Sample Business Contracts


Retainer Agreement [Amendment No. 1] - Regent Pacific Management Corp. and Verity Inc.

Management Forms


                          [REGENT PACIFIC LETTERHEAD]

April 13, 1998


Mr. Charles P. Waite, Jr., Director
Mr. Steven M. Krausz, Director
Verity, Inc.
894 Ross Drive
Sunnyvale, CA 94089

Dear Messrs. Waite and Krausz:

RE: AMENDMENT TO RETAINER AGREEMENT BETWEEN REGENT PACIFIC MANAGEMENT
    CORPORATION AND VERITY, INC.

This Amendment to Retainer Agreement sets forth certain amendments to the
Retainer Agreement between Regent Pacific Management Corporation, a California
corporation ("Regent Pacific"), and Verity, Inc., a Delaware corporation, and
its wholly-owned and controlled subsidiaries (collectively, "Verity") dated
July 31, 1997 (the "Original Retainer Agreement"). Except for the amendments
expressly contained herein, the Original Retainer Agreement shall remain in full
force and effect.

1.   Paragraph 1 of the Original Retainer Agreement is hereby amended to include
     the following language at the end of such paragraph:

          "Commencing as of September 1, 1997, Regent Pacific also agrees that
          the size of the Regent Pacific crisis team was increased and shall
          continue to be increased from at least four (4) persons to at least
          five (5) persons. In addition to the team referred to in this
          Paragraph, Regent Pacific made available a sixth (6th) person in the
          US for fourteen (14) of the first twenty-six (26) weeks of the
          engagement, and Regent Pacific has made available and will continue to
          make available one additional management team member located in Europe
          to assist with Verity's European operations on an as-needed basis.
          Additionally, the parties agree that Gary J. Sbona became an employee
          of Verity, effective February 16, 1998 at an annual salary of $52,000
          per year. In consideration for the additional services provided, as
          described in this amendment, Verity agrees to release to Regent
          Pacific $146,000 of the retainer escrow at the end of the
          Non-Cancelable Period (as defined in this amendment), and Regent
          Pacific agrees to return the other $54,000 of the retainer escrow to
          Verity at the end of the Non-Cancelable Period to offset Gary J.
          Sbona's salary for the period February 16, 1998 to February 28, 1999.
<PAGE>   2
Mr. Charles P. Waite, Jr., Director                        [REGENT PACIFIC LOGO]
Mr. Steven M. Krausz, Director
April 13, 1998
Page 2

2.   The Paragraph of the Original Retainer Agreement entitled "Fees" is hereby
     amended in its entirety as follows:

        "Fees: We have agreed to provide the work product included in this
        agreement for a period of twenty-five (25) months, including services
        covering a non-cancelable period beginning on the date hereof and
        ending on February 28, 1999 (the "Non-Cancelable Period"). This service
        shall be $50,000 per week, payable in four (4) week increments, each to
        be paid in advance of each Regent Pacific standard four-week billing
        period. It is agreed and understood between us that the payments of
        such cash fees are to be made immediately preceding the start of each
        four-week billing period, and that failure to pay such periodic
        payments when due shall constitute a breach of this agreement by
        Verity. It is further understood that Regent Pacific's fees are to be
        paid in advance of the work to be performed, and that the initial
        payment is to be paid on or before July 31, 1997. It is further agreed
        that such cash payments are earned in full upon receipt by Regent
        Pacific, by virtue of our accepting this agreement and the
        responsibilities it entails, and are nonrefundable."

3.  The Paragraph of the Original Retainer Agreement entitled "Term of
    Agreement" is hereby amended in its entirety as follows:

        "Term of agreement: The term of this agreement shall be for twenty-five
        (25) months, unless earlier terminated in accordance with this
        paragraph. Regent Pacific hereby commits the availability of its
        resources to Verity under this agreement for the full twenty-five (25)
        month term of the engagement, or for the full term of the agreement, if
        such term is extended by Verity as provided in this Paragraph. Verity
        may discharge Regent Pacific at any time after the Non-Cancelable
        Period provided that Verity has delivered a 60-day written notice of
        intent to cancel this agreement. Verity may, at its option, extend the
        term of this agreement for an additional twenty-six (26) week period
        beyond the twenty-five (25) month period by providing written notice to
        Regent Pacific at any time on or before February 28, 1999. If Verity
        elects to exercise its option to extend the term of this agreement for
        such twenty-six (26) week period, the Non-Cancelable Period also shall
        be extended automatically through August 31, 1999. Regent Pacific may
        withdraw from this assignment at any time with Verity's consent or for
        good cause without Verity's consent. Good cause includes Verity's
        breach of this agreement (including Verity's failure to pay any invoice
        within five working days of presentation), or any fact or circumstance
        that would render our continuing participation in the assignment
        unethical or unlawful."

<PAGE>   3
                                                           [REGENT PACIFIC LOGO]
Mr. Charles P. Waite, Jr., Director
Mr. Steven M. Krausz, Director
April 13, 1998
Page 3


4.  The following Paragraph is hereby added to the Original Retainer Agreement,
    immediately following the Paragraph entitled "Term of Agreement":

        "Option Grant: In consideration for the services to be performed by Gary
        J. Sbona as President and Chief Executive Officer of Verity pursuant to
        this agreement, and to provide additional incentive to Mr. Sbona to
        enhance the performance of Verity, the parties acknowledge that the
        Compensation Committee of the Board of Directors of Verity has granted
        to Mr. Sbona an incentive stock option to purchase three hundred fifty
        thousand (350,000) shares of Verity's common stock. Such option shall
        vest monthly over a period of thirteen months, commencing on January 31,
        1998, shall be exercisable for a period of one year following the
        termination of Regent Pacific's service, and shall otherwise be subject
        to the terms of Verity's standard form of incentive stock option
        agreement under its 1995 Employee Stock Option Plan; provided however,
        that such option shall fully vest upon the termination of Regent Pacific
        by Verity without cause or upon a "Change of Control Transaction," which
        is defined to mean (i) the consummation of a sale of all or
        substantially all of the assets of Verity, or (ii) a merger of Verity
        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."

Very truly yours,


REGENT PACIFIC MANAGEMENT CORPORATION


Gary J. Sbona
Chairman and Chief Executive Officer
    
<PAGE>   4
                                                           [REGENT PACIFIC LOGO]


Mr. Charles P. Waite, Jr., Director
Mr. Steven M. Krausz, Director
April 13, 1998
Page 4


THE FOREGOING IS HEREBY APPROVED AND AGREED TO:


Dated: April 13, 1998.


VERITY, INC.
(Signifies full agreement with all terms and conditions)


BY:
    --------------------------------------------
    Name: Charles P. Waite, Jr.  Title: Director
    On Behalf of the Board of Directors


BY: /s/ STEVEN M. KRAUSZ
    --------------------------------------------
    Name: Steven M. Krausz  Title: Director
    On Behalf of the Board of Directors
    
<PAGE>   5
                                                           [REGENT PACIFIC LOGO]


Mr. Charles P. Waite, Jr., Director
Mr. Steven M. Krausz, Director
April 13, 1998
Page 4


THE FOREGOING IS HEREBY APPROVED AND AGREED TO:


Dated: April 13, 1998.


VERITY, INC.
(Signifies full agreement with all terms and conditions)


BY: /s/ CHARLES P. WAITE, JR.
    --------------------------------------------
    Name: Charles P. Waite, Jr.  Title: Director
    On Behalf of the Board of Directors


BY:
    --------------------------------------------
    Name: Steven M. Krausz  Title: Director
    On Behalf of the Board of Directors
    

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