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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

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FORM 10-K/A
Amendment No. 1


ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended May 31, 2002
Commission file number 0-26880

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VERITY, INC.
(Exact name of registrant as specified in its charter)


|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Delaware                                                       |  | 77-0182779                          
|(State or other jurisdiction of
incorporation or organization) |  | (I.R.S. Employer
Identification No.)
|                                                              
|894 Ross Drive
Sunnyvale, California                           |  | 94089                               
|(Address of principal executive offices)                       |  | (Zip code)                          

Registrants telephone number, including area code: (408) 541-1500

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

Securities registered pursuant to section 12(g) of the Act:

Common Stock, $0.001 Par Value
(Title of class)

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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 [X] No [   ]


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 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. [X]

The aggregate market value of the voting stock held by non-affiliates of
the registrant, based upon the closing price of the Common Stock on July 31,
2002, as reported on Nasdaq National Market was approximately $228,084,000.
Excludes approximately 14,835,000 shares of Common Stock held collectively by
the executive officers and directors of the registrant and by each person who
owned 5% or more of the outstanding Common Stock as of such date. Exclusion of
shares held by any person should not be construed to indicate that such person
is an affiliate of the registrant.

The number of shares of the registrants Common Stock outstanding on July
31, 2002 was 35,199,316.





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|                  |                                                                           |  |  |  |  |  |  | 
|----------------- | ------------------------------------------------------------------------- |  |  |  |  |  |  | 
|PART IV          
|                  | Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
|SIGNATURES       
|INDEX TO EXHIBITS
|EXHIBIT 10.36    
|EXHIBIT 10.37    
|EXHIBIT 10.38    
|EXHIBIT 10.39    



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DOCUMENTS INCORPORATED BY REFERENCE

Certain information in Part III of the Annual Report on Form 10-K, which
is amended by this Form 10-K/A, is incorporated by reference to the proxy
statement for the registrants 2002 annual meeting of stockholders to be filed
with the Securities and Exchange Commission pursuant to Regulation 14A not
later than 120 days after the end of the fiscal year covered by the Form 10-K.

EXPLANATORY NOTE

We are filing this amendment to our Annual Report on Form 10-K, originally
filed with the Securities and Exchange Commission on August 16, 2002, solely
for the purpose of adding exhibits 10.36, 10.37, 10.38 and 10.39. Except as
specifically indicated herein, no other information included in the Annual
Report on Form 10-K is amended by this Form 10-K/A.




PART IV




Item 14.Exhibits, Financial Statement Schedules, and Reports on Form 8-K



|(a) |  | The following documents are filed as a part of this Form:
|--- |  | ---------------------------------------------------------

|   |  |                                                                                                                                                                                                                 |  |       
|-- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------
|   |  |                                                                                                                                                                                                                 |  | Page  
|   |  |                                                                                                                                                                                                                 |  | Number
|   |  |                                                                                                                                                                                                                 |  |       
|1. |  | Financial
          Statements:                                                                                                                                                                                 |  |       
|   |  |                                                                                                                                                                                                                 |  |       
|   |  | Report
          of Independent Accountants                                                                                                                                                                     |  | 36    
|   |  |                                                                                                                                                                                                                 |  |       
|   |  | Consolidated
          Balance Sheets  As of May 31, 2002 and 2001                                                                                                                                             |  | 37    
|   |  |                                                                                                                                                                                                                 |  |       
|   |  | Consolidated
          Statements of Operations  For the Years Ended May 31, 2002,
          2001 and 2000                                                                                                     |  | 38    
|   |  |                                                                                                                                                                                                                 |  |       
|   |  | Consolidated
          Statements of Changes in Stockholders Equity  For the Years
          Ended May 31, 2002, 2001 and 2000                                                                                |  | 39    
|   |  |                                                                                                                                                                                                                 |  |       
|   |  | Consolidated
          Statements of Cash Flows  For the Years Ended May 31, 2002,
          2001 and 2000                                                                                                     |  | 40    
|   |  |                                                                                                                                                                                                                 |  |       
|   |  | Consolidated
          Statements of Comprehensive Income  For the Years Ended May 31,
          2002, 2001 and 2000                                                                                           |  | 41    
|   |  |                                                                                                                                                                                                                 |  |       
|   |  | Notes
          to Consolidated Financial Statements                                                                                                                                                            |  | 42    
|   |  |                                                                                                                                                                                                                 |  |       
|2. |  | Financial
          Statement Schedules  For the Years Ended May 31, 2002, 2001
          and 2000:                                                                                                            |  |       
|   |  |                                                                                                                                                                                                                 |  |       
|   |  | Schedule II
           Valuation and Qualifying Accounts                                                                                                                                                       |  | 57    
|   |  |                                                                                                                                                                                                                 |  |       
|   |  | All other
          schedules are omitted because they are not applicable or the required
          information is shown in the consolidated financial statements or notes
          thereto                    |  |       
|   |  |                                                                                                                                                                                                                 |  |       
|3. |  | Exhibits:
          See Index to Exhibits after the signature page. The Exhibits listed
          in the accompanying Index to Exhibits are filed or incorporated by reference
          as part of this report |  |       





|(b) |  | Reports on Form 8-K:
|--- |  | --------------------

None.





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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.



| | Verity, Inc.
| | ------------



|Date: August 29, 2002 | By: |  | /s/ Todd K. Yamami                    
|--------------------- | --- |  | --------------------------------------
|                      |     | 
|                      |     |  | Todd K. Yamami
Chief Financial Officer





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INDEX TO EXHIBITS

|            |  |                                                                                                                                                                                                      
|----------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit     |  |                                                                                                                                                                                                      
|Number      |  | Description of Document                                                                                                                                                                              
|            |  |                                                                                                                                                                                                      
|3.1         |  | Restated Certificate of Incorporation of the Company.(20)                                                                                                                                            
|3.2         |  | By-Laws.(20)                                                                                                                                                                                         
|4.1         |  | Amended and Restated Rights Agreement dated August 1, 1995, as amended.(1)                                                                                                                           
|4.2         |  | Form of Rights Agreement between Verity, Inc. and First National Bank of Boston dated
September 18, 1996.(3)                                                                                         
|4.3         |  | First Amendment to Rights Agreement dated as of July 23, 1999 among Verity, Inc. and
BankBoston, N.A.(15)                                                                                            
|10.1        |  | Form of Indemnification Agreement for directors and officers.(1),(4)                                                                                                                                 
|10.2        |  | Amended and Restated 1995 Stock Option Plan and forms of agreements thereunder.(4),(5)                                                                                                               
|10.3        |  | 1995 Employee Stock Purchase Plan, as amended.(4),(21)                                                                                                                                               
|10.4        |  | 1995 Outside Directors Stock Option Plan, as amended, and forms of agreement
thereunder.(4),(17)                                                                                                     
|10.5        |  | 1996 Non-Statutory Stock Option Plan, as amended.(4),(22)                                                                                                                                            
|10.6        |  | 1997 Non-Statutory Stock Option Plan for Verity, Canada, as amended.(4),(23)                                                                                                                         
|10.18
10.19 |  | Lease Agreement between Ross Drive Investors and the Company dated
January 22, 1996.(6)
Retainer Agreement between Regent Pacific Management Corporation and Verity, Inc. dated
July 31, 1997.(4),(7)
|10.21       |  | Employment Agreement between Anthony J. Bettencourt and the Company dated August 28,
1997.(4),(8)                                                                                                    
|10.22       |  | Security and Loan Agreement between Imperial Bank and the Company dated November 30,
1997.(9)                                                                                                        
|10.23       |  | Amendment to Retainer Agreement between Regent Pacific Management Corporation and Verity,
Inc. dated April 13, 1998.(4),(10)                                                                         
|10.24       |  | Amendment to Security and Loan Agreement between Imperial Bank and the Company dated
November 15, 1998.(11)                                                                                          
|10.25       |  | Amendment to Employment Agreement between Anthony J. Bettencourt and the Company dated
October 6, 1998.(4),(11)                                                                                      
|10.26       |  | Amendment to Retainer Agreement between Regent Pacific Management Corporation and Verity,
Inc. dated March 12, 1999.(4),(12)                                                                         
|10.27       |  | Amendment to Retainer Agreement between Regent Pacific Management Corporation and Verity,
Inc. dated February 9, 2000.(4),(14)                                                                       
|10.28       |  | Amendment to Employment Agreement between Anthony J. Bettencourt and the Company dated
September 23, 1999.(4),(18)                                                                                   
|10.29       |  | Amendment to Retainer Agreement between Regent Pacific Management Corporation and Verity,
Inc. dated March 12, 2001.(4),(19)                                                                         
|10.30       |  | Promissory Note dated January 2, 2001 given by Anthony Bettencourt in favor of Verity,
Inc.(4),(19)                                                                                                  
|10.31       |  | Promissory Note dated January 2, 2001 given by Todd Yamami in favor of Verity, Inc.(4),(19)                                                                                                          
|10.32       |  | Amendment to Employment Agreement between Anthony J. Bettencourt and the Company dated
September 29, 2000.(4),(24)                                                                                   
|10.33       |  | Amendment to Employment Agreement between Anthony J. Bettencourt and the Company dated
September 1, 2001.(4),(26)                                                                                    
|10.34       |  | Amendment to Retainer Agreement between Regent Pacific Management Corporation and Verity,
Inc. dated June 17, 2002.(4),(26)                                                                          
|10.35       |  | 1995 Employee Stock Purchase Plan, as amended September 28, 2001.(4),(26)                                                                                                                            
|10.36       |  | Loan Agreement, dated December 24, 1999, between Verity Benelux B.V. and Hugo
Sluimer.(4),(25)                                                                                                       
|10.37       |  | Loan Agreement, dated December 24, 1999, between Verity Benelux B.V. and Hugo
Sluimer.(4),(25)                                                                                                       
|10.38       |  | Loan Agreement, dated April 19, 2000, between Verity Benelux B.V. and Hugo Sluimer.(4),(25)                                                                                                          
|10.39       |  | Loan Agreement, dated September 11, 2000, between Verity Benelux B.V. and Hugo Sluimer.(4),(25)                                                                                                      





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|        |  |                                                                    
|------- |  | -------------------------------------------------------------------
|Exhibit |  |                                                                    
|Number  |  | Description of Document                                            
|        |  |                                                                    
|21.1    |  | Subsidiaries of the Company.(26)                                   
|23.1    |  | Consent of Independent Accountants, PricewaterhouseCoopers LLP.(26)
|99.1    |  | Certification.(26)                                                 



|(1)  |  | Incorporated by reference from the exhibits with corresponding numbers from the Companys Registration Statement (No. 33-96228), declared effective on October
5, 1995.                                                                                                                                                                                                                                                                                                                                 
|---- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    
|    
|    
|    
|(2)  |  | Incorporated by reference from the exhibits with corresponding numbers from the Companys Form 10-Q for the quarter ended August 31, 1996.                                                                                                                                                                                                                                                                                                                                                              
|    
|    
|    
|    
|(3)  |  | Incorporated by reference from Exhibit No. 1 to the Companys Form 8-K as filed with the Securities and Exchange Commission on October 10, 1996.                                                                                                                                                                                                                                                                                                                                                        
|    
|    
|    
|    
|(4)  |  | Management contract or compensatory plan or arrangement required to be filed as an exhibit.                                                                                                                                                                                                                                                                                                                                                                                                             
|    
|    
|    
|    
|(5)  |  | With respect to the Amended and Restated 1995 Stock Option Plan, incorporated by reference to Exhibit 99.2 to the Companys Registration Statement on Form S-8
filed October 22, 1999. With respect to the form of agreements under the Amended and Restated 1995 Stock Option Plan, incorporated by reference to such
agreements filed as exhibits with corresponding exhibit number from the Companys Form 10-Q for the quarter ended August 31, 1996.                                               
|    
|    
|    
|    
|(6)  |  | Incorporated by reference from the exhibits with corresponding numbers from the Companys Form 10-Q for the quarter ended February 29, 1996.                                                                                                                                                                                                                                                                                                                                                            
|    
|    
|    
|    
|(7)  |  | Incorporated by reference from the exhibits with corresponding numbers from the Companys Form 10-K for the year ended May 31, 1997.                                                                                                                                                                                                                                                                                                                                                                    
|    
|    
|    
|    
|(8)  |  | Incorporated by reference from the exhibits with corresponding numbers from the Companys Form 10-Q for the quarter ended August 31, 1997.                                                                                                                                                                                                                                                                                                                                                              
|    
|    
|    
|    
|(9)  |  | Incorporated by reference from the exhibits with corresponding numbers from the Companys Form 10-Q for the quarter ended February 28, 1998.                                                                                                                                                                                                                                                                                                                                                            
|    
|    
|    
|    
|(10) |  | Incorporated by reference from the exhibits with corresponding numbers from the Companys Form 10-K for the year ended May 31, 1998.                                                                                                                                                                                                                                                                                                                                                                    
|    
|    
|    
|    
|(11) |  | Incorporated by reference from the exhibits with corresponding numbers from the Companys Form 10-Q for the quarter ended November 30, 1998.                                                                                                                                                                                                                                                                                                                                                            
|    
|    
|    
|    
|(12) |  | Incorporated by reference from the exhibits with corresponding numbers from the Companys Form 10-Q for the quarter ended February 28, 1999.                                                                                                                                                                                                                                                                                                                                                            
|    
|    
|    
|    
|(13) |  | Incorporated by reference from the exhibits with corresponding numbers from the Companys Form 10-Q for the quarter ended November 30, 1999.                                                                                                                                                                                                                                                                                                                                                            
|    
|    
|    
|    
|(14) |  | Incorporated by reference from the exhibits with corresponding numbers from the Companys Form 10-Q for the quarter ended February 29, 2000.                                                                                                                                                                                                                                                                                                                                                            
|    
|    
|    
|    
|(15) |  | Incorporated by reference from Exhibit No. 99.2 to the Companys Form 8-K as filed with the Securities and Exchange Commission on July 29, 1999.                                                                                                                                                                                                                                                                                                                                                        
|    
|    
|    
|    
|(16) |  | Incorporated by reference to Exhibit 99.1 to the Companys Registration Statement on Form S-8 filed October 22, 1999.                                                                                                                                                                                                                                                                                                                                                                                   
|    
|    
|    
|    
|(17) |  | With respect to the 1995 Outside Directors Stock Option Plan, as amended, incorporated by reference to Exhibit 99.3 to the Companys Registration Statement on
Form S-8 filed October 22, 1999. With respect to the form of agreements under the 1995 Outside Directors Stock Option Plan, as amended, incorporated by
reference to such agreements filed as exhibits with corresponding exhibit number from the Companys Registration Statement (No. 33-96228), declared effective
on October 5, 1995.
|    
|    
|    
|    
|(18) |  | Incorporated by reference from the exhibits with corresponding numbers from the Companys Form 10-K for the year ended May 31, 2000.                                                                                                                                                                                                                                                                                                                                                                    
|    
|    
|    
|    
|(19) |  | Incorporated by reference from the exhibits with corresponding numbers from the Companys Form 10-Q for the quarter ended
February 28, 2001.                                                                                                                                                                                                                                                                                                                                                            
|    
|    
|    
|    
|(20) |  | Incorporated by reference from the exhibits with corresponding numbers from the Companys Form 10-Q for the quarter ended
November 30, 2000.                                                                                                                                                                                                                                                                                                                                                            
|    
|    
|    
|    
|(21) |  | Incorporated by reference to Exhibit 99.1 to the Companys Registration Statement on Form S-8 filed December 11, 2000.                                                                                                                                                                                                                                                                                                                                                                                  





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|(22) |  | Incorporated by reference to Exhibit 99.1 to the Companys Registration Statement on Form S-8 filed August 29, 2001.                
|---- |  | ------------------------------------------------------------------------------------------------------------------------------------
|    
|    
|    
|    
|(23) |  | Incorporated by reference to Exhibit 99.1 to the Companys Registration Statement on Form S-8 filed June 25, 2002.                  
|    
|    
|    
|    
|(24) |  | Incorporated by reference from the exhibits with corresponding numbers from the Companys Form 10-K for the year ended May
31, 2001.
|    
|    
|    
|    
|(25) |  | Filed herewith.                                                                                                                     
|    
|    
|    
|    
|(26) |  | Previously filed.