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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
<Table>
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED
BY RULE 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section240.14a-12
KEANE, INC.
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(Name of Registrant as Specified In Its Charter)
-----------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
</Table>
Payment of Filing Fee (Check the appropriate box):
<Table>
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
(1) Title of each class of securities to which transaction
applies:
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(2) Aggregate number of securities to which transaction
applies:
----------------------------------------------------------
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how
it was determined):
----------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
----------------------------------------------------------
(5) Total fee paid:
----------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or
Schedule and the date of its filing.
(1) Amount Previously Paid:
----------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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</Table>
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KEANE, INC.
TEN CITY SQUARE
BOSTON, MASSACHUSETTS 02129
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 29, 2002
------------------------
The Annual Meeting of Stockholders of Keane, Inc. (the "Company") will be
held on Wednesday, May 29, 2002 at 4:30 p.m., Boston time, at the offices of
Hale and Dorr LLP, 60 State Street, Boston, Massachusetts, to consider and act
upon the following matters:
1. To elect three Class I directors for the ensuing three years;
2. To ratify and approve the selection by the Board of Directors of
Ernst & Young LLP as the Company's independent accountants for the
current year; and
3. To transact such other business as may properly come before the meeting
or any adjournment of the meeting.
Stockholders of record at the close of business on April 1, 2002 will be
entitled to notice of and to vote at the meeting or any adjournment thereof. The
stock transfer books of the Company will remain open.
All stockholders are cordially invited to attend the meeting.
By Order of the Board of Directors
/s/ Hal J. Leibowitz
Hal J. Leibowitz, CLERK
Boston, Massachusetts
April 12, 2002
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE AND SIGN
THE ENCLOSED PROXY AND MAIL IT PROMPTLY IN THE ENCLOSED ENVELOPE IN ORDER TO
ASSURE REPRESENTATION OF YOUR SHARES. NO POSTAGE NEED BE AFFIXED IF MAILED IN
THE UNITED STATES.
<Page>
KEANE, INC.
TEN CITY SQUARE
BOSTON, MASSACHUSETTS 02129
------------------------
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 29, 2002
------------------------
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Keane, Inc. ("Keane" or the "Company") for
use at the Annual Meeting of Stockholders to be held on May 29, 2002, and at any
adjournment of that meeting. All proxies will be voted in accordance with the
instructions contained therein, and if no choice is specified, the proxies will
be voted in favor of the proposals set forth in the accompanying Notice of
Meeting. Any proxy may be revoked by a stockholder at any time before it is
exercised by giving written notice to that effect to the Clerk of the Company or
by voting in person at the Annual Meeting.
The Board of Directors has fixed April 1, 2002 as the record date for
determining stockholders who are entitled to vote at the meeting. At the close
of business on April 1, 2002, there were outstanding and entitled to vote
75,461,917 shares of Common Stock of the Company, $.10 par value per share
("Common Stock"), and 284,866 shares of Class B Common Stock of the Company,
$.10 par value per share ("Class B Common Stock"). Each share of Common Stock is
entitled to one vote, and each share of Class B Common Stock is entitled to ten
votes.
THE COMPANY'S ANNUAL REPORT FOR THE YEAR ENDED DECEMBER 31, 2001 IS BEING
MAILED TO THE COMPANY'S STOCKHOLDERS WITH THIS NOTICE AND PROXY STATEMENT ON OR
ABOUT APRIL 12, 2002. THE COMPANY WILL, UPON WRITTEN REQUEST OF ANY STOCKHOLDER,
FURNISH WITHOUT CHARGE A COPY OF ITS ANNUAL REPORT ON FORM 10-K FOR THE YEAR
ENDED DECEMBER 31, 2001, AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
(THE "SEC"), WITHOUT EXHIBITS. PLEASE ADDRESS ALL SUCH REQUESTS TO THE COMPANY,
ATTENTION OF LARRY M. VALE, VICE PRESIDENT OF EXTERNAL COMMUNICATIONS, TEN CITY
SQUARE, BOSTON, MASSACHUSETTS 02129. EXHIBITS WILL BE PROVIDED UPON WRITTEN
REQUEST AND PAYMENT OF AN APPROPRIATE PROCESSING FEE.
As used in this Proxy Statement, the terms "Keane" and the "Company" refer
to Keane, Inc. and its wholly-owned and majority-owned subsidiaries, unless the
context otherwise requires.
<Page>
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of February 13, 2002, the beneficial
ownership of the Company's outstanding Common Stock and Class B Common Stock of
(i) each person known by the Company to own beneficially more than 5% of the
Company's outstanding Common Stock or Class B Common Stock, (ii) each director,
(iii) each executive officer named in the Summary Compensation Table under the
heading "Executive Compensation" below, and (iv) all current directors and
executive officers as a group:
AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP(1)
<Table>
<Caption>
PERCENTAGE OF
PERCENTAGE OF SHARES OF CLASS B
SHARES OF COMMON CLASS B COMMON
COMMON STOCK COMMON STOCK PERCENTAGE OF
NAME AND ADDRESS OF BENEFICIAL OWNER(2) STOCK OUTSTANDING STOCK OUTSTANDING TOTAL VOTES
- --------------------------------------- ---------- ------------- --------- ------------- -------------
Marilyn T. Keane(3)..................... 11,523,031 15.26% 267,800 94.01% 18.12%
John F. Keane(4)........................ 11,523,031 15.26% 267,800 94.01% 18.12%
John H. Fain(5)......................... 4,013,119 5.32% -- -- 5.13%
Brian T. Keane(6)....................... 1,577,173 2.09% 48,221 16.93% 2.62%
John F. Keane, Jr.(7)................... 1,329,280 1.76% 48,221 16.93% 2.31%
Maria A. Cirino(8)...................... -- * -- -- *
Philip J. Harkins(9).................... 16,650 * -- -- *
Winston R. Hindle, Jr.(10).............. 16,750 * -- -- *
John F. Rockart(11)..................... 43,899 * -- -- *
Steven D. Steinour(12).................. -- * -- -- *
Robert Atwell(13)....................... 69,707 * -- -- *
John J. Leahy(14)....................... 39,688 * -- -- *
Linda B. Toops(15)...................... 45,570 * -- -- *
Raymond W. Paris(16).................... 269,642 * -- -- *
All current directors and executive
officers as a group (15
persons)(17).......................... 16,750,419 22.04% 270,910 95.10% 24.68%
</Table>
- ------------------------
* Less than 1% of outstanding stock of the respective class, or less than 1%
of aggregate voting power, as the case may be.
(1) The number of shares beneficially owned by each director and executive
officer is determined under rules promulgated by the SEC and is not
necessarily indicative of beneficial ownership for any other purpose. Under
such rules, beneficial ownership includes any shares as to which the
individual has sole or shared voting power or investment power and also any
shares which the
2
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individual has the right to acquire within 60 days following February 13,
2002 through the exercise of any stock option or other right. The inclusion
herein of such shares, however, does not constitute an admission that the
named stockholder is a direct or indirect beneficial owner of such shares.
Unless otherwise indicated, each person or entity named in the table has
sole voting power and investment power (or shares such power with his or her
spouse) with respect to all shares of capital stock listed as owned by such
person or entity. In calculating the percentage of the Common Stock
beneficially owned by each person listed, the number of shares deemed
outstanding consists of the 75,455,292 shares of Common Stock actually
outstanding as of February 13, 2002 plus, for that person, any shares
subject to options that were exercisable on, or within 60 days after,
February 13, 2002. In calculating the percentage of the Class B Common Stock
beneficially owned by each person listed, the number of shares deemed
outstanding consists of 284,866 shares of Class B Common Stock actually
outstanding as of February 13, 2002. In calculating the percentage of total
votes for each person listed, the total number of votes deemed entitled to
be cast as of February 13, 2002 consists of 78,303,952 votes, plus, for that
person, a number of votes equal to the number of shares subject to options
that were exercisable on, or within 60 days after, February 13, 2002.
(2) Unless otherwise indicated, the address of any person or entity listed is
c/o Keane, Inc., Ten City Square, Boston, MA 02129.
(3) Includes (i) 1,579,928 shares of Common Stock held of record by Marilyn T.
Keane and her husband, John F. Keane, as trustees of the John F. Keane
Qualified Annuity Trust, of which John F. Keane is a beneficiary,
(ii) 1,579,928 shares of Common Stock held of record by Marilyn T. Keane and
John F. Keane, as trustees of the Marilyn T. Keane Qualified Annuity Trust,
of which Marilyn T. Keane is a beneficiary, (iii) 2,658,720 shares of Common
Stock and 127,800 shares of Class B Common Stock held of record by John F.
Keane, (iv) 3,524,000 shares of Common Stock and 140,000 shares of Class B
Common Stock held of record by Marilyn T. Keane and one other individual as
trustees of three trusts of which John and Marilyn Keane's adult children
are the beneficiaries, and (v) options to purchase, within 60 days following
February 13, 2002, 60,000 shares of Common Stock held by John F. Keane. With
regard to the children's trusts shares, Marilyn T. Keane and the other
trustee have sole voting and investment power, but disclaim any beneficial
interest in such shares. Marilyn T. Keane disclaims beneficial ownership of
the shares specified in clauses (i), (iii), (iv) and (v) above.
(4) Includes (i) 1,579,928 shares of Common Stock held of record by John F.
Keane and his wife, Marilyn T. Keane, as trustees of the John F. Keane
Qualified Annuity Trust, of which John F. Keane is the beneficiary,
(ii) 1,579,928 shares of Common Stock held of record by John F. Keane and
Marilyn T. Keane, as trustees of the Marilyn T. Keane Qualified Annuity
Trust, of which Marilyn T. Keane is the beneficiary, (iii) 2,120,445 shares
of Common Stock held of record by Marilyn T. Keane, (iv) 3,524,000 shares of
Common Stock and 140,000 shares of Class B Common Stock held of record by
Marilyn T. Keane and one other individual as trustees of three trusts of
which John and Marilyn Keane's adult children are the beneficiaries, and
(v) options to purchase, within 60 days following February 13, 2002, 60,000
shares of Common Stock held by John F. Keane. With regard to the children's
trusts shares, Marilyn T. Keane and the other trustee have sole voting and
investment power, but disclaim any beneficial interest in such shares. John
F. Keane disclaims beneficial ownership of the shares specified in clauses
(ii), (iii) and (iv) above.
3
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(5) Includes (i) 778,325 shares of Common Stock owned by a trust established by
Mr. Fain of which his wife, Joyce L. Fain, and his sister, Cynthia L. Akins,
are co-trustees, (ii) 109,427 shares of Common Stock held by Mr. Fain as
trustee for his son, and (iii) 99,326 shares of Common Stock held by
Ms. Akins as custodian for the benefit of Mr. Fain's daughter under the
Virginia Uniform Transfer to Minors Act. Mr. Fain disclaims beneficial
ownership of the securities described in clauses (i), (ii) and (iii) above.
(6) Includes (i) 1,137,330 shares of Common Stock and 46,666 shares of Class B
Common Stock held by the John Francis Keane Irrevocable Trust for Benefit of
Brian T. Keane, of which Mr. Brian T. Keane is the beneficiary, (ii) 95,229
shares of Common Stock and 1,555 shares of Class B Common Stock held by the
John F. and Marilyn T. Keane 1997 Children's Trust for Benefit of Brian T.
Keane, of which Mr. Brian T. Keane is the beneficiary, and (iii) options to
purchase, within 60 days following February 13, 2002, 187,500 shares of
Common Stock held by Mr. Brian T. Keane.
(7) Includes (i) 1,193,330 shares of Common Stock and 46,666 shares of Class B
Common Stock held by the John Francis Keane Irrevocable Trust for Benefit of
Mr. John F. Keane, Jr., of which Mr. John F. Keane, Jr. is the beneficiary,
(ii) 1,555 shares of Class B Common Stock held by the John F. and Marilyn T.
Keane 1997 Children's Trust for Benefit of John F. Keane, Jr., of which
Mr. John F. Keane, Jr. is the beneficiary, and (iii) options to purchase,
within 60 days following February 13, 2002, 127,500 shares of Common Stock
held by Mr. John F. Keane, Jr.
(8) Ms. Cirino became a director of the Company in July 2001.
(9) Includes options to purchase, within 60 days following February 13, 2002,
2,750 shares of Common Stock held by Mr. Harkins.
(10) Includes options to purchase, within 60 days following February 13, 2002,
2,750 shares of Common Stock held by Mr. Hindle.
(11) Includes options to purchase, within 60 days following February 13, 2002,
2,750 shares of Common Stock held by Dr. Rockart.
(12) Mr. Steinour became a director of the Company in July 2001.
(13) Consists of 29,494 shares held of record by Mr. Atwell and his wife,
Virginia M. Atwell, and options to purchase, within 60 days following
February 13, 2002, 40,213 shares of Common Stock held by Mr. Atwell.
(14) Consists of 2,188 shares of restricted stock and options to purchase,
within 60 days following February 13, 2002, 37,500 shares of Common Stock
held by Mr. Leahy.
(15) Includes options to purchase, within 60 days following February 13, 2002,
31,500 shares of Common Stock held by Ms. Toops.
(16) Includes 2,940 shares of restricted stock and options to purchase, within
60 days following February 13, 2002, 21,125 shares of Common Stock held by
Mr. Paris.
(17) Includes options to purchase, within 60 days following February 13, 2002,
556,187 shares of Common Stock held by all current directors and executive
officers as a group.
4
<Page>
VOTES REQUIRED
The holders of a majority of the aggregate voting power represented by the
shares of Common Stock and Class B Common Stock issued and outstanding and
entitled to vote at the meeting, together as a single class, shall constitute a
quorum for transacting business at the meeting. The shares of Common Stock and
Class B Common Stock present in person or represented by executed proxies
received by the Company will be counted for purposes of establishing a quorum at
the meeting, regardless of how or whether such shares are voted on any specific
proposal.
The affirmative vote of the holders of a plurality of the aggregate voting
power represented by the shares of Common Stock and Class B Common Stock, voting
together as a single class, present or represented at the meeting, is required
for the election of directors. The affirmative vote of the holders of a majority
of the aggregate voting power represented by the shares of Common Stock and
Class B Common Stock, voting together as a single class, present or represented
at the meeting, is required for the ratification and approval of the selection
by the Board of Directors of Ernst & Young LLP as the Company's independent
accountants for the current year.
Shares which are withheld or which abstain from voting and shares held in
"street name" by brokers or nominees who indicate that they do not have
discretionary authority to vote such shares as to a particular matter ("broker
non-votes") will not be counted as votes in favor of such matter, and will also
not be counted as shares voting on such matter. Accordingly, shares withheld or
abstaining and broker non-votes will have no effect on the voting on the
election of directors and the ratification and approval of the selection of
Ernst & Young LLP as the Company's independent accountants for the current year.
ELECTION OF DIRECTORS
Under the Massachusetts Business Corporation Law, the board of directors of
every publicly held Massachusetts corporation must be divided into three
classes, only one of which is elected each year. However, either the board or
the stockholders may vote that the corporation not be subject to this
"classified board" requirement. Shortly following the adoption of the classified
board statute, Keane's Board of Directors elected that the Company not be
required to maintain a classified board in light of the significant interests in
the Company then held by members of the Keane family.
Under the Massachusetts classified board statute, if the board adopts a vote
electing that the corporation not be required to maintain a classified board,
the board can at a future date adopt a vote to subject the corporation to this
requirement. Similarly, if the stockholders adopt a vote electing that the
corporation not be required to maintain a classified board, the stockholders can
at a future date adopt a vote to subject the corporation to this requirement. In
connection with an overall review of its corporate governance provisions, on
February 13, 2002, the Company's Board of Directors carefully deliberated, and
by written consent dated March 27, 2002, the Board of Directors voted to
institute a classified board, consisting of three Class I directors, three
Class II directors and three Class III directors. The terms of the current
Class I, Class II and Class III directors expire at the annual meetings of
stockholders to be held in 2002, 2003 and 2004, respectively. At each annual
meeting of stockholders, directors are elected for a full term of three years to
succeed those whose terms are expiring.
5
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The Board of Directors decided to institute a classified board because it
believes that a classified board will help lend continuity and stability to the
management of the Company. Following the establishment of a classified board, at
any given time, approximately two-thirds of the members of the Board of
Directors will generally have had experience as directors of the Company. The
Company's Board of Directors believes that this will facilitate long-range
business planning, strategic planning and policy making, and will have a
positive impact on customer and employee loyalty. In particular, the Company
believes that a classified board of directors will permit the Company to more
effectively represent the interests of all of its stockholders in a variety of
situations, including responding to circumstances which might be created by the
demands or actions of a single stockholder or stockholder group, than might be
the case if the Board of Directors were not classified. The decision to enact a
classified board was not a response to any specific effort, of which the Company
is aware, to accumulate the Company's stock or to obtain control of the Company.
The classified board may discourage efforts to obtain control of the Company
by making it more difficult for stockholders to change the composition of the
Board of Directors in a relatively short time period. At least two annual
meetings will be required to be held in order to effect a change in a majority
of the members of the Board. The directors believe that the delay afforded by
these arrangements will help ensure that the Board, if confronted with a hostile
tender offer, a proxy contest or other similar proposal, will have sufficient
time to review and consider any proposal and appropriate alternatives, and to
act in, what it believes to be, the best interest of the Company's stockholders.
The persons named in the enclosed proxy (Brian T. Keane, John J. Leahy and
Hal J. Leibowitz) will vote to elect as Class I directors Maria A. Cirino, John
F. Keane, Jr. and Stephen D. Steinour, the three director nominees named below,
unless authority to vote for the election of directors is withheld by marking
the proxy to that effect or the proxy is marked with the names of nominees as to
whom authority to vote is withheld.
Each nominee will be elected to hold office as a Class I director until the
annual meeting of stockholders in 2005 and until his or her successor is duly
elected and qualified. If a nominee becomes unavailable, the persons acting
under the proxy may vote the proxy for the election of a substitute. The Company
does not anticipate that any of the nominees will be unavailable. All of the
nominees have indicated their willingness to serve if elected.
Set forth below are the names and certain information with respect to each
director, including those who are nominees for election as Class I directors, of
the Company.
CLASS I DIRECTORS (NOMINEES FOR TERMS EXPIRING IN 2005)
MARIA A. CIRINO has served as a director of the Company since July 2001.
Since February 2000, Ms. Cirino has served as the Chief Executive Officer and
Chairman of Guardent, Inc., a provider of security and privacy services. From
November 1999 to February 2000, Ms. Cirino served as Vice President of Sales and
Marketing for Razorfish, Inc., a strategic digital communications company, and
from July 1997 to November 1999, Ms. Cirino served as Vice President of Sales
and Marketing of i-Cube, Inc., which merged into Razorfish, Inc. in
November 1999. From June 1994 to July 1997, Ms. Cirino served as Vice President
of Sales, and from January 1993 to June 1994, Ms. Cirino served as director of
channel sales, of Shiva Corporation, a developer of remote access products for
enterprise
6
<Page>
networks. Ms. Cirino is a director of Cortex Technologies, Inc., a provider of
business card scanning software and hardware. Ms. Cirino is 38 years old.
JOHN F. KEANE, JR. has served as a director of the Company since May 1998.
Mr. John Keane, Jr. has been the President and Chief Executive Officer of
ArcStream Solutions, Inc., a consulting and systems integration firm focusing on
mobile and wireless solutions which he founded, since July 2000. From
October 1997 to July 2000, Mr. John Keane, Jr. was Executive Vice President and
a member of the Office of the President of the Company; from December 1996 to
September 1997, Mr. John Keane, Jr. was Senior Vice President of the Company;
and from December 1994 to December 1996, he was Area Vice President of the
Company's Information Services Division. From January 1994 to December 1994,
Mr. John Keane, Jr. served as an ISD Business Area Manager of the Company. From
July 1992 to January 1994, Mr. John Keane, Jr. acted as manager of Software
Reengineering, and from January 1991 to July 1992, he served as Director of
Corporate Development. Mr. John Keane, Jr. is the brother of Mr. Brian Keane,
the President, Chief Executive Officer and a director of the Company, and a son
of Mr. John Keane, the founder and Chairman of the Board of Directors of the
Company. Mr. John Keane, Jr. is 42 years old.
STEPHEN D. STEINOUR has served as a director of the Company since
July 2001. Since July 2001, Mr. Steinour has served as the Chief Executive
Officer of Citizens Bank of Pennsylvania. From January 1997 to July 2001,
Mr. Steinour served as Vice Chairman of Citizens Financial Group, a commercial
bank holding company. From October 1992 to December 1996, Mr. Steinour served as
the Executive Vice President and Chief Credit Officer of Citizens Wholesale
Banking Group of Citizens Financial Group. Mr. Steinour is 43 years old.
CLASS II DIRECTORS (DIRECTORS WHOSE TERMS EXPIRE IN 2003)
PHILIP J. HARKINS has served as a director of the Company since
February 1997. He is currently the Chief Executive Officer and President of
Linkage, Inc., an organizational development company founded by Mr. Harkins in
1988. Prior to 1988, Mr. Harkins was Vice President of Human Resources of the
Company. Mr. Harkins is 54 years old.
WINSTON R. HINDLE, JR. has served as a director of the Company since
February 1995. Mr. Hindle is also a director of CareCentric, Inc., formerly
known as Simione Central Holdings, Inc., a public company providing information
systems and services to home healthcare providers; C.P. Clare Corporation, a
public company providing high-voltage analog semiconductor integrated packages,
components and switches; and Mestek, Inc., a public company which manufactures
and markets industrial products. From September 1962 to July 1994, Mr. Hindle
served as a Vice President and, subsequently, Senior Vice President of Digital
Equipment Corporation, a computer systems and services firm. Mr. Hindle is
71 years old.
BRIAN T. KEANE has served as President and Chief Executive Officer of the
Company since November 1999 and as a director of the Company since May 1998.
From October 1997 to October 1999, Mr. Brian Keane was Executive Vice President
and a member of the Office of the President of the Company; from December 1996
to September 1997, he was Senior Vice President of the Company; and from
December 1994 to December 1996, he was Area Vice President of the Company's
Information Services Division. From July 1992 to December 1994, Mr. Brian Keane
served as an ISD Business Area Manager of the Company, and from January 1990 to
July 1992, he served as a
7
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Branch Manager. Mr. Brian Keane is a son of Mr. John Keane, the founder and
Chairman of the Board of Directors of the Company, and the brother of Mr. John
Keane, Jr., a director of the Company. Mr. Brian Keane is 41 years old.
CLASS III DIRECTORS (DIRECTORS WHOSE TERMS EXPIRE IN 2004)
JOHN H. FAIN has served as a director of the Company since November 2001 and
was a Senior Vice President of the Company from November 2001 to March 2002.
From July 1979 to November 2001, Mr. Fain served as Chairman of the Board and
Chief Executive Officer, and from July 1979 to January 2001, he served as
President, of Metro Information Services, Inc., a provider of information
technology consulting and custom software development services acquired by the
Company in November 2001. Mr. Fain is 53 years old.
JOHN F. KEANE has served as Chairman of the Board of Directors of the
Company since 1967. From 1967 to November 1999, Mr. John Keane, founder of the
Company, served as President and Chief Executive Officer of the Company.
Mr. John Keane is a director of PerkinElmer, Inc., a public global technology
company, and Firstwave Technologies, a public company which provides Internet-
based customer relationship management solutions. Mr. John Keane is the father
of Mr. Brian Keane, the President, Chief Executive Officer and a director of the
Company, and Mr. John Keane, Jr., a director of the Company. Mr. John Keane is
70 years old.
JOHN F. ROCKART has served as a director of the Company since its
incorporation in 1967. Mr. Rockart has been a Senior Lecturer at the Alfred J.
Sloan School of Management of the Massachusetts Institute of Technology since
1974 and was Director of the Center for Information Systems Research from 1976
to 2000. Dr. Rockart is a director of Comshare, Inc., a public company
developing and supporting e-Business solutions for management planning and
control. Dr. Rockart is 70 years old.
The Company has a standing Audit Committee, comprising Dr. Rockart,
Ms. Cirino and Messrs. Hindle and Steinour, which held four official meetings
and four informal meetings during the year ended December 31, 2001. The Audit
Committee makes recommendations to the Board of Directors relative to the
appointment of independent auditors, establishes and monitors policy relative to
non-audit services provided by the independent auditors, and facilitates open
communication among the Audit Committee, the Board of Directors, the outside,
independent auditors and management. The independent auditors meet with the
Audit Committee (both with and without the presence of the Company's management)
to review and discuss various matters pertaining to the audit, including the
Company's financial statements, the report of independent auditors on the
results, scope and terms of their work, and their recommendations concerning the
financial practices, controls, procedures and policies employed by the Company.
Each of the members of the Audit Committee is considered "independent" within
the meaning of Section 121(A) of the Listing Standards, Policies and
Requirements of the American Stock Exchange.
The Company has a standing Compensation Committee, comprising Dr. Rockart,
Ms. Cirino and Messrs. Harkins and Steinour, which held one informal meeting and
acted once by unanimous written consent during the year ended December 31, 2001.
The Compensation Committee annually reviews and approves the compensation of the
Company's senior executives and administers the Company's 1992
8
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Stock Option Plan, 1992 Employee Stock Purchase Plan, 1998 Stock Incentive Plan
and the 2001 Stock Incentive Plan.
The Company has a Governance and Nominating Committee, comprising
Messrs. John F. Keane, John F. Keane, Jr., Harkins and Hindle which held no
meetings during the year ended December 31, 2001. The Governance and Nominating
Committee examines and defines the Board of Directors' role in corporate
governance, formulates policy to address stockholder concerns and formulates
guidance for management action to deal with evolving social issues, both
internal and external to the organization. The Governance and Nominating
Committee also nominates persons to serve as members of the Board of Directors,
recommends directors to serve on various Board committees, and recommends a
successor to the Chief Executive Officer whenever a vacancy occurs for any
reason. The Governance and Nominating Committee will consider for nomination to
the Board of Directors candidates suggested by the stockholders, provided that
such recommendations are delivered to the Company, with an appropriate
biographical summary, no later than the deadline for submission of stockholder
proposals.
During the year ended December 31, 2001, the Board of Directors of the
Company held seven meetings. Each of the directors attended at least 75% of the
aggregate of (i) the total number of meetings of the Board of Directors and
(ii) the total number of meetings held by all committees of the Board on which
he or she served, in each case during the periods that he or she served, except
for Mr. Steinour, who attended two out of the four Board and Audit Committee
meetings held while he was a director and member of the Audit Committee.
DIRECTORS' COMPENSATION
Compensation of the Company's non-employee directors currently consists of
an annual director's fee of $4,000 plus $1,000 and expenses for each meeting of
the Board of Directors attended. Non-employee directors are also eligible to
receive stock options under the Company's stock incentive plans. Ms. Cirino and
Mr. Steinour, non-employee directors who joined the Board of Directors in
July 2001, each received an option to purchase 10,000 shares of the Company's
Common Stock on July 30, 2001 at an exercise price of $18.30 per share under the
Time Accelerated Restricted Stock Award Plan established under the Company's
2001 Stock Incentive Plan. Directors who are officers or employees of the
Company do not receive any additional compensation for their services as
directors.
9
<Page>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth information with respect to the annual and
long-term compensation of (i) the Company's chief executive officer and
(ii) the four most highly compensated executive officers of the Company who were
serving as executive officers as of December 31, 2001 (collectively, the "Named
Executive Officers").
SUMMARY COMPENSATION TABLE
<Table>
<Caption>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
------------------------------ --------------------------
AWARDS PAYOUTS
---------- -----------
NUMBER OF
SECURITIES
RESTRICTED UNDERLYING
OTHER ANNUAL STOCK OPTIONS/ LTIP
SALARY BONUS COMPENSATION AWARDS SARS PAYOUTS
NAME AND PRINCIPAL POSITION YEAR ($) ($) ($) ($)(1) (2) ($)
- --------------------------- -------- -------- -------- ------------- ---------- ----------- --------
Brian T. Keane............... 2001 428,979 89,250 -- -- 400,000 --
President and Chief 2000 376,595 100,000 -- -- 300,000 --
Executive Officer 1999 325,881 -- -- -- 130,000 --
Robert Atwell................ 2001 377,331 67,500 -- -- 200,000 --
Senior Vice President-- 2000 327,316 75,000 -- 14,937(4) 90,000 --
North American Branch 1999 243,885 96,232 -- -- 20,000 --
Operations
John J. Leahy(5)............. 2001 346,446 89,700 -- -- 100,000 --
Senior Vice President-- 2000 311,909 34,630 -- 51,877(4) 90,000 --
Finance and Chief Financial 1999 118,846 -- -- -- 45,000 --
Officer
Linda B. Toops............... 2001 385,741 47,040 -- -- 40,000 --
Senior Vice President 2000 371,000 222,600 -- -- 60,000 --
1999 325,000 188,500 -- -- 20,000 --
Raymond W. Paris............. 2001 282,702 35,000 -- -- 70,000 --
Senior Vice President-- 2000 265,166 25,000 -- 70,009(4) 45,000 --
Healthcare Solutions 1999 249,798 -- -- -- 11,500 --
Division
<Caption>
ALL OTHER
COMPENSATION
NAME AND PRINCIPAL POSITION ($)
- --------------------------- -------------
Brian T. Keane............... 2,000(3)
President and Chief 2,000(3)
Executive Officer 2,000(3)
Robert Atwell................ 2,000(3)
Senior Vice President-- --
North American Branch --
Operations
John J. Leahy(5)............. 2,000(3)
Senior Vice President-- 65,362(6)
Finance and Chief Financial 9,582
Officer
Linda B. Toops............... 2,000(3)
Senior Vice President 2,000(3)
2,000(3)
Raymond W. Paris............. 2,000(3)
Senior Vice President-- 2,000(3)
Healthcare Solutions 2,000(3)
Division
</Table>
- ------------------------------
(1) Represents the difference between the closing price of the Company's Common
Stock on the American Stock Exchange on the date of grant and the per share
purchase price, multiplied by the number of shares awarded.
(2) All options other than options granted in December 2000 and 2001 become
exercisable in three or four equal installments commencing on the first or
second anniversary of the date of grant. Options granted in December 2000
and December 2001 become exercisable in a single installment on the fifth
anniversary of the date of grant, provided that the vesting of such options
immediately accelerates with respect to 34% of the shares covered thereby
upon the Company's achieving earnings per share of $1.00, with respect to an
additional 33% of the shares covered thereby upon the Company's achieving
earnings per share of $1.50 and with respect to the remaining 33% of the
shares covered thereby upon the Company's achieving earnings per share of
$2.00.
(3) Consists of contributions to the Company's 401(k) Plan on behalf of the
named executive officer.
(4) Shares of restricted stock vest on the second anniversary of the date of
grant. As of December 31, 2001, the number of shares (whether vested or
unvested) held by each of Messrs. Atwell, Leahy, and Paris was 630, 2,188
and 2,940, respectively,
10
<Page>
and the value of such shares (whether vested or unvested) was $11,308,
$39,275 and $52,773, respectively. The value of such shares is based on
$18.05 per share, the last sale price of the Company's Common Stock on
December 31, 2001 as reported on the American Stock Exchange.
(5) Mr. Leahy joined the Company in August 1999.
(6) Consists of reimbursement by the Company of relocation expenses.
OPTION GRANTS DURING 2001
The following table sets forth the number of shares of the Company's Common
Stock underlying options granted, the exercise price per share and the
expiration date of all options granted to each of the Named Executive Officers
during 2001:
OPTION GRANTS IN LAST FISCAL YEAR
<Table>
<Caption>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
------------------------------------------------------ VALUE AT
PERCENT OF ASSUMED ANNUAL
NUMBER OF TOTAL RATES OF STOCK
SECURITIES OPTIONS/SARS EXERCISE OR PRICE APPRECIATION
UNDERLYING GRANTED TO BASE PRICE FOR OPTION TERM(1)
DATE OF OPTIONS EMPLOYEES IN PER SHARE EXPIRATION ----------------------
EXECUTIVE OFFICER GRANT GRANTED FISCAL YEAR $/SH DATE 5%($) 10%($)
- ----------------- -------- ---------- -------------- ----------- --------------- --------- ----------
Brian T. Keane................ 12/04/01 400,000 33% 17.14 12/04/11 4,312,000 10,928,000
Robert Atwell................. 12/04/01 200,000 16% 17.14 12/04/11 2,156,000 5,464,000
John J. Leahy................. 12/04/01 100,000 8% 17.14 12/04/11 1,078,000 2,732,000
Linda B. Toops................ 12/04/01 40,000 3% 17.14 12/04/11 431,200 1,092,800
Raymond W. Paris.............. 12/04/01 70,000 6% 17.14 12/04/11 754,600 1,912,400
</Table>
- ------------------------------
(1) Amounts represent hypothetical gains that could be achieved for the options
if exercised at the end of the option terms. These gains are based on
assumed rates of stock appreciation of 5% and 10% compounded annually from
the date the respective options were granted. Actual gains, if any, on stock
option exercises will depend on the future performance of the Common Stock
and the date on which the options are exercised.
(2) Options become exercisable in a single installment on the fifth anniversary
of the date of grant, provided that the vesting of such options immediately
accelerates with respect to 34% of the shares covered thereby upon the
Company's achieving earnings per share of $1.00, with respect to an
additional 33% of the shares covered thereby upon the Company's achieving
earnings per share of $1.50 and with respect to the remaining 33% of the
shares covered thereby upon the Company's achieving earnings per share of
$2.00.
11
<Page>
OPTION EXERCISES DURING 2001 AND YEAR END OPTION VALUES
The following table sets forth the aggregate dollar value of all options
exercised and the total number of unexercised options held, on December 31,
2001, by each of the Named Executive Officers:
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
<Table>
<Caption>
NUMBER OF SECURITIES
UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS/ IN-THE-MONEY
NUMBER OF SARS AT OPTIONS/SARS AT FISCAL YEAR
SHARES FISCAL YEAR END END($)
ACQUIRED -------------------- ---------------------------
ON VALUE EXERCISABLE/ EXERCISABLE/
EXECUTIVE OFFICER EXERCISE REALIZED($)(1) UNEXERCISEABLE UNEXERCISEABLE(2)
- ----------------- --------- -------------- -------------------- ---------------------------
Brian T. Keane............. 20,000 252,600 122,500/747,500 31,200/2,013,500
Robert Atwell.............. -- -- 25,208/295,625 10,049/675,100
John J. Leahy.............. -- -- 30,000/205,000 0/585,800
Linda B. Toops............. -- -- 26,500/110,500 300/367,100
Raymond W. Paris........... 20,000 132,800 21,250/118,250 113/310,813
</Table>
- ------------------------
(1) Value is calculated based on the difference between the option exercise
price and the closing market price of the Company's Common Stock on the
American Stock Exchange on the date of exercise, multiplied by the number of
shares to which the exercise relates.
(2) The closing price for the Company's Common Stock on the American Stock
Exchange on December 31, 2001 was $18.05. Value is calculated on the basis
of the difference between the option exercise price and $18.05, multiplied
by the number of shares of Common Stock underlying the option.
12
<Page>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The Company is not aware of any executive officer, director or principal
stockholder who failed to comply with filing requirements under Section 16 of
the Securities Exchange Act of 1934 (the "Exchange Act") during the year ended
December 31, 2001, except that Mr. John F. Keane, Sr. was late in filing a
Form 4, Statement of Change in Beneficial Ownership, to report the acquisition
of shares of Common Stock of the Company, and Messrs. John Keane, Jr. and Paris
were late in filing Forms 4 to report sales of shares of Common Stock of the
Company.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee comprises Dr. Rockart, Ms. Cirino and
Messrs. Harkins and Steinour. No executive officer of the Company has served as
a director or member of the compensation committee (or other committee serving
an equivalent function) of any other entity, one of whose executive officers
served as a director or member of the Compensation Committee of the Company.
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS ON EXECUTIVE
COMPENSATION
The Company's compensation policy for executive officers has been to offer
competitive compensation based on the individual's performance as well as the
overall performance of the Company. The Company's compensation program is
intended to attract and retain executives whose abilities are critical to the
long-term success and competitiveness of the Company.
The compensation of the Company's senior executives (other than the Chief
Executive Officer) is reviewed and approved annually by the Compensation
Committee based upon the recommendations of the Chief Executive Officer and the
evaluation of the members of the Compensation Committee. Each of the named
executives regularly makes presentations to the Board of Directors. As a result,
the members of the Compensation Committee are personally familiar with the
performance of each senior executive.
The key components of executive compensation are salary, which is based on
factors such as the individual's performance and level of responsibility in
comparison to similar positions in comparable companies in the industry, and
stock option awards. In December 2000, the Company initiated a "Time Accelerated
Restricted Stock Award Plan" ("TARSAP") under its 1998 Stock Incentive Plan and
in 2001, initiated a TARSAP under its 2001 Stock Incentive Plan. The vesting of
options granted under the TARSAP accelerates upon the Company's obtaining
certain profitability criteria. Otherwise, such options vest on the fifth
anniversary of the date of grant. The Company began awarding options under
TARSAP to executives in order to better align the interest of such individuals
with the interest of stockholders in the Company's long-term success. The
Compensation Committee believes that TARSAP grants will continue to be a key
component of executive compensation in the future.
The compensation of the Company's Chief Executive Officer is determined
annually by the Compensation Committee. The Chief Executive Officer's salary in
2001 was based on a variety of factors including those described above and a
comparison of the compensation of the chief executive officers of comparable
companies in the industry. The Chief Executive Officer did not participate in
any decisions regarding his own compensation. The Compensation Committee
believes that, although the base salary of the Chief Executive Officer is not
directly related to financial performance, his base salary is within the range
of base salaries paid to comparable industry executives.
13
<Page>
The Compensation Committee expects that compensation levels will continue to
depend primarily on each individual's personal performance as well as on the
overall performance of the Company.
Section 162(m) of the Internal Revenue Code of 1986, as amended, generally
disallows a tax deduction to a public company for compensation in excess of
$1 million paid to the company's Chief Executive Officer and four other most
highly compensated executive officers. Certain compensation, including qualified
performance-based compensation, will not be subject to the deduction limit if
certain requirements are met. In general, the Company structures and administers
its stock option plans in a manner intended to comply with the performance-based
exception to Section 162(m). Nevertheless, there can be no assurance that
compensation attributable to awards granted under the Company's stock option
plans will be treated as qualified performance-based compensation under
Section 162(m). In addition, the Compensation Committee reserves the right to
use its judgment to authorize compensation payments that may be subject to the
deduction limit when the Compensation Committee believes such payments are
appropriate and in the best interests of the Company and its stockholders, after
taking into consideration business conditions and the performance of its
officers.
The Compensation Committee
Maria A. Cirino
Philip J. Harkins
John F. Rockart
Stephen D. Steinour
14
<Page>
STOCK PERFORMANCE CHART
The following graph compares the yearly percentage change in the cumulative
total stockholder return on the Company's Common Stock during the five years
ended December 31, 2001 with the cumulative total return on (i) the Standard &
Poor's 500 Composite Index (the "S&P 500") and (ii) a peer group index selected
by the Company which includes the following four publicly traded companies
within the Company's industry: American Management Systems, Inc., Computer
Sciences Corporation, Electronic Data Systems Corporation and Sapient
Corporation (the "Peer Group"). The 2002 peer group index does not include
Cambridge Technology Partners (Massachusetts), Inc., which was included in the
peer group index appearing in the Company's 2001 proxy statement, because it was
acquired by Novell, Inc. in July 2001. The comparison assumes $100 was invested
on December 31, 1996 in the Company's Common Stock and in each of the foregoing
indices and assumes reinvestment of dividends.
<Table>
<Caption>
1996 1997 1998 1999 2000 2001
-------- -------- -------- -------- -------- --------
Keane, Inc...................................... $100 $255.91 $251.57 $202.36 $ 61.42 $113.57
Peer Group...................................... $100 $102.67 $131.75 $197.70 $138.63 $148.81
S&P 500......................................... $100 $133.36 $171.47 $207.56 $188.66 $166.24
</Table>
15
<Page>
CERTAIN RELATED PARTY TRANSACTIONS
In February 1985, the Company entered into a lease, which subsequently was
extended to a term of 20 years, with City Square Limited Partnership, pursuant
to which the Company leased approximately 34,000 square feet of office and
development space in a building located at Ten City Square, in Boston,
Massachusetts. The Company now leases approximately 88% of this building and the
remaining 12% is occupied by other tenants. John F. Keane, Chairman of the Board
of the Company, and Philip J. Harkins, a director of the Company, are limited
partners of City Square. Based upon its knowledge of rental payments for
comparable facilities in the Boston area, the Company believes that the rental
payments under this lease, which will be approximately $850,000 per year ($25.00
per square foot) for the remainder of the lease term (until February 2006), plus
specified percentages of any annual increases in real estate taxes and operating
expenses, were, at the time the Company entered into the lease, as favorable to
the Company as those which could have been obtained from an independent third
party.
In October 2001, the Company entered into a lease with Gateway Developers
LLC ("Gateway LLC") for a term of twelve years, pursuant to which the Company
agreed to lease approximately 95,000 square feet of office and development space
in a building under construction at One Chelsea Street in Boston, Massachusetts
(the "New Facility"). The Company will lease approximately 57% of the New
Facility and the remaining 43% will be occupied by other tenants. John Keane
Family LLC is a member of Gateway LLC. The members of John Keane Family LLC are
trusts for the benefit of John F. Keane, Chairman of the Board of the Company,
and his immediate family members.
On October 31, 2001, Gateway LLC entered into a $39,400,000 construction
loan with Citizens Bank of Massachusetts (the "Gateway Loan") in connection with
the New Facility and an adjacent building to be located at 20 City Square,
Boston, Massachusetts. John Keane Family LLC and John F. Keane are each liable
for certain obligations under the Gateway Loan if and to the extent Gateway LLC
requires funds to comply with its obligations under the Gateway Loan.
Stephen D. Steinour, a director of the Company, is Chief Executive Officer of
Citizens Bank of Pennsylvania. Citizens Bank of Massachusetts and Citizens Bank
of Pennsylvania are subsidiaries of Citizens Financial Group, Inc.
The Company currently expects to occupy the New Facility in January 2003.
Based upon its knowledge of rental payments for comparable facilities in the
Boston area, the Company believes that the rental payments under the lease for
the New Facility, which will be approximately $3.2 million per year ($33.00 per
square foot for the first 75,000 square feet and $35.00 per square foot for the
remainder of the premises) for the first six years of the lease term and
approximately $3.5 million per year ($36.00 per square foot for the first 75,000
square feet and $40.00 per square foot for the remainder of the premises) for
the remainder of the lease term, plus specified percentages of any annual
increases in real estate taxes and operating expenses, were, at the time the
Company entered into the lease, as favorable to the Company as those which could
have been obtained from an independent third party.
SELECTION OF INDEPENDENT ACCOUNTANTS
Subject to ratification by the stockholders, the Board of Directors has
selected the firm of Ernst & Young LLP ("Ernst & Young") as the Company's
independent accountants for the year ending December 31, 2001. Ernst & Young has
served as the Company's independent accountants since April 2, 1999. Although
stockholder approval of the Board of Directors' selection of Ernst & Young is
16
<Page>
not required by law, the Board of Directors believes that it is advisable to
give stockholders an opportunity to ratify this selection. If the stockholders
do not approve this proposal at the Annual Meeting, the Board of Directors may
reconsider the selection of Ernst & Young.
Representatives of Ernst & Young are expected to be present at the Annual
Meeting of Stockholders. They will have an opportunity to make a statement if
they desire to do so, and will also be available to respond to appropriate
questions from stockholders.
REPORT OF THE AUDIT COMMITTEE
The Audit Committee of the Company's Board of Directors is composed of four
members and acts under a written charter first adopted and approved in
May 2000. A copy of the Audit Committee Charter is attached as Appendix I to the
Company's proxy statement for the 2001 Annual Meeting of Stockholders, filed
with the Securities and Exchange Commission on April 13, 2001, and is available
on the SEC's website at www.sec.gov. The members of the Audit Committee are
independent directors, as defined by its charter and the rules of the American
Stock Exchange.
The Audit Committee reviewed the Company's audited financial statements for
the fiscal year ended December 31, 2001 and discussed these financial statements
with the Company's management. Management is responsible for the Company's
internal controls and the financial reporting process, including its system of
internal control, and for the preparation of consolidated financial statements
in accordance with generally accepted accounting principles ("GAAP"). The
Company's independent auditors are responsible for performing an independent
audit of the Company's financial statements in accordance with GAAP and issue a
report on those financial statements. As appropriate, the Audit Committee
reviews and evaluates, and discusses with the Company's management, internal
accounting, financial and auditing personnel and the independent auditors, the
following:
- the plan for, and the independent auditors' report on, each audit of the
Company's financial statements;
- the Company's financial disclosure documents, including all financial
statements and reports filed with the SEC or sent to shareholders;
- changes in the Company's accounting practices, principles, controls or
methodologies;
- significant developments or changes in accounting rules applicable to the
Company; and
- the adequacy of the Company's internal controls and accounting, financial
and auditing personnel.
Management represented to the Audit Committee that the Company's financial
statements had been prepared in accordance with GAAP.
The Audit Committee also reviewed and discussed the audited financial
statements and the matters required by Statement on Auditing Standards 61
(Communication with Audit Committees) with Ernst & Young LLP, the Company's
independent auditors. SAS 61 requires the Company's independent auditors to
discuss with the Company's Audit Committee, among other things, the following:
- methods to account for significant unusual transactions;
- the effect of significant accounting policies in controversial or emerging
areas for which there is a lack of authoritative guidance or consensus;
17
<Page>
- the process used by management in formulating particularly sensitive
accounting estimates and the basis for the auditors' conclusions regarding
the reasonableness of those estimates; and
- disagreements with management, if any, over the application of accounting
principles, the basis for management's accounting estimates and the
disclosures in the financial statements.
The Company's independent auditors also provided the Audit Committee with
the written disclosures and the letter required by Independence Standards Board
Standard No. 1 (Independence Discussions with Audit Committees). Independence
Standards Board Standard No. 1 requires auditors annually to disclose in writing
all relationships that in the auditor's professional opinion may reasonably be
thought to bear on independence, confirm their perceived independence and engage
in a discussion of independence. In addition, the Audit Committee discussed with
the independent auditors their independence from the Company. The Audit
Committee also considered whether the independent auditors' provision of certain
other, non-audit related services to the Company is compatible with maintaining
such auditors' independence.
Based on its discussions with management and the independent auditors, and
its review of the representations and information provided by management and the
independent auditors, the Audit Committee recommended to the Company's Board of
Directors that the audited financial statements be included in the Company's
Annual Report on Form 10-K for the year ended December 31, 2001.
The Audit Committee
Maria A. Cirino
Winston R. Hindle, Jr.
John F. Rockart
Stephen D. Steinour
INDEPENDENT AUDITORS FEES
AUDIT FEES
Ernst & Young billed the Company an aggregate of $1,511,921 in fees for
professional services in 2001. The following table provides information about
these fees. The Audit Committee of our Board of Directors believes that the
non-audit services described below did not compromise Ernst & Young's
independence.
<Table>
<Caption>
FINANCIAL INFORMATION
SYSTEMS DESIGN AND
AUDIT FEES (1) IMPLEMENTATION FEES ALL OTHER FEES (2)
- -------------- --------------------- ------------------
$368,100 None $1,143,821
</Table>
- ------------------------
(1) Represents total fees paid to Ernst & Young for the audit of the Company's
2001 annual financial statements and for reviewing the financial statements
included in the Company's Quarterly Reports on From 10-Q.
(2) Represents total fees paid to Ernst & Young for services rendered other than
services described in note (1) above. These fees consist of the following:
- $575,913 for tax consulting and compliance services;
18
<Page>
- $300,000 for tax outsourcing services;
- $165,361 for review and assistance in connection with registration
statements the Company filed with the SEC;
- $32,500 for assistance with the Company's due diligence in connection with
the acquisition of Metro Information Services, Inc.;
- $55,859 in other audit-related fees; and
- $14,188 in all other fees.
OTHER MATTERS
The Board of Directors does not know of any other matters which may come
before the meeting. However, if any other matters are properly presented to the
meeting, it is the intention of the persons named in the accompanying proxy to
vote, or otherwise act, in accordance with their judgment on such matters.
All costs of solicitation of proxies will be borne by the Company. In
addition to solicitations by mail, the Company's directors, officers and regular
employees, without additional remuneration, may solicit proxies by telephone,
telegraph and personal interviews. Brokers, custodians and fiduciaries will be
requested to forward proxy soliciting material to the owners of stock held in
their names, and the Company will reimburse them for reasonable out-of-pocket
expenses in connection with the distribution of proxy solicitation material.
DEADLINE FOR SUBMISSION OF STOCKHOLDER PROPOSALS
Proposals of stockholders intended to be presented at the 2003 Annual
Meeting of Stockholders must be received by the Company at its principal office
in Boston, Massachusetts not later than December 13, 2002 for inclusion in the
proxy statement for that meeting.
Stockholders who wish to make a proposal at the 2003 Annual Meeting of
Stockholders other than one that will be included in the Company's proxy
materials should notify the Company no later than February 26, 2003 and no
earlier than February 11, 2003. If a stockholder who wishes to present a
proposal fails to notify the Company by this date, the proxies that management
solicits for that meeting will have discretionary authority to vote on the
stockholder's proposal if it is properly brought before that meeting. If a
stockholder makes timely notification, the proxies may still exercise
discretionary authority under circumstances consistent with the Securities and
Exchange Commission's proxy rules.
By order of the Board of Directors,
/s/ Hal J. Leibowitz
Hal J. Leibowitz, CLERK
April 12, 2002
THE BOARD OF DIRECTORS HOPES THAT STOCKHOLDERS WILL ATTEND THE MEETING.
WHETHER OR NOT YOU PLAN TO ATTEND, YOU ARE URGED TO COMPLETE, DATE, SIGN AND
RETURN THE ENCLOSED PROXY IN THE ACCOMPANYING ENVELOPE. YOUR PROMPT RESPONSE
WILL GREATLY FACILITATE ARRANGEMENTS FOR THE MEETING, AND WE APPRECIATE YOUR
COOPERATION.
19
PROXY
KEANE, INC.
ANNUAL MEETING OF STOCKHOLDERS
MAY 29, 2002
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned, revoking all prior proxies, hereby appoints Brian T.
Keane, John J. Leahy and Hal J. Leibowitz and each of them, with full power of
substitution, as Proxies to represent and vote as designated hereon all shares
of stock of Keane, Inc. (the "Company") which the undersigned would be entitled
to vote if personally present at the Annual Meeting of Stockholders of the
Company to be held on Wednesday, May 29, 2002, at 4:30 p.m., Boston time, at the
offices of Hale and Dorr LLP, 60 State Street, Boston, Massachusetts and at any
adjournment thereof with respect to the matters set forth on the reverse side
hereof.
PLEASE FILL IN, DATE, SIGN AND MAIL THIS PROXY
IN THE ENCLOSED POST-PAID RETURN ENVELOPE.
- ----------- -----------
SEE REVERSE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
SIDE SIDE
- ----------- -----------
- -------------- ----------------
PLEASE MARK
X VOTES AS IN
THIS EXAMPLE.
- -------------- ----------------
IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED IN FAVOR OF THE PROPOSALS SET
FORTH BELOW.
1. To elect three Class I directors for the 2. To ratify and approve the selection by the FOR AGAINST ABSTAIN
ensuing three years. Board of Directors of Ernst & Young LLP as / / / / / /
the Company's independent accountants for
NOMINEES: (01) Maria A. Cirino, (02) John F. Keane, the current year.
Jr. and (03) Stephen D. Steinour.
FOR WITHHELD FROM ALL
ALL NOMINEES NOMINEES
/ / / /
/ /
---------------------------------------
For all nominees except as noted above.
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT. / /
IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE
UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE
THE MEETING OR ANY ADJOURNMENT THEREOF.
Please sign exactly as your name appears hereon. If the stock
is registered in the names of two or more persons, each should
sign. Executors, administrators, trustees, guardians, attorneys and
corporate officers should add their titles.
Signature:________________ Date:_______ Signature:________________ Date:_______
-2-