Document:

Exhibit 10.2

 

 

Keane, Inc.

 

 

Incentive Stock Option Agreement

Granted Under 2001 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 2001 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 determines that the cash EPS targets set
forth below have been met, and if the Board of 

 

1

 

Directors
so concurs, then this option shall immediately become exercisable as to not
more than the number of shares set forth opposite such cash EPS target in the
table below.

 

	
  Cash EPS Target

  	
   

  	
  Number of

  Shares as to which

  Option is Exercisable

  	
   

  

 

 

[Vesting Schedule omitted for
purposes of form of option]

 

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

 

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 (within the two years prior to the termination of his or her
employment) customer of Keane, or any prospective customer of Keane, with whom
he or she has 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 his or her employment.

 

(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

 

(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

 

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.

 

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

 

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

 

10.                                 Entire
Agreement.  This Agreement
constitutes the entire agreement between the parties, and supercedes all prior
agreements and understanding, relating to the subject matter of this Agreement.

 

11.                                 Amendment.  This Agreement may be amended or modified
only by a written instrument executed by both the Company and the Employee.

 

12.                                 Governing
Law.  This Agreement shall be
governed by and enforced in accordance with the internal laws of the
Commonwealth of Massachusetts, without giving effect to the principles of
conflicts of law thereof.

 

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.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name/Title

  

 

5

 

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 2001 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: 

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
						

 

6Exhibit 10.3

 

 

Keane, Inc.

 

 

Stock Restriction Agreement

Granted Under 1998 Stock Incentive
Plan

 

 

AGREEMENT
made this      day of
                          ,
          , between
Keane, Inc., a Massachusetts corporation (the “Company”), and                                 
(the “Employee”).

 

For
valuable consideration, receipt of which is acknowledged, the parties hereto
agree as follows:

 

1.                                       Purchase
of Shares.  The Company shall issue
and 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 shares
shall be paid by the Employee by check payable to the order of the Company or
by such other method as may be acceptable to the Company.  Upon receipt of payment by the Company for
the 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 the
Employee for that number of Shares purchased by the Employee.  The Employee agrees that the Shares shall be
subject to the Purchase Option set forth in Section 2 of this Agreement
and the restrictions on transfer set forth in Section 4 of the Agreement.

 

2.                                       Purchase
Option.

 

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

 

(a)                                  If
the Employment Termination is effective on or before                   
    ,         , the
Company may exercise the Purchase Option against 75% of the total number of
Shares;

 

1

 

(b)                                 If
the Employment Termination is effective on or before                   
    ,         , the
Company may exercise the Purchase Option against 50% of the total number of
Shares;

 

(c)                                  If
the Employment Termination is effective on or before                   
    ,         , the
Company may exercise the Purchase Option against 25% of the total number of
Shares;

 

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

 

3.                                       Exercise
of Purchase Option and Closing.

 

(a) The Company may exercise the Purchase Option by delivering or mailing
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 the
Company, a written notice of exercise of the Purchase Option.  Such notice shall specify the number of
Shares to be purchased.  If and to the
extent the Purchase Option is not so exercised by the giving of such a notice
within such 60-day period, the Purchase Option shall automatically expire and
terminate effective upon the expiration of such 60-day period.

 

(b) Within 10 days after his receipt of the
Company’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 its
principle offices the certificate or certificates representing the Shares which
the Company has elected to purchase, duly endorsed in blank by the Employee or
with duly endorsed stock powers attached thereto, all in form suitable for the
transfer of such Shares to the Company. 
Upon its receipt of such certificate or certificates, the Company shall
deliver or mail to the Employee a check in the amount of the aggregate Option
Price therefor.

 

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

 

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

 

4.                                       Restrictions
on Transfer.

 

(a)
Except as otherwise provided in subsection (b) below, the Employee shall
not, 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, unless
and until such Shares are no longer subject to the Purchase Option.

 

2

 

(b)
Notwithstanding the foregoing, the Employee may transfer Shares to or for the
benefit of any spouse, child or grandchild, or to a trust for their benefit,
provided that such Shares shall remain subject to this Agreement (including
without limitation the Purchase Option set forth in Section 2 and the restrictions
on transfer set forth in this Section 4) and such permitted transferee
shall, as a condition to such transfer, deliver to the Company a written
instrument confirming that such transferee shall be bound by all of the terms
and conditions of this Agreement.

 

5.                                       Effect
of Prohibited Transfer.  The Company
shall not be required (a) to transfer on its books any of the Shares which
shall have been sold or transferred in violation of any of the provisions set
forth in this Agreement, or (b) to treat as owner of such Shares or to pay
dividends to any transferee to whom any such Shares shall have been so sold or
transferred.

 

6.                                       Restrictive
Legend.  All certificates
representing Shares shall have affixed thereto a legend in substantially the
following form, in addition to any other legends that may be required under
federal or state securities laws:

 

“The
shares of stock represented by this certificate are subject to restrictions on
transfer and an option to purchase set forth in a certain Stock Restriction Agreement
between the corporation and the registered owner of these shares (or his
predecessor in interest), and such Agreement is available for inspection
without charge at the office of the Clerk of the corporation.”

 

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

 

7.                                       Adjustments
for Stock Splits, Stock Dividends, etc.

 

(a) If
from time to time during the term of the Purchase Option there is any stock
split-up, stock dividend, stock distribution or other reclassification of the
Common Stock of the Company, any and all new, substituted or additional
securities to which the Employee is entitled by reason of his or her ownership
of the Shares be immediately subject to the Purchase Option, the restrictions
on transfer and other provisions of this Agreement in the same manner and to
the same extent as the Shares, and the Option Price shall be appropriately
adjusted.

 

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

 

3

 

8.                                       Withholding
Taxes.

 

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

 

(b) If
the Employee elects, in accordance with Section 83(b) of the Internal
Revenue Code of 1986, as amended, to recognize ordinary income in the year of
acquisition of the Shares, the Company will require the Employee to make to the
Company, at the time of such election, an additional payment for withholding
tax purposes based on the difference, if any, between the purchase price for
such Shares and the fair market value of such Shares as of the day immediately
preceding the date of the purchase of such Shares by the Employee.

 

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

 

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

 

11.                                 Binding
Effect.  This Agreement shall be
binding upon and inure to the benefit of the Company and the Employee and their
respective heirs, executors, administrators, legal representatives, successors
and assigns, subject to the restrictions on transfer set forth in Section 4
of this Agreement.

 

12.                                 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 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 (within the two years prior to the
termination of his or her employment) customer of Keane, or any prospective
customer of Keane, with whom he or she has had contact in connection with any
business activity, but is 

 

4

 

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

 

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

 

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

 

15.                                 Entire
Agreement.  This Agreement
constitutes the entire agreement between the parties, and supercedes all prior
agreements and understanding, relating to the subject matter of this Agreement.

 

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

 

17.                                 Governing
Law.  This Agreement shall be
governed by and enforced in accordance with the internal laws of the
Commonwealth of Massachusetts, without giving effect to the principles of
conflicts of law thereof.

 

18.                                 Specific
Performance.  The Company and the
Employee agree that any breach of this Agreement will cause the Company
substantial and irrevocable damage and therefore, in the event of any such
breach, in addition to such other remedies which may be available, the Company
shall have the right to specific performance and injunctive relief.

 

 

IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day
and year first above written.

 

	
   

  	
  KEANE, INC.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name/Title

  

 

5

 

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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