shall be subject to the
restrictions set forth herein with respect to ISOs, or to such other
termination and cancellation provisions as the Committee may determine. The
Committee may from time to time confer authority and responsibility on one or
more of its own members and/or one or more officers of the Company to execute
and deliver such instruments. The proper officers of the Company are authorized
and 

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directed to take any and
all action necessary or advisable from time to time to carry out the terms of
such instruments.

13.   ADJUSTMENTS. Upon the occurrence of any of
the following events, an optionee’s or grantee’s rights with respect to Options
or SARs granted to such optionee or grantee hereunder shall be adjusted as
hereinafter provided, unless otherwise specifically provided in the written
agreement between the optionee or grantee and the Company relating to such
Option or SAR:

A.            STOCK DIVIDENDS AND
STOCK SPLITS. If the shares of Common Stock shall be subdivided or combined
into a greater or smaller number of shares or if the Company shall issue any
shares of Common Stock as a stock dividend on its outstanding Common Stock, the
number of shares of Common Stock deliverable upon the exercise of Options or
SARs shall be appropriately increased or decreased proportionately, and
appropriate adjustments shall be made in the purchase price per share to
reflect such subdivision, combination or stock dividend.

B.            CONSOLIDATIONS OR
MERGERS. If the Company is to be consolidated with or acquired by another
entity in a merger or other reorganization in which the holders of the
outstanding voting stock of the Company immediately preceding the consummation
of such event, shall, immediately following such event, hold, as a group, less
than a majority of the voting securities of the surviving or successor entity,
or in the event of a sale of all or substantially all of the Company’s assets
or otherwise (each, an “Acquisition”), the Committee or the board of directors
of any entity assuming the obligations of the Company hereunder (the “Successor
Board”), shall, as to outstanding Options and SARs, either (i) make
appropriate provision for the continuation of such Options or SARs by
substituting on an equitable basis for the shares then subject to such Options
or SARs either (a) the consideration payable with respect to the
outstanding shares of Common Stock in connection with the Acquisition, (b) shares
of stock of the surviving or successor corporation, or (c) such other
securities as the Successor Board deems appropriate, the fair market value of
which shall not materially exceed the fair market value of the shares of Common
Stock subject to such Options or SARS immediately preceding the Acquisition; or
(ii) upon written notice to the optionees and grantees, provide that all
Options and SARs must be exercised, to the extent then exercisable or to be
exercisable as a result of the Acquisition, within a specified number of days
of the date of such notice, at the end 

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of which
period the Options and SARs shall terminate; or (iii) terminate all
Options and SARs in exchange for a cash payment equal to the excess of the fair
market value of the shares subject to such Options or SARs (to the extent then
exercisable or to be exercisable as a result of the Acquisition) over the
exercise price thereof.

C.            RECAPITALIZATION OR
REORGANIZATION. In the event of a recapitalization or reorganization of the
Company (other than a transaction described in subparagraph 13(B) above)
pursuant to which securities of the Company or of another corporation are
issued with respect to the outstanding shares of Common Stock, an optionee or
grantee upon exercising an Option or SAR shall be entitled to receive for the
purchase price paid upon such exercise the securities he or she would have
received if he or she had exercised such Option or SAR prior to such
recapitalization or reorganization.

D.            MODIFICATION OF ISOS.
Notwithstanding the foregoing, any adjustments made pursuant to subparagraphs
13(A), (B) or (C) with respect to ISOs shall be made only after the
Committee, after consulting with counsel for the Company, determines whether
such adjustments would constitute a “modification” of such ISOs (as that term
is defined in Section 424 of the Code) or would cause any adverse tax
consequences for the holders of such ISOs. If the Committee determines that
such adjustments made with respect to ISOs would constitute a modification of
such ISOs or would cause adverse tax consequences to the holders, it may
refrain from making such adjustments.

E.             DISSOLUTION OR
LIQUIDATION. In the event of the proposed dissolution or liquidation of the
Company, each Option and SAR will terminate immediately prior to the
consummation of such proposed action or at such other time and subject to such
other conditions as shall be determined by the Committee.

F.             ISSUANCES OF
SECURITIES. Except as expressly provided herein, no issuance by the Company of
shares of stock of any class, or securities convertible into shares of stock of
any class, shall affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of shares subject to Options and SARs. No
adjustments shall be made for dividends paid in cash or in property other than
securities of the Company.

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G.            FRACTIONAL SHARES. No
fractional shares shall be issued under the Plan and the optionee and grantee
shall receive from the Company cash in lieu of such fractional shares.

H.            ADJUSTMENTS. Upon
the happening of any of the events described in subparagraphs 13(A), (B) or
(C) above, the class and aggregate number of shares set forth in paragraph
4 hereof that are subject to Stock Rights which previously have been or
subsequently may be granted under the Plan shall also be appropriately adjusted
to reflect the events described in such subparagraphs. The Committee or the
Successor Board shall determine the specific adjustments to be made under this
paragraph 13 and, subject to paragraph 2, its determination shall be
conclusive.

14.   MEANS OF EXERCISING OPTIONS AND SARS.

A.            OPTIONS. An Option
(or any part or installment thereof) shall be exercised by giving written
notice to the Company at its principal office address, or to such transfer
agent as the Company shall designate. Such notice shall identify the Option
being exercised and specify the number of shares as to which such Option is
being exercised, accompanied by full payment of the purchase price therefor
either (a) in United States dollars in cash or by check, (b) at the
discretion of the Committee, through delivery of shares of Common Stock having
a fair market value equal as of the date of the exercise to the cash exercise
price of the Option, (c) at the discretion of the Committee, by delivery
of the optionee’s personal recourse note bearing interest payable not less than
annually at no less than 100% of the lowest applicable Federal rate, as defined
in Section 1274(d) of the Code, (d) at the discretion of the
Committee and consistent with applicable law, through the delivery of an
assignment to the Company of a sufficient amount of the proceeds from the sale
of the Common Stock acquired upon exercise of the Option and an authorization
to the broker or selling agent to pay that amount to the Company, which sale
shall be at the optionee’s direction at the time of exercise, or (e) at
the discretion of the Committee, by any combination of (a), (b), (c) and (d) above.
If the Committee exercises its discretion to permit payment of the exercise
price of an ISO by means of the methods set forth in clauses (b), (c), (d) or
(e) of the preceding sentence, such discretion shall be exercised in
writing at the time of the grant of the ISO in question. The holder of an Option
shall not have the rights of a shareholder with respect to the shares covered
by such Option until the date of issuance of a 

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stock
certificate to such holder for such shares. Except as expressly provided above
in paragraph 13 with respect to changes in capitalization and stock dividends,
no adjustment shall be made for dividends or similar rights for which the
record date is before the date such stock certificate is issued.

B.            SARS. Tandem SARs
may be exercised for all or part of the shares of Common Stock subject to the
related Option upon the surrender of the right to exercise the equivalent
portion of the related Option. A Tandem SAR may be exercised only with respect
to the shares of Common Stock for which its related Option is then exercisable.
Notwithstanding any other provision of the Plan to the contrary, with respect
to a Tandem SAR granted in connection with an ISO: (i) the Tandem SAR will
expire no later than the expiration of the underlying ISO; (ii) the value
of the payout with respect to the Tandem SAR may be for no more than one
hundred percent (100%) of the difference between the exercise price of the
underlying ISO and the fair market value of the shares of Common Stock subject
to the underlying ISO at the time the Tandem SAR is exercised; and (iii) the
Tandem SAR may be exercised only when the fair market value of the shares of
Common Stock subject to the ISO exceeds the exercise price of the ISO. Freestanding
SARs may be exercised upon whatever terms and conditions the Committee, in its
sole discretion, imposes upon them and sets forth in the award agreement. Upon
exercise of a SAR, a grantee shall be entitled to receive payment from the
Company in an amount determined by multiplying: (i) the difference between
the fair market value of a share of Common Stock on the date of exercise over
the grant price; by (ii) the number of shares of Common Stock with respect
to which the SAR is exercised. At the discretion of the Committee, the payment
upon SAR exercise may be in cash, in shares of Common Stock of equivalent
value, or in some combination thereof.

15.   TERM AND AMENDMENT OF PLAN. This Plan was
adopted by the Board on September 19, 1998, subject, with respect to the
validation of ISOs granted under the Plan, to approval of the Plan by the stockholders
of the Company at the next Meeting of Stockholders or, in lieu thereof, by
written consent. If the approval of stockholders is not obtained prior to September 19,
1999, any grants of ISOs under the Plan made prior to that date will be
rescinded. The Plan shall expire at the end of the day on September 18,
2008 (except as to Options outstanding on that date). Subject to the provisions
of paragraph 5 above, Options may be 

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granted under the Plan prior to the date of
stockholder approval of the Plan. The Board may terminate or amend the Plan in
any respect at any time, except that, without the approval of the stockholders
obtained within 12 months before or after the Board adopts a resolution
authorizing any of the following actions: (a) the total number of shares
that may be issued under the Plan may not be increased (except by adjustment
pursuant to paragraph 13); (b) the provisions of paragraph 3 regarding
eligibility for grants of ISOs may not be modified; (c) the provisions of
paragraph 6(B) regarding the exercise price at which shares may be offered
pursuant to ISOs may not be modified (except by adjustment pursuant to
paragraph 13); and (d) the expiration date of the Plan may not be
extended. Except as otherwise provided in this paragraph 15, in no event may
action of the Board or stockholders alter or impair the rights of a grantee or
optionee, without such grantee’s or optionee’s consent, under any Stock Right
previously granted to such grantee or optionee.

16.   MODIFICATIONS OF ISOS; CONVERSION OF ISOS
INTO NON-QUALIFIED OPTIONS. Subject to paragraph 13(D), without the prior
written consent of the holder of an ISO, the Committee shall not alter the
terms of such ISO (including the means of exercising such ISO) if such
alteration would constitute a modification (within the meaning of Section 424(h)(3) of
the Code). The Committee, at the written request or with the written consent of
any optionee, may in its discretion take such actions as may be necessary to
convert such optionee’s ISOs (or any installments or portions of installments
thereof) that have not been exercised on the date of conversion into
Non-Qualified Options at any time prior to the expiration of such ISOs,
regardless of whether the optionee is an employee of the Company or a Related
Corporation at the time of such conversion. Such actions may include, but shall
not be limited to, extending the exercise period or reducing the exercise price
of the appropriate installments of such ISOs. At the time of such conversion,
the Committee (with the consent of the optionee) may impose such conditions on
the exercise of the resulting Non-Qualified Options as the Committee in its
discretion may determine, provided that such conditions shall not be
inconsistent with this Plan. Nothing in the Plan shall be deemed to give any
optionee the right to have such optionee’s ISOs converted into Non-Qualified
Options, and no such conversion shall occur until and unless the Committee
takes appropriate action. Upon the taking of such action, the Company shall
issue separate certificates to the optionee with respect to Options that are
Non-Qualified Options and Options that are ISOs.

 14
 

 

17.   APPLICATION OF FUNDS. The proceeds received
by the Company from the sale of shares pursuant to Options granted and Purchases
authorized under the Plan shall be used for general corporate purposes.

18.   NOTICE TO COMPANY OF A DISQUALIFYING
DISPOSITION. By accepting an ISO granted under the Plan, each optionee agrees
to notify the Company in writing immediately after such optionee makes a
Disqualifying Disposition (as described in Sections 421, 422 and 424 of the
Code and regulations thereunder) of any stock acquired pursuant to the exercise
of ISOs granted under the Plan. A Disqualifying Disposition is generally any
disposition occurring on or before the later of (a) the date two years
following the date the ISO was granted, or (b) the date one year following
the date the ISO was exercised.

19.   WITHHOLDING OF ADDITIONAL INCOME TAXES. Upon
the exercise of a Non-Qualified Option, the transfer of a Non-Qualified Option
pursuant to an arm’s-length transaction, the grant of an Award, the exercise of
a SAR, the making of a Purchase of Common Stock for less than its fair market
value, the making of a Disqualifying Disposition (as defined in paragraph 18),
the vesting or transfer of restricted stock or securities acquired on the
exercise of an Option or SAR hereunder, or the making of a distribution or
other payment with respect to such stock or securities, the Company may
withhold taxes in respect of amounts that constitute compensation includible in
gross income. The Committee in its discretion may condition (i) the
exercise of an Option, (ii) the transfer of a Non-Qualified Option, (iii) the
grant of an Award, (iv) the exercise of a SAR, (v) the making of a
Purchase of Common Stock for less than its fair market value, or (vi) the
vesting or transferability of restricted stock or securities acquired by
exercising an Option or SAR, on the optionee’s or grantee’s making satisfactory
arrangements for such withholding. Such arrangements may include payment by the
optionee or grantee in cash or by check of the amount of the withholding taxes
or, at the discretion of the Committee, by the optionee’s or grantee’s delivery
of previously held shares of Common Stock or the withholding from the shares of
Common Stock otherwise deliverable upon exercise of a Option or SAR shares
having an aggregate fair market value equal to the amount of such withholding
taxes.

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20.   GOVERNMENTAL REGULATION. The Company’s
obligation to sell and deliver shares of the Common Stock under this Plan is
subject to the approval of any governmental authority required in connection
with the authorization, issuance or sale of such shares.

Government regulations may impose reporting or other
obligations on the Company with respect to the Plan. For example, the Company
may be required to send tax information statements to employees and former
employees that exercise ISOs under the Plan, and the Company may be required to
file tax information returns reporting the income received by optionees of
Options in connection with the Plan.

21.   GOVERNING LAW. The validity and construction
of the Plan and the instruments evidencing Stock Rights shall be governed by
the laws of Delaware, or the laws of any jurisdiction in which the Company or
its successors in interest may be organized.

22.   CODE SECTION 409A. To the extent
applicable, it is intended that this Plan and any Options, SARs and Awards
granted and Purchases made hereunder comply with the requirements of Section 409A
of the Code, and any related regulations or other guidance promulgated with
respect to such Section by the U.S. Department of the Treasury or the
Internal Revenue Service (“Section 409A”). Any provision that would cause
the Plan or any Options, SARs and Awards granted or Purchases made hereunder to
fail to satisfy Section 409A shall have no force or effect until amended
to comply with Section 409A, which amendment may be retroactive to the
extent permitted by Section 409A.

 16Exhibit 10.1

Settlement
Agreement

This
Settlement Agreement (the “Agreement”) is by and between Ms. Georgina Fisk
and Keane, Inc. (hereinafter the “Company”), Mr. John Keane, Sr.,
Mr. John Keane Jr., and Mr. Brian Keane (collectively the “Parties”
and individually referred to as “Party”). For good and sufficient consideration
more fully described below, the Parties agree that:

1.             Status:  Ms. Fisk hereby resigns from her
position with the Company effective June 30, 2006 (the “Resignation Date”).
As of the Resignation Date, Ms. Fisk’s employment with the Company will
terminate and any entitlement Ms. Fisk may have had under any
Company-provided benefit plan, program or practice shall conclude except as
required by federal or state law, or as otherwise expressly provided below

2.     (a)                   Payment. Within fourteen days following the
Resignation Date, the Company and/or its insurer shall pay to Ms. Fisk, or
to her estate in the event that she dies, the total gross sum of $1,060,000
(One Million and Sixty Thousand Dollars). Said payment to be made as follows: (1) delivering
a check in the amount of $228,000, with all applicable withholdings, paid to
the order of “Georgina Fisk” to Ms. Fisk’s counsel, Barbara A. Robb, Esq.,
Shilepsky O’Connell, 225 Franklin Street, 16th Floor, Boston, MA 02110 in settlement of
alleged financial damage claims;  (2) delivering
a check in the amount of $832,000 paid to the order of “Georgina Fisk” to Ms. Fisk’s
counsel, Barbara A. Robb, Esq., Shilepsky O’Connell, 225 Franklin Street,
16th Floor, Boston, MA 02110 in settlement of
alleged non-financial/non-wage damage claims. The Company shall issue a 1099
for the second check in the amount of $832,000 in due course. The parties agree
all amounts paid in this paragraph are made as part of a settlement of claims
and, accordingly, it is the Parties understanding that such payments are not
subject to 409A of the Internal Revenue Code (“Section 409A”), or are
exempt under applicable proposed regulations and therefore no reporting under
said Section 409A is required. Ms. Fisk acknowledges that she will
rely solely on the advice on her own tax advisors concerning the tax treatment
of the above specified payments.

(b)                   Stock Options. The
Parties agree and acknowledge that the following is an exclusive list of all of
the options to purchase shares of the Company’s common stock awarded to Ms. Fisk
and remaining outstanding as of the date hereof: January 18, 2006 (15,000
shares); December 15, 2004 (30,000 shares); February 4, 2004 (25,000
shares); April 11, 2003 (2,000 shares); December 29, 2000 (10,000
shares). The Company and Ms. Fisk agree and acknowledge that their
respective rights with respect to these stock options shall be governed by the
terms of the Stock Option Agreements. The Company hereby acknowledges Ms. Fisk’s
rights to exercise vested options will be governed by the Incentive Stock
Agreement Granted Under the Company’s 1998 Stock Incentive Plan  provided that
notwithstanding the provisions of the Incentive Stock Agreement the Company and
Ms. Fisk hereby agree (a) that the period to exercise options which
are vested as of the Resignation Date shall be extended to December 31,
2006, provided that nothing herein is intended to modify in any way the
treatment of such 

 1
 

 

options as a result of an Acquisition Event under the
terms of the applicable stock option or stock incentive plan; and (b) that
the Company will waive any rights that it may have to limit her exercise rights.
For the avoidance of doubt, the parties agree that the vesting of stock options
under the Stock Option Agreements ceases effective on the Resignation Date.

(c)                   Restricted Stock Awards.
The Parties agree and acknowledge that the following is an exclusive list of
all of the restricted stock awards granted to Ms. Fisk and remaining
outstanding as of the date hereof: December 15, 2004 (10,000 shares) (“Restricted
Stock Award Agreements”). The Company and Ms. Fisk agree and acknowledge
that their respective rights with respect to these restricted stock awards
shall be governed by the terms of the Restricted Stock Award Agreements; provided that the Company agrees that it shall not exercise
any Purchase Option as defined in the Restricted Stock Award Agreements with
respect to 2,500 shares of restricted stock that would otherwise vest on December 16,
2006 until after December 31, 2006 and Ms. Fisk understands and
agrees that the Company intends to exercise any and all other Purchase Options.
For purposes of clarity, Ms. Fisk’s termination of employment shall not
preclude Ms. Fisk from vesting in the 2,500 shares that would otherwise
vest on December 16, 2006.

(d)                   Payment
of Accrued Obligation. On the Resignation Date, the Company will provide Ms. Fisk
with a check for her final earned, unpaid salary and her unused vacation
accrued through the Resignation Date. In addition, provided that within one
week after her Resignation Date, Ms. Fisk submits to the Company an
expense report and supporting documentation for all final expenses incurred on
behalf of the Company, the Company will reimburse Ms. Fisk for such
expenses within two weeks after she submits such documentation, all to be done
in accordance with the Company’s expense-related policies and /or practices.

(e)                   Attorneys
Fees Payment. At Ms. Fisk’s request and for her convenience, within
fourteen (14) days of the Resignation Date the Company will pay Ms. Fisk
the sum of  Eighty Thousand Dollars
($80,000), which sum Ms. Fisk represents 
reflects an amount which at least equals the attorneys fees incurred by
her in connection the claims released and the negotiation of this Agreement.
Form 1099 shall issue to her for this payment.

(f)                    Tax Matters. The
amounts paid to Ms. Fisk and/or her attorneys specified above shall be
subject to all applicable tax reporting obligations, if any, as required by law.
Ms. Fisk shall be solely responsible for paying all applicable taxes owed
by her associated with the receipt of the payments set forth above. In the
event that the Company is notified or requested by the Internal Revenue Service
or by any State taxing authority to pay any withholding tax or other employee
taxes and interest or penalties on all or any part of the amounts paid to Ms. Fisk,
the Company shall  immediately notify Ms. Fisk.
Ms. Fisk agrees to repay the Company the full amount of any income, FICA
and Medicare taxes owed by her, interest, and penalties the Company is required
to pay on Ms. Fisk’s behalf. Ms. Fisk shall not be responsible for
any Employer taxes, such as F.U.T.A. and M.U.T.A. Ms. Fisk agrees to
indemnify and hold harmless the Company for any liability or costs (other than
attorneys fees) arising out of the failure to withhold income, FICA, and
Medicare taxes owed by Ms. Fisk.

 2
 

 

(g)                   Responsibility for Fees
and Costs:  Other than the payment to
Ms. Fisk’s counsel set forth above, each Party hereto shall be fully
responsible for the payment of their own legal fees and costs incurred in the
underlying dispute as well as the negotiation and execution of this Agreement.

3.             Accord and Satisfaction.
Ms. Fisk acknowledges that the payments set forth in Paragraph2(a)-(d) above
constitute full, complete and unconditional payment, settlement, accord and/or
satisfaction with respect to all obligations and liabilities through the
Resignation Date of the Company, its predecessors, successors, affiliates, and
its and their current and former directors, shareholders, officers, employees,
insurers, fiduciaries, attorneys, representatives and/or agents, both
individually and in their official capacities, including, without limitation,
all claims for back or front pay wages, salary, vacation pay, draws, incentive
pay, bonuses, stock, stock options, any and all equity and/or ownership
interests, commissions, severance pay, and any and all other forms of payment,
compensation or benefits.

4.             Compromise.
The Parties agree and acknowledge that this Agreement is the result of a
compromise of disputed claims. While this Agreement fully resolves all the
issues between the Parties, neither this Agreement nor any of its provisions
constitute an admission by any Party of any liability or wrongdoing whatsoever,
which is denied. Neither this Agreement nor anything in the Agreement shall be
construed to be or shall be admissible in any proceeding as evidence of
liability or wrongdoing by any of the Parties.

5.             Mutual
Releases:

(a)           In exchange for the consideration
described in this Agreement , the receipt and sufficiency of which is hereby
acknowledged, Ms. Fisk (the “Releasor”) hereby agrees that she, her
representatives, agents, estate, trusts, heirs, successors and assigns
absolutely and unconditionally release, remise, discharge, and hold harmless
the Company, its predecessors, successors, as well as its current and former
directors shareholders, officers, employees, attorneys, representatives and/or
agents (including without limitation Brian Keane, John Keane, Sr., and
John Keane, Jr.), both individually and in their official capacities,
(collectively and individually the “Releasees”), from any and all actions or
causes of action, suits, claims, complaints, contracts, liabilities,
agreements, promises, contracts, torts, debts, damages, controversies,
judgments, rights and demands of any kind and nature, whether existing or
contingent, known or unknown, including, without limitation, those claims which
arise out of Ms. Fisk’s employment with and/or separation from the Company
and those claims that Ms. Fisk has threatened to assert against the
Company and its current or past officers and directors. Except as specified
below, the release is intended by Ms. Fisk to be all encompassing and to
act as a full and total release of any claims that she may have or has had
against any and all of the Releasees, from the beginning of the World through
and including the date of this Agreement, including, but not limited to, any
federal or state law or regulation dealing with either employment or employment
discrimination such as those laws or regulations 

 3
 

 

concerning discrimination on the basis of race, color,
creed, religion, sex, sex harassment, sexual orientation, national origin,
ancestry, handicap or disability, veteran status or any military service or
application for military service; any contract, whether oral or written,
express or implied; any tort; any claim for equity or ownership interest; any
claim for benefits; and/or any statutory or common law claims. Provided:  Nothing herein shall be deemed to release or
waive (1) any right to seek enforcement of the terms of this Agreement, including
those rights under the agreements referenced in paragraph 5(b) below;
(2) claims and/or rights, if any, under any disability insurance
policy/plan; (3) rights and/or claims to vested benefits under any
retirement and/or pension plans and the Employee Retirement Income Security Act
(29 U.S.C. § 1001 et seq.); (4) claims and/or rights under the
Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”); (5) rights
to defense and indemnification from the Company and/or its insurers under the
Company’s Articles of Organization and/or ByLaws and/or insurance policies
and/or applicable law.

       (b)           This
release shall not affect Ms. Fisk’s rights and obligations under The Keane, Inc.
1998 Stock Incentive Plan, the Stock Option Agreements, the Restricted Stock
Award Agreements, or the “Agreement” with the Company concerning confidential information,
works for hire, and other matters (the “Confidential Information Agreement”),
except that the Company agrees to void, and waive its right to enforce, any and
all the non-competition provisions, including, but not limited to, those
contained therein, and further agrees to void, and waive its right to enforce,
any and all the non-solicitation provisions, including, but not limited to,
those contained therein, after January 1, 2007.

(c)           Ms. Fisk
agrees that she shall not seek or accept damages of any nature, other equitable
or legal remedies for her own benefit, attorney’s fees, or costs from any of
the Releasees with respect to any claim released by this Agreement. As a
material inducement to the Company to enter into this Agreement, Ms. Fisk
represents that she has not assigned to any third party and she has not filed
with any agency or court any claim released by this Agreement.

(d)           Except
as otherwise set forth herein, in exchange for consideration described in this
Agreement and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Brian Keane, John Keane, Sr.,
John Keane, Jr., and their respective attorneys, representatives, agents,
estate, trusts, heirs, successors and assigns, and  the Company, (collectively the “Company
Releasors”),  hereby absolutely and
unconditionally release and forever discharge Ms. Fisk and her
representatives, agents, attorneys, estates, trusts, successors and assigns,
from any and all actions or causes of action, suits, claims, complaints,
contracts, liabilities, agreements, promises, debts, judgments, damages and
demands of every kind and nature, in law or in equity, whether existing or
contingent, known or unknown, including, without limitation, all claims arising
from or relating to Ms. Fisk’s employment with and /or separation from
employment with the Company. Except as specified below, this Release is
intended by the Company Releasors to be all-encompassing and to act as a full
and total release of any claims that the Company Releasors may have or have had
against Ms. Fisk and her representatives, agents, estate, successors and
assigns, since the beginning of the World 

 4
 

 

through the date of this Agreement, including, but not
limited to, all claims arising from or relating to Ms. Fisk’s employment
or separation from employment with the Company; any contract, express or
implied; any tort; and any statutory or common law claim. Provided:  Nothing herein shall be deemed to release or
waive any claims involving intentional misappropriation of confidential
information by Ms. Fisk. Provided further: 
Nothing herein shall be deemed to impair any right to seek enforcement
of the terms of this Agreement.

6.             Confidentiality/Non-disparagement

(a)           It
is understood and agreed that this Agreement, and any of the terms thereof,
shall be subject to public disclosure by the Company.

(b)           On
Monday, June 12, 2006 or Tuesday, June 13, 2006, between the hours of
4:00-5:00 PM, the Company shall disclose Ms. Fisk’s resignation by
issuing the Press Release attached as Exhibit A
and by making such other public disclosures as it reasonably determines to be
required by applicable law. Each of the Parties agrees not to make any prior or
additional disclosure or comment on Ms. Fisk’s resignation or the Agreement
beyond the Press Release and the required public disclosures by the Company as
set forth herein. No Party shall make any statement or other disclosure
regarding the resolution of any claims threatened by any Party against any
other Party or their family member beyond those referenced in paragraph 6 (a) and
(b) hereof, and shall respond to any inquiry by referring to the Press
Release and any required public disclosure and declining to make any further
comment.

(c)           Communications.
The Parties agree to maintain strict confidentiality concerning, and shall not
disclose the substance of, any claims that any Party has  threatened to assert against another or the
subject matter of any such claims. Nothing in this Paragraph 6 shall prohibit
or bar any Party from providing truthful testimony in any legal proceeding, or
in communicating with any governmental agency, or from making any other
truthful disclosure that is required by law. Moreover, nothing herein shall bar
any Party from making truthful disclosures regarding any claims that any Party
has threatened to assert against any other Party which are reasonably necessary
for a Party to defend against any claims that may be made against that Party.

 5
 

 

(d)           The
Company agrees that its executive officers and directors will not make
disparaging comments or communications with any person or entity concerning Ms. Fisk.
Mr. Brian Keane, Mr. John Keane, Sr., and Mr. John Keane, Jr.,
each agree not to make, or instruct and/or influence others to make (whether
directly or indirectly), any disparaging comments or communications with any
person or entity concerning Ms. Fisk. Ms. Fisk agrees that she, will
not make, or instruct and/or influence others to make (whether directly or
indirectly), any disparaging comments or communications with any person or
entity concerning the Company, its business, products, services, or finances,
or concerning the Company’s current or past directors, executive officers,
employees or representatives (including without limitation, Mr. John Keane, Sr.,
Mr. John Keane, Jr., and Mr. Brian Keane).

(e)           The
Parties to this Agreement agree and affirm that breach of nondisparagement and
communication restrictions provided in paragraphs 6(b), (c) and (d) shall
constitute a material breach of this Agreement and, in addition to any other
available legal or equitable remedy, shall entitle the other Party to recover
damages of not less than $50,000 and not more than $250,000 per breach, as
determined by an arbitrator (in accordance with Paragraph 11), and reasonable
attorneys fees. The parties acknowledge and agree that the payment required by
this paragraph is a reasonable forecast of the damages likely to result from
such breach and is not a penalty of any kind.

(f)            Any Party shall have the right to
make truthful statements that are reasonably necessary to
proportionately and fairly countervail 
harm to their reputation in the limited event that any other Party
 breaches Paragraphs 6(b), (c) and /or (d), whether directly or
indirectly, but only after first providing at least two business days’
written notice by courier to the alleged breaching Party’s counsel (which
notice shall state, to the extent known, who committed the alleged breach,
when and where the alleged breach occurred, all facts and
words constituting the alleged breaching statement, to whom the alleged
breaching statement was made, and the precise correcting statement the alleged
non-breaching Party proposes to make and where and how the response statement
is proposed to be made) so that the other Party has an opportunity to seek
injunctive relief from a court in the Commonwealth of Massachusetts. The
Parties agree that said court shall decide whether a breach has occurred
and the appropriate equitable remedy for such an alleged breach including, but
not limited to, the right of the non-breaching Party to issue a responsive
statement and the content of any such statement, with costs and attorneys’
fees awarded to the prevailing party as determined by said court. For purposes
of the notice requirement above, the Parties agree to notify each other of the
name and address of any new counsel.

(g)           All
requests for verbal and/or written references concerning Ms. Fisk from the
Company shall be directed to the Senior Vice President of Human Resources, who shall
respond in a manner to be mutually agreed upon in writing by Ms. Fisk and
the Company.

7.             Company
Confidential Information, Work Product and Property. Ms. Fisk agrees
that by the Resignation Date, she will return to the Company all property and 

 6
 

 

materials of the Company (including its subsidiaries
and/or affiliates), including but not limited to, credit cards; gas cards;
telephone charge cards; building keys and/or passes; and all materials relating
to or constituting Work Product and/or Confidential Information (as such terms
are defined in the Confidential Information Agreement). Ms. Fisk agrees
that in the event she discovers any other Company materials in her possession
after the date she executes this Agreement, she will immediately return such materials
to the Company.

       8.             Future
Cooperation. Ms. Fisk agrees to cooperate reasonably with the Company
and all Company affiliates (including the Company’s outside counsel) in
connection with the contemplation, prosecution and defense of all phases of existing,
past and future litigation, regulatory or administrative actions about which
the Company believes Ms. Fisk may have knowledge or information. She
further agrees to make herself available at mutually convenient times during
and outside of regular business hours as reasonably deemed necessary by the
Company’s counsel. The Company shall not utilize this Paragraph to require Ms. Fisk
to make herself available to an extent that would unreasonably interfere with
employment responsibilities that she may have and shall reimburse her for any
pre-approved reasonable business travel expenses that she incurs on the Company’s
behalf as a result of these litigation cooperation services, after receipt of
appropriate documentation consistent with the Company’s business expense
reimbursement policy. She agrees to appear without the necessity of a subpoena
to testify truthfully in any legal proceedings in which the Company calls her
as a witness. Ms. Fisk further agrees that she shall not voluntarily
provide information to or otherwise cooperate with any individual or private
entity that is contemplating or pursuing litigation against any of the Company
Releasors.

       9.             Health
Insurance Continuation. The Resignation Date shall be the date of the “qualifying
event” under the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”)
for purposes of health insurance continuation. Ms. Fisk will receive COBRA
information under separate cover.

10.           Injunctive
Relief. The Parties agree that they would be irreparably harmed by any
violation of Paragraph 6 and that they are entitled, in addition to all other
rights and remedies, at law or in equity, to immediate injunctive and other
equitable relief by a court in the Commonwealth of Massachusetts (which shall
have personal and subject matter jurisdiction over the parties and disputes
concerning this Agreement regardless of where a breach occurs), without the
necessity of giving notice, an opportunity to cure or the posting a bond, to
enforce the obligations of Paragraph 6, together with all costs (including
attorneys’ fees) attributable to the enforcement of such obligations.

 7
 

 

11.           Mandatory
Arbitration. Except as provided in Paragraph 10 above, Ms. Fisk, Mr. Brian
Keane, Mr. John Keane, Sr., Mr. John Keane, Jr., and the
Company agree that any claim, dispute or controversy arising under or in
connection with this Agreement shall be resolved solely and exclusively by
binding confidential arbitration. The confidential arbitration shall be held in
the City of Boston, Massachusetts (or at such other location as shall be
mutually agreed by the parties). The arbitration shall be conducted in
accordance with the National Rules for the Resolution of Employment
Disputes (the “Rules”) of the American Arbitration Association (the “AAA”).  The Parties agree that AAA in Boston shall
have personal and subject matter jurisdiction over the parties and disputes
concerning this Agreement regardless of where a breach occurs. All fees and
expenses of the arbitration, including a transcript if either requests, shall
be borne equally by the parties; provided, however, that all such fees and
expenses (including attorneys’ fees) shall be awarded to the prevailing party.

12.           Representations
and Governing Law:

(a)           This
Agreement may not be changed, amended, modified, altered or rescinded except
upon the express written consent of the Parties.

(b)           This
Agreement shall be deemed to be made and entered into the Commonwealth of
Massachusetts. This Agreement shall in all aspects be interpreted, enforced and
governed under the laws of Massachusetts without giving effect to the
principles of conflicts of law thereof. The language of all parts of this
Agreement shall in all cases be construed as a whole according to its fair
meaning and not strictly for or against any of the Parties.

(c)           This
Agreement shall not be assigned by Ms. Fisk but shall be binding on the
Parties hereto and their respective heirs, legal representatives, successors
and assigns and shall inure to the benefit of the Company’s successors and
assigns. Each of the Parties expressly warrant that they have not transferred
to any person or entity any rights, or causes of action, or claims, released by
this Agreement.

13.           Headings/Counterparts. The
paragraph headings used in this Agreement are included solely for convenience
and shall not affect or be used in connection with the interpretation of this
Agreement. This Agreement may be executed in any number of counterparts, each
of which will be deemed an original, but all of which will be deemed one and
the same instrument.

14.           Entire
Agreement. This Agreement constitutes the entire agreement between the
Parties with respect to the subject matter hereof and supersedes all prior
agreements between the Parties with respect to any related subject matter,
except for the Keane, Inc. 1998 Stock Incentive Plan, Stock Option
Agreements, the Restricted Stock Award Agreements, and the Confidential
Information Agreement. Nothing herein shall alter the contractual agreements
between the Company and Mr. Brian Keane

15.           Representation.
The Parties acknowledge that each of the Parties have been represented by
counsel who have explained the terms of this Agreement to them. 

 8
 

 

 

[Remainder
of Page Left Blank Intentionally]

 9
 

 

 

IN WITNESS WHEREOF,
the Parties hereby execute this Agreement this 8th day of June, 2006.

EACH OF THE PARTIES REPRESENT THAT THEY HAVE READ THE
FOREGOING AGREEMENT, THAT THEY FULLY UNDERSTAND THE TERMS AND CONDITIONS OF
SUCH AGREEMENT AND THAT THEY ARE VOLUNTARILY EXECUTING THE SAME. EACH PARTY
ACKNOWLEDGES THAT IN ENTERING INTO THE AGREEMENT, THEY ARE NOT RELYING ON ANY
REPRESENTATION, PROMISE OR INDUCEMENT MADE BY ANY OTHER PARTY OR THEIR
ATTORNEYS WITH THE EXCEPTION OF THE CONSIDERATION DESCRIBED IN THIS DOCUMENT.

	
  

  	
  /s/ Georgina Fisk

  	
   

  
	
   

  	
  Georgina Fisk

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  KEANE, INC.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ Martha J. Zackin

  	
   

  
	
   

  	
  By: Martha J. Zackin, Corporate Counsel

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ Brian Keane

  	
   

  
	
   

  	
  Brian Keane

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ John Keane, Sr.

  	
   

  
	
   

  	
  John Keane, Sr.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ John Keane, Jr.

  	
   

  
	
   

  	
  John Keane, Jr.

  	
   

  

 

 10

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