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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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
[X] Definitive Proxy Statement by Rule 14a-6(e)(2))
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
KEANE, INC.
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(Name of Registrant as Specified In Its Charter)
KEANE, INC.
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[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:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] 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:
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KEANE, INC.
Ten City Square
Boston, Massachusetts 02129
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held on May 31, 2000
----------------
The Annual Meeting of Stockholders of Keane, Inc. (the "Company") will be
held on Thursday, May 31, 2000 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 fix the number of directors at seven and to elect a Board of
Directors for the ensuing year;
2. To approve the amendment and restatement of the Company's By-Laws;
3. 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
4. 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 3, 2000 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
Hal J. Leibowitz, Clerk
Boston, Massachusetts
April 14, 2000
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.
KEANE, INC.
Ten City Square
Boston, Massachusetts 02129
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PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
To Be Held on May 31, 2000
----------------
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 31, 2000, 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 3, 2000 as the record date for
determining stockholders who are entitled to vote at the meeting. At the close
of business on April 3, 2000, there were outstanding and entitled to vote
69,927,240 shares of Common Stock of the Company, $.10 par value per share
("Common Stock"), and 284,987 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, 1999 is being
mailed to the Company's stockholders with this Notice and Proxy Statement on
or about April 14, 2000. 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, 1999, as filed with the Securities and
Exchange Commission (the "SEC"), without exhibits. Please address all such
requests to the Company, Attention of John J. Leahy, Senior Vice President and
Chief Financial Officer, 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.
Stock Ownership of Certain Beneficial Owners and Management
The following table sets forth, as of February 1, 2000 (or such other date
as is set forth in the footnotes below), 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 and 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)
-------------------------------------------------------
Percentage
Percentage Shares of of Class B
Shares of of Common Class B Common Percentage
Name and Address of Common Stock Common Stock of Total
Beneficial Owner Stock Outstanding Stock Outstanding Votes
- ------------------- ---------- ----------- --------- ----------- ----------
John F. Keane(2)........ 11,463,031 16.4% 267,800 94.1% 19.4%
c/o Keane, Inc.
Ten City Square
Boston, MA 02129
Marilyn T. Keane(3)..... 11,463,031 16.4% 267,800 94.1% 19.4%
c/o Keane, Inc.
Ten City Square
Boston, MA 02129
John Francis Keane
Irrevocable Children's
Trusts;
John K. and Marilyn T.
Keane
1997 Children's
Trusts(4)............... 3,704,143 5.3% 144,665 50.8% 6.9%
c/o Keane, Inc.
Ten City Square
Boston, MA 02129
Philip J. Harkins....... 9,900 * -- -- *
c/o Keane, Inc.
Ten City Square
Boston, MA 02129
Winston Hindle.......... 14,000 * -- -- *
c/o Keane, Inc.
Ten City Square
Boston, MA 02129
Brian T. Keane(5)....... 1,432,782 2.0% 48,221 16.9% 2.6%
c/o Keane, Inc.
Ten City Square
Boston, MA 02129
John F. Keane, Jr.(6)... 1,310,107 1.8% 48,221 16.9% 2.5%
c/o Keane, Inc.
Ten City Square
Boston, MA 02129
John F. Rockart......... 41,149 * -- -- *
c/o Keane, Inc.
Ten City Square
Boston, MA 02129
Robert A. Shafto........ 12,000 * -- -- *
c/o Keane, Inc.
Ten City Square
Boston, MA 02129
2
Amount and Nature of Beneficial Ownership(1)
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Percentage
Percentage Shares of of Class B
Shares of of Common Class B Common Percentage
Name and Address of Common Stock Common Stock of Total
Beneficial Owner Stock Outstanding Stock Outstanding Votes
- ------------------- ---------- ----------- --------- ----------- ----------
Edward Longo(7)......... 110,042 * -- -- *
c/o Renaissance
189 Wells Avenue
Newton, MA 02459
Raymond W. Paris(8)..... 283,551 * -- -- *
c/o Keane, Inc.
Ten City Square
Boston, MA 02129
Renee Southard(9)....... 39,902 * -- -- *
c/o Keane, Inc.
Ten City Square
Boston, MA 02129
All current directors 12,693,146 18.2% 272,463 95.7% 21.2%
and executive officers
as a group (10
persons)(10)...........
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* 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 the
information 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 individual has the right to acquire
within 60 days of February 1, 2000 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.
(2) Includes (i) 3,276,581 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)
3,276,581 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) 423,802 shares
of Common Stock held of record by Marilyn T. Keane, and (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. 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) Includes (i) 3,276,581 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)
3,276,581 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) 962,067 shares
of Common Stock and 127,800 shares of Class B Common Stock held of
3
record by John F. Keane, and (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. 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) and (iv) above.
(4) Marilyn T. Keane and one other trustee hold sole voting and investment
power with respect to the shares held by the John Francis Keane
Irrevocable Children's Trusts, but disclaim any beneficial interest
therein. Brian T. Keane and one other trustee hold sole voting and
investment power with respect to the shares held by the John F. and
Marilyn T. Keane 1997 Children's Trust for Benefit of Victoire K. Lang,
the sister of Messrs. Brian Keane and John F. Keane, Jr., but disclaim
any beneficial interest therein. John F. Keane, Jr. and one other trustee
hold sole voting and investment power with respect to the shares held by
the John F. and Marilyn T. Keane 1997 Children's Trust for Benefit of
Brian T. Keane, but disclaim any beneficial interest therein.
(5) Includes (i) options to purchase, within 60 days following February 1,
2000, 41,668 shares of Common Stock held by Mr. Brian Keane, (ii)
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 Keane is the beneficiary, and (iii)
105,381 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 Keane is the beneficiary.
(6) Includes options to purchase, within 60 days following February 1, 2000,
26,782 shares of Common Stock held by Mr. John F. Keane, Jr., (ii)
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,
and (iii) 49,381 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 John F. Keane, Jr., of which Mr. John F. Keane, Jr.
is the beneficiary.
(7) Mr. Longo served as an executive officer of the Company until his
resignation on July 16, 1999.
(8) Includes options to purchase, within 60 days following February 1, 2000,
27,834 shares of Common Stock held by Mr. Paris.
(9) Includes options to purchase, within 60 days following February 1, 2000,
19,750 shares of Common Stock held by Ms. Southard.
(10) Includes options to purchase, within 60 days following February 1, 2000,
132,287 shares of Common Stock held by all directors and executive
officers as a group.
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 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, each voting as a
separate class, is required for the proposed amendment and restatement of the
Company's By-Laws to be submitted to the stockholders at the meeting.
4
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 election of directors and for each of the other matters which
are to be submitted to the stockholders at the meeting.
With respect to the required vote on any particular matter, abstentions will
be treated as shares present and represented, while votes withheld by nominee
recordholders who did not receive specific instructions from the beneficial
owners of such shares (so called "broker non-votes") will not be treated as
shares present or represented.
ELECTION OF DIRECTORS
The persons named in the enclosed proxy (John F. Keane, Brian T. Keane, John
F. Keane, Jr., and Hal J. Leibowitz) will vote to fix the number of directors
at seven and to elect as directors the seven 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. The proxy may not be voted for more than
seven directors.
Each director will be elected to hold office until the next annual meeting
of stockholders and until his 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.
Set forth below are the names and certain information with respect to each
director of the Company.
JOHN F. KEANE has served as a director of the Company since its
incorporation in 1967. He is also currently Chairman of the Board of
Directors.(1) Mr. Keane is 68 years old.
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 52 years old.
WINSTON HINDLE has served as a director of the Company since February 1995.
Mr. Hindle is also a director of Simione Central Holdings, Inc., a public
company providing information systems and services to home healthcare
providers. 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 69 years old.
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(1) In November 1999, the Company announced the promotion of Mr. Brian Keane
to the position of Chief Executive Officer and Mr. John Keane, Jr. to the
position of President. These promotions are subject to the approval by the
Company's stockholders of the proposed amendment and restatement of the
Company's Amended and Restated By-Laws at the meeting. Pending such
approval, Mr. John Keane continues to formally serve as Chief Executive
Officer and President of the Company.
5
BRIAN T. KEANE has served as a director of the Company since May 1998. In
November 1999, the Company announced the promotion of Mr. Brian Keane to the
position of Chief Executive Officer.(2) From December 1996 until September
1997, Mr. Brian Keane 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 Branch Manager. Mr. Brian Keane is a son of
John F. Keane, the founder, President and Chief Executive Officer and Chairman
of the Board of Directors of the Company, and the brother of John F. Keane,
Jr. Mr. Brian Keane is 39 years old.
JOHN F. KEANE, JR. has served as a director of the Company since May 1998.
In November 1999, the Company announced the promotion of Mr. John Keane, Jr.
to the position of President.(3) From December 1996 until 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 a son of John F. Keane, the founder,
President and Chief Executive Officer and Chairman of the Board of Directors
of the Company, and the brother of Brian T. Keane. Mr. John F. Keane, Jr. is
40 years old.
JOHN F. ROCKART has served as a director of the Company since its
incorporation in 1967. He is currently a Senior Lecturer of the Center for
Information Systems Research at the Alfred J. Sloan School of Management of
the Massachusetts Institute of Technology. Dr. Rockart became a Senior
Lecturer at the Center in 1974 and was named as the Director in 1976. Dr.
Rockart is 68 years old.
ROBERT A. SHAFTO has served as a director of the Company since February
1994. He is currently retired. From 1993 until May 1998, Mr. Shafto served as
the Chairman and Chief Executive Officer of New England Financial, an
insurance and investment firm formerly known as New England Life Insurance
Company, which he joined in 1972. Mr. Shafto has served as a director of the
Company since February 1994. Mr. Shafto is 64 years old.
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(2) Mr. Brian Keane's promotion to the position of Chief Executive Officer is
subject to the approval of the proposed amendment and restatement of the
Company's Amended and Restated By-Laws at the meeting. Pending such
approval, he continues to formally serve as Executive Vice President and a
member of the Office of the President of the Company.
(3) Mr. John Keane, Jr.'s promotion to the position of President is subject to
approval of the proposed amendment and restatement of the Company's
Amended and Restated By-Laws at the meeting. Pending such approval, he
continues to formally serve as Executive Vice President and a member of
the Office of the President of the Company.
The Company has a standing Audit Committee, comprised of Messrs. Harkins,
Hindle and Shafto and Dr. Rockart, which held meetings during the year ended
December 31, 1999. The Audit Committee makes recommendations to the Board of
Directors relative to the appointment of independent auditors, reviews the
scope and results of the independent audit, and establishes and monitors
policy relative to non-audit services provided by the independent auditors in
order to ensure that the auditors are in fact independent.
6
The Company has a standing Compensation Committee, comprised of Messrs.
Hindle and Shafto and Dr. Rockart, which held one meeting during the year
ended December 31, 1999. The Compensation Committee
annually reviews and approves the compensation of the Company's senior
executives, administers the Company's 1992 Stock Option Plan, the Company's
1992 Employee Stock Purchase Plan, and the Company's 1998 Equity Incentive
Plan.
The Company does not have a standing nominating committee.
During the year ended December 31, 1999, the Board of Directors of the
Company held four 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 served, in each case during the periods that he served.
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. Directors who are officers or employees of
the Company do not receive any additional compensation for their services as
directors.
APPROVAL OF AMENDMENT AND RESTATEMENT OF BY-LAWS
On February 17, 2000, the Board of Directors voted, subject to stockholder
approval, to approve an amendment and restatement of the Company's Amended and
Restated By-Laws. The purpose of the proposed amendment and restatement is to
update various provisions in the Company's current By Laws, which have been in
effect since 1994. The following discussion summarizes certain material
differences between the Company's current Amended and Restated By-Laws (the
"Current By-Laws") and the proposed Second Amended and Restated By-Laws (the
"Proposed By-Laws"). The text of the Proposed By-Laws is set forth in Appendix
I to this Proxy Statement and is incorporated by reference herein.
Special Meetings of Stockholders. The Proposed By-Laws would increase the
percentage of outstanding capital stock (so long as the Company remains
public) required to call a special meeting of stockholders from 10% to 50%. In
addition, the Proposed By-Laws would add specific instructions concerning the
process by which a stockholder may call a special meeting, including (i)
written notice requirements, (ii) the fixing by the Board of Directors of a
record date to determine the stockholders entitled to call a special meeting,
and (iii) a prohibition against a stockholder calling a special meeting within
90 days following the most recent meeting of stockholders.
Notice of Business at Meetings. The Proposed By-Laws would add a provision
specifying the process by which a stockholder may bring business before a
meeting. If such business is to be brought before a special meeting of
stockholders, written notice must be received at the Company's principal
executive offices not less than 60 days nor more than 90 days prior to the
special meeting. If such business is to be brought before an annual meeting of
stockholders, written notice must be received at the Company's principal
executive offices not less than 45 days nor more than 60 days prior to the
anniversary date of the mailing of the prior year's proxy materials. Notices
must set forth a description of the business to be brought before the meeting,
the name and address of the stockholder, the number of shares beneficially
owned by the stockholder and any material interest of the stockholder in such
business.
7
Electronic Voting. The Proposed By-Laws would add a provision permitting
stockholders to vote by means of a proxy executed in any manner permitted by
law and filed with the Company's clerk by any form of transmission permitted
by law.
Nomination and Election of Members of the Board of Directors, Enlargement of
the Board of Directors and Removal of Members of the Board of Directors. The
Current By-Laws specify a minimum number of directors at three and a maximum
number at seven and allow the stockholders or a majority of the directors to
decrease and increase the number of directors. The Proposed By-Laws would
maintain the minimum number of directors as well as the power to decrease the
number of directors, but would no longer specify a maximum number of
directors. The Proposed By-Laws would allow the stockholders or a majority of
the directors to increase the number of directors (without limitations placed
on the size of the Board of Directors) and would specify that a director need
not be a stockholder.
The Proposed By-Laws would add a provision providing that nominations to the
Board of Directors may be made by the Board of Directors or by a stockholder,
provided that nominations by a stockholder must be submitted in writing to the
Clerk of the Company not less than 45 days nor more than 60 days prior to the
anniversary date of the mailing of the prior year's proxy materials. The
Proposed By-Laws would also add a provision specifying that a director may be
removed (i) with or without cause by majority of the shares entitled to vote,
or (ii) with cause by a majority of the directors. Finally, the Proposed By-
Laws would provide that a director may be removed for cause only after notice
and an opportunity to be heard.
Chief Executive Officer. The Proposed By-Laws would no longer require that
the President and Chief Executive Officer be the same individual. In addition,
the Proposed By-Laws would add detail regarding the duties of the Company's
Chief Executive Officer. If the proposed By-Laws are approved, the Board of
Directors intends, immediately following the meeting, to elect Mr. Brian Keane
as the Chief Executive Officer of the Company and Mr. John Keane, Jr., as the
President of the Company.
THE BOARD OF DIRECTORS BELIEVES THAT THE APPROVAL OF THE PROPOSED BY-LAWS IS
IN THE BEST INTERESTS OF THE COMPANY AND ITS STOCKHOLDERS AND RECOMMENDS A
VOTE FOR THIS PROPOSAL.
8
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, (ii) the
four most highly compensated executive officers of the Company who were
serving as executive officers at the end of 1999, and (iii) one other person
who served as an executive officer during 1999 and would have been among the
four most highly compensated executive officers but for the fact that the
individual was not serving as an executive officer at the end of 1999.
SUMMARY COMPENSATION TABLE
Annual Compensation Long-Term Compensation
------------------------------------ -------------------------------
Awards Payouts
----------------------- -------
Number of
Restricted Securities
Name and Other Annual Stock Underlying LTIP All Other
Principal Salary Bonus Compensation Awards Options/SARs Payouts Compensation
Position Year ($) ($) ($) ($)(1) (1) ($) ($)(2)
--------- ---- ------- ------- ------------ ---------- ------------ ------- ------------
John F. Keane........... 1999 403,399 133,000(4) -- -- 80,000 -- 2,000
Chairman of the 1998 428,961 -- -- -- -- -- 2,000
Board of Directors(3) 1997 390,446 -- -- -- -- -- 2,000
Brian T. Keane.......... 1999 325,881 -- -- -- 130,000 -- 2,000
Chief Executive 1998 308,498 105,000 -- -- 30,000 -- 2,000
Officer(3) 1997 210,758 60,000 -- -- 10,000 -- 2,000
John F. Keane, Jr. ..... 1999 325,731 -- -- -- 130,000 -- 2,000
President(3) 1998 308,472 105,000 -- -- 30,000 -- 1,412
1997 209,598 60,000 -- -- 10,000 -- --
Raymond W. Paris........ 1999 249,798 -- -- 70,009 11,500 -- 2,000
Senior Vice President-- 1998 255,790 80,000 -- -- 5,000 -- 2,000
Healthcare Services 1997 237,052 25,000 -- -- 8,000 -- 2,000
Division
Renee Southard.......... 1999 181,158 -- -- 8,334 20,000 -- 2,000
Senior Vice President-- 1998 171,944 35,000 -- -- -- -- 1,667
Human Resources 1997 122,832 20,000 -- -- -- -- 2,000
Edward Longo(5)......... 1999 215,211 -- -- -- 35,000 -- 2,000
Senior Vice President-- 1998 347,934 141,700 -- -- 20,000 -- 2,000
Information Services 1997 300,039 75,000 -- -- 16,000 -- 2,000
Division
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(1) Options become exercisable in three or four equal installments commencing
on the first or second anniversary of the date of grant.
(2) "All Other Compensation" consists of contributions to the Company's 401(k)
Plan on behalf of each of the named executive officers.
(3) In November, 1999, the Company announced the promotion of Mr. Brian Keane
to the position of Chief Executive Officer and Mr. John Keane, Jr. to the
position of President. These promotions are subject to approval of the
proposed amendment and restatement of the Company's Amended and Restated
By-Laws at the meeting. Pending such approval, Mr. John Keane continues to
serve formally as Chief Executive Officer and President and Mr. Brian
Keane and Mr. John Keane, Jr. continue to serve formally as Executive Vice
Presidents and members of the Office of the President of the Company.
(4) Represents a bonus paid to Mr. John Keane in 1999 for performance in 1998.
(5) Mr. Longo served as an executive officer of the Company until his
resignation on July 16, 1999.
9
Option Grants During 1999
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 1999:
Individual Grants Potential Realizable
---------------------------------------------- Value at Assumed
Percent Annual Rates of
Number of of Total Stock Price
Securities Options/SARs Exercise or Appreciation
Underlying Granted to Base Price for Option Term(2)
Options Employees in Per Share Expiration ---------------------
Executive Officer Granted(1) Fiscal Year $/Sh Date 5% ($) 10% ($)
- ----------------- ---------- ------------ ----------- ---------- --------- -----------
John F. Keane........... 30,000 1.9% $18.50 4/6/04 153,300 338,700
50,000 3.2% $18.00 4/7/04 248,500 564,500
OPTIONS/SAR GRANTS IN LAST FISCAL YEAR
Brian T. Keane.......... 30,000 1.9% $18.50 4/6/04 153,300 338,700
100,000 6.32% $18.00 4/7/04 497,000 1,099,000
John F. Keane, Jr. ..... 30,000 1.9% $18.50 4/6/04 153,300 338,700
100,000 6.32% $18.00 4/7/04 497,000 1,099,000
Raymond W. Paris........ 4,000 .25% $18.50 4/6/04 20,440 45,160
7,500 .47% $18.00 4/7/04 37,275 82,425
Renee Southard.......... 5,000 .32% $18.50 4/6/04 25,550 56,450
15,000 .95% $18.00 4/7/04 74,550 164,850
Edward Longo(3)......... 10,000 .63% $18.50 4/6/04 51,100 112,900
25,000 1.6% $18.00 4/7/04 124,250 274,750
- --------
(1) Options become exercisable in four equal installments commencing on the
first anniversary of the date of grant.
(2) Amounts represent hypothetical gains that could be achieved for the
options if exercised at the end of the option terms. These gains are based
on assumed rates of stock appreciation of 5% and 10% compounded annually
from the date the respective options were granted. Actual gains, if any,
on stock option exercises will depend on the future performance of the
Common Stock and the date on which the options are exercised.
(3) Mr. Longo served as an executive officer of the Company until his
resignation on July 16, 1999.
10
Option Exercises During 1999 and Year End Option Values
The following table sets forth the aggregate dollar value of all options
exercised and the total number of unexercised options held, on December 31,
1999, by each of the named executive officers:
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
Number of Securities Value of Unexercised
Underlying Unexercised In-The-Money
Options/SARs at Options/SARs at
Number of Fiscal Year End Fiscal Year End($)
Shares Acquired Value -------------------------- -----------------------------
Executive Officer on Exercise Realized($)(1) Exercisable/Unexerciseable Exercisable/Unexerciseable(2)
- ----------------- --------------- -------------- -------------------------- -----------------------------
John F. Keane........... -- -- 0/ 80,000 0/1,085,000
Brian T. Keane.......... 15,000 529,650 44,168/165,832 930,195/2,055,405
John F. Keane, Jr. ..... 15,278 396,543 9,284/165,830 41,475/2,055,354
Raymond W. Paris........ -- -- 53,254/ 27,246 1,344,091/ 416,714
Renee Southard.......... -- -- 21,875/ 33,625 504,980/ 442,260
Edward Longo(3)......... 40,002 768,754 0/0 0/0
- --------
(1) Value is calculated based on the difference between the option exercise
price and the closing market price of the Common Stock 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 as reported by the
American Stock Exchange on December 31, 1999 (the last day of trading in
1999) was $31.75. Value is calculated on the basis of the difference
between the option exercise price and $31.75, multiplied by the number of
shares of Common Stock underlying the option.
(3) Mr. Longo served as an executive officer of the Company until his
resignation on July 16, 1999.
Executive Employment Agreement
The Company is a party to an agreement with John J. Leahy relating to Mr.
Leahy's employment as the Company's Senior Vice President and Chief Financial
Officer. Pursuant to the agreement, Mr. Leahy is entitled to an annual salary
of $300,000. The agreement also provides for the participation of Mr. Leahy in
the Company's Senior Management Bonus Plan, at a level of up to 35% of Mr.
Leahy's salary based upon achievement of established annual criteria, and the
grant to Mr. Leahy of options to purchase 45,000 shares of the Company's
common stock under the 1998 Stock Incentive Plan. Under the agreement, if the
Company terminates Mr. Leahy's employment during his first year of employment
other than "for cause," the Company must pay Mr. Leahy one year's salary on
termination.
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, 1999.
11
Compensation Committee Interlocks and Insider Participation
The Compensation Committee is comprised of Messrs. Hindle and Shafto and Dr.
Rockart. 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, which are
intended to align the interest of such individual with the Company's long-term
success as measured by the Company's share price and book value per share.
The compensation of the Company's Chief Executive Officer is determined
annually by the Compensation Committee. The Chief Executive Officer's salary
in 1999 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 may be more modest
than that paid to comparable industry executives.
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, enacted in
1993, generally disallows a tax deduction to public companies for compensation
over $1 million paid to the corporation's Chief Executive Officer and four
other most highly compensated executive officers. Qualifying performance-based
compensation will not be subject to the deduction limit if certain
requirements are met.
Winston R. Hindle, Jr. John F. Rockart Robert A. Shafto
12
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, 1999 with the cumulative total return on (i) the Standard &
Poor's 500 Composite Index, (ii) a peer group index selected by the Company
which includes five publicly traded companies within the Company's industry
(the "New Peer Group"), and (iii) a peer group index previously used by the
Company (the "Former Peer Group"). The Company has changed its peer group from
the Former Peer Group because the Company believes that the inclusion of
Analysts International Corp., Computer Horizons Corp. and Computer Task Group
in the Company's stock performance chart no longer accurately reflects the
Company's business focus which is now concentrated more heavily on new
technology development and internet-related business solutions. In addition,
due to the Company's recent growth, the Company believes that the composition
of the Former Peer Group no longer accurately reflected comparable companies
based on the Company's size. The comparison assumes $100 was invested on
December 31, 1993 in the Company's Common Stock and in each of the foregoing
indices and assumes reinvestment of dividends.
[GRAPH APPEARS HERE]
1994 1995 1996 1997 1998 1999
-------------------------------------------------
Keane, Inc. 100 93.16 267.37 680.21 672.63 541.05
New Peer Group/(1)/ 100 139.18 126.76 131.67 159.33 231.79
S&P Composite 100 137.58 169.17 225.61 290.09 351.13
Former Peer Group/(2)/ 100 149.63 190.68 219.78 281.05 348.54
- --------
(1) The New Peer Group index reflects the stock performance of the following
companies: American Management Systems, Inc., Computer Sciences Corp.,
Electronic Data Systems Corporation, Sapient Corporation and Cambridge
Technology Partners Massachusetts Inc.
(2) The Former Peer Group index reflects the stock performance of the
following companies: American Management Systems, Inc., Analysts
International Corp., Computer Horizons Corp., Computer Sciences Corp. and
Computer Task Group, Inc.
13
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 in Boston, Massachusetts. The Company
now leases approximately 88% of this building and the remaining 12% is
occupied by other tenants. John F. Keane, Chief Executive Officer, President
and Chairman of the Board of the Company, Wallace A. Cataldo, the Vice
President-Finance and Administration of the Company until August 13, 2000, 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.
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, 2000. If the
stockholders do not ratify the selection of Ernst & Young, the Board of
Directors will reconsider the matter.
On April 2, 1999, the Company dismissed PricewaterhouseCoopers LLP ("PWC")
as its independent auditors and engaged Ernst & Young to fill such position.
The decision to change accountants was recommended by the Audit Committee and
approved by the Board of Directors of the Company. None of the reports of PWC
on the financial statements of the Company for either of the past two fiscal
years contained an adverse opinion or a disclaimer of opinion, or was
qualified or modified as to uncertainty, audit scope or accounting principles.
During the Company's two most recent fiscal years and the subsequent interim
period immediately preceding the date of the dismissal of PWC, the Company had
no disagreements with PWC on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedure, which
disagreement(s), if not resolved to the satisfaction of PWC, would have caused
PWC to make reference to the subject matter of the disagreement(s) in
connection with its reports on the financial statements of the Company. None
of the reportable events listed in Item 304(a)(1)(v) of Regulation S-K under
the Exchange Act occurred with respect to the Company's two most recent fiscal
years or the subsequent interim period preceding the dismissal of PWC.
Prior to making the decision to retain Ernst & Young, the Company had
consulted with Ernst & Young concerning certain tax matters. However, neither
the Company nor anyone on its behalf consulted Ernst & Young regarding the
application of accounting principles to a specific completed or contemplated
transaction, or the type of audit opinion that might be rendered on the
Company's financial statements, and no written or oral advice concerning the
same was provided to the Company that was an important factor considered by
the Company in reaching a decision as to any accounting, auditing or financial
reporting issue.
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.
14
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 2001 Annual
Meeting of Stockholders must be received by the Company at its principal
office in Boston, Massachusetts not later than December 18, 2000 for inclusion
in the proxy statement for that meeting.
By order of the Board of Directors,
Hal J. Leibowitz,
Clerk
April 14, 2000
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.
15
APPENDIX I
SECOND AMENDED AND RESTATED
BY-LAWS
OF
KEANE, INC.
ARTICLE 1--Stockholders
1.1 Place of Meetings. All meetings of stockholders shall be held within the
Commonwealth of Massachusetts unless the Articles of Organization permit the
holding of stockholders' meetings outside Massachusetts, in which event such
meetings may be held either within or without Massachusetts. Meetings of
stockholders shall be held at the principal office of the corporation unless a
different place is fixed by the Board of Directors, the Chairman of the Board,
the Chief Executive Officer or the President and stated in the notice of the
meeting.
1.2 Annual Meeting. The annual meeting of stockholders shall be held within
six months after the end of each fiscal year of the corporation on a date to
be fixed by the Board of Directors, the Chairman of the Board, the Chief
Executive Officer or the President (which date shall not be a legal holiday in
the place where the meeting is to be held) at the time and place to be fixed
by the Board of Directors, the Chairman of the Board, the Chief Executive
Officer or the President and stated in the notice of the meeting. The purposes
for which the annual meeting is to be held, in addition to those prescribed by
law, by the Articles of Organization or by these By-Laws, may be specified by
the Board of Directors, the Chairman of the Board, the Chief Executive Officer
or the President. If no annual meeting is held in accordance with the
foregoing provisions, a special meeting may be held in lieu of the annual
meeting, and any action taken at that special meeting shall have the same
effect as if it had been taken at the annual meeting, and in such case all
references in these By-Laws to the annual meeting of stockholders shall be
deemed to refer to such special meeting.
1.3 Special Meetings. Special meetings of stockholders may be called by the
President or by the Board of Directors. In addition, upon written application
of one or more stockholders who are entitled to vote and who hold at least the
Required Percentage (as defined below) of the capital stock entitled to vote
at the meeting, special meetings shall be called by the Clerk, or in case of
the death, absence, incapacity or refusal of the Clerk, by any other officer.
For purposes of this Section 1.3, the "Required Percentage" shall be (i) 10%
at any time at which the corporation shall not have a class of voting stock
registered under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and (ii) 50% or such lesser percentage as shall constitute
the maximum percentage permitted by law for this purpose at any time at which
the corporation shall have a class of voting stock registered under the
Exchange Act.
Any request for a call of a special meeting of stockholders (a "Call") by
the holders of the Required Percentage of the capital stock entitled to vote
at the meeting (the "Voting Stock") shall be governed by and subject to the
following:
(a) Any stockholder of record seeking to solicit requests for a Call
pursuant to this Section 1.3 shall so notify the Clerk of the corporation
in writing, and such written notification shall set forth the reason or
reasons for the Call and the purpose or purposes of such special meeting.
1
(b) No solicitation of stockholder requests for a Call (a "Call
Solicitation") may be commenced (i) before the Call Request Record Date (as
defined in paragraph (c) of this Section 1.3), or (ii) during the period of
90 days following the most recent meeting of the stockholders of the
corporation.
(c) In order that the corporation may determine the stockholders entitled
to request a Call, the Board of Directors of the corporation shall fix a
record date (the "Call Request Record Date"). Any stockholder of record
seeking to solicit stockholder requests for a Call shall, with delivery to
the corporation of the written information specified in paragraph (a) of
this Section 1.3, request in writing that the Board of Directors fix the
Call Request Record Date. The Board of Directors shall, within 10 days
after the date on which such request is received, adopt a resolution fixing
the Call Request Record Date, and such Call Request Record Date shall be
not more than 10 days after the date upon which such resolution is adopted
by the Board of Directors.
(d) All requests for a Call and revocations thereof shall be delivered to
the Clerk of the corporation no later than the 30th day (the "Delivery
Date") after the Call Request Record Date.
(e) Any stockholder may revoke a prior request for a Call or opposition
to a Call by an instrument in writing delivered to the Clerk of the
corporation prior to the Delivery Date.
(f) Promptly after the Delivery Date, requests for a Call and revocations
thereof shall be counted and verified by an independent party selected by
the corporation.
(g) If, in response to any Call Solicitation, the holders of record of
the Required Percentage of the Voting Stock as of the Call Request Record
Date submit valid and unrevoked requests for a Call no later than the
Delivery Date, the Board of Directors of the corporation shall fix a record
date pursuant to Section 4.4 hereof and a date for the special meeting,
provided that the date to be fixed for such meeting shall be no earlier
than 60 days or later than 90 days after the Delivery Date, and provided
further that the Board of Directors shall not be obligated to fix a meeting
date or to hold any meeting of stockholders within 60 days of the next
scheduled meeting of the stockholders of the corporation.
(h) In the absence of a quorum at any special meeting called pursuant to
a Call Solicitation, such special meeting may be postponed or adjourned
from time to time only by the officer of the corporation entitled to
preside at such meeting.
(i) If a Call Solicitation does not receive the support of the holders of
record of the Required Percentage of the Voting Stock, no subsequent Call
may be made or solicited by any stockholder during a period of 90 days
after the Delivery Date.
1.4 Notice of Meetings. A written notice of each meeting of stockholders,
stating the place, date and hour thereof, and the purposes for which the
meeting is to be held, shall be given by the Clerk, Assistant Clerk or other
person calling the meeting at least seven days before the meeting to each
stockholder entitled to vote at the meeting and to each stockholder who by
law, by the Articles of Organization or by these By-Laws is entitled to such
notice, by leaving such notice with him or at his residence or usual place of
business, or by mailing it postage prepaid and addressed to him at his address
as it appears in the records of the corporation. Whenever any notice is
required to be given to a stockholder by law, by the Articles of Organization
or by these By-Laws, no such notice need be given if a written waiver of
notice, executed before or after the meeting by the stockholder or his
authorized attorney, is filed with the records of the meeting.
1.5 Quorum. Unless the Articles of Organization otherwise provide, the
holders of a majority of the number of shares of the stock issued, outstanding
and entitled to vote on any matter shall constitute a quorum with respect to
that matter, except that if two or more classes of stock are outstanding and
entitled to vote as
2
separate classes, then in the case of each such class a quorum shall consist
of the holders of a majority of the number of shares of the stock of that
class issued, outstanding and entitled to vote. Shares owned directly or
indirectly by the corporation shall not be counted in determining the total
number of shares outstanding for this purpose.
1.6 Adjournments. Except as provided in Section 1.3 hereof, any meeting of
stockholders may be postponed or adjourned to any other time and to any other
place at which a meeting of stockholders may be held under these By-Laws by
the stockholders present or represented at the meeting, although less than a
quorum, or by any officer entitled to preside or to act as clerk of such
meeting, if no stockholder is present. It shall not be necessary to notify any
stockholder of any postponement or adjournment. Any business which could have
been transacted at any meeting of the stockholders as originally called may be
transacted at any resumption or adjournment of the meeting.
1.7 Voting and Proxies. Each stockholder shall have one vote for each share
of stock entitled to vote held of record by such stockholder and a
proportionate vote for each fractional share so held, unless otherwise
provided by the Articles of Organization. Stockholders may vote either in
person or by a proxy executed in writing (or in such other manner permitted by
law) dated not more than six months before the meeting named in the proxy.
Proxies shall be filed, by any form of transmission permitted by law, with the
clerk of the meeting, or of any adjourned meeting, before being voted. Except
as otherwise limited by its terms, a proxy shall entitle the persons named in
the proxy to vote at any adjournment of such meeting, but shall not be valid
after final adjournment of such meeting. A proxy with respect to stock held in
the name of two or more persons shall be valid if executed by any one of them,
unless at or prior to exercise of the proxy the corporation receives a
specific written notice to the contrary from any one of them. A proxy
purported to be executed by or on behalf of a stockholder shall be deemed
valid unless challenged at or prior to its exercise.
1.8 Action at Meeting. When a quorum is present at any meeting, the holders
of shares of stock representing a majority of the votes cast on a matter (or
if there are two or more classes of stock entitled to vote as separate
classes, then in the case of each such class, the holders of shares of stock
of that class representing a majority of the votes cast on a matter), shall
decide any matter to be voted on by the stockholders, except when a different
vote is required by law, the Articles of Organization or these By-Laws. When a
quorum is present at any meeting, any election by stockholders shall be
determined by a plurality of the votes cast on the election. No ballot shall
be required for such election unless requested by a stockholder present or
represented at the meeting and entitled to vote in the election. The
corporation shall not directly or indirectly vote any share of its own stock.
1.9 Action without Meeting. Any action required or permitted to be taken at
any meeting of the stockholders may be taken without a meeting if all
stockholders entitled to vote on the matter consent to the action in writing
and the written consents are filed with the records of the meetings of
stockholders. Each such consent shall be treated for all purposes as a vote at
a meeting.
1.10 Nomination of Directors. Only persons who are nominated in accordance
with the following procedures shall be eligible for election as directors.
Nomination for election to the board of directors of the corporation at an
annual meeting of stockholders may be made by the board of directors or by any
stockholder of the corporation entitled to vote for the election of directors
at such meeting who complies with the notice procedures set forth in this
Section 1.10. Such nominations, other than those made by or on behalf of the
board of directors, shall be made by notice, in writing delivered or mailed by
first class United States mail, postage prepaid, to the Clerk of the
corporation, and received not less than 45 days nor more 60 days prior to the
3
anniversary of the date on which the corporation first mailed its proxy
materials for the prior year's annual meeting of stockholders; provided,
however, that if the date of such annual meeting is more than 30 days before
or after the anniversary of the prior year's annual meeting, such nomination
shall have been mailed or delivered to the Clerk not later than the close of
business on the later of (i) the date 60 days prior to the date of such
meeting or (ii) the 10th day following the date on which the notice of the
meeting was mailed or public disclosure was made, whichever occurs first. Such
notice shall set forth (a) as to each proposed nominee (i) the name, age,
business address and, if known, residence address of each such nominee, (ii)
the principal occupation or employment of each such nominee, (iii) the number
of shares of stock of the corporation which are beneficially owned by each
such nominee, and (iv) any other information concerning the nominee that must
be disclosed as to nominees in proxy solicitations pursuant to Regulation 14a
under the Securities Exchange Act of 1934, as amended (including such person's
written consent to be named as a nominee and to serve as a director if
elected); (b) as to the stockholder giving the notice (i) the name and
address, as they appear on the corporation's books, of such stockholder, and
(ii) the class and number of shares of the corporation which are beneficially
owned by such stockholder; and (c) as to the beneficial owner, if any, on
whose behalf the nomination is made, (i) the name and address of such person,
and (ii) the class and number of shares of the corporation which are
beneficially owned by such person.
The officer presiding at the meeting of stockholders may, if the facts
warrant, determine and declare to the meeting that a nomination was not made
in accordance with the foregoing procedure, and if he should so determine, he
shall so declare to the meeting and the defective nomination shall be
disregarded.
Nothing in the foregoing provisions shall obligate the corporation or the
board of directors to include in any proxy statement or other stockholder
communication distributed on behalf of the corporation or the board of
directors information with respect to any nominee for directors submitted by a
stockholder.
1.11 Notice of Business at Meetings. At a meeting of the stockholders, only
such business shall be conducted as shall have been (a) specified in the
notice of meeting (or any supplement thereto), (b) brought before the meeting
by or at the direction of the Board of Directors, or (c) otherwise properly
brought before the meeting by a stockholder. For business to be properly
brought before an annual meeting by a stockholder, if such business relates to
the election of directors of the corporation, the procedures in Section 1.10
must be complied with. For business to be properly brought before a special
meeting by a stockholder, and for business other than the election of
directors to be properly brought before an annual meeting by a stockholder,
the stockholder must have given timely notice thereof in writing to the Clerk
of the corporation. To be timely with respect to a special meeting, a
stockholder's notice must be delivered to or mailed and received at the
principal executive offices of the corporation not less than 60 days nor more
than 90 days prior to the special meeting; provided, however, that if less
than 70 days' notice or prior public disclosure of the date of the special
meeting is given or made to stockholders, notice by the stockholder to be
timely must be delivered or mailed to the Clerk not later than the close of
business on the 10th day following the date on which the notice of the special
meeting was mailed or public disclosure was made, whichever occurs first. To
be timely with respect to an annual meeting, a stockholder's notice must be
delivered to or mailed and received at the principal executive offices of the
corporation not less than 45 days nor more 60 days prior to the anniversary of
the date on which the corporation first mailed its proxy materials for the
prior year's annual meeting of stockholders; provided, however, that if the
date of such annual meeting is more than 30 days before or after the
anniversary of the prior year's annual meeting, such stockholder's notice
shall have been mailed or delivered to the Clerk not later than the close of
business on the later of (i) the date 60 days prior to the date of such
meeting or (ii) the 10th day following the date on which the notice of the
meeting was mailed or public disclosure was made, whichever
4
occurs first. A stockholder's notice to the Clerk shall set forth as to each
matter the stockholder proposes to bring before the meeting (a) a brief
description of the business desired to be brought before the meeting and the
reasons for conducting such business at the meeting, (b) the name and address,
as they appear on the corporation's books, of the stockholder proposing such
business, and the name and address of the beneficial owner, if any, on whose
behalf the proposal is made, (c) the class and number of shares of the
corporation which are beneficially owned by such stockholder and such person,
if any, and (d) any material interest of the stockholder, and such person, if
any, in such business. Notwithstanding anything in these By-Laws to the
contrary, no business shall be conducted at any meeting of stockholders except
in accordance with the procedures set forth in this Section 1.11 and except
that any stockholder proposal which complies with Rule 14a-8 of the proxy
rules (or any successor provision) promulgated under the Securities Exchange
Act of 1934, as amended, and is to be included in the corporation's proxy
statement for an annual meeting of stockholders shall be deemed to comply with
the requirements of this Section 1.11.
The officer presiding at a meeting of stockholders shall, if the facts
warrant, determine and declare to the meeting that business was not properly
brought before the meeting in accordance with the provisions of this Section
1.11, and if he should so determine, he shall so declare to the meeting that
any such business not properly brought before the meeting shall not be
transacted.
ARTICLE 2--Directors
2.1 Powers. The business of the corporation shall be managed by a Board of
Directors, who may exercise all the powers of the corporation except as
otherwise provided by law, by the Articles of Organization or by these By-
Laws. In the event of a vacancy in the Board of Directors, the remaining
Directors, except as otherwise provided by law, may exercise the powers of the
full Board until the vacancy is filled.
2.2 Number, Election and Qualification. The number of Directors which shall
constitute the whole Board of Directors shall be determined by vote of the
stockholders or the Board of Directors, but shall consist of not less than
three Directors (except that whenever there shall be only two stockholders,
the number of Directors shall be not less than two, and whenever there shall
be only one stockholder or prior to the issuance of any stock, there shall be
at least one Director). The number of Directors may be decreased at any time
and from time to time either by the stockholders or by a majority of the
Directors then in office, but only to eliminate vacancies existing by reason
of the death, resignation, removal or expiration of the term of one or more
Directors. The Directors shall be elected at the annual meeting of
stockholders by such stockholders as have the right to vote on such election.
No Director need be a stockholder of the corporation.
2.3 Enlargement of the Board. The number of Directors may be increased at
any time and from time to time by the stockholders or by a majority of the
Directors then in office.
2.4 Tenure. Each Director shall hold office until the next annual meeting of
stockholders and until his successor is elected and qualified, or until his
earlier death, resignation or removal.
2.5 Vacancies. Unless and until filled by the stockholders, any vacancy in
the Board of Directors, however occurring, including a vacancy resulting from
an enlargement of the Board, may be filled by vote of a majority of the
Directors present at any meeting of Directors at which a quorum is present.
Each such successor shall hold office for the unexpired term of his
predecessor and until his successor is chosen and qualified or until his
earlier death, resignation or removal.
5
2.6 Resignation. Any Director may resign by delivering his written
resignation to the corporation at its principal office or to the Chairman of
the Board, the Chief Executive Officer, the President, the Clerk or the
Secretary. Such resignation shall be effective upon receipt unless it is
specified to be effective at some other time or upon the happening of some
other event.
2.7 Removal. A Director may be removed from office with or without cause by
vote of the holders of a majority of the shares entitled to vote in the
election of Directors. Moreover, the Directors elected by the holders of a
particular class or series of stock may be removed from office with or without
cause only by vote of the holders of a majority of the outstanding shares of
such class or series. In addition, a Director may be removed from office for
cause by vote of a majority of the Directors then in office. A director may be
removed for cause only after a reasonable notice and opportunity to be heard
before the body proposing to remove him.
2.8 Regular Meetings. Regular meetings of the Directors may be held without
call or notice at such places, within or without Massachusetts, and at such
times as the Directors may from time to time determine, provided that any
Director who is absent when such determination is made shall be given notice
of the determination. A regular meeting of the Directors may be held without a
call or notice immediately after and at the same place as the annual meeting
of stockholders.
2.9 Special Meetings. Special meetings of the Directors may be held at any
time and place, within or without Massachusetts, designated in a call by the
Chairman of the Board, the Chief Executive Officer, the President, the
Treasurer, two or more Directors or by one Director in the event that there is
only a single Director in office.
2.10 Meetings by Telephone Conference Calls. Directors or members of any
committee designated by the Directors may participate in a meeting of the
Directors or such committee by means of a conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other at the same time and participation by such means
shall constitute presence in person at a meeting.
2.11 Notice of Special Meetings. Notice of any special meeting of the
Directors shall be given to each Director by the Clerk or the Secretary or by
the officer or one of the Directors calling the meeting. Notice shall be duly
given to each Director (i) by notice given to such Director in person or by
telephone at least 48 hours in advance of the meeting, (ii) by sending a
telegram, telecopy or telex, or by delivering written notice by hand, to his
last known business or home address at least 48 hours in advance of the
meeting, or (iii) by mailing written notice to his last known business or home
address at least 72 hours in advance of the meeting. Notice need not be given
to any Director if a written waiver of notice, executed by him before or after
the meeting, is filed with the records of the meeting, or to any Director who
attends the meeting without protesting prior to the meeting or at its
commencement the lack of notice to him. A notice or waiver of notice of a
Directors' meeting need not specify the purposes of the meeting. If notice is
given in person or by telephone, an affidavit of the Clerk, the Secretary, the
officer or Director who gives such notice that the notice has been duly given
shall, in the absence of fraud, be conclusive evidence that such notice was
duly given.
2.12 Quorum. At any meeting of the Board of Directors, a majority of the
Directors then in office shall constitute a quorum. Less than a quorum may
adjourn any meeting from time to time without further notice.
2.13 Action at Meeting. At any meeting of the Board of Directors at which a
quorum is present, the vote of a majority of those present shall be sufficient
to take any action, unless a different vote is specified by law, by the
Articles of Organization or by these By-Laws.
6
2.14 Action by Consent. Any action required or permitted to be taken at any
meeting of the Board of Directors may be taken without a meeting if all the
Directors consent to the action in writing and the written consents are filed
with the records of the Directors' meetings. Each such consent shall be
treated for all purposes as a vote at a meeting.
2.15 Committees. The Board of Directors may, by vote of a majority of the
Directors then in office, elect from their number an executive committee or
other committees and may by like vote delegate to committees so elected some
or all of their powers to the extent permitted by law. Except as the Board of
Directors may otherwise determine, any such committee may make rules for the
conduct of its business, but unless otherwise provided by the Directors or in
such rules, its business shall be conducted as nearly as possible in the same
manner as is provided by these By-Laws for the Directors. The Board of
Directors shall have the power at any time to fill vacancies in any such
committee, to change its membership or to discharge the committee.
2.16 Compensation of Directors. Directors may be paid such compensation for
their services and receive such reimbursement for expenses of attendance at
meetings as the Board of Directors may from time to time determine. No such
payment shall preclude any Director from serving the corporation in any other
capacity and receiving compensation therefor.
ARTICLE 3--Officers
3.1 Enumeration. The officers of the corporation shall consist of a
President, a Treasurer, a Clerk and such other officers with such other titles
as the Board of Directors may determine, including, but not limited to, a
Chairman of the Board, a Vice Chairman of the Board, a Chief Executive
Officer, a Secretary and one or more Vice Presidents, Assistant Treasurers,
Assistant Clerks and Assistant Secretaries.
3.2 Election. The President, the Treasurer and the Clerk shall be elected
annually by the Board of Directors at their first meeting following the annual
meeting of stockholders. Other officers may be chosen or appointed by the
Board of Directors at such meeting or at any other meeting.
3.3 Qualification. No officer need be a director or stockholder. Any two or
more offices may be held by the same person. The Clerk shall be a resident of
Massachusetts unless the corporation has a resident agent appointed for the
purpose of service of process. Any officer may be required by the Directors to
give bond for the faithful performance of his duties to the corporation in
such amount and with such sureties as the Directors may determine. The
premiums for such bonds may be paid by the corporation.
3.4 Tenure. Except as otherwise provided by law, by the Articles of
Organization or by these By-Laws, the President, the Treasurer and the Clerk
shall hold office until the first meeting of the Directors following the next
annual meeting of stockholders and until their respective successors are
chosen and qualified; and all other officers shall hold office until the first
meeting of the Directors following the annual meeting of stockholders, unless
a different term is specified in the vote choosing or appointing them, or
until his earlier death, resignation or removal.
3.5 Resignation and Removal. Any officer may resign by delivering his
written resignation to the corporation at its principal office or to the
Chairman of the Board, the Chief Executive Officer, the President, the Clerk
or the Secretary. Such resignation shall be effective upon receipt unless it
is specified to be effective at some other time or upon the happening of some
other event. Any officer may be removed at any time, with or without cause, by
vote of a majority of the entire number of Directors then in office.
7
Except as the Board of Directors may otherwise determine, no officer who
resigns or is removed shall have any right to any compensation as an officer
for any period following his resignation or removal, or any right to damages
on account of such removal, whether his compensation be by the month or the
year or otherwise, unless such compensation is expressly provided in a duly
authorized written agreement with the corporation.
3.6 Vacancies. The Board of Directors may fill any vacancy occurring in any
office for any reason and may, in its discretion, leave unfilled for such
period as it may determine any offices other than those of the President, the
Treasurer and the Clerk. Each such successor shall hold office for the
unexpired term of his predecessor and until his successor is chosen and
qualified, or until he sooner dies, resigns or is removed.
3.7 Chairman of the Board and Vice-Chairman of the Board. The Board of
Directors may appoint a Chairman of the Board and may designate him as Chief
Executive Officer. If the Board of Directors appoints a Chairman of the Board,
he shall perform such duties and possess such powers as the Board of Directors
may from time to time prescribe. If the Board of Directors appoints a Vice-
Chairman of the Board, he shall, in the absence or disability of the Chairman
of the Board, perform the duties and exercise the powers of the Chairman of
the Board and shall perform such other duties and possess such other powers as
may from time to time be vested in him by the Board of Directors.
3.8 Chief Executive Officer. The Board of Directors may appoint a Chief
Executive Officer. If the Board of Directors appoints a Chief Executive
Officer, he shall, subject to the direction of the Board of Directors, have
general charge and supervision of the business of the corporation. Unless
otherwise provided by the Board of Directors, if the Board of Directors
appoints a Chief Executive Officer, he shall preside at all meetings of the
stockholders and, if he is a Director, at all meetings of the Board of
Directors. The Chief Executive Officer shall perform such other duties and
shall possess such other powers as the Board of Directors may from time to
time prescribe.
3.9 President. Unless the Board of Directors has designated the Chairman of
the Board or another officer as Chief Executive Officer, the President shall
be the Chief Executive Officer of the corporation. The President shall perform
such duties and shall possess such other powers as the Board of Directors may
from time to time prescribe. It shall be his duty, and he shall have the
power, to see that all orders and resolutions of the directors are carried
into effect.
3.10 Vice Presidents. Any Vice President shall perform such duties and
possess such powers as the Board of Directors, the Chief Executive Officer or
the President may from time to time prescribe. In the event of the absence,
inability or refusal to act of the Chief Executive Officer or the President,
the Vice President (or if there shall be more than one, the Vice Presidents in
the order determined by the Board of Directors) shall perform the duties of
the President and when so performing shall have all the powers of and be
subject to all the restrictions upon the President. The Board of Directors may
assign to any Vice President the title of Executive Vice President, Senior
Vice President or any other title selected by the Board of Directors.
3.11 Treasurer and Assistant Treasurers. The Treasurer shall perform such
duties and shall have such powers as may from time to time be assigned to him
by the Board of Directors, the Chief Executive Officer or the President. In
addition, the Treasurer shall perform such duties and have such powers as are
incident to the office of treasurer, including without limitation the duty and
power to keep and be responsible for all funds and securities of the
corporation, to deposit funds of the corporation in depositories selected in
accordance with these By-Laws, to disburse such funds as ordered by the Board
of Directors, to make proper accounts of such funds, and to render as required
by the Board of Directors statements of all such transactions and of the
financial condition of the corporation.
8
The Assistant Treasurers shall perform such duties and possess such powers
as the Board of Directors, the Chief Executive Officer, the President or the
Treasurer may from time to time prescribe. In the event of the absence,
inability or refusal to act of the Treasurer, the Assistant Treasurer (or if
there shall be more than one, the Assistant Treasurers in the order determined
by the Board of Directors) shall perform the duties and exercise the powers of
the Treasurer.
3.12 Clerk and Assistant Clerks. The Clerk shall perform such duties and
shall possess such powers as the Board of Directors, the Chief Executive
Officer or the President may from time to time prescribe. In addition, the
Clerk shall perform such duties and have such powers as are incident to the
office of clerk, including without limitation the duty and power to give
notices of all meetings of stockholders and special meetings of the Board of
Directors, to attend all meetings of stockholders and the Board of Directors
and keep a record of the proceedings, to maintain a stock ledger and prepare
lists of stockholders and their addresses as required, to be custodian of
corporate records and the corporate seal and to affix and attest to the same
on documents.
Any Assistant Clerk shall perform such duties and possess such powers as the
Board of Directors, the Chief Executive Officer, the President or the Clerk
may from time to time prescribe. In the event of the absence, inability or
refusal to act of the Clerk, the Assistant Clerk (or if there shall be more
than one, the Assistant Clerks in the order determined by the Board of
Directors) shall perform the duties and exercise the powers of the Clerk.
In the absence of the Clerk or any Assistant Clerk at any meeting of
stockholders or Directors, the person presiding at meeting shall designate a
temporary clerk to keep a record of the meeting.
3.13 Secretary and Assistant Secretaries. If a Secretary is appointed, he
shall attend all meetings of the Board of Directors and shall keep a record of
the meetings of the Directors. He shall, when required, notify the Directors
of their meetings, and shall possess such other powers and shall perform such
other duties as the Board of Directors, the Chief Executive Officer or the
President may from time to time prescribe.
Any Assistant Secretary shall perform such duties and possess such powers as
the Board of Directors, the Chief Executive Officer, the President or the
Secretary may from time to time prescribe. In the event of the absence,
inability or refusal to act of the Secretary, the Assistant Secretary (or if
there shall be more than one, the Assistant Secretaries in the order
determined by the Board of Directors) shall perform the duties and exercise
the powers of the Secretary.
3.14 Salaries. Officers of the corporation shall be entitled to such
salaries, compensation or reimbursement as shall be fixed or allowed from time
to time by the Board of Directors.
ARTICLE 4--Capital Stock
4.1 Issue of Capital Stock. Unless otherwise voted by the stockholders, the
whole or any part of any unissued balance of the authorized capital stock of
the corporation or the whole or any part of the capital stock of the
corporation held in its treasury may be issued or disposed of by vote of the
Board of Directors, in such manner, for such consideration and on such terms
as the Directors may determine.
4.2 Certificates of Stock. Each stockholder shall be entitled to a
certificate of the capital stock of the corporation in such form as may be
prescribed from time to time by the Directors. The certificate shall be signed
by the Chairman of the Board, the President or a Vice President, and by the
Treasurer or an Assistant Treasurer,
9
but when a certificate is countersigned by a transfer agent or a registrar,
other than a Director, officer or employee of the corporation, such signature
may be a facsimile. In case any officer who has signed or whose facsimile
signature has been placed upon such certificate shall have ceased to be such
officer before such certificate is issued, it may be issued by the corporation
with the same effect as if he were such officer at the time of its issue.
Every certificate for shares of stock which are subject to any restriction
on transfer pursuant to the Articles of Organization, the By-Laws, applicable
securities laws or any agreement to which the corporation is a party, shall
have conspicuously noted on the face or back of the certificate either the
full text of the restriction or a statement of the existence of such
restriction and a statement that the corporation will furnish a copy of the
restriction to the holder of such certificate upon written request and without
charge. Every certificate issued when the corporation is authorized to issue
more than one class or series of stock shall set forth on its face or back
either the full text of the preferences, voting powers, qualifications and
special and relative rights of the shares of each class and series authorized
to be issued or a statement of the existence of such preferences, powers,
qualifications and rights and a statement that the corporation will furnish a
copy thereof to the holder of such certificate upon written request and
without charge.
4.3 Transfers. Subject to the restrictions, if any, stated or noted on the
stock certificates, shares of stock may be transferred on the books of the
corporation by the surrender to the corporation or its transfer agent of the
certificate representing such shares properly endorsed or accompanied by a
written assignment or power of attorney properly executed, and with such proof
of authority or the authenticity of signature as the corporation or its
transfer agent may reasonably require. Except as may be otherwise required by
law, by the Articles of Organization or by these By-Laws, the corporation
shall be entitled to treat the record holder of stock as shown on its books as
the owner of such stock for all purposes, including the payment of dividends
and the right to vote with respect thereto, regardless of any transfer, pledge
or other disposition of such stock until the shares have been transferred on
the books of the corporation in accordance with the requirements of these By-
Laws.
It shall be the duty of each stockholder to notify the corporation of his
post office address and of his taxpayer identification number.
4.4 Record Date. The Board of Directors may fix in advance a time not more
than 60 days preceding the date of any meeting of stockholders or the date for
the payment of any dividend or the making of any distribution to stockholders
or the last day on which the consent or dissent of stockholders may be
effectively expressed for any purpose, as the record date for determining the
stockholders having the right to notice of and to vote at such meeting, and
any adjournment, or the right to receive such dividend or distribution or the
right to give such consent or dissent. In such case only stockholders of
record on such record date shall have such right, notwithstanding any transfer
of stock on the books of the corporation after the record date. Without fixing
such record date the Directors may for any of such purposes close the transfer
books for all or any part of such period.
If no record date is fixed and the transfer books are not closed, the record
date for determining the stockholders having the right to notice of or to vote
at a meeting of stockholders shall be at the close of business on the day
before the day on which notice is given, and the record date for determining
the stockholders for any other purpose shall be at the close of business on
the day on which the Board of Directors acts with respect to such purpose.
4.5 Replacement of Certificates. In case of the alleged loss or destruction
or the mutilation of a certificate of stock, a duplicate certificate may be
issued in place of the lost, destroyed or mutilated certificate, upon such
10
terms as the Directors may prescribe, including the presentation of reasonable
evidence of such loss, destruction or mutilation and the giving of such
indemnity as the Directors may require for the protection of the corporation
or any transfer agent or registrar.
ARTICLE 5--Miscellaneous Provisions
5.1 Fiscal Year. Except as otherwise set forth in the Articles of
Organization or as otherwise determined from time to time by the Board of
Directors, the fiscal year of the corporation shall in each year end on
December 31.
5.2 Seal. The seal of the corporation shall, subject to alteration by the
Directors, bear its name, the word "Massachusetts" and the year of its
incorporation.
5.3 Voting of Securities. Except as the Board of Directors may otherwise
designate, the Chief Executive Officer, the President or the Treasurer may
waive notice of, and act as, or appoint any person or persons to act as, proxy
or attorney-in-fact for this corporation (with or without power of
substitution) at any meeting of stockholders or shareholders of any other
corporation or organization, the securities of which may be held by this
corporation.
5.4 Corporate Records. The original, or attested copies, of the Articles of
Organization, By-Laws and records of all meetings of the incorporators and
stockholders, and the stock records, which shall contain the names of all
stockholders and the record address and the amount of stock held by each,
shall be kept in Massachusetts at the principal office of the corporation, or
at an office of its transfer agent or of the Clerk. These copies and records
need not all be kept in the same office. They shall be available at all
reasonable times for the inspection of any stockholder for any proper purpose,
but not to secure a list of stockholders for the purpose of selling the list
or copies of the list or of using the list for a purpose other than in the
interest of the applicant, as a stockholder, relative to the affairs of the
corporation.
5.5 Evidence of Authority. A certificate by the Clerk or the Secretary, or
an Assistant Clerk or Assistant Secretary, or a temporary Clerk or temporary
Secretary, as to any action taken by the stockholders, Directors, any
committee or any officer or representative of the corporation shall as to all
persons who rely on the certificate in good faith be conclusive evidence of
such action.
5.6 Articles of Organization. All references in these By-Laws to the
Articles of Organization shall be deemed to refer to the Articles of
Organization of the corporation, as amended and in effect from time to time.
5.7 Severability. Any determination that any provision of these By-Laws is
for any reason inapplicable, illegal or ineffective shall not affect or
invalidate any other provision of these By-Laws.
5.8 Pronouns. All pronouns used in these By-Laws shall be deemed to refer to
the masculine, feminine or neuter, singular or plural, as the identity of the
person or persons may require.
5.9 Transactions with Interested Parties. In the absence of fraud, no
contract or other transaction between this corporation and any other
corporation or any firm, association, partnership or person shall be affected
or invalidated by the fact that any Director or officer of this corporation is
pecuniarily or otherwise interested in or is a director, member or officer of
such other corporation or of such firm, association or partnership or is a
party to or is pecuniarily or otherwise interested in such contract or other
transaction or is in
11
any way connected with any person or persons, firm, association, partnership,
or corporation pecuniarily or otherwise interested therein; provided that the
fact that he individually or as a director, member of officer of such
corporation, firm, association or partnership is such a party or is so
interested shall be disclosed to or shall have been known by the Board of
Directors or a majority or such members thereof as shall be present at a
meeting of the Board of Directors at which action upon any such contract or
transaction shall be taken; any director may be counted in determining the
existence of a quorum and may vote at any meeting of the Board of Directors of
this corporation for the purpose of authorizing any such contract or
transaction with like force and effect as if he were not so interested, or
were not a director, member or officer of such other corporation, firm,
association or partnership, provided that any vote with respect to such
contract or transaction must be adopted by a majority of the Directors then in
office who have no interest in such contract or transaction.
ARTICLE 6--Amendments
These By-Laws may be amended by vote of the holders of a majority of the
shares of each class of the capital stock at the time outstanding and entitled
to vote at any annual or special meeting of stockholders, if notice of the
substance of the proposed amendment is stated in the notice of such meeting.
If authorized by the Articles of Organization, the Directors, by a majority of
their number then in office, may also make, amend or repeal these By-Laws, in
whole or in part, except with respect to (a) the provisions of these By-Laws
governing (i) the removal of Directors and (ii) the amendment of these By-
Laws, and (b) any provision of these By-Laws which by-law, the Articles of
Organization or these By-Laws requires action by the stockholders.
Not later than the time of giving notice of the meeting of stockholders next
following the making, amending or repealing by the Directors of any by-law,
notice stating the substance of such change shall be given to all stockholders
entitled to vote on amending the By-Laws.
Any by-law adopted by the Directors may be amended or repealed by the
stockholders entitled to vote on amending the By-Laws.
Adopted by the Board of Directors on February 17, 2000.
Adopted by the stockholders on , 2000.
12
PROXY BALLOT PROXY BALLOT
- ------------ ------------
KEANE, INC.
ANNUAL MEETING OF STOCKHOLDERS
------------------------------
May 31, 2000
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned, revoking all prior proxies, hereby appoints John F. Keane,
Brian T. Keane, John F. Keane, Jr. 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 Thursday, May 31, 2000, 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
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
[X] Please mark 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 fix the number of directors at seven and to elect a Board of Directors for
the ensuing year.
NOMINEES: John F. Keane, Philip J. Harkins, Winston Hindle,
Brian T. Keane, John F. Keane, Jr., John F. Rockart and Robert A. Shafto
FOR WITHHELD
ALL [_] [_] FROM ALL
NOMINEES NOMINEES
[_] ______________________________________
For all nominees except as noted above
2. To approve an amendment and restatement FOR AGAINST ABSTAIN
of the Company's By-Laws. [_] [_] [_]
3. To ratify and approve the selection by FOR AGAINST ABSTAIN
the Board of Directors of Ernst & Young [_] [_] [_]
LLP as the Company's independent
accountants for the current year.
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