Document:

Supplemental Indenture dated April 1, 1991

 EXHIBIT 4.9 
  

 
 AEGON N.V. 
 as Guarantor 
  
 and 
  
 TRANSAMERICA FINANCE CORPORATION

 as Issuer 
  
 and 
  
 BANK OF NEW YORK 
 (formerly First Interstate Bank, Ltd.) 
 as Trustee 
  

  
 SUPPLEMENTAL INDENTURE 
  
 Dated as of
                , 2003 
  
 to 
  
 INDENTURE 
  
 Dated as of April 1, 1991

  

  
  

 TABLE OF CONTENTS 
  

	 	  	 	  	Page

		
	 ARTICLE I
  
 DEFINITIONS
	  	 
			
	 SECTION 1.1
	  	DEFINITION OF TERMS	  	2
		
	 ARTICLE II
  
 THE PARTIES
	  	 
			
	 SECTION 2.1
	  	THE TRUSTEE	  	2
	 SECTION 2.2
	  	THE GUARANTOR	  	2
		
	 ARTICLE III
  
 THE GUARANTEE
	  	 
			
	 SECTION 3.1
	  	GUARANTEE	  	3
	 SECTION 3.2
	  	WAIVER OF NOTICE AND DEMAND	  	4
	 SECTION 3.3
	  	WAIVER OF GUARANTOR’S RIGHTS	  	4
	 SECTION 3.4
	  	NO DEFENSE; IMMUNITY; SET-OFF; COUNTERCLAIM	  	4
	 SECTION 3.5
	  	GUARANTEE OF PAYMENT	  	5
	 SECTION 3.6
	  	OBLIGATIONS NOT AFFECTED	  	5
	 SECTION 3.7
	  	SUBROGATION	  	5
	 SECTION 3.8
	  	INDEPENDENT OBLIGATIONS	  	5
		
	 ARTICLE IV
  
 SUBORDINATION
	  	 
			
	 SECTION 4.1
	  	RANKING	  	6
		
	 ARTICLE V
  
 CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
	  	 
			
	 SECTION 5.1
	  	GUARANTOR MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS	  	6
	 SECTION 5.2
	  	SUCCESSOR SUBSTITUTED	  	6
		
	 ARTICLE VI
  
 MISCELLANEOUS
	  	 
			
	 SECTION 6.1
	  	RATIFICATION OF THE INDENTURE	  	6
	 SECTION 6.2
	  	TRUSTEE NOT RESPONSIBLE FOR RECITALS	  	6
	 SECTION 6.3
	  	TERMINATION	  	7
	 SECTION 6.4
	  	SUCCESSORS AND ASSIGNS	  	7
	 SECTION 6.5
	  	AMENDMENTS	  	7
	 SECTION 6.6
	  	NOTICES	  	7
	 SECTION 6.7
	  	BENEFIT	  	7
	 SECTION 6.8
	  	GOVERNING LAW; JURISDICTION	  	7
	 SECTION 6.9
	  	SEPARABILITY	  	8
	 SECTION 6.10
	  	COUNTERPARTS	  	8
	 SECTION 6.11
	  	EFFECTIVENESS	  	8

  

 1 

 SUPPLEMENTAL INDENTURE, dated as of
             , 2003 (this “Supplemental Indenture”) among AEGON N.V., a Netherlands public company with limited liability (the “Guarantor”), Transamerica Finance
Corporation, a Delaware corporation (the “Company”), and Bank of New York (formerly First Interstate Bank, Ltd.), a banking association duly incorporated and registered under the laws of New York, as trustee (the “Trustee”).

  
 WHEREAS, the Company has executed and delivered to the Trustee
an indenture dated as of April 1, 1991 (the “Indenture”) providing for the issuance by the Company from time to time of its unsecured subordinated debt securities issuable in one or more series; 
  
 WHEREAS, the Company has issued, and the Trustee has authenticated and
delivered, the series of debt securities designated Medium Term Notes, Series D (the “Notes”); 
  
 WHEREAS, the Company is the obligor with respect to the Notes; 
  
 WHEREAS, the Guarantor is willing to provide the Guarantee (as defined herein) on the terms and subject to the conditions set forth herein; 
  
 WHEREAS, the Company proposes to amend and supplement the Indenture in
certain respects; 
  
 NOW THEREFORE, in consideration of the
premises, the parties hereby agree as follows: 
  
 ARTICLE I

  
 DEFINITIONS 
  
 SECTION 1.1    DEFINITION OF TERMS.

  
 Unless the context otherwise requires: 
  
 (a) a term defined in the Indenture has the same meaning when used in this
Supplemental Indenture; 
  
 (b) a term defined anywhere in this
Supplemental Indenture has the same meaning throughout this Supplemental Indenture; 
  
 (c) the singular includes the plural and vice versa; and 
  
 (d) the Article and Section headings herein and the Table of Contents are for convenience of reference only and do not affect the construction of this Supplemental Indenture. 
  
 ARTICLE II 
  
 THE PARTIES 
  
 SECTION 2.1    THE TRUSTEE. 

 
 The Guarantee shall be held by the Trustee for the benefit of the
Holders, and the Trustee shall not transfer the Guarantee to any Person except in connection with a simultaneous transfer of the Notes carried out in accordance with the Indenture. 
  
 SECTION 2.2    THE GUARANTOR. 
  
 The Guarantor is hereby made a party to the Indenture. 
  

 2 

 ARTICLE III 
  
 THE GUARANTEE 
  
 SECTION 3.1    GUARANTEE. 
  

(a) The Guarantor hereby fully and unconditionally guarantees to each Holder, and to the Trustee on behalf of each Holder, the due and punctual payment
(and not merely the collection) of the principal of (premium, if any) and interest on the Notes, when and as the same shall become due and payable whether at maturity, by acceleration, call for redemption or otherwise, according to the terms thereof
and the Indenture without any requirement that a Holder or Paying Agent first proceed against the Company (the “Guarantee”). The obligations under the Guarantee shall be absolute and unconditional for the duration of the Guarantee,
irrespective of (i) any invalidity, irregularity or unenforceability of the Notes, (ii) the absence of any action to enforce the same or any release or amendment or waiver of any term of any other guarantee of, all or of any of the Notes, any waiver
or consent by the Holder of such Note or by the Trustee or either of them with respect to any provisions thereof or of the Indenture, (iii) the obtaining of any judgment against the Company or any action to enforce the same or any other
circumstances which might otherwise constitute a legal or equitable discharge or defense of a guarantor; provided, however, that notwithstanding the foregoing, no such release, amendment, waiver, consent or judgment shall, without the consent
of the Guarantor, increase the principal amount of such Note or increase the rate or rates of interest thereon, or increase any premium payable upon redemption thereof, or alter the Stated Maturity thereof. The Guarantee shall continue in full force
and effect until the principal of (premium, if any) and interest in respect of all outstanding Notes shall have been paid. 
  
 (b) The Guarantor will make all payments pursuant to the Guarantee without withholding or deduction for, or on account of, any present or future taxes,
duties, assessments, levies and other governmental charges of any nature whatsoever now or hereafter imposed or established by or on behalf of the Netherlands or any authority in the Netherlands, unless such deduction or withholding is required by
law (a “Netherlands Tax”). In the event any Netherlands Tax is so imposed or established on any amounts payable under the Guarantee, the Guarantor agrees to pay such additional amounts to each Holder (the “Additional Amounts”) as
may be necessary in order that the net amounts receivable by each Holder after any payment, withholding or deduction in respect of such Netherlands Tax shall equal the respective amounts of principal (premium, if any) and interest, which would have
been receivable in respect of the Notes in the absence of such payment, withholding or deduction; provided, however, that the amounts with respect to the Netherlands Tax shall be payable only to Holders that are not residents in the
Netherlands for purposes of its tax laws; and provided further, that the Guarantor shall not be required to make any payment of Additional Amounts for or account of: 
  

	 	A.	 	any tax, assessment or other governmental charge which would not have been imposed but for the existence of any present or former connection between such Holder (or between a
fiduciary, settlor, beneficiary, member or shareholder of, or possessor of a power over such Holder, if such Holder is an estate, trust, partnership or corporation) and the Netherlands, or any political subdivision or territory or possession thereof
or therein or area subject to its jurisdiction, including, without limitation, such Holder (or such fiduciary, settlor, beneficiary, member, shareholder or possessor) being or having been a citizen or resident thereof or treated as a resident
thereof or being or having been present or engaged in a trade or business therein or having or having had a permanent establishment therein; 

  

	 	B.	 	any estate, inheritance, gift, sales, transfer, personal property or similar tax, assessment or other governmental charge; 

  

	 	C.	 	any tax, assessment or other governmental charge which is payable other than by withholding from payments of (or in respect of) principal of (premium, if any) or any interest on,
the Notes; 

  

	 	D.	 	any tax, assessment or other governmental charge required to be withheld by any paying agent from any payment of principal of (premium, if any) or any interest on, any Note, if such
payment can be made without such withholding by any other paying agent; 

  

 3 

	 	E.	 	any tax, assessment or other governmental charge which would not have been imposed or withheld if such Holder had made a declaration of nonresidence or other similar claim for
exemption or presented any applicable form of certificate, upon the making or presentation of which that Holder would either have been able to avoid such tax, assessment or charge or to obtain a refund of such tax, assessment or charge;

  

	 	F.	 	any tax, assessment or other governmental charge which would not have been imposed but for the presentation of a Note (where presentation is required) for payment on the date more
than 30 days after the date on which such payment became due and payable or more than 30 days after the date on which payment thereof was duly provided for, whichever occurred later; 

  

	 	G.	 	any withholding or deduction imposed on a payment under the Guarantee which is required to be made pursuant to a European Union directive on the taxation of savings or any law
implementing or complying with, or introduced in order to conform to, such directive; or 

  

	 	H.	 	any combination of items above; 

  
 nor shall Additional Amounts be paid with respect to any payment of the principal of (premium, if any) or any interest on any Note pursuant to the Guarantee to any such
Holder who is a fiduciary or a partnership or a beneficial owner who is other than the sole beneficial owner of such payment to the extent a beneficiary or settlor with respect to such fiduciary or a member of such partnership or a beneficial owner
would not have been entitled to such Additional Amount had it been the Holder of the Note. 
  
 Whenever in the Notes there is a reference, in any context, to the payment of the principal of (premium, if any) or interest, or in respect of, any Note such payment shall be deemed to include the payment of
Additional Amounts to the extent that, in such context, Additional Amounts are, were or would be payable in respect of such payment pursuant to the provisions hereof or thereof and express mention of the payment of Additional Amounts (if applicable)
in any provision hereof shall not be construed as excluding Additional Amounts in those provisions hereof where such express mention is not made. 
  
 SECTION 3.2    WAIVER OF NOTICE AND DEMAND. 
  
 The Guarantor hereby waives the benefits of diligence, presentment, demand of payment, any requirement that the Trustee or
any of the Holders exhaust any right or take any action against the Company or any other Person, filing of claims with a court in the event of insolvency or bankruptcy of the Company, protest or notice with respect to such Note or the indebtedness
evidenced thereby; provided, however, that the Guarantor receives prompt written notice from the Trustee or any Holder of any failure by the Company to make any payment of principal (premium, if any) or interest or any sinking fund or
analogous payment. 
  
 SECTION
3.3    WAIVER OF GUARANTOR’S RIGHTS. 
  
 The Guarantor will not exercise any rights which it may acquire by way of subrogation or by any indemnity, reimbursement or other agreement until the principal (premium, if any) and interest in respect of all outstanding Notes shall have
been paid. 
  
 SECTION
3.4    NO DEFENSE; IMMUNITY; SET-OFF; COUNTERCLAIM. 
  
 To the extent that the Guarantor or any of its respective properties, assets or revenues may have or may hereafter become entitled to, or have attributed to it, any right of immunity on the grounds of sovereignty or
other similar grounds, from any legal action, any suit, process or proceeding in connection with or arising out of the Guarantee, from the giving of any relief thereunder, from set-off or counterclaim, from the jurisdiction of any court, from
service of process, from attachment upon or prior to judgment from attachment in aid of execution of judgment, or from execution of judgment or other legal action, suit, process or proceeding for the giving of any relief or for the enforcement of
any judgment, in any jurisdiction in which any proceeding may at any time be 

  

 4 

 
commenced, with respect to its obligations, liabilities or any other matter under or arising out of or in connection with the Guarantee, the Guarantor hereby
irrevocably and unconditionally waives and agrees, for the benefit of each Holder, from time to time, not to plead or claim any such immunity, set-off or counterclaim. 
  
 SECTION 3.5    GUARANTEE OF PAYMENT. 
  
 This Supplemental Indenture creates a guarantee of payment and not of
collection. 
  
 SECTION
3.6    OBLIGATIONS NOT AFFECTED. 
  
 The
obligations of the Guarantor under this Supplemental Indenture shall in no way be affected or impaired by reason of the occurrence from time to time of any of the following: 
  

	 	(a)	 	the release or waiver, by operation of law or otherwise, of the performance or observance by the Company of any express or implied agreement, covenant, term or condition relating to
the Notes to be performed or observed by the Company; 

  

	 	(b)	 	any failure, omission, delay or lack of diligence on the part of the Holders to enforce, assert or exercise any right, privilege, power or remedy conferred on the Holders pursuant
to the terms of the Notes, or any action on the part of the Company granting indulgence or extension of any kind; 

  

	 	(c)	 	the voluntary or involuntary liquidation, dissolution, sale of any collateral, receivership, insolvency, bankruptcy, assignment for the benefit of creditors, reorganization,
arrangement, composition or readjustment of debt of, or other similar proceedings affecting, the Company or any of the assets of the Company; 

  

	 	(d)	 	any invalidity of, or defect or deficiency in, the Notes; 

  

	 	(e)	 	the settlement or compromise of any obligation of the Guarantor under the Guarantee or incurred under the Guarantee; or 

  

	 	(f)	 	any other circumstance whatsoever that may otherwise constitute a legal or equitable discharge or defense of a guarantor, it being the intent of this Section 3.6 that the
obligations of the Guarantor hereunder shall be absolute and unconditional under any and all circumstances. 

  
 There shall be no obligation of the Holders to give notice to, or obtain consent of, the Guarantor with respect to the happening of any of the foregoing.

  
 SECTION
3.7    SUBROGATION. 
  
 The Guarantor shall
be subrogated to all rights, if any, of the Holders of the Notes against the Company in respect of any amounts paid to such Holders by the Guarantor under this Supplemental Indenture; provided, however, that the Guarantor shall not (except to
the extent required by mandatory provisions of law) be entitled to enforce or exercise any right that it may acquire by way of subrogation or any indemnity, reimbursement or other agreement, in all cases as a result of payment under this
Supplemental Indenture, if, at the time of any such payment, any amounts are due and outstanding under this Supplemental Indenture. If any amount shall be paid to the Guarantor in violation of the preceding sentence, the Guarantor agrees to hold
such amount in trust for the benefit of the Holders and to pay over such amount to the Holders. 
  
 SECTION 3.8    INDEPENDENT OBLIGATIONS. 
  
 The Guarantor acknowledges that its obligations hereunder are independent of the obligations of the Company with respect to
the Notes, and that the Guarantor shall be liable as principal and as debtor hereunder to make payments with respect to the Guarantee pursuant to the terms of this Supplemental Indenture notwithstanding the occurrence of any event referred to in
subsections (a) through (f), inclusive, of Section 3.6 hereof. 
  

 5 

 ARTICLE IV 
  
 SUBORDINATION 
  
 SECTION 4.1    RANKING. 
  
 The Guarantee will constitute an unsecured and subordinated obligation of the Guarantor, will be subordinated in right of payment to all senior
indebtedness of the Guarantor and will rank pari passu with all unsecured and subordinated indebtedness of the Guarantor other than obligations that by mandatory operation of law would be given priority in a dissolution of the Guarantor.

  
 ARTICLE V 
  
 CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE 
  
 SECTION 5.1    GUARANTOR MAY
CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS. 
  
 The Guarantor shall
not consolidate with or merge into any other Person or convey, transfer or lease its properties and assets substantially as an entirety to any Person, unless: 
  

	 	(a)	 	the Person formed by such consolidation or into which the Guarantor is merged or the Person which acquires by conveyance or transfer, or which leases, the properties and assets of
the Guarantor substantially as an entirety (for purposes of this Article V, a “Successor Guarantor”) shall expressly assume, by an indenture supplemental to the Indenture, executed and delivered to the Trustee, in form and substance
reasonably satisfactory to the Trustee, the Guarantor’s obligations under this Supplemental Indenture and the performance or observance of every covenant of this Supplemental Indenture on the part of the Guarantor to be performed or observed;
and 

  

	 	(b)	 	immediately after giving effect to such transaction, no Event of Default, and no event which, after notice or lapse of time or both, would become an Event of Default, shall have
happened and be continuing. 

  
 SECTION 5.2    SUCCESSOR SUBSTITUTED. 
  
 Upon any consolidation of the Guarantor with, or merger of the Guarantor into, any other Person or any conveyance, transfer or lease of all or substantially all of the properties and assets of the Guarantor as an entirety in accordance with
Section 5.1, the Successor Guarantor shall succeed to and be substituted for, and may exercise every right and power of, the Guarantor under this Supplemental Indenture with the same effect as if such Successor Guarantor had been named as the
Guarantor herein, and thereafter, the Guarantor shall be relieved of all obligations and covenants under this Supplemental Indenture. 
  
 ARTICLE VI 
  
 MISCELLANEOUS 
  
 SECTION 6.1    RATIFICATION OF THE INDENTURE. 
  
 Except as hereby expressly amended, the Indenture is in all respects ratified and confirmed and all terms, provisions and conditions thereof shall be and
remain in full force and effect. 
  
 SECTION
6.2    TRUSTEE NOT RESPONSIBLE FOR RECITALS. 
  
 The recitals herein contained are made by the Guarantor and not by the Trustee, and the Trustee assumes no responsibility for the correctness thereof. The Trustee makes no representation as to the validity or sufficiency of this
Supplemental Indenture. 
  

 6 

 SECTION 6.3    TERMINATION. 
  
 This Supplemental Indenture shall terminate once the principal (premium, if
any) and interest of all outstanding Notes have been paid. 
  
 SECTION 6.4    SUCCESSORS AND ASSIGNS. 
  
 The Guarantee and other obligations of the Guarantor contained in this Supplemental Indenture shall bind the successors, assigns, receivers, trustees and representatives of the Guarantor and shall inure to the benefit
of the Holders then outstanding. 
  
 SECTION
6.5    AMENDMENTS. 
  
 This Supplemental
Indenture may only be amended in accordance with Section 902 of the Indenture. 
  
 SECTION 6.6    NOTICES. 
  
 All notices provided for in this Supplemental Indenture shall be in writing, duly signed by the party giving such notice, and shall be delivered,
telecopied or mailed by registered or certified mail, as follows: 
  

	 	(a)	 	If given to the Trustee, at the mailing address of the Trustee set forth below: 

  
 Bank of New York 
 101 Barclay Street, 21W 
 New York, NY 10286 
  

	 	(b)	 	If given to the Guarantor, at the mailing address of the Guarantor set forth below (or such other address as the Guarantor may give notice of to the Holders):

  
 AEGONplein 50, 
 2591 TV, The Hague, 
 The Netherlands 
 Attn: Group Treasury 
  

	 	(c)	 	If given to any Holder, at the address set forth in the Security Register. 

  
 All such notices shall be deemed to have been given when received in person, transmitted by facsimile with receipt confirmed, or mailed by first class
mail, postage prepaid except that if a notice or other document was refused delivery or could not be delivered because of a change of address, of which no notice was given, such notice or other document shall be deemed to have been delivered on the
date of such refusal or inability to deliver. 
  

	SECTION	 	6.7    BENEFIT. 

  
 Nothing in this Supplemental Indenture or in the Notes, express or implied, shall give to any Person, other than the parties hereto and their successors
hereunder and the Holders, any benefit or any legal or equitable right, remedy or claim under this Supplemental Indenture. 
  

	SECTION	 	6.8    GOVERNING LAW; JURISDICTION. 

  
 This Supplemental Indenture shall be governed by and construed in accordance with the laws of the State of California except (i) with respect to Article
III hereof and the Guarantee, which shall be governed by and construed in accordance with the laws of the State of New York, without regard to conflicts of law provisions and (ii) with respect to authorization and execution of this Supplemental
Indenture by or on behalf of the Guarantor which are required to be governed by the laws of the Netherlands. The Guarantor agrees that any legal action, suit or proceeding against it arising out of or related to this Supplemental Indenture may be
brought in the 

  

 7 

 
United States federal courts located in the Borough of Manhattan or the courts of the State of New York located in the Borough of Manhattan and hereby
irrevocably accepts and submits to the non-exclusive jurisdiction of the aforementioned courts, in personam, generally and unconditionally, with respect to any suit, action or proceeding in connection with or arising out of the Guarantee for itself
and its respective properties, assets and revenues. The Guarantor agrees that a final unappealable judgment in any action or proceeding arising, out of or relating to this Supplemental Indenture shall be conclusive and may be enforced in any other
jurisdiction otherwise having jurisdiction over the Guarantor by suit on the judgment or in any other manner provided by law. 
  
 SECTION 6.9    SEPARABILITY. 
  
 In case any one or more of the provisions contained in this Supplemental Indenture shall for any reason be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provisions of this Supplemental Indenture, and this Supplemental Indenture shall be construed as if such invalid or illegal
or unenforceable provisions had never been contained herein. 
  
 SECTION 6.10    COUNTERPARTS. 
  
 This Supplemental Indenture may be executed in any number of counterparts each of which shall be an original, but such counterparts shall together constitute one and the same instrument. 
  

	SECTION	 	6.11    EFFECTIVENESS. 

  
 This Supplemental Indenture shall become a legally effective and binding instrument upon the execution and delivery hereof by all parties hereto.

  
 * * * * * 
  
 IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed as of the day and year first above written. 
  

	 AEGON N.V.

		
	 By:
	 	

	 Name:
	 	 
	 Title:
	 	 

  

	 TRANSAMERICA FINANCE CORPORATION

		
	 By:
	 	

	 Name:
	 	 
	 Title:
	 	 

  

	 BANK OF NEW YORK
  
 as Trustee

		
	 By:
	 	

	 Name:
	 	 
	 Title:
	 	 

  

 8Prepared by R.R. Donnelley Financial -- Key Employment Agreement for Anthony J. Bettencourt

 Exhibit 10.42 
 Verity, Inc. 
  
 KEY EMPLOYEE AGREEMENT 
 FOR 
 Anthony J. Bettencourt 
  
 This Key Employee Agreement (“Agreement”) by and between Anthony J. Bettencourt (“Executive”) and Verity, Inc., a Delaware corporation
(the “Company”), is effective as of March 4, 2003 (the “Employment Date”). 
  
 WHEREAS, the Company desires to employ Executive to provide personal services to the Company as its President and Chief Executive Officer, and wishes to provide Executive with
certain compensation and benefits in return for his services; and 
  
 WHEREAS, Executive wishes to be employed by the Company and provide personal services to the Company in return for certain compensation and benefits; 
  
 NOW, THEREFORE, in
consideration of the mutual promises and covenants contained herein, it is hereby agreed by and between the parties hereto as follows:  
  

	 	1.	 	Position, Duties and Responsibilities. 

  
 The Company will employ Executive in the position of President and Chief Executive Officer. Executive will report to the Company’s Board of Directors
(the “Board”), and will perform the duties customarily associated with his position and such other duties assigned by the Board. Executive agrees to exercise the highest degree of professionalism, utilize his expertise and creative
talents, and devote all of his business time and attention (except for periods of vacation and reasonable periods of illness or other incapacity permitted by the Company’s general employment policies) in performing his duties as the
Company’s President and Chief Executive Officer. 
  
 The
Executive is serving at the discretion of the Board and the Board retains the discretion to modify Executive’s position and duties from time to time. 
  

	 	2.	 	Compensation and Employee Benefits. 

  
 Base Salary. As of the Employment Date, Executive’s annual base salary will be five hundred thousand dollars ($500,000), less standard payroll
deductions and withholdings, paid according to the Company’s regular payroll schedule and procedures. Executive’s salary may be further adjusted from time to time at the sole discretion of the Board.  
  
 Annual Incentive Bonus. Subject to the achievement of milestones
and/or other criteria as mutually agreed upon in writing between the Executive and Board on an annual basis, which achievement will be determined by the Board in its sole discretion, Executive will be eligible to earn an annual incentive bonus of
one hundred seventy-five 
  

 1 

 thousand dollars ($175,000), subject to standard payroll deductions and withholdings (the “Annual Incentive
Bonus”). If Executive is not employed at the time any bonus is to be paid he will not have earned the bonus, and no partial or pro-rata bonus will be earned or paid.  
  
 Stock Option Grant. Pursuant to the Company’s 1996 Non-Statutory Stock Option Plan (the “Plan”), on
March 4, 2003 the Company granted Executive a stock option to purchase three hundred thousand (300,000) shares of the Company’s common stock (the “Option”). The exercise price per share of the Option is equal to the closing price of
the Company’s common stock on the Nasdaq National Market on March 4, 2003, which the Board determined to be the fair market value of the Company’s common stock on the date of the grant. Shares of the Option will vest over a two year period
from the Employment Date, with vesting to occur in twenty-four (24) equal monthly installments until the Option is fully vested or Executive’s continuous service to the Company is terminated, whichever occurs first, and is subject to the
Company’s standard change of control provisions, including full acceleration of vesting upon termination without cause following a change of control. The Option is subject to the terms and conditions of the Plan, any amendments thereto, and
Executive’s corresponding written grant agreement entered into in connection therewith. 
  
 Employee Benefits. Executive shall be entitled to all benefits, including health and disability benefits, for which he is eligible under the terms and conditions of the standard Company benefits plans which may
be in effect from time to time and provided by the Company to its senior executive level employees generally. Details about these benefits are set forth in the Company’s summary plan descriptions and other materials. 
  
 Indemnification. The Company and Executive hereby reaffirm and
acknowledge the obligations and duties under their September 5, 1997 Indemnity Agreement, which is unaffected by this Agreement. 
  
 PTO Accrual. Executive will accrue paid time off according to the Company’s paid leave policies and practices, with such accrual to cease as
of Executive’s last day of employment. 
  

	 	3.	 	At-Will Employment Relationship. Subject to the terms of this Agreement, either Executive or the Company may 

 terminate the employment relationship at any time, with or without cause or advance notice. 
  

	 	4.	 	Termination. 

  
 Termination for Death or Disability. Unless mutually agreed in writing, this Agreement and Executive’s employment relationship with the
Company shall be terminated immediately in the event of his death or any illness, disability or other incapacity that results in his physical or mental inability to regularly perform his duties for a period in excess of one hundred twenty (120)
consecutive days or more than one hundred eighty (180) days in any consecutive twelve (12) month period. The determination of whether Executive is physically or mentally unable to regularly perform his duties shall be made in good faith by the
Board. Executive’s inability to be physically present on the Company’s premises shall not constitute a presumption that he is unable to perform such duties. If his employment with the Company 
  

 2 

 terminates due to the circumstances described in this Section 4(a), Executive shall be entitled to receive, in full
discharge of all obligations of the Company to him, his unpaid base salary (if any), and his accrued and unused vacation time, as of the termination date, and such other benefits as expressly required by law or the terms of applicable benefit plans.
Executive will not be entitled to receive the Severance Benefits (defined below) if his employment is terminated pursuant to this Section 4(a). 
  
 Severance Benefits For Termination Without Cause Or Resignation With Good Reason Following A Change In Control. Subject to Section 5 herein, if
there is a Change in Control (defined below) and following the Change in Control (a) the Company terminates Executive’s employment without “Cause” (defined below) or (b) Executive resigns for Good Reason (defined below), Executive
shall be eligible to receive the following as his sole severance benefits (collectively, the “Severance Benefits”): (i) he will continue to receive his annual base salary in effect as of the termination effective date, subject to standard
payroll deductions and withholdings (the “Severance Payments”), on the Company’s standard payroll dates for the period from the termination effective date and continuing for twelve (12) months thereafter (the “Severance
Period”); (ii) he will receive full payment of his Annual Incentive Bonus for the relevant year, subject to standard payroll deductions and withholdings, which will be paid at the same time as annual Company bonuses are paid out for the
relevant year to other executive level employees; and (iii) if Executive timely elects to continue his Company-provided group health insurance coverage pursuant to federal COBRA law, through the last day of the Severance Period or until such time as
Executive qualifies for comparable health insurance benefits through a new employer, whichever occurs first, the Company will reimburse him for the cost of his COBRA premiums to continue his health insurance coverage at the same level of coverage
for him and his dependents (if applicable) in effect as of the termination date. As a condition of his receipt of all or any of the Severance Benefits, Executive shall: (i) prior to his receipt of any of the Severance Benefits, provide the Company
with an effective general release of known and unknown claims, in the form attached as Exhibit A; and (ii) at any time during the Severance Period, respond fully to any Company inquiry regarding his post-termination employment, consulting and
contracting activities. 
  
 Termination for Cause;
Resignation. If (a) there is no Change in Control during Executive’s employment or (b) there is a Change in Control during Executive’s employment but after the Change in Control Executive’s employment ends due to his resignation
without Good Reason or the Company terminating his employment for Cause, Executive will not receive any of the Severance Benefits; rather, Executive shall only be entitled to receive, in full discharge of all obligations of the Company to him, his
unpaid base salary (if any), and his accrued and unused vacation time, as of the termination date. 
  
 Definition of Cause. For purposes of this Agreement, “Cause” will be defined to mean (i) Executive’s violation of any material
provision of the Inventions Agreement (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 tasks the Board reasonably requests of Executive after written notice and a reasonable opportunity to comply with such notice. 
  

 3 

 Definition of Change in Control. As used in this Agreement, a “Change in Control” shall
mean an Ownership Change Event (defined below) or a series of related Ownership Change Events (collectively, the “Transaction”) wherein the stockholders of the Company immediately before the Transaction do not retain immediately after the
Transaction, in substantially the same proportions as their ownership of shares of the Company’s voting stock immediately before the Transaction, direct or indirect beneficial ownership of more than fifty percent (50%) of the total combined
voting power of the outstanding voting stock of the Company or the corporation or corporations to which the assets of the Company were transferred (the “Transferee Corporation(s)”), as the case may be. For purposes of the preceding
sentence, indirect beneficial ownership shall include, without limitation, an interest resulting from ownership of the voting stock of one or more corporations which, as a result of the Transaction, own the Company or the Transferee Corporation(s),
as the case may be, either directly or through one or more subsidiary corporations. The Board shall have the right to determine whether multiple sales or exchanges of the voting stock of the Company or multiple Ownership Change Events are related,
and its determination shall be final, binding and conclusive. 
  
 An “Ownership Change Event” shall be deemed to have occurred if any of the following occurs with respect to the Company: (a) the direct or indirect sale or exchange in a single or series of related transactions by the stockholders
of the Company of more than fifty percent (50%) of the voting stock of the Company; (b) a merger or consolidation in which the Company is a party; (c) the sale, exchange, or transfer of all or substantially all of the assets of the Company; or (d) a
liquidation or dissolution of the Company. 
  
 Definition of
Good Reason Resignation. As used in this Agreement, a resignation for “Good Reason” is Executive’s resignation due to any of the following (without Executive’s express written consent): (i) a material reduction in
Executive’s essential duties as President and Chief Executive Officer or a change in circumstances such that Executive no longer reports to the Board, provided, however, that Executive must first provide the Company with written notice
of such reduction in duties or change in reporting relationship and sixty (60) days to cure; (ii) following an acquisition that constitutes a Change in Control, as defined in Section 4(e), Executive no longer being President and Chief Executive
Officer of an independently run subsidiary of the acquiring entity and an officer of the acquiring entity; (iii) a reduction in Executive’s base salary by more than fifteen percent (15%), measured against his base salary in effect as of the
Employment Date (except Good Reason shall not exist if such reduction is applied equally to all senior executives at the Company and the Board in good faith determines such reduction is necessary); (v) a relocation of his place of employment by more
than fifty (50) miles; or (vi) an affirmative rejection of this Agreement by any successor, provided, however, that any attempt by a successor to renegotiate the terms of this Agreement shall not be considered Good Reason. 
  
 Parachute Payments. In the event that the severance, acceleration of
stock options and other benefits provided for in this Agreement or otherwise payable to Executive (i) constitute “parachute payments” within the meaning of Section 28OG (as it may be amended or replaced) of the Internal Revenue Code of
1986, as amended or replaced (the “Code”) and (ii) but for this Section 4(g), would be subject to the excise tax imposed by Section 4999 (as it may be amended or replaced) of the Code (the “Excise Tax”), then Executive’s
benefits hereunder shall be either (a) provided to Executive in full, or (b) provided to Executive 
  

 4 

 only as to such lesser extent which would result in no portion of such benefits being subject to the Excise Tax,
whichever of the foregoing amounts, taking into account the applicable federal, state and local income taxes and the Excise Tax, results in the receipt by Executive on an after-tax basis, of the greatest amount of benefits, notwithstanding that all
or some portion of such benefits may be taxable under the Excise Tax. Unless the Company and Executive otherwise agree in writing, any determination required under this Section 4(g) shall be made in writing in good faith by the Company’s
independent public accountants (the “Accountants”). In the event of a reduction in benefits hereunder, Executive shall be given the choice of which benefits to reduce. For purposes of making the calculations required by this Section
4(g), the Accountants may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of the Code. The Company and Executive shall furnish to the
Accountants such information and documents as the Accountants may reasonably request in order to make a determination under this Section 4(g). The Company shall bear all costs the Accountants may reasonably incur in connection with any
calculations contemplated by this Section 4(g). 
  

	5.	 	Early Termination of Severance Benefits. 

  
 Executive’s Forfeiture Actions. In the event that Executive takes any of the Forfeiture Actions, set forth below, during the Severance Period,
Executive’s right to receive the Severance Payments shall cease immediately upon the date that the Forfeiture Action(s) first occurs (the “Forfeiture Date”) and the Company shall have no further obligation to provide the Severance
Benefits to the Executive. For purposes of this Agreement, the following constitute “Forfeiture Actions” by Executive: (i) attempts, directly or indirectly, to recruit or otherwise induce or influence any person to leave employment or to
terminate a consulting relationship with the Company; (ii) attempts to Solicit any Customer (defined below) of the Company; (iii) breach of his Inventions Agreement or material breach of any other written agreement (including this Agreement) with
the Company; or (iv) directly or indirectly, whether as owner, partner, shareholder, consultant, agent, employee, co-venturer or otherwise, engaging, participating or investing in any Competing Business (defined below). Notwithstanding the
foregoing, Executive may own up to one percent (1%) of the outstanding stock of a publicly held corporation which constitutes or is affiliated with a Competing Business. 
  

	 	(b)	 	Definitions. For purposes of this Agreement: 

  

	 	(i)	 	The term “Competing Business” shall mean: (A) a business which is competitive with any business that the Company or any of its affiliates conducts or proposes to conduct
at any time during Executive’s employment; or (B) a business that the Company or any of its affiliates conducts or proposes to conduct at any time during the Severance Period, if Executive participated in the conduct of or planning for such
business while he was employed by the Company; 

  

	 	(ii)	 	The term “Customer” shall mean any present or past customer, vendor, supplier or business partner of the Company or any prospective customer, vendor, supplier or business
partner of the Company with whom Executive has had contact during his employment; and 

  

 5 

	 	(iii)	 	The term “Solicit” shall mean, directly or indirectly: (A) soliciting the business or patronage of any Customer for any person or entity other than the Company; (B)
diverting, enticing, or otherwise taking away from the Company the business or patronage of any Customer, or attempting to do so; or (C) soliciting or inducing any Customer to terminate or reduce its relationship with the Company.

  

	6.	 	Other Activities During Employment. 

  
 Except with the prior written consent of the Board, Executive will not during his employment undertake or engage in any other employment, occupation or
business enterprise, other than ones in which he is a passive investor. Executive may engage in civic and not-for-profit activities so long as such activities do not materially interfere with the performance of his duties under this Agreement.

  
 Except as permitted by Section 6(c) below, during
Executive’s employment he agrees not to acquire, assume or participate in, directly or indirectly, any position, investment or interest known by Executive to be adverse or antagonistic to the Company, or its business or prospects, financial or
otherwise. 
  
 During the term of Executive’s employment by
the Company except on behalf of the Company, Executive will not directly or indirectly, whether as an officer, director, stockholder, partner, proprietor, associate, representative, consultant, or in any capacity whatsoever engage in, become
financially interested in, be employed by or have any business connection with any other person, corporation, firm, partnership or other entity whatsoever that qualifies as a Competing Business; provided, however, that anything above to the
contrary notwithstanding, Executive may own, as a passive investor, securities of any Competing Business, so long as his direct holdings in any one such corporation do not in the aggregate constitute more than one percent (1%) of the voting stock of
such corporation. 
  

	7.	 	Company Policies. As a Company employee, Executive will be expected to abide by Company rules and policies. 

  

	8.	 	Inventions Agreement. Executive acknowledges his continuing obligations set forth in his Employee Inventions and Proprietary Rights Assignment Agreement (“Inventions
Agreement”) between Executive and the Company dated August 19, 2003. 

  

	9.	 	Waiver. If either party should waive any breach of any provisions of this Agreement, he or it will not thereby be deemed to have waived any preceding or succeeding breach of
the same or any other provision of this Agreement. 

  

	10.	 	Headings. The headings of the sections hereof are inserted for convenience only and will not be deemed to constitute a part hereof nor to affect the meaning thereof.

  

	11.	 	Amendment. This Agreement may not be amended or modified except by a written instrument signed by Executive and a duly authorized member of the Board.

  

	12.	 	Severability. If any provision of this Agreement is determined to be invalid or unenforceable, in whole or in part, this determination will not affect any other provision of
this 

  

 6 

 Agreement, and the Agreement should be enforced insofar as possible to achieve the intent of the parties.

  

	13.	 	Governing Law. This Agreement will be construed and interpreted in accordance with the laws of the State of California. 

  

	14.	 	Complete Agreement. This Agreement, including its exhibit, the Option written grant agreement and the Inventions Agreement, constitutes the complete, final and exclusive
embodiment of Executive’s employment agreement with the Company. This Agreement is entered into without reliance upon any promise, warranty or representation, written or oral, on any subject concerning the Company or concerning Executive’s
employment with the Company other than those expressly contained herein, and it supersedes any other such promises, warranties, representations or agreements. 

  

 7 

 IN WITNESS WHEREOF, the parties have
executed this Agreement on the day and year written below. 
  

	VERITY, INC.
		
	 By:
	 	 /s/    GARY J.
SBONA        

	 	 	Gary J. Sbona
	 	 	Executive Chairman of the Board

  
 Date: 8/22/03 
  
 Accepted and agreed this 
 25 day of Aug., 2003. 
  

	
	 /s/    ANTHONY J.
BETTENCOURT        

	Anthony J. Bettencourt

  
 Date: 8-25-03 
  
 Exhibit A: Form of Release 
  

 8 

 Exhibit A 
  

Form of Release 
  
 I understand that my employment with Verity, Inc. (the “Company”) terminated effective
            ,              (the “Separation Date”). The Company has agreed that if I choose to sign this Release
Agreement (“Release”), the Company will pay me certain severance benefits (minus standard withholdings and deductions) pursuant to the terms of the Key Employee Agreement between myself and the Company, effective March 4, 2003 (the
“Agreement”). I understand that I am not entitled to such benefits unless I sign this Release and it becomes fully effective. I understand that, regardless of whether I sign this Release, the Company will pay me all of my accrued
salary and vacation through the Separation Date, to which I am entitled by law. 
  
 In consideration for the severance benefits I am receiving under the Agreement, as described therein, I hereby agree to release the Company and its officers, directors, agents, attorneys, employees, shareholders,
parents, subsidiaries, affiliates, successors, and assigns, of and from any and all claims, liabilities, demands, causes of action, costs, expenses, attorneys’ fees, damages, indemnities and obligations of every kind and nature, in law, equity,
or otherwise, known or unknown, suspected and unsuspected, disclosed and undisclosed, liquidated or contingent, arising out of or in any way related to agreements, events, acts or conduct at any time prior to and including the execution date of this
Release, including but not limited to: any and all such claims and demands directly or indirectly arising out of or in any way connected with my employment with the Company or the conclusion of that employment; claims or demands related to salary,
bonuses, commissions, incentive payments, stock, stock options, or any ownership or equity interests in the Company, vacation pay, personal time off, fringe benefits, expense reimbursements, severance benefits, or any other form of compensation;
claims pursuant to any federal, any state or any local law, statute, common law or cause of action including, but not limited to, the federal Civil Rights Act of 1964, as amended; the federal Americans with Disabilities Act of 1990; the federal
Employee Retirement Income Security Act; the federal Age Discrimination in Employment Act of 1967, as amended (“ADEA”); the California Fair Employment and Housing Act, as amended; tort law; contract law; wrongful discharge; discrimination;
harassment; fraud; misrepresentation; defamation; libel; emotional distress; and breach of the implied covenant of good faith and fair dealing. 
  
 In releasing claims unknown to me at present, I am waiving all rights and benefits under Section 1542 of the California Civil Code, and any law or legal
principle of similar effect in any jurisdiction: “A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially
affected his settlement with the debtor.” 
  
 I
understand this Release will not be effective until the ADEA Effective Date, defined below. I acknowledge that I am knowingly and voluntarily waiving and releasing any rights I may have under the ADEA. I also acknowledge that the consideration given
for the waiver in the above paragraph is in addition to anything of value to which I was already entitled. I have been advised by this writing, as required by the ADEA that: (a) my waiver and release do not apply to any claims that may arise after
my signing of this Release; (b) I should consult with an 
  

 9 

 attorney prior to signing this Release; (c) I have twenty-one (21) days within which to consider this Release (although I
may choose to voluntarily sign this Release earlier); (d) I have seven (7) days after I sign this Release to revoke it; and (e) this Release will not be effective until the eighth day after this Release has been signed by me (the “ADEA
Effective Date”). 
  
 I accept and agree to the terms and
conditions stated above: 
  

	
	 	

	        Date 	 	Anthony J. Bettencourt

  

 10

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