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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K

FOR ANNUAL AND TRANSITION REPORTS
PURSUANT TO SECTIONS 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934

Commission file number 1-7516

KEANE, INC
(Exact Name of Registrant as Specified in Its Charter)

Registrant's telephone number, including area code: (617) 241-9200

Securities registered pursuant to Section 12(b) of the Act:

Securities registered pursuant to Section 12(g) of the Act: None

        Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý    No o

        Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. Yes o    No ý

        Indicate by check mark whether the registrant is an accelerated filer as defined in Rule 12b-2 of the Securities Exchange Act of 1934, as amended. Yes ý    No o

        The aggregate market value of the common stock held by non-affiliates of the registrant, based on the last sale price of the common stock on the AMEX on June 28, 2002, was $749,037,388. As of March 7, 2003, 68,331,059 shares of common stock, $.10 par value per share, and 284,599 shares of class B common stock, $.10 par value per share, were issued and outstanding.

        Documents Incorporated by Reference. The Registrant intends to file a definitive proxy statement pursuant to Regulation 14A, promulgated under the Securities Exchange Act of 1934, as amended, to be used in connection with the Registrant's Annual Meeting of Stockholders to be held on May 28, 2003. The information required in response to Items 10–13 of Part III of this Form 10-K is hereby incorporated by reference to such proxy statement.

PART I

        This Report contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended. For purposes of these Acts, any statement that is not a statement of historical fact may be deemed a forward-looking statement. For example, statements containing the words "believes," "anticipates," "plans," "expects," and similar expressions may be forward-looking statements. However, Keane cautions investors not to place undue reliance on any forward-looking statements in this Report because these statements speak only as of the date when made. Keane undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. There are a number of factors that could cause our actual results to differ materially from those indicated by these forward-looking statements, including without limitation, the factors set forth under the caption "Certain Factors That May Affect Future Results."

ITEM 1.    BUSINESS

OVERVIEW

        Keane, Inc. (collectively with its subsidiaries, "Keane" or "the Company," unless the context requires otherwise) is a leading provider of Information Technology (IT) and business consulting services. In business since 1965, Keane's mission is to help clients optimize the performance of their IT organizations. The Company helps clients improve business performance by planning, building, managing, and rationalizing application software through its Business Consulting, Application Development and Integration (AD&I), and Application Development and Management Outsourcing (Applications Outsourcing) services.

        Keane delivers its services through an integrated network of local branch offices in North America and the United Kingdom, and through Advanced Development Centers (ADCs) in the United States, Canada, and India. This global delivery model enables Keane to provide its services to customers on-site, at its near-shore facilities in Canada, and through its offshore development centers in India. Branch offices work in conjunction with the Company's business consulting arm, Keane Consulting Group (KCG), and are supported by centralized Strategic Practices and Quality Assurance Groups.

        Keane's clients consist primarily of Global 2000 companies across every major industry, healthcare organizations, and government agencies. Keane strives to build long-term relationships with customers by providing a broad range of service offerings that enable clients to optimize their portfolio of software applications throughout their useful life. Keane also achieves recurring revenue as a result of its multi-year outsourcing contracts and its focus on process, management disciplines, and metrics as a means to consistently generate high business value for its customers.

        Keane is a Massachusetts corporation headquartered in Boston. Its common stock is traded on the American Stock Exchange under the symbol KEA. Keane maintains a website with the address www.keane.com. Keane is not including the information contained in its website as part of, or incorporating it by reference into, this annual report on Form 10-K. Keane makes available, free of charge, through its website its annual reports on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K, and amendments to these reports, as soon as reasonably practical after Keane electronically files these materials with, or otherwise furnishes them to, the Securities and Exchange Commission.

        Keane's registered trademarks include EZ-Access®. Keane's trademarks include: Keane, Enterprise Application Integration, Keane InSight and VistaKeane. Keane's registered service marks include: Applications Rationalization^SM Service and Application Lifecycle Optimization^SM Services. Keane's service marks include: Application Development and Integration services and Application

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Development and Management Outsourcing Services. All other trademarks, service marks, or tradenames referenced in this Form 10-K are the property of their respective owners.

SERVICES

        Keane helps clients plan, build, manage, and rationalize their application software. Specifically, Keane focuses on three synergistic service offerings: Business Consulting, Application Development and Integration (AD&I), and Applications Outsourcing, which is Keane's flagship service offering. As part of its Build services, the Company also provides a full-line of healthcare information systems and related IT consulting and IT integration services for healthcare organizations. Keane believes its broad range of services position it as a strategic partner to clients, enabling it to identify and implement comprehensive solutions that meet clients' specific business requirements.

Business Consulting (Plan services)

        Keane's business consulting services play an important role in the Company's ability to help clients align their businesses for today's economy. Business Consulting revenue is reported within the Company's Plan sector. The Company provides its business consulting services through Keane Consulting Group (KCG), the Company's business and management consulting arm. KCG helps companies maximize productivity, reduce costs, and create capacity for future growth by identifying high-value business opportunities and implementing its operations improvement recommendations. In addition, KCG enables customers to lower costs and improve the flexibility and scalability of their IT assets through Keane's Applications Rationalization Service. As part of this service, the Company analyzes a client's applications portfolio and helps the company to identify and eliminate software with redundant functionality, end-of-life systems, and software that uses non-core technology.

        KCG delivers its services by taking a broad view of business processes, organizational design, and technology architecture. KCG provides operations improvement services in four core competency areas: insurance and financial services, manufacturing and distribution, technology, and public sector services. Typical KCG client engagements include: streamlining customer processes and operations, optimizing supply chains, and aligning IT and business strategies. KCG helps Keane develop strong relationships with senior business executives because their assignments often involve work for these decision makers who may, in the future, request that the Company perform critical services. In addition, KCG consulting engagements can lead to follow-on IT projects as clients rely on Keane to support an idea or concept from its genesis through implementation and eventual management.

Application Development and Integration (AD&I) (Build services)

        As application software becomes more complex, it requires sophisticated integration between front-end and back-end systems to enhance access to critical corporate data, enable process improvements, and improve customer service. Many of Keane's AD&I projects focus on solutions for Enterprise Application Integration (EAI), supply chain, and customer service problems. AD&I revenue is reported within the Company's Build sector.

        As a result of its significant expertise and experience, Keane has become a top-tier provider of large, complex software development and integration projects for Global 2000 companies. The Company also provides AD&I services to the public sector, which includes agencies within the United States Federal Government, various states, and other local government entities.

        Given the recent economic downturn, many clients have deferred investments in new information systems. As a result, Keane has concentrated its short-term marketing efforts on helping clients to better integrate and enhance existing applications, and on projects that rapidly improve efficiency and immediately lower costs.

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        Keane believes that it is well positioned to capture large-scale AD&I projects from both the commercial and public sector markets due to its core competencies in project management, integration, and global delivery. The Company anticipates that these competencies, together with its long-term relationships with Global 2000 companies, particularly those clients for which Keane provides Applications Outsourcing services, will enable it to benefit from an economic recovery and an increase in spending on information technology.

Application Development and Management Outsourcing (Applications Outsourcing) (Manage services)

        Keane's Applications Outsourcing service helps clients manage existing business systems more efficiently and more reliably, improving the performance of these applications while frequently reducing costs. Application Outsourcing revenue is reported within the Company's Manage sector. Under this service offering, Keane assumes responsibility for managing a client's business applications with the goal of instituting operational efficiencies that enhance flexibility, freeing up client personnel resources, and achieving higher user satisfaction.

        Keane seeks to obtain competitive advantages in the application outsourcing market by targeting its Global 2000 client base and generating measurable client business benefit. The Company achieves this client benefit through the use of its world-class methodologies, continuous process improvement, and its global delivery model. On March 15, 2002, Keane acquired SignalTree Solutions, a United States-based corporation with offshore development capabilities in India. The addition of SignalTree Solutions' delivery capability, now called Keane India Ltd., expanded Keane's delivery model to include two Advanced Development Centers (ADCs) in India. Keane's global delivery model now offers customers the flexibility and economic advantage of allocating work between a variety of delivery options, including on-site at a client's facility, near-shore in Halifax, Nova Scotia, and offshore in India. Keane believes the addition of offshore ADCs strengthens its Applications Outsourcing offering.

        Forty-three of the Company's Applications Outsourcing engagements have been independently assessed at Level 3 or 4 on the Software Engineering Institute's (SEI) Capability Maturity Model (CMM). In addition, Keane's ADCs in India, located in Hyderabad and Delhi, are independently evaluated at Level 5 on the SEI CMM and comply with ISO 9001: 2000 standards. Keane's ADC in Halifax, Nova Scotia, has been independently evaluated at Level 3 on the SEI CMM, and is transitioning its processes in alignment with SEI CMM Level 5. The SEI CMM has five levels of process maturity, and many IT organizations typically operate at Level 1, the lowest level of maturity. Since 1997, Keane has used the SEI CMM as a standard for objectively measuring its success in improving its clients' application management environments. The SEI CMM has become the industry's standard method for evaluating the effectiveness of an IT environment and the process maturity of outsourcing vendors.

        Applications Outsourcing provides Keane with larger, longer-term contracts. These client engagements usually span three-to-five years. Outsourcing projects typically supply Keane with contractually-obligated recurring revenue, and with an incumbent position from which to cross-sell other solutions. The Company has observed historically that consistently providing measurable business value within an existing client account strongly positions it to win additional outsourcing engagements and development and integration projects.

Healthcare Solutions (Build services)

        Keane's Healthcare Solutions Division (HSD) develops and markets a complete line of open-architecture financial management, patient care, clinical operations, enterprise information, long-term care, and practice management systems for healthcare organizations. In addition, HSD provides healthcare-related IT consulting, outsourcing, and IT integration services. Because the healthcare market is less cyclical in nature than most of the commercial IT market, Keane's HSD

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business compliments the Company's commercial AD&I revenue and typically acts as a stabilizing influence on Build revenue during periods of slower economic growth. HSD revenue is reported within Keane's AD&I (Build) sector.

        HSD's products help healthcare organizations overcome the challenge of providing higher quality patient care while administering more efficient operations through the use of information technology. HSD's core healthcare solutions include EZ-Access, Keane InSight, and VistaKEANE. EZ-Access is a browser-based family of healthcare information systems designed to improve access to patient data, reduce the occurrence of medical errors, and protect client investment in information technology. EZ-Access includes Keane's highly rated and widely installed Patcom Plus, a patient management system. Keane InSight is a comprehensive healthcare information system that provides immediate access to patient information using secure, browser-based technology. VistaKEANE is a fully integrated financial and clinical solution for long-term and post-acute care providers. HSD's customers include integrated delivery networks, hospitals, long-term care facilities, and physician group practices. HSD currently provides proprietary software and services to more than 300 hospital-based clients and 4,300 long-term care facilities throughout the United States.

        In addition, Keane's broad range of services help healthcare clients address ongoing Health Insurance Portability and Accountability Act (HIPAA) requirements. HIPAA is Federal legislation designed to improve efficiency in the national healthcare system and protect the privacy of health information. It is expected to have far-reaching implications on the healthcare industry's IT infrastructure and business operations. The Company's HIPAA related services include Enterprise Assessment and Planning, Compliance Implementation, and Ongoing Compliance Management.

STRATEGY

        Keane's vision is to be recognized as one of the world's great IT services firms by its clients, employees, and shareholders. The Company believes it can achieve this vision by leveraging its position as a provider of Application Lifecycle Optimization Services to build strong long-term relationships with clients. To support its customers in better managing their application portfolios over a long period of time, Keane's Application Lifecycle Optimization framework has three phases: Application Development, Application Management, and Applications Rationalization. Through its rigorous adherence to process management disciplines, and performance metrics, Keane believes it can deliver measurable business benefit to its clients, and ultimately grow per share value by consistently generating cash from operations.

        The Company has four major strategic priorities for 2003. Keane believes these strategic priorities will enable the Company to gain competitive strength during the current economic downturn, as well as to strongly position itself to take advantage of future increases in IT spending.

        Grow long-term per share value.    The Company is focused on continuing to increase operating cash flow, which it believes is the ultimate driver of valuation. The Company plans to use excess cash to repurchase shares and to complete attractive acquisitions. In order to maximize cash flow, the Company is focused on increasing revenue, improving operating margins, and continuing to aggressively manage its balance sheet. The Company believes that long-term revenue growth will be achieved by Keane's Applications Outsourcing business as well as the Company's strong position in less cyclical vertical industries such as healthcare and the public sector. The Company expects to increase its operating margins over the short-term by aggressively controlling its Selling, General, and Administrative (SG&A) spending and by improving billing rates and utilization as the economy recovers. Finally, Keane's ability to effectively manage its balance sheet, most notably Days Sales Outstanding (DSO) and capital spending, is expected to enable the Company to generate strong operating cash flow in the current economic climate.

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        Expand offshore global delivery.    Global sourcing has become an important component of our clients' overall sourcing strategies. Use of offshore delivery enables clients to gain access to a large pool of cost-effective technical personnel, while enhancing productivity via a 24 hours a day, 7 days a week development approach. As a result, the Company believes offshore delivery is critical for success in today's IT services market. During 2002, Keane added an offshore sourcing component through its acquisition of SignalTree Solutions, now called Keane India Ltd. Keane India has over 20 years of experience servicing customers in North America and Europe and is known for its project management expertise and quality initiatives. During 2003, Keane plans to target both existing clients and new customers for development and outsourcing engagements that involve an offshore component. In addition, the Company plans to invest in and expand its two ADCs in India, as well as its ADC in Halifax, Nova Scotia, to support new opportunities. In addition to offshore solutions, components of Keane's next generation global delivery model include on-site and near-shore solutions.

        Strengthen position as leading provider of Applications Outsourcing services.    Industry analysts and clients recognize Keane as one of the leading application outsourcing vendors in North America. Given changes in customer buying behavior, Keane's ability to provide high-quality service to its clients has been significantly enhanced by the addition of an offshore delivery capability in India. As a result, Keane is intensifying its efforts during 2003 to position itself as a full lifecycle, global provider of outsourcing, and a means for clients to gain the economic advantage of offshore delivery while reducing their associated risks. The Company also seeks opportunities to proactively target its existing customer base of Global 2000 customers to cross-sell its Applications Outsourcing service.

        Improve Organizational Effectiveness and operational leverage.    Keane endeavors to continuously build its sales and management team by hiring, developing, and retaining high-potential employees. During 2003, Keane plans to add high-potential personnel resources to further strengthen its sales and management team. In addition, Keane plans to enhance its sales and management processes as well as its information systems to boost the effectiveness of these critical functions. Keane is currently implementing a PeopleSoft suite of enterprise software applications, which when completed and installed, will provide real-time data on sales pursuits and significant sales trends. In addition, during 2003, Keane plans to better align its internal focus, measurement processes, and compensation systems to promote a high performance culture, encouraging intra-company cooperation, and create a more positive and supportive work environment for its employees. The Company anticipates that the results of these efforts will be the elimination of bureaucracy, a more efficient response system to client needs, and an increased focus on client satisfaction.

COMPETITION

        The IT services market is highly competitive and driven by continual changes in client business requirements and advances in technology. The Company's competition varies by the type of service provided and by geographic markets.

        The Company competes with traditional players in the IT services industry, including large integrators (such as Accenture (ACN), Electronic Data Systems (EDS), Computer Sciences Corporation (CSC), IBM Global Services (IBM), and Perot Systems (PER)); IT solutions providers (such as Sapient Corporation (SAPE), American Management Systems (AMSY), BearingPoint (BP), and Ciber (CBR)); and management consulting firms (such as McKinsey and Booz Allen). Some of these competitors are larger and have greater financial resources than the Company.

        The Company believes that the basis for competition in the IT services industry includes the ability to create an integrated solution that best meets the needs of an individual customer, provide competitive cost pricing models, develop strong client relationships, generate recurring revenue, and offer flexible client-service delivery options. The Company believes that it competes favorably with respect to these factors. There can be no assurance that the Company will continue to compete

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successfully with its existing competitors or will be able to compete successfully with any new competitors.

CLIENTS

        Keane's clients consist primarily of Global 2000 organizations, government agencies, and healthcare organizations. These organizations generally have significant IT budgets and frequently depend on service providers for Application Lifecycle Optimization services.

        In 2002, the Company derived its revenue from the following industry groups:

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        The following table is a representative list of clients for which Keane provided services in 2002:

        Keane's ten largest clients accounted for approximately 29% and 32% of the Company's total revenue during each of the years ended December 31, 2002 and 2001, respectively. The Company's two largest clients during 2002 and 2001 were various agencies within the Federal Government and IBM. Federal Government contracts accounted for approximately 7.6% and 6.9% of the Company's total revenue in 2002 and 2001, respectively. IBM accounted for approximately 4.4% and 6.5% of the Company's total revenue for 2002 and 2001, respectively. A significant decline in revenue from IBM or the Federal Government would have a material adverse effect upon the Company's total revenue. With the exception of IBM and the Federal Government, no single client accounted for more than 5% of the Company's total revenue during any of the three years ended on or before December 31, 2002.

        In accordance with industry practice, many of the Company's orders are terminable by either the client or the Company on short notice. Moreover, any and all orders relating to the Federal Government may be subject to renegotiation of profits or termination of contract or subcontractors at

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the election of the Federal Government. The Company had orders at December 31, 2002 of approximately $1.46 billion, in comparison to orders of approximately $843 million at December 31, 2001. Because Keane's clients can cancel or reduce the scope of their engagements on short notice, the Company does not believe that backlog is a reliable indication of future business.

SALES, MARKETING AND ACCOUNT MANAGEMENT

        Keane markets its services and software products through its direct sales force, which is based in its branch offices and regional areas, as well as through its Applications Outsourcing Corporate Practice. Keane's account executives are assigned to a limited number of accounts so they can develop an in-depth understanding of each client's individual needs and form strong client relationships. Under the direction of Regional Sales Vice Presidents, these account executives identify IT services needs within clients and are responsible for creating a solution that meets these requirements better than any other alternative. In addition, account executives ensure that clients receive responsive service that achieves their objectives. Account executives receive in-depth training in Keane's sales processes and service offerings and are supported by enterprise knowledge management systems in order to efficiently share organizational learning. Account executives collaborate with Keane's Applications Outsourcing Practice, other branch offices, and Global Services Group as needed to address specialized customer requirements.

        Keane's Applications Outsourcing Practice employs specialized senior sales professionals to respond to client requirements and to pursue and close large, strategic outsourcing engagements. Applications Outsourcing engagements provide a strong base of recurring revenue and afford the opportunity to cross-sell Keane's other strategic services.

        Keane focuses its marketing efforts on organizations with significant IT budgets and recurring software development and outsourcing needs. The Company maintains a corporate branding campaign focused on communicating Keane's value proposition of reliably delivering application solutions with quantifiable business results. These branding efforts are actively executed through multiple channels.

EMPLOYEES

        On December 31, 2002, Keane had 7,331 employees, including 6,175 business and technical professionals whose services are billable to clients. The Company sometimes supplements its technical staff by utilizing subcontractors.

        Management believes Keane's growth and success are dependent on the caliber of its people and will continue to dedicate significant resources to hiring, training and development, and career advancement programs. Keane's efforts in these areas are grounded in the Company's core values, namely respect for the individual, commitment to client success, achievement through teamwork, integrity, continuous improvement, and commitment to shareholder value. Keane strives to hire, promote, and recognize individuals and teams who embody these values.

        The Company generally does not have employment contracts with its key employees. None of the Company's employees are subject to a collective bargaining agreement. The Company believes that its relations with its employees are good.

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ITEM 2.    PROPERTIES

        The principal executive office of the Company as of December 31, 2002, was located at Ten City Square, Boston, Massachusetts 02129, in an approximately 34,000 square foot office building which is leased from City Square Limited Partnership. Some of the Company's officers and directors are limited partners in this partnership. (See Item 13 "Certain Relationships and Related Transactions)." At December 31, 2002, the Company leased and maintained sales and support offices in more than seventy locations in North America, the United Kingdom, and India. The aggregate annual rental expense for the Company's sales and support offices was approximately $27.7 million in 2002. The aggregate annual rental expense for all of the Company's facilities was approximately $30.8 million in 2002. For additional information regarding the Company's lease obligations, see Note J of Notes to Consolidated Financial Statements.

        In October 2001, the Company entered into a lease with Gateway Developers LLC ("Gateway LLC") for a term of twelve years, pursuant to which the Company agreed to lease approximately 95,000 square feet of office and development space in a building located at 100 City Square in Boston, Massachusetts (the "New Facility"). The Company leases approximately 57% of the New Facility and the remaining 43% is or will be occupied by other tenants. John Keane Family LLC is a member of Gateway LLC. The members of John Keane Family LLC are trusts for the benefit of John F. Keane, Chairman of the Board of the Company, and his immediate family members.

        On October 31, 2001, Gateway LLC entered into a $39.4 million construction loan with Citizens Bank of Massachusetts (the "Gateway Loan") in connection with the New Facility and an adjacent building located at 20 City Square, Boston, Massachusetts. John Keane Family LLC and John F. Keane are each liable for certain obligations under the Gateway Loan if and to the extent Gateway LLC requires funds to comply with its obligations under the Gateway Loan. Stephen D. Steinour, a director of the Company, is Chief Executive Officer of Citizens Bank of Pennsylvania. Citizens Bank of Massachusetts and Citizens Bank of Pennsylvania are subsidiaries of Citizens Financial Group, Inc. Mr. Steinour was not involved in the process of approving the loan.

        The Company began occupying the New Facility and vacating its offices at Ten City Square in March 2003. Based upon its knowledge of rental payments for comparable facilities in the Boston area, the Company believes that the rental payments under the lease for the New Facility, which will be approximately $3.2 million per year ($33.00 per square foot for the first 75,000 square feet and $35.00 per square foot for the remainder of the premises) for the first six years of the lease term and approximately $3.5 million per year ($36.00 per square foot for the first 75,000 square feet and $40.00 per square foot for the remainder of the premises) for the remainder of the lease term, plus specified percentages of any annual increases in real estate taxes and operating expenses, were, at the time the Company entered into the lease, as favorable to the Company as those which could have been obtained from an independent third party.

ITEM 3.    LEGAL PROCEEDINGS

        In April 1998, United Services Planning Association, Inc. and Independent Research Agency for Life Insurance, Inc. filed a complaint in the District Court for Tarrant County, Texas (Civil Action No. 96-173235-98) against the Company and two of its employees alleging that the Company misrepresented its ability to complete a project contracted for by the plaintiffs and concealed from the plaintiffs material facts related to the status of the project. The parties are currently engaged in discovery. It is not likely that the case will go to trial before the fall of 2003. The plaintiffs seek monetary relief. The Company believes that it has a meritorious defense to the plaintiff's complaint and intends to contest the claims vigorously. However, the Company is presently unable to assess the likely outcome of the matter.

        On September 25, 2000, the United States Equal Employment Opportunity Commission ("EEOC") commenced a civil action against the Company in the United States District Court for the

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District of Massachusetts alleging that the Company discriminated against former employee Michael Randolph and other unspecified "similarly-situated individuals" by acts of racial harassment, retaliation and constructive discharge. This matter was settled and dismissed, and a consent decree entered by the Court, in May 2002. This settlement was not material to the Company's financial position or results of operations.

        The Company is involved in other litigation and various legal matters, which have arisen in the ordinary course of business. The Company does not believe that the ultimate resolution of these matters will have a material adverse effect on its financial condition, results of operations, or cash flows. The Company believes these litigation matters are without merit and intends to defend these matters vigorously.

ITEM 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

        No matters were submitted to a vote of the Company's security holders during the fourth quarter of the year ended December 31, 2002.

        DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY:    The executive officers and directors of the Company are as follows:

(1)

Audit Committee

(2)

Compensation Committee

(3)

Former Governance and Nominating Committee (The Company had, until February 2003, a Governance and Nominating Committee. The Governance and Nominating Committee was reconstituted in February 2003 into two separate committees, a Nominating Committee and a Governance Committee.)

(4)

Governance Committee

(5)

Nominating Committee

        All Directors hold office until the next Annual Meeting of Stockholders and until their successors have been elected and qualified. Officers of the Company serve at the discretion of the Board of Directors.

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        Mr. John Keane, the founder of the Company, has been Chairman of the Board of Directors since the Company's incorporation in March 1967. Mr. Keane served as Chief Executive Officer and President of the Company from 1967 to November 1999. Prior to joining the Company, Mr. Keane worked for IBM's Data Processing Division and was employed as a consultant by Arthur D. Little, Inc., a Cambridge, Massachusetts management consulting firm. Mr. Keane is also a director of Firstwave Technologies, Inc. and APC, Inc.

        Mr. Brian Keane joined the Company in 1986 and has served as the Company's President and Chief Executive Officer since November 1999. From September 1997 to November 1999, Mr. Keane served as Executive Vice President and a member of the Office of the President of the Company. From December 1996 to September 1997, he served as Senior Vice President. From December 1994 to December 1996, he was an Area Vice President. From July 1992 to December 1994, Mr. Keane served as a Business Area Manager, and from January 1990 to July 1992, he served as a Branch Manager. Mr. Keane has been a director of the Company since May 1998. Mr. Keane has served as a trustee of Mount Holyoke College since May 2000. Brian Keane is a son of John Keane, the founder, and Chairman of the Company, and the brother of John Keane, Jr., a director.

        Mr. Leahy joined the Company in August 1999 as Senior Vice President—Finance and Administration and Chief Financial Officer. From 1982 to August 1999, Mr. Leahy was employed by PepsiCo, during which time he held a number of positions, serving most recently as Vice President of Business Planning and Development for Pepsi-Cola International.

        Mr. Hillier joined the Company in July 2002 as Senior Vice President, Human Resources. From June 1999 to February 2002, Mr. Hillier was Senior Vice President of Human Resources for CGU/One Beacon, an insurance company. From June 1990 to May 1999, Mr. Hillier served as Senior Vice President of Human Resources and Operations for Zurich Financial Services Group.

        Mr. Atwell joined the Company in 1974 and served as a Branch Manager from 1974 to 1985 and as head of Seminars Projects & Services (SPS), formerly Productivity Management Services Group (PMSG), from 1985 to 1986. Mr. Atwell left the Company from 1986 to 1991. During that time, he served as Regional Sales Vice President for Palladian Software, Vice President of Sales for Applied Expert Systems, Vice President of Sales and Marketing for Access Development Corporation, and Vice President of Broadway and Seymour. In 1991, Keane acquired Broadway and Seymour and appointed Mr. Atwell Managing Director of the Company's Raleigh/Durham Branch. Since that time, Mr. Atwell has served as Area Manager from 1993 to 1994, Area Vice President from 1995 to 1999, and Senior Vice President of North American Branch Operations from 1999 to present.

        Mr. Cappellino joined the Company as Senior Vice President, Offshore Solutions in March of 2002. From 1995 to March 2002, Mr. Cappellino served as Chairman and CEO of SignalTree Solutions, Inc. From 1993 to 1995, Mr. Cappellino was President of Network Solutions and Vice President/General Manager of Worldwide Telecommunications Marketing at Tandem Computers.

        Mr. Paris joined the Company in November 1976. Mr. Paris has served as Senior Vice President—Healthcare Solutions since January 2000 and as Vice President and General Manager of the Healthcare Solutions Practice from August 1986 to January 2000. Mr. Paris also served as Area Manager of the Healthcare Solutions Practice from 1981 to 1986.

        Mr. Shaw joined the Company in September 2002 as Senior Vice President and Managing Director of Keane Ltd. From 1996 to September 2002, Mr. Shaw was employed by Headstrong, a global restructuring corporation, during which time he held a number of positions, serving most recently as Chief Operating Officer of European Operations.

        Ms. Toops joined the Company in August of 1992. Ms. Toops has served as President of Keane Consulting Group (KCG) and Senior Vice President of Keane, Inc. since June 2000. From 1992 to June 2000, Ms. Toops served as Executive Vice President of KCG. From 1977 through 1992, Ms. Toops held a variety of sales and management positions within the IBM Corporation.

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        Ms. Cirino has been a director of the Company since July 2001. Since 2000, Ms. Cirino has held the position of CEO and Chairman of Guardent, Inc., a managed security services corporation. Prior to 2000, Ms. Cirino served as Vice President of Sales and Marketing for Razorfish, an internet company. From 1997 to 1999, Ms. Cirino held the same position of Vice President of Sales and Marketing for I-cube, an internet company, which was acquired by Razorfish in October of 1999. Prior to 1997, Ms. Cirino held the position of Vice President of Sales for Shiva Corporation, a developer of remote access products for enterprise networks.

        Mr. Fain has been a director of the Company since November 2001 and served as Senior Vice President of the Company from November 2001 through March 2002. Prior to joining the Company, Mr. Fain was the founder, Chief Executive Officer and Chairman of the Board of Directors of Metro Information Services, which was acquired by the Company in November 2001. Mr. Fain's role at Metro Information Services also included serving as President until January 2001 and Chairman of the Compensation Committee until February 1999.

        Mr. Harkins has been a director of the Company since February 1997. Mr. Harkins is currently the President and Chief Executive Officer 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. Hindle has been a director of the Company since February 1995. Mr. Hindle is currently retired. From September 1962 to July 1994, Mr. Hindle served as a Vice President and, subsequently, Senior Vice President of Digital Equipment Corporation. Mr. Hindle is also a director of Mestek, Inc. and CareCentric, Inc.

        Mr. John Keane, Jr. has been a director of the Company since May 1998. Mr. Keane is the founder of ArcStream Solutions, Inc., a consulting and systems integration firm focusing on cable and wireless solutions, and has been its President and Chief Executive Officer since July 2000. From September 1997 to July 2000, he was Executive Vice President and a member of the Office of the President of the Company. From December 1996 to September 1997, he served as Senior Vice President. From December 1994 to December 1996, he was an Area Vice President. From January 1994 to December 1994, Mr. Keane served as a Business Area Manager. From July 1992 to January 1994, he acted as manager of Software Reengineering, and from January 1991 to July 1992, he served as Director of Corporate Development. John Keane, Jr. is a son of John Keane, the founder and Chairman of the Company, and a brother of Brian Keane. Mr. Keane is also a director of Ezenia! Inc., a collaboration software company.

        Dr. Rockart has been a director of the Company since the Company's incorporation in March 1967. Dr. Rockart has been a Senior Lecturer Emeritus at the Alfred J. Sloan School of Management of the Massachusetts Institute of Technology (MIT) since July 2002. Dr. Rockart served as a Senior Lecturer at the Alfred J. Sloan School of Management of MIT from 1974 to July 2002 and was the Director of the Center for Information Systems Research from 1976 to 2000. Dr. Rockart is also a director of Comshare, Inc. and Selective Insurance Group.

        Mr. Steinour has been director of the Company since July 2001. Since July 2001, Mr. Steinour has served as the Chief Executive Officer of Citizens Bank of Pennsylvania. From January 1997 to July 2001, Mr. Steinour served as Vice Chairman of Citizens Financial Group, a commercial bank holding company. From October 1992 to December 1996, Mr. Steinour served as the Executive Vice President and Chief Credit Officer of Citizens Wholesale Banking Group of Citizens Financial Group.

        Compensation of the Company's non-employee directors currently consists of an annual directors' fee of $4,000 plus $1,000 and expense reimbursement for each meeting of the Board of Directors

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attended. Effective for the annual directors term beginning with the Company's 2003 Annual Meeting of Stockholders, the compensation of the members of the Board of Directors will be as follows:

        The compensation of the Company's non-employee directors is determined on an approximate fifty-two week period (the "Annual Directors Term") that runs from annual meeting date to annual meeting date rather than on a calendar year. A director may elect to receive his or her annual fee or meeting attendance fees for an Annual Directors Term in the form of shares of common stock in lieu of cash payments. If a director elects to receive shares of common stock in lieu of cash as payment for the annual fee or meeting attendance fees, the number of shares to be received by the director will be determined by dividing the dollar value of the annual fee or the meeting attendance fees owed by the closing price of Keane's common stock as reported on the American Stock Exchange on the last day of the Annual Directors Term.

        Directors generally make their elections as to the form of compensation for his or her annual fee or meeting attendance fees in July of each year and such election is valid for the Annual Directors Term beginning in the calendar year in which the election is made.

        Non-employee directors are also eligible to receive stock options under the Company's stock incentive plans. During 2002, the Company did not grant stock options to non-employee directors. Directors who are officers or employees of the Company do not receive any additional compensation for their services as directors.

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PART II

ITEM 5.    MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

        The Company's authorized capital stock consists of 200,000,000 shares of common stock, $.10 par value per share; 503,797 shares of class B common stock, $.10 par value per share; and 2,000,000 shares of Preferred Stock, $.01 par value per share. As of March 7, 2003, there were 68,331,059 shares of common stock outstanding and held of record by approximately 2,843 registered stockholders; 284,599 shares of class B common stock outstanding and held of record by approximately 108 registered stockholders; and no shares of preferred stock outstanding.

COMMON STOCK AND CLASS B COMMON STOCK

        Voting.    Each share of common stock is entitled to one vote on all matters submitted to stockholders and each share of class B common stock is entitled to ten votes on all matters submitted to stockholders. The holders of common stock and class B common stock vote as a single class on all actions submitted to a vote of the Company's stockholders, except that separate class votes of the holders of common stock and class B common stock are required with respect to amendments to the articles of organization that alter or change the powers, preferences, or special rights of their respective classes or as to affect them adversely, and with respect to such other matters as may require class votes under Massachusetts law. Voting for directors is non-cumulative.

        As of March 7, 2003, the class B common stock represented less than 1.0% of the Company's outstanding equity, but had approximately 4.0% of the combined voting power of the Company's outstanding common stock and class B common stock. The voting rights of the class B common stock may make Keane less attractive as the potential target of a hostile tender offer or other proposal to acquire the stock or business of Keane and render merger proposals more difficult, even if such actions would be in the best interests of the holders of the common stock.

        Dividends and Other Distributions.    The holders of common stock and class B common stock are entitled to receive ratably such dividends, if any, as may be declared by Keane's Board of Directors, out of funds legally available therefore, except that the Board of Directors may not declare and pay a regular quarterly cash dividend on the shares of class B common stock unless a non-cumulative per share dividend which is $.05 per share greater than the per shares dividend paid on the class B common stock is paid at the same time on the shares of common stock. In the event of a liquidation, dissolution, or winding up of Keane, holders of common stock and class B common stock have the right to ratable portions of Keane's net assets after the payment of all debts and other liabilities.

        Trading Markets.    Shares of class B common stock are not transferable by a stockholder except for transfers:

•

By gift,



•

In the event of the death of a stockholder, or



•

By a trust to a person who is the grantor or a principal beneficiary of that trust.

        Individuals or entities receiving shares of class B common stock pursuant to these transfers are referred to as "permitted transferees." The class B common stock is not listed or traded on any exchange or in any market, and no trading market exists for shares of the class B common stock. The class B common stock is, however, convertible at all times, and without cost to the stockholder, into shares of common stock on a share-for-share basis. Shares of class B common stock are automatically converted into an equal number of shares of common stock in connection with any transfer of those shares other than to a permitted transferee. In addition, all of the outstanding shares of class B

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common stock are convertible into shares of common stock upon a majority vote of the Board of Directors.

        Future Issuance of Class B Common Stock; Retirement of Class B Common Stock Upon Conversion into Common Stock.    The Company may not issue any additional shares of class B common stock without stockholder approval. All shares of class B common stock converted into common stock are retired and may not be reissued.

        Other Matters.    The holders of common stock and class B common stock have no preemptive rights or, except as described above, rights to convert their stock into any other securities and are not subject to future calls or assessments by the Company. The common stock is listed on the American Stock Exchange under the symbol "KEA." All outstanding shares of common stock and class B common stock are fully paid and non-assessable. The rights, preferences, and privileges of holders of common stock and class B common stock are subject to, and may be adversely affected by, the rights of the holders of shares of any series of preferred stock which the Company may designate and issue in the future.

PREFERRED STOCK

        The Company's Articles of Organization authorize the issuance of up to 2,000,000 shares of Preferred Stock. Shares of Preferred Stock may be issued from time to time in one or more series, and the Board of Directors is authorized to determine the rights, preferences, privileges, and restrictions, including the dividend rights, conversion rights, voting rights, terms of redemption, redemption price or prices, and liquidation preferences, of any series of Preferred Stock, and to fix the number of shares of any such series of Preferred Stock without any further vote or action by the stockholders. The voting and other rights of the holders of common stock and class B common stock will be subject to, and may be adversely affected by, the rights of holders of any Preferred Stock that may be issued in the future. The issuance of shares of Preferred Stock, while providing desirable flexibility in connection with acquisitions and other corporate purposes, could have the effect of making it more difficult for a third party to acquire, or of discouraging a third party from acquiring, a majority of the outstanding voting stock of the Company. The Company has no present plans to issue any shares of Preferred Stock.

PRICE RANGE OF COMMON STOCK AND DIVIDEND POLICY

        The Company's common stock is traded on the American Stock Exchange under the symbol "KEA." The following table sets forth, for the periods indicated, the high and low sales price per share as reported by the American Stock Exchange.

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        The closing price of the common stock on the American Stock Exchange on March 7, 2003 was $7.67.

        The Company has not paid any cash dividend since June 1986. The Company currently intends to retain all of its earnings to finance future growth and therefore does not anticipate paying any cash dividend in the foreseeable future. The Company's new $50.0 million credit facility with two banks contains restrictions that may limit its ability to pay cash dividends in the future.

        The Company's Articles of Organization restrict the ability of the Board of Directors to declare regular quarterly dividends on the class B common stock.

SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)

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ITEM 6.    SELECTED FINANCIAL DATA

FINANCIAL HIGHLIGHTS

All amounts prior to 1999 have been restated to reflect the acquisitions of Bricker & Associates, Inc., Icom Systems Limited, and Fourth Tier, Inc., which were accounted for as poolings-of-interests.

ITEM 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

        This Annual Report on Form 10-K contains forward-looking statements. For this purpose, any statements contained herein that are not statements of historical fact may be deemed forward-looking statements. Without limiting the foregoing, the words "believes," "anticipates," "plans," "expects," and similar expressions are intended to identify forward-looking statements. There are a number of important factors that could cause the Company's actual results to differ materially from those indicated by such forward-looking statements. These factors include, without limitation, those set forth below under the caption "Certain Factors That May Affect Future Results."

OVERVIEW

        Keane plans, builds, manages, and rationalizes application software through its Business Consulting, Application Development and Integration (AD&I), and Application Development and Management Outsourcing (Applications Outsourcing) services. Keane develops long-term relationships with customers by providing a broad ran