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                                                                   EXHIBIT 10.21
                              (VERITY LETTERHEAD)


August 28, 1997


Mr. Anthony J. Bettencourt
2802 Vizzolini Court
Pleasanton, CA 94566


Dear Anthony,

     Verity, Inc. is pleased to offer you the position of Senior Vice President,
Worldwide Sales, reporting directly to Verity's CEO. Your starting monthly
salary will be $16,666.57. Your compensation package will also include a
commission plan providing for the payment of an aggregate of $150,000.00 in
commissions with respect to the year ending August 31, 1998 if the Company
achieves its budgeted revenues for that period. During the first year of your
employment, (i) your salary may not be reduced and (ii) unless you voluntarily
terminate or are terminated by the Company for "cause", as defined below, during
the first year, you will be paid commissions of a minimum of $150,000.00.

     You will also receive a special bonus of $230,000.00, payable as follows:
(i) $40,000.00 on your start date, (ii) $80,000.00 on March 1, 1998, (iii)
$60,000.00 on June 1, 1998 and (iv) $50,000.00 on September 1, 1998. If your
employment by the Company terminates prior to the first anniversary of your
start date as an employee under this agreement (other than as a result of a
termination due to your death or permanent disability or a termination by the
Company without "cause", as defined below), you will not be entitled to receive
any of the payments scheduled to be made after the date of such termination and
you will be obligated to reimburse the company for the full amount of this bonus
paid prior to such date.

     It will further be recommended to the Board of Directors that you be
granted a stock option to purchase 125,000 shares of Common Stock under Verity's
Employee Stock Option Plan. Your option will be subject to a two year vesting
schedule, with vesting to commence as of your start date as an employee under
this agreement. Under the vesting schedule, your option shares would vest at the
rate of 4.167% per month of employment over the 24 months following your start
date; provided, that all of the shares subject to your option will vest
automatically upon the consummation of a sale of all or substantially all of the
assets of the company or a merger of the company with or into another
corporation in which the stockholders of Verity immediately before the
transaction do not own, directly or indirectly, a majority of Verity or the
surviving entity immediately following the transaction. The exercise price of
your stock option will not be fixed until the date of grant by the Compensation
Committee of the Board of Directors. We expect that the grant will occur during
the two weeks following your start date. The exercise price for your option
would ordinarily be set equal to the closing sale price of Verity's stock on the
grant date.

     Verity also offers an outstanding benefits package, including life, vision,
medical and dental insurance coverage, a 401(k) tax deferred retirement plan,
employee stock purchase plan, flexible benefits, and three weeks vacation
annually. Additionally, depending on your actual start date, Verity offers up to
twelve paid holidays per year. 

     Your employment with Verity is for no specified term and may be terminated
by you of Verity at any time. However, if the company terminates your employment
without cause prior to the anniversary of your start date under this agreement
(the "End Date"), (i) you will be entitled to receive payments on Verity's
standard payroll dates at the rate of $29,166.67 per month, net of withholding,
from the termination date until the End Date, (ii) you will not be required to
reimburse the Company for any amounts of the special bonus previously paid to
you and (iii) you will be entitled to receive upon the scheduled payment dates
any unpaid portion of the special bonus. You shall not be entitled to any such
benefits if your employment is terminated by the company for cause or by your
voluntarily. For 
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these purposes, "cause" will be defined to mean (i) your violation of any
material provision of the Inventions Agreement (as defined below), (ii) any act
of theft or dishonesty, (iii) any immoral or illegal act which has a detrimental
effect on the business or reputation of the company or its affiliates or (iv)
any material failure to use reasonable efforts to perform reasonably requested
tasks after written notice and a reasonable opportunity to comply with such
notice. You agree that the benefits stated in this paragraph shall be your sole
and exclusive remedy for any damages or injury arising out of or related to any
termination of your employment by Verity.

     This letter and the company's standard agreement relating to proprietary
rights between you and Verity (the "Inventions Agreement") set forth the terms
of your employment with the company and supersede any prior representations or
agreements, whether written or oral. This letter may not be modified or amended,
except by a written agreement, signed by the company and you.

     Anthony, we believe this position will provide you with an excellent
opportunity for professional growth, as well as offering you the excitement and
rewards of a dynamic and growing company. Verity feels the single most important
factor in our success has been our people. We are confident that the skills and
background you bring to us will be instrumental to Verity's continued success.

     Please keep a copy and return the signed original of this offer letter to
me by August 29, 1997. As we've discussed, the effectiveness of our agreement is
subject to approval by Verity's Board of Directors, which we expect to obtain
within the next week. Accordingly, we look forward to you joining our team and
starting on or before September __, 1997.

Sincerely,


Gary J. Sbona
President and CEO


I agree to and accept this offer of employment with Verity, Inc.


/s/ Anthony J. Bettencourt                    Sept. 5, 1997
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Signature                                     Start Date